Exhibit (h.12)
AMENDED AND RESTATED
SECURITIES LENDING AGENCY AGREEMENT
AGREEMENT, dated as of November 2, 2009, between iShares, Inc., a Maryland
corporation, and iShares Trust, a Delaware statutory trust (both singly and
together, the "Company"), acting on behalf of the funds listed on Schedule A
hereto and any future series or portfolio of the Company (each, a "Fund"), and
Barclays Global Investors, N.A., a national banking association ("BGI") and its
successors.
WHEREAS, the Company is registered as an open-end investment company under
the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, BGI acts as the Company's agent for the purpose of lending
Securities in the Account (as defined below) pursuant to a securities lending
agency agreement, dated as of April 2, 2007; and
WHEREAS, BGI and the Company desire to amend and restate such agreement on
the terms set forth herein;
NOW, THEREFORE, for and in consideration of the mutual promises set forth
herein, the parties hereto agree as follows:
1. Definitions.
Whenever used in this Agreement, unless the context otherwise requires, the
following words shall have the meanings set forth below. Capitalized terms used
but not defined herein shall have the meaning assigned to them in the applicable
Securities Lending Agreement.
1.1 "Account" shall mean the custodial account or accounts established and
maintained by the Custodian on behalf of each Fund for the safekeeping of
Securities and monies of the Fund from time to time.
1.2 "Approved Investment" shall mean any type of investment permitted for
Cash Collateral under the Securities Lending Guidelines.
1.3 "Authorized Person" shall be any officer of the Company and any other
person, whether or not any such person is an officer or employee of the Company,
duly authorized by resolutions of the Company to give Oral Instructions and/or
Written Instructions on behalf of the Company, such persons to be designated in
a Certificate which contains a specimen signature of such person.
1.4 "Book-Entry System" shall mean the Federal Reserve/Treasury book-entry
system for receiving and delivering Government Securities (as defined herein),
its successors or equivalent and nominees.
1.5 "Borrower" shall mean any entity which is permitted to borrow
Securities from the Company pursuant to then applicable law, regulation, and/or
interpretation and pursuant to
the Securities Lending Guidelines, and which has a valid Securities Lending
Agreement in place with BGI.
1.6 "Business Day" shall mean, with respect to a Fund for which Securities
loans are outstanding pursuant to this Agreement, a day on which both such Fund
and BGI are open for business.
1.7 "Cash Collateral" shall mean either Fed funds or New York Clearing
House funds or their equivalent if denominated in U.S. dollars, or the
equivalent if the Cash Collateral is denominated in a currency other than U.S.
dollars, as applicable for a particular loan of Securities.
1.8 "Cash Management Costs" shall mean the expenses incurred in connection
with the management and investment of a Fund's Cash Collateral, including fees
and expenses payable to BGI, Barclays Global Fund Advisors ("BGFA") or any other
affiliate of BGI (or its successors) as a result of the investment of Cash
Collateral in any joint account, fund or similar vehicle.
1.9 "Certificate" shall mean any notice, instruction, schedule or other
instrument in writing, authorized or required by this Agreement to be given to
BGI, which is actually received by BGI and signed on behalf of the Company by an
Authorized Person or a person reasonably believed by BGI to be an Authorized
Person.
1.10 "Collateral" shall mean Cash Collateral, Government Securities and
Letters of Credit, plus such other collateral as may be then permitted by
applicable law, regulation and/or interpretation, and the Securities Lending
Guidelines.
1.11 "Collateral Account" shall mean a segregated account or accounts
established and maintained by the Custodian for the purpose of holding
Collateral and Approved Investments, and interest, dividends and other payments
and distributions received with respect to Collateral and Approved Investments
("Distributions"). A Collateral Account may include a joint account as permitted
by the Securities Lending Guidelines.
1.12 "Custodian" shall mean State Street Bank and Trust Company, a trust
company organized and existing under the laws of the Commonwealth of
Massachusetts, or such other company that may from time to time be retained as
custodian by the Company with respect to one or more Funds.
1.13 "Depository" shall mean the Depository Trust Company, Euroclear, and
any other securities depository, sub-depository or clearing agency (and their
respective successors and nominees) authorized under applicable law or
regulation to act as a securities depository, sub-depository or clearing agency,
including any foreign securities depository or sub-depository for the Company.
1.14 "Earnings Account" shall mean a segregated account established and
maintained by the Custodian for the purpose of receiving any Securities Loan Fee
paid by Borrowers in connection with Securities loans hereunder.
