Exhibit (h)(1)
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the day of September, 2007 by and between BARCLAYS
FOUNDRY INVESTMENT TRUST, a Delaware statutory trust organized under the laws
of the State of Delaware (the "Trust"), and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company (the "Bank") (each of the Trust and the
Bank are referred to herein individually as a "Party" and together as the
"Parties").
WHEREAS, the Trust desires to appoint the Bank as its transfer agent,
dividend disbursing agent and agent in connection with certain other
activities, and the Bank desires to accept such appointment;
WHEREAS, the Bank is duly registered as a transfer agent as provided in
Section 17A(c) of the Securities Exchange Act of 1934, as amended (the "1934
Act");
WHEREAS, the Trust is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets;
WHEREAS, the Trust currently intends to offer shares in each of the series
and classes listed on Appendix A hereto (such series and classes, together with
all other series and classes subsequently established by the Trust and made
subject to this Agreement in accordance with Section 20 of this Agreement,
being herein referred to as the "Fund(s)");
NOW, THEREFORE, in consideration of the mutual covenants herein set forth,
the Trust and the Bank agree as follows:
1. Terms of Appointment. Subject to the terms and conditions set forth in this
Agreement, the Trust on behalf of the Funds hereby employs and appoints the
Bank to act, and the Bank agrees to act, as transfer agent for each of the
Fund(s)' authorized and issued shares of beneficial interest ("Shares"),
dividend disbursing agent and agent in connection with any accumulation,
open-account or similar plans provided to the shareholders of the Trust
("Shareholders") and set out in the currently effective prospectus and
statement of additional information, as each may be amended from time to time,
of the respective Funds (together, the "Prospectus(es)"), including without
limitation any periodic investment plan or periodic withdrawal program. For
purposes of this Agreement, Shareholder shall refer to a record holder of
Shares.
2. Definitions. Whenever used herein, the terms listed below will have the
following meaning:
2.1 Authorized Trust Person. Authorized Trust Person will mean any of the
persons duly authorized to give Proper Instructions (as defined below) or
otherwise act on behalf of the Trust by appropriate resolution of its Board.
Each Authorized Trust Person shall be set forth in a certificate as required by
Section 4 hereof.
2.2 Other Authorized Person. Other Authorized Person will mean:
(a) Any of the persons duly authorized to give Proper Instructions or
otherwise act on behalf of one or more of the financial intermediaries,
institutional investors or
other parties listed on a schedule provided by the Trust to the Bank from time
to time (the "Providers") by appropriate resolution of their respective
governing bodies; or
(b) Any Shareholder of a Fund who has delivered to the Bank a
signature guarantee.
Each person authorized to give Proper Instructions on behalf of a Provider
hereunder shall be set forth in a certificate as required by Section 4 hereof.
2.3 Board. Board will mean the Board of Trustees of the Trust.
2.4 Proper Instructions. Proper Instructions shall mean (i) instructions
regarding the purchase or sale of the Funds' Shares, and payments and
deliveries in connection therewith, given by an Authorized Trust Person or
Other Authorized Person, as the case may be, such instructions to be given in
such form and manner as the Bank and the Trust shall agree upon from time to
time; (ii) instructions from an Other Authorized Person with respect to
payments, checks, wire transfers and shareholder account information as to the
shareholder accounts over which such Provider has authority; and
(iii) instructions (which may be continuing instructions) regarding other
matters signed or initialed by an Authorized Trust Person. With regard only to
purchases and sales of Shares, oral instructions will be considered Proper
Instructions if the Bank reasonably believes them to have been given by an
Authorized Trust Person or Other Authorized Person. The Trust or the Other
Authorized Person, as the case may be, shall cause all oral instructions to be
promptly confirmed in writing. The Bank shall act upon and comply with any
subsequent Proper Instruction which modifies a prior instruction and the sole
obligation of the Bank with respect to any follow-up or confirmatory
instruction shall be to make reasonable efforts to detect any discrepancy
between the original instruction and such confirmation and to report such
discrepancy to the Trust or a Provider, as the case may be. The Trust shall be
responsible, at the Trust's expense, for taking any action, including any
reprocessing, necessary to correct any such discrepancy or error, and to the
extent such action requires the Bank to act, the Trust shall give the Bank
specific Proper Instructions as to the action required. Upon receipt by the
Bank of a certificate of an Authorized Trust Person as to the authorization by
the Board accompanied by a detailed description of procedures approved by the
Trust, Proper Instructions may include communication effected directly between
electro-mechanical or electronic devices provided that the Trust and the Bank
agree in writing that such procedures afford adequate safeguards for the Funds'
assets.
2.5 Key Performance Indicators. Key Performance Indicators or KPIs will mean
the targets for specific key Service Levels specified in Appendix B hereto.
2.6 Service Levels. Service Levels will mean the service levels set out in
the Service Level Agreements to which the Bank, the Trust, Barclays Global
Investors, N.A. and/or Barclays Global Fund Advisors are parties, as such
Service Level Agreements may from time to time be amended.
3. Duties of the Bank.
3.1 The Bank agrees that it will perform the following services:
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(a) In connection with procedures established from time to time by
agreement between the Trust and the Bank, the Bank shall:
(i) Receive for acceptance from the Trust and the Providers
orders for the purchase of Shares and promptly deliver payment and appropriate
documentation therefor to the custodian of the Trust appointed by the Board
(the "Custodian");
(ii) Pursuant to purchase orders received from the Trust and the
Providers, issue the appropriate number of Shares and hold such Shares in the
appropriate Shareholder account;
(iii) Receive for acceptance from the Trust and the Providers
redemption requests and redemption directions and deliver the appropriate
documentation therefor to the Custodian;
(iv) At the appropriate time as and when it receives monies paid
to it by the Custodian with respect to any redemption, pay over or cause to be
paid over in the appropriate manner such monies as instructed by the redeeming
Shareholders;
(v) Effect exchanges (if provided for in the Funds' respective
Prospectuses), account registration changes and transfers of Shares by the
registered owners thereof upon receipt of Proper Instructions;
(vi) Account for and administer the redemption fees on the
redemption and exchange of Shares (if provided for in the Funds' respective
Prospectuses);
(vii) Provide escheatment and lost shareholder services in
accordance with applicable laws and regulations and policies and procedures
agreed upon by the Parties;
(viii) Prepare and transmit payments for dividends and
distributions declared by the Trust on behalf of a Fund;
(ix) Issue replacement checks and place stop orders on original
checks based on Shareholders' representations that checks were not received or
were lost;
(x) Create and maintain all necessary records, including those
specified in Section 13 hereof, in accordance with all applicable laws and
regulations, including but not limited to records required by Section 31(a) of
the Investment Company Act of 1940, as amended (the "1940 Act") and the rules
thereunder, records required by Section 17A of the 1934 Act and the rules
thereunder and those records pertaining to the various functions performed by
the Bank hereunder. All records shall be available for inspection and use by
the Trust. Where applicable, such records shall be maintained by the Bank for
the periods and in the places required by Rule 31a-2 under the 1940 Act;
(xi) Make available during regular business hours all records and
other data created and maintained pursuant to this Agreement for reasonable
audit and inspection by the Trust, or any person retained by the Trust. Upon
reasonable notice by the Trust, the Bank shall make available during regular
business hours its facilities and premises employed in
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connection with its performance of this Agreement for reasonable visitation by
the Trust, or any person retained by the Trust; and
(xii) Record the issuance of Shares of the Trust and maintain,
pursuant to Rule 17Ad-10(c) under the 1934 Act, a record of the total number of
Shares of the Trust which are authorized, based upon data provided to it by the
Trust, and issued and outstanding. The Bank shall also provide the Trust on a
regular basis with the total number of Shares which are authorized and issued
and outstanding and shall have no obligation, when recording the issuance of
Shares, to monitor the issuance of such Shares or to take cognizance of any
laws relating to the issue or sale of such Shares, which functions shall be the
sole responsibility of the Trust.
