Exhibit (h7)
SECURITIES LENDING AGENCY AGREEMENT
BETWEEN
INVESTORS BANK & TRUST COMPANY
AND
XXXXXX XXXX INVESTMENT FUNDS
SECURITIES LENDING AGENCY AGREEMENT
AGREEMENT, dated as of July 24, 2006, between XXXXXX XXXX INVESTMENT
FUNDS, ON BEHALF OF THE PORTFOLIOS LISTED ON APPENDIX I, (the "Lender"), and
Investors Bank & Trust Company, a trust company organized and existing under the
laws of the Commonwealth of Massachusetts (the "Bank").
WHEREAS, the Bank currently acts as custodian for securities held by it in
the Account (as defined below) from time to time on behalf of the Lender; and
WHEREAS, the Lender desires to appoint the Bank as its agent for the
purpose of lending securities in the Account as more fully set forth below; and
WHEREAS, the Bank has agreed to act as the Lender'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 Borrowing Agreement.
1.1 "Account" shall mean the custodial account or accounts established and
maintained by the Bank on behalf of the Lender for the safekeeping of securities
and monies received by the Bank from time to time.
1.2 "Approved Investment" shall mean any type of security, participation
or interest in property in which Cash Collateral may be invested or reinvested,
as set forth on Schedule I hereto (which may be amended from time to time to add
additional Approved Investments with the written consent of the Bank and the
Lender, or to delete any Approved Investment at the written direction of the
Lender).
1.3 "Authorized Person" shall be any officer of the Lender and any other
person, whether or not any such person is an officer or employee of the Lender,
duly authorized by corporate resolutions of the Board of Directors or Trustees,
as the case may be, of the Lender to give Oral and/or Written Instructions on
behalf of the Lender, 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 and nominees.
1.5 "Borrower" shall mean any entity named on Schedule II hereto (as such
Schedule may be amended from time to time to add additional Borrowers with the
written consent of the Bank and the Lender, or to delete any Borrower at the
written direction of the Lender) or any affiliate of such named entity. The
Lender will promptly notify the Bank if at any time:
(a) any potential Borrower which is a broker-dealer registered under
the Securities Exchange Act of 1934 (the "1934 Act"), a broker-dealer exempted
from registration under Section 15(a)(1) of the 1934 Act as a dealer of exempted
Government securities, or a bank, has discretionary authority or control with
respect to the investment of any Securities available for Loan, or
(b) any potential Borrower not described in clause (a) above is a
party who is with respect to the Lender in such a position that a loan would be
considered a conflict of interest under applicable law.
2
If the Lender provides such notice, the Bank shall take appropriate action to
prevent the Lender from engaging in a Loan with any potential Borrower so
identified by the Lender. The Bank shall be entitled to rely upon such notices
from the Lender (and the absence of such notices) in its operation of this
securities lending program.
1.6 "Cash Collateral" shall mean either fed funds or New York Clearing
House funds, as applicable for a particular loan of Securities.
1.7 "Certificate" shall mean any notice, instruction, schedule or other
instrument in writing, authorized or required by this Agreement to be given to
the Bank, which is actually received by the Bank and signed on behalf of the
Lender by an Authorized Person or a person reasonably believed by the Bank to be
an Authorized Person.
1.8 "Collateral" shall mean Cash Collateral, Government Securities and
Letters of Credit.
1.9 "Collateral Account" shall mean a segregated account established and
maintained by the Bank for the purpose of holding Collateral, Cash Collateral
and Approved Investments, interest, dividends and other payments and
distributions received with respect to Collateral and Approved Investments
("Distributions"), and any Securities Loan Fee paid by Borrowers in connection
with Securities loans hereunder.
1.10 "Depository" shall mean the Depository Trust Company, Participant's
Trust Company, Euroclear, and any other securities depository or clearing agency
(and their respective successors and nominees) authorized under applicable law
or regulation to act as a securities depository or clearing agency, including
any foreign securities depository approved by the Lender.
1.11 "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 fully guaranteed by the United States government
or any agency or instrumentality of the United States government.
1.12 "Letter of Credit" shall mean a clean, unconditional and irrevocable
letter of credit in favor of the Bank as agent for the Lender issued by a bank
named on Schedule III hereto as may be amended from time to time to add
additional banks by the written consent of the parties hereto, or to delete any
Bank at the written direction of the Lender.
1.13 "Oral Instructions" shall mean verbal instructions actually received
by the Bank from an Authorized Person or from a person reasonably believed by
the Bank to be an Authorized Person.
