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Service Agreement - Page 1
Business Sweep Services Agreement
This is the Business Sweep Services Agreement (Agreement) entered into between the Customer named below and the SunTrust Capital
Markets, Inc. or Sun Trust Bank named below for business sweep services in accordance with the terms and conditions set forth in this
Agreement.
I.
Account Information
Customer (Name/Company):
Address:
City of Clennont
P. O. Box 120219
ClemlOnt, FL 34712-0219
Attn:
Joseph E. Van Zile
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SunTrust Capital Markets, Inc. or SunTrust Bank
Address:
POBox 3833
MC-II04 Tower 10
Orlando, FL 32802
407-237-4680
(Toll Free) 888-432-4760 ext 4680
Ann:
Charles Raney
DDA Account Number:
59-6000290
Tax Identification Number:
Agreement Date:
November 1, 1998
Services Requested:
Investment:
x
Loan:
Investment and Loan:
Investment Option:
Master Repurchase Agreement
Minimum Purchase Requirement:
$100,000.00
Target Investment Balance:
so.oo
Loan/Obligor Account Number:
N/A
Target Loan Balance:
N/A
Monthly Business Fee:
s.oo
Bank Cost Center
13 70099
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Definitions
The following definitions apply to this Agreement:
a. "Account" means the checking 1DDA) accollnt specified in Section I. above.
b. "Agreement Date" means the date specified in Section I. above.
e. "Bank" means the SunTrust Capital Markets. Inc. or SunTrllsl Bank specified in Section I. abo\'t~. and its affiliates.
successors and assigns.
"Customer" means the individual or company specified in Section I. abo\.e.
agents.
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5.
e.
"Effective Date" means the banking day on which the services become effective. The Effective Date shall be the Agreement
Date or as soon as possible thereafter, as determined solely by the Bank. The Bank shall not be liable in any way for any reason
if it is unable to process transactions in the Account on the Agreement Date or any date prior to the Effective Date.
"Investable Balance" means the collected balance in the Account and/or funds invested in the Investment Option, if any,
exceeding the Target Investment Balance.
"Investment Option" means the Investment Option specified in Section], above.
"Investment and Loan Services" means the services facilitating loan paydown/drawdown and investment transactions as
described in Section 6, below.
"Investment Services" means the services facilitating investment transactions as described in Section 4, below.
"Loan" means the loan(s) specified in Section I, above.
"Loan Services" means the services facilitating loan paydown/drawdown transactions as described in Section 5, below.
"Loan Payment Balance" means the collected balance in the Account in excess of the Target Loan Balance.
"Minimum Purchase Requirement" means the amount specified in Section I, above, that is required for Investment Services.
The Minimum Purchase Requirement is subject to review by the Bank and may change from time to time as determined by the
Bank, with fourteen (14) days advance notice to the Customer.
"Target Investment Balance" and "Target Loan Balance" mean the required collected balances specified in Section I, above,
for the Account The Target Investment Balance and the Target Loan Balance are subject to review by the Bank and may change
from time to time as determined by the Bank, with fourteen (14) days advance notice to the Customer.
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Authorization
By signing this Agreement, the Customer authorizes and directs the Bank as follows:
a.
To determine the Target Investment Balance, Target Loan Balance, Investable Balance, and/or Loan Payment Balance for each
day in the Customer's Account.
To debit or credit Customer's Account on each banking day for the purpose of performing the services requested in Section],
above, on behalf of the Customer.
To credit Customer's Account with interest or dividends as provided in Appendix A in accordance with the selected Investment
Option.
To debit Customer's Account for all fees and expenses incurred against the Account in connection with the transactions
completed. Such debits shall be made as the Bank may elect. Customers using account analysis services may pay fees and
expenses through analysis.
b.
c.
d.
Investment Services
4.1. The Investment Services shall be subject to the temlS and conditions of Appendix A, executed of even date herewith between
the Bank and Customer and incorporated herein by this reference.
4.2. Customer acknowledges and agrees that placement of all or a portion of the Investable Balance in the Investment Option is
subject to the Minimum Purchase Requirement specified in Section I, above.
