Bank in advance or if Bank is unable to invest any or all of the additional funds in repurchase agreements, Customer agrees that Bank may be required to withhold or withdraw any interest that may have been previously paid.
(ii) Confirmations. After each repurchase transaction, Bank will deliver to Customer via mail, fax, email, or other electronic means, including without limitation, posting to a password- protected website) a confirmation (“Confirmation”) describing any information required by applicable law and any other terms and information which Bank may include at its discretion. The information contained in the Confirmation shall be considered true and correct and conclusively binding unless Customer notifies Bank of any error therein within three (3) B usiness Days after the date the Confirmation is mailed, faxed, emailed, personally delivered to Customer or sent via other electronic means, including without limitation, posting to a password- protected website. If Customer elects to receive Confirmations electronically, Customer acknowledges and agrees that Customer will no longer receive Confirmations by mail . If Customer desires to discontinue receiving Confirmations electronically, Customer shall provide written notice to Bank, whereupon Bank shall resume delivering mailed Confirmations.
b. Money Market Mutual Funds (“Money Fund”).
(i) Terms. If Customer chooses the Money Fund sweep option, Excess Funds will be invested in the First American Money Market Fund offered for this Service. Excess Funds will be swept from the DDA to a pooled deposit account held in Bank’s name. On the next Business Day, the Excess Funds from the pooled Deposit Account will be swept to the Money Fund to purchase shares. Customer’s shares in the Money Fund will be held in Bank’s name in an omnibus investment account, as agent on behalf of all Bank customers invested in the Money Fund. Customer grants to Bank a consensual possessory
security interest in the omnibus investment account and all accounts maintained with Bank to secure payment of all of Customer’s obli gations under this Service. Customer will accrue dividends beginning on the Business Day the shares are purchased.
Dividends accrue daily and are paid monthly on the last Business Day of the month. No dividends will accrue on the Business Day the shares are sold . If, for any reason, Money Fund shares are not available on any given Business Day, all Excess Funds will not be swept to the Money Fund and no dividends will accrue until shares become available for purchase. Funds in the DDA and in the pooled deposit account held at Bank will be treated as deposits and will be insured up to the applicable FDIC insurance limits. The Money Fund sweep option is only available to entities having a presence in the United States, which may be demonstrated by a U.S. mailing address and U.S. taxpayer identification number in Bank’s records. (ii) Customer Acknowledgments . BY ACCEPTING THIS SERVICE,
CUSTOMER HEREBY ACKNOWLEDGES THAT IT HAS
RECEIVED A COPY OF THE PROSPECTUS OF THE
DESIGNATED FUND. THIS PROSPECTUS FORMS PART OF THE
IMPLEMENTATION DOCUMENTS AND WILL CONTROL OVER
THE IMPLEMENTATION DOCUMENTS WITH RESPECT TO
MONEY FUND SHARES . CUSTOMER FURTHER
ACKNOWLEDGES THAT BANK IS NOT PROVIDING ANY
INVESTMENT ADVICE HEREIN TO CUSTOMER AND MAKES NO
REPRESENTATION OR WARRANTY AS TO THE SUITABILITY OR
SAFETY OF THE INVESTMENTS IN ANY FUND OFFERED
UNDER THIS SERVICE.
(iii) Money Fund Disclosures. BANK AFFILIATES SERVE AS
INVESTMENT ADVISOR, ADMINISTRATOR, CUSTODIAN,
DISTRIBUTOR, TRANSFER AGENT, AND SECURITIES LENDING
AGENT AND RECEIVE COMPENSATION FOR SUCH SERVICES
AS DISCLOSED IN THE PROSPECTUS FOR THE DESIGNATED
FUND. ALTHOUGH MONEY FUNDS SEEK TO PRESERVE THE
VALUE OF CUSTOMER’S INVESTMENT AT $1.00 PER SHARE, IT
IS POSSIBLE TO LOSE MONEY BY INVESTING IN A MONEY
FUND.
(iv) THIS NOTICE IS GIVEN PURSUANT TO APPLICABLE LAW: IN
THE UNLIKELY EVENT OF BANK FAILURE, CUSTOMER WILL
MAINTAIN ITS INTEREST IN THE MONEY FUND SHARES
FOLLOWING A COMPLETED MONEY FUND SWEEP . THE
VALUE OF THE SHARES IN THE MONEY FUND OMNIBUS
INVESTMENT ACCOUNT WILL NOT BE DEEMED “DEPOSITS”
UNDER RULES PROMULGATED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION (“FDIC”) AND WILL NOT BE
INSURED BY THE FDIC. ON THE DAY OF FAILURE, HOWEVER,
THE FDIC MAY DISALLOW THAT DAY’S SWEEP TO OCCUR. IF
THE SWEEP IS DISALLOWED, ANY EXCESS FUNDS THAT
WOULD HAVE NORMALLY SWEPT ON THAT BUSINESS DAY
WILL REMAIN IN THE DDA AND WILL BE TREATED AS
DEPOSITS. THOSE DEPOSITS WILL BE INSURED UP TO THE
APPLICABLE FDIC INSURANCE LIMITS.
c. Commercial Paper.
(i) Terms. If Customer chooses the Commercial Paper sweep option, Excess Funds shall be invested in an unsecured short -term promissory note issued by U.S. Bank National Association and held in book entry. At the end of each Business Day, Excess Funds are automatically transferred from Customers' DDA into a sweep account that invests overnight in U.S. Bank National Association Commercial Paper. The minimum amount that may be swept pursuant to this option is $1,000. Excess Funds less than $1,000 on a given Business Day will not be invested. The minimum amount may be increased if requested by Customer and agreed to by Bank.
(ii) THIS NOTICE IS GIVEN PURSUANT TO APPLICABLE LAW: IN
THE UNLIKELY EVENT OF BANK FAILURE, THE BALANCES
RESIDING IN CUSTOMER’S COMMERCIAL PAPER SWEEP
ACCOUNT AT BANK WILL NOT BE DEEMED “DEPOSITS”
UNDER RULES PROMULGATED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION (“FDIC”) AND WILL NOT BE
INSURED BY THE FDIC. IN THE UNLIKELY EVENT OF BANK
FAILURE, CUSTOMER’S CLAIM FOR FUNDS THAT WERE
SWEPT INTO THE COMMERCIAL PAPER SWEEP ACCOUNT
WILL BE TREATED AS UNSECURED GENERAL CREDITOR
CLAIMS.
d. Business Savings Sweep. If Customer chooses the Business Savings Sweep option, collected funds with a minimum of $500 in excess of a Peg Balance shall be swept from Customer’s DDA into a Business Savings Sweep Account (the “Savings Account”). The Peg Balance shall be set at a minimum of $10,000 unless otherwise agreed to by Bank. Funds remain in the Savings Account until Customer’s DDA reaches a negative balance, whereupon available funds are swept back into Customer’s DDA in an amount necessary to return the DDA balance to the Peg Balance.
O. MASTER REPURCHASE AGREEMENT (MRA)
THIS NOTICE IS GIVEN PURSUANT TO APPLICABLE LAW: ALL
FUNDS IN THE REPURCHASE AGREEMENT SWEEP WILL NOT BE
DEEMED “DEPOSITS” AND WILL NOT BE INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION (“FDIC”) . IN THE
UNLIKELY EVENT OF BANK FAILURE, CUSTOMER WILL MAINTAIN
ITS OWNERSHIP OR SECURITY INTEREST IN THE SECURITIES
THAT ARE SUBJECT TO THE REPURCHASE AGREEMENT AND,
UPON LIQUIDATION, WILL RECEIVE THE VALUE OF THE
SECURITIES UP TO THE AMOUNT OF FUNDS SWEPT FROM THE
ACCOUNT.
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 MRA and if applicable, Annex III and the Amendment to Annex III (International Transactions) of the SIFMA Master Repurchase Agreement (1996 version).
2. Definitions.
a. “Act of Insolvency” means, 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” means Securities provided by Seller to Buyer pursuant to Paragraph 4(a) hereof;
c. “Buyer’s Margin Amount” means, 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” means, 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” is given the meaning specified in Paragraph 3(b) hereof; f. “Income” means, with respect to any Security at any time, any principal thereof and all interest, dividends or other distributions thereon; g. “Margin Deficit” is given the meaning specified in Paragraph 4(a) hereof; h. “Margin Excess” is given the meaning specified in Paragraph 4(b) hereof;
i. “Margin Notice Deadline” means the time agreed to by the parties in the relevant Confirmation, 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” means, 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” means, 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 Sel ler to Buyer with respect to such Transaction);
l. “Pricing Rate” means the per annum percentage rate for determination of the Price Differential;
m. “Prime Rate” means 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” means the date on which Purchased Securities are to be transferred by Seller to Buyer;
o. “Purchase Price” means (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” means the Securities transferred by Seller to Buyer in a Transaction hereunder . 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” means 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” means 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 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” means, 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” means, 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 MRA. The
Confirmation, together with this MRA, 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 MRA, this MRA 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 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 MRA).
