Exhibit (h)(19)
SECURITIES LENDING AGENCY AGREEMENT
AGREEMENT, dated as of April 2, 2007, between Barclays Global Investors
Funds, a Delaware statutory trust ( the "Trust"), acting on behalf of the funds
listed on Schedule A hereto and any future series or portfolio of the Trust
(each, a "Fund"), and Barclays Global Investors, N.A., a national banking
association ("BGI").
WHEREAS, the Trust is registered as an open-end investment company under the
Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Trust, on behalf of each Fund, desires to appoint BGI as its
agent for the purpose of lending Securities in the Account (as defined below)
as more fully set forth below; and
WHEREAS, BGI has agreed to act as the Trust's agent for such purpose pursuant
to the terms hereof;
NOW, THEREFORE, for and in consideration of the mutual promises set forth
herein, the parties hereto agree as follows:
1. Definitions.
Whenever used in this Agreement, unless the context otherwise requires, the
following words shall have the meanings set forth below. Capitalized terms used
but not defined herein shall have the meaning assigned to them in the
applicable Securities Lending Agreement.
1.1 "Account" shall mean the custodial account or accounts established and
maintained by the Custodian on behalf of each Fund for the safekeeping of
Securities and monies of the Fund from time to time.
1.2 "Approved Investment" shall mean any type of investment permitted for
Cash Collateral under the Securities Lending Guidelines.
1.3 "Authorized Person" shall be any officer of the Trust and any other
person, whether or not any such person is an officer or employee of the Trust,
duly authorized by resolutions of the Trust to give Oral Instructions and/or
Written Instructions on behalf of the Trust, such persons to be designated in a
Certificate which contains a specimen signature of such person.
1.4 "Book-Entry System" shall mean the Federal Reserve/Treasury book-entry
system for receiving and delivering Government Securities (as defined herein),
its successors or equivalent and nominees.
1.5 "Borrower" shall mean any entity which is permitted to borrow
Securities from the Trust pursuant to then applicable law, regulation, and/or
interpretation and pursuant to the Securities Lending Guidelines, and which has
a valid Securities Lending Agreement in place with BGI.
1.6 "Business Day" shall mean, with respect to a Fund for which Securities
loans are outstanding pursuant to this Agreement, a day on which both such Fund
and BGI are open for business.
1.7 "Cash Collateral" shall mean either Fed funds or New York Clearing
House funds or their equivalent if denominated in U.S. dollars, or the
equivalent if the Cash Collateral is denominated in a currency other than U.S.
dollars, as applicable for a particular loan of Securities.
1.8 "Certificate" shall mean any notice, instruction, schedule or other
instrument in writing, authorized or required by this Agreement to be given to
BGI, which is actually received by BGI and signed on behalf of the Trust by an
Authorized Person or a person reasonably believed by BGI to be an Authorized
Person.
1.9 "Collateral" shall mean Cash Collateral, Government Securities and
Letters of Credit, plus such other collateral as may be then permitted by
applicable law, regulation and/or interpretation, and the Securities Lending
Guidelines.
1.10 "Collateral Account" shall mean a segregated account or accounts
established and maintained by the Custodian for the purpose of holding
Collateral and Approved Investments, and interest, dividends and other payments
and distributions received with respect to Collateral and Approved Investments
("Distributions"). A Collateral Account may include a joint account as
permitted by the Securities Lending Guidelines.
1.11 "Custodian" shall mean Investors Bank & Trust Company, a trust
company organized and existing under the laws of the Commonwealth of
Massachusetts, or such other company that may from time to time be retained as
custodian by the Trust with respect to one or more Funds.
1.12 "Depository" shall mean the Depository Trust Company, Euroclear, and
any other securities depository, sub-depository or clearing agency (and their
respective successors and nominees) authorized under applicable law or
regulation to act as a securities depository, sub-depository or clearing
agency, including any foreign securities depository or sub-depository for the
Trust.
1.13 "Earnings Account" shall mean a segregated account established and
maintained by the Custodian for the purpose of receiving any Securities Loan
Fee paid by Borrowers in connection with Securities loans hereunder.
1.14 "Government Security" shall mean book-entry Treasury securities (as
defined in Subpart 0 of Treasury Department Circular No. 300, 31 C.F.R. 306)
and any other securities issued or guaranteed by the United States government
or any agency or instrumentality of the United States government.
1.15 "Letter of Credit" shall mean an unconditional and irrevocable letter
of credit in favor of BGI as agent for the Fund issued by a bank other than the
Borrower, the creditworthiness of which has been deemed to be acceptable by BGI
and which meets any applicable requirements in the Securities Lending
Guidelines.
1.16 "Oral Instructions" shall mean verbal instructions actually received
by BGI from an Authorized Person or from a person reasonably believed by BGI to
be an Authorized Person.
1.17 "Rebate" shall mean the amount payable by the Fund to a Borrower in
connection with Securities loans at any time collateralized by Cash Collateral.
1.18 "Securities Lending Agreement" shall mean with respect to any
Borrower, the agreement pursuant to which BGI lends securities on behalf of its
customers (including the Fund) to such Borrower, as amended from time to time,
which agreement shall meet any applicable requirements in the Securities
Lending Guidelines. The Securities Lending Agreement may be in the form of a
master agreement covering a series of Securities lending transactions from
multiple lenders, including the Trust.
1.19 "Securities Lending Guidelines" shall mean guidelines governing the
Trust's Securities lending program adopted by the Trust and provided to BGI
from time to time. The Securities Lending Guidelines may address any aspect of
the Trust's Securities lending program, including without limitation the kinds
of Securities that may be lent, permissible forms of Collateral, permissible
Approved Investments, the selection of Borrowers, and regular reporting to the
Trust.
1.20 "Securities Loan Fee" shall mean the amount payable by a Borrower to
BGI, as agent for the Fund, pursuant to the applicable Securities Lending
Agreement in connection with Securities loans, if any, collateralized by
Collateral other than Cash Collateral.
1.21 "Security" shall mean any Government Securities, non-U.S. securities,
U.S. common stock and other equity securities, bonds, debentures, corporate
debt securities, notes, mortgages or other obligations, and any certificates,
warrants or other instruments representing rights to receive, purchase, or
subscribe for the same, or evidencing or representing any other rights or
interests therein, which are available for lending pursuant to Section 2.2 of
this Agreement.
1.22 "Written Instructions" shall mean written communications actually
received by BGI from an Authorized Person or from a person reasonably believed
by BGI to be an Authorized Person by letter, memorandum, telegram, cable,
telex, telecopy facsimile, computer, video (CRT) terminal or other on-line
system, or any other method whereby BGI is able to verify with a reasonable
degree of certainty the identity of the sender.
2. Appointment; Scope of Agency Authority.
2.1 Appointment. The Trust, on behalf of each Fund, hereby appoints BGI as
its agent to lend Securities in the Account to Borrowers from time to time as
hereinafter set forth, and BGI hereby accepts appointment as such agent and
agrees to so act.
2.2 Securities Subject to Lending. Unless the Trust provides BGI Written
Instructions to the contrary, all Securities maintained in the Account shall be
available for lending pursuant to this Agreement.
2.3 Securities Lending Agreement.
(a) Attached hereto as Exhibit A are the standard forms of Securities
Lending Agreements in effect between BGI and the Borrowers as of the date
hereof. BGI shall provide the Trust with any proposed material amendments or
changes, and notify the Trust of any such amendments or changes, to any form of
Securities Lending Agreement to be used prior to their effectiveness. The Trust
may elect, without penalty, to terminate any Borrower if it opposes the change.
(b) BGI is hereby authorized to lend Securities in the Account to
Borrowers pursuant to the Securities Lending Agreements, this Agreement and the
Securities Lending Guidelines.
2.4 Loan Opportunities. The Trust on behalf of each Fund acknowledges and
agrees that BGI shall have the right to decline to make any loans of Securities
under any Securities Lending Agreement, to discontinue lending or to terminate
any loans of Securities under any Securities Lending Agreement in its sole
discretion. The Trust on behalf of each Fund agrees that it shall have no claim
against BGI based on, or relating to, loans made for other customers, or loan
opportunities refused hereunder, whether or not BGI has made fewer or more
loans for any other customer than for the Fund, and whether or not any loan for
another customer, or the opportunity refused, could have resulted in loans made
hereunder.
2.5 Use of Book-Entry System and Depositories. The Trust on behalf of each
Fund hereby authorizes BGI on a continuous and on-going basis, to deposit in
the Book-Entry System and any Depositories all Securities eligible for deposit
therein and to utilize the Book-Entry System and Depositories to the extent
possible in connection with its receipt and delivery of Securities, Collateral,
Approved Investments and monies under this Agreement. Where Securities,
Collateral (other than Cash Collateral) and Approved Investments eligible for
deposit in the Book-Entry System or a Depository are transferred to the
Account, BGI shall identify or cause to be identified as belonging to the Fund
a quantity of securities in a fungible bulk of securities shown on BGI's
account on the books of the Book-Entry System or the applicable Depository.
Securities, Collateral and Approved Investments deposited in the Book-Entry
System or a Depository will be commingled in accounts which include assets held
by BGI for customers, including but not limited to accounts in which BGI acts
in a fiduciary or agency capacity, as well as assets held by or on behalf of
other clients or participants of the Book-Entry System or Depository.
2.6 Use of Third-Party Service Providers. The Trust on behalf of each Fund
hereby acknowledges and agrees that BGI may utilize third-party service
providers to perform or analyze the functions described herein, including
service providers in which BGI may have an ownership interest. As permitted by
Section 5.8 below, these services may require the transmission, use or sharing
of data created in Securities lending transactions involving the Funds. BGI
shall bear the cost of any such service providers out of its portion of the
proceeds from Securities lending.
3. Representations and Warranties.
3.1 Trust's Representations. The Trust hereby represents and warrants to
BGI, which representations and warranties shall be deemed to be continuing and
to be reaffirmed on any day that a Securities loan hereunder is outstanding,
that:
(a) This Agreement and the Securities Lending Guidelines have been
approved by the Board of Trustees of the Trust; this Agreement is, and, if
properly entered into under the terms of this Agreement and the Securities
Lending Guidelines, each Securities loan and Approved Investment will be,
legally and validly entered into by the Trust on behalf of each Fund, does not,
and will not, violate any statute, regulation, rule, order or judgment binding
on the Fund, or any provision of the Trust's charter or by-laws, or any
agreement binding on the Trust or affecting its property, and is enforceable
against the Trust and each Fund in accordance with its terms, except as may be
limited by bankruptcy, insolvency or similar laws, or by equitable principles
relating to or limiting creditors' rights generally;
(b) The person executing this Agreement and all Authorized Persons
acting on behalf of the Trust or any Fund has and have been duly and properly
authorized to do so;
(c) Each Fund is lending Securities as principal for its own account
and it will not transfer, assign or encumber its interest in, or rights with
respect to, any Securities loans;
(d) All Securities available for lending pursuant to Section 2.2 of
this Agreement are free and clear of all liens, claims, security interests and
encumbrances that would preclude their being lent as contemplated by this
Agreement. The Trust shall promptly notify BGI in the manner agreed between the
parties from time to time when any Securities are no longer subject to the
representations contained in this sub-paragraph (d).
