SECURITIES LENDING AUTHORIZATION
EXHIBIT (h)(4)
This Agreement (this “Agreement”) made as of the 5th day of June, 2008, by and between MELLON
BANK, N.A., a national banking association (the “Lending Agent”) and BB&T VARIABLE INSURANCE FUNDS,
a Massachusetts business trust (the “Client”), for and on behalf of each of the funds identified
on Schedule 1 hereto, as amended, modified or supplemented from time to time (each a “Fund” and
collectively the “Funds”).
WITNESSETH:
WHEREAS, the Client has deposited certain securities for safekeeping on behalf each of the
Funds in an account or accounts maintained with U.S. Bank, National Association (the “Custodian”);
and
WHEREAS, the Client has instructed the Custodian to establish a separate account or accounts
for each Fund (as designated on Exhibit A hereto, hereinafter collectively the “Account”) on its
books and records and to maintain each such separate Account in a manner so as to enable the
Custodian to account for such Account and transactions with respect thereto separately from each
Fund’s other securities and assets; and
WHEREAS, the Client desires to authorize the Lending Agent to establish, manage and administer
a Securities Lending Program in accordance with the provisions hereof (the “Program”) with respect
to the lendable securities of each Fund held in such respective Account; and
WHEREAS, the Lending Agent is willing to lend securities held in such Account from time to
time on behalf of the each Fund; and
WHEREAS, having determined that such loan transactions are suitable for and that each Fund has
the financial resources for such transactions, the Client has authorized the Lending Agent to
engage in lending such securities, subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. Appointment of Lending Agent. The Client hereby authorizes and appoints the
Lending Agent, as the exclusive agent for each Fund to lend U.S. Securities and Foreign Securities
(each as hereinafter defined) held by each such Fund to such borrowers as may be selected by the
Lending Agent and approved in writing by the Client, for the Program (each a “Borrower”). An
entity shall cease to be a Borrower for all purposes upon delivery by Client to Lending Agent of a
notice to that effect. In addition, Lending Agent may terminate a Borrower’s status as such at any
time. The Lending Agent shall provide the Client with a list of the Borrowers in the Program on at
least a quarterly basis; provided, however, that any changes in the status of Borrowers shall be
reflected on a revised list of Borrowers which will be provided by Lending Agent to Client promptly
upon request. Exhibit A attached hereto lists the Borrowers in the Program as of the date hereof.
Lending Agent shall use reasonable efforts to monitor the financial condition of each Borrower.
The Client hereby acknowledges that it is independent of the Lending Agent and that it has
authority to execute this Agreement. For purposes hereof and unless otherwise specified by the
Lending Agent, (i) “U.S. Securities” shall mean securities which are cleared and principally
settled in the United States; and (ii) “Foreign Securities” shall mean securities which are cleared
and principally settled outside of the United States.
If required to prevent self-dealing or any other transaction prohibited by law, rule or
regulation applicable to the Client or a Fund, the Client agrees to identify for the Lending Agent
those persons who exercise investment discretion or render investment advice with respect to
securities of any Fund which are available for the Program who (or whose affiliates) are Borrowers
under the Program and the Lending Agent shall refrain from lending the securities of such Fund to
any Borrower so identified. The Client also agrees to notify the Lending Agent promptly in writing
of all future appointments and terminations regarding such persons.
2. Conduct of Program. The Lending Agent shall have responsibility for negotiating
the terms of each loan and for collecting all required collateral, whether in the form of U.S.
Dollar cash, securities issued or guaranteed by the United States Government or its agencies or
instrumentalities, irrevocable letters of credit issued by banks independent of the Borrowers or
such other forms as may be agreed upon by the Lending Agent and the Client from time to time
(“Collateral”). Each loan of a Fund’s securities shall be made pursuant to a written agreement
between the Lending Agent (or an affiliate of the Lending Agent) and the Borrower substantially in
the form of the Lending Agent’s standard form(s) of Securities Borrowing Agreement as in effect
from time to time copies of which will be provided to Client promptly upon request (the “Borrower
Agreement”). The Lending Agent represents and warrants that the substantive provisions of each of
the Borrower Agreements are consistent in all respects with the requirements of this Agreement.
The Client acknowledges and agrees and that the non-material provisions of any Borrower Agreement
may differ from the Lending Agent’s then current master form of Borrower Agreement as a result of
the customary negotiation process between the Lending Agent and the Borrowers, provided, however,
that Lending Agent shall not amend or modify any Borrower Agreement or any of its current master
forms of Borrower Agreement in any manner which is inconsistent with the provisions of this
Agreement or otherwise materially adverse to Client without the prior written consent of the Client
and provided, further that the terms of any such Borrower Agreement (i) do not purport to create
any obligation on behalf of Client or any Fund, in
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respect of any indemnification provision or
otherwise, other than the obligation to return Collateral
provided under such agreement, to pay any rebate and/or to make any in-lieu-of payment in respect
of such Collateral, (ii) do not make Client or any Fund liable for the obligations of any other
person nor grant a security interest in or pledge of any assets of Client or any Fund to secure or
otherwise support the obligations of any other such person, (iii) require that each loan thereunder
be fully collateralized at all times, (iv) provide for the return to Client or the Fund of the
loaned securities or securities identical in all material respects to the loaned securities, (v)
provide for each loan thereunder to be terminable by the Lender in the normal and customary
settlement time for such securities transactions; and (vi) are otherwise consistent with the terms
of this Agreement and applicable law. Copies of such agreements will be made available to Client
upon request. The Lending Agent shall not amend or modify such form(s) of Borrower Agreement in
any manner which is inconsistent with the provisions of this Agreement without the prior written
consent of the Client.
