SPDR® DOW JONES INDUSTRIAL AVERAGE ETF TRUST PARTICIPANT AGREEMENT
Exhibit
99.A4
SPDR® DOW XXXXX INDUSTRIAL AVERAGE ETF TRUST
This Participant Agreement (the “Agreement”) is entered into by and among ALPS Distributors,
Inc. (the “Distributor”), State Street Bank and Trust Company, providing certain transfer agency
services in its capacity as trustee (the “Transfer Agent”) and [Participant’s Name and NSCC#] (the “Participant”), and is
subject to acceptance by State Street Bank and Trust Company, as trustee (“Trustee”) for SPDR Dow
Xxxxx Industrial Average ETF Trust (the “Trust” or “Fund”). The Trustee serves as trustee of the
Trust pursuant to Standard Terms and Conditions of the Trust, as may have been or may be amended
and/or restated from time to time. The Distributor has been retained as principal underwriter of
the Trust and provides certain services in connection with the sale and distribution of shares of
beneficial interest of the Fund (the “Shares”). The Transfer Agent has been retained to provide
certain transfer agency services with respect to the purchase and redemption of Shares.
As specified in the Trust’s prospectus, as may be amended or supplemented from time to time
(together, the “Prospectus”), Shares may be purchased or redeemed from the Fund only in
aggregations of a specified number of Shares as set forth in the Prospectus (each, a “Creation
Unit” and collectively, the “Creation Units”). The Prospectus describes the primary form of
consideration to be provided to the Fund by the Participant for its own account or on behalf of any
party for which it is acting (whether a customer or otherwise) (“Participant Client”), which
generally includes a designated portfolio of securities (the “Deposit Securities”) and/or cash.
Creation Units shall generally be redeemed in exchange for Fund securities (“Fund Securities”)
and/or cash, as described in the Prospectus. The Participant also pays applicable transaction
fees (“Transaction Fees”) and Taxes (as defined below). All references to “cash” shall refer to
US Dollars. Capitalized terms not otherwise defined herein are used herein as defined in the
Prospectus.
This Agreement is intended to set forth the terms and procedures pursuant to which the
Participant may create and/or redeem Creation Units through the Continuous Net Settlement (“CNS”)
clearing processes of the National Securities Clearing Corporation (“NSCC”) as such processes have
been enhanced to effect purchases and redemptions of Creation Units, such processes being referred
to herein as the “Clearing Process”, or (ii) outside the Clearing Process (i.e., through the
facilities of The Depository Trust Company (“DTC”)).
The parties hereto in consideration of the premises and of the mutual agreements contained
herein agree as follows:
| 1. | STATUS AND ROLE OF PARTICIPANT. |
a. Clearing Status. The Participant represents, covenants and warrants that with respect to
orders for the purchase of Creation Units (“Creation Orders”) or orders for the redemption
of Creation Units (“Redemption Orders” and, together with “Creation Orders”, “Orders”) of
the Fund (i) by means of the Clearing Process, it is a member in good standing of the NSCC
and a participant in the CNS System of the NSCC and agrees that it will remain in good
standing throughout the term of this Agreement (a “Participating Party”); (ii) outside the
Clearing Process, it is a DTC Participant (a “DTC Participant”); and (iii) it has the
ability to transact through the Federal Reserve System. The Participant may place Orders
either through the Clearing Process or outside the Clearing Process, subject to the
procedures for purchase and redemption of Creation Units set forth in the Prospectus, this
Agreement and all attachments hereto, as may be amended from time to time (the
“Procedures”). Any change in the foregoing status of Participant shall terminate this
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Agreement and Participant shall give prompt notice to the Distributor, Transfer Agent and
the Trustee of such change.
b. Broker-Dealer Status. The Participant represents, covenants and warrants that it is (i)
registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, (ii)
qualified to act as a broker or dealer in the states or other jurisdictions where it
transacts business, and (iii) a member in good standing of the Financial Industry Regulatory
Authority (“FINRA”). The Participant agrees that it will maintain such registrations,
qualifications and membership in good standing and in full force and effect throughout the
term of this Agreement. The Participant further agrees to comply with all applicable U.S.
federal laws, the laws of the states or other jurisdictions concerned, and the rules and
regulations promulgated thereunder and with the Constitution, By-Laws and Conduct Rules of
FINRA (including any NASD Rules that remain operative until such rules are subsequently
renamed, repealed, rescinded or are otherwise replaced by FINRA Rules), and that it will not
offer or sell Shares of the Fund in any state or jurisdiction where they may not lawfully be
offered and/or sold. Any change in the foregoing status of Participant shall result in the
automatic termination of this Agreement and Participant shall give prompt notice to the
Distributor, Transfer Agent and the Trustee of such change.
