SECURITIES LENDING AMENDMENT
TO CUSTODIAN AGREEMENT
STI CLASSIC FUNDS
THIS AMENDMENT made and entered into as of the 1st day of October, 2002 by and
between STI Classic Funds (the "The Trust"), and SunTrust Bank, a Georgia
corporation (the "Custodian".).
W I T N E S S E T H:
WHEREAS, the Trust and the Custodian are parties to that certain Custodian
Agreement dated as of February 1, 1994, pursuant to which Custodian serves as
custodian of certain of the Trust's property and assets as described therein
(the "Custodian Agreement"); and
WHEREAS, The Trust desires to amend the Custodian Agreement to provide for the
Trust's participation in a program whereby securities held by the Custodian in
the custody account maintained by the Custodian pursuant to the Custodian
Agreement (the "Account"), may be loaned from time to time to borrowers (each
such borrower hereinafter a "Borrower" and each such loan of securities to a
Borrower hereinafter a "Loan"); and
WHEREAS, The Trust desires to appoint the Xxxxxxx Xxxxx Trust Company, doing
business as Boston Global Advisors ("BGA") as its agent for the purpose of
lending securities;
NOW, THEREFORE, for and in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
I.
The Custodian Agreement is hereby amended by adding the provisions which relate
to securities lending attached hereto as Exhibit A.
II.
The securities lending activities authorized by Exhibit A entail the delivery of
securities to Borrowers, many of whom may be broker-dealers registered under the
Securities Exchange Act of 1934, in return for the Borrower paying the Trust
compensation and putting up certain collateral. The Trust understands that such
transactions may entail some degree of risk, including, but not limited to,
risks arising from bankruptcy of the Borrower, absence of control over the
securities during the period of the Loan, fraud, and operational mistakes and
delays. The Trust acknowledges that it alone is responsible for any loss, unless
the Trust has reached an agreement with other parties to cover such losses,
which may arise from such a Loan, except that Custodian will be liable to the
Trust only to the extent specifically provided in Exhibit A. The Trust
understands that it has access to the various forms of agreement used in, and
other information related to, securities lending, and has made its own judgment
that the degree of risk is acceptable. The Trust further understands that the
provisions of the Securities Investor Protection Act of 1970 may not protect it
with respect to loans pursuant to this program and, therefore, that the
Collateral delivered to the Custodian for the
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Trust, together with any legal remedies existing under transaction documents and
applicable law, may constitute the Trust's only protection in the event the
Borrower fails to return the loan securities.
III.
MISCELLANEOUS
(a) This Amendment shall be governed by and construed in accordance with
the laws of the State of Georgia.
(b) Except as expressly amended hereby, the Custodian Agreement shall
remain in full force and effect in accordance with the terms thereof.
IN RECOGNITION OF THEIR ACCEPTANCE OF THE TERMS AND CONDITIONS OF THIS
AMENDMENT, THE TRUST AND THE CUSTODIAN HEREBY EXECUTE THIS AMENDMENT AS A SEALED
INSTRUMENT BY THEIR DULY AUTHORIZED REPRESENTATIVES, AS OF THE DAY AND YEAR
FIRST ABOVE WRITTEN.
SunTrust Bank
By: [ILLEGIBLE SIGNATURE]
------------------------------
Title: EXECUTIVE VICE PRESIDENT
---------------------------
Attest:
By: ----------------------------
Title: --------------------
(SEAL)
STI Classic Funds
By: XXXXXXX X. XXXXX
------------------------------
Title: VICE PRESIDENT
---------------------------
Attest:
By: [ILLEGIBLE SIGNATURE]
-----------------------
Title: VICE PRESIDENT
-----------------------
(SEAL)
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EXHIBIT A
THIRD PARTY SECURITIES LENDING
AUTHORIZATION AGREEMENT
These provisions set forth the terms and conditions under which the Custodian is
authorized to act on behalf of the Trust with respect to the lending of certain
securities of the Trust held by the Custodian.
Certain capitalized terms used in this Agreement are defined in Section 9.
The Trust and the Custodian, as the parties hereto, hereby agree as follows:
1. APPOINTMENT OF SECURITIES LENDING AGENT. The Trust has appointed BGA as
its agent (hereinafter "Agent") to lend Securities from any of the
Accounts listed in Appendix I attached hereto maintained by the
Custodian for the Trust. Such agent loan shall be subject to the
Securities lending Operating Guide, attached hereto as Appendix II and
made a part hereof.
