Exhibit (g)(v) under Form N1-A
Exhibit 10 under Item 601/Reg. S-K
SECURITIES LENDING AUTHORIZATION AGREEMENT
Between
MTB GROUP OF FUNDS ON BEHALF
OF ITS SERIES AS LISTED ON SCHEDULE B
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..............................................2
4. BORROWERS............................................................3
5. SECURITIES LOAN AGREEMENTS...........................................5
6. LOANS OF AVAILABLE SECURITIES........................................5
7. DISTRIBUTIONS ON AND VOTING RIGHTS WITH RESPECT TO
LOANED SECURITIES....................................................6
8. COLLATERAL...........................................................6
9. INVESTMENT OF CASH COLLATERAL AND COMPENSATION ......................7
10. FEE DISCLOSURE......................................................9
11. RECORDKEEPING AND REPORTS...........................................9
12. STANDARD OF CARE....................................................9
13. REPRESENTATIONS AND WARRANTIES.....................................10
14. INDEMNIFICATION....................................................13
15. CONTINUING AGREEMENT AND TERMINATION...............................14
16. NOTICES............................................................14
17. MISCELLANEOUS......................................................15
18. SECURITIES INVESTORS PROTECTION ACT................................16
19. COUNTERPARTS.......................................................16
20. MODIFICATION.......................................................17
EXHIBITS AND SCHEDULES
EXHIBIT 4.1 (State Street Securities Loan Agreement) EXHIBIT 4.2 ("MOD-2 form")
SCHEDULE A (Schedule of Fees) SCHEDULE B (Funds) SCHEDULE 8.1 (Acceptable Forms
of Collateral)
SECURITIES LENDING AUTHORIZATION AGREEMENT
Agreement dated the 21st day of May, 2004 between MTB Group of Funds, on
behalf of its series as listed on Schedule B, severally and not jointly, a
registered management investment company organized and existing under the laws
of Delaware (the "Trust"), and STATE STREET BANK AND TRUST COMPANY, its
affiliates or subsidiaries ("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 trustee, agent 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 shares of
the Trust as listed on Schedule B to this Agreement (each a "Fund" and
collectively, the "Funds") as it may be amended by the parties, and no series of
shares 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 does hereby covenant and agree
as follows:
1. Definitions. For the purposes hereof:
(a) "Available Securities" means the securities of the Funds that are
available for Loans pursuant to Section 3.
(b) "Borrower" means any of the entities to which Available Securities may
be loaned under a Securities Loan Agreement, as described in Section 4.
(c) "Collateral" means collateral delivered by a Borrower to secure its
obligations under a Securities Loan Agreement.
(d) "Investment Manager" when used in any provision, means the person or
entity who has discretionary authority over the investment of the Available
Securities to which the provision applies.
(e) "Loan" means a loan of Available Securities to a Borrower.
(f) "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.
(g) "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.
(h) "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.
(i) "Replacement Securities" means securities of the same issuer, class and
denomination as Loaned Securities.
2. Appointment of State Street.
Each Fund hereby appoints and authorizes State Street, its affiliates or
subsidiaries, 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.
Each Fund also authorizes State Street, its affiliates or subsidiaries, as
its agent, to enter into fee for holds arrangements with respect to certain
Available Securities. State Street will, in return 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 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 agent, 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.
4. Borrowers.
The Available Securities may be loaned to any Borrower identified on the
schedule of borrowers, as such schedule may be modified from time to time by
State Street and the Fund, including without limitation, State Street. State
Street and the Fund may each unilaterally delete a Borrower from the schedule
upon written notice to the other party. However, if Available Securities are
loaned to State Street, in addition to being consistent with the terms hereof,
said Loan shall be made in accordance with the terms of the Securities Loan
Agreement attached hereto as Exhibit 4.1, as modified from time to time in
accordance with the provisions therein and herein (hereinafter, the "State
Street Securities Loan Agreement"). The form of the State Street Securities Loan
Agreement may be modified by State Street from time to time, upon written notice
to the Funds, in order to comply with the requirements of law or any regulatory
authority having jurisdiction over State Street, the Funds or the securities
lending program.
Each Fund acknowledges that it is aware that State Street, acting as
"Lender's Agent" hereunder and thereunder, is or may be deemed to be the same
legal entity as State Street acting as "Borrower" under the State Street
Securities Loan Agreement, notwithstanding the different designations used
herein and therein or the dual roles assumed by State Street hereunder and
thereunder. Each Fund represents that the power granted herein to State Street,
as agent, to lend Available Securities owned by the Fund (including, in legal
effect, the power granted to State Street to make Loans to itself) and the other
powers granted to State Street, as agent herein, are given expressly for the
purpose of averting and waiving any prohibitions upon such lending or other
exercise of such powers which might exist in the absence of such powers, and
that transactions effected pursuant to and in compliance with this Agreement and
the State Street Securities Loan Agreement will not constitute a breach of trust
or other fiduciary duty by State Street.
Each Fund further acknowledges that it has granted State Street the power
to effect Loans with State Street and other powers assigned to State Street
hereunder and under the Securities Loan Agreements and the State Street
Securities Loan Agreement as a result of the Fund's desire to increase the
opportunity for it to lend securities held in its account on fair and reasonable
terms to qualified Borrowers without such loans being considered a breach of
State Street's fiduciary duty. In connection therewith, each party hereby agrees
that it shall furnish to the other party, upon request (i) the most recent
available audited statement of its financial condition, and (ii) the most recent
available unaudited statement of its financial condition, if more recent than
the audited statement. As long as any Loan is outstanding under this Agreement,
each party shall also promptly deliver to the other party all such financial
information that is subsequently available, and any other financial information
or statements that such other party may reasonably request.
In the event any such Loan is made to Xxxxx Xxxxxx, Xxxxx Xxxxxx hereby
covenants and agrees for the benefit of the Funds that it has adopted and
implemented procedural safeguards to help ensure that all actions taken by it
hereunder will be effected by individuals other than, and not under the
supervision of, individuals who are acting in a capacity as Borrower thereunder,
and that all trades effected hereunder will take place at the same fully
negotiated "arms length" prices offered to similarly situated third parties by
State Street 4 when it acts as lending agent, notwithstanding the inherent
conflict of interest with respect to Loans to be effected by State Street to
State Street.
In the event the Fund approves lending to Borrowers resident in the United
Kingdom, the Fund shall complete Part 1 of the Inland Revenue document known as
a "MOD-2 form," which is attached hereto as Exhibit 4.2.
5. Securities Loan Agreements.
Each Fund acknowledges receipt of State Street's standard form of
Securities Loan Agreement and authorizes State Street to enter into one or more
Securities Loan Agreements substantially in the form thereof with such Borrowers
as may be selected by State Street. Each Securities Loan Agreement shall have
such terms and conditions as State Street may negotiate with the Borrower.
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 shall
be made and shall have the authority to terminate any Loan in its discretion, at
any time and without prior notice to the Fund.
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 end of the customary
settlement period. 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 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.
Each Fund represents and warrants that it is the 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. Except as provided in the
next sentence, all 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.
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.
8. Collateral.
(a) Receipt of Collateral. Each Fund hereby authorizes State Street, or a
third party bank, 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 8.1. 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 a value
of at least 102% of the Market Value of the Loaned Securities except that the
initial Collateral received for Loans of non-US equity securities shall have a
value of at least 105% of the Market Value of such non-US equity securities, and
the initial Collateral received for Loans of UK Gilts shall have a value of at
least 102.5% of the Market Value of such UK Gilts.
