[LOGO OF THE BOND MARKET ASSOCIATION]
EXHIBIT 10.23
MASTER REPURCHASE
AGREEMENT
September 1996 Version
Dated as of 4/24/03
Between: Banc of America Securities LLC
and The PMI Group, Inc.
1. APPLICABILITY
From time to time the parties hereto may enter into transactions in which one
party ("Seller") agrees to transfer to the other ("Buyer") securities or other
assets ("Securities") against the transfer of funds by Buyer, with a
simultaneous agreement by Buyer to transfer to Seller such Securities at a date
certain or on demand, against the transfer of funds by Seller. Each such
transaction shall be referred to herein as a "Transaction" and, unless otherwise
agreed in writing, shall be governed by this Agreement, including any
supplemental terms or conditions contained in Annex I hereto and in any other
annexes identified herein or therein as applicable hereunder.
2. DEFINITIONS
(a) "Act of Insolvency", with respect to any party, (i) the commencement by such
party as debtor of any case or proceeding under any bankruptcy, insolvency,
reorganization, liquidation, moratorium, dissolution, delinquency or similar
law, or such party seeking the appointment or election of a receiver,
conservator, trustee, custodian or similar official for such party or any
substantial part of its property, or the convening of any meeting of creditors
for purposes of commencing any such case or proceeding or seeking such an
appointment or election, (ii) the commencement of any such case or proceeding
against such party, or another seeking such an appointment or election, or the
filing against a party of an application for a protective decree under the
provisions of the Securities Investor Protection Act of 1970, which (A) is
consented to or not timely contested by such party, (B) results in the entry of
an order for relief, such an appointment or election, the issuance of such a
protective decree or the entry of an order having a similar effect, or (C) is
not dismissed within 15 days, (iii) the making by such party of a general
assignment for the benefit of creditors, or (iv) the admission in writing by
such party of such party's inability to pay such party's debts as they become
due;
(b) "Additional Purchased Securities", Securities provided by Seller to Buyer
pursuant to Paragraph 4(a) hereof;
(c) "Buyer's Margin Amount", with respect to any Transaction as of any date, the
amount obtained by application of the Buyer's Margin Percentage to the
Repurchase Price for such Transaction as of such date;
(d) "Buyer's Margin Percentage", with respect to any Transaction as of any date,
a percentage (which may be equal to the Seller's Margin Percentage) agreed to by
Buyer and Seller or, in the absence of any such agreement, the percentage
obtained by dividing the Market Value of the Purchased Securities on the
Purchase Date by the Purchase Price on the Purchase Date for such Transaction;
(e) "Confirmation", the meaning specified in Paragraph 3(b) hereof;
(f) "Income", with respect to any Security at any time, any principal thereof
and all interest, dividends or other distributions thereon;
(g) "Margin Deficit", the meaning specified in Paragraph 4(a) hereof;
(h) "Margin Excess", the meaning specified in Paragraph 4(b) hereof;
(i) "Margin Notice Deadline", the time agreed to by the parties in the relevant
Confirmation, Annex I hereto or otherwise as the deadline for giving notice
requiring same-day satisfaction of margin maintenance obligations as provided in
Paragraph 4 hereof (or, in the absence of any such agreement, the deadline for
such purposes established in accordance with market practice);
(j) "Market Value", with respect to any Securities as of any date, the price for
such Securities on such date obtained from a generally recognized source agreed
to by the parties or the most recent closing bid quotation from such a source,
plus accrued Income to the extent not included therein (other than any Income
credited or transferred to, or applied to the obligations of, Seller pursuant to
Paragraph 5 hereof ) as of such date (unless contrary to market practice for
such Securities);
(k) "Price Differential", with respect to any Transaction as of any date, the
aggregate amount obtained by daily application of the Pricing Rate for such
Transaction to the Purchase Price for such Transaction on a 360 day per year
basis for the actual number of days during the period commencing on (and
including) the Purchase Date for such Transaction and ending on (but excluding)
the date of determination (reduced by any amount of such Price Differential
previously paid by Seller to Buyer with respect to such Transaction);
(l) "Pricing Rate", the per annum percentage rate for determination of the Price
Differential;
(m) "Prime Rate", the prime rate of U.S. commercial banks as published in The
Wall Street Journal (or, if more than one such rate is published, the average of
such rates);
(n) "Purchase Date", the date on which Purchased Securities are to be
transferred by Seller to Buyer;.
(o) "Purchase Price", (i) on the Purchase Date, the price at which Purchased
Securities are transferred by Seller to Buyer, and (ii) thereafter, except where
Buyer and Seller agree otherwise, such price increased by the amount of any cash
transferred by Buyer to Seller pursuant to Paragraph 4(b) hereof and decreased
by the amount of any cash transferred by Seller to Buyer pursuant to Paragraph
4(a) hereof or applied to reduce Seller's obligations under clause (ii) of
Paragraph 5 hereof;
(p) "Purchased Securities", the Securities transferred by Seller to Buyer in a
Transaction hereunder, and any Securities substituted therefor in accordance
with Paragraph 9 hereof. The term "Purchased Securities" with respect to any
Transaction at any time also shall include Additional Purchased Securities
delivered pursuant to Paragraph 4(a) hereof and shall exclude Securities
returned pursuant to Paragraph 4(b) hereof;
(q) "Repurchase Date", the date on which Seller is to repurchase the Purchased
Securities from Buyer, including any date determined by application of the
provisions of Paragraph 3(c) or 11 hereof;
(r) "Repurchase Price", the price at which Purchased Securities are to be
transferred from Buyer to Seller upon termination of a Transaction, which will
be determined in each case (including Transactions
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terminable upon demand) as the sum of the Purchase Price and the Price
Differential as of the date of such determination;
(s) "Seller's Margin Amount", with respect to any Transaction as of any date,
the amount obtained by application of the Seller's Margin Percentage to the
Repurchase Price for such Transaction as of such date;
(t) "Seller's Margin Percentage", with respect to any Transaction as of any
date, a percentage (which may be equal to the Buyer's Margin Percentage) agreed
to by Buyer and Seller or, in the absence of any such agreement, the percentage
obtained by dividing the Market Value of the Purchased Securities on the
Purchase Date by the Purchase Price on the Purchase Date for such Transaction.
3. INITIATION; CONFIRMATION; TERMINATION
(a) An agreement to enter into a Transaction may be made orally or in writing at
the initiation of either Buyer or Seller. On the Purchase Date for the
Transaction, the Purchased Securities shall be transferred to Buyer or its agent
against the transfer of the Purchase Price to an account of Seller.
(b) Upon agreeing to enter into a Transaction hereunder, Buyer or Seller (or
both), as shall be agreed, shall promptly deliver to the other party a written
confirmation of each Transaction (a "Confirmation"). The Confirmation shall
describe the Purchased Securities (including CUSIP number, if any), identify
Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase Price,
(iii) the Repurchase Date, unless the Transaction is to be terminable on demand,
(iv) the Pricing Rate or Repurchase Price applicable to the Transaction, and (v)
any additional terms or conditions of the Transaction not inconsistent with this
Agreement. The Confirmation, together with this Agreement, shall constitute
conclusive evidence of the terms agreed between Buyer and Seller with respect to
the Transaction to which the Confirmation relates, unless with respect to the
Confirmation specific objection is made promptly after receipt thereof. In the
event of any conflict between the terms of such Confirmation and this Agreement,
this Agreement shall prevail.
(c) In the case of Transactions terminable upon demand, such demand shall be
made by Buyer or Seller, no later than such time as is customary in accordance
with market practice, by telephone or otherwise on or prior to the business day
on which such termination will be effective. On the date specified in such
demand, or on the date fixed for termination in the case of Transactions having
a fixed term, termination of the Transaction will be effected by transfer to
Seller or its agent of the Purchased Securities and any Income in respect
thereof received by Buyer (and not previously credited or transferred to, or
applied to the obligations of, Seller pursuant to Paragraph 5 hereof ) against
the transfer of the Repurchase Price to an account of Buyer.
4. MARGIN MAINTENANCE
(a) If at any time the aggregate Market Value of all Purchased Securities
subject to all Transactions in which a particular party hereto is acting as
Buyer is less than the aggregate Buyer's Margin Amount for all such Transactions
(a "Margin Deficit"), then Buyer may by notice to Seller require Seller in such
Transactions, at Seller's option, to transfer to Buyer cash or additional
Securities reasonably acceptable to Buyer ("Additional Purchased Securities"),
so that the cash and aggregate Market Value of the Purchased Securities,
including any such Additional Purchased Securities, will thereupon equal or
exceed such aggregate Buyer's Margin Amount (decreased by the amount of any
Margin Deficit as of such date arising from any Transactions in which such Buyer
is acting as Seller).
(b) If at any time the aggregate Market Value of all Purchased Securities
subject to all Transactions in which a particular party hereto is acting as
Seller exceeds the aggregate Seller's Margin Amount for all such Transactions at
such time (a "Margin Excess"), then Seller may by notice to Buyer require Buyer
in such Transactions, at Buyer's option, to transfer cash or Purchased
Securities to Seller, so that the aggregate Market Value of the Purchased
Securities, after deduction of any such cash or any Purchased Securities so
transferred, will thereupon not exceed such aggregate Seller's Margin Amount
(increased by
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the amount of any Margin Excess as of such date arising from any Transactions in
which such Seller is acting as Buyer).
