Exhibit 99.(E)(4)
iShares, Inc.
SALES AND INVESTOR SERVICES AGREEMENT
Date:
Name:
Company:
Dear Ladies and Gentleman:
iShares, Inc. (the "Fund") is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), organized as a series fund and incorporated under the laws of the State
of Maryland. The Fund consists of index series (each, an "iShares MSCI Index
Fund"), and issues shares of common stock, par value $.001 per share, of each
iShares MSCI Index Fund (such shares are referred to herein as "iSharesSM"),
except that certain iShares MSCI Index Funds may not issue iShares because they
have not commenced operations or because the issuance of iShares of such iShares
MSCI Index Fund has been suspended. The Fund issues and redeems iShares of an
iShares MSCI Index Fund only in aggregations of a specified number of iShares
(each, a "Creation Unit") and only to or through Authorized Participants, all as
set forth in the Fund's Prospectus and Statement of Additional Information, as
they may be amended from time to time. Pursuant to a Distribution Agreement
between the Fund and us (the "Distribution Agreement"), we act as distributor
(the "Distributor") of Creation Units of iShares of the various iShares MSCI
Index Funds as exclusive agent on behalf of the Fund. Capitalized terms not
defined herein shall have the meanings attributed to them in the current
Prospectus and Statement of Additional Information of the Fund.
As Distributor of the Fund, we wish to enter into this Sales and Investor
Services Agreement (this "Agreement") with you concerning (i) your solicitation
of purchase orders for Creation Units of iShares and (ii) your provision of
broker-dealer and shareholder support services to your clients ("Clients") who
may from time to time beneficially own iShares of any iShares MSCI Index Fund.
You understand and acknowledge that the proposed method by which Creation
Units of iShares will be created and traded may raise certain issues under
applicable securities laws. For example, because new Creation Units of iShares
may be issued and sold by the Fund on an ongoing basis, at any point a
"distribution," as such term is used in the Securities Act of 1933, as amended
(the "1933 Act"), may occur. You understand and acknowledge that some
activities on your part, as further described in the Fund's Statement of
Additional Information under "Continuous Offering," may, depending on the
circumstances, result in your being deemed a participant in a distribution in a
manner which could render you a statutory underwriter and subject you to the
Prospectus delivery and liability provisions of the 1933 Act. You also
understand and acknowledge that when you are not an "underwriter" but are
effecting transactions in iShares, whether or not participating in the
distribution of iShares, you are generally required to deliver a Prospectus.
This Agreement is a related agreement as contemplated by Rule 12b-1 under
the 1940 Act with respect to the Rule 12b-1 plan of the Fund ("12b-1 Plan").
Both we and the Fund expect that your services and educational and promotional
activities in connection with iShares pursuant to this Agreement will tend to
increase investor interest in and the use and trading of iShares in the
secondary market and thus further sales of iShares of the Fund's iShares MSCI
Index Funds.
In consideration of the mutual covenants contained herein, it is hereby
agreed that our respective rights and obligations shall be as follows:
1. Role of Distributor. Pursuant to and in accordance with the provisions
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of the Distribution Agreement, we will make arrangements with securities dealers
that will solicit orders for the purchase of Creation Units of iShares pursuant
to the representations set forth in Section 4 of this Agreement. You are hereby
invited to become one of the securities dealers referred to herein as a
"Soliciting Dealer." This will confirm our mutual agreement as to the terms and
conditions applicable to your participation as a Soliciting Dealer, such
agreement to be effective upon your confirmation hereof. You understand that we
are seeking to enter into this Agreement in counterparts with you and other
firms which also may act as Soliciting Dealers. All purchases of Creation Units
of iShares from the Fund shall be effected by us, through an Authorized
Participant, in our capacity as principal underwriter and distributor acting as
agent on behalf of the Fund. You understand that the Distributor shall have no
distribution or underwriting obligation to you hereunder with regard to the
purchase and sale of iShares (including Creation Unit aggregations).