2. COLLATERAL ACCOUNT. The Custodian shall receive collateral in
connection with transactions initiated by BGA hereunder, the Trust will
advise the Custodian accordingly and Custodian shall establish and
maintain a collateral account to which all collateral received by
Custodian shall be deposited (the "Collateral Account"). All overdrafts
and indebtedness in connection with the Collateral Account shall be
subject to the terms and conditions of the Agreement and the Collateral
Account shall be deemed to be an Account for such purposes.
3. AUTHORIZED PERSONS TO INSTRUCT THE CUSTODIAN. The Trust shall cause BGA
to furnish to the Custodian a Certificate of Authorized Persons
(including specimen signatures) identifying all of BGA's officers and
employees authorized to give Oral or Written Instructions with respect
to the Account(s) and the Collateral Account. Upon Custodian's receipt
of such Certificate, Agent and all such officers and employees shall be
deemed to be Authorized Persons. The Trust hereby authorizes and
directs the Custodian to follow BGA's Oral or Written Instructions
concerning the transfer of Securities to or from the Account(s),
whether or not such transfer are against receipt of collateral or other
payment. The Custodian shall comply with BGA's Oral or Written
Instructions on the Business Day such instructions are received,
provided they are received prior to the Custodian's deadlines for the
same-day processing of such instructions. The Custodian shall be
entitled to rely upon any Oral or Written Instructions from BGA without
inquiry, and shall have no duty to monitor any transactions initiated
by BGA in connection herewith.
4. CUSTODIAN'S RESPONSIBILITY. The responsibilities of the Custodian shall
be specified in the Domestic-Securities Lending Operating Guide, STI
Classic Funds, SunTrust Bank as Custodian, Xxxxxxx Xxxxx as Exclusive
Borrower, Boston Global Advisors (BGA) as Lending Agent and
Administrator as of October 1, 2002 and as amended. The Custodian and
Trust or the investment manager(s) for the Trust may also from time to
time establish operating procedures which shall be binding on the
Custodian. The Custodian shall also be responsible for furnishing to
BGA on each Business Day a report listing all Available Securities then
held in the Account(s) listed in the Appendix II attached hereto,
pending settlement instructions (if any) with respect to such Available
Securities, and such other reports as the Trust and the Custodian shall
agree. The Custodian shall have no responsibility to deliver any
Security pursuant to BGA's Oral or Written Instructions if such
Security is subject to a pending settlement instruction. Any
Instruction that
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fails to conform to such data specifications as the Trust and the
Custodian shall agree or which are received after the Custodian's
cut-off times may result in a failed agent loan transaction.
5. CUSTODIAN'S OBLIGATIONS. Upon transferring any Securities from an
Account and until such Securities are returned to such Account, the
Custodian shall have no obligation with respect to such Securities
(anything in the Agreement to the contrary notwithstanding), including
without limitation, no obligation to (i) collect dividends, income and
other distributions, or (ii) perform any corporate action processing.
However, Custodian may notify the Trust of rights offerings,
shareholder meetings and other information relating to such Securities
received by it in the ordinary course of business, but shall have no
further obligation with respect thereto, including, without limitation,
any responsibility to solicit a response from the Trust with respect to
any such corporate action.
6. TAX RECLAIMS. The Trust understands and agrees that the Custodian shall
not be responsible for any tax reclaims that are due on Securities in
an agent loan transaction. It is the responsibility of BGA to collect
any tax benefits that may be due to the Trust in connection with any
such agent loan transaction.
7. COMPENSATION FOR THE CUSTODIAN. In exchange for providing the custodial
support described herein, for which the Custodian accepts it
responsibility, the Trust shall agree to compensate the Custodian
according to the Addendum to Section 7 attached hereto.
8. RECORDKEEPING AND REPORTS. The Custodian will establish and maintain
such records as are reasonable or necessary to account for Loans that
are made and the income derived therefrom. On a monthly basis, the
Custodian will provide the Trust with a statement describing the Loans
made, and the income derived from Loans, during the period covered by
such statement.
9. STANDARD OF CARE. The Bank shall not be liable with respect to any
losses incurred by the Trust in connection with the securities lending
program, except to the extent that such losses result from the
negligence, reckless disregard, bad faith or willful misconduct of the
Bank, or its breach of this Agreement or violation of law or regulation
in the performance of its duties under this Agreement.
10. DEFINITIONS. For the purpose hereof:
(a) "Available Securities" means the securities of the Trust that
are available for Loans pursuant to Section 4.
(b) "Collateral" means collateral delivered by a Borrower to
secure its obligations under a Securities Loan Agreement.
(c) "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.
