SECURITIES LENDING AUTHORIZATION AGREEMENT
Between
SPDR(R) SERIES TRUST
ON BEHALF OF EACH OF ITS RESPECTIVE SERIES AS LISTED ON SCHEDULE B,
SEVERALLY AND NOT JOINTLY,
and
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
PAGE
1. DEFINITIONS............................................................................1
2. APPOINTMENT OF STATE STREET............................................................2
3. SECURITIES TO BE LOANED................................................................3
4. BORROWERS..............................................................................3
5. SECURITIES LOAN AGREEMENTS.............................................................4
6. LOANS OF AVAILABLE SECURITIES..........................................................4
7. DISTRIBUTIONS ON AND VOTING RIGHTS WITH RESPECT TO
LOANED SECURITIES.............................................................5
8. COLLATERAL.............................................................................6
9. INVESTMENT OF CASH COLLATERAL AND COMPENSATION ........................................7
10. FEE DISCLOSURE.........................................................................8
11. RECORDKEEPING AND REPORTS..............................................................8
12. STANDARD OF CARE.......................................................................9
13. REPRESENTATIONS AND WARRANTIES.........................................................9
14. BORROWER DEFAULT INDEMNIFICATION......................................................11
15. CONTINUING AGREEMENT AND TERMINATION..................................................12
16. NOTICES...............................................................................12
17. SECURITIES INVESTORS PROTECTION ACT...................................................13
18. AUTHORIZED REPRESENTATIVES ...........................................................13
19. AGENTS................................................................................13
20. FORCE MAJEURE.........................................................................14
21. NON-US BORROWERS......................................................................14
22. MISCELLANEOUS.........................................................................14
23. COUNTERPARTS..........................................................................15
24. MODIFICATION..........................................................................15
25. CLIENT NOTIFICATION...................................................................15
EXHIBITS AND SCHEDULES
SCHEDULE A (Schedule of Fees)
SCHEDULE B (Funds)
SCHEDULE C (Acceptable Forms of Collateral)
SCHEDULE D (Schedule of Approved Borrowers)
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SECURITIES LENDING AUTHORIZATION AGREEMENT
Agreement dated the 28th day of November, 2007 between SPDR(R) SERIES TRUST, an
open-end management investment company, organized as a Massachusetts business
trust, on behalf of each of its respective series as listed on Schedule B,
severally and not jointly, each a registered management investment company
organized and existing under the laws of Massachusetts (the "Trust"), and STATE
STREET BANK AND TRUST COMPANY acting either directly or through the State Street
Affiliates (defined below) (collectively "State Street"), setting forth the
terms and conditions under which State Street is authorized to act on behalf of
the Trust with respect to the lending of certain securities of the Trust held by
State Street as agent, trustee or custodian.
This Agreement shall be deemed for all purposes to constitute a
separate and discrete agreement between State Street and each of the series of
the Trust as listed on Schedule B to this Agreement (the Trust acting on behalf
of each such series, a "Fund" and collectively, the "Funds") as it may be
amended by the parties, and no series of the Trust shall be responsible or
liable for any of the obligations of any other series of the Trust under this
Agreement or otherwise, notwithstanding anything to the contrary contained
herein.
NOW, THEREFORE, in consideration of the mutual promises and of the
mutual covenants contained herein, each of the parties hereto does hereby
covenant and agree as follows:
1. Definitions. For the purposes hereof:
(a) "Authorized Representative" means any individual designated by the
Funds in a written notice to State Street as authorized to act on behalf of a
Fund with respect to any of the transactions contemplated by this Agreement, and
all individuals so designated shall remain authorized representatives until
State Street receives a notice revoking such designation.
(b) "Available Securities" means the securities of the Funds that are
available for Loans pursuant to Section 3.
(c) "Borrower" means any of the entities to which Available Securities
may be loaned under a Securities Loan Agreement, as described in Section 4.
(d) "Collateral" means collateral delivered by a Borrower to secure its
obligations under a Securities Loan Agreement.
(e) "Investment Manager" when used in any provision, means the person
or entity that has discretionary authority over the investment of the Available
Securities to which the provision applies.
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(f) "Loan" means a loan of Available Securities to a Borrower made
under a Securities Loan Agreement.
(g) "Loaned Security" shall mean any "security" which is delivered as a
Loan under a Securities Loan Agreement; provided 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 was made.
(h) "Market Value" of a security means the market value of such
security (including, in the case of a Loaned Security that is a debt security,
the accrued interest on such security) as determined by the independent pricing
service designated by State Street, or such other independent sources as may be
selected by State Street on a reasonable basis.
(i) "Replacement Securities" means securities of the same issuer, class
and denomination as Loaned Securities.
(j) "Securities Loan Agreement" means the agreement between a Borrower
and State Street (on behalf of the Funds) that governs Loans, as described in
Section 5.
(k) "State Street Affiliates" means any entity that directly or
indirectly through one or more intermediaries, controls State Street or that is
controlled by or is under common control with State Street.
2. Appointment of State Street.
Each Fund hereby appoints and authorizes State Street as its agent to
lend Available Securities to Borrowers in accordance with the terms of this
Agreement. State Street shall have the responsibility and authority to do or
cause to be done all acts State Street shall determine to be desirable,
necessary, or appropriate to implement and administer this securities lending
program. Each Fund agrees that State Street is acting as a fully disclosed agent
and not as principal in connection with the securities lending program. State
Street may take action as agent of the Fund on an undisclosed or a disclosed
basis. State Street is also hereby authorized to request a third party bank to
undertake certain custodial functions in connection with holding of the
Collateral provided by a Borrower pursuant to the terms hereof. In connection
therewith, State Street may instruct such third party bank to establish and
maintain a Borrower's account and a State Street account wherein all Collateral,
including cash, shall be maintained by such bank (as applicable) in accordance
with the terms of a form of custodial arrangement which shall also be consistent
with the terms hereof.