2. Role of Soliciting Dealers.
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(a) As a Soliciting Dealer, you shall offer and solicit purchase orders for
Creation Units of iShares. When and if you generate a customer request for the
purchase of Creation Units of iShares and you transmit such request to us, you
shall comply with the procedures for the purchase of Creation Units of iShares
set forth in the then current Prospectus and Statement of Additional Information
of the Fund. You shall be responsible for opening, approving and monitoring
customer accounts and for the review and supervision of these accounts, all in
accordance with the rules of the Securities and Exchange Commission ("SEC") and
the National Association of Securities Dealers, Inc. (the "NASD"). You
understand that all orders for the purchase of Creation Units of iShares must be
placed with us and may be placed only through an Authorized Participant that has
entered into an Authorized Participant Agreement with us. During any period
that you are an Authorized Participant, you may submit purchase orders to us in
such capacity. Your duties and obligations as an Authorized Participant are
determined by the terms and conditions of the Authorized Participant Agreement
and not pursuant hereto. If you are not an Authorized Participant, each
Creation Unit transaction shall be promptly confirmed to you by the Authorized
Participant effecting such transaction in writing on a fully disclosed basis.
You understand and agree that to the extent that such Creation Unit transaction
was effected by you on behalf of your customer, you will promptly confirm such
transaction to your customer. You agree that upon receipt of confirmations from
an Authorized Participant you will examine
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them and promptly notify us of any errors or discrepancies which you discover
and shall promptly bring to our attention, the Authorized Participant's
attention and the Fund's attention any errors in such confirmations claimed by
your customers.
(b) You agree to offer iShares in Creation Unit size aggregations to the
public at the then current public offering price per Creation Unit of iShares
(i.e., the next determined net asset value per iShares) as set forth in the
Fund's then current Prospectus and Statement of Additional Information, as the
same maybe amended or supplemented. All orders are subject to acceptance or
rejection by us or the Fund in our or its sole discretion. A further discussion
regarding the acceptance or rejection of an order by us or the Fund is contained
in the Fund's Statement of Additional Information under "Creation and Redemption
of Creation Unit Aggregations."
(c) You agree to provide broker/dealer and shareholder support services to
Clients in connection with the outstanding and issued iShares, including one or
more of the following: (i) distributing Prospectuses and shareholder reports to
current shareholders; (ii) as applicable, complying with federal and state
securities laws pertaining to transactions in iShares; (iii) processing dividend
payments on behalf of Clients; (iv) providing information periodically to
Clients showing their positions in iShares; (v) providing and maintaining
elective services such as check writing on the Client's account and wire
transfer services; (vi) acting as nominee for Clients holding iShares; (vii)
maintaining account records for Clients; (viii) issuing confirmations of
transactions; (ix) providing subaccounting with respect to iShares beneficially
owned by Clients or the information necessary for subaccounting; (x) if required
by law, forwarding shareholder communications from us or on behalf of the Fund
(such as proxies, shareholder reports, annual and semi-annual financial
statements and dividend, distribution and tax notices); (xi) providing services
primarily intended to result in the sale of iShares; (xii) assisting
shareholders who wish to aggregate sufficient iShares of an iShares MSCI Index
Fund to constitute a Creation Unit for redemption; and provide usual and
ordinary educational and marketing services related to the sale of iShares to
your customers;
(d) In addition to the services described in this section 2 you agree to
provide the additional services set forth in annex II.
(e) Subject to the requirements of applicable law and regulations, nothing
in this Agreement shall be construed to prohibit or restrict you from purchasing
or selling for your own account Creation Unit aggregations of iShares, whether
as agent or principal.
