Exhibit 99.B(99b)
Exhibit C
to the Securities Lending
Agency Agreement
MASTER SECURITIES LENDING AGREEMENT (REV. 1/13/84)
DATED: __________________, 199___
Gentlemen:
This letter sets forth the terms of an agreement between Citibank, N.A., as
Agent for one or more holders of securities (the "Agent"), and
_______________________________ (the "Borrower").
1. POSITION OF AGENT
The Agent has been appointed the agent for one or more holders of
securities (collectively, the "Lenders"), to arrange and administer, on
behalf of such holders, pursuant to this Agreement, loans of securities. A
list of such Lenders is available upon request to the Agent.
2. LOANS OF SECURITIES
If the Borrower desires to borrow securities it may telephone the Agent,
specifying the securities the Borrower wishes to borrow, the nature of the
Collateral (such term and certain other defined terms employed herein being
defined in Annex I) the Borrower proposes to deliver to the Agent as
security for such loan, the Maintenance Percentage to be applicable in
connection with such loan, the fees and rebates the Borrower proposes to
pay and collect in connection with such loan and the principal terms of the
Loan referred to in Section 4 hereof. The Agent, on behalf of a Lender
willing to consummate a loan ( a "Loan") of such securities (the "Loaned
Securities") upon such terms shall so notify the Borrower by telephone
(such day of notification being herein referred to as the "Trade Date").
Unless otherwise agreed by the Agent and the Borrower and provided in the
Confirmation (as defined in Section 4 hereof), the settlement date (the
"Settlement Date") for such Loan shall be the Trade Date. In the case of
Foreign Securities, the Settlement Date shall be the Foreign Business Day
for the principal market for the Loaned Securities agreed by both the
parties on the Trade Date.
3. DELIVERIES ON THE SETTLEMENT DATE
(a) On the Settlement Date for any Loan and during the Agent's business
hours, the Lender making such Loan shall (i) cause the Loaned Securities
which are to be the subject of such Loan to be credited to the account of
the Borrower in accordance with subsection (c) (ii) (B) of Section 20
hereof or (ii) deliver to the Agent for delivery to the Borrower
certificates representing such Loaned Securities in accordance with
subsection (c) (ii) (A) of Section 20 hereof, in which event the Agent
shall list such Loaned Securities on a receipt which the Borrower shall
execute and return to the Agent at the time such Loaned Securities are
received by the Borrower.
(b) Against receipt of such Loaned Securities, the Borrower shall
deliver to the Agent, as Initial Collateral, (i) cash, (ii) Marketable
Securities or (iii) a Letter of Credit, or any combination thereof as
agreed to on the Trade Date with respect to such Loan. The Market Value of
the Initial Collateral for such Loan shall be at least equal to the
Maintenance Percentage of the Market Value of the Loaned Securities subject
thereto at the time the Agent has been notified by the Borrower of its
intent to borrow securities.
(c) Upon the delivery of the Loaned Securities by the Agent to the
Borrower as contemplated by subsection (a) of this Section a Loan of the
Loaned Securities, upon the terms and conditions agreed to on the Trade
Date, and subject to the terms and conditions of this Agreement, shall be
deemed to have been made.
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4. THE CONFIRMATION
The terms and conditions of each Loan shall be memorialized in a written
confirmation (the "Confirmation") in the form attached as Exhibit A. By the
close of business on the Business Day following Trade Date for each Loan,
the Agent shall send to the Borrower a Confirmation that reflects the
principal terms of such Loan, including (i) the identity of the Lender
making such Loan, (ii) a description of the Loaned Securities subject
thereto, (iii) the basis of compensation for such Loan, (iv) the type and
amount of Collateral to be provided for such Loan, (v) the termination date
of such Loan, if any, and (vi) any special terms and conditions for such
Loan agreed between the parties on the Trade Date. The Borrower shall
review such Confirmation in accordance with the procedures set forth
therein. This Agreement shall be deemed to be incorporated into each such
Confirmation as though set forth therein. The description of the Collateral
on the Confirmation shall include the foreign currency market value of the
Foreign Securities, the exchange rate used in the calculation of the dollar
equivalent of the Foreign Securities, and the dollar value of the
Collateral.
5. SECURITY INTEREST
The Borrower shall be deemed to have granted to each Lender with respect to
any and all Loans extended by such Lender a security interest in all cash
and Marketable Securities held by the Agent as Collateral for such Loans
and any proceeds thereof to secure all present and future obligations of
the Borrower to such Lender under this Agreement with respect to such
Loans. Any such security interest shall survive the termination of any
Loans arising from a Borrower's Default under Section 16 hereof or a
failure of the Borrower to make a delivery required by Section 15 hereof
and shall continue until all obligations of the Borrower to the Lender
hereunder have been satisfied.
