EXHIBIT (g)(2)
SECURITIES LENDING AUTHORIZATION AGREEMENT
Between
CITISTREET FUNDS, INC., ON BEHALF OF ITS SERIES AS LISTED ON
SCHEDULE B, SEVERALLY AND NOT JOINTLY
and
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
PAGE
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1. DEFINITIONS............................................................ 1
2. APPOINTMENT OF STATE STREET............................................ 2
3. SECURITIES TO BE LOANED................................................ 2
4. BORROWERS.............................................................. 3
5. SECURITIES LOAN AGREEMENTS............................................. 3
6. LOANS OF AVAILABLE SECURITIES.......................................... 3
7. DISTRIBUTIONS ON AND VOTING RIGHTS WITH RESPECT TO
LOANED SECURITIES...................................................... 4
8. COLLATERAL............................................................. 5
9. INVESTMENT OF CASH COLLATERAL AND COMPENSATION......................... 5
10. FEE DISCLOSURE......................................................... 7
11. RECORDKEEPING AND REPORTS.............................................. 7
12. STANDARD OF CARE....................................................... 7
13. REPRESENTATIONS AND WARRANTIES......................................... 8
14. INDEMNIFICATION ....................................................... 9
15. CONTINUING AGREEMENT AND TERMINATION................................... 10
16. NOTICES................................................................ 11
17. MISCELLANEOUS.......................................................... 11
18. SECURITIES INVESTORS PROTECTION ACT.................................... 12
19. COUNTERPARTS........................................................... 12
20. MODIFICATION........................................................... 13
EXHIBITS AND SCHEDULES
EXHIBIT 4.1 (Schedule of Prohibited Borrowers)
EXHIBIT 4.2 ("MOD-2 form")
SCHEDULE A (Schedule of Fees)
SCHEDULE 8.1 (Acceptable Forms of Collateral)
SCHEDULE B (Funds)
SECURITIES LENDING AUTHORIZATION AGREEMENT
Agreement dated the 1st day of May, 2003 between CITISTREET FUNDS,
INC., on behalf of its series as listed on Schedule B, severally and not
jointly, each a registered management investment company organized and existing
under the laws of Maryland (the "Company"), and STATE STREET BANK AND TRUST
COMPANY, its affiliates or subsidiaries ("State Street"), setting forth the
terms and conditions under which State Street is authorized to act on behalf of
the Trust with respect to the lending of certain securities of the Company held
by State Street as trustee, agent or custodian.
This Agreement shall be deemed for all purposes to constitute a
separate and discrete agreement between State Street and each of the series of
shares of the Company as listed on Schedule B to this Agreement (each a "Fund"
and collectively, the "Funds") as it may be amended by the parties, and no
series of shares of the Company shall be responsible or liable for any of the
obligations of any other series of the Company under this Agreement or
otherwise, notwithstanding anything to the contrary contained herein.
NOW, THEREFORE, in consideration of the mutual promises and of the
mutual covenants contained herein, each of the parties does hereby covenant and
agree as follows:
1. Definitions. For the purposes hereof:
(a) "Available Securities" means the securities of the Funds that
are available for Loans pursuant to Section 3.
(b) "Borrower" means any of the entities to which Available
Securities may be loaned under a Securities Loan Agreement, as described in
Section 4.
(c) "Collateral" means collateral delivered by a Borrower to
secure its obligations under a Securities Loan Agreement.
(d) "Investment Manager" when used in any provision, means the
person or entity who has discretionary authority over the investment of the
Available Securities to which the provision applies.
(e) "Loan" means a loan of Available Securities to a Borrower.
(f) "Loaned Security" shall mean any "security" which is delivered
as a Loan under a Securities Loan Agreement; provided that, if any new or
different security shall be exchanged for any Loaned Security by
recapitalization, merger, consolidation, or other corporate action, such new or
different security shall, effective upon such exchange, be deemed to become a
Loaned Security in substitution for the former Loaned Security for which such
exchange was made.
(g) "Market Value" of a security means the market value of such
security (including, in the case of a Loaned Security that is a debt security,
the accrued interest on such security) as determined by the independent pricing
service designated by State Street, or such other independent sources as may be
selected by State Street on a reasonable basis.
