Court filing
Exhibit B — Federal Reserve Bank of San Francisco v. Benworth Capital Partners PR LLC, et al. (Dkt. 146.4)
No. 3:23-cv-01034-GMM · Doc. 146-4 · Docket on CourtListener
Summary
Exhibit B, Document 146-4 in Federal Reserve Bank of San Francisco v. Benworth Capital Partners PR LLC, et al., Case 3:23-cv-01034-GMM, filed August 2, 2024, reproduces Federal Reserve Banks Operating Circular No. 10, Lending, effective August 28, 2023. The circular sets the terms under which an entity may obtain Advances from, incur Obligations to or pledge Collateral to a Reserve Bank. Its table of contents runs from 1.0 Scope through 20.0 Status of Previous Lending Agreement, followed by appendices that include application packages and Discount Window Direct terms. The circular defines Events of Default and Insolvency, charges interest 500 basis points above the applicable rate on unpaid Advance amounts, and makes an Advance due 24 hours after it is made when no due date is set. The 33-page exhibit closes with Appendix 7's access and indemnity terms for Discount Window Direct.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
Case 3:23-cv-01034-GMM Document 146-4 Filed 08/02/24 Page 1 of 33
Federal Reserve Banks
Operating Circular No. 10
LENDING
Effective August 28, 2023
Case 3:23-cv-01034-GMM Document 146-4 Filed 08/02/24 Page 2 of 33
FEDERAL RESERVE BANKS
OPERATING CIRCULAR NO. 10
Effective August 28, 2023
LENDING
(Click CTRL + section or page number to go directly to the section)
1.0 SCOPE ............................................................................................................... 1
2.0 DEFINED TERMS .............................................................................................. 1
3.0 ADVANCES ....................................................................................................... 5
4.0 INTEREST.......................................................................................................... 5
5.0 REPAYMENT OF ADVANCE ............................................................................ 5
6.0 GRANT OF SECURITY INTEREST ................................................................... 6
7.0 COLLATERAL ................................................................................................... 6
8.0 MAINTENANCE OF LENDING DOCUMENTS .................................................. 9
9.0 REPRESENTATIONS AND WARRANTIES .................................................... 10
10.0 COVENANTS ................................................................................................... 11
11.0 WAIVER OF IMMUNITY; SUBMISSION TO JURISDICTION ......................... 13
12.0 REMEDIES....................................................................................................... 14
13.0 INDEMNIFICATION ......................................................................................... 15
14.0 MISCELLANEOUS .......................................................................................... 16
15.0 AMENDMENT .................................................................................................. 17
16.0 NOTICE ............................................................................................................ 17
17.0 TERMINATION ................................................................................................ 18
18.0 GOVERNING LAW .......................................................................................... 18
19.0 WAIVER OF JURY TRIAL .............................................................................. 19
20.0 STATUS OF PREVIOUS LENDING AGREEMENT ......................................... 19
APPENDIX 1: FINANCING STATEMENT COLLATERAL DESCRIPTION
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APPENDIX 2: TERMS OF CONTROL AGREEMENT
APPENDIX 3: APPLICATION PACKAGE FOR U.S. BORROWERS
FORM OF OC-10 LETTER OF AGREEMENT
FORM OF OC-10 CERTIFICATE
FORM OF OC-10 AUTHORIZING RESOLUTIONS FOR BORROWERS
FORM OF OC-10 OFFICIAL AUTHORIZATION LIST
APPENDIX 4: APPLICATION PACKAGE FOR BRANCHES OR AGENCIES OF NON-U.S.
BORROWERS
FORM OF OC-10 LETTER OF AGREEMENT
FORM OF OC-10 CERTIFICATE
FORM OF OC-10 AUTHORIZING RESOLUTIONS FOR BORROWERS
FORM OF OC-10 OFFICIAL AUTHORIZATION LIST
FORM OF OPINION OF FOREIGN OUTSIDE COUNSEL
FORM OF OPINION OF UNITED STATES OUTSIDE COUNSEL
APPENDIX 5: ANCILLARY AGREEMENTS
FORM OF AGREEMENT FOR THIRD-PARTY CUSTODIAN TO HOLD COLLATERAL
FORM OF CORRESPONDENT CREDIT AND PAYMENT AGREEMENT
EXHIBIT 1: LETTER OF AGREEMENT TO CORRESPONDENT CREDIT AND
PAYMENT AGREEMENT
APPENDIX 6: PROHIBITION AGAINST FEDERAL ASSISTANCE TO ANY SWAPS ENTITY
APPENDIX 7: DISCOUNT WINDOW DIRECT
Case 3:23-cv-01034-GMM Document 146-4 Filed 08/02/24 Page 4 of 33
CREDIT AND SECURITY TERMS
1.0 SCOPE
This Operating Circular is issued by each Reserve Bank and sets forth the terms under
which an entity may, in accordance with the Federal Reserve Act and regulations
promulgated thereunder by the Board of Governors of the Federal Reserve System, obtain
Advances from, incur Obligations to, or pledge Collateral to a Reserve Bank.
2.0 DEFINED TERMS
2.1 The capitalized terms used hereafter in this Operating Circular have the meanings
defined below:
Account means a “Master Account” as defined in the Reserve Banks’ Operating
Circular No. 1.
Advance means an extension of credit to the Borrower (not including a discount
of paper) pursuant to Regulation A, including any renewal or extension thereof.
Advance Repayment Amount means the amount of an Advance, plus all accrued
and unpaid interest thereon.
Adverse Claim has the meaning set forth in Section 9.1(d) of this Operating
Circular.
Application Package means the Application Package, substantially in the form of
Appendix 3 or 4, as appropriate, which the Borrower submitted in connection with
its agreement to this Operating Circular.
Bank means the Reserve Bank in whose district the Borrower is located
(determined in accordance with 12 C.F.R. Section 204.3(g) (Regulation D), or such
other Reserve Bank with which the Borrower has entered into a borrowing
relationship under this Operating Circular.
BIC-held Collateral means Collateral that is in the possession or control of the
Borrower or stored or maintained with a third-party custodian pursuant to an
authorized BIC Arrangement.
Board of Governors means the Board of Governors of the Federal Reserve
System.
Borrower means an entity that incurs an Obligation to the Bank.
Borrower-in-Custody or BIC Arrangement means an arrangement whereby the
Bank authorizes a Borrower, or a third party (including affiliates of a Borrower), to
store or maintain possession of the Collateral, as described in Section 7 of this
Operating Circular.
Business Day means any day the Bank is open for conducting all or substantially
all its banking functions.
Certificate means the certificate, substantially in the form set forth in the
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appropriate Application Package, provided to the Bank by the Borrower.
Collateral means:
(i) all the Borrower’s rights, title, and interest in property (wherever
located, now owned or hereafter acquired), including, but not limited
to, accounts, chattel paper, inventory, equipment, instruments,
investment property, general intangibles, documents, deposit
accounts, commercial tort claims and, real property that is (a)
identified on a Collateral Schedule, (b) identified on the books or
records of a Reserve Bank as pledged to, or subject to a security
interest in favor of, the Bank or any other Reserve Bank or (c) in the
possession or control of, or maintained with, the Bank or any other
Reserve Bank including, but not limited to, investment property, but
excluding any investment property in any Unrestricted Securities
Account maintained at any Reserve Bank that the Borrower may
not encumber under applicable law;
(ii) all documents, books and records, including programs, tapes, and
related electronic data processing software, evidencing or relating
to any or all of the foregoing; and
(iii) to the extent not otherwise included, all proceeds and products of
any and all of the foregoing and all supporting obligations given by
any person with respect to any of the foregoing, including, but not
limited to interest, dividends, insurance, rents and refunds.
Collateral Schedule means the written, electronic or other statement(s) listing
Collateral in effect at any time. Each statement of Collateral shall be in the form
required by the Bank and shall identify the items of Collateral with the specificity
required by the Bank. The removal of an item from a statement of Collateral will
not be effective and will not affect the Bank’s security interest in the item unless
such removal is made in accordance with this Operating Circular and the Bank’s
procedures, including prior Bank approval or authorization.
