EX-99.H.8 6 l24157aexv99whw8.txt EX-99.H.8 EXHIBIT (h)(8) SECURITIES LENDING AGREEMENT: CUSTOMER AGREEMENT (FUND/INDEMNIFIED) FORM OF SECURITIES LENDING AGREEMENT CUSTOMER AGREEMENT This Securities Lending Agreement, made as of this ___ day of _______________, 2006 including all exhibits attached hereto, all of the terms of which are incorporated herein by reference, in each case, as amended and/or supplemented from time to time in accordance with the terms hereof (this "Agreement"), by and between U.S. Bank National Association (the "Bank") and BB&T Variable Insurance Funds (hereinafter referred to as the "Trust"), a Massachusetts business trust, on behalf of each respective series identified on Exhibit A attached hereto, separately and not jointly (each such series hereinafter referred to as a separate "Customer"). This Agreement shall be deemed for all purposes to constitute a separate and discrete agreement between the Bank and each Customer as it may be amended by the parties from time to time, and no Customer shall be responsible or liable for any of the obligations of any other Customer under this Agreement or otherwise, notwithstanding anything to the contrary contained herein. In addition, with respect to transactions entered into by a Customer, neither the Bank nor any Borrower (as defined below) shall in any event have recourse to the assets of any other Customer. WITNESSETH: WHEREAS, the Trust is an open-end management investment company registered under the Investment Company Act of 1940 (the "1940 Act") which offers its shares in one or more separate series, with each such series representing a separate and distinct pool of cash, securities, and other assets (collectively "Property"); and WHEREAS, each Customer desires to have the Bank engage in securities lending as Customer's agent with respect to certain Securities; and WHEREAS, the Bank and each Customer desire to specify the terms and conditions under which such securities lending will be performed. NOW, THEREFORE, in consideration of the mutual premises, covenants and undertakings set forth herein, the parties hereto agree as follows: 1. Definitions: For purposes hereof: "Adviser" shall mean BB&T Asset Management, Inc., the investment adviser to each Customer. "Borrower" shall be, subject to the other provisions of this Agreement, one or more (i) broker-dealers registered under the Securities Exchange Act of 1934 (the "1934 Act"); (ii) broker-dealers exempt from registration under 15(a)(1) of the 1934 Act as a dealer in exempted Government Securities, or (iii) bank(s), with which the Bank or one of its agents has established a securities lending agreement whereby Borrower may borrow Securities and which the Customer has expressly approved in accordance with the last sentence of this paragraph. Such Borrowers are listed in Exhibit B attached hereto. Borrowers may be added to or deleted from Exhibit B by (i) written notice delivered by the Customer to the Bank, or (ii) written notice delivered by the Bank to the Customer which is confirmed by the Customer via letter, fax or e-mail. "Borrower Agreement" shall have the meaning provided such term in Section 3(a) hereof. "Business Day" shall mean, with respect to any Loan hereunder, a day on which regular trading occurs in the principal market for the Loaned Securities subject to such Loan, provided, however, that for purposes of determining the Market Value of any Securities hereunder, such term shall mean a day on which regular trading occurs in the principal market for the Securities whose value is being determined. Notwithstanding the foregoing, in no event shall a Saturday or Sunday be considered a Business Day. "Close of Trading" shall mean, with respect to any Security, the end of the primary trading session established by the principal market for such Security on a Business Day. "Collateral" shall be collateral which the Bank shall receive from Borrower(s) to secure Loans on behalf of a Customer in the form of (i) cash denominated in United States dollars ("Cash Collateral"), (ii) securities issued or guaranteed by the United States Government or its agencies, or (iii) irrevocable bank letters of credit issued by a person other than the Borrower or an affiliate thereof, or an equivalent obligation denominated in United States dollars that is pre-approved by the Adviser. "Government Securities" shall mean government securities as defined in Section 3(a)(42)(A)-(C) of the 1934 Act, as amended. "Loans" shall be the lending of Securities to Borrower(s). "Loaned Securities" shall be those Securities which are loaned to the Borrower(s) by the Bank, securities identical to such Securities, or securities equivalent to such loaned Securities in the event of a reorganization, recapitalization