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 ter mination 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. In all Transactions, Seller is acting as agent for Buyer.
In the event of Seller’s default under the MRA, Buyer has the right to either:
(i) direct Seller to sell the Securities or (ii) sell the Securities, and, following any sale pursuant to this sentence, apply the proceeds in satisfaction of Seller’s liability hereunder.
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 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 MRA . 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 MRA 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 MRA and therefore must keep Buyer’s securities segregated at all times, unless in this MRA 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 may be subject to liens granted by Seller to third parties and may be used by Seller for deliveries on other securities transactions . Whenever the securities are commingled, Seller’s ability to re-segregate substitute securities for Buyer will be subject to Seller’s ability to satisfy any lien or to obtain substitute securities.
9. Substitution. Seller may not substitute other Securities for any Purchased Securities.
10. Representations. Each of Buyer and Seller represents and warrants to the other that (i) it is duly authorized to execute and deliver this MRA,
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 will engage in such Transactions as principal (or, if agreed in writing in advance of any Transaction by the other party hereto, as agent for a disclosed principal), (iii) the person signing this MRA 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 MRA and the Transactions hereunder and such authorizations are in full force and effect , and (v) the execution, delivery and performance of this MRA and the Transactions hereunder will not violate any law, ordinance, charter, bylaw 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.
11. Events 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 Days' 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 non- defaulting 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 non-defaulting 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 non-defaulting 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 therefore 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 non-defaulting 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 non-defaulting 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 non- defaulting 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 non-defaulting party, and the defaulting party shall deliver all such Purchased Securities to the non- defaulting party.
d. If the non-defaulting party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Paragraph, the non-defaulting 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 non- defaulting 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 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 therefore 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 non- defaulting 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 non-defaulting 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 therefore on such date, obtained from a generally recognized source or the most recent closing offer quotation from such a source. 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 non- defaulting party may establish the source therefore 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 non- defaulting party for any excess of the price paid (or deemed paid) by the non- defaulting 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 non- defaulting party of the option referred to in subparagraph (a) of this Paragraph.
g. The defaulting party shall be liable to the non-defaulting party for (i) the amount of all reasonable legal or other expenses incurred by the non-defaulting 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 exp ense 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 non-defaulting 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 non-defaulting party’s rights hereunder. Interest on any sum payable by the defaulting party to the non-defaulting 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 non-defaulting party shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law.
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 by Bank, 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 MRA 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. Nonassignability; Termination.
a. The rights and obligations of the parties under this MRA 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 MRA and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. This MRA may be terminated by either party upon giving written notice to the other, except that this MRA 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 MRA shall be governed by the laws of the State of New York without giving effect to the conflict of law principles thereof.
17. No 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 MRA 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 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 S eller 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. I ntent.
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 MRA 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).
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.
P. ZERO BALANCE ACCOUNT (ZBA) SERVICES
1. General. ZBA Services allow Customer to concentrate balances across multiple checking accounts consisting of a lead (“Master Account”) and one or more sub-accounts funded by the Master Account. At the close of each Business Day, at a time determined by Bank, Bank shall transfer available or collected balances between the Master Account and sub- account(s) via t wo-way automatic transfers to ensure that the sub- accounts maintain a zero balance or a balance otherwise designated by Customer (collectively, the "Established Balance") . In addition, one -way transfers can be made from: (i) the Master Account to the sub-account; (ii) the sub-account to the Master Account; or (iii) the Master Account to the sub-account with deposits remaining in the sub-account.
Customer agrees to maintain sufficient available funds in the Master Account to cover the aggregate debits made to the sub-accounts to enable the sub-accounts to be maintained at the Established Balance at the close of each Business Day . If the available balance in the Master Account is insufficient to restore the balance in a sub- account to the Established Balance, a lesser amount may be transferred to the sub-account in Bank’s sole discretion. If there are multiple sub-accounts and insufficient funds in the Master Account to fund all sub- accounts, Bank may, in its sole discretion, determine which sub- accounts to fund and to what extent . In addition, Bank may, in its sole discretion, either (i) reject any checks or other debit items drawn on any sub-account or (ii) accept any checks or other debit items drawn on a sub-account, even if such acceptance would bring the sub- account below the E stablished Balance . If Bank must reverse a provisional credit and such reversal causes the Master Account to have a negative balance, Customer agrees that Bank may reverse the transfer of any funds, in whole or in part, between the sub-account and the Master Account, and Bank may additionally reject any items not finally paid on the sub-account. Bank reserves the right to suspend or terminate ZBA Services without prior notice to Customer.
2. Focal Point Plus. If selected by Customer, the Focal Point Plus Service allows Customer to: (i) concentrate balances across multiple checking accounts consisting of a Master Account with one or more subaccounts (“Shadow Accounts”), which are all funded by the Master Account; and (ii) track transactions with location reporting. Two-way automatic transfers ensure the Shadow Accounts maintain a zero balance. One-way transfers can also be made from the Shadow Accounts to the Master Account .
Customer acknowledges and agrees the Shadow Accounts are deemed to be part of the Master Account for purposes of this Agreement and cannot be used to process transactions independent of the Master Account.
Q. SINGLEPOINT® INTERNATIONAL REQUEST FOR TRANSFER
SERVICES
1. Introduction. The U.S. Bank SinglePoint ® International Request for Transfer Services will enable domestic or foreign organizations doing cross-border business to initiate or execute payment or transfer instructions from, or between, Customer accounts held at Bank and foreign banks . Prior to implementation of this Service, the Forwarding Bank and the Executing Bank must enter into a Bilateral Agreement referencing their mutual accession to the SWIFT Request for Transfer (MT101) Service Level or other relevant Service Level . Bank acts in the capacity of the Forwarding Bank with respect to all Requests for Transfer.
This Service or other similar remote initiation Services offered by Bank are governed by this Agreement, the Bilateral Agreement, the Interbank Agreement, and all other applicable federal, state, and local laws and regulations. Unless otherwise defined, all capitalized terms shall have the meanings set forth in the Interbank Agreement and Bilateral Agreement.
2. Definitions.
a. “Beneficiary” means the person or entity designated in the Originator’s instruction to receive funds.
b. “Beneficiary Bank” means the financial institution crediting the funds to the Beneficiary’s account.
c. “Execute” or “Execution” means the debiting of the Originator’s account by the Executing Bank pursuant to a Request for Transfer from the Forwarding Bank and the forwarding of the credit transfer to the Beneficiary Bank.
d. “Executing Bank” means the financial institution that receives and Executes the Request for Transfer from the Forwarding Bank and then forwards the credit transfer to the Beneficiary Bank.
e. “Forwarding Bank” means a financial institution receiving a Request for Transfer from the Instructing Party and forwarding it to the Executing Bank. f. “Instructing Party” means a customer of the Forwarding Bank, which could be an office, department or division of the Originator, or a separate legal entity, authorized by the Originator to initiate a Request for Transfer to the Forwarding Bank.
g. “Interbank Agreement” means the Service Level Master Agreement (SLMA) and Request for Transfer Service Level Rules and Regulations (MT 101) or other relevant Service Levels offered by Society for Worldwide Interbank Financial Telecommunication (SWIFT), to which the Forwarding Bank and the Executing Bank are a party.
h. “Originator” means the customer of the Executing Bank whose account is to be debited pursuant to a Request for Transfer.
i. “Request for Transfer” means a transfer instruction received by the Forwarding Bank from the Instructing Party for onward transmission as an MT101 to the Executing Bank, and which is capable of being processed under an Interbank Agreement.
3. Bank as the Forwarding Bank . If Customer selects Bank as the Forwarding Bank, Customer is deemed to be the Instructing Party for all Requests for Transfer. Customer will appoint those individuals authorized to instruct Bank regarding Request for Transfer Services (“Authorized Users”) via the relevant Implementation Documents and System Administrator designations establishing the Authorized Users’ access authority and transaction limits. Bank may rely on any such authorization until it has received Customer’s written notice of revocation and has had a reasonable opportunity to act thereon. Customer and its Authorized Users and other Agents shall maintain the highest possible level of confidentiality with regard to PINs or other security devices and will take all steps necessary to prevent access to them by unauthorized persons. Customer shall be responsible for the accuracy, completeness and timeliness of all Requests for Transfer sent to Bank. Requests for Transfer received after Bank’s established deadline or on any non- Business Day, including any Saturday, Sunday, holiday, or any day that Bank’s wire department is not open, will be considered received on the next Business Day . Customer authorizes Bank to process and forward to the Executing Bank all Requests for Transfer received in accordance with any established security procedures . Notwithstanding the foregoing, Bank does not
assume any responsibility for the Execution of the Request for Transfer by the Executing Bank and completion of the credit transfer to the Beneficiary Bank. Customer understands and acknowledges that any applicable callback notifications on PIN limits established by Customer with Bank for wire transfer dollar thresholds do not apply to Requests for Transfer .
