first republic securities is a wholly-ownedsubsidiary of first republic bank.

member finra /s ipc

Eagle SweepDisclosure

effective october 2013

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Eagle Sweep DisclosureEffective October 2013

Table of ContentsEagle Sweep Disclosure..................................................2

Truth in Savings Disclosure ..........................................6

Pass-Through Deposit Insurance Coverage Disclosure for ERISA Plans ........................................20

Important Information aboutthe Eagle Sweep Program

First Republic Securities Company, LLC (“FRSC”) makesavailable several different options for holding uninvestedcash in our customers’ Brokerage Accounts (“sweepoptions”). Not all sweep options are available to all FRSCcustomers. The primary sweep option for those customerswho qualify is the Eagle Sweep program. The Eagle SweepAccount is an FDIC-insured deposit account opened andmaintained by FRSC’s Clearing Agent, Pershing LLC, atFRSC’s affiliated bank, First Republic Bank. FirstRepublic Bank is a California State-chartered bank thedeposits of which are insured by the FDIC to the extentprovided under the Federal Deposit Insurance Act andFDIC rules. The deposit account shall be entitled“Pershing LLC as agent for its customers acting for them-selves and others.”For all new FRSC brokerage accounts opened after March1, 2007, and carried at Pershing LLC, customers will haveagreed that, if they qualify, the Eagle Sweep program willbe used to hold the customer’s cash balances, unless thecustomer directs FRSC in writing to use a different sweepoption. For FRSC brokerage accounts openedbeforeMarch 1, 2007, the Eagle Sweep program is beingmade available to those customers who direct FRSC inwriting to change their existing cash sweep option to theEagle Sweep program.Customers who qualify for the Eagle Sweep programinclude individuals, joint accounts, personal trusts andestates, state and municipal government entities, domesticnon-profit corporations, sole proprietorships, IndividualRetirement Accounts (“IRAs”) and other pension andemployee benefit plans, partnerships and for-profit corpo-rations. FRSC is making the Eagle Sweep available for rea-sons that include the features and benefits to be provided

to its customers, the profitability and cost to it of provid-ing the various cash program options and its fundingneeds.Other available cash sweep options for FRSC customersinclude certain money market mutual funds. Not alloptions are available to all of our customers. Under theEagle Sweep program, Pershing LLC will act as your agentto place your cash balances into an Eagle Sweep depositaccount at First Republic Bank. Withdrawals from yourEagle Sweep deposit account can only be made throughyour FRSC brokerage account. If you have an existingFRSC brokerage account that uses a different sweepoption, and you are eligible for the Eagle Sweep program,you may change to the Eagle Sweep program at this timeby signing and returning a letter of instruction or you mayelect the Eagle Sweep option at any future date youchoose, subject to the availability of alternative programsat that time.Interest rates, effective yields and APYs for each of theoptions for cash pending further investment are subject tochange at any time. Those rates will normally go up anddown to some degree with market rates of interest.Applicable rates of the different sweep options will be dif-ferent from one another, some paying significantly higheror lower rates than others. The interest rates paid to cus-tomers on the Eagle Sweep Account are set by FirstRepublic Bank in its sole discretion, and may pay interestat lower rates than the current yields on money marketmutual funds. Current rates and other information on ourprograms are available at www.firstrepublic.com/brokerage.FRSC may at any time change the products available as asweep for your brokerage account, or change the termsand conditions of the Eagle Sweep or the sweep productor program, after providing not less than 30 days’ writtennotice to you. Changes to interest rates, APYs and bal-ances required to qualify for higher rates may be changedwithout prior notice to you; for other changes, FRSC willprovide you with notice prior to: (1) making changes toyour Eagle Sweep Program; (2) making changes to theterms and conditions of a deposit product currently avail-able through your Eagle Sweep Program; (3) changing,adding, or deleting deposit products available throughyour Eagle Sweep Program; or (4) changing your sweepoption from one product to another. FRSC may sendwritten notice of a change to you by e-mail, regular mail,as part of your statement, or by other means, including, ifpermitted by applicable law, by posting on the FRSCwebsite. The notice will describe the new terms and con-ditions and provide you with other available optionsshould you choose to decline the new terms, conditions,or products. You may ask us to remit your available cashbalances to you, or place them in another sweep option

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for which you are eligible. If you do not close youraccount within thirty (30) calendar days of the notice ofmodification to the terms and conditions and/or to theservices provided by FRSC, then you will be deemed tohave accepted the modification. Any modifications thatare required by law will be immediately effective.First Republic Bank and its affiliates and third party serv-ice providers may receive fees and derive other benefitsfrom each of the programs. For example, under the EagleSweep program, Pershing LLC receives from FRSC a pay-ment to operate and maintain the Eagle Sweep program.In the case of money market mutual fund sweep options,FRSC and Pershing LLC receive Rule 12b-1 fees andother servicing fees from participating money marketfunds. Pershing LLC pays fees to FRSC based on cus-tomer balances in money market funds.Other benefits that First Republic Bank receives from itscash programs include access to relatively low-cost fund-ing of its own assets. For example, Eagle Sweep depositsmay provide First Republic Bank with relatively low-costfunds that can be lent or invested at higher rates, thusenabling First Republic Bank to earn a profit based on thespread between the rate paid to its customers and theinterest earned by First Republic Bank on the assets.Each of the cash program options provided by FRSC hasdifferent risks and is regulated in very different ways. TheEagle Sweep is a program by which Pershing LLC acts asyour agent to place your cash balances into a depositaccount at First Republic Bank, and is regulated primari-ly under federal banking laws. Money market mutualfunds are pools of investments in short-term debt instru-ments, and are regulated by the SEC under theInvestment Company Act of 1940 and other federal secu-rities laws. Earnings on money market mutual funds arethe net return on this pool, after payment of expenses,and tend to go up and down over time with market ratesof interest on short-term debt instruments. Some moneymarket mutual funds invest primarily in tax-exemptmunicipal securities and offer tax savings to certain cus-tomers. Interest paid to customers on Eagle SweepAccounts is fully taxable. Eagle Sweep Accounts earninterest in Pershing LLC’s account as agent for EagleSweep customers at First Republic Bank, and a moneymarket fund investment earns dividends on fund sharesheld in your brokerage account. The interest earned onEagle Sweep Accounts may fluctuate and may be greateror less than the then current yield on a money marketfund investment.The several cash options are treated differently for purpos-es of the Securities Investor Protection Corporation(“SIPC”) coverage and Federal Deposit InsuranceCorporation (“FDIC”) insurance. You should consider