3. Information.
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(a) We will furnish you, without charge, the Fund's current Prospectus and
Statement of Additional Information and copies of sales materials relating to
the offer and sale of Creation Units of iShares approved and filed with the NASD
by us ("Fund Sales Materials") in such quantities as are reasonably requested by
you and made available to us by the Fund for use in connection with the offer
and sale of Creation Units of iShares. Such Fund Sales Materials may include
materials suitable for institutional marketing efforts, including conferences,
road shows
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and institutional advertisements and/or "tombstones" related to the initial
public offering of Creation Units of iShares.
(b) Under this Agreement you will neither act for us, the Fund or Barclays
Global Fund Advisors (the "Investment Adviser"), nor make any representation on
our behalf or the Fund's behalf, or as authorized by us, the Fund or the
Investment Adviser.
(c) In offering and selling Creation Units of iShares hereunder you may
rely only upon the Fund's then current Prospectus and Statement of Additional
Information and the Fund Sales Materials.
(d) If you receive the proper authorization from us or the Fund, you may
prepare and use at your own cost and expense other brochures, advertisements (in
print or other format) or similar materials in connection with your solicitation
of purchases of Creation Units of iShares, which may constitute "sales
literature" within the meaning of Section 24(b) of the 1940 Act ("Other
Soliciting Materials"), but only if such Other Soliciting Materials are (i)
prepared in compliance with all applicable NASD and SEC rules and regulations
and the requirements set forth in Annex I hereof, (ii) provided to us a
reasonable time prior to their intended use and (iii) not used until approved by
us and the Fund and filed by us with the NASD.
(e) Not withstanding the foregoing, you may without our written approval
prepare and circulate in the regular course of your business research reports
that include information, opinions or recommendations relating to iShares (i)
for public dissemination, provided that such research reports compare the
relative merits and benefits of iShares with other products and are not used for
purposes of marketing iShares and (ii) for your internal use.
4. Representations.
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(a) You represent to us as follows, and agree to abide by all of the rules
and regulations of the NASD, including, without limitation, the following
provisions of its Rules of Conduct except as otherwise permitted by the NASD as
set forth in writing, a copy of which shall be provided to you by us:
(i) you will not withhold placing customers' orders for any Creation Units
of iShares so as to profit yourself as a result of such withholding;
(ii) you are familiar with Rule 15c2-8 under the Securities Exchange Act
of 1934, as amended (the "1934 Act"), Section 4(3) of the 1933 Act, and
Section 24(d) of the 1940 Act relating to the distribution and delivery of
Prospectuses and agree that you will comply therewith;
(iii) you are a member in good standing of the NASD or, if you are not
such a member, you are a foreign bank, dealer or institution not eligible
for membership in the NASD which agrees to make no sale within the United
States, its territories or its possessions or to persons who are citizens
thereof or residents therein, and in making
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other sales to comply, as though you were a member of NASD, with the
provisions of the NASD Rules of Conduct.
(b) You agree that your expulsion from the NASD will automatically
terminate this Agreement.
(c) You agree to comply with any rules of the American Stock Exchange, Inc.
(the "AMEX") or such other secondary market or markets as has or have been
approved by an order of the SEC for the trading of iShares. A copy of the
conditions of the SEC orders in accordance with which iShares are offered are
attached hereto as Annex I.
(d) You hereby represent, covenant and warrant that with respect to
purchase and sales of iShares of any iShares MSCI Index Fund, you are a
participant of The Depository Trust Company ("DTC"). Any change in the
foregoing status shall terminate this Agreement and you shall give prompt
written notice to the Distributor and the Fund of such change.
(e) We represent to you that we are a member in good standing of the NASD
and agree to abide by all of the NASD's rules and regulations.
5. Independent Contractor. For all purposes of this Agreement, you will
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be deemed to be an independent contractor, and will have no authority to act as
agent, partner, joint venture participant or in any similar capacity for us in
any matter or in any respect. You and your officers and employees will, upon
request, be available during normal business hours to consult with us or our
designees concerning the performance of your responsibilities under this
Agreement.