(c) If any notice is given by Buyer or Seller under subparagraph (a) or (b) of
this Paragraph at or before the Margin Notice Deadline on any business day, the
party receiving such notice shall transfer cash or Additional Purchased
Securities as provided in such subparagraph no later than the close of business
in the relevant market on such day. If any such notice is given after the Margin
Notice Deadline, the party receiving such notice shall transfer such cash or
Securities no later than the close of business in the relevant market on the
next business day following such notice.
(d) Any cash transferred pursuant to this Paragraph shall be attributed to such
Transactions as shall be agreed upon by Buyer and Seller.
(e) Seller and Buyer may agree, with respect to any or all Transactions
hereunder, that the respective rights of Buyer or Seller (or both) under
subparagraphs (a) and (b) of this Paragraph may be exercised only where a Margin
Deficit or Margin Excess, as the case may be, exceeds a specified dollar amount
or a specified percentage of the Repurchase Prices for such Transactions (which
amount or percentage shall be agreed to by Buyer and Seller prior to entering
into any such Transactions).
(f) Seller and Buyer may agree, with respect to any or all Transactions
hereunder, that the respective rights of Buyer and Seller under subparagraphs
(a) and (b) of this Paragraph to require the elimination of a Margin Deficit or
a Margin Excess, as the case may be, may be exercised whenever such a Margin
Deficit or Margin Excess exists with respect to any single Transaction hereunder
(calculated without regard to any other Transaction outstanding under this
Agreement).
5. INCOME PAYMENTS
Seller shall be entitled to receive an amount equal to all Income paid or
distributed on or in respect of the Securities that is not otherwise received by
Seller, to the full extent it would be so entitled if the Securities had not
been sold to Buyer. Buyer shall, as the parties may agree with respect to any
Transaction (or, in the absence of any such agreement, as Buyer shall reasonably
determine in its discretion), on the date such Income is paid or distributed
either (i) transfer to or credit to the account of Seller such Income with
respect to any Purchased Securities subject to such Transaction or (ii) with
respect to Income paid in cash, apply the Income payment or payments to reduce
the amount, if any, to be transferred to Buyer by Seller upon termination of
such Transaction. Buyer shall not be obligated to take any action pursuant to
the preceding sentence (A) to the extent that such action would result in the
creation of a Margin Deficit, unless prior thereto or simultaneously therewith
Seller transfers to Buyer cash or Additional Purchased Securities sufficient to
eliminate such Margin Deficit, or (B) if an Event of Default with respect to
Seller has occurred and is then continuing at the time such Income is paid or
distributed.
6. SECURITY INTEREST
Although the parties intend that all Transactions hereunder be sales and
purchases and not loans, in the event any such Transactions are deemed to be
loans, Seller shall be deemed to have pledged to Buyer as security for the
performance by Seller of its obligations under each such Transaction, and shall
be deemed to have granted to Buyer a security interest in, all of the Purchased
Securities with respect to all Transactions hereunder and all Income thereon and
other proceeds thereof.
7. PAYMENT AND TRANSFER
Unless otherwise mutually agreed, all transfers of funds hereunder shall be in
immediately available funds. All Securities transferred by one party hereto to
the other party (i) shall be in suitable form for transfer or shall be
accompanied by duly executed instruments of transfer or assignment in blank and
such other documentation as the party receiving possession may reasonably
request, (ii) shall be transferred on the
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book-entry system of a Federal Reserve Bank, or (iii) shall be transferred by
any other method mutually acceptable to Seller and Buyer.
8. SEGREGATION OF PURCHASED SECURITIES
To the extent required by applicable law, all Purchased Securities in the
possession of Seller shall be segregated from other securities in its possession
and shall be identified as subject to this Agreement. Segregation may be
accomplished by appropriate identification on the books and records of the
holder, including a financial or securities intermediary or a clearing
corporation. All of Seller's interest in the Purchased Securities shall pass to
Buyer on the Purchase Date and, unless otherwise agreed by Buyer and Seller,
nothing in this Agreement shall preclude Buyer from engaging in repurchase
transactions with the Purchased Securities or otherwise selling, transferring,
pledging or hypothecating the Purchased Securities, but no such transaction
shall relieve Buyer of its obligations to transfer Purchased Securities to
Seller pursuant to Paragraph 3, 4 or 11 hereof, or of Buyer's obligation to
credit or pay Income to, or apply Income to the obligations of, Seller pursuant
to Paragraph 5 hereof.
Required Disclosure for Transactions in Which the Seller Retains Custody of the
Purchased Securities
Seller is not permitted to substitute other securities for those subject to this
Agreement and therefore must keep Buyer's securities segregated at all times,
unless in this Agreement Buyer grants Seller the right to substitute other
securities. If Buyer grants the right to substitute, this means that Buyer's
securities will likely be commingled with Seller's own securities during the
trading day. Buyer is advised that, during any trading day that Buyer's
securities are commingled with Seller's securities, they [will]* [may]** be
subject to liens granted by Seller to [its clearing bank]* [third parties]** and
may be used by Seller for deliveries on other securities transactions. Whenever
the securities are commingled, Seller's ability to resegregate substitute
securities for Buyer will be subject to Seller's ability to satisfy [the
clearing]* [any]** lien or to obtain substitute securities.
* Language to be used under 17 C.F.R. (beta)403.4(e) if Seller is a government
securities broker or dealer other than a financial institution.
** Language to be used under 17 C.F.R.(beta)403.5(d) if Seller is a financial
institution.
9. SUBSTITUTION
(a) Seller may, subject to agreement with and acceptance by Buyer, substitute
other Securities for any Purchased Securities. Such substitution shall be made
by transfer to Buyer of such other Securities and transfer to Seller of such
Purchased Securities. After substitution, the substituted Securities shall be
deemed to be Purchased Securities.
(b) In Transactions in which Seller retains custody of Purchased Securities, the
parties expressly agree that Buyer shall be deemed, for purposes of subparagraph
(a) of this Paragraph, to have agreed to and accepted in this Agreement
substitution by Seller of other Securities for Purchased Securities; provided,
however, that such other Securities shall have a Market Value at least equal to
the Market Value of the Purchased Securities for which they are substituted.
10.REPRESENTATIONS
Each of Buyer and Seller represents and warrants to the other that (i) it is
duly authorized to execute and deliver this Agreement, to enter into
Transactions contemplated hereunder and to perform its obligations hereunder and
has taken all necessary action to authorize such execution, delivery and
performance, (ii) it
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will engage in such Transactions as principal (or, if agreed in writing, in the
form of an annex hereto or otherwise, in advance of any Transaction by the other
party hereto, as agent for a disclosed principal), (iii) the person signing this
Agreement on its behalf is duly authorized to do so on its behalf (or on behalf
of any such disclosed principal), (iv) it has obtained all authorizations of any
governmental body required in connection with this Agreement and the
Transactions hereunder and such authorizations are in full force and effect and
(v) the execution, delivery and performance of this Agreement and the
Transactions hereunder will not violate any law, ordinance, charter, by-law or
rule applicable to it or any agreement by which it is bound or by which any of
its assets are affected. On the Purchase Date for any Transaction Buyer and
Seller shall each be deemed to repeat all the foregoing representations made by
it.
▇▇.▇▇▇▇▇▇ OF DEFAULT
In the event that (i) Seller fails to transfer or Buyer fails to purchase
Purchased Securities upon the applicable Purchase Date, (ii) Seller fails to
repurchase or Buyer fails to transfer Purchased Securities upon the applicable
Repurchase Date, (iii) Seller or Buyer fails to comply with Paragraph 4 hereof,
(iv) Buyer fails, after one business day's notice, to comply with Paragraph 5
hereof, (v) an Act of Insolvency occurs with respect to Seller or Buyer, (vi)
any representation made by Seller or Buyer shall have been incorrect or untrue
in any material respect when made or repeated or deemed to have been made or
repeated, or (vii) Seller or Buyer shall admit to the other its inability to, or
its intention not to, perform any of its obligations hereunder (each an "Event
of Default"):
(a) The nondefaulting party may, at its option (which option shall be deemed to
have been exercised immediately upon the occurrence of an Act of Insolvency),
declare an Event of Default to have occurred hereunder and, upon the exercise or
deemed exercise of such option, the Repurchase Date for each Transaction
hereunder shall, if it has not already occurred, be deemed immediately to occur
(except that, in the event that the Purchase Date for any Transaction has not
yet occurred as of the date of such exercise or deemed exercise, such
Transaction shall be deemed immediately canceled). The nondefaulting party shall
(except upon the occurrence of an Act of Insolvency) give notice to the
defaulting party of the exercise of such option as promptly as practicable.