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the differences between SIPC coverage and FDIC insur-ance in evaluating the options. Unlike the money marketfund shares or the cash balances held in your brokerageaccount as a free credit balance, the Eagle Sweep Accountis not covered by SIPC. SIPC is a non-profit member cor-poration funded primarily by member securities broker-age firms registered with SEC. SIPC provides protectionagainst risks to clients of member brokerage firms, includ-ing Pershing LLC, in the event of a member firm’s failure.However, SIPC does not afford protection against the fail-ure of the issuer of securities and does not guarantee bankdeposits.The Eagle Sweep is a program under which PershingLLC, as your agent, places your uninvested cash balancesin a deposit account at First Republic Bank in PershingLLC’s name as agent for its customers acting for them-selves and others. Funds held in such deposit accounts atFirst Republic Bank are insured by the FDIC up to theStandard Maximum Deposit Insurance Amount, whichhas been increased by the U.S. Congress to $250,000 inprincipal and accrued interest per depositor for allaccounts in the same title and capacity, with the maxi-mum to be adjusted for inflation beginning in 2010.Amounts in a customer’s Eagle Sweep Account in excessof the Standard Maximum Deposit Insurance Amount,when aggregated with all other deposits at First RepublicBank that the customer owns in the same right and capac-ity, are not insured by the FDIC. FDIC insurance pro-tects depositors against losses in the event of a failure ofthe bank holding the deposit, up to the StandardMaximum Deposit Insurance Amount held at that bankin the same ownership right and capacity, but does notprotect against bookkeeping errors, misappropriation ordisappearance of the funds. The Eagle Sweep Account isinsured by the FDIC, and is neither covered by SIPC norguaranteed by Pershing LLC.Under certain circumstances, if you become the owner ofdeposits at a bank either because of a merger or becauseanother depositor dies, beginning six months after themerger or the death of the depositor, the FDIC will aggre-gate those deposits that you own in the same legal capac-ity at the Bank. The FDIC provides the six-month “graceperiod” to permit you to restructure your deposits toobtain the maximum amount of deposit insurance forwhich you are eligible.The Eagle Sweep program offers up to the StandardMaximum Deposit Insurance Amount in deposit insur-ance, subject to any other deposits you may have outsideof the Eagle Sweep program at First Republic Bank. Whileaccrued interest and interest paid on your Eagle SweepAccount are generally subject to FDIC insurance cover-age, there will be one situation where interest will not be

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FDIC-insured. Accrued interest on your Eagle SweepAccount at First Republic Bank will not be FDIC-insuredif the balance of your Eagle Sweep Account at the banktogether with the balances of any other deposits you holdin the same right and capacity at the bank is already at theStandard Maximum Deposit Insurance Amount becauseany accrued interest would be in excess of that limit.However, once accrued interest is paid it will be coveredby FDIC insurance if the total balance in your EagleSweep deposit account, together with the interest paid,does not exceed the Standard Maximum DepositInsurance Amount.SIPC coverage protects brokerage customers against mis-appropriation or disappearance of cash or securities in thecustomer’s account at a broker-dealer firm during thebankruptcy of the broker-dealer, but does not protectagainst a decline in value of securities or other assets. If abroker-dealer is placed in liquidation, a SIPC designatedtrustee will ensure that what is owed to the customer isreturned, within certain limits. Eligible customers who areowed cash and securities by a broker-dealer are protectedup to $500,000 (including securities issued by moneymarket mutual funds), of which up to $250,000 may beused to satisfy any portion of a claim that is for cash only.Eagle Sweep Accounts are not covered by SIPC.You should keep in mind other accounts held in the sametitle and capacity at the same bank or broker-dealer in cal-culating FDIC or SIPC coverage limits, because both pro-grams’ coverage limits are set per customer across allaccounts. For more information on SIPC, please visit theSIPC website at www.sipc.org or call SIPC at 202-371-8300. For more information on FDIC depositinsurance, please visit the FDIC website at www.fdic.govor call the FDIC at 877-275-3342.

Eagle SweepTruth in Savings Disclosure

In accordance with applicable laws and regulations, thisdocument, together with the current Interest RateSchedule, constitute the Truth in Savings Disclosure foryour Eagle Sweep Account at First Republic Bank. FirstRepublic Bank is a California State-chartered bank thedeposits of which are insured by the FDIC to the extentprovided under the Federal Deposit Insurance Act andFDIC rules.Please read this disclosure, the current Interest RateSchedule at www.firstrepublic.com/brokerage, theFRSC New Account Application and relevant supple-ments carefully before accepting them. These docu-ments govern your Eagle Sweep Account.

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The Eagle Sweep Account is available only as a cashsweep option linked to a First Republic SecuritiesCompany, LLC Brokerage Account.This Truth in Savings Disclosure and the Interest RateSchedule found at www.firstrepublic.com/brokerage areintended to assist you in comparing the terms of our EagleSweep product with other brokerage sweep options avail-able through First Republic Securities Company, LLC(“FRSC”), and with those of our competitors.If you have any questions, please call Customer Service at1-877-348-5576 option #2.

