SECURITIES LENDING AGREEMENT: Customer Agreement (Fund/Indemnified)
Customer
Agreement (Fund/Indemnified)
Customer
Agreement
This
Securities Lending Agreement, made as of this 3rd day of
December, 2007 including all exhibits attached hereto, all of the terms of
which
are incorporated herein by reference, in each case, as amended and/or
supplemented from time to time in accordance with the terms hereof (this
“Agreement”), by and between U.S. Bank National Association (the
“Bank”) and the Kinetics Portfolios Trust (the “Trust”), a Delaware
statutory trust, on behalf of each respective series identified in Exhibit
A
attached hereto (each such series hereinafter referred to as a separate
“Customer”).
WITNESSETH:
WHEREAS,
the Trust is an open-end management investment company registered under the
Investment Company Act of 1940 (the “1940 Act”) which offers its shares in one
or more separate series, with each such series representing a separate and
distinct pool of cash, securities, and other assets; and
WHEREAS,
the Trust desires to have the Bank engage in securities lending as each
Customer’s agent with respect to certain Securities; and
WHEREAS,
the Bank and the Trust desire to specify the terms and conditions under which
such securities lending will be performed.
NOW,
THEREFORE, in consideration of the mutual premises, covenants and undertakings
set forth herein, the parties hereto agree as follows:
1. Definitions: For
purposes hereof:
“Borrower”
shall be, subject to the other provisions of this Agreement, one or more (i)
broker-dealers registered under the Securities Exchange Act of 1934, as amended
(the “1934 Act”); (ii) broker-dealers exempt from registration under 15(a)(1) of
the 1934 Act as a dealer in exempted Government Securities, or (iii) bank(s),
with which the Bank or one of its agents has established a securities lending
agreement whereby bank(s) may borrow Securities and which the Customer has
expressly approved in accordance with the last sentence of this
paragraph. Such potential Borrowers are listed in Exhibit B attached
hereto. Borrowers may be added to or deleted from Exhibit B by (i)
the Customer by means of written notice delivered by the Customer to the Bank,
or (ii) by the Bank by means of written notice delivered by the Bank to the
Customer which is confirmed by the Customer via letter, fax or
e-mail.
“Borrower
Agreement” shall have the meaning provided such term in Section 3(a)
hereof.
“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 foregoing, in no event shall a Saturday or
Sunday be considered a Business Day.
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“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.
“Collateral”
shall be collateral which the Bank shall receive from Borrower(s) to secure
Loans on behalf of a Customer in the form of cash denominated in United States
dollars ( “Cash Collateral”).
“Government
Securities” shall mean government securities as defined in Section
3(a)(42)(A)-(C) of the 1934 Act.
“Loans”
shall be the lending of Securities to Borrower(s).
“Loaned
Securities” shall be those Securities which are loaned to the Borrower(s) by
the Bank, securities identical to such Securities, or securities equivalent
to
such loaned Securities in the event of a reorganization, recapitalization or
merger affecting the originally loaned securities.
“Margin
Percentage” shall mean, with respect to any Loan as of any date, a
percentage agreed to by the Borrower and the Bank, provided that in no event
shall the Margin Percentage be less than 100% of the Market Value of the Loaned
Securities.
“Xxxx
to Market” shall be the procedure whereby the Bank determines the Market
Value of securities Collateral and Loaned Securities.
“Market
Value” shall be:
(i) 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, including where applicable, accrued interest to the extent not already
included therein, unless market practice with respect to the valuation of such
securities in connection with securities loans is to the contrary.
(ii) 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, including where applicable, accrued interest
to the extent not already included therein, unless market practice with respect
to the valuation of such securities in connection with securities loans is
to
the contrary.
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(iii) Except
as
provided in Subsection (iv) of this definition, 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 Bank and the Borrower(s) 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, including where applicable, accrued interest to the extent
not
already included therein, unless market practice with respect to the valuation
of such securities in connection with securities loans is to the
contrary.
(iv) The
Market Value of a letter of credit shall be the outstanding amount
thereof.
“Offering
Memorandum” shall mean the offering memorandum dated on or about April 25,
2007 relating to the Selected Series.
“Person”
shall be any natural person, corporation, partnership, limited partnership,
joint venture, firm, association, trust, unincorporated organization, government
or governmental agency or political subdivision or any other entity, whether
acting in an individual, fiduciary or other capacity.