Each Fund also appoints and authorizes State Street as its agent, to
enter into fee for holds arrangements with respect to certain Available
Securities. State Street will, in return
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for a fee from the Borrower, hold and reserve certain Available Securities and
refrain from lending such Available Securities to any third party without the
Borrower's permission, provided, however, that the fee for holds arrangements
shall not restrict or otherwise affect the Fund's ownership rights (including
the ability to sell such Available Securities at any time deemed appropriate by
the Fund) with regard to the Available Securities. The fee from the Borrower
shall be allocated between State Street and the Fund in accordance with Schedule
A.
3. Securities to be Loaned.
All of the Fund's securities held by State Street as trustee or
custodian shall be subject to this securities lending program and constitute
Available Securities hereunder, except those securities which the Fund or the
Investment Manager specifically identifies herein or in notices to State Street
as not being Available Securities. In the absence of any such identification
herein or other notices identifying specific securities as not being Available
Securities, State Street shall have no authority or responsibility for
determining whether any of the Fund's securities should be excluded from the
securities lending program.
State Street will not make a Loan on behalf of a Fund if as a result of
such Loan the aggregate outstanding Loans for such Fund would be in excess of 33
1/3% of such Fund's total asset value. Should the applicable law change with
respect to the percentage on-loan, an Authorized Representative of the Fund or
the Investment Manager shall so notify State Street and the parties shall revise
this Agreement accordingly
4. Borrowers.
The Available Securities may be loaned to any Borrower identified on
Schedule D, the Schedule of Approved Borrowers, as such schedule may be modified
from time to time by State Street and the Fund as stated herein. In no event may
Available Securities be loaned to any Borrower who is an affiliate of State
Street, whether or not such Borrower is listed on Schedule D. State Street shall
provide the Funds with a list of current Borrowers that State Street has
selected, and shall update such list monthly except where such list remains
unchanged from the previous month. Except for any potential Borrowers with
respect to whom a Fund notifies State Street in writing that the Borrower is
unacceptable, the updated list shall become the amended Schedule D. Any
Borrowers deleted from State Street's list of current Borrowers shall
automatically be deleted at the same time from Schedule D.
State Street shall not be responsible for any statements,
representations, warranties or covenants made by any Borrower in connection with
any Loan or for any Borrower's performance of or failure to perform the terms of
any Loan under the applicable Securities Loan Agreement or any related
agreement, including the failure to make any required payments, except as
otherwise expressly provided herein.
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5. Securities Loan Agreements.
Each Fund authorizes State Street to enter into one or more Securities
Loan Agreements with such Borrowers as may be selected by State Street from
Schedule D. Each Securities Loan Agreement shall have such terms and conditions
as State Street may negotiate with the Borrower; provided, however, that such
terms and conditions shall be consistent with the terms hereof. Certain terms of
individual Loans, including rebate fees to be paid to the Borrower for the use
of cash Collateral, shall be negotiated at the time a Loan is made.
6. Loans of Available Securities.
State Street shall be responsible for determining whether any
Loans of Available Securities shall be made and for negotiating and establishing
the terms of each such Loan. State Street shall have the authority to terminate
any Loan in its discretion, at any time and without prior notice to the Fund. In
the event of a default by a Borrower on any Loan (within the meaning of the
applicable Securities Loan Agreement) State Street shall be fully protected in
acting in any manner it deems reasonable and appropriate. Upon notice to State
Street, the Fund has the right to direct State Street to initiate action to
terminate any Loan made under this Agreement.
Each Fund acknowledges that State Street administers securities lending
programs for other clients of State Street. State Street will allocate
securities lending opportunities among its clients, using reasonable and
equitable methods established by State Street from time to time. State Street
does not represent or warrant that any amount or percentage of the Fund's
Available Securities will in fact be loaned to Borrowers. Each Fund agrees that
it shall have no claim against State Street and State Street shall have no
liability arising from, based on, or relating to, loans made for other clients,
or loan opportunities refused hereunder, whether or not State Street has made
fewer or more loans for any other client, and whether or not any loan for
another client, or the opportunity refused, could have resulted in loans made
under this Agreement.
Each Fund also acknowledges that, under the applicable Securities Loan
Agreements, the Borrowers will not be required to return Loaned Securities
immediately upon receipt of notice from State Street terminating the applicable
Loan, but instead will be required to return such Loaned Securities within such
period of time following such notice as is specified in the applicable
Securities Loan Agreement, and in no event later than the earlier to occur of
(a) the end of the customary settlement period for such securities; or (b)
except as otherwise agreed, the close of the fifth securities trading day
following the day on which Borrower receives notice of said termination. Upon
receiving a notice from the Fund or the Investment Manager that Available
Securities which have been loaned to a Borrower should no longer be considered
Available Securities (whether because of the sale of such securities or
otherwise), State Street shall use its reasonable efforts to notify promptly
thereafter the Borrower which has borrowed such securities that the Loan of such
Available Securities is
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terminated and that such Available Securities are to be returned within the time
specified by the applicable Securities Loan Agreement and in no event later than
the end of the customary settlement period.