6. REPRESENTATIONS AND WARRANTIES OF AND COVENANTS BY THE BORROWER
The Borrower represents and warrants to the Agent on the Settlement Date
and for any Loan shall be deemed to have represented and warranted to the
Agent and the Lender making such Loan, and covenants with the Agent and
such Lender that:
(a) this Agreement has been duly authorized and validly executed and
delivered by the Borrower and constitutes the legal, valid and binding
obligation of the Borrower;
(b) any securities borrowed by the Borrower hereunder will be borrowed
and used only for purposes permitted by, and in full conformity with, all
applicable laws and regulations;
(c) any Marketable Securities delivered by the Borrower as Collateral
hereunder shall be owned by the Borrower and delivered free and clear of
any lien, claim or encumbrance whatsoever (other than the security interest
of any Lender under Section 5 hereof);
(d) if such Borrower is not a registered broker-dealer under the
Securities and Exchange Act of 1934, as amended (the "Exchange Act") it has
delivered to the Agent audited financial statements of the Borrower for its
last fiscal year and the most recent available unaudited balance sheet of
the Borrower and the related statements of income and retained earnings (if
more recent than such audited statements) and such other financial
information, if any, relating to it as has been made available to the
public by the Borrower since the date of such audited financial statements;
the financial statements and information furnished hereunder fairly
present, in accordance with generally accepted accounting principles
consistently applied, its financial condition and results of operations as
of the respective dates thereof; there has been no material adverse change
in its financial condition or results of operations subsequent to the date
of the latest such statement delivered to the Agent; and no Borrower's
Default has occurred or is expected to occur; and
(e) if such Borrower is not a registered broker-dealer under the
Exchange Act, the Borrower will promptly deliver to the Agent all revised
and future audited financial statements and such other financial
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information as long as this Agreement is in force and Loans are outstanding
hereunder all of which will fairly present, in accordance with generally
accepted accounting principles consistently applied, the Borrower's
financial condition or results of operations as of the dates of such
revised and future statements or information; the Borrower will provide the
Agent with audited financial statements of the Borrower as of the end of
each fiscal year of the Borrower within ninety days thereof; and the
Borrower will promptly notify the Agent in writing of any material, adverse
change in the financial condition or results of operations of the Borrower
from the date of the most recent audited financial statements for its last
fiscal year furnished under this Section.
(f) if such Borrower is a registered broker-dealer under the Exchange
Act, (i) it has delivered to the Agent the audited financial statements of
the Borrower for its last fiscal year required to be furnished to customers
under Rule 17a-5(c) under the Exchange Act and the most recently available
financial statements required of the Borrower to be furnished to its
customers by such Rule, (ii) such statements are substantially in the form
required under said Rule and (iii) the Borrower's net capital ratio as set
forth in such reports has been and will continue to be computed
substantially in accordance with such Rule; the Borrower has also delivered
to the Agent such other recent financial statements and other information,
if any, relating to it as are available to the public; the Borrower
represents that each such statement and calculation fairly presents its
financial condition and net capital ratio in accordance with the
requirements of the Securities and Exchange Commission (the "SEC") as of
the date thereof; and the Borrower also represents that there has been no
material adverse change in its financial condition or results of operations
subsequent to the date of the latest financial statement or calculation
delivered to the Agent and that no Borrower's Default has occurred or is
expected to occur; and
(g) if such Borrower is a registered broker-dealer under the Exchange
Act, the Borrower shall promptly deliver to the Agent all such revised and
future statements, calculations and information as long as this Agreement
is in force and Loans are outstanding hereunder, all of which will be in
conformity with the applicable rules of the SEC and will fairly present the
information purported to be shown thereby; the Borrower shall provide the
Agent with the audited financial statements of the Borrower required to be
furnished to customers of the Borrower under said Rule as of the end of
each fiscal year of the Borrower within ninety days thereof; and the
Borrower shall promptly notify the Agent in writing of any material adverse
change in financial condition or results of operations of the Borrower from
the date of the most recent statement or calculation furnished under
subsection (f) of this Section.
7. REPRESENTATIVES AND WARRANTIES OF AND COVENANTS BY THE LENDER; LIMITATIONS
ON LIABILITY OF LENDER
(a) Each Lender by the Agent on the Settlement Date for any Loan
hereunder shall be deemed to have represented and warranted to and
covenanted with the Borrower that:
(i) any securities furnished as Collateral to such Lender hereunder
will be used only for purposes permitted by, and in full conformity with,
all applicable laws and regulations;
(ii) any Loaned Securities delivered by such Lender hereunder shall be
owned by the Lender and delivered free and clear of any lien, claim or
encumbrance whatsoever;
(iii) the obligations of the Lender hereunder have been duly and
validly authorized by all necessary action of the Lender;
(iv) it will not direct the Agent to draw against any Letter of Credit
furnished as Collateral unless a Borrower's Default has occurred or is
continuing; and
(v) no Lender's Default by, or attributable to, such Lender has
occurred or is expected to occur.
(b) The Borrower agrees that no Lender will have any Liability to the
Borrower with respect to any Loan hereunder arising from any breach by the
Agent of the representations and warranties set forth in
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Section 8 hereof or any negligence or willful misconduct of the Agent in
the performance of its duties hereunder.
8. REPRESENTATIONS AND WARRANTIES OF AGENT; LIMITATION ON LIABILITY OF AGENT
(a) The Agent represents and warrants to the Borrower that:
(i) this Agreement has been duly authorized and validly executed and
delivered by the Agent and constitutes the legal, valid and binding
obligation of the Agent;
(ii) the Agent will hold all Collateral for any Loan pursuant to the
terms of each Lender's authorization which will provide that the Agent will
hold any Collateral for such Lender and that such authorization will not be
revocable on less than 5 Business Days notice. The Agent will give the
Borrower prompt notice of any notice of revocation thereof received by the
Agent from any Lender which has made an outstanding Loan; and
(iii) the Agent has been duly authorized by the respective Lenders to
enter into this Agreement and the transactions contemplated hereby.