(d) "Loan" means a loan of Available Securities to a Borrower.
(e) "Loaned Security" shall mean any "security" (as defined in the
0000 Xxx) which is delivered as a Loan under a Securities
Lending Agreement; provided that, if any new or different
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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.
(f) "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
the Custodian, or such other independent sources as may be
selected by the Custodian on a reasonable basis.
11. CONTINUING AGREEMENT: TERMINATION REMEDIES. 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 not existing or hereafter made. The Trust and the Custodian 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 the Custodian
on behalf of the Trust, and (b) the Custodian 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.
12. 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 Trust:
STI Classic Funds
c/o SEI Investments Company
Xxx Xxxxxxx Xxxxxx Xx.
Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
If to Lender:
SunTrust Custodian
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Securities Lending Department -
Mail Code 3181
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 Trust to give notice
to, direct, or provide information to the Custodian, such notice,
direction, or information shall be provided to the Custodian on the
Trust's behalf by an individual designated for such purposes by the
Trust in a written notice to the Custodian. (This Agreement shall be
considered such a designation of the person executing the Agreement on
the Trust's behalf). After its receipt of such notice of designation,
and until its receipt of a notice revoking such designation, the
Custodian shall be fully protected in relying upon the notices,
directions, and information given by such designee.
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13. MISCELLANEOUS. This Agreement supersedes any other agreement between
the parties concerning loans of securities by the Custodian on behalf
of the Trust. This Agreement shall not be assigned by either party
without the prior written consent of the other party. Subject to the
foregoing, this Agreement shall be binding upon and shall insure 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 applicable federal law and,
to the extent not preempted by such federal law, the laws of the State
of Georgia.
14. MODIFICATION. This Agreement shall not be modified, except by an
instrument in writing signed by the party against whom enforcement is
sought.
END
Initial Revision Date September 19, 2002
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ADDENDUM TO SECTION 7
COMPENSATION FOR THE CUSTODIAN
The Trust agrees to compensate the Custodian for performing the duties with
respect to the Trust's securities lending activity as follows:
1.) For All Custodial Services
For all deliveries, receipts and other standard custodial services in
connection with securities lending, the Custodian's compensation shall
be as set forth in Schedule A of the Custodian Agreement between
SunTrust Bank and the STI Classic Funds originally dated February 1,
1994, and as amended.
2.) Maintenance of Collateral Account
For opening and maintenance of each Collateral Account, the Account
Maintenance fee of $1,000 per month shall be assessed. Custodian's
duties relating to maintenance of the Account would include: a.)
Provide the cash balance information to the cash manager designated by
the Trust; b.) Carry out investment transactions in accordance with the
cash manager's written instructions; c.) Perform periodic
reconciliation of the Account with the records maintained by BGA; and,
d.) Make necessary arrangement when the Account is overdrawn (cash
outflow exceeds the cash balance in the Account.). The Trust authorizes
the Custodian to open and maintain as many as three (3) Collateral
Accounts.
3.) Monitoring and Reporting of Lending Activity
For periodical monitoring and reporting certain aspects of securities lending
activity including, but not limited to, credit exposure to borrower,
xxxx-to-market adequacy and type and amount of investment so as to ensure all
lending and investment transactions meet the guidelines approved by the Trust.
The Securities Lending Administration fee of $8,500.00 shall also be assessed
monthly. This $8,500 fee is a combined total fee for all Funds of the Trust and
all funds of the STI Classic Variable Trust that participate in securities
lending activities ("Participating Funds"). The $8,500 fee will be allocated pro
rata among all Participating Funds based on the amount of revenue each Fund
generates from its securities lending transactions during the quarter.
STI Classic Funds
Approved by: XXXXXXX X. XXXXX
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Date: 6/2/03
---------------------------------
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APPENDIX I
STI CLASSIC FUNDS
Fixed Income Funds:
|X| High Income
|X| Investment Grade Bond
|X| Limited-Term Federal Mortgage Securities
|X| Short-Term Bond
|X| Strategic Income
|X| U.S. Government Securities
|X| Classic Institutional Short-Term Bond
|X| Classic Institutional Super Short Income Plus
|X| Classic Institutional U.S. Government Securities Super Short
Income Plus
Equity Funds:
|X| Balanced
|X| Capital Appreciation
|X| Growth and Income
|X| Information and Technology
|X| International Equity
|X| International Equity Index
|X| Mid-Cap Equity
|X| Mid Cap Value Equity
|X| Small Cap Growth Stock
|X| Small Cap Value Equity
|X| Tax Sensitive Growth Stock
|X| Value Income Stock
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