(b) In all Transactions in which the defaulting party is acting as Seller, if
the nondefaulting party exercises or is deemed to have exercised the option
referred to in subparagraph (a) of this Paragraph, (i) the defaulting party's
obligations in such Transactions to repurchase all Purchased Securities, at the
Repurchase Price therefor on the Repurchase Date determined in accordance with
subparagraph (a) of this Paragraph, shall thereupon become immediately due and
payable, (ii) all Income paid after such exercise or deemed exercise shall be
retained by the nondefaulting party and applied to the aggregate unpaid
Repurchase Prices and any other amounts owing by the defaulting party hereunder,
and (iii) the defaulting party shall immediately deliver to the nondefaulting
party any Purchased Securities subject to such Transactions then in the
defaulting party's possession or control.
(c) In all Transactions in which the defaulting party is acting as Buyer, upon
tender by the nondefaulting party of payment of the aggregate Repurchase Prices
for all such Transactions, all right, title and interest in and entitlement to
all Purchased Securities subject to such Transactions shall be deemed
transferred to the nondefaulting party, and the defaulting party shall deliver
all such Purchased Securities to the nondefaulting party.
(d) If the nondefaulting party exercises or is deemed to have exercised the
option referred to in subparagraph (a) of this Paragraph, the nondefaulting
party, without prior notice to the defaulting party, may:
(i) as to Transactions in which the defaulting party is acting as Seller,
(A) immediately sell, in a recognized market (or otherwise in a
commercially reasonable manner) at such price or prices as the
nondefaulting party may reasonably deem satisfactory, any or all Purchased
Securities subject to such Transactions and apply the proceeds thereof to
the aggregate unpaid Repurchase Prices
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and any other amounts owing by the defaulting party hereunder or (B) in its
sole discretion elect, in lieu of selling all or a portion of such
Purchased Securities, to give the defaulting party credit for such
Purchased Securities in an amount equal to the price therefor on such date,
obtained from a generally recognized source or the most recent closing bid
quotation from such a source, against the aggregate unpaid Repurchase
Prices and any other amounts owing by the defaulting party hereunder; and
(ii) as to Transactions in which the defaulting party is acting as Buyer,
(A) immediately purchase, in a recognized market (or otherwise in a
commercially reasonable manner) at such price or prices as the
nondefaulting party may reasonably deem satisfactory, securities
("Replacement Securities") of the same class and amount as any Purchased
Securities that are not delivered by the defaulting party to the
nondefaulting party as required hereunder or (B) in its sole discretion
elect, in lieu of purchasing Replacement Securities, to be deemed to have
purchased Replacement Securities at the price therefor on such date,
obtained from a generally recognized source or the most recent closing
offer quotation from such a source.
Unless otherwise provided in Annex I, the parties acknowledge and agree that (1)
the Securities subject to any Transaction hereunder are instruments traded in a
recognized market, (2) in the absence of a generally recognized source for
prices or bid or offer quotations for any Security, the nondefaulting party may
establish the source therefor in its sole discretion and (3) all prices, bids
and offers shall be determined together with accrued Income (except to the
extent contrary to market practice with respect to the relevant Securities).
(e) As to Transactions in which the defaulting party is acting as Buyer, the
defaulting party shall be liable to the nondefaulting party for any excess of
the price paid (or deemed paid) by the nondefaulting party for Replacement
Securities over the Repurchase Price for the Purchased Securities replaced
thereby and for any amounts payable by the defaulting party under Paragraph 5
hereof or otherwise hereunder.
(f) For purposes of this Paragraph 11, the Repurchase Price for each Transaction
hereunder in respect of which the defaulting party is acting as Buyer shall not
increase above the amount of such Repurchase Price for such Transaction
determined as of the date of the exercise or deemed exercise by the
nondefaulting party of the option referred to in subparagraph (a) of this
Paragraph.
(g) The defaulting party shall be liable to the nondefaulting party for (i) the
amount of all reasonable legal or other expenses incurred by the nondefaulting
party in connection with or as a result of an Event of Default, (ii) damages in
an amount equal to the cost (including all fees, expenses and commissions) of
entering into replacement transactions and entering into or terminating hedge
transactions in connection with or as a result of an Event of Default, and (iii)
any other loss, damage, cost or expense directly arising or resulting from the
occurrence of an Event of Default in respect of a Transaction.
(h) To the extent permitted by applicable law, the defaulting party shall be
liable to the nondefaulting party for interest on any amounts owing by the
defaulting party hereunder, from the date the defaulting party becomes liable
for such amounts hereunder until such amounts are (i) paid in full by the
defaulting party or (ii) satisfied in full by the exercise of the nondefaulting
party's rights hereunder. Interest on any sum payable by the defaulting party to
the nondefaulting party under this Paragraph 11(h) shall be at a rate equal to
the greater of the Pricing Rate for the relevant Transaction or the Prime Rate.
(i) The nondefaulting party shall have, in addition to its rights hereunder, any
rights otherwise available to it under any other agreement or applicable law.
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12.SINGLE AGREEMENT
Buyer and Seller acknowledge that, and have entered hereinto and will enter into
each Transaction hereunder in consideration of and in reliance upon the fact
that, all Transactions hereunder constitute a single business and contractual
relationship and have been made in consideration of each other. Accordingly,
each of Buyer and Seller agrees (i) to perform all of its obligations in respect
of each Transaction hereunder, and that a default in the performance of any such
obligations shall constitute a default by it in respect of all Transactions
hereunder, (ii) that each of them shall be entitled to set off claims and apply
property held by them in respect of any Transaction against obligations owing to
them in respect of any other Transactions hereunder and (iii) that payments,
deliveries and other transfers made by either of them in respect of any
Transaction shall be deemed to have been made in consideration of payments,
deliveries and other transfers in respect of any other Transactions hereunder,
and the obligations to make any such payments, deliveries and other transfers
may be applied against each other and netted.
13.NOTICES AND OTHER COMMUNICATIONS
Any and all notices, statements, demands or other communications hereunder may
be given by a party to the other by mail, facsimile, telegraph, messenger or
otherwise to the address specified in Annex II hereto, or so sent to such party
at any other place specified in a notice of change of address hereafter received
by the other. All notices, demands and requests hereunder may be made orally, to
be confirmed promptly in writing, or by other communication as specified in the
preceding sentence.
14.ENTIRE AGREEMENT; SEVERABILITY
This Agreement shall supersede any existing agreements between the parties
containing general terms and conditions for repurchase transactions. Each
provision and agreement herein shall be treated as separate and independent from
any other provision or agreement herein and shall be enforceable notwithstanding
the unenforceability of any such other provision or agreement.
15.NON-ASSIGNABILITY; TERMINATION
(a) The rights and obligations of the parties under this Agreement and under any
Transaction shall not be assigned by either party without the prior written
consent of the other party, and any such assignment without the prior written
consent of the other party shall be null and void. Subject to the foregoing,
this Agreement and any Transactions shall be binding upon and shall inure to the
benefit of the parties and their respective successors and assigns. This
Agreement may be terminated by either party upon giving written notice to the
other, except that this Agreement shall, notwithstanding such notice, remain
applicable to any Transactions then outstanding.
(b) Subparagraph (a) of this Paragraph 15 shall not preclude a party from
assigning, charging or otherwise dealing with all or any part of its interest in
any sum payable to it under Paragraph 11 hereof.
16.GOVERNING LAW
This Agreement shall be governed by the laws of the State of New York without
giving effect to the conflict of law principles thereof.
▇▇.▇▇ WAIVERS, ETC.
No express or implied waiver of any Event of Default by either party shall
constitute a waiver of any other Event of Default and no exercise of any remedy
hereunder by any party shall constitute a waiver of its right to exercise any
other remedy hereunder. No modification or waiver of any provision of this
Agreement and no consent by any party to a departure herefrom shall be effective
unless and until such shall be in writing and duly executed by both of the
parties hereto. Without limitation on any of the foregoing, the failure to
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give a notice pursuant to Paragraph 4(a) or 4(b) hereof will not constitute a
waiver of any right to do so at a later date.
18.USE OF EMPLOYEE PLAN ASSETS
(a) If assets of an employee benefit plan subject to any provision of the
Employee Retirement Income Security Act of 1974 ("ERISA") are intended to be
used by either party hereto (the "Plan Party") in a Transaction, the Plan Party
shall so notify the other party prior to the Transaction. The Plan Party shall
represent in writing to the other party that the Transaction does not constitute
a prohibited transaction under ERISA or is otherwise exempt therefrom, and the
other party may proceed in reliance thereon but shall not be required so to
proceed.
(b) Subject to the last sentence of subparagraph (a) of this Paragraph, any such
Transaction shall proceed only if Seller furnishes or has furnished to Buyer its
most recent available audited statement of its financial condition and its most
recent subsequent unaudited statement of its financial condition.
(c) By entering into a Transaction pursuant to this Paragraph, Seller shall be
deemed (i) to represent to Buyer that since the date of Seller's latest such
financial statements, there has been no material adverse change in Seller's
financial condition which Seller has not disclosed to Buyer, and (ii) to agree
to provide Buyer with future audited and unaudited statements of its financial
condition as they are issued, so long as it is a Seller in any outstanding
Transaction involving a Plan Party.
19.INTENT
(a) The parties recognize that each Transaction is a "repurchase agreement" as
that term is defined in Section 101 of Title 11 of the United States Code, as
amended (except insofar as the type of Securities subject to such Transaction or
the term of such Transaction would render such definition inapplicable), and a
"securities contract" as that term is defined in Section 741 of Title 11 of the
United States Code, as amended (except insofar as the type of assets subject to
such Transaction would render such definition inapplicable).