3.2 BGI's Representations. BGI hereby represents and warrants to the
Trust, which representations and warranties shall be deemed to be continuing
and to be reaffirmed on any day that a Securities loan hereunder is
outstanding, that:
(a) This Agreement is legally and validly entered into by BGI, does
not and will not, violate any statute, regulation, rule, order or, judgment
binding on BGI, or any provision of BGI's charter or by-laws, or any agreement
binding on BGI or affecting its property, and is enforceable against BGI in
accordance with its terms, except as may be limited by bankruptcy, insolvency
or similar laws, or by equitable principles relating to or limiting creditors'
rights generally;
(b) Both the person executing this Agreement on behalf of BGI and all
persons acting on BGI's behalf pursuant to this Agreement have been duly and
properly authorized to do so; and
(c) It will comply with all laws, rules and regulations, including
without limitation the conditions of any exemptive orders granted to the Trust
by the Securities and Exchange Commission with respect to securities lending
transactions, if required, applicable to the Securities lending transactions
contemplated by this Agreement.
4. Securities Lending Transactions.
4.1 Compliance with Securities Lending Guidelines. BGI hereby acknowledges
receipt of the current Securities Lending Guidelines. The Trust shall promptly
notify BGI of any changes to the Securities Lending Guidelines. BGI
acknowledges and agrees that it shall only lend Securities on behalf of the
Funds in accordance with the conditions of the Securities Lending Guidelines
applicable to the Funds' lending agent.
4.2 Loan Initiation. From time to time BGI may lend Securities to
Borrowers and deliver such Securities against receipt of Collateral in
accordance with the applicable Securities Lending Agreement and the Securities
Lending Guidelines. If instructed by the Trust in writing, BGI shall refrain
from lending a particular Security or from making loans to a particular
Borrower.
4.3 Receipt of Collateral; Approved Investments.
(a) With respect to any Securities loan entered into on behalf of a
Fund, BGI shall require that the Borrower deliver and maintain collateral that
is equal at all times during the term of the loan to at least the market value
of the Securities loaned and any accrued interest thereon. If Cash Collateral
is received, BGI is hereby authorized and directed, without obtaining any
further approval from the Fund, to invest and reinvest all or substantially all
of the Cash Collateral received in any Approved Investments, including in the
name of and on behalf of the Fund to redeem, withdraw or sell the same, and to
receive distributions in the name of and on behalf of the Fund in accordance
with the Securities Lending Guidelines. The Trust hereby agrees to execute all
necessary documents and take all necessary actions reasonably requested by BGI
in order to permit BGI to so act with regard to Approved Investments. BGI shall
instruct the Custodian to credit all Collateral, Approved Investments and
Distributions received with respect to Collateral and Approved Investments to
the Collateral Account and xxxx its books and records to identify the Fund's
ownership thereof as appropriate.
(b) All Approved Investments shall be for the account and risk of the
Fund. To the extent any loss arising out of Approved Investments results in a
deficiency in the amount of Collateral available for return to a Borrower
pursuant to the Securities Lending Agreement, the Fund agrees to pay BGI on
demand cash in an amount equal to such deficiency.
(c) Except as otherwise provided herein, all Collateral, Approved
Investments and Distributions credited to the Collateral Account shall be
controlled by, and subject only to the instructions of, BGI, and BGI shall not
be required to comply with any instructions of the Trust with respect to the
same.
4.4 Distributions on Loaned Securities. Except as provided in the next
sentence, all amounts received from the Borrower equivalent to all interest,
dividends, and other distributions which the owner of the loaned Securities is
entitled to receive shall be credited to the Fund's Account on the date such
amounts are delivered by the Borrower to the Custodian. Any non-cash
distribution on loaned Securities which is in the nature of a stock split or a
stock dividend shall be added to the applicable loan (and shall be considered
to constitute loaned Securities) as of the date such non-cash distribution is
declared payable whether or not it has been received by the Borrower, provided
that any such addition shall be conditional upon the actual receipt of such
non-cash distribution and may be reversed by the Custodian to the extent that
such non-cash distribution is not received.
4.5 Xxxx to Market. BGI shall on each Business Day xxxx to market in U.S.
dollars the value of all Collateral (other than Cash Collateral) and Securities
loaned hereunder and accordingly receive and release Collateral in accordance
with the applicable Securities Lending Agreement.
4.6 Collateral Substitutions. BGI may accept substitutions of Collateral
in accordance with the applicable Securities Lending Agreement and the
Securities Lending Guidelines and shall credit all such substitutions to the
Collateral Account; provided, however, that unless other Collateral has been
mutually agreed upon in writing by BGI and the Fund (including by means of the
Securities Lending Guidelines), no other Collateral may be substituted for Cash
Collateral.
4.7 Termination of Loans. In addition to BGI's authority to terminate a
loan of Securities pursuant to the terms of the applicable Securities Lending
Agreement as described in Section 2.4 above, BGI shall terminate any Securities
loan to a Borrower in accordance with the applicable Securities Lending
Agreement promptly:
(a) upon receipt by BGI of Oral Instructions or Written Instructions
instructing it to terminate a Securities loan; provided that the Trust may
require that each Security must be returned to the Fund by no later than the
date which is the standard settlement date for trades of such Security entered
into on the date such Oral Instruction or Written Instruction is received by
BGI;
(b) upon receipt by BGI of Oral Instructions or Written Instructions
pursuant to the Securities Lending Guidelines to no longer lend to a particular
Borrower;
(c) upon receipt of written notice from the Trust terminating this
Agreement with respect to one or more Funds in accordance with Section 6; or
(d) as contemplated by the Securities Lending Guidelines.
4.8 Securities Loan Fee. BGI shall receive any applicable Securities Loan
Fee paid by any Borrower pursuant to a Securities Lending Agreement and credit
all such amounts received to the Earnings Account.
4.9 Borrower's Financial Condition. BGI has delivered to Barclays Global
Fund Advisors, the investment adviser to the portfolios of Master Investment
Portfolio in which the Funds invest their assets, each Borrower's most recent
statements required to be furnished to customers by Rule 17a-5(c) of the
Securities and Exchange Commission under the Securities Exchange Act of 1934,
as have been made available to BGI pursuant to the Securities Lending
Agreements. BGI shall promptly deliver to any investment adviser for the Funds
all statements and financial information subsequently delivered to BGI and
required to be furnished to BGI under the Securities Lending Agreements.
4.10 Transfer Taxes and Necessary Costs. All transfer taxes and necessary
costs with respect to the transfer of the loaned Securities by the Fund to the
Borrower and the Borrower to
the Fund upon the termination of the loan shall be paid by the Borrower in
accordance with the applicable Securities Lending Agreement.
4.11 BGI's Obligation. Except as specifically set forth herein, or in any
applicable Securities Lending Agreement, BGI shall have no duty or obligation
to take action to effect payment by a Borrower of any amounts owed by such
Borrower pursuant to the Securities Lending Agreement.
4.12 Loans to Affiliated Borrowers. The Trust and BGI have obtained an
exemptive order from the Securities and Exchange Commission that permits BGI to
lend Securities on behalf of the Funds to Affiliated Borrowers, provided that
such loans are made in accordance with the conditions and procedures outlined
in the exemptive order. BGI shall only make loans to Affiliated Borrowers in
accordance with such conditions and procedures, as they may be amended from
time to time, and only so long as they remain applicable, and in accordance
with the Securities Lending Guidelines.
5. Concerning BGI.
5.1 Standard of Care: Indemnification.
(a) It is expressly understood and agreed that in exercising its
rights and performing its obligations hereunder, BGI owes no fiduciary duty to
the Fund. BGI shall not be liable for any costs, expenses, damages, liabilities
or claims (including reasonable attorneys and accountants fees) incurred by the
Fund, except to the extent those costs, expenses, damages, liabilities or
claims result from BGI's material breach of this Agreement or BGI's negligence,
willful misconduct, bad faith, or reckless disregard of its obligations and
duties hereunder.
Neither the Trust nor BGI shall have any obligation hereunder for
costs, expenses, damages, liabilities or claims (including reasonable attorneys
and accountants fees), which are sustained or incurred by reason of any action
or inaction by the Book-Entry System or any Depository or their respective
successors or nominees. In no event shall either party be liable to the other
for special, punitive or consequential damages, arising under or in connection
with this Agreement, even if previously informed of the possibility of such
damages.
(b) The Trust on behalf of each Fund agrees to indemnify BGI and to
hold it harmless from and against any and all costs, expenses, damages,
liabilities or claims (including reasonable fees and expenses of counsel) which
BGI may sustain or incur or which may be asserted against BGI by reason of or
as a result of any action taken or omitted by BGI in connection with or arising
out of BGI's operating under and in compliance with this Agreement, except
those costs, expenses, damages, liabilities or claims arising out of BGI's
negligence, bad faith, willful misconduct, or reckless disregard of its
obligations and duties hereunder. Actions taken or omitted in reasonable
reliance upon Oral Instructions or Written Instructions, any Certificate, or
upon any information, order, indenture, stock certificate, power of attorney,
assignment, affidavit or other instrument reasonably believed by BGI to be
genuine or bearing the signature of a person or persons reasonably believed by
BGI to be genuine or bearing the signature of a person or persons reasonably
believed to be authorized to sign, countersign or execute the same, shall be
presumed to have been taken or omitted in good faith.
(c) BGI shall indemnify and hold harmless the Trust and each Fund, its
Board of Trustees and its agents, Barclays Global Fund Advisors and any
investment adviser for the Funds from any and all loss, liability, costs,
damages, actions, and claims ("Loss") to the extent that any such Loss arises
out of the material breach of this Agreement by or negligent acts or omissions,
bad faith or willful misconduct of BGI, its officers, directors or employees or
any of its agents or subcustodians in connection with the Securities lending
activities undertaken pursuant to this Agreement, provided that BGI's
indemnification obligation with respect to the acts or omissions of its
subcustodians shall not exceed the indemnification provided by the applicable
subcustodian to BGI. The Fund and/or Trust may obtain indemnification against
losses due to a Borrower default from a third party, including from an
affiliate of BGI. BGI is not a party to any such arrangement.
5.2 No Obligation to Inquire. Without limiting the generality of the
foregoing, BGI shall be under no obligation to inquire into, and shall not be
liable for, the validity of the issue of any Securities at any time held in the
Account or Approved Investments held in the Collateral Account.
5.3 Advice of Counsel. BGI may, with respect to questions of law, apply
for and obtain the advice and opinion of counsel which may be counsel to the
Trust, provided that the foregoing shall not be deemed to be a waiver by the
Trust of any conflict of such counsel.
5.4 No Collection Obligations. BGI shall be under no obligation or duty to
take action to effect collection from the issuer of any amounts payable in
respect of Securities or Approved Investments if the issuer of such Securities
or Approved Investments is in default, or if payment is refused after due
demand and presentation.
5.5 Pricing Methods. BGI is authorized to utilize any recognized pricing
information service or any other means of valuation specified in the applicable
Securities Lending Agreement ("Pricing Methods") in order to perform its
valuation responsibilities with respect to loaned Securities, Collateral and
Approved Investments, and the Fund agrees to hold BGI harmless from and against
any loss or damage suffered or incurred as a result of errors or omissions of
any such Pricing Methods.
