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Public Securities Association Exhibit 99.9
00 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000
Telephone (000) 000-0000
MASTER SECURITIES LOAN AGREEMENT
Dated as of August 5, 1998
Between:
Xxxxx Xxxxxx, Inc
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and
Tribune Company
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This Agreement sets forth the terms and conditions under which one
party ("Lender") may, from time to time, lend to the other party ("Borrower")
certain securities against a pledge of collateral. Capitalized terms not
otherwise defined herein shall have the meanings provided in Section 26.
The parties hereto agree as follows:
1. Loans of Securities.
1.1 Subject to the terms and conditions of this Agreement, Borrower
or Lender may, from time to time, orally seek to initiate a transaction in which
Lender will lend securities to Borrower. Borrower and Lender shall agree orally
on the terms of each Loan, including the issuer of the securities, the amount of
securities to be lent, the basis of compensation, and the amount of Collateral
to be transferred by Borrower, which terms may be amended during the Loan.
1.2 Notwithstanding any other provision in this Agreement regarding
when a Loan commences, a Loan hereunder shall not occur until the Loaned
Securities and the Collateral therefor have been transferred in accordance with
Section 16.
1.3 WITHOUT WAIVING ANY RIGHTS GIVEN TO LENDER HEREUNDER, IT IS
UNDERSTOOD AND AGREED THAT THE PROVISIONS OF THE SECURITIES INVESTOR PROTECTION
ACT OF 1970 MAY NOT PROTECT LENDER WITH RESPECT TO LOANED SECURITIES HEREUNDER
AND THAT, THEREFORE, THE COLLATERAL DELIVERED TO LENDER MAY CONSTITUTE THE ONLY
SOURCE OF SATISFACTION OF BORROWER'S OBLIGATIONS IN THE EVENT BORROWER FAILS TO
RETURN THE LOANED SECURITIES.
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2. Transfer of Loaned Securities.
2.1 Unless otherwise agreed, Lender shall transfer Loaned Securities
to Borrower hereunder on or before the Cutoff Time on the date agreed to by
Borrower and Lender for the commencement of the Loan.
2.2 Unless otherwise agreed, Borrower shall provide Lender, in each
Loan in which Lender is a Customer, with a schedule and receipt listing the
Loaned Securities. Such schedule and receipt may consist of (a) a schedule
provided to Borrower by Lender and executed and returned by Borrower when the
Loaned Securities are received, (b) in the case of securities transferred
through a Clearing Organization which provides transferors with a notice
evidencing such transfer, such notice, or (c) a confirmation or other document
provided to Lender by Borrower.
3. Collateral.
3.1 Unless otherwise agreed, Borrower shall, prior to or
concurrently with the transfer of the Loaned Securities to Borrower, but in no
case later than the close of business on the day of such transfer, transfer to
Lender Collateral with a market value at least equal to a percentage of the
market value of the Loaned Securities agreed to by Borrower and Lender (which
shall be not less than 100% of the market value of the Loaned Securities) (the
"Margin Percentage").
3.2 The Collateral transferred by Borrower to Lender, as adjusted
pursuant to Section 8, shall be security for Borrower's obligations in respect
of such Loan and for any other obligations of Borrower to Lender. Borrower
hereby pledges with, assigns to, and grants Lender a continuing first security
interest in, and a lien upon, the Collateral, which shall attach upon the
transfer of the Loaned Securities by Lender to Borrower and which shall cease
upon the transfer of the Loaned Securities by Borrower to Lender. In addition to
the rights and remedies given to Lender hereunder, Lender shall have all the
rights and remedies of a secured party under the New York Uniform Commercial
Code. It is understood that Lender may use or invest the Collateral, if such
consists of cash, at its own risk, but that (unless Lender is a Broker-Dealer)
Lender shall, during the term of any Loan hereunder, segregate Collateral from
all securities or other assets in its possession. Lender may pledge, repledge,
hypothecate, rehypothecate, lend, relend, sell or otherwise transfer the
Collateral, or re-register Collateral evidenced by physical certificates in any
name other than Borrower's, only (a) if Lender is Broker-Dealer or (b) in the
event of a Default by Borrower. Segregation of Collateral may be accomplished by
appropriate identification on the books and records of Lender if it is a
"financial intermediary" or a "clearing corporation" within the meaning of the
New York Uniform Commercial Code.
3.3 Except as otherwise provided herein, upon transfer to Lender of
the Loaned Securities on the day a Loan is terminated pursuant to Section 5,
Lender shall be obligated to transfer the Collateral (as adjusted pursuant to
Section 8) to Borrower no later than the Cutoff
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Time on such day or, if such day is not a day on which a transfer of such
Collateral may be effected under Section 16, the next day on which such a
transfer may be effected.
3.4 If Borrower transfers Collateral to Lender, as provided in
Section 3.1, and Lender does not transfer the Loaned Securities to Borrower,
Borrower shall have the absolute right to the return of the Collateral, and if
Lender transfers Loaned Securities to Borrower and Borrower does not transfer
Collateral to Lender as provided in Section 3.1, Lender shall have the absolute
right to the return of the Loaned Securities.
3.5 Borrower may, upon reasonable notice to Lender (taking into
account all relevant factors, including industry practice, the type of
Collateral to be substituted and the applicable method of transfer), substitute
Collateral for Collateral securing any Loan or Loans; provided, however, that
such substituted Collateral shall (a) consist only of cash, securities or other
property that Borrower and Lender agreed would be acceptable Collateral prior to
the Loan or Loans and (b) have a market value such that the aggregate market
value of such substituted Collateral, together with all other Collateral for
Loans in which the party substituting such Collateral is acting as Borrower,
shall equal or exceed the agreed upon Margin Percentage of the market value of
the Loaned Securities. Prior to the expiration of any letter of credit
supporting Borrower's obligations hereunder, Borrower shall, no later than the
Cutoff Time on the date such letter of credit expires, obtain an extension of
the expiration of such letter of credit or replace such letter of credit by
providing Lender with a substitute letter of credit in an amount at least equal
to the amount of the letter of credit for which it is substituted.