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1.15 "Government Security" shall mean book-entry Treasury securities (as
defined in Subpart 0 of Treasury Department Circular No. 300, 31 C.F.R. 306) and
any other securities issued or guaranteed by the United States government or any
agency or instrumentality of the United States government.
1.16 "Letter of Credit" shall mean an unconditional and irrevocable letter
of credit in favor of BGI as agent for the Fund issued by a bank other than the
Borrower, the creditworthiness of which has been deemed to be acceptable by BGI
and which meets any applicable requirements in the Securities Lending
Guidelines.
1.17 "Oral Instructions" shall mean verbal instructions actually received
by BGI from an Authorized Person or from a person reasonably believed by BGI to
be an Authorized Person.
1.18 "Rebate" shall mean the amount payable by the Fund to a Borrower in
connection with Securities loans at any time collateralized by Cash Collateral.
1.19 "Securities Lending Agreement" shall mean with respect to any
Borrower, the agreement pursuant to which BGI lends securities on behalf of its
customers (including the Fund) to such Borrower, as amended from time to time,
which agreement shall meet any applicable requirements in the Securities Lending
Guidelines. The Securities Lending Agreement may be in the form of a master
agreement covering a series of Securities lending transactions from multiple
lenders, including the Company.
1.20 "Securities Lending Guidelines" shall mean guidelines governing the
Company's Securities lending program adopted by the Company and provided to BGI
from time to time. The Securities Lending Guidelines may address any aspect of
the Company's Securities lending program, including without limitation the kinds
of Securities that may be lent, permissible forms of Collateral, permissible
Approved Investments, the selection of Borrowers, and regular reporting to the
Company.
1.21 "Securities Loan Fee" shall mean the amount payable by a Borrower to
BGI, as agent for the Fund, pursuant to the applicable Securities Lending
Agreement in connection with Securities loans, if any, collateralized by
Collateral other than Cash Collateral.
1.22 "Security" shall mean any Government Securities, non-U.S. securities,
U.S. common stock and other equity securities, bonds, debentures, corporate debt
securities, notes, mortgages or other obligations, and any certificates,
warrants or other instruments representing rights to receive, purchase, or
subscribe for the same, or evidencing or representing any other rights or
interests therein, which are available for lending pursuant to Section 2.2 of
this Agreement.
1.23 "Written Instructions" shall mean written communications actually
received by BGI from an Authorized Person or from a person reasonably believed
by BGI to be an Authorized Person by letter, memorandum, telegram, cable, telex,
telecopy facsimile, computer, video (CRT) terminal or other on-line system, or
any other method whereby BGI is able to verify with a reasonable degree of
certainty the identity of the sender.
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2. Appointment; Scope of Agency Authority.
2.1 Appointment. The Company, on behalf of each Fund, hereby appoints BGI
as its agent to lend Securities in the Account to Borrowers from time to time as
hereinafter set forth, and BGI hereby accepts appointment as such agent and
agrees to so act.
2.2 Securities Subject to Lending. Unless the Company provides BGI Written
Instructions to the contrary, all Securities maintained in the Account shall be
available for lending pursuant to this Agreement.
2.3 Securities Lending Agreement.
(a) Attached hereto as Exhibit A are the standard forms of Securities
Lending Agreements in effect between BGI and the Borrowers as of the date
hereof. BGI shall provide the Company with any proposed material amendments
or changes, and notify the Company of any such amendments or changes, to
any form of Securities Lending Agreement to be used prior to their
effectiveness. The Company may elect, without penalty, to terminate any
Borrower if it opposes the change.
(b) BGI is hereby authorized to lend Securities in the Account to
Borrowers pursuant to the Securities Lending Agreements, this Agreement and
the Securities Lending Guidelines.
2.4 Loan Opportunities. The Company on behalf of each Fund acknowledges and
agrees that BGI shall have the right to decline to make any loans of Securities
under any Securities Lending Agreement, to discontinue lending or to terminate
any loans of Securities under any Securities Lending Agreement in its sole
discretion. The Company on behalf of each Fund agrees that it shall have no
claim against BGI based on, or relating to, loans made for other customers, or
loan opportunities refused hereunder, whether or not BGI has made fewer or more
loans for any other customer than for the Fund, and whether or not any loan for
another customer, or the opportunity refused, could have resulted in loans made
hereunder.
