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Exhibit (8)(a)(iii)
SECURITIES LENDING AND REVERSE REPURCHASE AGREEMENT SERVICES
CLIENT ADDENDUM
(CUSTODIAN AGREEMENT: OCTOBER 18, 1991)
THIS AGREEMENT for securities lending and/or reverse repurchase agreement
services is made, effective as of June 8, 1995, by and between THE
PARKSTONE GROUP OF FUNDS ("Principal") and THE BANK OF CALIFORNIA, NATIONAL
ASSOCIATION ("Bank"). This Agreement is an addendum to the Custody Agreement
by and between Principal and Bank dated as of October 18, 1991 ("Custodian
Agreement"). This Addendum supersedes the Addendum to the Custodian Agreement
dated by the parties on October 7, 1991 and September 30, 1991 addressing
securities lending activities.
Principal and Bank agree as follows:
I. APPOINTMENT OF BANK; ELIGIBLE COUNTERPARTIES
1. APPOINTMENT OF BANK AS AGENT. Principal hereby authorizes Bank to act as
agent for Principal in securities lending and reverse repurchase agreement
transactions with respect to securities deposited with or held by Bank
pursuant to the Custodian Agreement. Bank's duties and responsibilities
shall be only those set forth in this Agreement and the Custodian Agreement,
or as otherwise agreed to by Bank in writing. Further, Principal authorizes
Bank to delegate Bank's duties as agent hereunder to a sub-agent(s).
2. ELIGIBLE BORROWERS/BUYERS. Bank may lend securities only to such securities
brokers and dealers or other person or entities as are listed in the
attached Exhibit A, as amended from time to time ("Borrowers"), unless and
until otherwise instructed in writing by Principal. Bank may engage in
reverse repurchase agreement transactions on Principal's behalf with only
those brokers and dealers or other person or entities as are listed on the
attached Exhibit A, as amended from time to time ("Buyers"), unless and
until otherwise instructed in writing by Principal. All securities lending
transactions and reverse repurchase agreement transactions entered into by
Bank hereunder shall be entered into pursuant to related agreements between
the Borrowers or Buyers, as the case may be, and Bank on behalf of
Principal. Principal's execution of Exhibits A, B, and C or any amendment
to Exhibits A, B, or C shall constitute Principal's representation and
agreement that it has received, read, and understood the terms of each such
agreement in respect of each Borrower or Buyer, as the case may be, listed
thereon. Principal hereby (i) represents and warrants to Bank (which
representations shall be deemed repeated at and as of all times when this
Addendum is in effect) that Principal has the power and authority, and has
taken all necessary action, to enter into this Addendum and each such
agreement, and to perform the obligations of a lender or seller, as the case
may be, under such transactions, and to authorize Bank to execute and
deliver each such agreement on Principal's behalf and to enter into such
transactions and to perform the obligations of a lender or seller, as the
case may be, under such transactions on behalf of Principal, and (ii)
authorizes Bank to execute and deliver each such agreement on Principal's
behalf and to enter into any transaction of a nature contemplated by any
such agreement on behalf of Principal and to perform the obligations of a
lender or seller, as the case may be, under such transactions on behalf of
Principal and (iii) has furnished
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or will furnish Bank with evidence satisfactory to Bank that Principal has
all necessary authority to enter into this Addendum and each of the
transactions contemplated hereby.
Bank shall have full unlimited power and authority to perform and each and
every act or thing it may in its discretion deem necessary or appropriate in
respect of any Securities Lending Agreement or Reverse Repurchase Agreement
or any securities loan or any reverse repurchase agreement transaction. Bank
shall be fully protected in engaging in repurchase agreement and securities
lending transactions on behalf of Principal, with respect to any or all
securities deposited with or held by Bank with any one or more of such
brokers or dealers or other person or entities until otherwise instructed in
writing by Principal.
II. SECURITIES LENDING TRANSACTIONS
1. LOANS: SECURITIES LOAN AGREEMENT. Principal hereby authorizes Bank, as
agent for Principal, to lend, from time to time in its discretion,
securities of Principal at any time on deposit with or held by Bank.
Principal acknowledges and agrees that any securities lending agreement
(each, a "Securities Lending Agreement") may take the form of a master
agreement covering a series of securities loan transactions between a
borrower and Bank as lender on behalf of Principal and other accounts
administered through Bank's Trust Department. There can be no assurance
that the activities of any such other account pursuant to any such
agreement, or by Bank in respect of any such other account, will not have
an adverse effect on Principal or on the rights of Principal in respect of
any securities loan.
Bank shall not in any event be liable to Principal or anyone else in
respect of any delay or failure of any other person (including Borrower or
any other lender) to comply with the provisions of the Securities Lending
Agreement unless such failure is the result of circumstances reasonably
likely to result in such failure and which were known to Bank at the time
at which the loan was made.
2. MARKING TO MARKET. Banks responsibilities in this regard shall be to
monitor the need for additional Collateral, and to use all reasonable
efforts to demand additional Collateral (as defined in the Securities
Lending Agreement) in accordance with the terms of the Securities Lending
Agreement in the event additional Collateral is required under the terms
of such Securities Lending Agreement, and to notify Principal in the event
a Borrower has refused to provide such additional Collateral in accordance
with the Securities Lending Agreement.
3. COLLATERAL. Collateral received by Bank in connection with a loan of
securities hereunder shall be held separate and apart from Bank's own
funds and securities. The amount of Collateral (as such term is defined
in the Securities Lending Agreements) transferred to Bank by any Borrower
at any time may be an amount calculated to meet the obligations of such
Borrower in respect of any or all loans to Borrower by Principal and any
one or more other clients of Bank, whether entered into pursuant to the
same loan or Securities Lending agreement or more
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than one such loan or agreement, and may be an amount calculated net of
amounts of Collateral required at the time to be delivered by Principal and
any one or more such other client to such Borrower pursuant to any such
Securities Lending Agreements. In addition, the amount of Collateral
transferred by Bank to any Borrower at any time may be an amount calculated
to meet the obligations of Principal and any one or more other clients of
Bank to such Borrower in respect of any or all loans to Borrower, whether
entered into pursuant to the same Securities Lending Agreement or more than
one such agreement, and may be an amount calculated net of amounts of
Collateral required at the time to be delivered by such Borrower to
Principal or one or more such other clients pursuant to any such Securities
Lending Agreements. Bank shall in good faith allocate or reallocate
(including without limitation in respect of any return of Collateral to any
Borrower) any Collateral held by it or received by it from any Borrower
among Principal and Bank's clients and in respect of any or all of such
loans in such manner and on such base as Bank in its discretion and from
time to time determine, and shall be fully protected in doing so. As a
result of the foregoing, the nature or amount of Collateral credited to the
account of Principal in respect of any Borrower or any securities loan or
loans will vary and may be different from or less than the nature or amount
of Collateral which might have been held by it or credited to its account
if it had entered into such loan or loans directly with such Borrower or if
Bank had entered into such loan or loans with such Borrower as agent solely
for Principal, provided that in no event shall any allocation be permitted
to give rise to the Market Value (as defined in the Securities Lending
Agreement) of the Collateral being less than 100% of the Market Value of
the loaned securities on any particular loan.
Bank may, in its discretion, invest and reinvest any Cash Collateral for
the benefit and at the risk of Principal in investments specified in
Exhibit D as it may be amended from time to time, including, without
limitation, The HighMark Group of Funds or which Bank provides investment
advice, custody and other administrative services. Principal acknowledge
that Bank shall receive fees from The HighMark Group of Funds ln addition
to the fees earned under this Agreement. Bank may invest any or all of
such Cash Collateral in any one or more of such investments, including any
such HighMark Funds, on any basis Bank determines appropriate. Bank shall
be entitled to pay or retain from any amounts held by Bank on Principal's
account from time to time in respect of any securities loan (i) all Cash
Collateral Fees and other sums required to be paid in accordance with the
Securities Lending Agreement, and (ii) Bank's compensation or other amounts
incurred by it or owed to it in respect of its services in lending
securities hereunder.
4. DISTRIBUTION ON LOANED SECURITIES. Bank shall pay to or for the account of
Principal, in accordance with Principal's instructions, any amounts it
receives from a Borrower which represent interest, dividends, and other
distributions made with respect to any Loaned Securities (as defined in the
Securities Lending Agreement) and which are credited by Bank to Principal's
account.
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5. TERM OF LOANS; TERMINATION OF LOANS; DEFAULT. Bank shall have full
discretion to determine the term of any securities lending transaction
entered into by Bank on Principal's behalf hereunder subject to any
guidelines provided to it in writing by the Principal, and shall in no
event incur any liability for entering into any such transaction on behalf
of Principal for a term equal to the maximum available (or permitted
pursuant to such guidelines), regardless of any change in market
conditions or in the financial condition of the Borrower or any other
person. Bank may in its discretion terminate any loan of securities
pursuant to the provisions of the Securities Lending Agreement based on
such factors as it in its discretion deems relevant, but shall in no event
have any liability for its failure to take steps to terminate any
transaction on any date or at any time unless instructed by Principal.
Bank shall in no event have any responsibility for taking steps to
terminate any securities lending transaction before its maturity (unless
instructed to do so by Principal), regardless of any change in market
conditions or in the financial condition of the Borrower or any other
person. In the event Bank receives actual notice of an Event of Default
by a Borrower under the Securities Lending Agreement, it shall notify
Principal thereof as soon as reasonably practicable and may in its
discretion (but shall in no event be obligated to) exercise any rights or
remedies given the Lender under the Securities Lending Agreement until
instructed by Principal otherwise, provided that Bank shall in no event
incur any liability for its exercise or its failure to exercise any such
rights or remedies under any circumstances.