3.6 Lender acknowledges that, in connection with Loans of Government
Securities and as otherwise permitted by applicable law, some securities
provided by Borrower as Collateral under this Agreement may not be guaranteed by
the United States.
4. Fees for Loan.
4.1 Unless otherwise agreed, (a) Borrower agrees to pay Lender a
loan fee (a "Loan Fee"), computed daily on each Loan to the extent such Loan is
secured by Collateral other than cash, based on the aggregate par value (in the
case of Loans of Government Securities) or the aggregate market value (in the
case of all other Loans) of the Loaned Securities on the day for which such Loan
Fee is being computed, and (b) Lender agrees to pay Borrower a fee or rebate (a
"Cash Collateral Fee") on Collateral consisting of cash, computed daily based on
the amount of cash held by Lender as Collateral, in the case of each of the Loan
Fee and the Cash Collateral Fee at such rates as Borrower and Lender may agree.
Except as Borrower and Lender may otherwise agree (in the event that cash
Collateral is transferred by clearing house funds or otherwise), Loan Fees shall
accrue from and including the date on which the Loaned Securities are
transferred to Borrower to, but excluding, the date on which such Loaned
Securities are returned to Lender, and Cash Collateral Fees shall accrue from
and including the date on which the cash Collateral is transferred to Lender to,
but excluding, the date on which such cash Collateral is returned to Borrower.
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4.2 Unless otherwise agreed, any Loan Fee or Cash Collateral Fee
payable hereunder shall be payable:
(a) in the case of any Loan of securities other than Government
Securities, upon the earlier of (i) the fifteenth day of the
month following the calendar month in which such fee was
incurred or (ii) the termination of all Loans hereunder (or,
if a transfer of cash in accordance with Section 16 may not be
effected on such fifteenth day or the day of such termination,
as the case may be, the next day on which such a transfer may
be effected); and
(b) in the case of any Loan of Government Securities, upon the
termination of such Loan.
Notwithstanding the foregoing, all Loan Fees shall be payable by Borrower
immediately in the event of a Default hereunder by Borrower and all Cash
Collateral Fees shall be payable immediately by Lender in the event of a Default
by Lender.
5. Termination of the Loan. Unless otherwise agreed, (a) Borrower may
terminate a Loan on any Business Day by giving notice to Lender and transferring
the Loaned Securities to Lender before the Cutoff Time on such Business Day, and
(b) Lender may terminate a Loan on a termination date established by notice
given to Borrower prior to the close of business on a Business Day. The
termination date established by a termination notice given by Lender to Borrower
shall be a date no earlier than the standard settlement date for trades of the
Loaned Securities entered into on the date of such notice, which date shall,
unless Borrower and Lender agree to the contrary, be (i) in the case of
Government Securities, the next Business Day following such notice and (ii) in
the case of all other securities, the fifth Business Day following such notice.
Unless otherwise agreed, Borrower shall, on or before the Cutoff Time on the
termination date of a Loan, transfer the Loaned Securities to Lender; provided,
however, that upon such transfer by Borrower, Lender shall transfer the
Collateral (as adjusted pursuant to Section 8) to Borrower in accordance with
Section 3.3.
6. Rights of Borrower in Respect of the Loaned Securities. Except as set
forth in Sections 7.1 and 7.2 and as otherwise agreed by Borrower and Lender,
until Loaned Securities are required to be redelivered to Lender upon
termination of a Loan hereunder, Borrower shall have all of the incidents of
ownership of the Loaned Securities, including the right to transfer the Loaned
Securities to others. Lender hereby waives the right to vote, or to provide any
consent or to take any similar action with respect to, the Loaned Securities in
the event that the record date or deadline for such vote, consent or other
action falls during the term of the Loan.
7. Dividends, Distributions, Etc.
7.1 Lender shall be entitled to receive all distributions made on or
in respect of the Loaned Securities which are not otherwise received by Lender,
to the full extent it would be so
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entitled if the Loaned Securities had not been lent to Borrower, including, but
not limited to: (a) cash and all other property; (b) stock dividends; (c)
securities received as a result of split ups of the Loaned Securities and
distributions in respect thereof; (d) interest payments; and (e) all rights to
purchase additional securities.
7.2. Any cash distributions made on or in respect of the Loaned
Securities, which Lender is entitled to receive pursuant to Section 7.1 shall be
paid by the transfer of cash to Lender by Borrower, on the date any such
distribution is paid, in an amount equal to such cash distribution, so long as
Lender is not in Default at the time of such payment. Non-cash distributions
received by Borrower shall be added to the Loaned Securities on the date of
distribution and shall be considered such for all purposes, except that if the
Loan has terminated, Borrower shall forthwith transfer the same to Lender.
7.3 Borrower shall be entitled to receive all cash distributions
made on or in respect of non-cash Collateral which are not otherwise received by
Borrower, to the full extent it would be so entitled if the Collateral had not
been transferred to Lender. Any distributions of cash made on or in respect of
such Collateral which Borrower is entitled to receive hereunder shall be paid by
the transfer of cash to Borrower by Lender, on the date any such distribution is
paid, in an amount equal to such cash distribution, so long as Borrower is not
in Default at the time of such payment.