(h) "Securities Loan Agreement" means the agreement between a
Borrower and State Street (on behalf of the Funds) that governs Loans, as
described in Section 5.
(i) "Replacement Securities" means securities of the same issuer,
class and denomination as Loaned Securities.
2. Appointment of State Street.
Each Fund hereby appoints and authorizes State Street, its affiliates
or subsidiaries, as its agent to lend Available Securities to Borrowers in
accordance with the terms of this Agreement. State Street shall have the
responsibility and authority to do or cause to be done all acts State Street
shall determine to be desirable, necessary, or appropriate to implement and
administer this securities lending program. Each Fund agrees that State Street
is acting as a fully disclosed agent and not as principal in connection with the
securities lending program. State Street may take action as agent of the Fund on
an undisclosed or a disclosed basis. State Street is also hereby authorized to
request a third party bank to undertake certain custodial functions in
connection with holding of the Collateral provided by a Borrower pursuant to the
terms hereof. In connection therewith, State Street may instruct said third
party to establish and maintain a Borrower's account and a State Street account
wherein all Collateral, including cash, shall be maintained by said third party
in accordance with the terms of a form of custodial arrangement which shall also
be consistent with the terms hereof.
Each Fund also authorizes State Street, its affiliates or subsidiaries,
as its agent, to enter into fee for holds arrangements with respect to certain
Available Securities. State Street will, in return for a fee from the Borrower,
hold and reserve certain Available Securities and refrain from lending such
Available Securities to any third party without the Borrower's permission,
provided, however, that the fee for holds arrangements shall not restrict or
otherwise affect the Fund's ownership rights with regard to the Available
Securities. The fee from the Borrower shall be allocated between State Street
and the Fund in accordance with Schedule A.
3. Securities to be Loaned.
All of the Fund's securities held by State Street as agent, trustee or
custodian shall be subject to this securities lending program and constitute
Available Securities hereunder, except those securities which the Fund or the
Investment Manager specifically identifies herein or in notices to State Street
as not being Available Securities. In the absence of any such identification
herein or other notices identifying specific securities as not being
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Available Securities, State Street shall have no authority or responsibility for
determining whether any of the Fund's securities should be excluded from the
securities lending program.
4. Borrowers.
The Available Securities may be loaned to any Borrower identified on
the Schedule of Borrowers, as such Schedule may be modified from time to time by
State Street and the Fund; provided, however, Available Securities may not be
loaned to any Prohibited Borrower identified on the Schedule of Prohibited
Borrowers, which is attached hereto as Exhibit 4.1, as such Schedule may be
modified from time to time by State Street and the Fund.
Each party hereby agrees that it shall furnish to the other party, upon
request (i) the most recent available audited statement of its financial
condition, and (ii) the most recent available unaudited statement of its
financial condition, if more recent than the audited statement. As long as any
Loan is outstanding under this Agreement, each party shall also promptly deliver
to the other party all such financial information that is subsequently
available, and any other financial information or statements that such other
party may reasonably request.
In the event the Fund approves lending to Borrowers resident in the
United Kingdom, the Fund shall complete Part 1 of the Inland Revenue document
known as a "MOD-2 form," which is attached hereto as Exhibit 4.2.
5. Securities Loan Agreements.
Each Fund authorizes State Street to enter into one or more Securities
Loan Agreements with such Borrowers as may be selected by State Street. Each
Securities Loan Agreement shall have such terms and conditions as State Street
may negotiate with the Borrower. Certain terms of individual Loans, including
rebate fees to be paid to the Borrower for the use of cash Collateral, shall be
negotiated at the time a Loan is made.
6. Loans of Available Securities.
State Street shall be responsible for determining whether any Loans
shall be made and shall have the authority to terminate any Loan in its
discretion, at any time and without prior notice to the Fund.
Each Fund acknowledges that State Street administers securities lending
programs for other clients of State Street. State Street will allocate
securities lending opportunities among its clients, using reasonable and
equitable methods established by State Street from time to time. State Street
does not represent or warrant that any amount or percentage of the Fund's
Available Securities will in fact be loaned to Borrowers. Each Fund agrees that
it shall have no claim against State Street and State Street shall have no
liability arising from, based on, or relating to, loans made for other clients,
or loan opportunities refused hereunder, whether or
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not State Street has made fewer or more loans for any other client, and whether
or not any loan for another client, or the opportunity refused, could have
resulted in loans made under this Agreement.