(b) In addition to and not in lieu of the services set forth in the
above paragraph (a) or in any Schedule hereto, the Bank shall: (i) perform all
of the customary services of a transfer agent, dividend disbursing agent and,
as relevant, agent in connection with accumulation, open-account or similar
plans (including without limitation any periodic investment plan or periodic
withdrawal program), including but not limited to maintaining all Shareholder
accounts, preparing Shareholder meeting lists, withholding taxes on all
accounts, including nonresident alien accounts, preparing and filing U.S.
Treasury Department Forms 1099 and other appropriate forms required by federal
authorities with respect to dividends and distributions for all Shareholders,
preparing and mailing confirmation forms and statements of account to
Shareholders for all purchases and redemptions of Shares and other confirmable
transactions in Shareholder accounts, monitoring, reporting, and remitting as
directed by appropriate authorities for state escheat, tax lien and similar
purposes, responding to Shareholder telephone calls and Shareholder
correspondence, preparing and mailing activity statements and any required
regulatory and other communications by the Trust to Shareholders, and providing
Shareholder account information; (ii) provide a system which will enable the
Trust to monitor the total number of Shares sold in each state; and
(iii) coordinate with the Funds' print/mail vendor. The Trust shall
(x) identify to the Bank in writing those transactions and assets to be treated
as exempt from blue sky reporting for each state and (y) verify the
establishment of transactions for each state on the system prior to activation
and thereafter monitor the daily activity for each state. The responsibility of
the Bank for a Fund's blue sky state registration status is solely limited to
the initial establishment of transactions subject to blue sky compliance by
such Fund and the reporting of such transactions to the Fund as provided above.
(c) Additionally, the Bank shall utilize a system to identify all
"as-of" Share transactions (i.e., Share transactions that involve purchase and
redemption orders for Shares that are received by the Trust, an agent of the
Trust or a financial intermediary prior to the time as of which the net asset
value per Share is computed on a business day but are processed after the time
as of which the net asset value per Share is computed on the business day on
which the orders were received) and shall compute the net effect upon the
Fund(s) of such transactions so identified on a daily and cumulative basis.
3.2 Duties Regarding the Trust's AML Program.
(a) Duties of the Trust. The Trust shall perform the following functions
of the Trust's Customer Identification Program ("CIP"):
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(i) Notice and Application. Because the Bank is responsible for
providing notice in the Trust's account applications to the Trust's prospective
account holders that information is being requested to verify their identity in
order to combat money laundering and terrorist financing, pursuant to
Section 3.2(b)(iv) below, the Trust will not create new or modify current forms
of account applications without the prior approval of the Bank.
(ii) Recordkeeping. The Trust shall collect or, if applicable,
create and retain the required records documenting the performance of these
functions in accordance with, and for the periods required by, applicable laws
and regulations.
(iii) AML Program. The Trust shall promptly furnish to the Bank a
copy of the Trust's AML Program and all amendments thereto.
(b) Duties of the Bank. Subject to the terms and conditions set forth
in this Agreement, the Trust delegates to the Bank on behalf of the Trust and
its principal underwriter, and the Bank hereby assumes, the following functions
set forth in this Section 3.2(b) with respect to new or existing Trust
customers, as defined in applicable Treasury regulations 31 C.F.R. (S) 103.122
(the "CIP Rule") (each a "CIP Customer"), as required pursuant to the CIP Rule
and all Office of Foreign Asset Control ("OFAC") requirements and other similar
compliance responsibilities (the "Delegated Functions"):
(i) Information Collection.
(A) The Bank shall obtain all required identifying information
from each CIP Customer, under applicable laws and regulations and in accordance
with the Bank's CIP and any procedures thereunder. This information will
include at a minimum, the following information with respect to each CIP
Customer, or such other information as is required pursuant to the CIP Rule:
(i) name, (ii) date of birth for an individual, (iii) residential address for
individuals and address for principal place of business for a legal entity, and
(iv) taxpayer identification number for a U.S. person or appropriate
identification number or information for a non-U.S. person.
(B) If the Bank does not receive all such identifying
information for any CIP Customer, the Bank will use its best efforts to contact
the CIP Customer and gather the required information. In the event the Bank is
unable to gather such information, the Bank will immediately contact the
Trust's AML Compliance Officer, and the Trust's AML Compliance Officer will
attempt to collect the outstanding identifying information. The Trust will
promptly transmit to the Bank any identifying information that the Trust is
able to collect.
(ii) Identity Verification.
(A) In accordance with the Bank's CIP, unless otherwise
required, the Bank will use non-documentary methods to verify the information
provided to the Bank under Section 3.2(b)(i) above for each CIP Customer.
(B) If documentary identity verification for any CIP Customer
is required in accordance with the Bank's CIP and any procedures thereunder,
the Bank will be
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responsible for reviewing the appropriate documentation and verifying the
identity of the CIP Customer based on that documentation.
(C) The Bank will not open any CIP Customer's account or
accept monies into the Trust, or any series or class thereof, on behalf of the
CIP Customer until the Bank is able to collect all required identifying
information and verify the identity of the CIP Customer.
(iii) Report Filing. The Bank shall monitor for and determine
when to file any and all reports that are required to be filed by the Funds in
connection with the Trust's AML Program. Without limiting the generality of the
foregoing, the Bank shall monitor for and determine when a suspicious activity
report ("SAR") should be filed as required by applicable laws and regulations
and prepare and file the SAR. The Bank shall also provide the Fund with a copy
of the SAR within a reasonable time after filing and notify the Trust's AML
Compliance Officer if any further communication is received from the U.S.
Department of the Treasury or other law enforcement agencies regarding the SAR.
The Bank shall also be required to monitor and track cash and cash equivalents
and file a Currency Transaction Report ("CTR") if required, and issue the
Shareholder notices required by the IRS. In the event that the Bank detects
activity as a result of the implementation of the Trust's AML Program which
necessitates the filing by the Bank of a SAR, a CTR or other similar report or
notice to OFAC or other regulatory authorities, then the Bank shall timely file
such report and also immediately notify the Trust's AML Compliance Officer,
unless prohibited by applicable laws and regulations.
(iv) OFAC and Other Similar Compliance. The Bank shall screen new
and existing customers, including Trust customers, against lists of politically
exposed persons and known or suspected terrorists or terrorist organizations
prepared by any federal government agency and referred to the Bank in
accordance with the Bank's CIP and all federal government directives related to
such lists. These lists include, but are not limited to, those prepared by
OFAC, which administers and enforces economic and trade sanctions against
targeted foreign countries, terrorism sponsoring organizations and
international narcotics traffickers based on U.S. foreign policy and national
security goals. Such screening shall occur (i) nightly for new accounts and
accounts with changes to identifying data; (ii) nightly upon receipt of changes
to OFAC or other lists; and (iii) periodically for existing accounts. In the
event that a new or existing Trust customer matches a name contained on one of
the foregoing lists and the Bank cannot resolve such match in accordance with
the Bank's CIP, the Bank shall not open such customer's account, shall freeze
such customer's assets and will immediately inform the Trust's AML Compliance
Officer of the foregoing circumstances, whereupon the Trust's AML Compliance
Officer shall take such other action as may be required by applicable laws and
regulations.
(v) Notice and Application. The Bank shall provide notice in the
Trust's account applications to the Trust's prospective account holders that
information is being requested to verify their identity in order to combat
money laundering and terrorist financing. The Trust account applications shall
request, at a minimum, the following information with respect to each account
holder, or such other information as is required pursuant to the CIP Rule:
(i) name, (ii) date of birth for an individual, (iii) residential address for
individuals and address
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for principal place of business for a legal entity, and (iv) taxpayer
identification number for a U.S. person or appropriate identification number or
information for a non-U.S. person.