5.6 BGI's Fee as Securities Lending Agent, etc.
(a) In connection with each Securities loan hereunder, the Fund shall,
subject to Section 5.6(c), pay to BGI a percentage (the "BGI Fee Percentage")
of the net amount earned from Securities lending activities, consisting of
income earned on the investment and reinvestment of Cash Collateral plus any
Securities Loan Fees otherwise paid by the Borrowers. The net amount to be paid
to BGI shall be computed after deducting any rebate due to the Borrowers under
the applicable Securities Lending Agreement with the Borrowers. The BGI Fee
Percentage shall be such percentage as may from time to time be agreed upon by
the Board of the Trust and BGI and shall be set forth in writing. As of the
date of this Agreement, the BGI Fee Percentage is fifty percent (50%).
(b) BGI is authorized on a monthly basis to charge the fee owed to it
by a Fund under this paragraph 5.6 against the applicable Collateral Account or
Earnings Account. Such
fee shall be charged and paid at the end of each month. Subject to
Section 5.6(c), BGI shall simultaneously therewith direct the Custodian to pay
to the applicable Fund the net amount earned from Securities lending
activities, as described in Section 5.6(a), that is not paid to BGI as its fee.
(c) BGI shall be responsible for all transaction fees and all other
operational costs relating to Securities lending activities, other than
extraordinary expenses (e.g., litigation and indemnification expenses). In the
event that a Fund directly or indirectly bears all or a portion of any fees and
expenses payable to BGI, BGFA or any other affiliate of BGI as a result of the
investment of Cash Collateral in any joint account, fund or similar vehicle,
such fees and expenses (other than extraordinary expenses) thereof borne by the
Fund, as computed at least monthly by BGI or its designee, shall, without
limitation, be deemed a transaction fee or other operational cost for which BGI
shall be responsible.
5.7 Reliance on Certificates and Instructions. The Trust agrees to furnish
to BGI a new Certificate whenever any then Authorized Person ceases to be an
Authorized Person or additional Authorized Persons are appointed and
authorized. BGI shall be entitled to rely, and shall be fully protected in
acting, upon any Certificate, any information contained on any schedule hereto
as may be amended in accordance with the terms hereof, and any Written or Oral
Instruction actually received by BGI and reasonably believed by BGI to be duly
authorized and delivered. The Trust agrees to forward to BGI Written
Instructions confirming Oral Instructions in such manner so that such Written
Instructions are received by BGI by the close of business of the same day that
such Oral Instructions are given to BGI. The Trust agrees that the fact that
such confirming Written Instructions are not received on a timely basis or that
contrary instructions are received by BGI shall in no way affect the validity
or enforceability of the transactions authorized by the Trust. BGI shall use
reasonable efforts to report any subsequently received contrary instructions.
In this regard, the records of BGI shall be presumed to reflect accurately any
Oral Instructions given by an Authorized Person or a person reasonably believed
by BGI to be an Authorized Person.
5.8 Disclosure of Information. BGI may not disclose or supply any
information regarding the Trust or Fund unless required by any law or
governmental regulation now or hereafter in effect or requested to do so by
Trust; provided that BGI may disclose or supply information regarding the Trust
and/or Fund and any transactions authorized by this Agreement as necessary in
the sole discretion of BGI in order to facilitate, effect or continue any
Securities loans hereunder or to assist in the analysis of the performance of
the Securities lending program.
5.9 Reports. BGI shall furnish the Trust and the Fund with reports
relating to loans hereunder and other information requested by the Trust and
shall provide such reports to the Trust's Board of Trustees upon request or as
may be required by the Securities Lending Guidelines.
5.10 Force Majeure. Notwithstanding anything to the contrary in this
Agreement, in no event shall a party to this Agreement be liable to the other
party or any third party for losses resulting from (i) any acts of God, fires,
floods, or other disturbances of nature, epidemics, strikes, riots,
nationalization, expropriation, currency restrictions, terrorist activity, or
insurrection, or (ii) other happenings or events beyond the reasonable control
or anticipation of
the party affected, provided that (A) the affected party has in place
appropriate business continuity procedures, systems and facilities and (B) the
affected party uses its best efforts to avoid or remove the cause of such
losses.
5.11 No Implied Duties.
(a) BGI shall have no duties or responsibilities whatsoever except
such duties and responsibilities as are specifically set forth in this
Agreement and in the applicable Securities Lending Agreement, and no covenant
or obligation shall be implied against BGI in connection with this Agreement.
(b) Neither the Trust nor any Fund shall have any duties or
responsibilities whatsoever except such duties and responsibilities as are
specifically set forth in this Agreement, and no covenant or obligation shall
be implied against the Trust or any Fund in connection with this Agreement.
(c) Nothing in this Agreement shall be understood to imply that in
performing the functions described herein, BGI is acting in the capacity of an
investment adviser or is providing advice as to the value of securities or as
to the advisability of investing in, purchasing, or selling securities.
6. Termination.
This Agreement may be terminated at any time with respect to one or more
Funds by either party upon delivery to the other party of a written notice
specifying the date of such termination, which shall be not less than 60 days
after the date of receipt of such notice. Both parties shall take all
commercially reasonable steps to cooperate to provide a smooth transition in
the event of a termination. Notwithstanding any such notice, this Agreement
shall continue in full force and effect with respect to any loans of Securities
that remain outstanding as of the date of termination; provided, however, that
BGI shall promptly terminate all loans of Securities made pursuant to this
Agreement and shall not make any further loans of Securities pursuant this
Agreement.
7. Miscellaneous.
7.1 Exclusivity. During the term of this Agreement, the Trust agrees that
it shall not enter into any other agreement with any third party whereby such
third party is permitted to make loans on behalf of any Fund of any Securities
held by BGI in the Account from time to time; provided, however, that nothing
in this provision shall prevent the Trust from terminating this Agreement
and/or hiring a securities lending agent other than BGI. The parties agree that
this provision does not prohibit the Trust from maintaining this Agreement
during any transition period to another Securities lending agent.
7.2 Notices.
(a) Any notice or other instrument in writing, authorized or required by
this Agreement to be given to BGI, shall be sufficiently given if addressed to
BGI and received by it at its offices at 00 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX
00000, Attention: Securities Lending
Department, with a copy to the General Counsel or at such other place as BGI
may from time to time designate in writing.
(b) Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Trust shall be sufficiently given if
addressed to the Fund and/or Trust and received by--Mutual Fund Administration,
c/o Barclays Global Fund Advisors, 00 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000,xxxx a copy to: Legal Department, or at such other place as the Trust may
from time to time designate in writing.
7.3 Cumulative Rights and No Waiver. Each and every right granted to a
party hereunder or under any other document delivered hereunder or in
connection herewith, or allowed it by law or equity, shall be cumulative and
may be exercised from time to time. No failure on the part of a party to
exercise, and no delay in exercising, any right shall operate as a waiver
thereof, nor shall any single or partial exercise by a party of any right
preclude any other or future exercise thereof or the exercise of any other
right.
7.4 Severability. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations shall not in any way be affected or impaired thereby, and if any
provision is inapplicable to any person or circumstances, it shall nevertheless
remain applicable to all other persons and circumstances.
7.5 Amendments. This Agreement may not be amended or modified in any
manner except by a written agreement executed by both parties.
7.6 Successors and Assigns. This Agreement shall extend to and shall be
binding upon the parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by either party
without the written consent of the other.
7.7 Governing Law. This Agreement shall be construed in accordance with
the laws of the State of California without regard to conflict of laws
principles thereof.
7.8 No Third Party Beneficiaries. In performing hereunder, BGI is acting
solely on behalf of the Trust and, except as specifically provided herein, no
contractual or service relationship shall be deemed to be established hereby
between BGI and any other person.
7.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
7.10 SIPA Notice. THE PROVISIONS OF THE SECURITIES INVESTOR PROTECTION ACT
OF 1970 MAY NOT PROTECT THE FUND WITH RESPECT TO LOANS HEREUNDER AND,
THEREFORE, THE COLLATERAL DELIVERED TO BGI AS AGENT FOR THE FUND MAY CONSTITUTE
THE ONLY SOURCE OF SATISFACTION OF A BORROWER'S OBLIGATION IN THE EVENT SUCH
BORROWER FAILS TO RETURN THE LOANED SECURITIES.
7.11 Survival of Indemnification. The indemnifications provided by a party
hereunder shall be a continuing obligation of such party, its successors and
assigns, notwithstanding the termination of any loans hereunder or of this
Agreement.
7.12 It is understood and agreed that none of the interestholders,
officers, agents or trustees of the Trust or any Fund shall be personally
liable hereunder. All persons contracting with or having a claim against the
Trust with respect to a Fund shall look solely to the assets of such Fund for
payment of such contract or claim, and no Fund shall be liable for the
obligations of any other Fund.
[End of Text]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers, thereunto duly authorized, as of the day
and year first above written.
BARCLAYS GLOBAL INVESTORS FUNDS
By: /s/ Xxx Xxxxxxxxx
-----------------------------
Xxx X. Xxxxxxxxx
Title: Chairman
BARCLAYS GLOBAL INVESTORS, N.A.
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------
H. Xxxxxxx Xxxxxxxx
Title: Managing Director
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Xxxxxxx Xxxxxx
Title: Managing Director
Approved by the Board of Trustees of Barclays Global Investors Funds on
March 15, 2007.
Schedule A
Institutional Money Market Fund
Prime Money Market Fund
Government Money Market Fund
Treasury Money Market Fund
S&P 500 Stock Fund
Bond Index Fund
LifePath Retirement Portfolio
LifePath 2010 Portfolio
LifePath 2020 Portfolio
LifePath 2030 Portfolio
LifePath 2040 Portfolio
Approved by the Board of Trustees of Barclays Global Investors Funds on
March 15, 2007.
Exhibit A
The Bond Market Association
Master Securities
Loan Agreement
2000 Version
Dated as of:______, 200_
Between: Barclays Global Investors, N.A., as agent or trustee for various
agency or trust accounts specified in Appendix A
and______________________________________________________________________
1. Applicability.
From time to time the parties hereto may enter into transactions in which one
party ("Lender") will lend to the other party ("Borrower") certain Securities
(as defined herein) against a transfer of Collateral (as defined herein). Each
such transaction shall be referred to herein as a "Loan" and, unless otherwise
agreed in writing, shall be governed by this Agreement, including any
supplemental terms or conditions contained in an Annex or Schedule hereto and
in any other annexes identified herein or therein as applicable hereunder.
Capitalized terms not otherwise defined herein shall have the meanings provided
in Section 25.
2. Loans of Securities.
2.1 Subject to the terms and conditions of this Agreement, Borrower or Lender
may, from time to time, seek to initiate a transaction in which Lender will
lend Securities to Borrower. Borrower and Lender shall agree on the terms of
each Loan (which terms may be amended during the Loan), including the issuer of
the Securities, the amount of Securities to be lent, the basis of compensation,
the amount of Collateral to be transferred by Borrower, and any additional
terms. Such agreement shall be confirmed (a) by a schedule and receipt listing
the Loaned Securities provided by Borrower to Lender in accordance with
Section 3.2, (b) through any system that compares Loans and in which Borrower
and Lender are participants, or (c) in such other manner as may be agreed by
Borrower and Lender in writing. Such confirmation (the "Confirmation"),
together with the Agreement, shall constitute conclusive evidence of the terms
agreed between Borrower and Lender with respect to the Loan to which the
Confirmation relates, unless with respect to the Confirmation specific
objection is made promptly after receipt thereof. In the event of any
inconsistency between the terms of such Confirmation and this Agreement, this
Agreement shall prevail unless each party has executed such Confirmation.