Each Fund also acknowledges that, under the applicable Securities Loan
Agreements, the Borrowers will not be required to return Loaned Securities
immediately upon receipt of notice from State Street terminating the applicable
Loan, but instead will be required to return such Loaned Securities within such
period of time following such notice as is specified in the applicable
Securities Loan Agreement and in no event later than the end of the customary
settlement period. Upon receiving a notice from the Fund or the Investment
Manager that Available Securities which have been loaned to a Borrower should no
longer be considered Available Securities (whether because of the sale of such
securities or otherwise), State Street shall use its reasonable efforts to
notify promptly thereafter the Borrower which has borrowed such securities that
the Loan of such Available Securities is terminated and that such Available
Securities are to be returned within the time specified by the applicable
Securities Loan Agreement and in no event later than the end of the customary
settlement period.
7. Distributions on and Voting Rights with Respect to Loaned Securities.
Each Fund represents and warrants that it is the legal owner of (or
exercises complete investment discretion over) all Available Securities free and
clear of all liens, claims, security interests and encumbrances and no such
security has been sold, and that it is entitled to receive all distributions
made by the issuer with respect to Loaned Securities. Except as provided in the
next sentence, all interest, dividends, and other distributions paid with
respect to Loaned Securities shall be credited to the Fund's account on the date
such amounts are delivered by the Borrower to State Street. Any non-cash
distribution on Loaned Securities which is in the nature of a stock split or a
stock dividend shall be added to the Loan (and shall be considered to constitute
Loaned Securities) as of the date such non-cash distribution is received by the
Borrower; provided that the Fund or Investment Manager may, by giving State
Street ten (l0) business days' notice prior to the date of such non-cash
distribution, direct State Street to request that the Borrower deliver such
non-cash distribution to State Street, pursuant to the applicable Securities
Loan Agreement, in which case State Street shall credit such non-cash
distribution to the Fund's account on the date it is delivered to State Street.
Each Fund acknowledges that it will not be entitled to participate in
any dividend reinvestment program or to vote with respect to Available
Securities that are on loan on the applicable record date for such Available
Securities.
Each Fund also acknowledges that any payments of distributions from
Borrower to the Fund are in substitution for the interest or dividend accrued or
paid in respect of Loaned Securities and that the tax treatment of such payment
may differ from the tax treatment of such interest or dividend.
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If an installment, call or rights issue becomes payable on or in
respect of any Loaned Securities, State Street shall use all reasonable
endeavors to ensure that any timely instructions from the Fund or its Investment
Manager are complied with, but State Street shall not be required to make any
payment unless the Fund has first provided State Street with funds to make such
payment.
8. Collateral.
(a) Receipt of Collateral. Each Fund hereby authorizes State
Street, or a third party bank, to receive and to hold, on the Fund's behalf,
Collateral from Borrowers to secure the obligations of Borrowers with respect to
any Loan of Available Securities made on behalf of the Fund pursuant to the
Securities Loan Agreements. All investments of cash Collateral shall be for the
account and at the risk of the Fund. Concurrently with or prior to the delivery
of the Loaned Securities to the Borrower under any Loan, State Street shall
receive from the Borrower Collateral in any of the forms listed on Schedule 8.1.
Said Schedule may be amended from time to time by State Street and the Fund.
Collateral shall have a Market Value of not less than one hundred
percent (l00%) of the Market Value of the Loaned Securities. Thereafter, State
Street shall take such action as is appropriate with respect to the Collateral
under the applicable Securities Loan Agreement.
(b) Marking to Market. State Street shall value all Loaned
Securities in accordance with its customary practice.
(c) Return of Collateral. The Collateral shall be returned to
Borrower at the termination of the Loan upon the return of the Loaned Securities
by Borrower to State Street in accordance with the applicable Securities Loan
Agreement.