Correspondent means a depository institution that maintains an Account with a
Reserve Bank and that has agreed to permit a Borrower to utilize its Account to
receive Advances and make payments to Reserve Banks pursuant to the
Correspondent Credit and Payment Agreement substantially in the form set forth
in Appendix 5.
Discount Window Direct means the online application described in Appendix 7.
Event of Default means the occurrence of any of the following:
(i) the Borrower fails to repay or satisfy any Obligation when due;
(ii) the Borrower fails to perform or observe any of its obligations or
agreements under the Lending Agreement or under any other
instrument or agreement delivered or executed in connection with
the Lending Agreement or under any other agreement with the
Bank or another Reserve Bank;
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(iii) any representation or warranty made or deemed to be made by the
Borrower under or in connection with the Lending Agreement, or
that is contained in any certificate, document or financial or other
statement delivered by it or in connection with the Lending
Agreement, is inaccurate in any material respect on or as of the
date made or deemed made;
(iv) the Insolvency of the Borrower;
(v) the Lending Agreement or any other agreement delivered or
executed in connection with the Lending Agreement ceases, for any
reason, to be in full force and effect, or any person so asserts or
any security interest or lien created hereby ceases to be
enforceable or have the same effect and priority purported to be
created hereby;
(vi) the creation of an encumbrance upon Collateral, or placement of a
levy, judicial seizure of, or an attachment upon Collateral;
(vii) whenever the Bank deems itself insecure with respect to the
financial condition of the Borrower or the Borrower’s ability to
perform its Obligations.
FRB Lending Documents has the meaning set forth in Section 8.0 of this
Operating Circular.
Indebtedness means the total of the Borrower’s overdrafts (whether intraday or
overnight) in its Account(s) and any penalties and charges thereon.
Indemnified Party has the meaning set forth in Section 13.1 of this Operating
Circular.
Insolvency means:
(i) the condition of insolvency;
(ii) that a proceeding relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking to adjudicate an entity bankrupt or
insolvent or seeking reorganization, adjustment, dissolution,
liquidation or other relief with respect to the Borrower or the
Borrower’s debt is commenced;
(iii) that an assignment for the benefit of the Borrower’s creditors
occurs;
(iv) that a receiver, custodian, conservator, or the like is appointed for
the Borrower or for any of its United States or foreign branches or
agencies;
(v) that the Borrower has been closed by order of its supervisory
authorities, or a public officer has been appointed to take over such
entity;
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(vi) that the Borrower ceases or refuses to make payments in the
ordinary course of business, or admits in a record its inability to pay
its debt as they become due;
(vii) the Borrower’s business is suspended, or any party has presented
or filed a petition for winding-up or liquidating the Borrower; or
(viii) any other circumstances that evince the Borrower’s inability to pay
its debts when due.
Lending Agreement means this Operating Circular, any Collateral Schedule,
each document in the Application Package executed or furnished to the Bank by
the Borrower, and any other agreement or document executed by the Borrower in
connection with this Operating Circular, in each case as the same may be
amended, supplemented or otherwise modified from time to time.
Letter of Agreement means the Letter of Agreement, substantially in the form
found in Appendix 3 or 4, as appropriate, pursuant to which the Borrower agrees
to be bound by the terms of this Operating Circular.
Obligation, whether now existing or hereafter incurred, means:
(i) Advance Repayment Amounts;
(ii) Indebtedness;
(iii) any other liabilities of the Borrower to the Bank or any other
Reserve Bank, including without limitation, any service fees,
whether due or to become due; and
(iv) any expense the Bank or its designee(s) may incur to:
a. obtain, preserve and/or enforce the Lending Agreement or
the Bank’s security interest in Collateral and the Borrower’s
Obligations under the Lending Agreement,
b. collect any or all of the foregoing, or
c. assemble, transport, maintain or preserve Collateral
(including, without limitation, taxes, assessments, insurance
premiums, repairs, reasonable attorneys’ fees, rent,
transportation, storage costs, and expenses of sale).
Regulation A means the Board of Governors’ Regulation A, 12 C.F.R. part 201,
as amended, supplemented or otherwise modified from time to time.
Reserve Bank means any one of the Federal Reserve Banks (including the Bank).
UCC means the Uniform Commercial Code as amended, supplemented or
otherwise modified from time to time.
Unrestricted Securities Account has the meaning set forth in Operating Circular
No. 7.
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2.2 The following terms are used herein as defined in Articles 8 and 9 of the UCC:
account, chattel paper, control, deposit account, documents, equipment, financial
assets, financing statement, general intangibles, instruments, inventory,
investment property, record, securities account and securities intermediary.
3.0 ADVANCES 1
3.1 A request for an Advance shall be made to the Bank in a form and time acceptable
to the Bank. An Advance must be secured by Collateral acceptable to the Bank.
Upon the Bank’s request, the Borrower shall submit a written application for an
Advance. The Bank may also require the Borrower to execute a promissory note
and/or additional relevant agreements or documents at any time with respect to an
Advance.
3.2 The Bank’s making of an Advance is subject to the terms of the Federal Reserve
Act as implemented by Regulation A.
3.3 The Bank’s approval of a request for an Advance shall be evidenced by, and the
Advance shall be deemed made at the time of, the Bank’s record of the credit of
the amount of the Advance to an Account agreed upon by the Borrower and the
Bank.
4.0 INTEREST
4.1 The interest rate applicable to an Advance shall be the rate, as from time to time
established by the Bank subject to the determination of the Board of Governors,
that applies to the particular credit program described under Regulation A under
which the Bank made the Advance. Interest on an Advance shall accrue from the
day the Advance is credited to the Account and shall be payable at the applicable
rate in effect on that day, except that if the interest rate changes while an Advance
is outstanding, the new rate shall apply as of the day on which the rate change is
effective. Interest shall be computed on the basis of 365 days in a year.
4.2 If all or any portion of an Advance Repayment Amount is not paid when due
(whether by acceleration or otherwise), interest on the unpaid portion of the
Advance Repayment Amount shall be calculated at a rate 500 basis points higher
than the applicable rate then in effect until the unpaid Advance Repayment Amount
is paid in full.
5.0 REPAYMENT OF ADVANCE
5.1 The Borrower promises to pay an Advance Repayment Amount when due in
actually and finally collected funds. An Advance Repayment Amount is
immediately due and payable:
1
Although a Reserve Bank almost always extends credit in the form of an Advance, a Reserve Bank may
extend credit by discounting paper that meets the requirements described in the Federal Reserve Act and
Regulation A if the Reserve Bank concludes that a discount more effectively would meet the needs of the
situation. A loan in the form of a discount would be subject to a separate agreement between the Reserve
Bank and the Borrower. Such agreement may be based on this Operating Circular and, if so, may vary or
supplement the terms of this Operating Circular as appropriate.
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(a) on demand;
(b) without any demand, notice or other action:
(i) on the due date and time specified by the Bank in writing (provided
that if such date falls on a day that is not a Business Day, the due
date shall be extended to the next Business Day). If no due date
and time is specified, then an Advance Repayment Amount is due
24 hours after the Advance was made (provided that if such time
falls on a day that is not a Business Day, the time shall be extended
to such time on the next Business Day); or
(ii) upon the occurrence of any Event of Default described in clause
(iv), (v) or (vii) of the definition of such term; or
(c) at the Bank’s option, upon the occurrence of any other Event of Default; or
(d) at the Bank’s option, if the Borrower, in whole or in part, is acquired,
merged, dissolved, or nationalized, or sells or otherwise disposes of
substantially all of its assets, or if the Borrower is taken over in any other
way by any other person or entity.
5.2 Operating Circular No. 1 issued by the Reserve Bank maintaining the Account
where Indebtedness is incurred governs when such Indebtedness is due and
payable; provided, however, that if an Advance Repayment Amount becomes due
under Sections 5.1(a), (b)(ii), (c) or (d), all other Obligations shall become due and
payable immediately, without any demand, notice, or other action.