Pursuant to the terms of the applicable Securities Loan Agreement, State
Street shall, in accordance with State Street's reasonable and customary
practices, and prevailing industry 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 ensure that each applicable
Securities Loan Agreement shall require each Borrower to deliver additional
Collateral (for Collateral comprised of a letter of credit, an additional or
replacement letter of credit) to State Street as follows:
In the case of a Loan of US equities or US corporate debt, the Borrower
will be required to deliver additional Collateral in the event that the Market
Value of the Collateral is less than one hundred and two percent (102%) of the
Market Value of the Loan, and such additional Collateral together with the
Collateral previously delivered shall have a Market Value of not less than one
hundred and two percent (102%) of the Market Value of the Loan.
In the case of a Loan of non-US equities, the Borrower will be required to
deliver additional Collateral in the event that the Market Value of the
Collateral is less than one hundred and five percent (105%) of the Market Value
of the Loan, and such additional Collateral together with the Collateral
previously delivered shall have a Market Value of not less than one hundred and
five percent (105%) of the Market Value of the Loan.
In the case of a Loan of United States government securities (including
securities issued by US agencies or instrumentalities), or a Loan of sovereign
debt issued by non-US governments, or a Loan of non-US corporate debt, the
Borrower will be required to deliver additional Collateral in the event that the
Market Value of the Collateral provided with respect to such Loan is less than
one hundred percent (100%) of the Market Value of the Loan. Such additional
Collateral together with the Collateral previously delivered with respect to
such Loan, and all other Loans with such Borrower as described in this
paragraph, shall have a Market Value not less than one hundred and two percent
(102%) of the Market Value of all such Loans.
In the case of a Loan which is comprised of UK Gilts, the Borrower will be
required to deliver additional Collateral in the event that the Market Value of
the Collateral is less than one hundred and two and one-half percent (102.5%) of
the Market Value of the Loan, and such additional Collateral together with the
Collateral previously delivered shall have a Market Value not less than one
hundred and two and one-half percent (102.5%) of the Market Value of the Loan.
(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.
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 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 State
Street and/or its affiliates provide investment management or advisory, trust,
custody, transfer agency, shareholder servicing and/or other services for which
they are compensated.
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 its affiliates provide services are not guaranteed or
insured by State Street or any of its 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 its 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 the payment of (i) the rebate fee, subject to
State Street's obligations in the immediately preceding sentence, (ii) all
Collateral pledged by the Borrower with respect to any Loan, (iii) interest,
dividends and distributions on non-cash Collateral, (iv) any taxes imposed on a
Loan hereunder and for which the Client is responsible, 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.
In the event of a Loan to a Borrower resident in Canada, which is made over
record date for a dividend reinvestment program ("DRP") and is secured by cash
Collateral, the Borrower shall pay the Fund a substitute payment equal to the
full amount of the cash dividend declared, and may pay a loan premium, the
amount of which shall be negotiated by State Street, above the amount of the
cash dividend. 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 and (b) the remainder of such
loan premium shall be credited to the Fund's account.
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.
10. Fee Disclosure; Fee Split.
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 9 time to time by State Street upon notice to the
Funds. An annual report with respect to such funds is available to the Funds, at
no expense, upon request.
As set forth on Schedule A hereto, all proceeds collected by State Street
on investment of cash collateral or any fee income shall be allocated as
follows: 65% payable to the Fund, and 35% payable to State Street. All payments
so allocated shall be made after deduction of such other amounts payable to
State Street or to the Borrower under the terms of this Agreement.
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.
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.
12. Standard of Care.
Subject to the requirements of applicable law, State Street shall not be
liable for any loss or damage, including counsel fees and court costs, whether
or not resulting from its acts or omissions to act hereunder or otherwise,
unless the loss or damage arises out of State Street's negligence. Except for
any liability, loss, or expense arising from or connected with State Street's
negligence, each Fund agrees to reimburse and hold State Street harmless from
and against any liability, loss and expense, including counsel fees, expenses
and court costs, arising in connection with any breach of any representation,
covenant or agreement of the Fund contained in this Agreement or any Loan or
arising from or connected with claims of any third parties, including any
Borrower, from and against all taxes and other governmental charges, and from
and against any out-of-pocket or incidental expenses. State Street may charge
any amounts to which it is entitled hereunder against the each Fund's account.
Without limiting the generality of the foregoing, each Fund agrees: (i) that
State Street shall not be responsible for any statements, representations or
warranties which any Borrower makes in connection with any securities loans
hereunder, or for the performance by any Borrower of the terms of a Loan, or any
agreement related thereto, and shall not be required to ascertain or inquire as
to the performance or observance of, or a default under the terms of, a Loan or
any agreement related thereto; (ii) that State Street shall be fully protected
in acting in accordance with the oral or written instructions of any person
reasonably believed by State Street to be authorized to execute this Agreement
on behalf of the Funds (an "Authorized Person"); (iii) that in the event of a
default by a Borrower under a Loan, State Street shall be fully protected in
acting in its sole discretion in a manner it deems appropriate; (iv) that State
Street shall not be under any duty or obligation to take action to effect
payment by a Borrower of any amounts owed by the Borrower pursuant to the Loan
Agreement, provided State Street timely advises the Fund of the non-payment by
the Borrower of any such amount; and (v) that the records of State Street shall
be presumed to reflect accurately any oral instructions given by an Authorized
Person or a person reasonably believed by State Street to be an Authorized
Person.
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.
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 the power 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.
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) the financial statements
delivered to State Street pursuant to Section 4 fairly present its financial
condition and there has been no material adverse change in its financial
condition or the financial condition of any parent company since the date of the
balance sheet included within such financial statements. Each Loan shall
constitute a present representation by the Fund that there has been no material
adverse change in its financial condition or the financial condition of any
parent company that has not been disclosed in writing to State Street since the
date of the most recent financial statements furnished to State Street pursuant
to Section 4.
Each Fund represents and warrants that it will, through its Investment
Manager, 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 notices 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 any 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 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; and (iv) its prospectus provides appropriate disclosure
concerning its securities lending activity.
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 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.
State Street represents and warrants to each Fund that it will not permit
the value of the loaned securities of any Fund to, at any time, exceed one-third
of the value of such Fund's total assets.
14. 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 (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 makes any payment and/or incurs 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.
(g) The provisions of this Section 14 shall not apply to losses
attributable to war, riot, revolution, acts of government or other causes beyond
the reasonable control or apprehension of State Street.
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:
MTB Group of Funds
0000 Xxxxxxxxx xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
If to State Street:
State Street Bank and Trust Company
Global Securities Lending Division
Two International Place, Floor 31
Xxxxxx, Xxxxxxxxxxxxx 00000
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. 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.
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 appoints the person
holding the office set forth in Section 16 of this Agreement as entitled to
receive notices under said Section 16, as its agent to receive on its behalf
service of copies of the summons and complaint and any other process which may
be served in any such action or proceeding (the "Process Agent"). Such service
may be made by mailing or delivering a copy of such process, in care of the
Process Agent at the above address. Each Fund hereby irrevocably authorizes and
directs the Process Agent to accept such service on its behalf. As an
alternative method of service, each Fund also 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 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.