(vi) Recordkeeping. The Bank will create and retain the required
records documenting the performance of the functions that it has agreed to
perform as set forth in this Section 3.2 in accordance with, and for the
periods required by, applicable laws and regulations.
(c) Certifications.
(i) The Bank shall certify to the Trust, on an annual basis, that
the Bank has performed (and will continue to perform) the functions that it has
agreed to perform as set forth in this Section 3.2 and that the Bank has
performed (and will continue to perform) those functions in accordance with the
specified aspects of the Trust's AML Program.
(ii) In addition, the Bank shall certify, on a quarterly basis,
that:
(A) The Bank's AML Program and the Bank's CIP have been
approved by properly authorized officers of the Bank or the Bank's board of
directors (or similar governing body);
(B) The Bank has established and implemented policies,
procedures and internal controls reasonably designed to prevent the Bank from
being used for money laundering or the financing of terrorist activities in
connection with the services it provides to the Trust, including, but not
limited to, all customer identification procedures related to all individuals
and entities investing in the Trust or any series or class thereof, and to
achieve compliance with the USA PATRIOT Act and the CIP Rule (the "Policies");
(C) The Bank has designated an individual or individuals
responsible for implementing and monitoring the Policies;
(D) The Bank has provided, and will continue to provide,
ongoing training for the appropriate personnel with respect to money laundering
activities (particularly as they relate to the mutual fund industry), all
applicable money laundering laws and regulations, and the Policies;
(E) The Bank's Policies are functioning as intended;
(F) Except as may have been previously disclosed to the
Trust's AML Compliance Officer in writing, during the period covered by the
certification, there was no suspicious activity reportable under applicable
laws and regulations with respect to the Trust or any series or class thereof,
and that none of the Trust's applicants or shareholders failed any of the
procedures enumerated in the Policies;
(G) The Bank provides for periodic testing of the Policies by
its internal auditors; and
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(H) There have been no amendments to the Bank's AML Program or
the Bank's CIP and other similar compliance procedures that may materially
affect the Trust or, alternatively, there has been an amendment to the Bank's
AML Program or the Bank's CIP, which amendment may materially affect the Trust
and which amendment has been furnished to the Trust's AML Compliance Officer
pursuant to Section 3.2(e)(i).
(d) Consent to Examination. The Bank understands and acknowledges
that the Trust remains responsible for ensuring its compliance with the USA
PATRIOT Act and the CIP Rule and that both the Bank, for purposes of the Bank's
AML Program and the Bank's CIP, as they relate to the Trust, and the records
the Bank maintains for the Trust relating to the Trust's AML Program may be
subject, from time to time, to examination and/or inspection by federal
regulators, the Trust's auditors or the Trust's AML Compliance Officer as part
of the periodic testing of the Trust's AML Program. The Bank hereby consents to
such examination and/or inspection and agrees to cooperate with such federal
examiners and auditors in connection with their review. For purposes of such
examination and/or inspection, the Bank will make available during normal
business hours, all required records and information concerning the functions
of the Trust's AML Program performed by the Bank for review by such examiners
and auditors. The Trust shall provide the Bank with notice of any pending or
planned examinations as soon as practicable after the Trust is notified of such
examination.
(e) Miscellaneous.
(i) In the event that the Bank materially amends the Bank's AML
Program or the Bank's CIP, it shall promptly provide such amended AML Program
and/or CIP and a written explanation of the amendment(s) to the Trust's AML
Compliance Officer.
(ii) At least annually, the Bank shall provide the Trust's AML
Compliance Officer with a report, in the form of the Bank's most recent SAS70,
which includes a summary of the findings from the most recent independent audit
of the Bank's AML Program.
(iii) A duly appointed officer of the Bank shall notify the
Trust's AML Compliance Officer promptly in writing of any material violations
of the Bank's AML Program that have been noted by the Bank's internal or
external auditors and may be adverse to the Trust's interests, and shall
provide the Trust's AML Compliance Officer with additional information
regarding corrective actions taken in response to such violations as the
Trust's AML Officer may reasonably request.
(iv) Except to the extent prohibited by laws and regulations, the
Bank's AML Compliance Officer will advise the Trust's AML Compliance Officer
promptly if there have been any suspicious activities involving the Trust or
any series or class thereof.
(v) The Bank shall provide the Trust's AML Compliance Officer
with any additional reports as the Trust's AML Compliance Officer or the
Trust's Board may reasonably request, pursuant to the Trust's AML Program.
(f) Limitation of Delegation. The Trust acknowledges and agrees that
in accepting the delegation hereunder, the Bank is agreeing to perform only
those aspects of the Trust's AML Program as specified in this Section 3.2, and
the Bank is not undertaking and shall
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not be responsible for any other aspect of the Trust's AML Program or for the
overall compliance by the Trust with the USA PATRIOT Act.
4. Certification as to Authorized Persons. The Secretary or an Assistant
Secretary of the Trust and each Provider will at all times maintain on file
with the Bank his or her certification to the Bank, in such form as may be
acceptable to the Bank, of the names and signatures of the Authorized Trust
Persons and Other Authorized Persons acting on behalf of such Provider, it
being understood that upon the occurrence of any change in the information set
forth in the most recent certification on file (including without limitation
any person named in the most recent certification who is no longer an
Authorized Trust Person or Other Authorized Person as designated therein), the
Secretary or an Assistant Secretary of the Trust and each Provider will sign a
new or amended certification setting forth the change and the new, additional
or omitted names or signatures. The Bank will be entitled to rely and act upon
any certificate given to it by the Trust or a Provider, as the case may be,
which has been signed by Authorized Trust Persons or Other Authorized Persons,
as the case may be, named in the most recent certification received by the Bank.
5. Sale of Trust Shares.
5.1 Whenever a Fund shall sell or cause to be sold any Shares of such Fund,
it shall deliver or cause to be delivered to the Bank a document duly
specifying: (i) the name of the Fund whose Shares were sold; (ii) the trade
date; (iii) the amount of money to be delivered to the Custodian for the sale
of such Shares and specifically allocated to such Fund; and (iv) in the case of
a new account, a new account application or sufficient information to establish
an account.
5.2 The Bank will, upon receipt by it of a check, wire transfer or other
payment identified by it as an investment in Shares of one of the Funds and
drawn or endorsed to the Bank as agent for, or identified as being for the
account of, one of the Funds, promptly deposit such check or other payment to
the appropriate Trust account postings necessary to reflect the investment. The
Bank will notify the Trust, or its designee, and the Custodian of all purchases
and related account adjustments.
5.3 Under written procedures as established by mutual agreement between the
Trust and the Bank, the Bank shall issue to the purchaser or its authorized
agent such Shares, computed to the nearest applicable number of decimal points
as agreed upon by the Parties, as such purchaser is entitled to receive, based
on the appropriate net asset value of the applicable Fund's Shares, determined
in accordance with the Fund's Prospectus and any applicable laws and
regulations. In issuing Shares to a purchaser or its authorized agent, the Bank
shall be entitled to rely upon the latest directions, if any, previously
received by the Bank from the purchaser or its authorized agent concerning the
delivery of such Shares.
5.4 The Bank shall not be required to issue any Shares of the Trust where it
has received a written instruction from the Trust or written notification from
any appropriate federal or state authority that the sale of the Shares of the
Fund(s) in question has been suspended or discontinued, and the Bank shall be
entitled to rely upon such written instructions or written notification.