(d) Limitations. State Street shall invest cash Collateral in
accordance with any directions, including any limitations established by the
Funds and set forth on Schedule A. State Street shall exercise reasonable care,
skill, diligence and prudence in the investment of Collateral. Subject to the
foregoing limits and standard of care, State Street does not assume any market
or investment risk of loss with respect to the investment of cash Collateral. If
the value of the cash Collateral so invested is insufficient to return any and
all other amounts due to such Borrower pursuant to the Securities Loan
Agreement, the Fund shall be responsible for such shortfall as set forth in
Section 9.
9. Investment of Cash Collateral and Compensation.
To the extent that a Loan is secured by cash Collateral, such cash
Collateral, including money received with respect to the investment of the same,
or upon the maturity, sale, or liquidation of any such investments, shall be
invested by State Street in accordance with the directions on Schedule A.
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Each Fund acknowledges that interests in mutual funds, securities
lending trusts and other collective investment funds, to which State Street
and/or one or more of its affiliates provide services, including the State
Street Navigator Securities Lending Prime Portfolio of the State Street
Navigator Securities Lending Trust, are not guaranteed or insured by State
Street or any of its affiliates or by the Federal Deposit Insurance Corporation
or any government agency.
The net income generated by any investment made pursuant to the first
paragraph of this Section 9 shall be allocated among the Borrower, State Street,
and the Fund, as follows: (a) a portion of such income shall be paid to the
Borrower in accordance with the agreement negotiated between the Borrower and
State Street; (b) the balance, if any, shall be split between State Street, as
compensation for its services in connection with this securities lending
program, and the Fund and such income shall be credited to the Fund's account,
in accordance with the fee split set forth on Schedule A.
In the event the net income generated by any investment made pursuant
to the first paragraph of this Section 9 does not equal or exceed the amount due
the Borrower (the rebate fee for the use of cash Collateral) in accordance with
the agreement between Borrower and State Street, State Street and the Fund
shall, in accordance with the fee split set forth on Schedule A, share the
amount equal to the difference between the net income generated and the amounts
to be paid to the Borrower pursuant to the Securities Loan Agreement. The Fund
shall be solely responsible for any and all other amounts due to such Borrower
pursuant to the Securities Loan Agreement and State Street may debit the Fund's
account accordingly. In the event debits to the Fund's account produce a deficit
therein, State Street shall sell or otherwise liquidate investments made with
cash Collateral and credit the net proceeds of such sale or liquidation to
satisfy the deficit. In the event the foregoing does not eliminate the deficit,
State Street shall have the right to charge the deficiency to any other account
or accounts maintained by the Fund with State Street.
In the event of a Loan to a Borrower resident in Canada, which is made
over record date for a dividend reinvestment program ("DRP") and is secured by
cash Collateral, the Borrower shall pay the Fund a substitute payment equal to
the full amount of the cash dividend declared, and may pay a loan premium, the
amount of which shall be negotiated by State Street, above the amount of the
cash dividend. Such loan premium shall be allocated between State Street and the
Fund as follows: (a) a portion of such loan premium shall be paid to State
Street as compensation for its services in connection with this securities
lending program, in accordance with Schedule A and (b) the remainder of such
loan premium shall be credited to the Fund's account.
To the extent that a Loan is secured by non-cash Collateral, the
Borrower shall be required to pay a loan premium, the amount of which shall be
negotiated by State Street.
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Such loan premium shall be allocated between State Street and the Fund as
follows: (a) a portion of such loan premium shall be paid to State Street as
compensation for its services in connection with this securities lending
program, in accordance with Schedule A hereto; and (b) the remainder of such
loan premium shall be credited to the Fund's account.
Each Fund hereby agrees that it shall reimburse State Street for any
and all funds advanced by State Street on behalf of the Fund as a consequence of
the Fund's obligations hereunder, including the Fund's obligation to return cash
Collateral to the Borrower and to pay any fees due the Borrower, all as provided
in Section 8 hereof.
10. Fee Disclosure.
The fees associated with the investment of cash Collateral in funds
maintained or advised by State Street are disclosed on Schedule A hereto. Said
fees may be changed from time to time by State Street upon notice to the Funds.
An annual report with respect to such funds is available to the Funds, at no
expense, upon request.