2.5 Use of Book-Entry System and Depositories. The Company on behalf of
each Fund hereby authorizes BGI on a continuous and on-going basis, to deposit
in the Book-Entry System and any Depositories all Securities eligible for
deposit therein and to utilize the Book-Entry System and Depositories to the
extent possible in connection with its receipt and delivery of Securities,
Collateral, Approved Investments and monies under this Agreement. Where
Securities, Collateral (other than Cash Collateral) and Approved Investments
eligible for deposit in the Book-Entry System or a Depository are transferred to
the Account, BGI shall identify or cause to be identified as belonging to the
Fund a quantity of securities in a fungible bulk of securities shown on BGI's
account on the books of the Book-Entry System or the applicable Depository.
Securities, Collateral and Approved Investments deposited in the Book-Entry
System or a Depository will be commingled in accounts which include assets held
by BGI for customers, including but not limited to accounts in which BGI acts in
a fiduciary or agency capacity, as well as assets held by or on behalf of other
clients or participants of the Book-Entry System or Depository.
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2.6 Use of Third-Party Service Providers. The Company on behalf of each
Fund hereby acknowledges and agrees that BGI may utilize third-party service
providers to perform or analyze the functions described herein, including
service providers in which BGI may have an ownership interest. As permitted by
Section 5.8 below, these services may require the transmission, use or sharing
of data created in Securities lending transactions involving the Funds. BGI
shall bear the cost of any such service providers out of its portion of the
proceeds from Securities lending.
3. Representations and Warranties.
3.1 Company's Representations. The Company hereby represents and warrants
to BGI, which representations and warranties shall be deemed to be continuing
and to be reaffirmed on any day that a Securities loan hereunder is outstanding,
that:
(a) This Agreement and the Securities Lending Guidelines have been
approved by the Board of Trustees or Board of Directors of the Company (as
applicable); this Agreement is, and, if properly entered into under the
terms of this Agreement and the Securities Lending Guidelines, each
Securities loan and Approved Investment will be, legally and validly
entered into by the Company on behalf of each Fund, does not, and will not,
violate any statute, regulation, rule, order or judgment binding on the
Fund, or any provision of the Company's charter or by-laws, or any
agreement binding on the Company or affecting its property, and is
enforceable against the Company and each Fund in accordance with its terms,
except as may be limited by bankruptcy, insolvency or similar laws, or by
equitable principles relating to or limiting creditors' rights generally;
(b) The person executing this Agreement and all Authorized Persons
acting on behalf of the Company or any Fund has and have been duly and
properly authorized to do so;
(c) Each Fund is lending Securities as principal for its own account
and it will not transfer, assign or encumber its interest in, or rights
with respect to, any Securities loans; and
(d) All Securities available for lending pursuant to Section 2.2 of
this Agreement are free and clear of all liens, claims, security interests
and encumbrances that would preclude their being lent as contemplated by
this Agreement. The Company shall promptly notify BGI in the manner agreed
between the parties from time to time when any Securities are no longer
subject to the representations contained in this sub-paragraph (d).
3.2 BGI's Representations. BGI hereby represents and warrants to the
Company, which representations and warranties shall be deemed to be continuing
and to be reaffirmed on any day that a Securities loan hereunder is outstanding,
that:
(a) This Agreement is legally and validly entered into by BGI, does
not and will not, violate any statute, regulation, rule, order or, judgment
binding on BGI, or any provision of BGI's charter or by-laws, or any
agreement binding on BGI or affecting its property, and is enforceable
against BGI in accordance with its terms, except as may be limited by
bankruptcy, insolvency or similar laws, or by equitable principles relating
to or limiting creditors' rights generally;
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(b) Both the person executing this Agreement on behalf of BGI and all
persons acting on BGI's behalf pursuant to this Agreement have been duly
and properly authorized to do so; and
(c) It will comply with all laws, rules and regulations, including
without limitation the conditions of any exemptive orders granted to the
Company by the Securities and Exchange Commission with respect to
securities lending transactions, if required, applicable to the Securities
lending transactions contemplated by this Agreement.
4. Securities Lending Transactions.
4.1 Compliance with Securities Lending Guidelines. BGI hereby acknowledges
receipt of the current Securities Lending Guidelines. The Company shall promptly
notify BGI of any changes to the Securities Lending Guidelines. BGI acknowledges
and agrees that it shall only lend Securities on behalf of the Funds in
accordance with the conditions of the Securities Lending Guidelines applicable
to the Funds' lending agent.