18. 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.
19. 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.
20. Modification.
This Agreement shall not be modified except by an instrument in writing
signed by the parties hereto.
MTB GROUP OF FUNDS, on behalf of its
respective series as listed on
Schedule B, severally and not
jointly
Name: /s/ Xxxx X. Xxxxxxxxx
--------------------------------------
By: Xxxx X. Xxxxxxxxx
Its: Vice President
STATE STREET BANK AND TRUST COMPANY
Name: /s/ X. X. Xxxxx
--------------------------------------
By: X.X. Xxxxx
Its: Senior Vice President
SCHEDULE 4.1
SECURITIES LOAN AGREEMENT
Agreement dated the 15th day of September, 1997 between STATE STREET BANK
AND TRUST COMPANY, a Massachusetts trust company, acting through its Global
Securities Lending Division, in its capacity as trustee, agent or custodian for
certain securities of its clients (in such capacity, "Lender's Agent"), and
STATE STREET BANK AND TRUST COMPANY, acting through the Money Market Division of
the Financial Markets Group, as Borrower ("Borrower"), setting forth the terms
and conditions under which one or more clients of Lender's Agent (hereinafter,
each a "Lender") from time to time, may lend to Borrower Securities (as defined
herein), against the receipt of collateral as specified herein.
Capitalized terms not otherwise defined shall have the meanings ascribed to
them in Section
WHEREAS, each Lender has appointed Lender's Agent as its agent to act on
its behalf with respect to the lending of Securities to Borrower in accordance
with the terms of a securities lending authorization agreement (hereinafter, the
Securities Lending Authorization Agreement) between such Lender and Lender's
Agent.
WHEREAS, pursuant to each Securities Lending Authorization Agreement,
Lender's Agent has been granted the responsibility and authority to do or cause
to be done all acts Lender's Agent shall determine to be desirable, necessary or
appropriate to implement or administer a securities lending program on behalf of
the Lender party thereto.
WHEREAS, upon request of Borrower, Lender's Agent may, from time to time,
in its discretion and on behalf of one or more Lenders, lend Available
Securities to Borrower against the receipt of Collateral (as defined herein)
delivered by Borrower .
NOW, THEREFORE, Lender's Agent and Borrower agree as follows:
1. Terms of Loan.
1.l Upon request of Borrower, Lender's Agent may, from time to time, in its
discretion and on behalf of the Lenders, lend Securities to Borrower against the
receipt of Collateral delivered by Borrower. Lender's Agent and Borrower shall
agree on the terms of each Loan, including the identity and amount of the
securities to be loaned, the basis of compensation, and the type and amount of
Collateral to be delivered by Borrower (subject to the terms and conditions of
this Agreement), which terms may be amended during the period of the Loan only
by mutual agreement of the parties hereto.
1.2 Loans, all applicable terms and conditions thereof, and amendments and
activity, if any, with respect thereto, shall be evidenced by Lender's Agent's
records pertaining to such Loans maintained by Lender's Agent in the regular
course of its business and such records shall represent conclusive evidence
thereof except for manifest error or willful misconduct. Lender's Agent will
send Borrower monthly statements of outstanding Loans showing Loan activity
which Borrower agrees to examine promptly and to advise Lender's Agent of any
error or exceptions. Borrower's failure to so advise Lender's Agent within
twenty (20) days after delivery of any such statement shall be deemed to be such
party's admission of the accuracy and correctness of the contents thereof and
such party shall be fully bound thereby.
1.3 Notwithstanding any other provisions in this Agreement with respect to
when a Loan occurs, a Loan hereunder shall not occur until the Borrowed
Securities and the Collateral therefor are delivered. If, on any Business Day,
Borrower delivers Collateral, as provided in Section 3.1 hereunder, and Lender's
Agent does not deliver the Borrowed Securities, Borrower shall have the absolute
right to the prompt return of the Collateral; and if, on any Business Day,
Lender's Agent delivers Borrowed Securities and Borrower does not deliver
Collateral as provided in Section 3.1 hereunder, Lender's Agent shall have the
absolute right to the prompt return of the Borrowed Securities.
1.4 Lender's Agent shall maintain records in accordance with its usual
practice showing the allocation among the participating Lenders of the Loans,
the compensation therefor, the collateral with respect thereto and other
relevant information. Lender's Agent shall implement appropriate procedures and
policies to restrict lending of Securities hereunder on behalf of the respective
Lenders beyond the maximum credit risk and financial exposure limits which may
be set by such Lenders and Borrower.
2. Deliveries and Treatment of Borrowed Securities.
2.1 With respect to each Loan, Lender's Agent shall deliver the Borrowed
Securities to Borrower (a) by delivering to Borrower certificates representing
the Borrowed Securities together with such transfer documents as are customary
for such securities, if any, (b) by causing the Borrowed Securities to be
credited to Borrower's Account and debited from the Relevant Lender's Account at
a clearing organization agreed to by the Parties, and such crediting and
debiting shall result in receipt by Borrower and Lender's Agent of a notice of
such crediting and debiting, which notice shall constitute a schedule of the
Borrowed Securities, or (c) by any other method customary for the delivery of
such Securities at the Securities Trading Location and as agreed to by the
Parties.
2.2 Except as provided in Section 2.3, Borrower shall exercise all of the
incidents of ownership with respect to the Borrowed Securities, including the
right to transfer the Borrowed Securities to others, until the Borrowed
Securities are returned to Lender's Agent in accordance herewith.
2.3 Lender's Agent, on behalf of the Relevant Lender, shall be entitled to
receive all distributions (including payments upon maturity and other
redemption) made on or in respect of the Borrowed Securities, the payable dates
for which are during the term of the Loan and which are not otherwise received
by Lender's Agent, to the full extent the Relevant Lender would be so entitled
if the Borrowed Securities had not been loaned to Borrower, including, without
limitation, (a) all cash dividends, (b) all other distributions of cash or
property, (c) stock dividends and bonus issues, (d) securities received as a
result of split-ups of the Borrowed Securities and distributions in respect
thereof, (e) interest payments, (1) in the case of a rights issue, the Borrowed
Securities together with the securities allotted thereon; (g) in the case of
redemptions, a sum of money equivalent to the proceeds of redemption; (h) any
rights relating to conversion, sub-division, consolidation, preemption, rights
arising under a takeover offer or other rights, including those requiring
election by the holder for the time being of such securities which become
exercisable prior to the redelivery of Borrowed Securities, in which event the
Lender may, within a reasonable time before the latest time for the exercise of
the right or option give written notice to the Borrower that on redelivery of
securities it wishes to receive redelivered Borrowed Securities in such form as
if the right is exercised or, in the case of a right which may be exercised in
more than one manner, is specified in such written notice; (i) in the case of a
capitalized issue, the Borrowed Securities together with the securities allotted
by way of a bonus thereon; G) in the case of any event similar to any of the
foregoing, the Borrowed Securities together with or replaced by a sum of money
or securities equivalent to that received in respect of such Borrowed Securities
resulting from such event; and (k) all rights to purchase additional securities.