Customer agrees not to initiate a Request for Transfer in violation of applicable federal, state, or local law or regulations.
4. Security Procedures . Customer and Bank shall comply with any established security procedures with respect to the initiation and forwarding of any Request for Transfer, including but not limited to, the SWIFT authentication procedures identified in the SWIFT User Handbook, as amended from time to time. Customer agrees that any such security procedures shall be deemed commercially reasonable . Customer understands that the security procedures are not intended for the purpose of detecting errors in the transmission or content of a Request for Transfer controlled by Customer. Customer agrees to be bound by any Request for Transfer sent in the name of Customer that is processed by Bank in compliance with the agreed security procedures whether or not authorized.
5. Amendment or Cancellation . Customer does not have the right to reverse, adjust or revoke any Request for Transfer after it has been received by Bank; provided, however, that Bank will make a reasonable effort to act on such a request by Customer. With respect to a Request for Transfer that has already been Executed, Bank may intervene at Customer’s request, to request that the Beneficiary Bank return all or a portion of the funds . Customer understands that the Beneficiary Bank is under no legal obligation to comply with this request.
6. Rejection/Repair. Bank may reject a Request for Transfer if: (i) it is not initiated or transmitted in accordance with the applicable security procedures; (ii) there is any inconsistency between a Request for Transfer and information previously supplied to Bank; or (iii) Bank has other reasonable grounds not to honor the Request for Transfer . Bank shall have no obligation to repair any Request for Transfer it receives but may, in its absolute discretion, endeavor to repair any Request for Transfer .
Bank shall notify Customer of any rejections or suspensions.
7. Limits on Bank’s Liability . Bank sends outgoing and receives incoming Requests for Transfer using SWIFT . Bank shall not be responsible for the acts or omissions of Customer, the SWIFT network, other financial institution, or any other person. Payment to a foreign country is subject to the laws of the foreign country involved. Bank assumes no liability for foreign exchange risk, delays, non- delivery, or other events resulting from causes beyond Bank’s control.
R. SWIFT-R
ELATED SERVICES
1. Introduction. The SWIFT-Related Services (the “Service”) will enable organizations with domestic or cross -border activity to initiate or execute payment or transfer instructions from Customer’s Bank account to another account held at Bank or a third -party bank, and to receive account information and payment notifications from Bank via products and services offered by the Society for Worldwide Interbank Financial Telecommunication ("SWIFT"). This Service or other similar services offered by Bank are governed by this Agreement, applicable SWIFT agreements, rules, and terms and conditions (collectively, "SWIFT Terms"), and all other applicable federal, state, and local laws and regulations. Unless otherwise defined, all capitalized terms shall have the meanings set forth in the SWIFT Terms.
2. Definitions.
a. “Account Reporting” means cash management notifications, transaction and account information provided by Bank to Customer.
b. “Beneficiary” means the person or entity (including Customer) designated in Customer’s Transfer Request to receive funds. c. “Beneficiary Bank” means the financial institution (including Bank) that credits the funds to the Beneficiary’s account.
d. “Execute” or “Execution” means the debiting of Customer’s account by Bank and the forwarding of the credit transfer to the Beneficiary Bank pursuant to a Transfer Request from Customer.
e. “FileAct” means a file transfer service that utilizes the SWIFT infrastructure to enable the transfer of data in various file formats. f. “Transfer Request” means a MT103 or other SWIFT transfer instruction sent by Customer to B ank for onward processing. If SWIFT -Related services are accessed using SCORE, “Transfer Request” means a MT101 Request for Transfer instruction.
g. “SCORE” means the Standardized Corporate Environment, a SWIFT direct access corporate service which offers Customer a secure connection and standardized environment to manage Customer’s payments and payment information.
3. Security Procedures. Customer shall comply with all security procedures established by Bank for the SWIFT -Related Services , including but not limited to, the SWIFT authentication procedures identified in the SWIFT User Handbook, as amended from time to time. Customer agrees that any such security procedures shall be deemed commercially reasonable. Customer understands that the security procedures are not intended for the purpose of detecting errors in the transmission or content of any Account Reporting, or of a Transfer Request controlled by Customer. Customer is solely responsible for maintaining its own internal security procedures to prevent errors or unauthorized access to Customer’s computer systems by unauthorized employees, vendors, or customers. Customer agrees to be bound by any Transfer Request that appears to have been sent by Customer that is processed by Bank in compliance with the agreed security procedures, whether or not authorized. Bank will use reasonable care in transmitting the Account Reporting but assumes no responsibility for the accuracy or timeliness of the information supplied by other financial institutions, the SWIFT network.
Customer agrees to immediately notify and fully cooperate with Bank if it suspects or becomes aware of any breach or compromise of the security of the SWIFT-Related Services.
4. Transmission and Processing of Transfer Requests. Customer authorizes Bank to Execute all Transfer Requests delivered to Bank by Customer in compliance with the terms of this Agreement and any established security procedures. Customer shall adhere to formatting and processing requirements established by Bank. Customer authorizes Bank to use whatever means Bank, in good faith, deems reasonable under the circumstances to execute each Transfer Request, including selection of a funds transfer system, routing and means of transmission. Customer shall be responsible for the accuracy, completeness and timeliness of all Transfer Requests sent to Bank for Execution. Transfer Requests with settlement dates of more than thirty (30) calendar days from receipt may not be processed unless prior arrangements have been made. Customer is solely responsible for initiating Transfer Requests sufficiently in advance to meet Customer’s contractual obligations to its vendors and/or customers. Bank shall not be responsible for any late payment or finance charges that may result from Customer’s failure to allow sufficient lead- time to make a Transfer Request. Bank and any other financial institution
may rely on the account, routing, or BIC numbers in the Transfer Requests even if such numbers do not correspond to the name of Customer, the Beneficiary, or the Beneficiary Bank.
5. Amendment or Cancellation of Transfer Requests. Customer does not have the right to reverse, adjust or revoke any Transfer Request after it has been received by Bank; provided, however, that Bank will make a reasonable effort to act on such a request by Customer. With respect to a Transfer Request that has already been Executed, Bank shall, at Customer’s request, request that the Beneficiary Bank return all or a portion of the funds . Customer understands that the Beneficiary Bank is under no legal obligation to comply with this request.
6. Rejection/Repair of Transfer Requests. Bank may reject a Transfer Request if: (i) it is not initiated or transmitted in accordance with the applicable security procedures; (ii) does not adhere to Bank’s formatting or processing requirements; (iii) there is any inconsistency between a Transfer Request and information previously supplied to Bank; (iv) Customer’s Transfer Requests exceed any applicable transaction limits established by Bank; (v) if there are insufficient collected funds in Customer’s account to fund the Transfer Request; or (vi) Bank has other reasonable grounds not to honor the Transfer Request. Bank shall have no obligation to repair any Transfer Request it receives but may, in its absolute discretion, endeavor to do so.
7. Reporting.
a. Account Reporting. Bank may send notifications that allow Customer to receive advices relating to Customer’s payments processed by Bank.
Bank may also provide Customer with information on accounts maintained at Bank . If Customer elects to receive notifications and other account information via SWIFT, Customer shall exercise extreme care in maintaining its own security in the receipt of the notifications or information. Customer acknowledges that the data received via SWIFT may include confidential information, including, without limitation, names, amounts, phone numbers and account information. Customer further acknowledges that it alone assumes full responsibility for maintenance of its internal security procedures to keep such information confidential. b. International Information Reporting. If requested by Customer and agreed to by Bank, Bank may provide incoming international information reporting through Providers or via SWIFT . Bank shall receive the international information reporting data through Providers or via SWIFT from Customer’s account -servicing Bank (“Servicing Bank”) and shall display such data to Customer using SinglePoint® or other similar System.
If Customer makes a request to Bank for an off -schedule international information report from the Servicing Bank, Customer agrees that Bank shall have no liability if the Servicing Bank does not support the off - schedule request or does not respond to the request in a timely manner.
8. Limits on Bank’s Liability. Bank will use reasonable efforts to provide notifications and information in a prompt fashion but shall not be liable for the temporary failure to provide timely data. Bank assumes no responsibility for any delays caused, or for inaccurate or incomplete information provided, by the SWIFT network or third- party banks with respect to payments and related information. Bank shall not be responsible for the acts or omission of Customer, the SWIFT network, any other financial institution, or any other person. Payment to a foreign country is subject to the laws of the foreign country involved. Bank assumes no liability for foreign exchange risk, delays, non- delivery, or other events resulting from causes beyond Bank’s control.