“RIC”
shall be the Mount Xxxxxx Securities Lending Trust.
“Securities”
shall be securities, of any type, that are owned or controlled by the Customer
and that have been hereby approved for use in securities lending by the
Customer.
“Selected
Series” shall be the series of the RIC that is selected by the Customer for
investment of Cash Collateral, as identified on the Customer Information Sheet
attached hereto. The Selected Series may be changed by the Customer
upon thirty (30) days written notice to the Bank.
“Substitute
Payments” shall mean payments in amounts equal to all distributions made to
holders of Loaned Securities during the term of the loan, including, but not
limited to, cash dividends, interest payments, shares of stock as a result
of
stock splits, and rights to purchase additional securities.
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2. Appointment
and Acceptance. The Customer hereby appoints the Bank as its
agent for the purpose of lending Securities; and the Bank hereby agrees to
accept such appointment and act in such capacity.
3. Delivery
of Securities; Receipt of Collateral; Return of Collateral. Until
given written notice of termination pursuant to Section 15, the Customer hereby
authorizes the Bank, and the Bank agrees, to undertake the
following:
(a) To
enter
into and maintain securities loan agreements with Borrower(s) which set forth
terms consistent with this Agreement. The Customer acknowledges that
the standard form(s) of Borrower Agreement(s) entered or to be entered with
Borrowers will be substantially in the form of the most current Master
Securities Loan Agreement produced by the Bond Market Association and the
Customer authorizes the Bank to lend Securities to Borrower(s) pursuant to
agreements substantially in the form thereof (each such agreement referred
to
herein as a “Borrower Agreement”). The Customer may from time to time
direct the Bank not to enter into loans with a Borrower, as the Customer
specifies by written notice to the Bank, in each case notwithstanding the
Customer’s prior approval of such Borrower in accordance with the terms
contained herein.
(b) To
negotiate fees with Borrowers in connection with securities lending, subject
to
the following requirements. In the case of a Loan for which the
Collateral is Cash Collateral, the Bank shall negotiate a fee (the “Borrower
Rebate Fee”) to be paid by the Bank to the Borrower on behalf of the
Customer.
(c) To
deliver to Borrowers, from time to time, such Securities as the Bank may in
its
discretion select for securities lending in accordance with this
Agreement.
(d) To
use
the securities lending services and custodial services of other financial
institutions, including, without limitation, FAF Advisors, Inc. (“FAF
Advisors”) and other financial institutions that are agents or affiliates of
the Bank as agents of the Bank, for the benefit of the Customer, as the Bank
in
its discretion shall determine to be necessary or desirable to perform
securities lending on behalf of the Customer.
(e) In
connection with each Loan, to receive from the Borrower, at the time the
Securities are loaned, Collateral of a value at least equal to 100% of the
then
current Market Value of the Loaned Securities. Such Collateral shall
be held as security by the Bank on behalf of the Customer for the due and
punctual performance by the Borrower of any and all of the Borrower’s
obligations under the Borrower Agreement.
(f) To
hold
and safekeep the Collateral on behalf of the Customer with other securities
lending collateral held by the Bank, provided that the Customer’s specific
interest in the Customer’s Collateral shall at all times be noted in the records
of the Bank, provided further, however, that all Collateral shall be held
separate from any other securities held by the Bank on behalf of an other person
or entity.
(g) To
invest
Cash Collateral for the benefit of the Customer in the Selected
Series.
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(h) Upon
termination of any Loan, to liquidate Cash Collateral investments made with
the
Collateral and to return the Collateral to the Borrower in accordance with
the
Borrower Agreement so long as the Borrower is not in default and the Bank
receives the Loaned Securities from the Borrower.
(i) To
receive from the Borrower Substitute Payments and to forward such Substitute
Payments to the Customer.
(j) To
originate or terminate any Loan at any time as the Bank may in its discretion
determine pursuant to the terms of this Agreement, without prior notice to
the
Customer.
(k) In
connection with the Customer’s Loaned Securities, to collect loan fees owed by
Borrower(s) and income earned on Cash Collateral investments, and to dispose
of
such monies pursuant to Sections 3(b) and 8 of this Agreement.