11. Recordkeeping and Reports.
State Street will establish and maintain such records as are reasonably
necessary to account for Loans that are made and the income derived therefrom.
On a monthly basis, State Street will provide the Funds with a statement
describing the Loans made, and the income derived from the Loans, during the
period covered by such statement. Each party to this Agreement shall comply with
the reasonable requests of the other for information necessary to the
requester's performance of its duties in connection with this securities lending
program.
12. Standard of Care
Subject to the requirements of applicable law, State Street shall not
be liable for any loss or damage, including counsel fees and court costs,
whether or not resulting from its acts or omissions to act hereunder or
otherwise, unless the loss or damage arises out of State Street's gross
negligence. Except for any liability, loss, or expense arising from or connected
with State Street's gross negligence, each Fund agrees to reimburse and hold
State Street harmless from and against any liability, loss and expense,
including counsel fees, expenses and court costs, arising in connection with any
breach of any representation, covenant or agreement of the Fund contained in
this Agreement or any Loan or arising from or connected with claims of any third
parties, including any Borrower, from and against all taxes and other
governmental charges, and from and against any out-of-pocket or incidental
expenses. State Street may charge any amounts to which it is entitled hereunder
against the each Fund's account. Without limiting the generality of the
foregoing, each Fund agrees: (i) that State Street shall not be responsible for
any statements, representations or warranties which any Borrower makes in
connection with any securities loans hereunder, or for the performance by any
Borrower of the terms of a Loan, or any agreement related thereto, and shall not
be
7
required to ascertain or inquire as to the performance or observance of, or a
default under the terms of, a Loan or any agreement related thereto; (ii) that
State Street shall be fully protected in acting in accordance with the oral or
written instructions of any person reasonably believed by State Street to be
authorized to execute this Agreement on behalf of the Funds (an "Authorized
Person"); (iii) that in the event of a default by a Borrower under a Loan, State
Street shall be fully protected in acting in its sole discretion in a manner it
deems appropriate; (iv) that State Street shall not be under any duty or
obligation to take action to effect payment by a Borrower of any amounts owed by
the Borrower pursuant to the Loan Agreement, provided State Street timely
advises the Fund of the non-payment by the Borrower of any such amount; and (v)
that the records of State Street shall be presumed to reflect accurately any
oral instructions given by an Authorized Person or a person reasonably believed
by State Street to be an Authorized Person.
Each Fund acknowledges that in the event that its participation in
securities lending generates income for the Fund, State Street may be required
to withhold tax or may claim such tax from the Fund as is appropriate in
accordance with applicable law.
State Street, in determining the Market Value of Securities, including
without limitation, Collateral, may rely upon any recognized pricing service and
shall not be liable for any errors made by such service.
13. Representations and Warranties.
Each party hereto represents and warrants that (a) it has the power to
execute and deliver this Agreement, to enter into the transactions contemplated
hereby, and to perform its obligations hereunder; (b) it has taken all necessary
action to authorize such execution, delivery, and performance; (c) this
Agreement constitutes a legal, valid, and binding obligation enforceable against
it; and (d) the execution, delivery, and performance by it of this Agreement
will at all times comply with all applicable laws and regulations.
Each Fund represents and warrants that (a) it has made its own
determination as to the tax and accounting treatment of any dividends,
remuneration or other funds received hereunder; and (b) the financial statements
delivered to State Street pursuant to Section 4 fairly present its financial
condition and there has been no material adverse change in its financial
condition or the financial condition of any parent company since the date of the
balance sheet included within such financial statements. Each Loan shall
constitute a present representation by the Fund that there has been no material
adverse change in its financial condition or the financial condition of any
parent company that has not been disclosed in writing to State Street since the
date of the most recent financial statements furnished to State Street pursuant
to Section 4.
The person executing this Agreement on behalf of the Funds represents
that he or she has the authority to execute this Agreement on behalf of the
Funds.