1. Account Holder and Other Terms Used

In this Truth in Savings Disclosure, the words “AccountHolder”, “you” and “your” refers to the customer and shallmean and refer to the person(s) or entity(ies) whosename(s) appears on the FRSC Brokerage Account and inwhose name the Eagle Sweep Account is opened. Thewords “we” and “us” refer to the Bank and/or its affiliates.This Account Agreement is binding upon you and theBank, and your and the Bank’s respective heirs, executors,administrators, agents, successors and assigns.

2. Introduction and Eligibility for the Eagle Sweep Program

If the Eagle Sweep program is the designated sweepoption for your FRSC Brokerage Account, the excess,uninvested, cash balance in your FRSC BrokerageAccount is automatically transferred into your EagleSweep Account, which is an interest-bearing depositaccount with the Bank that is insured by the FederalDeposit Insurance Corporation (“FDIC”). The owner-ship title and address of your Eagle Sweep Account will bethe same as your FRSC Brokerage Account, and a singlestatement covering your FRSC Brokerage Account andyour Eagle Sweep Account will be sent to you.The Eagle Sweep option has two sub-accounts, one beingan interest-bearing demand deposit sub-account, theother being an interest-bearing money market depositsub-account. Please ask FRSC for additional detail con-cerning eligibility. Persons and entities that are eligible tobe Eagle Sweep account holders are referred to as“Qualified Participants”.If you are a Qualified Participant but do not wish to haveyour excess cash deposited in the Eagle Sweep Account atthe Bank, your cash options will be governed by yourFRSC New Account Application.

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3. Minimum Deposit Balance Requirements for the Eagle Sweep Account

The Bank will not require any minimum deposit balancerequirement to open your Eagle Sweep Account. We alsowill not charge any fees to you for low balances in yourEagle Sweep Account. Your Eagle Sweep Account will befunded solely from excess cash balances in your FRSCBrokerage Account.

4. How Your Eagle Sweep Account OperatesUnder the Eagle Sweep program, excess, uninvested, freecredit balances in your FRSC Brokerage Account are auto-matically transferred into interest bearing deposit accountsat the Bank. These deposits are eligible for federal depositinsurance from the FDIC up to the Standard MaximumDeposit Insurance Amount, which is $250,000 in princi-pal and accrued interest per depositor for all accounts inthe same title and capacity, such maximum to be adjustedfor inflation beginning in 2010. Funds in your EagleSweep Account are not covered by the Securities InvestorProtection Corporation (“SIPC”). You may have previ-ously elected to sweep excess funds from your FRSCBrokerage Account to a money market mutual fund.FRSC continues to offer these money market mutualfund sweep options to some types of accounts and isgiving you the opportunity to invest your excess fundsin the Eagle Sweep option. If you do not wish to exer-cise this option, or wish to discuss your options inmore detail, please contact FRSC. Not all sweepoptions are available to all customers of FRSC.Each Eagle Sweep Account will consist of two separatesub- accounts: (1) an interest-bearing transaction sub-account which is a demand deposit account, and (2) aninterest bearing money market deposit (“MMDA”) sub-account. You will earn the same rate of interest andreceive the same level of FDIC insurance coverageapplicable to the Eagle Sweep Account regardless of theallocation of the funds on deposit with the Bankbetween your transaction sub-account and the MMDAsub-account. Pershing LLC, as your agent, will establishthese sub-accounts on your behalf in the same name andcapacity as your FRSC Brokerage Account. An unlimitednumber of transfers of funds may be made from the trans-action sub-account. However, the MMDA sub- account isconsidered a savings deposit under applicable law, and thenumber of funds transfers from that sub- account is limit-ed to six (6) per statement cycle.As your agent, Pershing LLC will on each business dayautomatically deposit or sweep available cash balances ofone penny ($0.01) or more from the FRSC BrokerageAccount into your Eagle Sweep Account. Deposits intoyour Eagle Sweep Account will be credited to the appro-

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priate sub-account. The Bank will establish and modifyfrom time to time a target balance for the transaction sub-account that is designed to optimize the amounts heldover time in the two sub-accounts to permit an unlimitednumber of monthly transfers from the transaction sub-account and a high average balance in the MMDA sub-account. However, initially, all of the funds will be trans-ferred to the MMDA sub-account at the beginning of themonthly statement period, and up to six (6) transfers permonthly statement period will be made to the transactionsub-account as needed to fund your FRSC BrokerageAccount. On the sixth transfer, the entire balance in theMMDA sub-account will be automatically transferred tothe transaction sub-account. The transaction sub-accountbalance will be transferred back to the MMDA sub-account at the beginning of the next monthly statementcycle.

Cash needed to fund transactions from your FRSCBrokerage Account will be automatically transferred byPershing LLC from any available balances in the transac-tion sub-account of your Eagle Sweep Account to theFRSC Brokerage Account. Your FRSC Brokerage Accountwill fund all your outside transactions, including purchas-es of securities, checks written against the FRSC BrokerageAccount, and fees or other debits charged against theFRSC Brokerage Account. If there are insufficient fundsfrom your Eagle Sweep Account to satisfy transactions orcharges from your FRSC Brokerage Account, the chargeswill be satisfied to the extent possible from your FRSCBrokerage Account available margin, if your account hasbeen approved for margin. Your monthly statement willshow any amounts charged against your margin account.Pershing LLC acts as your agent with regard to your EagleSweep Account and will maintain records for, and processtransactions to and from your Eagle Sweep Account. YourEagle Sweep bank deposit will be evidenced by a bookentry on Pershing LLC’s account records. No evidence ofownership, such as a passbook or certificate, will be issuedto you, and no deposits or withdrawals will be accepteddirectly from you by the Bank. The ownership title andaddress of your Eagle Sweep Account will be the same asyour FRSC Brokerage Account, and a single statementcovering your FRSC Brokerage Account and Eagle SweepAccount will be sent to you periodically. This statementwill show the amounts on deposit in your Eagle SweepAccount, the transfers between your Eagle Sweep Accountand your FRSC Brokerage Account, and any chargesfunded from your FRSC Brokerage Account or chargedagainst your available margin. Transfers between the sub-accounts will not be reflected in the periodic statementand will not affect the Annual Percentage Yield or APY onyour Eagle Sweep Account or the extent to which yourEagle Sweep Account qualifies for FDIC insurance.