If the Borrower is required to make a payment (a “Borrower Payment”) with respect to any
distributions on loaned securities, and the Borrower is required by law to collect or remit any
withholding or other tax, duty, fee, levy or charge required to be deducted or withheld from such
Borrower payment (a “Tax”), then the Borrower shall be required by the Lending Agent, in connection
with the loan of U.S. Securities or Foreign Securities, as the case may be, in question, to pay
such additional amounts as may be necessary in order that the net amount of the Borrower’s payment
received by Fund for whose account such loan has been made, after payment of such Tax, equals the
net amount of the distribution that would have been received if such distribution had been paid
directly to such Fund.
In the event that a Borrower assigns any loan to any person or entity that is not a Borrower,
Lending Agent will terminate the loan immediately. In the event that a Borrower assigns a Borrower
Agreement to any person or entity that is not itself a Borrower, Bank will immediately terminate
all loans outstanding under such Borrower Agreement.
Client may, in its sole and absolute discretion, by written notice to Lending Agent, (i)
restrict the loan of one or more securities held by Lending Agent on behalf of one or more Funds;
and/or (ii) restrict one or more Borrowers from borrowing securities from one or more Funds.
The Lending Agent shall have authority to do or cause to be done all acts by and on behalf of
the Funds as it shall determine to be desirable, necessary or appropriate to implement and
administer the Program, subject to such restrictions as set forth elsewhere in this Agreement. The
Lending Agent agrees to conduct the Program in accordance with all applicable laws and regulations.
Without limiting the generality of the foregoing, in connection with the administration of the
Program and in order to facilitate the approval of loan transactions by and on behalf of each
Borrower, the Lending Agent is specifically authorized to disclose to each Borrower, the identity
of the Client and the Funds as well as certain other information specific to the Funds including,
without limitation, business address, U.S. Tax Identification Number, aggregate lendable assets,
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capitalization, total assets of the Funds held with the Lending Agent and/or net asset value. Any
disclosure by the Lending Agent of Client or Fund-specific information of the type specified in the
preceding sentence shall be made by the Lending Agent subject to the confidentiality agreement of
the Borrower receiving such information in such form and substance as the Lending Agent shall
reasonably and in good faith determine to be appropriate and as otherwise consistent with industry
practice. The Lending Agent covenants and agrees that it shall undertake periodic credit reviews
of Borrowers and establish credit limits applicable thereto in accordance with its established
credit policies and procedures and otherwise consistent with safe and sound banking practices.
This Agreement shall be deemed to create a separate agreement for each Fund to the same extent
as though each such Fund had separately executed an identical agreement. Any reference to a Fund
in this Agreement shall be deemed to refer solely and exclusively to a particular Fund to which a
given lending transaction under this Agreement relates. The rights and obligations of each Fund
pursuant hereto or in connection with any transaction hereunder, are independent of, and separate
and distinct from, the rights and obligations of each and every other Fund pursuant hereto or in
connection with any transaction hereunder. Under no circumstances shall the rights, obligations or
remedies with respect to a particular Fund constitute a right, obligation or remedy applicable to
any other Fund. In particular, and without limiting the generality of the foregoing, the parties
hereto agree that: (a) any event of default regarding one Fund shall not create any right or
obligation with respect to any other Fund; (b) neither the Lending Agent nor any Borrower shall
have any right to set off any claims of or against a Fund by applying property or rights of any
other Fund, or series thereof, and (c) no Fund, or series thereof, shall have claims to, or the
right to set off against, assets or property held by a Borrower on account of any other Fund or
series thereof.
3. Collateral/Marking to Market. Concurrently with the delivery of a Fund’s securities
to a Borrower, the Lending Agent shall obtain from such Borrower Collateral in an amount equal, as
of such date, to the Required Percentage, of the market value of any securities loaned, including
any accrued interest. For purposes hereof, “Required Percentage” shall mean (i) 102% with respect
to U.S. Securities; (ii) 105% with respect to Foreign Securities except in the case of loans of
Foreign Securities which are denominated and payable in US Dollars, in which event the “Required
Percentage” shall be 102% and (iii) such other percentage(s) as may be otherwise mutually agreed
from time to time by Addendum to this Agreement.
