Wells Fargo Bank/Cash Mgmt 01CORPORATE CASH MANAGEMENT ACCOUNT AGREEMENT
This Corporate Cash Management Account Agreement ("Agreement") is entered into as of the date set
forth below by and between the undersigned customer ("Customer", severally and collectively if more
than one) and Wells Fargo Bank, N.A., a national banking association ("Bank").
WHEREAS, Bank furnishes to its customers the Corporate Cash Management Account service
described below (the "Service");
WHEREAS, Customer desires to obtain the Service from Bank;
WHEREAS, Customer and Bank agree that the Service will be provided by Bank to Customer subject
to the following terms and conditions.
Customer and Bank agree as follows:
1. Accounts: Customer shall designate an account (the "Concentration Account") and may
designate an account for the receipt of investment earnings (the "Interest Account"). The
Concentration Account and the Interest Account may be maintained at Bank or at an affiliate of
Bank ("Affiliate"). Customer and Bank shall jointly designate in Schedule A the desired target
balance (the "Specified Balance") for the Concentration Account.
2. investment Sweep Option: On each Monday through Friday, except days on which Bank or
the Federal Reserve Bank is not open for business (each a "Business Day"), Bank will compute
the excess funds position (the "Investment Sweep Amount") of the Concentration Account,
based upon the Specified Balance. Only the balance available for immediate withdrawal (the
"Collected Balance") above the Specified Balance will be swept. If the Investment Sweep
Amount is greater than zero, Bank will debit the Concentration Account and Bank shall invest
the resulting Investment Sweep Amount until the following Business Day in accordance with the
investment sweep options designated by Customer (the "Designated Investment(s)"), subject to
the Designated Investment(s) being made available by Bank or its agents. If the Concentration
Account is maintained at an Affiliate, Customer authorizes and instructs Affiliate to allow Bank to
debit and credit the Concentration Account as provided herein. Bank reserves the right to
discontinue the availability of a particular investment option at any time without notice to
Customer. Customer shall complete a CCMA Designated Investments form identifying those
investments desired by Customer. The Investment Sweep Amount will not be swept until Bank
has received a properly executed CCMA Designated Investments form; upon Bank's receipt of
such form, Bank will begin sweeping the Investment Sweep Amount within ten (10) Business
Days of receipt of such form.
If the Designated Investment(s) are not available on any given Business Day, Customer
instructs Bank to invest the Investment Sweep Amount in a "Repurchase Transaction" as
defined in the Master Repurchase Agreement attached as Schedule B and incorporated herein
by reference (the "Master Repurchase Agreement"). The Investment Sweep Amount will be
allocated by Bank each Business Day among the Designated Investment(s) and any
Repurchase Transactions by a proprietary computer program based on preset criteria for the
availability of investments. On the following Business Day, whatever -the specific allocation of
Designated Investment(s), Bank will sweep the Investment Sweep Principal Amount to the
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Concentration Account for Customer's immediate use or reinvestment. However, the
Investment Sweep Interest Amount will not be credited to the Concentration Account until after
the close of business on the following Business Day.
3. Designated Investment(sl: In providing this service to Customer, Bank makes available to
Customer certain investment options. Customer directs Bank to sweep funds into the
investments designated by Customer. With respect to the investment options made available
under this Agreement, Bank has various alternatives for where, from and how the investments
are obtained. Bank may act as principal, as agent for the issuer or as agent for Customer in
doing so. When acting as agent for the issuer, Bank receives compensation from the issuer,
which may increase based on volume. Customer authorizes Bank to act in any of the above
capacities as desired by Bank. When Bank acts as agent for Customer for mutual fund
transactions, Bank represents numerous Customers as agent and such funds are held in Bank's
name for the benefit of Customers. Bank provides all subsidiary accounting services on behalf
of Customers for these purposes and is the only party authorized to effect transactions in the
fund accounts. Customer authorizes Bank or its designee to transmit purchase and redemption
orders to the mutual funds, and otherwise interact with the mutual funds, consistent with the
terms of this Agreement.
If the Designated Investments of Customer's choice are not available on a given day, the
Investment Sweep Amount will be invested in whole or in part in a Repurchase Transaction.
The Master Repurchase Agreement and this Agreement will apply to all such investments. If
the Investment Sweep Amount is invested in whole or in part in a Repurchase Transaction, the
repurchase counterparty (Bank or an Affiliate) will deliver to Bankers Trust, or any affiliate or
subsidiary thereof, ("Bankers Trust") (or a similar party as determined by Bank), serving as a
third party custodian for the benefit of Customer and the repurchase counterparty, the securities
serving as collateral pursuant to the Master Repurchase Agreement and identified in
Customer's daily confirmation of investment transaction(s). In the event of default by or
insolvency of either Bank or the repurchase counterparty, Bankers Trust will contact Customer
for instructions as to disposition of such collateral securities and distribution of any sale
proceeds thereof. Customer expressly consents to Bankers Trust (or a similar party as
determined by Bank) serving as third party custodian.
The Bank will use its "Best Efforts" to make available an adequate amount of securities for the
daily investment of Concentration Account funds. In the event that the Bank does not have
adequate securities available for investment on a given day, the Bank reserves the right not to
invest any part of the balances in a Customer's Concentration Account. In order to assist the
Bank in determining what amount of securities may be necessary for investment, Customer
agrees to notify Wells Fargo Institutional & Brokerage Sales at least one business day prior to
the business day that Customer expects to have more than its usual balances in its
Concentration Account for investment through the Service.