5.3 The Borrower waives any right to presentment, notice of dishonor, protest, and any
other notice of any kind except as expressly provided for herein.
5.4 The Borrower may prepay an Advance Repayment Amount, in whole or in part,
without penalty.
5.5 The Bank or the appropriate Reserve Bank will debit the Borrower’s Account for
the Advance Repayment Amount and all other Obligations when due. If the
Borrower does not have an Account, the Borrower must make arrangements
satisfactory to the Bank for paying the Advance Repayment Amount prior to
requesting any Advance, such as making payment through a Correspondent.
6.0 GRANT OF SECURITY INTEREST
For value received and in consideration of the Bank permitting the Borrower to obtain
Advances or incur Indebtedness, the Borrower hereby transfers and assigns to the Bank
and grants to the Bank for itself and as agent for each other Reserve Bank to which an
Obligation is or becomes owing, a continuing security interest in and lien on the Collateral
as collateral security for the timely and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of all Obligations.
7.0 COLLATERAL
7.1 The Borrower shall ensure that the Collateral meets the requirements as the Bank
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may from time to time prescribe and shall deliver, hold, store or otherwise maintain
Collateral on such terms and conditions as the Bank may from time to time
prescribe. Borrower must keep all Collateral Schedules current and updated and
otherwise comply with the Bank’s instructions.
7.2 The Bank may at any time request the Borrower to replace any item of Collateral
or to grant a lien and security interest in additional assets of a type and in an
amount acceptable to the Bank, and the Borrower shall promptly do so.
7.3 Unless otherwise specified by the Bank in writing, the Borrower shall promptly
withdraw from the Collateral Schedule:
(a) any Collateral that has a payment of principal or interest past due, in whole
or in part, for more than 30 days (or 60 days past due for mortgage notes,
and other types of consumer debt, including student loans);
(b) any Collateral that has been paid in full by the obligor;
(c) any Collateral if the obligor on such Collateral becomes insolvent, or if a
receiver, custodian, or the like is appointed for the obligor; or
(d) any Collateral that does not meet the other eligibility requirements that the
Bank may prescribe from time to time.
Prior to such withdrawal, however, the Borrower shall pledge substitute Collateral
acceptable to the Bank by submitting an updated Collateral Schedule or otherwise
pledging such Collateral to the Bank.
7.4 Except as may be the case for book-entry securities held on a Reserve Bank’s
books pursuant to Operating Circular No. 7 issued by the Bank, the Bank has no
duty to collect any income accruing on Collateral or to preserve any rights relating
to Collateral.
7.5 The Borrower hereby:
(a) authorizes the Bank at any time to file or record in any filing office in any
jurisdiction which the Bank determines appropriate to perfect the security
interests set forth hereunder, financing statements, and any amendments
or continuation statements related thereto without the signature of the
Borrower therein, that describes the Collateral substantially as set forth on
Appendix 1 hereto, and the Borrower shall, promptly at the Bank’s request,
provide any additional information required by Article 9 of the UCC, as in
effect in any relevant jurisdiction, for the sufficiency or acceptability of any
financing statement;
(b) ratifies its authorization for the Bank to have filed any financing statement,
including any amendment or continuation statement related thereto, in any
jurisdiction, where the same has been filed prior to the date on which the
Letter of Agreement is signed by the Borrower;
(c) authorizes the Bank, at any time, to take any and all other actions that may
be necessary or, in the Bank’s sole discretion, desirable to obtain,
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preserve, perfect or enforce the Bank’s security interest in the Collateral;
(d) authorizes the Bank to endorse or assign as the Borrower’s agent any item
of Collateral, to cause Collateral consisting of uncertificated securities to
be marked on the books of the securities issuer as pledged to the Bank or
its nominee as pledgee, and to inspect Collateral held by the Borrower and
copy any relevant records and/or documents.
7.6 If the Bank approves, the Borrower may pledge BIC-held Collateral subject to the
following: 2
(a) BIC-held Collateral shall be prominently identified as Pledged to the Bank
and subject exclusively to the Bank’s written instructions. At the Bank’s
request, the Borrower shall, without delay, prominently and conspicuously
affix a legend to items of BIC-held Collateral indicating that such items are
subject to a security interest in favor of the Bank.
(b) The Borrower shall mark its records to show that BIC-held Collateral has
been pledged to the Bank and is subject exclusively to the Bank’s written
instructions. Any computer-generated list or report containing BIC-held
Collateral must incorporate a legend indicating that such Collateral is
pledged to the Bank.
(c) Upon the Bank’s request, the Borrower shall at all times segregate BIC-
held Collateral from its own assets or the assets of any other party and
shall hold Collateral in such location(s) approved by the Bank. BIC-held
Collateral shall not be removed from such location(s) without the prior
written approval of the Bank.
(d) The Borrower may withdraw or replace BIC-held Collateral only with the
approval of the Bank and on terms acceptable to the Bank.
(e) The Bank may from time to time notify Borrower of additional requirements
on BIC-held Collateral. The Borrower’s failure to comply with such
requirements shall disqualify the Borrower from participation in the BIC
Arrangement.
7.7 With respect to any item of Collateral not delivered or transferred to the Bank or its
custodian, including BIC-held Collateral, the Borrower shall hold such item of
Collateral in trust for the Bank until the Collateral is delivered or transferred in
accordance with the Bank’s instructions. The Borrower bears the risk of loss for
any Collateral held in the Borrower’s possession or control, at any custodian,
maintained in an account at a securities intermediary other than a Reserve Bank,
or in transit to or from the Bank. The Borrower also bears the risk of any accidental
2
If Collateral is maintained by a third party (including an affiliate of the Borrower), the Borrower must comply
with (or compel such third party’s compliance with) the provisions in this Operating Circular pertaining to
BIC-held Collateral. In addition, such third party must execute an Agreement for Third-Party Custodian to
Hold Collateral, the form of which is in Appendix 5. Finally, the Bank may require the third party to complete
Collateral Schedules and participate or comply with inspection and certification requirements related to the
BIC-held Collateral. For purposes of this Operating Circular, “affiliate” means a parent, direct or indirect
subsidiary of the Borrower or any entity having the same parent or ultimate parent as the Borrower.
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loss or damage to Collateral in the Bank’s possession or control to the extent the
Bank exercised reasonable care.
7.8 Unless an Event of Default occurs or the Bank expressly directs otherwise, any
proceeds, dividend, interest, rent, proceeds of redemption, and/or any other
payment received by the Borrower regarding any Collateral may be retained by the
Borrower. If the Bank directs that any of the foregoing be paid to the Bank, the
Borrower shall remit those payments, or cause such payments to be remitted,
promptly to the Bank and, until receipt by the Bank, such payments are deemed to
be held in trust for the Bank.
7.9 The Bank is under no obligation to allow for the withdrawal of any item of Collateral
from the pledge to the Bank, or to allow the removal of any item of Collateral from
the Collateral Schedule or otherwise release its security interest in any item of
Collateral unless:
(a) the Borrower has provided substitute Collateral acceptable to the Bank; or
(b) the Bank has verified, in accordance with its normal customs and
procedures, that all Obligations have been unconditionally repaid in full and
that the Borrower is not currently in default under another agreement with
the Bank or any other Reserve Bank.
7.10 In order to perfect its security interest in property, whether now owned or hereafter
acquired, maintained with any other Reserve Bank including, but not limited to, any
deposit account, investment property in any Unrestricted Securities Account, and
items in the process of collection and their proceeds, but excluding any investment
property in any Unrestricted Securities Account maintained at any Reserve Bank
that the Borrower may not encumber under applicable law, Bank will enter, or has
entered, a control agreement, substantially in the form of Appendix 2, with any
other Reserve Bank with respect to any accounts of Borrower maintained at such
Reserve Banks. Borrower hereby agrees to and consents to be bound by the terms
of any such control agreement. It is understood that any such control agreement
creates in favor of the Bank and for the benefit of the other Reserve Banks, a legal,
valid, and enforceable security interest, perfected by control, within the meaning
of the UCC, in Collateral described in this section. The Bank will not exercise its
rights in such accounts under such agreement except upon the occurrence of an
Event of Default.