The Collateral shall be marked-to-marked each business day. If at the close of trading on any
business day, the market value of the Collateral previously delivered by the Borrower and held in
connection with loans of a Fund’s Securities is less than the Minimum Percentage of the market
value of such loaned securities as of such business day, the Lending Agent shall require that the
Borrower deliver an amount of additional Collateral by the close of the next business day
sufficient to cause the market value of all Collateral delivered in connection with such loan to
equal not less than the Required Percentage of the market value of such loaned securities,
including accrued interest. For purposes hereof, “market value” of cash Collateral means the value
of any cash Collateral as of the time of receipt thereof by the Lending Agent, unadjusted for any
subsequent
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increases or decreases in value as a result of any investment thereof by the Lending
Agent pursuant to Section 4 below. For purposes hereof, “Minimum Percentage” shall mean 100% or
such other
percentage(s) as may be otherwise mutually agreed from time to time by Addendum to this Agreement.
3A. Custody of Client’s Securities. (a) The Client hereby appoints the Lending Agent
as custodian for any securities of the Funds which are delivered to, and/or held by, the Lending
Agent for the purpose of executing a loan of such securities by the Lending Agent or otherwise in
connection with the conduct of the Program by the Lending Agent in accordance with this Agreement
(hereinafter “Program Securities”). The Lending Agent shall have no responsibility for any
securities of any Fund held by the Custodian until such securities are, in fact, received by the
Lending Agent or its agents or subcustodians.
(b) As custodian for the Program Securities, the Lending Agent shall have and exercise the
power and authority to:
(i). appoint sub-custodians (including a corporate affiliates of the Lending Agent) domestic
or foreign, as to part or all of the Program Securities; and
(ii) hold Program Securities in nominee name, in bearer form or in book entry form in a
clearinghouse corporation or in a depository, so long as the Lending Agent’s records clearly
indicate that the assets held are a part of the applicable Fund’s account maintained with the
Lending Agent.
(c) The Lending Agent may, and shall cause its agents or subcustodians to, hold the Program
Securities in safekeeping facilities of the Lending Agent or of other custodian banks or clearing
corporations, in the United States or elsewhere.
(d) In performing its custodial duties under this Agreement, the Lending Agent shall exercise
the same care and diligence that it would devote to its own property in like circumstances. The
custodial duties of the Lending Agent shall only be those necessary for the administration of the
Program as contemplated by this Agreement. The Lending Agent shall not be liable for any act or
omission of the Custodian or any other third party appointed or engaged by the Client, or the
Custodian in carrying out any responsibility imposed upon such person.
4. Collateral Investment. (a) The Lending Agent is hereby authorized to invest and
reinvest, on behalf of each Fund, any and all cash Collateral as agreed upon by the Lending Agent
and the Client and as set forth in Exhibit C hereto. Cash collateral required to be held and
managed in a in a segregated cash-collateral account for any Fund shall be invested and reinvested
in accordance with the investment guidelines established for such segregated cash-collateral
account as specified in Exhibit C (“Segregated Investment Guidelines”). The assets of any
collective investment vehicle used for the investment of the Funds’ cash Collateral pursuant hereto
as
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identified in Exhibit C shall be invested and reinvested in accordance with the investment
guidelines established for such collective investment vehicle, a copy of which guidelines have been
provided to the Client (the “Collective Investment Guidelines” and together with the Segregated
Investment Guidelines, hereinafter the “Investment Guidelines”), which Collective Investment
Guidelines shall not be revised or substituted upon less than thirty (30) days prior notice to the
Client. In order to facilitate the investment of cash Collateral on behalf of the Funds in a
collective investment vehicle, and as a condition precedent to the effectiveness of this Agreement,
the Client shall, at the request of the Lending Agent, execute on behalf of each Fund and deliver
to the Lending Agent, a Subscription Agreement and/or Substitute form W-9 in such form as may be
prescribed by the applicable collective investment vehicle from time to time.
(b) All non-cash Collateral, cash Collateral (and investments thereof) to be held in a
segregated investment account for any Fund pursuant hereto, and uninvestested proceeds received or
held by the Lending Agent on behalf of a Fund, shall be held in an account of such Fund and shall
be segregated on the books and records of the Lending Agent from all property of the Lending Agent
or held by the Lending Agent for other clients, funds or third parties. The Lending Agent shall not
assign, re-lend, hypothecate, pledge, dispose of or otherwise grant to any third party a security
interest in any Collateral held by the Lending Agent for the account of any Fund.
5. Allocation of Lending Opportunities. The Client acknowledges that the Lending
Agent has been appointed Lending Agent by other clients on behalf of other funds and that the
Lending Agent will allocate securities loan opportunities among its securities lending clients for
which it serves as Lending Agent, including the Funds, by such equitable methods as the Lending
Agent reasonably deems appropriate and otherwise in accordance with applicable law and regulation
including, without limitation Banking Circular 196 of the Office of the Comptroller of the
Currency. While the Lending Agent will make reasonable efforts to lend each Fund’s securities,
nothing in this Agreement shall be deemed to impose upon the Lending Agent any obligation, in the
event it makes a loan of another securities lending client’s securities, to make a loan of any
Fund’s securities, whether or not such loan could have been made in accordance with this Agreement,
and whether or not the Lending Agent has made fewer or more loans for any other securities lending
client or other Fund than for any Fund. Lending Agent does not represent or warrant that any
amount or percentage of any Fund’s securities will, in fact, be loaned.