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Each Fund hereby represents to State Street that: (i) its policies and
objectives generally permit it to engage in securities lending transactions;
(ii) its policies permit it to purchase shares of the State Street Navigator
Securities Lending Trust with cash Collateral; (iii) its participation in State
Street's securities lending program, including the investment of cash Collateral
in the State Street Navigator Securities Lending Trust, and the existing series
thereof has been approved by a majority of the directors or trustees which
directors and trustees are not "interested persons" within the meaning of
section 2(a)(19) of the Investment Company Act of 1940, and such directors or
trustees will evaluate the securities lending program no less frequently than
annually to determine that the investment of cash Collateral in the State Street
Navigator Securities Lending Trust, including any series thereof, is in each
Fund's best interest; (iv) its prospectus provides appropriate disclosure
concerning its securities lending activity; and (v) that the directors and
trustees have obtained competing quotes with respect to lending agent fees from
at least three independent lending agents to assist the director or trustees in
determining that the fees for State Street's services hereunder are fair and
reasonable in light of the usual and customary charges imposed by others for
services of the same nature and quality.
Each Fund hereby further represents that it is not subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") with
respect to this Agreement and the Securities; that it qualifies as an
"accredited investor" within the meaning of Rule 501 of Regulation D under the
Securities Act of 1933, as amended; and that the taxpayer identification
number(s) and corresponding tax year-end are as set forth on Schedule B.
14. Indemnification.
(a) If at the time of a default by a Borrower with respect to a
Loan (within the meaning of the applicable Securities Loan Agreement), some or
all of the Loaned Securities under such Loan have not been returned by the
Borrower, and subject to the terms of this Agreement, State Street shall
indemnify the Fund against the failure of the Borrower as follows. State Street
shall purchase a number of Replacement Securities equal to the number of such
unreturned Loaned Securities, to the extent that such Replacement Securities are
available on the open market. Such Replacement Securities shall be purchased by
applying the proceeds of the Collateral with respect to such Loan to the
purchase of such Replacement Securities. Subject to the Fund's obligations
pursuant to Section 8 hereof, if and to the extent that such proceeds are
insufficient or the Collateral is unavailable, the purchase of such Replacement
Securities shall be made at State Street's expense.
(b) If State Street is unable to purchase Replacement Securities
pursuant to Paragraph (a) hereof, State Street shall credit to the Fund's
account an amount equal to the Market Value of the unreturned Loaned Securities
for which Replacement Securities are not so purchased, determined as of (i) the
last day the Collateral continues to be successfully marked to market by the
Borrower against the unreturned Loaned Securities; or (ii) the next business day
following the day referred to in (i) above, if higher.
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(c) In addition to making the purchases or credits required by
Paragraphs (a) and (b) hereof, State Street shall credit to the Fund's account
the value of all distributions on the Loaned Securities (not otherwise credited
to the Fund's accounts with State Street), for record dates which occur before
the date that State Street purchases Replacement Securities pursuant to
Paragraph (a) or credits the Fund's account pursuant to Paragraph (b).
(d) Any credits required under Paragraphs (b) and (c) hereof shall
be made by application of the proceeds of the Collateral, if any, that remains
after the purchase of Replacement Securities pursuant to Paragraph (a). If and
to the extent that the Collateral is unavailable or the value of the proceeds of
the remaining Collateral is less than the value of the sum of the credits
required to be made under Paragraphs (b) and (c), such credits shall be made at
State Street's expense.
(e) If after application of Paragraphs (a) through (d) hereof,
additional Collateral remains or any previously unavailable Collateral becomes
available or any additional amounts owed by the Borrower with respect to such
Loan are received from the Borrower, State Street shall apply the proceeds of
such Collateral or such additional amounts first to reimburse itself for any
amounts expended by State Street pursuant to Paragraphs (a) through (d) above,
and then to credit to the Fund's account all other amounts owed by the Borrower
to the Fund with respect to such Loan under the applicable Securities Loan
Agreement.
(f) In the event that State Street is required to make any payment
and/or incur any loss or expense under this Section, State Street shall, to the
extent of such payment, loss, or expense, be subrogated to, and succeed to, all
of the rights of the Fund against the Borrower under the applicable Securities
Loan Agreement.
(g) The provisions of this Section 14 shall not apply to losses
attributable to war, riot, revolution, acts of government or other causes beyond
the reasonable control or apprehension of State Street.