(b) The Borrower agrees that the Agent will have no liability to the
Borrower with respect to any Loan hereunder except for breach of the
foregoing warranties and representations and any negligence or willful
misconduct by the Agent in the performance of its duties hereunder.
9. RIGHTS OF BORROWER IN RESPECT OF LOANED SECURITIES
Until such time as a Loan is terminated pursuant hereto, the Borrower shall
have all of the incidents of ownership of the Loaned Securities which are
the subject of such Loan.
10. RIGHTS OF LENDER IN RESPECT OF CASH AND MARKETABLE SECURITIES DELIVERED AS
COLLATERAL
(a) The Agent, on behalf of each Lender having a Loan outstanding
hereunder, shall be entitled to exercise all rights of ownership of any
cash held by the Agent as Collateral for such Loan, including the right to
invest it, and may deal with such cash at the risk and for the account of
such Lender. The sole obligation of such Lender in respect of any such cash
shall be to direct the Agent to transmit to the Borrower upon termination
of any Loan in respect of which such cash was delivered an amount of cash
equal to the amount of cash theretofore delivered to the Agent as
Collateral for such Loan (net of redeliveries, if any).
(b) Until such time as a Loan is terminated pursuant hereto, a Lender
shall have all of the incidents of ownership of any Marketable Securities
delivered as Collateral for any Loan made by such Lender.
(c) The Agent shall not have any obligation to segregate any Collateral
but the Agent will record on its books and records all deliveries of
Collateral made by the Borrower hereunder.
11. DISTRIBUTIONS ON LOANED SECURITIES AND ON MARKETABLE SECURITIES DELIVERED
AS COLLATERAL
(a) With respect to each Loan hereunder, the Borrower will, provided no
Lender's Default by or attributable to the Lender making such Loan has
occurred and is continuing, and except as provided in subsection (b) of
this Section:
(i) Deliver to the Agent an amount equal to any cash distributions or
dividends payable on the Loaned Securities subject to such Loan within one
Business Day after the payable date for any such payment or distribution.
In the case of Foreign Securities, all cash distributions, dividends, and
interest shall be delivered by the Borrower to the Agent. In the event that
such Loaned Securities have been re-registered while on loan in the name of
an entity which incurs a higher withholding tax on distributions than the
Lender would have incurred, the Borrower will deliver to the Agent the full
amount that would have been due the Lender if the Loaned Securities had not
been on loan.
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(ii) Deliver to the Agent securities or rights corresponding to any
securities or rights distributed on such Loaned Securities within one
Business Day after receipt by the Borrower of any such distribution or
within one Business Day after distribution date, whichever date is earlier.
In the event a distribution or dividend on such Loaned Securities is
payable in one of several forms at the option of the owner of record of
such Loaned Securities and one of such options is a cash option, the
Borrower shall deliver to the Agent within one Business Day after the
payable date for such cash option, free and clear of any claims of the
Borrower hereunder, a payment in cash equal to the amount that would have
been received if the cash option had been chosen with respect to such
distribution or dividend.
(b) In the case of distributions or dividends in securities made on
Loaned Securities subject to any Loan, such securities will be added to the
Loaned Securities, and be considered as Loaned Securities subject to such
Loan for all purposes, unless the Borrower and Agent agree otherwise. Where
such securities are to be added to the Loaned Securities, the Borrower
shall deliver to the Agent on such distribution date additional Collateral
with a Market Value at least equal to the Maintenance Percentage of the
Market Value of such securities on distribution date.
(c) With respect to each Loan hereunder the Lender making such Loan
will, provided no Borrower's Default has occurred and is continuing:
(i) direct the Agent to deliver to the Borrower an amount equal to any
cash distributions or dividends payable on any Marketable Securities
included in the Collateral for such Loan within one (1) Business Day after
the payable date for any such payment or distribution; and
(ii) direct the Agent to deliver to the Borrower securities or rights
corresponding to any securities or rights distributed on such Marketable
Securities within one (1) Business Day after receipt by the Lender of any
such distribution. In the event a distribution or dividend on such
Marketable Securities is payable in one of several forms at the option of
the owner of record of such Marketable Securities and one of such options
is a cash option, the Lender shall direct the Agent to deliver to the
Borrower within one (1) Business Day after the payable date for such cash
option free and clear of any claims hereunder a payment in cash equal to
the amount that would have been received if the cash options had been
chosen with respect to such distribution or dividend.
12. MARKS TO MARKET
(a) If, as of the close of business on any Business Day, the aggregate
Market Value of the Collateral in respect of all Loans between a single
Lender and the Borrower (the "Aggregate Collateral Value") shall exceed the
Maintenance Percentage of the aggregate Market Value of the Loaned
Securities subject to such Loans (the "Aggregate Loaned Securities Value"),
the Agent shall, if so directed by the Borrower and provided that the Agent
shall not know that any Borrower's Default has occurred and is continuing,
as promptly as possible on the next Business Day, return to the Borrower
(and the Lender making such Loan shall be deemed to have directed the Agent
to do so ) Collateral specified by the Borrower provided that as of the
close of business on the day prior to the date of such return, after giving
effect to any such return, the Aggregate Collateral Value shall be at least
equal to the Maintenance Percentage of the Aggregate Loaned Securities
Value.