(l) To
disclose to any Borrower, or to any Person to an investment entered into
pursuant to Section 3(g) above, the name of the Customer and such other
information required by such Borrower or such Person to enable such Borrower
or
such Person to comply with applicable federal or state law, as the Bank may
in
its discretion deem necessary.
(m) To
group
the Customer’s Securities together with the securities of other securities
lending customers for the purposes of facilitating Loans to
Borrower(s). The Customer acknowledges that whether particular
Securities are loaned depends on many variables, including, but not limited
to,
the demand for a particular security by Borrower(s), the Bank’s automated
queuing system for equitable utilization of all available securities for lending
transactions, and the quantity of a particular security that is held
in the lendable pool, and that the Bank cannot ensure that the Customer’s
Securities will become the subject of any particular Loan or that the Customer’s
Securities will be loaned.
4. Voting
Rights. Customer shall not retain voting rights of Loaned
Securities while loaned to any Borrower.
5. Xxxx
to Market. The Bank shall on a daily basis (a) Xxxx to Market
Loaned Securities and Collateral. If the Market Value of the
Collateral at the Close of Trading on a Business Day is less than the Margin
Percentage of the Market Value of the Loaned Securities at the Close of Trading
on that Business Day, the Borrower shall deliver, by the close of business
on
the following Business Day, an additional amount of Collateral the Market Value
of which, together with the Market Value of all previously delivered collateral,
equals at least the Margin Percentage of the Market Value of the Loaned
Securities as of such preceding day. In the event that the Market
Value of the Collateral exceeds the Margin Percentage of the Market Value of
the
Loaned Securities, part of the Collateral may be returned to the Borrower as
long as the Market Value of the remaining Collateral equals at least the Margin
Percentage of the Market Value of the Loaned Securities.
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6. Accountings. The
Bank shall include in a monthly report to the Customer daily information
concerning all securities loans outstanding, including an accounting of all
securities lending transactions.
7. Loan
Termination by Customer.
(a) Unless
otherwise agreed in writing, the Customer may, in its sole discretion, elect
to
terminate a Loan on a termination date established by notice given to the Bank
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, which date shall be determined in accordance with the terms of
the
Borrower Agreement. Upon receipt of such notice, the Bank shall
notify the appropriate Borrower for return of the Loaned Securities in
accordance with the terms of the Borrower Agreement.
(b) The
Bank
shall be deemed to have received appropriate notice as required by this Section
7 upon receipt of written or oral directions (i) signed or given by any person
whose name and signature is listed on the most recent certificate delivered
by
the Customer to the Bank which lists those persons authorized to give directions
in the name and on behalf of the Customer or (ii) signed or given by any other
person(s), duly authorized by the Customer to give directions to the Bank
hereunder or whom the Bank reasonably believes to be so authorized. Appropriate
notice as required by this Section 7 shall include notice sent to the Bank
by
letter, memorandum, telegram, cable, telex, telecopy facsimile, video (CRT)
terminal or other “on-line” system, or similar means of communication, or given
over the telephone or in person.
8. Fees.
(a) The
Customer shall pay fees to the Bank in the amount and at such times set forth
on
Exhibit C attached hereto and made a part hereof as though fully set forth
herein. The provisions of Exhibit C may be renegotiated at any time,
are premised on the assumptions described therein and may be modified in the
event the assumptions are no longer valid upon five days written notice by
either party and may be amended by a separate writing between the Bank and
the
Customer. The Bank shall charge such fees against the net income
received as proceeds from securities lending transactions (after payment of
any
applicable Borrower Rebate Fees) (“Net Income”); provided, however, that
if not so charged, the Customer shall pay such fees.
(b) Any
Borrower Rebate Fee incurred by a Customer arising from the receipt of cash
as
Collateral for Loaned Securities shall be charged against the gross income
received by the Customer as proceeds from securities lending transactions and
the Bank shall pay such Borrower Rebate Fee to the appropriate Borrower on
behalf of the Customer; provided, however, that if not so charged, the Customer
shall pay such Borrower Rebate Fee.
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9. Customer
Representations and Warranties.