2.2 Notwithstanding any other provision in this Agreement regarding when a Loan
commences, unless otherwise agreed, a Loan hereunder shall not occur until the
Loaned Securities and the Collateral therefor have been transferred in
accordance with Section 15.
2000 Master Securities Loan Agreement-1
3. Transfer of Loaned Securities.
3.1 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.
3.2 Unless otherwise agreed, Borrower shall provide Lender, for 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.
3.3 Notwithstanding any other provision in this Agreement, 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.
4. Collateral.
4.1 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 the Margin Percentage of the Market Value
of the Loaned Securities.
4.2 The Collateral transferred by Borrower to Lender, as adjusted pursuant to
Section 9, shall be security for Borrower's obligations in respect of such Loan
and for any other obligations of Borrower to Lender hereunder. Borrower hereby
pledges with, assigns to, and grants Lender a continuing first priority
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 UCC. 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 Retransfer Collateral
only (a) if Lender is a 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 "securities
intermediary" within the meaning of the UCC.
4.3 Except as otherwise provided herein, upon transfer to Lender of the Loaned
Securities on the day a Loan is terminated pursuant to Section 6, Lender shall
be obligated to transfer the Collateral (as adjusted pursuant to Section 9) 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 15, the
next day on which such a transfer may be effected.
4.4 If Borrower transfers Collateral to Lender, as provided in Section 4.1, 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
2000 Master Securities Loan Agreement-2
Borrower does not transfer Collateral to Lender as provided in Section 4.1,
Lender shall have the absolute right to the return of the Loaned Securities.
4.5 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 substituting such Collateral is acting as Borrower, shall equal or
exceed the agreed upon Margin Percentage of the Market Value of the Loaned
Securities.
4.6 Prior to the expiration of any letter of credit supporting Borrower's
obligations hereunder, Borrower shall, no later than the Extension Deadline,
(a) obtain an extension of the expiration of such letter of credit, (b) 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, or (c) transfer such other Collateral to Lender as may be
acceptable to Lender.
5. Fees for Loan.
5.1 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 Market Value 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.
5.2 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 and (ii) the termination of all Loans
hereunder (or, if a transfer of cash in accordance with Section 15 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 and at such other times, if any, as may be customary in accordance
with market practice.
2000 Master Securities Loan Agreement-3
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.
6. Termination of the Loan.
6.1
(a) Unless otherwise agreed, either party may terminate a Loan on a termination
date established by notice given to the other party prior to the Close of
Business on a Business Day. The termination date established by a termination
notice shall be a date no earlier than the standard settlement date that would
apply to a purchase or sale of the Loaned Securities (in the case of a notice
given by Lender) or the non-cash Collateral securing the Loan (in the case of a
notice given by Borrower) entered into at the time 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 Securities, the third Business Day following such notice.
(b) Notwithstanding paragraph (a) and unless otherwise agreed, 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 if (i) the Collateral for such Loan consists of cash or Government
Securities or (ii) Lender is not permitted, pursuant to Section 4.2, to
Retransfer Collateral.
6.2 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 9) to Borrower in accordance
with Section 4.3.
7. Rights in Respect of Loaned Securities and Collateral.
7.1 Except as set forth in Sections 8.1 and 8.2 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.
7.2 Except as set forth in Sections 8.3 and 8.4 and as otherwise agreed by
Borrower and Lender, if Lender may, pursuant to Section 4.2, Retransfer
Collateral, Borrower hereby waives the right to vote, or to provide any consent
or take any similar action with respect to, any such Collateral in the event
that the record date or deadline for such vote, consent or other action falls
during the term of a Loan and such Collateral is not required to be returned to
Borrower pursuant to Section 4.5 or Section 9.
8. Distributions.
8.1 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.
2000 Master Securities Loan Agreement-4
8.2 Any cash Distributions made on or in respect of the Loaned Securities,
which Lender is entitled to receive pursuant to Section 8.1, 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 that Lender is
entitled to receive pursuant to Section 8.1 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.
8.3 Borrower shall be entitled to receive all 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.
8.4 Any cash Distributions made on or in respect of such Collateral, which
Borrower is entitled to receive pursuant to Section 8.3, 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. Non-cash Distributions that Borrower is
entitled to receive pursuant to Section 8.3 shall be added to the Collateral on
the date of distribution and shall be considered such for all purposes, except
that if each Loan secured by such Collateral has terminated, Lender shall
forthwith transfer the same to Borrower.
8.5 Unless otherwise agreed by the parties:
(a) If (i) Borrower is required to make a payment (a "Borrower Payment") with
respect to cash Distributions on Loaned Securities under Sections 8.1 and 8.2
("Securities Distributions"), or (ii) Lender is required to make a payment (a
"Lender Payment") with respect to cash Distributions on Collateral under
Sections 8.3 and 8.4 ("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.
(b) No additional amounts shall be payable to a Payee under subsection
(a) above to the extent 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
2000 Master Securities Loan Agreement-5
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.
8.6 To the extent that, under the provisions of Sections 8.1 through 8.5, (a) a
transfer of cash or other property by Borrower would give rise to a Margin
Excess or (b) a transfer of cash or other property by Lender would give rise to
a Margin Deficit, 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).
9. Xxxx to Market.
9.1 If Lender is a Customer, 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 100%
of the Market Value of all the outstanding Loaned Securities subject to such
Loan, Borrower shall transfer additional Collateral no later than the Close of
Business on 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 100% of the Market Value of the Loaned Securities.
9.2 In addition to any rights of Lender under Section 9.1, if at any time 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 Margin
Percentage of the Market Value of the Loaned Securities.
9.3 Subject to Borrower's obligations under Section 9.1, if at any time 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, after
deduction of such amounts, shall thereupon not exceed the Margin Percentage of
the Market Value of the Loaned Securities.
9.4 Borrower and Lender may agree, with respect to one or more Loans hereunder,
to xxxx the values to market pursuant to Sections 9.2 and 9.3 by separately
valuing the Loaned Securities lent and the Collateral given in respect thereof
on a Loan-by-Loan basis.
9.5 Borrower and Lender may agree, with respect to any or all Loans hereunder,
that the respective rights of Lender and Borrower under Sections 9.2 and 9.3
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).
2000 Master Securities Loan Agreement-6
9.6 If any notice is given by Borrower or Lender under Sections 9.2 or 9.3 at
or before the Margin Notice Deadline on any day on which a transfer of
Collateral may be effected in accordance with Section 15, the party receiving
such notice shall transfer Collateral as provided in such Section no later than
the Close of Business on such day. If any such notice is given after the Margin
Notice Deadline, the party receiving such notice shall transfer such Collateral
no later than the Close of Business on the next Business Day following the day
of such notice.
10.Representations.
The parties to this Agreement hereby make the following representations and
warranties, which shall continue during the term of any Loan hereunder:
10.1 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.
10.2 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.
10.3 Each party hereto represents and warrants that it is acting for its own
account unless it expressly specifies otherwise in writing and complies with
Section 11.1(b).
10.4 Borrower represents and warrants that it has, or will have at the time of
transfer of any Collateral, the right to grant a first priority security
interest therein subject to the terms and conditions hereof.
10.5
(a) Borrower represents and warrants that it (or the person to whom it relends
the Loaned Securities) is borrowing or will borrow Loaned Securities that are
Equity Securities for the purpose of making delivery of such Loaned 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.
(b) Borrower and Lender may agree, as provided in Section 24.2, that Borrower
shall not be deemed to have made the representation or warranty in subsection
(a) with respect to any Loan. By entering into any such agreement, Lender shall
be deemed to have represented and warranted to Borrower (which representation
and warranty shall be deemed to be repeated on each day during the term of the
Loan) that Lender is either (i) an "exempted borrower" within the meaning of
Regulation T or (ii) a member of a national securities exchange or a broker or
dealer registered with the U.S. Securities and Exchange Commission that is
entering into such Loan to finance its activities as a market maker or an
underwriter.
10.6 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.
2000 Master Securities Loan Agreement-7
11.Covenants.
11.1 Each party 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).
11.2 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.
00.Xxxxxx of Default.
All Loans hereunder may, at the option of the non-defaulting party (which
option shall be deemed to have been exercised immediately upon the occurrence
of an Act of Insolvency), be terminated immediately upon the occurrence of any
one or more of the following events (individually, a "Default"):
12.1 if any Loaned Securities shall not be transferred to Lender upon
termination of the Loan as required by Section 6;
12.2 if any Collateral shall not be transferred to Borrower upon termination of
the Loan as required by Sections 4.3 and 6;
12.3 if either party shall fail to transfer Collateral as required by Section 9;
12.4 if either party (a) shall fail to transfer to the other party amounts in
respect of Distributions required to be transferred by Section 8, (b) shall
have been notified of such failure by the other party prior to the Close of
Business on any day, and (c) shall not have cured such failure by the Cutoff
Time on the next day after such Close of Business on which a transfer of cash
may be effected in accordance with Section 15;
12.5 if an Act of Insolvency occurs with respect to either party;
12.6 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;
12.7 if either party notifies the other 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
12.8 if either party (a) shall fail to perform any material obligation under
this Agreement not specifically set forth in clauses 12.1 through 12.7, above,
including but not limited to the payment of fees as required by Section 5, and
the payment of transfer taxes as required by Section 14, (b) shall have been
notified of such failure by the other party prior to the Close of Business on
any day, and (c) shall not have cured such failure by the Cutoff Time on the
next day after such Close of Business on which a transfer of cash may be
effected in accordance with Section 15.
2000 Master Securities Loan Agreement-8
The non-defaulting party shall (except upon the occurrence of an Act of
Insolvency) give notice as promptly as practicable to the defaulting party of
the exercise of its option to terminate all Loans hereunder pursuant to this
Section 12.
13.Remedies.
13.1 Upon the occurrence of a Default under Section 12 entitling Lender to
terminate all Loans hereunder, Lender shall have the right, in addition to any
other remedies provided herein, (a) to purchase a like amount of Loaned
Securities ("Replacement Securities") in the principal market for such Loaned
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 5, 8, 14 and 16. In the event that 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
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 13.1 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 13.1,
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 last bid
quotation from such a source at the most recent Close of Trading. Subject to
Section 18, upon the satisfaction of all obligations hereunder, any remaining
Collateral shall be returned to Borrower.
13.2 Upon the occurrence of a Default under Section 12 entitling Borrower to
terminate all Loans hereunder, Borrower shall have the right, in addition to
any other remedies provided herein, (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 Loaned 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 5, 8 and 16.
In such event, Borrower may treat the Loaned Securities as its own and Lender's
obligation to return a
2000 Master Securities Loan Agreement-9
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 12. 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 13.2 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 13.2, 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 last bid quotation from such a source at the most
recent Close of Trading. Subject to Section 18, upon the satisfaction of all
Lender's obligations hereunder, any remaining Loaned Securities (or remaining
cash proceeds thereof) shall be returned to Lender.