(b) If, as of the close of business on any Business Day, the Aggregate
Collateral Value shall be less than the Maintenance Percentage of the
Aggregate Loaned Securities Value, the Agent shall, prior to 12:00 noon on
the next Business Day, give telephonic notice of such fact to the Borrower
which shall, provided that no Lender's Default, by or attributable to the
Lender which made such Loan, has occurred and is continuing, deliver to the
Agent Collateral with a Market Value such that as of the close of business
on the day prior to the date of such delivery the Aggregate Collateral
Value, after giving effect to such delivery, shall be at least equal to the
Maintenance Percentage of the Aggregate Loaned Securities Value.
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(c) For purposes of this Agreement, if a Lender has more than one Loan
outstanding hereunder, Collateral delivered by the Borrower with respect to
all Loans outstanding from such Lender hereunder shall be aggregated and
deemed allocated pro rata to each such Loan according to the respective
Market Value of the Loaned Securities which are the subject of each such
Loan.
(d) If any notice of the type described in subsection (b) of this
Section is given by the Agent by 10:00 A.M., New York City time, on any
Business Day, deliveries of Collateral called for as a result thereof shall
be made no later than the close of business on such Business Day.
Otherwise, deliveries shall be made no later than 12:00 noon, New York City
time, on the following Business Day.
(e) Solely with respect to Borrowers which are registered broker-
dealers under the Exchange Act, the Borrower shall furnish to the Agent
prior to 12:00 noon, New York City time, daily on each Business Day during
the term of any Loan under this Agreement a report, either by telephone or
otherwise, of the Market Value at the close of trading on the last
preceding Business Day of all Collateral and Loaned Securities on such day.
In the event the Aggregate Loaned Securities Value at the close of trading
on such last preceding Business Day exceeds 100% of the Aggregate
Collateral Value, the Borrower shall deliver to the Agent additional
Collateral by the close of the day such report is furnished as necessary to
equal, when added to the Aggregate Collateral Value as of the close of
business on the date of such delivery, not less than the Maintenance
Percentage of the Aggregate Loaned Securities Value. The Borrower may elect
in such report to leave any excess Collateral with the Agent. In the event
the Agent disagrees with a report furnished by the Borrower, or in the
event that the Borrower fails to furnish such report by 12:00 noon, New
York City time, on the Business Day following the day for which the report
is made, the Agent may demand that the Borrower deliver an amount of
additional Collateral computed pursuant to this Section 12, and the
Borrower shall make delivery of such additional Collateral and a statement
of its Market Value to the Agent by the close of business on the same
Business Day. The obligations of the Borrower under this subsection (e) are
in addition to, and not in lieu of, the obligations of the Borrower under
subsection (b) of this Section.
13. TRANSFER TAXES AND FEES
All transfer taxes and fees, if any, with respect to any transfers of
Loaned Securities and any Collateral shall be paid by the Borrower.
14. INDEMNIFICATION
(a) The Borrower will indemnify, defend, hold and save harmless the
Agent and each Lender from any claims, actions, demands or liabilities of
any kind whatsoever arising in any way out of any use that the Borrower
makes of any Loaned Securities and will reimburse each Lender, upon demand,
for any losses, other than consequential damages, incurred by such Lender
(including all reasonable counsel fees and expenses) as a result of any
failure or inability of the Borrower to return Equivalent Securities
corresponding to the Loaned Securities subject to any Loan by such Lender
in the manner and under the circumstances contemplated by this Agreement.
(b) Each Lender will indemnify, defend, hold and save harmless the
Agent and the Borrower from any claims, actions, demands or liabilities of
any kind whatsoever arising in any way out of the use that such Lender
makes of any Marketable Securities included in the Collateral for any Loan
by such Lender and will reimburse the Borrower, upon demand, for any
losses, other than consequential damages, incurred by the Borrower
(including all reasonable counsel fees and expenses) as a result of any
failure or inability of such Lender to return any cash or Equivalent
Securities corresponding to any Marketable Securities included in the
Collateral for any Loan by such Lender in the manner and under the
circumstances contemplated by this Agreement.
15. TERMINATION WITHOUT DEFAULT
(a) Provided that no Borrower's Default has occurred and is continuing,
the Borrower may terminate a Loan on any Business Day by giving notice to
the Agent of its intention to terminate such Loan on such
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day (a "Borrower's Termination Date"); provided, however, that if such
notice is given after 12:00 noon, New York City time, on such day, the
Borrower's Termination Date for such Loan, shall be the next following
Business Day. On any Borrower's Termination Date for any Loan, the Borrower
shall deliver Equivalent Securities corresponding to the Loaned Securities
which are the subject of such Loan to the Agent and the Agent shall deliver
to the Borrower:
(i) cash in an amount equal to the amount of cash Collateral for such
Loan (net of redeliveries) theretofore delivered to the Agent by the
Borrower; and
(ii) Equivalent Securities corresponding to any Marketable Securities
theretofore delivered to the Agent as Collateral for such Loan, provided
that no such delivery under (i) above or this Subsection (ii) shall be made
to the extent such delivery would cause the Aggregate Collateral Value to
be less than the Maintenance Percentage of the Aggregate Loaned Securities
Value.