6. TERMINATION OF LENDING AUTHORITY. Principal may terminate Bank's
authority to lend securities by fifteen (15) days' written notice to Bank
and may direct Bank to terminate any outstanding securities loans, which
Bank shall do in accordance with provisions of the Securities Lending
Agreement. In the event Principal terminates Bank's authority to lend
securities hereunder, the provisions of this Agreement relating to
securities loans, including provisions relating to Bank's compensation,
shall remain in effect with respect to all securities loans outstanding on
the effective date of termination, until termination thereof in accordance
with the Securities Lending Agreement.
III. REVERSE REPURCHASE AGREEMENT TRANSACTIONS
1. REVERSE REPURCHASE AGREEMENT TRANSACTIONS; REVERSE REPURCHASE AGREEMENTS.
Principal hereby authorizes Bank, as agent for Principal, to engage from
time to time, in its discretion, in reverse repurchase agreement
transactions with Buyers with respect to securities of Principal at
anytime on deposit with or held by Bank. Principal acknowledges and
agrees that any reverse repurchase agreement (each a "Master Repurchase
Agreement") may take the form of a master agreement covering a series of
reverse repurchase agreement transactions between a Buyer and Bank as
seller on behalf of Principal and other accounts administered through
Bank's Trust Department. There can be no assurance that the activities of
any other such account pursuant to any such agreement, or by Bank in
respect of any such other account, will not have an adverse effect on
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Principal or on the rights of Principal with respect to any such reverse
repurchase agreement transaction.
Bank shall not in any event be liable to Principal or anyone else in
respect of any delay or failure of any other person (including any Buyer or
any other seller) to comply with the provisions of the Master Repurchase
Agreement unless such failure is the result of circumstances reasonably
likely to result in such failure and which were known to Bank at the time
at which the repurchase agreement transaction was entered into.
2. MARKING TO MARKET. Bank's responsibilities in this regard shall be to
monitor the need for margin maintenance under the Master Repurchase
Agreement, and to use all reasonable efforts to require margin maintenance
in accordance with the terms of the Master Repurchase Agreement in the
event such margin maintenance is required under the terms of the Master
Repurchase Agreement, and to notify Principal in the event a Buyer has
refused to provide such margin maintenance in accordance with the Master
Repurchase Agreement.
3. INVESTMENT OF CASH. Cash received by Bank in connection with reverse
repurchase agreement transactions shall be held separate and apart from
Bank's own funds and securities.
The amount of the Purchase Price or any amount with respect to a Margin
Excess (as such terms are defined in the Master Repurchase Agreements)
transferred to Bank by any Buyer at any time may be an amount calculated to
meet the obligations of such Buyer in respect of any or all sales to Buyer
by Principal and any one or more other clients of Bank, whether entered
into pursuant to the same reverse repurchase agreement transaction or
Master Repurchase agreement, and may be an amount calculated net of amounts
of the Repurchase Price (as such term is defined in the Master Repurchase
Agreements) required at the time to be delivered by Principal and any one
or more such other clients to such Buyer pursuant to any such Master
Repurchase Agreements. In addition, the amount of the Repurchase Price or
any amount with respect to a Margin Deficit (as such term is defined in the
Master Repurchase Agreement) transferred by Bank to any Buyer at any time
may be an amount calculated to meet the obligations of Principal and any
one or more other clients of Bank to such Buyer in respect of any or all
sales to such Buyer, whether entered into pursuant to the same Master
Repurchase Agreement or more than one such agreement, and may be an amount
calculated net of amounts of the Purchase Price required at the time to be
delivered by such Buyer to Principal or one or more such other clients
pursuant to any such Master Repurchase Agreements. Bank shall in good
faith allocate or reallocate (including without limitation in respect of
any payment of any Repurchase Price to any Buyer) any Purchase Price and
any amount with respect to a Margin Excess held by it or received by it
from any Buyer among Principal and Bank's clients and in respect of any or
all of such reverse repurchase agreement transactions in such manner and on
such bases as Bank in its discretion may from time to time determine, and
shall be fully protected in doing so. As
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a result of the foregoing, the nature or amount of the Purchase Price and
any amount with respect to a Margin Excess credited to the account of
Principal in respect of any Buyer or any reverse repurchase agreement
transaction or transactions will vary and may be different from or less
than the nature or amount of the Purchase Price and any amount with respect
to a Margin Excess which might have been held by it or credited to its
account if it had entered into such reverse repurchase transaction or
transactions directly with such Buyer or if Bank had entered into such loan
or loans with Buyer as agent solely for Principal in no event, however,
shall any allocation and reallocation be permitted to give rise to the
Margin Amount (as defined in the Master Repurchase Agreement) being less
than 100% of the Market Value of the Purchased Securities (as defined in
the Master Repurchase Agreement) on any particular Repurchase Agreement
transaction.
Bank may in its discretion invest and reinvest cash received by Bank on
behalf of Principal in connection with reverse repurchase agreement
transactions in investments specified in Exhibit D, as it may be amended
from time to time, including without limitation in any way, The HighMark
Group of Funds for which Bank provides investment advice, custody and other
administrative services. Principal acknowledges that Bank shall receive
fees from The HighMark Group of Funds in addition to the fees earned under
this Agreement. Bank may invest any or all of such cash in any one or more
of such investments, including such HighMark Funds, on any basis Bank
determines appropriate. Bank shall be entitled to pay or retain from any
amounts held by Bank for Principal's account from time to time in respect
of any reverse repurchase agreement transaction (i) the Repurchase Price,
any amount necessary to correct a Margin Deficit, and other sums required
to be paid in accordance with the Master Repurchase Agreement, and (ii)
Bank's compensation and other amounts incurred by it or owed to it in
respect of services with respect to reverse repurchase agreement
transactions hereunder.
4. DISTRIBUTIONS ON SECURITIES SUBJECT TO REVERSE REPURCHASE AGREEMENTS.
Bank shall pay to or for the account of Principal, in accordance with
Principal's instructions, any amounts received from a Buyer or its agent
which represent interest, dividends or other distributions on Purchased
Securities (as such term is defined in the Master Repurchase Agreement)
and which are credited by Bank to Principal's account.
5. TERM OF REVERSE REPURCHASE AGREEMENT TRANSACTIONS; TERMINATION OF REVERSE
REPURCHASE AGREEMENT TRANSACTIONS: DEFAULT. Bank shall have full
discretion to determine the term of any reverse repurchase agreement
transaction entered into by Bank on Principal's behalf hereunder subject
to any guidelines provided to it in writing by Principal, and shall in no
event incur any liability for entering into any such reverse repurchase
agreement transaction on behalf of Principal for a term equal to the
maximum available (or permitted pursuant to such guidelines), regardless
of any change in market conditions or in the financial condition of the
Buyer or any other person. Bank may in its discretion terminate
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any reverse repurchase agreement transaction pursuant to the provisions of
the Master Repurchase Agreement based on such factors as it in its
discretion deems relevant, but shall in no event have any liability for its
failure to terminate any transaction on any date or at any time unless
instructed by Principal. Bank shall in no event have any responsibility
for taking steps to terminate any reverse repurchase agreement transaction
before its maturity (unless instructed to do so by Principal), regardless
of any change in market conditions or in the financial condition of the
Buyer or any other person. In the event Bank receives actual notice of an
vent of Default by a Buyer under the Master Repurchase Agreement, it shall
notify Principal thereof as soon as reasonably practicable and may in its
discretion (but shall in no event be obligated to) exercise any rights or
remedies given the Seller under the Master Repurchase Agreement until
instructed by Principal otherwise, provided that Bank shall in no event
incur any liability for its failure to exercise any such rights or remedies
under any circumstances.
6. TERMINATION OF AUTHORITY TO ENTER INTO REVERSE REPURCHASE AGREEMENTS.
Principal may terminate Bank's authority to enter into reverse repurchase
agreement transactions by fifteen (15) days' written notice to Bank and
may direct Bank to terminate any outstanding reverse repurchase agreement
transaction, which Bank shall do in accordance with provisions of the
Master Repurchase Agreement. In the event Principal terminates Bank's
authority to enter into reverse repurchase agreement transactions
hereunder, the provisions of this Agreement relating to reverse repurchase
agreements, including, provisions relating to Bank's compensation, shall
remain in effect with respect to all reverse repurchase agreement
transactions outstanding on the effective date of termination, until
termination thereof in accordance with the Master Repurchase Agreement.
IV. GENERAL
1. PRINCIPAL'S REPRESENTATIONS AND WARRANTIES. In addition to any other
representation and warranty of Principal hereunder, Principal represents
and warrants (which representations shall be deemed repeated at and as of
all times when this Addendum is in effect) that:
(a) Lending Principal's securities and/or entering into reverse
repurchase agreement transactions as provided in this Agreement, and
the appointment of Bank as Principal's agent as contemplated hereby,
will not violate any law, regulation, charter, by-law, or other
restriction applicable to Principal.
(b) Principal will not sell any securities subject to this Agreement
unless and until Principal shall have first obtained confirmation from
Bank that the securities Principal intends to sell are not subject to
an outstanding loan or reverse repurchase agreement transaction.
Principal will notify Bank in writing, or cause written notice to be
given to Bank, that Principal intends to sell securities which are
subject to this Agreement, such notice
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to be provided on or before the second Business Day immediately prior
to the trade date on which Principal intends to sell such securities.
(c) Principal acknowledges and agrees that there can be no assurance,
during the term of any securities loan or reverse repurchase agreement
transaction, that (notwithstanding any provision of any Securities
Lending Agreement or Master Repurchase Agreement) Principal will be
able to participate in, or the full benefit of, any corporate action,
dividend or principal payment, or any other right or privilege
accruing in respect of any securities subject to any such Agreement.
