EXHIBIT (h)(11)
[LOGO] MASTER SECURITIES
LOAN AGREEMENT
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Dated as of July 22, 1999
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Between Xxxxxxx, Xxxxx & Co.
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and Xxxxxxxx|Applegate Institutional Fund, as listed in Annex I
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This Agreement sets forth the terms and conditions under which one party
("Lender") may, from time to time, lend to the other party ("Borrower")
certain securities against a pledge of collateral. Capitalized terms not
otherwise defined herein shall have the meanings provided in Section 26.
The parties hereto agree as follows:
1. LOANS OF SECURITIES.
1.1 Subject to the terms and conditions of this Agreement, Borrower
or Lender may, from time to time, orally seek to initiate a
transaction in which Lender will lend securities to Borrower.
Borrower and Lender shall agree orally on the terms of each
Loan, including the issuer of the securities, the amount of
securities to be lent, the basis of compensation, and the amount
of Collateral to be transferred by Borrower, which terms may be
amended during the Loan.
1.2 Notwithstanding any other provision in this Agreement regarding
when a Loan commences, a Loan hereunder shall not occur until
the Loaned Securities and the Collateral therefor have been
transferred in accordance with Section 16.
1.3 WITHOUT WAIVING ANY RIGHTS GIVEN TO LENDER HEREUNDER, IT IS
UNDERSTOOD AND AGREED THAT THE PROVISIONS OF THE SECURITIES
INVESTOR PROTECTION ACT OF 1970 MAY NOT PROTECT LENDER WITH
RESPECT TO LOANED SECURITIES HEREUNDER AND THAT, THEREFORE, THE
COLLATERAL DELIVERED TO LENDER MAY CONSTITUTE THE ONLY SOURCE OF
SATISFACTION OF BORROWER'S OBLIGATIONS IN THE EVENT BORROWER
FAILS TO RETURN THE LOANED SECURITIES.
2. TRANSFER OF LOANED SECURITIES.
2.1 Unless otherwise agreed, Lender shall transfer Loaned Securities
to Borrower hereunder on or before the Cutoff Time on the date
agreed to by Borrower and Lender for the commencement of the
Loan.
2.2 Unless otherwise agreed, Borrower shall provide Lender, in each
Loan in which Lender is a Customer, with a schedule and receipt
listing the Loaned Securities. Such schedule and receipt may
consist of (a) a schedule provided to Borrower by Lender and
executed and returned by Borrower when the Loaned Securities are
received, (b) in the case of securities transferred through a
Clearing Organization which provides transferors with a notice
evidencing such transfer, such notice, or(C)a confirmation or
other document provided to Lender by Borrower.
3. COLLATERAL.
3.1 Unless otherwise agreed, Borrower shall, prior to or
concurrently with the transfer of the Loaned Securities to
Borrower, but in no case later than the close of business on the
day of such transfer, transfer to Lender Collateral with a
market value at least equal to a percentage of the market value
of the Loaned Securities agreed to by Borrower and Lender (which
shall be 102% of the market value of the Loaned Securiies for
domestic securities and 105% of the market value of the Loaned
Securities for international securities) (the "Margin
Percentage").
3.2 The Collateral transferred by Borrower to Lender, as adjusted
pursuant to Section 8, shall be security for Borrower's
obligations in respect of such Loan and for any other
obligations of Borrower to Lender. Borrower hereby pledges with,
assigns to, and grants Lender a continuing first security
interest in, and a lien upon, the Collateral, which shall attach
upon the transfer of the Loaned Securities by Lender to Borrower
and which shall cease upon the transfer of the Loaned Securities
by Borrower to Lender. In addition to the rights and remedies
given to Lender hereunder, Lender shall have all the rights and
remedies of a secured party under the New York Uniform
Commercial Code. It is understood that Lender may use or invest
the Collateral, if such consists of cash, at its own risk, but
that (unless Lender is a Broker-Dealer) Lender shall, during the
term of any Loan hereunder, segregate Collateral from all
securities or other assets in its possession. Lender may pledge,
re-pledge, hypothecate, re-hypothecate, lend, re-lend, sell or
otherwise transfer the Collateral, or re- register Collateral
evidenced by physical certificates in any name other than
Borrower's, only (a) if Lender is Broker-Dealer or (b) in the
event of a Default by Borrower. Segregation of Collateral may be
accomplished by appropriate identification on the books and
records of Lender if it is a "financial intermediary" or a
"clearing corporation" within the meaning of the New York
Uniform Commercial Code.
3.3 Except as otherwise provided herein, upon transfer to Lender of
the Loaned Securities on the day a Loan is terminated pursuant
to Section 5, Lender shall be obligated to transfer the
Collateral (as adjusted pursuant to Section 8) to Borrower no
later than the Cutoff Time on such day or, if such day is not a
day on which a transfer of such Collateral may be effected under
Section 16, the next day on which such a transfer may be
effected.
3.4 If Borrower transfers Collateral to Lender, as provided in
Section 3.1, and Lender does not transfer the Loaned Securities
to Borrower, Borrower shall have the absolute right to the
return of the Collateral; and if Lender transfers Loaned
Securities to Borrower and Borrower does not transfer Collateral
to Lender as provided in Section 3.1, Lender shall have the
absolute right to the return of the Loaned Securities.
3.5 Borrower may, upon reasonable notice to Lender (taking into
account all relevant factors, including industry practice, the
type of Collateral to be substituted and the applicable method
of transfer), substitute Collateral for Collateral securing any
Loan or Loans; provided, however, that such substituted
Collateral shall (a) consist only of cash, securities or other
property that Borrower and Lender agreed would be acceptable
Collateral prior to the Loan or Loans and (b) have a market
value such that the aggregate market value of such substituted
Collateral, together with all other Collateral for Loans in
which the party
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substituting such Collateral is acting as Borrower, shall equal
or exceed the agreed upon Margin Percentage of the market value
of the Loaned Securities. Prior to the expiration of any letter
of credit supporting Borrower's obligations hereunder, Borrower
shall, no later than the Cutoff Time on the date such letter of
credit expires, obtain an extension of the expiration of such
letter of credit or replace such letter of credit by providing
Lender with a substitute letter of credit in an amount at least
equal to the amount of the letter of credit for which it is
substituted.
3.6 Lender acknowledges that, in connection with Loans of Government
Securities and as otherwise permitted by applicable law, some
securities provided by Borrower as Collateral under this
Agreement may not be guaranteed by the United States.