7. Distributions on and Voting Rights with Respect to Loaned Securities.
Except as provided in the next sentence, all substitute interest,
dividends, and other distributions paid with respect to Loaned Securities shall
be credited to the Fund's account on the date such amounts are delivered by the
Borrower to State Street. Any non-cash distribution on Loaned Securities which
is in the nature of a stock split or a stock dividend shall be added to the Loan
(and shall be considered to constitute Loaned Securities) as of the date such
non-cash distribution is received by the Borrower; provided that the Fund or
Investment Manager may, by giving State Street ten (l0) business days' notice
prior to the date of such non-cash distribution, direct State Street to request
that the Borrower deliver such non-cash distribution to State Street, pursuant
to the applicable Securities Loan Agreement, in which case State Street shall
credit such non-cash distribution to the Fund's account on the date it is
delivered to State Street.
Each Fund acknowledges that it will not be entitled to participate in
any dividend reinvestment program or to vote with respect to Available
Securities that are on loan on the applicable record date for such Available
Securities. Notwithstanding the foregoing, each Fund reserves the right to
recall Loans to vote proxies if a material event affecting the investment, as
determined by the Fund or its Investment Manager, is to occur. In such event,
the Fund shall instruct State Street, at least ten (10) business days prior to
the record date established for determining the identity of stockholders
entitled to vote the Loan Securities, to terminate the Loan of the Loan
Securities. State Street shall use reasonable efforts to terminate the Loan at
least five (5) business days prior to the record date.
Each Fund also acknowledges that any payments of distributions from
Borrower to the Fund are in substitution for the interest or dividend accrued or
paid in respect of Loaned Securities and that the tax and accounting treatment
of such payment may differ from the tax and accounting treatment of such
interest or dividend.
If an installment, call or rights issue becomes payable on or in
respect of any Loaned Securities, State Street shall use all reasonable
endeavors to ensure that any timely instructions from the Fund or its Investment
Manager are complied with, but State Street shall not be required to make any
payment unless the Fund has first provided State Street with funds to make such
payment.
Each Fund acknowledges and agrees that, with respect to a dividend paid
during the Loan term by a company that is a resident of France, the Fund will
not be entitled to receive, either from the French company or the Borrower, any
additional dividends (sometimes referred to as "complementary coupons") declared
and payable by such company that are
5
equivalent to a refund of any prepayment of French tax ("equalization tax" or
"precompte") or an additional tax credit adjustment ("credit d'impot").
Each Fund further acknowledges and agrees that the Fund will be
required to accept cash in lieu of fractional shares in all instances in which
an issuer does not issue fractional shares.
8. Collateral.
(a) Receipt of Collateral. Each Fund hereby authorizes State Street (or
a third party bank as described in Section 2 above) to receive and to hold, on
the Fund's behalf, Collateral from Borrowers to secure the obligations of
Borrowers with respect to any Loan of Available Securities made on behalf of the
Fund pursuant to the Securities Loan Agreements. All investments of cash
Collateral shall be for the account and at the risk of the Fund. Concurrently
with or prior to the delivery of the Loaned Securities to the Borrower under any
Loan, State Street shall receive from the Borrower Collateral in any of the
forms listed on Schedule C. Said Schedule may be amended from time to time by
State Street and the Fund.
(b) Marking to Market. The initial Collateral received shall have
(depending on the nature of the Loaned Securities and the Collateral received) a
value of 102% or 105% of the Market Value of the Loaned Securities, or such
other value, but not less than 102% of the Market Value of the Loaned
Securities, as may be applicable in the jurisdiction in which such Loaned
Securities are customarily traded.
Pursuant to the terms of the applicable Securities Loan Agreement,
State Street shall, in accordance with State Street's reasonable and customary
practices, xxxx Loaned Securities and Collateral to their Market Value each
business day based upon the Market Value of the Collateral and the Loaned
Securities at the close of business employing the most recently available
pricing information and receive and deliver Collateral in order to maintain the
value of the Collateral at no less than one hundred percent (100%) of the Market
Value of the Loaned Securities.
(c) Return of Collateral. The Collateral shall be returned to Borrower
at the termination of the Loan upon the return of the Loaned Securities by
Borrower to State Street in accordance with the applicable Securities Loan
Agreement.
(d) Limitations. State Street shall invest cash Collateral in
accordance with any directions, including any limitations established by the
Funds and set forth on Schedule A. State Street shall exercise reasonable care,
skill, diligence and prudence in the investment of Collateral. Subject to the
foregoing limits and standard of care, State Street does not assume any market
or investment risk of loss with respect to the investment of cash Collateral. If
the value of the cash Collateral so invested is insufficient to return any and
all other amounts due to such Borrower pursuant to the Securities Loan
Agreement, the Fund shall be responsible for such shortfall as set forth in
Section 9.
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9. Investment of Cash Collateral and Compensation.
To the extent that a Loan is secured by cash Collateral, such cash
Collateral, including money received with respect to the investment of the same,
or upon the maturity, sale, or liquidation of any such investments, shall be
invested by State Street, subject to the directions referred to in Section 8(d)
above, if any, in short-term instruments, short term investment funds maintained
by State Street, money market mutual funds and such other investments as State
Street may from time to time select, including without limitation, investments
in obligations or other securities of State Street or of any State Street
Affiliate and investments in any short-term investment fund, mutual fund,
securities lending trust or other collective investment fund with respect to
which Xxxxx Xxxxxx xxx/xx Xxxxx Xxxxxx Affiliates provide investment management
or advisory, trust, custody, transfer agency, shareholder servicing and/or other
services for which they are compensated. State Street does not assume any market
or investment risk of loss associated with any investment or change of
investment in any such investments, including any cash Collateral investment
vehicle designated on Schedule A.