(b) Provided that no Lender's Default by or attributable to such Lender
has occurred and is continuing, a Lender may on any Business Day notify the
Agent by telephone of the Lender's election to terminate a Loan made by
such Lender on such day (a "Lender's Termination Date"); provided, however,
that if such notice is given after 12:00 noon, New York City time on such
day, the Lender's Termination Date for such Loan shall be the next Business
Day. The Agent shall, as promptly as practicable, after receipt of such
notice from such Lender, give notice of such Lender's Termination Date to
the Borrower. Within five (5) Business Days after any Lender's Termination
Date or, if the then customary delivery period in New York City in the
principal market for Equivalent Securities corresponding to the Marketable
Securities which are the subject of such Loan would expire on an earlier
date, on such earlier date, the Borrower shall deliver to the Agent
Equivalent Securities corresponding to the Loaned Securities which are the
subject of the terminated Loan and the Agent shall deliver to the Borrower:
(i) cash in an amount equal to the amount of cash Collateral for such
Loan (net of redeliveries) theretofore delivered to the Agent by the
Borrower; and
(ii) Equivalent Securities corresponding to any Marketable Securities
theretofore delivered to the Agent as Collateral for such Loan, provided
that no such delivery under (i) or (ii) above shall be made to the extent
such delivery would cause the Aggregate Collateral Value to be less than
the Maintenance Percentage of the Aggregate Loaned Securities Value.
With respect to Foreign Securities:
(i) For termination of a loan by the Borrower, the Borrower shall
notify the Agent of the termination of a loan on the Business Day which
immediately precedes the Foreign Business Day in the principal market in
which the Securities will be returned;
(ii) For termination of a loan by the Lender, the Borrower shall return
Foreign Securities within a period of time equal to the customary
settlement period in the principal trading market for such Foreign
Securities commencing on the Foreign Business Day immediately following the
Business Day on which the Lender or the Agent notifies the Borrower of
termination; and
(iii) The collateral will be returned to the Borrower on the Business Day
immediately following the Foreign Business Day on which the Foreign
Securities are returned to the Agent. If the collateral is in the form of
cash, transfer will be effected in immediately available funds.
(c) Notwithstanding the provisions of this Section, any Lender,
provided that no Lender's Default by or attributable to such Lender has
occurred and is continuing, or the Borrower, provided that no Borrower's
Default has occurred and is continuing, may terminate a Loan with respect
to (i) any U.S. Government Securities, on any Business Day on which the
Federal Reserve Clearance System is open for business and (ii) any Agency
Securities, on any Business Day on which the Federal Reserve Clearance
System is open for business, by giving telephonic notice of its intent to
terminate such Loan on said day (a "Government
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Termination Date"); provided however, that if such notice is given after
10:00 A.M., New York City time, on such day, the Government Termination
Date for such Loan shall be the next following Business Day. On the
Government Termination Date for any Loan, the Borrower shall deliver
Equivalent Securities corresponding to the Loaned Securities which are the
subject of such Loan to the Agent and the Lender shall direct the Agent to
return the Collateral for such Loan to the Borrower.
16. TERMINATION OF LOAN UPON DEFAULT
(a) All Loans made under this Agreement shall terminate immediately
upon the happening of any Borrower's Default (as defined in subsection (b)
of this Section) and all Loans made hereunder by a particular Lender shall
terminate immediately upon the happening of a Lender's Default (as defined
in subsection (b) of this section) by or attributable to such Lender and
without any notice by the non-defaulting party or the Agent.
(b) Any event of the nature described below occurring to, or arising
out of the action or inaction of, the Borrower shall be referred to herein
as a "Borrower's Default," and any event of the nature described below
occurring to, or arising out of the action or inaction of, the Lender shall
be referred to herein as a "Lender's Default":
(i) the Borrower shall fail to deliver the Initial Collateral pursuant
to Section 3 hereof or a Lender shall fail to deliver the Loaned
Securities, or either the Borrower or a Lender shall fail to deliver
Collateral as required by Section 12 hereof;
(ii) either the Borrower or a Lender shall fail to make any delivery to
the Agent as required by Section 11 hereof or any delivery requested by
Section 15 hereof;
(iii) either the Borrower or a Lender shall fail to comply with any other
provision hereof and such failure shall continue for more than one day
after notice;
(iv) either the Borrower or a Lender shall make a general assignment for
the benefit of creditors, or shall admit in writing its inability to pay
its debts as they become due, or shall file a petition in bankruptcy or
shall be adjudicated a bankrupt or insolvent, or shall file a petition
seeking reorganization, liquidation, dissolution or similar relief under
any present or future statute, law or regulation, or shall seek consent to
or acquiesce in the appointment of any trustee, receiver or liquidator or
similar official for all or any material portion of its properties; or if
any petition is filed against it in any court or before any agency alleging
it is bankrupt or insolvent or seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under
any present or future statute, law or regulation, or the appointment of a
trustee, receiver or liquidator or similar official of all or a material
portion of its property and such petition shall not be dismissed within 30
days; or
(v) any representation or warranty made or deemed made by the Borrower
or a Lender hereunder or in connection herewith shall prove to have been
incorrect in any material respect when made or deemed made or the Borrower
shall fail to promptly notify the Agent of a material adverse change in the
Borrower's financial condition or results of operations.