6. Rights of Borrower in Respect of the Securities. (a) Until such time as a loan of
securities is terminated and such securities are returned to the Lending Agent, a Borrower shall
have all incidents of ownership of the securities loaned, including, but not limited to, the right
to transfer the securities to others; provided, however, that Borrower will be obligated to the
Lending Agent with respect to all distributions including amounts equivalent to all dividends,
interest and other cash distributions pertaining to the securities. Each Fund hereby waives the
right to vote any voting securities loaned to a Borrower or participate in any dividend
reinvestment program during the term of any such loan.
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(b) The Lending Agent shall collect for, and credit to, the account of the Fund from whose
account a particular loan is made (the “Effected Fund”), all distributions in respect of such
loaned securities including amounts equivalent to all interest, dividends or other cash
distributions paid with respect to securities loaned to Borrowers on behalf of such Fund (“In Lieu
of
Distributions”), subject to any necessary costs (other than any Tax). Unless otherwise agreed, In
Lieu of Distributions paid on loaned securities shall be credited to the Account of the Fund in the
currency in which such distributions are paid on the business day on which they are received from
the Borrower, unless Lending Agent reasonably determines, in accordance with procedures generally
applicable to its institutional accounts, that the distribution is received by Lending Agent at a
time when it is impracticable to credit such distribution to the Fund on the date of receipt, in
which event it will be credited to the account of the Fund on the next following business day.
(c) The Client and the Funds acknowledge that the tax treatment of In-Lieu-of Distributions
may differ from the tax treatment of the interest or dividend to which such payment relates and
that the Client, on behalf of the Funds, has made its own determination as to the tax treatment of
any securities loan transaction undertaken pursuant to this Agreement and of any dividends,
distributions, remuneration or other funds received hereunder.
7. Remedies for Failure to Deliver Securities. (a) In the event that any loan made
pursuant to this Agreement is terminated and the loaned securities, or any portion thereof, shall
not have been returned to the Effected Fund for any reason (including, without limitation, the
insolvency or bankruptcy of the Borrower) within the time specified by the applicable securities
Borrower Agreement, the Lending Agent, at its expense and subject to (b) below shall (i) promptly
replace the loaned securities, or any portion thereof, not so returned with other securities of the
same issuer, class, and denomination and with the same dividend rights and other economic benefits
as such securities possessed at the close of business on the date as of which the loaned securities
should have been returned, or (ii) if it is unable to purchase such securities on the open market,
within a commercially reasonable time credit the Effected Fund with the market value of such
unreturned loaned securities, such market value to be determined as of the close of business on the
date on which the loaned securities should have been returned. Until such time as the actions in
clauses (i) or (ii) have been consummated, any dividends or interest which have accrued on the
loaned securities, whether or not received from the Borrower, shall be credited by the Lending
Agent to the Effected Fund.
(b) The Client and the Funds shall have, as to the Collateral, all of the rights and remedies
of a secured party under applicable law. In the event that the Lending Agent should be required to
make any payment or incur any loss or expense in connection with any securities loaned pursuant to
(a) above, the Lending Agent shall, to the extent of any such payment and/or loss or expense, be
subrogated and succeed to all such rights and remedies of the Client and/or the Effected Fund
against the Borrower under the applicable Borrower Agreement and to the collateral securing the
Borrower’s obligations to the Lending Agent under such Borrower Agreement. If for any reason the
Lending Agent cannot assert any such rights and remedies against the Borrower and/or its
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successors
and assigns in its own right, the Client and/or the Effected Fund shall, at the expense of the
Lending Agent, file and prosecute such complaints and lawsuits and take such action as the Lending
Agent may reasonably request in connection with the recovery of any such deficiency and shall
otherwise cooperate with the Lending Agent in any such litigation.
The Client acknowledges that, notwithstanding any other provision herein to the contrary, in
the event of the default of a Borrower, the provisions of the Securities Investor Protection Act of
1970 may not protect the Funds with respect to certain loan transactions.
8. Risk of Loss; Indemnification.
(a) Risk of Loss (i) In the event that the amount of earnings on invested Collateral
is insufficient to pay the entire rebate or other amount payable to a Borrower under any loan of
securities in respect of which such Collateral is held and, therefore, results in negative earnings
(“Negative Earnings”), the amount of such Negative Earnings shall be shared by the Effected Fund
and the Lending Agent, on a monthly basis, in accordance with and in the same proportion as their
respective percentage entitlements to earnings as set forth in Exhibit D hereto except to the
extent, if any, that any such Negative Earnings result from the, negligence or willful misconduct
of the Lending Agent, or the failure of the Lending Agent to comply with the provisions of this
Agreement including the Investment Guidelines.