or merger affecting the originally loaned securities. "Margin Percentage" shall mean, with respect to any Loan as of any date, a percentage agreed to by the Borrower and the Bank, provided that in no event shall the Margin Percentage be less than 100% of the Market Value of the Loaned Securities. "Mark to Market" shall be the procedure whereby the Bank determines the Market Value of securities Collateral and Loaned Securities. "Market Value" shall be: -2- (i) If the principal market for the securities to be valued is a national securities exchange in the United States, their Market Value shall be determined by their last sale price on such exchange at the most recent Close of Trading or, if there was no sale on the Business Day of the most recent Close of Trading, by the last sale price at the Close of Trading on the next preceding Business Day on which there was a sale on such exchange, all as quoted on the Consolidated Tape or, if not quoted on the Consolidated Tape, then as quoted by such exchange, including where applicable, accrued interest to the extent not already included therein, unless market practice with respect to the valuation of such securities in connection with securities loans is to the contrary. (ii) If the principal market for the securities to be valued is the over-the-counter market, and the securities are quoted on The Nasdaq Stock Market ("Nasdaq"), their Market Value shall be the last sale price on Nasdaq at the most recent Close of Trading or, if the securities are issues for which last sale prices are not quoted on Nasdaq, the last bid price at such Close of Trading. If the relevant quotation did not exist at such Close of Trading, then the Market Value shall be the relevant quotation on the next preceding Close of Trading at which there was such a quotation, including where applicable, accrued interest to the extent not already included therein, unless market practice with respect to the valuation of such securities in connection with securities loans is to the contrary. (iii) Except as provided in Subsection (iv) of this definition, if the principal market for the securities to be valued is the over-the-counter market, and the securities are not quoted on Nasdaq, their Market Value shall be determined in accordance with market practice for such securities, based on the price for such securities as of the most recent Close of Trading obtained from a generally recognized source agreed to by the Bank and the Borrower(s) or the closing bid quotation at the most recent Close of Trading obtained from such a source. If the relevant quotation did not exist at such Close of Trading, then the Market Value shall be the relevant quotation on the next preceding Close of Trading at which there was such a quotation, including where applicable, accrued interest to the extent not already included therein, unless market practice with respect to the valuation of such securities in connection with securities loans is to the contrary. (iv) The Market Value of a letter of credit shall be the outstanding amount thereof. "Offering Memorandum" shall mean the offering memorandum dated on or about March 31, 2006 relating to the Selected Series. "Person" shall be any natural person, corporation, partnership, limited partnership, joint venture, firm, association, trust, unincorporated organization, government or governmental agency or political subdivision or any other entity, whether acting in an individual, fiduciary or other capacity. "RIC" shall be the Mount Vernon Securities Lending Trust. -3- "Securities" shall be securities, of any type, that are owned or controlled by a Customer and that have been hereby approved for use in securities lending by a Customer. "Selected Series" shall be the series of the RIC that is selected by a Customer for investment of Cash Collateral, as identified on the Customer Information Sheet attached hereto. The Selected Series may be changed by a Customer upon thirty (30) days written notice to the Bank. "Substitute Payments" shall mean payments in amounts equal to all distributions made to holders of Loaned Securities during the term of the Loan, including, but not limited to, cash dividends, interest payments, shares of stock as a result of stock splits, and rights to purchase additional securities. 2. Appointment and Acceptance. Each Customer hereby appoints the Bank as its agent for the purpose of lending Securities; and the Bank hereby agrees to accept such appointment and act in such capacity. 