6. Compensation; Expenses. In consideration of the services and
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facilities provided by you hereunder, subject to the terms and conditions of the
12b-1 Plan, in our capacity as the Distributor implementing the 12b-1 Plan, we
will pay to you and you agree to accept as full payment therefor, the fees set
forth in Annex II attached hereto. You understand and agree that no amount
shall be paid or payable to you hereunder except from amounts paid to us by the
Fund for disbursements to you under this Agreement and pursuant to and in
accordance with the 12b-1 Plan. You understand and agree that the Distributor
is obligated to make such payments to you only after the Fund has paid such 12b-
1 payments to the Distributor.
7. Reports. Pursuant to Rule 12b-1, as requested from time to time, you
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will provide to us and the Fund's Board of Directors, and we and the Fund's
Directors will review a written report of the amounts so expended and the
purposes for which such expenditures were made. In addition, you will furnish
us or our designees with such information as we or they may reasonably request
(including, without limitation, periodic certifications confirming the provision
to Clients by you or your agents of the services described herein), and will
otherwise cooperate with us and our designees (including, without limitation,
any auditors designated by us or the Fund), in connection with preparation of
reports to the Fund's Board of Directors concerning this Agreement and the
monies paid or payable by us in connection with the services you have agreed to
provide hereunder, as well as any other reports or filings that may be required
by law. In
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addition, you shall provide to us on a monthly basis information which breaks
out all sales by state and by branch.
8. Rule 12b-1 Related Agreement. By your written acceptance of this
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Agreement, you represent, warrant and agree that you understand that this
Agreement is a Rule 12b-1 related agreement under the 1940 Act, subject to the
provisions of such Rule, as well as any other applicable rules or regulations of
the SEC, and agree to conform to the applicable compliance standards adopted by
us for sale of iShares, as in effect from time to time.
9. Compliance.
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(a) You agree that your activities pursuant to this Agreement will be at
all times in conformity in all material respects with all applicable federal and
state laws, rules and regulations, including without limitation, the 1933 Act,
the 1934 Act, the 1940 Act and the NASD Conduct Rules (as provided in Section 4
hereof). In connection with offers to sell and sales of iShares of each iShares
MSCI Index Fund, you agree to deliver or cause to be delivered to each person to
whom any such offer of sale is made, at or prior to the time of such offer or
sale, a copy of the then current Prospectus and the Statement of Additional
Information of the Fund.
(b) We agree to inform you, as the Fund provides or causes to be provided
to us such information, as to the states in which we believe iShares of the
respective iShares MSCI Index Fund have been qualified for sale under, or are
exempt from the requirements of, the respective securities laws thereof, but we
shall have no obligation or responsibility to make iShares of any iShares MSCI
Index Fund available for sale in any jurisdiction.
10. Beneficial Ownership. The Soliciting Dealer represents and warrants
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to the Distributor and the Fund that (based upon the number of outstanding
iShares of such iShares MSCI Index Fund made publicly available by the Fund) it
does not, and will not in the future, hold for the account of any single
beneficial owner of iShares of the relevant iShares MSCI Index Fund 80 percent
or more of the currently outstanding iShares of such relevant iShares MSCI Index
Fund, so as to cause the Fund to have a basis in the portfolio securities
deposited with the Fund with respect to such iShares MSCI Index Fund different
from the market value of such portfolio securities on the date of such deposit,
pursuant to Section 351of the Internal Revenue Code of 1986, as amended.