(b) It is understood that either party's right to liquidate Securities delivered
to it in connection with Transactions hereunder or to exercise any other
remedies pursuant to Paragraph 11 hereof is a contractual right to liquidate
such Transaction as described in Sections 555 and 559 of Title 11 of the United
States Code, as amended.
(c) The parties agree and acknowledge that if a party hereto is an "insured
depository institution," as such term is defined in the Federal Deposit
Insurance Act, as amended ("FDIA"), then each Transaction hereunder is a
"qualified financial contract," as that term is defined in FDIA and any rules,
orders or policy statements thereunder (except insofar as the type of assets
subject to such Transaction would render such definition inapplicable).
(d) It is understood that this Agreement constitutes a "netting contract" as
defined in and subject to Title IV of the Federal Deposit Insurance Corporation
Improvement Act of 1991 ("FDICIA") and each payment entitlement and payment
obligation under any Transaction hereunder shall constitute a "covered
contractual payment entitlement" or "covered contractual payment obligation",
respectively, as defined in and subject to FDICIA (except insofar as one or both
of the parties is not a "financial institution" as that term is defined in
FDICIA).
9
20.DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS
The parties acknowledge that they have been advised that:
(a) in the case of Transactions in which one of the parties is a broker or
dealer registered with the Securities and Exchange Commission ("SEC") under
Section 15 of the Securities Exchange Act of 1934 ("1934 Act"), the Securities
Investor Protection Corporation has taken the position that the provisions of
the Securities Investor Protection Act of 1970 ("SIPA") do not protect the other
party with respect to any Transaction hereunder;
(b) in the case of Transactions in which one of the parties is a government
securities broker or a government securities dealer registered with the SEC
under Section 15C of the 1934 Act, SIPA will not provide protection to the other
party with respect to any Transaction hereunder; and
(c) in the case of Transactions in which one of the parties is a financial
institution, funds held by the financial institution pursuant to a Transaction
hereunder are not a deposit and therefore are not insured by the Federal Deposit
Insurance Corporation or the National Credit Union Share Insurance Fund, as
applicable.
BANC OF AMERICA SECURITIES LLC THE PMI Group, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Principal Title: SVP Treasurer
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Date: 4/25/03 Date: 4/24/03
10
ANNEX I
SUPPLEMENTAL TERMS AND CONDITIONS
This Annex I forms a part of the Master Repurchase Agreement dated as of April
24, 2003 (the "Agreement") between Banc of America Securities LLC and The PMI
Group, Inc. Capitalized terms used but not defined in this Annex I shall have
the meanings ascribed to them in the Agreement.
1. Other Applicable Annexes. In addition to this Annex I and Annex II, the
following selected Annexes and any Schedules thereto shall form a part of the
Agreement and shall be applicable thereunder:
[ ] Annex III (International Transactions)
[ ] Annex IV (Party Acting as Agent (agent, manager, investment adviser or trustee))
[X] Annex V (Margin for Forward Transactions)
[X] Annex VI (Buy/Sell Back Transactions)
[ ] Annex VII (Transactions Involving Registered Investment Companies)
2. Submission to Jurisdiction and Waiver of Immunity.
(a) Each party irrevocably and unconditionally (i) submits to the
non-exclusive jurisdiction of any United States Federal or New York State
court sitting in Manhattan, and any appellate court from any such court,
solely for the purpose of any suit, action or proceeding brought to enforce
its obligations under the Agreement or relating in any way to the Agreement
or any Transaction under the Agreement and (ii) waives, to the fullest extent
it may effectively do so, any defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court and any right of
jurisdiction on account of its place of residence or domicile.
(b) To the extent that either party has or hereafter may acquire any immunity
(sovereign or otherwise) from any legal action, suit or proceeding, from
jurisdiction of any court or from setoff or any legal process (whether
service or notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise) with respect to
itself or any of its property, such party hereby irrevocably waives and
agrees not to plead or claim such immunity in respect of any action brought
to enforce its obligations under the Agreement or relating in any way to the
Agreement or any Transaction under the Agreement.
3. Additional Events of Default. In addition to the Events of Default set forth
in Paragraph 11 of the Agreement, it shall be an "Event of Default" if:
(a) as a result of sovereign action or inaction (directly or indirectly),
Buyer or Seller becomes unable to perform any absolute or contingent
obligation to make a payment or transfer or to receive a payment or transfer
in respect of any Transaction under the Agreement or to comply with any other
material provision of the Agreement relating to such Transaction; or
(b) either party defaults or becomes subject to an Additional Termination
Event (as defined in any ISDA Master Agreement) between Counterparty and any
affiliate of Banc of America Securities LLC with respect to any other
agreement between the parties or any affiliate of the parties.
11
4. Representations and Warranties. In addition to the representations and
warranties made pursuant to Paragraph 10 of the Agreement, each party in
addition represents and warrants to the other party that no material adverse
change in such party's financial condition has occurred since the date of the
most recent financial statements furnished by such party to the other party, and
such financial statements are complete and correct and fairly present such
party's financial condition and results of operations as at and for the period
ended on the date thereof, all in accordance with generally accepted accounting
principles and practices applied on a consistent basis.
5. Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS
TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
6. No Reliance. In addition to the representations and warranties set forth in
Paragraph 10 of the Agreement, each party hereby makes the following
representations and warranties in connection with the Agreement and each
Transaction under the Agreement, which shall continue until the settlement of
any such Transaction:
(a) unless there is a written agreement with the other party to the
contrary, it is not relying on any advice (whether written or oral) of the other
party, other than the representations expressly set out in the Agreement;
(b) it has made and will make its own decisions regarding the entering into
and exercise of any Transaction under the Agreement based upon its own judgment
and upon advice from such professional advisers as it has deemed it necessary to
consult; and
(c) it understands the terms, conditions and risks of each Transaction
under the Agreement and is willing to assume (financially and otherwise) those
risks.
7. Recording of Conversations. Each party to this Agreement acknowledges and
agrees to the tape recording of conversations between trading and marketing
personnel of the parties to this Agreement whether by one or other or both of
the parties or their agents, and that any such tape recordings may be submitted
in evidence in any proceedings relating to the Agreement.
12
8. Evidence of Authority. Each party agrees to deliver to the other party the
following documents:-
PARTY REQUIRED TO DELIVER DATE BY WHICH TO
DOCUMENT FORM/DOCUMENT/CERTIFICATE BE DELIVERED
Both parties Certified copies of all Upon execution and delivery of
corporate authorizations and any this Agreement
other documents with respect to
the execution, delivery and
performance of this Agreement
Both parties Certificate of authority and Upon execution and delivery of
specimen signatures of this Agreement and thereafter
individuals executing this upon request of the other party
Agreement any Credit Support
Document and Confirmations
ACCEPTED AND AGREED:
BANC OF AMERICA SECURITIES LLC THE PMI Group, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Principal Title: SVP Treasurer
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Date: 4/25/03 Date: 4/24/03
13
ANNEX II
NAMES AND ADDRESSES FOR COMMUNICATIONS BETWEEN PARTIES
CORPORATE HEADQUARTERS:
Banc of America Securities LLC
Bank of America Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
DOCUMENTATION ISSUES:
Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
OPERATIONAL ISSUES:
Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇/5720
________________________________________________________________________________
Name of Party: The PMI Group, Inc.
Contact: ▇▇▇▇ ▇▇▇▇▇▇▇
Street Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇, ▇▇▇ Code: ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Email address: ▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
14
ANNEX III
INTERNATIONAL TRANSACTIONS
This Annex III (including any Schedules hereto) forms a part of the Master
Repurchase Agreement dated as of April 24, 2003 (the "Agreement") between Banc
of America Securities LLC and The PMI Group, Inc. Capitalized terms used but not
defined in this Annex III shall have the meanings ascribed to them in the
Agreement.