9. SCORE . If Customer accesses the SWIFT -Related Services using SCORE, Customer shall additionally comply with applicable SWIFT agreements, documentation, user guides , security procedures and all other instructions and recommendations provided by SWIFT or by Bank in relation to the use of SCORE . Customer acknowledges that Bank does not regulate the setup and provision of SWIFT membership, joining the SWIFT network or SCORE, the SWIFT network security, or the facilities necessary to access and use them. Customer represents that it is, and will throughout the term of this Service remain, an authorized SWIFT participant. Customer authorizes Bank to act on any instruction contained in a SWIFT message received by Bank through SCORE which appears to have been sent by Customer . In the event that Customer requests Bank to provide SWIFT-Related Services through SCORE to a parent company, subsidiary, affiliate or other commonly owned company, Customer agrees that it shall be jointly and severally liable for such related entity’s obligations under this Agreement. Customer represents and warrants that such related entity is a duly authorized agent of the Customer and that the related entity is acting on behalf of Customer in its authorized capacity.
10. FileAct . If the FileAct service is offered by Bank and selected by Customer, Customer may use this service which enables the secure and reliable transfer of files to exchang e batches of financial messages , reports, bulk payment files, images and other data over the SWIFT network. FileAct supports both interactive (real -time) and store -and- forward modes. Prior to implementation, Customer shall verify that Bank is capable of supporting the file formats and transaction types that Customer wishes to transmit. If the file format and transaction type is supported by Bank, Customer agrees that the processing of each file shall be additionally subject to all applicable Sections of the Agreement.
IV. TERMS APPLICABLE TO SPECIFIC FOREIGN EXCHANGE
SERVICES
The following are additional terms and conditions applicable to all Foreign Exchange (“FX”) Services offered by Bank representing methods, channels and products that facilitate currency accounts and the execution of foreign exchange transactions, including, but not limited to, spot, forward, swap and option transactions, whether physically settled or non- deliverable (cash settled). Unless otherwise agreed in writing, Bank is under no obligation to quote or enter into any FX transaction. Bank may change the number or type of FX Services offered at any time.
1. Conflicting Provisions and Separate Disclosures. With respect to all foreign exchange transactions or other derivative products entered into by Customer, to the extent that any provision of this Agreement conflicts with a provision of any ISDA Master Agreement by and between Customer and Bank or any documents related thereto (the “ISDA”), the ISDA terms shall govern. Disclosures herein supplement other disclosures that Bank may provide Customer and any other agreements between Bank and Customer in connection with FX transactions, including, but not limit ed to, ISDA Master Agreement, the USBNA Assessment and Agreement for Swap Transactions, the ISDA August 2012 DF Protocol, the ISDA March 2013 DF Protocol, the ISDA General Disclosure Statement for Transactions, the ISDA Disclosure Annex for Foreign Exchange Transactions, and the U.S.
Bank National Association Foreign Exchange Disclosures, transaction confirmations and supplemental documentation to any of the above (“FX Documentation”).
2. Foreign Exchange Risk. Many banking and finance transactions carry risk. Foreign exchange transactions involve unique risks specific to the nature of these types of transactions and the currency markets . These types of transactions are not suitable for all Customers. Customer should fully understand the nature and extent of exposure to risk of loss, if any, which in some circumstances may significantly exceed the amount of any initial payment made by or to Customer. All decisions to enter into foreign exchange transactions should be made by Customer giving appropriate consideration to Customer’s experience, objectives, financial resources and business environment. Any statements made by Bank regarding FX transactions or markets should not be construed as recommendations or advice.
3. Arm’s Length Transactions. Bank is a dealer and market maker in the foreign exchange market. As such, Bank engages in price quoting, order taking, trade execution and other related activities with counterparties and other dealers and for Bank’s own account. Unless otherwise agreed to by Bank in writing, Bank acts as a principal on an arm’s length basis, does not act as Customer’s agent, broker, fiduciary, financial advisor or in any similar capacity when engaging in FX transactions with Customer, nor will Bank perform the duties associated with these roles.
4. Pricing . Many factors affect foreign exchange pricing, including but not limited to, the size and nature of the transaction, credit, capital and funding costs, applicable trading venue or platform and the manner that such trading platform or venue is utilized, settlement risk, operational considerations, regulatory requirements, relationship factors such as the amount and nature of service provided and volumes traded by Customer, the type of trade request, and business costs such as fees related to exchanges, brokers or other intermediaries. Market conditions, such as demand, frequency, timing, and volatility, also affect foreign exchange pricing. These factors in pricing may result in Bank offering different prices to different customers for the same or similar FX t ransactions. Unless otherwise agreed, prices quoted by Bank on all FX t ransactions (actionable and indicative) are an “all in” price that typically includes Bank’s bid or offer spread for the requested transaction and an amount to compensate Bank for its services. These components will not be separately disclosed unless required by law . Bank’s pricing may not be reflective of prices being offered by other dealers, on interdealer platforms or as published by financial media. Foreign exchange markets can move quickly depending upon the delivery channel, currency pair, and market conditions. During extreme market conditions, such as disruption or liquidity events, the notional size and price levels Bank offers are unlikely to match levels provided in normal market conditions.
A. ELECTRONIC F
OREIGN EXCHANGE SERVICES
1. Introduction. Bank may provide foreign exchange services to Customer in connection with one or more web-based services, via private Internet site or application programming interface (API) owned and operated by Bank (“ EFX”). Bank provides such services in accordance with this Agreement, the FX Documentation and any additional terms of use and EFX procedures provided to the Customer (“EFX
Documentation”). Customer’s use of EFX and all transactions initiated thereby constitute its acknowledgment and agreement with the terms of the EFX documentation. EFX shall be available only during hours as established by Bank, which may vary by day or location. Notwithstanding anything to the contrary herein, Bank does not confirm that the person authorizing any EFX transaction on behalf of Customer is authorized to do so.
2. Access Devices. Once Bank has granted Customer access to any EFX system, System Administrator(s) designated by Customer will be provided one or more access devices, which may include cards, identification numbers and/or passwords. Customer shall use all EFX services in accordance with the security procedures set forth in this Agreement.
3. Transactions.
a. General Procedures. Within the applicable EFX platform, Customer may inform Bank that Customer wishes to purchase or sell a stated amount of currency against a second currency on a designated date (“Settlement Date”) either unconditionally or at a displayed exchange rate (“Trade Request”). Any transaction (“Transaction”) that results following the submission of a Trade Request shall be Customer’s legally binding obligation. Trade Requests submitted to Bank via an EFX platform shall be effective only upon acceptance by Bank. Bank will establish from time- to-time specific times of day after which Trade Requests will not be processed on a "same- day" or "next -day" basis . Deadlines will differ depending on the Trade Requests currenc ies and other factors . Trade Requests submitted after Bank's cut-off will be considered received on the next business day . Market movements may occur while systems are processing Customer’s transaction resulting in pricing that is less favorable to Customer (slippage).
b. Confirmations. Bank shall provide or make available details regarding terms of any Transaction executed on an EFX platform (“Confirmation”).
EFX Confirmations created online may be formed electronically, by matching or click-acceptance or other agreed methods. Failure by Bank or Customer to confirm a Transaction for any reason, including without limitation computer malfunction, shall not excuse either party’s obligations thereunder. Bank’s internal records with respect to each EFX Transaction shall constitute conclusive evidence of the terms thereof. c. Settlement Instructions and Payment . Once a Transaction exists, Customer agrees to make payment or delivery of currency to Bank on the Settlement Date in accordance with the settlement instructions provided to Customer, plus any applicable fees or charges . Bank expects that all Transactions will settle via standing settlement instructions . Customer is solely responsible for the accuracy and completeness of any settlement instructions delivered to Bank through EFX and such settlement instructions are subject to the concurrence of Bank . Any alternative instructions must be accurately completed on the platform prior to Settlement Date, and no less than two business days prior to settlement.
Failure to do so may result in delays, use of the previously applicable settlement instructions and/or additional costs. Bank strongly discourages the use of third- party payments to settle foreign exchange transactions.
Third-party payments will only be permitted in certain instances in the sole discretion of Bank. Requests for third -party payments will require all information requested by Bank in connection with anti-money laundering regulations and policies . Should Customer instruct Bank to settle a Transaction by debiting an account, Customer agrees to maintain sufficient available funds in the account to settle on the Settlement Date.