11. Indemnification.
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(a) The Soliciting Dealer hereby agrees to indemnify and hold harmless the
Distributor and the Fund, their respective subsidiaries, affiliates, directors,
officers, employees and agents, and each person, if any, who controls such
persons within the meaning of Section 15 of the 1933 Act (each, an "Indemnified
Party") from and against any loss, liability, cost and expense (including
attorneys' fees) incurred by such Indemnified Party as a result of (i) a breach
of any representation, warranty or covenant made by the Soliciting Dealer in
this Agreement; (ii) failure of the Soliciting Dealer to perform any obligations
set forth in the Agreement; or (iii) any
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failure on the part of the Soliciting Dealer to comply with applicable laws. The
Soliciting Dealer and the Distributor understand and agree that the Fund as a
third party beneficiary to this Agreement is entitled and intends to proceed
directly against the Soliciting Dealer in the event that the Soliciting Dealer
fails to honor any obligations pursuant to this Agreement that benefit the Fund.
(b) The Distributor hereby agrees to indemnify and hold harmless the
Soliciting Dealer, its respective subsidiaries, affiliates, directors, officers,
employees and agents, and each person, if any, who controls such persons within
the meaning of Section 15 of the 1933 Act (each, a "Soliciting Dealer
Indemnified Party") from and against any loss, liability, cost and expense
(including attorneys' fees) incurred by such Soliciting Dealer Indemnified Party
as a result of (i) a breach of any representation, warranty or covenant made by
the Distributor in this Agreement; (ii) failure of the Distributor to perform
any obligations set forth in the Agreement; or (iii) any failure on the part of
the Distributor to comply with applicable laws.
(c) The provisions of this Section 11 shall survive the termination of this
Agreement. The Distributor shall not be liable to the Soliciting Dealer for any
damages arising out of mistakes or errors in data provided to the Distributor,
or arising out of interruptions or delays or communications with the Indemnified
Parties who are service providers to the Fund.
12. Term; Termination; Amendment.
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(a) Unless sooner terminated, this Agreement will continue for one year
following the date of its adoption, and thereafter will continue automatically
for successive annual periods. This Agreement is terminable, without penalty, at
any time by the Distributor or the Fund with respect to any iShares MSCI Index
Fund or by you upon 60 days' notice in writing to the other party hereto. This
Agreement will also terminate automatically in the event of its assignment
(within the meaning of the 0000 Xxx) or upon the termination of the Distribution
Agreement or Rule 12b-1 Plan between the Fund and us. The Distributor, with the
prior written consent of the Fund, may amend this Agreement by mailing a copy of
the amendment to the Soliciting Dealer, which amendment will become part of this
Agreement if the Soliciting Dealer does not object in writing within 10 business
days after its receipt. This Agreement may also be amended in writing by the
parties hereto.
(b) In the event that the Board of Directors of the Fund establishes any
series of iShares of the Fund listed and traded on the AMEX or any other
national securities exchange in addition to the iShares MSCI Index Fund then
subject to this Agreement, adopts a 12b-1 Plan with respect to such additional
series and approves this Agreement with respect to such additional series in
accordance with Rule 12b-1, such additional series shall be made subject to this
Agreement and shall become an "Additional Fund" hereunder effective immediately
upon such adoption and approval.
13. Suspension. All sales will be made subject to receipt of iShares from
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the Fund. We and the Fund reserve the right, in our sole discretion, without
notice, to suspend sales or
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withdraw the offering of sales of Creation Units of iShares of any iShares MSCI
Index Fund entirely, including the sale of such iShares to you for the account
of any client or clients.
14. No Other Agreement. This Agreement shall supersede any prior
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agreements between us regarding the sale of Creation Units of iShares.
15. Board Approval. A Form of this Agreement and the 12b-1 Plan is
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subject to approval by vote of (i) the Fund's Board of Directors and (ii) of a
majority of those Directors who are not "interested persons" (as defined in the
0000 Xxx) of the Fund and have no direct or indirect financial interest in the
operation of the 12b-1 Plan adopted by the Fund regarding the provision of
support services to the beneficial owners of iShares of the respective iShares
MSCI Index Fund or in any agreement related thereto cast in person at a meeting
called for the purpose of voting on such approval.