4. Interest Earnings and Expenses: The Designated Investment(s) and any Repurchase
Transactions will be structured to earn interest on a daily basis. On commercial paper
investment transactions where Bank is acting as principal or as agent for the issuer, the interest
rate is based on current market conditions and may be changed daily without prior notice to
Customer. As full or partial compensation for performing the Service and in connection with
those Designated Investment(s) where Bank is acting as principal or agent, Bank reserves the
right to charge a fee or take a mark-up on the sale of the Designated Investment(s) in addition
to the monthly maintenance fee on Schedule C. The fee or mark-up may be up to 1.25% on
balances of $100,000 or greater; the amount for balances less than $100,000 may be up to
1.75%. The amount of interest earned by Customer, net of any fees or mark-ups, will be
identified in periodic statements to Customer. Customer may obtain information on the current
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interest rate(s) by contacting Bank. Bank will credit earnings to the Interest Account on each
Business Day.
5. CCMA 4-Way Sweep Option:
(a) 4-Way Sweep Authorization: If the 4-Way Sweep Option is designated in Schedule A,
(i) Customer authorizes and directs Bank to apply the Investment Sweep Amount at
the end of each Business Day first, to pay down the outstanding balance under the line of
credit, if any, specified in Schedule A, or otherwise in writing, as the same may be
modified from time to time, including all renewals or substitutions thereof whether in the
same or a different principal amount or with the same or a different AFS number (the
"Line of Credit"). All such payments will be applied to the Line of Credit in accordance
with the terms of the.loan documentation relating to the Line of Credit. If the Line of
Credit balance is zero as a result of any such pay down, Bank is authorized and directed
to invest the Investment Sweep Amount in accordance with Sections 2 and 3 of this
Agreement.
(ii) To the extent that the balance in the Concentration Account is less than the
Specified Balance, Bank is authorized and directed to advance funds from the Line of
Credit in an amount sufficient to restore the Collected Balance to the Specified Balance.
Customer understands that such advances will be subject to the terms and conditions of
the loan documentation relating to the Line of Credit, and that Bank may elect not to
make any such advance at any time in its sole discretion.
6. Periodic Statements: Bank will provide periodic statements to Customer of investment
transactions detailing daily transactions, accrued investment earnings, and a summary of
earnings credited. Customer must review the statements and notify Bank of any errors,
overcharges, improper investments or other problems with the Service (collectively, "Error(s)")
within ten (10) Business Days of Bank's mailing of the first notice on which any such Error(s)
appears. If Customer fails to notify Bank of such Error(s) within the time period set forth above,
the confirmations and statements will be deemed to be correct and conclusive as to Customer.
7. Fees: Customer shall pay Bank those fees set forth on Schedule C attached hereto and
incorporated herein by references (the "Fees"). At its discretion, the Bank is authorized to debit
the Concentration Account for payment of the fees or, if Customer is a Cash Management
Customer, Bank may charge Fees to Customer's account analysis.
8. Disclaimer: Bank is not providing any investment advice hereunder and makes no
representation or warranty as to the suitability or safety of any of the investments made
pursuant to this Agreement or Customer's choice of Designated Investment(s). As long as Bank
or its Affiliates invest funds of Customer in Designated Investment(s) or in a Repurchase
Transaction as provided herein, neither Bank nor Wells Fargo & Co. and Affiliates, or their
employees, officers or directors shall be liable to Customer for any reason whatsoever related to
the purchase of any Designated Investment(s) or a Repurchase Transaction for Customer's
account. Bank makes no express or implied representations or warranties with respect to the
Service other than those expressly set forth in this Agreement.
9. Authority of Banks to Appoint Agent(sl: Bank is authorized to appoint agents, including
Affiliates or subsidiaries, to assist Bankers Trust in the performance of its obligations under this
Agreement.
10. Amendments and Changes: Except as otherwise provided, Bank may amend the terms of this
Agreement (or of the attached Schedules) and the fees charged hereunder from time to time by
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giving written notice to Customer or by mailing a copy of the amended Agreement or Schedule
to Customer. Their prospectuses, and federal and state securities laws and regulations govern
changes to fees charged by the mutual funds.
Customer shall make any changes to its Designated Investment(s), or Specified Balances or
accounts, through the execution of a new Designated Investment(s) form or Schedule A,
respectively, by any person authorized by Customer to execute this Agreement and the delivery
of such form or schedule to Bank on any Business Day. Any such changes shall become
effective no later than five (5) Business Days following receipt by the Bank.
11. Schedules: All Schedules referenced in this Agreement are hereby incorporated by reference.
In case of any inconsistency between the Schedules and this Agreement, the Schedules will
prevail. Capitalized terms used in the Schedules shall have the meaning set forth in this
Agreement, unless such terms are defined in the Schedules.
12. Counterparts: This Agreement may be executed in as many counterparts as may be deemed
necessary or convenient, each of which, when so executed, shall be deemed an original, but all
such counterparts shall constitute but one and the same agreement.
13. Notification: All written notices required by this Agreement shall be delivered or mailed to the
other parties at the addresses set forth below or to such other address as a party may specify in
writing. Notices sent hereunder shall be effective upon receipt, or if personally delivered,
telexed or mailed as herein described, on the earlier to occur of delivery or five (5) Business
Days after the postmarked date (if mailed).
14. Multiple Signers: If this Agreement covers more than one legal entity, each such entity shall
be included in the term "Customer" and each such entity shall execute Schedule D pursuant to
which they will agree to be bound by the terms and conditions of this Agreement. Bank may
take instructions and direction from any party signing this Agreement on behalf of all signers.
All signers authorize Bank to act on such instructions and direction. Such authorization shall
include but not be limited to any changes or amendments to this Agreement or changes to
Designated Investments or any schedule. Whether or not indicated on such instructions or
direction, such actions shall be deemed to have been taken on behalf of all legal entities
included in the term "Customer" hereunder. Notice sent to a signer of this Agreement should be
deemed notice to all signers of Schedule D.
15. Governing Law: This Agreement shall be governed by and construed under the laws of the
State of California, without giving effect to the conflict of laws principles of such state.
