Exhibit (h)(3)
FORM OF SECURITIES LENDING AGREEMENT AND GUARANTY
AGREEMENT, dated as of July 24, 2007, between TDAX Funds, Inc. on
behalf of each of its Series listed on Exhibit A (each Series is hereinafter
referred to as "Lender"), and The Bank of New York ("Bank").
ARTICLE I
DEFINITIONS
-----------
Whenever used in this Agreement, unless the context otherwise requires,
the following words shall have the meanings set forth below:
1. "Act of Insolvency" shall mean (i) the filing by a Borrower of a
petition in bankruptcy or a petition seeking reorganization, liquidation or
similar relief, or the filing of any such petition against a Borrower which is
not dismissed or stayed within 60 calendar days, (ii) the adjudication of a
Borrower as bankrupt or insolvent, (iii) the seeking or consenting to the
appointment of a trustee, receiver or liquidator by a Borrower, or (iv) the
making of a general assignment for the benefit of creditors by a Borrower or a
Borrower's admission in writing of its inability to pay its debts as they become
due.
2. "Account" shall mean the custodial account established and
maintained by Bank on behalf of Lender for the safekeeping of Securities and
monies received by Bank from time to time.
3. "Approved Investment" shall mean any type of security, instrument,
participation or interest in property in which Cash Collateral may be invested
or reinvested, as set forth on Schedule I hereto (which may be amended from time
to time by execution of a revised Schedule I).
4. "Authorized Person" shall mean any officer of Lender and any other
person, whether or not any such person is an officer or employee of Lender, duly
authorized by corporate resolutions of the Board of Directors of Lender to give
Oral and/or Written Instructions on behalf of Lender, such persons to be
designated in a Certificate which contains a specimen signature of such person.
5. "BNY Affiliate" shall mean any affiliate of Bank, as such term is
defined in Regulation W issued by the Board of Governors of the Federal Reserve
System.
6. "Book-Entry System" shall mean the Treasury/Reserve Automated Debt
Entry System maintained at The Federal Reserve Bank of New York.
7. "Borrower" shall mean any entity named on a list supplied to Lender
by Bank (as such list may be amended from time to time), other than any entity
deleted from such list pursuant to a Certificate.
8. "Business Day" shall mean any day on which Bank is open for business
and on which the Book-Entry System and/or the applicable Depositories are open
for business.
9. "Cash Collateral" shall mean either fed funds or New York Clearing
House funds, as applicable for a particular Loan.
10. "Certificate" shall mean any notice, instruction, schedule or other
instrument in writing, authorized or required by this Agreement to be given to
Bank, which is actually received by Bank and signed on behalf of Lender by an
Authorized Person or a person reasonably believed by Bank to be an Authorized
Person.
11. "Collateral" shall mean Government Securities, Letters of Credit
and/or Cash Collateral.
12. "Collateral Account" shall mean an account established and
maintained by Bank for the purpose of holding Collateral, Approved Investments,
Proceeds and any Securities Loan Fee paid by Borrowers in connection with Loans
hereunder.
13. "Collateral Requirement" shall mean with respect to Loans an amount
equal to 102% of the then current Market Value of Loaned Securities which are
the subject of Loans as of the close of trading on the preceding Business Day.
14. "Depository" shall mean the Depository Trust Company and any other
securities depository or clearing agency (and their respective successors and
nominees) registered with the Securities and Exchange Commission or otherwise
authorized to act as a securities depository or clearing agency.
15. "Distributions" shall mean interest, dividends and other payments
and distributions payable by Borrowers in respect of Loaned Securities.
16. "Government Security" shall mean Book-entry Securities as defined
in 31 C.F.R. Part 357.2 and any other securities issued or fully guaranteed by
the United States government or any agency, instrumentality or establishment of
the United States government.
17. "Letter of Credit" shall mean a clean, unconditional and
irrevocable letter of credit in favor of Bank as agent for Lender issued by a
bank named on a list supplied to Lender by Bank (as such list may be amended
from time to time), other than a bank deleted from such list pursuant to a
Certificate.
- 2 -
18. "Loan" shall mean a loan of Securities hereunder.