On each banking day there is an Investable Balance of at least the Minimum Purchase Requirement. the Bank shall invest such
funds in the amount of the Minimum Purchase Requirement and/or additional Investable Balance funds in increments ofS 1,000
until all or substantially all of the Investable Balance is invested in the Investment Option.
4.4. On each banking day (i) there is no Investable Balance or (ii) the Investable Balance equals less than the Minimum Purchase
Requirement, no Investment Services will occur.
4.5. Customer acknowledges and agrees that if the Bank is unable to invest all or a portion of the Investable Balance in the
Investment Option for any reason. the Bank shall have no liability to the Customer. In such event. the uninvested portion of the
Investable Balance will remain in the Account and will not earn interest or dividends. Funds remaining in the Account will be
credited to services in analysis. if any. at the prevailing earnings credit rate.
4.3.
Loan Services
5.1. The Loan Ser\'ices shall be subject to the terms and conditions of the Loan Agreement(s) for the Lo;.m(s) described in Section I.
above. and incorporated herein by this reference,
On each banking day the Account contains a Loan Payment Balance, the Bank shall debit the Account the lesser of (i) the
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Service Agreement - Page 3
7. Miscellaneous
7,]. Large Deposits or Withdrawals - Customer acknowledges and agrees that the Bank intends to invest the Investable Balance on
a same-day basis, and therefore must estimate each day the aggregate Investable Balance of all Bank customers having business
sweep accounts. Customer therefore agrees to notify the Bank promptly whenever Customer expects a cash deposit or
withdrawal to the Account of S I 0,000,000 or more. Customer understands that failure to so notify the Bank may result in cash
not being invested for that particular day and that the Bank shall have no liability in connection therewith.
Confidential Information - Customer authorizes the Bank and its SunTrust affiliates, including without limitation. Sun Trust
Capital Markets, Inc. and SunTrust Securities, Inc., to share with each other confidential information concerning the Customer
and/or its accounts for marketing or other purposes from time to time unless Customer gives the Bank written notice to the
contrary.
Statements - The Customer will receive a monthly statement ("Statement") describing the Investment Services on the Account
in addition to the regular checking and analysis statement (if any). The Customer will receive a daily transaction notification
describing the Loan activity. The Bank shall not be liable for any unauthorized signature. alteration. misencoding or other
material error on the face of any item on the Statement or for any incorrect amount or any other error on the Statement itself
(including any item improperly charged to the Account), unless the Customer notifies the Bank of its objection within 14
calendar days after the Bank mails, personally delivers, or otherwise makes the Statement available to the Customer. The Bank
will not be liable for any Statement or items included in the Statement that the Customer does not receive unless the Bank
receives notice of non-receipt from the Customer within 30 days of the date on which the Statement is customarily received. The
absence of the Customer's notice of objection to or non-receipt of the Statement shall constitute a complete waiver of any and all
claims that the Customer may have with respect to any such Statement and the transactions described therein.
Fees and Expenses - The Customer shall pay all fees and expenses incurred in connection with the Loan and/or Investment
Services as specified in Section I, above, as amended from time to time by the Bank upon notice to the Customer.
Termination - Either party may ternlinate or cancel this Agreement upon written notice to the other. Any ternlination or
cancellation of this Agreement shall be effective within three (3) banking days following the other party's actual receipt of notice
thereof.
Liability - The Bank's responsibility is limited to the exercise of due care and diligence in acting pursuant to this Agreement.
The Bank shall not be liable for losses caused directly or indirectly by acts or conditions beyond its control, including but not
limited to acts of God, governmental restrictions, war. nuclear events, strike. interruptions in transportation, communications or
data processing services, change of law or any other circumstances beyond the reasonable control of the Bank. The Bank may at
all times rely upon and act in accordance with any instructions or inquiries which it may receive, whether written or oral,
pertaining to this Agreement and the Services and which the Bank in good faith believes to be genuine and authorized by the
Customer.