7.4 (a) Unless otherwise agreed, if (i) Borrower is required to make
a payment (a "Borrower Payment") with respect to cash distributions on Loaned
Securities under Sections 7.1 and 7.2 ("Securities Distributions"), or (ii)
Lender is required to make a payment (a "Lender Payment") with respect to cash
distributions on Collateral under Section 7.3 ("Collateral Distributions"), and
(iii) Borrower or Lender, as the case may be ("Payor"), shall be required by law
to collect any withholding or other tax, duty, fee, levy or charge required to
be deducted or withheld from such Borrower Payment or Lender Payment ("Tax"),
then Payor shall (subject to subsections (b) and (c) below, pay such additional
amounts as may be necessary in order that the net amount of the Borrower Payment
or Lender Payment received by the Lender or Borrower, as the case may be
("Payee"), after payment of such Tax equals the net amount of the Securities
Distribution or Collateral Distribution that would have been received if such
Securities Distribution or Collateral Distribution had been paid directly to the
Payee.
(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.
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(d) Each party hereto shall be deemed to represent that, as of
the commencement of any Loan hereunder, no Tax would be imposed on any cash
distribution paid to it with respect to (i) Loaned Securities subject to a Loan
in which it is acting as Lender or (ii) Collateral for any Loan in which it is
acting as Borrower, unless such party has given notice to the contrary to the
other party hereto (which notice shall specify the rate at which such Tax would
be imposed). Each party agrees to notify the other of any change that occurs
during the term of a Loan in the rate of any Tax that would be imposed on any
such cash distributions payable to it.
7.5 To the extent that, under the provisions of Sections 7.1
through 7.4 (a) a transfer of cash or other property by Borrower would give rise
to a Margin Excess (as defined in Section 8.3 below) or (b) a transfer of cash
or other property by Lender would give rise to a Margin Deficit (as defined in
Section 8.2 below), Borrower or Lender (as the case may be) shall not be
obligated to make such transfer of cash or other property in accordance with
such Sections, but shall in lieu of such transfer immediately credit the amounts
that would have been transferable under such Sections to the account of Lender
or Borrower (as the case may be).
8. Xxxx to Market
8.1 Borrower shall daily xxxx to market any Loan hereunder and in
the event that at the close of trading on any Business Day the market value of
the Collateral for any Loan to Borrower shall be less that 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 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.
8.2 In addition to any rights of Lender under Section 8.1, in the
event that at the close of trading on any Business Day the aggregate market
value of all Collateral for Loans by Lender shall be less than the Margin
Percentage of the market value of all the outstanding Loaned Securities subject
to such Loans (a "Margin Deficit"), Lender may, by notice to Borrower, demand
that Borrower transfer to Lender additional Collateral so that the market value
of such additional Collateral, when added to the market value of all other
Collateral for such Loans, shall equal or exceed the agreed upon Margin
Percentage of the market value of the Loaned Securities. Unless otherwise
agreed, such transfer is to be made no later than the close of the next Business
Day following the day of Lender's notice to Borrower.
8.3 In the event that at the close of trading on any Business Day
the market value of all Collateral for Loans to Borrower shall be greater than
the Margin Percentage of the market value of all the outstanding Loaned
Securities subject to such Loans (a "Margin Excess"), Borrower may, by notice to
Lender, demand that Lender transfer to Borrower such amount of the Collateral
selected by Borrower so that the market value of the Collateral for such Loans,
after deduction of such amounts, shall thereupon not exceed the Margin
Percentage of the market value of the
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Loaned Securities. Unless otherwise agreed, such transfer is to be made no later
than the close of the next Business Day following the day of Borrower's notice
to Lender.
8.4 Borrower and Lender may agree, with respect to one or more
Loans hereunder, to xxxx the values to market pursuant to Sections 8.2 and 8.3
by separately valuing the Loaned Securities lent and the Collateral given in
respect thereof on a Loan-by-Loan basis.
8.5 Borrower and Lender may agree, with respect to any or all Loans
hereunder, that the respective rights of Lender and Borrower under Sections 8.2
and 8.3 may be exercised only where a Margin Excess or Margin Deficit exceeds a
specified dollar amount or a specified percentage of the market value of the
Loaned Securities under such Loans (which amount or percentage shall be agreed
to by Borrower and Lender prior to entering into any such Loans).
9. Representations. Each party to this Agreement hereby makes the
following representations and warranties, which shall continue during the term
of any Loan hereunder:
9.1 Each party hereto represents and warrants that (a) it has the
power to execute and deliver this Agreement, to enter into the Loans
contemplated hereby and to perform its obligations hereunder; (b) it has taken
all necessary action to authorize such execution, delivery and performance; and
(c) this Agreement constitutes a legal, valid and binding obligation enforceable
against it in accordance with its terms.
9.2 Each party hereto represents and warrants that the execution,
delivery and performance by it of this Agreement and each Loan hereunder will at
all times comply with all applicable laws and regulations including those of
applicable regulatory and self-regulatory organizations.
9.3 Each party hereto represents and warrants that it has not
relied on the other for any tax or accounting advice concerning this Agreement
and that it has made its own determination as to the tax and accounting
treatment of any Loan and any dividends, remuneration or other funds received
hereunder.
9.4 Borrower represents and warrants that it is acting for its own
account. Lender represents and warrants that it is acting for its own account
unless it expressly specifies otherwise in writing and complies with Section
10.3(b).
9.5 Borrower represents and warrants that (a) has, or will have at
the time of transfer of any Collateral, the right to grant a first security
interest therein subject to the terms and conditions hereof, and (b) it (or the
person to whom it relends the Loaned Securities) is borrowing or will borrow the
Loaned Securities (except for Loaned Securities that qualify as "exempted
securities" under Regulation T of the Board of Governors of the Federal Reserve
System) for the purpose of making delivery of such securities in the case of
short sales, failure to
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receive securities required to be delivered, or as otherwise permitted pursuant
to Regulation T as in effect from time to time.
