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<br />B. Segregation of Purchased Securities
<br />To the extent required by applicable law, all Purchased Securities in the possession of Seller shall be segregated from other securities in its
<br />possession and shall be identified as subject to this Agreement. Segregation may be accomplished by appropriate identification on the books and records
<br />of the holder, including a financial or securities intermediary or a clearing corporation. All of Seller's interest in the Purchased Securities shall pass to
<br />Buyer on the Purchase Date and, unless otherwise agreed by Buyer and Seller, nothing in this Agreement shall preclude Buyer from engaging in
<br />repurchase transactions with the Purchased Securities or otherwise selling, transferring, pledging or hypothecating the Purchased Securities, but no such
<br />transaction shall relieve Buyer of its obligations to transfer Purchased Securities to Seller pursuant to Paragraph 3, 4 or 11 hereof, or of Buyer's obligation
<br />to credit or pay Income to, or apply Income to the obligations of, Seller pursuant to Paragraph 5 hereof.
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<br />9. Substitution
<br />(a) Seller may, subject to agreement with and acceptance by Buyer, substitute other Securities for any Purchased Securities. Such substitution shall
<br />be made by transfer to Buyer of such other Securities and transfer to Seller of such Purchased Securities. After substitution, the substituted Securities
<br />shall be deemed to be Purchased Securities.
<br />(b) In Transactions in which Seller retains custody of Purchased Securities, the parties expressly agree that Buyer shall be deemed, for purposes of
<br />subparagraph (a) of this Paragraph, to have agreed to and accepted in this Agreement substitution by Seller of other Securities for Purchased Securities;
<br />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
<br />substituted.
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<br />1, ':lepresentations
<br />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
<br />rransactions contemplated hereunder and to perform its obligations hereunder and has taken all necessary action to authorize such execution, delivery
<br />dnd performance, (Ii) it will engage in such Transactions as principal (or, if agreed in writing, in the form of an annex hereto or otherwise, in advance of
<br />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
<br />so on its behalf (or on behalf of any such disclosed principal), (iv) it has obtained all authorizations of any govemmental body required in connection with
<br />this Agreement and the Transactions hereunder and such authorizations are in full force and effect and (v) the execution, delivery and performance of
<br />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
<br />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
<br />foregoing representations made by it.
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<br />11. Events of Default
<br />In the event that (i) Seller fails to transfer or Buyer fails to purchase Purchased Securities upon the applicable Purchase Date, (iJ) Seller fails to
<br />repurchase or Buyer fails to transfer Purchased Securities upon the applicable Repurchase Date, (iii) Seller or Buyer fails to comply with Paragraph 4
<br />hereof, (iv) Buyer fails, after one business day's notice, to comply with Paragraph 5 hereof, (v) an Act of Insolvency occurs with respect to Seller or Buyer,
<br />(vi) any representation made by Seller or Buyer shall have been incorrect or untrue in any material respect when made or repeated or deemed to have
<br />been made or repeated, or (vii) Seller or Buyer shall admit to the other its inability to, or its intention not to, perform any of its obligations hereunder (each
<br />an "Event of Default'?:
<br />(a) The nondefaulting party may, at its option (which option shall be deemed to have been exercised immediately upon the occurrence of an Act of
<br />Insolvency), declare an Event of Default to have occurred hereunder and, upon the exercise or deemed exercise of such option, the Repurchase Date for
<br />each Transaction hereunder shall, if it has not already occurred, be deemed immediately to occur (except that, in the event that the Purchase Date for
<br />any Transaction has not yet occurred as of the date of such exercise or deemed exercise, such Transaction shall be deemed immediately canceled). The
<br />nondefaulting party shall (except upon the occurrence of an Act of Insolvency) give notice to the defaulting party of the exercise of such option as
<br />promptly as practicable.