Should funds be insufficient to settle the trade on the Settlement Date, Bank reserves the right in its sole discretion to debit any of Customer’s account with the Bank in the amount due, subject to applicable account fees and charges, or to reject the Trade Request.
d. Cancellation or Change. Once a Trade Request is accepted, any request to cancel or amend is at the sole discretion of Bank. If such request is accommodated, Customer agrees to pay all costs and expenses of
executing an offsetting transaction on new terms at the updated exchange rate that is unlikely to match the original rate. Should a Transaction be successfully canceled or amended, Customer also agrees to reimburse Bank for any breakage costs and other expenses incurred by Bank to cancel or amend the Trade, including any fees imposed for this extraordinary service.
4. Funds Transfers . Customer authorizes Bank to execute and charge the designated Customer account(s) for wire transfer payment orders delivered to Bank via any EFX service. Customer agrees that all such wire transfer payment orders will be governed by the relevant Sections of this Agreement.
5. Representations and Warranties. Customer represents and warrants to Bank as of the date of this Agreement and as of the date of each Transaction that: (i) Customer is authorized to enter into this Agreement and any Transaction, (ii) the persons entering into the Agreement (and each Transaction) on Customer’s behalf have been duly authorized to do so, (iii) the Agreement (and each Transaction) is binding and enforceable against Customer in accordance with its terms, and (iv) unless otherwise expressly agreed, Customer is acting as principal with respect to each Transaction.
B. FOREIGN CURRENCY ACCOUNTS
1. Introduction. If requested by Customer and agreed to by Bank, Customer may open a Foreign Currency Account (“FCA”) at U.S. Bank National Association (“Standard FCA”).
2. Permitted Deposits. Bank may accept the following for deposit into FCA:
a. Proceeds of matured foreign exchange purchase contracts; b. Proceeds of foreign currency denominated letters of credit or documentary collection;
c. Incoming international funds transfers;
d. Proceeds of loan disbursements; or
e. Foreign checks and other items subject to collection, which may not be available until funds are received by Bank.
Bank will not accept currency or coin for deposit into FCA. Deposits not specifically enumerated above may be allowed if agreed to by Bank in writing. Only collected and verified funds can be deposited into FCA, whereupon funds will be immediately available for withdrawal or transfer by Customer.
3. Withdrawals . Customer can make withdrawals out of FCA in the following ways:
a. Settlement of a foreign exchange transaction;
b. Negotiation of foreign currency denominated letters of credit or documentary collection;
c. Outgoing international funds transfers by wires initiated in accordance with Bank procedures; or
d. Payment of a foreign currency loan.
Each of these methods of making a withdrawal will result in an immediate debit to the FCA for the entire amount Customer has elected to withdraw from such FCA.
4. Interest. Interest rates offered on FCAs are determined in Bank’s discretion based on the applicable currency . Such interest rates may be set at zero or a negative interest rate. Interest is calculated based on the average daily balance method . The average daily balance method is an annualized rate that reflects the relationship between the amount of interest each fiscal month and the average daily balance in the account for such fiscal month. Negative interest may be assessed as a fee based on the interest rate set by the applicable monetary authority plus the incremental cost of funding to U.S. Bank . Interest rates and fees related to negative interest rates may be changed at Bank’s discretion without notice to Customer.
5. Denomination. Customer will elect the denomination of each FCA on a separate account opening document. Transfers of funds into and out of FCA in the currency in which that particular FCA is denominated will be made without regard to the equivalent value of that sum of foreign currency in U.S. dollars or other foreign currencies. Transfers of funds into and out of FCA in a currency other than the currency in which that particular FCA is denominated may be accommodated by the Bank in its discretion. Such transfers will be made at an exchange rate determined by Bank.
6. Non-Business Days. In addition to non-Business Days specified in the Agreement, there will occasionally be other days on which Bank cannot process or complete a transaction due to holidays in foreign countries.
7. Other Terms . Bank may refuse a deposit, limit the amount which Customer may deposit, return all or any part of a deposit or require that Customer close FCA at any time. Bank may also close FCA without prior notice and remit to Customer any balance remaining after taking into account all pending debits and charges against such FCA.
8. Foreign Currency Account Risks. Investing in any currency other than the base currency of the Customer carries risk. The value of the balances in such accounts may be significantly affected by changes in currency exchange rates . Some other risks of maintaining foreign currency balances include but are not limited to: the effects of a different economic system in a foreign country, future political and economic developments,
possible imposition of exchange controls or other government restrictions, and with respect to certain countries, the possibility of expropriation or confiscatory taxation, political or social instability, or diplomatic developments which could adversely affect the value of the currency.
Should Bank’s balances in a foreign country become blocked or withdrawals by Bank become otherwise restricted, Customer’s funds in the FCA will likewise be blocked or otherwise restricted.
WHILE DEPOSITS IN FCAS MAY BE INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION (“FDIC”) UP TO A MAXIMUM
AMOUNT ALLOWED BY LAW, CUSTOMER IS NOT PROTECTED BY
BANK AGAINST FOREIGN CURRENCY EXCHANGE RATE
FLUCTUATIONS OR FROM INABILITY TO ACCESS FUNDS FROM
FOREIGN REGULATIONS BY THE FDIC INSURANCE, OR ANY
OTHER INSURANCE OR GUARANTY PROGRAM.
9. Limitations on Liability. In addition to other limitations on liability set forth in this Agreement, Customer expressly releases and holds harmless Bank, and its affiliates, agents, and employees, from any liability, loss, damage or claim related to currency exchange rates or fluctuations in value of the currency in which the applicable FCA is denominated with respect to the U.S. d ollar and other currencies. Customer hereby assumes all risks related to currency exchange rates and fluctuations in currency values, including that the foreign currency in FCA might be worth less, in U.S. dollars or other foreign currencies, than the U.S. d ollar or other foreign currency equivalent of such funds at the time deposited into the FCA. Bank makes no warranty and no representation about the value of any FCA balance at any time.
V. TERMS APPLICABLE TO SPECIFIC MONEY CENTER AND
SAFEKEEPING SERVICES
The following are additional terms and conditions applicable to specific Money Center and Safekeeping Services offered by Bank. In the event of a conflict between this Section V and any other provision of this Agreement, Section V shall govern. Bank may change the number or type of Services offered at any time. Customer shall not be bound by the terms and conditions for the specific Services described in this Section V to the extent Customer is not using such Service(s).
Municipal Advisor Rule Disclosure . This disclosure applies to Customer if Customer is classified as a municipality or an "obligated person" under the Municipal Advisor Rule. For purposes of Section 15B of the Securities Exchange Act of 1934 (the "Act") (SEC Rule 15Ba1-1 et seq.) (the "Rule"), Bank: (1) is not recommending and will not recommend an action to Customer; (2) is not providing and will not provide "advice" to Custom er as defined in the Rule, and any information or communication from Bank in respect of Customer's accounts with the Money Center or the Safekeeping Departments of Bank or in respect of any securities transaction or potential securities transaction to be executed via such account(s) is not intended to be and should not be construed as "advice" as defined in the Rule; and (3) is not acting as an advisor to Customer and does not owe Customer any fiduciary duty pursuant to Section 15B of the Act or otherwise w ith respect to any such account(s), information, communication, transaction or potential transaction. Customer should discuss any information or material provided to Customer by Bank in connection with trading, investing or other activity in such account(s) with any and all of Customer's internal or external advisors and experts that Customer deems appropriate before acting on any such information or material.
A. INVESTMENT,
DEPOSITORY AND SAFEKEEPING SERVICES
From time to time, Customer may effect securities transactions or establish deposits with Bank's Money Center Department and/or request safekeeping services from Bank's Safekeeping Department . All such transactions shall be subject to the terms and conditions of this Agreement.
1. Definitions.
a. “Confirmation” means the confirmation statement from Bank as described in this Agreement.
b. A “Money Center deposit” means an interest-bearing demand deposit account, a money market deposit account (“MMDA”), a time deposit, or other deposit liabilit y of Bank to Customer established under this Agreement and maintained in Customer's Money Center investment account.
c. "Safekept Securities" means securities that Bank has agreed to accept and hold for the account of Customer under the terms of this Agreement. d. The term "securities" means all securities (as Defined in the Securities Exchange Act of 1934) and all investment securities or products from time to time offered by Bank to Customer, other than certificates of deposit issued by Bank and deposits made with Bank.
e. “Settlement Account” means any settlement account(s) designated by Customer or any replacement account identified by Customer in a written notice delivered to Bank.
2. Securities Transactions: Compensation and Capacity of Bank. a. In General. In any securities transaction governed by this Section V.A, Bank may be acting as principal, riskless principal, or agent . Bank’s capacity in any securities transaction will be indicated on the Confirmation. (i) As Principal. When acting as a principal in securities transactions, Bank will either buy securities for its own account or sell for its own account securities owned by Bank, whether such securities are bought before or after receiving Customer’s order . Bank’s compensation is reflected in the price at which Bank buys or sells the securities.