4. FEES FOR LOAN.
4.1 Unless otherwise agreed, (a) Borrower agrees to pay Lender a
loan fee (a "Loan Fee"), computed daily on each Loan to the
extent such Loan is secured by Collateral other than cash, based
on the aggregate par value (in the case of Loans of Government
Securities) or the aggregate market value (in the case of all
other Loans) of the Loaned Securities on the day for which such
Loan Fee is being computed, and (b) Lender agrees to pay
Borrower a fee or rebate (a "Cash Collateral Fee") on Collateral
consisting of cash, computed daily based on the amount of cash
held by Lender as Collateral, in the case of each of the Loan
Fee and the Cash Collateral Fee at such rates as Borrower and
Lender may agree. Except as Borrower and Lender may otherwise
agree (in the event that cash Collateral is transferred by
clearing house funds or otherwise), Loan Fees shall accrue from
and including the date on which the Loaned Securities are
transferred to Borrower to, but excluding, the date on which
such Loaned Securities are returned to Lender, and Cash
Collateral Fees shall accrue from and including the date on
which the cash Collateral is transferred to Lender to, but
excluding, the date on which such cash Collateral is returned to
Borrower.
4.2 Unless otherwise agreed, any Loan Fee or Cash Collateral Fee
payable hereunder shall be payable:
(a) in the case of any Loan of securities other than Government
Securities, upon the earlier of (i) the fifteenth day of the
month following the calendar month in which such fee was
incurred or (ii) the termination of all Loans hereunder (or, if
a transfer of cash in accordance with Section 16 may not be
effected on such fifteenth day or the day of such termination,
as the case may be, the next day on which such a transfer may be
effected); and
(b) in the case of any Loan of Government Securities, upon the
termination of such Loan.
Notwithstanding the foregoing, all Loan Fees shall be payable by
Borrower immediately in the event of a Default hereunder by
Borrower and all Cash Collateral Fees shall be payable
immediately by Lender in the event of a Default by Lender.
5. TERMINATION OF THE LOAN.
Unless otherwise agreed, (a) Borrower may terminate a Loan on any
Business Day by giving notice to Lender and transferring the Loaned
Securities to Lender before the Cutoff Time on such Business Day, and
(b) Lender may terminate a Loan on a termination date established by
notice given to Borrower prior to the close of business on a Business
Day. The termination date established by a termination notice given by
Lender to Borrower shall be a date no earlier than the standard
settlement date for trades of the Loaned Securities entered into on the
date of such notice, which date shall, unless Borrower and Lender agree
to the contrary, be (i) in the case of Government Securities, the next
Business Day following such notice and (ii) in the case of all other
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securities, the third Business Day following such notice. Unless
otherwise agreed, Borrower shall, on or before the Cutoff Time on the
termination date of a Loan, transfer the Loaned Securities to Lender;
provided, however, that upon such transfer by Borrower, Lender shall
transfer the Collateral (as adjusted pursuant to Section 8) to Borrower
in accordance with Section 3.3.
6. RIGHTS OF BORROWER IN RESPECT OF THE LOANED SECURITIES.
Except as set forth in Sections 7.1 and 7.2 and as otherwise agreed by
Borrower and Lender, until Loaned Securities are required to be
redelivered to Lender upon termination of a Loan hereunder, Borrower
shall have all of the incidents of ownership of the Loaned Securities,
including the right to transfer the Loaned Securities to others. Lender
hereby waives the right to vote, or to provide any consent or to take
any similar action with respect to, the Loaned Securities in the event
that the record date or deadline for such vote, consent or other action
falls during the term of the Loan.
7. DIVIDENDS, DISTRIBUTIONS, ETC.
7.1 Lender shall be entitled to receive all distributions made on or
in respect of the Loaned Securities which are not otherwise
received by Lender, to the full extent it would be so entitled
if the Loaned Securities had not been lent to Borrower,
including, but not limited to: (a) cash and all other property,
(b) stock dividends, (C) securities received as a result of
split ups of the Loaned Securities and distributions in respect
thereof, (d) interest payments, and (e) all rights to purchase
additional securities.
7.2 Any cash distributions made on or in respect of the Loaned
Securities, which Lender is entitled to receive pursuant to
Section 7.1, shall be paid by the transfer of cash to Lender by
Borrower, on the date any such distribution is paid, in an
amount equal to such cash distribution, so long as Lender is not
in Default at the time of such payment. Non-cash distributions
received by Borrower shall be added to the Loaned Securities on
the date of distribution and shall be considered such for all
purposes, except that if the Loan has terminated, Borrower shall
forthwith transfer the same to Lender.
7.3 Borrower shall be entitled to receive all cash distributions
made on or in respect of non-cash Collateral which are not
otherwise received by Borrower, to the full extent it would be
so entitled if the Collateral had not been transferred to
Lender. Any distributions of cash made on or in respect of such
Collateral which Borrower is entitled to receive hereunder shall
be paid by the transfer of cash to Borrower by Lender, on the
date any such distribution is paid, in an amount equal to such
cash distribution, so long as Borrower is not in Default at the
time of such payment.
7.4 (a) Unless otherwise agreed, if (i) Borrower is required to make
a payment (a "Borrower Payment") with respect to cash
distributions on Loaned Securities under Sections 7.1 and 7.2
("Securities Distributions"), or (ii) Lender is required to make
a payment (a "Lender Payment") with respect to cash
distributions on Collateral under Section 7.3 ("Collateral
Distributions"), and (iii) Borrower or Lender, as the case may
be ("Payor"), shall be required by law to collect any
withholding or other tax, duty, fee, levy or charge required to
be deducted or withheld from such Borrower Payment or Lender
Payment ("Tax"), then Payor shall (subject to subsections (b)
and (C) below), pay such additional amounts as may be necessary
in order that the net amount of the Borrower Payment or Lender
Payment received by the Lender or Borrower, as the case may be
("Payee"), after payment of such Tax equals the net amount of
the Securities Distribution or Collateral Distribution that
would have been received if such Securities Distribution or
Collateral Distribution had been paid directly to the Payee.
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(b) No additional amounts shall be payable to a Payee under
subsection (a) above to the xtent that Tax would have been
imposed on a Securities Distribution or Collateral
Distribution paid directly to the Payee.