(vi) if the Borrower is a registered broker-dealer under the Exchange
Act and, if the Borrower shall have been suspended or expelled from
membership or participation in any national securities exchange or
association or other self-regulatory organization or if it is suspended
from dealing in securities by any governmental agency; or
(vii) if the Borrower is a registered broker-dealer under the Exchange
Act and, if under the net capital requirements under the Exchange Act or
any national securities exchange of which the Borrower is a member, (i) the
Borrower's aggregate indebtedness shall exceed 1,000 percent of its net
capital if the Borrower is not operating pursuant to the alternative net
capital requirements provided in Rule 15c3-1 under
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the Exchange Act or (ii) the Borrower's net capital shall be less than 5%
of its aggregate debit items if the Borrower is operating pursuant to such
alternative net capital requirements.
(c) Except as provided in Section 20(d) hereof, the Agent shall,
promptly after learning of any Lender's Default or Borrower's Default, give
notice by telephone (confirmed as promptly as practicable in writing) to
the non-defaulting party, identifying the party in default and describing
the Lender's or the Borrower's Default in question. No failure or omission
by the Agent to give any such notice shall excuse any Lender's Default or
Borrower's Default or limit the rights of any Borrower or Lender in respect
thereof.
17. REMEDIES OF LENDER
Upon the happening of any Borrower's Default each Lender shall have all the
rights in respect of the Collateral of a secured party under Articles 8 and
9 of the New York Uniform Commercial Code and as otherwise provided by law,
including the right of set-off and, in addition to any and all other rights
and remedies it may have, may at its sole option, elect, without any
further notice to or demand on the Borrower by the Agent, to purchase
Equivalent Securities corresponding to the Loaned Securities which are the
subject of any outstanding Loan or Loans and apply the Collateral for such
Loan or Loans to or toward the payment of the cost thereof (the purchase
price thereof, including accrued interest, if applicable, plus any
brokerage commissions, fees, transfer taxes, and other charges incurred by
the Lender in connection with such purchase) and any other amounts then
owing to the Lender hereunder, in which event the obligation of the
Borrower to return Equivalent Securities corresponding to such Loaned
Securities shall terminate and such Lender shall be entitled to collect and
retain all payments of principal of, interest on or any other amount
payable on or with respect to such Collateral. The Borrower shall be liable
for, and shall pay to the Agent upon demand, the excess, if any, of the
cost to such Lender (as defined above and as specified in such demand) of
the Equivalent Securities corresponding to the Loaned Securities purchased
by such Lender pursuant to this Section, plus any amounts then owing to the
Lender hereunder with respect to the Loan or Loans in question, over the
sum of (i) the amount of cash Collateral then held by the Agent with
respect to such Loan or Loans (ii) the cash proceeds received by the Agent
under any Letters of Credit included in the Collateral then held by the
Agent with respect to such Loan or Loans and (iii) the Market Value, as of
the close of business on the Business Day preceding the date of purchase of
such Equivalent Securities of the Marketable Securities included in the
Collateral then held by the Agent with respect to such Loan or Loans,
together with interest on such excess at an annual rate equal to the
broker's loan rate in effect at Citibank N.A., from time to time, or the
maximum rate permitted by law, if less, from the date of such purchase or
notice until the date of payment of such excess. In the event the sum of
(i), (ii) and (iii) set forth in the immediately preceding sentence exceeds
the cost of the Equivalent Securities purchased pursuant to this Section
plus any amounts then owing to such Lender hereunder, such Lender shall
return such excess amount to the Borrower, provided that no such amount
shall be returned to the extent such delivery would cause the Aggregate
Collateral Value to be less then the maintenance Percentage of the
Aggregate Loaned Securities Value. The Borrower shall be liable for, and
shall pay to the Agent on demand, all reasonable costs and expenses
incurred by any Lender as a result of any Borrower's Default.
18. REMEDIES OF BORROWER
Upon the happening of any Lender's Default, the Borrower, in addition to
any and all other rights and remedies it may have, may at its sole option,
and without any further notice to or demand on the Lender in question by
the Agent, elect to purchase the Loaned Securities which are the subject of
any Loan or Loans by such Lender at a purchase price equal to the Market
Value of such loaned Securities (including accrued interest, if applicable,
if such interest is not included in the Market Value of such Loaned
Securities) at the close of business on the day preceding the date of such
event less any other amounts then owing to the Borrower by such Lender
hereunder, and apply any cash or Marketable Securities then held by the
Agent as Collateral for such Loan or Loans by such Lender to the payment of
such purchase price (any Marketable Securities included in such Collateral
being valued for purposes of such payment at their Market Value at
9
the close of business on the day preceding the date of such event). Such
Lender shall remain liable, in the event of any such purchase of such
Loaned Securities, to the Borrower for an amount equal to the excess of the
Market Value of the Collateral for such Loan or Loans over the purchase
price of the Loaned Securities as defined above, together with interest on
such excess at an annual rate equal to the broker's loan rate in effect at
Citibank, N.A., from time to time, or the maximum rate permitted by law, if
less, from the date of such purchase until the date of payment of such
excess. In the event the Market Value of the Loaned Securities which are
the subject of such Loan or Loans exceeds the Market Value of the
Collateral for such Loan or Loans on such date plus any amounts then owing
to the Borrower by such Lender hereunder, the Borrower shall remit to such
Lender such excess amount. If the Borrower purchases Loaned Securities
pursuant to this Section the Borrower shall be entitled to collect and
retain all payments of principal of, interest on or any other amounts
payable on or with respect to such Loaned Securities. Each Lender shall be
liable for, and shall pay to the Agent on demand, all reasonable costs and
expenses incurred by the Borrower as a result of a Lender's Default by or
attributable to such Lender.