(ii) As Riskless Principal. When acting as a riskless principal in securities transactions, after receiving from Customer an order to buy or sell
securities, Bank will buy or sell securities for its own account to offset the sale to or purchase from Customer . Bank’s compensation is reflected in the price at which Bank buys and sells the securities. (iii) As Agent . When acting as Customer’s agent in securities transactions, Bank will buy or sell securities solely for Customer’s account. Bank’s compensation due from Customer is the amount of any agency service charge indicated on the Confirmation. b. Service Fees. In addition to compensation received as a principal, riskless principal or agent, Bank may charge Customer service fees in relation to securities transaction as specified in the current fee schedule as provided to Customer, which may be amended from time to time upon notice to Customer.
c. Other Compensation; Bank Securities. Bank may be paid a fee or other compensation by any other party in connection with any securities transaction, and any such fee or compensation will be in addition to fees payable by Customer to Bank under this Agreement . Such additional compensation may include, without limitation, advisory, custodial, distribution and/or shareholder service fees (which may be paid as service fees pursuant to Rule 12b-1 under the Investment Company Act of 1940) that Bank or its affiliates may receive from various mutual funds and/or mutual fund service providers, based upon moneys invested in those mutual funds . Customer acknowledges that those fees or other compensation may be paid to Bank for such services , and that such payments will not reduce or offset any fee or compensation due from Customer to Bank under this Agreement . Further, Customer acknowledges that securities Customer acquires through Bank may directly or indirectly (including through mutual funds) represent an ownership interest in securities issued by Bank or its affiliates or by mutual funds sponsored by Bank or its affiliates.
3. Money Center Deposits.
a. In General. If Customer elects to deposit funds through the Bank’s Money Center Department, that Money Center deposit shall be maintained within Customer’s Money Center investment account . Bank will provide Customer with a Confirmation upon Customer’s placement of funds, and the deposit transaction will be reflected on Customer’s Money Center account statement. With the exception of Eurodollar deposits (which are not deemed deposits under rules promulgated by the FDIC and therefore are not insured by the FDIC), Money Center deposits are FDIC insured per depositor, up to applicable FDIC limits. By opening and maintaining a Money Center deposit, Customer agrees to be bound by this Agreement. b. Access to Funds .
In addition to any other restrictions specified
elsewhere in this Agreement, Customer shall not be allowed to make withdrawals or transfers from a Money Center deposit at a U.S. Bank branch or ATM or via check. No debit or ATM cards will be issued on a Money Center deposit. Customer shall be permitted to make withdrawals or transfers from a Money Center deposit only by contacting the Money Center Department in the following manner: telephone, facsimile, email, or via an online system provided or approved by Bank.
c. Notice of Withdrawal. Bank reserves the right to require at least seven (7) days written notice prior to withdrawal or transfer of funds from an MMDA, unless otherwise specified on the Confirmation for the Customer's placement of funds. Customer must provide such notice to Bank's Money Center Department by 3:00 PM Central Time via telephone, email, or fax.
4. Pledges; Segregation.
a. Pledges. Upon request of Customer, Bank can provide a form of control agreement suitable for transactions where Customer wishes to grant to third parties a lien, pledge or other rights over its property held by or at the Money Center or Safekeeping Departments at B ank. Customer agrees that all costs of Bank, including reasonable fees and expenses of outside counsel if deemed necessary by Bank, will be at Customer's expense if such a control agreement is requested, whether or not a final agreement is entered into.
b. Segregated Assets . Where Customer wishes to effect transactions hereunder on behalf of its customers using the property of such customers, Customer will first notify Bank in writing of its intention to do so before effecting any such transactions. Customer acknowledges that Bank may require one or more additional agreements in order to accept such transactions. Once acceptance of such transactions has been approved by Bank, Customer agrees to include in its instructions to Bank an agreed identifier or designation as to the applicable securities, deposits, and transactions.
5. Securities Transaction Requests.
a. Effecting Transactions . Each securities transaction will be effected pursuant to Customer's instructions made verbally, by fax or sent electronically via email or a trading system provided or approved by Bank.
Emailed instructions must be directed to Bank’s email address as designated from time to time by Bank, and fax instructions must be directed to Bank’s fax number as designated from time to time by Bank .
Securities transaction requests may be acted upon by Bank without acknowledgment by Bank that it has received such request. b. Cut-Off Times. Bank establishes cut-off times for receipt of securities transaction requests depending on the type of security and the market in which it is traded. In addition, market holidays, procedural or operational matters, and actions taken by market operators may affect Bank’s ability to process securities transaction requests. Customer instructions for same day settlement received before the applicable cut-off time will be submitted for processing that Business D ay. Customer instructions for same day settlement received after the applicable cut-off time may be processed by Bank on a ‘best efforts’ basis that Business Day and otherwise will be submitted for processing the next Business Day.
c. Bank's Rights. Bank may reject, refuse to honor, or reverse all or any portion of any transaction request, with or without prior notice to Customer.
If Customer fails to pay in full for any security purchased or fails to deliver security sold, in each case on or before the related settlement date, Bank is authorized in its discretion and without notice or demand to take any one or more of the following actions: cancel the transaction; sell the securities covered thereby; buy-in cover securities or other property required to make delivery; charge the Settlement Account for amounts due; hold Customer liable for any loss, cost or expense including but not limited to, breakage or pair-off fees and the capital charge and interest cost to carry any securities purchased; and/or impose fees.
6. Safekept Securities. B
ank, acting through its Safekeeping
Department, agrees to hold and keep as custodian hereunder all Safekept Securities, and to deliver such Safekept Securities in accordance with the instructions of Customer, all subject to the terms and conditions of this Agreement.
a. Acceptance and Withdrawal. Securities eligible to be Safekept Securities may be delivered to Bank, and any Safekept Securities may be withdrawn from Bank, in each case upon an instruction of Customer delivered in accordance with this Agreement. Withdrawal or delivery of Safekept Securities is subject to availability (e.g., among other reasons, securities involved in a corporate action or in frozen status, restricted securities or pledged securities may not be available for withdrawal or delivery). Bank shall not be liable or responsible for or on account of any act or omission of any broker or other agent designated by Customer or, in the absence of such designation, selected by Bank to receive or deliver securities for the account of Customer.
b. Registration; Depositories. Bank shall register Safe kept Securities in nominee name and may from time to time change the registration of Safekept Securities from nominee name to Customer’s name, or vice versa. Customer agrees that it will timely complete any necessary documentation provided by Bank to change the registration of Safekept Securities. Safekept Securities held in nominee name may be deposited with The Depository Trust Company or other third- party depository acceptable to Bank. Securities that are depository eligible will be held at the depository in the depository’s nominee name.
c. Securityholder Information. Unless otherwise required by law or pursuant to instructions from Customer, in no event shall Bank be responsible to take any action concerning any puts, calls, conversions, exchanges, reorganizations, offers, tenders or other corporate actions or similar matters relating to Safekept Securities, other than (i) to forward to Customer in accordance with this Agreement the written information received by Bank relating to any such transaction, and (ii) follow
Customer’s lawful instructions with respect to such actions. Customer may directly vote any proxy or other corporate action, or if it instructs Bank to vote on its behalf, agrees that any instructions to Bank with respect to any such actions shall be delivered to Bank within sufficient time for Bank to act thereon if any action is required. Safekept Securities called for redemption prior to maturity will be presented by Bank for payment provided the trustee or other appropriate entity gives Bank adequate notice of redemption. Should any Safekept Security be called for partial redemption by the issuer of such security, Bank is authorized to accept the allocation applied by any central depository . In the event Bank has to allocate any redemption among its accounts, Bank shall allot the redemption proceeds in accordance with its standard procedures therefor, effected in such manner as it deems appropriate in its sole discretion. d. Collection of Income and Principal . Bank shall collect and receive the interest, principal, and other income payable in connection with the Safekept Securities and shall pay to Customer or credit to the Settlement Account all such amounts . Bank shall not be obligated (i) to pay to Customer or credit to the Settlement Account any payment of interest, principal or other income until Bank receives such payment in immediately available funds or (ii) to institute or participate in any collection proceedings or other proceedings to enforce Customer’s rights relative to any Safekept Securities or to pursue any remedies on behalf of Customer.
Bank is hereby authorized to sign on behalf of Customer any declarations, affidavits, certificates of ownership or other documents relating to securities held by Bank in nominee name that may at any time be required with respect to all coupons, registered interest, dividends, or other income.