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5.5 Upon the issuance of any Shares of any Fund(s) in accordance with the
foregoing provisions of this Section, the Bank shall not be responsible for the
payment of any original issue or other taxes if any, required to be paid by the
Trust in connection with such issuance.
5.6 The Bank may establish such additional rules and regulations governing
the transfer or registration of Shares as it may deem advisable and consistent
with such rules and regulations generally adopted by transfer agents, or with
the written consent of the Trust, any other rules and regulations.
6. Returned Checks. In the event that any check or other order for the transfer
of money is returned unpaid for any reason, the Bank will take such steps as
the Bank may, in its discretion, deem appropriate to protect the Trust from
financial loss or as the Trust or its designee may instruct. Provided that the
standard procedures, as agreed upon in writing from time to time, between the
Trust and the Bank, regarding purchases and redemptions of Shares, are adhered
to by the Bank, the Bank shall not be liable for any loss suffered by a Fund as
a result of returned or unpaid purchase or redemption transactions. Legal or
other expenses incurred to collect amounts owed to a Fund as a consequence of
returned or unpaid purchase or redemption transactions shall be an expense of
that Fund.
7. Redemptions. Shares of any Fund may be redeemed in accordance with the
procedures set forth in the Fund's Prospectus and the Bank will duly process
all redemption requests.
8. Transfers and Exchanges. The Bank is authorized to review and process
(i) transfers of Shares of each Fund, or (ii) exchanges between Funds on the
records of the Funds maintained by the Bank and exchanges between a Fund and
any other entity, as may be permitted by the Fund's Prospectus. If Shares to be
transferred are represented by outstanding certificates, the Bank will, upon
surrender to it of the certificates in proper form for transfer and upon
cancellation thereof, countersign and issue new certificates for a like number
of Shares and deliver the same. If the Shares to be transferred are not
represented by outstanding certificates, the Bank will, upon an order therefor
by or on behalf of the registered holder thereof in proper form, credit the
same to the transferee on its books. If Shares are to be exchanged for Shares
of another Fund, the Bank will process such exchange in the same manner as a
redemption and sale of Shares, except that it may in its discretion waive
requirements for information and documentation.
9. Right to Seek Assurances. The Bank reserves the right to refuse to transfer
or redeem Shares until it is satisfied that the requested transfer or
redemption is legally authorized, and it shall incur no liability for the
refusal, in good faith, to make transfers or redemptions which the Bank, in its
judgment, deems improper or unauthorized, or until it is satisfied that there
is no basis for any claims adverse to such transfer or redemption. The Bank
may, in effecting transfers, rely upon the provisions of the Uniform Act for
the Simplification of Fiduciary Security Transfers or the Uniform Commercial
Code, as the same may be amended from time to time, which in the opinion of
legal counsel for the Trust or the Bank's own legal counsel, do not require
certain documents in connection with the transfer or redemption of Shares of
any Fund, and the Trust shall indemnify the Bank for any act done or omitted by
it in compliance with such laws or in reliance upon opinions of counsel of the
Trust or of the Bank.
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10. Distributions.
10.1 The Trust will promptly notify the Bank of the declaration of any
dividend or distribution. The Trust shall furnish to the Bank a resolution of
the Board certified by the Secretary (a "Certificate"): (i) authorizing the
declaration of dividends on a specified periodic basis and authorizing the Bank
to rely on Proper Instructions provided by an Authorized Trust Person
specifying the date of the declaration of such dividend or distribution, the
date of payment thereof, the record date as of which Shareholders entitled to
payment shall be determined and the amount payable per share to Shareholders of
record as of such record date and the total amount payable to the Bank on the
payment date; or (ii) setting forth the date of the declaration of any dividend
or distribution by a Fund, the date of payment thereof, the record date as of
which Shareholders entitled to payment shall be determined, and the amount
payable per share to the Shareholders of record as of that date and the total
amount payable to the Bank on the payment date.
10.2 The Bank, on behalf of the Trust, shall instruct the Custodian to place
in a dividend disbursing account funds equal to the cash amount of any dividend
or distribution to be paid out. The Bank will calculate, prepare and mail
checks to (at the address as it appears on the records of the Bank), or (where
appropriate) credit such dividend or distribution to the account of Fund
Shareholders, and maintain and safeguard all underlying records.
10.3 The Bank will replace lost checks at its discretion and in conformity
with regular business practices.
10.4 The Bank will maintain all records necessary to reflect the crediting
of dividends which are reinvested in Shares of the Trust, including without
limitation daily dividends.
10.5 The Bank shall not be liable for any improper payments made in
accordance with a resolution of the Board.
10.6 If the Bank shall not receive from the Custodian sufficient cash to
make payment to all Shareholders of the Trust as of the record date, the Bank
shall, upon notifying the Trust, withhold payment to all Shareholders of record
as of the record date until such sufficient cash is provided to the Bank and
shall not be liable for any claim arising out of such withholding.
11. Other Duties. In addition to the duties expressly provided for herein, the
Bank shall perform such other duties and functions and shall be paid such
amounts therefor as may from time to time be agreed to in writing.
12. Taxes. It is understood that the Bank shall file such appropriate
information returns concerning the payment of dividends and capital gain
distributions and tax withholding with the proper federal, state and local
authorities as are required by law to be filed by the Trust and shall withhold
such sums as are required to be withheld by applicable laws and regulations.
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13. Books and Records / Intellectual Property.
13.1 Books and Records.
(a) Record Retention. The Bank shall create and maintain accurate,
complete and up-to-date books and records relating to the services provided
hereunder in accordance with this Agreement and in compliance with applicable
laws and regulations (including without limitation the 1940 Act and the rules
thereunder). The Trust shall retain ownership of all such books and records.
(b) Shareholder Records. The Bank shall create and maintain records
showing for each Shareholder's account the following: (i) names, addresses and
tax identification numbers; (ii) numbers of Shares held; (iii) historical
information (as available from prior transfer agents) regarding the account of
each Shareholder, including dividends paid and date and price of all
transactions on a Shareholder's account; (iv) any stop or restraining order
placed against a Shareholder's account; (v) information with respect to
withholdings; (vi) any capital gain or dividend reinvestment order, plan
application, dividend address and correspondence relating to the current
maintenance of a Shareholder's account; (vii) certificate numbers and
denominations for any Shareholders holding certificates; (viii) any information
required in order for the Bank to perform the calculations contemplated or
required by this Agreement; and (ix) such other information and data as may be
required by applicable laws and regulations.
(c) Any records required to be maintained by Rule 31a-1 under the 1940
Act will be preserved for the periods prescribed in Rule 31a-2 under the 1940
Act. Such records may be inspected by the Trust and its duly authorized
representatives and agents during regular business hours upon reasonable
notice. The Bank may, at its option at any time, and shall forthwith upon the
Trust's demand, turn over to the Trust and cease to retain in the Bank's files,
records and documents created and maintained by the Bank in performance of its
services or for its protection. At the end of the six-year retention period,
such documents will either be turned over to the Trust, or destroyed in
accordance with the Trust's authorizations.
(d) Written procedures applicable to the services to be performed
hereunder may be established from time to time by agreement between the Trust
and the Bank. The Bank shall have the right to utilize any shareholder
accounting and recordkeeping system which, in its opinion, qualifies to perform
any services to be performed hereunder. The Bank shall keep records relating to
the services performed hereunder in accordance with the requirements of this
Agreement, in the form and manner as it may deem advisable.
13.2 Intellectual Property.
(a) Use of Trust trademarks or service marks (or marks of related
companies) by the Bank shall be prohibited, unless the Parties otherwise agree
in a duly authorized writing.