19. "Loaned Security" shall mean any Security which is subject to a
Loan.
20. "Market Value" shall mean (a) with respect to Government
Securities, the price of such Securities as quoted by a recognized pricing
information service at the time the determination of Market Value is made, plus
accrued but unpaid interest, if any, on the particular Security, (b) with
respect to other Securities, the price of such Securities as quoted by a
recognized pricing information service at the time such determination is made,
plus accrued but unpaid interest, if any, to the extent not included in the
price as quoted, (c) with respect to Cash Collateral, its amount, and (d) with
respect to Letters of Credit, the amount of such Letters of Credit.
21. "Oral Instructions" shall mean verbal instructions actually
received by Bank from an Authorized Person or from a person reasonably believed
by Bank to be an Authorized Person.
22. "Proceeds" shall mean any interest, dividends and other payments
and distributions received by Bank in respect of Collateral and Approved
Investments.
23. "Rebate" shall mean the amount payable by Lender to a Borrower in
connection with Loans at any time collateralized by Cash Collateral.
24. "Receipt" shall mean an advice or confirmation setting forth the
terms of a particular Loan.
25. "Securities Borrowing Agreement" shall mean the agreement pursuant
to which Bank lends securities to a Borrower on behalf of its customers
(including Lender) from time to time.
26. "Securities Loan Fee" shall mean the amount payable by a Borrower
to Bank pursuant to the Securities Borrowing Agreement in connection with Loans
collateralized by Collateral other than Cash Collateral.
27. "Security" shall include Government Securities, common stock and
other equity securities, bonds, debentures, corporate debt securities, notes,
mortgages or other obligations, and any certificates, warrants or other
instruments representing rights to receive, purchase, or subscribe for the same,
or evidencing or representing any other rights or interests therein.
28. "Written Instructions" shall mean written communications actually
received by Bank from an Authorized Person or from a person reasonably believed
by Bank to be an Authorized Person by letter, memorandum, telegram, cable,
telex, facsimile, computer, video (CRT) terminal or other on-line system, or any
other method whereby Bank is able to verify with a reasonable degree of
certainty the identity of the
- 3 -
sender of such communications or the sender is required to provide a password or
other identification code.
ARTICLE II
APPOINTMENT OF BANK; SCOPE OF AGENCY AUTHORITY
----------------------------------------------
1. Appointment. Lender hereby appoints Bank as its agent to lend
Securities in the Account to Borrowers from time to time (except Securities
which Lender has advised Bank in a Certificate are no longer subject to the
representations set forth in Article III, sub-paragraph (e) hereof), and Bank
hereby accepts appointment as such agent and agrees to so act.
2. Securities Borrowing Agreement. Lender hereby acknowledges receipt
of Bank's standard form(s) of Securities Borrowing Agreement and authorizes Bank
to lend Securities in the Account to Borrowers pursuant to agreements
substantially in the form thereof. Bank is hereby authorized to negotiate with
each Borrower the amount of Rebates payable in connection with particular Loans.
Bank shall deliver to Lender a Receipt relating to each Loan.
3. Loan Opportunities. Bank shall treat Lender equitably with other
lenders of like circumstances in making lending opportunities available to it
hereunder, taking into account the demand for specific securities, availability
of securities, types of collateral, eligibility of borrowers, limitations on
investments of cash collateral and such other factors as Bank deems appropriate.
Bank shall nevertheless have the right to decline to make any Loans pursuant to
any Securities Borrowing Agreement and to discontinue lending under any
Securities Borrowing Agreement in its sole discretion and without notice to
Lender.
4. Use of Book-Entry System and Depositories. Lender hereby authorizes
Bank on a continuous and on-going basis, to deposit in the Book-Entry System and
the applicable Depositories all Securities eligible for deposit therein and to
utilize the Book-Entry System and Depositories to the extent possible in
connection with its receipt and delivery of Securities, Collateral, Approved
Investments and monies under this Agreement. Where Securities, Collateral and
Approved Investments eligible for deposit in the Book-Entry System or a
Depository are transferred to Lender hereunder, Bank shall identify as belonging
to Lender a quantity of securities in a fungible bulk of securities shown on
Bank's account on the books of the Book-Entry System or the applicable
Depository. Securities, Collateral and Approved Investments deposited in the
Book-Entry System or a Depository will be represented in accounts which include
only assets held by Bank for customers, including but not limited to accounts in
which Bank acts in a fiduciary or agency capacity.
