EXHIBIT 99.1
[THE BOND MARKET ASSOCIATION LOGO]
MASTER SECURITIES
LOAN AGREEMENT
Dated as of
--------------------------------------------------------------------------------
Between: CITIGROUP GLOBAL MARKETS INC.
--------------------------------------------------------------------------------
And
--------------------------------------------------------------------------------
This Agreement sets forth the terms and conditions under which one party
("Lender") may, from time to time, lend to the other party ("Borrower")
certain securities against a pledge of collateral. Capitalized terms not
otherwise defined herein shall have the meanings provided in Section 26.
The parties hereto agree as follows:
1. LOANS OF SECURITIES.
1.1 Subject to the terms and conditions of this Agreement, Borrower or
Lender may, from time to time, orally seek to initiate a transaction
in which Lender will lend securities to Borrower. Borrower and
Lender shall agree orally on the terms of each Loan, including the
issuer of the securities, the amount of securities to be lent, the
basis of compensation, and the amount of Collateral to be
transferred by Borrower, which terms may be amended during the Loan.
1.2 Notwithstanding any other provision in this Agreement regarding when
a Loan commences, a Loan hereunder shall not occur until the Loaned
Securities and the Collateral therefor have been transferred in
accordance with Section 16.
1.3 WITHOUT WAIVING ANY RIGHTS GIVEN TO LENDER HEREUNDER, IT IS
UNDERSTOOD AND AGREED THAT THE PROVISIONS OF THE SECURITIES INVESTOR
PROTECTION ACT OF 1970 MAY NOT PROTECT LENDER WITH RESPECT TO LOANED
SECURITIES HEREUNDER AND THAT, THEREFORE, THE COLLATERAL DELIVERED
TO LENDER MAY CONSTITUTE THE ONLY SOURCE OF SATISFACTION OF
BORROWER'S OBLIGATIONS IN THE EVENT BORROWER FAILS TO RETURN THE
LOANED SECURITIES.
2. TRANSFER OF LOANED SECURITIES.
2.1 Unless otherwise agreed, Lender shall transfer Loaned Securities to
Borrower hereunder on or before the Cutoff Time on the date agreed
to by Borrower and Lender for the commencement of the Loan.
May 1993 - Master Securities Loan Agreement - 1
2.2 Unless otherwise agreed, Borrower shall provide Lender, in each Loan
in which Lender is a Customer, with a schedule and receipt listing
the Loaned Securities. Such schedule and receipt may consist of (a)
a schedule provided to Borrower by Lender and executed and returned
by Borrower when the Loaned Securities are received, (b) in the case
of securities transferred through a Clearing Organization which
provides transferors with a notice evidencing such transfer, such
notice, or (c) a confirmation or other document provided to Lender
by Borrower.
3. COLLATERAL.
3.1 Unless otherwise agreed, Borrower shall, prior to or concurrently
with the transfer of the Loaned Securities to Borrower, but in no
case later than the close of business on the day of such transfer,
transfer to Lender Collateral with a market value at least equal to
a percentage of the market value of the Loaned Securities agreed to
by Borrower and Lender (which shall be not less than 100% of the
market value of the Loaned Securities) (the "Margin Percentage").
3.2 The Collateral transferred by Borrower to Lender, as adjusted
pursuant to Section 8, shall be security for Borrower's obligations
in respect of such Loan and for any other obligations of Borrower to
Lender. Borrower hereby pledges with, assigns to, and grants Lender
a continuing first security interest in, and a lien upon, the
Collateral, which shall attach upon the transfer of the Loaned
Securities by Lender to Borrower and which shall cease upon the
transfer of the Loaned Securities by Borrower to Lender. In addition
to the rights and remedies given to Lender hereunder, Lender shall
have all the rights and remedies of a secured party under the New
York Uniform Commercial Code. It is understood that Lender may use
or invest the Collateral, if such consists of cash, at its own risk,
but that (unless Lender is a Broker-Dealer) Lender shall, during the
term of any Loan hereunder, segregate Collateral from all securities
or other assets in its possession. Lender may pledge, repledge,
hypothecate, rehypothecate, lend, relend, sell or otherwise transfer
the Collateral, or reregister Collateral evidenced by physical
certificates in any name other than Borrower's, only (a) if Lender
is Broker-Dealer or (b) in the event of a Default by Borrower.
Segregation of Collateral may be accomplished by appropriate
identification on the books and records of Lender if it is a
"financial intermediary" or a "clearing corporation" within the
meaning of the New York Uniform Commercial Code.
3.3 Except as otherwise provided herein, upon transfer to Lender of the
Loaned Securities on the day a Loan is terminated pursuant to
Section 5, Lender shall be obligated to transfer the Collateral (as
adjusted pursuant to Section 8) to Borrower no later than the Cutoff
Time on such day or, if such day is not a day on which a transfer of
such Collateral may be effected under Section 16, the next day on
which such a transfer may be effected.
3.4 If Borrower transfers Collateral to Lender, as provided in Section
3.1, and Lender does not transfer the Loaned Securities to
Borrower, Borrower shall have the absolute right to the return of
the Collateral; and if Lender transfers Loaned Securities to
Borrower and Borrower does not transfer Collateral to Lender as
provided in Section 3.1, Lender shall have the absolute right to the
return of the Loaned Securities.
May 1993 - Master Securities Loan Agreement - 2
3.5 Borrower may, upon reasonable notice to Lender (taking into account
all relevant factors, including industry practice, the type of
Collateral to be substituted and the applicable method of transfer),
substitute Collateral for Collateral securing any Loan or Loans;
provided, however, that such substituted Collateral shall (a)
consist only of cash, securities or other property that Borrower and
Lender agreed would be acceptable Collateral prior to the Loan or
Loans and (b) have a market value such that the aggregate market
value of such substituted Collateral, together with all other
Collateral for Loans in which the party substituting such Collateral
is acting as Borrower, shall equal or exceed the agreed upon Margin
Percentage of the market value of the Loaned Securities. Prior to
the expiration of any letter of credit supporting Borrower's
obligations hereunder, Borrower shall, no later than the Cutoff Time
on the date such letter of credit expires, obtain an extension of
the expiration of such letter of credit or replace such letter of
credit by providing Lender with a substitute letter of credit in an
amount at least equal to the amount of the letter of credit for
which it is substituted.
3.6 Lender acknowledges that, in connection with Loans of Government
Securities and as otherwise permitted by applicable law, some
securities provided by Borrower as Collateral under this Agreement
may not be guaranteed by the United States.
4. FEES FOR LOAN
4.1 Unless otherwise agreed, (a) Borrower agrees to pay Lender a loan
fee (a "Loan Fee"), computed daily on each Loan to the extent such
Loan is secured by Collateral other than cash, based on the
aggregate par value (in the case of Loans of Government Securities)
or the aggregate market value (in the case of all other Loans) of
the Loaned Securities on the day for which such Loan Fee is being
computed, and (b) Lender agrees to pay Borrower a fee or rebate (a
"Cash Collateral Fee") on Collateral consisting of cash, computed
daily based on the amount of cash held by Lender as Collateral, in
the case of each of the Loan Fee and the Cash Collateral Fee at such
rates as Borrower and Lender may agree. Except as Borrower and
Lender may otherwise agree (in the event that cash Collateral is
transferred by clearing house funds or otherwise), Loan Fees shall
accrue from and including the date on which the Loaned Securities
are transferred to Borrower to, but excluding, the date on which
such Loaned Securities are returned to Lender, and Cash Collateral
Fees shall accrue from and including the date on which the cash
Collateral is transferred to Lender to, but excluding, the date on
which such cash Collateral is returned to Borrower.
4.2 Unless otherwise agreed, any Loan Fee or Cash Collateral Fee payable
hereunder shall be payable:
(a) in the case of any Loan of securities other than Government
Securities, upon the earlier of (i) the fifteenth day of the
month following the calendar month in which such fee was
incurred or (ii) the termination of all Loans hereunder (or,
if a transfer of cash in accordance with Section 16 may not be
effected on such fifteenth day or the day of such termination,
as the case may be, the next day on which such a transfer may
be effected); and
(b) in the case of any Loan of Government Securities, upon the
termination of such Loan.
May 1993 - Master Securities Loan Agreement - 3
Notwithstanding the foregoing, all Loan Fees shall be payable by Borrower
immediately in the event of a Default hereunder by Borrower and all Cash
Collateral Fees shall be payable immediately by Lender in the event of a
Default by Lender.