(b) The Bank agrees that all books, records and other information of
Barclays Global Fund Advisors ("BGFA") or the Trust ("Materials") and all
proprietary inventions, copyrightable works, computer software, technical
know-how, trademarks and other intellectual property (collectively,
"Intellectual Property") owned by BGFA or the Trust that is received by
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the Bank from BGFA, the Trust or any service provider for use in the
performance of the Bank's duties set forth herein shall remain the property
exclusively of BGFA or the Trust, as applicable, and, following termination of
this Agreement, all Materials and Intellectual Property owned by BGFA or the
Trust shall be returned to BGFA or the Trust, as applicable, and the Bank shall
retain no rights to hold or use any Materials or such Intellectual Property
thereafter.
14. Fees and Expenses.
14.1 Fees. For performance by the Bank pursuant to this Agreement, the
Fund(s) agree to pay the Bank such fees as may from time to time be agreed in
writing between the Parties.
14.2 Expenses. In addition to the fees paid under Section 14.1 above, the
Fund(s) agree to reimburse the Bank for out-of-pocket expenses incurred by the
Bank in performing its obligations under this Agreement as may be agreed in
writing between the Parties. In addition, any other expenses incurred by the
Bank at the request or with the written consent of the Trust including, without
limitation, any equipment or supplies which the Trust specifically orders or
requires the Bank to purchase, will be reimbursed by the Trust.
14.3 The Fund(s) agree to pay all proper fees and reimbursable expenses
within thirty days following the mailing of the respective billing notice.
Postage for mailing of dividends, proxies, Fund reports and other mailings to
all Shareholder accounts shall be advanced to the Bank by the Trust prior to
the mailing date of such materials as agreed to by the Parties. Any waiver or
extension by the Bank of the thirty day time period commented in this
Section 14.3 shall not constitute a dismissal or any monies due under this
Agreement nor shall such waiver or extension apply to any future monies due to
the Bank hereunder.
15. Representations and Warranties of the Bank.
The Bank represents and warrants to the Trust that:
15.1 It is a trust company duly organized and existing and in good standing
under the laws of the Commonwealth of Massachusetts.
15.2 It is empowered under applicable laws and regulations and by its
charter and by-laws to enter into and perform this Agreement.
15.3 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
15.4 It has and will continue to have access to the necessary facilities,
equipment, computer systems and personnel to perform its duties and obligations
under this Agreement, including, but not limited to, reasonable back-up and
data recovery facilities, equipment, computer systems and personnel.
15.5 This Agreement, when executed and delivered, will constitute a legal,
valid and binding obligation of the Bank, enforceable against the Bank in
accordance with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the rights and
remedies of creditors and secured parties.
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16. Representations and Warranties of the Trust.
The Trust represents and warrants to the Bank that:
16.1 It is a statutory trust duly organized and existing and in good
standing under the laws of the State of Delaware as set forth in the preamble
hereto.
16.2 It is empowered under applicable laws and regulations and by its
charter documents and by-laws to enter into and perform this Agreement.
16.3 All proceedings required by said charter documents and by-laws have
been taken to authorize it to enter into and perform this Agreement.
16.4 It is an open-end investment company registered under the 1940 Act.
16.5 A registration statement on Form N-1A (including a prospectus and
statement of additional information) under the Securities Act of 1933, as
amended (the "1933 Act"), and the 1940 Act is currently effective and, except
as the Trust may otherwise notify the Bank, will remain effective, and any
appropriate state securities law filings have been made and will continue to be
made, with respect to all Shares of the Trust being offered for sale.
16.6 When Shares are hereafter issued in accordance with the terms of the
applicable Fund's Prospectus, such Shares shall be validly issued, fully paid
and nonassessable by the Fund.
16.7 This Agreement, when executed and delivered, will constitute a legal,
valid and binding obligation of the Trust, enforceable against the Trust in
accordance with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the rights and
remedies of creditors and secured parties.
17. Indemnification.
17.1 Notwithstanding anything in this Agreement to the contrary, in no event
shall the Bank or any of its officers, directors, employees or agents
(collectively, the "Bank Indemnified Parties") be liable to the Trust, any
Fund, any Provider, or any third party, and the Trust and each Fund shall
indemnify and hold the Bank and the Bank Indemnified Parties harmless from and
against any and all loss, damage, liability, actions, suits, claims, costs and
expenses, including legal fees (a "Claim"), arising as a result of any act or
omission of the Bank or any Bank Indemnified Party under this Agreement, except
for any Claim resulting from the negligence, willful misfeasance or bad faith
of the Bank or any Bank Indemnified Party. Without limiting the foregoing,
neither the Bank nor the Bank Indemnified Parties shall be liable for, and the
Bank and the Bank Indemnified Parties shall be indemnified against, any Claim
arising as a result of:
(a) Any actions taken or omitted to be taken by the Bank or its
permitted agents or subcontractors in good faith in reliance on, or use by the
Bank or its permitted agents or subcontractors of, information, records and
documents which (i) are received by the Bank or its permitted agents or
subcontractors and furnished to such party by or on behalf of the Fund(s)
(other than by any affiliate of the Bank on behalf of the Fund(s)), (ii) have
been prepared and/or maintained by the Fund(s) or any other person or firm on
behalf of the Fund(s) (other than by
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any affiliate of the Bank on behalf of the Fund(s)), or (iii) were received by
the Bank or its permitted agents or subcontractor from a prior transfer agent
(other than any affiliate of the Bank).
(b) Any action taken or omitted to be taken by the Bank in good faith
reliance upon any then effective law or regulation or interpretation of a law
or regulation.
(c) The Fund(s)' refusal or failure to comply with the terms of this
Agreement, or which arise out of the Funds' lack of good faith, negligence or
willful misconduct or which arise out of the breach of any representation or
warranty of the Fund(s) hereunder.
(d) The reliance on, or the carrying out by the Bank or its permitted
agents or subcontractors of, any Proper Instructions in accordance with the
terms thereof.
(e) The offer or sale of Shares by the Trust in violation of (i) any
requirement under the federal securities laws; (ii) any requirement under the
securities laws of any state; or (iii) any stop order or other determination or
ruling by any federal or state agency with respect to the offer or sale of such
Shares.
17.2 Notwithstanding anything in this Agreement to the contrary, in no event
shall the Trust or any of its officers, trustees, employees or agents
(collectively, "Trust Indemnified Parties") be liable to the Bank or any Bank
Indemnified Party for, and the Bank shall indemnify and hold the Trust
Indemnified Parties harmless from and against, any and all losses, damages,
costs, charges, legal fees, payments, expenses and liability arising out of or
attributed to any action or failure or omission to act by the Bank as a result
of the Bank's lack of good faith, negligence, willful misconduct, knowing
violation of law or fraud.
17.3 At any time the Bank may apply to any officer of the Trust for
instructions, and may consult with legal counsel of the Bank or the Trust with
respect to any matter arising in connection with the services to be performed
by the Bank under this Agreement, and the Bank and its agents or subcontractors
shall not be liable and shall be indemnified by the Trust for any action taken
or omitted by it in reliance upon and in conformity with such instructions or
upon the opinion of such counsel except for a knowing violation of law. The
Bank, its permitted agents and subcontractors shall be protected and
indemnified in acting upon any paper or document furnished by or on behalf of
the Fund(s), including any information furnished by Provider(s), reasonably
believed to be genuine and to have been signed by the proper person or persons
and within the scope of their authority, or upon any instruction, information,
data, records or documents provided to the Bank or its permitted agent or
subcontractor by machine readable input, telex, CRT data entry or other similar
means authorized by the Fund(s), and the Bank, its permitted agents and
subcontractors shall not be held to have notice of any change of authority of
any person, until receipt of written notice thereof from the Fund(s). The Bank,
its permitted agents and subcontractors shall also be protected and indemnified
in recognizing stock certificates which are reasonably believed to bear the
proper manual or facsimile signatures of an officer of the Trust, and one
proper countersignature of any former transfer agent or registrar, or of a
co-transfer agent or co-registrar.