- 4 -
ARTICLE III
REPRESENTATIONS AND WARRANTIES
------------------------------
Lender hereby represents and warrants to Bank, which representations
and warranties shall be deemed to be continuing and to be reaffirmed on any day
that a Loan is outstanding, that:
(a) This Agreement is, and each Loan will be, legally and validly
entered into, does not, and will not, violate any statute, regulation, rule,
order or judgment binding on Lender, or any provision of Lender's charter or
by-laws, or any agreement binding on Lender or affecting its property, and is
enforceable against Lender in accordance with its terms, except as may be
limited by bankruptcy, insolvency or similar laws, or by equitable principles
relating to or limiting creditors' rights generally;
(b) The person executing this Agreement and all Authorized Persons
acting on behalf of Lender has and have been duly and properly authorized to do
so;
(c) If it is lending Securities as principal for its own account it
will not transfer, assign or encumber its interest in, or rights with respect
to, any Loans;
(d) If it is acting as agent for one or more third parties, Lender
is either authorized by virtue of standing instructions or is a fiduciary with
the authority to enter into, execute and bind such third parties to this
Agreement and the Loans effected for such third parties, and Lender is
authorized to make, and makes each of the representations and warranties set
forth in sub-paragraphs (a) through (c) above for each such third party; and
(e) All Securities in the Account are free and clear of all liens,
claims, security interests and encumbrances and no such Security has been sold.
Lender shall promptly deliver to Bank a Certificate identifying any and all
Securities which are no longer subject to the representations contained in this
sub-paragraph (e).
ARTICLE IV
SECURITIES LENDING TRANSACTIONS
-------------------------------
1. General Bank Responsibilities. Bank shall enter Loans pursuant to
the Securities Borrowing Agreement and take all actions deemed necessary or
appropriate in order to perform on Lender's behalf thereunder, including
receiving Collateral having a Market Value of not less than the Collateral
Requirement, collecting Distributions and applicable Securities Loan Fees, and
demanding additional Collateral from the appropriate Borrowers when the Market
Value of Collateral received by Bank from such Borrowers is less than the then
current Market Value of all of the Loaned Securities. Whenever Bank demands
additional Collateral pursuant to the foregoing, such additional Collateral
together with the Collateral then held by Bank in connection with Loans shall
have a Market Value of not less than the Collateral Requirement.
- 5 -
2. Approved Investments.
(a) Bank is hereby authorized and directed, without obtaining any
further approval from Lender, to invest and reinvest all or substantially all of
the Cash Collateral received in any Approved Investment. Bank shall credit all
Collateral, Approved Investments and Proceeds received with respect to
Collateral and Approved Investments to the Collateral Account and xxxx its books
and records to identify Lender's interest therein as appropriate, it being
understood that all monies credited to the Collateral Account may for purposes
of investment be commingled with cash collateral held for other lenders of
securities for whom Bank acts as their respective agent. Bank reserves the
right, in its sole discretion, to liquidate any Approved Investment and credit
the net proceeds to the Collateral Account.
(b) Lender may deliver to Bank a Certificate from time to time
instructing Bank not to make Approved Investments with particular financial
institutions or issuers.
(c) All Approved Investments shall be for the account and risk of
Lender. To the extent any loss arising out of Approved Investments results in a
deficiency in the amount of Collateral available for return to a Borrower,
Lender agrees to pay Bank on demand cash in an amount equal to such deficiency.
(d) Except as otherwise provided herein, all Collateral, Approved
Investments and Proceeds credited to the Collateral Account shall be controlled
by, and subject only to the instructions of, Bank, and Bank shall not be
required to comply with any instructions of Lender with respect to the same.