<br />(b) In all Transactions in which the defaulting party is acting as Seller, if the nondefaulting party exercises or is deemed to have exercised the option
<br />referred to in subparagraph (a) of this Paragraph, (i) the defaulting party's obligations in such Transactions to repurchase all Purchased Securities, at the
<br />Repurchase Price thereforon the Repurchase Date determined in accordance with subparagraph (a) of this Paragraph, shall thereupon become
<br />immediately due and payable, (ii) all Income paid after such exercise or deemed exercise shall be retained by the nondefaulting party and applied to the
<br />aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder, and (iii) the defaulting party shall immediately
<br />deliver to the nondefaulting party any Purchased Securities subject to such Transactions then in the defaulting party's possession or control.
<br />(c) In all Transactions in which the defaulting party is acting as Buyer, upon tender by the nondefaulting party of payment of the aggregate
<br />Repurchase Prices for all such Transactions, all right, title and interest in and entitlement to all Purchased Securities subject to such Transactions shall
<br />>e deemed transferred to the nondefaulting party, and the defaulting party shall deliver all such Purchased Securities to the nondefaulting party.
<br />(d) If the nondefaulting party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Paragraph, the
<br />10ndefaulting party, without prior notice to the defaulting party, may:
<br />(i) as to Transactions in which the defaulting party is acting as Seller, (A) immediately sell, in a recognized market (or othervvise in a
<br />commercially reasonable manner) at such price or prices as the nondefaulting party may reasonably deem satisfactory, any or all Purchased Securities
<br />subject to such Transactions and apply the proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting
<br />party hereunder or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Securities, to give the defaulting party credit for such
<br />Purchased Securities in an amount equal to the price therefor on such date, obtained from a generally recognized source or the most recent closing bid
<br />quotation from such a source, against the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder; and
<br />(ii) as to Transactions in which the defaulting party is acting as Buyer, (A) immediately purchase, in a recognized market (or otherwise in a
<br />commercially reasonable manner) at such price or prices as the nondefaulting party may reasonably deem satisfactory, securities ("Replacement
<br />Securities'? of the same class and amount as any Purchased Securities that are not delivered by the defaulting party to the nondefaulting party as
<br />required hereunder or (B) in its sole discretion elect, in lieu of purchasing Replacement Securities, to be deemed to have purchased Replacement
<br />Securities at the price therefor on such date, obtained from a generally recognized source or the most recent closing offer quotation from such a source.
<br />Unless othervvise provided in Annex I, the parties acknowledge and agree that (1) the Securities subject to any Transaction hereunder are
<br />instruments traded in a recognized market, (2) in the absence of a generally recognized source for prices or bid or offer quotations for any Security, the
<br />nondefaulting party may establish the source therefor in its sole discretion and (3) all prices, bids and offers shall be determined together with accrued
<br />Income (except to the extent contrary to market practice with respect to the relevant Securities).
<br />(e) As to Transactions in which the defaulting party is acting as Buyer, the defaulting party shall be liable to the nondefaulting party for any excess of
<br />the price paid (or deemed paid) by the nOndefaulting party for Replacement Securities over the Repurchase Price for the Purchased Securities replaced
<br />thereby and for any amounts payable by the defaulting party under Paragraph 5 hereof or otherwise hereunder.
<br />(f) For purposes of this Paragraph 11, the Repurchase Price for each Transaction hereunder in respect of which the defaulting party is acting as
<br />Buyer shall not increase above the amount of such Repurchase Price for such Transaction determined as of the date of the exercise or deemed exercise
<br />by the nondefaulting party of the option referred to in subparagraph (a) of this Paragraph.
<br />(g) The defaulting party shall be liable to the nondefaulting party for (i) the amount of all reasonable legal or other expenses incurred by the
<br />nondefaulting party in connection with or as a result of an Event of Default, (Ii) damages in an amount equal to the cost (including all fees, expenses and
<br />commissions) of entering into replacement transactions and entering into or terminating hedge transactions in connection with or as a result of an Event
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