(ii) The Client acknowledges and agrees that any losses of principal from investing and
reinvesting cash Collateral or any market decline in the value of any non-cash Collateral
including, without limitation, the default or failure of any issuer of any letter of credit
Collateral (collectively, “Principal Losses”) shall be at the Effected Fund’s risk and for the
Effected Fund’s account except to the extent, if any, that any such Principal Losses result from
the negligence, bad faith or willful misconduct of the Lending Agent, or the failure of the Lending
Agent to comply with the provisions of this Agreement including the Investment Guidelines.
(iii) If, at any time upon the return of loaned securities by a Borrower, the Collateral held
in respect of such loaned securities is insufficient to satisfy the obligation to return the full
amount owed to such Borrower (a “Collateral Insufficiency”), the Effected Fund shall be solely
responsible for such shortfall except to the extent, if any, that any such Collateral Insufficiency
results from the negligence, bad faith or willful misconduct of the Lending Agent, or the failure
of the Lending Agent to comply with the provisions of this Agreement including the Investment
Guidelines.
(iv) In the event the Lending Agent is unable to obtain the Effected Fund’s share of Negative
Earnings or shortfalls from Principal Losses or any Collateral Insufficiency for which such Fund is
responsible pursuant to (i), (ii) or (iii) above from revenues derived from such Fund’s securities
lending activities, the Client hereby agrees to pay, or cause the Effected Fund to pay, such
amounts promptly upon receipt of Lending Agent’s statement.
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(b) Standard of Care/Limitation of Liability. (i) The Lending Agent shall perform its
obligations under this Agreement with the care, skill, prudence, and diligence which, under the
circumstances then prevailing, a prudent person acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like character and with like aim.
(ii) Except to the extent, if any, otherwise specifically provided herein, the Lending Agent
shall not be liable with respect to any losses incurred by the Client or any Fund in connection
with this Agreement or the Program, except to the extent that such losses result from the Lending
Agent’s negligence, bad faith or willful misconduct in its administration of the Program, or the
failure of the Lending Agent to comply with the provisions of this Agreement, including the
Investment Guidelines. Notwithstanding any other provision of this Agreement, under no
circumstances shall either party be liable for any indirect, consequential, or special damages
arising under or in connection with this Agreement.
(c) Indemnification Subject to the other provisions of this Agreement (i) The Client
and, to the extent permitted by applicable law, each Fund severally, hereby indemnify and agree to
defend, hold and save harmless the Lending Agent, its officers, directors, agents and employees
from any and all claims, actions, demands, lawsuits, losses or damages of any kind whatsoever
arising in any way out of the performance of the Lending Agent’s duties under this Agreement,
except to the extent caused by the negligence, bad faith or willful misconduct of the Lending Agent
in its administration of the Program, or the failure of the Lending Agent to comply with the
provisions of this Agreement including the Investment Guidelines.
(ii) The Lending Agent hereby indemnifies and agrees to defend, and hold and save harmless the
Client and the Funds from and against any and all, claims, actions, demands, lawsuits, losses and
damages of any kind whatsoever arising or resulting from the negligence, bad faith or willful
misconduct of the Lending Agent in its administration of the Program or the failure of the Lending
Agent to comply with the provisions of this Agreement including, the Investment Guidelines.
9. Compensation to the Lending Agent. In consideration for the securities lending
services to be provided by the Lending Agent hereunder, the Lending Agent shall be entitled to
compensation in accordance with the fee schedule set forth in Exhibit C attached hereto, as amended
from time to time upon agreement of the parties.
10. Assignability. The parties hereto will not assign this Agreement without first
obtaining the written consent of the other party; provided, however, that any entity controlled
by The Bank of New York Mellon Corporation, which shall by merger, consolidation, purchase or
otherwise succeed to substantially all of the securities lending business of the Lending Agent
shall, upon such succession and without any appointment or other action by the Client, be and
become successor Lending Agent hereunder upon prior written notification to the Client.
Notwithstanding
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the foregoing, the Lending Agent may utilize the services of or one or more of its
affiliates as sub-agent, for the Client to perform all or any portion of the services to be
provided by the Lending Agent, provided, however, that the use of such sub-agent shall not, under
any circumstances, limit the liability of the Lending Agent for the performance of its obligations
hereunder and the Lending Agent shall be responsible for the acts and omissions of such sub-agent
to the same extent as though such acts or omissions were (and such acts or omissions shall be
deemed to be) the acts or
omissions of the Lending Agent. This Agreement will be binding upon, and inure to the benefit of,
the respective successors or permitted assigns of the Lending Agent and the Client.