16. Assignment_ We may at any time assign or delegate our rights and duties under the Service
Documents to any of our Affiliates that are owned or controlled by Wells Fargo & Company.
Otherwise, neither we nor you may assign or transfer its rights or obligations under any Service
Document without prior written consent which shall not be unreasonably withheld. We may at
any time assign or sell our operations facilities which provide the Services.
17. Termination: Bank or Customer may terminate the Service with or without cause upon written
notice of at least ten (10) calendar days. Bank or Customer may immediately terminate the
Service by giving written notice if either party violates any of the terms of conditions for using
the Service.
18. Limitation on Liability: Bank's liability relating to the Service shall be limited exclusively to
actual proven damages arising directly from Bank's negligence or willful misconduct. In no
event shall Bank be liable for any special, incidental, indirect, consequential or punitive losses or
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damages, whether any claim is based on contract or tort or whether the likelihood of such
damages was known to Bank.
Bank will perform the Service in a manner consistent with the quality provided when Bank
performs similar services for its own account. Bank, however, cannot be responsible for the
errors, acts or omissions of others, such as communications carriers, correspondents or
clearing houses through which Bank may effect Customer instructions or receive or transmit
information in the performance of the Service. Bank cannot be responsible for any loss, liability
or delay resulting from or caused by war, communications networks outages, labor disputes,
legal constraints, fires, power surges or failures, earthquakes, civil disturbances or other events
beyond Bank's control. In addition, Bank shall not be liable for any losses or damages caused,
in whole or in part, by the action or inaction of Customer, or any agent or employee of
Customer, whether or not such action or inaction constitutes negligence or a breach of this
Agreement.
19. Arbitration:
(a) Arbitration: Upon the demand of any party, any Dispute shall be resolved by binding
arbitration in accordance with the terms of this Section 19 [except as set forth in subsection (e) below]. A
"Dispute" shall mean any action, dispute, claim or controversy of any kind, whether in contract or tort,
statutory or common law, legal or equitable, now existing or hereafter arising under or in connection with,
or in any way pertaining to this Agreement. Any party may by summary proceedings, brings an action in
court to compel arbitration of a Dispute. Any party who fails or refuses to submit to arbitration following a
lawful demand by any other party shall bear all costs and expenses incurred by such other party in
compelling arbitration of any Dispute.
(b) Governing Rules: the American Arbitration Association ("AAA") or such other
administrator shall administer Arbitration proceedings, as the parties shall mutually agree upon.
Arbitration shall be conducted in accordance with the AAA Commercial Arbitration Rules. If there is any
inconsistency between the terms hereof and any such rules, the terms and procedures set forth herein
shall control. All Disputes submitted to arbitration shall be resolved in accordance with the Federal
Arbitration Act (Title 9 of the United States Code). The arbitration shall be conducted at a location in
California selected by the AAA or other administrator. All statutes of limitation applicable to any Dispute
shall apply to any arbitration proceeding. All discovery activities shall be expressly limited to matters
directly relevant to the Dispute being arbitrated. Judgment upon any award rendered in an arbitration
may be entered in any court having jurisdiction; provided however, that nothing contained herein shall be
deemed to be a waiver, by any party that is a bank, of the protections afforded to it under 12 U.S.C. §91
or any similar applicable state law.
(c) No Waiver: Provisional Remedies: No provision hereof shall limit the right of any party to
obtain provisional or ancillary remedies, including without limitation injunctive relief, attachment or the
appointment of a receiver, from a court of competent jurisdiction before, after or during the pendency of
any arbitration or other proceeding. The exercise of any such remedy shall not waive the right of any
party to compel arbitration or reference hereunder.
(d) Arbitrator Qualifications and Powers: Awards: Arbitrators must be active members of the
California State Bar or retired judges of the state or federal judiciary of California, with expertise in the
substantive laws applicable to the subject matter of the Dispute. Arbitrators are empowered to resolve
Disputes by summary rulings in response to motions filed prior to the final arbitration hearing. Arbitrators
(i) shall resolve all Disputes in accordance with the substantive law of the state of California, (ii) may grant
any remedy or relief that a court of the state of California could order or grant within the scope hereof and
such ancillary relief as is necessary to make effective any award, and (iii) shall have the power to award
recovery of all costs and fees, to impose sanctions and to take such other actions as they deem
necessary to the same extent a judge could pursuant to the Federal Rules of Civil Procedure, the
California Rules of Civil Procedure or other applicable law. A single arbitrator who shall not render an
award of greater than $5,000,000 (including damages, costs, fees and expenses) shall decide any
Dispute in which the amount in controversy is $5,000,000 or less. By submission to a single arbitrator,
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each party expressly waives any right or claim to recover more than $5,000,000. Any Dispute in which
the amount in controversy exceeds $5,000,000 shall be decided by majority vote of a panel of three
arbitrators; provided however, that all three arbitrators must actively participate in all hearings and
deliberations.
(e) Judicial Review: Notwithstanding anything herein to the contrary, in any arbitration in
which the amount in controversy exceeds $5,000,000, the arbitrators shall be required to make specific,
written findings of fact and conclusions of law. In such arbitrations (i) the arbitrators shall not have the
power to make any award which is not supported by substantial evidence or which is based on legal
error, (ii) an award shall not be binding upon the parties unless the findings of fact are supported by
substantial evidence and the conclusions of law are not erroneous under the substantive law of the state
of Califomia, and (iii) the parties shall have in addition to the grounds referred to in the Federal Arbitration
Act for vacating, modifying or correcting an award, the right to judicial review of (A) whether the findings
of fact rendered by the arbitrators are supported by substantial evidence, and (B) whether the conclusions
of law are erroneous under the substantive law of the state of Califomia. Judgment confirming an award
in such a proceeding may be entered only if a court determines the award is supported by substantial
evidence and not based on legal error under the substantive law of the state of Califomia.
