Ex-99.(h)(4)
SECURITIES LENDING AGENCY CLIENT AGREEMENT
THIS AGREEMENT is made as of the 21st day of March, 2006, by and
between the party or parties listed as Clients on Exhibit 1 to this Agreement
(each a "Client") and UBS Securities LLC ("UBS"). Capitalized terms not
otherwise defined shall have the meanings set forth in Section 13.
Each Client and UBS, intending to be legally bound, agree as follows:
1. Appointment of UBS; Terms of Loans.
(a) (i) Each Client hereby authorizes and appoints UBS, and UBS
agrees to act, as Client's agent to effect Loans of Available Securities to
Eligible Borrowers and to provide related administrative services to Client, all
pursuant to the terms and conditions of this Agreement. During the term of this
Agreement, UBS may from time to time, in its sole discretion, contact Eligible
Borrowers on behalf of any Client and lend Available Securities belonging to
that Client ("Lending Client") to those Eligible Borrowers.
(ii) The initial Eligible Borrowers for each Client are listed
on Exhibit 2 hereto. Exhibit 2 may be amended by UBS from time to time,
provided, however, that no such amendment adding an Eligible Borrower shall be
effective with respect to any Client unless approved by that Client, and
provided further, that UBS shall amend Exhibit 2 to delete any Eligible Borrower
with respect to any Client promptly following written notice from that Client
directing UBS to do so.
(b) Each Loan shall be made pursuant to an agreement ("Borrowing
Agreement") substantially in a form attached as Schedule A hereto or in such
other form as may be approved by from time to time by Client. The form of the
Borrowing Agreement used with respect to a Loan made on behalf of any Client
shall not be amended by UBS in any material respect except with the prior
written consent of that Client. UBS shall disclose fully to Eligible Borrowers
that UBS acts as agent for its clients and not as principal.
(c) Each Loan shall be terminable by UBS on behalf of Lending Client
or the Borrower upon notice to the other party. At its sole discretion, UBS may
notify any Borrower of the termination of any Loan at any time. UBS will notify
the Borrower of the termination of any Loan on the same day that it is directed
to terminate the Loan by Lending Client if UBS receives such direction by the
Termination Notice Time on a Business Day; if the direction to terminate is
received by UBS after the Termination Notice Time, UBS will notify the Borrower
of the termination of the Loan on the next Business Day. In the case of notice
by UBS, the termination date so established will be no later than: (i) in the
case of Loans of Government Securities, the same Business Day as such notice,
(ii) in the case of Foreign Securities, the standard settlement date for trades
of the Loaned Securities entered into on the date of such notice in the
principal market for such securities, or (iii) in all other cases, the third
Business Day following such notice.
2. Authority of UBS with Respect to Loans.
(a) UBS is hereby authorized:
(i) to make, execute, acknowledge and deliver Borrowing
Agreements and any and all other documents or agreements of transfer and
conveyance and any and all other instruments that may be necessary or
appropriate to effect a transfer of Available Securities to Eligible Borrowers
pursuant to a Borrowing Agreement or to complete any Loan; and
(ii) to exercise all of the rights of Lending Client under the
Borrowing Agreement and to do all acts, whether or not expressly
authorized, which it may deem reasonably necessary or proper for the protection
of the Collateral held thereunder.
(b) Each Client acknowledges and agrees that:
(i) if Client's Available Securities or Collateral are, or
under the terms of this Agreement are required to be, held by its Custodian,
Client shall direct its Custodian to take such actions as are necessary or
appropriate to enable UBS to perform its obligations hereunder or under any
Borrowing Agreement;
(ii) UBS shall have full discretion regarding the selection of
the particular Eligible Borrowers to whom Loans of Available Securities may be
made and as to the selection of the particular Available Securities loaned
pursuant to any Loan;
(iii) there is no assurance that Loans will be made at any
time;
(iv) UBS may perform securities lending activities for other
clients of UBS, including clients that are, or that are advised or managed by,
its Affiliates, and UBS may allocate securities lending opportunities among any
or all of its clients using such reasonable methods as UBS may follow from time
to time; and
(v) Client waives the right to vote Loaned Securities or to
provide any consent or take any similar action with respect to any Loaned
Securities. Notwithstanding the foregoing, under the terms of the Borrowing
Agreement, Client shall be entitled to receive any payment made in respect of
any consent solicitation with respect to its Loaned Securities.