9.6 Lender represents and warrants that it has, or will have at the
time of transfer of any Loaned Securities, the right to transfer the Loaned
Securities subject to the terms and conditions hereof.
10. Covenants
10.1 Each party hereto agrees and acknowledges that (a) each Loan
hereunder is a "securities contract," as such term is defined in Section 741(7)
of Title 11 of the United States Code (the "Bankruptcy Code"), (b) each and
every transfer of funds, securities and other property under this Agreement and
each Loan hereunder is a "settlement payment" or a "margin payment," as such
terms are used in Sections 362(b)(6) and 546(e) of the Bankruptcy Code, and (c)
the rights given to Borrower and Lender hereunder upon a Default by the other
constitute the right to cause the liquidation of a securities contract and the
right to set off mutual debts and claims in connection with a securities
contract, as such terms are used in Sections 555 and 362(b)(6) of the Bankruptcy
Code. Each party hereto further agrees and acknowledges that if a party hereto
is an "insured depository institution," as such term is defined in the Federal
Deposit Insurance Act, as amended ("FDIA"), then each Loan hereunder is a
"securities contract" and "qualified financial contract," as such terms are
defined in the FDIA and any rules, orders or policy statements thereunder.
10.2 Borrower agrees to be liable as principal with respect to its
obligations hereunder.
10.3 Lender agrees either (a) to be liable as principal with respect
to its obligations hereunder or (b) to execute and comply fully with the
provisions of Annex I (the terms and conditions of which Annex are incorporated
herein and made a part hereof).
10.4 Promptly upon (and in any event within seven (7) Business Days
after) demand by Lender, Borrower shall furnish Lender with Borrower's most
recent publicly-available financial statements and any other financial
statements mutually agreed upon by Borrower and Lender. Unless otherwise agreed,
if Borrower is subject to the requirements of Rule 17a-5(c) under the Exchange
Act, it may satisfy the requirements of this Section by furnishing Lender with
its most recent statement required to be furnished to customers pursuant to such
Rule.
10.5 Except to the extent required by applicable law or regulation
or as otherwise agreed, Borrower and Lender agree that Loans hereunder shall in
no event be "exchange 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 or other
self-regulatory organization.
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11. Events of Default. All Loans hereunder may, at the option of
the non-defaulting party exercised by notice to the defaulting party (which
option shall be deemed to have been exercised even if no notice is given,
immediately upon the occurrence of an event specified in subsection(e) below),
be terminated immediately upon the occurrence of any one or more of the
following events (individually a "Default"):
(a) if any Loaned Securities shall not be transferred to Lender
upon termination of the Loan as required by Section 5;
(b) if any Collateral shall not be transferred to Borrower upon
termination of the Loan as required by Sections 3.3 and 5;
(c) if either party shall fail to transfer Collateral as required
by Section 8;
(d) if either party (i) shall fail to transfer to the other party
amounts in respect of distributions required to be transferred
by Section 7, (ii) shall have received notice of such failure
from the non-defaulting party, and (iii) shall not have cured
such default by the Cutoff Time on the next day after such
notice on which a transfer of cash may be effected in
accordance with Section 16;
(e) if (i) either party shall commence as debtor any case or
proceeding under any bankruptcy, insolvency, reorganization,
liquidation, dissolution or similar law, or seek the
appointment of a receiver, conservator, trustee, custodian or
similar official for such party or any substantial part of its
property, (ii) any such case or proceeding shall be commenced
against either party, or another shall seek such an
appointment, or any application shall be filed against either
party for a protective decree under the provisions of the
Securities Investor Protection Act of 1970, which (A) is
consented to or not timely contested by such party, (B) results
in the entry of any order for relief, such an appointment, the
issuance of such a protective decree or the entry of an order
having similar effect, or (C) is not dismissed within 15 days,
(iii) either party shall make a general assignment for the
benefit of creditors, or (iv) either party shall admit in
writing its inability to pay its debts as they become due;
(f) if either party shall have been suspended or expelled from
membership or participation in any national securities exchange
or registered national securities association of which it is a
member or other self-regulatory organization to whose rules it
is subject or if it is suspended from dealing in securities by
any federal or state government agency thereof;
(g) if either party shall have its license, charter, or other
authorization necessary to conduct a material portion of its
business withdrawn, suspended or revoked by any applicable
federal or state government or agency thereof;
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(h) 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;
(i) if either party notifies the other, orally or in writing, of
its inability to or its intention not to perform its
obligations hereunder or otherwise disaffirms, rejects or
repudiates any if its obligations hereunder; or
(j) if either party (i) shall fail to perform any material
obligation under this Agreement not specifically set forth in
clauses (a) through (i) above, including but not limited to the
payment of fees as required by Section 4, and the payment of
transfer taxes as required by Section 14, (ii) shall have
received notice of such failure from the non-defaulting party
and (iii) shall not have cured such failure by the Cutoff Time
on the next day after such notice on which a transfer of cash
may be effected under Section 16.