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Funds transferred to your Eagle Sweep Account, includingfunds availability and acceptance or rejection of any funds,will be governed by the Eagle Sweep Agreement. As noted,you are not permitted to withdraw funds from your EagleSweep Account directly. Rather, all withdrawals will bemade, and checks paid, from your linked FRSC BrokerageAccount. Pershing LLC, as your agent, effects all transfersbetween your Eagle Sweep Account and your FRSCBrokerage Account to fund transactions from and feesimposed on your FRSC Brokerage Account.

5. Withdrawals from Your Eagle Sweep Accountand Availability of Funds

Withdrawals and deposits of funds from and to your EagleSweep Account are processed through your linked FRSCBrokerage Account.Federal banking regulations require the Bank to reservethe right to require seven (7) days’ prior notice before per-mitting a withdrawal of funds from the MMDA sub-account of your Eagle Sweep Account, but not the trans-action sub-account portion of your Eagle Sweep Account.The Bank does not currently impose holds or limits onfunds availability on transfers from either sub-account ofyour Eagle Sweep Account back to your linked FRSCBrokerage Account. Although the Bank does not current-ly exercise this seven days’ prior notice provision, the Bankmay, in its sole discretion, choose to do so in the future.The availability of funds for making payments, with-drawals or transfers from your FRSC Brokerage Accountis governed by the provisions of your separate FRSC NewAccount Application. Pershing LLC may impose holdsand limits on the availability of funds from your FRSCBrokerage Account or from your Eagle Sweep Account,including for example, to cover the settlement of a pend-ing securities or other transaction from your FRSCBrokerage Account. Please see your FRSC New AccountApplication for information on availability of funds andhold periods applicable to your FRSC Brokerage Account.

6. No Overdraft ProtectionThe overdraft protection that is available on certain Bankdeposit accounts is not available with your Eagle SweepAccount.

7. Day of DepositInterest begins to accrue on the business day a transfer offunds from your linked FRSC Brokerage Account is madeto your Eagle Sweep Account. The date of deposit is thedate of the Bank’s receipt of the funds transferred fromyour FRSC Brokerage Account.

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8. Interest Rate and Annual Percentage Yield for Your Eagle Sweep Account

Your Eagle Sweep Account consists of two linked sub-accounts: (1) a transaction sub-account, and (2) an inter-est-bearing savings sub-account. Interest will accrue on thecombined balances of the transaction sub-account and thesavings sub-account, at an interest rate established for yourEagle Sweep Account. The initial simple interest rate, atwhich interest is paid on the principal balances of theinterest-bearing sub-accounts of your Eagle SweepAccount, and the corresponding annual percentage yield(“APY”), at which the interest-bearing sub-accounts ofyour Eagle Sweep Account would earn interest each year ifall interest paid on your Eagle Sweep Account remains inthe account, are as specified in the Interest Rate Schedule,as modified by the Bank from time-to-time, in its sole dis-cretion. The interest rate and APY paid on the interest-bearing sub-accounts of your Eagle Sweep Account aresubject to change from time-to-time without prior noticeby the Bank, in its sole discretion. The APY on your EagleSweep Account is based on no withdrawal of creditedinterest and no change in the interest rate for a full yearand no withdrawals or addition to the funds on deposit.The interest rate generally is available at 4:00 p.m.,Eastern Time, on the business day the rate is set and willapply to balances in your Eagle Sweep Account on thatday and on any successive non-business days followingsuch business day. Interest will accrue on Eagle Sweep bal-ances from the business day a transfer of funds from yourlinked FRSC Brokerage Account is made to your EagleSweep Account through the business day preceding thedate of withdrawal from the Bank using the daily balancecomputation method described below. Interest will becompounded daily and credited on to your Eagle SweepAccount on a monthly basis, or if the balance on yourEagle Sweep Account is reduced to zero, on the date of thetransfer resulting in the zero balance. Daily interest accru-al below $0.01 is calculated and accrued to your EagleSweep Account and paid when total interest accrual equals$0.01 or greater. Funds in accounts subject to ERISA, theTaft Hartley Act and certain other types of pension, retire-ment and employee benefit plan accounts (other thanIRAs) will be separately maintained from general sweepaccount funds, and the interest rate tier, interest rate andAPY determined based on deposit amounts only of thatparticular pension, retirement or employee benefit plan.Interest calculated on such amounts will be paid separate-ly from interest calculated and paid on general sweepaccount funds. You may contact FRSC to determine thecurrent interest rates and APYs applicable to your EagleSweep Account or you may obtain this information on theInternet through www.firstrepublic.com/brokerage.

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The interest rate and APY paid on your Eagle SweepAccount may be lower than rates paid by other banks orby the Bank on other accounts, including other types ofchecking or savings accounts.The Eagle Sweep Account may bear a higher rate of inter-est and APY, as specified in the Interest Rate Schedule, ifyou maintain a minimum average balance or meet certainother requirements that are specified in the Interest RateSchedule. Customers who establish an Eagle SweepAccount but subsequently no longer meet the balance orother requirements that are specified in the Interest RateSchedule will earn lower rates as specified in the InterestRate Schedule. The Bank may revise the Interest RateSchedule to change interest rates and APYs and the quali-fying balance or other requirements to qualify for thehigher rate from time-to-time, in its sole discretion.