(c) No additional amounts shall be payable to a Payee under
subsection (a) above to the extent that such Payee is
entitled to an exemption from, or reduction in the rate of,
Tax on a Borrower Payment or Lender Payment subject to the
provision of a certificate or other documentation, but has
failed timely to provide such certificate or other
documentation.
(d) Each party hereto shall be deemed to represent that, as of
the commencement of any Loan hereunder, no Tax would be
imposed on any cash distribution paid to it with respect to
(i) Loaned Securities subject to a Loan in which it is
acting as Lender or (ii) Collateral for any Loan in which it
is acting as Borrower, unless such party has given notice to
the contrary to the other party hereto (which notice shall
specify the rate at which such Tax would be imposed). Each
party agrees to notify the other of any change that occurs
during the term of a Loan in the rate of any Tax that would
be imposed on any such cash distributions payable to it.
7.5 To the extent that, under the provisions of Sections 7.1 through
7.4 (a) a transfer of cash or other property by Borrower would
give rise to a Margin Excess (as defined in Section 8.3 below)
or (b) a transfer of cash or other property by Lender would give
rise to a Margin Deficit (as defined in Section 8.2 below),
Borrower or Lender (as the case may be) shall not be obligated
to make such transfer of cash or other property in accordance
with such Sections, but shall in lieu of such transfer
immediately credit the amounts that would have been transferable
under such Sections to the account of Lender or Borrower (as the
case may be).
8. XXXX TO MARKET.
8.1 Borrower shall daily xxxx to market any Loan hereunder and in
the event that at the close of trading on any Business Day the
market value of the Collateral for any Loan to Borrower shall be
less than 102% of the market value of all the outstanding Loaned
Securities for domestic securities and 105% of the market value
of all the outstanding Loaned Securities for international
securities subject to such Loan, Borrower shall transfer
additional Collateral no later than the close of the next
Business Day so that the market value of such additional
Collateral, when added to the market value of the other
Collateral for such Loan, shall equal 102% or 105%, whichever is
applicable, of the market value of the Loaned Securities.
8.2 In addition to any rights of Lender under Section 8.1, in the
event that at the close of trading on any Business Day the
aggregate market value of all Collateral for Loans by Lender
shall be less than the Margin Percentage of the market value of
all the outstanding Loaned Securities subject to such Loans (a
"Margin Deficit"), Lender may, by notice to Borrower, demand
that Borrower transfer to Lender additional Collateral so that
the market value of such additional Collateral, when added to
the market value of all other Collateral for such Loans, shall
equal or exceed the agreed upon Margin Percentage of the market
value of the Loaned Securities. Unless otherwise agreed, such
transfer is to be made no later than the close of the next
Business Day following the day of Lender's notice to Borrower.
8.3 In the event that at the close of trading on any Business Day
the market value of all Collateral for Loans to Borrower shall
be greater than the Margin Percentage of the market value of all
the outstanding Loaned Securities subject to such Loans (a
"Margin Excess"), Borrower may, by notice to Lender, demand that
Lender transfer to Borrower such amount of the Collateral
selected by Borrower so that the market value of the Collateral
for such Loans,
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after deduction of such amounts, shall thereupon not exceed the
Margin Percentage of the later than the close of the next
Business Day following the day of Borrower's notice to Lender.
8.4 Borrower and Lender may agree, with respect to one or more Loans
hereunder, to xxxx the values to market pursuant to Sections 8.2
and 8.3 by separately valuing the Loaned Securities lent and the
Collateral given in respect thereof on a Loan-by-Loan basis.
8.5 Borrower and Lender may agree, with respect to any or all Loans
hereunder, that the respective rights of Lender and Borrower
under Sections 8.2 and 8.3 may be exercised only where a Margin
Excess or Margin Deficit exceeds a specified dollar amount or a
specified percentage of the market value of the Loaned
Securities under such Loans (which amount or percentage shall be
agreed to by Borrower and Lender prior to entering into any such
Loans).
9. REPRESENTATIONS.
Each party to this Agreement hereby makes the following representations
and warranties, which shall continue during the term of any Loan
hereunder:
9.1 Each party hereto represents and warrants that (a) it has the
power to execute and deliver this Agreement, to enter into the
Loans contemplated hereby and to perform its obligations
hereunder; (b) it has taken all necessary action to authorize
such execution, delivery and performance; and(C)this Agreement
constitutes a legal, valid and binding obligation enforceable
against it in accordance with its terms.
9.2 Each party hereto represents and warrants that the execution,
delivery and performance by it of this Agreement and each Loan
hereunder will at all times comply with all applicable laws and
regulations including those of applicable regulatory and
self-regulatory organizations.
9.3 Each party hereto represents and warrants that it has not relied
on the other for any tax or accounting advice concerning this
Agreement and that it has made its own determination as to the
tax and accounting treatment of any Loan and any dividends,
remuneration or other funds received hereunder.
9.4 Borrower represents and warrants that it is acting for its own
account. Lender represents and warrants that it is acting for
its own account unless it expressly specifies otherwise in
writing and complies with Section 10.3(b).
9.5 Borrower represents and warrants that (a) it has, or will have
at the time of transfer of any Collateral, the right to grant a
first security interest therein subject to the terms and
conditions hereof, and (b) it (or the person to whom it relends
the Loaned Securities) is borrowing or will borrow the Loaned
Securities (except for Loaned Securities that qualify as
"exempted securities" under Regulation T of the Board of
Governors of the Federal Reserve System) for the purpose of
making delivery of such securities in the case of short sales,
failure to receive securities required to be delivered, or as
otherwise permitted pursuant to Regulation T as in effect from
time to time.
9.6 Lender represents and warrants that it has, or will have at the
time of transfer of any Loaned Securities, the right to transfer
the Loaned Securities subject to the terms and conditions
hereof.
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10. COVENANTS.
10.1 Each party hereto agrees and acknowledges that (a) each Loan
hereunder is a "securities contract," as such term is defined in
Section 741(7) of Title 11 of the United States Code (the
"Bankruptcy Code"), (b) each and every transfer of funds,
securities and other property under this Agreement and each Loan
hereunder is a "settlement payment" or a "margin payment," as
such terms are used in Sections 362(b)(6) and 546(e) of the
Bankruptcy Code, and(C)the rights given to Borrower and Lender
hereunder upon a Default by the other constitute the right to
cause the liquidation of a securities contract and the right to
set off mutual debts and claims in connection with a securities
contract, as such terms are used in Sections 555 and 362(b)(6)
of the Bankruptcy Code. Each party hereto further agrees and
acknowledges that if a party hereto is an "insured depository
institution," as such term is defined in the Federal Deposit
Insurance Act, as amended ("FDIA"), then each Loan hereunder is
a "securities contract" and "qualified financial contract," as
such terms are defined in the FDIA and any rules, orders or
policy statements thereunder.