4.2 Loan Initiation. From time to time BGI may lend Securities to Borrowers
and deliver such Securities against receipt of Collateral in accordance with the
applicable Securities Lending Agreement and the Securities Lending Guidelines.
If instructed by the Company in writing, BGI shall refrain from lending a
particular Security or from making loans to a particular Borrower.
4.3 Receipt of Collateral; Approved Investments.
(a) With respect to any Securities loan entered into on behalf of a
Fund, BGI shall require that the Borrower deliver and maintain collateral
that is equal at all times during the term of the loan to at least the
market value of the Securities loaned and any accrued interest thereon. If
Cash Collateral is received, BGI is hereby authorized and directed, without
obtaining any further approval from the Fund, to invest and reinvest all or
substantially all of the Cash Collateral received in any Approved
Investments, including in the name of and on behalf of the Fund to redeem,
withdraw or sell the same, and to receive distributions in the name of and
on behalf of the Fund in accordance with the Securities Lending Guidelines.
The Company hereby agrees to execute all necessary documents and take all
necessary actions reasonably requested by BGI in order to permit BGI to so
act with regard to Approved Investments. BGI shall instruct the Custodian
to credit all Collateral, Approved Investments and Distributions received
with respect to Collateral and Approved Investments to the Collateral
Account and xxxx its books and records to identify the Fund's ownership
thereof as appropriate.
(b) All Approved Investments shall be for the account and risk of the
Fund. To the extent any loss arising out of Approved Investments results in
a deficiency in the amount of Collateral available for return to a Borrower
pursuant to the Securities Lending Agreement, the Fund agrees to pay BGI on
demand cash in an amount equal to such deficiency.
(c) Except as otherwise provided herein, all Collateral, Approved
Investments and Distributions credited to the Collateral Account shall be
controlled by, and subject only to the instructions of, BGI, and BGI shall
not be required to comply with any instructions of the Company with respect
to the same.
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4.4 Distributions on Loaned Securities. Except as provided in the next
sentence, all amounts received from the Borrower equivalent to all interest,
dividends, and other distributions which the owner of the loaned Securities is
entitled to receive shall be credited to the Fund's Account on the date such
amounts are delivered by the Borrower to the Custodian. Any non-cash
distribution on loaned Securities which is in the nature of a stock split or a
stock dividend shall be added to the applicable loan (and shall be considered to
constitute loaned Securities) as of the date such non-cash distribution is
declared payable whether or not it has been received by the Borrower, provided
that any such addition shall be conditional upon the actual receipt of such
non-cash distribution and may be reversed by the Custodian to the extent that
such non-cash distribution is not received.
4.5 Xxxx to Market. BGI shall on each Business Day xxxx to market in U.S.
dollars the value of all Collateral (other than Cash Collateral) and Securities
loaned hereunder and accordingly receive and release Collateral in accordance
with the applicable Securities Lending Agreement.
4.6 Collateral Substitutions. BGI may accept substitutions of Collateral in
accordance with the applicable Securities Lending Agreement and the Securities
Lending Guidelines and shall credit all such substitutions to the Collateral
Account; provided, however, that unless other Collateral has been mutually
agreed upon in writing by BGI and the Fund (including by means of the Securities
Lending Guidelines), no other Collateral may be substituted for Cash Collateral.
4.7 Termination of Loans. In addition to BGI's authority to terminate a
loan of Securities pursuant to the terms of the applicable Securities Lending
Agreement as described in Section 2.4 above, BGI shall terminate any Securities
loan to a Borrower in accordance with the applicable Securities Lending
Agreement promptly:
(a) upon receipt by BGI of Oral Instructions or Written Instructions
instructing it to terminate a Securities loan; provided that the Company
may require that each Security must be returned to the Fund by no later
than the date which is the standard settlement date for trades of such
Security entered into on the date such Oral Instruction or Written
Instruction is received by BGI;
(b) upon receipt by BGI of Oral Instructions or Written Instructions
pursuant to the Securities Lending Guidelines to no longer lend to a
particular Borrower;
(c) upon receipt of written notice from the Company terminating this
Agreement with respect to one or more Funds in accordance with Section 6;
or
(d) as contemplated by the Securities Lending Guidelines.
4.8 Securities Loan Fee. BGI shall receive any applicable Securities Loan
Fee paid by any Borrower pursuant to a Securities Lending Agreement and credit
all such amounts received to the Earnings Account.