5. TERMINATION OF THE LOAN
Unless otherwise agreed, (a) Borrower may terminate a Loan on any Business
Day by giving notice to Lender and transferring the Loaned Securities to
Lender before the Cutoff Time on such Business Day, and (b) Lender may
terminate a Loan on a termination date established by notice given to
Borrower prior to the close of business on a Business Day. The termination
date established by a termination notice given by Lender to Borrower shall
be a date no earlier than the standard settlement date for trades of the
Loaned Securities entered into on the date of such notice, which date
shall, unless Borrower and Lender agree to the contrary, be (i) in the
case of Government Securities, the next Business Day following such notice
and (ii) in the case of all other securities, the third Business Day
following such notice. Unless otherwise agreed, Borrower shall, on or
before the Cutoff Time on the termination date of a Loan, transfer the
Loaned Securities to Lender; provided, however, that upon such transfer by
Borrower, Lender shall transfer the Collateral (as adjusted pursuant to
Section 8) to Borrower in accordance with Section 3.3.
6. RIGHTS OF BORROWER IN RESPECT OF THE LOANED SECURITIES.
Except as set forth in Sections 7.1 and 7.2 and as otherwise agreed by
Borrower and Lender, until Loaned Securities are required to be
redelivered to Lender upon termination of a Loan hereunder, Borrower shall
have all of the incidents of ownership of the Loaned Securities, including
the right to transfer the Loaned Securities to others. Lender hereby
waives the right to vote, or to provide any consent or to take any similar
action with respect to, the Loaned Securities in the event that the record
date or deadline for such vote, consent or other action falls during the
term of the Loan.
7. DIVIDENDS, DISTRIBUTIONS, ETC.
7.1 Lender shall be entitled to receive all distributions made on or in
respect of the Loaned Securities which are not otherwise received by
Lender, to the full extent it would be so entitled if the Loaned
Securities had not been lent to Borrower, including, but not limited
to: (a) cash and all other property, (b) stock dividends, (c)
securities received as a result of split ups of the Loaned
Securities and distributions in respect thereof, (d) interest
payments, and (e) all rights to purchase additional securities.
7.2 Any cash distributions made on or in respect of the Loaned
Securities, which Lender is entitled to receive pursuant to Section
7.1, shall be paid by the transfer of cash to Lender by Borrower, on
the date any such distribution is paid, in an amount equal to such
cash distribution, so long as Lender is not in Default at the time
of such payment. Non-cash distributions received by Borrower shall
be added to the Loaned Securities on the date of distribution and
shall be considered such for all purposes, except that if the Loan
has terminated, Borrower shall forthwith transfer the same to
Lender.
7.3 Borrower shall be entitled to receive all cash distributions made on
or in respect of non-cash Collateral which are not otherwise
received by Borrower, to the full extent it would be so entitled if
the Collateral had not been transferred to Lender. Any distributions
of cash made
May 1993 - Master Securities Loan Agreement - 4
on or in respect of such Collateral which Borrower is entitled to
receive hereunder shall be paid by the transfer of cash to Borrower
by Lender, on the date any such distribution is paid, in an amount
equal to such cash distribution, so long as Borrower is not in
Default at the time of such payment.
7.4 (a) Unless otherwise agreed, if (i) Borrower is required to make a
payment (a "Borrower Payment") with respect to cash
distributions on Loaned Securities under Sections 7.1 and 7.2
("Securities Distributions"), or (ii) Lender is required to
make a payment (a "Lender Payment") with respect to cash
distributions on Collateral under Section 7.3 ("Collateral
Distributions"), and (iii) Borrower or Lender, as the case may
be ("Payor"), shall be required by law to collect any
withholding or other tax, duty, fee, levy or charge required
to be deducted or withheld from such Borrower Payment or
Lender Payment ("Tax"), then Payor shall (subject to
subsections (b) and (c) below), pay such additional amounts as
may be necessary in order that the net amount of the Borrower
Payment or Lender Payment received by the Lender or Borrower,
as the case may be ("Payee"), after payment of such Tax equals
the net amount of the Securities Distribution or Collateral
Distribution that would have been received if such Securities
Distribution or Collateral Distribution had been paid directly
to the Payee.
(b) No additional amounts shall be payable to a Payee under
subsection (a) above to the extent that Tax would have been
imposed on a Securities Distribution or Collateral
Distribution paid directly to the Payee.
(c) No additional amounts shall be payable to a Payee under
subsection (a) above to the extent that such Payee is entitled
to an exemption from, or reduction in the rate of, Tax on a
Borrower Payment or Lender Payment subject to the provision of
a certificate or other documentation, but has failed timely to
provide such certificate or other documentation.
(d) Each party hereto shall be deemed to represent that, as of the
commencement of any Loan hereunder, no Tax would be imposed on
any cash distribution paid to it with respect to (i) Loaned
Securities subject to a Loan in which it is acting as Lender
or (ii) Collateral for any Loan in which it is acting as
Borrower, unless such party has given notice to the contrary
to the other party hereto (which notice shall specify the rate
at which such Tax would be imposed). Each party agrees to
notify the other of any change that occurs during the term of
a Loan in the rate of any Tax that would be imposed on any
such cash distributions payable to it.
7.5 To the extent that, under the provisions of Sections 7.1 through 7.4
(a) a transfer of cash or other property by Borrower would give rise
to a Margin Excess (as defined in Section 8.3 below) or (b) a
transfer of cash or other property by Lender would give rise to a
Margin Deficit (as defined in Section 8.2 below), Borrower or Lender
(as the case may be) shall not be obligated to make such transfer of
cash or other property in accordance with such Sections, but shall
in lieu of such transfer immediately credit the amounts that would
have been transferable under such Sections to the account of Lender
or Borrower (as the case may be).
May 1993 - Master Securities Loan Agreement - 5
8. ▇▇▇▇ TO MARKET.
8.1 Borrower shall daily ▇▇▇▇ to market any Loan hereunder and in the
event that at the close of trading on any Business Day the market
value of the Collateral for any Loan to Borrower shall be less than
100% of the market value of all the outstanding Loaned Securities
subject to such Loan, Borrower shall transfer additional Collateral
no later than the close of the next Business Day so that the market
value of such additional Collateral, when added to the market value
of the other Collateral for such Loan, shall equal 100% of the
market value of the Loaned Securities.
8.2 In addition to any rights of Lender under Section 8.1, in the event
that at the close of trading on any Business Day the aggregate
market value of all Collateral for Loans by Lender shall be less
than the Margin Percentage of the market value of all the
Outstanding Loaned Securities subject to such Loans (a "Margin
Deficit"), Lender may, by notice to Borrower, demand that Borrower
transfer to Lender additional Collateral so that the market value of
such additional Collateral, when added to the market value of all
other Collateral for such Loans, shall equal or exceed the agreed
upon Margin Percentage of the market value of the Loaned Securities.
Unless otherwise agreed, such transfer is to be made no later than
the close of the next Business Day following the day of Lender's
notice to Borrower.
8.3 In the event that at the close of trading on any Business Day the
market value of all Collateral for Loans to Borrower shall be
greater than the Margin Percentage of the market value of all the
outstanding Loaned Securities subject to such Loans (a "Margin
Excess"), Borrower may, by notice to Lender, demand that Lender
transfer to Borrower such amount of the Collateral selected by
Borrower so that the market value of the Collateral for such Loans,
after deduction of such amounts, shall thereupon not exceed the
Margin Percentage of the market value of the Loaned Securities.
Unless otherwise agreed, such transfer is to be made no later than
the close of the next Business Day following the day of Borrower's
notice to Lender.
8.4 Borrower and Lender may agree, with respect to one or more Loans
hereunder, to ▇▇▇▇ the values to market pursuant to Sections 8.2 and
8.3 by separately valuing the Loaned Securities lent and the
Collateral given in respect thereof on a Loan-by-Loan basis.
8.5 Borrower and Lender may agree, with respect to any or all Loans
hereunder, that the respective rights of Lender and Borrower under
Sections 8.2 and 8.3 may be exercised only where a Margin Excess or
Margin Deficit exceeds a specified dollar amount or a specified
percentage of the market value of the Loaned Securities under such
Loans (which amount or percentage shall be agreed to by Borrower and
Lender prior to entering into any such Loans).
9. REPRESENTATIONS.
Each party to this Agreement hereby makes the following representations
and warranties, which shall continue during the term of any Loan
hereunder:
May 1993 - Master Securities Loan Agreement - 6
9.1 Each party hereto represents and warrants that (a) it has the power
to execute and deliver this Agreement, to enter into the Loans
contemplated hereby and to perform its obligations hereunder; (b) it
has taken all necessary action to authorize such execution, delivery
and performance; and (c) this Agreement constitutes a legal, valid
and binding obligation enforceable against it in accordance with its
terms.
9.2 Each party hereto represents and warrants that the execution,
delivery and performance by it of this Agreement and each Loan
hereunder will at all times comply with all applicable laws and
regulations including those of applicable regulatory and
self-regulatory organizations.