3. Delivery of Securities; Receipt of Collateral; Return of Collateral. Until given written notice of termination pursuant to Section 15, each Customer hereby authorizes the Bank, and the Bank agrees, to undertake the following: (a) To enter into and maintain securities loan agreements with Borrower(s) which set forth terms consistent with this Agreement. Each Customer acknowledges that the standard form(s) of Borrower Agreement(s) entered or to be entered with Borrowers will be substantially in the form of the most current Master Securities Loan Agreement produced by the Bond Market Association and each Customer authorizes the Bank to lend Securities to Borrowers pursuant to agreements substantially in the form thereof (each such agreement referred to herein as a "Borrower Agreement"). Any Customer may direct the Bank not to enter into Loans with a Borrower, as the Customer specifies by written notice to the Bank, in each case notwithstanding the Customer's prior approval of such Borrower in accordance with the terms contained herein. (b) To negotiate fees with Borrowers in connection with securities lending, subject to the following requirements. In the case of a Loan for which the Collateral is Cash Collateral, the Bank shall negotiate a fee (the "Borrower Rebate Fee") to be paid by the Bank to the Borrower on behalf of a Customer. In the case of a Loan for which the Collateral is non-cash, the Bank shall negotiate a loan fee to be paid by the Borrower. (c) To deliver to Borrowers, from time to time, such Securities as the Bank may in its discretion select for securities lending in accordance with this Agreement, subject to any limitations in the respective Customers' prospectuses and statements of additional information concerning the percentages of a Customer's assets which may be subject to securities lending transactions at any one time. (d) To use the securities lending services and custodial services of other financial institutions, including, without limitation, FAF Advisors, Inc. ("FAF Advisors") and other financial institutions that are agents or affiliates of the Bank as agents of the Bank, -4- for the benefit of each Customer, as the Bank in its discretion shall determine to be necessary or desirable to perform securities lending on behalf of each Customer. (e) In connection with each Loan, to receive from the Borrower, at the time the Securities are loaned, Collateral of a value at least equal to 100% of the then current Market Value of the Loaned Securities. Such Collateral shall be held as security by the Bank on behalf of the Customer for the due and punctual performance by the Borrower of any and all of the Borrower's obligations under the Borrower Agreement. (f) To hold and safekeep the Collateral on behalf of each Customer separate and apart from other securities lending collateral held by the Bank for other customers of the Bank in a manner such that each Customer shall have a perfected security interest in such collateral free and clear of any creditor of any Borrower or the Bank, and each Customer's specific interest in the Customer's Collateral shall at all times be noted in the records of the Bank. (g) To invest Cash Collateral for the benefit of each Customer in the Selected Series. (h) Upon termination of any Loan, to liquidate Cash Collateral investments made with the Collateral and to return the Collateral to the Borrower in accordance with the Borrower Agreement so long as the Borrower is not in default and the Bank receives the Loaned Securities from the Borrower. (i) To receive from the Borrower Substitute Payments and to forward such Substitute Payments to each Customer. (j) To pay to the Borrower all interest and dividend payments, including Substitute Payments, received on securities which are held as Collateral, provided that there is no material default by the Borrower of the terms and conditions of the Borrower Agreement, in cases where the Borrower has provided non-cash Collateral in the form of securities, in whole or in part. (k) To originate or terminate any Loan at any time as the Bank may in its discretion determine pursuant to the terms of this Agreement, without prior notice to a Customer. (l) In connection with a Customer's Loaned Securities, to collect loan fees owed by Borrowers and income earned on Cash Collateral investments, and to dispose of such monies pursuant to Sections 3(b) and 8 of this Agreement. (m) To disclose to any Borrower, or to any Person party to an investment entered into pursuant to Section 3(g) above, the name of the applicable Customer and such other information required by such Borrower or such Person to enable such Borrower or such Person to comply with applicable federal or state law, as the Bank may in its discretion deem necessary. -5- (n) To group each Customer's securities together with the securities of other securities lending customers for the purposes of facilitating Loans to Borrowers. Each Customer acknowledges that whether particular securities are loaned depends on many variables, including, but not limited to, the demand for a particular security by Borrowers, the Bank's automated queuing system for equitable utilization of all available securities for lending transactions, and the quantity of a particular security that is held in the lendable pool, and that the Bank cannot ensure that the Customer's Securities will become the subject of any particular Loan or that the Customer's Securities will be loaned. 