9. Frequency of Interest Rate and APY Changes Your interest rate and APY may change at any time inBank’s sole discretion. Please see the Interest Rate Scheduleand the “Interest Rate and Annual Percentage Yield” pro-vision above for information on current interest rates andcorresponding APYs. The Interest Rate Schedule can befound at www.firstrepublic.com/brokerage.

10. Compounding and Crediting Frequency Interest is compounded daily on the interest-bearing sub-account balances in your Eagle Sweep Account. Interestwill compound and accrue from the date of deposit to thelast full day before the date of withdrawal using the dailybalance method. Accrued interest will be credited to yourEagle Sweep Account on a monthly basis or, if the balanceon your Eagle Sweep Account is reduced to zero, on thedate of the transfer resulting in the zero balance.

11. Method for Calculating Interest The Bank uses the daily balance computation method tocalculate interest on the interest-bearing sub-accounts ofyour Eagle Sweep Account. This method applies a dailyperiodic rate to the balance in the interest-bearing sub-accounts of your Eagle Sweep Account each day.

12. How Interest is Credited if You Close Your Eagle Sweep Account

If you close your Eagle Sweep Account before interest iscredited, you will receive the accrued interest on the bal-ance in your Eagle Sweep Account through the last full dayprior to date of your Eagle Sweep Account closure.

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13. Your Relationship with the Bank and Pershing LLC

Under the Eagle Sweep option, Pershing LLC will act asyour agent in establishing your Eagle Sweep Account atthe Bank, depositing funds into your Eagle SweepAccount and withdrawing funds from your Eagle SweepAccount. No evidence of ownership, such as a passbook orcertificate, will be issued to you. The only evidence of yourEagle Sweep bank deposit will be a book entry on theaccount records of the Bank and records maintained byPershing LLC as your agent. As discussed above, you willbe provided with a periodic statement from FRSC thatwill reflect the balances in your Eagle Sweep Account atthe Bank. You should retain these account statements foryour records.Upon your request, we will liquidate your Eagle Sweepcash balances by either transferring the balances to yourlinked brokerage account, or at FRSC’s discretion, remit-ting the remaining balances to you.Pershing LLC may, in its sole discretion and withoutnotice (unless notice is required by applicable law), termi-nate your use of the Eagle Sweep option. In addition, theBank may, at any time, in its discretion, close your EagleSweep Account. No deposits will be accepted after yourEagle Sweep Account is closed. Upon closing, the balancein your Eagle Sweep Account will be transferred to yourBrokerage Account at FRSC (unless that BrokerageAccount was previously closed), or, at the Bank’s discre-tion, a Bank check for the remaining balance, if applica-ble, may be mailed to you. If you close your FRSCBrokerage account to which the Eagle Sweep account islinked, the Eagle Sweep account will also be closed and thefunds in your Eagle Sweep Account distributed outthrough the FRSC Brokerage Account according to theconditions of the FRSC New Account Application. Youalso may terminate your participation in the Eagle Sweepoption by contacting FRSC.

14. Your Rights and Responsibilities Regarding Your Eagle Sweep Account

You will not be permitted to directly deposit or withdrawfunds from your Eagle Sweep Account. Rather, all depositsand withdrawals will be made, and checks paid, from yourFRSC Brokerage Account. The terms and conditions thatapply to, among other things, ACH transfers, wire trans-fers, funds availability, and acceptance or rejection of anyfunds for your FRSC Brokerage Account are governed byyour separate FRSC New Account Application. Youshould consult the FRSC Brokerage Agreement if youhave any questions concerning these matters. Please con-tact Customer Service with any questions, error resolutionrequests, account inquiries or concerns about transactionsin your FRSC Brokerage Account. If you have questions

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concerning the Electronic Funds Transfers between yourFRSC Brokerage Account and your Eagle Sweep Account,please refer to “How Your Eagle Sweep Operates” on Page8 of this disclosure.15. Disclosure of Benefits to FRSC, the Bank and Pershing LLC

The investment in your Eagle Sweep Account of the cashbalances from your linked FRSC Brokerage Account pres-ents the following conflicts of interest. FRSC, which oper-ates your FRSC Brokerage Account, is an affiliate of theBank. Your Eagle Sweep bank deposit is a deposit obliga-tion of the Bank, and like all deposits, is used by the Bankto fund its general operations. The Bank derives its profitsprimarily from the spread between its cost of funds (e.g.,deposits) and the return on its assets (e.g., loans and otherinvestments it makes), net of expenses. Your Eagle SweepAccount provides a relatively low-cost source of funds tothe Bank and thus helps contribute to the Bank’s prof-itability. Pershing LLC, which is not affiliated with theBank or FRSC, acts for the Bank in establishing, main-taining, keeping the books and records, and providingother services to the Bank related to your Eagle SweepAccount. Pershing LLC may pay certain fees to other bro-ker-dealers, including FRSC, that introduce FRSCBrokerage Accounts to Pershing LLC. Pershing LLCreserves the right to increase, decrease or waive all or partof any fee from the Bank. You will receive notification inadvance of any increase.16. Fees Applicable to Your Eagle Sweep AccountFees generally will be imposed on your linked FRSCBrokerage Account, rather than your Eagle SweepAccount. Any such fees will be charged to your FRSCBrokerage Account. However, the following fees apply toall Eagle Sweep Accounts and are in addition to other feesthat may be assessed against your linked FRSC BrokerageAccount:Liens $ 75.00Garnishments $ 75.0017. ArbitrationBecause your Eagle Sweep Account at the Bank is linkedto your FRSC Brokerage Account at our affiliate, FRSC,any disputes regarding your Eagle Sweep Account may besubject to binding arbitration under your FRSC NewAccount Application. Please see your Brokerage CustomerAgreement for further details.18. Deposit Insurance CoverageThe Eagle Sweep Account is insured by the FDIC to theStandard Maximum Deposit Insurance Amount, which iscurrently $250,000 (including principal and interest)when aggregated with all other deposits held by you in thesame title and capacity at the Bank, with the maximum to