Indemnification - Customer agrees to pay all of the Bank's costs. including but not limited to atlorneys' fees and court costs
incurred in connection with (a) Customer's failure to pay when due the monies owed pursuant to this Agreement or (b) the
defense by Bank of any claims by the Customer or on the Customer's behalf arising out of this Agreement outsidc of arbitration
(to the extent permitted) where Bank prevails.
Modifications - The terms and conditions of this Agreement may be modified by the Bank at an)' lime upon notice to the
Customer. Any other modification to this Agreement shall not be binding on the ßank unless such modification is in writing and
signed by the Bank.
Communications - All notices to be given in connection with this Agreemenlmust be in writing and mailed. postage pre-paid 10
Ihe parties at Ihe addresses set forth in Section I, above. The parties. by writtcn notice, may designate another address to which
notices are gi\'en. Any telephonc eoll\"CI"sation with the ßank may be recorded by the ßank 10 assure accuracy.
7.10. Dispute Resolution/Mediation tnd Jury Trhtl Waiver - Any controversy arising out of or relating to transactions with or for
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existing Loan(s) balance(s) or (ii) the Loan Payment Balance, and shall transfer such funds for Loan paydown.
On each banking day the Account contains less than the Target Loan Balance, the Bank shall initiate a Loan drawdown (in
increments of S I ,000) of funds necessary to reach at least the Target Loan Balance and shall deposit such funds into the
Account.
Investment and Loan Services
6.1. On each banking day the Bank shall first undertake the Loan Services described in Section 5, above.
6.2. In the event there is an Investable Balance after completion of the Loan Services, if any, the Bank shall undertake the Investment
Services described in Section 4, above.
7.2.
7.3.
7.4.
7.5.
7.6,
7.7.
7.8.
7.9.
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the Customer or to this Agreement and whether executed or to be executed within or outside the United States and which cannot
be settled between the parties by good faith negotiations. shall first be submitted to mediation. Mediation shall be conducted at
the nearest office of the mediation organization the Bank selects. unless the Customer requests a different mediation organization
which is reasonably acceptable to the Bank.
JURY TRIAL. THE CUSTOMER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY
WAIVES THE RIGHT TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON OR ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY OTHER DOCUMENT OR INSTRUMENT
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH AS PERMITfED UNDER APPLICABLE LA W.
Any party may initiate mediation by mailing a written notice to the other party. Nothing in this provision shall preclude the
Bank from exercising any right the Bank may otherwise have, including without limitation, any rights of off-set. The provisions
of this Section 7.10 shall survive termination of this Agreement.
7.11 Use of Agents - Customer understands and agrees that the Bank may employ one or more agents to assist the Bank in the
performance of its duties hereunder, which agents mayor may not be affiliates of Bank. Without limiting the generality of the
foregoing, Customer understands and agrees that certain affiliates of the Bank, including, but not limited to SunTrust Capital
Markets, Inc., may perform certain services on behalf of the Bank in connection with the Account. including but not limited to,
handling Customer Account inquiries and other service functions. Consequently, references in this Agreement to "Bank" include
references to such agents of the Bank.
7.12. Governing Law and Assignment - This Agreement and its enforcement shall be governed by the laws of the state where the
Bank has its principal place of business. This Agreement shall inure to the benefit of the Bank and its successors (whether by
merger. consolic,lation, or otherwise) and assigns, and shall be binding upon Customer and its heirs, executors, administrators,
guardians, successors and assigns. The Bank may assign its rights and obligations under this Agreement at any time after
reasonable written notice of such intended assignment to the Customer.
7.13. Severability - If any provision or condition of this Agreement shall be held to be invalid or unenforceable by any court,
regulator, or self-regulatory agency or body, such invalidity or enforceability shall apply only to that provision or condition.
The validity of the remaining provisions shall not be affected:and this Agreement shall be carried out as ifany such invalid or
unenforceable provision or condition were not contained herein.