Each Fund acknowledges that interests in such mutual funds, securities
lending trusts and other collective investment funds, to which State Street
and/or one or more of the State Street Affiliates provide services are not
guaranteed or insured by State Street or any of the State Street Affiliates or
by the Federal Deposit Insurance Corporation or any government agency. Each Fund
hereby authorizes State Street to purchase or sell investments of cash
Collateral to or from other accounts held by State Street or State Street
Affiliates.
The net income generated by any investment made pursuant to the first
paragraph of this Section 9 shall be allocated among the Borrower, State Street,
and the Fund, as follows: (a) a portion of such income shall be paid to the
Borrower in accordance with the agreement negotiated between the Borrower and
State Street; (b) the balance, if any, shall be split between State Street, as
compensation for its services in connection with this securities lending
program, and the Fund and such income shall be credited to the Fund's account,
in accordance with the fee split set forth on Schedule A.
In the event the net income generated by any investment made pursuant
to the first paragraph of this Section 9 does not equal or exceed the amount due
the Borrower (the rebate fee for the use of cash Collateral) in accordance with
the agreement between Borrower and State Street, State Street and the Fund
shall, in accordance with the fee split set forth on Schedule A, share the
amount equal to the difference between the net income generated and the amounts
to be paid to the Borrower pursuant to the Securities Loan Agreement. The Fund
shall be solely responsible for (i) the payment to the Borrower of the rebate
fee, subject to State Street's obligations in the immediately preceding
sentence, (ii) the return to the Borrower, on termination of the loan and based
on xxxx-to-market valuations, of Collateral pledged or otherwise posted by the
Borrower with respect to any Loan, (iii) payment to the Borrower of interest,
dividends and distributions on non-cash Collateral, (iv) any taxes
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imposed on a Loan for which the Client is responsible by law, rule or
regulation, and (v) any amounts erroneously credited to the Client's custody
account and which are due and owing to either State Street or the Borrower, and
State Street may debit the Fund's account accordingly. In the event debits to
the Fund's account produce a deficit therein, State Street shall sell or
otherwise liquidate investments made with cash Collateral and credit the net
proceeds of such sale or liquidation to satisfy the deficit. In the event the
foregoing does not eliminate the deficit, State Street shall have the right to
charge the deficiency to any other account or accounts maintained by the Fund
with State Street.
To the extent that a Loan is secured by non-cash Collateral, the
Borrower shall be required to pay a loan premium, the amount of which shall be
negotiated by State Street. Such loan premium shall be allocated between State
Street and the Fund as follows: (a) a portion of such loan premium shall be paid
to State Street as compensation for its services in connection with this
securities lending program, in accordance with Schedule A hereto; and (b) the
remainder of such loan premium shall be credited to the Fund's account.
Each Fund hereby agrees that it shall reimburse State Street for any
and all funds advanced by State Street on behalf of the Fund as a consequence of
the Fund's obligations hereunder, including the Fund's obligation to return cash
Collateral to the Borrower and to pay any fees due the Borrower, all as provided
in Section 8 hereof or this Section 9.
10. Fee Disclosure.
The fees associated with the investment of cash Collateral in funds
maintained or advised by State Street are disclosed on Schedule A hereto. Said
fees may be changed from time to time by State Street upon notice to the Funds,
in accordance with the governing documents of the applicable trust. An annual
report with respect to such funds is available to the Funds, at no expense, upon
request.
11. Recordkeeping and Reports.
State Street will establish and maintain such records as are reasonably
necessary to account for Loans that are made and the income derived therefrom.
State Street's records shall be presumed to reflect accurately any instructions,
directions or other communications regardless of how communicated, sent or
delivered from any Authorized Representative. On a monthly basis, State Street
will provide the Funds with a statement describing the Loans made, and the
income derived from the Loans, during the period covered by such statement. Each
party to this Agreement shall comply with the reasonable requests of the other
for information necessary to the requester's performance of its duties in
connection with this securities lending program.
Each Fund hereby agrees to participate in the Performance Explorer
service offered by State Street through Data Explorers Limited and each Fund
further agrees that as a condition for its participation in the Performance
Explorer service, State Street is authorized by the Fund to provide to Data
Explorers information relating to the Fund's Loaned
8
Securities on an anonymous basis for aggregation into the Data Explorers
database, provided that the identity of the Fund as owner of the Loaned
Securities is in no way identifiable and provided further that Data Explorers
Limited has agreed to treat any such information provided to it confidentially
and to use such information solely for the purposes of providing the service.
12. Standard of Care and Indemnification.
(a) State Street shall use reasonable care in the performance of its
duties hereunder consistent with that exercised by banks generally in the
performance of duties arising from acting as agent for clients in securities
lending transactions.
(b) Each Fund shall indemnify State Street and hold State Street
harmless from any loss or liability (including without limitation, the
reasonable fees and disbursements of counsel) incurred by State Street in
rendering services hereunder or in connection with any breach of the terms of
this Agreement by such Fund, except such loss or liability which results from
the State Street's failure to exercise the standard of care required by this
Section 12. Nothing in this Section shall derogate from the indemnities provided
by State Street in Xxxxxxx 00. Xxxxx Xxxxxx may charge any amounts to which it
is entitled hereunder against each Fund's account.