11. Amendment and Termination. (a) The Client may, in its sole and absolute
discretion, direct the Lending Agent to terminate any loan of any Fund’s securities at any time and
for any reason in which event the Lending Agent shall, promptly, upon receipt of notice thereof
from the Client, take all steps necessary to cause the termination of such Loan and the return of
the loaned securities to such Fund’s account within the standard settlement period for such
securities..
(b) This Agreement may not be amended or modified except by written agreement duly executed by
or on behalf of the parties hereto. This Agreement may be terminated at any time at the option of
either party upon thirty (30) days prior written notice to the other party. In the event that this
Agreement is terminated, the Lending Agent shall not make any further securities loans on behalf of
the Funds after it has given or received, as the case may be, notice of such termination and shall
promptly take all reasonable actions to terminate all securities loans then outstanding. The
Client acknowledges that certain events, including but not limited to the Client’s termination of
any loan or loans in accordance with (a) above or the termination of a Fund’s participation in the
Program, certain changes to the composition of a Fund’s lendable securities, extraordinary changes
in applicable interest rates or the bankruptcy, insolvency or deteriorating credit condition of any
issuer of a security may result in a loss to the Funds. The obligations and the rights of the
Client, the Funds and the Lending Agent under this Agreement with respect to any outstanding loans
shall survive and continue despite any termination of this Agreement until fully performed or
satisfied.
12. Notices. Any notice, request, demand or other communication in connection with
this Agreement shall be deemed to have been given or made when received by the party to whom
directed. All such notices and other communications shall be in writing unless otherwise provided
herein and shall be directed, if to the Lending Agent to:
Mellon Bank, X.X.
Xxxxxx Client Service Center
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxxxxxxxxx, 00000
Attention: Global Securities Lending Contract Administration Unit
Xxxxxx Client Service Center
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxxxxxxxxx, 00000
Attention: Global Securities Lending Contract Administration Unit
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and if to the Client to:
BB&T Asset Management, Inc.
000 Xxxxxxxxxxxx Xxxxxx Xxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
000 Xxxxxxxxxxxx Xxxxxx Xxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
or otherwise in accordance with the latest unrevoked written direction from any party to the other
party hereto.
13. Force Majeure Notwithstanding anything in this Agreement to the contrary, the
Lending Agent shall not be responsible or liable for its failure to perform under this Agreement or
for any losses to the Funds resulting from any event beyond the reasonable control of the Lending
Agent, its agents or subcustodians, including but not limited to nationalization, strikes,
expropriation, devaluation, seizure, or similar action by any governmental authority, de facto or
de jure; or enactment, promulgation, imposition or enforcement by any such governmental authority
of currency restrictions, exchange controls, levies or other charges affecting the Funds’ assets;
or the breakdown, failure or malfunction of any utilities or telecommunications systems; or any
order or regulation of any banking or securities industry including changes in market rules and
market conditions affecting the execution or settlement of transactions; or acts of war, terrorism,
insurrection or revolution; or acts of God; or any other similar event. This Section shall survive
the termination of this Agreement.
14. Representations. The Client and the Lending Agent hereby each represent and
warrant to the other that (i) it has full authority to enter into this Agreement upon the terms and
conditions hereof; (ii) all such action has been duly authorized by all necessary proceedings on
its part; and (iii) that the individual executing this Agreement on its behalf has the requisite
authority to bind it (and, in the case of the Client, to bind each Fund) to this Agreement. The
Client further represents and warrants that (i) the Funds may legally enter into the securities
loans contemplated by this Agreement, that (ii) they will have the legal right to transfer the
lendable securities in connection with such loans, and that such loans will create legal, valid and
binding obligations enforceable against the Effected Fund in accordance with their terms; and (iii)
the Client has received and read the following “Customer Identification Program Notice”:
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CUSTOMER IDENTIFICATION PROGRAM NOTICE
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT
To help the government fight the funding of terrorism and money laundering activities, all
financial institutions are required by law to obtain, verify and record information that identifies
each individual or entity that opens an account.
What this means for you: When you open an account, we will ask you for your name, address,
taxpayer or other government identification number and other information, such as date of birth for
individuals, that will allow us to identify you. We may also ask to see identification documents
such as a driver’s license, passport or documents showing existence of the entity.
15. Information/Service-Level Agreement. The Client shall instruct the Custodian to
provide the Lending Agent with such periodic statements of each Account, including details of the
contents thereof, as Lending Agent may reasonably request from time to time, and, absent
demonstrable error, Lending Agent may rely on such information without further inquiry or review.
The obligation of the Lending Agent to perform the services required by this Agreement shall be
subject to the Custodian’s agreement to, and establishment of, such operational procedures and
undertakings as may, in the reasonable judgment of the Lending Agent, be necessary or appropriate
to facilitate and support the loan of securities and related services hereby contemplated.
16. Governing Law. This Agreement shall be construed in accordance with, and the
rights of the parties are to be governed by, the laws of the Commonwealth of Massachusetts,
exclusive of its conflict of laws principles, and except insofar as the same are or may be
preempted or superseded by applicable Federal law.