4. Voting Rights. Customer shall not retain voting rights of Loaned Securities while loaned to any Borrower. 5. Mark to Market. The Bank shall on a daily basis (a) Mark to Market Loaned Securities and Collateral. If the Market Value of the Collateral at the close of trading on a Business Day is less than the Margin Percentage of the Market Value of the Loaned Securities at the close of trading on that day, the Borrower shall deliver, by the close of business on the following Business Day, an additional amount of Collateral the Market Value of which, together with the Market Value of all previously delivered collateral, equals at least the Margin Percentage of the Market Value of the Loaned Securities as of such preceding day. In the event that the Market Value of the Collateral exceeds the Margin Percentage of the Market Value of the Loaned Securities, part of the Collateral may be returned to the Borrower as long as the Market Value of the remaining Collateral equals at least the Margin Percentage of the Market Value of the Loaned Securities. 6. Accountings. The Bank shall include in a regular report to each Customer to be produced on a daily basis a listing of all securities loans outstanding. On a monthly basis the Bank shall provide to each Customer an accounting of all securities lending transactions. 7. Loan Termination by Customer. (a) Unless otherwise agreed in writing, any Customer may, in its discretion, elect to terminate a Loan on a termination date established by notice given to the Bank prior to the close of business on a Business Day. The termination date established by a termination notice shall be a date no earlier than the standard settlement date that would apply to a purchase or sale of the Loaned Securities, which date shall be determined in accordance with the terms of the Borrower Agreement. Upon receipt of such notice, the Bank shall notify the appropriate Borrower for return of the Loaned Securities in accordance with the terms of the Borrower Agreement. (b) The Bank shall be deemed to have received appropriate notice as required by this Section 7 upon receipt of written or oral directions (i) signed or given by any person whose name and signature is listed on the most recent certificate delivered by the Customer to the Bank which lists those persons authorized to give directions in the name and on behalf of the Customer or (ii) signed or given by any other person(s), duly authorized by the Customer to give directions to the Bank hereunder or whom the Bank reasonably believes to be so authorized. Appropriate notice as required by this Section 7 -6- shall include notice sent to the Bank by letter, memorandum, telegram, cable, telex, telecopy facsimile, video (CRT) terminal or other "on-line" system, or similar means of communication, or given over the telephone or in person. 8. Fees. (a) Each Customer shall pay fees to the Bank in the amount and at such times set forth on Exhibit C attached hereto and made a part hereof as though fully set forth herein. The provisions of Exhibit C may be renegotiated at any time upon five days written notice by either party hereto and may be amended by a separate writing between the Bank and a Customer. The Bank shall charge such fees against the net income received as proceeds from securities lending transactions (after payment of any applicable Borrower Rebate Fees) ("Net Income"); provided, however, that if not so charged, the Customer shall pay such fees. (b) Any Borrower Rebate Fee incurred by a Customer arising from the receipt of cash as Collateral for Loaned Securities shall be charged against the gross income received by the Customer as proceeds from securities lending transactions and the Bank shall pay such Borrower Rebate Fee to the appropriate Borrower on behalf of the Customer; provided, however, that if not so charged, the Customer shall pay such Borrower Rebate Fee. 9. Customer Representations and Warranties. (a) Each Customer represents and warrants that: (i) the Customer has the legal right, power and authority to execute, deliver and perform this Agreement and to carry out all of the transactions contemplated hereby; (ii) the execution and delivery of this Agreement by the Customer will not violate any provision of its charter, bylaws or any other governing documents, or any law, or any regulation, interpretation