19. SUBSTITUTION
The Borrower shall have the right to substitute Marketable Securities, cash
and/or a Letter of Credit for the Collateral delivered to the Agent for any
Loan provided that the Collateral so substituted is acceptable to the Agent
in its sole discretion and has a Market Value at least equal to the Market
Value of the replaced Collateral.
20. NOTICES, DELIVERIES AND PAYMENTS
(a) Except as otherwise provided herein, all notices under this
Agreement shall be deemed to be delivered and received when transmitted or
sent to the party entitled to receive such notices at the addresses
indicated at the end of this Agreement, or to such other addresses and
telephone numbers and to the attention of such other persons as either
party may furnish the other party by written notice under this Section.
(b) Except as otherwise expressly herein provided, all payments of
money under this Agreement, whether by or to the Agent, any Lender or the
Borrower, shall be made by (i) delivering a certified or official bank
check payable to the order of the Borrower, the Agent or such Lender, as
the case may be, drawn in New York Clearing House Funds or (ii) by
crediting the account of the Borrower, the Agent or such Lender, as the
case may be, at the Federal Reserve Bank of New York, a recognized
securities depository or a clearing corporation acceptable to the parties.
Notwithstanding the provisions of this Section, all payments made with
respect to Government Securities shall be made in same day funds.
(c) Except as otherwise expressly herein provided, all deliveries of
securities under this Agreement, whether by or to the Agent, any Lender or
the Borrower must be:
(i) of the specified issue, and
(ii) (A) placed in the possession of the transferee in bearer
form or registered in the name of the transferee or endorsed to said
transferee in blank, or
(B) effected by the making of appropriate entries on the books of
the Federal Reserve Bank of New York, or a recognized securities depository
or clearing corporation acceptable to the parties, reducing the account of
the transferor and increasing the account of the transferee. As used in
this Section, "transferee" shall include transferee's designated agent,
custodian or nominee.
(d) Each Lender and the Borrower each acknowledges that failures to
make deliveries at the times called for herein may be expected to occur in
the ordinary course of business. Each Lender and the Borrower each hereby
agrees that the Agent need not notify it of any such failure unless such
failure shall have continued for one (1) full Business Day after the time
such delivery was required, and agrees (without prejudice to any rights the
Borrower may have against any Lender or any Lender may have against the
10
Borrower) not to assert any claim against the Agent for any damages
suffered by it as a result of compliance by the Agent with this subsection.
21. MISCELLANEOUS
This Agreement supersedes any other agreement between the parties
concerning securities loans, shall not be assignable by either party
without prior written consent of the other party, shall be binding upon and
inure to the benefit of the parties and their respective successors and
assigns, shall not be changed except by an instrument in writing signed by
each of the parties, and shall be governed by the laws of the State of
New York.
The Borrower hereby consents to the disclosure of its identity by the Agent
to any Lender from whom the Borrower borrows Loaned Securities.
This Agreement may be executed in two or more counterparts, each of which
shall constitute an original, but all of which when taken together shall
constitute one instrument.
22. MATTERS CONCERNING THE SECURITIES INVESTOR PROTECTION ACT OF 1970
A LENDER MAY NOT BE PROTECTED BY THE PROVISIONS OF THE SECURITIES INVESTOR
PROTECTION ACT OF 1970 WITH RESPECT TO SECURITIES LOAN TRANSACTIONS AND,
THEREFORE, COLLATERAL DELIVERED TO A LENDER MAY CONSTITUTE THE ONLY SOURCE
OF SATISFACTION OF THE BORROWER'S OBLIGATION IN THE EVENT THE BORROWER
FAILS TO RETURN THE SECURITIES.
CITIBANK, N.A., AS AGENT
-----------------------------------
(Borrower)
By: By:
--------------------- -------------------------
Vice President Authorized Signature
Date: Date:
--------------------- ---------------------
Address: Address:
--------------------- ---------------------
--------------------- ---------------------
--------------------- ---------------------
Attention: Attention:
--------------------- ---------------------
Telephone No.: Telephone No.:
--------------------- ---------------------
Telex No.: Telex No.:
--------------------- ---------------------
11
ANNEX I
CERTAIN DEFINED TERMS
"AGENCY SECURITIES" shall mean any securities issued by a federal agency or
transactions which are settled by the physical delivery of such securities
against payment through the Federal Reserve Clearance System or otherwise in
same day funds.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday, a day on
which banking institutions in the City of New York are authorized or obligated
by law or executive order to close, or a day on which the New York Stock
Exchange, Inc. is closed.
"COLLATERAL" shall mean cash, Marketable Securities or Letters of Credit
delivered by the Borrower to the Agent to be held by the Agent on behalf of a
Lender (net of redeliveries, if any, pursuant to Section 12 (a) of the
Agreement) as collateral to secure the performance by the Borrower of its
obligations in respect of any Loan upon the terms and conditions set forth in
the Agreement and in any Confirmation with respect to such Loan.