13.3 Unless otherwise agreed, the parties acknowledge and agree that (a) the
Loaned Securities and any Collateral consisting of Securities are of a type
traded in a recognized market, (b) in the absence of a generally recognized
source for prices or bid or offer quotations for any security, the
non-defaulting party may establish the source therefor in its sole discretion,
and (c) all prices and bid and offer quotations shall be increased to include
accrued interest to the extent not already included therein (except to the
extent contrary to market practice with respect to the relevant Securities).
13.4 In addition to its rights hereunder, the non-defaulting party shall have
any rights otherwise available to it under any other agreement or applicable
law.
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 and
with respect to the transfer of Collateral by Borrower to Lender and by Lender
to Borrower upon termination of the Loan or pursuant to Section 4.5 or
Section 9 shall be paid by Borrower.
2000 Master Securities Loan Agreement-10
15.Transfers.
15.1 All transfers by either Borrower or Lender of Loaned Securities or
Collateral consisting of "financial assets" (within the meaning of the UCC)
hereunder shall be by (a) in the case of certificated securities, 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 firm of the New York Stock Exchange, Inc.,
(b) registration of an uncertificated security in the transferee's name by the
issuer of such uncertificated security, (c) the crediting by a Clearing
Organization of such financial assets to the transferee's "securities account"
(within the meaning of the UCC) maintained with such Clearing Organization, or
(d) such other means as Borrower and Lender may agree.
15.2 All transfers of cash hereunder shall be by (a) wire transfer in
immediately available, freely transferable funds or (b) such other means as
Borrower and Lender may agree.
15.3 All transfers of letters 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. Transfers of
letters of credit from Lender to Borrower shall be made by causing such letters
of credit to be returned or by causing the amount of such letters of credit to
be reduced to the amount required after such transfer.
15.4 A transfer of Securities, cash or letters of credit may be effected under
this Section 15 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.
15.5 For the avoidance of doubt, the parties agree and acknowledge that the
term "securities," as used herein (except in this Section 15), shall include
any "security entitlements" with respect to such securities (within the meaning
of the UCC). In every transfer of "financial assets" (within the meaning of the
UCC) hereunder, the transferor shall take all steps necessary (a) to effect a
delivery to the transferee under Section 8-301 of the UCC, or to cause the
creation of a security entitlement in favor of the transferee under
Section 8-501 of the UCC, (b) to enable the transferee to obtain "control"
(within the meaning of Section 8-106 of the UCC), and (c) to provide the
transferee with comparable rights under any applicable foreign law or
regulation.
16.Contractual Currency.
16.1 Borrower and Lender agree that (a) any payment in respect of a
Distribution under Section 8 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
2000 Master Securities Loan Agreement-11
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.
16.2 If for any reason the amount in the Contractual Currency received under
Section 16.1, 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,
immediately pay such additional amount in the Contractual Currency as may be
necessary to compensate for the shortfall.
16.3 If for any reason the amount in the Contractual Currency received under
Section 16.1 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.
17.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 this Agreement or upon initiation of such Loan under Section 2.1. 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:
17.1 Borrower represents and warrants to Lender that it is either (a) a bank
subject to federal or state supervision, (b) a broker-dealer registered under
the Exchange Act or (c) exempt from registration under Section 15(a)(1) of the
Exchange Act as a dealer in Government Securities.
17.2 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
Section 17.2.
2000 Master Securities Loan Agreement-12
17.3 Borrower shall xxxx to market daily each Loan hereunder pursuant to
Section 9.1 as is required if Lender is a Customer.
17.4 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 (i) the most recent available audited statement of Borrower's financial
condition and (ii) 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;
(c) the Loan may be terminated by Lender at any time, whereupon Borrower shall
deliver the Loaned Securities to Lender within the lesser of (i) the customary
delivery period for such Loaned Securities, (ii) five Business Days, and
(iii) 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.
18.Single Agreement.
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.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.
2000 Master Securities Loan Agreement-13
20.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.
21.Survival of 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.
22.Notices and Other Communications.
Any and all notices, statements, demands or other communications hereunder may
be given by a party to the other by telephone, mail, facsimile, e-mail,
electronic message, telegraph, messenger or otherwise to the individuals and at
the facsimile numbers and addresses specified with respect to it in Schedule A
hereto, or sent to such party at any other place specified in a notice of
change of number or address hereafter received by the other party. Any notice,
statement, demand or other communication hereunder will be deemed effective on
the day and at the time on which it is received or, if not received, on the day
and at the time on which its delivery was in good faith attempted; provided,
however, that any notice by a party to the other party by telephone shall be
deemed effective only if (a) such notice is followed by written confirmation
thereof and (b) at least one of the other means of providing notice that are
specifically listed above has previously been attempted in good faith by the
notifying party.
23.SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
23.1 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
HEREUNDER 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.
23.2
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.
24.Miscellaneous.
24.1 Except as otherwise agreed by the parties, 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
2000 Master Securities Loan Agreement-14
and shall inure to the benefit of Borrower and Lender and their respective
heirs, representatives, successors and assigns. This Agreement may be
terminated by either party upon 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.
24.2 Any agreement between Borrower and Lender pursuant to Section 10.5(b) or
Section 25.37 shall be made (a) in writing, (b) orally, if confirmed promptly
in writing or through any system that compares Loans and in which Borrower and
Lender are participants, or (c) in such other manner as may be agreed by
Borrower and Lender in writing.
25.Definitions.
For the purposes hereof:
25.1"Act of Insolvency" shall mean, with respect to any party, (a) the
commencement by such party as debtor of any case or proceeding under any
bankruptcy, insolvency, reorganization, liquidation, moratorium, dissolution,
delinquency or similar law, or such party's seeking the appointment or election
of a receiver, conservator, trustee, custodian or similar official for such
party or any substantial part of its property, or the convening of any meeting
of creditors for purposes of commencing any such case or proceeding or seeking
such an appointment or election, (b) the commencement of any such case or
proceeding against such party, or another seeking such an appointment or
election, or the filing against a party of an application for a protective
decree under the provisions of the Securities Investor Protection Act of 1970,
which (i) is consented to or not timely contested by such party, (ii) results
in the entry of an order for relief, such an appointment or election, the
issuance of such a protective decree or the entry of an order having a similar
effect, or (iii) is not dismissed within 15 days, (c) the making by such party
of a general assignment for the benefit of creditors, or (d) the admission in
writing by such party of such party's inability to pay such party's debts as
they become due.
25.2"Bankruptcy Code" shall have the meaning assigned in Section 26.1
25.3"Borrower" shall have the meaning assigned in Section 1.
25.4"Borrower Payment" shall have the meaning assigned in Section 8.5(a).
25.5"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 U.S.
Securities and Exchange Commission or other regulatory body.
25.6 "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 determining the
Market Value of any Securities hereunder, 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
2000 Master Securities Loan Agreement-15
foregoing, (a) for purposes of Section 9, "Business Day" shall mean any day on
which regular trading occurs in the principal market for any Loaned Securities
or for any Collateral consisting of Securities under any outstanding Loan
hereunder and "next Business Day" shall mean the next day on which a transfer
of Collateral may be effected in accordance with Section 15, and (b) in no
event shall a Saturday or Sunday be considered a Business Day.
25.7"Cash Collateral Fee" shall have the meaning assigned in Section 5.1.
25.8"Clearing Organization" shall mean (a) The Depository Trust Company, or, if
agreed to by Borrower and Lender, such other "securities intermediary" (within
the meaning of the UCC) at which Borrower (or Borrower's agent) and Lender (or
Lender's agent) maintain accounts, or (b) a Federal Reserve Bank, to the extent
that it maintains a book-entry system.
25.9"Close of Business" shall mean the time established by the parties 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.
25.10 "Close of Trading" shall mean, with respect to any Security, the end of
the primary trading session established by the principal market for such
Security on a Business Day, unless otherwise agreed by the parties.
25.11 "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 prior to the Loan shall be acceptable collateral and which is
transferred to Lender pursuant to Sections 4 or 9 (including as collateral, for
definitional purposes, any letters of credit mutually acceptable to Lender and
Borrower), (b) any property substituted therefor pursuant to Section 4.5,
(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; provided, however, that if Lender is a
Customer, "Collateral" shall (subject to Section 17.4(a), if applicable) be
limited to cash, U.S. Treasury bills and notes, an irrevocable letter of credit
issued by a "bank" (as defined in Section 3(a)(6)(A)-(C) of the Exchange Act),
and any other property permitted to serve as collateral securing a loan of
securities 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
regulation) pursuant to exemptive, interpretive or no-action relief or
otherwise. If any new or different Security shall be exchanged for any
Collateral by recapitalization, merger, consolidation or other corporate
action, such new or different Security shall, effective upon such exchange, be
deemed to become Collateral in substitution for the former Collateral for which
such exchange is made. For purposes of return of Collateral by Lender or
purchase or sale of Securities pursuant to Section 13, such term shall include
Securities of the same issuer, class and quantity as the Collateral initially
transferred by Borrower to Lender, as adjusted pursuant to the preceding
sentence.
25.12 "Collateral Distributions" shall have the meaning assigned in
Section 8.5(a).
25.13 "Confirmation" shall have the meaning assigned in Section 2.1.
25.14 "Contractual Currency" shall have the meaning assigned in Section 16.1.
2000 Master Securities Loan Agreement-16
25.15 "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 regulation).
25.16 "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.
25.17 "Default" shall have the meaning assigned in Section 12.
25.18 "Defaulting Party" shall have the meaning assigned in Section 18.
25.19 "Distribution" shall mean, with respect to any Security at any time, any
distribution made on or in respect of such Security, including, but not limited
to: (a) cash and all other property, (b) stock dividends, (c) Securities
received as a result of split ups of such Security and distributions in respect
thereof, (d) interest payments, (e) all rights to purchase additional
Securities, and (f) any cash or other consideration paid or provided by the
issuer of such Security in exchange for any vote, consent or the taking of any
similar action in respect of such Security (regardless of whether the record
date for such vote, consent or other action falls during the term of the Loan).
In the event that the holder of a Security is entitled to elect the type of
distribution to be received from two or more alternatives, such election shall
be made by Lender, in the case of a Distribution in respect of the Loaned
Securities, and by Borrower, in the case of a Distribution in respect of
Collateral.
25.20 "Equity Security" shall mean any security (as defined in the Exchange
Act) other than a "nonequity security," as defined in Regulation T.
25.21 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
25.22 "Extension Deadline" shall mean, with respect to a letter of credit, the
Cutoff Time on the Business Day preceding the day on which the letter of credit
expires.
25.23 "FDIA" shall have the meaning assigned in Section 26.4.
25.24 "FDICIA" shall have the meaning assigned in Section 26.5.
25.25 "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.
25.26 "Foreign Securities" shall mean, unless otherwise agreed, Securities that
are principally cleared and settled outside the United States.
25.27 "Government Securities" shall mean government securities as defined in
Section 3(a)(42)(A)-(C) of the Exchange Act.
25.28 "Lender" shall have the meaning assigned in Section 1.
2000 Master Securities Loan Agreement-17
25.29 "Lender Payment" shall have the meaning assigned in Section 8.5(a).
25.30 "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).
25.31 "Loan" shall have the meaning assigned in Section 1.
25.32 "Loan Fee" shall have the meaning assigned in Section 5.1.