(c) Notwithstanding any express provision to the contrary herein, State
Street shall not be liable for any consequential, incidental, special or
exemplary damages, even if State Street has been apprised of the likelihood of
such damages occurring.
(d) Each Fund acknowledges that in the event that its participation in
securities lending generates income for the Fund, State Street may be required
to withhold tax or may claim such tax from the Fund as is appropriate in
accordance with applicable law.
(e) State Street, in determining the Market Value of Securities,
including without limitation, Collateral, may rely upon any recognized pricing
service and shall not be liable for any errors made by such service.
13. Representations and Warranties.
Each party hereto represents and warrants that (a) it has and will have
the legal right, power and authority to execute and deliver this Agreement, to
enter into the transactions contemplated hereby, and to perform its obligations
hereunder; (b) it has taken all necessary action to authorize such execution,
delivery, and performance; (c) this Agreement constitutes a legal, valid, and
binding obligation enforceable against it; and (d) the execution, delivery, and
performance by it of this Agreement will at all times comply with all applicable
laws and regulations.
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Each Fund represents and warrants that (a) it has made its own
determination as to the tax and accounting treatment of any dividends,
remuneration or other funds received hereunder; and (b) it is the legal and
beneficial owner of (or exercises complete investment discretion over) all
Available Securities free and clear of all liens, claims, security interests and
encumbrances and no such security has been sold, and that it is entitled to
receive all distributions made by the issuer with respect to Loaned Securities.
Each Fund further represents and warrants that it will immediately
notify State Street orally and by written notice, of the relevant details of any
corporate actions, private consent offers/agreements and/or any other off-market
arrangements that may require the recall and/or restriction of a security from
lending activity. Such written notice shall be delivered sufficiently in advance
so as to: (a) provide State Street with reasonable time to notify Borrowers of
any instructions necessary to comply with the terms of the corporate actions,
private consent offers/agreements and/or other off-market arrangements, and (b)
provide such Borrowers with reasonable time to comply with such instructions.
The person executing this Agreement on behalf of the Funds represents
that he or she has the authority to execute this Agreement on behalf of the
Funds.
Each Fund hereby represents to State Street that: (i) its policies and
objectives generally permit it to engage in securities lending transactions;
(ii) its policies permit it to purchase shares of the State Street Navigator
Securities Lending Trust with cash Collateral; (iii) its participation in State
Street's securities lending program, including the investment of cash Collateral
in the State Street Navigator Securities Lending Trust, and the existing series
thereof has been approved by a majority of the directors or trustees which
directors and trustees that are not "interested persons" within the meaning of
section 2(a)(19) of the Investment Company Act of 1940, and such directors or
trustees will evaluate the securities lending program no less frequently than
annually to determine that the investment of cash Collateral in the State Street
Navigator Securities Lending Trust, including any series thereof, is in the
Fund's best interest; (iv) its prospectus provides appropriate disclosure
concerning its securities lending activity; and (v) that the directors and
trustees have obtained competing quotes with respect to lending agent fees from
at least three independent lending agents to assist the director or trustees in
determining that the fees for State Street's services hereunder are fair and
reasonable in light of the usual and customary charges imposed by others for
services of the same nature and quality.
Each Fund hereby further represents that it is not subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") with
respect to this Agreement and the Available Securities; that it qualifies as an
"accredited investor" within the meaning of Rule 501 of Regulation D under the
Securities Act of 1933, as amended; and that the taxpayer identification
number(s) and corresponding tax year-end are as set forth on Schedule B.
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14. Borrower Default Indemnification.
(a) If at the time of a default by a Borrower with respect to a Loan
(within the meaning of the applicable Securities Loan Agreement), some or all of
the Loaned Securities under such Loan have not been returned by the Borrower,
and subject to the terms of this Agreement, State Street shall indemnify the
Fund against the failure of the Borrower as follows. State Street shall purchase
a number of Replacement Securities equal to the number of such unreturned Loaned
Securities, to the extent that such Replacement Securities are available on the
open market. Such Replacement Securities shall be purchased by applying the
proceeds of the Collateral with respect to such Loan to the purchase of such
Replacement Securities. Subject to the Fund's obligations pursuant to Section 8
hereof, if and to the extent that such proceeds are insufficient or the
Collateral is unavailable, the purchase of such Replacement Securities shall be
made at State Street's expense.
(b) If State Street is unable to purchase Replacement Securities
pursuant to Paragraph 14(a) hereof, State Street shall credit to the Fund's
account an amount equal to the Market Value of the unreturned Loaned Securities
for which Replacement Securities are not so purchased, determined as of (i) the
last day the Collateral continues to be successfully marked to market by the
Borrower against the unreturned Loaned Securities; or (ii) the next business day
following the day referred to in (i) above, if higher.
(c) In addition to making the purchases or credits required by
Paragraphs (a) and (b) hereof, State Street shall credit to the Fund's account
the value of all distributions on the Loaned Securities (not otherwise credited
to the Fund's accounts with State Street), for record dates which occur before
the date that State Street purchases Replacement Securities pursuant to
Paragraph (a) or credits the Fund's account pursuant to Paragraph (b).