3. Termination of Loans.
(a) Bank shall terminate any Loan:
(i) upon receipt by Bank of a notice of termination from a
Borrower;
(ii) upon receipt by Bank of Written Instructions to do so;
(iii) upon receipt by Bank of a Certificate instructing it to
delete the Borrower to whom such Loan was made from the list referred to in
Article I, paragraph 6 hereof;
(iv) upon receipt by Bank of a Certificate advising that the
Loaned Security is no longer subject to the representations contained in Article
III, sub-paragraph (e) hereof;
- 6 -
(v) upon receipt by Bank of notice or a Certificate advising
that an Event of Default (as defined in the Securities Borrowing Agreement) has
occurred and is continuing beyond any applicable grace period;
(vi) whenever Bank, in its sole discretion, elects to
terminate such Loan; or
(vii) upon termination of this Agreement.
(b) Upon termination of any Loan (which shall be effected according
to the standard settlement time for trades in the particular Loaned Security)
and receipt from the Borrower of the Loaned Securities and any Distributions
then due, Bank shall return to the Borrower such amount of Collateral as is
required by the Securities Borrowing Agreement and pay the Borrower any Rebates
then payable.
(c) In order for Bank to timely settle the sale of Loaned
Securities, it shall be Lender's responsibility to ensure prompt notification to
Bank regarding any such sale.
4. Securities Loan Fee. Bank shall receive any applicable Securities
Loan Fee paid by Borrowers and credit all such amounts received to the
Collateral Account.
5. Guarantee and Subrogation.
(a) If as a result of an Act of Insolvency a Borrower fails to
return any Loaned Securities, Bank shall take all actions which it deems
necessary or appropriate to liquidate Approved Investments and Collateral in
connection with Loans to such Borrower and, unless advised by Lender to the
contrary, shall make a reasonable effort for two Business Days (the "Replacement
Period") to apply the proceeds thereof to the purchase of Securities identical
to the Loaned Securities (or the equivalent thereof in the event of a
reorganization or recapitalization of the issuer) not returned. If during the
Replacement Period the Collateral liquidation proceeds are insufficient to
replace any of the Loaned Securities not returned, Bank shall, subject to
satisfaction of Lender's obligations under paragraph 2(c) of this Article, pay
such additional amounts as are necessary to make such replacement. Purchases of
replacement Securities shall be made only in such markets, in such manner and
upon such terms as Bank shall consider appropriate in its sole discretion.
Replacement Securities shall be credited to the Account upon receipt by Bank. If
Bank is unsuccessful in purchasing any replacement Securities during the
Replacement Period, the proceeds of the liquidation of Approved Investments and
Collateral pursuant hereto shall be credited to the Account, and Bank shall,
subject to satisfaction of Lender's obligations under paragraph 2(c) of this
Article, credit to the Account cash in an amount (if any) equal to (X) the
Market Value of the Loaned Securities not returned, minus (Y) the Collateral
liquidation proceeds, such calculation to be made on the date of such credit.
- 7 -
(b) Lender agrees, without the execution of any documents or the
giving of any notice, that Bank is and will remain subrogated to all of Lender's
rights under the Securities Borrowing Agreement or otherwise (to the extent of
any credit pursuant to paragraph 5(a) above), including but not limited to,
Lender's rights with respect to Loaned Securities and Distributions, and
Collateral, Approved Investments and Proceeds. Lender agrees to execute and
deliver to Bank such documents as Bank may require and to otherwise fully
cooperate with Bank to give effect to its rights of subrogation hereunder.
(c) Bank shall have no obligation to take any actions pursuant to
paragraph 5(a) above if it believes that such action will violate any applicable
statute, regulation, rule, order or judgment. Furthermore, except as provided in
paragraph 5(a), Bank shall have no other liability to Lender relating to any
Borrower's failure to return Loaned Securities and no duty or obligation to take
action to effect payment by a Borrower of any amounts owed by such Borrower
pursuant to the Securities Borrowing Agreement.
(d) Either party may terminate the provisions of paragraph 5(a)
above with respect to any Borrower at any time by delivery of a notice to the
other party specifying a termination date not earlier then the date of receipt
of such notice by the other party. No such termination shall be effective with
respect to then existing rights of either party under this paragraph 5 or
outstanding Securities Loans hereunder.