10.2 Borrower agrees to be liable as principal with respect to its
obligations hereunder.
10.3 Lender agrees either (a) to be liable as principal with respect
to its obligations hereunder or (b) to execute and comply fully
with the provisions of Annex I (the terms and conditions of
which Annex are incorporated herein and made a part hereof).
10.4 Promptly upon (and in any event within seven (7) Business Days
after) demand by Lender, Borrower shall furnish Lender with
Borrower's most recent publicly-available financial statements
and any other financial statements mutually agreed upon by
Borrower and Lender. Unless otherwise agreed, if Borrower is
subject to the requirements of Rule 17a-5(C) under the Exchange
Act, it may satisfy the requirements of this Section by
furnishing Lender with its most recent statement required to be
furnished to customers pursuant to such Rule.
10.5 Except to the extent required by applicable law or regulation or
as otherwise agreed, Borrower and Lender agree that Loans
hereunder shall in no event be "exchange con-tracts" for
purposes of the rules of any securities exchange and that Loans
hereunder shall not be governed by the buy-in or similar rules
of any such exchange, registered national securities or other
self-regulatory organization.
11. EVENTS OF DEFAULT.
All Loans hereunder may, at the option of the non-defaulting party
exercised by notice to the defaulting party (which option shall be deemed to
have been exercised, even if no notice is given, immediately upon the occurrence
of an event specified in subsection 11.5 below), be terminated immediately upon
the occurrence of any one or more of the following events (individually, a
"Default"):
11.1 if any Loaned Securities shall not be transferred to Lender upon
termination of the Loan as required by Section 5;
11.2 if any Collateral shall not be transferred to Borrower upon
termination of the Loan as required by Sections 3.3 and 5;
11.3 if either party shall fail to transfer Collateral as required by
Section 8;
11.4 if either party (i) shall fail to transfer to the other party
amounts in respect of distributions required to be transferred
by Section 7, (ii) shall have received notice of such failure
from the non-defaulting party, and (iii) shall not have cured
such default by the Cutoff Time on the
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next day after such notice on which a transfer of cash may be
effected in accordance with Section 16;
11.5 if (i) either party shall commence as debtor any case or
proceeding under any bankruptcy, insolvency, reorganization,
liquidation, dissolution or similar law, or seek the appointment
of a receiver, conservator, trustee, custodian or similar
official for such party or any substantial part of its property,
(ii) any such case or proceeding shall be commenced against
either party, or another shall seek such an appointment, or any
application shall be filed against either party for a protective
decree under the provisions of the Securities Investor
Protection Act of 1970, which (A) is consented to or not timely
contested by such party, (B) results in the entry of an order
for relief, such an appointment, the issuance of such a
protective decree or the entry of an order having a similar
effect, or (C) is not dismissed within 15 days, (iii) either
party shall make a general assignment for the benefit of
creditors, or (iv) either party shall admit in writing its
inability to pay its debts as they become due;
11.6 if either party shall have been suspended or expelled from
membership or participation in any national securities exchange
or registered national securities association of which it is a
member or other self-regulatory organization to whose rules it
is subject or if it is suspended from dealing in securities by
any federal or state government agency thereof.
11.7 if either party shall have its license, charter, or other
authorization necessary to conduct a material portion of its
business withdrawn, suspended or revoked by any applicable
federal or state government or agency thereof;
11.8 if any representation made by either party in respect of this
Agreement or any Loan or Loans hereunder shall be incorrect or
untrue in any material respect during the term of any Loan
hereunder;
11.9 if either party notifies the other, orally or in writing, of its
inability to or its intention not to perform its obligations
hereunder or otherwise disaffirms, rejects or repudiates any of
its obligations hereunder; or
11.10 if either party (i) shall fail to perform any material
obligation under this Agreement not specifically set forth in
clauses 11.1 through 11.9 above, including but not limited to
the payment of fees as required by Section 4, and the payment of
transfer taxes as required by Section 14, (ii) shall have
received notice of such failure from the non-defaulting party
and (iii) shall not have cured such failure by the Cutoff Time
on the next day after such notice on which a transfer of cash
may be effected under Section 16.
12. LENDER'S REMEDIES.
Upon the occurrence of a Default under Section 11 entitling Lender to
terminate all Loans hereunder, Lender shall have the right (without
further notice to Borrower), in addition to any other remedies provided
herein or under applicable law, (a) to purchase a like amount of Loaned
Securities ("Replacement Securities") in the principal market for such
securities in a commercially reasonable manner, (b) to sell any
Collateral in the principal market for such Collateral in a commercially
reasonable manner and (C) to apply and set off the Collateral and any
proceeds thereof (including any amounts drawn under a letter of credit
supporting any Loan) against the payment of the purchase price for such
Replacement Securities and any amounts due to Lender under Sections 4,
7, 14 and 17. In the event Lender shall exercise such rights, Borrower's
obligation to return a like amount of the Loaned Securities shall
terminate. Lender may similarly apply the Collateral and any proceeds
thereof to any other obligation of Borrower under this Agreement,
including Borrower's obligations with respect to distributions paid to
Borrower (and not forwarded to Lender) in respect of Loaned Securities.
In the event that (i) the purchase price of Replacement Securities (plus
all other amounts, if any, due to Lender hereunder) exceeds (ii) the
amount of the Collateral, Borrower shall be liable to Lender for the
amount of such excess together with interest thereon at a rate equal to
(A) in the case of purchases of Foreign Securities, LIBOR, (B) in the
case of purchases of any other securities (or other amounts, if any, due
to Lender hereunder), the Federal
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Funds Rate or (C) such other rate as may be specified in Schedule B, in
each case as such rate fluctuates from day to day, from the date of such
purchase until the date of payment of such excess. As security for
Borrower's obligation to pay such excess, Lender shall have, and
Borrower hereby grants, a security interest in any property of Borrower
then held by or for Lender and a right of setoff with respect to such
property and any other amount payable by Lender to Borrower. The
purchase price of Replacement Securities purchased under this Section 12
shall include, and the proceeds of any sale of Collateral shall be
determined after deduction of, broker's fees and commissions and all
other reasonable costs, fees and expenses related to such purchase or
sale (as the case may be). In the event Lender exercises its rights
under this Section 12, Lender may elect in its sole discretion, in lieu
of purchasing all or a portion of the Replacement Securities or selling
all or a portion of the Collateral, to be deemed to have made,
respectively, such purchase of Replacement Securities or sale of
Collateral for an amount equal to the price therefor on the date of such
exercise obtained from a generally recognized source or the most recent
closing bid quotation from such a source. Subject to Section 19, upon
the satisfaction of all obligations hereunder, any remaining Collateral
shall be returned to Borrower.