7.11 Unless Bank notifies the Borrower otherwise, the Borrower shall be permitted to
Transfer Collateral consisting of securities held in the Borrower’s Unrestricted
Securities Account as provided for in Operating Circular No. 7. Securities that the
Borrower Transfers shall be free and clear of any security interest of the Bank
created hereunder. The term “Transfer” as used in this Section, has the meaning
set forth in Operating Circular No. 7.
8.0 MAINTENANCE OF LENDING DOCUMENTS
The Borrower must maintain at all times a copy of any Collateral Schedule, each document
in the Application Package executed or furnished to the Bank by the Borrower, and any
other agreement or document executed by the Borrower in connection with this Operating
Circular, in each case, as the same may be amended, supplemented or otherwise
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modified from time to time (collectively, the “FRB Lending Documents”), and should treat
such documents as official records of the Borrower. The Borrower must also maintain at
all times a current statement of outstanding Advances and Indebtedness. The FRB
Lending Documents, (i) if in paper form, must be maintained together in a secure location
on or accessible from the Borrower’s premises; or (ii) if in electronic form, must be
maintained in a manner that is easily and readily accessible from the Borrower’s
information technology systems. If the Borrower is a U.S. branch or agency of a foreign
bank, the FRB Lending Documents must be maintained in or be accessible from the office
of the Borrower’s U.S. branch or agency located in the Federal Reserve District in which
the Borrower obtains Advances or incurs Indebtedness.
9.0 REPRESENTATIONS AND WARRANTIES
9.1 The Borrower represents and warrants that:
(a) (i) the Borrower has the power and authority, and the legal right, to make,
deliver and perform the Lending Agreement and to obtain Advances or
otherwise incur Indebtedness; (ii) the Borrower has taken all necessary
organizational action to authorize the execution, delivery and performance
of the Lending Agreement and to authorize the obtaining of Advances on
the terms and conditions of the Lending Agreement; (iii) no consent or
authorization of, filing with, notice to or other act by or in respect of, any
governmental authority or any other person is required in connection with
the obtaining of Advances hereunder or with the execution, delivery,
performance, validity or enforceability of the Lending Agreement; and (iv)
the Lending Agreement has been duly executed and delivered on behalf of
the Borrower;
(b) the Borrower is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization and in each jurisdiction where
the conduct of its business requires qualification, and is not in violation of
any laws or regulations in any respect which could have any adverse effect
whatsoever upon the validity, performance or enforceability of any of the
terms of the Lending Agreement;
(c) the Lending Agreement constitutes a legal, valid and binding obligation of
the Borrower, enforceable against the Borrower in accordance with its
terms;
(d) the Borrower has rights in Collateral sufficient to grant an enforceable
security interest to the Bank, and its rights in Collateral are free of any
assertion of a property right that would adversely affect a Reserve Bank’s
right to Collateral, including but not limited to any claim, lien, security
interest, encumbrance, preference or priority arrangement or restriction on
the transfer or pledge of Collateral (an “Adverse Claim”), except as created
by, or otherwise permitted under, the Lending Agreement or by the Bank;
(e) all information set forth on the Certificate is accurate and complete and
there has been no change in such information since the date of the
Certificate;
(f) (i) the Lending Agreement is effective to create in favor of the Bank for itself
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and for the benefit of the other Reserve Banks, if applicable, a legal, valid,
and enforceable security interest in the Collateral described in the Lending
Agreement and proceeds thereof; (ii) when financing statements are filed
in the state filing offices located in the jurisdictions specified on the
Certificate, those security interests shall constitute a fully and validly
perfected lien on, and security interest in, all rights, title and interest of the
Borrower in such Collateral as to which perfection can be obtained by filing,
as security for the Obligations, in each case prior and superior in right to
any other person (except for liens that arise by operation of law); and (iii)
no financing statement or other public notice with respect to all or any part
of the Collateral is on file or of record in any public office, except such as
have been filed in favor of the Bank pursuant to the Lending Agreement,
are permitted by the Lending Agreement, or are otherwise permitted by the
Bank;
(g) no statement or information contained in the Lending Agreement or any
other document, certificate, or statement furnished by the Borrower to the
Bank or any other Reserve Bank for use in connection with the transactions
contemplated by the Lending Agreement, on and as of the date when
furnished, is untrue as to any material fact or omits any material fact
necessary to make the same not misleading, and the representations and
warranties in the Lending Agreement are true and correct in all material
respects;
(h) the Borrower has evaluated the potential risks and liabilities accruing to the
Borrower under applicable Federal and State environmental laws, rules,
and regulations and has determined, to the best of the Borrower’s
knowledge that under applicable laws, rules, or regulations that impose
environmental liability on a creditor or lender or an owner or manager of
the real property that secures Collateral, the Borrower does not have and
has not assumed any liability of any person thereunder; and
(i) no Event of Default has occurred or is continuing.
9.2 Each time the Borrower requests an Advance, incurs any Indebtedness, or grants
a security interest in any Collateral to a Reserve Bank, the Borrower is deemed to
make all of the foregoing representations and warranties on and as of the date
such Advance or Indebtedness is incurred or security granted. Such
representations and warranties shall be true on and as of such date and shall
remain true and correct so long as the Lending Agreement remains in effect, any
Obligation remains outstanding, or any other amount is owing to the Bank.
10.0 COVENANTS
The Borrower covenants that so long as the Lending Agreement remains in effect or any
Obligation remains outstanding or any other amount is owing to the Bank:
(a) the Borrower shall provide to the Bank any reports or statements that the
Bank requests;
(b) the Borrower shall permit the Bank or its designee to inspect or copy any
documents or evidence in the Borrower’s possession or control relating to
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Collateral and any Obligation;
(c) except for the security interest herein granted or otherwise permitted
hereunder or by the Bank, the Borrower shall have rights in the Collateral
free from any Adverse Claim, and shall maintain the security interest
created hereby as a perfected security interest with the priority set forth in
Section 9.1(f) and shall take all actions necessary or prudent to defend
against Adverse Claims;
(d) except as otherwise permitted hereunder or by the Bank, the Borrower shall
not (i) sell or otherwise dispose of, or offer to sell or otherwise dispose of,
the Collateral or any interest therein, or (ii) pledge, mortgage, or create, or
permit the existence of any right of any person in or claim to, the Collateral
other than the security interest granted herein;
(e) the Borrower shall pay promptly when due (or before they become
delinquent) all taxes, assessments, governmental charges, and levies
imposed upon the Collateral or any income or profits therefrom, and any
claims of any kind against Collateral;
(f) upon the Bank’s request, the Borrower shall promptly reimburse the Bank
for any expense incurred by the Bank with respect to enforcing or
administering the Lending Agreement and any item of Collateral, including
perfecting or maintaining perfection of the Borrower’s and/or the Bank’s
security interest in Collateral, and assembling, transporting, safekeeping,
managing, inspecting, or liquidating Collateral, whether Collateral is held
by the Bank, its custodian, or the Borrower;
(g) the Borrower shall not perform any act with respect to any Collateral that
would impair the Bank’s rights or interests therein, nor will the Borrower fail
to perform any act that would reasonably be expected to prevent such
impairment or that is necessary to preserve the Bank’s rights;
(h) at the Bank’s request, the Borrower shall promptly execute any agreement
or document and take any other actions that the Bank deems necessary or
desirable, including but not limited to the execution and delivery of any
document the Bank deems necessary to grant, perfect or otherwise protect
the Bank’s security interest in any existing or additional Collateral;
(i) the Borrower shall promptly notify the Bank if the Borrower is or is about to
become an undercapitalized depository institution or a critically
undercapitalized depository institution, as such terms are defined in
Regulation A;
(j) the Borrower shall renew or keep in full force and effect its organizational
existence or take all reasonable action to maintain all rights, privileges,
licenses and franchises necessary or desirable in the normal conduct of its
business;
(k) without providing at least 30 days’ prior written notice to the Bank and
submitting an updated Certificate to the Bank, the Borrower shall not cause
or permit any of the information provided in the Certificate, including its
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jurisdiction of organization or its name on its Organizational Document (as
defined in the Certificate), to become untrue;
(l) the Borrower shall continuously maintain the FRB Lending Documents in
the same manner as it maintains all other official corporate records, and
the FRB Lending Documents shall be immediately and routinely available
to any examiner authorized to examine the Borrower;
(m) in any BIC Arrangement, the Borrower shall provide for periodic audits of
BIC-held Collateral pledged to the Bank, shall notify the Bank immediately
of any irregularities discovered during any audits, shall certify periodically,
as determined by the Bank, that it is complying with the requirements of the
BIC Arrangement, and shall ensure risk ratings assigned to any Collateral
subject to Borrower’s internal loan ratings are accurate;
(n) the Borrower shall promptly notify the Bank of the occurrence or impending
occurrence of any Event of Default; and
(o) the Borrower shall promptly notify the Bank of any change in applicable
law, the regulations or policies of its chartering and/or licensing authority,
or its charter, bylaws, or other governing documents, or any legal or
regulatory process asserted against the Borrower, that materially affects or
may materially affect the Borrower’s authority or ability to lawfully perform
its obligations under the Lending Agreement.