"EQUIVALENT SECURITIES" shall mean securities of the same class, issue (maturity
and interest rate, in the case of debt securities) and quantity as the Loaned
Securities or any Marketable Securities delivered as Collateral, as the case may
be, or, if such class shall have ceased to exist or the quantity thereof shall
have been adjusted as a result of a merger or a recapitalization or similar
event, securities of the same class and quantity as the securities into which
Loaned Securities or Marketable Securities shall have been converted or changed.
"FOREIGN BUSINESS DAY" shall mean, with respect to Foreign Securities, any day
other than a Saturday, a Sunday, a day on which local banking institutions are
authorized or obligated by law or executive order to close, or a day on which
the principal local exchange on which securities are traded in closed.
"FOREIGN SECURITIES" shall mean, Loaned Securities issued outside the
continental United States, as well as al Loaned Securities denominated in
currencies other than in United States dollars, whose principal trading market
is located outside of the continental United States.
"GOVERNMENT SECURITIES" shall mean U.S. Government Securities and Agency
Securities.
"INITIAL COLLATERAL" shall mean the Collateral delivered by the Borrower on a
Settlement Date.
"LETTER OF CREDIT" shall mean an irrevocable letter of credit issued by a bank
which is acceptable to the Agent in its sole discretion and which shall provide
that payments thereunder shall be made to the Agent upon certification by the
Agent that a Borrower's Default has occurred and is continuing.
"MAINTENANCE PERCENTAGE" shall mean, with respect to Loaned Securities which are
Government Securities, 100%; with respect to Loaned Securities which are Foreign
Securities, 105%; and, with respect to Loaned Securities which are Other
Securities, 102%.
"MARKET VALUE" shall mean:
(a) in the case of cash, 100% of the amount thereof;
(b) in the case of a Letter of Credit, 100% of the amount payable thereunder;
(c) in the case of Other Securities:
(i) if traded on a national securities exchange the last publicly available
sale price (regular way) on the principal national securities exchange on
which such securities are traded or, if there has not been any such sale on
a particular day, the last publicly available bid quotation on such
exchange on such day, or
(ii) if such securities are not traded on a national securities
exchange, the last publicly available bid quotation as reported by NASDAQ;
12
(d) in the case of Government Securities, the sum of
(i) the last publicly available bid quotation of such securities, or such
other valuation to which the Agent and the Borrower agree, and
(ii) the interest accrued but not yet due and owing on such securities
as of such date, if any.
(e) in the case of Foreign Securities
the value as determined as of the close of business on the preceding
business day by a third party pricing agent in accordance with market
practice in the principal market for such securities, considering, among
other factors, applicable foreign exchange rates and accrued interest
obligations.
Notwithstanding the provisions of clause (c) of this definition, if the Agent
and Borrower so agree on the Trade Date and it is so indicated in the
Confirmation, the Market Value of debt securities that are Other Securities
shall also include interest accrued but not yet due and owing on such securities
as of such date, if any.
"MARKETABLE SECURITIES" shall mean: (a) with respect to Loans to Borrowers which
are not registered broker-dealers under the Exchange Act, any Government
Securities and any Other Securities and (b) with respect to Loans to Borrowers
which are registered broker-dealers under the Exchange Act, United States
Treasury Bills and United States Treasury Notes.
"OTHER SECURITIES" shall mean any debt or equity securities other than
Government Securities.
"U.S. GOVERNMENT SECURITIES" shall mean any debt securities issued by the United
States or by federal agencies or transactions which are settled through the
Federal Reserve Clearance System.
MASTER
10/93
13
EXHIBIT A TO MASTER SECURITIES LENDING AGREEMENT
SECURITIES LOAN PROGRAM
TRANS. TYPE NEW SECURITIES LOAN TRANS NO. 200645
TRADE DATE 01/23/90
SETTLEMENT DELIVERY VIA FEDERAL FUNDS SETTLE DATE 01/23/90
ACCOUNT
TERM DATE OPEN
UNITS 18,000,000 PRICE 105.000000
CUSIP XX. 000000XX0 XXX XX. XX00X00 XXXXXX XXXXXX TREASURY NOTES
DTD 12.3.04
DELIVER TO SECURITYNY INT RATE 11.0 MAT DATE 02/15/90
PRU-BACHE
AMOUNT $18,900,000.00
UNITS CURRENTLY HELD FED
SPECIAL INSTRUCTIONS
RATE 7.950
FINDER
ORIGINATOR LMS ** AGENT ** SEE REVERSE SIDE FOR ADDITIONAL INFORMATION
THE TRANSACTION(s) REFLECTED HEREIN WERE MADE BY CITIBANK,
N.A. AS AGENT FOR LENDERS UNDER OUR WRITTEN MASTER SECURITIES
LENDING AGREEMENT WITH YOU.
IF THE INFORMATION PROVIDED HEREIN IN NOT CORRECT IN EVERY
RESPECT, PLEASE IMMEDIATELY PROVIDE WRITTEN NOTICE OF ANY
INACCURACIES TO:
CITIBANK, N.A., AS AGENT
000 XXXX XXXXXX, 0XX XXXXX
XXX XXXX, XXX XXXX 00000
ATTN: SECURITIES LENDING DEPARTMENT
14