or order or any court or other government agency, or judgment, applicable to the Customer; (iii) the Customer has obtained all necessary authorizations, including those from any persons who may have an interest in the Securities, including the consent or approval of any governmental agency or instrumentality; (iv) the execution, delivery and performance of this Agreement and the carrying out of any of the transactions contemplated hereby will not be in conflict with, result in a breach of or constitute a default under any agreement or other instrument to which the Customer is a party or which is otherwise known to the Customer, including but not limited to, liens against and/or pledges of Securities; and (v) all persons executing this Agreement on behalf of the Customer and carrying out the transactions contemplated hereby on behalf of the Customer are duly authorized to do so. (b) The Trust represents and warrants that it is an "investment company" as that term is defined in the Investment Company Act of 1940 (the "1940 Act") and that it will indicated each "affiliate" as that term is defined in the 1940 Act by instructing the Bank not to lend each Customer's Securities to such Borrower by completion of Exhibit A hereto. -7- (c) Each Customer is aware that it is possible to loan portfolio securities without incurring the loan fees payable pursuant hereto by administering such a program itself, rather than hiring the Bank. (d) Each Customer represents and warrants that each Person who owns, controls or possesses securities which may be lent pursuant to this agreement is identified in the Customer Information Sheet attached hereto and made a part hereof as though fully set forth herein, such Customer Information Sheet to be updated from time to time upon written notice to the Bank from a Customer (the "Customer Information Sheet") and that the tax identification number of such Person is set forth opposite such Person's name on such Customer Information Sheet. (e) Each Customer represents and warrants (i) that the information contained in the attached Customer Information Sheet relating to such Customer is complete and accurate in all respects as of the date hereof and each Customer acknowledges and affirms that the Bank may rely upon the accuracy and completeness of the information contained in the Customer Information Sheet in complying with its obligations under applicable laws and regulations and (ii) that each Customer has reviewed and understands the Offering Memorandum. (f) Each Customer represents and warrants that all recitals contained herein are true and correct in all respects. 10. The Bank's Responsibilities. The Bank's duties and responsibilities shall only be those expressly set forth in this Agreement. The Bank hereby agrees that it shall at all times during the term of this Agreement exercise its reasonable care and efforts in performing its obligations hereunder. The Bank will perform such obligations and responsibilities in accordance with all applicable laws, including, but not limited to Securities and Exchange Commission rules and regulations. The Bank intends to rely on the Securities and Exchange Commission no-action letters entitled Sife Trust Fund (Feb. 17, 1982), Norwest Bank Minnesota, N.A. (May 25, 1995) and The Chase Manhattan Bank (July 24, 2001) in performing its responsibilities under this Agreement. Neither the Bank nor its agents shall be responsible for any loss or liability arising from their performance of the Bank's duties under this Agreement, except for direct loss or liability (but not consequential or punitive damages) arising from the Bank's, or its agent's, willful misfeasance, bad faith or negligence in the performance of the Bank's duties under this Agreement. In no event shall the Bank be liable for special, indirect or consequential damages, or lost profits or loss of business, arising under or in connection with this Agreement, even if previously informed of the possibility of such damages and regardless of the form of action. 11. Customer Responsibilities. (a) Each Customer agrees to (i) promptly notify the Bank of any change that the Customer wishes to make to Exhibit A, (ii) promptly notify the Bank if any information contained in the Customer Information Sheet relating to such Customer becomes inaccurate or untrue and (iii) indemnify the Bank for any losses resulting from such Customer's failure to adhere to the provisions of Subsection (a) of this Section 11. -8- (b) Each Customer agrees that, to the extent any loss arising out of investments of Cash Collateral in the Selected Series results in a deficiency in the amount of Collateral available for return to a Borrower, the Customer shall pay to the Bank, on demand, cash in an amount equal to such