12. Lender's Remedies. Upon the occurrence of a Default under Section 11
entitling Lender to terminate all Loans hereunder, Lender shall have the right
(without further notice to Borrower), in addition to any other remedies provided
herein or under applicable law, (a) to purchase a like amount of Loaned
Securities ("Replacement Securities") in the principal market for such
Collateral in a commercially reasonable manner, (b) to sell any Collateral in
the principal market for such Collateral in a commercially reasonable manner and
(c) to apply and set off the Collateral and any proceeds thereof (including any
amounts drawn under a letter of credit supporting any Loan) against the payment
of the purchase price for such Replacement Securities and any amounts due to
Lender under Sections 4, 7, 14 and 17. In the event Lender shall exercise such
rights, Borrower's obligation to return a like amount of the Loaned Securities
shall terminate, Lender may similarly apply the Collateral and any proceeds
thereof to any other obligation of Borrower under this Agreement, including
Borrower's obligations with respect to distributions paid to Borrower (and not
forwarded to Lender) in respect of Loaned Securities. In the event that (i) the
purchase price of Replacement Securities (plus all other amounts, if any, due to
Lender hereunder) exceeds (ii) the amount of the Collateral, Borrower shall be
liable to Lender for the amount of such excess together with interest thereon at
a rate equal to (A) in the case of purchases of Foreign Securities, LIBOR, (B)
in the case of purchases of any other securities (or other amounts, if any, due
to Lender hereunder), the Federal Funds Rate or (C) such other rate as may be
specified in Schedule B, in each case as such rate fluctuates from day to day,
from the date of such purchase until the date of payment of such excess. As
security for Borrower's obligation to pay such excess, Lender shall have, and
Borrower hereby grants, a security interest in any property of Borrower then
held by or for Lender and a right of setoff with respect to such property and
any other amount payable by Lender to Borrower. The purchase price of
Replacement Securities purchased under this Section 12 shall include, and the
proceeds of any sale of Collateral shall be determined after deduction of,
broker's fees and commissions and all other reasonable costs, fees and expenses
related to such purchase or sale (as the case may be). In the event Lender
exercises its rights under this Section 12, Lender may elect in its sole
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discretion, in lieu of purchasing all or a portion of the Replacement Securities
or selling all or a portion of the Collateral, to be deemed to have made,
respectively, such purchase of Replacement Securities or sale of Collateral for
an amount equal to the price therefor on the date of such exercise obtained from
a generally recognized source or the most recent closing bid quotation from such
a source. Subject to Section 19, upon the satisfaction of all obligations
hereunder, any remaining Collateral shall be returned to Borrower.
13. Borrower's Remedies. Upon the occurrence of a Default under Section 11
entitling Borrower to terminate all Loans hereunder, Borrower shall have the
right (without further notice to Lender), in addition to any other remedies
provided herein or under applicable law, (a) to purchase a like amount of
Collateral ("Replacement Collateral") in the principal market for such
Collateral in a commercially reasonable manner, (b) to sell a like amount of the
Loaned Securities in the principal market for such securities in a commercially
reasonable manner and (c) to apply and set off the Loaned Securities and any
proceeds thereof against (i) the payment of the purchase price for such
Replacement Collateral, (ii) Lender's obligation to return any cash or other
Collateral and (iii) any amounts due to Borrower under Sections 4, 7 and 17. In
such event, Borrower may treat the Loaned Securities as its own and Lender's
obligation to return a like amount of the Collateral shall terminate; provided,
however, that Lender shall immediately return any letters of credit supporting
any Loan upon the exercise or deemed exercise by Borrower of its termination
rights under Section 11. Borrower may similarly apply the Loaned Securities and
any proceeds thereof to any other obligation of Lender under this Agreement,
including Lender's obligations with respect to distributions paid to Lender (and
not forwarded to Borrower) in respect of Collateral. In the event that (i) the
sales price received from such Loaned Securities is less than (ii) the purchase
price of Replacement Collateral (plus the amount of any cash or other Collateral
not replaced by Borrower and all other amounts, if any, due to Borrower
hereunder), Lender shall be liable to Borrower for the amount of any such
deficiency, together with interest on such amounts at a rate equal to (A) in the
case of Collateral consisting of Foreign Securities, LIBOR, (B) in the case of
Collateral consisting of any other securities (or other amounts due, if any, to
Borrower hereunder), the Federal Funds Rate or (C) such other rate as may be
specified in Schedule B, in each case as such rate fluctuates from day to day,
from the date of such sale until the date of payment of such deficiency. As
security for Lender's obligation to pay such deficiency, Borrower shall have,
and Lender hereby grants, a security interest in any property of Lender then
held by or for Borrower and a right of setoff with respect to such property and
any other amount payable by Borrower to Lender. The purchase price of any
Replacement Collateral purchased under this Section 13 shall include, and the
proceeds of any sale of Loaned Securities shall be determined after deduction
of, broker's fees and commissions and all other reasonable costs, fees and
expenses related to such purchase or sale (as the case may be). In the event
Borrower exercises its rights under this Section 13, Borrower may elect in its
sole discretion, in lieu of purchasing all or a portion of the Replacement
Collateral or selling all or a portion of the Loaned Securities, to be deemed to
have made, respectively, such purchase of Replacement Collateral or sale of
Loaned Securities for an amount equal to the price therefor on the date of such
exercise obtained from a generally recognized source or the most recent closing
bid quotation from such a source. Subject to Section 19, upon the satisfaction
of all Lender's
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obligations hereunder, any remaining Loaned Securities (or remaining cash
proceeds thereof) shall be returned to Lender. Without limiting the foregoing,
the parties hereto agree that they intend the Loans hereunder to be loans of
securities. If, however, any Loan is deemed to be a loan of money by Borrower to
Lender, then Borrower shall have, and Lender shall be deemed to have granted, a
security interest in the Loaned Securities and the proceeds thereof.
14. Transfer Taxes. All transfer taxes with respect to the transfer of the
Loaned Securities by Lender to Borrower and by Borrower to Lender upon
termination of the Loan shall be paid by Borrower.
15. Market Value.
15.1 Unless otherwise agreed, if the principal market for the
securities to be valued is a national securities exchange in the United States,
their market value shall be determined by their last sale price on such exchange
on the preceding Business Day or, if there was no sale on that day, by the last
sale price on the next preceding Business Day on which there was a sale on such
exchange, all as quoted on the Consolidated Tape or, if not quoted on the
Consolidated Tape, then as quoted by such exchange.