13. BORROWER'S REMEDIES.
Upon the occurrence of a Default under Section 11 entitling Borrower to
terminate all Loans hereunder, Borrower shall have the right (without
further notice to Lender), in addition to any other remedies provided
herein or under applicable law, (a) to purchase a like amount of
Collateral ("Replacement Collateral") in the principal market for such
Collateral in a commercially reasonable manner, (b) to sell a like
amount of the Loaned Securities in the principal market for such
securities in a commercially reasonable manner and (C) to apply and set
off the Loaned Securities and any proceeds thereof against (i) the
payment of the purchase price for such Replacement Collateral (ii)
Lender's obligation to return any cash or other Collateral and (iii) any
amounts due to Borrower under Sections 4, 7 and 17. In such event,
Borrower may treat the Loaned Securities as its own and Lender's
obligation to return a like amount of the Collateral shall terminate;
provided, however, that Lender shall immediately return any letters of
credit supporting any Loan upon the exercise or deemed exercise by
Borrower of its termination rights under Section 11. Borrower may
similarly apply the Loaned Securities and any proceeds thereof to any
other obligation of Lender under this Agreement, including Lender's
obligations with respect to distributions paid to Lender (and not
forwarded to Borrower) in respect of Collateral. In the event that (i)
the sales price received from such Loaned Securities is less than (ii)
the purchase price of Replacement Collateral (plus the amount of any
cash or other Collateral not replaced by Borrower and all other amounts,
if any, due to Borrower hereunder), Lender shall be liable to Borrower
for the amount of any such deficiency, together with interest on such
amounts at a rate equal to (A) in the case of Collateral consisting of
Foreign Securities, LIBOR, (B) in the case of Collateral consisting of
any other securities (or other amounts due, if any, to Borrower
hereunder), the Federal Funds Rate or (C) such other rate as may be
specified in Schedule B, in each case as such rate fluctuates from day
to day, from the date of such sale until the date of payment of such
deficiency. As security for Lender's obligation to pay such deficiency,
Borrower shall have, and Lender hereby grants, a security interest in
any property of Lender then held by or for Borrower and a right of
setoff with respect to such property and any other amount payable by
Borrower to Lender. The purchase price of any Replacement Collateral
purchased under this Section 13 shall include, and the proceeds of any
sale of Loaned Securities shall be determined after deduction of,
broker's fees and commissions and all other reasonable costs, fees and
expenses related to such purchase or sale (as the case may be). In the
event Borrower exercises its rights under this Section 13, Borrower may
elect in its sole discretion, in lieu of purchasing all or a portion of
the Replacement Collateral or selling all or a portion of the Loaned
Securities, to be deemed to have made, respectively, such purchase of
Replacement Collateral or sale of Loaned Securities for an amount equal
to the price therefor on the date of such exercise obtained from a
generally recognized source or the most recent closing bid quotation
from such a source. Subject to Section 19, upon the satisfaction of all
Lender's obligations hereunder, any remaining Loaned Securities (or
remaining cash proceeds thereof ) shall be returned to Lender. Without
limiting the foregoing, the parties hereto agree that they intend the
Loans hereunder to be loans of securities. If, however, any Loan is
deemed to be a loan of money by Borrower to Lender, then Borrower shall
have, and Lender shall be deemed to have granted, a security interest in
the Loaned Securities and the proceeds thereof.
9
14. TRANSFER TAXES.
All transfer taxes with respect to the transfer of the Loaned Securities
by Lender to Borrower and by Borrower to Lender upon termination of the
Loan shall be paid by Borrower.
15. MARKET VALUE.
15.1 Unless otherwise agreed, if the principal market for the
securities to be valued is a national securities exchange in the
United States, their market value shall be determined by their
last sale price on such exchange on the preceding Business Day
or, if there was no sale on that day, by the last sale price on
the next preceding Business Day on which there was a sale on
such exchange, all as quoted on the Consolidated Tape or, if not
quoted on the Consolidated Tape, then as quoted by such
exchange.
15.2 Except as provided in Section 15.3 or 15.4 or as otherwise
agreed, if the principal market for the securities to be valued
is the over-the-counter market, their market value shall be
determined as follows. If the securities are quoted on the
National Association of Securities Dealers Automated Quotations
System ("NASDAQ"), their market value shall be the closing sale
price on NASDAQ on the preceding Business Day or, if the
securities are issues for which last sale prices are not quoted
on NASDAQ, the closing bid price on such day. If the securities
to be valued are not quoted on NASDAQ, their market value shall
be the highest bid quotation as quoted in any of The Wall Street
Journal, the National Quotation Bureau pink sheets, the Salomon
Brothers quotation sheets, quotations sheets of registered
market makers and, if necessary, dealers' telephone quotations
on the preceding Business Day. In each case, if the relevant
quotation did not exist on such day, then the relevant quotation
on the next preceding Business Day in which there was such a
quotation shall be the market value.
15.3 Unless otherwise agreed, if the securities to be valued are
Government Securities, their market value shall be the average
of the bid and ask prices as quoted on Prophesy at 3:30 P.M. New
York time on the Business Day preceding the date on which such
determination is made. If the securities are not so quoted on
such day, their market value shall be determined as of the next
preceding Business Day on which they were so quoted. If the
securities to be valued are Government Securities that are not
quoted on Prophesy, their market value shall be determined as of
the close of business on the preceding Business Day in
accordance with market practice for such securities.
15.4 Unless otherwise agreed, if the securities to be valued are
Foreign Securities, their market value shall be determined as of
the close of business on the preceding Business Day in
accordance with market practice in the principal market for such
securities.
15.5 Unless otherwise agreed, the market value of a letter of credit
shall be the undrawn amount thereof.