1.14 "Rebate" shall mean the amount payable by the Lender to a Borrower
(as set forth in a Receipt) in connection with Securities loans at any time
collateralized by Cash Collateral.
1.15 "Receipt" shall mean a notation on the Lender's fund accounting
records reflecting each loan of Securities hereunder and the receipt of
Collateral with respect to such loan.
1.16 "Securities Borrowing Agreement" shall mean with, respect to any
Borrower, the agreement pursuant to which the Bank lends securities on behalf of
its customers (including the Lender) to such Borrower as may be amended from
time to time.
1.17 "Securities Loan Fee" shall mean the amount payable by a Borrower to
the Bank, as agent for the Lender, pursuant to the applicable Securities
Borrowing Agreement in connection with Securities loans, if any, collateralized
by Collateral other than Cash Collateral.
1.18 "Security" shall mean any Government Securities, non-U.S. securities,
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.
3
1.19 "Written Instructions" shall mean written communications actually
received by the Bank from an Authorized Person or from a person reasonably
believed by the Bank 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 the Bank is able to verify with a
reasonable degree of certainty the identity of the sender of such communications
or the sender is required to provide a password or other identification code.
2. APPOINTMENT; SCOPE OF AGENCY AUTHORITY.
2.1 APPOINTMENT. The Lender hereby appoints the Bank as its agent to lend
Securities in the Account to Borrowers from time to time as hereinafter set
forth, and the Bank hereby accepts appointment as such agent and agrees to so
act.
2.2 SECURITIES SUBJECT TO LENDING. Unless the lender provides otherwise in
writing to the Bank, all Securities maintained in the Account shall be available
for lending pursuant to this Agreement.
2.3 SECURITIES BORROWING AGREEMENT. The Lender hereby authorizes the Bank
to enter into a Securities Borrowing Agreement with respect to Lender with each
Borrower and to lend Securities in the Account to Borrowers pursuant to such
agreements. The Lender may elect to terminate any Borrower from Schedule II at
any time.
2.4 LOAN OPPORTUNITIES. The Lender acknowledges and agrees that the Bank
shall have the right to decline to make any loans of Securities under any
Securities Borrowing Agreement and to discontinue lending under any Securities
Borrowing Agreement in its sole discretion and without notice to the Lender. The
Lender agrees that it shall have no claim against the Bank based on, or relating
to, loans made for other customers or for the Bank's own account, or loan
opportunities refused hereunder, whether or not the Bank has made fewer or more
loans for any other customer or for the Bank's own account than for the Lender,
and whether or not any loan for another customer or for the Bank's own account,
or the opportunity refused, could have resulted in loans made hereunder.
2.5 USE OF BOOK-ENTRY SYSTEM AND DEPOSITORIES. The Lender hereby
authorizes the Bank 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,
the Bank shall identify as belonging to the Lender a quantity of securities in a
fungible bulk of securities shown on the Bank'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 Deposit will be
represented in accounts which include only assets held by the Bank for
customers, including but not limited to accounts in which the Bank acts in a
fiduciary or agency capacity.
3. REPRESENTATIONS AND WARRANTIES.
3.1 LENDER'S REPRESENTATIONS The Lender hereby represents and warrants to
the Bank, 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 use of the Approved Investments has been
approved and will be reapproved annually by the Board of Directors/Trustees of
the Lender as being in the best interests of shareholders of the Lender; this
Agreement is, and each Securities loan and Approved Investment will be, legally
and validly entered into by the Lender, does not, and will not, violate any
statute, regulation, rule, order or, judgment binding on the Lender, or any
provision of the Lender's charter or by-laws, or any agreement binding on the
Lender or affecting its property, and is enforceable against the Lender 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 Lender has and have been duly and properly authorized to
do so;
4
(c) It 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 subject to lending pursuant to Section 2.2 of
this Agreement are free and clear of all liens, claims, security interests and
encumbrances, no such Security subject to lending has been sold and the Lender
has no present intention to sell any of the Securities subject to lending. The
Lender shall promptly delete from the list referenced in Section 2.2 hereof any
and all Securities which are no longer subject to the representations contained
in this sub-paragraph (d).
3.2 BANK'S REPRESENTATIONS The Bank hereby represents and warrants to the
Lender, 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 the Bank,
does not and will not, violate any statute, regulation, rule, order or, judgment
binding on the Bank, or any provision of the Bank's charter or by-laws, or any
agreement binding on the Bank or affecting its property, and is enforceable
against the Bank 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; and
(b) The person executing this Agreement on behalf of the Bank and
all persons acting on the Bank's behalf pursuant to this Agreement have been
duly and properly authorized to do so.