(vi) Should a sale, voluntary corporate action, or cash or
non-cash distribution or other action requiring Client selection or modification
occur in respect of any Loaned Securities, Client shall provide UBS with timely
advice of such notification.
(c) If an installment, call or rights issue becomes payable on, or
in respect of any, Loaned Securities, UBS shall use reasonable efforts to ensure
that any timely instructions from Lending Client are complied with, but UBS
shall not be required to make any payment unless Lending Client has first
provided funds to make such payment.
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3. Collateral; Responsibilities of UBS and Client.
(a) Under the terms of each Loan, Borrower shall be required to
transfer to UBS or to the Client Account, at or before the inception of the
Loan, Eligible Collateral having a Market Value (determined as of the close of
trading on the preceding Business Day) at least equal to 105% of the Market
Value of any Loaned Securities that are Foreign Securities and 102% of all other
Loaned Securities (the "Required Collateral Level").
(b) UBS shall determine the Market Value of the Loaned Securities
and the Collateral for each Loan on each Business Day. Under the terms of each
Loan, if at any time the Market Value of the Eligible Collateral for any Loan
decreases to 100% or less of the Market Value of the Loaned Securities, the
Borrower shall be required to transfer to UBS or the Client Account, on or
before the next Business Day, additional Eligible Collateral sufficient to
increase the Market Value of the Eligible Collateral to at least the Required
Collateral Level.
(c) (i) If the Collateral Guidelines provide that Collateral for
Client is to be held in its Client Account, UBS shall transfer any Collateral
received by it with respect to Loans for that Client to its Client Account. If
UBS receives such Collateral prior to 3:00 p.m., Eastern time (or, in the case
of cash Collateral, 5:00 p.m., Eastern time), such transfer shall be made on the
same Business Day that the Collateral is transferred to UBS; if such Collateral
received later than that time, such transfer shall be made on the next Business
Day.
(ii) If the Collateral Guidelines do not provide that
Collateral for Client is to be held in its Client Account, UBS shall remit the
net earnings on cash Collateral for such Client to its Client Account on a
monthly basis, within 10 Business Days after the end of the month, and shall use
its best efforts to credit to such Client Account any loan fees paid by
Borrowers to UBS in respect of any Loan on the dates that such fees are received
by UBS. In each case, the amount credited to such Clients may be reduced by the
amount of any compensation due to UBS pursuant to Section 6.
(d) Unless otherwise agreed by Client and UBS, UBS shall invest, or
shall arrange for the investment of, all cash Collateral in accordance with the
Collateral Guidelines. All investments of cash Collateral shall be for the
account of the Lending Client and shall be solely at the Lending Client's risk.
To the extent consistent with the Collateral Guidelines, cash Collateral may be
invested in repurchase agreements with UBS or in investment companies or other
commingled accounts advised or managed by UBS or its Affiliates, and Client
consents to the retention by UBS and its Affiliates of any advisory or other
fees paid by such accounts. If UBS arranges for cash Collateral to be invested
by an investment manager or adviser (other than UBS but including any advisory
Affiliate of UBS) approved by Client, Client will be responsible for any
investment management or advisory fees charged by that investment manager or
adviser.
(e) UBS shall give appropriate and timely directions to Lending
Client or its Custodian with respect to the transfer and re-transfer of any and
all Loaned Securities, Collateral maintained in the Client Account and payments,
distributions and proceeds thereon or thereof, and if the Collateral is
maintained in the Client Account, with respect to the payment of any loan
rebates to Borrowers, and each Lending Client will cause its Custodian to timely
execute such directions.
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(f) In the event of any default by any Borrower in respect of any
Loan, UBS shall be responsible for notifying the Lending Client, and UBS shall
take any and all actions in accordance with the Borrowing Agreement necessary or
appropriate to protect the interest of the Lending Client in respect of the
Loan, including without limitation, liquidating or, if the Collateral is
maintained in the Client Account, directing Lending Client or its Custodian to
liquidate, the Collateral.
(g) Except as provided in paragraph (h), UBS shall arrange for an
amount equal to any interest, dividends or other distributions paid on Loaned
Securities to be credited to the appropriate Client Account.