(e) Bank may offset any amounts payable by Lender under this
Agreement against amounts payable by Bank under paragraph 5(a) of this Article.
6. Taxes. Lender shall be solely responsible for all tax matters
arising in connection with Loans and Approved Investments, including without
limitation, determinations of whether or not any Loan or Approved Investment
results in liability to it for income tax, capital gains tax, value added tax,
withholding tax, stamp duties, transfer taxes or any other taxes, assessments,
duties and other governmental charges, including any interest or penalty with
respect thereto ("Taxes"). Lender shall indemnify Bank for the amount of any
Taxes that Bank or any withholding agent is required under applicable laws
(whether by assessment or otherwise) to pay on behalf of, or in respect of
income earned by or payments or distributions made to or for the account of
Lender (including any payment of Tax required by reason of an earlier failure to
withhold). In the event that Bank or any withholding agent is required under
applicable law to pay any Tax on behalf of Lender, Bank is hereby authorized to
withdraw cash from any cash account in the amount required to pay such Tax and
to use such cash for the timely payment of such Tax in the manner required by
applicable law. If the aggregate amount of cash in such cash account is not
sufficient to pay such Tax, Bank shall promptly notify Lender of the additional
amount of cash (in the appropriate currency) required, and Lender shall directly
deposit such additional amount in the appropriate cash account
- 8 -
promptly after receipt of such notice, for use by Bank as specified herein. In
no event shall Bank be responsible for collecting any Taxes from Borrowers.
ARTICLE V
CONCERNING BANK
---------------
1. Standard of Care; Reimbursement.
(a) Bank shall not be liable for any costs, expenses, damages,
liabilities or claims (including attorneys' and accountants' fees) incurred by
Lender, except those costs, expenses, damages, liabilities or claims arising out
of the negligence, bad faith or wilful misconduct of Bank. Bank shall have no
obligation hereunder for costs, expenses, damages, liabilities or claims
(including attorneys' and accountants' fees), which are sustained or incurred by
reason of any action or inaction by the Book-Entry System or any Depository or
their respective successors or nominees. In no event shall Bank be liable for
special, indirect or consequential damages, or lost profits or loss of business,
arising under or in connection with this Agreement, even if previously informed
of the possibility of such damages and regardless of the form of action.
(b) Except for any costs or expenses incurred by Bank in performing
its obligations pursuant to paragraph 5(a) of Article IV hereof, Lender agrees
to reimburse Bank and to hold it harmless from and against any and all costs,
expenses, damages, liabilities or claims, including reasonable fees and expenses
of counsel incurred by Bank in a successful defense of claims by Lender, which
Bank may sustain or incur or which may be asserted against Bank by reason of or
as a result of any action taken or omitted by Bank in connection with operating
under this Agreement, other than those costs, expenses, damages, liabilities or
claims arising out of the negligence, bad faith or willful misconduct of Bank.
The foregoing shall be a continuing obligation of Lender, its successors and
assigns, notwithstanding the termination of any Loans hereunder or of this
Agreement. Bank may charge any amounts to which it is entitled hereunder against
the Account. Actions taken or omitted in reliance upon Oral or Written
Instructions, any Certificate, or upon any information, order, indenture, stock
certificate, power of attorney, assignment, affidavit or other instrument
reasonably believed by Bank to be genuine or bearing the signature of a person
or persons reasonably believed to be authorized to sign, countersign or execute
the same, shall be conclusively presumed to have been taken or omitted in good
faith.
2. No Obligation to Inquire. Without limiting the generality of the
foregoing, Bank shall be under no obligation to inquire into, and shall not be
liable for, the validity of the issue of any Securities, Collateral or Approved
Investments held in the Account or Collateral Account, or the legality or
propriety of any Loans hereunder.
3. Reliance on Borrowers' Statements, Representations and Warranties.
Provided that it acts with reasonable care, Bank shall be entitled to rely upon
the most recently available audited and unaudited statements of financial
condition and
- 9 -
representations and warranties made by Borrowers, and Bank shall not be liable
for any loss or damage suffered as a result of any such reliance.