4. SECURITIES LENDING TRANSACTIONS.
4.l LOAN INITIATION. From time to time the Bank may lend Securities to
Borrowers and deliver such Securities against receipt of Collateral in
accordance with the applicable Securities Borrowing Agreement. The Bank shall
deliver to the Lender a Receipt in connection with each loan made hereunder.
4.2 RECEIPT OF COLLATERAL; APPROVED INVESTMENTS.
(a) For each loan hereunder the Bank shall (i) initially receive
Cash Collateral equivalent to no less than 100% of the market value of the
securities lent and (ii) thereafter shall request on a daily basis as necessary
additional Collateral, which for Cash Collateral shall be an amount such that
the value of the Cash Collateral in no event be equivalent to less than 100% of
the market value of the Securities lent (as determined in accordance with the
applicable Securities Borrowing Agreement), and the Bank is hereby authorized
and directed, without obtaining any further approval from the Lender, to invest
and reinvest all or substantially all of the Cash Collateral received in any
Approved Investment. The Bank shall 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
Lender's ownership thereof as appropriate.
(b) All Approved Investments shall be for the account and risk of
the Lender. 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 Borrowing Agreement, the Lender agrees to pay the
Bank 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, the Bank, and the Bank
shall not be required to comply with any instructions of the Lender with respect
to the same.
4.3 DISTRIBUTIONS ON LOANED SECURITIES. Except as provided in the next
sentence, amounts equal to all interests, dividends, and other distributions
paid with respect to loaned Securities shall be credited to the Lender's account
on the date such amounts are delivered by the Borrower to the Bank. Lender
acknowledges that it will be receiving a substitute payment from the Borrower in
lieu of such interests, dividends, and other distributions. 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
received by the Borrower.
5
4.4 MARKS TO MARKET. The Bank shall on each Business Day xxxx to market in
U.S. dollars the value of all Securities loaned hereunder and accordingly
receive and release Collateral in accordance with the applicable Securities
Borrowing Agreement.
4.5 COLLATERAL SUBSTITUTIONS. The Bank shall accept substitutions of
Collateral in accordance with the applicable Securities Borrowing Agreement and
shall credit all such substitutions to the Collateral Account, provided however
that unless other Collateral has been mutually agreed upon in writing by the
Bank and the Lender, no other Collateral may be substituted for Cash Collateral.
4.6 TERMINATION OF LOANS. The Bank shall terminate any Securities loan to
a Borrower in accordance with the applicable Securities Borrowing Agreement as
soon as practicable after:
(a) receipt by the Bank of a notice of termination pursuant to the
Securities Borrowing Agreement;
(b) receipt by the Bank of Written Instructions instructing it to
terminate a Securities loan;
(c) receipt by the Bank of Written Instructions deleting the
Borrower to whom such loan was made from Schedule II hereto;
(d) upon the Bank's becoming aware of the occurrence of a default
pursuant to the applicable Securities Borrowing Agreement requiring termination
of such loan; or
(e) whenever the Bank, in its sole discretion, elects to terminate
such loan.
4.7 SECURITIES LOAN FEE. The Bank shall receive any applicable Securities
Loan Fee paid by Borrowers pursuant to the Securities Borrowing Agreement and
credit all such amounts received to the Collateral Account.
4.8 THE BORROWER'S FINANCIAL CONDITION. The Bank shall promptly inform
Lender of any event of which it becomes aware that woulod have a material effect
on a Borrower's ability to perform under any Securities Borrowing Agreement.
4.9 TRANSFER TAXES AND NECESSARY COSTS. All transfer taxes and necessary
costs with respect to the transfer of the loaned Securities by the Lender to the
Borrower and the Borrower to the Lender upon the termination of the loan shall
be paid by the Borrower in accordance with the applicable Securities Borrowing
Agreement.
4.10 REMEDIES UPON DEFAULT. In the event of any default by a Borrower
under the applicable Securities Borrowing Agreement, the Bank shall use its best
efforts to pursue, on behalf of the Lender, any remedies that the Bank or the
Lender may have under the applicable Securities Borrowing Agreement.
4.11 BANK'S OBLIGATION. Except as specifically set forth herein, or in any
applicable Securities Borrowing Agreement, the Bank 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 Borrowing Agreement.