(d) Any credits required under Paragraphs (b) and (c) hereof shall be
made by application of the proceeds of the Collateral, if any, that remains
after the purchase of Replacement Securities pursuant to Paragraph (a). If and
to the extent that the Collateral is unavailable or the value of the proceeds of
the remaining Collateral is less than the value of the sum of the credits
required to be made under Paragraphs (b) and (c), such credits shall be made at
State Street's expense.
(e) If after application of Paragraphs (a) through (d) hereof,
additional Collateral remains or any previously unavailable Collateral becomes
available or any additional amounts owed by the Borrower with respect to such
Loan are received from the Borrower, State Street shall apply the proceeds of
such Collateral or such additional amounts first to reimburse itself for any
amounts expended by State Street pursuant to Paragraphs (a) through (d) above,
and then to credit to the Fund's account all other amounts owed by the Borrower
to the Fund with respect to such Loan under the applicable Securities Loan
Agreement.
(f) In the event that State Street is required to make any payment
and/or incur any loss or expense under this Section, State Street shall, to the
extent of such payment, loss, or expense, be subrogated to, and succeed to, all
of the rights of the Fund against the Borrower under the applicable Securities
Loan Agreement.
11
15. Continuing Agreement and Termination.
It is the intention of the parties hereto that this Agreement shall constitute a
continuing agreement in every respect and shall apply to each and every Loan,
whether now existing or hereafter made. The Funds and State Street may each at
any time terminate this Agreement upon five (5) business days' written notice to
the other to that effect. The only effects of any such termination of this
Agreement will be that (a) following such termination, no further Loans shall be
made hereunder by State Street on behalf of the Funds, and (b) State Street
shall, within a reasonable time after termination of this Agreement, terminate
any and all outstanding Loans. The provisions hereof shall continue in full
force and effect in all other respects until all Loans have been terminated and
all obligations satisfied as herein provided. State Street does not assume any
market or investment risk of loss associated with the Fund's change in cash
Collateral investment vehicles or termination of, or change in, its
participation in this securities lending program and the corresponding
liquidation of cash Collateral investments.
16. Notices.
Except as otherwise specifically provided herein, notices under this
Agreement may be made orally, in writing, or by any other means mutually
acceptable to the parties. If in writing, a notice shall be sufficient if
delivered to the party entitled to receive such notices at the following
addresses:
If to the Funds:
SPDR SERIES TRUST
c/o SSgA Funds Management, Inc.
Xxx Xxxxxxx Xxxxxx, XXX/00
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
12
If to State Street:
State Street Bank and Trust Company
Securities Finance
State Street Financial Center
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 0000-0000
or to such other addresses as either party may furnish the other party by
written notice under this section.
Whenever this Agreement permits or requires the Funds to give notice
to, direct, provide information to State Street, such notice, direction, or
information shall be provided to State Street on the Funds' behalf by any
individual designated for such purpose by the Funds in a written notice to State
Street. This Agreement shall be considered such a designation of the person
executing the Agreement on the Funds' behalf. After State Street's receipt of
such a notice of designation and until its receipt of a notice revoking such
designation, State Street shall be fully protected in relying upon the notices,
directions, and information given by such designee.
17. Securities Investors Protection Act of 1970 Notice.
EACH FUND IS HEREBY ADVISED AND ACKNOWLEDGES THAT THE PROVISIONS OF THE
SECURITIES INVESTOR PROTECTION ACT OF 1970 MAY NOT PROTECT THE FUND WITH RESPECT
TO THE LOAN OF SECURITIES HEREUNDER AND THAT, THEREFORE, THE COLLATERAL
DELIVERED TO THE FUND MAY CONSTITUTE THE ONLY SOURCE OF SATISFACTION OF THE
BROKER'S OR DEALER'S OBLIGATION IN THE EVENT THE BROKER OR DEALER FAILS TO
RETURN THE SECURITIES.
18. Authorized Representatives.
Each Fund authorizes State Street to accept and to act on any
instructions or other communications, regardless of how sent or delivered, from
any Authorized Representative. Each Fund shall be fully responsible for all acts
of any Authorized Representative, even if that person exceeds his or her
authority, and in no event shall State Street be liable to a Fund or any other
third party for any losses or damages arising out of or relating to any act
State Street takes or fails to take in connection with any such instructions or
other communications.
19. Agents.
State Street may use such agents, including but not limited to, such
regulated clearing agents, securities depositaries, nominees, sub-custodians,
third party custodians and State
13
Street Affiliates, as State Street deems appropriate to carry out its duties
under this Agreement. To the extent the State Street Affiliates act as State
Street's agent hereunder, State Street agrees to be responsible for the acts and
omissions of such State Street Affiliates as though performed by State Street
directly. The Client agrees that State Street's sole liability for the acts or
omissions of any other agent shall be limited to liability arising from State
Street's failure to use reasonable care in the selection of such agent.
20. Force Majeure.
State Street shall not be responsible for any losses, costs or damages
suffered by a Fund resulting directly or indirectly from war, riot, revolution,
terrorism, acts of government or other causes beyond the reasonable control or
apprehension of State Street.
21. Non-US Borrowers.
In the event a Fund approves lending to Borrowers resident in the
United Kingdom ("UK"), the Fund shall provide sufficient documentation, in the
form and manner required by the UK Inland Revenue, to establish that the Fund is
(1) the beneficial owner of any manufactured dividends received and (2) not a UK
recipient for purposes of UK manufactured overseas dividend rules
22. Miscellaneous.
This Agreement supersedes any other agreement between the parties or
any representations made by one party to the other, whether oral or in writing,
concerning Loans of Available Securities by State Street on behalf of the Funds.
