Amended and Restated Reverse Repurchase Agreement Confirmation between First State Bank and Citigroup Global Markets Inc.

Contract Categories: Business Finance › Repurchase Agreements
Summary

This agreement is between First State Bank and Citigroup Global Markets Inc. (CGMI) and amends a previous confirmation related to a reverse repurchase transaction. Under the agreement, First State Bank sells securities to CGMI with an agreement to repurchase them at a later date. The agreement sets out the purchase price, interest rates, margin requirements, and conditions under which CGMI can terminate the transaction. It also details events that would constitute a default, such as failure to maintain certain capital levels or provide required margin. The agreement is effective upon execution by both parties and remains in effect until May 25, 2017, unless terminated earlier under its terms.

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EX-10.11 3 dex1011.htm LETTER AGREEMENT BETWEEN FIRST STATE BANK AND CITIBANK GLOBAL MARKETS Letter Agreement between First State Bank and Citibank Global Markets

Exhibit 10.11

390 Greenwich Street – 4th floor

New York, New York 10013

212 ###-###-####

April 15, 2009

THE PURPOSE OF THIS LETTER AGREEMENT (THIS “CONFIRMATION”) IS TO AMEND AND RESTATE THAT CONFIRM DATED MAY 24, 2007 THAT SETS FORTH THE TERMS AND CONDITIONS OF THE TRANSACTION BETWEEN CITIGROUP GLOBAL MARKETS INC. (“CGMI”) AND FIRST STATE BANK (“COUNTERPARTY”) ON THE TRADE DATE SET FORTH BELOW (THE “ORIGINAL CONFIRM”). CGMI AND COUNTERPARTY AGREE THAT THE ORIGINAL CONFIRM SHALL BE AMENDED AND RESTATED TO READ AS FOLLOWS:

COUNTERPARTY AND CGMI ARE PARTIES TO THE MASTER REPURCHASE AGREEMENT DATED AS OF MAY 23, 2007 (AS AMENDED, SUPPLEMENTED, OR OTHERWISE MODIFIED FROM TIME TO TIME, OR ANY MASTER REPURCHASE AGREEMENT ENTERED INTO WHICH MAY BE DEEMED TO SUPERCEDE THE AFORMENTIONED AGREEMENT, THE “AGREEMENT”), AND THIS CONFIRMATION SHALL SUPPLEMENT, FORM A PART OF, AND BE SUBJECT TO, SUCH AGREEMENT UPON THE EXECUTION AND DELIVERY THEREOF BY BOTH PARTIES, AND ALL PROVISIONS CONTAINED OR INCORPORATED BY REFERENCE IN SUCH AGREEMENT SHALL GOVERN THIS TRANSACTION EXCEPT AS EXPRESSLY MODIFIED HEREIN. IN THE EVENT OF ANY INCONSISTENCY BETWEEN THIS CONFIRMATION AND THE AGREEMENT, THIS CONFIRMATION WILL GOVERN. TERMS DEFINED IN THE AGREEMENT AND USED BUT NOT OTHERWISE DEFINED IN THIS CONFIRMATION SHALL HAVE THE SAME MEANING AS IN THE AGREEMENT.

 

TRANSACTION:    REVERSE REPURCHASE
SELLER:    COUNTERPARTY
BUYER:    CGMI
PURCHASED SECURITIES:    AGENCY PASSTHROUGHS AND AGENCY DEBENTURES
PURCHASE DATE:    MAY 25, 2007
REPURCHASE DATE:    MAY 25, 2017
*PRICING RATE:    A) FROM, AND INCLUDING, THE PURCHASE DATE, UP TO, BUT NOT INCLUDING, MAY 25, 2009, THE PRICING RATE SHALL BE 3 MONTH LIBOR MINUS 100 BASIS POINTS PER ANNUM; PROVIDED THAT, SUCH PRICING RATE SHALL NOT BE LESS THAN 0.00%; AND
   (B) FROM, AND INCLUDING, MAY 25, 2009, UP TO, AND INCLUDING, THE REPURCHASE DATE, THE PRICING RATE SHALL BE 4.95%.
INITIAL MARGIN PERCENTAGE:    10% HAIR-CUT
PURCHASE PRICE:    USD $5,000,000.00
   PURCHASE PRICE TO REMAIN CONSTANT DURING TERM OF TRANSACTION UNLESS OTHERWISE AGREED BY THE PARTIES.
LOCK OUT DATE:    MAY 25, 2009
SELLER PAYMENTS:    SELLER SHALL PAY THE BUYER INTEREST QUARTERLY, ON THE 15 TH OF EVERY AUGUST, NOVEMBER, FEBRUARY, AND MAY (OR IF SUCH DATE IS NOT A NEW YORK AND LONDON BUSINESS DAY, THEN THE FOLLOWING DAY THAT IS A NEW YORK AND LONDON