7.14. Waiver And Amendment - Customer agrees that the Bank's failure to insist at any time upon strict compliance with this
Agreement or with any of its terms or any continued course of conduct on its part shall not constitute a waiver by the Bank of
any of its rights. Except as otherwise provided for herein. no provision of this Agreement shall in any respect be waived.
modified, or amended unless such waiver, modification or amendment is in writing signed by a duly authorized officer of the
Bank.
7.15. Representations and Warranties - By execution of this Agreement on behalf of the Customer, the undersigned individual or
individuals represent and warrant that they have full right. power and authority to enter into this Agreement on behalf of the
Customer and to make the investments requested pursuant to this Agreement on behalf of Customer.
FOR THE CUSTOMER
FOR THE BANK
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Appendix A
MASTER REPURCHASE AGREEMENT
This is the Master Repurchase Agreement ("Agreemenf') entered into between the Customer named below and
SunTrust Capital Markets, Inc. or SunTrust Bank and dated as of the Agreement Date below.
Customer (Name/Company):
City of Clermont
SunTrust Capital Markets, Inc. or SunTrust Bank
Agreement Date:
November 1, 1998
1.
Applicability
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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 financial instruments ("Securities") against the transfer of funds by Buyer, with a
simultaneous agreement by Buyer to transfer to SeIler such Securities at a date certain or on demand, against the
transfer of funds by SeIler. Each such transaction shaIl be referred to herein as a "Transaction" and shall be
governed by this Agreement, unless otherwise agreed in writing.
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, dissolution or similar law, or such party
seeking the appointment of a receiver, trustee, custodian or similar official for such party or any substantial part of
its property, or (ii) the commencement of any such case or proceeding against such party, or another seeking such
an appointment, 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, 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 a party of a general
assignment for the benefit of creditors, or (iv) the admission in writing by a party of such party's inability to pay
such party's debts as they become due; or (v) the reasonable belief of the other party to this Agreement that such
party is insolvent or has ceased or is about to cease to do business.
(b) "Additional Purchased Securities", Securities provided by SeIler 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 a percentage (which may be equal to the percentage that is agreed to as the SeIler's Margin Amount under
subparagraph (q) of this Paragraph), agreed to by Buyer and SeIler prior to entering into the Transaction, to the
Repurchase Price for such Transaction as of such date;
(d) "Confinnation", the meaning specified in Paragraph 3(b) hereof;
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(e) "Income", with respect to any Security at any time. any principal thereof then payable and all interest. dividends
or other distributions thereon;
(I) "Margin Deficit", the meaning specified in Paragraph 4(a) hereof;
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(g) "Margin Excess", the meaning specified in Paragraph 4(b) hereof;
(h) "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);
(i) "Price Differential", with respect to any Transaction hereunder 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);
(j) "Pricing Rate", the per annum percentage rate for determination of the Price Differential;
(k) "Prime Rate", the prime rate of U.S. money center commercial banks as published in the /Vall Street Jouma/:
(I) "Purchase Date", the date on which Purchased Securities are transferred by Seller to Buyer;
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(m) "Purchase Price", (i) on the Purchase Date, the price at which Purchased Securities are transferred by Seller to
Buyer, and (ii) thereafter, 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;
(n) "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) and shall exclude Securities returned pursuant to Paragraph 4(b);
(0) "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 Paragraphs 3(c) or 11 hereof;
(p) "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 deternlination, increased
by any amount determined by the application of the provisions of Paragraph II hereof;
(q) "Seller's Margin Amount", with respect to any Transaction as of any date. the amount obtained by application
ofa percentage (which may be equal to the percentage that is agreed to as the Buyer's Margin Amount under
subparagraph (c) of this Paragraph), agreed to by Buyer and Seller prior to entering into the Transaction. to the
Repurchase Price for such Transaction as of such date.
3.
Initiation; Confirmation; Termination
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(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 Seiler (or both), as shall be agreed, shall
promptly deliver to the other party a written confirmation of each Transaction (a "Conlirmation"). The
Confirmation shall describe the Purchased Securities (including CUSIP number. if any), identitY Buyer amI Seller
and set forth (i) the Purchase Date. (ii) the Purchase Price. (iii) the Repurchase Date. unless the Transaction is to he
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terminable on demand, (iv) the Pricing Rate or Repurchase Price applicable to the Transaction, and (v) any
additional terms or conditions of the Transaction not inconsistent with this Agreement. .The Confirmation, together
with this Agreement, shall constitute conclusive evidence of the terms agreed between Buyer and Seller with
respect to the Transaction to which the Confirmation relates, unless with respect to the Confirmation specific
objection is made promptly after receipt thereof. In the event of any conflict between the temlS 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
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(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) Ifat 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) Any cash transferred pursuant to this Paragraph shall be attributed to such Transactions as shall be agreed upon
by Buyer and Seller
(d) 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 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).
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(e) 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 ofa Margin Deficit or
a Margin Excess. as the case may be. may be exercised whenever such a Margin Deficit or Margin Excess exists
with respect to any single Transaction hereunder (calculated without regard to any other Transaction outstanding
under this Agreement).
5.
Income Payments
Where a particular Transaction's term extends over ,\11 Income payment dale on the Securilies subjecllo Ihal
Transaction. Buyer shall. as the parties may agree wilh respect 10 such Transaction (or, in the absence of an)'
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agreement, as Buyer shall reasonably determine in its discretion), on the date such Income is payable either (i)
transfer to or credit to the account of Seller an amount equal to such Income payment or payments with respect to
any Purchased Securities subject to such Transaction or (ii) apply the Income payment or payments to reduce the
amount to be transferred to Buyer by Seller upon termination of the Transaction. Buyer shall not be obligated to
take any action pursuant to the preceding sentence 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.
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
perforn1ance 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 proceeds
thereof.
7.
Payment and Transfer
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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 forn1 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 ofa Federal
Reserve Bank, or (iii) shall be transferred by any other method mutually acceptable to Seller and Buyer. As used
herein with respect to Securities, "transfer" is intended to have the same meaning as when used in Section 8-313 of
the New York Uniform Commercial Code or, where applicable, in any federal regulation governing transfers of the
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
intermediary or a clearing corporation. Title to all Purchased Securities shall pass to Buyer and, unless otherwise
agreed by Buyer and Seller. nothing in this Agreement shall preclude Buyer from engaging in repurchase
transactions with the Purchased Securities or otherwise pledging or hypothecating the Purchased Securities, but no
such transaction shall relieve Buyer of its obligations to transfer Purchased Securities to Seller pursuant to
Paragraphs 3, 4 or II 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 Transaction 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 grams Seller thc 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
othcr securities transactions. Whenever the securities are commingled. Scllcr's ability to resegregate substitute securities
for Buyer will be subject 10 Seller's ability to satisfy any lien or to obtain substitute securities.
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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 tr::msfer to Buyer of such other Securities and transfer to Seller of
such Purchased Securities. Alier substitution, the substituted Securities shall be deemed to be Purchased Securities.
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(b) In Transactions in which the 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.
(c) In the case of any Transaction for which the Repurchase Date is other than the business day immediately
following the Purchase Date and with respect to which Seller does not have any existing right to substitute
substantially the same Securities for the Purchased Securities, Seller shall have the right, subject to the proviso to
this sentence, upon notice to Buyer, which notice shall be given at or prior to 10:00 a.m. (New York time) on such
business day, to substitute substantially the same Securities for any Purchased Securities; provided. however. that
Buyer may elect, by the close of business on the business day notice is received, or by the close of the next business
day if notice is given after 10:00 a.m. (New York time) on such day, not to accept such substitution. In the event
such substitution is accepted by Buyer, such substitution shall be made by Seller's transfer to Buyer of such other
Securities and Buyer's transfer to Seller of such Purchased Securities, and after substitution, the substituted
Securities shall be deemed to be Purchased Securities. In the event Buyer elects not to accept such substitution,
Buyer shall offer Seller the right to terminate the Transaction.
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(d) In the event Seller exercises its right to substitute or terminate under subparagraph (c), Seller shall be obligated
to pay to Buyer, by the close of the business day of such substitution or termination, as the case may be, an amount
equal to (A) Buyer's actual cost (including all fees, expenses and commissions) of (i) entering into replacement
transactions; (ii) entering into or ternlinating hedge transactions; and/or (iii) terminating transactions or substituting
securities in like transactions with third parties in connection with or as a result of such substitution or termination,
and (B) to the extent Buyer deternlines not to enter into replacement transactions, the loss incurred by Buyer
directly arising or resulting from such substitution or ternlination. The foregoing amounts shall be solely
determined and calculated by Buyer in good faith."
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10.
Representations
Each of Buyer and Seller represents and warrants to the other that (i) it is duly authorized to execute and deliver
this Agreement, to enter into the Transactions contemplated hereunder and to perform its obligations hereunder and
has taken all necessary action to authorize such execution, delivery and perfornlance, (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 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
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In the event that (i) Seller fails to repurchase or Buyer fails to transfer Purchased Securities upon the applicable
Repurchase Date, (ii) Seller or Buyer fails, after one business day's notice, to comply with Paragraph 4 hereof, (iii)
Buyer fails to comply with Paragraph 5 hereof, (iv) an Act of Insolvency occurs with respect to Seller or Buyer, (v)
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 (vi) 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 Delåult"):
(a) At the option of the non delålllting party, exercised by written notice to the delåulting party (which option shall
be deemed to have been exercised, even il no notice is given, immediately upon the occurrence of an Act of
Insolvency). the Repurchase Date for each Transaction hereunder shall be deemed immediately 10 occur;
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(b) In all Transactions in which the detàulting 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 hereunder to repurchase all Purchased Securities in such Transactions shall thereupon become
immediately due and payable, (ii) to the extent permitted by applicable law, the Repurchase Price with respect to
each such Transaction shall be increased by the aggregate amount obtained by daily application of (x) the greater of
the Pricing Rate for such Transaction or the Prime Rate to (y) the Repurchase Price for such Transaction as of the
Repurchase Date as determined pursuant to subparagraph (a) of this Paragraph (decreased as of any day by (A) any
amounts retained by the non defaulting party with respect to such Repurchase Price pursuant to clause (iii) of this
subparagraph, (B) any proceeds from the sale of Purchased Securities pursuant to subparagraph (d)( I) of this
Paragraph, and (C) any amounts credited to the account of the defaulting party pursuant to subparagraph (e) of this
Paragraph) on a 360 day per year basis for the actual number of days during the period from and including the date
of the Event of Default giving rise to such option to but excluding the date of payment of the Repurchase Price as
so increased, (iii) 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 owed by the defaulting party, and (iv) 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;
(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, the defaulting party's right, title and interest
in 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.
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(d) After one business day's notice to the defaulting party (which notice need not be given ifan Act of Insolvency
shall have occurred, and which may be the notice given under subparagraph (a) of this Paragraph or the notice
referred to in clause (ii) of the first sentence of this Paragraph), the non defaulting party may:
(i) as to Transactions in which the defaulting party is acting as Seller, (A) immediately sell, in a recognized
market at such price or prices as the non defaulting party may reasonably deem satistàctory, 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 giye the detàulting party
credit for such Purchased Securities in an amount equal to the price therefor on stich 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 detàulting party hereunder~ and
(ii) as to Transactions in which the defaulting party is acting as Buyer, (A) purchase 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 bid quotation from such a source.
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(e) As to Transactions in which the defaulting party is acting as Buyer. the detàulting party shall be liable to the non
defaulting party (i) with respect to Purchased Securities (other than Additional Purchased Securities), for any excess
of the price paid (or deemed paid) by the non defaulting party for Replacement Securities therefor oyer the
Repurchase Price for such Purchased Securities and (ii) with respect to Additional Purchased Securities. for the
price paid (or deemed paid) by the non defàulting party for the Replacement Securities therefor. In addition. the
defaulting party shall be liable to the non dt:làulting party for interest on such remaining liability with respect to
each such purchase (or deemed purchase) of Replacement Securities from the date of such purchase (or deemed
purchase) until paid in full by Buyer. Such interest shall be at a rate equal to the greak'r of thl' Pricing Rate for such
Transaction or the Prime Rate.