(a) The
Customer represents and warrants that: (i) the Customer has the legal right,
power and authority to execute, deliver and perform this Agreement and to carry
out all of the transactions contemplated hereby; (ii) the execution and delivery
of this Agreement by the Customer will not violate any provision of its charter,
bylaws or any other governing documents, or any law, or any regulation,
interpretation or order of any court or other government agency, or judgment,
applicable to the Customer; (iii) the Customer has obtained all necessary
authorizations, including those from any persons who may have an interest in
the
Loaned Securities, including the consent or approval of any governmental agency
or instrumentality; (iv) the execution, delivery and performance of this
Agreement and the carrying out of any of the transactions contemplated hereby
will not be in conflict with, result in a breach of or constitute a default
under any agreement or other instrument to which the Customer is a party or
which is otherwise known to the Customer, including but not limited to, liens
against and/or pledges of Securities; and (v) all persons executing this
Agreement on behalf of the Customer and carrying out the transactions
contemplated hereby on behalf of the Customer are duly authorized to do
so.
(b) The
Customer represents and warrants that it is an “investment company” as that term
is defined in the 1940 Act and that it will indicate each “affiliate” as that
term is defined in the 1940 Act by instructing the Bank not to lend the
Customer’s Securities to such Borrower by completion of Exhibit B hereto, such
Exhibit B to be updated from time to time upon written notice to the Bank from
the Customer.
(c) The
Customer is aware that it is possible to loan portfolio securities without
incurring the loan fees payable pursuant hereto by administering such a program
itself, rather than hiring the Bank.
(d) The
Customer represents and warrants that each Person who owns, controls or
possesses securities which may be lent pursuant to this agreement is identified
in the Customer Information Sheet attached hereto and made a part hereof as
though fully set forth herein, such Customer Information Sheet to be updated
from time to time upon written notice to the Bank from the Customer (the
“Customer Information Sheet”) and that the tax identification number of
such Person is set forth opposite such Person’s name on such Customer
Information Sheet.
(e) The
Customer represents and warrants (i) that the information contained in the
attached Customer Information Sheet is complete and accurate in all respects
as
of the date hereof and the Customer acknowledges and affirms that the Bank
may
rely upon the accuracy and completeness of the information contained in the
Customer Information Sheet in complying with its obligations under applicable
laws and regulations and (ii) that the Customer has reviewed and understands
the
Offering Memorandum.
(f) The
Customer represents and warrants that all recitals contained herein are true
and
correct in all respects.
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10. The
Bank’s Responsibilities. The Bank’s duties and responsibilities
shall only be those expressly set forth in this Agreement. The Bank
hereby agrees that it shall at all times during the term of this Agreement
exercise its reasonable care and efforts in performing its obligations
hereunder. The Bank will perform such obligations and
responsibilities in accordance with all applicable laws, including, but not
limited to Securities and Exchange Commission rules and regulations, as well
as
other interpretive guidance, no action positions or other pronouncements of
the
SEC and/or its staff. In particular, the Bank intends to rely on the
Securities and Exchange Commission no-action letters entitled Sife Trust
Fund (Feb. 17, 1982), Norwest Bank Minnesota, N.A. (May 25, 1995) and
The Chase Manhattan Bank (July 24, 2001) in performing its
responsibilities under this Agreement. Neither the Bank nor its
agents shall be responsible for any loss or liability arising from their
performance of the Bank’s duties under this Agreement, except for direct loss or
liability (but not consequential or punitive damages) arising from the Bank’s,
or its agent’s, willful misfeasance, bad faith or gross negligence in the
performance of the Bank’s duties under this Agreement. The Bank
agrees to reimburse each Customer and to hold each Customer harmless from and
against any and all costs, expenses, damages, liabilities or claims, including
reasonable fees and expenses of counsel incurred by each Customer which each
Customer may sustain or incur or which may be asserted against each Customer
by
reason of or as a result of the Bank’s, or it’s agents’ willful misfeasance, bad
faith or gross negligence in the performance of the Bank’s duties under this
Agreement. In no event shall the Bank be liable for special, indirect
or consequential damages, or lost profits or loss of business, arising under
or
in connection with this Agreement, even if previously informed of the
possibility of such damages and regardless of the form of action.
11. Customer
Responsibilities.
(a) The
Customer agrees to (i) promptly notify the Bank of any change that the Customer
wishes to make to Exhibit B, (ii) promptly notify the Bank if any information
contained in the Customer Information Sheet becomes inaccurate or untrue and
(iii) indemnify the Bank for any losses resulting from the Customer’s failure to
adhere to the provisions of Subsection (a) of this Section 11.