11.0 WAIVER OF IMMUNITY; SUBMISSION TO JURISDICTION
11.1 If the Borrower or its property is now, or in the future becomes, entitled to any
immunity, whether characterized as sovereign or otherwise (including, without
limitation, immunity from set-off, from service of process, from jurisdiction of any
court or tribunal, from attachment in aid of execution, from attachment prior to the
entry of a judgment, or from execution upon a judgment) in any legal proceeding
in Federal or State courts in the United States of America, or in the courts of the
country where the Borrower is chartered, or in the courts of the country in which
the Borrower principally conducts its business, then the Borrower expressly and
irrevocably waives, to the maximum extent permitted by law, any such immunity.
To the extent the Borrower receives any such entitlement in the future, the
Borrower shall promptly notify the Bank of such entitlement.
11.2 The Borrower submits in any legal action or proceeding relating to or arising out of
the Lending Agreement, or the conduct of any party with respect therefor or for
recognition and enforcement of any judgment in respect thereof, to the
nonexclusive general jurisdiction of the Federal District Court sitting where the
Bank’s head office is located and any appellate court thereof. In the case of a
foreign Borrower, such Borrower also submits to the non-exclusive jurisdiction of
the courts of the country where the Borrower is chartered or in which it principally
conducts its business over any suit, action or proceeding arising out of or relating
to the Lending Agreement. The Borrower agrees that service of process in any
such action or proceeding may be effected by mailing a copy thereof by registered
or certified mail (or any substantially similar form of mail), postage prepaid, to the
address provided in the Letter of Agreement; and agrees that nothing herein shall
affect the right to effect service of process in any other manner permitted by law or
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shall limit the right to sue in any other jurisdiction. The Borrower irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or hereafter
have to the venue of any such suit, action, or proceeding brought in any such court
and any claim that any such suit, action or proceeding brought in such a court has
been brought in an inconvenient forum. The Borrower also agrees that a final
judgment in any such suit, action, or proceeding brought in such court shall be
conclusive and binding upon the Borrower. The foregoing does not diminish or
otherwise affect the Bank’s rights under Section 25B of the Federal Reserve Act,
12 USC § 632.
12.0 REMEDIES
12.1 Upon the occurrence of, and at any time during the continuance of, an Event of
Default, the Bank may pursue any of the following remedies, separately,
successively, or concurrently:
(a) debit the Borrower’s Account, or cause the Borrower’s Account to be
debited (in the case of an Account at another Reserve Bank), in an amount
up to the Borrower’s unpaid Obligations;
(b) set off any Obligation against any amount owed by the Bank or any other
Reserve Bank to the Borrower, whether or not such amount owed is then
due and payable;
(c) exercise any right of set-off or banker’s lien provided by applicable law
against the Borrower’s property in the possession or control of, or
maintained with, the Bank or any other Reserve Bank, including but not
limited to items in process of collection and their proceeds and any balance
to the credit of the Borrower with a Reserve Bank;
(d) take possession or control of any Collateral not already in the Bank’s
possession or control, without demand and without legal process. Upon the
Bank’s demand, the Borrower shall assemble and make Collateral
available to the Bank as the Bank directs. The Borrower grants to the Bank
the right, for this purpose to enter into or on any premises where Collateral
may be located; and
(e) pursue any other remedy available to collect, enforce, or satisfy any
Obligation, including exercising its rights as a secured creditor to collect
income on the Collateral, or to sell, assign, transfer, lease or otherwise
dispose of Collateral whether or not Collateral is in the Bank’s possession
or control.
12.2 If the Bank exercises its rights in Collateral upon an Event of Default:
(a) the Bank may sell, assign, transfer, and deliver, at the Bank’s option, all or
any part of Collateral at private or public sale, at such prices as the Bank
may, in good faith, deem best, without advertisement, and the Borrower
waives notice of the time and place of the sale, except any notice that is
required by law and may not be waived;
(b) the Bank has no obligation to prepare Collateral for sale, and the Bank may
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sell Collateral and disclaim any warranties without adversely affecting the
commercial reasonableness of the sale;
(c) the Bank has no obligation to collect from any third party or to marshal any
assets in favor of the Borrower to satisfy any Obligation; and
(d) the Bank or another Reserve Bank may purchase any or all of Collateral
and pay for it by applying the purchase price to reduce amounts owed by
the Borrower to the Bank or any other Reserve Bank.
12.3 The Borrower appoints the Bank, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place and
stead of the Borrower, to endorse, assign, transfer, and deliver Collateral to any
party, and to take any action deemed necessary or advisable by the Bank either
to protect the Bank’s interests or exercise its rights under the Lending Agreement,
including taking any action to perfect or maintain the Bank’s security interest
(including but not limited to recording an assignment of a mortgage or filing a
financing statement). This power of attorney is coupled with an interest and as
such is irrevocable and full power of substitution is granted to the assignee or
holder. As attorney-in-fact, the Bank may take any lawful action to collect all sums
due in connection with Collateral, the Bank may release any Collateral, instruments
or agreements securing or evidencing the Obligations as fully as the Borrower
could do if acting for itself, and the Bank may take any action set forth in Section
7.5, but the Bank has no obligation to take any such actions or any other action in
respect of the Collateral.
12.4 The proceeds realized by the Bank upon selling or disposing of Collateral, to the
extent actually received in cash by the Bank or another Reserve Bank, will be
applied toward satisfaction of the Obligations. The Bank shall apply such proceeds
first to any fees, other charges, penalties, indemnities, and costs and expenses of,
collection, or realizing on interests in Collateral (including reasonable attorneys’
fees), next to accrued but unpaid interest, and last to the unpaid principal balance.
The Bank will account to the Borrower for any surplus amount realized upon such
sale or other disposition, and the Borrower shall remain liable for any deficiency.
12.5 No delay or failure by the Bank to exercise any right or remedy accruing upon an
Event of Default shall impair any right or remedy, waive any default or operate as
an acquiescence to the Event of Default, or affect any subsequent Event of Default
of the same or of a different nature.
12.6 On complying with the provisions of the Lending Agreement and applicable law,
the Bank is fully discharged from any liability or responsibility to any person
regarding Collateral.
13.0 INDEMNIFICATION
13.1 The Borrower shall indemnify the Bank and its officers, directors, employees and
agents (each, an “Indemnified Party”) for any loss, claim, damage, liability, and
expense (including, without limitation, reasonable attorneys’ fees, court costs and
expenses of litigation) incurred by an Indemnified Party in the course of or arising
out of the performance of the Lending Agreement, any action related to Collateral,
or any action to which an Indemnified Party may become subject in connection
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with the Bank’s exercise, enforcement or preservation of any right or remedy
granted to it under the Lending Agreement, except to the extent that such loss,
claim, damage, liability, or expense results, as determined by a court, from the
Bank’s gross negligence or willful misconduct.