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17.4 In the event either Party is unable to perform its obligations under
the terms of this Agreement because of acts of God, strikes, interruption of
electrical power or other utilities, equipment or transmission failure or
damage reasonably beyond its control, or other causes reasonably beyond its
control, such Party shall not be liable to the other for any damages resulting
from such failure to perform or otherwise from such causes, provided that the
Bank shall make all reasonable efforts, whenever necessary, to use suitable
data processing back-up facilities.
17.5 Neither Party to this Agreement shall be liable to the other Party for
special, incidental or consequential damages, even if the other Party has been
advised of the possibility of such damages, under any provision of this
Agreement or for any act or failure to act hereunder as contemplated by this
Agreement.
17.6 In order that the indemnification provisions contained in this
Section 17 shall apply, upon the assertion of a claim for which either Party
may be required to indemnify the other, the Party seeking the indemnification
shall promptly notify the other Party of such assertion, and shall keep the
other Party advised with respect to all developments concerning such claim. The
Party seeking indemnification shall give the indemnifying Party full and
complete authority, information and assistance to defend such claim or
proceeding, and the indemnifying Party shall have, at its option, sole control
of the defense of such claim or proceeding and all negotiations for its
compromise or settlement. The Party seeking indemnification shall in no case
confess any claim or make any compromise in any case in which the other Party
may be required to indemnify it except with the other Party's prior written
consent, which consent shall not be unreasonably withheld, conditioned or
delayed.
18. Covenants of the Trust and the Bank.
18.1 The Trust shall promptly furnish or cause to be furnished to the Bank
the following:
(a) A certified copy of the resolution of the Trustees of the Trust
authorizing the appointment of the Bank and the execution and delivery of this
Agreement.
(b) A copy of the charter documents and by-laws of the Trust and all
amendments thereto.
(c) Copies of each vote of the Board designating Authorized Trust
Persons to give instructions to the Bank, and a certificate providing specimen
signatures for such Authorized Trust Persons.
(d) Certificates as to any change in any officer or Trustee of the Trust.
(e) Copies of each vote of the governing body of the Provider(s)
designating Other Authorized Persons to give instructions to the Bank, and a
certificate providing specimen signatures for such Other Authorized Persons.
(f) Certificates as to any change in any officer or director of the
Provider(s).
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(g) If applicable, a specimen of the certificate of Shares in each Fund
of the Trust in the form approved by the Trustees, with a certificate as to
such approval.
(h) All account application forms and other documents relating to
Shareholder accounts or relating to any plan, program or service offered by the
Trust.
(i) A list of all Shareholders of the Fund(s) with the name, address and
tax identification number of each Shareholder, and the number of Shares of the
Fund(s) held by each certificate numbers and denominations (if any certificates
have been issued), lists of any account against which stops have been placed,
together with the reasons for said stops, and the number of Shares redeemed by
the Fund(s).
(j) An opinion of counsel for the Trust with respect to the validity of
the Shares and the status of such Shares under the 1933 Act.
(k) Copies of the Trust's registration statement on Form N-1A (if
applicable) as amended and declared effective by the Securities and Exchange
Commission and all post-effective amendments thereto.
(l) Such other certificates, documents or opinions as the Bank may deem
necessary or appropriate for the Bank in the proper performance of its duties
hereunder.
18.2 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Trust for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any,
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
18.3 The Bank agrees that all records prepared or maintained by the Bank
pursuant to Section 31 of 1940 Act and the rules thereunder relating to the
services to be performed by the Bank hereunder are the confidential property of
the Trust and will be preserved, maintained and made available in accordance
with such Section and rules, and will be surrendered to the Trust on and in
accordance with its request.
18.4 The Bank and the Trust agree that all books, records, information and
data pertaining to the business of the other Party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement
shall remain confidential, and shall not be voluntarily disclosed to any other
person, except as may be required by laws or regulations.
18.5 In case of any requests or demands for the inspection of the
Shareholder records of the Trust, the Bank will endeavor to notify the Trust
and to secure instructions from an authorized officer of the Trust as to such
request or demand. The Bank reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised by its counsel that it
may be subject to enforcement or other action by any court or regulatory body
for the failure to exhibit the Shareholder records to such person.
19. Term / Termination / Transition Assistance.
19.1 Term and Termination.
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(a) Term. Subject to the termination rights set forth below, the initial
term of this Agreement shall commence on the date first set forth above and end
on November 1, 2009 (the "Initial Term"). Following the expiration of the
Initial Term, this Agreement shall automatically renew and continue in force
for subsequent one-year terms until terminated as provided herein (each, a
"Renewal Term").
(b) Termination. The Trust may terminate this Agreement in whole or in
part (for example, as to any Fund) prior to the expiration of the Initial Term
or any Renewal Term: (i) upon sixty (60) days' prior written notice in the form
of Proper Instructions specifying the date upon which termination is to occur
("Termination Notice") in the event that a conservator or receiver is appointed
for the Bank in accordance with 12 USC (S)1821(c) or similar and successor
provisions; or (ii) without cause at any time by giving the Bank at least 180
days' prior written notice of the designated termination date.
(c) Further Termination. The Trust may terminate this Agreement in whole
or in part (for example, as to any Fund) prior to the expiration of the Initial
Term or any Renewal Term in the event:
(i) that the Bank fails to meet the criteria defined in each of six
(6) separate Key Performance Indicators, each for four (4) consecutive months,
in any rolling twelve-month period. For avoidance of doubt, this right shall
only apply if the failure by the Bank to meet the Service Level as defined in
the relevant KPI is not (a) the result of an event that is not reasonably
predictable or foreseeable (and, therefore should not have been anticipated and
prepared for) by prudent persons or entities providing or operating a business
similar to the affected Party and in each case, beyond such Party's reasonable
control (a "Force Majeure Event"), (b) caused by the Trust or a direct result
of a specific request by the Trust, (c) a direct result of a specific request
by a duly authorized agent of the Trust, (d) caused by a third party other than
an agent of the Bank or (e) the result of agreement by the Parties;
(ii) of a material breach of a material provision of this Agreement;
(iii) the Board of the Trust votes to liquidate a Fund and terminate
its registration with the Securities and Exchange Commission other than in
connection with a merger or acquisition of the Fund or the Fund's investment
adviser; or
(iv) Barclays Global Investors, N.A. terminates its Custodial, Fund
Accounting and Services Agreement (as amended) with the Bank pursuant to the
fiduciary capacity provision in Section 13.1(b)(ii) of such agreement;
provided that the Trust shall not exercise its rights under subsections (i) or
(ii) above unless the Trust has first provided written notice to the Bank of
its intent to terminate under such subsection, and the Bank: (x) does not
present a plan to remedy or cure the KPI or breach that is reasonably
acceptable to the Trust, which plan will be provided as soon as practicable,
and in any event not later than ten (10) days after such notice, and (y) has
not made substantial progress toward curing or remedying that KPI or breach in
material respects to the reasonable satisfaction of the Trust, within thirty
(30) days of presenting such plan to the Trust.
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(d) Notice of Basis for Termination. The Trust shall advise the Bank of
any service level, practice, policy, circumstance or any breach by the Bank of
which it becomes aware from time to time that, if unaddressed, would permit the
termination of this Agreement under any of the basis set forth in this
Section 19.1.