If any of Customer’s deposits or securities the subject of this Agreement, including Safekept Securities, are subject to a variable or fixed rate of interest and such deposits or securities bear an interest rate less than zero, Customer agrees to pay Bank all amounts of the negative interest or fees that Bank imposes as compensation for the less -than-zero interest rate (which may also be debited from the Settlement Account by Bank), and Customer agrees that the principal amount of such Safekept Securities may be reduced to the extent necessary to cover the amount of the negative interest or fees if available funds are not otherwise provided by Customer.
e. Return of Payments . Customer will repay Bank, or Bank may charge the Settlement Account, in the event that for any reason (i) Bank is required to return to the issuer or to a third party any payments in respect of Safekept Securities, (ii) Bank fails to receive from the issuer or appropriate other party a payment Bank paid to Customer in respect of Safekept Securities, or (iii) Bank must return to the issuer or appropriate other party a payment Bank paid to Customer in respect of Safekept Securities. Customer further agrees that the principal amount of any Safekept Securities may be reduced, and any remittances due from Bank to Customer (whether or not under t his Agreement), and any other accounts of Customer with Bank, may be offset to the extent necessary to cover the amount of such returned payments to the extent that immediately available funds are not otherwise provided by Customer to Bank.
7. Confirmation Statements . Promptly after effecting any transaction pursuant to this Section V.A, Bank will deliver to Customer a Confirmation which shall identify at least (i) Bank and Customer, (ii) the trade and settlement dates of the transaction, (iii) the issuer and par amount of the related securities (for securities transactions) and the principal amount of any deposit (for deposit transactions), (iv) the interest rate if applicable and/or any discount rate applicable to any securities transactions or deposit transactions, (v) the maturity date of the transaction, if applicable, (vi) the capacity of Bank as principal, riskless principal or agent (if the transaction is a securities transaction) and, if applicable, whether the securities will be Safekept Securities, (vii) any terms and information required by applicable law, and (viii) any other terms and information which Bank may include at its discretion. The information contained on the Confirmation shall be considered true and correct and conclusively binding upon Customer unless Customer notifies Bank of any error therein within three (3) business days after the date the Confirmation is deemed delivered to Customer in accordance with this Agreement. Customer may, by notice from an Authorized User in accordance with this Agreement, elect to receive Confirmations by mail, fax, email, or other electronic means including posting to a password-protected website), subject to the terms of this Agreement.
8. Settlement Account . Unless Bank is otherwise instructed in writing, Customer unconditionally authorizes, empowers, and directs Bank (and authorizes and directs Bank to communicate with any financial institution maintaining the Settlement Account as necessary ) to: (i) debit the Settlement Account on the settlement date indicated on the Confirmation for the full amount of each transaction effected under this Section V .A (including all fees and charges payable hereunder), notwithstanding that such debit may cause the Settlement Account to be overdrawn; and (ii) credit the Settlement Account with interest payments, principal payments, maturity payments or other payments received in respect of transactions effected under this Agreement. Customer hereby represents and warrants that instruction from any Authorized User is sufficient to authorize Bank to debit or credit the Settlement Account . If the Settlement Account is not held by Bank, Customer confirms to Bank that it has authorized the financial institution maintaining the Settlement Account to accept debit and credit entries to the Settlement Account and that no such authorization will be cancelled except with prior notice to Bank and in sufficient time and in such manner as to allow the financial institution maintaining the Settlement Account and Bank a reasonable opportunity to act on such termination without disruption of any transactions or services under this Agreement .
Customer acknowledges that ACH payments to a Settlement Account not held by Bank are subject to ACH processing timelines, which may involve a delay in available funds.
9. Delivery. Through the instructions of an Authorized User, Customer shall specify the account to which any securities purchased hereunder are to be delivered. If such account is maintained by the Safekeeping Department of Bank, the securities will be held in accordance with this Agreement. If such account is maintained by an institution other than Bank, Bank’s responsibility for ensuring delivery shall be limited to accurately conveying the instructions for the appropriate delivery account to the depository, agent, or issuer of the securities, as applicable for the particular type of securities . Bank will issue no certificate, passbook, or any other evidence of any deposit except for the Confirmation.
10. Interest. All securities, Money Center deposits, and certificates of deposit purchased by Customer or held by Customer under this Agreement shall earn interest on the principal balance from the date of deposit or settlement date, as applicable, computed at the rate and in the manner established by Bank from time to time for the given product. Any interest due will be credited monthly unless otherwise agreed to by Customer and Bank. No interest shall accrue on the date of withdrawal .
Bank reserves the right to change the applicable interest rate on variable rate products (including those products whose underlying interest rate is not managed by Bank) at any time. Such interest rate may be set at zero or an interest rate less than zero. If the interest rate, or the index or other referenced rate upon which the interest rate is based , is at any time less than zero percent, Customer agrees to pay Bank all amounts of the negative interest or fees that Bank imposes as compensation for the less- than-zero interest rate. Bank will not provide notice of rate changes, but Customer may call the Money Center Department to obtain current rate information. Bank shall notify Customer of the applicable interest rate and maturity term for the product opened under this Agreement at the time that the request for such product is made.
11. Fixed Investment Periods . Customer acknowledges that certain products held by Bank under this Agreement have fixed investment periods and agrees that such products will be held by Customer until their maturity dates or through their commitment dates. Customer agrees that if it withdraws part or all of such product before such date, Bank shall be entitled to impose a penalty (including by debiting the Settlement Account for such amounts) in accordance with the terms of such product or the fee schedule provided to Customer, as applicable, and that the principal amount of such product may be reduced to the extent necessary to cover such penalty if available funds are not otherwise provided by Customer.
12. Repurchase Transactions. Cus
tomer shall not effect any securities
transactions under this Agreement in the expectation of entering into a repurchase transaction with Bank as counterparty unless Customer shall first have executed and delivered to Bank a written master repurchase agreement, in form and substance satisfactory to Bank, governing such transactions. In any such transaction, where Bank is to hold securities as collateral or as the subject of a transaction, such securities will be held by the Safekeeping Department of Bank subject to the terms of this
Agreement, unless Customer is otherwise notified. To the extent of any inconsistency between the terms of any such agreement and the terms of this Agreement, the terms of such other agreement shall control.
13. Fees and Expenses. Customer shall pay to Bank such fees in respect of the services provided under this Agreement, as disclosed to Customer on the current fee schedule (which fee schedule may be amended from time to time by Bank). If the fee schedule is amended, the amended fees will apply to any Safekept Securities being held at that time, and to any securities transactions effected on the day such amendment becomes effective. Customer agrees and acknowledges that Bank may debit the Settlement Account for any fees and other amounts owing by Customer to Bank under this Agreement, or exercise an offset for such amounts against any funds of Customer on deposit with Bank, or against any interest, principal or other income received or to be received by Bank on behalf of Customer, whether or not in respect of Safekept Securities. In addition, Customer agrees to reimburse Bank for its commercially reasonable out ‐ of‐pocket expenses for providing the services hereunder, including, but not limited to the reasonable fees and expenses of outside counsel if retained by Bank in its discretion in connection with this Section V . If Customer fails to pay Bank any sums due under this Section V within thirty (30) days after the same are due (whether or not a late notice is sent to Customer by Bank), Bank may terminate this Agreement and return any Safekept Securities to Customer at Customer’s expense, and to avail itself of any other remedy it may have in law or in equity.
14. Service Termination; Account Closure. Subject to Section V .A.11 ("Fixed Investment Periods"), Customer may terminate the Service(s) described in this Section V or close its Money Center investment account at any time upon prior notice to Bank. Bank may terminate the Service(s) described in this Section V or close Customer's Money Center investment account at any time without prior notice to Customer . If any Service described in this Section V is terminated or Customer's Money Center investment account is closed for any reason, Customer will continue to be responsible for any obligation incurred by Customer prior to termination or closure and for the fees and costs, if any, payable under this Agreement with respect to delivery of Customer's securities (including Safekept Securities) or funds held by Bank to Customer or to another financial institution.
15. Notices. Except for oral instructions to Bank from Authorized Users or from Bank to Authorized Users, all notices, disclosures, and communications (including Confirmations) under this Section V shall be in writing and delivered by mail, fax, email, or other electronic means as provided for in this Agreement. Notices, disclosures and communications (including Confirmations) shall be deemed delivered upon transmission of the same by mail, fax, email or other electronic means as provided for in this Agreement, or on the third (3
rd) Business Day after deposit of the same
in the United States mail, postage prepaid, and addressed to the mailing address provided by Customer. All written confirmations, notices, instructions, or other communications from Customer to Bank shall be sent to following address ( which may be amended from time to time by Bank upon notice to Customer):
For securities transactions:
U.S. Bank National Association
Money Center Department
800 Nicollet Mall, BC‐MN‐H18T
Minneapolis, MN 55402
Fax: (866) 904-7067
Email: [email protected]
For
safekeeping services:
U.S. Bank National Association
Safekeeping Department
800 Nicollet Mall, BC‐MN‐H18R
Minneapolis, MN 55402
Fax: (612) 303‐0202
Email: [email protected]
16. Terms and Conditions of Electronic Delivery. All notices, disclosures and communications (including Confirmations and other account information) from Bank may be delivered to Customer by electronic means (including, without limitation posting to a password- protected website) to the extent Customer elects to receive such information through electronic means, subject to the Terms and Conditions of Electronic Delivery set forth in Section V .B below. Customer agrees that sending information in this manner will constitute good and effective delivery of the information to Customer, regardless of whether Customer actually accesses the website or other electronic medium containing the information.