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4.9 Borrower's Financial Condition. BGI has delivered to BGFA, the
investment adviser to the Funds, each Borrower's most recent statements required
to be furnished to customers by Rule 17a-5(c) of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as have been made
available to BGI pursuant to the Securities Lending Agreements. BGI shall
promptly deliver to any investment adviser for the Funds all statements and
financial information subsequently delivered to BGI and required to be furnished
to BGI under the Securities Lending Agreements.
4.10 Transfer Taxes and Necessary Costs. All transfer taxes and necessary
costs with respect to the transfer of the loaned Securities by the Fund to the
Borrower and the Borrower to the Fund upon the termination of the loan shall be
paid by the Borrower in accordance with the applicable Securities Lending
Agreement.
4.11 BGI's Obligation. Except as specifically set forth herein, or in any
applicable Securities Lending Agreement, BGI shall have no duty or obligation to
take action to effect payment by a Borrower of any amounts owed by such Borrower
pursuant to the Securities Lending Agreement.
4.12 Loans to Affiliated Borrowers. The Company and BGI have obtained an
exemptive order from the Securities and Exchange Commission that permits BGI to
lend Securities on behalf of the Funds to Affiliated Borrowers, provided that
such loans are made in accordance with the conditions and procedures outlined in
the exemptive order. BGI shall only make loans to Affiliated Borrowers in
accordance with such conditions and procedures, as they may be amended from time
to time, and only so long as they remain applicable, and in accordance with the
Securities Lending Guidelines.
5. Concerning BGI.
5.1 Standard of Care: Indemnification.
(a) It is expressly understood and agreed that in exercising its
rights and performing its obligations hereunder, BGI owes no fiduciary duty
to the Fund. BGI shall not be liable for any costs, expenses, damages,
liabilities or claims (including reasonable attorneys and accountants fees)
incurred by the Fund, except to the extent those costs, expenses, damages,
liabilities or claims result from BGI's material breach of this Agreement
or BGI's negligence, willful misconduct, bad faith, or reckless disregard
of its obligations and duties hereunder.
Neither the Company nor BGI shall have any obligation hereunder for
costs, expenses, damages, liabilities or claims (including reasonable
attorneys and accountants fees), which are sustained or incurred by reason
of any action or inaction by the Book-Entry System or any Depository or
their respective successors or nominees. In no event shall either party be
liable to the other for special, punitive or consequential damages, arising
under or in connection with this Agreement, even if previously informed of
the possibility of such damages.
(b) The Company on behalf of each Fund agrees to indemnify BGI and to
hold it harmless from and against any and all costs, expenses, damages,
liabilities or claims (including reasonable fees and expenses of counsel)
which BGI may sustain or incur or which may be asserted against BGI by
reason of or as a result of any action taken or omitted by BGI in
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connection with or arising out of BGI's operating under and in compliance
with this Agreement, except those costs, expenses, damages, liabilities or
claims arising out of BGI's negligence, bad faith, willful misconduct, or
reckless disregard of its obligations and duties hereunder. Actions taken
or omitted in reasonable reliance upon Oral Instructions or Written
Instructions, any Certificate, or upon any information, order, indenture,
stock certificate, power of attorney, assignment, affidavit or other
instrument reasonably believed by BGI to be genuine or bearing the
signature of a person or persons reasonably believed by BGI to be genuine
or bearing the signature of a person or persons reasonably believed to be
authorized to sign, countersign or execute the same, shall be presumed to
have been taken or omitted in good faith.
(c) BGI shall indemnify and hold harmless the Company and each Fund,
its Board of Trustees or Board of Directors (as applicable) and its agents,
BGFA and any investment adviser for the Funds from any and all loss,
liability, costs, damages, actions, and claims ("Loss") to the extent that
any such Loss arises out of the material breach of this Agreement by or
negligent acts or omissions, bad faith or willful misconduct of BGI, its
officers, directors or employees or any of its agents or subcustodians in
connection with the Securities lending activities undertaken pursuant to
this Agreement, provided that BGI's indemnification obligation with respect
to the acts or omissions of its subcustodians shall not exceed the
indemnification provided by the applicable subcustodian to BGI.
(d) BGI has obtained a Guaranty and Indemnity dated February 15, 2003
from Barclays Bank PLC, in favor of the Funds. Upon the termination of that
guaranty, BGI shall obtain, and bear the costs of obtaining, a guaranty
from Barclays Bank PLC or another entity, the creditworthiness of which is
reasonably satisfactory to the Board of Trustees or Board of Directors (as
applicable) of the Company, pursuant to which the guarantor will indemnify
the Funds for losses due to a Borrower default on terms that are consistent
in all material respects with the existing Guarantee and Indemnity by
Barclays Bank PLC. The Funds and/or Company, at their expense, may obtain
further indemnification against losses due to a Borrower default from a
third party to which BGI is not a party.