5. CONCERNING THE BANK.
5.1 STANDARD OF CARE: INDEMNIFICATION.
(a) It is expressly understood and agreed that in exercising its
rights and performing its obligations hereunder, the Bank owes no fiduciary duty
to the Lender. The Bank shall not be liable for any costs, expenses, damages,
liabilities or claims (including attorneys and accountants fees) incurred by the
Lender, except those costs, expenses, damages, liabilities or claims arising out
of the Bank's negligence, willful misconduct, bad faith, or reckless disregard
of its obligations and duties hereunder. The Bank shall have no 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
6
successors or nominees. In no event shall the Bank be liable 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 Lender agrees to indemnify the Bank 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 the Bank may sustain or
incur or which may be asserted against the Bank by reason of or as a result of
any action taken or omitted by the Bank in connection with or arising out of the
Bank's operating under and in compliance with this Agreement, except those
costs, expenses, damages, liabilities or claims arising out of the Bank's
negligence, bad faith, willful misconduct, or reckless disregard of its
obligations and duties hereunder. The foregoing indemnity shall be a continuing
obligation of the Lender, its successors and assigns, notwithstanding the
termination of any loans hereunder or of this Agreement. Actions taken or
omitted in reasonable reliance upon Oral or Written Instructions, any
Certificate, or upon any information, order, indenture, stock certificate, power
of attorney, assignment, affidavit or other instrument reasonably believed by
the Bank to be genuine or bearing the signature of a person or persons
reasonably believed by the Bank 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.
5.2 NO OBLIGATION TO INQUIRE. Without limiting the generality of the
foregoing, the Bank 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, or the
legality or propriety of any loans of Securities to Borrowers.
5.3 ADVANCES, OVERDRAFTS AND INDEBTEDNESS; SECURITY INTEREST.
(a) The Bank may, in its sole discretion, advance funds on behalf of
the Lender in order to pay to Borrowers any Rebates or to return to Borrowers
Cash Collateral to which they are entitled pursuant to the Securities Borrowing
Agreement. The Bank may also, in its sole discretion and as a matter of
bookkeeping convenience, credit the Account with interest, dividends or other
distributions payable on Securities prior to its actual receipt of final payment
therefor and the Lender agrees that such bookkeeping credits may also be
reflected on its books, and otherwise, as "immediately available" or "same day"
funds or by some similar characterization. Notwithstanding any such credit or
characterization, all such credits shall be conditional upon the Bank's actual
receipt of final payment and may be reversed by the Bank to the extent that
final payment is not received. If the Bank, in its sole discretion, permits the
Lender to use funds credited to the Account prior to receipt by the Bank of
final payment thereof, the Lender shall nonetheless, continue to bear the risk
of, and liability for, the Bank's non receipt of final payment in full.
(b) The Lender agrees to repay the Bank on demand the amount of any
advance or credit described in Section 5.3(a) above or any other amount owed by
the Lender hereunder plus accrued interest at a rate per annum (based on a
360-day year for the actual number of days involved) as agreed to by the parties
from time to time. In order to secure repayment of any credit, advance,
overdraft or other indebtedness of the Lender to the Bank arising hereunder, the
Lender hereby agrees that the Bank shall have a continuing lien and security
interest, to the extent of any such amounts owing, in and to all assets now or
hereafter held in the Account and the Collateral Account, which is then in the
Bank's possession or control or in the possession or control of any third party
acting on the Bank's behalf. In this regard, the Bank shall be entitled to
charge any amounts owed to the Bank hereunder against any balance of account
standing to the credit of the Lender on the Bank's books and, without limiting
the foregoing, to all the rights and remedies of a pledgee under common law and
a secured party under the Massachusetts Uniform Commercial Code and/or any other
applicable laws and/or regulations as then in effect.
(c) The rights of the Bank and the obligations of the Lender under
this Section are absolute and unconditional whether or not the Bank would be
entitled to indemnification pursuant to Section 5.l(b) hereof.
(d) For all purposes of this Agreement, payment with respect to a
transaction will not be "final" until the Bank shall have received immediately
available funds which under applicable law or rule are irreversible, which are
not subject to any security interest, levy or other encumbrance, and which are
specifically applicable, or deemed by the Bank to be specifically applicable, to
such transaction. A debit by the Bank to any other account of the Lender
maintained by the Bank or to an account of any third party to whom or for whose
account Securities have
7
been delivered shall not constitute final payment to the extent that such debit
creates an overdraft or does not otherwise result in the receipt by the Bank of
immediately available, irreversible and unencumbered funds.