15.6 All determinations of market value under Sections 15.1, 15.2,
15.3 and 15.4 shall include, where applicable, accrued interest
to the extent not already included therein (other than any
interest transferred to the other party pursuant to Section 7),
unless market practice with respect to the valuation of such
securities in connection with securities loans is to the
contrary. All determinations of market value that are required
to be made at the close of trading on any Business Day pursuant
to Section 8 or otherwise hereunder shall be made as if being
determined at the commencement of trading on the next Business
Day. The determinations of market value provided for in this
Section 15 shall apply for all purposes under this Agreement,
except for purposes of Sections 12 and 13.
10
16. TRANSFERS.
16.1 All transfers of securities hereunder shall be by (a) physical
delivery of certificates representing such securities together
with duly executed stock and bond transfer powers, as the case
may be, with signatures guaranteed by a bank or a member of the
New York Stock Exchange, Inc., (b) transfer on the books of a
Clearing Organization, or -C- such other means as Borrower and
Lender may agree. In every transfer of securities hereunder, the
transferor shall take all steps necessary (i) to effect a
"transfer" under Section 8-313 of the New York Uniform
Commercial Code or, where applicable, under any U.S. federal
regulation governing transfers of securities and (ii) to provide
the transferee with comparable rights under any applicable
foreign law or regulation.
16.2 All transfers of cash Collateral hereunder shall be by (a) wire
transfer in immediately available, freely transferable funds or
(b) such other means as Borrower and Lender may agree. All other
transfers of cash hereunder shall be made in accordance with the
preceding sentence or by delivery of a certified or official
bank check representing next-day New York Clearing House Funds.
16.3 All transfers of a letter of credit from Borrower to Lender
shall be made by physical delivery to Lender of an irrevocable
letter of credit issued by a "bank" as defined in Section
3(a)(6)(A)--C- of the Exchange Act. Transfer of a letter of
credit from Lender to Borrower shall be made by causing such
letter of credit to be returned or by causing the amount of such
letter of credit to be reduced to the amount required after such
transfer.
16.4 A transfer of securities, cash or letters of credit may be
effected under this Section 16 on any day except (a) a day on
which the transferee is closed for business at its address set
forth in Schedule A hereto or (b) a day on which a Clearing
Organization or wire transfer system is closed, if the
facilities of such Clearing Organization or wire transfer system
are required to effect such transfer.
17. CONTRACTUAL CURRENCY.
17.1 Borrower and Lender agree that: (a) any payment in respect of a
distribution under Section 7 shall be made in the currency in
which the underlying distribution of cash was made; (b) any
return of cash shall be made in the currency in which the
underlying transfer of cash was made and -C- any other payment
of cash in connection with a Loan under this Agreement shall be
in the currency agreed upon by Borrower and Lender in connection
with such Loan (the currency established under clause (a), (b)
or -C- hereinafter referred to as the "Contractual Currency").
Notwithstanding the foregoing, the payee of any such payment
may, at its option, accept tender thereof in any other currency;
provided, however, that, to the extent permitted by applicable
law, the obligation of the payor to make such payment will be
discharged only to the extent of the amount of Contractual
Currency that such payee may, consistent with normal banking
procedures, purchase with such other currency (after deduction
of any premium and costs of exchange) on the banking day next
succeeding its receipt of such currency.
17.2 If for any reason the amount in the Contractual Currency
received under Section 17.1, including amounts received after
conversion of any recovery under any judgment or order expressed
in a currency other than the Contractual Currency, falls short
of the amount in the Contractual Currency due in respect of this
Agreement, the party required to make the payment will (unless a
Default has occurred and such party is the non-defaulting party)
as a separate and independent obligation and to the extent
permitted by applicable law,
11
immediately pay such additional amount in the Contractual
Currency as may be necessary to compensate for the shortfall.
17.3 If for any reason the amount in the Contractual Currency
received under Section 17.1 exceeds the amount in the
Contractual Currency due in respect of this Agreement, then the
party receiving the payment will (unless a Default has occurred
and such party is the non-defaulting party) refund promptly the
amount of such excess.
18. ERISA.
Lender shall, if any of the securities transferred to the Borrower
hereunder for any Loan have been or shall be obtained, directly or
indirectly, from or using the assets of any Plan, so notify Borrower in
writing upon the execution of the Agreement or upon initiation of such
Loan under Section 1.1. If Lender so notifies Borrower, then Borrower
and Lender shall conduct the Loan in accordance with the terms and
conditions of Department of Labor Prohibited Transaction Exemption 81-6
(46 Fed. Reg. 7527, Jan. 23, 1981; as amended, 52 Fed. Reg. 18754, May
19, 1987), or any successor thereto (unless Borrower and Lender have
agreed prior to entering into a Loan that such Loan will be conducted in
reliance on another exemption, or without relying on any exemption, from
the prohibited transaction provisions of Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, and Section 4975 of
the Internal Revenue Code of 1986, as amended). Without limiting the
foregoing and notwithstanding any other provision of this Agreement, if
the Loan will be conducted in accordance with Prohibited Transaction
Exemption 81-6, then:
18.1 Borrower represents and warrants to Lender that it is either (i)
a bank subject to federal or state supervision, (ii) a
broker-dealer registered under the Exchange Act or (iii) exempt
from registration under Section 15(a)(1) of the Exchange Act as
a dealer in Government Securities.
18.2 Borrower represents and warrants that, during the term of any
Loan hereunder, neither Borrower nor any affiliate of Borrower
has any discretionary authority or control with respect to the
investment of the assets of the Plan involved in the Loan or
renders investment advice (within the meaning of 29 C.F.R.
Section 2510.3-21-C-) with respect to the assets of the Plan
involved in the Loan. Lender agrees that, prior to or at the
commencement of any Loan hereunder, it will communicate to
Borrower information regarding the Plan sufficient to identify
to Borrower any person or persons that have discretionary
authority or control with respect to the investment of the
assets of the Plan involved in the Loan or that render
investment advice (as defined in the preceding sentence) with
respect to the assets of the Plan involved in the Loan. In the
event Lender fails to communicate and keep current during the
term of any Loan such information, Lender rather than Borrower
shall be deemed to have made the representation and warranty in
the first sentence of this clause (b).