Without limiting the generality of the foregoing, Principal hereby
waives the right to vote or to provide any consent or to take any
similar action with respect to any securities loaned or which are
subject to any reverse repurchase agreement transaction during the
term of such loan, and/or reverse repurchase agreement transaction.
By its signature hereunder, Principal acknowledges that it has been apprised
of the fact that:
NOTWITHSTANDING ANY OTHER PROVISION TO THE CONTRARY, IN THE EVENT OF
THE DEFAULT OF A BORROWER AND/OR BUYER, THE PROVISIONS OF THE
SECURITIES INVESTOR PROTECTION ACT OF 1970 MAY NOT PROTECT PRINCIPAL'S
ACCOUNT WITH RESPECT TO SECURITIES LOAN OR REVERSE REPURCHASE AGREEMENT
TRANSACTIONS AND IN SUCH EVENT, THE COLLATERAL DELIVERED TO LENDER IN
CONNECTION WITH SUCH LOANS AND REVERSE REPURCHASE AGREEMENTS MAY BE THE
ONLY SOURCE OF SATISFACTION OF THE BORROWER'S OR BUYER'S OBLIGATIONS IN
THE EVENT THE BORROWER/BUYER FAILS TO RETURN THE LOANED SECURITIES AND
OR SECURITIES SUBJECT TO REVERSE REPURCHASE AGREEMENTS.
2. INSTRUCTIONS OF PRINCIPAL. All instructions of Principal to Bank shall be
provided as set forth in the Custodian Agreement.
Bank shall be entitled to accept and rely on any written instruction Bank
reasonably believes to have been authorized by Principal. Bank shall have
no obligation to act in the absence of instructions. If at anytime the
circumstances require immediate action and Bank endeavors to obtain
instructions from Principal, but is unable to so obtain them, Bank may act
and is fully protected in acting in such manner as it considers appropriate
hereunder.
3. REPORTS. Bank shall provide Principal with periodic reports at such
intervals as Principal and Bank should agree, reflecting a schedule of
property, statement of transactions recording principal and income receipts
and disbursements,
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outstanding loans and reverse repurchase agreements transactions, income,
and schedule of property detailing investments made hereunder.
4. DUTIES OF BANK. Bank's duties and responsibilities shall be only those
expressly set forth in this Agreement, or as otherwise agreed by Bank in
writing. Bank shall not be liable for acting or failing to act in
accordance with the instructions of Principal under this Agreement or
otherwise in accordance with this Agreement or within the scope of its
actual or apparent authority. Bank shall not be required to appear in or
defend any legal proceedings with respect to the property subject to this
Agreement unless Bank has been indemnified to its satisfaction against
loss and expense (including reasonable attorneys' fees). Bank may consult
with counsel acceptable to it concerning its duties and responsibilities
under this Agreement, and shall not be liable for any action taken or not
taken on the advice of such counsel.
Principal acknowledges that Bank and its agents, if any, act as agent for
other repurchase agreement and securities lending clients and accordingly,
that other clients' securities may be used prior to Principal's. Principal
agrees that each of Bank and any such agent has full discretion to allocate
the use of Principal's securities as it deems appropriate, and that Bank
may make available securities lending and/or reverse repurchase agreement
opportunities to clients other than Principal for any reason, and that Bank
will have no obligation to make any securities lending and/or reverse
repurchase agreement opportunities available to Principal.
5. EXPENSES: COMPENSATION OF BANK. Principal shall be responsible for
payment of all expenses and charges incurred in connection with the
administration of this Agreement, including Bank's compensation for its
services hereunder as determined in accordance with the attached Exhibit
E, and Bank may in its discretion charge the assets subject to this
Agreement therefor.
6. INDEMNIFICATION. Principal shall indemnify, keep indemnified, defend and
hold harmless the Bank and any of its directors, officers, employees or
agents against any cost, expense, damage, loss or liability whatsoever
(including without limitation attorneys' fees and expenses) which may be
suffered or incurred by any of them directly or indirectly as a result of,
or in connection with, or arising out of, this Agreement or any loan of
securities or reverse repurchase agreement transaction involving
Principal's securities provided, however, that Principal shall not
indemnify the Bank for any cost, expense, damage, loss or liability
whatsoever which is attributable to the negligence or intentional
misconduct of the Bank or any of its directors, officers, employees or
agents. This provision shall survive any termination of this Agreement
and shall be binding on Principal's successors and assigns.
7. TAX CONSEQUENCES. Bank makes no representations regarding tax treatment
by federal, state, or local authorities of the lending or placing in
reverse repurchase agreements of securities under this Agreement, the
receipt of any income or profit
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inuring to Principal as the result of receipt of any loan premium,
dividends, interest, distributions or other amounts on securities loaned
and/or the subject of reverse repurchase agreements hereunder, or the
investment by Bank of any Collateral received in connection with such
loans or cash received in connection with such reverse repurchase
agreements (including without limitation the characterization for tax
purposes of any such amount as taxable income.
8. FINANCIAL CONDITION. Upon reasonable request by Bank, and at least
annually, Principal shall provide Bank with its most recent available
audited statement of its financial condition, and its most recent
unaudited statement of its financial condition if more recent than the
audited statement. Principal represents and warrants that to the best of
its knowledge and belief such statement(s) fairly represent its financial
condition and net capital as of the dates of such statements and have been
prepared in accordance with generally accepted accounting principles of
the jurisdiction in which Principal is organized or located, as the case
may be. Principal acknowledges and agrees that Bank may provide Borrowers
and Buyers with copies of such financial statements and that Principal
will cooperate with Bank in providing such other financial information to
Borrowers and Buyers as such Borrowers and Buyers may reasonably request.
9. OTHER BORROWER RELATIONSHIPS. Principal acknowledges and agrees that Bank
may, through its commercial, trust or other departments, be a creditor for
its own account or represent in a fiduciary capacity other
Borrowers/Buyers (or its or their affiliates, creditors or customers) to
which securities are loaned or sold under this Agreement, even though any
of such relationships may potentially be in conflict with those of
Principal.
10. TERMINATION. This Agreement may be terminated at any time by either
party upon fifteen (15) days' written notice to the other. In the event
of termination, Bank shall deliver to Principal all funds, securities,
and other property held by it under this Agreement for the account of
Principal or to such other person or persons as Principal shall
designate in writing on Exhibit F or shall continue to hold such
property pursuant to the Custodian Agreement; provided however, that
this Agreement shall remain in effect with respect to all securities
loan transactions or reverse repurchase agreement transactions
outstanding on the effective date of termination, until consummation or
completion thereof.
11. AMENDMENTS. This Agreement may be amended only in writing executed by
both parties. Amendments to any Exhibit or Attachment hereto shall be
effective only if executed by all the parties required to execute the
initial Attachment/Exhibit, and then, only after received by Bank and
Principal by the party to whom notices are to be sent hereunder.
12. NOTICES. All notices hereunder shall be given and deemed received as
set forth in the Custodian Agreement.
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13. GOVERNING LAW. The validity, construction, and administration of this
Agreement shall be governed by the laws of the State of California from
time to time in force and effect.
Dated: June 8, 1995
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The Parkstone Group of Funds ("PRINCIPAL")
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Dated: June 8, 1995
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The Bank of California, National Association ("BANK")
By: /s/ ▇▇▇▇▇ ▇. KAUNER
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By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
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EXHIBIT "A"
BORROWERS/BUYERS
FOR
SECURITIES LENDING/REVERSE REPURCHASE AGREEMENT TRANSACTIONS
Bank of America NT & SA
Barclays De Zoete Wedd Securities, Inc.
Bear ▇▇▇▇▇▇▇ & Co. Inc.
BT Securities Corporation
HSBC Securities
Chase Securities, Inc.
Chemical Securities Inc.
Citicorp Securities
Daiwa Securities America, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc.
Deutche Bank Securities Corporation
▇▇▇▇▇▇ Read & Company, Inc.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corp.
Eastbridge Capital Inc.
First Boston Corporation
First Chicago Capital Markets
Fuji Securities, Inc.
▇▇▇▇▇▇▇ Sachs & Company
Greenwich Capital Markets, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Securities, Inc.
▇▇▇▇▇▇ GSI
▇▇▇▇▇▇▇ ▇▇▇▇▇ GSI
▇▇▇▇▇▇ (J.P.) Securities, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Company, Inc.
NationsBanc Capital Markets, Inc.
The Nikko Securities International, Inc.
Nomura-BGK Securities, ▇.▇.
▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
Prudential Securities, Inc.
Salomon Brothers
SBC Government Securities
▇▇ ▇▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ Shearson Inc.
Union Bank of Switzerland
Yamaichi International (America), Inc.
Dated: June 8, 1995
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The Parkstone Group of Funds ("PRINCIPAL")
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Dated: June 8, 1995
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The Bank of California, National Association ("BANK")
By: /s/ ▇▇▇▇▇ ▇. KAUNER
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By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
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EXHIBIT B
SECURITIES LENDING AGREEMENT
Following under separate cover.
All executed borrower agreements to date.
Please sign when received.
Dated: June 8, 1995
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The Parkstone Group of Funds ("PRINCIPAL")
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Dated: June 8, 1995
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The Bank of California, National Association ("BANK")
By: /s/ ▇▇▇▇▇ ▇. KAUNER
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By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
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EXHIBIT C
PUBLIC SECURITIES ASSOCIATION PROTOTYPE
MASTER REPURCHASE AGREEMENT
Attached.