5.4 ADVICE OF COUNSEL The Bank may, with respect to questions of law,
apply for and obtain the advice and opinion of counsel and shall be fully
protected with respect to anything done or omitted by it in good faith in
conformity with such advice or opinion.
5.5 NO COLLECTION OBLIGATIONS. The Bank shall be under no obligation or
duty to take action to effect collection of any amounts payable in respect of
Securities or Approved Investments if such Securities or Approved Investments
are in default, or if payment is refused after due demand and presentation.
5.6 PRICING METHODS. The Bank is authorized to utilize any recognized
pricing information service or any other means of valuation specified in the
applicable Securities Borrowing Agreement ("Pricing Methods") in order to
perform its valuation responsibilities with respect to loaned Securities,
Collateral and Approved Investments, and the Lender agrees to hold the Bank
harmless from and against any loss or damage suffered or incurred as a result of
errors or omissions of any such Pricing Methods.
5.7 AGENT'S FEE. In connection with each Securities loan hereunder the
Lender shall pay to the Bank a fee equal to 20% of (a) net realized income
derived from Approved Investments, plus (b) any Securities Loan Fee paid or
payable by the Borrower, minus (c) any Rebate paid by the Bank to the Borrower.
The Bank is authorized, on a monthly basis, to charge its fee and any other
amounts owed by the Lender hereunder against the Account and/or Collateral
Account.
5.8 RELIANCE ON CERTIFICATES AND INSTRUCTIONS. The Bank shall be entitled
to rely upon any Certificate, any information contained on any Schedule hereto
as may be amended in accordance with the terms hereof, and Written or Oral
Instruction actually received by the Bank and reasonably believed by the Bank to
be duly authorized and delivered. The Lender agrees to forward to the Bank
Written Instructions confirming Oral Instructions in such manner so that such
Written Instructions are received by the Bank by the close of business of the
same day that such Oral Instructions are given to the Bank. The Lender agrees
that the fact that such confirming Written Instructions are not received on a
timely basis or that contrary instructions are received by the Bank shall in no
way affect the validity or enforceability of the transactions authorized by the
Lender. The Bank will use reasonable efforts to report any subsequently received
contrary instructions. In this regard, the records of the Bank shall be presumed
to reflect accurately any Oral Instructions given by an Authorized Person or a
person reasonably believed by the Bank to be an Authorized Person.
5.9 DISCLOSURE OF ACCOUNT INFORMATION. It is understood and agreed that
the Bank is authorized to supply to any Borrower any information regarding the
Account which is required by the Borrower or by any law or governmental
regulation now or hereafter in effect.
5.10 STATEMENTS. The Bank will periodically furnish the Lender with
statements relating to loans hereunder.
5.11 FORCE MAJEURE. The Bank shall not be responsible or liable for any
failure or delay in the performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by acts of God, earthquakes,
fires, floods, storms or other disturbances of nature, epidemics, strikes,
riots, nationalization, expropriation, currency restrictions, acts of war, civil
war or terrorism, insurrection, nuclear fusion, fission or radiation, the
interruption, loss or malfunction of utilities, transportation, the
unavailability of energy sources and other similar happenings or events.
5.12 NO IMPLIED DUTIES.
(a) The Bank 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 Borrowing Agreement, and no covenant
or obligation shall be implied against the Bank in connection with this
Agreement.
8
(b) The Lender shall have no 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 Lender in
connection with this Agreement.
6. TERMINATION. This Agreement may be terminated at any time 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. Notwithstanding any such notice, this Agreement shall continue in
full force and effect with respect to all loans of Securities outstanding on the
date of termination.
7. MISCELLANEOUS.
7.1 EXCLUSIVITY. The Lender 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 the Lender of any securities held by the Bank in the Account
from time to time.
7.2 CERTIFICATES. The Lender agrees to furnish to the Bank a new
Certificate in the event that any present Authorized Person ceases to be an
Authorized Person or in the event that any other Authorized Persons are
appointed and authorized. Until such new Certificate is received, the Bank shall
be fully protected in acting upon Oral Instructions or signatures of the present
Authorized Persons.
7.3 NOTICES.
(a) Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Bank, shall be sufficiently given
if addressed to the Bank and received by it at its offices at 000 Xxxxxxxxx
Xxxxxx, X.X. Xxx 0000, Xxxxxx, Xxxxxxxxxxxxx 00000-0000, Attention: Securities
Lending Department, , with a copy to: Xxxx X. Xxxxx, General Counsel or at such
other place as the Bank 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 Lender shall be sufficiently given
if addressed to the Lender and mailed or delivered to it at its offices at 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxx, or at such
other place as the Lender may from time to time designate in writing.