(b) The
Customer agrees that, to the extent any loss arising out of investments of
Cash
Collateral in the Selected Series results in a deficiency in the amount of
Collateral available for return to a Borrower, the Customer shall pay to the
Bank, on demand, cash in an amount equal to such deficiency.
(c) The
Customer acknowledges that the Bank is acting as an agent on the Customer’s
behalf in connection with the lending of the Customer’s assets and the
investment of cash received as Collateral for such Loans. The Customer
understands that it bears the risks of investment loss, including any decline
in
value of Cash Collateral investment and loss resulting from any securities
lending default by a Borrower.
(d) The
Customer acknowledges that it is responsible for paying any taxes that are
incurred as a result of Loans made on behalf of the Customer, and the Customer
agrees that it shall reimburse the Bank for any taxes paid on Customer’s behalf
by the Bank.
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(e) The
Customer agrees to reimburse the Bank and to hold the Bank harmless from and
against any and all costs, expenses, damages, liabilities or claims, including
reasonable fees and expenses of counsel incurred by the Bank 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 operating
under this Agreement (including, but not limited to, actions or omissions
related to the lending of Securities to Borrower(s) or the holding or investment
of Collateral or resulting from the Customer’s failure to comply with its
obligations under Section 11(a) hereof) other than those costs, expenses,
damages, liabilities or claims arising out of the Bank’s gross negligence, bad
faith or willful misfeasance, as adjudicated by a court of competent
jurisdiction. The foregoing shall be a continuing obligation of the
Customer and the Customer’s successors and assigns, notwithstanding the
termination of any Loans hereunder or of this Agreement. The Bank may
charge any amounts to which it is entitled hereunder against the account in
which the Customer’s Securities are held.
12. Indemnification.
(a) In
the
event of a Borrower’s material default of the terms and conditions of the
Borrower Agreement, the Bank shall promptly:
(i) take
all
actions the Bank deems appropriate, in its discretion, to liquidate the
Collateral,
(ii) at
its
own expense, but subject to the Customer’s obligations pursuant to Section 11(c)
hereto, replace as soon as reasonably practicable such Loaned Securities with
identical securities or the equivalent thereof in the event of a reorganization,
recapitalization or merger of the issuer of the Loaned Securities,
or
(iii) if
the
Bank is unable to obtain replacement securities, the Bank shall provide the
Customer with immediately available funds in an amount equal to the Market
Value
of such Loaned Securities. The Market Value shall be calculated (1)
in the case of a Borrower insolvency, on the date of such insolvency, or (2)
in
the case of a Borrower’s failure to return Loaned Securities, on the date that
the Bank deposits funds to the Customer’s account pursuant to this section
12(a)(iii).
(b) If
the
Market Value of the Collateral on the date of such replacement or credit is
less
than that which is required to purchase replacement securities or to provide
equivalent funds to the Customer as a result of a decrease in the Market Value
of investments of Cash Collateral, the Bank will not be responsible for such
decrease. In such event, the Bank shall purchase and deposit
replacement securities, or deposit cash to the Customer’s account, in an amount
equal to the then current Market Value of Cash Collateral investments. If the
Market Value of the Collateral on the date of such replacement or credit is
less
than that which is required to purchase replacement securities or to credit
equivalent funds to Customer’s account as a result of any reason other than a
decrease in the Market Value of investments of Cash Collateral, Bank shall
pay
such additional amounts as are necessary to purchase replacement securities
in
an amount equal to the Market Value of such Loaned Securities or credit
equivalent funds to Customer’s account as of the date of such
replacement. The Bank shall not be liable for any appreciation in the
Market Value of the Loaned Securities subsequent to such date.
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(c) The
Customer agrees that the Bank shall be subrogated to the rights of the Customer
in the Collateral and against the Borrower to the extent of any amount paid
by
the Bank to the Customer hereunder.
(d) Except
as
provided for herein, the Bank shall have no additional liability to the Customer
relating to any Borrower’s failure to return Loaned Securities and no duty or
obligation to take action to effect payment by a Borrower of any amounts owed
by
such Borrower pursuant to the Borrower Agreement.