1.Definitions.For purposes of the Agreement and this Annex III:
(a)The following terms shall have the following meanings:
"Base Currency", United States dollars or such other currency as Buyer
and Seller may agree in the Confirmation with respect to any International
Transaction or otherwise in writing;
"Business Day" or "business day":
(i) in relation to any International Transaction which (A) involves an
International Security and (B) is to be settled through CEDEL or Euroclear, a
day on which CEDEL or, as the case may be, Euroclear is open to settle business
in the currency in which the Purchase Price and the Repurchase Price are
denominated;
(ii) in relation to any International Transaction which (A) involves an
International Security and (B) is to be settled through a settlement system
other than CEDEL or Euroclear, a day on which that settlement system is open to
settle such International Transaction;
(iii) in relation to any International Transaction which involves a
delivery of Securities not falling within (i) or (ii) above, a day on which
banks are open for business in the place where delivery of the relevant
Securities is to be effected; and
(iv) in relation to any International Transaction which involves an
obligation to make a payment not falling within (i) or (ii) above, a day other
than a Saturday or Sunday on which banks are open for business in the principal
financial center of the country of which the currency in which the payment is
denominated is the official currency and, if different, in the place where any
account designated by the parties for the making or receipt of the payment is
situated (or, in the case of ECU, a day on which ECU clearing operates);
"CEDEL",CEDEL Bank, societe anonyme;
"Contractual Currency", the currency in which the International
Securities subject to any International Transaction are denominated or such
other currency as may be specified in the Confirmation with respect to any
International Transaction;
"Euroclear", ▇▇▇▇▇▇ Guaranty Trust Company of New York, Brussels
Branch, as operator of the Euroclear System;
"International Security", any Security that (i) is denominated in a
currency other than United States dollars or (ii) is capable of being cleared
through a clearing facility outside the United States or (iii) is issued by an
issuer organized under the laws of a jurisdiction other than the United States
(or any political subdivision thereof );
15
"International Transaction", any Transaction involving (i) an
International Security or (ii) a party organized under the laws of a
jurisdiction other than the United States (or any political subdivision thereof
) or having its principal place of business outside the United States or (iii) a
branch or office outside the United States designated in Annex I by a party
organized under the laws of the United States (or any political subdivision
thereof ) as an office through which that party may act;
"LIBOR", in relation to any sum in any currency, the offered rate for
deposits for such sum in such currency for a period of three months which
appears on the Reuters Screen LIBO page as of 11:00 A.M., London time, on the
date on which it is to be determined (or, if more than one such rate appears,
the arithmetic mean of such rates);
"Spot Rate", where an amount in one currency is to be converted into a
second currency on any date, the spot rate of exchange of a comparable amount
quoted by a major money-center bank in the New York interbank market, as agreed
by Buyer and Seller, for the sale by such bank of such second currency against a
purchase by it of such first currency.
(b) Notwithstanding Paragraph 2 of the Agreement, the term "Prime Rate" shall
mean, with respect to any International Transaction, LIBOR plus a spread, as may
be specified in the Confirmation with respect to any International Transaction
or otherwise in writing.
2. Manner of Transfer. All transfers of International Securities (i) shall be in
suitable form for transfer and accompanied by duly executed instruments of
transfer or assignment in blank (where required for transfer) and such other
documentation as the transferee may reasonably request, or (ii) shall be
transferred through the book-entry system of Euroclear or CEDEL, or (iii) shall
be transferred through any other agreed securities clearing system or (iv) shall
be transferred by any other method mutually acceptable to Seller and Buyer.
3. Contractual Currency.
(a) Unless otherwise mutually agreed, all funds transferred in respect of the
Purchase Price or the Repurchase Price in any International Transaction shall be
in the Contractual Currency.
(b) Notwithstanding subparagraph (a) of this Paragraph 3, the payee of any
payment may, at its option, accept tender thereof in any other currency;
provided, however, that, to the extent permitted by applicable law, the
obligation of the payor to make such payment will be discharged only to the
extent of the amount of the Contractual Currency that such payee may, consistent
with normal banking procedures, purchase with such other currency (after
deduction of any premium and costs of exchange) for delivery within the
customary delivery period for spot transactions in respect of the relevant
currency.
(c) If for any reason the amount in the Contractual Currency so received,
including amounts received after conversion of any recovery under any judgment
or order expressed in a currency other than the Contractual Currency, falls
short of the amount in the Contractual Currency due in respect of the Agreement,
the party required to make the payment shall (unless an Event of Default has
occurred and such party is the nondefaulting party) as a separate and
independent obligation (which shall not merge with any judgment or any payment
or any partial payment or enforcement of payment) and to the extent permitted by
applicable law, immediately pay such additional amount in the Contractual
Currency as may be necessary to compensate for the shortfall.
(d) If for any reason the amount of the Contractual Currency received by one
party hereto exceeds the amount in the Contractual Currency due such party in
respect of the Agreement, then (unless an Event of Default has occurred and such
party is the nondefaulting party) the party receiving the payment shall refund
promptly the amount of such excess.
16
4. Notices. Any and all notices, statements, demands or other communications
with respect to International Transactions shall be given in accordance with
Paragraph 13 of the Agreement and shall be in the English language.
5. Taxes.
(a) Transfer taxes, stamp taxes and all similar costs with respect to the
transfer of Securities shall be paid by Seller.
(b)(i) Unless otherwise agreed, all money payable by one party (the "Payor") to
the other (the "Payee") in respect of any International Transaction shall be
paid free and clear of, and without withholding or deduction for, any taxes or
duties of whatsoever nature imposed, levied, collected, withheld or assessed by
any authority having power to tax (a "Tax"), unless the withholding or deduction
of such Tax is required by law. In that event, unless otherwise agreed, Payor
shall pay such additional amounts as will result in the net amounts receivable
by Payee (after taking account of such withholding or deduction) being equal to
such amounts as would have been received by Payee had no such Tax been required
to be withheld or deducted; provided that for purposes of Paragraphs 5 and 6 the
term "Tax" shall not include any Tax that would not have been imposed but for
the existence of any present or former connection between Payee and the
jurisdiction imposing such Tax other than the mere receipt of payment from Payor
or the performance of Payee's obligations under an International Transaction.
The parties acknowledge and agree, for the avoidance of doubt, that the amount
of Income required to be transferred, credited or applied by Buyer for the
benefit of Seller under Paragraph 5 of the Agreement shall be determined without
taking into account any Tax required to be withheld or deducted from such
Income, unless otherwise agreed.
(ii) In the case of any Tax required to be withheld or deducted from any money
payable to a party hereto acting as Payee by the other party hereto acting as
Payor, Payee agrees to deliver to Payor (or, if applicable, to the authority
imposing the Tax) any certificate or document reasonably requested by Payor that
would entitle Payee to an exemption from, or reduction in the rate of,
withholding or deduction of Tax from money payable by Payor to Payee.
(iii) Each party hereto agrees to notify the other party of any circumstance
known or reasonably known to it (other than a Change of Tax Law, as defined in
Paragraph 6 hereof ) that causes a certificate or document provided by it
pursuant to subparagraph (b)(ii) of this Paragraph to fail to be true.
(iv) Notwithstanding subparagraph (b)(i) of this Paragraph, no additional
amounts shall be payable by Payor to Payee in respect of an International
Transaction to the extent that such additional amounts are payable as a result
of a failure by Payee to comply with its obligations under subparagraph (b)(ii)
or (b)(iii) of this Paragraph with respect to such International Transaction.
6. Tax Event.
(a) This Paragraph 6 shall apply if either party notifies the other, with
respect to a Tax required to be collected by withholding or deduction, that:
(i) any action taken by a taxing authority or brought in a court of
competent jurisdiction after the date an International Transaction is entered
into, regardless of whether such action is taken or brought with respect to a
party to the Agreement; or
(ii) a change in the fiscal or regulatory regime after the date an
International Transaction is entered into,
(each, a "Change of Tax Law") has or will, in the notifying party's
reasonable opinion, have a material adverse effect on such party in the context
of an International Transaction.
17
(b) If so requested by the other party, the notifying party will furnish the
other party with an opinion of a suitably qualified adviser that an event
referred to in subparagraph (a)(i) or (a)(ii) of this Paragraph 6 has occurred
and affects the notifying party.
(c) Where this Paragraph 6 applies, the party giving the notice referred to in
subparagraph (a) above may, subject to subparagraph (d) below, terminate the
International Transaction effective from a date specified in the notice, not
being earlier (unless so agreed by the other party) than 30 days after the date
of such notice, by nominating such date as the Repurchase Date.
(d) If the party receiving the notice referred to in subparagraph (a) of this
Paragraph 6 so elects, it may override such notice by giving a counter-notice to
the other party. If a counter-notice is given, the party which gives such
counter-notice will be deemed to have agreed to indemnify the other party
against the adverse effect referred to in subparagraph (a) of this Paragraph 6
so far as it relates to the relevant International Transaction and the original
Repurchase Date will continue to apply.
(e) Where an International Transaction is terminated as described in this
Paragraph 6, the party which has given the notice to terminate shall indemnify
the other party against any reasonable legal and other professional expenses
incurred by the other party by reason of the termination, but the other party
may not claim any sum constituting consequential loss or damage in respect of a
termination in accordance with this Paragraph 6.
(f) This Paragraph 6 is without prejudice to Paragraph 5 of this Annex III; but
an obligation to pay additional amounts pursuant to Paragraph 5 of this Annex
III may, where appropriate, be a circumstance which causes this Paragraph 6 to
apply.
7. Margin. In the calculation of "Margin Deficit" and "Margin Excess" pursuant
to Paragraph 4 of the Agreement, all sums not denominated in the Base Currency
shall be deemed to be converted into the Base Currency at the Spot Rate on the
date of such calculation.
8. Events of Default.
(a) In addition to the Events of Default set forth in Paragraph 11 of the
Agreement, it shall be an additional "Event of Default" if either party fails,
after one business day's notice, to perform any covenant or obligation required
to be performed by it under this Annex III, including, without limitation, the
payment of taxes or additional amounts as required by Paragraph 5 of this Annex
III.
(b) In addition to the other rights of a nondefaulting party under Paragraph 11
of the Agreement, following an Event of Default, the nondefaulting party may, at
any time at its option, effect the conversion of any currency into a different
currency of its choice at the Spot Rate on the date of the exercise of such
option and offset obligations of the defaulting party denominated in different
currencies against each other.