13.2 The Bank will give the Borrower written notice of any claim that the Bank or any
other person may have under this indemnity. The Borrower is not liable for any
claim that is compromised or settled by the Bank or such persons without the
Borrower’s prior written consent, provided that the Borrower responded promptly
and in the Bank’s judgment, adequately, to the Bank’s notice of such claim. This
indemnity remains an obligation of the Borrower notwithstanding termination of the
Lending Agreement, and is binding on the Borrower’s successors and assigns.
Upon written demand from the Bank, the Borrower shall pay promptly amounts
owed under this indemnity, free and clear of any right of offset, counterclaim or
other deduction, and the Bank’s reasonable determination of amounts owing
hereunder is binding. If not promptly paid by the Borrower, such obligation
becomes an Obligation secured under the Lending Agreement.
14.0 MISCELLANEOUS
14.1 The Bank is not obligated by the Lending Agreement or otherwise to make,
increase, renew, or extend any Advance to the Borrower.
14.2 The amount of any Advance Repayment Amount and/or Obligation reflected on
the books and records of a Reserve Bank is presumptive evidence of the amounts
due and owing by the Borrower to such Reserve Bank.
14.3 The Borrower’s obligations under the Lending Agreement shall be performed by it
at its own cost and expense.
14.4 Unless expressly agreed otherwise by the Bank, the time zone of the Bank’s head
office shall be used to determine any deadline hereunder, including the time an
Advance Repayment Amount is due and payable.
14.5 The Bank may record telephone communications between the Bank and the
Borrower, and such recordings may be submitted in evidence to any court or in
any proceeding for the purpose of establishing any matters pertinent to the Lending
Agreement.
14.6 The Bank may rely on any record used by the Borrower to endorse or pledge
Collateral to the Bank.
14.7 The Bank’s rights and remedies under the Lending Agreement are in addition to
any others agreed to by the Borrower or that may exist at law or in equity.
14.8 Any provision of the Lending Agreement that is unenforceable or invalid under any
law in any jurisdiction is ineffective to the extent of such unenforceability or
invalidity without affecting the enforceability or validity of any other provision, and
any such unenforceability or invalidity shall not invalidate or render unenforceable
such provision in any other jurisdiction.
14.9 The Lending Agreement is binding on the receivers, administrators, permitted
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assignees and successors, and legal representatives of the Borrower and inures
to the benefit of the Bank, its assignees and successors.
14.10 The Bank may sell, transfer, assign or participate to any other Reserve Bank(s)
any or all of its interest in repayment of any Obligation and may purchase any
Obligation from any other Reserve Bank. The Borrower may not assign its rights
or obligations hereunder.
14.11 The Bank is not required to provide a written advice to the Borrower for any
Advance or Advance Repayment Amount.
14.12 The Bank has no liability for acting in reliance upon any communication (including
a fax, telex, electronic communication, or similar communication) reasonably
believed by the Bank to be genuine or to be sent by an individual acting on behalf
of the Borrower.
14.13 The Section headings used herein are for convenience only and are not to affect
the construction hereof or be taken into consideration in the construction hereof.
14.14 To the extent any Reserve Bank requires agreements or other documents to be in
writing, including the Lending Agreement, a Reserve Bank may accept such
documents created, generate, or stored by electronic means or executed with a
digital signature provided that such format or form of execution does not affect the
effectiveness or enforceability of the agreement or the security interest created
thereunder. If a Reserve Bank accepts an agreement executed with a digital
signature, the Reserve Bank will view the agreement as an electronic record as
provided in the Electronic Signatures in Global and National Commerce Act (E-
Sign Act) (15 U.S.C. § 7001 et seq.). A Reserve Bank may reject any document
executed with a digital signature that does not satisfy the Reserve Bank’s
standards for acceptable signatures.
15.0 AMENDMENT
The Bank, in its sole discretion, may amend the Lending Agreement without prior notice
at any time. The Bank shall notify the Borrower of any such amendment and, thereafter,
any pledge of Collateral, request for any Advance or incurrence of any other Obligation
shall constitute the Borrower’s agreement to such amendment as of the effective date of
such amendment. An amendment does not modify, except for a change in interest rate or
other charges, the terms of an outstanding Advance.
16.0 NOTICE
16.1 Any notice or other communication in respect of this Agreement may be given in
any manner set forth below to the addresses or numbers or in accordance with the
e-mail or electronic messaging system details provided in or pursuant to this
Agreement with respect to the receiving party and will be deemed effective as
indicated:
(a) if in writing and delivered in person or by courier, on the date it is delivered;
(b) if sent by certified or registered mail (airmail, if overseas) or the equivalent
(return receipt requested), on the date that mail is delivered, or its delivery
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is attempted;
(c) if sent by electronic messaging system, on the date that electronic
message is received;
(d) if sent by e-mail or through Discount Window Direct, on the date that
message is delivered; or
(e) if by telephone or other oral communication, on the date that oral
communication occurred, provided that such oral communication either is
confirmed promptly in writing by at least one of the methods specified in (a)
to (d) above or is recorded,
unless the date of the delivery (or attempted delivery), the receipt or the
occurrence, as applicable, is not a Business Day or that communication is
delivered (or attempted), received or shall have occurred, as applicable, after the
close of business on a Business Day, in which case that communication shall be
deemed given and effective on the first following day that is a Business Day.
16.2 Notices that are mailed or delivered in person or by courier to the Borrower must
be addressed as indicated by the Borrower in the Letter of Agreement, or as
otherwise specified by the Borrower in a record.
Notices that are mailed or delivered in person or by courier to the Bank must be
addressed to the credit function at the Bank’s head office or as otherwise specified
by the Bank.
17.0 TERMINATION
17.1 The Borrower may terminate its consent to be bound by the Lending Agreement
by giving written notice to the credit function at the Bank’s head office or as
otherwise specified by the Bank, so long as no Advance is then outstanding. 3
Notice of termination does not release the Borrower or affect the Bank’s rights,
remedies, powers, security interests or liens against Collateral in existence prior
to the Bank’s receipt of the notice, nor does notice of termination affect any
provision of the Lending Agreement which by its terms survives termination of the
Lending Agreement.
17.2 Upon termination, the Bank may retain Collateral until the Bank has had a
reasonable opportunity to verify, in accordance with its normal customs and
procedures, that all of the Borrower’s Obligations, contingent or otherwise, to the
Bank or any other Reserve Bank have been fully satisfied and discharged.
18.0 GOVERNING LAW
The Lending Agreement, including any Advance or any other transaction entered into
pursuant thereto, is governed by the law of the State in which the Bank’s head office is
located. The Lending Agreement is a security agreement for purposes of the UCC, as in
3
Collateral arrangements, including arrangements with securities intermediaries, such as Euroclear or
Clearstream, and third-party custody and Borrower-in-Custody Arrangements may have their own
termination provisions.
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effect in any relevant jurisdiction, and other applicable law.
19.0 WAIVER OF JURY TRIAL
THE BORROWER AND THE BANK EACH HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, COUNTERCLAIM, OR CROSS CLAIM ARISING IN CONNECTION WITH, OUT
OF, OR OTHERWISE RELATING TO THE LENDING AGREEMENT, THE
COLLATERAL, OR ANY TRANSACTION OR AGREEMENT ARISING THEREFROM OR
RELATED THERETO.
20.0 STATUS OF PREVIOUS LENDING AGREEMENT
This Operating Circular amends and restates the Bank’s Operating Circular No. 10,
Lending, dated July 16, 2013.