5.2 No Obligation to Inquire. Without limiting the generality of the
foregoing, BGI shall be under no obligation to inquire into, and shall not be
liable for, the validity of the issue of any Securities at any time held in the
Account or Approved Investments held in the Collateral Account.
5.3 Advice of Counsel. BGI may, with respect to questions of law, apply for
and obtain the advice and opinion of counsel which may be counsel to the
Company, provided that the foregoing shall not be deemed to be a waiver by the
Company of any conflict of such counsel.
5.4 No Collection Obligations. BGI shall be under no obligation or duty to
take action to effect collection from the issuer of any amounts payable in
respect of Securities or Approved Investments if the issuer of such Securities
or Approved Investments is in default, or if payment is refused after due demand
and presentation.
5.5 Pricing Methods. BGI is authorized to utilize any recognized pricing
information service or any other means of valuation specified in the applicable
Securities Lending Agreement
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("Pricing Methods") in order to perform its valuation responsibilities with
respect to loaned Securities, Collateral and Approved Investments, and the Fund
agrees to hold BGI harmless from and against any loss or damage suffered or
incurred as a result of errors or omissions of any such Pricing Methods.
5.6 BGI's Fee as Securities Lending Agent, etc.
(a) (i) In the case of a Fund with a portfolio whose assets consist of
a majority of fixed income portfolio securities by weighting (a "Fixed
Income Fund"), in connection with each Securities loan hereunder, the Fixed
Income Fund shall, subject to Sections 5.6(a)(ii) and 5.6(d), pay to BGI a
percentage (the "BGI Fee Percentage for Fixed Income Funds") of the net
amount earned from Securities lending activities, consisting of income
earned on the investment and reinvestment of Cash Collateral plus any
Securities Loan Fees otherwise paid by the Borrowers. The net amount to be
paid to BGI in connection with any such Securities Loan shall be computed
after deducting (x) any rebate due to the Borrowers under the applicable
Securities Lending Agreement with the Borrowers and (y) Cash Management
Costs in an amount not to exceed 0.05% of the value of such Cash
Collateral. The BGI Fee Percentage for Fixed Income Funds shall be such
percentage as may from time to time be agreed upon by the Board of the
Company and BGI and shall be set forth in writing. As of the date of this
Agreement, the BGI Fee Percentage for Fixed Income Funds is forty percent
(40%).
(ii) Notwithstanding the provisions of Section 5.6(a)(i), if the fee
calculated pursuant to such Section 5.6(a)(i) for any month would result in
an effective fee split for the Fund of less than 50% of the sum of the
Fixed Income Fund's securities lending income (after deducting the rebate
to the borrowers) plus Cash Management Costs for such month ("50/50
Effective Fee Split"), then BGI's fees for such month shall be reduced to
the extent necessary to provide the Fixed Income Fund with the 50/50
Effective Fee Split.
(b) In the case of any Fund, other than a Fixed Income Fund (a
"Non-Fixed Income Fund"), in connection with each Securities Loan
hereunder, the Non-Fixed Income Fund shall, subject to Section 5.6(d), pay
to BGI a percentage (the "BGI Fee Percentage for Non-Fixed Income Funds")
of the net amount earned from securities lending activities, consisting of
income earned on the investment and reinvestment of Cash Collateral plus
any Securities Loan Fees otherwise paid by the Borrowers. The net amount to
be paid to BGI in connection with any such Securities loan shall be
completed after deducting (x) any rebate due to the Borrowers under the
applicable Securities lending Agreement with the Borrowers and (y) Cash
Management Costs in an amount not to exceed 0.09% of the value of such Cash
Collateral. The BGI Fee Percentage for Non-Fixed Income Funds shall be such
percentage as may from time to time be agreed upon by the Board of the
Company and BGI and shall be set forth in writing. As of the date of this
Agreement, the BGI Fee Percentage for Non-Fixed Income Funds is thirty-five
percent (35%).
(c) BGI is authorized on a monthly basis to charge the fee owed to it
by a Fund under this Section 5.6 against the applicable Collateral Account
or Earnings Account. Such fee shall be charged and paid at the end of each
month. Subject to Section 5.6(d), BGI shall simultaneously therewith direct
the Custodian to pay to the applicable Fund the net amount earned from
Securities lending activities, as described in Section 5.6(a), that is not
paid to BGI as its fee.