(h) Non-cash distributions on Loaned Securities in the nature of
stock splits or stock dividends shall be added to the Loan and become Loaned
Securities; provided that a Lending Client may, by giving UBS ten (10) Business
Days' notice prior to the date of such non-cash distribution, direct UBS to
request that the Borrower deliver such non-cash distributions to its Client
Account, in which case UBS shall arrange for such non-cash distribution to be
credited to that Client Account as soon as practicable.
4. Representations, Warranties and Covenants.
(a) Each Client represents, warrants and covenants as follows:
(i) this Agreement constitutes the legal, valid and binding
obligation of Client, enforceable against it in accordance with its terms except
as enforcement may be limited by bankruptcy, insolvency or similar laws, or by
equitable principles relating to or limiting creditors' rights generally;
(ii) the execution, delivery and performance by Client of this
Agreement, execution of each Borrowing Agreement by UBS on behalf of Client, and
UBS's entering into Loans under Borrowing Agreements on behalf of Client, have
been duly and validly authorized by Client, and Loans made in accordance with
the terms hereof will comply with all laws and regulations, including those of
securities regulatory and self-regulatory organizations, applicable to Client;
(iii) Client owns, and will own at the time that any Loan is
outstanding, all Available Securities free and clear of any lien or encumbrance,
and no Available Securities have been, or will at the time of any Loan have
been, sold;
(iv) Client has made its own determination as to the tax
treatment of any dividends, remuneration or other funds received hereunder;
(v) Client and any party serving as an investment adviser to
Client have approved the lending of the Available Securities, have determined
that each of the Eligible Borrowers, the Eligible Collateral and the Investment
Guidelines (as the same may be amended pursuant to the terms hereof) are
appropriate for Loans by Client hereunder and have directed UBS to comply with
the same, and have determined that lending the Available Securities in
accordance
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with the terms hereof is an appropriate activity for Client, consistent with its
investment objectives and policies;
(vi) the Available Securities are not "plan assets" within the
meaning of ERISA, or if the Available Securities are such plan assets, a Loan of
the Available Securities to an Eligible Borrower would not constitute a
prohibited transaction for purposes of ERISA; and
(vii) no Loan of the Available Securities will violate any
statute, regulation, rule, order, judgment or agreement binding on Client or any
of its assets.
(b) UBS represents, warrants and covenants to each Client as
follows:
(i) this Agreement constitutes a legal, valid and binding
obligation of UBS, enforceable against it in accordance with its terms except as
enforcement may be limited by bankruptcy, insolvency or similar laws, or by
equitable principles relating to or limiting creditors' rights generally;
(ii) the execution, delivery and performance by UBS of this
Agreement and of each Borrowing Agreement, and UBS's entering into Loans under
Borrowing Agreements on behalf of Client, have been duly and validly authorized
by UBS, and Loans made in accordance with the terms hereof will comply with all
laws and regulations relating to the lending of securities and applicable to UBS
as lending agent; and
(iii) UBS has the power to execute and deliver this Agreement,
to enter into the transactions contemplated hereby and to perform its
obligations hereunder, and it has taken all necessary action to authorize such
execution, delivery and performance.
(c) Each of the above representations and warranties shall be deemed
made and repeated for all purposes at and as of all times when any Loan entered
into under the Borrowing Agreement is outstanding.
(d) Each Client and UBS agree that, under the terms of this
Agreement, Client and its investment adviser, if any, retain ultimate authority
with respect to lending Client's securities and have directed UBS to lend
Available Securities in accordance with the terms hereof. Each Client and UBS
further agree that UBS is not, and shall not be considered to be, solely by
virtue of its role hereunder, an investment adviser for Client.
5. Statements; Records. UBS shall maintain current and accurate records
of the Loans as required by applicable regulations and shall provide each
Client with monthly statements detailing all deliveries and receipts of
Loaned Securities and Collateral, all transactions in the Client Account made at
the direction of UBS, all fees received and income earned from the Collateral
and Loaned Securities, all fees and other amounts paid to each Borrower or
others, and such other information as Client may reasonably request.