Cash dividends and other distributions shall be paid gross of any foreign
withholding taxes. Any cash distributions made on or in respect of the Borrowed
Securities which Lender's Agent is entitled to receive pursuant to this Section
shall be paid to Lender's Agent for the Account of the Relevant Lender by
Borrower on payable, maturity, or redemption date. Non-cash distributions other
than those in the nature of stock splits or stock dividends shall be paid to
Lender's Agent for the Account of the Relevant Lender as soon as possible under
the best efforts of Borrower. Accordingly, Borrower shall either: (i) redeliver
the Borrowed Securities in time to allow the respective Relevant Lender to
participate in rights, fees or other benefits which attach to the Borrowed
Securities as described in this Section 2; or (ii) exercise such rights, fees or
other benefits as directed by Lender's Agent. Furthermore, in the event a
re-registration process is necessary in order to transfer such rights, fees or
other benefits, and a Loan is terminated prior to the applicable record/payable
date but not sufficiently prior to the record/payable date to enable Lender's
Agent to re-register the Borrowed Securities in its own name, Borrower is to
forward, and/or act on Lender Agent's behalf in accordance with Lender Agent's
instructions with respect to, all rights, fees and other benefits on the
Borrowed Securities.
2.4 With respect to Section 2.3(k) above, Lender's Agent may, at its sole
option, (A) direct Borrower to purchase additional securities or (B) terminate
the Loan of specified securities so that Lender's Agent may exercise its
purchase rights. In the case of option (A) under the next preceding sentence,
Borrower may elect either (i) to retain such additional securities as part of
its Loan, in which case Lender's Agent and Borrower shall make such arrangements
as are necessary to provide that Borrower has adequate funds to purchase such
additional securities and that the Loan of such additional securities is
collateralized as required herein; or, (ii) to deliver such additional
securities to Lender's Agent (on the date specified by Lender's Agent). In the
case of option (B) under the second preceding sentence, the applicable
provisions of this Agreement regarding termination of Loans shall apply.
Non-cash distributions which are in the nature of stock splits or stock
dividends and which are received by Borrower shall be added to the Borrowed
Securities and shall be considered such for all purposes, except that: (i) if
the Borrowed Securities have been returned to Lender's Agent or if Borrower is
in Default hereunder, Borrower shall forthwith deliver any such non-cash
distributions to Lender's Agent; and (ii) Lender's Agent may direct Borrower,
upon no less than six Business Days' notice prior to the date of such a non-cash
distribution, to deliver the same to Lender's Agent on the Business Day next
following the date of such non-cash distribution.
3. Deliveries and Treatment of Co1lateral.
3.1 Simultaneous to or prior to the transfer of Borrowed Securities
hereunder, Borrower shall deliver to Lender's Agent Collateral in an amount not
less than the applicable Margin Percentage of the current Market Value of the
Borrowed Securities. The Collateral shall be delivered by one or more of the
following methods, as agreed to by the parties pursuant to Section 1.1: (a)
Borrower delivering Securities to Lender's Agent, (b) Borrower delivering funds
to the Lender's Agent for the Account of the Relevant Lender, (c) Borrower
transferring funds by wire, (d) Borrower delivering to Lender Agent, or causing
to be credited to Lender Agent's account at a Clearing Organization, a certified
or official bank check representing New York Clearing House funds, (e) Borrower
delivering to Lender's Agent an irrevocable letter of credit issued by mutually
acceptable "bank" (as defined in Section 3(a)(6)(A)-(C) of the Securities
Exchange Act of 1934) that is not an Affiliate of Borrower, (f) Borrower
delivering U.S. Securities through the Federal Reserve book-entry system to the
account of Lender's Agent at the Federal Reserve Bank of Boston, (g) Borrower
delivering federal funds to the Lender Agent's account at the Federal Reserve
Bank of Boston or at a Clearing Organization, (h) Borrower delivering non-cash
Collateral through any Clearing Organization agreed to by the parties, and/or
(i) Borrower delivering to Lender's Agent, one or more other types of Collateral
as the Parties may agree.
As further security for the due and punctual performance by Borrower of any
and all of its obligations to Lender's Agent hereunder, Borrower hereby grants
and transfers to Lender's Agent a lien upon and a security interest in any and
all property (together with the proceeds thereof) in which the Borrower at any
time has rights and which at any time has been delivered, transferred, or
deposited in or credited to an account with, the Lender's Agent or otherwise at
any time is in the possession or under the control or recorded on the books of
the Lender's Agent, provided such property is delivered as collateral for a Loan
hereunder or under any other loan agreement with the Relevant Lender, including
(without limitation) any property which may be in transit by mail or carrier for
such purpose, or converted or affected by any documents in the Lender Agent's
possession for such purpose.
3.2 With respect to each Loan, the Collateral delivered by Borrower to
Lender's Agent, as adjusted pursuant to Section 4 below, shall be security for
the due and punctual performance by Borrower of any and all of its obligations
to Lender's Agent on behalf of the Relevant Lender hereunder now or hereafter
arising, and Borrower hereby pledges with, assigns to, and grants to Lender's
Agent on behalf of the Relevant Lender a continuing first security interest in,
and a lien upon, the Collateral and its proceeds. Borrower shall make
appropriate notations on its books and records so as to ensure the validity of
such security interest. Such first security interest shall attach upon the
delivery of the Collateral to Lender's Agent, shall survive the termination of
this Agreement, and shall cease only upon the return of the Collateral to
Borrower subsequent to the return of the Borrowed Securities to Lender's Agent.
In addition to the rights and remedies given to Lender's Agent hereunder,
Lender's Agent, on behalf of the Relevant Lender, shall have all the rights and
remedies of a secured party under the Uniform Commercial Code of Massachusetts.
3.3 Borrower understands that Lender's Agent may use or invest the
Collateral, to the extent that such Collateral consists of cash. Such use or
investment shall be at the risk of the Relevant Lender and, subject to the
payment of an agreed rebate fee pursuant to Section 5.2, and any other fees
payable hereunder, the Relevant Lender shall be entitled to retain all income
and profits therefrom and shall bear all losses therefrom. Except as provided in
Section 10, neither Lender's Agent nor any Lender may pledge, repledge,
hypothecate, rehypothecate, lend, or relend the Collateral, to the extent such
Collateral consists of other than cash. However, Lender's Agent may commingle
and hold non-cash Collateral in bulk.
3.4 With the approval of Lender's Agent, Borrower may at any time
substitute for any Securities held by Lender's Agent as Collateral for the
Borrowed Securities other Collateral with respect to the Borrowed Securities of
equal current Market Value to the Securities for which it is to be substituted.
Prior to the maturity of any U.S. Security (as defined in Section 12) that is
delivered to Lender's Agent as Collateral, Borrower shall replace such U.S.
Security with other Collateral acceptable to Lender's Agent and of equal current
Mar],et Value to the U.S. Security for which it is to be substituted.
Substituted collateral shall be considered Collateral for all purposes hereof.
3.5 Borrower shall be entitled to receive all distributions made on or in
respect of non-cash Collateral the payable dates for which are during the term
of a Loan and which are not otherwise received by Borrower, to the full extent
it would be so entitled if the Collateral had not been delivered to Lender's
Agent; provided, ~, that the amount, type or value of such distribution which
Borrower is entitled to receive hereunder shall not exceed the amount, type and
value received by State Street or its agents. Any distributions made on or in
respect of such Collateral which Borrower is entitled to receive under this
section shall be paid in the same currency as such distribution is paid by the
issuer, by Lender's Agent, acting on behalf of the Relevant Lender, to Borrower
forthwith upon receipt thereof by Lender's Agent, so long as Borrower has not
committed a Default at the time of such receipt. Cash dividends and other
distributions shall be paid gross of any withholding taxes. Borrower
acknowledges that distributions on non-cash Collateral may be afforded different
treatment than Borrower would have been so entitled had it not delivered the
Collateral to Lender's Agent, and agrees not to claim Lender's Agent or any
Relevant Lender for any disparate treatment as a result of its receiving the
distribution from Lender' Agent (as opposed to a distribution from issuer
directly).
