Master Securities Loan Agreement

Master Securities Loan Agreement
2017 Version

Dated as of:

Between:

and

1. Applicability.

From time to time the parties hereto may enter into transactions in which one party (“Lender”) will lend to the other party (“Borrower”) certain Securities (as defined herein) against a transfer of Collateral (as defined herein). Each such transaction shall be referred to herein as a “Loan” and, unless otherwise agreed in writing, shall be governed by this Agreement, including any supplemental terms or conditions contained in an Annex or Schedule hereto and in any other annexes identified herein or therein as applicable hereunder. Capitalized terms not otherwise defined herein shall have the meanings provided in Section 25.

2. Loans of Securities.

2.1 Subject to the terms and conditions of this Agreement, Borrower or Lender may, from time to time, seek to initiate a transaction in which Lender will lend Securities to Borrower. Borrower and Lender shall agree on the terms of each Loan, including the issuer of the Securities, the amount of Securities to be lent, the basis of compensation, the amount of Collateral to be transferred by Borrower, and any additional terms.

2.2 A Loan hereunder shall not occur until the Loaned Securities and the Collateral therefor have been transferred in accordance with Section 15.

3. Transfer of Loaned Securities.

3.1 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.

3.2 Borrower shall provide Lender, for each Loan in which Lender is a Customer, with a schedule and receipt listing the Loaned Securities.

3.3 The parties hereto agree that they intend the Loans hereunder to be loans of Securities.

4. Collateral.

4.1 Borrower shall transfer to Lender Collateral with a Market Value at least equal to the Margin Percentage of the Market Value of the Loaned Securities.

4.2 The Collateral transferred by Borrower to Lender shall be security for Borrower’s obligations in respect of such Loan and for any other obligations of Borrower to Lender hereunder.

4.3 Upon transfer to Lender of the Loaned Securities on the day a Loan is terminated, Lender shall be obligated to transfer the Collateral to Borrower.

4.4 If Borrower transfers Collateral to Lender and Lender does not transfer the Loaned Securities to Borrower, Borrower shall have the absolute right to the return of the Collateral.

4.5 Borrower may, upon reasonable notice to Lender, substitute Collateral for Collateral securing any Loan or Loans.

4.6 Prior to the expiration of any letter of credit supporting Borrower’s obligations hereunder, Borrower shall obtain an extension, replace it, or transfer other acceptable Collateral.

5. Fees for Loan.

5.1 Borrower agrees to pay Lender a loan fee or, in the event the Loan Fee is less than zero, Lender agrees to pay Borrower the Loan Fee. Lender agrees to pay Borrower a fee or rebate on cash Collateral, as applicable.

5.2 Any Loan Fee or Cash Collateral Fee payable hereunder shall be payable in accordance with the Agreement.

6. Termination of the Loan.

6.1 Either party may terminate a Loan on a termination date established by notice. Borrower may terminate a Loan on any Business Day by giving notice and transferring the Loaned Securities to Lender before the Cutoff Time, if applicable.

6.2 Borrower shall, on or before the Cutoff Time on the termination date of a Loan, transfer the Loaned Securities to Lender.

7. Rights in Respect of Loaned Securities and Collateral.

Borrower shall have all of the incidents of ownership of the Loaned Securities, and Lender waives the right to vote or provide consent with respect to the Loaned Securities during the term of the Loan.

8. Distributions.

Lender shall be entitled to receive all Distributions made on or in respect of the Loaned Securities. Borrower shall be entitled to receive all Distributions made on or in respect of non-cash Collateral.

9. Mark to Market.

Borrower shall daily mark to market any Loan hereunder. If there is a Margin Deficit or Margin Excess, the relevant party shall transfer Collateral as provided herein.

10. Representations.

The parties to this Agreement hereby make the representations and warranties set forth in this Agreement.

11. Covenants.

Each party agrees either to be liable as principal with respect to its obligations hereunder or to execute and comply fully with Annex I.

12. Events of Default.

All Loans hereunder may, at the option of the non-defaulting party, be terminated immediately upon the occurrence of any one or more of the events of default described herein.

13. Remedies.

Upon the occurrence of a Default, the non-defaulting party shall have the rights and remedies set forth in this Agreement.