   BUSINESS DAY UNLESS THAT DAY FALLS IN THE NEXT CALENDAR MONTH, IN WHICH CASE THAT DATE WILL BE THE FIRST PRECEDING DAY THAT IS A BUSINESS DAY), COMMENCING AUGUST 25, 2007, ON AN ACTUAL/360 BASIS.
CALCULATION AGENT:    CGMI
CALL OPTION:    CGMI SHALL HAVE THE RIGHT IN ITS OWN DISCRETION TO TERMINATE THE TRANSACTION ON THE LOCK OUT DATE OR ANY QUARTERLY PAYMENT DATE THEREAFTER WITH TWO NEW YORK BUSINESS DAYS PRIOR NOTICE BY TELEPHONE OR FAX.
MARGIN:    MARK TO MARKET DAILY.
   MARGIN REQUIREMENTS MAY BE SATISFIED BY DELIVERY OF CASH OR ADDITIONAL PURCHASE SECURITIES, OR AS OTHERWISE AGREED BY THE PARTIES.
   UPON THE PROVISION OF SEVEN (7) DAY’S NOTICE, BUYER MAY REQUIRE ADDITIONAL MARGIN (AS DETERMINED BY BUYER, IN ITS ABSOLUTE DISCRETION) FROM SELLER WITH RESPECT TO ANY UNDERLYING INTEREST RATE EXPOSURE FOR THIS TRANSACTION. UPON RECEIPT OF SUCH NOTICE, SELLER SHALL TRANSFER CASH OR ADDITIONAL PURCHASED SECURITIES (AS DEFINED IN THE AGREEMENT) NO LATER THAN THE CLOSE OF BUSINESS IN THE RELEVANT MARKET ON THE SEVENTH DAY FOLLOWING RECEIPT OF NOTICE (OR IF SUCH DAY IS NOT A BUSINESS DAY, THEN THE FOLLOWING BUSINESS DAY).
TERMINATION EVENT:    (A) IF SELLER FAILS TO PROVIDE ADDITIONAL MARGIN FOR ANY INTEREST RATE EXPOSURE WITHIN THE SEVEN (7) DAYS OF BUYER’S NOTICE (AS MORE SPECIFICALLY DESCRIBED ABOVE), THEN SUCH FAILURE SHALL BE AN EVENT OF DEFAULT UNDER THE AGREEMENT, WITH SELLER BEING THE DEFAULTING PARTY.
   (B) IT SHALL CONSTITUTE AN ADDITIONAL EVENT OF DEFAULT UNDER THE AGREEMENT (AND BUYER SHALL HAVE THE RIGHTS OF THE NON-DEFAULTING PARTY SET FORTH IN PARAGRAPH 11 OF THE AGREEMENT) IF ANY OF THE FOLLOWING OCCUR WITH RESPECT TO SELLER:
   (1) SELLER CEASES TO BE “ADEQUATELY CAPITALIZED” AT ANY TIME BEFORE SEPTEMBER 30, 2009; OR
   (2) SELLER FAILS TO REGAIN AND MAINTAIN “WELL CAPITALIZED” STATUS ON AND AFTER SEPTEMBER 30, 2009; OR
   (3) SELLER IS ISSUED A “CEASE AND DESIST ORDER” AT ANY TIME BY ITS FEDERAL OR STATE REGULATORS; OR