19.2 Transition Assistance.
(a) In the event the Trust or any Fund terminates this Agreement in
accordance with Section 19.1, or upon the expiration of the Initial Term or any
Renewal Term and non-renewal of this Agreement:
(i) the Bank will immediately upon receipt of notice of termination
or non-renewal, commence and prosecute diligently to completion the transfer of
all cash and the delivery of all assets in the Trust's (or Fund's) accounts as
to which this Agreement is terminated, duly endorsed, and all records
maintained under the terms hereof and of the Service Level Agreements directly
to such successor custodian appointed by the Trust ("Transfer");
(ii) the Bank will provide such reasonably necessary transition
assistance as described below in this Section 19.2 (the "Transition
Assistance"). The Bank will fully cooperate with the Trust and will provide
such reasonable assistance as directed by Trust to effectively transition the
services provided by the Bank to the Trust under this Agreement to a successor
entity (or entities) as designated by the Trust in its sole discretion,
including but not limited to using its commercially reasonable efforts to
provide for an orderly transition of the funds from Bank's custody to the
successor's custody. During such transition period, the Trust will continue to
pay the Bank the fees applicable to such services set forth in the then-current
fee schedule, plus an amount calculated based on additional time and materials
outside the usual services provided under this Agreement and required to effect
the conversion of the services to a successor service provider. The Bank shall
provide Transition Assistance for a period of up to twenty-four (24) months as
requested by the Trust;
(iii) The Bank and the Trust shall negotiate in good faith to agree
on a plan for the orderly transition of the Trust to a successor service
provider by no later than sixty (60) days after the date of termination or
non-renewal;
(iv) The Trust shall, in the event Transition Assistance is required
for more than twenty-four (24) months from the date of termination, pay the
Bank an annual bonus on a monthly basis in an amount equal to 5% of the
aggregate fees being charged as of the date of termination; and
(v) The Trust and the Bank will take all reasonably necessary steps
as mutually agreed by the Parties, to assure the retention of key employees of
the Bank involved in the provision of Transition Assistance.
19.3 Release. Upon Transfer of a Fund or completion of the Transition
Assistance, as the case may be, the Bank shall be released from any and all
further obligations under this Agreement with respect to the Fund as to which
this Agreement is terminated; provided that Bank shall continue to be
responsible for services normally provided by transfer agents post-conversion
in the normal course of business at the Bank's then current rates.
19
19.4 Survival. Notwithstanding anything to the contrary in this Agreement,
each Party's obligations under Sections 13 (Books and Records/Intellectual
Property), 17 (Indemnification), 19.2 (Transition Assistance), 21
(Confidentiality), 24 (Governing Law; Proceedings), 27 (Service Credits),
28 (Customized Technology Deliverables), 30 (Dispute Resolution) and 31
(Limitation of Liability of the Trustees and Shareholders) hereof shall
continue and remain in full force and effect after the termination of this
Agreement.
20. Additional Funds. In the event that the Trust establishes one or more
series or classes of Shares in addition to the series listed on Appendix A
hereto with respect to which it desires to have the Bank render services as
transfer agent under the terms hereof, it shall so notify the Bank in writing
and, unless the Bank declines in writing to provide such services within seven
(7) days after receipt of such notification, Appendix A shall be amended to
include the new series or class of Shares.
21. Confidentiality. Both Parties agree that any non-public information
obtained hereunder concerning the other Party is confidential and may not be
disclosed to any other person without the consent of the other Party, except as
may be required by applicable laws or regulations or at the request of a
governmental agency. The Parties further agree that a breach of this provision
would irreparably damage the other Party and accordingly agree that each of
them is entitled, in addition to all other remedies at law or in equity and
without bond or other security, to an injunction or injunctions to prevent
breaches of this provision.
22. Assignment.
22.1 Except as provided in Section 22.3 below, neither this Agreement nor
any rights or obligations hereunder may be assigned by either Party without the
written consent of the other Party.
22.2 This Agreement shall inure to the benefit of and be binding upon the
Parties and their respective successors and permitted assigns.
22.3 The Bank may, without further consent on the part of the Trust,
subcontract for the performance of any of the services to be provided hereunder
to third parties, including any affiliate of the Bank, provided that the Bank
shall remain liable hereunder for any acts or omissions of any subcontractor as
if performed by the Bank.
23. Amendment. This Agreement may be amended or modified only by a written
agreement executed by both Parties, except as provided in Section 20 above.
24.Governing Law; Proceedings.
24.1 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts, without regard to its conflict of law provisions.
24.2 The Bank shall advise the Trust of all legal proceedings that would
have a material adverse impact on the Bank's ability to provide the services
contemplated by this Agreement.
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25. Merger of Agreement and Severability; Counterparts.
25.1 This Agreement, together with any fee agreement pursuant to
Section 14.1 and any Service Level Agreement(s), constitutes the entire
agreement between the Parties hereto with respect to the matters addressed
hereby, and supersedes any prior agreement with respect to the subject hereof
whether oral or written.
25.2 In the event any provision of this Agreement shall be held
unenforceable or invalid for any reason, the remainder of this Agreement shall
remain in full force and effect.
25.3 This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall together,
constitute only one instrument.
26. Notices. Any notice or other instrument in writing authorized or required
by this Agreement to be given to either Party hereto will be sufficiently given
if addressed to such Party and delivered, via registered U.S. Mail or facsimile
with written confirmation via registered U.S. Mail, to it at its offices at the
address set forth below, namely:
For the Trust or the Fund(s):
Barclays Foundry Investment Trust
c/o Barclays Global Fund Advisors
00 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Legal Department
For the Bank:
State Street Bank and Trust Company
___________________________________
___________________________________
Attention: ________________________
27. Service Credits. Only during the period in which the Bank is providing
Transition Assistance:
(a) In the event Bank fails to meet the criteria defined in the relevant
Key Performance Indicator for two consecutive months, the Trust shall receive a
Service Credit. "Service Credit" shall mean: a five percent (5%) reduction of
fees, only for the service to which the uncured KPI relates, for the month in
which the uncured KPI failures occurred, and only for the Fund affected by the
uncured KPI failures. For the avoidance of doubt, this right shall only apply
if the failure by the Bank to meet the Service Level as defined in the relevant
KPI is not (i) the result of a Force Majeure Event, (ii) caused by the Trust or
a direct result of a specific request by the Trust, (iii) a direct result of a
specific request by an agent of the Trust, (iv) caused by a third party other
than an agent of Bank or (v) the result of agreement by the Parties.
21
(b) Service Credits shall be calculated on a monthly basis, and the
Service Credits shall be payable as an offset against current or future fees
owed by the Trust, and upon termination, expiration or non-renewal of this
Agreement, all unused Service Credits shall be paid in cash to the Trust.
(c) The Bank shall not be deemed to have failed to meet a monthly KPI
where such failure arises from a single underlying cause that is promptly
remedied by the Bank, without the occurrence of which, the Bank would not have
failed to meet that KPI in that month.
(d) Time periods referenced in this Section 27 shall begin to run as of
the date the Bank knows, reasonably should have known, or is notified of the
relevant failure.
(e) The Bank shall earn back 100% of any Service Credit, provided that
the Bank achieves the applicable KPI requirement the failure of which led to
the Service Credit for two consecutive months beginning in the month following
the month in which the Service Credit is earned. For example, if the Bank fails
to meet a particular KPI for January and February of a year, the Bank shall
earn back 100% of the associated Service Credit if the Bank meets that KPI in
the months of March and April.
(f) The Bank acknowledges that its failure to meet the minimum levels
set forth in the Key Performance Indicators would have a material adverse
effect on the Trust's business. The Bank further acknowledges that the Service
Credits represent a reduction in the fees payable by the Trust hereunder which,
in turn, reflects the Bank's provision of a lower level of services than that
required by the Trust. The Bank further acknowledges that the Service Credits
are reasonably proportionate to the loss likely to be suffered by the Trust as
a result of the failure by the Bank to meet the applicable KPIs.
(g) The level of Service Credits payable in any calendar year will not
exceed in the aggregate 5% of the aggregate fees payable under this Agreement
for such year.
