Exhibit 10.4
TRANSFER AGENCY AND SERVICE
AGREEMENT
AGREEMENT made as of the
day of
, 2010, by and between each Trust (each, individually, a
“Trust” and collectively, the “Trusts”)
listed on Appendix I hereto (as such Appendix be amended
from time to time), and THE BANK OF NEW YORK MELLON, a New York
banking company having its principal office and place of business
at One Wall Street, New York, New York 10286 (the
“Bank”).
WHEREAS, each Trust is an exchange
traded fund; and
WHEREAS, each Trust will issue for
purchase and redeem units of beneficial interest of each Trust (the
“Shares”) only in aggregations of shares known as
“Creation Units” (each a “Creation
Unit”);
WHEREAS, The Depository Trust
Company, a limited purpose trust company organized under the laws
of the State of New York (“DTC”), or its nominee
(Cede & Co.), will be the registered owner (the
“Shareholder”) of all Shares; and
WHEREAS, each Trust desires to
appoint the Bank as transfer agent, distribution disbursing agent,
and agent in connection with certain other activities, and the Bank
desires to accept such appointment;
NOW, THEREFORE, in consideration of
the mutual covenants herein contained, the parties hereto agree as
follows:
1. Terms of Appointment; Duties
of the Bank
1.1 Subject to the terms and
conditions set forth in this Agreement, each Trust hereby employs
and appoints the Bank to act as, and the Bank agrees to act as, its
respective transfer agent for the authorized and issued Shares and
as each Trust’s distribution disbursing agent.
1.2 The Bank agrees that it will
perform the following services:
(a) In accordance with the terms and
conditions of the form of Participant Agreement of each Trust, a
copy of which is attached hereto as Exhibit A , the Bank
shall:
(i) Perform and facilitate the
performance of purchases and redemption of Creation Units for each
Trust;
(ii) Prepare and transmit by means
of DTC’s book-entry system payments for distributions on or
with respect to the Shares declared by the applicable
Trust;
(iii) Maintain separate and distinct
records for each Trust with respect to the name and address of the
Shareholders and the number of Shares issued by each Trust and held
by Shareholders;
(iv) With respect to each Trust,
record, separately and distinctly, the issuance of Shares of each
Trust and maintain separate and distinct records of the total
number of Shares of each Trust which have been issued since
inception and the number of Shares which are outstanding based upon
data provided to it by each Trust. The Bank 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;
(v) Prepare and transmit to each
Trust and each Trust’s administrator and to any applicable
securities exchange (as specified to the Bank by the Trust or its
administrator) information with respect to purchases and
redemptions of Shares of each respective Trust;
(vi) On days that a Trust may accept
orders for purchases or redemptions, calculate and transmit to the
Bank and such Trust’s administrator the number of outstanding
Shares;
(vii) On days that a Trust may
accept orders for purchases or redemptions (pursuant to the
Participant Agreement), transmit to the Bank, the Trust and DTC the
amount of Shares purchased redeemed on such day by such
Trust;
(viii) Confirm to DTC the number of
Shares issued to Shareholders of each respective Trust, as DTC may
reasonably request;
(ix) Prepare and deliver other
reports, information and documents to DTC as DTC may reasonably
request;
(x) Extend the voting rights to the
Shareholder for extension by DTC to DTC participants and the
beneficial owners of Shares in accordance with the policies and
procedures of DTC for book-entry only securities;
(xi) Maintain separate and distinct
books and records of each Trust as specified by each Trust in
Schedule A attached hereto;
(xii) With respect to each Trust,
prepare a monthly report of all purchases and redemptions of Shares
during such month on a gross transaction basis, and identify on a
daily basis the net number of Shares either redeemed or purchased
on such Business Day and with respect to each Authorized
Participant purchasing or redeeming Shares, the amount of Shares
purchased or redeemed;
(xiii) Receive from the Managing
Owner purchase orders from Authorized Participants (as defined in
the Participant Agreement) for Creation Unit Aggregations of Shares
received in good form and accepted by or on behalf of the Trust by
the Distributor, transmit appropriate trade instructions to the
National Securities Clearance Corporation, if applicable, and
pursuant to such orders issue the appropriate number of Shares of
the Trust and hold such Shares in the account of the Shareholder
for each of the respective Trusts;
(xiv) Receive from the Authorized
Participants redemption requests, deliver the appropriate
documentation thereof to The Bank of New York Mellon as custodian
for the Trust, generate and transmit or cause to be generated and
transmitted confirmation of receipt of such redemption requests to
the Authorized Participants submitting the same; transmit
appropriate trade instructions to the National Securities Clearance
Corporation, if applicable, and redeem the appropriate number of
Creation Unit Aggregations of Shares held in the account of the
Shareholder; and
(xv) Confirm the name, U.S taxpayer
identification number and principle place of business of each
Authorized Participant.