17. No Investment or Tax Advice. Customer acknowledges that Bank’s role is ministerial in nature and that Bank will not provide supervision, recommendations, or advice to Customer in connection with the investment, purchase, sale, retention, or other disposition of any securities or Money Center deposits, or the advisability or suitability of any product or transaction. Customer is responsible for evaluating the risks associated with such decisions. Customer acknowledges Bank is not an investment adviser, has no investment discretion, and will merely carry out instructions as directed by Customer. Bank’s ability to determine interest rates on securities or Money Center deposits shall not be deemed to be discretion or advice. Customer further acknowledges that Bank will not provide advice to Customer regarding the tax implications associated with the investment, purchase, sale, retention, or other disposition of any securities or Money Center deposits.
18. ERISA. If assets of an employee benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), are intended to be deposited, invested or used by Customer in a transaction under this Section V.A, Customer shall notify Bank prior to effecting such deposit, investment or transaction and will provide Bank with such additional information as Bank may reasonably request. Customer represents and warrants to Bank that any deposit, investment, or transaction pursuant to this Section V .A shall not result in a " prohibited transaction" under ERISA or shall otherwise be exempt under ERISA, and Customer further agrees to indemnify and hold Bank harmless from any loss or claim arising therefrom.
19. No Representation or Warranty. Customer acknowledges and agrees that Bank makes no representation or warranty, express or implied, with respect to the validity, enforceability, collectability, or investment quality of any securities bought or sold hereunder, or any deposits made or terminated hereunder.
20. Records; Account Statements; Taxes. Bank will maintain records of Customer's account and provide customer with a Confirmation for transactions in accordance with this Section V.A and periodic account statements. Bank will also send to Customer such notices and reports as are required by law . Customer acknowledges and agrees that it is Customer's obligation to prepare and file all required tax returns and to pay all taxes due on any income that Bank collects for Customer.
21. Set Off. Bank
has the right to apply funds in Customer's Money Center investment account or Settlement Account to any debt Customer owes Bank. A debt includes any fees, overdrafts, debts that now exist and debts that Customer may incur in the future, or Customer's obligations under a guaranty. When Bank sets off a debt Customer owes Bank, Bank reduces the funds in the Money Center investment account or Settlement Account by the amount of the debt . If there are not sufficient funds in Customer’s Money Center account or Settlement Account to satisfy any obligations of Customer to Bank, Bank has right to sell any or all securities in those accounts to satisfy such obligations. Bank is not required to give Customer any notice before selling Customer’s securities or otherwise exercising its right of setoff . Customer agrees to hold Bank harmless from any claim arising as the result of Bank's enforcement of its right of setoff against Customer's Money Center investment account or Settlement Account .
This right of setoff is in addition to any security interest that Bank might have in Customer's Money Center investment account or Settlement Account.
22. Legal Process. Legal process includes any levy, garnishment or attachment, tax levy or withholding order, injunction, restraining order, subpoena, search warrant, government agency request for information, forfeiture or seizure, or any other legal process relating to Cus tomer's Money Center investment account or Settlement Account. Bank may accept and act on any legal process Bank believes to be valid, whether
the process is served in person, by mail, by electronic notification, or at a banking location. If Bank incurs any fees or expenses (including attorneys' fees and expenses) due to responding to legal process related to Customer's Money Center investment account or Settlement Account, Bank may, in its sole discretion, charge these costs to any other deposit account Customer maintains with Bank. All legal process is subject to Bank's rights of setoff and security interest in Customer's Money Center investment account and/or Settlement Account.
B. TERMS AND CONDITIONS OF E
LECTRONIC DELIVERY
The following sets forth the terms and conditions of use of Bank’s electronic delivery and notification service (the “Electronic Delivery Service”) in connection with account(s) with Bank's Money Center Department or Safekeeping Department.
The Electronic Delivery Service described in this Section V .B shall constitute an Internet Service as defined in Section I of this Agreement and shall be subject to the terms set forth therein, as well as any other agreements between Customer and Bank and any applicable laws or regulations. If there is a conflict between the terms and conditions set forth in this Section V .B and the terms and conditions of any other section of this Agreement or any other agreement between Customer and Bank as they relate to the Electronic Delivery Service, the terms and conditions set forth herein will control.
1. Electronic Delivery of Account Communications . Customer may elect to receive Account Communications (defined below) related to Customer's account(s) electronically. All Account Communications will be delivered electronically by posting to Bank’s password-protected website designated for Customer’s account(s) or, at Bank’s election, delivered via electronic mail to the email address provided by Customer to Bank . “Account Communications” include, without limitation, all current and future account statements, Confirmations, security notices, maturity notices, prospectuses, offering and disclosure documents, shareholder communications (such as quarterly, semi-annual, and annual reports, proxy statements, etc.), regulatory communications and other information, documents, data, notices and records regarding Customer’s account(s) with Bank. Bank may, from time to time, designate additional Account Communications that are then eligible for electronic delivery through the Electronic Delivery Service, the delivery of which will then be subject to these terms and conditions. From time to time, Bank may add to, modify, or delete any feature of the Electronic Delivery Service or Account Communications eligible for delivery through the Electronic Delivery Service at its sole discretion. Customer acknowledges and agrees that by being enrolled in the Electronic Delivery Service, Customer will no longer receive Account Communications by mail that is otherwise available for delivery as part of the Electronic Delivery Service.
2. Accessing Account Communications. Bank will notify Customer via email when Account Communications are posted. Bank may also provide, in its sole and absolute discretion, Account Communications directly via email. Customer may access all Account Communications for at least thirty (30) days from the date of initial posting . Customer acknowledges and agrees that all Account Communications will be deemed to constitute good and effective delivery to Customer upon posting, regardless of whether Customer actually or timely receives or accesses the Account Information, or if Account Communications are delivered directly to Customer via email, when so delivered.
3. Changes in Delivery Method. Customer must notify Bank if it wishes to discontinue use of the Electronic Delivery Service. Following Bank’s receipt of such notice and after Bank has a reasonable opportunity to act on such notice, Customer will thereafter begin to receive Account Communications via U.S. mail beginning with Customer's next statement cycle and/or mailed Confirmation.
4. Reporting Unauthorized Transactions or Erroneous Statements .
Customer agrees to promptly and carefully review all Account Communications as and when delivered and notify Bank in accordance with this Agreement if Customer objects to any of the information provided.
5. Third -Party Services. Customer acknowledges and agrees that Customer's access to the Electronic Delivery Service and Customer's receipt of email notifications when Account Communications are posted may be delayed or prevented by factors affecting Customer’s or Bank’s Internet or telephone service provider(s) or other similar entities (“Third- Party Service Providers”). Bank makes no representations or warranties whatsoever with regard to the products and services offered by such Third- Party Service Providers and shall not be liable for any loss caused, in whole or in part, by a Third-Party Service Provider.
6. International Use. Bank makes no representations or warranties that any content or use of the Electronic Delivery Service is appropriate, legal, or available in locations outside the United States . Customer
acknowledges and agrees that accessing the Electronic Delivery Services from territories where its contents or use is illegal and is prohibited by Bank. If Customer accesses the Electronic Delivery Service from locations outside the United States, Customer does so at its own risk. Customer is responsible for compliance with local laws.
7. Proprietary Rights; Materials; Trademarks. All content included or available through the Electronic Delivery Service (other than Customer’s account information), such as advertisements, test s, graphics, logos, button icons, images, audio clips and software, is the property of Bank and/or third parties and is protected by copyrights, trademarks, or other intellectual property rights . The compilation (meaning the collection, arrangement, and assembly) of all content on the Electronic Delivery Service is the exclusive property of Bank and/or its licensors and is protected by copyrights or other intellectual property rights. The trademarks, logos and service marks displayed on the Electronic Delivery Service (collectively, “Trademarks”) are the registered and unregistered Trademarks of Bank or third parties . Under no circumstances may Customer use, copy, alter, modify, or change these Trademarks. Nothing contained on the Electronic Delivery Service should be construed as granting by implication or otherwise any license or right to use any Trademark without the express written permission of Bank or the third party that has rights to such Trademark, as the case may be.