18
SCHEDULE III.A
INTERNATIONAL TRANSACTIONS RELATING TO [Relevant Country]
This Schedule III.A forms a part of Annex III to the Master Repurchase Agreement
dated as of April 24, 2003 (the "Agreement") between Banc of America Securities
LLC and The PMI Group, Inc. Capitalized terms used but not defined in this
Schedule III.A shall have the meanings ascribed to them in Annex III.
Insert provisions applicable to relevant country: Not Applicable.
19
ANNEX IV
PARTY ACTING AS AGENT
This Annex IV forms a part of the Master Repurchase Agreement dated as of April
24, 2003 (the "Agreement") between Banc of America Securities LLC and The PMI
Group, Inc. This Annex IV sets forth the terms and conditions governing all
transactions in which a party selling securities or buying securities, as the
case may be ("Agent"), in a Transaction is acting as agent for one or more third
parties (each, a "Principal"). Capitalized terms used but not defined in this
Annex IV shall have the meanings ascribed to them in the Agreement.
1.Additional Representations. In addition to the representations set forth in
Paragraph 10 of the Agreement, Agent hereby makes the following representations,
which shall continue during the term of any Transaction: Principal has duly
authorized Agent to execute and deliver the Agreement on its behalf, has the
power to so authorize Agent and to enter into the Transactions contemplated by
the Agreement and to perform the obligations of Seller or Buyer, as the case may
be, under such Transactions, and has taken all necessary action to authorize
such execution and delivery by Agent and such performance by it.
2.Identification of Principals. Agent agrees (a) to provide the other party,
prior to the date on which the parties agree to enter into any Transaction under
the Agreement, with a written list of Principals for which it intends to act as
Agent (which list may be amended in writing from time to time with the consent
of the other party), and (b) to provide the other party, before the close of
business on the next business day after orally agreeing to enter into a
Transaction, with notice of the specific Principal or Principals for whom it is
acting in connection with such Transaction. If (i) Agent fails to identify such
Principal or Principals prior to the close of business on such next business day
or (ii) the other party shall determine in its sole discretion that any
Principal or Principals identified by Agent are not acceptable to it, the other
party may reject and rescind any Transaction with such Principal or Principals,
return to Agent any Purchased Securities or portion of the Purchase Price, as
the case may be, previously transferred to the other party and refuse any
further performance under such Transaction, and Agent shall immediately return
to the other party any portion of the Purchase Price or Purchased Securities, as
the case may be, previously transferred to Agent in connection with such
Transaction; provided, however, that (A) the other party shall promptly (and in
any event within one business day) notify Agent of its determination to reject
and rescind such Transaction and (B) to the extent that any performance was
rendered by any party under any Transaction rejected by the other party, such
party shall remain entitled to any Price Differential or other amounts that
would have been payable to it with respect to such performance If such
Transaction had not been rejected. The other party acknowledges that Agent shall
not have any obligation to provide it with confidential information regarding
the financial status of its Principals; Agent agrees, however, that it will
assist the other party in obtaining from Agent's Principals such information
regarding the financial status of such Principals as the other party may
reasonably request.
3.Limitation of Agent's Liability. The parties expressly acknowledge that if the
representations of Agent under the Agreement, Including this Annex IV, are true
and correct in all material respects during the term of any Transaction and
Agent otherwise complies with the provisions of this Annex IV, then (a) Agent's
obligations under the Agreement shall not include a guarantee of performance by
its Principal or Principals and (b) the other party's remedies shall not include
a right of setoff in respect of rights or obligations, if any, of Agent arising
in other transactions in which Agent is acting as principal.
20
4. Multiple Principals.
(a) In the event that Agent proposes to act for more than one Principal
hereunder, Agent and the other party shall elect whether (i) to treat
Transactions under the Agreement as transactions entered into on behalf of
separate Principals or (ii) to aggregate such Transactions as if they were
transactions by a single Principal. Failure to make such an election in writing
shall be deemed an election to treat Transactions under the Agreement as
transactions on behalf of separate Principals.
(b) In the event that Agent and the other party elect (or are deemed to elect)
to treat Transactions under the Agreement as transactions on behalf of separate
Principals, the parties agree that (i) Agent will provide the other party,
together with the notice described in Paragraph 2(b) of this Annex IV, notice
specifying the portion of each Transaction allocable to the account of each of
the Principals for which it is acting (to the extent that any such Transaction
is allocable to the account of more than one Principal); (ii) the portion of any
individual Transaction allocable to each Principal shall be deemed a separate
Transaction under the Agreement; (iii) the margin maintenance obligations of
Buyer and Seller under Paragraph 4 of the Agreement shall be determined on a
Transaction-by-Transaction basis (unless the parties agree to determine such
obligations on a Principal-by-Principal basis); and (iv) Buyer's and Seller's
remedies under the Agreement upon the occurrence of an Event of Default shall be
determined as if Agent had entered into a separate Agreement with the other
party on behalf of each of its Principals.
(c) In the event that Agent and the other party elect to treat Transactions
under the Agreement as if they were transactions by a single Principal, the
parties agree that (i) Agent's notice under Paragraph 2(b) of this Annex IV need
only identify the names of its Principals but not the portion of each
Transaction allocable to each Principal's account; (ii) the margin maintenance
obligations of Buyer and Seller under Paragraph 4 of the Agreement shall,
subject to any greater requirement imposed by applicable law, be determined on
an aggregate basis for all Transactions entered into by Agent on behalf of any
Principal; and (iii) Buyer's and Seller's remedies upon the occurrence of an
Event of Default shall be determined as if all Principals were a single Seller
or Buyer, as the case may be.
(d) Notwithstanding any other provision of the Agreement (including, without
limitation, this Annex IV), the parties agree that any Transactions by Agent on
behalf of an employee benefit plan under ERISA shall be treated as Transactions
on behalf of separate Principals in accordance with Paragraph 4(b) of this Annex
IV (and all margin maintenance obligations of the parties shall be determined on
a Transaction-by-Transaction basis).
5. Interpretation of Terms. All references to "Seller" or "Buyer", as the case
may be, in the Agreement shall, subject to the provisions of this Annex IV
(including, among other provisions, the limitations on Agent's liability in
Paragraph 3 of this Annex IV), be construed to reflect that (i) each Principal
shall have, in connection with any Transaction or Transactions entered into by
Agent on its behalf, the rights, responsibilities, privileges and obligations of
a "Seller" or "Buyer", as the case may be, directly entering into such
Transaction or Transactions with the other party under the Agreement, and (ii)
Agent's Principal or Principals have designated Agent as their sole agent for
performance of Seller's obligations to Buyer or Buyer's obligations to Seller,
as the case may be, and for receipt of performance by Buyer of its obligations
to Seller or Seller of its obligations to Buyer, as the case may be, in
connection with any Transaction or Transactions under the Agreement (including,
among other things, as Agent for each Principal in connection with transfers of
Securities, cash or other property and as agent for giving and receiving all
notices under the Agreement). Both Agent and its Principal or Principals shall
be deemed "parties" to the Agreement and all references to a "party" or "either
party" in the Agreement shall be deemed revised accordingly (and any Act of
Insolvency with respect to Agent or any other Event of Default by Agent under
Paragraph 11 of the Agreement shall be deemed an Event of Default by Seller or
Buyer, as the case may be).
21
ANNEX IV.A
IDENTIFICATION OF PRINCIPALS
22
ANNEX V
MARGIN FOR FORWARD TRANSACTIONS
This Annex V forms a part of the Master Repurchase Agreement dated as of April
24, 2003 (the "Agreement") between Banc of America Securities LLC and The PMI
Group, Inc.Capitalized terms used but not defined in this Annex V shall have the
meanings ascribed to them in the Agreement.
1.Definitions. For purposes oft he Agreement and this Annex V, the following
terms shall have the following meanings:
"Forward Exposure", the amount of loss a party would incur upon canceling a
Forward Transaction and entering into a replacement transaction, determined in
accordance with market practice or as otherwise agreed by the parties;
"Forward Transaction", any Transaction agreed to by the parties as to which the
Purchase Date has not yet occurred;
"Net Forward Exposure", the aggregate amount of a party's Forward Exposure to
the other party under all Forward Transactions hereunder reduced by the
aggregate amount of any Forward Exposure of the other party to such party under
all Forward Transactions hereunder;
"Net Unsecured Forward Exposure", a party's Net Forward Exposure reduced by the
Market Value of any Forward Collateral transferred to such party (and not
returned) pursuant to Paragraph 2 of this Annex V.
2.Margin Maintenance.
(a) If at any time a party (the "In-the-Money Party") shall have a Net Unsecured
Forward Exposure to the other party (the "Out-of-the-Money Party") under one or
more Forward Transactions, the In-the-Money Party may by notice to the
Out-of-the-Money Party require the Out-of-the-Money Party to transfer to the
In-the-Money Party Securities or cash reasonably acceptable to the
In-the-Money-Party (together with any Income thereon and proceeds there of,
"Forward Collateral") having a Market Value sufficient to eliminate such Net
Unsecured Forward Exposure. The Out-of-the-Money Party may by notice to the
In-the-Money Party require the In-the-Money Party to transfer to the
Out-of-the-Money Party Forward Collateral having a Market Value that exceeds the
In-the-Money Party's Net Forward Exposure ("Excess Forward Collateral
Amount").The rights of the parties under this subparagraph shall be in addition
to their rights under subparagraphs (a) and (b) of Paragraph 4 and any other
provisions of the Agreement.