9.3 Each party hereto represents and warrants that it has not relied on
the other for any tax or accounting advice concerning this Agreement
and that it has made its own determination as to the tax and
accounting treatment of any Loan and any dividends, remuneration or
other funds received hereunder.
9.4 Borrower represents and warrants that it is acting for its own
account. Lender represents and warrants that it is acting for its
own account unless it expressly specifies otherwise in writing and
complies with Section 10.3(b).
9.5 Borrower represents and warrants that (a) it has, or will have at
the time of transfer of any Collateral, the right to grant a first
security interest therein subject to the terms and conditions
hereof, and (b) it (or the person to whom it relends the Loaned
Securities) is borrowing or will borrow the Loaned Securities
(except for Loaned Securities that qualify as "exempted securities"
under Regulation T of the Board of Governors of the Federal Reserve
System) for the purpose of making delivery of such securities in the
case of short sales, failure to receive securities required to be
delivered, or as otherwise permitted pursuant to Regulation T as in
effect from time to time.
9.6 Lender represents and warrants that it has, or will have at the time
of transfer of any Loaned Securities, the right to transfer the
Loaned Securities subject to the terms and conditions hereof.
10. COVENANTS.
10.1 Each party hereto agrees and acknowledges that (a) each Loan
hereunder is a "securities contract," as such term is defined in
Section 741(7) of Title 11 of the United States Code (the
"Bankruptcy Code"), (b) each and every transfer of funds, securities
and other property under this Agreement and each Loan hereunder is a
"settlement payment" or a "margin payment," as such terms are used
in Sections 362(b)(6) and 546(e) of the Bankruptcy Code, and (c) the
rights given to Borrower and Lender hereunder upon a Default by the
other constitute the right to cause the liquidation of a securities
contract and the right to set off mutual debts and claims in
connection with a securities contract, as such terms are used in
Sections 555 and 362(b)(6) of the Bankruptcy Code. Each party hereto
further agrees and acknowledges that if a party hereto is an
"insured depository institution:' as such term is defined in the
Federal Deposit Insurance Act, as amended ("FDIA"), then each Loan
May 1993 - Master Securities Loan Agreement - 7
hereunder is a "securities contract" and "qualified financial
contract," as such terms are defined in the FDIA and any rules,
orders or policy statements thereunder.
10.2 Borrower agrees to be liable as principal with respect to its
obligations hereunder.
10.3 Lender agrees either (a) to be liable as principal with respect to
its obligations hereunder or (b) to execute and comply fully with
the provisions of Annex I (the terms and conditions of which Annex
are incorporated herein and made a part hereof).
10.4 Promptly upon (and in any event within seven (7) Business Days
after) demand by Lender, Borrower shall furnish Lender with
Borrower's most recent publicly-available financial statements and
any other financial statements mutually agreed upon by Borrower and
Lender. Unless otherwise agreed, if Borrower is subject to the
requirements of Rule 17a-5(c) under the Exchange Act, it may satisfy
the requirements of this Section by furnishing Lender with its most
recent statement required to be furnished to customers pursuant to
such Rule.
10.5 Except to the extent required by applicable law or regulation or as
otherwise agreed, Borrower and Lender agree that Loans hereunder
shall in no event be "exchange contracts" for purposes of the rules
of any securities exchange and that Loans hereunder shall not be
governed by the buy-in or similar rules of any such exchange,
registered national securities or other self-regulatory
organization.
11. EVENTS OF DEFAULT.
All Loans hereunder may, at the option of the non-defaulting party
exercised by notice to the defaulting party (which option shall be deemed
to have been exercised, even if no notice is given, immediately upon the
occurrence of an event specified in subsection (e) below), be terminated
immediately upon the occurrence of any one or more of the following events
(individually, a "Default"):
11.1 if any Loaned Securities shall not be transferred to Lender upon
termination of the Loan as required by Section 5;
11.2 if any Collateral shall not be transferred to Borrower upon
termination of the Loan as required by Sections 3.3 and 5;
11.3 if either party shall fail to transfer Collateral as required by
Section 8;
11.4 if either party (i) shall fail to transfer to the other party
amounts in respect of distributions required to be transferred by
Section 7, (ii) shall have received notice of such failure from the
non-defaulting party, and (iii) shall not have cured such default by
the Cutoff Time on the next day after such notice on which a
transfer of cash may be effected in accordance with Section 16;
May 1993 - Master Securities Loan Agreement - 8
11.5 if (i) either party shall commence as debtor any case or proceeding
under any bankruptcy, insolvency, reorganization, liquidation,
dissolution or similar law, or seek the appointment of a receiver,
conservator, trustee, custodian or similar official for such party
or any substantial part of its property, (ii) any such case or
proceeding shall be commenced against either party, or another shall
seek such an appointment, or any application shall be filed against
either party for a protective decree under the provisions of the
Securities Investor Protection Act of 1970, which (A) is consented
to or not timely contested by such party, (B) results in the entry
of an order for relief, such an appointment, the issuance of such a
protective decree or the entry of an order having a similar effect,
or (C) is not dismissed within 15 days, (iii) either party shall
make a general assignment for the benefit of creditors, or (iv)
either party shall admit in writing its inability to pay its debts
as they become due;
11.6 if either party shall have been suspended or expelled from
membership or participation in any national securities exchange or
registered national securities association of which it is a member
or other self-regulatory organization to whose rules it is subject
or if it is suspended from dealing in securities by any federal or
state government agency thereof;
11.7 if either party shall have its license, charter, or other
authorization necessary to conduct a material portion of its
business withdrawn, suspended or revoked by any applicable federal
or state government or agency thereof;
11.8 if any representation made by either party in respect of this
Agreement or any Loan or Loans hereunder shall be incorrect or
untrue in any material respect during the term of any Loan
hereunder;
11.9 if either party notifies the other, orally or in writing, of its
inability to or its intention not to perform its obligations
hereunder or otherwise disaffirms, rejects or repudiates any of its
obligations hereunder; or
11.10 if either party (i) shall fail to perform any material obligation
under this Agreement not specifically set forth in clauses (a)
through (i) above, including but not limited to the payment of fees
as required by Section 4, and the payment of transfer taxes as
required by Section 14, (ii) shall have received notice of such
failure from the non-defaulting party and (iii) shall not have cured
such failure by the Cutoff Time on the next day after such notice on
which a transfer of cash may be effected under Section 16.
12. LENDER'S REMEDIES.
Upon the occurrence of a Default under Section 11 entitling Lender to
terminate all Loans hereunder, Lender shall have the right (without
further notice to Borrower), in addition to any other remedies provided
herein or under applicable law, (a) to purchase a like amount of Loaned
Securities ("Replacement Securities") in the principal market for such
securities in a commercially reasonable manner, (b) to sell any Collateral
in the principal market for such Collateral in a commercially reasonable
manner and (c) to apply and set off the Collateral and any proceeds
thereof (including any amounts drawn under a letter of credit supporting
any Loan) against the
May 1993 - Master Securities Loan Agreement - 9
payment of the purchase price for such Replacement Securities and any
amounts due to Lender under Sections 4, 7, 14 and 17. In the event Lender
shall exercise such rights, Borrower's obligation to return a like amount
of the Loaned Securities shall terminate. Lender may similarly apply the
Collateral and any proceeds thereof to any other obligation of Borrower
under this Agreement, including Borrower's obligations with respect to
distributions paid to Borrower (and not forwarded to Lender) in respect of
Loaned Securities. In the event that (i) the purchase price of Replacement
Securities (plus all other amounts, if any, due to Lender hereunder)
exceeds (ii) the amount of the Collateral, Borrower shall be liable to
Lender for the amount of such excess together with interest thereon at a
rate equal to (A) in the case of purchases of Foreign Securities, LIBOR,
(B) in the case of purchases of any other securities (or other amounts, if
any, due to Lender hereunder), the Federal Funds Rate or (C) such other
rate as may be specified in Schedule B, in each case as such rate
fluctuates from day to day, from the date of such purchase until the date
of payment of such excess. As security for Borrower's obligation to pay
such excess, Lender shall have, and Borrower hereby grants, a security
interest in any property of Borrower then held by or for Lender and a
right of setoff with respect to such property and any other amount payable
by Lender to Borrower. The purchase price of Replacement Securities
purchased under this Section 12 shall include, and the proceeds of any
sale of Collateral shall be determined after deduction of, broker's fees
and commissions and all other reasonable costs, fees and expenses related
to such purchase or sale (as the case may be). In the event Lender
exercises its rights under this Section 12, Lender may elect in its sole
discretion, in lieu of purchasing all or a portion of the Replacement
Securities or selling all or a portion of the Collateral, to be deemed to
have made, respectively, such purchase of Replacement Securities or sale
of Collateral for an amount equal to the price therefor on the date of
such exercise obtained from a generally recognized source or the most
recent closing bid quotation from such a source. Subject to Section 19,
upon the satisfaction of all obligations hereunder, any remaining
Collateral shall be returned to Borrower.