15.2 Except as provided in Section 15.3 or 15.4 or as otherwise
agreed, if the principal market for the securities to be valued is the
over-the-counter market, their market value shall be determined as follows. If
the securities are quoted on the National Association of Securities Dealers
Automated Quotations System ("NASDAQ"), their market value shall be the closing
sale price on NASDAQ on the preceding Business Day or, if the securities are
issues for which last sale prices are not quoted on NASDAQ, the closing bid
price on such day. If the securities to be valued are not quoted on NASDAQ,
their market value shall be the highest bid quotation as quoted in any of The
Wall Street Journal, the National Quotation Bureau pink sheets, the Salomon
Brothers quotation sheets, quotations sheets of registered market makers and, if
necessary, dealers' telephone quotations on the preceding Business Day. In each
case, if the relevant quotation did not exist on such day, then the relevant
quotation on the next preceding Business Day in which there was such a quotation
shall be the market value.
15.3 Unless otherwise agreed, if the securities to be valued are
Government Securities, their market value shall be the average of the bid and
ask prices as quoted on Prophesy at 3:30 P.M. New York time on the Business Day
preceding the date on which such determination is made. If the securities are
not so quoted on such day, their market value shall be determined as of the next
preceding Business Day on which they were so quoted. If the securities to be
valued are Government Securities that are not quoted on Prophesy, their market
value shall be determined as of the close of business on the preceding Business
Day in accordance with market practice for such securities.
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15.4 Unless otherwise agreed, if the securities to be valued are
Foreign Securities, their market value shall be determined as of the close of
business on the preceding Business Day in accordance with market practice in the
principal market for such securities.
15.5 Unless otherwise agreed, the market value of a letter of
credit shall be the undrawn amount thereof.
15.6 All determinations of market value under Sections 15.1, 15.2,
15.3 and 15.4 shall include, where applicable, accrued interest to the extent
not already included therein (other than any interest transferred to the other
party pursuant to Section 7), unless market practice with respect to the
valuation of such securities in connection with securities loans is to the
contrary. All determinations of market value that are required to be made at the
close of trading on any Business Day pursuant to Section 8 or otherwise
hereunder shall be made as if being determined at the commencement of trading on
the next Business Day. The determinations of market value provided for in this
Section 15 shall apply for all purposes under this Agreement, except for
purposes of Sections 12 and 13.
16. Transfers.
16.1 All transfers of securities hereunder shall be by (a)
physical delivery of certificates representing such securities together with
duly executed stock and bond transfer powers, as the case may be, with
signatures guaranteed by a bank or a member firm of the New York Stock Exchange,
Inc., (b) transfer on the books of a Clearing Organization, or (c) such other
means as Borrower and Lender may agree. In every transfer of securities
hereunder, the transferor shall take all steps necessary (i) to effect a
"transfer" under Section 8-313 of the New York Uniform Commercial Code or, where
applicable, under any U.S. federal regulation governing transfers of securities
and (ii) to provide the transferee with comparable rights under any applicable
foreign law or regulation.
16.2 All transfers of cash Collateral hereunder shall be by (a)
wire transfer in immediately available, freely transferable funds or (b) such
other means as Borrower and Lender may agree. All other transfers of cash
hereunder shall be made in accordance with the preceding sentence or by delivery
of a certified or official bank check representing next-day New York Clearing
House Funds.
16.3 All transfers of a letter of credit from Borrower to Lender
shall be made by physical delivery to Lender of an irrevocable letter of credit
issued by a "bank" as defined in Section 3(a)(6)(A)-(C) of the Exchange Act.
Transfer of a letter of credit from Lender to Borrower shall be made by causing
such letter of credit to be returned or by causing the amount of such letter of
credit to be reduced to the amount required after such transfer.
16.4 A transfer of securities, cash or letters of credit may be
effected under this Section 16 on any day except (a) a day on which the
transferee is closed for business at its address set
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forth in Schedule A hereto or (b) a day on which a Clearing Organization or wire
transfer system is closed, if the facilities of such Clearing Organization or
wire transfer system are required to effect such transfer.
17. Contractual Currency.
17.1 Borrower and Lender agree that: (a) any payment in respect of a
distribution under Section 7 shall be made in the currency in which the
underlying distribution of cash was made; (b) any return of cash shall be made
in the currency in which the underlying transfer of cash was made and (c) any
other payment of cash in connection with a Loan under this Agreement shall be in
the currency agreed upon by Borrower and Lender in connection with such Loan
(the currency established under clause (a), (b) or (c) hereinafter referred to
as the "Contractual Currency"). Notwithstanding the foregoing, the payee of any
such payment may, at its option, accept tender thereof in any other currency;
provided, however, that, to the extent permitted by applicable law, the
obligation of the payor to make such payment will be discharged only to the
extent of the amount of Contractual Currency that such payee may, consistent
with normal banking procedures, purchase with such other currency (after
deduction of any premium and costs of exchange) on the banking day next
succeeding its receipt of such currency.
17.2 If for any reason the amount in the Contractual Currency
received under Section 17.1, including amounts received after conversion of any
recovery under any judgment or order expressed in a currency other than the
Contractual Currency, falls short of the amount in the Contractual Currency due
in respect of this Agreement, the party required to make the payment will
(unless a Default has occurred and such party is the non-defaulting party) as a
separate and independent obligation and to the extent permitted by applicable
law, immediately pay such additional amount in the Contractual Currency as may
be necessary to compensate for the shortfall.
17.3 If for any reason the amount in the Contractual Currency
received under Section 17.1 exceeds the amount in the Contractual Currency due
in respect of this Agreement, then the party receiving the payment will (unless
a Default has occurred and such party is the nondefaulting party) refund
promptly the amount of such excess.