3.6 Except as provided in Sections 10 and 11 hereunder, Lender's Agent
shall be obligated to return the Collateral to Borrower upon the return to
Lender's Agent of the Borrowed Securities.
4. Marks to Market; Maintenance of Collateral.
4.1 Borrower shall daily xxxx to market any Loans hereunder and in the
event that at the close of trading on any day the Market Value of all the
Collateral delivered by Borrower to Lender's Agent with respect to any Loan
hereunder shall be less than the Margin Percentage of the Market Value of all
Borrowed Securities outstanding with respect to such Loan, Borrower shall
deliver to Lender's Agent for the benefit of the Relevant Lender additional
Collateral by the close of the next Business Day so that the Market Value of the
additional Collateral when added to the Market Value of the Collateral with
respect to such Loan shall equal at least the Margin Percentage of the Market
Value of the Borrowed Securities outstanding with respect to such Loan. Such
additional Collateral shall be delivered as provided in Section 3.1 above.
4.2 In the event that at the close of trading on any day the Market Value
of all the Collateral delivered by Borrower to Lender's Agent with respect to
any Loan hereunder shall be less than the Margin Percentage of the Market Value
of all the Borrowed Securities outstanding with respect to such Loan, Lender's
Agent may, by oral notice to Borrower, demand that Borrower deliver to Lender's
Agent for the benefit of the Relevant Lender additional Collateral such that the
Market Value of such additional Collateral when added to the Market Value of the
Collateral with respect to such Loan shall equal at least the Margin Percentage
of the Market Value of the Borrowed Securities outstanding with respect to such
Loan. Except as provided below, such delivery is to be made by the close of
business on the day of Lender's Agent's notice to Borrower if such notice is
given before 11:30 a.m. on a Business Day, or on the next Business Day if agreed
to between the Parties. If Lender's Agent's notice is given after 11:30 a.m. on
a Business Day or is given on a day other than a Business Day, such delivery is
to be made by the close of business of the next Business Day, unless such notice
has been superseded by a proper demand made pursuant to Section 4.3 before 11:30
a.m. of that next Business Day. Such Collateral shall be delivered as provided
in Section 3.1 above. If the transfer of Collateral is to occur outside the
United States, such delivery is to be made not later than the time on such day
that is customary in such location.
4.3 In the event that at the close of trading on any day the Market Value
of all the Collateral delivered by Borrower to Lender's Agent with respect to
any Loan hereunder shall be greater than the Margin Percentage of the Market
Value of all the Borrowed Securities outstanding with respect to such Loan,
Borrower may, by oral notice to Lender's Agent, demand that Lender's Agent
deliver to Borrower such amount of Collateral as may be selected by Borrower, so
long as the Market Value of the remaining Collateral equals at least the Margin
Percentage of the Market Value of the Borrowed Securities outstanding with
respect to such Loan. Except as provided below, such delivery is to be made by
the close of business on the day of Borrower's notice to Lender's Agent if such
notice is given before 11:30 a.m. on a Business Day, or on the next Business Day
if agreed to between the Parties. If Borrower's notice is given after 11:30 a.m.
on a Business Day or is given on a day other than a Business Day, such delivery
is to be made by the close of business of the next Business Day, unless (a) such
notice has been superseded by a proper demand made pursuant to Section 4.2 or
this Section 4.3 given before 11:30 a.m. of that next Business Day, or (b)
additional Collateral is required to be delivered on that next Business Day
pursuant to Section 4.1. Such Collateral shall be delivered as provided in
Section 3.1 above. If the transfer of Collateral is to occur outside the United
States, such delivery is to be made not later than the time on such day that is
customary in such location.
5. Fees and Investment of Cash Collateral.
5.1 When an agreement to lend securities is made, Lender's Agent and
Borrower shall agree on the basis of compensation to be paid in respect of the
Loan.
5.2 To the extent that a Loan of Borrowed Securities is collateralized by
cash, the parties hereby agree that Lender's Agent for the benefit of the
Relevant Lender shall use and invest such cash Collateral, and that, in
consideration for such right to use and invest cash Collateral, Lender's Agent,
on behalf of the Relevant Lender, will pay Borrower a loan rebate fee computed
daily for each such Loan and based on the amount of cash Collateral delivered
with respect to such Loan. In the event Securities other than U.S. Securities
are borrowed hereunder, the amount of such loan rebate fee shall be computed (a)
from the first Business Day next following the day that cash Collateral is
delivered to Lender's Agent to the extent that such Loan is collateralized by
cash through a means other than Borrower's delivery of federal funds, and (b)
from the first Business Day that cash Collateral is delivered to Lender's Agent,
to the extent that the Loan is collateralized by Borrower's delivery of federal
funds, Computation of such loan rebate fee shall be made daily, through and
including the earliest of; (i) the date that such cash Collateral is returned to
Borrower, to the extent that such Loan is collateralized by cash through a means
other than Borrower's delivery of federal funds; (ii) the date next preceding
the date such cash Collateral is returned to Borrower, to the extent that such
Loan is collateralized by Borrower's delivery of federal funds; (iii) the date
of a Default by Borrower; and (iv) the date Lender's Agent gives notice of
termination pursuant to Section 8.2, provided that the parties may mutually
agree that a loan rebate fee will be paid for all or an agreed upon number of
days after such notice is given (but in no event for a period beyond the
earliest of the dates described in clauses (i), (ii), and (iii) of this
sentence). Such loan rebate fee shall be payable before the tenth Business Day
following the rendering of a correct invoice by Borrower. In the event U.S.
Government Securities are borrowed hereunder, the amount of such loan rebate fee
shall be computed daily from the first Business Day that cash Collateral is
delivered to Lender's Agent, through and including the earliest of (I) the date
next preceding the date that such cash Collateral is returned to Borrower; (II)
the date of a Default by Borrower; and (Ill) the date Lender's Agent gives
notice of termination pursuant to Section 8.2, provided that the parties may
mutually agree that a loan rebate fee will be paid for all or an agreed upon
number of days, and provided the Borrower is not in Default, such loan rebate
fee shall be payable upon the date the Borrowed Securities are returned to the
Lender's Agent upon termination of the Loan. If requested by any party to this
agreement, Lender's Agent and Borrower shall renegotiate the loan rebate fee
from time to time.
5.3 To the extent that a Loan of Borrowed Securities is collateralized by
other than cash, Lender's Agent and Borrower may agree that Borrower shall pay
to Lender's Agent, for the account of the Relevant Lender, a loan premium based
on the par value of the borrowed securities. The amount of such loan premium
shall be computed from the first Business Day that the borrowed securities are
delivered to Borrower, through and including the date next preceding the date
that securities identical to the Borrowed Securities are returned to Lender's
Agent pursuant to Section 8 or the date that Lender's Agent makes a purchase of
securities or an election to treat the Borrowed Securities as sold pursuant to
Section 10.1. Any fee payable by Borrower hereunder shall be payable upon the
earliest of the following: (a) the seventh Business Day of the month following
the month in which the fee was incurred; or (b) immediately, in the event of a
Default hereunder by Borrower; or ( c ) the date this Agreement is terminated.