Dated: June 8, 1995
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The Parkstone Group of Funds ("PRINCIPAL")
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Dated: June 8, 1995
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The Bank of California, National Association ("BANK")
By: /s/ ▇▇▇▇▇ ▇. KAUNER
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By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
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Public Securities Association [LOGO]
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT C
MASTER REPURCHASE AGREEMENT
Dated as of ________________________
Between:
_____________________________________
and
_____________________________________
1. APPLICABILITY
From time to time the parties hereto may enter into transactions in which one
party ("Seller") agrees to transfer to the other ("Buyer") securities or
financial instruments ("Securities") against the transfer of funds by Buyer,
with a simultaneous agreement by Buyer to transfer to Seller such Securities at
a date certain or on demand, against the transfer of funds by Seller of each
such transaction shall be referred to herein as a Transaction and shall be
governed by this Agreement, including any supplemental terms or conditions
contained in Annex I hereto, unless otherwise agreed in writing.
2. DEFINITIONS
(a) "Act of Insolvency" with respect to any party, (i) the commencement by
such party as debtor of any case or proceeding under any bankruptcy,
insolvency, reorganization, liquidation, dissolution or similar law, or such
party seeking the appointment of a receiver, trustee, custodian or similar
official for such party or any substantial part of its property, or (ii) the
commencement of any such case or proceeding against such party, or another
seeking such an appointment, or the filing against a party of an application
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) the
making by a party of a general assignment for the benefit of Creditors, or (iv)
the admission in writing by a party of such party's inability to pay such
party's debts as they become due;
(b) Additional Purchased Securities' Securities provided by Seller to Buyer
pursuant to Paragraph 4(a) hereof;
16
(c) "Buyer's Margin Amount," with respect to any Transaction as of any date,
the amount obtained by application of a percentage (which may be equal to the
percentage that is agreed to as the Seller's Margin Amount under subparagraph
(q) of this Paragraph), agreed to by Buyer and Seller prior to entering into
the Transaction, to the Repurchase Price for such Transaction as of such date;
(d) "Confirmation" the meaning specified in Paragraph 3(b) hereof;
(e) "Income" with respect to any Security at any time, any principal thereof
then payable and all interest, dividends or other distributions thereon;
(f) "Margin Deficit- the meaning specified in Paragraph 4(a) hereof;
(g) "Margin Excess' the meaning specified in Paragraph 4(b) hereof;
(h) "Market Value" with respect to any Securities as of any date, the price
for such Securities on such date obtained from a generally recognized source
agreed to by the parties or the most recent closing bid quotation from such a
source, plus accrued Income to the extent not included therein (other than any
Income credited or transferred to, or applied to the obligations of, Seller
pursuant to Paragraph 5 hereof) as of such date (unless contrary to market
practice for such Securities);
(i) "Price Differential," with respect to any Transaction hereunder as of
any date, the aggregate amount obtained by daily application of the Pricing
Rate for such Transaction to the Purchase Price for such Transaction on a 360
day per year basis for the actual number of days during the period commencing
on (and including) the Purchase Date for such Transaction and ending on (but
excluding) the date of determination (reduced by any amount of such Price
Differential previously paid by Seller to Buyer with respect to such
Transaction);
(j) "Pricing Rate," the per annum percentage rate for determination of the
Price Differential;
(k) "Prime Rate," the prime rate of U.S. money center commercial banks as
published in The Wall Street Journal;
(l) "Purchase Date," the date on which Purchased Securities are transferred
by Seller to Buyer;
(m) "Purchase Price," (i) on the Purchase Date, the price at which Purchased
Securities are transferred by Seller to Buyer, and (ii) thereafter, such price
increased by the amount of any cash transferred by Buyer to Seller pursuant to
Paragraph 4(b) hereof and decreased by the amount of any cash transferred by
Seller to Buyer pursuant to Paragraph 4(a) hereof or applied to reduce Seller's
obligations under clause (ii) of Paragraph 5 hereof;
(n) "Purchased Securities," the Securities transferred by Seller to Buyer in
a Transaction hereunder, and any Securities substituted therefor in accordance
with Paragraph 9 hereof. The term "Purchased Securities" with respect to any
Transaction at any time also shall
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include Additional Purchased Securities delivered pursuant to Paragraph 4(a)
and shall exclude Securities returned pursuant to Paragraph 4(b);
(o) "Repurchase Date," the date on which Seller is to repurchase the
Purchased Securities from Buyer, including any date determined by application
of the provisions of Paragraphs 3(c) or 11 hereof;
(p) "Repurchase Price," the price at which Purchased Securities are to be
transferred from Buyer to Seller upon termination of a Transaction, which will
be determined in each case (including Transactions terminable upon demand) as
the sum of the Purchase Price and the Price Differential as of the date of such
determination, increased by any amount determined by the application of the
provisions of Paragraph 11 hereof;
(q) "Seller's Margin Amount," with respect to any Transaction as of any
date, the amount obtained by application of a percentage (which may be equal to
the percentage that is agreed to as the Buyer's Margin Amount under
subparagraph (c) of this Paragraph), agreed to by Buyer and Seller prior to
entering into the Transaction, to the Repurchase Price for such Transaction as
of such date.
3. INITIATION; CONFIRMATION; TERMINATION
(a) An agreement to enter into a Transaction may be made orally or in
writing at the initiation of either Buyer or Seller On the Purchase Date for
the Transaction, the Purchased Securities shall be transferred to Buyer or its
agent against the transfer of the Purchase Price to an account of Seller.
(b) Upon agreeing to enter into a Transaction hereunder, Buyer or Seller (or
both), as shall be agreed, shall promptly deliver to the other party a written
confirmation of each Transaction (a "Confirmation"). The Confirmation shall
describe the Purchased Securities (including CUSIP number, if any), identify
Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase Price,
(iii) the Repurchase Date, unless the Transaction is to be terminable on
demand, (iv) the Pricing Rate or Repurchase Price applicable to the
Transaction, and (v) any additional terms or conditions of the Transaction not
inconsistent with this Agreement. The Confirmation, together with this
Agreement, shall constitute conclusive evidence of the terms agreed between
Buyer and Seller with respect to the Transaction to which the Confirmation
relates, unless with respect to the Confirmation specific objection is made
promptly after receipt thereof. In the event of any conflict between the terms
of such Confirmation and this Agreement, this Agreement shall prevail.
(c) In the case of Transactions terminable upon demand, such demand shall be
made by Buyer or Seller, no later than such time as is customary in accordance
with market practice, by telephone or otherwise on or prior to the business day
on which such termination will be effective. On the date specified in such
demand, or on the date fixed for termination in the case of Transactions having
a fixed term, termination of the Transaction will be effected by transfer to
Seller or its agent of the Purchased Securities and any Income in rest thereof
received by Buyer (and not previously credited or transferred to, or applied to
the obligations of, Seller
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pursuant to Paragraph 5 hereof) against the transfer of the Repurchase Price to
an account of Buyer.
4. MARGIN MAINTENANCE
(a) If at any time the aggregate Market Value of all Purchased Securities
subject to all Transactions in which a particular party hereto is acting as
Buyer is less than the aggregate Buyer's Margin amount for all such
Transactions (a "Margin Deficit"), then Buyer may by notice to Seller require
Seller in such Transactions, at Seller's option, to transfer to Buyer cash or
additional Securities reasonably acceptable to Buyer ("Additional Purchased
Securities"), so that the cash and aggregate Market Value of the Purchased
Securities, including any such Additional Purchased Securities, will thereupon
equal or exceed such aggregate Buyer's Margin Amount (decreased by the amount
of any Margin Deficit as of such date arising from any Transactions in which
such Buyer is acting as Seller).
(b) If at any time the aggregate Market Value of all Purchased Securities
subject to all Transactions in which a particular party hereto is acting as
Seller exceeds the aggregate Seller's Margin Amount for all such Transactions
at such time (a "Margin Excess"), then Seller may by notice to Buyer require
Buyer in such Transactions at Buyer's option, to transfer cash or Purchased
Securities to Seller, so that the aggregate Market Value of the Purchased
Securities, after deduction of any such cash or any Purchased Securities so
transferred, will thereupon not exceed such aggregate Seller's Margin Amount
(increased by the amount of any Margin Excess as of such date arising from any
Transactions in which such Seller is acting as Buyer).
(c) Any cash transferred pursuant to this Paragraph shall be attributed to
such Transactions as shall be agreed upon by Buyer and Seller.
(d) Seller and Buyer may agree, with respect to any or all Transactions
hereunder, that the respective rights of Buyer or Seller (or both) under
subparagraphs (a) and (b) of this Paragraph may be exercised only where a
Margin Deficit or Margin Excess exceeds a specified dollar amount or a
specified percentage of the Repurchase Prices for such Transactions (which
amount or percentage shall be agreed to by Buyer and Seller prior to entering
into any such Transactions).
(e) Seller and Buyer may agree, with respect to any or all Transactions
hereunder, that the respective rights of Buyer and Seller under subparagraphs
(a) and (b) of this Paragraph to require the elimination of a Margin Deficit or
a Margin Excess, as the case may be, may be exercised whenever such a Margin
Deficit or Margin Excess exists with respect to any single Transaction
hereunder (calculated without regard to any other Transaction outstanding under
this Agreement).
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5. INCOME PAYMENTS
Where a particular Transaction's term extends over an Income payment date on
the Securities subject to that Transaction, Buyer shall, as the parties may
agree with respect to such Transaction (or, in the absence of any agreement, as
Buyer shall reasonably determine in its discretion), on the date such Income is
payable either (i) transfer to or credit to the account of Seller an amount
equal to such Income payment or payments with respect to any Purchased
Securities subject to such Transaction or (ii) apply the Income payment or
payments to reduce the amount to be transferred to Buyer by Seller upon
termination of the Transaction. Buyer shall not be obligated to take any
action pursuant to the preceding sentence to the extent that such action would
result in the creation of a Margin Deficit, unless prior thereto or
simultaneously therewith Seller transfers to Buyer cash or Additional Purchased
Securities sufficient to eliminate such Margin Deficit.