6. Compensation of UBS. In consideration of the services to be provided by
UBS hereunder, UBS shall be entitled to compensation as set forth in Exhibit 4.
UBS is hereby authorized to charge such compensation and reimbursements against
and collect the same from
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the revenues derived from securities lending activities or to direct the
Custodian to pay UBS such compensation and reimbursements on a monthly basis,
within 10 business days after the end of each month. The fees paid to UBS
hereunder are solely in consideration of securities lending services rendered by
it and are in addition to any other fees or compensation to which it may be
entitled for services rendered for Client under other agreements.
7. Modification and Termination of Agreement.
(a) This Agreement is a continuing agreement and shall remain in
full force and effect until terminated in accordance with this Section. This
Agreement may be modified or terminated with respect to any Client at any time
upon mutual written agreement of UBS and that Client, expressly referring to
this Agreement and indicating an intention to effect such modification or
termination. This Agreement also may be terminated at any time by UBS or any
Client upon ninety (90) days prior written notice to the other party.
(b) Following any termination of this Agreement but only with
respect to the Client or Clients with respect to which such termination is
effective, UBS shall:
(i) immediately cease making new Loans;
(ii) terminate, as promptly as possible, any outstanding
Loans, but shall continue to administer any such outstanding Loans as necessary
to effect their termination, including, without limitation, (A) the return to
Borrowers of Collateral on Loans as to which Loaned Securities are returned to
UBS or to the Client Account and as to which the Borrower is not in default, and
(B) the coordination of the liquidation of Collateral, all in the manner and on
the terms permitted under the Borrowing Agreements and deemed necessary or
appropriate by UBS; and
(iii) remit and deliver, or arrange for remittance and
delivery, to the Client Account all securities, earnings and other items due to
each Lending Client.
(c) Regardless of any agreement as to, or the receipt of any notice
of, termination and the cessation of lending, this Agreement shall not entirely
terminate with respect to any Lending Client until all Loans have been closed,
all Collateral liquidated or returned, all deliveries and remittances due the
Client have been made, and all final reports required hereunder have been made.
8. Standard of Care; Indemnification.
(a) Subject to the requirements of ERISA with respect to Loans
involving "plan assets" within the meaning of ERISA, UBS shall not be liable for
any loss or damage suffered or incurred by any Client in connection with any
Loan or the administration and operation of UBS's securities lending program,
whether or not resulting from any act or omission to act hereunder or otherwise,
unless and except to the extent such loss or damage has been determined by a
final judgment or order of a court of competent jurisdiction to have arisen out
of UBS's own negligence or willful misconduct. Notwithstanding anything in this
Agreement to the contrary, UBS shall not be liable to any Client for any
consequential, special or indirect losses or damages which the Client may incur
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or suffer by or as a consequence of UBS's performance of, or failure to perform,
the services to be provided hereunder, whether or not the likelihood of such
losses or damages was known by UBS, nor shall UBS be liable for any losses or
damages resulting from UBS's having complied with the Investment Guidelines or
with any other directions from, or requirements of, the Client.
(b) UBS shall not be liable to any Client for any investment
losses with respect to cash Collateral. Each Client authorizes UBS to charge the
Client Account for any amounts payable by such Client pursuant to this Section
8(b).
(c) Client shall indemnify UBS and hold it harmless from and against
any and all liability, loss, damages and claims, including attorneys' fees and
all other expenses reasonably incurred in its defense, to which UBS shall be
subjected by reason of its actions, or failure to act, in either case taken in
good faith pursuant to this Agreement, except that this indemnity shall not
apply: (i) to the extent that a court of competent jurisdiction in a final
judgment or order determines that UBS's actions or failure to act resulted from
UBS's negligence or willful misconduct; or (ii) if Available Securities are
"plan assets" within the meaning of ERISA, but only to the extent that UBS acts
as a fiduciary with respect to such plan assets, to a breach of fiduciary duty
by UBS under ERISA.
9. Governing Law; Jurisdiction. This Agreement shall be construed in
accordance with the laws of the State of New York without giving effect to the
conflict of laws principles thereof.
10. Miscellaneous.
(a) If Exhibit 1 specifies that a party identified thereon as a
Client is acting on behalf of one or more of its portfolios, series, sub-trusts
or sub-accounts (each, a "portfolio") that are also identified on Exhibit 1,
each such portfolio shall be deemed to be a Client for all purposes under this
Agreement.