(e) Notwithstanding
the foregoing, the Bank shall not be required to act inconsistently with (i)
any
court or government agency order regarding the Customer’s Collateral or (ii) the
Borrower Agreement.
(f) With
respect to its use in this Section 12, a Borrower’s “insolvency” is defined to
mean any of the following: (i) the Borrower shall commence any case
or proceeding under any bankruptcy, insolvency, reorganization, liquidation,
dissolution or similar law, or seek the appointment of a receiver, conservator,
trustee, custodian or similar official for such party or any substantial part
of
its property; (ii) any case, proceeding or appointment referred to in the
preceding Clause (i) shall be commenced against the Borrower, or any application
shall be filed against the Borrower for a protective decree under the provisions
of the Securities Investor Protection Act of 1970 as amended, any of which
(aa)
is consented to or not timely contested by the Borrower, (bb) results in the
entry of any order for relief, such an appointment, the issuance of such a
protective decree or the entry of any order having a similar effect, or (cc)
is
not dismissed within 15 days; (iii) the Borrower shall make a general assignment
for the benefit of creditors; or (iv) the Borrower shall admit in writing its
inability to pay its debts as they become due.
13. Agreement
Modification. This Agreement, together with the Exhibits hereto,
contains a complete statement of the parties with respect to its subject matter,
supersedes all existing agreements between them concerning the subject and
cannot be amended or modified in any manner except by a written agreement
executed by all parties hereto. Notwithstanding the foregoing,
Exhibit B may be amended in the manner set forth in the definition of “Borrower”
contained in Section 1 and the fee schedule set forth in Exhibit C may be
renegotiated and amended in the manner set forth in Section 8(a).
14. Notice. Any
notice required to be given in writing under this Agreement shall be delivered
by hand or mailed by registered mail, postage prepaid, to FAF Advisors, Inc.,
000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: Securities Lending, or such other address provided by the
Bank, and to the Customer at the most recent address of such party provided
to
the Bank.
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15. Termination. This
Agreement may be terminated at any time by the Bank or any Customer upon thirty
(30) days prior written notice to the other party. In the event the
Agreement is terminated by the Customer prior to the expiration of 14 months
from the date of execution of the Agreement, the Customer shall pay the Bank
an
amount equal to 25% of the Net Income from the date of the Agreement’s execution
until the termination date, less any amounts previously received by the Bank,
unless this Agreement is terminated because the Bank has breached this
Agreement. Upon termination, all outstanding Loans, unless the
Customer specifies otherwise, shall remain outstanding until such Loans
terminate pursuant to the securities loan agreement with Borrower, even if
such
date is past the termination date established by either party pursuant to this
Section 15 (but subject to Section 7 and to any other agreement between the
Customer and the Bank).
16. Assignment. This
Agreement shall not be assignable by the Bank or the Customer without the
written consent of the other party, except that the Bank may assign this
Agreement to an affiliate of the Bank acceptable to the
Customer. Subject to the preceding sentence hereof, this Agreement
shall be binding upon and shall inure to the benefit of the parties and their
respective successors and assigns.
17. Governing
Law. This Agreement shall be construed and enforced in accordance
with the laws of the State of New York without reference to its conflicts or
choice of law principles.
IN
WITNESS WHEREOF, the parties hereto have hereunto set their hands as of the
day
and year first above written.
By:
/s/ Xxxxxx
Xxxxxxxx
Name:
Xxxxxx
Xxxxxxxx
Its:
Treasurer
Date:
11/28/2007
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U.S.
BANK
NATIONAL ASSOCIATION
By:
/s/ Xxxxxxx X.
Xxxxxxx
Name:
Xxxxxxx X.
Xxxxxxx
Its:
Product Manager, Securities
Lending
Date:
12/3/07
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EXHIBIT
A
List
of Customers
The
Internet Emerging Growth Portfolio
The
Internet Portfolio
The
Market Opportunities Portfolio
The
Medical Portfolio
The
Paradigm Portfolio
The
Small
Cap Opportunities Portfolio
The
Water
Infrastructure Portfolio
The
Multi-Disciplinary Portfolio
EXHIBIT
B
APPROVED
BORROWERS
The
following entities are pre-approved as “Borrowers” pursuant to Section 1 of the
Agreement unless the Customer places an “X” on the line across from a Borrower
name.