5.4 All necessary costs, including any and all taxes (such as, but not
limited to, transfer taxes), duties (including, without limitation, stamp
duties) and fees (if any), with respect to any transfers hereunder of the
Borrowed Securities or Collateral shall be paid by Borrower when the same become
due.
6. Representations of rhe Parties.
The parties hereby make the following representations and warranties, which
shall continue during the term of any Loan hereunder;
6.1 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.
6.2 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 securities regulatory and self-regulatory agencies and organizations.
6.3 Borrower represents and warrants for the benefit of Lender's Agent and
each Lender that (a) it is a trust company duly organized and validly existing
under the laws of the Commonwealth of Massachusetts, (b) it is a bank within the
meaning of Section 3(a)(6)(A)-(C) of the Exchange Act, (c) it has, or will have
at the time of delivery of any Collateral, the right to grant a first security
interest therein subject to the terms and conditions hereof, and (d) the
purposes for which it borrows securities hereunder shall not violate the Jaws of
the Commonwealth of Massachusetts or the federal laws applicable therein.
6.4 Borrower represents that the statements provided pursuant to Section
7.1 fairly represent its financial condition, and that there has been no
material adverse change in its financial condition or the financial condition of
any parent company since that date that has not been disclosed in writing to
Lender's Agent. Lender's Agent represents that it has not been informed of any
material adverse change in Lender's financial condition. Each Loan effected
hereunder shall constitute a present representation by: (i) Borrower that there
has been no material adverse change in its financial condition or the financial
condition of any parent company that has not been disclosed in writing to
Lender's Agent since the date of the most recent statement furnished to Lender's
Agent pursuant to Section 7.1; and (ii) Lender's Agent that it knows of no
material adverse change in the financial condition of any Lender that the
Borrower is not aware of.
7. Covenants.
7.1 To the extent that Lender's Agent has provided Borrower with written
statements identifying any of the Lenders as employee benefit plans subject to
Title 1 of the Employee Retirement Income Security Act of 1974 ("ERISA"), each
request by Borrower for a Loan shall constitute a present representation that,
except as disclosed in writing by Borrower to Lender's Agent, neither borrower
nor any Affiliate of Borrower is a "fiduciary" (within the meaning of Section
3(21) of ERISA) with respect to the assets of the Lender so identified that may
be Borrowed Securities hereunder. Borrower hereby makes the following covenants:
Upon execution of this Agreement, Borrower shall furnish to Lender's Agent (i)
the most recent available audited statement of Borrower's financial condition,
and (ii) the most recent available unaudited statement of Borrower's financial
condition. As long as any Loan is outstanding under this Agreement, Borrower
will promptly deliver to Lender's Agent all such financial information that is
subsequently available, and any other financial information or statements that
Lender's Agent may reasonably request.
7.2 Lender's Agent hereby makes the following covenants. Subject to
confidentiality restrictions, if any, Lender's Agent shall furnish to Borrower,
upon request, any of the following statements received from each Lender,
promptly upon such receipt (i) the most recent available audited statement of
such Lender's financial condition, and (ii) the most recent available unaudited
statement of such Lender's financial condition. As long as any Loan is
outstanding under this Agreement, Lender's Agent will promptly deliver to
Borrower, upon request, all such financial information that is subsequently
delivered to Lender's Agent and any other financial information or statements
pertaining to a Lender and received by Lender's Agent that Borrower may
reasonably request.
7.3 Lender's Agent and Borrower hereby covenant and agree for the benefit
of the Lenders that they each have adopted and implemented procedural safeguards
to help ensure that all actions taken by Lender's Agent hereunder will be
effected by individuals other than, and not under the supervision of,
individuals who are acting in a capacity as Borrower hereunder, and that all
transactions effected hereunder will take place at the same fully negotiated
"arms length" prices offered to similarly situated third parties by Lender's
Agent when it acts as lending agent for the various participants in its
securities lending program, notwithstanding the inherent conflict of interest
with respect to Loans to be effected by Lender's Agent to Borrower.
7.4 The Borrower covenants that it shall ensure that this Agreement and all
instruments of transfer of any Securities provided or returned pursuant to the
terms of this Agreement have been duly stamped in accordance with all applicable
legislation.
7.5 The Borrower covenants that at all times it shall ensure compliance
with those provisions of applicable law concerning the taxation of securities
lending arrangements so that Lender does not incur any unnecessary tax or
capital gains tax (other than income tax in respect of fees payable under this
Agreement) arising out of the provision of Borrowed Securities to the Borrower
and the return to Lender's Agent of Borrowed Securities.
8. Termination of Loan without Default.
8.1 Borrower may cause the termination of a Loan at any time by returning
the Borrowed Securities to Lender's Agent.
8.2 Lender's Agent may cause the termination of a Loan by giving notice of
termination of such Loan to Borrower, prior to the close of business on any
Business Day. Upon such notice, Borrower shall deliver the applicable Borrowed
Securities to Lender's Agent (i) in the event U.S .Securities are loaned, no
later than the close of business on the next Business Day; or (ii) in the event
Securities other than U.S. Securities are loaned, no later than the earlier of
(a) the end of the customary delivery period for such Securities or (b) the
third Business Day following the day on which Lender gives notice of termination
of such Loan Borrower.
8.3 Borrower's delivery of the Borrowed Securities to Lender's Agent
pursuant to Section 8.1 or 8.2 shall be made by causing Lender's Agent to credit
the Account of the Relevant Lender with the Borrowed Securities, by causing the
Borrowed Securities to be credited to the Account of the Relevant Lender at the
applicable Clearing Organization, or, if Lender's Agent consents, by physical
delivery to Lender of certificates representing the Borrowed Securities. Upon
such delivery by or on behalf of Borrower, Lender's Agent shall concurrently
therewith deliver the Collateral (as adjusted pursuant to Section 4) to
Borrower; provided, however, that if upon the return of the Borrowed Securities
there is not sufficient time for Lender's Agent to effect a return of the
Collateral to Borrower's Account, Lender's Agent may return such Collateral on
the next Business Day such return can be so effected.
9. Events of Default.
With respect to each Loan, the following shall constitute defaults
hereunder (individually, a "Default")
(a) if Lender's Agent or Borrower fails to return the relevant Borrowed
Securities or Collateral as required by Section 8 hereof;
(b) if Lender's Agent or Borrower fails to deliver or return the relevant
Collateral, as required by Section 4 hereof;
(c) if Lender's Agent or Borrower fails to mal{e the payment of
distributions with respect to such Loan as required by Section 2.3 and 3.5
hereof and such default is not cured within one Business Day of notice of such
failure to Borrower or Lender's Agent, as the case may be;
(d) if any party fails to make any payment with respect to such Loan due
hereunder;
(e) if any party, or any parent company of Borrower, or the Relevant Lender
makes a general assignment for the benefit of creditors, or admits in writing
its inability to pay its debts as they become due, or files or becomes subject
to a petition in bankruptcy or is adjudicated as bankrupt or insolvent, or files
or becomes subject to a petition seeking reorganization, liquidation,
dissolution, or similar relief under any present or future law or regulation, or
seeks, consents to or acquiesces in the appointment of any trustee, receiver, or
liquidator of it or any material part of its properties;
(f) if Borrower or the Relevant Lender has 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;
(g) if it is found that Borrower or the Relevant Lender has made a material
misrepresentation of its financial condition;
(h) if Borrower breaches any covenants, representations, or agreements
herein;
(i) if a final judgment for the payment of money shall be rendered against
Borrower and such judgment shall not have been discharged or its execution
stayed pending appeal within sixty (60) days of entry or such judgment shall not
have been discharged within sixty (60) days of expiration of any such stay.