c. Underwriter Status. The Participant understands and acknowledges that the method by
which Creation Units will be created and traded may raise certain issues under applicable
securities laws. For example, because new Creation Units of Shares may be issued and sold by
the Fund on an ongoing basis, a “distribution”, as such term is used in the Securities Act
of 1933, as amended (“1933 Act”), may occur at any point. The Participant understands and
acknowledges that some activities on its part, depending on the circumstances, may result in
it being deemed a participant in a distribution in a manner which could render it a
statutory underwriter and subject it to the prospectus delivery and liability provisions of
the 1933 Act. The Participant also understands and acknowledges that dealers who are not
“underwriters,” but who effect transactions in Shares, whether or not participating in the
distribution of Shares, are generally required to deliver a prospectus.
d. Agency. The Participant shall have no authority in any transaction to act as agent of the
Distributor, Transfer Agent, the Trust, Trustee or their agents. The Participant
acknowledges and agrees that for all purposes of this Agreement, the Participant will be
deemed to be an independent contractor. The Participant agrees to make itself and its
employees available, upon request, during normal business hours to consult with the Trustee,
the Transfer Agent or the Distributor or their designees concerning the performance of the
Participant’s responsibilities under this Agreement.
e. Rights and Obligations as DTC Participant. The Participant agrees that in connection
with any transactions in which it acts for a Participant Client, including, without
limitation, for any other DTC Participant or indirect participant, or any other beneficial
owner of Shares (each, a “Beneficial Owner”), that it shall extend to any such party all of
the rights, and shall be bound by all of the obligations, of a DTC Participant, in addition
to any obligations that it undertakes hereunder or in accordance with the Prospectus.
f. Qualified Institutional Buyer Status. The Participant represents, covenants and warrants
that it currently is, and will continue to be throughout the term of this Agreement, a
“qualified institutional buyer” as such term is defined in Rule 144A of the 1933 Act. Any
change in the
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foregoing status of Participant shall terminate this Agreement and Participant shall give
prompt notice to the Distributor, Transfer Agent and the Trustee of such change.
g. No Affiliation. The Participant represents, covenants and warrants that, during the term
of this Agreement, it will not be an affiliated person of the Fund, a promoter or a
principal underwriter of the Fund or an affiliated person of such persons, except to the
extent that the Participant may be deemed to be an affiliated person under 2(a)(3)(A) or
2(a)(3)(C) of the Investment Company Act of 1940, as amended (the “1940 Act”), due to
ownership of Shares. The Participant shall give prompt notice to the Distributor, Transfer
Agent and the Trustee of any change to the foregoing status.
h. Agent for Proxy. The Participant represents, covenants and warrants that, from time to
time, it may be a Beneficial Owner or legal owner of Shares. The Participant agrees to
irrevocably appoint the Distributor as its attorney and proxy with full authorization and
power to vote (or abstain from voting) its beneficially or legally owned Shares which the
Participant has not rehypothecated and which the Participant is or may be entitled to vote
at any meeting of shareholders of the Trust held after the effective date of this Agreement,
whether annual or special and whether or not an adjourned meeting, or, if applicable, to
give written consent with respect thereto. The Distributor intends to vote (or abstain from
voting) such Shares in the same proportion as the votes (or abstentions) of all other
shareholders of the corresponding Fund (“Mirror Vote”) on any matter submitted to the vote
of shareholders of the Fund with complete independence from and without any regard to any
views, statements or interests of the Participant, its affiliates or any other person. The
Participant acknowledges that any Mirror Vote cast by the Distributor with respect to any
shareholders’ meeting will likely be an approximation of the true shareholder vote since the
Distributor anticipates that it will be requested to vote such Shares in advance of any
actual shareholders’ meeting (e.g., 24 hours in advance).
For purposes of this Section 1.h., beneficially owned Shares shall not include those Shares
for which the Participant is the record owner but which are held for the benefit of third
parties or in customer or fiduciary accounts in the ordinary course of business, unless the
Participant instructs the Distributor in writing otherwise. The Participant acknowledges
that the Distributor will not exercise the voting rights applicable to such Shares unless
the Participant instructs the Distributor in writing otherwise. For the avoidance of doubt,
it shall be the responsibility of the Participant to instruct the Distributor in writing as
to which Shares will/will not be voted by the attorney pursuant to this Section 1.h. The
Participant represents that it has all the necessary legal power and authority to vote, and
to appoint an attorney and proxy to vote, all such Shares as contemplated herein.
The Distributor, as attorney and proxy for the Participant hereunder: (i) is hereby given
full power of substitution and revocation; (ii) may act through such agents, nominees, or
attorneys as it may appoint from time to time; and (iii) may provide voting instructions to
such agents, nominees, or substitute attorneys. The powers of such attorney and proxy shall
include (without limiting its general powers hereunder) the power to receive and waive any
notice of any meeting on behalf of the Participant. The Distributor may terminate this
irrevocable proxy (i.e., Section 1.h.) after sixty (60) days written notice to the
Participant and termination of this irrevocable proxy by itself shall not serve to terminate
the Agreement.