deficiency. (c) Each Customer acknowledges that the Bank is acting as an agent on the Customer's behalf in connection with the lending of the Customer's assets and the investment of cash received as Collateral for such Loans. Each Customer understands that it bears the risks of investment loss, including any decline in value of Cash Collateral investment and loss resulting from any securities lending default by a Borrower. (d) Each Customer acknowledges that it is responsible for paying any taxes that are incurred as a result of Loans made on behalf of the Customer, and each Customer agrees that it shall reimburse the Bank for any taxes paid on Customer's behalf by the Bank. (e) Each Customer agrees to reimburse the Bank and to hold the Bank harmless from and against any and all costs, expenses, damages, liabilities or claims, including reasonable fees and expenses of counsel incurred by the Bank which the Bank may sustain or incur or which may be asserted against the Bank by reason of or as a result of any action taken or omitted by the Bank in connection with operating under this Agreement (including, but not limited to, actions or omissions related to the lending of Securities to Borrowers or the holding or investment of Collateral or resulting from the Customer's failure to comply with its obligations under Section 11(a) hereof) other than those costs, expenses, damages, liabilities or claims arising out of the Bank's negligence, bad faith or willful misfeasance, as adjudicated by a court of competent jurisdiction. The foregoing shall be a continuing obligation of each Customer and each Customer's successors and assigns, notwithstanding the termination of any Loans hereunder or of this Agreement. The Bank may charge any amounts to which it is entitled hereunder against the account in which the Customer's Securities are held. 12. Indemnification. (a) In the event of a Borrower's material default of the terms and conditions of the Borrower Agreement, the Bank shall: (i) take all actions the Bank deems appropriate, in its discretion, to liquidate the Collateral, (ii) at its own expense, but subject to each Customer's obligations pursuant to Section 11(c) hereto, replace as soon as reasonably practicable such Loaned Securities with identical securities or the equivalent thereof in the event of a reorganization, recapitalization or merger of the issuer of the Loaned Securities, or (iii) if the Bank is unable to obtain replacement securities, the Bank shall provide the applicable Customer with immediately available funds in an -9- amount equal to the Market Value of such Loaned Securities. The Market Value shall be calculated (1) in the case of a Borrower insolvency, on the date of such insolvency, or (2) in the case of a Borrower's failure to return Loaned Securities, on the date that the Bank deposits funds to such Customer's account. (b) If the Market Value of the Collateral on the date of such replacement or credit is less than that which is required to purchase replacement securities or to provide equivalent funds to the applicable Customer as a result of a decrease in the Market Value of investments of Cash Collateral, the Bank will not be responsible for such decrease. In such event, the Bank shall purchase and deposit replacement securities, or deposit cash to such Customer's account, in an amount equal to the then current Market Value of Cash Collateral investments. If the Market Value of the Collateral on the date of such replacement or credit is less than that which is required to purchase replacement securities or to credit equivalent funds to Customer's account as a result of any reason other than a decrease in the Market Value of investments of Cash Collateral, Bank shall pay such additional amounts as are necessary to purchase replacement securities in an amount equal to the Market Value of such Loaned Securities or credit equivalent funds to Customer's account as of the date of such replacement. The Bank shall not be liable for any appreciation in the Market Value of the Loaned Securities subsequent to such date. (c) Each Customer agrees that the Bank shall be subrogated to the rights of the Customer in the Collateral and against the Borrower to the extent of any amount paid by the Bank to the Customer hereunder. (d) Except as provided for herein, the Bank shall have no additional liability to a Customer relating to any Borrower's failure to return Loaned Securities and no duty or obligation to take action to effect payment by a Borrower of any amounts owed by such Borrower pursuant to the Borrower Agreement. (e) Notwithstanding the foregoing, the Bank shall not be required to act inconsistently with (i) any court or government agency order regarding such Collateral or (ii) the Borrower Agreement. (f) With