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be adjusted for inflation beginning in 2010. Your fundsare eligible for federal deposit insurance immediately uponplacement of the funds by Pershing LLC into your EagleSweep Account at the Bank. In the unlikely event that theBank should fail, the funds in your Eagle Sweep Accountare insured up to the Standard Maximum DepositInsurance Limit for principal and interest accrued on allaccounts, which are insured up to $250,000 per partici-pant in the aggregate (other than as described above),adjusted for inflation, to the day the Bank is closed. Undercertain circumstances, if you become the owner of depositsat the Bank either because of a merger or because anotherdepositor dies, beginning six months after the merger orthe death of the depositor, the FDIC will aggregate thosedeposits that you own in the same legal capacity at theBank. The FDIC provides the six-month “grace period” topermit you to restructure your deposits to obtain the max-imum amount of deposit insurance for which you are eli-gible.

You are responsible for monitoring the total amount ofdeposits that you have with the Bank in order to deter-mine the extent of deposit insurance coverage available toyou on your deposits, including deposits in your EagleSweep Account. Pershing LLC and FRSC will not beresponsible for any insured or uninsured portion of theBank’s Eagle Sweep Accounts, including your Eagle SweepAccount. In the unlikely event that federal deposit insur-ance payments should become necessary, payment of prin-cipal plus unpaid and accrued interest will be made to youby the FDIC up to the deposit insurance limits. There isno specific time period during which the FDIC mustmake insurance payment available. Furthermore, you maybe required to provide certain documentation to theFDIC before insurance payments are made.

If funds in your Eagle Sweep Account or other deposits atthe Bank are assumed by another depository institution ina merger or consolidation, these funds will continue to beseparately insured from the deposits that you might havewith the acquiror until (i) the maturity date of any certifi-cate of deposit or other time deposit that is assumed; or (ii)with respect to non-time deposits, the expiration of a six-month period from the date of the merger or consolida-tion. Thereafter, for federal deposit insurance purposes,any assumed deposits will be aggregated with your existingdeposits with the acquiror held in the same name and legalcapacity. Any deposits opened at the acquiror depositoryinstitution after the merger or consolidation will be aggre-gated with deposits established with the acquiror for fed-eral deposit insurance purposes.The application of the federal deposit insurance limitsdescribed above to certain common account types is illus-trated below.

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Individual Client Accounts— Funds owned by an individ-ual and held in an account in the name of an agent ornominee such as your Eagle Sweep Account held throughFRSC are not treated as owned by the agent or nominee,but rather by the individual and aggregated with otherdeposits of the individual held in the same name and legalcapacity (including funds held in a sole proprietorship)and insured up to the Standard Maximum DepositInsurance Amount in the aggregate.Custodial Accounts— Funds in accounts held by a custo-dian (for example under the Uniform Gifts to Minors Actor the Uniform Transfers to Minor Act) are not treated asowned by the custodian, but rather by the minor or otherbeneficiary, and aggregated with other deposits of theminor or other beneficiary held in the same legal capacityand insured to up to the Standard Maximum DepositInsurance Amount in the aggregate.Joint Accounts— A client’s interest in funds in all accountsheld under any form of joint ownership valid under appli-cable state law are insured up to the Standard MaximumDeposit Insurance Amount in the aggregate, separate fromand in addition to the Standard Maximum DepositInsurance Amount allowed on any deposits held individu-ally by each of the co-owners of such accounts. For exam-ple, currently, a joint account owned by two personswould be eligible for insurance coverage of up to twice theStandard Maximum Deposit Insurance Amount (or cur-rently $500,000 plus any inflation adjustment) subject toaggregation with each owner’s interests in other jointaccounts at the same depository institution. This insur-ance would be separate from the insurance coverage apply-ing to individually owned accounts.Revocable Trust Accounts— Generally, when an individualdeposits money into accounts for which the depositor evi-dences an intention that upon his or her death the fundsshall belong to one or more beneficiaries, the deposit bal-ances are separately insured (from other types of accountsthe owner has at the same insured depository institution)in an amount equal to the total number of different bene-ficiaries named in the account(s) multiplied by the stan-dard maximum deposit insurance amount set by theFederal Deposit Insurance Act (“SMDIA”) (currently$250,000 and subject to adjustment for inflation begin-ning in 2010. This treatment applies to accounts heldunder informal and formal testamentary revocable trusts,including “payable-on-death accounts,” “in-trust-for”accounts or “Totten Trust” accounts, and “living trusts.”The intention that upon the owner’s death the funds shallbelong to one or more beneficiaries must be evident in theaccount title using commonly accepted terms. For infor-mal revocable trust accounts, the beneficiaries must bespecifically named in the deposit account records of the