(b) The parties may agree, with respect to any or all Forward Transactions
hereunder, that the respective rights of the parties under subparagraph (a) of
this Paragraph may be exercised only where a Net Unsecured Forward Exposure or
Excess Forward Collateral Amount, as the case may be, exceeds a specified dollar
amount or other specified threshold for such Forward Transactions (which amount
or threshold shall be agreed to by the parties prior to entering into any such
Forward Transactions).
(c) The parties may agree, with respect to any or all Forward Transactions
hereunder, that the respective rights of the parties under subparagraph (a) of
this Paragraph to require the elimination of a Net Unsecured Forward Exposure or
Excess Forward Collateral Amount, as the case may be, may be exercised whenever
such a Net Unsecured Forward Exposure or Excess Forward Collateral Amount exists
with respect to any single Forward Transaction hereunder (calculated without
regard to any other Forward Transaction outstanding hereunder).
23
(d) The parties may agree, with respect to any or all Forward Transactions
hereunder, that (i) one party shall transfer to the other party Forward
Collateral having a Market Value equal to a specified dollar amount or other
specified threshold no later than the Margin Notice Deadline on the day such
Forward Transaction is entered into by the parties or (ii) one party shall not
be required to make any transfer otherwise required to be made under this
Paragraph if, after giving effect to such transfer, the Market Value of the
Forward Collateral held by such party would be less than a specified dollar
amount or other specified threshold (which amount or threshold shall be agreed
to by the parties prior to entering into any such Forward Transactions).
(e) If any notice is given by a party to the other under subparagraph (a) of
this Paragraph at or before the Margin Notice Deadline on any business day, the
party receiving such notice shall transfer Forward Collateral as provided in
such subparagraph no later than the close of business in the relevant market on
such business day. If any such notice is given after the Margin Notice Deadline,
the party receiving such notice shall transfer such Forward Collateral no later
than the close of business in the relevant market on the next business day.
(f) Upon the occurrence of the Purchase Date for any Forward Transaction and the
performance by the parties of their respective obligations to transfer cash and
Securities on such date, any Forward Collateral in respect of such Forward
Transaction, together with any Income thereon and proceeds thereof, shall be
transferred by the party holding such Forward Collateral to the other party;
provided, however, that neither party shall be required to transfer such Forward
Collateral to the other if such transfer would result in the creation of a Net
Unsecured Forward Exposure of the transferor.
(g) The Pledgor (as defined below) of Forward Collateral may, subject to
agreement with and acceptance by the Pledgee (as defined below) thereof,
substitute other Securities reasonably acceptable to the Pledgee for any
Securities Forward Collateral. Such substitution shall be made by transfer to
the Pledgee of such other Securities and transfer to the Pledgor of such
Securities Forward Collateral. After substitution, the substituted Securities
shall constitute Forward Collateral.
3. Security Interest.
(a) In addition to the rights granted to the parties under Paragraph 6 of the
Agreement, each party ("Pledgor") hereby pledges to the other party ("Pledgee")
as security for the performance of its obligations hereunder, and grants Pledgee
a security interest in and right of setoff against, any Forward Collateral and
any other cash, Securities or property, and all proceeds of any of the
foregoing, transferred by or on behalf of Pledgor to Pledgee or due from Pledgee
to Pledgor in connection with the Agreement and the Forward Transactions
hereunder.
(b) Unless otherwise agreed by the parties, a party to whom Forward Collateral
has been transferred shall have the right to engage in repurchase transactions
with Forward Collateral or otherwise sell, transfer, pledge or hypothecate
Forward Collateral, including in respect of loans or other extensions of credit
to such party that may be in amounts greater than the Forward Collateral such
party is entitled to as security for obligations hereunder, and that may extend
for periods of time longer than the periods during which such party is entitled
to Forward Collateral as security for obligations hereunder; provided, however,
that no such transaction shall relieve such party of its obligations to transfer
Forward Collateral pursuant to Paragraph 2 or 4 of this Annex V or Paragraph 11
of the Agreement.
4. Events of Default.
(a) In addition to the Events of Default set forth in Paragraph 11 of the
Agreement, it shall be an additional "Event of Default" if either party fails,
after one business day's notice, to perform any covenant or obligation required
to be performed by it under Paragraph 2 or any other provision of this Annex.
24
(b) In addition to the other rights of a nondefaulting party under Paragraphs 11
and 12 of the Agreement, if the nondefaulting party exercised or is deemed to
have exercised the option referred to in Paragraph 11(a) of the Agreement:
(i) The nondefaulting party, without prior notice to the defaulting
party, may (A) immediately sell, in a recognized market (or otherwise in a
commercially reasonable manner) at such price or prices as the nondefaulting
party may reasonably deem satisfactory, any or all Forward Collateral subject to
any or all Forward Transactions hereunder and apply the proceeds thereof to any
amounts owing by the defaulting party hereunder or (B) in its sole discretion
elect, in lieu of selling all or a portion of such Forward Collateral, to give
the defaulting party credit for such Forward Collateral in an amount equal to
the price therefor on such date, obtained from a generally recognized source or
the most recent closing bid quotation from such a source, against any amounts
owing by the defaulting party hereunder.
(ii) Any Forward Collateral held by the defaulting party, together with
any Income thereon and proceeds thereof, shall be immediately transferred by the
defaulting party to the nondefaulting party. The nondefaulting party may, at its
option (which option shall be deemed to have been exercised immediately upon the
occurrence of an Act of Insolvency), and without prior notice to the defaulting
party, (i) immediately purchase, in a recognized market (or otherwise in a
commercially reasonable manner) at such price or prices as the nondefaulting
party may reasonably deem satisfactory, securities ("Replacement Securities") of
the same class and amount as any Securities Forward Collateral that is not
delivered by the defaulting party to the nondefaulting party as required
hereunder or (ii) in its sole discretion elect, in lieu of purchasing
Replacement Securities, to be deemed to have purchased Replacement Securities at
the price therefor on such date, obtained from a generally recognized source or
the most recent closing offer quotation from such a source, whereupon the
defaulting party shall be liable for the price of such Replacement Securities
together with the amount of any cash Forward Collateral not delivered by the
defaulting party to the nondefaulting party as required hereunder.
Unless otherwise provided in Annex I, the parties acknowledge and agree that (1)
the Forward Collateral subject to any Forward Transaction hereunder are
instruments traded in a recognized market, (2) in the absence of a generally
recognized source for prices or bid quotations for any Forward Collateral, the
nondefaulting party may establish the source therefor in its sole discretion and
(3) all prices and bids shall be determined together with accrued Income (except
to the extent contrary to market practice with respect to the relevant Forward
Collateral).
5. No Waivers, Etc. Without limitation of the provisions of Paragraph 17 of the
Agreement, the failure to give a notice pursuant to subparagraph (a), (b), (c)
or (d) of Paragraph 2 of this Annex V will not constitute a waiver of any right
to do so at a later date.
25
ANNEX VI
BUY/SELL BACK TRANSACTIONS
This Annex VI forms a part of the Master Repurchase Agreement dated as of April
24, 2003 (the "Agreement") between Banc of America Securities LLC and The PMI
Group, Inc. Capitalized terms used but not defined in this Annex VI shall have
the meanings ascribed to them in the Agreement.
1. In the event of any conflict between the terms of this Annex VI and any other
term of the Agreement, the terms of this Annex VI shall prevail.
2. Each Transaction shall be identified at the time it is entered into and in
the relevant Confirmation as either a Repurchase Transaction or a Buy/Sell Back
Transaction.
3. In the case of a Buy/Sell Back Transaction, the Confirmation delivered in
accordance with Paragraph 3 of the Agreement may consist of a single document in
respect of both of the transfers of funds against Securities which together form
the Buy/Sell Back Transaction or separate Confirmations may be delivered in
respect of each such transfer.
4. Definitions. The following definitions shall apply to Buy/Sell Back
Transactions:
(a) "Accrued Interest", with respect to any Purchased Securities subject to a
Buy/Sell Back Transaction, unpaid Income that has accrued during the period from
(and including) the issue date or the last Income payment date (whichever is
later) in respect of such Purchased Securities to (but excluding) the date of
calculation. For these purposes unpaid Income shall be deemed to accrue on a
daily basis from (and including) the issue date or the last Income payment date
(as the case may be) to (but excluding) the next Income payment date or the
maturity date (whichever is earlier);
(b) "Sell Back Differential", with respect to any Buy/Sell Back Transaction as
of any date, the aggregate amount obtained by daily application of the Pricing
Rate for such Buy/Sell Back Transaction to the Purchase Price for such Buy/Sell
Back Transaction on a 360 day per year basis (unless otherwise agreed by the
parties for the Transaction) for the actual number of days during the period
commencing on (and including) the Purchase Date for such Buy/Sell Back
Transaction and ending on (but excluding) the date of determination;
(c) "Sell Back Price", with respect to any Buy/Sell Back Transaction:
(i) in relation to the date originally specified by the parties as the
Repurchase Date pursuant to Paragraph 2(q) of the Agreement, the price agreed by
the Parties in relation to such Buy/Sell Back Transaction, and
(ii) in any other case (including for the purposes of the application
of Paragraph 4 or Paragraph 11 of the Agreement), the product of the formula
(P + D) - (IR + C), where --
P = the Purchase Price.