6. SECURITY INTEREST
Although the parties intend that all Transactions hereunder be sales and
purchases and not loans, in the event any such Transactions are deemed to be
loans, Seller shall be deemed to have pledged to Buyer as security for the
performance by Seller of its obligations under each such Transaction, and shall
be deemed to have granted to Buyer a security interest in, all of the Purchased
Securities with respect to all Transactions hereunder and ail proceeds thereof.
7. PAYMENT AND TRANSFER
Unless otherwise mutually agreed, all transfers of funds hereunder shall be
in immediately available funds. All Securities transferred by one party hereto
to the other party (i) shall be in suitable form for transfer or shall be
accompanied by duly executed instruments of transfer or assignment in blank and
such other documentation as the party receiving possession may reasonably
request, (ii) shall be transferred on the book-entry system of a Federal
Reserve ink, or (iii) shall be transferred by any other method mutually
acceptable to Seller and Buyer. As used herein with respect to Securities,
"transfer" is intended to have the same meaning as when used in Section 8-313
of the New York Uniform Commercial Code or, where applicable, in any federal
regulation governing transfers of the Securities.
8. SEGREGATION OF PURCHASED SECURITIES
To the extent required by applicable law, all Purchased Securities in the
possession of Seller shall be segregated from other securities in its
possession and shall be identified as subject to this Agreement Segregation may
be accomplished by appropriate identification on the books and records of the
holder, including a financial intermediary or a clearing corporation. Title to
all Purchased Securities shall pass to Buyer and, unless otherwise agreed by
Buyer and Seller, nothing in this Agreement shall preclude Buyer from engaging
in repurchase transactions with the Purchased Securities or otherwise pledging
or hypothecating the Purchased Securities, but no such transaction shall
relieve Buyer of its obligations to transfer Purchased Securities to Seller
pursuant to Paragraphs 3, 4 or 11 hereof, or of Buyer's obligation to credit or
pay Income to, or apply Income to the obligations of, Seller pursuant to
Paragraph 5 hereof.
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REQUIRED DISCLOSURE FOR TRANSACTIONS IN WHICH THE SELLER RETAINS CUSTODY OF THE
PURCHASED SECURITIES
Seller is not permitted to substitute other securities for those subJect
to this Agreement and therefore must keep Buyer's securities segregated at all
times, unless in this Agreement Buyer grants Seller the right to substitute
other securities. If Buyer grants the right to substitute, this means that
Buyer's securities will likely be commingled with Seller's own securities
during the trading day Buyer is advised that, during any trading day that
Buyer's securities are commingled with Seller's securities, they [will]*
[may]** be subject to liens granted by Seller to [its clearing bank]* [third
parties]** and may be used by Seller for deliveries on other securities
transactions. Whenever the securities are commingled, Seller's ability to
resegregate substitute securities for Buyer will be subject to Seller's ability
to satisfy [the clearing]* [any]** lien or to obtain substitute securities.
9. SUBSTITUTION
(a) Seller may, subject to agreement with and acceptance by Buyer,
substitute other Securities for any Purchased Securities. Such substitution
shall be made by transfer to Buyer of such other Securities and transfer to
Seller of such Purchased Securities. After substitution, the substituted
Securities shall be deemed to be Purchased Securities.
(b) In Transactions in which the Seller retains custody of Purchased
Securities, the parties expressly agree that Buyer shall be deemed, for
purposes of subparagraph (a) of this Paragraph, to have agreed to and accepted
in this Agreement substitution by Seller of other Securities for Purchased
Securities; provided, however, that such other Securities shall have a Market
Value at least equal to the Market Value of the Purchased Securities for which
they are substituted.
10. REPRESENTATIONS
Each of Buyer and Seller represents and warrants to the other that (i) it is
duly authorized to execute and deliver this Agreement, to enter into the
Transactions contemplated hereunder and to perform its obligations hereunder
and has taken all necessary action to authorize such execution, delivery and
performance, (ii) it will engage in such Transactions as principal (or, if
agreed in writing in advance of any Transaction by the other party hereto, as
agent for a disclosed principal), (iii) the person signing this Agreement on
its behalf is duly authorized to do so on its behalf (or on behalf of any such
disclosed principal), (iv) it has obtained all authorizations of any
governmental body required in connection with this Agreement and the
Transactions hereunder and such authorizations are in full force and effect and
(v) the execution, delivery and performance of this Agreement and the
Transactions hereunder will not violate any law, ordinance, charter, by-law or
rule applicable to it or any agreement by which it is bound
__________________________________
*Language to be used under 17 C.F.R. Section 403.4(e) if Seller is a
government securities broker or dealer other than a financial institution.
**Language to be used under 17 C.F.R. Section 403.5(d) if Seller is a
financial institution.
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or by which any of its assets are affected. On the Purchase Date for any
Transaction Buyer and Seller shall each be deemed to repeat all the foregoing
representations made by it.
11. EVENTS OF DEFAULT
In the event that (i) Seller fails to repurchase or Buyer fails to transfer
Purchased Securities upon the applicable Repurchase Date, (ii) Seller or Buyer
fails, after one business day's notice, to comply with Paragraph 4 hereof,
(iii) Buyer fails to comply with Paragraph 5 hereof, (iv) an Act of Insolvency
occurs with respect to Seller or Buyer, (v) any representation made by Seller
or Buyer shall have been incorrect or untrue in any material respect when made
or repeated or deemed to have been made or repeated, or (vi) Seller or Buyer
shall admit to the other its inability to, or its intention not to, perform any
of its obligations hereunder (each an "Event of Default"):
(a) At the option of the nondefaulting party, exercised by written 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 Act of
Insolvency), the Repurchase Date for each Transaction hereunder shalt be deemed
immediately to occur.
(b) In all Transactions in which the defaulting party is acting as Seller,
if the nondefaulting party exercises or is deemed to have exercised the option
referred to in subparagraph (a) of this Paragraph, (i) the defaulting party's
obligations hereunder to repurchase all Purchased Securities in such
Transactions shall thereupon become immediately due and payable, (ii) to the
extent permitted by applicable law, the Repurchase Price with resect to each
such Transaction shall be increased by the aggregate amount obtained by daily
application of (x) the greater of the Pricing Rate for such Transaction or the
Prime Rate to (y) the Repurchase Price for such Transaction as of the
Repurchase Date as determined pursuant to subparagraph (a) of this Paragraph
(decreased as of any day by (A) any amounts retained by the nondefaulting party
with respect to such Repurchase Price pursuant to clause (iii) of this
subparagraph, (B) any proceeds from the sale of Purchased Securities pursuant
to subparagraph (d)(i) of this Paragraph, and (C) any amounts credited to the
account of the defaulting pursuant to subparagraph (e) of this Paragraph) on a
360 day per year basis for the actual number of days during the period from and
including the date of the Event of Default giving rise to such option to but
excluding the date of payment of the Repurchase Price as so increased, (iii)
all Income paid after such exercise or deemed exercise shall be retained by the
nondefaulting party and applied to the aggregate unpaid Repurchase Prices owed
by the defaulting party, and (iv) the defaulting party shall immediately
deliver to the nondefaulting party any Purchased Securities subject to such
Transactions then in the defaulting party's possession.
(c) In all Transactions in which the defaulting party is acting as Buyer,
upon tender by the nondefaulting party of payment of the aggregate Repurchase
Prices for all such Transactions, the defaulting party's right, title and
interest in all Purchased Securities subject to such Transactions shall be
deemed transferred to the nondefaulting party, and the defaulting party shall
deliver all such Purchased Securities to the nondefaulting party.
(d) After one business days notice to the defaulting party (which notice
need not be given if an Act of Insolvency shall have occurred, and which may be
the notice given under
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subparagraph (a) of this Paragraph or the notice referred to in clause (ii) of
the first sentence of this Paragraph), the nondefaulting party may:
(i) as to Transactions in which the defaulting party is acting as Seller,
(A) immediately sell, in a recognized market at such price or prices as the
nondefaulting party may reasonably deem satisfactory, any or all Purchased
Securities subject to such Transactions and apply the proceeds thereof to the
aggregate unpaid Repurchase Prices and any other amounts owing by the
defaulting party hereunder or (B) in its sole discretion elect, in lieu of
selling all or a portion of such Purchased Securities, to give the defaulting
party credit for such Purchased Securities in an amount equal to the price
therefor on such date, obtained from a generally recognized source or the
most recent closing bid quotation from such a source, against the aggregate
unpaid Repurchase Prices and any other amounts owing by the defaulting party
hereunder; and
(ii) as to Transactions in which the defaulting party is acting as Buyer,
(A) purchase securities ("Replacement Securities") of the same class and
amount as any Purchased Securities that are not delivered by the defaulting
party to the nondefaulting party as required hereunder or (B) in its sole
discretion elect, in lieu of purchasing Replacement Securities, to be deemed
to have purchased Replacement Securities at the price therefor on such date,
obtained from a generally recognized source or the most recent closing bid
quotation from such a source
(e) As to Transactions in which the defaulting party is acting as Buyer, the
defaulting party shall be liable to the nondefaulting party (i) with respect to
Purchased Securities (other than Additional Purchased Securities), for any
excess of the price paid or deemed paid) by the nondefaulting party for
Replacement Securities therefor over the Repurchase Price for such Purchased
Securities and (ii) with respect to Additional Purchased Securities, for the
price paid (or deemed paid) by the nondefaulting party for the Replacement
Securities therefor. In addition, the defaulting party shall be liable to the
nondefaulting party for interest on such remaining liability with respect to
each such purchase (or deemed purchase) of Replacement Securities from the date
of such purchase (or deemed purchase) until paid in full by Buyer. Such
interest shall be at a rate equal to the greater of the Pricing Rate or such
Transaction or the Prime Rate.