(b) Notwithstanding any other provision of this Agreement,
the parties agree that, if more than one Client (including any portfolio)
is identified on Exhibit 1:
(i) the relationships and agreements set forth in this
Agreement between each Client and UBS shall be several, separate and distinct
from those between any other Client and UBS, to the same effect as if that
Client had executed a separate agreement in the form hereof with UBS; and
(ii) the assets and liabilities of each Client are separate
and distinct from the assets and liabilities of each other Client, and no Client
shall be liable or shall be charged for any debt, obligation or liability of any
other Client under this Agreement.
(c) With respect to each Client that is a business trust, notice is
hereby given that this instrument is executed on behalf of the trustees of
Client as trustees and not individually and that the obligations of this
instrument are not binding upon any of the trustees or shareholders of Client
individually but are binding solely upon the assets and property of Client.
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(d) In the event any provision of this Agreement shall be held
illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining provisions of this Agreement, and this Agreement shall be
construed and enforced as if such illegal or invalid provision had never been
contained herein.
(e) This Agreement (including the exhibits and schedules attached
hereto) constitutes the entire agreement between the parties and supersedes any
prior agreements between the parties with respect to the subject matter hereof.
This Agreement shall not be assigned by either party without the prior written
consent of the other party.
11. Notices. All notices, reports and statements shall be mailed, sent by
express delivery service, or facsimile transmitted to the parties at the
following addresses and facsimile telephone numbers and shall be effective upon
receipt thereof:
To UBS:
Address:
UBS Securities LLC
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Global Portfolio Lending
Fax: (000) 000-0000
To Client:
Address: WisdomTree Trust
c/o WisdomTree Investments, Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Fax: (000) 000-0000
12. SECURITIES INVESTORS PROTECTION ACT OF 1970 NOTICE.
EACH CLIENT IS HEREBY ADVISED AND ACKNOWLEDGES THAT THE PROVISIONS OF THE
SECURITIES INVESTOR PROTECTION ACT OF 1970 MAY NOT PROTECT CLIENT WITH RESPECT
TO THE LOAN OF SECURITIES HEREUNDER AND THAT, THEREFORE, THE COLLATERAL
DELIVERED TO CLIENT MAY CONSTITUTE THE ONLY SOURCE OF SATISFACTION OF BORROWER'S
OBLIGATION IN THE EVENT THE BORROWER FAILS TO RETURN THE SECURITIES.
13. Definitions. For the purposes hereof:
(a) "Affiliate" shall mean any entity which controls, is controlled by, or
is under common control with another entity.
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(b) "Available Securities" shall mean with respect to any Client and on
any date, those securities held or maintained in its Client Account, other than
those securities that Client has designated by written notice to UBS as not
being available for Loans.
(c) "Borrower" shall mean, with respect to any Loan, the party that is a
borrower under a Borrowing Agreement.
(d) "Borrowing Agreement" shall have the meaning set forth in Section 1.
(e) "Business Day" shall mean any day other than a day on which the New
York Stock Exchange, Inc. is closed for trading; provided, however, that for
purposes of the notice required to terminate any Loan, "Business Day" shall have
the meaning established under the related Borrowing Agreement.
(f) "Client Account" shall mean, with respect to any Client, the
account specified in Exhibit 3.
(g) "Collateral" shall mean all securities and other items of property
pledged as collateral for a Loan.
(h) "Collateral Guidelines" shall mean, with respect to any Client,
the guidelines for Eligible Collateral and for the investment of cash Collateral
set forth in Exhibit 5.
(i) "Custodian" shall mean, with respect to any Client, the entity
identified as such in Exhibit 3.
(j) "Eligible Borrower" shall mean, with respect to any Client and on any
date, any entity to which Available Securities may be loaned on behalf of that
Client, as listed in Exhibit 2, as the same may be amended from time to time by
UBS.
(k) "Eligible Collateral" shall mean, with respect to any Lending Client
and subject to such limitations as are specified in the Collateral Guidelines,
Collateral consisting of (i) cash, (ii) Government Securities; (iii) Letters of
Credit; and (iv) such other securities, instruments or investment property
specified in the Collateral Guidelines.