(f) Damages: The arbitrator(s) will have no authority to award punitive or other damages not
measured by the prevailing party's actual damages, except as may be required by statute. The
arbitrator(s) shall not award consequential damages in any arbitration initiated under this Section. Any
award in arbitration under this Section shall be limited to monetary damages and shall include no
injunction or direction to any party other than the direction to pay a monetary amount.
(g) Miscellaneous: To the maximum extent practicable, the AAA, the arbitrators and the
parties shall take all action required to conclude any arbitration proceeding within 180 days of the filing of
the Dispute with the AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by a party required in the
ordinary course of its business, by applicable law or regulation, or to the extent necessary to exercise any
judicial review rights set forth herein. This arbitration provision shall survive termination, amendment or
expiration of the Agreement or any relationship between the parties.
20. Disclosure of Customer Information: Customer consents to the disclosure of Customer
information to Wells Fargo & Co. or any Affiliate or subsidiary.
21. DISCLOSURE STATEMENT: IMPORTANT INFORMATION
GENERAL
Funds deposited into the Concentration Account or the Interest Account are insured by the Federal
Deposit Insurance Corporation (FDIC), subject to the FDIC's terms for such insurance but only until
they are swept into investment instruments.
Investment instruments offered, sold, or placed by Bank are not deposits in or obligations of, and are
not guaranteed by, Bank or any Affiliate (except for Repurchase Agreements, see below); and are not
insured by the FDIC, the Securities Investors Protection Corporation, or the United States of America.
Investment instruments offered, sold, or placed by Bank are subject to investment risk including
possible loss of principal invested or the nonpayment of interest.
Yields vary with market conditions. Past performance is no guarantee of future results.
WELLS FARGO: Wells Fargo Funds Management, LLC, a wholly -owned subsidiary of Wells
Fargo & Company, provides investment advisory and administrative services for the Wells
Fargo Funds. Other affiliates of Wells Fargo & Company provide sub -advisory and other
services for the Funds. The Funds are distributed by Stephens Inc., Member NYSE/SIPC.
Wells Fargo & Company and its affiliates are not affiliated with Stephens Inc. Fees for such
services are disclosed in the prospectuses for those funds.
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REPURCHASE AGREEMENTS: Repurchase Agreement transactions are obligations of, but
not deposits with, the repurchase counterparty (the Bank or Affiliates).
COMMERCIAL PAPER: Bank may act as agent,for the issuer or as agent for Customer for
commercial paper transactions. Commercial paper is an unsecured obligation of the respective
issuer.
MUTUAL FUNDS: Bank may act as agent or as principal for Customer for mutual fund
transactions. Money Market Mutual Funds seek to preserve the value of your investment at
$1.00 per share; it is possible to lose money by investing in the money market mutual funds.
GOVERNMENT SPONSORED ENTERPRISES ("GSE'T Bank will act as principal for all GSE
transactions. Discount notes and other short-term obligations issued by GSE's are obligations
of their respective issuers. The obligations of such issuers are not obligations of, nor are they
guaranteed by, the United States of America.
PROSPECTUSES AND OTHER INVESTMENT INFORMATION: Prior to Customer's choice of
Designated Investment(s), Customer acknowledges having received and read current
prospectuses or other information regarding the Designated Investments, including but not
limited to Offering Statements and Information Statements, as applicable, describing the
investments being offered.
Customer acknowledges Customer has read and understands the Corporate Cash Management
Account Agreement, including the Disclosure Statement, the Designated Investments Form and
all Schedules.
Bank
WELLS FARGo BANK, N.A.
1111 Main Street, Suite 306
MAC P6769-031
Vancouver, WA 98660
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CCMA
08101
Page 7
Designated Investments Form
Corporate Cash Management Account Agreement
Wells Fargo Bank, N.A.
IMPORTANT INSTRUCTIONS: PLEASE READ BEFORE COMPLETING
1. You may select multiple investment options. If you do, please rank them in the order that you wish to
invest your funds; for example, 1 for first, 2 for second, etc. Rank Commercial Paper (CP) or Mutual Fund
(MF) choices higher than Government Sponsored Enterprise (GSE) choices.
2. If you do not wish to invest your funds with a particular issuer, please leave that issuer line blank.
3. You may select the CP option or the MF option, but you may not select both.
4. If you select a CP issuer(s) or a MF issuer(s), then you must also select at least one GSE issuer.
1. Commercial Paper Investment Option
General Mills, Inc.
Weyerhaeuser Real Estate or Weyerhaeuser Company, whichever is
available
2. Mutual Fund Investment Option
Wells Fargo Cash Investment Money Market Fund
21 Wells Fargo Treasury Plus Institutional Money Market Fund
I Dreyfus Treasury Prime Cash Management
3. Government Sponsored Enterprise & PEFCO' Investment Option (Must select at least one)
Federal Farm Credit Bank ("FFCB")
Federal Home Loan Bank ("FHLB")
Federal National Mortgage Association ("Fannie Mae")
Private Export Funding Corp. ("PEFCO")
This form lists Customer's choice of investments for the Corporate Cash Management Account
Agreement (the "Agreement") between Customer and Bank (as defined therein) and is subject
to the terms of the Agreement. Customer acknowledges having read and understood the
Disclosure Statement in the Agreement.
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' Pefco is not a GSE and may not fall within certain regulatory guidelines.
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08101 Page 8
Schedule A
Designated Accounts, Specified Balances and 4-Way Sweep Option
Corporate Cash Management Account Agreement
Wells Fargo Bank, N.A.
The Concentration Account, Interest Account and Specified Balance listed below are subject to the
Corporate Cash Management Account Agreement.