(f) For purposes of this Paragraph 11, the Repurchase Price for each
Transaction hereunder in respect of which the defaulting party is acting as
Buyer shall not increase above the amount of such Repurchase Price for such
Transaction determined as of the date of the exercise or deemed exercise by the
nondefaulting party of its option under subparagraph (a) of this Paragraph.
(g) The defaulting party shall be liable to the nondefaulting party for the
amount of all reasonable legal or other expenses incurred by the nondefaulting
party in connection with or as a consequence of an Event of Default, together
with interest thereon at a rate equal to the greater of the Pricing Rate for
the relevant Transaction or the Prime Rate.
(h) The nondefaulting party shall have, in addition to its rights hereunder,
any rights otherwise available to it under any other agreement or applicable
law.
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12. SINGLE AGREEMENT
Buyer and Seller acknowledge that, and have entered hereinto and will enter
into each Transaction hereunder in consideration of and in reliance upon the
fact that, all Transactions hereunder constitute a single business and
contractual relationship and have been made in consideration of each other
Accordingly, each of Buyer and Seller agrees (i) to perform all of its
obligations in respect of each Transaction hereunder, and that a default in the
performance of any such obligations shall constitute a default by it in respect
of all Transactions hereunder, (ii) that each of them shall be entitled to set
off claims and apply property held by them in respect of any Transaction
against obligations owing to them in respect of any other Transactions
hereunder and (iii) that payments, deliveries and other transfers made by
either of them in respect of any Transaction shall be deemed to have been made
in consideration of payments, deliveries and other transfers in respect of any
other Transactions hereunder, and the obligations to make any such payments,
deliveries and other transfers may be applied against each other and netted.
13. 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 Annex I attached hereto.
14. ENTIRE AGREEMENT; SEVERABILITY
This Agreement shall supersede any existing agreements between the parties
containing general terms and conditions for repurchase transactions. Each
provision and agreement herein shall be treated as separate and independent
from any other provision or agreement herein and shall be enforceable
notwithstanding the unenforceability of any such other provision or agreement.
15. NON-ASSIGNABILITY; TERMINATION
The rights and obligations of the parties under this Agreement and under any
Transaction shall not be assigned by either party without the prior written
consent of the other party Subject to the foregoing, this Agreement and any
Transactions shall be binding upon and shall inure to the benefit of the
parties and their respective successors and assigns. This Agreement may be
cancelled by either party upon giving written notice to the other, except that
this Agreement shall, notwithstanding such notice, remain applicable to any
Transactions then outstanding.
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16. GOVERNING LAW
This Agreement shall be governed by the laws of the State of New York without
giving effect to the conflict of law principles thereof.
17. NO WAIVERS, ETC.
No express or implied waiver of any Event of Default by either party shall
constitute a waiver of any other Event of Default and no exercise of any remedy
hereunder by any party shall constitute a waiver of its right to exercise any
other remedy hereunder. No modification or waiver of any provision of this
Agreement and no consent by any party to a departure herefrom shall be
effective unless and until such shall be in writing and duly executed by both
of the parties hereto Without limitation on any of the foregoing, the failure
to give a notice pursuant to subparagraphs 4(a) or 4(b) hereof will not
constitute a waiver of any right to do so at a later date.
18. USE OF EMPLOYEE PLAN ASSETS
(a) If assets of an employee benefit plan subject to any provision of the
Employee Retirement Income Security Act of 1974 ("ERISA") are intended to be
used by either party hereto (the "Plan Party") in a Transaction, the Plan Party
shall so notify the other party prior to the Transaction. The Plan Party shall
represent in writing to the other party that the Transaction does not
constitute a prohibited transaction under ERISA or is otherwise exempt
therefrom, and the other party may proceed in reliance thereon but shall not be
required so to proceed.
(b) Subject to the last sentence of subparagraph (a) of this Paragraph, any
such Transaction shall proceed only it Seller furnishes or has furnished to
Buyer its most recent available audited statement of its financial condition
and its most recent subsequent unaudited statement of its financial condition.
(c) By entering into a Transaction pursuant to this Paragraph, Seller shall
be deemed (i) to represent to Buyer that since the date of Sellers latest such
financial statements, there has been no material adverse change in Seller's
financial condition which Seller has not disclosed to Buyer, and (ii) to agree
to provide Buyer with future audited and unaudited statements of its financial
condition as they are issued, so long as it is a Seller in any outstanding
Transaction involving a Plan Party.
19. INTENT
(a) The parties recognize that each Transaction is a "repurchase agreement"
as that term is defined in Section 101 of Title 11 of the United States Code.
as amended (except insofar as the type of Securities subject to such
Transaction or the term of such Transaction would render such definition
inapplicable), and a "securities contract" as that term is defined in Section
741 of Title 11 of the United States Code, as amended.
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(b) It is understood that either party's right to liquidate Securities
delivered to it in connection with Transactions hereunder or to exercise any
other remedies pursuant to Paragraph 11 hereof, is a contractual right to
liquidate such Transaction as described in Sections 55 and 559 of Title 11 of
the United States Code, as amended.
20. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS
The parties acknowledge that they have been advised that:
(a) in the case of Transactions in which one of the parties is a broker or
dealer registered with the Securities and Exchange Commission ("SEC") under
Section 15 of the Securities Exchange Act of 1934 ("1934 Act"), the Securities
Investor Protection Corporation has taken the position that the provisions of
the Securities Investor Protection Act of 1970 ("SIPA") do not protect the
other party with respect to any Transaction hereunder;
(b) in the case of Transactions in which one of the parties is a government
securities broker or a government securities dealer registered with the SEC
under Section 15C of the 1934 Act, SIPA will not provide protection to the
other party with respect to any Transaction hereunder; and
(c) in the case of Transactions in which one of the parties is a financial
institution, funds held by the financial institution pursuant to a Transaction
hereunder are not a deposit and therefore are not insured by the Federal
Deposit Insurance Corporation, the Federal Savings and Loan Insurance
Corporation or the National Credit Union Share Insurance Fund, as applicable.
[Name of Party]
By: By:
------------------------- ----------------------
Title: Title:
---------------------- -------------------
Date: Date:
----------------------- --------------------
-11-
26
ANNEX 1
Names and Addresses for Communications Between Parties
Name of Party
-------------------------------------------------------------------
Contact
-------------------------------------------------------------------------
Street Address
------------------------------------------------------------------
City, State, Zip Code
-----------------------------------------------------------
Telephone No.
-------------------------------------------------------------------
-12-
27
EXHIBIT D
THE PARKSTONE GROUP OF FUNDS
BOND FUND
PROPOSED PERMITTED INVESTMENTS FOR SECURITIES LENDING
All investment of cash collateral for the securities lending program will be
subject to the following criteria and additional limits specified by the
client:
NO MORE THAN 5% OF THE TOTAL PORTFOLIO OR EACH CLIENT ACCOUNT MAY BE INVESTED
IN ANY SINGLE ISSUER. NO MORE THAN 25% OF THE TOTAL PORTFOLIO MAY BE
INVESTED IN SECURITIES OF ONE OR MORE ISSUERS CONDUCTING THEIR PRINCIPAL
BUSINESS ACTIVITIES IN THE SAME INDUSTRY WITH THE EXCEPTION OF U.S.
GOVERNMENT SECURITIES Section 1 BELOW, U.S. AGENCIES, Section 2 BELOW OR
REVERSE REPO. Section 9 BELOW. IF MATURITIES ARE LONGER THAN ONE BUSINESS
DAY, NO MORE THAN 5% OF THE TOTAL PORTFOLIO OR EACH CLIENT ACCOUNT MAY BE
INVESTED WITH ANY SINGLE ISSUER.
Bank is authorized to invest cash collateral on behalf of Customer in
investments, which at the time of purchase, may consist of the following:
1. Securities issued by any agencies, instrumentalities, sponsored agencies or
enterprises of the United States Government. This specifically includes
pass-through certificates and collateralized mortgage obligations. Maximum
maturity seven days (except when used as collateral in a reverse repurchase
transaction). Maximum exposure to any issuer 25% of portfolio at time of
purchase.
2. Deposits in, notes of, or bankers acceptances issued by banks with minimum
assets of one billion U.S. dollars (or U.S. dollar equivalent thereof),
which are rated "high quality" by at least one nationally recognized rating
agency. This category includes both "Yankee" and "Euro" paper. Maximum
maturity seven days.
3. Commercial paper and variable rate master notes rated at least A1 or P1 or
equivalent by at least one nationally recognized rating agency. Maximum
maturity seven days (or to the next reset date). This may include letter of
credit backed paper. This may include Section 4(2) or unregistered
commercial paper. Total portfolio exposure to Section 4(2) paper shall not
exceed 50% at time of purchase.
4. Reverse repurchase agreements for investment of funds from financial
institutions such as member banks of the Federal Deposit Insurance
Corporation or registered broker-dealers which First of America deems
creditworthy. Collateral must be delivered to either The Bank of
California, Mitsubishi Global, or a third party custodian acceptable to The
Bank of California. Collateral is limited to the securities and/or
instruments that are defined in Exhibit A. Collateral level must be at
least 100% and marked to market on a daily basis. Maximum exposure per
counterparty: the greater of $10 million or 25% at time of purchase. (See
Attachment 1).
28
5. Shares of Registered Investment Companies or STIFs including those for which
Bank or any of its Affiliates acts as an investment adviser, administrator,
custodian and/or in any other capacity for which it may be compensated. No
more than 5% of any one money market fund with no more than 10% total in
money market mutual funds.