18.3 Borrower and Lender agree that:
(a) the term "Collateral" shall mean cash, securities issued or
guaranteed by the United States government or its agencies or
instrumentalities, or irrevocable bank letters of credit
issued by a person other than Borrower or an affiliate
thereof;
(b) prior to the making of any Loans hereunder, Borrower shall
provide Lender with (A) the most recent available audited
statement of Borrower's financial condition and (B) the most
recent available unaudited statement of Borrower's financial
condition (if more recent than the most recent audited
statement), and each Loan made hereunder shall be deemed a
representation by Borrower that there has been no material
adverse change in Borrower's financial condition subsequent
to the date of the latest financial statements or information
furnished in accordance herewith;
12
(c) the Loan may be terminated by Lender at any time, whereupon
Borrower shall deliver the Loaned Securities to Lender within
the lesser of (A) the customary delivery period for such
securities; (B) five Business Days and -C- the time
negotiated for such delivery between Borrower and Lender;
provided, however, that Borrower and Lender may agree to a
longer period only if permitted by Prohibited Transaction
Exemption 81-6; and
(d) the Collateral transferred shall be security only for
obligations of Borrower to the Plan with respect to Loans,
and shall not be security for any obligation of Borrower to
any agent or affiliate of the Plan.
19. SINGLE AGREEMENT.
19.1 Borrower and Lender acknowledge that, and have entered into this
Agreement in reliance on the fact that, all Loans hereunder
constitute a single business and contractual relationship and
have been entered into in consideration of each other.
Accordingly, Borrower and Lender hereby agree that payments,
deliveries and other transfers made by either of them in respect
of any Loan shall be deemed to have been made in consideration
of payments, deliveries and other transfers in respect of any
other Loan hereunder, and the obligations to make any such
payments, deliveries and other transfers may be applied against
each other and netted. In addition, Borrower and Lender
acknowledge that, and have entered into this Agreement in
reliance on the fact that, all Loans hereunder have been entered
into in consideration of each other. Accordingly, Borrower and
Lender hereby agree that (a) each shall perform all of its
obligations in respect of each Loan hereunder, and that a
default in the performance of any such obligation by Borrower or
by Lender (the "Defaulting Party") in any Loan hereunder shall
constitute a default by the Defaulting Party under all such
Loans hereunder, and (b) the non-defaulting party shall be
entitled to set off claims and apply property held by it in
respect of any Loan hereunder against obligations owing to it in
respect of any other Loan with the Defaulting Party.
19.2 Notwithstanding the above, where the Lender has executed this
Agreement on behalf of the funds listed in Annex 1 (the
"Funds"), each Fund shall be deemed a "Lender" and to have
entered into a wholly separate loan agreement relating to any
Loaned Security and Loan Fee. In no event shall such Fund have
any responsibility for the obligations of any other Fund arising
from such Fund lending securities to Borrower.
20. APPLICABLE LAW.
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAW PRINCIPLES THEREOF.
21. WAIVER.
The failure of a party to this Agreement to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a
waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement. All
waivers in respect of a Default must be in writing.
22. REMEDIES.
All remedies hereunder and all obligations with respect to any Loan
shall survive the termination of the relevant Loan, return of Loaned
Securities or Collateral and termination of this Agreement.
13
23. NOTICES AND OTHER COMMUNICATIONS.
Unless another address is specified in writing by the respective party
to whom any notice or other communication is to be given hereunder, all
such notices or communications shall be in writing or confirmed in
writing and delivered at the respective addresses set forth in Schedule
A attached hereto. All notices shall be effective upon actual receipt,
provided, however, that if any notice shall be received by a party on a
day on which such party is not open for business at its office located
at the address set forth in Schedule A, such notice shall be deemed to
have been received by such party at the opening of business on the next
day on which such party is open for business at such address.
24. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
24.1 EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
NEW YORK STATE COURT SITTING IN NEW YORK CITY, AND ANY APPELLATE
COURT FROM ANY SUCH COURT, SOLELY FOR THE PURPOSE OF ANY SUIT,
ACTION OR PROCEEDING BROUGHT TO ENFORCE ITS OBLIGATIONS
HEREUNDER OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY LOAN
HEREUN-DER AND (B) WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO, ANY DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT AND
ANY RIGHT OF JURISDICTION ON ACCOUNT OF ITS PLACE OF RESIDENCE
OR DOMICILE.
24.2 EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY RIGHT THAT IT
MAY HAVE TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
25. MISCELLANEOUS.
This Agreement supersedes any other agreement between the parties hereto
concerning loans of securities between Borrower and Lender. This
Agreement shall not be assigned by either party without the prior
written consent of the other party and any attempted assignment without
such consent shall be null and void. Subject to the foregoing, this
Agreement shall be binding upon and shall ensure to the benefit of
Borrower and Lender and their respective heirs, representatives,
successors and assigns. This Agreement may be terminated by either party
upon written notice to the other, subject only to fulfillment of any
obligations then outstanding. This Agreement shall not be modified,
except by an instrument in writing signed by the party against whom
enforcement is sought. The parties hereto acknowledge and agree that, in
connection with this Agreement and each Loan hereunder, time is of the
essence. Each provision and agreement herein shall be treated as
separate and independent from any other provision herein and shall be
enforceable notwithstanding the unenforceability of any such other
provision or agreement.
26. DEFINITIONS.
For the purposes hereof:
26.1 "Broker-Dealer" shall mean any person that is a broker
(including a municipal securities broker), dealer, municipal
securities dealer, government securities broker or government
securities dealer as defined in the Exchange Act, regardless of
whether the activities of such person are conducted in the
United States or otherwise require such person to register with
the Securities and Exchange Commission or other regulatory body.
14
26.2 "Business Day" shall mean, with respect to any Loan hereunder, a
day on which regular trading occurs in the principal market for
the Loaned Securities subject to such Loan, provided, however,
that for purposes of Section 15, such term shall mean a day on
which regular trading occurs in the principal market for the
securities whose value is being determined. Notwithstanding the
foregoing, (i) for purposes of Section 8, "Business Day" shall
mean any day on which regular trading occurs in the principal
market for any Loaned Securities or for any securities Collateral
under any outstanding Loan here-under and "next Business Day"
shall mean the next day on which a transfer of Collateral may be
effected in accordance with Section 16; and (ii) in no event
shall a Saturday or Sunday be considered a Business Day.
26.3 "Clearing Organization" shall mean The Depository Trust Company,
or, if agreed to by Borrower and Lender, such other clearing
agency at which Borrower (or Borrower's agent) and Lender (or
Lender's agent) maintain accounts, or a book-entry system
maintained by a Federal Reserve Bank.