(h) The Trust shall not be entitled to recover as part of any damages
claim any sums credited or paid as Service Credits if the damages claim arose
from a KPI failure, provided the damages to which the Trust is otherwise
entitled arose from the same services to which the KPI failure relates, for the
same Fund, and for the same underlying event.
28. Customized Technology Deliverables. The Bank will deliver into escrow for
the benefit of the Trust copies of all final requirements documentation related
to any builds, features or functionality customized for the Fund, that are
incorporated into or used in connection with the provision of services under
this Agreement (the "Requirements Documentation"), within thirty (30) days
after such builds, features or functionality have been incorporated into or
used in connection with the provision of services. Such Requirements
Documentation shall be in the form customarily produced by the Bank in
connection with such projects generally. The Fund shall have access to such
Requirements Documentation only in the event of the termination of this
Agreement other than by reason of breach by the Fund. The Bank hereby grants to
the Fund a worldwide, irrevocable, royalty-free, fully paid-up,
non-transferable and non-exclusive license, solely for the purpose of the
Fund's or the Fund's third party supplier assuming performance obligations for
the services previously performed by the Bank hereunder.
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29. Service Enhancements. The Bank hereby commits that it will use commercially
reasonable efforts to continue to develop and provide to the Trust service
enhancements that will enable the Trust to maintain the Trust's market leader
position in product innovation, information technology, and service delivery
(collectively, "Market Efforts"). The Bank agrees that its Market Efforts will
be and will continue to be during the Initial Term and any Renewal Term no less
favorable than those being offered at that time by the Bank to any other
customer purchasing services of a type substantially similar to the services
provided hereunder relating to funds in aggregate substantially similar in
scope (even if smaller in asset size) to the Funds. The Bank shall, upon
written request, review and have an officer of the Bank certify its compliance
with this Section 29 to the Trust. If the Bank at any time offers other
customers or brokers processes, discounts and/or other cost reduction methods
or improved services more favorable than those provided to the Trust pursuant
to this Agreement such that the foregoing terms of this subsection become
untrue, the Bank shall promptly offer these to the Trust prospectively from the
date such more favorable terms were offered to other customers or brokers,
unless the Bank is prevented from doing so in a reasonable manner due to third
party patent related restrictions. The Bank acknowledges that the requirements
of this Section 29 are a material provision of this Agreement.
30. Dispute Resolution.
30.1 In the event of any dispute under this Agreement, each Party will
appoint a designated representative whose task will be to resolve the dispute
(the "Representatives"). The Representatives will have five (5) business days
to meet and discuss in good faith a resolution to the dispute. During the
course of such discussions, each Party will honor the other Party's reasonable
requests for relevant information, including but not limited to providing
copies of relevant documents. The specified format for such discussions will be
left to the discretion of the Representatives, but may include the preparation
and delivery of statements of facts or written statements of positions.
30.2 If the Representatives are unable to resolve the dispute within such
five (5) day period, the Representatives will refer the dispute to their
respective CEO, President or COO (the "Managers"). Such Managers will have ten
(10) business days to meet and discuss in good faith a resolution of the
dispute. If the Managers are unable to resolve the dispute within such ten
(10) day period, the Parties may elect to extend the time for such dispute
resolution, or proceed in accordance with their respective rights under this
Agreement or otherwise.
30.3 If the Parties are unable to resolve the dispute as set forth herein,
the Parties may, upon mutual agreement, seek to resolve the dispute through
mediation.
31. Limitations of Liability of the Trustees and Shareholders. The Bank
acknowledges that the Trust's obligations hereunder are binding only on the
assets and property belonging to the applicable Fund. No Fund shall have any
liability for the obligations of any other Fund. It is expressly agreed that
obligations of the Trust hereunder shall not be binding upon any Trustee,
Shareholder, nominees, officers, agents, or employees of the Trust, personally,
but bind only the assets and property of the Trust, as provided in the Trust's
Agreement and Declaration of Trust (the "Declaration of Trust"). The execution
and delivery of this Agreement have been authorized by the Trustees and signed
by an authorized officer of the Trust, acting as such, and neither this
23
authorization nor this execution and delivery shall be deemed to have been made
by any of them individually or to impose any liability on any of them
personally, but shall bind only the assets and property of the applicable Fund
as provided in the Declaration of Trust.
32. Master Agreement. For convenience purposes, this Agreement is being entered
into as a master agreement by the Bank and the Trust on behalf of each Fund
from time to time set forth on Appendix A hereto. However, this Agreement shall
be interpreted as applying solely to each Fund individually, and no Fund shall
be liable for the obligations of any other Fund.
33. Other Agreements. The Bank and the Trust may from time to time be parties
to agreements in addition to this Agreement. The terms of this Agreement shall
not be applicable to, or otherwise affect the relationship of the Bank and the
Trust under, such other agreements unless specifically agreed to therein by the
Bank and the Trust. Further, nothing in this Agreement shall limit the
obligations of the Bank or the liabilities of the Bank for any act or omission
of the Bank either herein or under any other agreement pursuant to which the
Bank provides, in any capacity, services to or on behalf of, the Trust or any
Fund.
[Remainder of Page Intentionally Blank]
24
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and the year first above written.
BARCLAYS FOUNDRY INVESTMENT TRUST
By:
------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
By:
------------------------------
Name:
Title:
[Signature Page to Transfer Agency and Service Agreement]
Appendices
Appendix A Funds
Appendix B Key Performance Indicators
Appendix A
Transfer Agency and Service Agreement
Barclays Foundry Investment Trust
List of Funds
LifePath(R) Index Retirement Portfolio, Class S
LifePath(R) Index 2010 Portfolio, Class S
LifePath(R) Index 2020 Portfolio, Class S
LifePath(R) Index 2030 Portfolio, Class S
LifePath(R) Index 2040 Portfolio, Class S
Note: Class S is currently the only class of shares for each of the listed
Funds.
Dated: ______________
Appendix B
Transfer Agency and Service Agreement
Barclays Foundry Investment Trust Key Performance Indicators
[________] [__], 2007
Service Category Task Criteria
---------------- -------------------------------------- ----------------------------------------
1. Fund Accounting Unit Value Accuracy Achieve an accuracy rate of at least
99.8%.
2. Fund Accounting Unit Value Delivery Achieve a timeliness rate of SLA* plus 2
hours at rate of 98%.
3. Fund Accounting Cash Projection Achieve an accuracy rate of at least
Accuracy 99.7%.
4. Fund Accounting Cash Projection Achieve a timeliness rate of SLA plus 1
Delivery hour at a rate of at least 99%.
5. TA Distributions Distributions will be processed into
Delivery client's accounts, by Payable Date + 2,
with no more than 4 exceptions per
month.
6. IT Services SWIFT 535 and 950 messages and SEI Achieve a timeliness rate of SLA plus 3
Client Holdings and Transactions hours with no more than 4 exceptions
Report Delivery per month per message type.
7. Fund Accounting Unit Settlement Achieve a timeliness rate of SLA plus 2
Delivery hours with no more than 4 exceptions
per
month.
8. Fund Accounting PRV Accuracy Achieve an accuracy rate of at least
99.7%.
9. Corporate Actions Corporate Actions Achieve SLA requirements for these
Notification/ activities at an accuracy rate of 99%.
Processing/ Posting for Vaulted Assets
10 TA Trade Wires Achieve a timeliness rate of SLA+1 hour
at a rate of at least 99%.
11 TA BFIT Order Flow Achieve a timeliness rate of SLA plus 2
hours at a rate of at least 99%.
12 Directed Loan Ops Securities Loan Settlement percentage of 99%.
Movements
--------
* SLA means Service Level Agreement(s).