18. ERISA. Lender shall, if any of the securities transferred to the
Borrower hereunder for any Loan have been or shall be obtained, directly or
indirectly, from or using the assets of any Plan, so notify Borrower in writing
upon the execution of the Agreement or upon initiation of such Loan under
Section 1.1. If Lender so notifies Borrower, then Borrower and Lender shall
conduct the Loan in accordance with the terms and conditions of Department of
Labor Prohibited Transaction Exemption 81-6 (46 Fed. Reg. 7527, Jan. 23, 1981;
as amended, 52 Fed. Reg. 18754, May 19, 1987), or any successor thereto (unless
Borrower and Lender have agreed prior to entering into a Loan that such Loan
will be conducted in reliance on another exemption, or without relying on any
exemption, from the prohibited transaction provisions of Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, and Section 4975 of
the
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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:
(a) Borrower represents and warrants to Lender that it is either
(i) a bank subject to federal or state supervision, (ii) a
broker-dealer registered under the Exchange Act or (iii) exempt
from registration under Section 15(a)(1) of the Exchange Act as
a dealer in Government Securities.
(b) Borrower represents and warrants that, during the term of any
Loan hereunder, neither Borrower nor any affiliate of Borrower
has any discretionary authority or control with respect to the
investment of the assets of the Plan involved in the Loan or
renders investment advice (within the meaning of 29 C.F.R.
Section 2510.3-21(c)) with respect to the assets of the Plan
involved in the Loan. Lender agrees that, prior to or at the
commencement of any Loan hereunder, it will communicate to
Borrower information regarding the Plan sufficient to identify
to Borrower any person or persons that have discretionary
authority or control with respect to the investment of the
assets of the Plan involved in the Loan or that render
investment advice (as defined in the preceding sentence) with
respect to the assets of the Plan involved in the Loan. In the
event Lender fails to communicate and keep current during the
term of any Loan such information, Lender rather than Borrower
shall be deemed to have made the representation and warranty in
the first sentence of this clause (b).
(c) Borrower and Lender agree that:
(i) 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;
(ii) prior to the making of any Loans hereunder, Borrower
shall provide Lender with (A) the most recent
available audited statement of Borrower's financial
condition and (B) the most recent available unaudited
statement of Borrower's financial condition (if more
recent than the most recent audited statement), and
each Loan made hereunder shall be deemed a
representation by Borrower that there has been no
material adverse change in Borrower's financial
condition subsequent to the date of the latest
financial statements or information furnished in
accordance herewith;
(iii) the Loan may be terminated by Lender at any time,
whereupon Borrower shall deliver the Loaned
Securities to Lender within the lesser of (A) the
customary delivery period for such securities; (B)
five Business Days and
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(C) the time negotiated for such delivery between
Borrower and Lender; provided, however, that Borrower
and Lender may agree to a longer period only if
permitted by Prohibited Transaction Exemption 81-6;
and
(iv) the Collateral transferred shall be security only for
obligations of Borrower to the Plan with respect to
Loans, and shall not be security for any obligation
of Borrower to any agent or affiliate of the Plan.
19. Single Agreement. Borrower and Lender acknowledge that, and have
entered into this Agreement in reliance of 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.
20. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.
21. Waiver. The failure of a party to this Agreement to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. All waivers in
respect of a Default must be in writing.
22. Remedies. All remedies hereunder and all obligations with respect to
any Loan shall survive the termination of the relevant Loan, return of Loaned
Securities or Collateral and termination of this Agreement.
23. Notices and Other Communications. Unless another address is specified
in writing by the respective party to whom any notice or other communication is
to be given hereunder, all such notices or communications shall be in writing or
confirmed in writing and delivered at the respective addresses set forth in
Schedule A attached hereto. All notices shall be effective upon actual receipt,
provided, however, that if any notice shall be received by a party on a day on
which
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such party is not open for business at its office located at the address
set forth in Schedule A, such notice shall be deemed to have been received by
such party at the opening of business on the next day on which such party is
open for business at such address.
24. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
24.1 EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE
COURT SITTING IN NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY SUCH COURT,
SOLELY FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING BROUGHT TO ENFORCE ITS
OBLIGATIONS HEREUNDER OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY LOAN
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.
24.2 EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY RIGHT THAT IT
MAY HAVE TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
25. Miscellaneous. This Agreement supersedes any other agreement between
the parties hereto concerning loans of securities between Borrower and Lender.
This Agreement shall not be assigned by either party without the prior written
consent of the other party and any attempted assignment without such consent
shall be null and void. Subject to the foregoing, this Agreement shall be
binding upon and shall ensure to the benefit of Borrower and Lender and their
respective heirs, representatives, successors and assigns. This Agreement may be
terminated by either party upon written notice to the other, subject only to
fulfillment of any obligations then outstanding. This Agreement shall not be
modified, except by an instrument in writing signed by the party against whom
enforcement is sought. The parties hereto acknowledge and agree that, in
connection with this Agreement and each Loan hereunder, time is of the essence.
Each provision and agreement herein shall be treated as separate and independent
from any other provision herein and shall be enforceable notwithstanding the
unenforceability of any such other provision or agreement.
26. Definitions. For the purposes hereof:
26.1 "Broker-Dealer" shall mean any person that is a broker
(including a municipal securities broker), dealer, municipal securities dealer,
government securities broker or government securities dealer as defined in the
Exchange Act, regardless of whether the activities of such
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person are conducted in the United States or otherwise require such person to
register with the Securities and Exchange Commission or other regulatory body.