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(d) BGI shall be responsible for all transaction fees and all other
operational costs relating to Securities lending activities, other than
Cash Management Costs to be borne by the Fund as provided in Section 5.6(a)
or Section 5.6(b), as applicable, and extraordinary expenses (e.g.,
litigation and indemnification expenses). In the event that a Fund directly
or indirectly bears any Cash Management Costs in excess of the amount of
the Cash Management Costs to be borne by the Fund as provided in Section
5.6(a) (other than extraordinary expenses), as computed at least monthly by
BGI or its designee, then such excess shall, without limitation, be deemed
a transaction fee or other operational cost for which BGI shall be
responsible.
5.7 Reliance on Certificates and Instructions. The Company agrees to
furnish to BGI a new Certificate whenever any then Authorized Person ceases to
be an Authorized Person or additional Authorized Persons are appointed and
authorized. BGI shall be entitled to rely, and shall be fully protected in
acting, upon any Certificate, any information contained on any schedule hereto
as may be amended in accordance with the terms hereof, and any Written or Oral
Instruction actually received by BGI and reasonably believed by BGI to be duly
authorized and delivered. The Company agrees to forward to BGI Written
Instructions confirming Oral Instructions in such manner so that such Written
Instructions are received by BGI by the close of business of the same day that
such Oral Instructions are given to BGI. The Company agrees that the fact that
such confirming Written Instructions are not received on a timely basis or that
contrary instructions are received by BGI shall in no way affect the validity or
enforceability of the transactions authorized by the Company. BGI shall use
reasonable efforts to report any subsequently received contrary instructions. In
this regard, the records of BGI shall be presumed to reflect accurately any Oral
Instructions given by an Authorized Person or a person reasonably believed by
BGI to be an Authorized Person.
5.8 Disclosure of Information. BGI may not disclose or supply any
information regarding the Company or Fund unless required by any law or
governmental regulation now or hereafter in effect or requested to do so by
Company; provided that BGI may disclose or supply information regarding the
Company and/or Fund and any transactions authorized by this Agreement as
necessary in the sole discretion of BGI in order to facilitate, effect or
continue any Securities loans hereunder or to assist in the analysis of the
performance of the Securities lending program.
5.9 Reports. BGI shall furnish the Company and the Fund with reports
relating to loans hereunder and other information requested by the Company and
shall provide such reports to the Company's Board of Trustees or Board of
Directors (as applicable) upon request or as may be required by the Securities
Lending Guidelines.
5.10 Force Majeure. Notwithstanding anything to the contrary in this
Agreement, in no event shall a party to this Agreement be liable to the other
party or any third party for losses resulting from (i) any acts of God, fires,
floods, or other disturbances of nature, epidemics, strikes, riots,
nationalization, expropriation, currency restrictions, terrorist activity, or
insurrection, or (ii) other happenings or events beyond the reasonable control
or anticipation of the party affected, provided that (A) the affected party has
in place appropriate business continuity procedures, systems and facilities and
(B) the affected party uses its best efforts to avoid or remove the cause of
such losses.
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5.11 No Implied Duties.
(a) BGI shall have no duties or responsibilities whatsoever except
such duties and responsibilities as are specifically set forth in this
Agreement and in the applicable Securities Lending Agreement, and no
covenant or obligation shall be implied against BGI in connection with this
Agreement.
(b) Neither the Company nor any Fund shall have any duties or
responsibilities whatsoever except such duties and responsibilities as are
specifically set forth in this Agreement, and no covenant or obligation
shall be implied against the Company or any Fund in connection with this
Agreement.
(c) Nothing in this Agreement shall be understood to imply that in
performing the functions described herein, BGI is acting in the capacity of
an investment adviser or is providing advice as to the value of securities
or as to the advisability of investing in, purchasing, or selling
securities.
6. Termination.
6.1 Termination. This Agreement may be terminated at any time with respect
to one or more Funds by either party upon delivery to the other party of a
written notice specifying the date of such termination, which shall be not less
than 60 days after the date of receipt of such notice.
6.2 Cooperation. Both parties shall take all commercially reasonable steps
to cooperate to provide a smooth transition in the event of a termination.