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insured depository institution. The settlor of a revocabletrust is presumed to own the funds deposited into theaccount. To qualify for this FDIC insurance treatment, abeneficiary must be a natural person or a non-profit enti-ty recognized under the Internal Revenue Code. If a ben-eficiary does not meet this requirement, the funds corre-sponding to that beneficiary are treated as the individual-ly owned funds of the owner(s) and will be aggregatedwith any other single ownership account of such owner(s)and insured up to the SMDIA per owner.For example, if an individual has a living trust accountwith four beneficiaries named in the trust and the accountowner has no other revocable trust accounts at the sameFDIC-insured institution, the maximum insurance cover-age would be $1,000,000, determined by multiplying 4(the number of beneficiaries) times $250,000 (the currentSMDIA, subject to adjustment for inflation beginning in2010).For funds owned by an individual in one or more revoca-ble trust accounts naming more than five different benefi-ciaries and whose aggregate balance is more than five timesthe SMDIA (revocable trust accounts aggregating above$1.25 million), the maximum revocable trust account cov-erage for the account owner shall be the greater of fivetimes the SMDIA (currently $1.25 million) or the aggre-gate amount of the ownership interests of each differentbeneficiary named in the trusts, to a limit of the SMDIAfor each beneficiary. Where a revocable trust account isestablished by more than one owner, the respective inter-est of each account owner (which are deemed equal) isinsured separately, for each beneficiary, up to the SMDIA,subject to the limit described above on revocable trustaccounts aggregating in excess of $1.25 million.For example, customer “A” has a living trust account witha balance of $1,500,000. Under the terms of the trust,upon A’s death, A’s three children are each entitled to$125,000, A’s friend is entitled to $15,000, and a designat-ed charity is entitled to $175,000. The trust also providesthat the remainder of the trust assets shall belong to A’sspouse. In this case, because the balance of the accountexceeds $1,250,000 (5 times the SMDIA) and there aremore than five different beneficiaries named in the trust,the maximum coverage available to A would be the greaterof: $1,250,000 or the aggregate of each different beneficia-ry’s interest to a limit of $250,000 per beneficiary. Thebeneficial interests in the trust for purposes of determiningcoverage are: $125,000 for each of the children (total-ing$375,000), $15,000 for the friend, $175,000 for thecharity, and $250,000 for the spouse (because the spouse’s$935,000 is subject to the $250,000 per-beneficiary limi-tation). The aggregate beneficial interests total $815,000.Thus, the maximum coverage afforded to the account

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owner would be $1,250,000, the greater of $1,250,000 or$815,000.For an example of how deposit insurance works with for-mal or informal revocable trust accounts established bytwo individuals, assume customers A and B establish apayable-on death account naming their two children, twocousins, and a charity as beneficiaries. The balance in theaccount is $2,500,000. Neither A nor B has any other rev-ocable trust accounts at the same bank. The maximumFDIC insurance coverage is determined by multiplyingthe number of account owners (2) times the number ofdifferent beneficiaries (5) times $250,000, totaling$2,500,000. Assume instead that in this example, cus-tomers A and B, two individuals, establish a living trustaccount with a balance of $3.75 million. Under the termsof the trust, upon the death of both A and B, each of theirthree children is entitled to $600,000, B’s cousin is enti-tled to $380,000, A’s friend is entitled to $70,000, and theremaining amount ($1,500,000) goes to a charity. Themaximum deposit insurance coverage as to each of A andB would be the greater of $1,250,000 or the aggregateamount (as to each co-owner) of the interest of each dif-ferent beneficiary named in the trust, to a limit of$250,000 per account owner per beneficiary. The benefi-cial interests in the trust considered for purposes of deter-mining coverage for account owner A are: $750,000 forthe children (each child’s interest attributable to A,$300,000, is subject to the $250,000-per beneficiary lim-itation), $190,000 for the cousin, $35,000 for the friend,and $250,000 for the charity (the charity’s interest attrib-utable to A, $750,000, is subject to the $250,000 per-ben-eficiary limitation). As to A, the aggregate amount of thebeneficial interests eligible for deposit insurance coveragetotals $1,225,000. Thus, the maximum coverage affordedto account co-owner A would be $1,250,000, which is thegreater of $1,250,000 or the aggregate of all the beneficialinterests attributable to A (limited to $250,000 per bene-ficiary), which totaled slightly less at $1,225,000. BecauseB has equal ownership interest in the trust, the same analy-sis and coverage determination also would apply to B.Thus, in this example, of the total account balance of$3.75 million, $2.5 million would be insured and $1.25million would be uninsured.If the owners of a joint revocable trust account are them-selves the sole beneficiaries of the corresponding trust, theaccount is insured as a joint account and not under theprovisions applicable to revocable trust accounts. Fordeposit accounts held in connection with a living trustthat provides for a life-estate interest for designated bene-ficiaries, the FDIC values each life estate interest as theSMDIA for purposes of determining the insurance cover-age available to the account owner. A revocable trustaccount continues to be insured under these provisions if

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the corresponding revocable trust, upon the death of oneor more of the owners, converts to an irrevocable trust.Irrevocable Trust Accounts — Funds held in an accountestablished pursuant to one or more irrevocable trustagreements created by the same grantor will be insured forup to the Standard Maximum Deposit Insurance Amountper beneficiary, provided that that beneficiary’s interest inthe account is capable of determination without any con-tingencies. The deposit insurance coverage of each benefi-ciary’s interest is separate from the coverage provided forother accounts maintained by the beneficiary, the grantor,the trustee or other beneficiaries. However, a beneficiary’sinterest in funds held in irrevocable trust accounts createdby the same grantor will be aggregated and insured up tothe Standard Maximum Deposit Insurance Amount.Individual Retirement Accounts — Funds held in an indi-vidual retirement account, including traditional, Roth,SEP and Simple IRAs, are currently insured up to$250,000 per participant in the aggregate. Such $250,000maximum will be adjusted for inflation beginning in2010. In addition, under FDIC regulations, funds held inan IRA are aggregated with funds held in certain otheremployee benefit plans in which the owner of the IRA hasan interest. For example, an individual’s interest indeposits at the Bank held by (i) IRAs, (ii) deferred com-pensation plans for certain employees of state or local gov-ernment or tax exempt organizations (i.e., Section 457Plans), (iii) self directed “Keogh Plans” of owner employ-ees described in Section 401(d) of the Internal RevenueCode, and (iv) self directed defined contribution plans, areinsured for up to $250,000 per participant in the aggre-gate whether or not maintained by the same employer oremployee organization. These amounts will be adjustedfor inflation beginning in 2010.If you have any questions about FDIC insurance coverage,please contact FRSC. You may also wish to seek advice foryour own attorney or other advisor concerning FDICinsurance coverage of deposits held in more than one rec-ognized legal capacity. You also may obtain information bycontacting the FDIC, Office of Compliance andConsumer Affairs, by letter (550 17th Street, N.W.,Washington, D.C. 20429), by phone (877-275-3342,800-925-4618 (TDD) or (202) 942-3100), by email(dcainternet@fdic.gov), or by accessing the FDIC’sInternet site at www.fdic.gov.