Conc ntra 'on Account Name
Interest Account Name
(May be the Concentration Account)
sck*e.. a s & W Ve,
Account Number
C� L-1 s 9 Z$
Account Number
SP. vV4e_ aS k b�✓�--
Specified Balance (if desired)
Customer Idoes X does not (ch ck one) want the 4-Way Sweep Option. If "does" is checked,
the Line of Credit number is:
All A --
If this Schedule A is executed to replace an existing Schedule A to the Corporate Cash
Management Account Agreement, then the following paragraph applies:
This new Schedule replaces any existing Schedule A to the Corporate Cash Management Account
Agreement. Except for this change, the terms and conditions of the Corporate Cash Management
Account Agreement (including the Disclosure Statement, Designated Investment form and all
Schedules) apply and are reaffirmed.
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Company Nb e
By:
Company Officer Signature
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Officer Title
Date
CCMA Page 9
08101
Schedule B
Master Repurchase Agreement
Corporate Cash Management Account Agreement
Wells Fargo Bank, N.A.
Between:
Wells Fargo Bank, N.A.
And
Customer, as designated in the Corporate Cash Management Account Agreement ("CCMA
Agreement") to which this Agreement is attached and incorporated into by reference.
1. Applicability
From time to time the parties hereto may enter into transactions in which one party ("Seller")
agrees to transfer to the other ("Buyer") securities or other assets ("Securities") against the
transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such
Securities at a date certain or on demand, against the transfer of funds by Seller. Each such
transaction shall be referred to herein as a "Transaction" and, unless otherwise agreed in
writing, shall be governed by this Agreement, including any supplemental terms or conditions
contained in Annex I hereto and in any other annexes identified herein or therein as applicable
hereunder.
2. Definitions
(a) "Act of Insolvency", with respect to any party, (i) the commencement by such party as
debtor of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation,
moratorium, dissolution, delinquency or similar law, or such party seeking the appointment or election of a
receiver, conservator, trustee, custodian or similar official for such party or any substantial part of its
property, or the convening of any meeting of creditors for purposes of commencing any such case or
proceeding or seeking such an appointment or election, (ii) the commencement of any such case or
proceeding against such party, or another seeking such an appointment or election, or the filing against a
party of an application for a protective decree under the provisions of the Securities Investor Protection
Act of 1970, which (A) is consented to or not timely contested by such party, (B) results in the entry of an
order for relief, such an appointment or election, the issuance of such a protective decree or the entry of
an order having a similar effect, or (C) is not dismissed within 15 days, (iii) the making by such party of a
general assignment for the benefit of creditors, or (iv) the admission in writing by such party of such
party's inability to pay such party's debts as they become due;
(b) "Additional Purchased Securities", Securities provided by Seller to Buyer pursuant to
Paragraph 4(a) hereof
(c) "Buyer's Margin Amount", with respect to any Transaction as of any date, the amount
obtained by application of the Buyer's Margin Percentage to the Repurchase Price for such Transaction
as of such date;
(d) "Buyer's Margin Percentage", with respect to any Transaction as of any date, a
percentage (which may be equal to the Seller's Margin Percentage) agreed to by Buyer and Seller or, in
the absence of any such agreement, the percentage obtained by dividing the Market Value of the
Purchased Securities on the Purchase Date by the Purchase Price on the Purchase Date for such
Transaction;
(e) "Confirmation", the meaning specified in Paragraph 3(b) hereof;
(f) "Income", with respect to any Security at any time, any principal thereof and all interest,
dividends or other distributions thereon;
CCMA
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(g) "Margin Deficit", the meaning specified in Paragraph 4(a) hereof;
(h) "Margin Excess", the meaning specified in Paragraph 4(b) hereof;
(i) "Margin Notice Deadline", the time agreed to by the parties in the relevant Confirmation,
Annex I hereto or otherwise as the deadline for giving notice requiring same -day satisfaction of margin
maintenance obligations as provided in Paragraph 4 hereof (or, in the absence of any such agreement,
the deadline for such purposes established in accordance with market practice);
0) "Market Value", with respect to any Securities as of any date, the price for such Securities
on such date obtained from a generally recognized source agreed to by the parties or the most recent
closing bid quotation from such a source, plus accrued Income to the extent not included therein (other
than any Income credited or transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5
hereof) as of such date (unless contrary to market practice for such Securities);
(k) "Price Differential", with respect to any Transaction as of any date, the aggregate amount
obtained by daily application of the Pricing Rate for such Transaction to the Purchase Price for such
Transaction on a 360 day per year basis for the actual number of days during the period commencing on
(and including) the Purchase Date for such Transaction and ending on (but excluding) the date of
determination (reduced by any amount of such Price Differential previously paid by Seller to Buyer with
respect to such Transaction);
(1) "Pricing Rate", the per annum percentage rate for determination of the Price Differential;
(m) " Prime Rate", the prime rate of U.S. commercial banks as published in The Wall Street
Journal (or, if more than one such rate is published, the average of such rates);
(n) "Purchase Date", the date on which Purchased Securities are to be transferred by Seller
to Buyer;
(o) "Purchase Price", (i) on the Purchase Date, the price at which Purchased Securities are
transferred by Seller to Buyer, and (ii) thereafter, except where Buyer and Seller agree otherwise, such
price increased by the amount of any cash transferred by Buyer to Seller pursuant to Paragraph 4(b)
hereof and decreased by the amount of any cash transferred by Seller to Buyer pursuant to Paragraph
4(a) hereof or applied to reduce Seller's obligations under clause (ii) of Paragraph 5 hereof;
(p) "Purchased Securities", the Securities transferred by Seller to Buyer in a Transaction
hereunder, and any Securities substituted therefor in accordance with Paragraph 9 hereof. The term
"Purchased Securities" with respect to any Transaction at any time also shall include Additional
Purchased Securities delivered pursuant to Paragraph 4(a) hereof and shall exclude Securities returned
pursuant to Paragraph 4(b) hereof;
(q) "Repurchase Date", the date on which Seller is to repurchase the Purchased Securities
from Buyer, including any date determined by application of the provisions of Paragraph 3(c) or 11 hereof;
(r) "Repurchase Price", the price at which Purchased Securities are to be transferred from
Buyer to Seller upon termination of a Transaction, which will be determined in each case (including
Transactions terminable upon demand) as the sum of the Purchase Price and the Price Differential as of
the date of such determination;
(s) "Seller's Margin Amount", with respect to any Transaction as of any date, the amount
obtained by application of the Seller's Margin Percentage to the Repurchase Price for such Transaction
as of such date;
(t) "Seller's Margin Percentage", with respect to any Transaction as of any date, a
percentage (which may be equal to the Buyer's Margin Percentage) agreed to by Buyer and Seller or, in
the absence of any such agreement, the percentage obtained by dividing the Market Value of the
Purchased Securities on the Purchase Date by the Purchase Price on the Purchase Date for such
Transaction.