6. Average weighted maturity mismatch of the portfolio shall not exceed 7 days.
7. All credit restrictions and rating requirements pertain to time of purchase.
8. Creditworthiness of issuers of potential collateral investments other than
U.S. government securities, when authorized by policy, will be analyzed by
Merus and approved by Merus' Investment Policy Board (IPB). Merus' IPB will
promptly notify Bank of California's Credit Administration and Credit Policy
of any changes to be above Permitted Investment Policy for Securities
Lending.
Mismatches of maturities between securities lent and securities accepted (or
invested in) as collateral should be minimized. The Trust Department will
manage the mismatch within guidelines established from time to time by Merus'
IPB.
9. Cash collateral may not be invested with broker-dealers who are borrowers of
The Bank of California. The Bank of California's Credit Department will
notify the Securities Lending Department of any lending activity of any
broker/dealer.
Nationally recognized rating agencies:
At least one of:
Supranationals Asset
At least one of: At least one of: Backed Mortgage
Minimum Short Ten Minimum Long Term Backed Sovereigns
Ratings Ratings
Standard & Poors ▇▇ ▇- ▇▇-
▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇
Fitch F1 A- AA-
Duff & ▇▇▇▇▇▇ ▇▇ ▇- ▇▇-
▇▇▇▇ ▇▇ ▇- ▇▇-
If any rating falls below the required rating criteria appropriate action will
be taken according to the client's instruction.
-ii-
29
Dated: June 8, 1995
------------
The Parkstone Group of Funds ("PRINCIPAL")
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Dated: June 8, 1995
------------
The Bank of California, National Association ("BANK")
By: /s/ ▇▇▇▇▇ ▇. KAUNER
----------------------------
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
-iii-
30
ATTACHMENT 1
COLLATERAL TO BE USED IN REVERSE REPURCHASE TRANSACTIONS (#4)
- Securities issued by or fully guaranteed as to the payment of principal and
interest by the United States Government.
- Securities issued by any agencies, instrumentality's, sponsored agencies or
enterprises of the United States Government. This specifically includes
pass-through certificates and collateralized mortgage obligations.
- Deposits in, notes of, or bankers acceptances issued by banks with minimum
assets of one billion U.S. dollars (or U.S. dollar equivalent thereof),
which are rated "high quality" by at least one nationally recognized rating
agency. This category includes both "Yankee" and "Euro" paper.
- Commercial paper and variable rate master notes rated at least A1 or P1 or
equivalent by at least one nationally recognized rating agency. Maximum
maturity 270 days (or to the next reset date). This may include letter of
credit backed paper. This may include Section 4(2) or unregistered
commercial paper.
- Asset-backed securities rated at least AA- or equivalent by at least one
nationally recognized rating agency. Maximum duration, overnight only.
- Mortgage backed securities rated at least AA- or equivalent by at least one
nationally recognized rating agency.
- Corporate obligations (exclusive of commercial paper), both with and without
credit enhancement. Those with a maturity of less than or equal to one year
may be judged upon the corporation's short term ratings, which must be rated
at least A1 or P1 or equivalent by at least one nationally recognized rating
agency. Those with a maturity of greater than one year must be rated at
least A- or equivalent by at least one nationally recognized rating agency.
This may include 144a (private placement) corporate obligations. Maximum
duration, overnight only.
-iv-
31
EXHIBIT E
SCHEDULE OF FEES AND CHARGES
The gross revenue generated from securities lending and reverse repurchase
agreement activity shall be split as follows:
The Parkstone Group of Funds ("PRINCIPAL") 60%
The Bank of California, National Association ("BANK") 40%
Dated: June 8, 1995
-------------------------
The Parkstone Group of Funds ("PRINCIPAL")
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Dated: June 8, 1995
-------------------------
The Bank of California, National Association ("BANK")
By: /s/ ▇▇▇▇▇ ▇. KAUNER
----------------------------
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
-i-
32
EXHIBIT D
THE PARKSTONE GROUP OF FUNDS
LIMITED MATURITY
PROPOSED PERMITTED INVESTMENTS FOR SECURITIES LENDING
All investment of cash collateral for the securities lending program will be
subject to the following criteria and additional limits specified by the
client:
NO MORE THAN 5% OF THE TOTAL PORTFOLIO OR EACH CLIENT ACCOUNT MAY BE INVESTED
IN ANY SINGLE ISSUER. NO MORE THAN 25% OF THE TOTAL PORTFOLIO MAY BE
INVESTED IN SECURITIES OF ONE OR MORE ISSUERS CONDUCTING THEIR PRINCIPAL
BUSINESS ACTIVITIES IN THE SAME INDUSTRY WITH THE EXCEPTION OF U.S.
GOVERNMENT SECURITIES Section 1 BELOW, U.S. AGENCIES, Section 2 BELOW OR
REVERSE REPO. Section 9 BELOW. IF MATURITIES ARE LONGER THAN ONE BUSINESS
DAY, NO MORE THAN 5% OF THE TOTAL PORTFOLIO OR EACH CLIENT ACCOUNT MAY BE
INVESTED WITH ANY SINGLE ISSUER.
Bank is authorized to invest cash collateral on behalf of Customer in
investments, which at the time of purchase, may consist of the following:
1. Securities issued by any agencies, instrumentalities, sponsored agencies or
enterprises of the United States Government. This specifically includes
pass-through certificates and collateralized mortgage obligations. Maximum
maturity seven days (except when used as collateral in a reverse repurchase
transaction). Maximum exposure to any issuer 25% of portfolio at time of
purchase.
2. Deposits in, notes of, or bankers acceptances issued by banks with minimum
assets of one billion U.S. dollars (or U.S. dollar equivalent thereof),
which are rated "high quality" by at least one nationally recognized rating
agency. This category includes both "Yankee" and "Euro" paper. Maximum
maturity seven days.
3. Commercial paper and variable rate master notes rated at least A1 or P1 or
equivalent by at least one nationally recognized rating agency. Maximum
maturity seven days (or to the next reset date). This may include letter of
credit backed paper. This may include Section 4(2) or unregistered
commercial paper. Total portfolio exposure to Section 4(2) paper shall not
exceed 50% at time of purchase.
4. Reverse repurchase agreements for investment of funds from financial
institutions such as member banks of the Federal Deposit Insurance
Corporation or registered broker-dealers which First of America deems
creditworthy. Collateral must be delivered to either The Bank of
California, Mitsubishi Global, or a third party custodian acceptable to The
Bank of California. Collateral is limited to the securities and/or
instruments that are defined in Exhibit A. Collateral level must be at
least 100% and marked to market on a daily basis. Maximum exposure per
counterparty: the greater of $10 million or 25% at time of purchase. (See
Attachment 1).
33
5. Shares of Registered Investment Companies or STIFs including those for which
Bank or any of its Affiliates acts as an investment adviser, administrator,
custodian and/or in any other capacity for which it may be compensated. No
more than 5% of any one money market fund with no more than 10% total in
money market mutual funds.
6. Average weighted maturity mismatch of the portfolio shall not exceed 7 days.
7. All credit restrictions and rating requirements pertain to time of purchase.
8. Creditworthiness of issuers of potential collateral investments other than
U.S. government securities, when authorized by policy, will be analyzed by
Merus and approved by Merus' Investment Policy Board (IPB). Merus' IPB will
promptly notify Bank of California's Credit Administration and Credit Policy
of any changes to be above Permitted Investment Policy for Securities
Lending.
Mismatches of maturities between securities lent and securities accepted (or
invested in) as collateral should be minimized. The Trust Department will
manage the mismatch within guidelines established from time to time by Merus'
IPB.
9. Cash collateral may not be invested with broker-dealers who are borrowers of
The Bank of California. The Bank of California's Credit Department will
notify the Securities Lending Department of any lending activity of any
broker/dealer.
Nationally recognized rating agencies:
At least one of:
Supranationals Asset
At least one of: At least one of: Backed Mortgage
Minimum Short Ten Minimum Long Term Backed Sovereigns
Ratings Ratings
Standard & Poors ▇▇ ▇- ▇▇-
▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇
Fitch F1 A- AA-
Duff & ▇▇▇▇▇▇ ▇▇ ▇- ▇▇-
▇▇▇▇ ▇▇ ▇- ▇▇-
lf any rating falls below the required rating criteria appropriate action will
be taken according to the client's instruction.
-ii-
34
Dated: 6-28-95
-------------------------
The Parkstone Group of Funds ("PRINCIPAL")
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Dated: June 28, 1995
-------------------------
The Bank of California, National Association ("BANK")
By: /s/ ▇▇▇▇▇ ▇. KAUNER
----------------------------
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
-iii-
35
LIMITED MATURITY FUND
ATTACHMENT 1
COLLATERAL TO BE USED IN REVERSE REPURCHASE TRANSACTIONS (#4)
- Securities issued by or fully guaranteed as to the payment of principal and
interest by the United States Government.
- Securities issued by any agencies, instrumentality's, sponsored agencies or
enterprises of the United States Government. This specifically includes
pass-through certificates and collateralized mortgage obligations.
- Deposits in, notes of, or bankers acceptances issued by banks with minimum
assets of one billion U.S. dollars (or U.S. dollar equivalent thereof),
which are rated "high quality" by at least one nationally recognized rating
agency. This category includes both "Yankee" and "Euro" paper.
- Commercial paper and variable rate master notes rated at least A1 or P1 or
equivalent by at least one nationally recognized rating agency. Maximum
maturity 270 days (or to the next reset date). This may include letter of
credit backed paper. This may include Section 4(2) or unregistered
commercial paper.
- Asset-backed securities rated at least AA- or equivalent by at least one
nationally recognized rating agency. Maximum duration, overnight only.
- Mortgage backed securities rated at least AA- or equivalent by at least one
nationally recognized rating agency.