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Pass-Through DepositInsurance CoverageDisclosure Statement

This separate disclosure regarding pass-through depositinsurance is being provided pursuant to Federal DepositInsurance Corporation (“FDIC”) regulations to vestedparticipants of certain employee benefit plans where theemployee benefit plan maintains an Eagle Sweep Accountat First Republic Bank (the “Bank”) that is linked to anFirst Republic Securities Company, LLC (“FRSC”)Brokerage Account. First Republic Bank is a CaliforniaState-chartered bank the deposits of which are insured bythe FDIC to the extent provided under the FederalDeposit Insurance Act and FDIC rules. This disclosuredescribes the pass-through insurance rules and how theyapply to insure the deposits of vested participants of cer-tain employee benefit plans.

1. “Pass-Through” Insurance

For certain types of employee benefit plans, having morethan one participant, that maintain a Eagle SweepAccount at the Bank, the FDIC insurance limit is deter-mined under FDIC rules on a “pass-through” basis foreach vested participant, allowing more deposit insurancecoverage than would be available if the deposit insurancelimit were set for the plan as a single owner.Deposits of an employee benefit plan under Section 3(3)of the Employee Retirement Income Security Act of 1974,as amended (“ERISA”), including any plan described inSection 401(d) of the Internal Revenue Code, as amended(“IRC”), held at the Bank are insured on a “pass-through”basis, in the amount of up to the standard maximumdeposit insurance amount (“SMDIA”) for the vestedinterest of each plan participant, provided the FDIC rulesgoverning the recognition of deposit ownership and fidu-ciary relationships are satisfied. The current SMDIA is$250,000. The SMDIA will be adjusted for inflationbeginning in 2010.Deposits at the Bank made in connection with certaintypes of retirement plans that are also deposits of anemployee benefit plan or deposits of a deferred compensa-tion plan described in Section 457 of the IRC held at theBank are insured on a “pass-through” basis in the amountof $250,000 for the vested interest of each plan partici-pant, provided the FDIC rules governing the recognitionof deposit ownership and fiduciary relationships are satis-fied. The $250,000 FDIC insurance limit for these typesof accounts will be adjusted for inflation beginning in2010.

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2. Aggregation of Multiple PlansFunds representing the vested interests of a beneficiary inan employee benefit plan, or eligible deferred compensa-tion plan described in Section 457 of the IRC, which aredeposited in one or more deposit accounts at the Bankshall be aggregated with any other deposited funds at theBank representing such interests of the same beneficiary inother employee benefit plans, or eligible deferred compen-sation plans described in Section 457 of the IRC, estab-lished by the same employer or employee organization.

3. Aggregation of Certain Retirement AccountsDeposits at the Bank made in connection with the follow-ing types of retirement plans shall be aggregated andinsured in the amount of up to $250,000 per participant:(i) Any individual retirement account described inSection 408(a) of the IRC;

(ii) Any eligible deferred compensation plan described inSection 457 of the IRC; and

(iii)Any individual account plan defined in section 3(34)of ERISA and any plan described in Section 401(d) ofthe IRC, to the extent that participants and benefici-aries under such plans have the right to direct theinvestment of assets held in individual accounts main-tained on their behalf by the plans.

Only the present vested and ascertainable interests of eachparticipant in an employee benefit plan or “Section 457Plan,” excluding any remainder interest created by, or as aresult of, the plan, shall be taken into account in determin-ing the amount of deposit insurance accorded to thedeposits of the plan.

4. Determination of Interests of Defined Contribution Plans

In the unlikely event of default of the Bank, the value ofan employee’s vested interest in a defined contributionplan shall be deemed to be the employee’s account balanceas of the date of default of the Bank, regardless of whethersaid amount was derived, in whole or in part, from contri-butions of the employee and/or the employer to theaccount.

5. Determination of Interests of Defined Benefit Plans

In the unlikely event of default of the Bank, the value ofan employee’s vested interest in a defined benefit plan shallbe deemed to be the present value of the employee’s inter-est in the plan, evaluated in accordance with the methodof calculation ordinarily used under such plan, as of thedate of default of the Bank.

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6. Treatment of Contingent InterestsIn the event that employees’ interests in an employee ben-efit plan are not capable of evaluation in accordance withthe rules of the FDIC, or an account established for anysuch plan includes amounts for future participants in theplan, payment by the FDIC with respect to all such inter-ests shall not exceed the SMDIA in the aggregate.

7. Overfunded Pension Plan DepositsAny portion of an employee benefit plan’s deposits whichis not attributable to the interests of the beneficiariesunder the plan shall be deemed attributable to the over-funded portion of the plan’s assets and shall be aggregatedand insured up to the SMDIA, separately from any otherdeposits.

8. Where to Obtain More InformationYou can learn more about FDIC deposit insurance cover-age and limits by reading the FDIC’s deposit insurancecoverage rules at 12 C.F.R. Part 330 and viewing addition-al information that is available on the FDIC’s website atwww.fdic.gov.

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NOTES

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FRSC 743 PE – 10/13

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