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| 2. | EXECUTION OF ORDERS (GENERAL TERMS). |
a. Purchase and Redemption of Creation Units. All Orders shall be handled by each party
hereto in accordance with the terms of the Prospectus and this Agreement (which includes the
Procedures). Each party hereto agrees to comply with the provisions of such documents to
the extent applicable to it. In the event of a conflict between the Prospectus and the
Procedures, the Prospectus shall control.
b. NSCC. Solely with respect to orders for the purchase or redemption of Creation Units
through the Clearing Process, the Participant as a Participating Party hereby authorizes the
Transfer Agent or its designee to transmit to NSCC on behalf of the Participant such
instructions, including Share and cash amounts as are necessary with respect to the purchase
and redemption of Creation Units, consistent with the instructions issued by the
Participant. The Participant agrees to be bound by the terms of such instructions issued by
the Transfer Agent or its designee on behalf of the Trust and reported to NSCC as though
such instructions were issued by the Participant directly to NSCC.
c. Consent to Recording. It is contemplated that the phone lines used by the Distributor,
the Transfer Agent and/or their affiliated persons will be recorded, and the Participant
hereby consents to the recording of all calls with any of those parties.
d. Irrevocability. The Participant acknowledges and agrees on behalf of itself and any
Participant Client that delivery of any Order shall be irrevocable, provided that the
Trustee, Transfer Agent and the Distributor on behalf of the Trust each reserve the right to
reject any Order for any reason.
e. Prospectus Delivery. The Participant understands a current Prospectus and all required
reports for the Fund are available at xxx.xxxxx.xxx (or any successor website). The
Distributor will provide to the Participant copies of the prospectus, and the Participant
consents to the delivery of all prospectuses electronically by e-mail at @ .com [Participant’s e-mail address]. The Participant agrees to
maintain a valid e-mail address and further agrees to promptly notify the other parties if
its e-mail address changes. The Participant can revoke this consent upon written notice to
the other parties. Notwithstanding the foregoing, the Distributor agrees to provide to the
Participant upon request a reasonable number of paper copies of either (i) the Fund’s
statutory prospectus or (ii) in the sole discretion of the Distributor, the Fund’s summary
prospectus in accordance with Rule 498 under the 1933 Act (or any successor rule). The
Participant acknowledges receipt of the Prospectus and represents it has reviewed the
Prospectus and understands the terms thereof, and further acknowledges that the procedures
contained therein pertaining to the purchase and redemption of Shares are incorporated
herein by reference.
| 3. | EXECUTION OF ORDERS FOR CREATION UNITS. |
a. Title to Securities; Restricted Shares. The Participant represents on behalf of
itself and any Participant Client that, upon delivery of a portfolio of Deposit Securities
to the Trust’s custodian (“Custodian”) and/or relevant sub-custodian (“Sub-Custodian”), the
Trust will acquire good and unencumbered title to such securities, free and clear of all
liens, restrictions, charges, duties and encumbrances and not subject to any adverse claims,
including, without limitation, any restriction upon the sale or transfer of such securities
imposed by (i) any agreement or arrangement entered into by the Participant or any
Participant Client in connection with a transaction to purchase
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Shares or (ii) any provision
of the 1933 Act and regulations thereunder (except that portfolio securities of issuers
other than U.S. issuers shall not be required to have been registered under the Securities
Act if exempt from such registration), or of the applicable laws or
regulations of any other applicable jurisdiction, and no such securities are “restricted securities,” as such
term is used in Rule 144(a)(3)(i) of the 1933 Act.
b. Corporate Actions. With respect to any Creation Order of the Fund, the Fund acknowledges
and agrees to return to the Participant any dividend, distribution or other corporate action
paid to the Fund in respect of any Deposit Security transferred to the Fund that, based on
the valuation of such Deposit Security at the time of transfer, should have been paid to the
Participant or Participant Client.
c. Beneficial Ownership. The Participant represents and warrants to the Distributor,
Transfer Agent, Trustee and the Trust that (based upon the number of outstanding Shares of
the Fund made publicly available by the Trust) (i) it does not hold, and will not as a
result of the contemplated transaction hold, for the account of any single Beneficial Owner
of Shares of the Fund, eighty percent (80%) or more of the outstanding Shares of the Fund,
or (ii) if it does hold for the account of any single Beneficial Owner of Shares of the
Fund, eighty percent (80%) or more of the outstanding Shares of the Fund, that such a
circumstance would not result in the Fund acquiring a basis in the portfolio securities
deposited with the Fund with respect to an order to create Shares in the Fund different from
the market value of such portfolio securities on the date of such order, pursuant to Section
351 and 362 of the Internal Revenue Code of 1986, as amended. Such representation and
warranty shall be deemed repeated with respect to each Creation Order for the Fund. If more
than one Beneficial Owner is combined in any Creation Order, this representation is made by
taking into account all such Beneficial Owners’ ownership of Shares as a group. The
Participant understands and agrees that the order form relating to any Creation Order of the
Fund shall state substantially the same foregoing representations and warranties.