(l) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may now or hereafter be amended.
(m) "Foreign Securities" shall mean securities that are denominated in a
currency other than United States dollars and that are principally cleared and
settled outside of the United States.
(n) "Government Securities" shall mean government securities as defined in
Section 3(a)(42)(A)-(C) of the Securities Exchange Act of 1934, as amended.
(o) "Lending Client" shall have the meaning set forth in Section 1.
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(p) "Letter of Credit" shall mean an irrevocable, unconditional, stand-by
letter of credit, in form and substance satisfactory to the Lending Client,
issued by a bank (not affiliated with the Borrower under the related Loan)
listed in the Collateral Guidelines.
(q) "Loan" shall mean a loan of Available Securities pursuant to this
Agreement.
(r) "Loaned Securities" shall mean, with respect to any Loan, the
securities loaned by UBS on behalf of a Lending Client.
(s) "Market Value" shall have the meaning assigned in the applicable
Borrowing Agreement.
(t) "Required Collateral Level" shall have the meaning set forth in
Section 3(a).
(u) "Termination Notice Time" shall mean: (i) with respect to a direction
by Client to UBS to terminate a Loan of Foreign or Government Securities, 9:45
a.m., Eastern time, on a Business Day; and (ii) with respect to a direction by
Client to UBS to terminate any other Loan, 10:00 a.m., Eastern time, on a
Business Day.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereto duly authorized effective as of
the day and year first above written.
UBS SECURITIES LLC
BY: /s/ Xxxxxx X Xxxxxxxx
----------------------------------------
NAME: Xxxxxx X. Xxxxxxxx
TITLE: Executive Director
BY: /s/ Xxxx X. Xxxxxx
----------------------------------------
NAME: Xxxx X. Xxxxxx
TITLE: Executive Director
WISDOMTREE TRUST, on behalf of each
Client listed on Exhibit 1
BY: /s/ Xxxxxxxx Xxxxxxxxx
----------------------------------------
NAME: Xxxxxxxx Xxxxxxxxx
TITLE: President
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EXHIBIT 1
EXHIBIT 1
WisdomTree Europe Total Dividend Fund
WisdomTree Europe High-Yielding Equity Fund
WisdomTree Europe SmallCap Dividend Fund
WisdomTree Japan Total Dividend Fund
WisdomTree Japan High-Yielding Equity Fund
WisdomTree Japan SmallCap Dividend Fund
WisdomTree Pacific ex-Japan Total Dividend Fund
WisdomTree Pacific ex-Japan High-Yielding Equity Fund
WisdomTree International LargeCap Dividend Fund
WisdomTree International Dividend Top 100(SM) Fund
WisdomTree International MidCap Dividend Fund
WisdomTree International SmallCap Dividend Fund
WisdomTree International Basic Materials Sector Fund
WisdomTree International Communications Sector Fund
WisdomTree International Consumer Cyclical Sector Fund
WisdomTree International Consumer Non-Cyclical Sector Fund
WisdomTree International Energy Sector Fund
WisdomTree International Financial Sector Fund
WisdomTree International Health Care Sector Fund
WisdomTree International Industrial Sector Fund
WisdomTree International Technology Sector Fund
WisdomTree International Utilities Sector Fund
Dated: June 12, 2006
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EXHIBIT 2
(ELIGIBLE BORROWERS)
Abbey National Securities Inc.
ABN AMRO Incorporated
BNP Paribas Securities Corp.
Banc of America Securities LLC
Barclays Capital Inc.
Bear Xxxxxxx Securities Corp.
Bear, Xxxxxxx & Co.
Citigroup Global Markets Inc.
Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
Dresdner Securities (U.S.) Inc.
First Clearing, LLC
Fortis Securities LLC
Xxxxxxx, Xxxxx & Company
HSBC Securities (USA) Inc.
ING Financial Markets LLC
X.X. Xxxxxx Securities Inc.
Xxxxxx Brothers Inc.
Xxxxxxx Xxxxx Government Securities Inc.
Xxxxxxx Xxxxx Xxxxxx Xxxxxx & Xxxxx, Inc.
Mizuho Securities USA Inc.
Xxxxxx Xxxxxxx & Co. Inc.