   (4) SELLER FAILS TO DELIVER (BY APRIL 16, 2009) ADDITIONAL CASH MARGIN SUCH THAT THE TOTAL AMOUNT OF EXCESS CASH MARGIN IS EQUAL TO $500,000 (SUCH AMOUNT SHALL BE IN ADDITION TO ANY MARGIN REQUIRED TO BE DELIVERED UNDER THE “MARGIN” SECTION HEREUNDER OR OTHERWISE UNDER THE AGREEMENT) (THE “EXCESS MARGIN”); OR
   (5) SELLER FAILS AT ANY TIME TO MAINTAIN EXCESS MARGIN EQUAL TO $500,000.
   “ADEQUATELY CAPITALIZED” AND “WELL CAPITALIZED” SHALL HAVE THE MEANINGS SET FORTH UNDER 12 U.S.C., AS DETERMINED BY SELLER’S APPROPRIATE FEDERAL BANKING AGENCY, BUT IN NO EVENT LESS THAN THE AMOUNT REQUIRED IN A CAPITAL DIRECTIVE OR OTHER CAPITAL REQUIREMENT BY SELLER’S APPROPRIATE FEDERAL BANKING AGENCY.”
   SELLER COVENANTS THAT IT SHALL NOTIFY BUYER AS PROMPTLY AS PRACTICABLE UPON THE OCCURRENCE OF THE EVENTS IN SUBCLAUSES (1) (2) AND (3) OF THIS CLAUSE (B).

* FOR PURPOSES OF THE AGREEMENT, “LIBOR” AS REFERENCED IN THIS LETTER SHALL MEAN THE RATE OF INTEREST FOR A PERIOD EQUAL TO THE RATE WHICH APPEARS ON BRIDGE TELERATE SERVICE (FORMERLY DOW JONES MARKET SERVICE) PAGE 3750 (OR A PAGE PUBLISHED BY A SUCCESSOR TO BRIDGE TELERATE SERVICE) AS OF 11:00 A.M. LONDON TIME ON THE DAY THAT IS TWO LONDON BANKING DAYS PRECEDING A SELLER PAYMENT DATE. SUCH RATE SHALL HAVE A RESET FREQUENCY ON A QUARTERLY BASIS. IF SUCH RATE IS NOT AVAILABLE, THEN THE RATE SHALL BE DETERMINED BY THE CALCULATION AGENT IN GOOD FAITH. A LONDON BANKING DAY IS ANY DAY ON WHICH COMMERCIAL BANKS ARE OPEN FOR GENERAL BUSINESS, INCLUDING DEALINGS IN FOREIGN EXCHANGE AND FOREIGN CURRENCY DEPOSITS, IN LONDON.

CGMI HAS SENT YOU A SYSTEM-GENERAGED CONFIRMATION IN ADDITION TO THIS CONFIRMATION. IN THE EVENT OF ANY INCONSISTENCY BETWEEN THIS CONFIMATION AND THE SYSTEM-GENERATED CONFIRMATION, ABSENT MANIFEST ERROR THE TERMS OF THIS CONFIRMATION SHALL PREVAIL. FROM AND AFTER THE DATE HEREOF, ALL REFERENCES IN THE AGREEMENT OR OTHERWISE TO THE ORIGINAL CONFIRMATION SHALL BE DEEMED TO BE REFERENCES TO THE ORIGINAL CONFIRMATION AS AMENDED AND RESTATED HEREBY.

PLEASE EXECUTE THIS CONFIRMATION BELOW AND RETURN TO ARLENE HAMILTON AT 388 GREENWICH STREET, 17TH FL, NEW YORK, NY 10013, TO SIGNIFY YOUR AGREEMENT TO THE ABOVE TERMS.

THANK YOU.

 

CITIGROUP GLOBAL MARKETS INC.

 

NAME:   STEPHEN MALEKIAN
TITLE:   MANAGING DIRECTOR

AGREED AND ACCEPTED:

FIRST STATE BANK

 

BY:  

 

NAME:  
TITLE: