Terms and Conditions

Sweep Services

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THE SERVICE

The Sweep Service allows Customer to maximize earnings on idle Account balances by automatically investing Excess Funds at end of each Business Day. How the Excess Funds are invested depends on which of the below applicable Sweep Service(s) is (are) selected. Customer agrees to establish and maintain a target balance (which can be set to any number equal to or greater than zero (0)), in the Customer’s Account (“Target Balance” as further defined herein for each respective Service). Bank Sweep Services are segmented into Automated Overnight Investment Sweeps (“Investment Sweep”) and Automated Loan Sweeps (“Loan Sweep” or “Line of Credit Service”).

Customer understands and agrees that in the event Customer subscribes to both the Investment Sweep and Loan Sweep (“Loan & Investment Sweep Bundle”), that the Loan Sweep will take precedence with respect to Excess Funds and only after the Line of Credit (“LOC”) Principal Balance is equal to zero will Excess Funds be directed for investment purposes. Customer is hereby advised that Bank only offers the Loan and Investment Sweep Bundle with specific loan types.

Bank agrees to use its best efforts to invest Customer's Excess Funds on an overnight basis; however, a failure on the part of Bank to invest shall not be actionable if such failure results from: (a) the lack of appropriate investments; or (b) computer error or breakdown.

If the available balance in the Account or in any other account of Customer with Bank drops below a zero (0) balance or Customer defaults on any obligation owed to Bank, Bank may, in addition to any remedies available to Bank under any other agreement between Bank and Customer, either hold any or all of Customer's investments made by Bank, pursuant to the terms of this Agreement, as security for payment of the obligations then owed by Customer to Bank, or Bank, at its sole discretion, may sell any and all investments held by Bank as a result of this Agreement and apply the proceeds toward the amount owed to Bank by Customer.

Sweep Services may include, at Customer's option, the ability to access Bank's information and reporting system, for the purpose of obtaining daily Sweep Investment and/or loan reports (hereinafter "Reports"). The Reports provide recaps of investment activity for Customer's Account and loan balance Information as designated by Customer in applicable Operational Instructions. Bank will provide Customer the access instructions, including access codes and passwords. Customer will provide a telephone, personal computer, or data terminal and communications software to utilize the system.

Bank reserves the right to refuse to transfer Excess Funds in accordance with this section if such transfers are less than $50,000. Interest rates are variable and subject to change at any time at our discretion without prior notice to you.

Customer appoints Bank, and Bank hereby accepts appointment, to act as Customer’s agent, subject to the terms and conditions of this Agreement, for the purpose of transferring to or from Customer's Account(s), Customer's line of credit, and/or Customer’s investment account, amounts necessary to ensure that mutually agreeable target amounts, as designated in the applicable Operating Instructions, are maintained in Customer’s Account.

Investment Sweep

The Bank’s Investment Sweep Service offers a Repurchase Agreement Sweep (“Repo Sweep”). The Repo Sweep offers Customer a secure way to invest Excess Funds by collateralizing Excess Funds overnight according to the Master Repurchase Service Agreement (“MRSA”, to be provided to Customer upon election of this option).

Repo Sweep Investments are governed by the terms and conditions outlined within the MRSA, if applicable, by and between Bank and Customer. In the event of Bank failure, Customer will be deemed to have a perfected security interest in the purchased securities. Notwithstanding anything to the contrary in the MRSA, Bank will not exercise substitution of these securities. The value of investment securities is subject to market fluctuation.

As a standard procedure, daily confirmations will be sent to Customer via mail unless otherwise specified in applicable Operational Instructions.

The process:

  • The established Target Balance is a mutually agreed upon standard maximum amount to be maintained in Customer’s Account overnight (“Target Balance” or “Maximum Balance”).
  • Excess Funds are invested overnight in an Investment Sweep Account ("Ghost Account" or "Parent Account"); and
  • Excess Funds are returned to Customer's Account on the following Business Day with interest (interest is compounded on a daily basis).

Customer acknowledges it has no right to draw checks against or to make deposits to the Ghost Account or to make presentment or receive notice of dishonor or protest (all of which are hereby waived) and agrees that the sole contact with and method of withdrawal from the Ghost Account shall be by means of this automatic redeposit into Customer's Account.

With respect to Investment Sweep Services, all Excess Funds swept from Customer’s Account are deemed not to be "deposits" within the meaning of 12 U.S.C. § 1813(l) and thus are not insured by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency.

Upon termination of this Agreement, unless otherwise directed in the written notice of termination of the Investment Sweep Service, Bank, as agent for Customer, shall forthwith sell all of Customer’s investments which Bank is holding and credit the proceeds to Customer’s Account.

Customer understands and agrees that Bank makes no recommendations concerning any investments made through this Sweep Service and will not be liable for the performance of the investments made through this Sweep Service.

Loan Sweep

With Loan Sweep, Bank will assume the responsibility of managing Customer’s Account and Line of Credit (“LOC”) balances based on the Target Balance. With respect to Loan Sweep Services:

  • The Target Balance is a mutually agreed upon standard minimum and/or maximum amount to be maintained in Customer’s Account at the end of each Business Day (“Target Balance” or “Minimum Balance” or “Maximum Balance”); and
  • Excess Funds are automatically transferred from Customer’s Account to Customer’s LOC in the form of a principal payment to the LOC up to the amount necessary to bring Customer’s LOC principal balance to zero (-0-). If the Account balance following the completion of provisional debits and credits to Customer’s Account is deemed by Bank to be less than the Minimum Balance, the amount of funds required to bring the Account back to the Minimum Balance (“Deficient Balance”) will be transferred from Customer’s LOC to Customer’s Account. Bank shall have no obligation to transfer funds between Customer’s LOC and Account when the Deficient Balance is greater than the amount available for disbursement on Customer’s LOC. Customer assumes responsibility for any and all fees associated with this lack of transfer.

Key Features of Loan Sweep Service:

  • Reduction of interest expense by automatically applying Excess Funds to pay down Customer’s LOC; and
  • Provided LOC availability, Loan Sweep eliminates costly overdraft charges by drawing from the LOC Account Deficient Balances as needed to fund daily clearings.

All transfers under this Agreement made to the LOC from Customer’s Account will be applied to interest as interest becomes due and/or applied to principal as a voluntary reduction.

Customer represents and warrants to Bank that the officer signing this Agreement on behalf of Customer is authorized to incur debt and borrow money on Customer’s behalf.

The terms and provisions of any other agreement Bank has with Customer regarding the LOC and any of Bank’s rules and regulations applicable to Customer’s Account or the LOC are made a part of this Agreement by this reference. Customer agrees to be bound by all of the terms and provisions of those agreements, rules, and regulations. Customer understands that in rendering the Loan Sweep Service, Bank is providing an additional Treasury Management Service to Customer. Bank will not be attempting to engage in Customer’s management. Bank does not take responsibility for the consequences of such transfers made in accordance with the terms of this Agreement.

Bank may terminate this Loan Sweep Service, with such termination to be effective immediately upon notice to Customer, at any time for any reason. Notwithstanding such termination, this Service shall remain in full force and effect as to all transactions taking place under the terms of the Loan Sweep prior to the termination date. No termination hereunder or expiration of this Loan Sweep Service shall affect the rights or obligations of either party which may have arisen or accrued prior to such termination or expiration.