MS Securities Services, Inc.
National Financial Services LLC
Nomura Securities International, Inc.
Pershing LLC
XX Xxxxx Securities Corporation
UBS Securities LLC
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EXHIBIT 3
(CLIENT ACCOUNT AND CUSTODIAN INFORMATION)
The following are the Client Accounts and, where applicable, the Custodians for
each Client:
Client Account
WisdomTree Total Dividend Fund
WisdomTree High-Yielding Equity(SM) Fund
WisdomTree LargeCap Dividend Fund
WisdomTree Dividend Top 100(SM) Fund
WisdomTree MidCap Dividend Fund
WisdomTree SmallCap Dividend Fund
WisdomTree DIEFA(SM) Fund
WisdomTree DIEFA High-Yielding Equity Fund
WisdomTree Europe Total Dividend Fund
WisdomTree Europe High-Yielding Equity Fund
WisdomTree Europe SmallCap Dividend Fund
WisdomTree Japan Total Dividend Fund
WisdomTree Japan High-Yielding Equity Fund
WisdomTree Japan SmallCap Dividend Fund
WisdomTree Pacific ex-Japan Total Dividend Fund
WisdomTree Pacific ex-Japan High-Yielding Equity Fund
WisdomTree International LargeCap Dividend Fund
WisdomTree International Dividend Top 100(SM) Fund
WisdomTree International MidCap Dividend Fund
WisdomTree International SmallCap Dividend Fund
WisdomTree International Basic Materials Sector Fund
WisdomTree International Communications Sector Fund
WisdomTree International Consumer Cyclical Sector Fund
WisdomTree International Consumer Non-Cyclical Sector Fund
WisdomTree International Energy Sector Fund
WisdomTree International Financial Sector Fund
WisdomTree International Health Care Sector Fund
WisdomTree International Industrial Sector Fund
WisdomTree International Technology Sector Fund
WisdomTree International Utilities Sector Fund
The Bank of New York is the Custodian for each Client.
Dated: June 12, 2006
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EXHIBIT 4
(COMPENSATION SCHEDULE)
UBS Fee: of the Spread (if cash Collateral) or of the Fee Paid By Borrower
(if non-cash Collateral)
Method of Calculation - Example:
Cash Collateral
Annual Investment Rate
Annual Rate of Rebate to Borrower (negotiated)
Spread
Income
Days Income on UBS to
Loan Size Open Investment* Rebate Spread Fee Client
--------- ---- ----------- ------ ------ --- ------
* Formula: Loan Value x Annual Investment Rate x # Days Open
Non-Cash Collateral
Annual Borrower Fee Rate (negotiated)
Income
Days Fee Paid by UBS to
Loan Size Open Borrower** Fee Client
--------- ---- ----------- --- ------
** Computation: Loan Value x Annual Fee Rate x # Days Open
In addition, each Client will reimburse UBS for all clearing corporation,
transit or other transactional costs and expenses incurred by UBS and agreed to
by Client in connection with the transfer or re-transfer of Loaned Securities or
Collateral to or from the Client Account.
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EXHIBIT 5
(COLLATERAL GUIDELINES)
1. For each Lending Client, Collateral shall be held (check appropriate box):
|_| by UBS for the account of Lending Client;
|X| in the Client Account.
2. For each Client, Eligible Collateral shall include:
A. Cash in the following currencies:
Yes No
--- --
(i) U.S. Dollars |X| |_|
(ii) Other: __________ |_| |X|
B. Government Securities |X| |_|
(Securities issued, guaranteed or sponsored
by the U.S. Government, Government Agency
or Instrumentality)
3. For each Client, cash Collateral may be invested in as follows:
Certificates of Deposits
Commercial Paper - A1/P1 Top Tier
Money Market Mutual Funds - AAA Rated
Private Placement Liquidity Funds - AAA Rated
Repurchase/ Reverse Repurchase Agreements
Time Deposits
UBS Private Money Market Fund LLC
U.S. Treasuries & Agencies
All securities must have a credit rating of "A1," "P1" or its equivalent as
rated by any nationally recognized statistical rating organizations ("NRSRO's")
from which it receives a rating.
16
SCHEDULE A
(FORM OF BORROWING AGREEMENT)
17