13. BORROWER'S REMEDIES.
Upon the occurrence of a Default under Section 11 entitling Borrower to
terminate all Loans hereunder, Borrower shall have the right (without
further notice to Lender), in addition to any other remedies provided
herein or under applicable law, (a) to purchase a like amount of
Collateral ("Replacement Collateral") in the principal market for such
Collateral in a commercially reasonable manner, (b) to sell a like amount
of the Loaned Securities in the principal market for such securities in a
commercially reasonable manner and (c) to apply and set off the Loaned
Securities and any proceeds thereof against (i) the payment of the
purchase price for such Replacement Collateral (ii) Lender's obligation to
return any cash or other Collateral and (iii) any amounts due to Borrower
under Sections 4, 7 and 17. In such event, Borrower may treat the Loaned
Securities as its own and Lender's obligation to return a like amount of
the Collateral shall terminate; provided, however, that Lender shall
immediately return any letters of credit supporting any Loan upon the
exercise or deemed exercise by Borrower of its termination rights under
Section 11. Borrower may similarly apply the Loaned Securities and any
proceeds thereof to any other obligation of Lender under this Agreement,
including Lender's obligations with respect to distributions paid to
Lender (and not forwarded to Borrower) in respect of Collateral. In the
event that (i) the sales price received from such Loaned Securities is
less than (ii) the purchase price of Replacement Collateral (plus the
amount of any cash or other Collateral not replaced by Borrower and all
other amounts, if any, due to Borrower hereunder), Lender shall be liable
to Borrower for the amount of any such deficiency, together with interest
on such amounts at a rate equal to (A) in
May 1993 - Master Securities Loan Agreement - 10
the case of Collateral consisting of Foreign Securities, LIBOR, (B) in the
case of Collateral consisting of any other securities (or other amounts
due, if any, to Borrower hereunder), the Federal Funds Rate or (C) such
other rate as may be specified in Schedule B, in each case as such rate
fluctuates from day to day, from the date of such sale until the date of
payment of such deficiency. As security for Lender's obligation to pay
such deficiency, Borrower shall have, and Lender hereby grants, a security
interest in any property of Lender then held by or for Borrower and a
right of setoff with respect to such property and any other amount payable
by Borrower to Lender. The purchase price of any Replacement Collateral
purchased under this Section 13 shall include, and the proceeds of any
sale of Loaned Securities shall be determined after deduction of, broker's
fees and commissions and all other reasonable costs, fees and expenses
related to such purchase or sale (as the case may be). In the event
Borrower exercises its rights under this Section 13, Borrower may elect in
its sole discretion, in lieu of purchasing all or a portion of the
Replacement Collateral or selling all or a portion of the Loaned
Securities, to be deemed to have made, respectively, such purchase of
Replacement Collateral or sale of Loaned Securities for an amount equal to
the price therefor on the date of such exercise obtained from a generally
recognized source or the most recent closing bid quotation from such a
source. Subject to Section 19, upon the satisfaction of all Lender's
obligations hereunder, any remaining Loaned Securities (or remaining cash
proceeds thereof) shall be returned to Lender. Without limiting the
foregoing, the parties hereto agree that they intend the Loans hereunder
to be loans of securities. If, however, any Loan is deemed to be a loan of
money by Borrower to Lender, then Borrower shall have, and Lender shall be
deemed to have granted, a security interest in the Loaned Securities and
the proceeds thereof.
14. TRANSFER TAXES.
All transfer taxes with respect to the transfer of the Loaned Securities
by Lender to Borrower and by Borrower to Lender upon termination of the
Loan shall be paid by Borrower.
15. MARKET VALUE.
15.1 Unless otherwise agreed, if the principal market for the securities
to be valued is a national securities exchange in the United States,
their market value shall be determined by their last sale price on
such exchange on the preceding Business Day or, if there was no sale
on that day, by the last sale price on the next preceding Business
Day on which there was a sale on such exchange, all as quoted on the
Consolidated Tape or, if not quoted on the Consolidated Tape, then
as quoted by such exchange.
15.2 Except as provided in Section 15.3 or 15.4 or as otherwise agreed,
if the principal market for the securities to be valued is the
over-the-counter market, their market value shall be determined as
follows. If the securities are quoted on the National Association of
Securities Dealers Automated Quotations System ("NASDAQ"), their
market value shall be the closing sale price on NASDAQ on the
preceding Business Day or, if the securities are issues for which
last sale prices are not quoted on NASDAQ, the closing bid price on
such day. If the securities to be valued are not quoted on NASDAQ,
their market value shall be the highest bid quotation as quoted in
any of The Wall Street Journal, the National Quotation Bureau pink
sheets, the Salomon Brothers quotation sheets, quotations sheets of
registered market makers and, if necessary, dealers' telephone
quotations on the preceding Business Day. In each case, if the
relevant quotation did not exist on such day, then the relevant
May 1993 - Master Securities Loan Agreement - 11
quotation on the next preceding Business Day in which there was such
a quotation shall be the market value.
15.3 Unless otherwise agreed, if the securities to be valued are
Government Securities, their market value shall be the average of
the bid and ask prices as quoted on Prophesy at 3:30 P.M. New York
time on the Business Day preceding the date on which such
determination is made. If the securities are not so quoted on such
day, their market value shall be determined as of the next preceding
Business Day on which they were so quoted. If the securities to be
valued are Government Securities that are not quoted on Prophesy,
their market value shall be determined as of the close of business
on the preceding Business Day in accordance with market practice for
such securities.
15.4 Unless otherwise agreed, if the securities to be valued are Foreign
Securities, their market value shall be determined as of the close
of business on the preceding Business Day in accordance with market
practice in the principal market for such securities.
15.5 Unless otherwise agreed, the market value of a letter of credit
shall be the undrawn amount thereof.
15.6 All determinations of market value under Sections 15.1, 15.2, 15.3
and 15.4 shall include, where applicable, accrued interest to the
extent not already included therein (other than any interest
transferred to the other party pursuant to Section 7), unless market
practice with respect to the valuation of such securities in
connection with securities loans is to the contrary. All
determinations of market value that are required to be made at the
close of trading on any Business Day pursuant to Section 8 or
otherwise hereunder shall be made as if being determined at the
commencement of trading on the next Business Day. The determinations
of market value provided for in this Section 15 shall apply for all
purposes under this Agreement, except for purposes of Sections 12
and 13.
16. TRANSFERS.
16.1 All transfers of securities hereunder shall be by (a) physical
delivery of certificates representing such securities together with
duly executed stock and bond transfer powers, as the case may be,
with signatures guaranteed by a bank or a member firm of the New
York Stock Exchange, Inc., (b) transfer on the books of a Clearing
Organization, or (c) such other means as Borrower and Lender may
agree. In every transfer of securities hereunder, the transferor
shall take all steps necessary (i) to effect a "transfer" under
Section 8-313 of the New York Uniform Commercial Code or, where
applicable, under any U.S. federal regulation governing transfers of
securities and (ii) to provide the transferee with comparable rights
under any applicable foreign law or regulation.
16.2 All transfers of cash Collateral hereunder shall be by (a) wire
transfer in immediately available, freely transferable funds or (b)
such other means as Borrower and Lender may agree. All other
transfers of cash hereunder shall be made in accordance with the
preceding sentence or by delivery of a certified or official bank
check representing next-day New York Clearing House Funds.
May 1993 - Master Securities Loan Agreement - 12
16.3 All transfers of a letter of credit from Borrower to Lender shall be
made by physical delivery to Lender of an irrevocable letter of
credit issued by a "bank" as defined in Section 3(a)(6)(A)-(C) of
the Exchange Act. Transfer of a letter of credit from Lender to
Borrower shall be made by causing such letter of credit to be
returned or by causing the amount of such letter of credit to be
reduced to the amount required after such transfer.
16.4 A transfer of securities, cash or letters of credit may be effected
under this Section 16 on any day except (a) a day on which the
transferee is closed for business at its address set forth in
Schedule A hereto or (b) a day on which a Clearing Organization or
wire transfer system is closed, if the facilities of such Clearing
Organization or wire transfer system are required to effect such
transfer.
17. CONTRACTUAL CURRENCY.
17.1 Borrower and Lender agree that: (a) any payment in respect of a
distribution under Section 7 shall be made in the currency in which
the underlying distribution of cash was made; (b) any return of cash
shall be made in the currency in which the underlying transfer of
cash was made and (c) any other payment of cash in connection with a
Loan under this Agreement shall be in the currency agreed upon by
Borrower and Lender in connection with such Loan (the currency
established under clause (a), (b) or (c) hereinafter referred to as
the "Contractual Currency"). Notwithstanding the foregoing, the
payee of any such payment may, at its option, accept tender thereof
in any other currency; provided, however, that, to the extent
permitted by applicable law, the obligation of the payor to make
such payment will be discharged only to the extent of the amount of
Contractual Currency that such payee may, consistent with normal
banking procedures, purchase with such other currency (after
deduction of any premium and costs of exchange) on the banking day
next succeeding its receipt of such currency.