6.3 Termination of Loans, etc. upon Termination of Agreement.
Notwithstanding any such notice, this Agreement shall continue in full force and
effect with respect to any loans of Securities that remain outstanding as of the
date of termination; provided, however, that BGI shall promptly terminate all
loans of Securities made pursuant to this Agreement and shall not make any
further loans of Securities pursuant to this Agreement.
7. Miscellaneous.
7.1 Exclusivity. During the term of this Agreement, the Company agrees that
it shall not enter into any other agreement with any third party whereby such
third party is permitted to make loans on behalf of any Fund of any Securities
held by BGI in the Account from time to time; provided, however, that nothing in
this provision shall prevent the Company from terminating this Agreement and/or
hiring a securities lending agent other than BGI. The parties agree that this
provision does not prohibit the Company from maintaining this Agreement during
any transition period to another Securities lending agent.
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7.2 Notices.
(a) Any notice or other instrument in writing, authorized or required
by this Agreement to be given to BGI, shall be sufficiently given if
addressed to BGI and received by it at its offices at 000 Xxxxxx Xxxxxx,
Xxx Xxxxxxxxx, XX 00000, Attention: Securities Lending Department, with a
copy to the General Counsel or at such other place as BGI may from time to
time designate in writing.
(b) Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Company shall be sufficiently given if
addressed to the Fund and/or Company and received by - Mutual Fund
Administration, c/o Barclays Global Fund Advisors, 000 Xxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, with a copy to: Legal Department, or at such
other place as the Company may from time to time designate in writing.
7.3 Cumulative Rights and No Waiver. Each and every right granted to a
party hereunder or under any other document delivered hereunder or in connection
herewith, or allowed it by law or equity, shall be cumulative and may be
exercised from time to time. No failure on the part of a party to exercise, and
no delay in exercising, any right shall operate as a waiver thereof, nor shall
any single or partial exercise by a party of any right preclude any other or
future exercise thereof or the exercise of any other right.
7.4 Severability. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or obligations
shall not in any way be affected or impaired thereby, and if any provision is
inapplicable to any person or circumstances, it shall nevertheless remain
applicable to all other persons and circumstances.
7.5 Amendments. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties.
7.6 Successors and Assigns. This Agreement shall extend to and shall be
binding upon the parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by either party
without the written consent of the other.
7.7 Governing Law. This Agreement shall be construed in accordance with the
laws of the State of California without regard to conflict of laws principles
thereof.
7.8 No Third Party Beneficiaries. In performing hereunder, BGI is acting
solely on behalf of the Company and, except as specifically provided herein, no
contractual or service relationship shall be deemed to be established hereby
between BGI and any other person.
7.9 Counterparts. 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.
7.10 SIPA Notice. THE PROVISIONS OF THE SECURITIES INVESTOR PROTECTION ACT
OF 1970 MAY NOT PROTECT THE FUND WITH RESPECT TO LOANS HEREUNDER AND, THEREFORE,
THE COLLATERAL DELIVERED TO BGI AS
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AGENT FOR THE FUND MAY CONSTITUTE THE ONLY SOURCE OF SATISFACTION OF A
BORROWER'S OBLIGATION IN THE EVENT SUCH BORROWER FAILS TO RETURN THE LOANED
SECURITIES.
7.11 Survival of Indemnification. The indemnifications provided by a party
hereunder shall be a continuing obligation of such party, its successors and
assigns, notwithstanding the termination of any loans hereunder or of this
Agreement.
7.12 No Personal Liability. It is understood and agreed that none of the
shareholders, officers, agents, Directors or Trustees (as applicable) of the
Company or any Fund shall be personally liable hereunder. All persons
contracting with or having a claim against the Company with respect to a Fund
shall look solely to the assets of such Fund for payment of such contract or
claim, and no Fund shall be liable for the obligations of any other Fund.
[End of Text]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers, thereunto duly authorized, as of the day
and year first above written.
iSHARES, INC.
By: /s/ Xxxx Xxx
------------------------------------
Name: Xxxx Xxx
Title: Treasurer and Chief Financial
Officer
iSHARES TRUST
By: /s/ Xxxx Xxx
------------------------------------
Name: Xxxx Xxx
Title: Treasurer and Chief Financial
Officer
BARCLAYS GLOBAL INVESTORS, N.A.
By: /s/ Xxxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxxx Xxxxx
Title: Managing Director
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
Approved by the Board of Trustees of iShares Trust and the Board of Directors of
iShares, Inc. on October 28, 2009
[Signature page to Securities Lending Agency Agreement]