4. Advances, Overdrafts and Indebtedness; Security Interest.
(a) Bank may, in its sole discretion, advance funds to Lender in
order to pay to Borrowers any Rebates or to return to Borrowers Cash Collateral
to which they are entitled. Bank may also credit the Account or Collateral
Account with Securities Loan Fees payable by Borrowers prior to its receipt
thereof. Any such credit shall be conditional upon receipt by Bank of final
payment and may be reversed to the extent final payment is not received.
(b) Lender agrees to repay Bank on demand the amount of any advance
or any other amount owed by Lender hereunder plus accrued interest at a rate per
annum (based on a 360-day year for the actual number of days involved) not to
exceed the fed funds rate as publicly announced to be in effect from time to
time, such rate to be adjusted on the effective date of any change in such fed
funds rate, but in no event less than 6% per annum. In order to secure repayment
of any advance or other indebtedness of Lender to Bank arising hereunder, Lender
hereby agrees that Bank shall have a continuing lien and security interest in
and to all assets now or hereafter held in the Account and the Collateral
Account (held on Lender's behalf) and any other property at any time held by it
for the benefit of Lender or in which Lender may have an interest which is then
in Bank's possession or control or in the possession or control of any third
party acting on Bank's behalf; provided that Bank shall have no lien or security
interest hereunder in any Security issued or guaranteed by a BNY Affiliate. In
connection with the foregoing, Bank shall be entitled to all the rights and
remedies of a pledgee under common law and a secured party under the New York
Uniform Commercial Code and/or any other applicable laws and/or regulations as
then in effect.
5. Advice of Counsel. Bank may, with respect to questions of law, apply
for and obtain the advice and opinion of counsel and shall be fully protected
with respect to anything done or omitted by it in good faith in conformity with
such advice or opinion.
6. No Collection Obligations. Bank shall be under no obligation or duty
to take action to effect collection of, or be liable for, any amounts payable in
respect of Securities or Approved Investments if such Securities or Approved
Investments are in default, or if payment is refused after due demand and
presentation.
7. Pricing Services. Bank is authorized to utilize any recognized
pricing information service in order to perform its valuation responsibilities
with respect to Loaned Securities, Collateral and Approved Investments, and
Lender agrees to hold Bank harmless from and against any loss or damage suffered
or incurred as a result of errors or omissions of any such pricing information
service.
- 10 -
8. Agent's Fee. For its performance as Lender's agent in making and
administering Loans, Lender shall pay to Bank a fee calculated as set forth in
Schedule II hereto. Bank is authorized, on a monthly basis, to charge its fees
and any other amounts owed by Lender hereunder against the Account and/or
Collateral Account.
9. Reliance On Certificates and Instructions. Bank shall be entitled to
rely upon any Certificate, Written or Oral Instruction actually received by Bank
and reasonably believed by Bank to be duly authorized and delivered. Lender
agrees to forward to Bank Written Instructions confirming Oral Instructions in
such manner so that such Written Instructions are received by Bank by the close
of business of the same day that such Oral Instructions are given to Bank.
Lender agrees that the fact that such confirming Written Instructions are not
received or that contrary instructions are received by Bank shall in no way
affect the validity or enforceability of the transactions authorized by Lender.
In this regard, the records of Bank shall be presumed to reflect accurately any
Oral Instructions given by an Authorized Person or a person believed by Bank to
be an Authorized Person.
10. Disclosure of Account Information. It is understood and agreed that
Bank is authorized to supply any information regarding the Account or Collateral
Account which is required by any statute, regulation, rule or order now or
hereafter in effect.
11. Statements. Bank will at least monthly furnish Lender with
statements relating to Loans hereunder.
12. Force Majeure. Bank shall not be responsible or liable for any
failure or delay in the performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
control, including without limitation, acts of God; earthquakes; fires; floods;
wars; civil or military disturbances; sabotage; epidemics; riots; interruptions,
loss or malfunctions of utilities, transportation, computer (hardware or
software) or communications service; accidents; labor disputes; acts of civil or
military authority; governmental actions; or inability to obtain labor,
material, equipment or transportation.