17.2 If for any reason the amount in the Contractual Currency received
under Section 17.1, including amounts received after conversion of
any recovery under any judgment or order expressed in a currency
other than the Contractual Currency, falls short of the amount in
the Contractual Currency due in respect of this Agreement, the party
required to make the payment will (unless a Default has occurred and
such party is the non-defaulting party) as a separate and
independent obligation and to the extent permitted by applicable
law, immediately pay such additional amount in the Contractual
Currency as may be necessary to compensate for the shortfall.
17.3 If for any reason the amount in the Contractual Currency received
under Section 17.1 exceeds the amount in the Contractual Currency
due in respect of this Agreement, then the party receiving the
payment will (unless a Default has occurred and such party is the
non-defaulting party) refund promptly the amount of such excess.
May 1993 - Master Securities Loan Agreement - 13
18. ERISA.
Lender shall, if any of the securities transferred to the Borrower
hereunder for any Loan have been or shall be obtained, directly or
indirectly, from or using the assets of any Plan, so notify Borrower in
writing upon the execution of the Agreement or upon initiation of such
Loan under Section 1.1. If Lender so notifies Borrower, then Borrower and
Lender shall conduct the Loan in accordance with the terms and conditions
of Department of Labor Prohibited Transaction Exemption 81-6 (46 Fed. Reg.
7527, Jan. 23, 1981; as amended, 52 Fed. Reg. 18754, May 19, 1987), or any
successor thereto (unless Borrower and Lender have agreed prior to
entering into a Loan that such Loan will be conducted in reliance on
another exemption, or without relying on any exemption, from the
prohibited transaction provisions of Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, and Section 4975 of
the Internal Revenue Code of 1986, as amended). Without limiting the
foregoing and notwithstanding any other provision of this Agreement, if
the Loan will be conducted in accordance with Prohibited Transaction
Exemption 81-6, then:
18.1 Borrower represents and warrants to Lender that it is either (I) a
bank subject to federal or state supervision, (ii) a broker-dealer
registered under the Exchange Act or (iii) exempt from registration
under Section 15 (a) (1) of the Exchange Act as a dealer in
Government Securities.
18.2 Borrower represents and warrants that, during the term of any Loan
hereunder, neither Borrower nor any affiliate of Borrower has any
discretionary authority or control with respect to the investment of
the assets of the Plan involved in the Loan or renders investment
advice (within the meaning of 29 C.F.R. Section 2510.3-21(c)) with
respect to the assets of the Plan involved in the Loan. Lender
agrees that, prior to or at the commencement of any Loan hereunder,
it will communicate to Borrower information regarding the Plan
sufficient to identify to Borrower any person or persons that have
discretionary authority or control with respect to the investment of
the assets of the Plan involved in the Loan or that render
investment advice (as defined in the preceding sentence) with
respect to the assets of the Plan involved in the Loan. In the event
Lender fails to communicate and keep current during the term of any
Loan such information, Lender rather than Borrower shall be deemed
to have made the representation and warranty in the first sentence
of this clause (b).
18.3 Borrower and Lender agree that:
(a) the term "Collateral" shall mean cash, securities issued or
guaranteed by the United States government or its agencies or
instrumentalities, or irrevocable bank letters of credit
issued by a person other than Borrower or an affiliate
thereof;
(b) prior to the making of any Loans hereunder, Borrower shall
provide Lender with (A) the most recent available audited
statement of Borrower's financial condition and (B) the most
recent available unaudited statement of Borrower's financial
condition (if more recent than the most recent audited
statement), and each Loan made hereunder shall be deemed a
representation by Borrower that there has been no material
May 1993 - Master Securities Loan Agreement - 14
adverse change in Borrower's financial condition subsequent to
the date of the latest financial statements or information
furnished in accordance herewith;
(c) the Loan may be terminated by Lender at any time, whereupon
Borrower shall deliver the Loaned Securities to Lender within
the lesser of (A) the customary delivery period for such
securities; (B) five Business Days and (C) the time negotiated
for such delivery between Borrower and Lender; provided,
however, that Borrower and Lender may agree to a longer period
only if permitted by Prohibited Transaction Exemption 81-6;
and
(d) the Collateral transferred shall be security only for
obligations of Borrower to the Plan with respect to Loans, and
shall not be security for any obligation of Borrower to any
agent or affiliate of the Plan.
19. SINGLE AGREEMENT.
Borrower and Lender acknowledge that, and have entered into this Agreement
in reliance on the fact that, all Loans hereunder constitute a single
business and contractual relationship and have been entered into in
consideration of each other. Accordingly, Borrower and Lender hereby agree
that payments, deliveries and other transfers made by either of them in
respect of any Loan shall be deemed to have been made in consideration of
payments, deliveries and other transfers in respect of any other Loan
hereunder, and the obligations to make any such payments, deliveries and
other transfers may be applied against each other and netted. In addition,
Borrower and Lender acknowledge that, and have entered into this Agreement
in reliance on the fact that, all Loans hereunder have been entered into
in consideration of each other. Accordingly, Borrower and Lender hereby
agree that (a) each shall perform all of its obligations in respect of
each Loan hereunder, and that a default in the performance of any such
obligation by Borrower or by Lender (the "Defaulting Party") in any Loan
hereunder shall constitute a default by the Defaulting Party under all
such Loans hereunder, and (b) the non-defaulting party shall be entitled
to set off claims and apply property held by it in respect of any Loan
hereunder against obligations owing to it in respect of any other Loan
with the Defaulting Party.
20. APPLICABLE LAW.
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF.
21. WAIVER.
The failure of a party to this Agreement to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. All waivers in
respect of a Default must be in writing.
22. REMEDIES.
All remedies hereunder and all obligations with respect to any Loan shall
survive the termination of the relevant Loan, return of Loaned Securities
or Collateral and termination of this Agreement.
May 1993 - Master Securities Loan Agreement - 15
23. NOTICES AND OTHER COMMUNICATIONS.
Unless another address is specified in writing by the respective party to
whom any notice or other communication is to be given hereunder, all such
notices or communications shall be in writing or confirmed in writing and
delivered at the respective addresses set forth in Schedule A attached
hereto. All notices shall be effective upon actual receipt, provided,
however, that if any notice shall be received by a party on a day on which
such party is not open for business at its office located at the address
set forth in Schedule A, such notice shall be deemed to have been received
by such party at the opening of business on the next day on which such
party is open for business at such address.
24. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
24.1 EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK
STATE COURT SITTING IN NEW YORK CITY, AND ANY APPELLATE COURT FROM
ANY SUCH COURT, SOLELY FOR THE PURPOSE OF ANY SUIT, ACTION OR
PROCEEDING BROUGHT TO ENFORCE ITS OBLIGATIONS HEREUNDER OR RELATING
IN ANY WAY TO THIS AGREEMENT OR ANY LOAN HEREUNDER AND (B) WAIVES,
TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT AND ANY RIGHT OF JURISDICTION ON ACCOUNT OF ITS
PLACE OF RESIDENCE OR DOMICILE.
24.2 EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY RIGHT THAT IT MAY
HAVE TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
25. MISCELLANEOUS.
This Agreement supersedes any other agreement between the parties hereto
concerning loans of securities between Borrower and Lender. This Agreement
shall not be assigned by either party without the prior written consent of
the other party and any attempted assignment without such consent shall be
null and void. Subject to the foregoing, this Agreement shall be binding
upon and shall ensure to the benefit of Borrower and Lender and their
respective heirs, representatives, successors and assigns. This Agreement
may be terminated by either party upon written notice to the other,
subject only to fulfillment of any obligations then outstanding. This
Agreement shall not be modified, except by an instrument in writing signed
by the party against whom enforcement is sought. The parties hereto
acknowledge and agree that, in connection with this Agreement and each
Loan hereunder, time is of the essence. Each provision and agreement
herein shall be treated as separate and independent from any other
provision herein and shall be enforceable notwithstanding the
unenforceability of any such other provision or agreement.
26. DEFINITIONS.
For the purposes hereof.
26.1 "Broker-Dealer" shall mean any person that is a broker (including a
municipal securities broker), dealer, municipal securities dealer,
government securities broker or government
May 1993 - Master Securities Loan Agreement - 16
securities dealer as defined in the Exchange Act, regardless of
whether the activities of such person are conducted in the United
States or otherwise require such person to register with the
Securities and Exchange Commission or other regulatory body.