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Effective August 28, 2023
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APPENDIX 1: FINANCING STATEMENT COLLATERAL DESCRIPTION
All accounts, chattel paper, inventory, equipment, instruments, investment property, general
intangibles, documents, and all assets, now owned or hereafter acquired, that are identified, from
time to time, by Debtor to Secured Party in writing, by electronic means (including by CD-ROM)
or by any other means agreed by the parties, as collateral securing the obligations of Debtor to
Secured Party under a written agreement between the parties, and all proceeds thereof; and all
collateral, guarantees, letters of credit, surety bonds and other supporting obligations pertaining
to the foregoing, and all proceeds thereof.
Appendix 1
to Operating Circular No. 10
Case 3:23-cv-01034-GMM Document 146-4 Filed 08/02/24 Page 24 of 33
APPENDIX 2: TERMS OF CONTROL AGREEMENT
Reference is made to Operating Circular No. 10 as issued by each of the Federal Reserve
Banks, as the same may be amended, supplemented or otherwise modified from time to time
(“OC-10”; capitalized terms used but not defined herein have the meaning assigned them in OC-
10).
Whereas, by agreeing to OC-10, each Borrower has given the Federal Reserve Bank with
which it has agreed to OC-10 (an “OC-10 Reserve Bank”), for itself and as agent for each other
Federal Reserve Bank, a security interest in property, whether now owned or hereafter acquired,
maintained with any other Federal Reserve Bank (an “Account Maintaining Reserve Bank”)
including, but not limited to, any deposit account, investment property in any securities account,
and items in the process of collection and their proceeds (but excluding any investment property
in any Unrestricted Securities Account maintained at any Federal Reserve Bank that the Borrower
may not encumber under applicable law) (each an “Account”);
Whereas each OC-10 Reserve Bank would like to perfect its security interest in each
Account now or hereafter maintained at any Account Maintaining Reserve Bank by control, as
such term is used in Articles 8 and 9 of the Uniform Commercial Code in effect in the relevant
jurisdictions; and
Whereas, by agreeing to OC-10, each Borrower has agreed to and consented to be bound
to the terms of this Control Agreement;
Now, therefore, each Account Maintaining Reserve Bank agrees with each OC-10 Reserve
Bank, for itself and as agent for each other Federal Reserve Bank, that with respect to any
Borrower maintaining an Account at such Account Maintaining Reserve Bank, it will follow the
instructions of an OC-10 Reserve Bank as to the withdrawal or disposition of funds or securities
from time to time credited to any such Account, or as to any other matters pertaining to such
Account without further consent or instruction from Borrower, subject only to the interest that the
Account Maintaining Reserve Bank may also have in such Account.
This Agreement is governed by the law of the State in which the Account Maintaining
Reserve Bank’s head office is located.
FEDERAL RESERVE BANK OF ATLANTA FEDERAL RESERVE BANK OF MINNEAPOLIS
By: _________________________________ By:
Name: Name:
Title: Title:
Date: Date:
FEDERAL RESERVE BANK OF BOSTON FEDERAL RESERVE BANK OF NEW YORK
By: _________________________________ By:
Name: Name:
Title: Title:
Date: Date:
Appendix 2
to Operating Circular No. 10
Case 3:23-cv-01034-GMM Document 146-4 Filed 08/02/24 Page 25 of 33
FEDERAL RESERVE BANK OF CHICAGO FEDERAL RESERVE BANK OF
PHILADELPHIA
By: _________________________________
Name: By:
Title: Name:
Date: Title:
Date:
FEDERAL RESERVE BANK OF CLEVELAND FEDERAL RESERVE BANK OF RICHMOND
By: _________________________________ By:
Name: Name:
Title: Title:
Date: Date:
FEDERAL RESERVE BANK OF DALLAS FEDERAL RESERVE BANK OF SAN
FRANCISCO
By: _________________________________
Name: By:
Title: Name:
Date: Title:
Date:
FEDERAL RESERVE BANK OF KANSAS CITY FEDERAL RESERVE BANK OF ST. LOUIS
By: _________________________________ By:
Name: Name:
Title: Title:
Date: Date:
Appendix 2
to Operating Circular No. 10
Case 3:23-cv-01034-GMM Document 146-4 Filed 08/02/24 Page 26 of 33
APPENDIX 3: APPLICATION PACKAGE FOR U.S. BORROWERS
U.S. Borrowers desiring capacity to request to borrow funds from their local Federal Reserve
Bank should submit the following documents, forms of which are included in this appendix:
Form of OC-10 Letter of Agreement
Form of OC-10 Certificate
Form of OC-10 Authorizing Resolutions for Borrowers
Form of OC-10 Official Authorization List
The form documents are available online. Before submitting such documentation, Borrowers
should consult with their local Federal Reserve Bank for any special instructions.
Appendix 3
to Operating Circular No. 10
Case 3:23-cv-01034-GMM Document 146-4 Filed 08/02/24 Page 27 of 33
APPENDIX 4: APPLICATION PACKAGE FOR BRANCHES OR AGENCIES OF
NON-U.S. BORROWERS
Non-U.S. Borrowers desiring capacity to request to borrow funds from their local Federal Reserve
Bank should submit the following documents, forms of which are included in this appendix:
Form of OC-10 Letter of Agreement
Form of OC-10 Certificate
Form of OC-10 Authorizing Resolutions for Borrowers
Form of OC-10 Official Authorization List
Form of OC-10 Legal Opinion of Foreign Outside Counsel
Form of OC-10 Legal Opinion of United States Outside Counsel
The form documents are available online. Before submitting such documentation, Borrowers
should consult with their local Federal Reserve Bank for any special instructions.
Appendix 4
to Operating Circular No. 10
Case 3:23-cv-01034-GMM Document 146-4 Filed 08/02/24 Page 28 of 33
APPENDIX 5: ANCILLARY AGREEMENTS
This appendix includes the following forms which are available online:
Form of Agreement for Third-Party Custodian to Hold Collateral
Form of Correspondent Credit and Payment Agreement
Exhibit 1: Form of Letter Agreement for Obtaining Advances Through Correspondent
Appendix 5
to Operating Circular No. 10
Case 3:23-cv-01034-GMM Document 146-4 Filed 08/02/24 Page 29 of 33
APPENDIX 6: PROHIBITION AGAINST FEDERAL ASSISTANCE TO ANY SWAPS ENTITY
This Appendix amends, supplements and becomes a part of the Reserve Banks’ Operating
Circular No. 10, as amended, supplemented or otherwise modified from time to time (“Operating
Circular”), and shall be binding on each institution that has executed a Letter of Agreement prior
to or following the date this Appendix is issued and each institution that receives an Advance
under the Operating Circular.
1.0 DEFINED TERMS
1.1 All capitalized terms used but not defined herein have the meaning assigned them
in the Operating Circular. The other capitalized terms used herein are limited to
this Appendix 6 and have the meanings set out below:
Borrower means an entity that incurs an Obligation to the Bank; provided that, for
purposes of the representations in section 2 below, in the case of a foreign bank,
“Borrower” means the U.S. branch or agency that has requested an Advance.
Commodity Exchange Act means the Commodity Exchange Act (7 U.S.C. 1 et
seq.), as amended, supplemented or otherwise modified from time to time.
Dodd-Frank Act means the Dodd-Frank Wall Street Reform and Consumer
Protection Act.
Federal assistance has the same meaning as in section 716 of the Dodd-Frank
Act (12 U.S.C. 8305).
Insured Depository Institution includes any insured depository institution as
defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) and
any uninsured U.S. branch or agency of a foreign bank.
Securities Exchange Act means the Securities Exchange Act of 1934 (15U.S.C.
78a et seq.), as amended, supplemented or otherwise modified from time to time.
Swaps Entity means:
1. any person that is registered as a swap dealer under the Commodity
Exchange Act;
2. any person that is registered as a security-based swap dealer under the
Securities Exchange Act;
3. any person that is registered as a major swap participant under the
Commodity Exchange Act and is not an Insured Depository Institution; and
4. any person that is registered as a major security-based swap participant
under the Securities Exchange Act and is not an Insured Depository
Institution.