(b) In addition to the services set
forth in the above sub-section 1.2(a), the Bank shall: perform the
customary services of a transfer agent and distribution disbursing
agent including, but not limited to, maintaining the account of the
Shareholder with respect to each Trust, obtaining at the request of
the Trust from the Shareholder a list of DTC participants holding
interests in each Trust’s Global Certificate, and those
services set forth on Schedule A attached hereto.
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(c) The following shall be delivered
to DTC participants as identified by DTC as the Shareholder for
book-entry only securities:
(i) Annual reports of each
Trust;
(ii) Trust proxies, proxy statements
and other proxy soliciting materials;
(iii) Trust prospectus and
amendments and supplements thereto, including stickers;
and
(iv) Other communications as a Trust
may from time to time identify as required by law or as a Trust may
reasonably request; and
(v) The Bank shall provide
additional services, if any, as may be agreed upon in writing by
the Trust and the Bank.
(d) The Bank shall keep records
relating to the services to be performed hereunder, in the form and
manner required by applicable laws, rules, and regulations (the
“Rules”), all such books and records shall be the
property of each respective Trust, will be preserved, maintained
and made available in accordance with such Section and Rules, and
will be surrendered promptly to the Trust on and in accordance with
its request.
2. Fees and
Expenses
2.1 The Bank shall receive from the
Trusts such compensation for the Transfer Agent’s services
provided pursuant to this Agreement as may be agreed to from time
to time in a written fee schedule approved by the parties. The fees
are accrued daily and billed monthly and shall be due and payable
upon receipt of the invoice. Upon the termination of this Agreement
before the end of any month, the fee for the part of the month
before such termination shall be prorated according to the
proportion which such part bears to the full monthly period and
shall be payable upon the date of termination of this
Agreement.
2.2 In addition to the fee paid
under Section 2.1 above, each Trust agrees to reimburse the
Bank for reasonable out-of-pocket expenses, including but not
limited to confirmation production, postage, forms, telephone,
microfilm, microfiche, tabulating proxies, records storage, or
advances incurred by the Bank for the items set out in the written
fee schedule attached hereto or relating to distributions and
reports (whereas all expenses related to creations and redemptions
of each respective Trust’s securities shall be borne by the
relevant authorized participant in such creations and redemptions).
In addition, any other expenses incurred by the Bank at the request
or with the consent of a Trust, will be reimbursed by the
applicable Trust.
2.3 The Trust agrees to pay all fees
and reimbursable expenses within ten (10) business days
following the receipt of the respective billing notice accompanied
by supporting documentation, as appropriate. Postage for mailing of
distributions, proxies, Trust reports and other mailings to all
shareholder accounts shall be advanced to the Bank by the Trust at
least seven (7) days prior to the mailing date of such
materials.
3. Representations and Warranties
of the Bank
The Bank represents and warrants to
each Trust that:
It is a banking company duly
organized and existing and in good standing under the laws of the
State of New York.
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It is duly qualified to carry on its
business in the State of New York.
It is empowered under applicable
laws and by its Charter and By-Laws to act as transfer agent and
dividend disbursing agent and to enter into, and perform its
obligations under, this Agreement.
All requisite corporate proceedings
have been taken to authorize it to enter into and perform this
Agreement.
It has and will continue to have
access to the necessary facilities, equipment and personnel to
perform its duties and obligations under this Agreement.
4. Representations and Warranties
of the Trust
Each Trust, severally and not
jointly, represents and warrants to the Bank that:
It is a statutory trust duly
organized and existing and in good standing under the laws of
Delaware.
It is empowered under applicable
laws and by its Declaration of Trust and Trust Agreement to enter
into and perform this Agreement.
A registration statement under the
Securities Act of 1933, as amended, on behalf of each of the Trusts
has become effective, will remain effective, and 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.