26.2 "Business Day" shall mean, with respect to any Loan hereunder,
a day on which regular trading occurs in the principal market for the Loaned
Securities subject to such Loan, provided, however, that for purposes of Section
15, such term shall mean a day on which regular trading occurs in the principal
market for the securities whose value is being determined. Notwithstanding the
foregoing, (i) for purposes of Section 8, "Business Day" shall mean any day on
which regular trading occurs in the principal market for any Loaned Securities
or for any securities Collateral under any outstanding Loan hereunder and "next
Business Day" shall mean the next day on which a transfer of Collateral may be
effected in accordance with Section 16; and (ii) in no event shall a Saturday or
Sunday be considered a Business Day.
26.3 "Clearing Organization" shall mean The Depository Trust
Company, or, if agreed to by Borrower and Lender, such other clearing agency at
which Borrower (or Borrower's agent) and Lender (or Lender's agent) maintain
accounts, or a book-entry system maintained by a Federal Reserve Bank.
26.4 "Collateral" shall mean, whether now owned or hereafter
acquired and to the extent permitted by applicable law, (a) any property which
Borrower and Lender agree shall be acceptable collateral prior to the Loan and
which is transferred to Lender pursuant to Section 3 or 8 (including as
collateral, for definitional purposes, any letters of credit mutually acceptable
to Lender and Borrower), (b) any property substituted therefor pursuant to
Section 3.5, (c) all accounts in which such property is deposited and all
securities and the like in which any cash collateral is invested or reinvested,
and (d) any proceeds of any of the foregoing. For purposes of return of
Collateral by Lender or purchase or sale of securities pursuant to Section 12 or
13, such term shall include securities of the same issuer, class and quantity as
the Collateral initially transferred by Borrower to Lender.
26.5 "Customer" shall mean any person that is a customer of
Borrower under Rule 15c3-3 under the Exchange Act or any comparable regulation
of the Secretary of the Treasury under Section 15C of the Exchange Act (to the
extent that Borrower is subject to such Rule or comparable regulation).
26.6 "Cutoff Time" shall mean a time on a Business Day by which a
transfer of cash, securities or other property must be made by Borrower or
Lender to the other, as shall be agreed by Borrower and Lender in Schedule B or
otherwise orally or in writing or, in the absence of any such agreement, as
shall be determined in accordance with market practice.
26.7 "Default" shall have the meaning assigned in Section 11.
26.8 "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
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26.9 "Federal Funds Rate" shall mean the rate of interest
(expressed as an annual rate), as published in Federal Reserve Statistical
Release H.15(519) or any publication substituted therefor, charged for federal
funds (dollars in immediately available funds borrowed by banks on an overnight
unsecured basis) on that day or, if that day is not a banking day in New York
City, on the next preceding banking day.
26.10 "Foreign Securities" shall mean, unless otherwise agreed,
securities that are principally cleared and settled outside the United States.
26.11 "Government Securities" shall mean government securities as
defined in Section 3(a)(42)(A)-(C) of the Exchange Act.
26.12 "LIBOR" shall mean for any date, the offered rate for deposits
in U.S. dollars for a period of three months which appears on the Reuters Screen
LIBO page as of 11:00 A.M., London time, on such date (or, if at least two such
rates appear, the arithmetic mean of such rates).
26.13 "Loan" shall mean a loan of securities hereunder.
26.14 "Loaned Security" shall mean any security which is a security
as defined in the Exchange Act, transferred in a Loan hereunder until such
security (or an identical security) is transferred back to Lender hereunder,
except that, if any new or different security shall be exchanged for any loaned
security by recapitalization, merger, consolidation or other corporate action,
such new or different security shall, effective upon such exchange, be deemed to
become a Loaned Security in substitution for the former Loaned Security for
which such exchange is made. For purposes of return of Loaned Securities by
Borrower or purchase or sale of securities pursuant to Section 12 or 13, such
term shall include securities of the same issuer, class and quantity as the
Loaned Securities, as adjusted pursuant to the preceding sentence.
26.15 "Plan" shall mean (a) any "employee benefit plan" as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974 which is
subject to Part 4 of Subtitle B of Title I of such Act; (b) any "plan" as
defined in Section 4975(e)(1) of the Internal Revenue Code of 1986; or (c) any
entity the assets of which are deemed to be assets of any such "employee benefit
plan" or "plan" by reason of the Department of Labor's plan asset regulation, 29
C.F.R. Section 2510.3-101.
XXXXX XXXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------------
Title: Managing Director
------------------------------
Date: August 10, 1998
-------------------------------
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TRIBUNE COMPANY
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Title: Director/Treasury Operations
----------------------------------
Date: August 5, 1998
-----------------------------------
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Schedule B
DEFINED TERMS AND SUPPLEMENTAL PROVISIONS
1. Section 4.1 is amended by deleting clause (a) and replacing it with the
following:
(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
2. Section 4.1 is amended by adding to the end the following new sentence:
Unless otherwise agreed, such Loan Fees and Cash Collateral Fees shall be
calculated on the basis of a 360-day year for the actual number of days the
Loaned Securities are outstanding in accordance with the preceding
sentence.
3. Section 5 is amended by deleting the second sentence and replacing it with
the following new sentence:
The termination date established by a termination notice given by Lender to
Borrower shall be a date no earlier than the standard settlement date for
trades of the Loaned Securities entered into on the date of such notice,
which date shall, unless Borrower and Lender agree to the contrary, be (i)
in the case of Government Securities, the next Business Day following such
notice, (ii) in the case of Foreign Securities, the next Business Day
following the standard settlement date for trades of the Loaned Securities
entered into on the date of such notice and (iii) in the case of all other
securities, the standard settlement date for trades of the Loaned
Securities entered into on the date of such notice.
4. Section 15.3 is amended by deleting the clause "on Prophecy" in the first
sentence and substituting the clause "by a mutually acceptable source or
mutually acceptable sources," and by deleting the third sentence in its
entirety.
5. The "Cutoff Time" shall be 3 p.m. New York time.
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