7.4 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 will operate as a waiver thereof, nor will 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.
7.5 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.
7.6 AMENDMENTS. This Agreement may not be amended or modified in any
manner except by a written agreement executed by both parties.
7.7 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.
7.8 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall be
construed in accordance with the laws of the Commonwealth of Massachusetts
without regard to conflict of laws principles thereof. The Lender hereby
consents to the jurisdiction of a state or federal court situated in Boston,
Massachusetts in connection with any dispute arising hereunder.
9
7.9 NO THIRD PARTY BENEFICIARIES. In performing hereunder, the Bank is
acting solely on behalf of the Lender and no contractual or service relationship
shall be deemed to be established hereby between the Bank and any other person.
7.10 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.
7.11 SIPA NOTICE. THE PROVISIONS OF THE SECURITIES INVESTOR PROTECTION ACT
OF 1970 MAY NOT PROTECT THE LENDER WITH RESPECT TO LOANS HEREUNDER AND,
THEREFORE, THE COLLATERAL DELIVERED TO THE BANK AS AGENT FOR THE LENDER MAY
CONSTITUTE THE ONLY SOURCE OF SATISFACTION OF A BORROWER'S OBLIGATION IN THE
EVENT SUCH BORROWER FAILS TO RETURN THE LOANED SECURITIES.
[Remainder of Page Intentionally Left Blank]
10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers, thereunto duly authorized and
their respective corporate seals to be hereunto affixed, as of the day and year
first above written.
XXXXXX XXXX INVESTMENT FUNDS ON BEHALF OF THE
PORTFOLIOS LISTED IN APPENDIX I
By: /s/ Xxxxx X. Xxxxxx / /s/ Xxxxxxx Xxxxxxxx
---------------------------------------------
Title: Chief Financial Officer / President
INVESTORS BANK & TRUST COMPANY
By: /s/ Xxxxxxx XxXxxxx
---------------------------------------------
Title: Managing Director
11
APPENDIX I
LIST OF PORTFOLIOS
Xxxxxx Xxxx International Equity Fund
Xxxxxx Xxxx International Equity Fund II
Xxxxxx Xxxx U.S. Microcap Fund
Xxxxxx Xxxx U.S. Smallcap Fund
Xxxxxx Xxxx U.S. Xxxxxx Fund
Xxxxxx Xxxx U.S. Multicap Fund
12
SCHEDULE I
APPROVED INVESTMENTS
BANK OBLIGATIONS:
Bank Obligations with Domestic and Foreign Banks including Offshore Time
Deposits. All Banks obligations will have a short term rating of X-0, X-0,
or P-1 from Fitch, S & P or Moody's at time of purchase.
MONEY MARKET FUNDS
Institutional Money Market Funds with assets greater than $500 million,
including, without limitation, the Merrimac Cash Fund series of Merrimac
Funds*.
COMMERCIAL PAPER
Must be rated A-1 by S&P or P-1 by Moodys at time of purchase.
CORPORATE BOND
Must have a Short Term rating of rated A-1 by S&P or P-1 by Moodys
or have a Long Term Rating of Investment Grade at time of purchase.
UNSECURED PROMISSORY NOTES (MASTER NOTES)
Must have a rating or Parental rating of A-1 by S&P or P-1 by Moodys
at time of purchase.
GENERAL
All investments will be US Dollar denominated.
The final maturity for any security/issue will be one year or less.
All investments will be in compliance with Investment Company Act of 1940.
By:___________________________
Title:________________________
Date:_________________________
----------
* The Bank acts as investment adviser to and serves as custodian, administrator
and transfer agent of the Merrimac Funds.
13
SCHEDULE II
APPROVED BORROWERS
Banc of America Securities LLC
Barclays Capital Inc.
Bear, Xxxxxxx Securities Corp.
Citigroup Global Markets Inc.
Credit Suisse First Boston LLC
Deutsche Bank Securities Inc.
Xxxxxxx, Xxxxx & Co.
Xxxxxx Brothers, Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx, Inc.
Xxxxxx Xxxxxxx & Co. (includes MS Securities Services, Inc.)
National Financial Services LLC
SG Americas Securities, LLC
UBS Securities LLC
By:___________________________
Title:________________________
Date:_________________________
14
SCHEDULE III
LETTER OF CREDIT BANKS
[To be Determined]
15