14. Transfer Taxes.

All transfer taxes with respect to the transfer of the Loaned Securities and Collateral shall be paid by Borrower.

15. Transfers.

All transfers of Securities, cash or letters of credit shall be made in accordance with the methods set forth in this Agreement.

16. Contractual Currency.

Borrower and Lender agree that payments shall be made in the Contractual Currency specified for the relevant Loan.

17. ERISA.

Lender shall notify Borrower if any of the Securities transferred have been obtained from or using the assets of any Plan.

18. Single Agreement.

Borrower and Lender acknowledge that all Loans hereunder constitute a single business and contractual relationship.

19. Applicable Law.

This Agreement shall be governed and construed in accordance with the laws of the State of New York.

20. Waiver.

The failure of a party to insist upon strict adherence to any term shall not be considered a waiver.

21. Survival of Remedies.

All remedies hereunder and all obligations with respect to any Loan shall survive termination of the relevant Loan and this Agreement.

22. Notices and Other Communications.

Any notices or other communications shall be given to the individuals and addresses specified in Schedule A.

23. Submission to Jurisdiction; Waiver of Jury Trial.

Each party hereto irrevocably and unconditionally submits to jurisdiction and waives the right to trial by jury as provided herein.

24. Miscellaneous.

This Agreement supersedes prior agreements concerning loans of Securities and may be modified only in writing signed by the party against whom enforcement is sought.

25. Definitions.

For the purposes hereof, the terms used in this Agreement have the meanings set forth herein.

26. Intent.

The parties recognize that each Loan hereunder is a securities contract and related settlement and margin payment as defined under applicable law.

27. Disclosure Relating to Certain Federal Protections.

The parties acknowledge the disclosures relating to federal protections and collateral as set forth in this section.

Annex I - Party Acting as Agent

This Annex sets forth the terms and conditions governing all transactions in which a party lending or borrowing Securities, as the case may be (“Agent”), in a Loan is acting as agent for one or more third parties (“Principal”).

1. Additional Representations and Warranties. Agent hereby makes the following representations and warranties.

2. Identification of Principals. Agent agrees to provide the other party a written list of Principals and subsequent notice identifying the specific Principal or Principals for each Loan.

3. Limitation of Agent’s Liability. The parties expressly acknowledge the limitations on Agent’s liability described herein.

4. Multiple Principals. The parties may elect to treat Loans as transactions on behalf of separate Principals or as a single Principal.

5. Interpretation of Terms. References to “Lender” or “Borrower” shall be construed to reflect the role of Agent and its Principal or Principals.

Annex II - Market Value

Unless otherwise agreed by Borrower and Lender, the Market Value of Securities shall be determined according to the rules set forth in this Annex.

1. If the principal market is a national securities exchange in the United States, value shall be determined by last sale price.

2. If quoted on Nasdaq, value shall be determined by the last sale price or last bid price, as applicable.

3. If not quoted on Nasdaq, value shall be determined in accordance with market practice.

4. If the Securities are Foreign Securities, value shall be determined in accordance with market practice in the principal market.

5. The Market Value of a letter of credit shall be the undrawn amount thereof.

6. Market Value determinations shall include accrued interest where applicable.

7. The determinations of Market Value provided for in this Annex shall apply for all purposes under the Agreement, except for purposes of Section 13.

Annex III - Term Loans

This Annex sets forth additional terms and conditions governing Loans designated as “Term Loans” against a pledge of cash Collateral by Borrower for an agreed upon Cash Collateral Fee until a scheduled termination date.

1. The terms of this Annex shall apply to Loans of Equity Securities only if designated as Term Loans.

2. The Confirmation for a Term Loan shall set forth the Term Loan Amount, the Cash Collateral Fee and the Termination Date.

3. If either party exercises its right to terminate a Term Loan prior to the Termination Date, the parties shall use best efforts to negotiate a Replacement Loan.

4. If the parties enter into a Replacement Loan, the Collateral for the related Terminated Loan need not be returned and shall instead serve as Collateral for the Replacement Loan.

5. If no Replacement Loan is entered into, the terminating party shall pay a Breakage Fee and Collateral shall be returned as required.

6. The Breakage Fee shall be determined as described herein.

Schedule A - Names and Addresses for Communications

Schedule B - Defined Terms and Supplemental Provisions