3. Initiation; Confirmation; Termination
(a) An agreement to enter into a Transaction may be made orally or in writing at the initiation
of either Buyer or Seller. On the Purchase Date for the Transaction, the Purchased Securities shall be
transferred to Buyer or its agent against the transfer of the Purchase Price to an account of Seller.
(b) Upon agreeing to enter into a Transaction hereunder, Buyer or Seller (or both), as shall
be agreed, shall promptly deliver to the other party a written confirmation of each Transaction (a
"Confirmation"). The Confirmation shall describe the Purchased Securities (including CUSIP number, if
any), identify Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase Price, (iii) the
Repurchase Date, unless the Transaction is to be terminable on demand, (iv) the Pricing Rate or
Repurchase Price applicable to the Transaction, and (v) any additional terms or conditions of the
Transaction not inconsistent with this Agreement. The Confirmation, together with this Agreement, shall
CCMA pwe1 l
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constitute conclusive evidence of the terms agreed between Buyer and Seller with respect to the
Transaction to which the Confirmation relates, unless with respect to the Confirmation specific objection is
made promptly after receipt thereof. In the event of any conflict between the terms of such Confirmation
and this Agreement, this Agreement shall prevail.
(c) In the case of Transactions terminable upon demand, such demand shall be made by
Buyer or Seller, no later than such time as is customary in accordance with market practice, by telephone
or otherwise on or prior to the business day on which such termination will be effective. On the date
specified in such demand, or on the date fixed for termination in the case of Transactions having a fixed
term, termination of the Transaction will be effected by transfer to Seller or its agent of the Purchased
Securities and any Income in respect thereof received by Buyer (and not previously credited or
transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereof) against the transfer
of the Repurchase Price to an account of Buyer.
4. Margin Maintenance
(a) If at any time the aggregate Market Value of all Purchased Securities subject to all
Transactions in which a particular party hereto is acting as Buyer is less than the aggregate Buyer's
Margin Amount for all such Transactions (a "Margin Deficit"), then Buyer may by notice to Seller require
Seller in such Transactions, at Seller's option, to transfer to Buyer cash or additional Securities
reasonably acceptable to Buyer (°Additional Purchased Securities"), so that the cash and aggregate
Market Value of the Purchased Securities, including any such Additional Purchased Securities, will
thereupon equal or exceed such aggregate Buyer's Margin Amount (decreased by the amount of any
Margin Deficit as of such date arising from any Transactions in which such Buyer is acting as Seller).
(b) If at any time the aggregate Market Value of all Purchased Securities subject to all
Transactions in which a particular party hereto is acting as Seller exceeds the aggregate Seller's Margin
Amount for all such Transactions at such time (a "Margin Excess"), then Seller may by notice to Buyer
require Buyer in such Transactions, at Buyer's option, to transfer cash or Purchased Securities to Seller,
so that the aggregate Market Value of the Purchased Securities, after deduction of any such cash or any
Purchased Securities so transferred, will thereupon not exceed such aggregate Seller's Margin Amount
(increased by the amount of any Margin Excess as of such date arising from any Transactions in which
such Seller is acting as Buyer).
(c) If any notice is given by Buyer or Seller under subparagraph (a) or (b) of this Paragraph
at or before the Margin Notice Deadline on any business day, the party receiving such notice shall
transfer cash or Additional Purchased Securities as provided in such subparagraph no later than the
close of business in the relevant market on such day. If any such notice is given after the Margin Notice
Deadline, the party receiving such notice shall transfer such cash or Securities no later than the close of
business in the relevant market on the next business day following such notice.
(d) Any cash transferred pursuant to this Paragraph shall be attributed to such Transactions
as shall be agreed upon by Buyer and Seller.
(e) Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the
respective rights of Buyer or Seller (or both) under subparagraphs (a) and (b) of this Paragraph may be
exercised only where a Margin Deficit or Margin Excess, as the case may be, exceeds a specified dollar
amount or a specified percentage of the Repurchase Prices for such Transactions (which amount or
percentage shall be agreed to by Buyer and Seller prior to entering into any such Transactions).
(f) Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the
respective rights of Buyer and Seller under subparagraphs (a) and (b) of this Paragraph to require the
elimination of a Margin Deficit or a Margin Excess, as the case may be, may be exercised whenever such
a Margin Deficit or Margin Excess exists with respect to any single Transaction hereunder (calculated
without regard to any other Transaction outstanding under this Agreement).