Abbey National Securities, Inc. | ||
ABN Amro Bank N.V. New York Branch | ||
ABN Amro Incorporated | ||
Ameritrade Clearing | ||
Bank of America Securities, LLC | ||
Barclays Capital Inc. | ||
Bear, Xxxxxxx and Co. Inc. | ||
Bear, Xxxxxxx Securities Corp. | ||
BNP Paribas Securities Corp. | ||
Calyon Securities (USA) Inc. | ||
Cantor Xxxxxxxxxx Securities | ||
CIBC World Markets | ||
Citigroup Global Markets, Inc. | ||
Credit Suisse Securities (USA) LLC | ||
Deutsche Bank NA | ||
Deutsche Bank Securities, Inc. | ||
Dresdner Kleinwort Xxxxxxxxxxx Securities, LLC | ||
First Clearing, LLC (Wachovia Corp.) | ||
Fortis Securities, LLC | ||
Xxxxxxx Xxxxx & Co., Incorporated | ||
RBS Greenwich Capital, Inc. | ||
HSBC Securities (USA), Inc. | ||
ING Financial Markets, LLC | ||
Xxxxxxxxx & Company, Inc. | ||
Xxxxxx Brothers, Inc. | ||
Xxxxxxx Xxxxx Government Securities Inc. | ||
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx, Inc. | ||
Xxxxxx Xxxxxxx & Co., Inc. | ||
X.X. Xxxxxx Securities, Inc. | ||
X.X. Xxxxxx Xxxxx Bank | ||
Xxxxxxx Xxxxx & Associates, Incorporated | ||
RBC Xxxx Xxxxxxxx | ||
RBC Capital Markets Corporation | ||
SG Americas Securities, LLC | ||
Societe Generale, New York Branch | ||
Swiss American Securities, Incorporated | ||
UBS Securities LLC | ||
Wachovia Bank NA | ||
Wachovia Securities, Inc. |
Please
Initial Here to Approve
Borrowers __________
EXHIBIT
C
LOAN
FEE SCHEDULE
The
Bank
shall be paid a fee for administering the securities lending program for the
Customer(s).
The
Bank’s fee shall be calculated daily and retained monthly by the Bank against
the Net Income received by the Customers’ aggregate Net Income in such an amount
equal to:
__
percent (__%) of the first $____________ of the Net Income (assuming
$____________ of Net Income, $____________ will be received by the Customer(s)
and $___ will be received by the Bank);
____
percent (____%) of the next $________ of Net Income (assuming additional
$_______ of Net Income, $__ will be received by the Customer(s) and $_________
will be received by the Bank);
___
percent (___%) of the next $___________ of Net Income (assuming additional
$________ of Net Income, $_________ will be received by the Customer(s) and
$__________ will be received by the Bank);
___
percent (___%) of the next 1.5 million of Net Income (assuming additional
$____________ of Net Income, $____________ will be received by the Customer(s)
and $_________ will be received by the Bank);
___
percent (___%) of the next ________ of Net Income (assuming additional
$_________ of Net Income, $_________ will be received by the Customer(s) and
$__________ will be received by the Bank);
___
percent (___%) of the next __________ of Net Income (assuming additional
$__________ of Net Income, $__________ will be received by the Customer(s)
and
$___________ will be received by the Bank);
___
percent (___%) of the remaining Net Income will be received by the
Bank.
Note: This
Loan Fee Schedule assumes:
1.
|
Cash
Collateral is invested in the Mount Xxxxxx Securities Lending Prime
Portfolio.
|
2.
|
That
100% of the Customer’s Securities are available to loan, that the
Securities will not be blocked or recalled during corporate events
and
that the Customer’s investment manager will limit recalls for proxy voting
to material votes.
|
3.
|
That
each Customer’s turnover rate remains relatively consistent with the
turnover listed in the Customer’s most recent shareholder report or the
industry standards for the style category for each Customer that
has not
posted a turnover rate.
|
4.
|
That
each Customer’s dividend entitlement by country is consistent with mutual
fund standards, that there is no gross-up related to the Jobs Growth
Act,
and that loans over record dates are
permitted.
|
5.
|
That
the Bank will have access to all of the Securities held by each
Customer for the entire period of the
Agreement.
|