This Agreement shall not be assigned by either State Street or the Fund without
the prior written consent of the other party. Subject to the foregoing, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, representatives, successors, and assigns.
This Agreement shall be governed and construed in accordance with the laws of
The Commonwealth of Massachusetts. Each Fund hereby irrevocably submits to the
jurisdiction of any Massachusetts state or Federal court sitting in The
Commonwealth of Massachusetts in any action or proceeding arising out of or
related to this Agreement and hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in such
Massachusetts state or Federal court except that this provision shall not
preclude any party from removing any action to Federal court. Each Fund hereby
irrevocably waives, to the fullest extent it may effectively do so, the defense
of an inconvenient forum to the maintenance of such action or proceeding. Each
Fund hereby irrevocably consents to the service of any and all process in any
such action or proceeding by the mailing of copies of such process to the Funds
at their address specified in Section 16 hereof. Each Fund agrees that a final
judgment in any such action or proceeding, all appeals having been taken or the
time period for such appeals having expired, shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. The provisions of this Agreement are severable and the
invalidity or
14
unenforceability of any provision hereof shall not affect any other provision of
this Agreement. If in the construction of this Agreement any court should deem
any provision to be invalid because of scope or duration, then such court shall
forthwith reduce such scope or duration to that which is appropriate and enforce
this Agreement in its modified scope or duration.
23. Counterparts.
The Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall, together,
constitute only one (1) instrument.
24. Modification.
This Agreement shall not be modified except by an instrument in writing
signed by the parties hereto.
25. Client Notification of Limitation of Liability of Trustees and Shareholders.
The Declaration of Trust of the Trust, as amended from time to time,
establishing the Trust, which is hereby referred to and a copy of which is on
file with the Secretary of The Commonwealth of Massachusetts, provides that the
name of the Trust, as stated herein, means the trustees from time to time
serving (as trustees, but not personally) under said Declaration of Trust.
Notice is hereby given that nothing in this Agreement shall be construed as
binding upon any of the shareholders, trustees, officers, employees, members or
agents of the Trust, personally, but shall bind only the assets and property of
the Trust.
SPDR(R) SERIES TRUST,
on behalf of each of its respective series as listed on
Schedule B, severally and not jointly
By: /s/ Xxxxx Xxxx
----------------------------------------
Name: Xxxxx Xxxx
Its: President
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxxx Xxxxxx
-----------------------------------------
Name: Xxxx Xxxxxx
Its: Senior Vice President
15
SCHEDULE A
This Schedule is attached to and made part of the Securities Lending
Authorization Agreement, dated the 28th day of November, 2007 between SPDR(R)
SERIES TRUST, ON BEHALF OF EACH OF ITS RESPECTIVE SERIES AS LISTED ON SCHEDULE
B, SEVERALLY AND NOT JOINTLY (the "Funds") and STATE STREET BANK AND TRUST
COMPANY ("State Street").
SCHEDULE OF FEES
1. Subject to Paragraph 2 below, all proceeds collected by State Street on
investment of cash Collateral or any fee income shall be allocated as follows:
- payable to the Fund, and
- payable to State Street.
2. All payments to be allocated under Paragraph 1 above shall be made after
deduction of such other amounts payable to State Street or to the Borrower under
the terms of this Securities Lending Authorization Agreement.
3. The Client instructs State Street to invest cash Collateral in the State
Street Navigator Securities Lending Prime Portfolio (the "Prime Portfolio"). The
management fees for investing in the Prime Portfolio are as follows:
On an annualized basis, the management/trustee/custody/fund
administration/transfer agent fee for investing cash Collateral in the Prime
Portfolio is not more than basis points netted out of yield. The trustee of the
Prime Portfolio may pay out of the assets of the Prime Portfolio all reasonable
expenses and fees of the Prime Portfolio, including professional fees or
disbursements incurred in connection with the operation of the Prime Portfolio.
SCHEDULE B
This Schedule is attached to and made part of the Securities Lending
Authorization Agreement, dated the 28th day of November, 2007 between SPDR(R)
SERIES TRUST, ON BEHALF OF EACH OF ITS RESPECTIVE SERIES AS LISTED ON SCHEDULE
B, SEVERALLY AND NOT JOINTLY (the "Funds") and XXXXX XXXXXX XXXX XXX XXXXX
XXXXXXX ("Xxxxx Xxxxxx").