17. Miscellaneous. This Agreement supersedes any other agreement between the parties
covering loans of securities by the Lending Agent on behalf of the Funds. 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. No single or partial waiver of any right hereunder
shall preclude any other or further exercise thereof, or the exercise of any other right hereunder.
18. Matters Relating to Client as a Massachusetts Business Trust. The names “BB&T
Variable Insurance Funds” and “Trustees of BB&T Variable Insurance Funds” refer respectively to the
Funds created and the Trustees, as trustees but not individually or personally, acting from time to
time under an Amended and Restated Agreement and Declaration of Trust dated as of June 2, 2007 to
which reference is hereby made and a copy of which is on file at the office of the Secretary of
State of The Commonwealth of Massachusetts and elsewhere as required by law, and to any and all
-12-
amendments thereto so filed or hereafter filed. The obligations of “BB&T Variable Insurance Funds”
entered into in the name or on behalf thereof by any of the Trustees, representatives or agents are
made not individually, but in such capacities, and are not binding upon any of the Trustees,
shareholders or representatives of the Funds personally, but bind only the assets of the Funds, and
all persons dealing with any series of shares of the Funds must look solely to the assets of the
Funds belonging to such series for the enforcement of any claims against the Funds.
[The remainder of the page is intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth
above.
BB&T VARIABLE INSURANCE FUNDS, a Massachusetts Business Trust
By: Title: |
/s/ Xxxx X. Xxxxxx
|
|||
| MELLON BANK, N.A. | ||||
By:
|
/s/ Xxxxx X. Xxxxxxx | |||
Title:
|
First Vice President, BNY Mellon Global Securities Lending | |||
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EXHIBIT A
Global Securities Lending
Global Securities Lending
THE ACCOUNT(S)
| FUND | TAXPAYER IDENTIFICATION NUMBER | |
BB&T Large Cap Variable Insurance Fund
|
00-0000000 | |
BB&T Mid Cap Growth Variable Insurance Fund
|
00-0000000 | |
BB&T Special Opportunities Equity Variable Insurance Fund
|
00-0000000 | |
BB&T Total Return Bond Variable Insurance Fund
|
00-0000000 |
EXHIBIT B
Global Securities Lending
Approved Borrowers
Global Securities Lending
Approved Borrowers
The following is the list of Borrowers in the Program referred to in Section 1 (entitled
Appointment of Lending Agent) of the Securities Lending Authorization dated June 5, 2008, by and
between MELLON BANK, N.A., as Lending Agent, and BB&T VARIABLE INSURANCE FUNDS as Client.
Domestic Broker/Dealers
| 1. | Abbey National Securities, Inc | |
| 2. | ABN AMRO Incorporated | |
| 3. | Banc Of America Securities LLC * | |
| 4. | Banca IMI Securities Corp | |
| 5. | Barclays Capital, Inc. * | |
| 6. | Bear Xxxxxxx & Company, Inc. *1 | |
| 7. | Bear Xxxxxxx Securities Corp. 1 | |
| 8 | BNP Paribas Securities Corp* | |
| 9. | CIBC World Markets Corporation | |
| 10 | Cantor Xxxxxxxxxx & Co. * | |
| 11. | Citigroup Global Markets, Inc. * | |
| 12. | Caylon Securities (USA) Inc. | |
| 13. | Credit Suisse Securities (USA) LLC * | |
| 14. | Deutsche Bank Securities, Inc.* | |
| 15. | Dresdner Kleinwort Securities LLC* | |
| 16. | First Clearing, LLC. | |
| 17. | Fortis Securities LLC | |
| 18. | Xxxxxxx, Xxxxx & Company * | |
| 19. | BMO Capital Markets Corp | |
| 20. | HSBC Securities (USA) Inc. * | |
| 21. | ING Financial Markets LLC. | |
| 22. | Jefferies and Co., Inc. | |
| 23. | X.X. Xxxxxx Securities, Inc. * | |
| 24 | Xxxxxx Brothers, Inc. * | |
| 25 | Xxxxxxx Xxxxx Government Securities, Inc.* | |
| 26 | Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx, Inc. | |
| 27. | Xxxxxx Xxxxxxx & Co., Inc. * | |
| 28. | MS Securities Services, Inc. | |
| 29. | National Financial Services LLC | |
| 30. | Nomura Securities International, Inc. | |
| 31. | RBC Capital Markets Corp. | |
| 32. | Greenwich Capital Markets, Inc * | |
| 33. | SG Americas Securities, LLC. | |
| 34. | Swiss American Securities Inc | |
| 35. | TD Securities (USA) Inc. | |
| 36. | UBS Securities LLC * | |
| 37. | Wachovia Capital Markets, LLC. |
Other Domestic
| 38. | XX Xxxxxx Chase Bank, N.A. | |
| 39. | State Street Bank and Trust Company | |
| 40. | Wachovia Bank National Association |
International Brokers & Banks
| 41. | ABN AMRO Bank, NV 2 | |
| 42. | ABN AMRO, N.V., New York Branch 2 | |