26.2 "Business Day" shall mean, with respect to any Loan hereunder, a day
on which regular trading occurs in the principal market for the
Loaned Securities subject to such Loan, provided, however, that for
purposes of Section 15, such term shall mean a day on which regular
trading occurs in the principal market for the securities whose
value is being determined. Notwithstanding the foregoing, (I) for
purposes of Section 8, "Business Day" shall mean any day on which
regular trading occurs in the principal market for any Loaned
Securities or for any securities Collateral under any outstanding
Loan hereunder and "next Business Day" shall mean the next day on
which a transfer of Collateral may be effected in accordance with
Section 16; and (ii) in no event shall a Saturday or Sunday be
considered a Business Day.
26.3 "Clearing Organization" shall mean The Depository Trust Company, or,
if agreed to by Borrower and Lender, such other clearing agency at
which Borrower (or Borrower's agent) and Lender (or Lender's agent)
maintain accounts, or a book-entry system maintained by a Federal
Reserve Bank.
26.4 "Collateral" shall mean, whether now owned or hereafter acquired and
to the extent permitted by applicable law, (a) any property which
Borrower and Lender agree shall be acceptable collateral prior to
the Loan and which is transferred to Lender pursuant to Section 3 or
8 (including as collateral, for definitional purposes, any letters
of credit mutually acceptable to Lender and Borrower), (b) any
property substituted therefore pursuant to Section 3.5, (c) all
accounts in which such property is deposited and all securities and
the like in which any cash collateral is invested or reinvested, and
(d) any proceeds of any of the foregoing. For purposes of return of
Collateral by Lender or purchase or sale of securities pursuant to
Section 12 or 13, such term shall include securities of the same
issuer, class and quantity as the Collateral initially transferred
by Borrower to Lender.
26.5 "Customer" shall mean any person that is a customer of Borrower
under Rule 15c3-3 under the Exchange Act or any comparable
regulation of the Secretary of the Treasury under Section 15C of the
Exchange Act (to the extent that Borrower is subject to such Rule or
comparable regulation).
26.6 "Cutoff Time" shall mean a time on a Business Day by which a
transfer of cash, securities or other property must be made by
Borrower or Lender to the other, as shall be agreed by Borrower and
Lender in Schedule B or otherwise orally or in writing or, in the
absence of any such agreement, as shall be determined in accordance
with market practice.
26.7 "Default" shall have the meaning assigned in Section 11.
26.8 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
May 1993 - Master Securities Loan Agreement - 17
26.9 "Federal Funds Rate" shall mean the rate of interest (expressed as
an annual rate), as published in Federal Reserve Statistical Release
H.15(519) or any publication substituted therefore, charged for
federal funds (dollars in immediately available funds borrowed by
banks on an overnight unsecured basis) on that day or, if that day
is not a banking day in New York City, on the next preceding banking
day.
26.10 "Foreign Securities" shall mean, unless otherwise agreed, securities
that are principally cleared and settled outside the United States.
26.11 "Government Securities" shall mean government securities as defined
in Section 3 (a)(42)(A)-(C) of the Exchange Act.
26.12 "LIBOR" shall mean for any date, the offered rate for deposits in
U.S. dollars for a period of three months which appears on the
Reuters Screen LIBO page as of 11:00 A.M., London time, on such date
(or, if at least two such rates appear, the arithmetic mean of such
rates).
26.13 "Loan" shall mean a loan of securities hereunder.
26.14 "Loaned Security" shall mean any security which is a security as
defined in the Exchange Act, transferred in a Loan hereunder until
such security (or an identical security) is transferred back to
Lender hereunder, except 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 is made. For purposes of return of
Loaned Securities by Borrower or purchase or sale of securities
pursuant to Section 12 or 13, such term shall include securities of
the same issuer, class and quantity as the Loaned Securities, as
adjusted pursuant to the preceding sentence.
26.15 "Plan" shall mean (a) any "employee benefit plan" as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974
which is subject to Part 4 of Subtitle B of Title I of such Act; (b)
any "plan" as defined in Section 4975(e) (1) of the Internal Revenue
Code of 1986; or (c) any entity the assets of which are deemed to be
assets of any such "employee benefit plan" or "plan" by reason of
the Department of Labor's plan asset regulation, 29 C.F.R. Section
2510.3-101.
CITIGROUP GLOBAL MARKETS INC.
By: ____________________________ By: __________________________
Title: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Title: __________________________
Managing Director Date: __________________________
Date: __________________________
May 1993 - Master Securities Loan Agreement - 18
ANNEX I
LENDER ACTING AS AGENT
This Annex sets forth the terms and conditions governing all transactions in
which a party lending securities ("Agent") in a Loan is acting as agent for one
or more third parties (each, a "Principal"). Unless otherwise defined,
capitalized terms used in this Annex shall have the meanings assigned in the
Securities Loan Agreement of which it forms a part (such agreement, together
with this Annex and any other schedules or exhibits, referred to as the
"Agreement") and, unless otherwise specified, all section references herein are
intended to refer to sections of such Securities Loan Agreement.
1. ADDITIONAL REPRESENTATIONS AND WARRANTIES. In addition to the
representations and warranties set forth in Section 9 of the Agreement,
Agent hereby makes the following representations and warranties, which
shall continue during the term of any Loan: Principal has duly authorized
Agent to execute and deliver the Agreement on its behalf, has the power to
so authorize Agent and to enter into the Loans contemplated by the
Agreement and to perform the obligations of Lender under such Loans, and
has taken all necessary action to authorize such execution and delivery by
Agent and such performance by it.
2. IDENTIFICATION OF PRINCIPALS. Agent agrees (a) to provide Borrower prior
to any Loan under the Agreement with a written list of Principals for
which it intends to act as Agent (which list may be amended in writing
from time to time with the consent of Borrower), and (b) to provide
Borrower, before the close of business on the next Business Day after
orally agreeing to enter into a Loan, with notice of the specific
Principal or Principals for whom it is acting in connection with such
Loan. If (i) Agent fails to identify such Principal or Principals prior to
the close of business on such next Business Day or (ii) Borrower shall
determine in its sole discretion that any Principal or Principals
identified by Agent are not acceptable to it, Borrower may reject and
rescind any Loan with such Principal or Principals, return to Agent any
Loaned Securities previously transferred to Borrower and refuse any
further performance under such Loan, and Agent shall immediately return to
Borrower any Collateral previously transferred to Agent in connection with
such Loan; provided, however, that (A) Borrower shall promptly (and in any
event within one Business Day) notify Agent of its determination to reject
and rescind such Loan and (B) to the extent that any performance was
rendered by any party under any Loan rejected by Borrower, such party
shall remain entitled to any fees or other amounts that would have been
payable to it with respect to such performance if such Loan had not been
rejected. Borrower acknowledges that Agent shall not have any obligation
to provide it with confidential information regarding the financial status
of its Principals; Agent agrees, however, that it will assist Borrower in
obtaining from Agent's Principals such information regarding the financial
status of such Principals as Borrower may reasonably request.
3. LIMITATION OF AGENT'S LIABILITY. The parties expressly acknowledge that if
the representations and warranties of Agent under the Agreement, including
this Annex, are true and correct in all material respects during the term
of any Loan and Agent otherwise complies with the provisions of this
Annex, then (a) Agent's obligations under the Agreement shall not
May 1993 - Master Securities Loan Agreement - A1-1
include a guarantee of performance by its Principal or Principals and (b)
Borrower's remedies shall not include a right of setoff against
obligations, if any, of Agent arising in other transactions in which Agent
is acting as principal.
4. MULTIPLE PRINCIPALS.
(a) In the event that Agent proposes to act for more than one Principal
hereunder, Borrower and Agent shall elect whether (i) to treat Loans
under this Agreement as transactions entered into on behalf of
separate Principals or (ii) to aggregate such Loans as if they were
transactions by a single Principal. Failure to make such an election
in writing shall be deemed an election to treat Loans under this
Agreement as transactions on behalf of separate Principals.
(b) In the event that Borrower and Agent elect (or are deemed to elect)
to treat Loans under the Agreement as transactions on behalf of
separate Principals, the parties agree that (i) Agent will provide
Borrower, together with the notice described in Section 2(b) of this
Annex, notice specifying the portion of each Loan allocable to the
account of each of the Principals for which it is acting (to the
extent that any such Loan is allocable to the account of more than
one Principal); (ii) the portion of any individual Loan allocable to
each Principal shall be deemed a separate Loan under the Agreement;
(iii) the ▇▇▇▇ to market obligations of Borrower and Lender under
Section 8 of the Agreement shall be determined on a Loan-by-Loan
basis (unless the parties agree to determine such obligations on a
Principal-by-Principal basis); and (iv) Borrower's and Lender's
remedies under the Agreement upon the occurrence of a Default shall
be determined as if Agent had entered into a separate Agreement with
Borrower on behalf of each of its Principals.