5. Indemnification
5.1 The Bank shall not be
responsible for, and the applicable Trust shall indemnify and hold
the Bank harmless from and against, any and all losses, damages,
costs, charges, counsel fees, including, without limitation, those
incurred by the Bank in a successful defense of any claims by a
Trust, payments, expenses and liability (“Losses”)
which may sustain or incur or which may be asserted against the
Bank in connection with or relating to this Agreement or the
Bank’s actions or omissions with respect to this Agreement,
except for any Losses for which the Bank has accepted liability
pursuant to Article 6 of this Agreement.
5.2 This indemnification provision
shall apply to actions taken pursuant to this Agreement or the
Participant Agreement.
6. Standard of Care and
Limitation of Liability
The Bank shall have no
responsibility and shall not be liable for any Losses, except that
the Bank shall be liable to the Trust for direct money damages
caused by its own negligence or willful misconduct or that of its
employees or agents, or its breach of any of its representations.
In no event shall the Bank be liable for special, indirect or
consequential damages, regardless of the form of action and even if
the same were foreseeable. For purposes of this Agreement, none of
the following shall be or be deemed negligence or willful
misconduct:
(a) The conclusive reliance on or
use by the Bank or its agents or subcontractors of information,
records, documents or services which (i) are received by the
Bank or its agents or subcontractors, and (ii) have been
prepared, maintained or performed by the Trust or any other person
or firm on behalf of the Trust including but not limited to any
previous transfer agent or registrar.
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(b) The conclusive reliance on, or
the carrying out by the Bank or its agents or subcontractors of,
any instructions or requests of the Trust or instructions or
requests on behalf of the Trust.
(c) The offer or sale of Shares by
or for the Trust in violation of any requirement under the federal
securities laws or regulations, or the securities laws or
regulations of any state that such Shares be registered in such
state, or any violation of any stop order or other determination or
ruling by any federal agency, or by any state with respect to the
offer or sale of Shares in such state.
7. Concerning the
Bank
7.1
(a) The Bank may employ agents or
attorneys-in-fact which are not affiliates of the Bank with the
prior written consent of the Trust (which consent shall not be
unreasonably withheld), and shall not be liable for any loss or
expense arising out of, or in connection with, the actions or
omissions to act of such agents or attorneys-in-fact, provided that
the Bank acts in good faith and with reasonable care in the
selection and retention of such agents or
attorneys-in-fact.
(b) The Bank may with the prior
written consent of the Trust (which consent shall not be
unreasonably withheld), enter into subcontracts, agreements and
understandings with any Bank affiliate, whenever and on such terms
and conditions as it deems necessary or appropriate to perform its
services hereunder. No such subcontract, agreement or understanding
shall discharge Bank from its obligations hereunder.
7.2 The Bank shall be entitled to
conclusively rely upon any written or oral instruction actually
received by the Bank and reasonably believed by the Bank to be duly
authorized and delivered. Each Trust agrees to forward to the Bank
written instructions confirming oral instructions by the close of
business on the same day that such oral instructions are given to
the Bank. Each Trust agrees that the fact that such confirming
written instructions are not received or that contrary written
instructions are received by the Bank shall in no way affect the
validity or enforceability of transactions authorized by such oral
instructions and effected by the Bank. If a Trust elects to
transmit written instructions through an on-line communication
system offered by the Bank, such Trust’s use thereof shall be
subject to the terms and conditions attached hereto as Appendix
A .
7.3 The Bank shall establish and
maintain a disaster recovery plan and back-up system at all times
satisfying the requirements of its regulators (the “Disaster
Recovery Plan and Back-Up System”). The Bank shall not be
responsible or liable for any failure or delay in the performance
of its obligations under this Agreement arising out of or caused,
directly or indirectly, by circumstances beyond its control which
are not a result of its negligence, including without limitation,
acts of God; earthquakes; fires; floods; wars; civil or military
disturbances; sabotage; epidemics; riots; interruption, loss or
malfunctions of utilities, transportation, computer (hardware or
software) or communication services; labor disputes; acts of civil
or military authority; governmental actions; or inability to obtain
labor, material, equipment or transportation, provided that the
Bank has established and is maintaining the Disaster Recovery Plan
and Back-Up System, or if not, that such delay or failure would
have occurred even if the Bank had established and was maintaining
the Disaster Recovery Plan and Back-Up System. Upon the occurrence
of any such delay or failure the Bank shall use commercially
reasonable best efforts to resume performance as soon as
practicable under the circumstances.
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7.4 The Bank shall have no duties or
responsibilities whatsoever except s