25.33 "Loaned Security" shall mean any Security 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 13, such term shall include Securities of the same issuer, class and
quantity as the Loaned Securities, as adjusted pursuant to the preceding
sentence.
25.34 "Margin Deficit" shall have the meaning assigned in Section 9.2.
25.35 "Margin Excess" shall have the meaning assigned in Section 9.3.
25.36 "Margin Notice Deadline" shall mean the time agreed to by the parties in
the relevant Confirmation, Schedule B hereto or otherwise as the deadline for
giving notice requiring same-day satisfaction of xxxx-to-market obligations as
provided in Section 9 hereof (or, in the absence of any such agreement, the
deadline for such purposes established in accordance with market practice).
25.37 "Margin Percentage" shall mean, with respect to any Loan as of any date,
a percentage agreed by Borrower and Lender, which shall be not less than 100%,
unless (a) Borrower and Lender agree otherwise, as provided in Section 24.2,
and (b) Lender is not a Customer. Notwithstanding the previous sentence, in the
event that the writing or other confirmation evidencing the agreement described
in clause (a) does not set out such percentage with respect to any such Loan,
the Margin Percentage shall not be a percentage less than the percentage
obtained by dividing (i) the Market Value of the Collateral required to be
transferred by Borrower to Lender with respect to such Loan at the commencement
of the Loan by (ii) the Market Value of the Loaned Securities required to be
transferred by Lender to Borrower at the commencement of the Loan.
25.38 "Market Value" shall have the meaning set forth in Annex II or otherwise
agreed to by Borrower and Lender in writing. Notwithstanding the previous
sentence, in the event that the meaning of Market Value has not been set forth
in Annex II or in any other writing, as described in the previous sentence,
Market Value shall be determined in accordance with market practice for the
Securities, based on the price for such Securities as of the most recent Close
of Trading obtained from a generally recognized source agreed to by the parties
or the closing bid quotation at the most recent Close of Trading obtained from
such source, plus accrued interest to the extent not included therein (other
than any interest credited or transferred to, or applied to the obligations of,
the other party pursuant to Section 8, unless market practice with respect to
the valuation of such Securities in
2000 Master Securities Loan Agreement-18
connection with securities loans is to the contrary). If the relevant quotation
did not exist at such Close of Trading, then the Market Value shall be the
relevant quotation on the next preceding Close of Trading at which there was
such a quotation. The determinations of Market Value provided for in Annex II
or in any other writing described in the first sentences of this Section 25.38
or, if applicable, in the preceding sentence shall apply for all purposes under
this Agreement, except for purposes of Section 13.
25.39 "Payee" shall have the meaning assigned in Section 8.5(a).
25.40 "Payor" shall have the meaning assigned in Section 8.5(a).
25.41 "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.
25.42 "Regulation T" shall mean Regulation T of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
25.43 "Retransfer" shall mean, with respect to any Collateral, to pledge,
repledge, hypothecate, rehypothecate, lend, relend, sell or otherwise transfer
such Collateral, or to re-register any such Collateral evidenced by physical
certificates in any name other than Borrower's.
25.44 "Securities" shall mean securities or, if agreed by the parties in
writing, other assets.
25.45 "Securities Distributions" shall have the meaning assigned in
Section 8.5(a).
25.46 "Tax" shall have the meaning assigned in Section 8.5(a).
25.47 "UCC" shall mean the New York Uniform Commercial Code.
26.Intent.
26.1 The parties recognize that each Loan hereunder is a "securities contract,"
as such term is defined in Section 741 of Title 11 of the United States Code
(the "Bankruptcy Code"), as amended (except insofar as the type of assets
subject to the Loan would render such definition inapplicable).
26.2 It is understood that 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.
26.3 It is understood that 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.
26.4 The parties agree and acknowledge 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
2000 Master Securities Loan Agreement-19
contract," as such terms are defined in the FDIA and any rules, orders or
policy statements thereunder (except insofar as the type of assets subject to
the Loan would render such definitions inapplicable).
26.5 It is understood that this Agreement constitutes a "netting contract" as
defined in and subject to Title IV of the Federal Deposit Insurance Corporation
Improvement Act of 1991 ("FDICIA") and each payment obligation under any Loan
hereunder shall constitute a "covered contractual payment entitlement" or
"covered contractual payment obligation," respectively, as defined in and
subject to FDICIA (except insofar as one or both of the parties is not a
"financial institution" as that term is defined in FDICIA).
26.6 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 contracts" 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 association
or other self-regulatory organization.
27.DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS.
27.1 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.
27.2 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.
By: Barclays Global Investors, N.A., as agent or trustee for various agency or
trust accounts specified in Appendix A
Title:
-------------------------
Date:
-------------------------
By:
-------------------------
Title:
-------------------------
Date:
-------------------------
2000 Master Securities Loan Agreement-20
Annex I
Party Acting as Agent
This Annex sets forth the terms and conditions governing all transactions in
which a party lending or borrowing Securities, as the case may be ("Agent"), in
a Loan is acting as agent for one or more third parties (each, a "Principal").
Unless otherwise defined, capitalized terms used but not defined in this Annex
shall have the meanings assigned in the Securities Loan Agreement of which it
forms a part (such agreement, together with this Annex and any other annexes,
schedules or exhibits, referred to as the "Agreement") and, unless otherwise
specified, all section references herein are intended to refer to sections of
such Securities Loan Agreement.
1. Additional Representations and Warranties. In addition to the
representations and warranties set forth in the Agreement, Agent hereby makes
the following representations and warranties, which shall continue during the
term of any Loan: Principal has duly authorized Agent to execute and deliver
the Agreement on its behalf, has the power to so authorize Agent and to enter
into the Loans contemplated by the Agreement and to perform the obligations of
Lender or Borrower, as the case may be, under such Loans, and has taken all
necessary action to authorize such execution and delivery by Agent and such
performance by it.
2. Identification of Principals. Agent agrees (a) to provide the other party,
prior to any Loan under the Agreement, with a written list of Principals for
which it intends to act as Agent (which list may be amended in writing from
time to time with the consent of the other party), and (b) to provide the other
party, before the Close of Business on the next Business Day after agreeing to
enter into a Loan, with notice of the specific Principal or Principals for whom
it is acting in connection with such Loan. If (i) Agent fails to identify such
Principal or Principals prior to the Close of Business on such next Business
Day or (ii) the other party shall determine in its sole discretion that any
Principal or Principals identified by Agent are not acceptable to it, the other
party may reject and rescind any Loan with such Principal or Principals, return
to Agent any Collateral or Loaned Securities, as the case may be, previously
transferred to the other party and refuse any further performance under such
Loan, and Agent shall immediately return to the other party any portion of the
Loaned Securities or Collateral, as the case may be, previously transferred to
Agent in connection with such Loan; provided, however, that (A) the other party
shall promptly (and in any event within one Business Day of notice of the
specific Principal or Principals) notify Agent of its determination to reject
and rescind such Loan and (B) to the extent that any performance was rendered
by any party under any Loan rejected by the other party, such party shall
remain entitled to any fees or other amounts that would have been payable to it
with respect to such performance if such Loan had not been rejected. The other
party acknowledges that Agent shall not have any obligation to provide it with
confidential information regarding the financial status of its Principals;
Agent agrees, however, that it will assist the other party in obtaining from
Agent's Principals such information regarding the financial status of such
Principals as the other party may reasonably request.
3. Limitation of Agent's Liability. The parties expressly acknowledge that if
the representations and warranties of Agent under the Agreement, including this
Annex, are true and correct in all material respects during the term of any
Loan and Agent otherwise complies with the provisions of this Annex, then
(a) Agent's obligations under the Agreement shall not include a guarantee of
performance by its Principal or Principals and (b) the other party's remedies
shall not include a right of setoff against obligations, if any, of Agent
arising in other transactions in which Agent is acting as principal.
2000 Master Securities Loan Agreement AI-1
4. Multiple Principals.
(a) In the event that Agent proposes to act for more than one Principal
hereunder, Agent and the other party shall elect whether (i) to treat Loans
under the Agreement as transactions entered into on behalf of separate
Principals or (ii) to aggregate such Loans as if they were transactions by a
single Principal. Failure to make such an election in writing shall be deemed
an election to treat Loans under the Agreement as transactions on behalf of
separate Principals.
(b) In the event that Agent and the other party elect (or are deemed to elect)
to treat Loans under the Agreement as transactions on behalf of separate
Principals, the parties agree that (i) Agent will provide the other party,
together with the notice described in Section 2(b) of this Annex, notice
specifying the portion of each Loan allocable to the account of each of the
Principals for which it is acting (to the extent that any such Loan is
allocable to the account of more than one Principal), (ii) the portion of any
individual Loan allocable to each Principal shall be deemed a separate Loan
under the Agreement, (iii) the xxxx to market obligations of Borrower and
Lender under the Agreement shall be determined on a Loan-by-Loan basis (unless
the parties agree to determine such obligations on a Principal-by-Principal
basis), and (iv) Borrower's and Lender's remedies under the Agreement upon the
occurrence of a Default shall be determined as if Agent had entered into a
separate Agreement with the other party on behalf of each of its Principals.
(c) In the event that Agent and the other party elect to treat Loans under the
Agreement as if they were transactions by a single Principal, the parties agree
that (i) Agent's notice under Section 2(b) of this Annex need only identify the
names of its Principals but not the portion of each Loan allocable to each
Principal's account, (ii) the xxxx to market obligations of Borrower and Lender
under the Agreement shall, subject to any greater requirement imposed by
applicable law, be determined on an aggregate basis for all Loans entered into
by Agent on behalf of any Principal, and (iii) Borrower's and Lender's remedies
upon the occurrence of a Default shall be determined as if all Principals were
a single Lender or Borrower, as the case may be.
(d) Notwithstanding any other provision of the Agreement (including, without
limitation, this Annex), the parties agree that any transactions by Agent on
behalf of a Plan shall be treated as transactions on behalf of separate
Principals in accordance with Section 4(b) of this Annex (and all xxxx to
market obligations of the parties shall be determined on a Loan-by-Loan basis).
5. Interpretation of Terms. All references to "Lender" or "Borrower," as the
case may be, in the Agreement shall, subject to the provisions of this Annex
(including, among other provisions, the limitations on Agent's liability in
Section 3 of this Annex), be construed to reflect that (i) each Principal shall
have, in connection with any Loan or Loans entered into by Agent on its behalf,
the rights, responsibilities, privileges and obligations of a "Lender" or
"Borrower," as the case may be, directly entering into such Loan or Loans with
the other party under the Agreement, and (ii) Agent's Principal or Principals
have designated Agent as their sole agent for performance of Lender's
obligations to Borrower or Borrower's obligations to Lender, as the case may
be, and for receipt of performance by Borrower of its obligations to Lender or
Lender of its obligations to Borrower, as the case may be, in connection with
any Loan or Loans under the Agreement (including, among other things, as Agent
for each Principal in connection with transfers of securities, cash or other
property and as agent for giving and receiving all notices under the
Agreement). Both Agent and its Principal or Principals shall be deemed
"parties" to the Agreement and all references to a "party" or "either party" in
the Agreement shall be deemed revised accordingly (and any
2000 Master Securities Loan Agreement AI-2
Default by Agent under the Agreement shall be deemed a Default by Lender or
Borrower, as
the case may be).