15. Continuing Agreement and Termination.
It is the intention of the parties hereto that this Agreement shall constitute a
continuing agreement in every respect and shall apply to each and every Loan,
whether now existing or hereafter made. The Funds and State Street may each at
any time terminate this Agreement upon five (5) business days' written notice to
the other to that effect. The only effects of any such termination of this
Agreement will be that (a) following such termination, no further Loans shall be
made hereunder by State Street on behalf of the Funds, and (b) State Street
shall, within a reasonable time after termination of this Agreement, terminate
any and all outstanding Loans. The provisions hereof shall continue in full
force and effect in all other respects until all Loans have been terminated and
all obligations satisfied as herein provided. State Street does not assume any
market or investment risk of loss associated with the Fund's change in cash
Collateral investment vehicles or termination of, or change in, its
participation
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in this securities lending program and the corresponding liquidation of cash
Collateral investments.
16. Notices.
Except as otherwise specifically provided herein, notices under this
Agreement may be made orally, in writing, or by any other means mutually
acceptable to the parties. If in writing, a notice shall be sufficient if
delivered to the party entitled to receive such notices at the following
addresses:
If to the Funds:
CitiStreet Funds, Inc.
Xxx Xxxxx Xxxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: President
If to State Street:
State Street Bank and Trust Company
Global Securities Lending Division
Two International Place, Floor 31
Xxxxxx, Xxxxxxxxxxxxx 00000
or to such other addresses as either party may furnish the other party by
written notice under this section.
Whenever this Agreement permits or requires the Funds to give notice
to, direct, provide information to State Street, such notice, direction, or
information shall be provided to State Street on the Funds' behalf by any
individual designated for such purpose by the Funds in a written notice to State
Street. This Agreement shall be considered such a designation of the person
executing the Agreement on the Funds' behalf. After State Street's receipt of
such a notice of designation and until its receipt of a notice revoking such
designation, State Street shall be fully protected in relying upon the notices,
directions, and information given by such designee.
17. Miscellaneous.
This Agreement supersedes any other agreement between the parties or
any representations made by one party to the other, whether oral or in writing,
concerning Loans of Available Securities by State Street on behalf of the Funds.
Subject to the foregoing, this Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs,
representatives, successors, and assigns. This Agreement shall be governed and
construed in accordance with the laws of The Commonwealth of Massachusetts. Each
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Fund hereby irrevocably submits to the jurisdiction of any Massachusetts state
or Federal court sitting in The Commonwealth of Massachusetts in any action or
proceeding arising out of or related to this Agreement and hereby irrevocably
agrees that all claims in respect of such action or proceeding may be heard and
determined in such Massachusetts state or Federal court except that this
provision shall not preclude any party from removing any action to Federal
court. Each Fund hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding. Each Fund hereby irrevocably appoints its President
as its agent to receive on its behalf service of copies of the summons and
complaint and any other process which may be served in any such action or
proceeding (the "Process Agent"). Such service may be made by mailing or
delivering a copy of such process, in care of the Process Agent at the above
address. Each Fund hereby irrevocably authorizes and directs the Process Agent
to accept such service on its behalf. As an alternative method of service, each
Fund also irrevocably consents to the service of any and all process in any such
action or proceeding by the mailing of copies of such process to the Funds at
their address specified in Section 16 hereof. Each Fund agrees that a final
judgment in any such action or proceeding, all appeals having been taken or the
time period for such appeals having expired, shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. The provisions of this Agreement are severable and the
invalidity or unenforceability of any provision hereof shall not affect any
other provision of this Agreement. If in the construction of this Agreement any
court should deem any provision to be invalid because of scope or duration, then
such court shall forthwith reduce such scope or duration to that which is
appropriate and enforce this Agreement in its modified scope or duration.
18. Securities Investors Protection Act of 1970 Notice.
EACH FUND IS HEREBY ADVISED AND ACKNOWLEDGES THAT THE PROVISIONS OF THE
SECURITIES INVESTOR PROTECTION ACT OF 1970 MAY NOT PROTECT THE FUND WITH RESPECT
TO THE LOAN OF SECURITIES HEREUNDER AND THAT, THEREFORE, THE COLLATERAL
DELIVERED TO THE FUND MAY CONSTITUTE THE ONLY SOURCE OF SATISFACTION OF THE
BROKER'S OR DEALER'S OBLIGATION IN THE EVENT THE BROKER OR DEALER FAILS TO
RETURN THE SECURITIES.