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5. Income Payments
Seller shall be entitled to receive an amount equal to all Income paid or distributed on or in
respect of the Securities that is not otherwise received by Seller, to the full extent it would be so
entitled if the Securities had not been sold to Buyer. Buyer shall, as the parties may agree with
respect to any Transaction (or, in the absence of any such agreement, as Buyer shall
reasonably determine in its discretion), on the date such Income is paid or distributed either (i)
transfer to or credit to the account of Seller such Income with respect to any Purchased
Securities subject to such Transaction or (ii) with respect to Income paid in cash, apply the
Income payment or payments to reduce the amount, if any, to be transferred to Buyer by Seller
upon termination of such Transaction. Buyer shall not be obligated to take any action pursuant
to the preceding sentence (A) to the extent that such action would result in the creation of a
Margin Deficit, unless prior thereto or simultaneously therewith Seller transfers to Buyer cash or
Additional Purchased Securities sufficient to eliminate such Margin Deficit, or (B) if an Event of
Default with respect to Seller has occurred and is then continuing at the time such Income is
paid or distributed.
6. Security Interest
Although the parties intend that all Transactions hereunder be sales and purchases and not
loans, in the event any such Transactions are deemed to be loans, Seller shall be deemed to
have pledged to Buyer as security for the performance by Seller of its obligations under each
such Transaction, and shall be deemed to have granted to Buyer a security interest in, all of the
Purchased Securities with respect to all Transactions hereunder and all Income thereon and
other proceeds thereof.
7. Payment and Transfer
Unless otherwise mutually agreed, all transfers of funds hereunder shall be in immediately
available funds. All Securities transferred by one party hereto to the other party (i) shall be in
suitable form for transfer or shall be accompanied by duly executed instruments of transfer or
assignment in blank and such other documentation as the party receiving possession may
reasonably request, (ii) shall be transferred on the book -entry system of a Federal Reserve
Bank, or (iii) shall be transferred by any other method mutually acceptable to Seller and Buyer.
Required Disclosure for Transactions in Which the Seller Retains Custody of the Purchased Securities
Seller is not permitted to substitute other securities for those subject to this Agreement and therefore must
keep Buyer's securities segregated at all times, unless in this Agreement Buyer grants Seller the right to
substitute other securities. If Buyer grants the right to substitute, this means that Buyer's securities will
likely be commingled with Seller's own securities during the trading day. Buyer is advised that, during any
trading day that Buyer's securities are commingled with Seller's securities, they 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 resegregate substitute securities for Buyer will
be subject to Seller's ability to satisfy any lien or to obtain substitute securities.
8. Segregation of Purchased Securities
To the extent required by applicable law, all Purchased Securities in the possession of Seller
shall be segregated from other securities in its possession and shall be identified as subject to
this Agreement. Segregation may be accomplished by appropriate identification on the books
and records of the holder, including a financial or securities intermediary or a clearing
corporation. All of Seller's interest in the Purchased Securities shall pass to Buyer on the
Purchase Date and, unless otherwise agreed by Buyer and Seller, nothing in this Agreement
shall preclude Buyer from engaging in repurchase transactions with the Purchased Securities or
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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.
9. Substitution
(a) Seller may, subject to agreement with and acceptance by Buyer, substitute other
Securities for any Purchased Securities. Such substitution shall be made by transfer to Buyer of such
other Securities and transfer to Seller of such Purchased Securities. After substitution, the substituted
Securities shall be deemed to be Purchased Securities.
(b) In Transactions in which Seller retains custody of Purchased Securities, the parties
expressly agree that Buyer shall be deemed, for purposes of subparagraph (a) of this Paragraph, to have
agreed to and accepted in this Agreement substitution by Seller of other Securities for Purchased
Securities; provided, however, that such other Securities shall have a Market Value at least equal to the
Market Value of the Purchased Securities for which they are substituted.
10. Representations
Each of Buyer and Seiler represents and warrants to the other that (i) it is duly authorized to
execute and deliver this Agreement, to enter into Transactions contemplated hereunder and to
perform its obligations hereunder and has taken all necessary action to authorize such
execution, delivery and performance, (ii) it will engage in such Transactions as principal (or, if
agreed in writing, in the form of an annex hereto or otherwise, in advance of any Transaction by
the other party hereto, as agent for a disclosed principal), (iii) the person signing this Agreement
on its behalf is duly authorized to do so on its behalf (or on behalf of any such disclosed
principal), (iv) it has obtained all authorizations of any governmental body required in connection
with this Agreement and the Transactions hereunder and such authorizations are in full force
and effect and (v) the execution, delivery and performance of this Agreement and the
Transactions hereunder will not violate any law, ordinance, charter, by-law or rule applicable to
it or any agreement by which it is bound or by which any of its assets are affected. On the
Purchase Date for any Transaction Buyer and Seller shall each be deemed to repeat all the
foregoing representations made by it.
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 day's notice, to comply with Paragraph 5
hereof, (v) an Act of Insolvency occurs with respect to Seller or Buyer, (vi) any representation
made by Seller or Buyer shall have been incorrect or untrue in any material respect when made
or repeated or deemed to have been made or repeated, or (vii) Seller or Buyer shall admit to the
other its inability to, or its intention not to, perform any of its obligations hereunder (each an
"Event of Default"):
(a) The 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.
CCMA page 14
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(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, (1) the defaulting parry's obligations in such Transactions to repurchase all Purchased
Securities, at the Repurchase Price therefor on the Repurchase Date determined in accordance with
subparagraph (a) of this Paragraph, shall thereupon become immediately due and payable, (ii) all Income
paid after such exercise or deemed exercise shall be retained by the 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 parry'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 therefor on such date, obtained
from a generally recognized source or the most recent closing bid quotation from such a
source, against the aggregate unpaid Repurchase Prices and any other amounts owing
by the defaulting party hereunder, and
(ii) As to Transactions in which the defaulting party is acting as Buyer, (A)
immediately purchase, in a recognized market (or otherwise in a commercially
reasonable manner) at such price or prices as the 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 therefor on such date, obtained from a generally recognized
source or the most recent closing offer quotation from such a source.