(c) In the event that Borrower and Agent elect to treat Loans under this
Agreement as if they were transactions by a single Principal, the
parties agree that (i) Agent's notice under Section 2(b) of this
Annex need only identify the names of its Principals but not the
portion of each Loan allocable to each Principal's account; (ii) the
▇▇▇▇ to market obligations of Borrower and Lender under Section 8
shall, subject to any greater requirement imposed by applicable law,
be determined on an aggregate basis for all Loans entered into by
Agent on behalf of any Principal; and (iii) Borrower's and Lender's
remedies upon the occurrence of a Default shall be determined as if
all Principals were a single Lender.
(d) Notwithstanding any other provision of the Agreement (including
without limitation this Annex), the parties agree that any
transactions by Agent on behalf of a Plan shall be treated as
transactions on behalf of separate Principals in accordance with
Section 4(b) of this Annex (and all ▇▇▇▇ to market obligations of
the parties shall be determined on a Loan-by-Loan basis).
5. INTERPRETATION OF TERMS . All references to "Lender" in the Agreement
shall, subject to the provisions of this Annex (including among other
provisions the limitations on Agent's liability in
May 1993 - Master Securities Loan Agreement - A1-2
Section 3 of this Annex), be construed to reflect that (i) each Principal
shall have, in connection with any Loan or Loans entered into by Agent on
its behalf, the rights, responsibilities, privileges and obligations of a
"Lender" directly entering into such Loan or Loans with Borrower under the
Agreement, and (ii) Agent's Principal or Principals have designated Agent
as their sole agent for performance of Lender's obligations to Borrower
and for receipt of performance by Borrower of its obligations to Lender in
connection with any Loan or Loans under the Agreement (including, among
other things, as agent for each Principal in connection with transfers of
securities, cash or other property and as agent for giving and receiving
all notices under the Agreement). Both Agent and its Principal or
Principals shall be deemed "parties" to the Agreement and all references
to a "party" or "either party" in the Agreement shall be deemed revised
accordingly (and any Default by Agent under paragraph (e) or any other
applicable provision of Section 11 shall be deemed a Default by Lender).
CITIGROUP GLOBAL MARKETS INC.
By: __________________________
Title: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Managing Director
Date: __________________________
By: __________________________
Title: __________________________
Date: __________________________
May 1993 - Master Securities Loan Agreement - A1-3
SCHEDULE B
DEFINED TERMS AND SUPPLEMENTAL PROVISIONS
1. The Cutoff Times referred to in this Agreement shall be as determined in
accordance with the market practice with respect to the country of origin
of the Loaned Securities.
2. Unless the parties otherwise agree with respect to a particular Loan(s)
hereunder, the Contractual Currency for the purposes described in clause
(c) of Section 17.1 shall be US Dollars for all Loans.
3. Section 4.1 is amended by adding to the end of such Section the following
sentence:
"Unless otherwise agreed, such Loan Fees and Cash Collateral Fees shall be
calculated on the basis of a 360-day year for the actual number of days
the Loan is outstanding in accordance with the preceding sentence."
4. For purposes of determining whether an Event of Default has occurred under
Section 11.8, the representations of Borrower made pursuant to Section
18.3(b) shall be deemed made, and to be true and correct, at all times
during the period a Loan is outstanding.
5. Each party to this Agreement (such party, "Party X") agrees that, upon the
insolvency of Party X or any of its affiliates or the default of Party X
or any of its affiliates under any transaction with the other party hereto
or any of such other party's affiliates (such other party or any of its
affiliates, a "Non-Defaulting Party"), each Non-Defaulting Party may,
without prior notice to Party X: (a) liquidate any transaction between
Party X and any Non-Defaulting Party (which liquidation may include the
conversion of amounts denominated in multiple currencies into a single
currency if deemed necessary or desirable by the Non-Defaulting Party),
(b) reduce any amounts due and owing to Party X under any transaction
between Party X and any Non-Defaulting Party by setting off against such
amounts any amounts due and owing to a Non-Defaulting Party by Party X,
and (c) treat all security for, and all amounts due and owing to Party X
under, any transaction between Party X and any Non-Defaulting Party as
security for all transactions between Party X and the Non-Defaulting
Party; provided, however, that the exercise of the remedies described in
clauses (a), (b) and (c) above (or in any similar provision in any
agreement between the parties) shall be deemed to occur immediately
subsequent to, but independent of, the exercise of any netting,
liquidation, set-off or other similar provision contained in any master
agreement between the parties; provided, further, that each provision or
agreement hereof shall be enforceable notwithstanding the unenforceability
of any such other provision or agreement. For purposes of the foregoing,
the term "affiliate" with respect to Citigroup Global Markets Inc. shall
not include any entity that controls or is under common control with
Citigroup Global Markets Holdings Inc., but in any event such term shall
include Citigroup Global Markets Holdings Inc. and any entity controlled
by it, and for purposes of clause (a) above only, shall include Citibank
N.A.
6. Section 5 is amended by deleting the second sentence thereof and replacing
it with the following sentence:
"The termination date established by a termination notice given by Lender
to Borrower shall be a date no earlier than the standard settlement date
for trades of the Loaned Securities entered into on the date of such
notice, which date shall, unless Borrower and Lender agree to the
contrary, be (i) in the case of Government Securities, the next Business
Day following such notice and (ii) in the case of Foreign Securities, the
next Business Day following the standard settlement date for trades of the
Loaned Securities entered into on the date of such notice and (iii) in the
case of all other Securities, the Business Day that is the standard
settlement date for trades of the Loaned Securities entered into on the
date of such notice."
7. Section 15.3 is amended by deleting the clause "on Prophecy" in the first
sentence thereof and substituting the clause "by a mutually acceptable
source or mutually acceptable sources" and by deleting the third sentence
in its entirety.
8. Section 11 is amended by (a) deleting the reference to "subsection (e)" in
the first sentence thereof and substituting "Section 11.5" therefore and
(b) by deleting the reference to "clauses (a) through (i)" in Section
11.10 and substituting "Sections 11.1 through 11.9" therefore.
9. Section 18.2 is amended by deleting the reference to "clause (b)" in the
last sentence thereof and substituting "Section 18.2" therefore.
10. In the event of any inconsistency between the provisions of this Schedule
and the provisions of the Master Securities Loan Agreement attached
hereto, the terms contained in this Schedule shall prevail.
11. No party shall be required to pay or be liable to the other party for any
consequential, indirect or punitive damages, opportunity costs or lost
profits (whether or not arising from its negligence).
CITIGROUP GLOBAL MARKETS INC.
By:___________________________ By:________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Name:______________________
Title: Managing Director Title:_______________________
[MARKET BOND ASSOCIATION LOGO]
AMENDMENT TO THE MASTER SECURITIES LOAN AGREEMENT
Dated as of
Between: CITIGROUP GLOBAL MARKETS INC.
and
The parties hereto, having previously entered into a Master Securities
Loan Agreement (the "Master Agreement"), dated as of , agree to amend and
supplement the Master Agreement as set forth below. Unless otherwise
defined in Section 11. 1 below, capitalized terms used herein shall have
the meanings assigned in the Master Agreement.
1. COLLATERAL AND ▇▇▇▇ TO MARKET.
Notwithstanding anything to the contrary in the Master Agreement, in
connection with any Loan in which Lender is not a Customer, Borrower
and Lender may agree, as provided in Section 11.2 hereof, that the
market value of the Collateral, if any, transferred by Borrower to
Lender, upon initial transfer and for purposes of any ▇▇▇▇-to-market
or similar provision of the Master Agreement. shall be equal to a
percentage of the market value of the Loaned Securities that is less
than 100%; provided, however, that in the event that the writing or
other confirmation evidencing such agreement does not set out such
percentage with respect to any such Loan, such percentage shall not,
for purposes of any ▇▇▇▇-to-market or similar provision of the
Master Agreement, be less than the percentage that is obtained by
dividing (i) the market value of the Collateral required to be
transferred by Borrower to Lender with respect to such Loan at the
commencement of the Loan by (ii) the market value of the Loaned
Securities required to be transferred by Lender to Borrower at the
commencement of the Loan.
2. PERMITTED PURPOSE.
2.1 Notwithstanding anything to the contrary in the Master
Agreement, with respect to any Loan of an Equity Security,
Borrower and Lender may agree, as provided in Section 11. 2
hereof, that Borrower shall not be deemed to have made any
representation or warranty to Lender regarding the purpose for
which Borrower is borrowing or will borrow the Loaned
Security, including without limitation any representation or
warranty regarding the use of the Loaned Security by it (or
the person to whom it relends the Loaned Security) for the
purpose of making delivery of such security in the case of a
short sale, failure to receive securities required to be
delivered or otherwise. By entering into any such agreement,
Lender shall be deemed to have represented and warranted to
Borrower (which representation and warranty shall be deemed to
be repeated on each day during the term of such Loan) that
Lender is
either (i) an "exempted borrower" within the meaning of
Regulation T or (ii) a member of a national securities
exchange or a broker or dealer registered with the Securities
and Exchange Commission that is entering into such Loan to
finance its activities as a market maker or an underwriter.