respect to its use in this Section 12, a Borrower's "insolvency" is defined to mean any of the following: (i) the Borrower shall commence any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law, or seek the appointment of a receiver, conservator, trustee, custodian or similar official for such party or any substantial part of its property; (ii) any case, proceeding or appointment referred to in the preceding Clause (i) shall be commenced against the Borrower, or any application shall be filed against the Borrower for a protective decree under the provisions of the Securities Investor Protection Act of 1970 as amended, any of which (aa) is consented to or not timely contested by the Borrower, (bb) results in the entry of any order for relief, such an appointment, the issuance of such a protective decree or the entry of any order having a similar effect, or (cc) is not dismissed within 15 days; (iii) the Borrower shall make a general assignment for the benefit of creditors; or (iv) the Borrower shall admit in writing its inability to pay its debts as they become due. -10- 13. Agreement Modification. This Agreement, together with the Exhibits hereto, contains a complete statement of the parties with respect to its subject matter, supersedes all existing agreements between them concerning the subject and cannot be amended or modified in any manner except by a written agreement executed by all parties hereto. Notwithstanding the foregoing, Exhibit B may be amended in the manner set forth in the definition of "Borrower" contained in Section 1 and the fee schedule set forth in Exhibit C may be renegotiated and amended in the manner set forth in Section 8(a). 14. Notice. Any notice required to be given in writing under this Agreement shall be delivered by hand or mailed by registered mail, postage prepaid, to FAF Advisors, Inc., 800 Nicollet Mall, Minneapolis, Minnesota 55402, Attention: Securities Lending, or such other address provided by the Bank, and to the Customer at the most recent address of such party provided to the Bank. 15. Termination. This Agreement may be terminated at any time by the Bank or any Customer upon thirty (30) days prior written notice to the other party. All outstanding Loans, unless a Customer shall specify otherwise, shall remain outstanding until such Loans terminate pursuant to the securities loan agreement with Borrower, even if such date is past the termination date established by either party pursuant to this Section 15 (but subject to Section 7 and to any other agreement between the Customer and the Bank). 16. Assignment. This Agreement shall not be assignable by the Bank or any Customer without the written consent of the other party, except that the Bank may assign this Agreement to an affiliate of the Bank. Subject to the preceding sentence hereof, this Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. 17. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Minnesota without reference to its conflicts or choice of law principles. 18. Matters Relating to the Trust as Massachusetts Business Trust. It is expressly agreed that the obligations of the Trust hereunder shall not be binding upon any of the Trustees, shareholders, nominees, officers, agents or employees of the Trust personally, but shall bind only the trust property of the Trust. The execution and delivery of this Agreement have been authorized by the Trustees, and this Agreement has been signed and delivered by an authorized officer of the Trust, acting as such, and neither such authorization by the Trustees nor such execution and deliver by such officer shall be deemed to have been made by any of them individually or to impose any liability on them personally, but shall bind only the trust property of the Trust as provided in the Trust's Declaration of Trust. [The remainder of this page is intentionally left blank] -11- IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as of the day and year first above written. BB&T Variable Insurance Funds, on behalf of each series thereof listed on Exhibit A hereto By: ------------------------------------ Name: ---------------------------------- Its: ----------------------------------- [Customer Signature Page] U.S. BANK NATIONAL ASSOCIATION By: ------------------------------------ Name: ---------------------------------- Its: ----------------------------------- [U.S. Bank Signature Page] EXHIBIT A FUNDS
FUND NAME TAX ID --------- ---------- Capital Manager Equity VIF 31-1759155 Large Cap VIF 31-1512391 Large Cap Growth VIF 31-1759159 Mid Cap Growth VIF 31-1759156 Special Opportunities Equity VIF 20-1267880 Total Return Bond VIF 20-1267915