| 43. | Banc of America Securities Ltd. | |
| 44. | Barclays Bank, PLC | |
| 45. | Barclays Capital Securities Ltd. | |
| 46. | Bear Xxxxxxx International, Ltd. | |
| 47. | BNP Paribas S.A. | |
| 48. | Xxxxx Xxxxx International Ltd. | |
| 49. | Citigroup Global Markets Ltd | |
| 50. | Credit Suisse Securities (Europe), Ltd. | |
| 51. | Deutsche Bank, AG | |
| 52. | Dresdner Bank, AG | |
| 53. | Dresdner Kleinwort Securities Limited | |
| 54. | Fortis Bank (Nederlands) N.V. | |
| 55. | Xxxxxxx Xxxxx International | |
| 56. | X.X. Xxxxxx Securities, Ltd. | |
| 57. | ING Bank, N.V. | |
| 58. | Xxxxxx Brothers International (Europe) | |
| 59. | Macquarie Bank Limited | |
| 60. | Xxxxxxx Xxxxx International | |
| 61. | Xxxxxx Xxxxxxx Securities, Ltd | |
| 62. | Xxxxxx Xxxxxxx & Co. International, PLC | |
| 63. | Natixis | |
| 64. | Nomura International PLC | |
| 65. | The Royal Bank of Scotland PLC | |
| 66. | Royal Bank of Canada | |
| 67. | Skandinaviska Enskilda Xxxxxx XX | |
| 68. | Societe Generale*3 | |
| 69. | Societe Generale, New York Branch3 | |
| 70. | UBS Limited |
| * | Denotes Primary US Government Securities Dealer | |
| 1 | Treated as single entity for credit & processing purposes. | |
| 2 | Treated as single entity for credit & processing purposes. | |
| 3 | Treated as single entity for credit & processing purposes. |
3/11/08 (ALLEXA)
EXHIBIT C
to
SECURITIES LENDING AUTHORIZATION AGREEMENT
dated June 5, 2008
by and between
MELLON BANK, N.A., as Lending Agent, and BB&T VARIABLE INSURANCE FUNDS, the Client, on behalf
of various Funds identified therein (the “Agreement”)
to
SECURITIES LENDING AUTHORIZATION AGREEMENT
dated June 5, 2008
by and between
MELLON BANK, N.A., as Lending Agent, and BB&T VARIABLE INSURANCE FUNDS, the Client, on behalf
of various Funds identified therein (the “Agreement”)
SECURITIES LENDING
INVESTMENT POLICY AND GUIDELINES SEPARATE ACCOUNT
INVESTMENT POLICY AND GUIDELINES SEPARATE ACCOUNT
In accordance with Section 4 of the Agreement, the Lending Agent shall cause all cash Collateral to
be invested on behalf of the Funds in the following:
BNY INSTITUTIONAL CASH RESERVES FUND a series of the BNY INSTITUTIONAL CASH RESERVES TRUST
In no circumstances shall cash Collateral be (i) directly invested in securities issued by entities
that are deemed to be an “affiliate” of the Funds, or (ii) knowingly invested in such securities
indirectly. A list of such entities will be provided to the Lending Agent from time to time and
promptly upon request by the Lending Agent.
EXHIBIT D
to
SECURITIES LENDING AUTHORIZATION AGREEMENT
Dated June 5, 2008
by and between
MELLON BANK, N.A., as Lending Agent, and BB&T VARIABLE INSURANCE FUNDS, the Client, on behalf
of various Funds identified therein (the “Agreement”)
to
SECURITIES LENDING AUTHORIZATION AGREEMENT
Dated June 5, 2008
by and between
MELLON BANK, N.A., as Lending Agent, and BB&T VARIABLE INSURANCE FUNDS, the Client, on behalf
of various Funds identified therein (the “Agreement”)
Securities Lending Fee Schedule
In consideration for the securities lending services to be provided by the Lending Agent hereunder,
the Lending Agent shall be entitled to the following:
| Lending Agent shall retain 20% of the net securities lending revenues generated under this Agreement as compensation for its securities lending services and the Funds shall be entitled to the remainder of such net securities lending revenues. For purposes hereof, net securities lending revenues shall mean (i) all loan premium fees derived from Lending Agent’s acceptance of non-cash Collateral; plus (ii) all income and earnings from the investment and reinvestment of the cash Collateral received and held on behalf of the Funds minus broker rebate fees paid by the Lending Agent to the Borrower in respect of the loans of the Fund’s securities. The Lending Agent is hereby authorized to charge such compensation against and collect and or retain such compensation from the revenues derived from the securities lending activities conducted on behalf of the Funds pursuant to this Agreement. |
The fees paid to the Lending Agent hereunder are solely in consideration of securities lending
services rendered by the Lending Agent and are in addition to any other fees or compensation to
which the Lending Agent (or any affiliate of the Lending Agent) may be entitled for services
rendered for the Client or the Funds under other agreements.