D = the Sell Back Differential
IR = the amount of any Income in respect of the Purchased Securities paid by the
issuer on any date falling between the Purchase Date and the Repurchase Date
26
C = the aggregate amount obtained by daily application of the Pricing Rate for
such Buy/Sell Back Transaction to any such Income from (and including) the date
of payment by the issuer to (but excluding) the date of calculation.
5. When entering into a Buy/Sell Back Transaction the parties shall also agree
on the Sell Back Price and the Pricing Rate to apply in relation to such
Buy/Sell Back Transaction on the scheduled Repurchase Date. The parties shall
record the Pricing Rate in at least one Confirmation applicable to such Buy/Sell
Back Transaction.
6. Termination of a Buy/Sell Back Transaction shall be effected on the
Repurchase Date by transfer to Seller or its agent of Purchased Securities
against the payment by Seller of (i) in a case where the Repurchase Date is the
date originally agreed to by the parties pursuant to Paragraph 2(q) of the
Agreement, the Sell Back Price referred to in Paragraph 4(c)(i) of this Annex;
and (ii) in any other case, the Sell Back Price referred to in Paragraph
4(c)(ii) of this Annex.
7. For the avoidance of doubt, the parties acknowledge and agree that the
Purchase Price and the Sell Back Price in Buy/Sell Back Transactions shall
include Accrued Interest (except to the extent contrary to market practice with
respect to the Securities subject to such Buy/Sell Back Transaction, in which
event (i) an amount equal to the Purchase Price plus Accrued Interest to the
Purchase Date shall be paid to Seller on the Purchase Date and shall be used, in
lieu of the Purchase Price, for calculating the Sell Back Differential, (ii) an
amount equal to the Sell Back Price plus the amount of Accrued Interest to the
Repurchase Date shall be paid to Buyer on the Repurchase Date, and (iii) the
formula in Paragraph 4(c)(ii) of this Annex VI shall be replaced by the formula
"(P + AI + D) - (IR + C)", where "AI" equals Accrued Interest to the Purchase
Date).
8. Unless the parties agree in Annex I to the Agreement that a Buy/Sell Back
Transaction is not to be repriced, they shall at the time of repricing agree on
the Purchase Price, the Sell Back Price and the Pricing Rate applicable to such
Transaction.
9. Paragraph 5 of the Agreement shall not apply to Buy/Sell Back Transactions.
Seller agrees, on the date such Income is received, to pay to Buyer any Income
received by Seller in respect of Purchased Securities that is paid by the issuer
on any date falling between the Purchase Date and the Repurchase Date.
10. References to "Repurchase Price" throughout the Agreement shall be construed
as references to "Repurchase Price or the Sell Back Price, as the case may be."
11. In 11 of the Agreement, references to the "Repurchase Prices" shall be
construed as reference to "Repurchase Prices and Sell Back Prices."
27
ANNEX VII
TRANSACTIONS INVOLVING REGISTERED INVESTMENT COMPANIES
This Annex VII (including any Schedules hereto) forms a part of the Master
Repurchase Agreement dated as of April 24, 2003 (the "Agreement") between Banc
of America Securities LLC ("Counterparty") and each investment company
identified on Schedule VII.A hereto (as such schedule may be amended from time
to time) acting on Behalf of its respective series or portfolios identified on
such Schedule VII.A, or in the case of those investment companies for which no
separate series or portfolios are identified on such Schedule VII.A, acting for
and on behalf of itself(each such series, portfolio or investment company, as
the case may be, hereinafter referred to as a "Fund").In the event of any
conflict between the terms of this Annex VII and any other term of the
Agreement, the terms of this Annex VII shall prevail. Capitalized terms used but
not defined in this Annex VII shall have the meanings ascribed to them in the
Agreement.
1.Multiple Funds. For any Transaction in which a Fund is acting as Buyer (or
Seller, as the case may be),each reference in the Agreement and this Annex VII
to Buyer (or Seller, as the case may be) shall be deemed a reference solely to
the particular Fund to which such Transaction relates, as identified to Seller
(or Buyer, as the case may be) by the Fund and as may be specified in the
Confirmation therefor. In no circumstances shall the rights, obligations or
remedies of either party with respect to a particular Fund constitute a right,
obligation or remedy applicable to any other Fund. Specifically, and without
otherwise limiting the scope of this Paragraph:(a) the margin maintenance
obligations of Buyer and Seller specified in Paragraph 4 or any other provisions
of the Agreement and the single agreement provisions of Paragraph 12 of the
Agreement shall be applied based solely upon Transactions entered into by a
particular Fund,(b) Buyer's and Seller's remedies under the Agreement upon the
occurrence of an Event of Default shall be determined as if each Fund had
entered into a separate Agreement with Counterparty, and (c) Seller and Buyer
shall have no right to set off claims related to Transactions entered into by a
particular Fund against claims related to Transactions entered into by any other
Fund.
2.Margin Percentage. For any Transaction in which a Fund is acting as Buyer, the
Buyer's Margin Percentage shall always be equal to at least ___%,or such other
percentage as the parties hereto may from time to time mutually determine;
provided, that in no event shall such percentage be less than 100%.For any
Transaction in which a Fund is acting as Seller, the Buyer's Margin Percentage
shall be such percentage as the parties hereto may from time to time mutually
determine; provided, that in no event shall such percentage be less than 100%.
3.Confirmations. Unless otherwise agreed, Counterparty shall promptly issue a
Confirmation to the Fund pursuant to Paragraph 3 of the Agreement. Upon the
transfer of substituted or Additional Purchased Securities by either party,
Counterparty shall promptly provide notice to the Fund confirming such transfer.
▇.▇▇▇▇▇▇▇▇▇ Condition. Each party represents that it has delivered the following
financial information to the other party to the Agreement: in the case of a
party that is a registered broker-dealer, its most recent statements required to
be furnished to customers by Rule 17a- 5(c) under the 1934 Act; in the case of a
party that is a Fund, its most recent audited or unaudited financial statements
required to be furnished to its shareholders by Rule 30d-1 under the Investment
Company Act of 1940; in the case of any other party, its most recent audited or
unaudited statements of financial condition or other comparable information
concerning its financial condition.
Each party represents that the financial statements or information so delivered
fairly reflect its financial condition and, if applicable, its net capital
ratio, on the date as of which such financial statements or
28
information were prepared. Each party agrees that it will make available and
deliver to the other party, promptly upon request, all such financial statements
that subsequently are required to be delivered to its customers or shareholders
pursuant to Rule 17a-5(c) or Rule 30d-1, as the case may be, or, in the case of
a party that is neither a registered broker-dealer nor a Fund, all such
financial information that subsequently becomes available to the public.
Each Fund acknowledges and agrees that it has made an independent evaluation of
the creditworthiness of the other party that is required pursuant to the
Investment Company Act of 1940 or the regulations thereunder. Each Fund agrees
that its agreement to enter into each Transaction hereunder shall constitute an
acknowledgment and agreement that it has made such an evaluation.
5. Segregation of Purchased Securities. Unless otherwise agreed by the parties,
any transfer of Purchased Securities to a Fund shall be effected by delivery or
other transfer (in the manner agreed upon pursuant to Paragraph 7 of the
Agreement) to the custodian or subcustodian designated for such Fund in Schedule
VII.A hereto ("Custodian") for credit to the Fund's custodial account with such
Custodian. If the party effecting such transfer is the Fund's Custodian, such
party shall, unless otherwise directed by the Fund, (a) transfer and maintain
such Purchased Securities to and in the Fund's custodial account with such party
and (b) so indicate in a notice to the Fund.
29
SCHEDULE VII.A
SUPPLEMENTAL TERMS AND CONDITIONS OF TRANSACTIONS
INVOLVING REGISTERED INVESTMENT COMPANIES
This Schedule VII.A forms a part of Annex VII to the Master Repurchase Agreement
dated as of April 24, 2003 (the "Agreement") between Banc of America Securities
LLC and The PMI Group, Inc.Capitalized terms used but not defined in this
Schedule VII.A shall have the meanings ascribed to them in Annex VII.
1. This Agreement is entered into by or on behalf of the following Funds, and
unless otherwise indicated by the appropriate Fund in connection with a
Transaction ,the following Custodians are designated to receive transfers of
Purchased Securities on behalf of such Funds for credit to the appropriate
Fund's custodial account:
Name of Fund Custodian
------------ ---------
The PMI Group, Inc. Bank of New York DTC 901
▇▇▇ ▇▇▇▇▇▇ ▇▇. 600 ABA ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
[ ].Limitation of Liability. If the Fund is organized as a business trust (or a
series thereof), the parties agree as follows:[insert appropriate language
limiting liability of trustees, officers and others].
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone ▇▇▇.▇▇▇.▇▇▇▇
Fax ▇▇▇.▇▇▇.▇▇▇▇
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇
30