19. Counterparts.
The Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall, together,
constitute only one (1) instrument.
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20. Modification.
This Agreement shall not be modified except by an instrument in writing
signed by the parties hereto.
CITISTREET FUNDS, INC., on behalf of its respective series
as listed on Schedule B, severally and not jointly
Name:_______________________________
By: Xxxx X. Xxxxxxxx
Its: President
STATE STREET BANK AND TRUST COMPANY
Name:_______________________________
By:_________________________________
Its:________________________________
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EXHIBIT 4.1
This Exhibit is attached to and made part of the Securities Lending
Authorization Agreement, dated the 1st day of May 0000, xxxxxxx XXXXXXXXXX
XXXXX, XXX., XX BEHALF OF ITS RESPECTIVE SERIES AS LISTED ON SCHEDULE B,
SEVERALLY AND NOT JOINTLY (the "Funds") and STATE STREET BANK AND TRUST COMPANY
("State Street").
SCHEDULE OF PROHIBITED BORROWERS
ALL FUNDS:
o State Street Corporation and its affiliates, including State Street Bank &
Trust Company and State Street Global Markets, LLC; and
o Citigroup and its affiliates, including Xxxxxxx Xxxxx Barney Inc.
INTERNATIONAL STOCK FUND:
o Bank of Ireland Group PLC, and its affiliates.
SMALL COMPANY STOCK FUND
o Society General and its affiliates
DIVERSIFIED BOND FUND
x Xxxx Xxxxx, Inc. and its affiliates, including Xxxx Xxxxx Xxxx Xxxxxx
Incorporated
SCHEDULE A
This Schedule is attached to and made part of the Securities Lending
Authorization Agreement, dated the 1st day of May 0000, xxxxxxx XXXXXXXXXX
XXXXX, XXX., XX BEHALF OF ITS RESPECTIVE SERIES AS LISTED ON SCHEDULE B,
SEVERALLY AND NOT JOINTLY (the "Funds") and STATE STREET BANK AND TRUST COMPANY
("State Street").
SCHEDULE OF FEES
1. Subject to Paragraph 2 below, all proceeds collected by State Street on
investment of cash Collateral or any fee income shall be allocated as follows
- seventy percent (70%) payable to the Fund, and
- thirty percent (30%) payable to State Street.
2. All payments to be allocated under Paragraph 1 above shall be made after
deduction of such other amounts payable to State Street or to the Borrower under
the terms of this Securities Lending Authorization Agreement.
3. Investment Management Fees:
All cash Collateral shall be invested in the State Street Navigator Securities
Lending Prime Portfolio unless otherwise agreed to by the Company in writing.
State Street Navigator Securities Lending Prime Portfolio:
On an annualized basis, the management/trustee/custody/fund administration/
transfer agent fee for investing cash Collateral in the State Street Navigator
Securities Lending Prime Portfolio is not more than 5.00 basis points netted out
of yield. The trustee may pay out of the assets of the Portfolio all reasonable
expenses and fees of the Portfolio, including professional fees or disbursements
incurred in connection with the operation of the Portfolio.
SCHEDULE 8.1
This Schedule is attached to and made part of the Securities Lending
Authorization Agreement, dated the 1st day of May 0000, xxxxxxx XXXXXXXXXX
XXXXX, XXX., XX BEHALF OF ITS RESPECTIVE SERIES AS LISTED ON SCHEDULE B,
SEVERALLY AND NOT JOINTLY (the "Funds") and STATE STREET BANK AND TRUST COMPANY
("State Street").
ACCEPTABLE FORMS OF COLLATERAL
- Cash (U.S. and foreign currency);
- Securities issued or guaranteed by the United States government or
its agencies or instrumentalities;
- Sovereign Debt;
- Convertible Bonds;
- Irrevocable bank letters of credit issued by a person other than
the Borrower or an affiliate of the Borrower may be accepted as
Collateral, if State Street has determined that it is appropriate
to accept such letters of credit as Collateral under the
securities lending programs it administers; and
- Such other Collateral as the parties may agree to in writing from
time to time.