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<0 The defaulting party shall be liable to the non defaulting party for the amount of all reasonable legal or other
expenses incurred by the non defaulting party in connection with or as a consequence of an Event of Default,
together with interest thereon at a rate equal to the greater of the Pricing Rate for the relevant Transaction or the
Prime Rate, and in addition for any other costs associated with the deemed occurrence of a Repurchase Date under
Paragraph ll(a), including without limitation lost profits on Transactions for which Repurchase Dates were deemed
to have occurred and any financing or hedging costs associated with the non defaulting pal1y's entering into
transactions to substitute or cover for Transactions which Repurchase Dates were deemed to have occurred.
(g) 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.
(h) Prior to a default, all Purchased Securities, Additional Purchased Securities, funds and the proceeds thereof held
by a Buyer shall be held in trust for the Seller.
12.
Single Agreement
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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.
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13.
Notices and Other Communications
Unless another address is specified in writing by the respective pal1y to whom any notice or other communication is
to be given hereunder, all such notices or communications shall be in wriling or confirmed in writing and delivered
at the respective addresses set forth in this document.
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
nonenforcement of any such other provision or agreement.
15.
Non-assignability; Termination
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. 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 canceled by either party upon notice to the other, except that this Agreement shall.
notwithstanding such notice, remain applicable to any Transactions then outstanding.
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16.
Governing Law
This Agreement shall be governed by the laws of the State of New York without giving effect to the contliet of law
principles thereof.
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17.
No Waivers, Etc.
No express or implied waiver of any Event of Defau[t by either party shall constitute a waiver of any other Event of
Defau[t 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 here from 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
subparagraphs 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.
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(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.
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19.
Intent
. 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 ternl
is defined in Section 741 of Title 11 of the United States Code, as amended.
(a) (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 II hereot: is a contractual right
to liquidate such Transaction as described in Sections 555 and 559 of Title II of the United States Code, as
amended.
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 [934 ("1934 Act"), the
Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor
Protection Act of 1970 ("SIP A") do not protect the other party with respect to any Transaction hereunder:
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(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 oCthe [934 Act. SIPA will not provide protection to
the other parly 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 Ihe financial
institution pursuant 10 a Transaction hereunder are not a deposit and therefore are not insur~d by the Federal
Deposit Insurance Corporation. the Federal Savings and Loan Insurance -Corporalion or the 1\alional Credit Union
Share Insurance Fund. as applicable.
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21.
Setoff
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A non defaulting party may Setoff claims and apply any property in which the defaulting party has an interest,
whether or not such claims or property are in respect of any Transacti~ns covered by this Agreement, against any
obligations owed the non defaulting party by the defaulting party. whether or not such obligations are in respect of
Transactions covered by this Agreement.
22.
Authorization
Until revoked or changed by the Undersigned. SunTrust Capital Markets, Inc. or SunTrust Bank may rely on any
statement, signed by any officer or partner of the Undersigned, identifying the individuals then authorized to give
SunTrust Capital Markets, Inc. or SunTrust Bank instructions on behalf of the Undersigned pursuant to this
Agreement.
FOR THE COMPANY
FOR THE BANK
BY""""""~""~"""""'"
Title.... ..... .... ..Þ..l. ß..e.ç".:RI..R..oo. .................. oo... ......
Date..............oo.I.!..~..~.~.::(¿.l......................oo....oo.....
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By.....
Title..............I1.1.K~f!:.:................................""""""
Date ................/.(/iJ/~I.....................................
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5unTr"ust Rob.""~on Humphrey
'-...../' Capital Markets
A Division of SunTrust Capital Markets, Inc.
Charles T. Raney
Director
Fixed Income Sales
Ph 407.237-4680
888.432.4'760 Ext. 4680
Mail Code: 1104
200 S. Orange Avenue
Orlando, Florida 32801
Fax 407.237.4383
char I es. ran ey â) sun trust. com
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