13. No Implied Duties. Bank shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are specifically set forth
in this Agreement, and no covenant or obligation shall be implied against Bank
in connection with this Agreement.
ARTICLE VI
TERMINATION
-----------
This Agreement may be terminated at any time by either party upon
delivery to the other party of a written notice specifying the date of such
termination, which shall be not less than 45 days after the date of receipt of
such notice. Notwithstanding any such
- 11 -
notice, this Agreement shall continue in full force and effect with respect to
all Loans outstanding on the date of termination.
ARTICLE VII
MISCELLANEOUS
-------------
1. Exclusivity. Lender agrees that it shall not enter into any other
agreement with any third party whereby such third party is permitted to make
loans on behalf of Lender of Securities held by Bank from time to time.
2. Certificates. Lender agrees to furnish to Bank a new Certificate in
the event that any present Authorized Person ceases to be an Authorized Person
or in the event that any other Authorized Persons are appointed and authorized.
Until such new Certificate is received, Bank shall be fully protected in acting
upon Oral Instructions or signatures of the present Authorized Persons.
3. Notices.
(a) Any notice or other instrument in writing, authorized or
required by this Agreement to be given to Bank, shall be sufficiently given if
addressed to Bank and received by it at its offices at 00 Xxx Xxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Securities Lending Division, or at such other place
as Bank may from time to time designate in writing.
(b) Any notice or other instrument in writing, authorized or
required by this Agreement to be given to Lender shall be sufficiently given if
addressed to Lender and received by it at its office at:
TDAX Funds, Inc.
c/o XShares Advisors LLC
attn: Xxxxx Xxxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
,or at such other place as Lender may from time to time designate in writing.
4. Cumulative Rights and No Waiver. Each and every right granted to
Bank hereunder or under any other document delivered hereunder or in connection
herewith, or allowed it by law or equity, shall be cumulative and may be
exercised from time to time. No failure on the part of Bank to exercise, and no
delay in exercising, any right will operate as a waiver thereof, nor will any
single or partial exercise by Bank of any right preclude any other or future
exercise thereof or the exercise of any other right.
5. Severability. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and
- 12 -
enforceability of the remaining provisions or obligations shall not in any way
be affected or impaired thereby, and if any provision is inapplicable to any
person or circumstances, it shall nevertheless remain applicable to all other
persons and circumstances.
6. Entire Agreement; Amendments. This Agreement represents the entire
understanding of the parties hereto with regard to the subject matter contained
herein and may not be amended or modified in any manner except by a written
agreement executed by both parties.
7. Successors and Assigns. This Agreement shall extend to and shall be
binding upon the parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by either party
without the written consent of the other.
8. Governing Law; Consent to Jurisdiction; Waiver of Immunity; Jury
Trial Waiver. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflict of laws principles thereof.
Lender hereby consents to the jurisdiction of a state or federal court situated
in New York City, New York in connection with any dispute arising hereunder. To
the extent that in any jurisdiction Lender may now or hereafter be entitled to
claim, for itself or its assets, immunity from suit, execution, attachment
(before or after judgment) or other legal process, Lender irrevocably agrees not
to claim, and it hereby waives, such immunity. Lender and Bank each hereby
irrevocably waives any and all rights to trial by jury in any legal proceeding
arising out of or relating to this Agreement.
9. No Third Party Beneficiaries. In performing hereunder, Bank is
acting solely on behalf of Lender and no contractual or service relationship
shall be deemed to be established hereby between Bank and any other person.
10. Counterparts. This 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 instrument.
11. Notice to Lender. Lender hereby acknowledges that Bank is subject
to federal laws, including the Customer Identification Program (CIP)
requirements under the USA PATRIOT Act and its implementing regulations,
pursuant to which Bank must obtain, verify and record information that allows
Bank to identify Lender. Accordingly, prior to opening an Account hereunder Bank
will ask Lender to provide certain information including, but not limited to,
Lender's name, physical address, tax identification number and other information
that will help Bank to identify and verify Lender's identity such as
organizational documents, certificate of good standing, license to do business,
or other pertinent identifying information. Lender agrees that Bank cannot open
an Account hereunder unless and until the Bank verifies the Lender's identity in
accordance with its CIP.