Unless otherwise provided in Annex I, the parties acknowledge and agree that
(1) the Securities subject to any Transaction hereunder are instruments traded in a
recognized market, (2) in the absence of a generally recognized source for prices or bid
or offer quotations for any Security, the non -defaulting party may establish the source
therefor in its sole discretion and (3) all prices, bids and offers shall be determined
together with accrued Income (except to the extent contrary to market practice with
respect to the relevant Securities).
(e) As to Transactions in which the defaulting party is acting as Buyer, the defaulting party
shall be liable to the 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
CCMA Page 15
08 01
or expense directly arising or resulting from the occurrence of an Event of Default in respect of a
Transaction.
(h) To the extent permitted by applicable law, the defaulting party shall be liable to the 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 hereunto and will enter into each
Transaction hereunder in consideration of and in reliance upon the fact that; all Transactions
hereunder constitute a single business and contractual relationship and have been made in
consideration of each other. Accordingly, each of Buyer and Seller agrees (i) to perform all of its
obligations in respect of each Transaction hereunder, and that a default in the performance of
any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii)
that each of them shall be entitled to set off claims and apply property held by them in respect of
any Transaction against obligations owing to them in respect of any other Transactions
hereunder and (iii) that payments, deliveries and other transfers made by either of them in
respect of any Transaction shall be deemed to have been made in consideration of payments,
deliveries and other transfers in respect of any other Transactions hereunder, and the
obligations to make any such payments, deliveries and other transfers may be applied against
each other and netted.
13. Notices and Other Communications
Any and all notices, statements, demands or other communications hereunder may be given by
a party to the other by mail, facsimile, telegraph, messenger or otherwise to the address
specified in Annex I hereto, or so sent to such party at any other place specified in a notice of
change of address hereafter received by the other. All notices, demands and requests
hereunder may be made orally, to be confirmed promptly in writing, or by other communication
as specified in the preceding sentence.
14. Entire Agreement; Severability
This Agreement shall supersede any existing agreements between the parties containing
general terms and conditions for repurchase transactions. Each provision and agreement herein
shall be treated as separate and independent from any other provision or agreement herein and
shall be enforceable notwithstanding the unenforceability of any such other provision or
agreement.
15. Non -assignability; Termination
(a) The rights and obligations of the parties under this Agreement and under any Transaction
shall not be assigned by either party without the prior written consent of the other party, and any such
assignment without the prior written consent of the other party shall be null and void. Subject to the
foregoing, this Agreement and any Transactions shall be binding upon and shall inure to the benefit of the
parties and their respective successors and assigns. This Agreement may be terminated by either party
upon giving written notice to the other, except that this Agreement shall, notwithstanding such notice,
remain applicable to any Transactions then outstanding.
CCMA
OW Page 16
(b) Subparagraph (a) of this Paragraph 15 shall not preclude a party from assigning,
charging or otherwise dealing with all or any part of its interest in any sum payable to it under Paragraph
11 hereof.
16. Governing Law
This Agreement shall be governed by the laws of the State of New York without giving effect to
the conflict of law principles thereof.
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 Agreement and no consent by any party to a departure herefrom
shall be effective unless and until such shall be in writing and duly executed by both of the
parties hereto. Without limitation on any of the foregoing, the failure to give a notice pursuant to
Paragraph 4(a) or 4(b) hereof will not constitute a waiver of any right to do so at a later date.
18. Use of Employee Plan Assets
(a) If assets of an employee benefit plan subject to any provision of the Employee -
Retirement Income Security Act of 1974 ("ERISA") are intended to be used by either party hereto (the
"Plan Party") in a Transaction, the Plan Party shall so notify the other party prior to the Transaction. The
Plan Party shall represent in writing to the other party that the Transaction does not constitute a
prohibited transaction under ERISA or is otherwise exempt therefrom, and the other party may proceed in
reliance thereon but shall not be required so to proceed.
(b) Subject to the last sentence of subparagraph (a) of this Paragraph, any such Transaction
shall proceed only if Seller furnishes or has furnished to Buyer its most recent available audited statement
of its financial condition and its most recent subsequent unaudited statement of its financial condition.
(c) By entering into a Transaction pursuant to this Paragraph, Seller shall be deemed (i) to
represent to Buyer that since the date of Seller's latest such financial statements, there has been no
material adverse change in Seller's financial condition which Seller has not disclosed to Buyer, and (ii) to
agree to provide Buyer with future audited and unaudited statements of its financial condition as they are
issued, so long as it is a Seller in any outstanding Transaction involving a Plan Party.
19. Intent
(a) The parties recognize that each Transaction is a "repurchase agreement" as that term is
defined in Section 101 of Title 11 of the United States Code, as amended (except insofar as the type of
Securities subject to such Transaction or the term of such Transaction would render such definition
inapplicable), and a "securities contract" as that term is defined in Section 741 of Title 11 of the United
States Code, as amended (except insofar as the type of assets subject to such Transaction would render
such definition inapplicable).
(b) It is understood that either party's right to liquidate Securities delivered to it in connection
with Transactions hereunder or to exercise any other remedies pursuant to Paragraph 11 hereof is a
contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the
United States Code, as amended.
(c) The parties agree and acknowledge that if a party hereto is an "insured depository
institution," as such term is defined in the Federal Deposit Insurance Act, as amended ("FDIA"), then each
Transaction hereunder is a "qualified financial contract," as that term is defined in FDIA and any rules,
orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction
would render such definition inapplicable).
(d) It is understood that this Agreement constitutes a "netting contract" as defined in and
subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") and
each payment entitlement and payment obligation under any Transaction hereunder shall constitute a
"covered contractual payment entitlement" or "covered contractual payment obligation", respectively, as
CCMA page 17
08101
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.
Bank
WELLS FARGO BANK, N.A.
111 Main Street, Suite 306
MAC P6769-031
Vancouver, WA 98660
Wells Fargo Bank, N.A.
B
Title: Vice President
Date:
Customer
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By:
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Date:
CCMA
08101
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