2.2 Notwithstanding anything to the contrary in the Master
Agreement, with respect to any Loan of a security that is not
an Equity Security, Borrower shall not be deemed to have made
any representation or warranty to Lender regarding the purpose
for which Borrower is borrowing or will borrow the Loaned
Security, including without limitation any representation or
warranty regarding the use of the Loaned Security by it (or
the person to whom it relends the Loaned Security) for the
purpose of making delivery of such security in the case of a
short sale, failure to receive securities required to be
delivered or otherwise.
3. TERMINATION AND RIGHTS IN RESPECT OF COLLATERAL . Notwithstanding
anything to the contrary in the Master Agreement, if under the
Master Agreement Lender may pledge, repledge, hypothecate,
rehypothecate, lend, relend, sell or otherwise transfer the
Collateral, or re-register Collateral evidenced by physical
certificates in any name other than Borrower's:
(a) Borrower may not terminate a Loan, if the Collateral for such Loan
includes securities other than Government Securities, except on a
termination date established by notice given to Lender prior to the
close of business on a Business Day; the date established by such
termination notice given by Borrower to Lender shall be a date no
earlier than the standard settlement date for trades of such
Collateral entered into on the date of such notice, which date
shall, unless Borrower and Lender agree to the contrary, be the
third Business Day following such notice; and
(b) Borrower waives the right to vote, or to provide any consent or take
any similar action with respect to, any Collateral in the event that
the record date or deadline for such vote, consent or other action
falls during the term of a Loan and such Collateral is not required
to be returned to Borrower pursuant to any substitution,
▇▇▇▇-to-market or similar provision of the Master Agreement.
4. DIVIDENDS, DISTRIBUTIONS, ETC.
4.1 Notwithstanding anything to the contrary in the Master Agreement,
Borrower shall be entitled to receive all distributions made on or
in respect of Collateral which are not otherwise received by
Borrower, to the full extent it would be so entitled if such
Collateral had not been transferred to Lender, including, but not
limited to (a) cash and all other property, (b) stock dividends, (c)
securities received as a result of split ups of such Collateral and
distributions in respect thereof, (d) interest payments, and (e) all
rights to purchase additional securities.
4.2 Any cash distributions made on or in respect of Collateral, which
Borrower is entitled to receive pursuant to Section 4.1 hereof,
shall be treated in accordance with the Master Agreement. Noncash
distributions received by Lender shall be added to the Collateral on
the date of distribution and shall be considered such for all
purposes, except that if each Loan secured by such Collateral has
terminated, Lender shall forthwith transfer the same to Borrower.
5. TRANSFER. Notwithstanding anything to the contrary in the Master
Agreement, all transfers by either Borrower or Lender of Loaned
Securities or Collateral consisting of "financial assets" (within
the meaning of the New York Uniform Commercial Code) thereunder
shall be by (a) in the case of certificated securities, physical
delivery of certificates representing such securities together with
duly executed stock and bond transfer powers, as the case may be,
with signatures guaranteed by a bank or a member firm of the New
York Stock Exchange, Inc., (b) registration of an uncertificated
security in the transferee's name by the issuer of such
uncertificated security, (c) the crediting by a securities
intermediary of such financial assets to the transferee's securities
account maintained with such securities intermediary, or (d) such
other means as Borrower and Lender may agree. For the avoidance of
doubt, the parties agree and acknowledge that the term "securities",
as used in the Master Agreement and herein, shall include any
"security entitlements" with respect to such securities (within the
meaning of the New York Uniform Commercial Code), and that the terms
"financial intermediary" and "clearing corporation", as used in the
Master Agreement, shall mean a "securities intermediary" (within the
meaning of the New York Uniform Commercial Code).
6. REPRESENTATIONS AND WARRANTIES. Each of the parties hereto (and, in
the case of a party acting as agent in accordance with the terms of
the Master Agreement, each of its principals) represents and
warrants that (a) it has full power and authority to execute and
deliver this Amendment and to enter into any Loan contemplated by
the Master Agreement and to perform its obligations thereunder, as
amended or supplemented herein; (b) it has taken all necessary
action to authorize such execution, delivery and performance; and
(c) this Amendment constitutes a legal, valid and binding
obligation, enforceable against it in accordance with its terms and
the terms of the Master Agreement.
7. ERISA. If any of the securities transferred to Borrower for any Loan
have been or shall be obtained, directly or indirectly, from or
using the assets of any Plan, and Borrower and Lender have not
agreed to conduct such Loan otherwise than in accordance with the
terms and conditions of Department of Labor Prohibited Transaction
Exemption 81 - 6 (46 Fed. Reg. 7527, Jan. 23, 1981; as amended, 52
Fed. Reg. 18,754, May 19, 1987) or any successor thereto, then
nothing in this Amendment shall be construed to limit Borrower's
obligation (i) to ▇▇▇▇ to market such Loan daily and (ii) to
transfer additional Collateral, in the event that at the close of
trading on any Business Day the market value of the Collateral for
any Loan to Borrower shall be less than 100% of the market value of
all the outstanding Loaned Securities subject to such Loan, no later
than the close of the next Business Day so that the market value of
such additional Collateral, when added to the market value of the
other Collateral for such Loan, shall equal 100% of the market value
of the Loaned Securities.
8. EVENTS OF DEFAULT. In addition to any events of default set forth in
the Master Agreement, it shall be an additional event of default
under the Master Agreement if either party fails to perform any
covenant or obligation required to be performed by it hereunder or
if any representation made by either party in respect hereof shall
be incorrect or untrue in any material respect during the term of
any Loan under the Master Agreement, as amended or supplemented
herein; provided, however, that to the extent that Section 4 hereof
amends and supplements any provisions in the Master Agreement
governing the rights of Borrower in respect of distributions on
Collateral, any such failure under Section 4 hereof shall constitute
an event of default only after the expiration of
the notice period, if any, specified in the Master Agreement with
respect to the occurrence of an event of default for such a failure.
9. TRANSFER TAXES. Unless otherwise agreed, all transfer taxes with
respect to the transfer of Collateral by Borrower to Lender and by
Lender to Borrower upon termination of the Loan or pursuant to any
substitution, ▇▇▇▇-to-market or similar provision of the Master
Agreement shall be paid by Borrower.
10. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
11. DEFINITIONS AND INTERPRETATIONS.
11.1 Notwithstanding anything to the contrary in the Master
Agreement, the following terms shall have the following
meanings for purposes of this Amendment.
"Collateral" shall have the meaning specified in the
Master Agreement, except that, if any new or different
security shall be exchanged for any Collateral by
recapitalization, merger, consolidation or other
corporate action, such new or different security shall,
effective upon such exchange, be deemed to become
Collateral in substitution for the former Collateral for
which such exchange is made.
"Customer" shall mean any person that is a customer of
Borrower under Rule 15c3-3 under the Exchange Act or any
comparable regulation of the Secretary of the Treasury
under Section 15C of the Exchange Act (to the extent
that Borrower is subject to such rule or comparable
regulation).
"Equity Security" shall mean any security other than a
"non-equity security", as defined in Regulation T.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Government Securities" shall mean "government
securities" as defined in Section 3(a) (42) (A) - (C) of
the Exchange Act.
"Plan" shall mean (i) any "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974 which is subject to Part 4
of Subtitle B of Title I of such Act; (ii) any "plan" as
defined in Section 4975(e)(1) of the Internal Revenue
Code of 1986; or (iii) any entity the assets of which
are deemed to be assets of any such "employee benefit
plan" or "plan" by reason of the Department of Labor's
plan asset regulation, 29 C.F.R. Section 2510.3-101.
"Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System, as in effect
from time to time.
11.2 Any agreement between the parties pursuant to Section 1 or
Section 2.1 shall be made (i) in writing, (ii) orally, if
confirmed promptly in writing or through any system that
compares
Loans and in which Borrower and Lender are participants, or
(iii) in such other manner as may be agreed by the parties in
writing.
This Amendment shall be effective as of the date hereof;
provided, however, that this Amendment shall not affect
the terms of any Loan entered into prior to the date
hereof.
Except as otherwise provided herein, the Master Agreement shall remain
unmodified and in full force and effect.
CITIGROUP GLOBAL MARKETS INC.
By: By:
Title: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Managing Director Title:
Date: Date:
Schedule A
Names and Addresses for Communications
CITIGROUP GLOBAL MARKETS INC.
Equity Stock Loan - 5th Floor
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