- 13 -
12. SIPA NOTICE. THE PROVISIONS OF THE SECURITIES INVESTOR PROTECTION
ACT OF 1970 MAY NOT PROTECT LENDER WITH RESPECT TO LOANS HEREUNDER AND,
THEREFORE, THE COLLATERAL DELIVERED TO BANK AS AGENT FOR LENDER MAY CONSTITUTE
THE ONLY SOURCE OF SATISFACTION OF A BORROWER'S OBLIGATION IN THE EVENT SUCH
BORROWER FAILS TO RETURN THE LOANED SECURITIES.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers, thereunto duly authorized, as
of the day and year first above written.
TDAX Funds, Inc.,
on behalf of each of the Lenders
By: __________________________
Title:
THE BANK OF NEW YORK
By:__________________________
Title:
- 14 -
EXHIBIT A
SERIES
TDAX Independence 2010 Exchange-Traded Fund
TDAX Independence 2020 Exchange-Traded Fund
TDAX Independence 2030 Exchange-Traded Fund
TDAX Independence 2040 Exchange-Traded Fund
TDAX Independence In-Target Exchange-Traded Fund
- 15 -
SCHEDULE I
APPROVED INVESTMENTS
Bank is hereby authorized to invest and reinvest Cash Collateral in the
following investments. Ratings descriptions specified in any category of
investments listed below shall mean the rating that is assigned to the
investment at the time that it is acquired.
Investment
----------
Securities issued or fully guaranteed by the United States government and any
agency, instrumentality or establishment of the United States government
("Government Securities").
Obligations issued by the central government of any member country of the
Organization for Economic Co-operation and Development and any agency or
instrumentality thereof (currency hedged) ("OECD Securities").
High-grade commercial paper, notes, bonds and other debt obligations including
promissory notes, master notes, funding agreements and guaranteed investment
contracts whether or not registered under the Securities Act of 1933, as
amended. Such obligations may have fixed, floating, or variable rate interest
payment provisions. Obligations maturing within one year shall be issued by
issuers rated at least A-1 (by Standard & Poor's) or P-1 (by Moody's).
Obligations maturing beyond one year shall be issued by issuers rated at least A
(by Standard & Poors) or A2 (by Moody's).
Asset-Backed Securities which carry the highest credit rating by Standard &
Poors or Moody's.
Certificates of deposit, time deposits and other bank obligations of U.S. banks,
their branches and subsidiaries, and the branches and subsidiaries of foreign
banks. Obligations maturing within one year shall be issued by banks (or their
subsidiaries) rated at least A-1 (by Standard & Poor's) or P-1 (by Moody's).
Obligations maturing after one year shall be issued by banks (or their
subsidiaries) rated A (by Standard & Poor's) or A-2 (by Moody's).
Repurchase and reverse repurchase agreements collateralized by Approved
Investments listed on this Schedule I and entered into with counterparties
approved by The Bank of New York.
Securities, units, shares and other participations in money market funds,
unregistered short-term investment funds, pools or trusts (including those
managed by The Bank of New York).
- 16 -
Maturities
----------
Government Securities and OECD Securities have no maturity limit. Fixed Rate
Instruments shall have a maturity no greater than 13 months. Floating Rate
Instruments shall have maturities as follows:
"A" & "AA" Rated Instruments no greater than three years with resets no
less frequent than 3 months, "AAA" Rated Instruments no greater than five
years with resets no less frequent than 3 months.
Dated:_____________
TDAX Funds, Inc.,
on behalf of each of the Lenders
By: __________________________
Name: __________________________
Title: __________________________
- 17 -
SCHEDULE II
AGENT FEE
Agent shall receive a fee for each month equal to seven basis points
(0.07%) of the weighted average daily Market Value of the Loaned Securities
during that month.
Dated:_____________
TDAX Funds, Inc.,
on behalf of each of the Lenders
By: __________________________
Name: __________________________
Title: __________________________
THE BANK OF NEW YORK
By: __________________________
Name: __________________________
Title: __________________________
- 18 -