1.2 The terms branch, agency, and foreign bank are defined in section 1 of the
International Banking Act of 1978 (12 U.S.C. 3101), except that, for purposes of
Appendix 6
to Operating Circular No. 10
Case 3:23-cv-01034-GMM Document 146-4 Filed 08/02/24 Page 30 of 33
this Appendix 6, a bank organized under the laws of a territory of the United States,
Puerto Rico, Guam, American Samoa or the Virgin Islands shall not be deemed
a foreign bank.
2.0 REPRESENTATIONS BY BORROWERS
Each time on or after July 16, 2013 that the Borrower requests an Advance that qualifies
as Federal assistance, and on each date thereafter on which that Advance remains
outstanding, the Borrower must be, and is deemed to represent that it is:
a. Not a Swaps Entity; or
b. A Swaps Entity that is eligible to receive the Advance pursuant to one or more
subsections of 716 of the Dodd-Frank Act.
For purposes of this representation, a Borrower that is a U.S. branch or agency of a foreign
bank is a Swaps Entity if the foreign bank is registered as a swap dealer under the
Commodity Exchange Act or as a security-based swap dealer under the Securities
Exchange Act.
3.0 COVENANTS; ACKNOWLEDGEMENT; AGREEMENT BY BORROWER
3.1 If any representation herein becomes untrue, incorrect, or inaccurate while an
Advance remains outstanding, Borrower shall notify Bank promptly.
3.2 Borrower acknowledges that any failure to comply with a requirement herein or
any representation or warranty contained herein that is inaccurate on or as of the
date it is deemed to be made or on any date on which an Advance remains
outstanding is an Event of Default under the Operating Circular.
3.3 Any pledge of Collateral, request for an Advance or incurrence of any other
Obligation by the Borrower after it has been notified of this Appendix 6 shall
constitute the Borrower’s agreement to the terms set forth herein.
Appendix 6
to Operating Circular No. 10
Case 3:23-cv-01034-GMM Document 146-4 Filed 08/02/24 Page 31 of 33
APPENDIX 7: DISCOUNT WINDOW DIRECT
1.0 GENERAL
1.1 Discount Window Direct (“DWD”) is an online application that Borrowers can use
to submit requests for Advances from and submit Collateral Schedules to the
Reserve Banks, and communicate with the Reserve Banks about Advances and
pledges of Collateral in accordance with Reserve Banks’ Operating Circular No.
10, as amended, supplemented or otherwise modified from time to time (“OC-10”).
DWD is owned and operated by the Reserve Banks. This Appendix provides the
terms and conditions which govern the access to and use of DWD and the
products, services, publications, data and information available on DWD.
Borrowers and their Authorized Users (as defined herein) are bound by the terms
and conditions of this Appendix. The Reserve Banks reserve the right to amend
this Appendix at any time.
1.2 In no event may a Borrower or its officers, employees, agents or contractors:
a. modify, add to, disable, translate, reverse assemble, reverse compile,
decompile, or otherwise attempt to derive the source code of DWD;
b. introduce spam, malicious code, or other information (e.g., virus, Trojan
horse, worm), or perform any action that could adversely impact the
performance or operation of DWD or that could affect another Borrower’s
use of DWD;
c. attempt to interfere with the normal operation of a Reserve Bank server or
the network over which DWD is provided; or
d. use DWD to engage in any deceptive, unlawful, or fraudulent activity.
1.3 No funds are transferred through DWD. DWD is not a funds-transfer system, and
this Appendix is not a funds-transfer system rule. No securities are transferred
through DWD. DWD is not a securities-transfer system, and this Appendix is not a
clearing corporation rule under section 8-111 of the UCC.
1.4 By using DWD, Borrower agrees to the terms of this Appendix, OC-10, OC-5, and
the other Operating Circulars as applicable, each as amended, supplemented or
otherwise modified from time to time. Use of DWD is a service which is accessed
using an electronic connection pursuant to OC-5.
1.5 In the event of a conflict between the provisions of this Appendix and the provisions
of OC-10 or the other Operating Circulars, the provisions of this Appendix control.
2.0 DEFINITIONS
2.1 Unless otherwise stated in this Appendix, a term used in this Appendix has the
same meaning as the defined term in OC-10.
2.2 For purposes of this Appendix:
Appendix 7
to Operating Circular No. 10
Case 3:23-cv-01034-GMM Document 146-4 Filed 08/02/24 Page 32 of 33
“Authorized User” means an individual that the Borrower authorizes to access and
use DWD through FedLine Solutions.
“OC-5” means the Reserve Banks’ Operating Circular No. 5 (Electronic Access),
as amended, supplemented or otherwise modified from time to time.
3.0 BORROWER RESPONSIBILITIES
3.1 Only Authorized Users may access and use DWD. In order for Authorized Users
to have the capabilities on DWD to submit requests for Advances and submit
Collateral Schedules, the Borrower must include the Authorized Users on a fully
executed OC-10 Official Authorization List which lists their email addresses.
3.2 Borrowers are responsible and liable for the access and use of DWD by their
Authorized Users.
4.0 NOTICES
4.1 Borrowers may use DWD to provide notices to the Reserve Banks in accordance
with OC-10. Borrowers may not use DWD to provide notices under any other
Operating Circular or agreement with the Reserve Banks.
4.2 By using DWD, Borrowers agree to receive communications from the Reserve
Banks via DWD. It is the responsibility of the Borrowers to monitor DWD for
communications from the Reserve Banks.
5.0 RESERVE BANK DISCLAIMERS
5.1 Certain aspects of the services provided on DWD are manual and do not occur in
real time. All requests for Advances and submissions of Collateral Schedules
made through DWD are subject to review and approval of Reserve Bank
personnel.
5.2 In the event of a conflict between information displayed on or communicated
through DWD and the books and records of the Reserve Banks, the information
on the books and records of the Reserve Banks controls.
5.3 DWD is provided “as is” and “as available” without warranty of any kind. While the
Reserve Banks use all reasonable efforts to protect the security of DWD, the
Reserve Banks make no guarantee that DWD will always be safe, secure, or error-
free, or that it will function without disruptions or delays. To the extent permitted by
law, THE RESERVE BANKS DISCLAIM ALL WARRANTIES, WHETHER
EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND
NON-INFRINGEMENT.
6.0 TERMINATION AND ACCESS RESTRICTIONS
The Reserve Banks may terminate, suspend, or otherwise restrict any Authorized User’s
access and use of DWD at any time without notice if the Reserve Banks have reason to
believe that such access or use does not comply with the terms of this Appendix,
guidelines for the use of DWD, if any, or any other agreement with the Reserve Banks.
Appendix 7
to Operating Circular No. 10
Case 3:23-cv-01034-GMM Document 146-4 Filed 08/02/24 Page 33 of 33
The Reserve Banks may terminate, suspend, or otherwise restrict any Authorized User’s
access or use of DWD if the Reserve Banks have reason to believe that such access or
use poses a risk to the Reserve Banks, any other Borrower, or the security or proper
functioning of DWD, or the Borrower or Authorized User does not timely respond to the
Reserve Banks’ request for information relating to access and use of DWD. The Reserve
Banks may otherwise terminate, suspend, or restrict any Authorized User’s access or use
of DWD at any time upon notice to the Borrower. The Reserve Banks will endeavor, but
are not obligated, to provide notice five (5) business days prior to terminating, suspending,
or restricting an Authorized User’s access or use of DWD.
7.0 INDEMNITY
Borrowers shall indemnify, hold harmless, and defend the Reserve Banks against any
claim, loss, harm, cost or expense (including reasonable attorneys’ fees and expenses of
litigation) resulting from the Reserve Banks’ acts or omissions in providing the
functionalities of DWD under this Appendix except for any claim, loss, harm, cost, or
expense arising solely out of the Reserve Banks’ gross negligence or willful misconduct.
Any legal action against the Reserve Banks with respect to DWD must be initiated by the
Borrower within one year from the date of the transaction or occurrence that gives rise to
the claim. In no event shall the Reserve Banks be liable for any special or consequential
damages.
Appendix 7
to Operating Circular No. 10
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