TAXPAYER IDENTIFICATION
FUND NAME NUMBER TAX-YEAR END
SPDR(R) DJ Wilshire Total Market ETF 00-0000000 June 30
SPDR(R) DJ Wilshire Large Cap ETF 00-0000000 June 30
SPDR(R) DJ Wilshire Large Cap Growth ETF 00-0000000 June 30
SPDR(R) DJ Wilshire Large Cap Value ETF 00-0000000 June 30
SPDR(R) DJ Wilshire Mid Cap ETF 00-0000000 June 30
SPDR(R) DJ Wilshire Mid Cap Growth ETF 00-0000000 June 30
SPDR(R) DJ Wilshire Mid Cap Value ETF 00-0000000 June 30
SPDR(R) DJ Wilshire Small Cap ETF 00-0000000 June 30
SPDR(R) DJ Wilshire Small Cap Growth ETF 00-0000000 June 30
SPDR(R) DJ Wilshire Small Cap Value ETF 00-0000000 June 30
SPDR(R) DJ Global Titans ETF 00-0000000 June 30
DJ Wilshire REIT ETF 00-0000000 June 30
KBW Bank ETF 00-0000000 June 30
KBW Capital Markets ETF 00-0000000 June 30
KBW Insurance ETF 00-0000000 June 30
Xxxxxx Xxxxxxx Technology ETF 00-0000000 June 30
SPDR(R) S&P(R) Dividend ETF 00-0000000 June 30
SPDR(R) S&P(R) Aerospace & Defense ETF* 00-0000000 June 30
SPDR(R) S&P(R) Biotech ETF 00-0000000 June 30
SPDR(R) S&P(R) Building & Construction ETF* 00-0000000 June 30
SPDR(R) S&P(R) Computer Hardware ETF* 00-0000000 June 30
SPDR(R) S&P(R) Computer Software ETF* 00-0000000 June 30
SPDR(R) S&P(R) Health Care Equipment ETF* 00-0000000 June 30
SPDR(R) S&P(R) Health Care Services ETF* 00-0000000 June 30
SPDR(R) S&P(R) Homebuilders ETF 00-0000000 June 30
SPDR(R) S&P(R) LeisureTime ETF* 00-0000000 June 30
SPDR(R) S&P(R) Metals & Mining ETF 00-0000000 June 30
SPDR(R) S&P(R) Oil & Gas Equipment & Services ETF 00-0000000 June 30
SPDR(R) S&P(R) Oil & Gas Exploration & Production ETF 00-0000000 June 30
SPDR(R) S&P(R) Outsourcing & IT Consulting ETF* 00-0000000 June 30
SPDR(R) S&P(R) Pharmaceuticals ETF 00-0000000 June 30
SCHEDULE B (CONTINUED)
TAXPAYER IDENTIFICATION
FUND NAME NUMBER TAX-YEAR END
SPDR(R) S&P(R) Retail ETF 00-0000000 June 30
SPDR(R) S&P(R) Semiconductor ETF 00-0000000 June 30
SPDR(R) S&P(R) Telecom ETF* 00-0000000 June 30
SPDR(R) S&P(R) Transportation ETF* 00-0000000 June 30
KBW Mortgage FinanceSM ETF* 00-0000000 June 30
KBW Regional BankingSM ETF 00-0000000 June 30
SPDR(R) Xxxxxx 1-3 Month T-Xxxx ETF 00-0000000 June 30
SPDR(R) Xxxxxx Intermediate Term Treasury ETF 00-0000000 June 30
SPDR(R) Xxxxxx Long Term Treasury ETF 00-0000000 June 30
SPDR(R) Barclays Capital TIPS ETF 00-0000000 June 30
SPDR(R) Xxxxxx Aggregate Bond ETF 00-0000000 June 30
SPDR(R) Xxxxxx Municipal Bond ETF 00-0000000 June 30
SPDR(R) Xxxxxx International Treasury Bond ETF 00-0000000 June 30
SPDR(R) Xxxxxx California Municipal Bond ETF 00-0000000 June 30
SPDR(R) Xxxxxx New York Municipal Bond ETF 00-0000000 June 30
SPDR(R) Xxxxxx Short Term Municipal Bond ETF 00-0000000 June 30
SPDR(R) Xxxxxx High Yield Bond ETF 00-0000000 June 30
SPDR(R) Xxxxxx Long Term Corporate Bond ETF* TBD June 30
SPDR(R) Xxxxxx Short Term Treasury Bond ETF* 00-0000000 June 30
SPDR(R) Xxxxxx Short Term Corporate Bond ETF* 00-0000000 June 30
SPDR(R) Xxxxxx Intermediate Term Corporate Bond ETF* 00-0000000 June 30
SPDR(R) DB International Government Inflation-Protected
Bond ETF 00-0000000 June 30
*Board approved and either SEC registered or in SEC registration, but not
operational. Any fund series marked with a " * " shall not participate in
securities lending unless and until the Funds have notified State Street in
writing that the fund series is operational and authorized to participate in
securities lending under this Agreement and such authorization is consented to
by State Street in writing. Such authorization may be effected by the Funds and
State Street executing a revised Schedule B with the applicable series no longer
denoted as not operational.
SCHEDULE C
This Schedule is attached to and made part of the
Securities Lending
Authorization Agreement, dated the 28th day of November, 2007 between SPDR(R)
SERIES TRUST, ON BEHALF OF EACH OF ITS RESPECTIVE SERIES AS LISTED ON SCHEDULE
B, SEVERALLY AND NOT JOINTLY (the "Funds") and STATE STREET BANK AND TRUST
COMPANY ("State Street").
ACCEPTABLE FORMS OF COLLATERAL
- Cash (U.S. and foreign currency);
- Securities issued or guaranteed by the United States
government or its agencies or instrumentalities;
- Irrevocable bank letters of credit issued by a person other
than the Borrower or an affiliate of the Borrower may be
accepted as Collateral, if State Street has determined that it
is appropriate to accept such letters of credit as Collateral
under the securities lending programs it administers; and
- Such other Collateral as the parties may agree to in writing
from time to time.
SCHEDULE D
This Schedule is attached to and made part of the
Securities Lending
Authorization Agreement, dated the 28th day of November, 2007 between SPDR(R)
SERIES TRUST, ON BEHALF OF EACH OF ITS RESPECTIVE SERIES AS LISTED ON
SCHEDULE B, SEVERALLY AND NOT JOINTLY (the "Funds") and STATE STREET BANK AND
TRUST COMPANY ("State Street").
SCHEDULE OF BORROWERS