By: Barclays Global Investors, N.A., as agent or trustee for various agency or
trust accounts specified in Appendix A
Title:
-------------------------
Date:
-------------------------
By:
-------------------------
Title:
-------------------------
Date:
-------------------------
2000 Master Securities Loan Agreement AI-3
Annex II
Market Value
Unless otherwise agreed by Borrower and Lender:
1. 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 at the most recent Close
of Trading or, if there was no sale on the Business Day of the most recent
Close of Trading, by the last sale price at the Close of Trading 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.
2. If the principal market for the Securities to be valued is the
over-the-counter market, and the Securities are quoted on The Nasdaq Stock
Market ("Nasdaq"), their Market Value shall be the last sale price on Nasdaq at
the most recent Close of Trading or, if the Securities are issues for which
last sale prices are not quoted on Nasdaq, the last bid price at such Close of
Trading. If the relevant quotation did not exist at such Close of Trading, then
the Market Value shall be the relevant quotation on the next preceding Close of
Trading at which there was such a quotation.
3. Except as provided in Section 4 of this Annex, if the principal market for
the Securities to be valued is the over-the-counter market, and the Securities
are not quoted on Nasdaq, their Market Value shall be determined in accordance
with market practice for such Securities, based on the price for such
Securities as of the most recent Close of Trading obtained from a generally
recognized source agreed to by the parties or the closing bid quotation at the
most recent Close of Trading obtained from such a source. If the relevant
quotation did not exist at such Close of Trading, then the Market Value shall
be the relevant quotation on the next preceding Close of Trading at which there
was such a quotation.
4. If the Securities to be valued are Foreign Securities, their Market Value
shall be determined as of the most recent Close of Trading in accordance with
market practice in the principal market for such Securities.
5. The Market Value of a letter of credit shall be the undrawn amount thereof.
6. All determinations of Market Value under Sections 1 through 4 of this Annex
shall include, where applicable, accrued interest to the extent not already
included therein (other than any interest credited or transferred to, or
applied to the obligations of, the other party pursuant to Section 8 of the
Agreement), unless market practice with respect to the valuation of such
Securities in connection with securities loans is to the contrary.
7. The determinations of Market Value provided for in this Annex shall apply
for all purposes under the Agreement, except for purposes of Section 13 of the
Agreement.
By: Barclays Global Investors, N.A., as agent or trustee for various agency or
trust accounts specified in Appendix A
Title:
-------------------------
Date:
-------------------------
By:
-------------------------
Title:
-------------------------
Date:
-------------------------
2000 Master Securities Loan Agreement AII-1
Annex III
Term Loans
This Annex sets forth additional terms and conditions governing Loans
designated as "Term Loans" in which Lender lends to Borrower a specific amount
of Loaned Securities ("Term Loan Amount") against a pledge of cash Collateral
by Borrower for an agreed upon Cash Collateral Fee until a scheduled
termination date ("Termination Date"). Unless otherwise defined, capitalized
terms used but not defined in this Annex shall have the meanings assigned in
the Securities Loan Agreement of which it forms a part (such agreement,
together with this Annex and any other annexes, schedules or exhibits, referred
to as the "Agreement").
1. The terms of this Annex shall apply to Loans of Equity Securities only if
they are designated as Term Loans in a Confirmation therefor provided pursuant
to the Agreement and executed by each party, in a schedule to the Agreement or
in this Annex. All Loans of Securities other than Equity Securities shall be
"Term Loans" subject to this Annex, unless otherwise agreed in a Confirmation
or other writing.
2. The Confirmation for a Term Loan shall set forth, in addition to any terms
required to be set forth therein under the Agreement, the Term Loan Amount, the
Cash Collateral Fee and the Termination Date. Lender and Borrower agree that,
except as specifically provided in this Annex, each Term Loan shall be subject
to all terms and conditions of the Agreement, including, without limitation,
any provisions regarding the parties'respective rights to terminate a Loan.
3. In the event that either party exercises its right under the Agreement to
terminate a Term Loan on a date (the "Early Termination Date") prior to the
Termination Date, Lender and Borrower shall, unless otherwise agreed, use their
best efforts to negotiate in good faith a new Term Loan (the "Replacement
Loan") of comparable or other Securities, which shall be mutually agreed upon
by the parties, with a Market Value equal to the Market Value of the Term Loan
Amount under the terminated Term Loan (the "Terminated Loan") as of the Early
Termination Date. Such agreement shall, in accordance with Section 2 of this
Annex, be confirmed in a new Confirmation at the commencement of the
Replacement Loan and be
executed by each party. Each Replacement Loan shall be subject to the same
terms as the corresponding Terminated Loan, other than with respect to the
commencement date and the identity of the Loaned Securities. The Replacement
Loan shall commence on the date on which the parties agree which Securities
shall be the subject of the Replacement Loan and shall be scheduled to
terminate on the scheduled Termination Date of the Terminated Loan.
4. Borrower and Lender agree that, except as provided in Section 5 of this
Annex, if the parties enter into a Replacement Loan, the Collateral for the
related Terminated Loan need not be returned to Borrower and shall instead
serve as Collateral for such Replacement Loan.
5. If the parties are unable to negotiate and enter into a Replacement Loan for
some or all of the Term Loan Amount on or before the Early Termination Date,
(a) the party requesting termination of the Terminated Loan shall pay to the
other party a Breakage Fee computed in accordance with Section 6 of this Annex
with respect to that portion of the Term Loan Amount for which a Replacement
Loan is not entered into and (b) upon the transfer by Borrower to Lender of the
Loaned Securities subject to the Terminated Loan, Lender shall transfer to
Borrower Collateral for the Terminated Loan in accordance with and to the
extent required under the Agreement, provided that no Default has occurred with
respect to Borrower.
2000 Master Securities Loan Agreement AIII-1
6. For purposes of this Annex, the term "Breakage Fee" shall mean a fee agreed
by Borrower and Lender in the Confirmation or otherwise orally or in writing.
In the absence of any such agreement, the term "Breakage Fee" shall mean, with
respect to Loans of Government Securities, a fee equal to the sum of (a) the
cost to the non-terminating party (including all fees, expenses and
commissions) of entering into replacement transactions and entering into or
terminating hedge transactions in connection with or as a result of the
termination of the Terminated Loan, and (b) any other loss, damage, cost or
expense directly arising or resulting from the termination of the Terminated
Loan that is incurred by the non-terminating party (other than consequential
losses or costs for lost profits or lost opportunities), as determined by the
non-terminating party in a commercially reasonable manner, and (c) any other
amounts due and payable by the terminating party to the non-terminating party
under the Agreement on the Early Termination Date.
By: Barclays Global Investors, N.A., as agent or trustee for various agency or
trust accounts specified in Appendix A
Title:
-------------------------
Date:
-------------------------
By:
-------------------------
Title:
-------------------------
Date:
-------------------------
2000 Master Securities Loan Agreement AIII-2
Master Securities Loan Agreement
Schedule B
Defined Terms and Supplemental Provisions
This Schedule B supplements and amends the Master Securities Loan Agreement
dated as of ________________ between Barclays Global Inventors, N.A. ("BGI"),
as agent or trustee for various agency or trust accounts specified in Appendix
A to this Schedule B (each such account, a various agency or trust accounts
specified in Appendix A may be amended from time to time by mutual agreement,
and __________ ("Borrower"). In the event of any inconsistency between the
provisions of this Schedule B ad the provisions of the Agreement, this Schedule
shall prevail.
1. Applicable Annexes, Schedules and Appendices. The following annexes,
schedules and appendices shall from part of this Agreement and shall be
applicable:
Annex I - Party Acting as Agent
Annex II - Market Value
Schedule A - Names and Addresses for Communication
Schedule B - Defined Terms and Supplemental Provisions
Appendix A to Schedule B - Lenders
Appendix B to Schedule B - Supplemental Terms for Foreign Securities
2. Section 3.3 The following sentence is deleted: "If, however, any Loan is
deemed to be a loan of money by Borrower to Lender, the Borrower shall
have, and Lender shall be deemed to have granted, a security interest in
the Loan Securities and the proceeds thereof."
3. Section 4.2. The following is deleted from the fifth sentence: "only
(a) if Lender is a Broker-Dealer or (b) in the event of a Default by
Borrower". The word "it" is deleted from the last line and replaced by "if
BGI or its agent is".
4. Section 4.4. The following words are inserted at the end: ", and Borrower
shall have the immediate obligation to return such Loan Securities to
Lender".
5. Section 4.6. The following is inserted before the first sentence: "If a
Letter of Credit is accepted by Lender as Collateral, Borrower agrees that
at any time Lender may by notice to Borrower require that Borrower, on the
Business Day following the date of delivery of such notice, substitute
Collateral consisting of, in the discretion of Lender, cash or U.S.
Treasury securities for the Letter of credit in an amount of at least
equal to the Market Value of the Letter of Credit for which the Collateral
is substituted; provided, however, that if an Act of Credit fro which the
Collateral is substituted: provided, however, that if an Act of Insolvency
occurs with respect to an Issuing Bank, Borrower shall provided substitute
Collateral by the Cutoff Time on the Business Day on which such Act of
Insolvency occurs."
6. Section 6.1(a). The Section is deleted and replaced in its entirety as
follows:
"6.1 (a) Lender may terminate a Loan on a termination date establish by notice
given to the Borrower at any time. The termination date established by a
termination notice shall be (i) in the case of Government Securities, the
next Business Day following such notice and (ii) in the case of all other
Securities, the standard settlement cycle for such securities, not to
exceed three Business Days following such notice."
7. Section 6.1(b). The Section is deleted and replaced in its entirety as
follows:
"(b) Borrower may terminate a Loan and any Business Day by giving notice
to Lender in the case of (i) U.S. equities and corporate bonds, not later
than 1 p.m. New York time on such Business Day and (ii) U.S. government
bonds, no later than 10 a.m. New York time, and transferring the Loan
Securities to Lender before the Cutoff Time on such Business Day."
8. Section 6.2. The following words are deleted from the beginning of the
sentence: "Unless otherwise agreed". The words "as adjusted pursuant to
Section 9" are deleted and replaced by the following words within the
parentheses: "less amounts due and owing the Lender under this Agreement".
The words "unless Borrower is in Default under this Agreement" and added
at the end of Section 6.2.
9. Section 8.2. The following words are deleted ", so long as Lender is not
in Default to the time of such payment".
10. Section 9.1. The following words are deleted from the first sentence: "If
Lender is a Customer,". In each instance, "100% is deleted and replaced by
"the Margin Percentage".
11. Section 9.2. The following is added at the end of the Section : "Further,
BGI may transfer all or any portion of the Collateral, and hold and apply
an Letter of Credit, among the various accounts for which it is acting as
agent or trustee hereunder as necessary to assure that the obligations of
Borrower to each such account under each Loan are adequately secured."
12. Section 10. The following section is added after Section 10.6:
"10.7 Borrower represents and warrants to Lender that it is either (a) a
bank subject to federal or state supervision, (b) a broker-dealer
registered under the Exchange Act or (c) exempt from registration under
Section 15(a)(1) or the Exchange Act as a dealer in Government Securities."
13. Section 11.1. The following is added: "Borrower acknowledges that BGI is
acting as agent on behalf of multiple Principals."