26.4 "Collateral" shall mean, whether now owned or hereafter acquired
and to the extent permitted by applicable law, (a) any property
which Borrower and Lender agree shall be acceptable collateral
prior to the Loan and which is transferred to Lender pursuant to
Section 3 or 8 (including as collateral, for definitional
purposes, any letters of credit mutually acceptable to Lender and
Borrower), (b) any property substituted therefor pursuant to
Section 3.5, -C- all accounts in which such property is deposited
and all securities and the like in which any cash collateral is
invested or reinvested, and (d) any proceeds of any of the
foregoing. For purposes of return of Collateral by Lender or
purchase or sale of securities pursuant to Section 12 or 13, such
term shall include securities of the same issuer, class and
quantity as the Collateral initially transferred by Borrower to
Lender.
26.5 "Customer" shall mean any person that is a customer of Borrower
under Rule 15c3-3 under the Exchange Act or any comparable
regulation of the Secretary of the Treasury under Section 15C of
the Exchange Act (to the extent that Borrower is subject to such
Rule or comparable regulations).
26.6 "Cutoff Time" shall mean a time on a Business Day by which a
transfer of cash, securities or other property must be made by
Borrower or Lender to the other, as shall be agreed by Borrower
and Lender in Schedule B or otherwise orally or in writing or, in
the absence of any such agreement, as shall be determined in
accordance with market practice.
26.7 "Default" shall have the meaning assigned in Section 11.
26.8 "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
26.9 "Federal Funds Rate" shall mean the rate of interest (expressed
as an annual rate), as published in Federal Reserve Statistical
Release H.15(519) or any publication substituted therefor,
charged for federal funds (dollars in immediately available
funds borrowed by banks on an overnight unsecured basis) on that
day or, if that day is not a banking day in New York City, on
the next preceding banking day.
26.10 "Foreign Securities" shall mean, unless otherwise agreed,
securities that are principally cleared and settled outside the
United States.
26.11 "Government Securities" shall mean government securities as
defined in Section 3(a)(42)(A)-C- of the Exchange Act.
15
26.12 "LIBOR" shall mean for any date, the offered rate for deposits
in U.S. dollars for a period of three months which appears on
the Reuters Screen LIBO page as of 11:00 A.M., London time, on
such date (or, if at least two such rates appear, the arithmetic
mean of such rates).
26.13 "Loan" shall mean a loan of securities hereunder.
26.14 "Loaned Security" shall mean any security which is a security as
defined in the Exchange Act, transferred in a Loan hereunder
until such security (or an identical security) is transferred
back to Lender hereunder, except that, if any new or different
security shall be exchanged for any Loaned Security by
recapitalization, merger, consolidation or other corporate
action, such new or different security shall, effective upon
such exchange, be deemed to become a Loaned Security in
substitution for the former Loaned Security for which such
exchange is made. For purposes of return of Loaned Securities by
Borrower or purchase or sale of securities pursuant to Section
12 or 13, such term shall include securities of the same issuer,
class and quantity as the Loaned Securities, as adjusted
pursuant to the preceding sentence.
16
26.15 "Plan" shall mean (a) any "employee benefit plan" as defined in
Section 3(3) of the Employee Retirement Income Security Act of
1974 which is subject to Part 4 of Subtitle B of Title I of such
Act; (b) any "plan" as defined in Section 4975(e)(1) of the
Internal Revenue Code of 1986; or -C- any entity the assets of
which are deemed to be assets of any such "employee benefit
plan" or "plan" by reason of the Department of Labor's plan
asset regulation, 29 C.F.R. Section 2510.3-101.
XXXXXXX, XXXXX & CO.
By:
-----------------------------------------
Title:
-----------------------------------------
Date:
-----------------------------------------
XXXXXXXX|APPLEGATE INSTITUTIONAL FUND, AS LISTED IN ANNEX I
By:
-----------------------------------------
Title:
-----------------------------------------
Date:
-----------------------------------------
17
SCHEDULE A to the Master Securities Loan Agreement dated as of July 7, 1999
between Xxxxxxxx|Xxxxxxxxx Institutional Fund, as listed in Annex I and Xxxxxxx,
Sachs & Co.
NAMES AND ADDRESSES FOR COMMUNICATIONS
XXXXXXX, XXXXX & CO.:
Mr. Xxxx Xxxxxxxxx
Managing Director
0 Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone - (000) 000-0000
Facsimile- (000) 000-0000
XXXXXXXX|XXXXXXXXX INSTITUTIONAL FUND, AS LISTED IN ANNEX I :
Mr. Xxxx Xxxxx
Chief Financial Officer
Xxxxxxxx|Xxxxxxxxx Capital Management
000 Xxxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Telephone - (000) 000-0000
Facsimile - (000) 000-0000
18
SCHEDULE B to the Master Securities Loan Agreement dated as of July 7, 1999
between Xxxxxxxx|Applegate Institutional Fund, as listed in Annex I and Xxxxxxx,
Xxxxx & Co.
1. Section 5 of the Agreement is hereby amended by:
- inserting in subsection (i) the designation "U.S." before the phrase
"Government Securities"
- deleting subsection (ii) in its entirety and substituting in place
thereof the following phrase "(ii) in the case of securities subject to
Rule 15c6-1, the standard settlement date i.e. the third business day
following such notice."
- inserting a new subsection (iii) to read as follows "(iii) in the
case of all other securities, the standard settlement date following
such notice."
2. Section 25 is modified by inserting at the end of the second sentence
therein after the word "void" the following language:
"; except for an assignment or delegation of all of either party's rights and
obligations hereunder in whatever form either party determines may be
appropriate to a partnership, corporation, trust or other organization in
whatever form that succeeds to all or substantially all of such party's assets
and business and that assumes such obligations by contract, operation of law or
otherwise. Upon any such delegation and assumption of obligations, such party
shall be relieved of and fully discharged from all obligations hereunder,
whether such obligations arose before or after such delegation and assumption."
19
Master Securities Loan Agreement
Annex I
Xxxxxxxx|Applegate Institutional Funds:
Global Blue Chip Fund
Convertible Fund
Emerging Countries Fund
Global Growth & Income Fund
Global Technology Fund
International Core Growth Fund
International Small Cap Growth Fund
Large Cap Growth Fund
Latin America Fund
Mid Cap Growth Fund
Mini Cap Growth Fund
Pacific Rim Fund
Small Cap Growth Fund
Worldwide Growth Fund
20