Exh. A-1 EXHIBIT B APPROVED BORROWERS THE FOLLOWING ENTITIES ARE PRE-APPROVED AS "BORROWERS" PURSUANT TO SECTION 1(A) OF THE AGREEMENT UNLESS THE CUSTOMER PLACES AN "X" ON THE LINE ACROSS FROM A BORROWER NAME. ABN Amro Bank N.V. New York Branch ______________________ ABN Amro Incorporated ______________________ Ameritrade Clearing ______________________ Bank of America Securities, LLC ______________________ Barclays Capital Inc. ______________________ Bear, Stearns and Co. Inc. ______________________ Bear, Stearns Securities Corp. ______________________ BNP Paribas Securities Corp. ______________________ Calyon Securities (USA) Inc. ______________________ Cantor Fitzgerald Securities ______________________ CIBC World Markets ______________________ Citadel Trading Group, LLC ______________________ Citigroup Global Markets, Inc. ______________________ Credit Suisse Securities (USA) LLC ______________________ Deutsche Bank NA ______________________ Deutsche Bank Securities, Inc. ______________________ Dresdner Kleinwort Wasserstein Securities, LLC ______________________ Edwards, A.G. Inc. ______________________ First Clearing, LLC (Wachovia Corp.) ______________________ Fortis Securities, LLC ______________________ Goldman Sachs & Co., Incorporated ______________________ RBS Greenwich Capital, Inc. ______________________ HSBC Securities (USA), Inc. ______________________ ING Financial Markets, LLC ______________________ Jefferies & Company, Inc. ______________________ Lehman Brothers, Inc. ______________________ Merrill Lynch Government Securities Inc. ______________________ Merrill Lynch, Pierce, Fenner & Smith, Inc. ______________________ Morgan Stanley & Co., Inc. ______________________ J.P. Morgan Securities, Inc. ______________________ J.P. Morgan Chase Bank ______________________ Paloma Securities, LLC ______________________ Raymond James & Associates, Incorporated ______________________ RBC Dain Rauscher ______________________ RBC Capital Markets Corporation ______________________ SG Americas Securities, LLC ______________________ Societe Generale, New York Branch ______________________ Swiss American Securities, Incorporated ______________________ UBS Financial Services ______________________ UBS Securities LLC ______________________ Wachovia Bank NA ______________________ Wachovia Securities, Inc. ______________________
PLEASE INITIAL HERE TO APPROVE BORROWERS __________ Exh. A-1 EXHIBIT B LOAN FEE SCHEDULE The Bank shall be paid a fee for administering the securities lending program for the Customer. The fee shall be calculated daily by the Bank against the Net Income earned by the Customer on such day. The fee shall equal 25 percent (25%) of Net Income and shall be retained monthly by the Bank out of the Customer's aggregate Net Income for such month, provided, however, that if the fee is not so retained, the Customer shall pay such fee upon request from the Bank. CUSTOMER INFORMATION SHEET Please provide the Bank with the following information: Name: ______________________________________________________________ Tax identification number: _________________________________________ Principal place of business: _______________________________________ State and nation of incorporation or organization: _____________________________ Address (or the address of your registered agent) within state of incorporation or organization: ________________________________________ Please select ONE (and only one) of the following two series of the Mount Vernon Securities Lending Trust in which you wish the Bank to invest Cash Collateral (each series is described more fully in such series' respective Offering Memorandum): [ ] Short-Term Bond Portfolio [ ] Prime Portfolio (IF YOU FAIL TO SELECT EITHER OF THE SERIES ABOVE, OR IF YOU SELECT BOTH OF THE SERIES ABOVE, THE BANK WILL BE UNABLE TO LEND YOUR SECURITIES.) Please set forth below the name of each entity which owns, controls or possesses securities which may be lent pursuant to the Customer Agreement and the tax identification number of such entity (attach additional pages if necessary):
NAME TAX ID ---- ------ _____________________________________ ________________________________________ _____________________________________ ________________________________________ _____________________________________ ________________________________________ _____________________________________ ________________________________________ _____________________________________ ________________________________________ _____________________________________ ________________________________________ _____________________________________ ________________________________________ _____________________________________ ________________________________________ _____________________________________ ________________________________________ _____________________________________ ________________________________________