16. Miscellaneous.
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(a) Notice. Notice shall have been duly given if delivered by hand, mail
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or facsimile transmission to you, at your address or facsimile number set forth
below and (b) if to us, to SEI Investments Distributor Co., 0 Xxxxxxx Xxxxxx
Xxxxx, Xxxx, XX 00000, facsimile no. (000) 000-0000, Attention: President,
with a copy to General Counsel, or in each case such other addresses as may be
notified to the other party.
(b) Successors. Subject to Section 8 hereof, this Agreement will inure to
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the benefit of and be binding upon the parties hereto and their respective legal
successors and the Fund, and no other person will have any right or obligation
hereunder.
(c) Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of New York, without giving effect to
principles of conflicts of law. The parties irrevocably submit to the non-
exclusive jurisdiction of any New York State or United States Federal Court
sitting in New York City over any suit, action or proceeding arising out of or
relating to this Agreement.
17. Counterparts. This Agreement may be executed in several counterparts,
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each of which shall be an original and all of which shall constitute but one and
the same instrument.
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Please confirm your agreement by signing and returning to us the enclosed
duplicate copies of this Agreement. Upon our acceptance hereof, this Agreement
shall constitute a valid and binding contract between us. After our acceptance,
we will deliver to you one fully executed copy of this Agreement.
Very truly yours,
SEI INVESTMENTS DISTRIBUTION CO.
By:______________________________
Name:
Title:
Confirmed: _______, 2000
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Name of Soliciting Dealer
By:_____________________________
Name:
Title:
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Annex I
CONDITIONS OF SEC ORDER
1. The Fund will not be advertised or marketed as an open-end investment
company, i.e., as a mutual fund, which offers redeemable securities. The Fund's
Prospectus will prominently disclose that iShares are not redeemable shares and
will disclose that the owners of iShares may acquire and tender those shares for
redemption to the Fund in Creation Unit aggregations only. Any advertising
material where features of obtaining, buying or selling Creation Units are
described or where there is reference to redeemability will prominently disclose
that iShares are not redeemable from the Fund and that owners of iShares may
acquire and tender those shares for redemption to the Fund in Creation Unit
aggregations only.
2. The Fund will provide copies of its annual and semi-annual shareholders
reports to DTC Participants for distribution to beneficial holders of individual
iShares.
Annex II
Annual Fees and Additional Services
Annual Fees
At the annual rate of up to _____ of 1% of the average monthly net assets of
iShares held in your name at DTC based on information obtained bi-weekly and
payable on a quarterly basis provided, that such fee shall be paid only in
respect of iShares that are held in your name directly, and not in respect of
iShares held indirectly, including iShares held by registered or unregistered
investment companies, including unit investment trusts held by you on behalf of
your clients or for your own account.
For purposes of determining the fees payable under this Annex II, the
average aggregate daily net assets of the iShares MSCI Index Fund will be
computed in the manner specified in the Fund's Registration Statement (as the
same is in effect from time to time) in connection with the computation of the
net asset value of iShares for purposes of purchases and redemptions. Except as
specifically provided in this Annex II, you shall bear all of your own costs and
expenses in connection with your acting as a Soliciting Dealer, it being
understood that we and the Fund shall bear our and the Fund's respective costs
and expenses. You shall not be required to bear any of the costs or expenses
assumed by us or any other Soliciting Dealer except as provided for herein or as
you may have agreed with another Soliciting Dealer.
Additional Services
In order to promote the sale of iShares you agree to:
[(i) provide monthly sales and asset level statistics for each fund sorted by
state, branch and broker]
[(ii); provide professional research coverage for the funds]
[(iii) provide iShares marketing representatives with reasonable access to your
offices and branches so as to allow such representatives to provide broker
education through sales meetings and other broker contact.]
(iv) such other services analogous to the foregoing as you customarily provide
to clients with respect to holdings of shares of open-end investment companies
or exchange-listed stocks or as we or the Fund may reasonably request to the
extent you are permitted to do so under applicable statutes, rules and
regulations.