10. Lender's Remedies on Borrower's Default.
10.1 In the event of any Default by Borrower under Section 9 hereof with
respect to a Loan, Lender's Agent, on behalf of the Relevant Lender, shall have
the right, in addition to any other remedies provided herein or under applicable
law, to terminate all Loans of such Relevant Lender, effective immediately upon
receipt of notice to that effect by Borrower, and at the option of Lender's
Agent (without further notice to Borrower) with respect to any or each such
Loan, either (a) to purchase a like amount of the Borrowed Securities in any
market for such securities or (b) to elect to treat the Borrowed Securities as
having been purchased by Borrower at a purchase price equal to the Replacement
Value. Lender's Agent may apply the relevant Collateral to the payment of such
purchase, after deducting therefrom all amounts, if any, due the Relevant
Lender, or Lender's Agent on its behalf, from Borrower under this Agreement. In
such event, Borrower's obligation to return the applicable Borrowed Securities
shall terminate. Borrower shall be liable to Lender's Agent, on behalf of the
Relevant Lender, for the cost of funds which Lender's Agent, on behalf of the
Relevant Lender, must advance to purchase such securities during any stay on the
application of the Collateral (whether such stay is automatic or imposed by a
court or any other governmental agency). In the event such purchase price or
Replacement Value exceeds the amount of the Collateral, Borrower shall be liable
to Lender's Agent, on behalf of the Relevant Lender, for the amount of such
excess (plus all amounts, if any, due by Borrower to the Lender's Agent, on
behalf of the Relevant Lender, hereunder) together with interest on all such
amounts at the Prime Rate, as it fluctuates from day to day, on demand from the
date of such purchase or election until the date of payment of such excess. Each
Lender shall have, as security for Borrower's obligation to such Lender to pay
such excess, a first security interest in or right of setoff against any
property of Borrower then held by such Lender and any other amount payable by
such Lender to Borrower. The purchase price of securities purchased under this
Section 10 shall include broker's fees and commissions and all other reasonable
costs, fees, and expenses related to such purchase. Lender's Agent shall
allocate among the Lenders and their respective Loans, in accordance with any
reasonable allocation method selected by Lender's Agent, the funds received,
Collateral realized upon and the costs of collection, including without
limitation, the cost of purchase of replacement securities. Upon the
satisfaction of all of Borrower' s obligations to Lender's Agent, on behalf of
the Relevant Lender hereunder, any remaining Collateral held by Lender's Agent
on behalf of the Relevant Lender shall be returned to Borrower.
11. Borrower's Remedies on or Lender's Agent Default.
11.1 With respect to each Loan, in the event of any Default by the Relevant
Lender, or by Lender's Agent by reason of the Relevant Lender's failure to
perform its obligations under the terms of its Securities Lending Authorization
Agreement, Borrower shall have the right to sell an amount of the Borrowed
Securities applicable to the Loans from the Relevant Lender, in the principal
market for such securities, that will provide proceeds equal in value to the
Market Value of the Collateral on the date of Default. In such event, Borrower
may retain the proceeds of such sale and the obligation of Lender's Agent to
return the Collateral applicable to the Loans from the Relevant Lender shall
terminate. In the event the sale price received from such securities is less
than the value of the Collateral, Lender's Agent shall be liable to Borrower
(but only if and to the extent of the funds received from the Relevant Lender
under its Securities Lending Authorization Agreement) for the amount of any
deficiency (plus all amounts, if any, due to Borrower hereunder). Upon the
satisfaction of all of the obligations of Lender's Agent thereunder, any
remaining Borrowed Securities applicable to the Loans from the Relevant Lender
shall be returned to Lender's Agent.
12. Definitions.
For the purposes hereof:
12.1 "Account of the Relevant Lender" shall mean, with respect to each
Relevant Lender, either; (i) such Relevant Lender's sub-account reflected on the
books and records of Lender's Agent within the 3E Special Account of Lender's
Agent held in the Federal Reserve Book-Entry System; or (ii) an account
designated on the books and records of State Street Bank and Trust Company as
representing cash Collateral held by Lender's Agent as custodian on the Relevant
Lender's behalf.
12.2 "Affiliate" means (i) any person directly or indirectly, through one
or more intermediaries, controlling, controlled by, or under common control with
another person; (ii) any officer, director, or partner, or employee of such
other person; and (iii) any corporation or partnership of which such other
person is an officer, director or partner. For purposes of this definition the
term "control" means the power to exercise a controlling influence over the
management or policies of a person other than an individual.
12.3 "Available Securities" shall mean the securities available to be
loaned hereunder, as described in Section 1 hereof.
12.4 "Borrowed Security" shall mean any "security" (as defined in the
Exchange Act) which is either: (i) a U.S. Security, and is delivered as a Loan
hereunder, until such security is credited through the Federal Reserve
book-entry system, to the Lender's account at the Federal Reserve Bank of Boston
or until the security is replaced by purchase. For purposes of the return of
Borrowed Securities by Borrower pursuant to Section 8 or the purchase of
securities pursuant to Section 10, such term shall include securities of the
same issuer, class, and quantity as the Borrowed Securities; or (ii) not a U.S.
Security and which is delivered as a Loan hereunder, until the Clearing
Organization credits the Lender's accounts or the certificate for such security
is delivered or otherwise accepted back hereunder or until the security is
replaced by purchase, except that, if any new or different security shall be
exchanged for any Borrowed Security by recapitalization, merger, consolidation
or other corporate action, such new or different security shall, effective upon
such exchange, be deemed to become a Borrowed Security in substitution for the
former Borrowed Security for which such exchange was made. For purposes of the
return of Borrowed Securities by Borrower pursuant to Section 8 or the purchase
of securities pursuant to Sections 10 or 11 hereunder, such term shall include
securities of the same issuer, class and quantity as the Borrowed Securities, as
adjusted pursuant to the preceding sentence.
12.5 "Borrower's Account" shall mean the 3A Investment Account of State
Street Bank and Trust Company held through the Federal Reserve Book-Entry
System.
12.6 "Business Day" shall mean any day recognized as a settlement day by
the Federal Reserve Bank of Boston and on which Lender's Agent is open for
business to the public.
12.7 "Clearing Organization" means any clearing agency for the transfer of
securities, the use of which is agreed to by the parties.
12.8 "Collateral" shall mean, with respect to each Loan whether now owned
or hereafter acquired, (a) that collateral delivered to Lender's Agent pursuant
to Section 3 or 4, and (b) all accounts in which such collateral is deposited
and all securities and the like in which all cash collateral is invested or
reinvested.
12.9 "Default" shall have the meaning set forth in Section 9 hereof.