14. Section 11. The following section is added after Section 11.2:
"11.3 Borrower and Lender agrees that, prior to the making of any Loans
hereunder, Borrower shall provided Lender with (i) the most recent
available audited 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."
15. Section 12.3. The following words are added at the end of the Section: "or
if either party shall fail to transfer the Loaned Securities or the
Collateral, as applicable, required by Section 4.6".
16. The following is added at the end of the Section: "or an affiliate of the
Borrower".
17. Section 12.7. The word "or" is deleted at the end.
18. Section 12. The following sections are added after Section 12.8:
"12.9 if Borrower, or any affiliate of Borrower, shall have been suspended
or expelled from membership or participation in any national securities
exchange or association or other self-regulatory organization or if it is
suspended from dealing in securities by any governmental agency;
"12.10 if, at any time, final judgments for the payment of money in excess
of $10 million shall be rendered against Borrower, and, within 60 days
after the entry thereof, such judgments shall not have been discharged or
execution thereof stayed pending appeal, or if, within 60 days after the
expiration of any such stay, such judgments shall not have been
discharged; or"
"12.11 if a Default with respect to Borrower shall have occurred under any
securities lending arrangement between Borrower and BGI, as trustee or
agent for any of its trust or agency accounts."
19. Section 17. The first sentence is deleted. The words "If Lender so
notifies Borrower, then" are deleted from the beginning of the second
sentence and replaced by the words "With respect to any Loan involving
Securities transferred to the Borrower hereunder that have been or shall
be obtained, directly or indirectly, from or using the assets of any
Plan,".
20. Section 17.2. In the second sentence, the words "Lender agrees that" are
deleted and replaced by "Lender may". The words "it will" is deleted
between the words "hereunder" and "communicate". The words "In the event
Lender fails to communicate and keep current during the term of any Loan
such information" are deleted from last sentence and replaced by the words
"In the absence of such communication by Lender". The following is added
after the last sentence: "With respect to any Loan hereunder involving
Plan assets from a "collective investment fund" (as defined in Prohibited
Transaction Exemption 91-38, 56 Fed Reg. 31966, July 12, 1991) trusteed by
BGI, Lender represents and warrants to the Borrower that BGI, in its
capacity as trustee, is the only person that has discretionary authority
or control with respect to the investment of, or renders investment advice
with respect to, the assets of any Plan that are invested in such
collective investment fund."
21. Section 17.4. The words "irrevocable bank letters of credit issued by a
person other than Borrower or an affiliate thereof" are deleted and
replaced by "Letters of Credit".
22. Section 25. 37. "Margin Percentage" is deleted and replaced in its
entirety as follows:
"Margin Percentage" shall mean, with respect to any Loan as of any date,
not less than 102% with respect to U.S. securities, and not less than 105%
with respect to Foreign Securities."
23. Section 25.11. "Collateral" is deleted and replaced in its entirety by the
definition of Collateral set forth under Section 17.4(a) of the Agreement.
24. Section 25. The following definitions are added after Section 25.47:
"25.48 "Issuing Bank" shall mean any bank that has issued a Letter of
Credit as Collateral under the Agreement."
"25.49 "Letter of Credit" shall mean Collateral in the form of an
irrevocable bank letter of credit issued by a bank, other than an
affiliate of Borrower, and acceptable to Lender, and in a form and
substance satisfactory to Lender."
25. Section 28. A new Section 28 is added to the Agreement:
"28. Indemnification.
Borrower agrees to indemnify and hold harmless Lender from any and all
damages, losses, costs and expenses (including reasonable attorneys' fees
and excise taxes, punitive and other damages under ERISA, but excluding
damages, losses, costs and expenses caused by the gross negligence of
Lender) that it may incur or suffer arising in any way out of (a) the use
by Borrower of Loaned Securities under this Agreement, (b) the failure of
Borrower to return the Loaned Securities or (c) the enforcement of this
Agreement or any Letter of Credit or in the protection, preservation or
enforcement of Lender's rights in connection with any of the Collateral."
26. Annex I. The portion of Section 2 of Annex I beginning with the words ",
and (b) provide" in the third line, and ending with the words before the
last sentence "if such Loan had not been rejected" shall be deleted.
Barclays Global Investors, N.A., as agent [Borrower]
or trustee for various agency or trust
accounts
specified in Appendix A
By: By:
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Title: Title:
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Date: Date:
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By:
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Title:
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Date:
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Master Securities Loan Agreement
Appendix B to Schedule B
Supplemental Terms for Foreign Securities
In addition to the terms of the Agreement (including Schedules, Annexes and
Appendices thereto), this Appendix B to Schedule B of the Agreement shall apply
to Loans of Foreign Securities only. In the event of any inconsistency between
the provisions of this Appendix B and the other provisions of the Agreement
(including Schedules, Annexes and Appendices thereto), this Appendix B shall
prevail.
1. Section 3.1. The following words are added at the end: "; provided that
Lender shall transfer Loaned Securities to Borrower only after Collateral
has been transferred to Lender pursuant to Section 4.1".
2. Section 4.1. The words "or concurrently with" and "but in no case later
than the Close of Business on the day of such transfer," are deleted from
the first sentence.
3. Section 4.6. The words "U.S. Business Day" shall replace "Business Day" in
Section 4.6 as such section is amended by Schedule B to the Agreement.
4. Section 6.1. The Section is deleted in its entirety and replaced with the
following:
"6.1 (a) Borrower may terminate a loan of any Foreign Securities by
(i) giving prior notice of such termination to Lender no later
than 4:00 p.m. New York time on the U.S. Business Day next
preceding the relevant Business Day on which Borrower intends
to return the Foreign Securities to Lender and (ii) delivering
such Foreign Securities to Lender.
(b) In addition to its right to terminate any or all loans
pursuant to Paragraph 12 hereof, Lender may terminate a loan
of any Foreign Securities by giving notice to Borrower at any
time. Any termination date established by an such notice shall
be a date no earlier than the standard settlement date for the
relevant Foreign Securities, but no later than five Business
Days after notice of termination from Lender to Borrower
("Termination Date"). On the Termination Date or at the time
specified in Borrower's notice to Lender, pursuant to
paragraph 5(a) hereof, Borrower shall deliver the Foreign
Securities to Lender."
5. Section 8.2. Section 8.2 is deleted in its entirety and replaced with the
following:
"8.2 Any cash distribution made on or in respect of the Loaned Foreign
Securities, which Lender is entitled to receive pursuant to
Section 8.1, shall be paid by the transfer of cash to Lender by
Borrower within one U.S. Business Day of the Payable Date of a cash
Distribution in an amount equal to such cash Distribution, whether
or not Borrower shall have received such payment from the issuer of
the Foreign Security. When a Non-cash Distribution is declared for
the benefit of holders of a Foreign Security as of a specified
date, pending the Payable Date Lender shall treat the declared
Non-cash Distribution as Securities and Borrower shall deliver
Collateral with respect to the declared Non-cash Distribution to
Lender in accordance with Section 4 and Section 9 hereof. If Lender
shall agree, Borrower may continue after Payable Date to treat a
Non-cash Distribution as Securities loaned to Borrower pursuant to
Section 2. Notwithstanding the provisions of Section 16.1, any
payment of cash from Borrower to Lender under this Section 8.2
shall be made as Lender shall
instruct in the currency specified by Lender. For the purpose of
this Section 8.2., Payable Date shall have the meaning that is
customary with respect of the applicable Foreign Security."
6. Section 8.7. A new Section 8.7 is added to the Agreement:
"8.7 In the event that Borrower takes instructions form Lender relating
to a mandatory or optional corporate action, Borrower shall use its
best efforts to adhere to those instructions and cannot return the
borrowed Foreign Security during the period imposed by Lender. IN
the event that a return is made without the approval of Lender,
Borrower will be liable for any losses, expenses or other costs
related to the corporate action."
7. Section 9.2. The following is added to the end of the Section 9.2, as such
Section is amended by Schedule B to the Agreement: "Borrower shall deliver
such additional Collateral by 1:00 p.m. New York time on the U.S. Business
Day next following the Business Day on which the market value of the
Collateral does not equal or exceed the Margin Percentage of the Market
Value of the Loaned Foreign Securities plus, in the case of Fixed Income
Securities, 100% of accrued interest".
8. Section 12.5. The words "U.S. Business Day" shall replace "Business Day"
in Section 12.5 as such Section is amended by Schedule B to the Agreement.
9. Section 24. A new Section 24.3 is added to the Agreement:
24.3 Lender and/or Borrower may from time to time appoint agents for the
purpose of carrying out all or a portion of their respective
custodial responsibilities under this Agreement. To the extent that
Lender or Borrower has notified the other party in writing of the
name and address of such agent, delivery and redelievery of Foreign
Securities Loaned under this Agreement may be effectuated through
such agent.
10. Australian Foreign Securities. Section 6.1(a) is modified as follows
solely with respect to a Loan of Foreign Securities that are principally
cleared and settled in Australia:
After the word Lender at the end of the sentence, the following is
inserted "; provided, however, that with respect to Australian Foreign
Securities to be returned, Borrower will not terminate a loan of such
Foreign Securities from the ex-date minus 5 Business Days through the
record date plus 1 Business Day."
11. New Zealand Foreign Securities. Section 6.1(a) is modified as follows
solely with respect to a Loan of Foreign Securities that are principally
cleared and settled in New Zealand:
After the word Lender at the end of the sentence, the following is
inserted "; provided, however, that with respect to any New Zealand
Foreign Securities to be returned, Borrower will not terminate a loan of
such Foreign Securities from the ex-date minus 8 Business Days through the
ex-date."
12. South African Foreign Securities. Section 14 to the Agreement is
renumbered 14(a), and the following Section 14(b) is added solely with
respect to a Loan of Foreign Securities that are principally cleared and
settled in South Africa:
"(b) In relation to any Securities issued or traded in South Africa
that are ordinarily subject to Un-certificated Securities Tax
(UST), in accordance with the South
African Un-certificated Securities Tax Act 44 1998, or Stamp
Duty, in accordance with the South African Stamp Duties Act 77
1968, the Borrower undertakes that the transaction (i) will
not exceed 12 months in duration and (ii) is undertaken solely
for the purpose of allowing the borrower to settle a sale of
identical securities.
In the event that actions by the Borrower result in the
transaction failing to meet the conditions laid down for an
exemption from UST or Stamp Duty the Borrower hereby
undertakes to account for and make payment of such taxes for
both the original transfer of securities and any subsequent
return. Further, the Borrower will also satisfy any fines or
levies made by the South African authorities as a result of
such failure, and produce evidence on request of the payment
of such taxes and any other relevant amount."
13. Section 25.8. The word "or" is deleted between the words "accounts," and
"b)", and the following words are added to the end "or (c) such other
clearing agency at which Borrower (or Borrower's agent) or Lender (or
Lender's agent) maintain accounts".
14. Section 25. A new section 25.51 is added to the Agreement:
"25.51 "U.S. Business Day" shall mean the regular hours of any day on
which the U.S. Federal Reserve Bank of New York, the Depository
Trust Company, Borrower and Lender are open for business."
Barclays Global Investors, N.A., as agent [Borrower]
or trustee for various agency or trust
accounts
specified in Appendix A
By: By:
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Title: Title:
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Date: Date:
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By:
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Title:
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Date:
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