- Corporate obligations (exclusive of commercial paper), both with and without
credit enhancement. Those with a maturity of less than or equal to one year
may be judged upon the corporation's short term ratings, which must be rated
at least A1 or P1 or equivalent by at least one nationally recognized rating
agency. Those with a maturity of greater than one year must be rated at
least A- or equivalent by at least one nationally recognized rating agency.
This may include 144a (private placement) corporate obligations. Maximum
duration, overnight only.
-iv-
36
EXHIBIT D
THE PARKSTONE GROUP OF FUNDS
BALANCED FUND
PROPOSED PERMITTED INVESTMENTS FOR SECURITIES LENDING
All investment of cash collateral for the securities lending program will be
subject to the following criteria and additional limits specified by the
client:
NO MORE THAN 5% OF THE TOTAL PORTFOLIO OR EACH CLIENT ACCOUNT MAY BE INVESTED
IN ANY SINGLE ISSUER. NO MORE THAN 25% OF THE TOTAL PORTFOLIO MAY BE
INVESTED IN SECURITIES OF ONE OR MORE ISSUERS CONDUCTING THEIR PRINCIPAL
BUSINESS ACTIVITIES IN THE SAME INDUSTRY WITH THE EXCEPTION OF U.S.
GOVERNMENT SECURITIES ▇▇▇▇▇▇ ▇ ▇▇▇▇▇, ▇.▇. AGENCIES, Section 2 BELOW OR
REVERSE REPO. Section 9 BELOW. IF MATURITIES ARE LONGER THAN ONE BUSINESS
DAY, NO MORE THAN 5% OF THE TOTAL PORTFOLIO OR EACH CLIENT ACCOUNT MAY BE
INVESTED WITH ANY SINGLE ISSUER.
Bank is authorized to invest cash collateral on behalf of Customer in
investments, which at the time of purchase, may consist of the following:
1. Securities issued by any agencies, instrumentalities, sponsored agencies or
enterprises of the United States Government. This specifically includes
pass-through certificates and collateralized mortgage obligations. Maximum
maturity seven days (except when used as collateral in a reverse repurchase
transaction). Maximum exposure to any issuer 25% of portfolio at time of
purchase.
2. Deposits in, notes of, or bankers acceptances issued by banks with minimum
assets of one billion U.S. dollars (or U.S. dollar equivalent thereof),
which are rated "high quality" by at least one nationally recognized rating
agency. This category includes both "Yankee" and "Euro" paper. Maximum
maturity seven days.
3. Commercial paper and variable rate master notes rated at least A1 or P1 or
equivalent by at least one nationally recognized rating agency. Maximum
maturity seven days (or to the next reset date). This may include letter of
credit backed paper. This may include Section 4(2) or unregistered
commercial paper. Total portfolio exposure to Section 4(2) paper shall not
exceed 50% at time of purchase.
4. Reverse repurchase agreements for investment of funds from financial
institutions such as member banks of the Federal Deposit Insurance
Corporation or registered broker-dealers which First of America deems
creditworthy. Collateral must be delivered to either The Bank of
California, Mitsubishi Global, or a third party custodian acceptable to The
Bank of California. Collateral is limited to the securities and/or
instruments that are defined in Exhibit A. Collateral level must be at
least 100% and marked to market on a daily basis. Maximum exposure per
counterparty: the greater of $10 million or 25% at time of purchase. (See
Attachment 1).
37
5. Shares of Registered Investment Companies or STIFs including those for which
Bank or any of its Affiliates acts as an investment adviser, administrator,
custodian and/or in any other capacity for which it may be compensated. No
more than 5% of any one money market fund with no more than 10% total in
money market mutual funds.
6. Average weighted maturity mismatch of the portfolio shall not exceed 7 days.
7. All credit restrictions and rating requirements pertain to time of purchase.
8. Creditworthiness of issuers of potential collateral investments other than
U.S. government securities, when authorized by policy, will be analyzed by
Merus and approved by Merus' Investment Policy Board (IPB). Merus' IPB will
promptly notify Bank of California's Credit Administration and Credit Policy
of any changes to be above Permitted Investment Policy for Securities
Lending.
Mismatches of maturities between securities lent and securities accepted (or
invested in) as collateral should be minimized. The Trust Department will
manage the mismatch within guidelines established from time to time by Merus'
IPB.
9. Cash collateral may not be invested with broker-dealers who are borrowers of
The Bank of California. The Bank of California's Credit Department will
notify the Securities Lending Department of any lending activity of any
broker/dealer.
Nationally recognized rating agencies:
At least one of:
Supranationals
At least one of: At least one of: Asset Backed
Minimum Short Minimum Long Mortgage Backed
Ten Ratings Term Ratings Sovereigns
Standard & Poors ▇▇ ▇- ▇▇-
▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇
Fitch F1 A- AA-
Duff & ▇▇▇▇▇▇ ▇▇ ▇- ▇▇-
▇▇▇▇ ▇▇ ▇- ▇▇-
If any rating falls below the required rating criteria appropriate action will
be taken according to the client's instruction.
-ii-
38
Dated: 6-28-95
-------------------------
The Parkstone Group of Funds ("PRINCIPAL")
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Dated: June 28, 1995
-------------------------
The Bank of California, National Association ("BANK")
By: /s/ ▇▇▇▇▇ ▇. KAUNER
----------------------------
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
-iii-
39
BALANCED FUND
ATTACHMENT 1
COLLATERAL TO BE USED IN REVERSE REPURCHASE TRANSACTIONS (#4)
- Securities issued by or fully guaranteed as to the payment of principal and
interest by the United States Government.
- Securities issued by any agencies, instrumentality's, sponsored agencies or
enterprises of the United States Government. This specifically includes
pass-through certificates and collateralized mortgage obligations.
- Deposits in, notes of, or bankers acceptances issued by banks with minimum
assets of one billion U.S. dollars (or U.S. dollar equivalent thereof),
which are rated "high quality" by at least one nationally recognized rating
agency. This category includes both "Yankee" and "Euro" paper.
- Commercial paper and variable rate master notes rated at least A1 or P1 or
equivalent by at least one nationally recognized rating agency. Maximum
maturity 270 days (or to the next reset date). This may include letter of
credit backed paper. This may include Section 4(2) or unregistered
commercial paper.
- Asset-backed securities rated at least AA- or equivalent by at least one
nationally recognized rating agency. Maximum duration, overnight only.
- Mortgage backed securities rated at least AA- or equivalent by at least one
nationally recognized rating agency.
- Corporate obligations (exclusive of commercial paper), both with and without
credit enhancement. Those with a maturity of less than or equal to one year
may be judged upon the corporation's short term ratings, which must be rated
at least A1 or P1 or equivalent by at least one nationally recognized rating
agency. Those with a maturity of greater than one year must be rated at
least A- or equivalent by at least one nationally recognized rating agency.
This may include 144a (private placement) corporate obligations. Maximum
duration, overnight only.
-iv-
40
EXHIBIT F
PRINCIPAL'S DESIGNATED AGENT
FOR RECEIPT OF FUNDS, SECURITIES AND OTHER
PROPERTY IN THE EVENT OF TERMINATION OF THIS AGREEMENT
N/A /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Dated: June 8, 1995
------------------------
The Parkstone Group of Funds ("PRINCIPAL")
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Dated: June 8, 1995
------------------------
The Bank of California, National Association ("BANK")
By: /s/ ▇▇▇▇▇ ▇. KAUNER
----------------------------
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
41
SCHEDULE I
The Parkstone Group of Funds designated below shall be eligible for securities
lending and reverse repurchase agreement transactions pursuant to the
Securities Lending and Reverse Repurchase Agreement Client Services Client
Addendum dated as of June 8, 1995:
Parkstone Bond Fund (effective June 8, 1995)
Parkstone Balanced Fund (effective June 28, 1995)
Parkstone Limited Maturity Fund (effective June 28, 1995)
THE PARKSTONE GROUP OF FUNDS THE BANK OF CALIFORNIA, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. Kauner
--------------------------- -----------------------------
Title: President Title: Vice President/Manager
------------------------ --------------------------
Date: 6-28-95 Date: June 28, 1995
------------------------- ---------------------------
42
AMENDMENT TO
SECURITIES LENDING AND REVERSE REPURCHASE AGREEMENT
SERVICES CLIENT ADDENDUM
This Amendment modifies the Addendum to the Securities Lending and Repurchase
Agreement Services Client Addendum between The Bank of California, National
Association ("Bank") and The Parkstone Group of Funds, ("Principal") effective
as of June 8, 1995 (the "Agreement"). Capitalized terms not otherwise defined
herein shall have the same meanings as in the Agreement.
1. The Agreement shall be modified by striking the introductory paragraph
thereto in its entirety and substituting it with the following:
THIS AGREEMENT for securities lending and/or reverse repurchase agreement
services is made, effective as of June 8, 1995, by and between THE PARKSTONE
GROUP OF FUNDS on behalf of each Fund listed in Schedule I hereto as may be
amended from time to time ("Principal"), and THE BANK OF CALIFORNIA, NATIONAL
ASSOCIATION ("Bank"). This Agreement is an addendum to the Custody Agreement by
and between The Parkstone Group of Funds and Bank dated as of October 18, 1991,
(Custodian Agreement"). This Addendum supersedes the Addendum to the Custodian
Agreement dated by Bank on September 30, 1991 and The Parkstone Group of Funds
on October 7, 1991 with respect to securities lending activities.
2. Paragraph 1 of the Agreement shall be modified by adding the following
immediately before the last sentence therein:
Bank shall perform its duties and responsibilities hereunder with respect to
each Fund individually.
THE PARKSTONE GROUP OF FUNDS THE BANK OF CALIFORNIA, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. KAUNER
--------------------------- -----------------------------
Title: President Title: Vice President/Manager
------------------------ --------------------------
Date: 6-28-95 Date: June 28, 1995
------------------------- ---------------------------