12.10 "Loan" shall mean a single transaction for the loan of securities
hereunder by Lender's Agent to Borrower on behalf of a designated Relevant
Lender.
12.11 "Loaned Securities" shall mean securities subject to a Loan.
12.12 "Margin Percentage" shall mean one hundred and two percent (102%) in
respect of U.S. Securities or Sovereign Debt, one hundred and five percent
(105%) in respect of all other Securities or such other percentage as is agreed
to by the Lender's Agent and Borrower pursuant to Section 1.1.
12.13 "Market Value" of a security shall mean the fair market value of such
security (including, in the case of any Borrowed Security that is a debt
security, the accrued interest on such security) as determined by the
independent pricing service designated by Lender's Agent, or by such other
independent sources as may be selected on a reasonable basis by Lender's Agent.
"Market Value" of cash shall mean the notional amount thereof.
12.14 "Prime Rate" shall mean the prime rate as quoted in The Wall Street
Journal, New York Edition, for the business day preceding the date on which such
determination is made. If more than one rate is so quoted, the Prime Rate shall
be the average of the rates so quoted.
12.15 "Relevant Lender" shall mean, with respect to each Loan, the Lender
to whom such Loan is allocated as shown on the books of Lender's Agent
maintained pursuant to Section 1.4 hereof.
12.16 "Replacement Value" shall mean the price, including any brokerage or
other expenses and accrued interest, at which a like amount of securities
identical to the Borrowed Securities could be purchased in the principal market
for such securities at the time of the election of Lender's Agent under Section
10.1 hereof.
12.17 "Security" means any security (as defined in the Exchange Act) which
is delivered for Loan hereunder.
12.18 "State Street" shall mean State Street Bank and Trust Company.
12.19 "U.S. Security" means a security issued or guaranteed by the United
States government or any of its agencies.
13. Indemnification.
Borrower hereby agrees to indemnify and hold harmless each Lender and
Lender's Agent from any and all damages, losses, costs, and expenses (including
attorney's fees) that such Lender or Lender's Agent may incur or suffer due to
the failure of the Borrower to perform its obligations under this Agreement.
This right to indemnification shall survive the termination of any Loan or of
this Agreement.
14. Waivers. General.
The failure of either party 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 of
any other term of this Agreement. All waivers in respect of a Default must be in
writing.
15. Standard of Care.
Subject to the requirements of applicable law, Lender's Agent shall not be
liable with respect to any losses incurred by Borrower in connection with this
Agreement except to the extent that such losses result from the negligence of
Lender's Agent in the performance of its duties hereunder.
16. Continuing Agreement: Termination: Remedies.
It is the intention of the parties hereto that, subject to the termination
provisions set forth herein, this Agreement shall constitute a continuing
agreement in every respect and shall apply to each and every Loan, whether now
existing or hereafter made by Lender's Agent to Borrower. Lender's Agent and
Borrower may each at any time terminate this Agreement upon five (5) days'
written notice to the other parties to that effect. The sole effect of any such
termination of this Agreement will be that, following such termination, no
further Loans by Lender's Agent shall be made or considered made hereunder, but
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.
17. 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 Lender's Agent:
State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Securities Lending Department
If to Borrower:
State Street Bank and Trust Company
Financial Markets Group
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Money Markets Area
or to such other addresses as either party may furnish the other party by
written notice under this section.
Telephone and facsimile notices shall be sufficient if communicated to
the party entitled to receive such notice at the following numbers:
If to Lender's Agent:
Telephone (000) 000-0000 Facsimile (000) 000-0000
If to Borrower:
Telephone: 000-0000 Facsimile 654-4270
18. Time.
All times specified herein shall be based on Boston time.
19. Securities Contracts,
Each party hereto agrees that this Agreement and the Loans made hereunder
shall be a "qualified financial contracts" for purposes of Section 11(e)(8) of
the Federal Deposit Insurance Act, as amended, and any receivership or
conservationship proceeding thereunder.
20. Declaration of Trust.
Lender's Agent hereby covenants and agrees that with respect to any
Collateral delivered to Lender's Agent by Borrower hereunder, Lender's Agent
shall hold such Collateral, or, in the case of cash Collateral, shall hold any
securities or units representing the investment of such cash Collateral,
separate and apart from Lender's Agent's assets and Lender's Agent hereby
further declares that it holds such Collateral or such securities or units, as
the case may be, in trust for the benefit of the Relevant Lender.
21. Miscellaneous,
With respect to loss of Securities to Borrower by Lender's Agent on behalf
of Lenders, this Agreement supersedes any other agreement between the parties.
This Agreement shall not be assigned by any party without the prior written
consent of the other parties. 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. The provisions of this Agreement are severable and the invalidity
or 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.
22. Modification.
This Agreement shall not be modified, except by an instrument in writing
signed by the party against whom enforcement is sought.
BORROWER: STATE STREET BANK AND TRUST COMPANY
Officer: Xxxxxx X. Xxxxxx
Title SVP and General Mgr., London Branch
Signature /s/ Xxxxxx X. Xxxxxx
---------------------------------------------
LENDER'S AGENT: STATE STREET BANK AND TRUST COMPANY
Officer: Xxxxxxx X. Xxxxxx
Title: SVP
Signature: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Schedule A
This Schedule is attached to and made part of the Securities Lending
Authorization Agreement, dated the 21st day of May, 2004 between MTB GROUP
OF FUNDS ON BEHALF 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
- Sixty-Five percent (65%) payable to the Fund, and
- Thirty-Five percent (35%) 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. Investment Management Fees
State Street Navigator Securities Lending Prime Portfolio:
On an annualized basis, the management/trustee/custody/fund
administration/transfer agent fee for investing cash Collateral in the State
Street Navigator Securities Lending Prime Portfolio is not more than 5.00 basis
points netted out of yield. The trustee may pay out of the assets of the
Portfolio all reasonable expenses and fees of the Portfolio, including
professional fees or disbursements incurred in connection with the operation of
the Portfolio.
Investment Management Direction
State Street will invest cash collateral in the State Street Navigator
Securities Lending Prime Portfolio or such other account identified by the Fund
in accordance with Section 16.
Schedle 8.1
This Schedule is attached to and made part of the Securities Lending
Authorization Agreement, dated the 21st day of May, 2004 between MTB GROUP OF
FUNDS ON BEHALF 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; and
- Such other Collateral as the parties may agree to in writing from time to
time.
Schedule B
This Schedule is attached to and made part of the Securities Lending
Authorization Agreement, dated the 21st day of May, 2004 between MTB GROUP OF
FUNDS ON BEHALF OF ITS RESPECTIVE SERIES AS LISTED ON SCHEDULE B, SEVERALLY AND
NOT JOINTLY (the "Funds") and STATE STREET BANK AND TRUST COMPANY ("State
Street").
Fund Name Taxpayer Identification Number Tax Year-End
MTB U.S. Treasury Money Market Fund 00-0000000 April 30th
MTB U.S. Government Bond Fund 00-0000000 April 30th
MTB Short Duration Government Bond Fund 00-0000000 April 30th
MTB Balance Fund 00-0000000 April 30th
MTB Income Fund 00-0000000 April 30th
MTB Intermediate Term Bond Fund 00-0000000 April 30th
MTB U.S. Government Money Market Fund 00-0000000 April 30th
MTB Short-Term Corporate Bond Fund 00-0000000 April 30th