The Distributor, Transfer Agent or the Trustee may request information from the Participant
regarding Share ownership and to rely thereon to the extent necessary to make a
determination regarding ownership of eighty percent (80%) or more of the outstanding Fund
Shares by a Beneficial Owner as a condition to the acceptance of Deposit Securities.
d. Sub-Custodian Account. The Participant understands and agrees that in the event the
Fund invests in international or global equity securities, the Trust will cause its
Custodian to maintain with the applicable Sub-Custodian for the Fund an account in the
relevant foreign jurisdiction to which the Participant shall deliver or cause to be
delivered the Deposit Securities for itself or any Participant Client in connection with any
Creation Order, with any appropriate adjustments as advised by such Sub-Custodian or Fund,
in accordance with the terms and conditions applicable to such account in such jurisdiction.
e. Deposit Securities and/or Relevant Cash Amounts. The Participant understands that the
amount of any cash and the identity and the required number of Deposit Securities, as
applicable, to be included with respect to any Creation Order (based on information at the
end of the previous Business Day) for the Fund will be made available on each Business Day,
prior to the opening of business on the New York Stock Exchange (“NYSE”) through the
facilities of the NSCC. The Participant understands that a Creation Unit will not be issued
until the requisite cash and/or Deposit Securities, as applicable, Transaction Fees and
Taxes (as defined below) are transferred to the Trust on or before the settlement date in
accordance with the Prospectus and in accordance with any instructions provided by the
Trust, the Custodian and/or Sub-Custodian with respect to cash payments, delivery and
settlement.
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| 4. | EXECUTION OF REDEMPTION REQUESTS. |
a. Order Placement. The Participant represents, covenants and warrants that it will not
attempt to place a Redemption Order unless it first ascertains that (a) it or the
Participant Client, as the case may be, owns outright or has full legal authority and legal
beneficial right to tender for redemption the requisite number of Shares to be redeemed and
receive the entire proceeds of the redemption, and (b) such Shares have not been loaned or
pledged to another party nor are they the subject of a repurchase agreement, securities
lending agreement or such other arrangement which would preclude the delivery of such Shares
in accordance with the Prospectus and on a “regular way” basis, or as otherwise required by
the Trustee. The Participant understands that Shares of the Fund may be redeemed only when
one or more Creation Units of Shares are held in the account of a single Participant. In
the event that the Distributor, Transfer Agent and/or the Trustee believes that a
Participant does not have the requisite number of Shares to be redeemed as a Creation Unit,
the Distributor, Transfer Agent and/or Trustee may reject without liability the
Participant’s Redemption Order.
b. Additional Payment on Redemption. In the event that the Participant receives Fund
Securities the value of which exceeds the net asset value of the Fund at the time of
redemption, the Participant agrees to pay, on the same business day it is notified, or cause
the Participant Client to pay, on such day, to the Fund an amount in cash equal to the
difference.
c. Corporate Actions. The Participant on behalf of itself and any Participant Client
acknowledges and agrees to return to the Fund any dividend, interest, distribution or other
corporate action paid to it or to Participant Client in respect of any Fund Security that is
transferred to the Participant or any Participant Client that, based on the valuation of the
Fund Security at the time of transfer, should have been paid to the Fund. The Fund is
entitled to reduce the amount of proceeds due to the Participant or Participant Client by an
amount equal to any dividend, interest distribution or other corporate action paid to the
Participant or to Participant Client in respect of any Fund Security that is transferred to
the Participant or to Participant Client that, based on the valuation of the Fund Security
at the time of transfer, should have been paid to the Fund.
| 5. | PARTICIPANT RECORDS, POLICIES AND REPRESENTATIONS. |
a. Maintenance of Records. The Participant agrees to maintain records of all sales of Shares
made by or through it and to furnish copies of such records to the Trustee, Transfer Agent
and/or the Distributor upon request.
b. Privacy. The Participant represents that it has procedures in place that are reasonably
designed to protect the privacy of non-public personal consumer/customer financial
information to the extent required by applicable U.S. Federal and state laws, rules and
regulations and will continue to do so throughout the term of this Agreement.
c. Shareholder Information. The Participant agrees: (i) subject to any privacy
obligations or other obligations arising under the federal or state securities laws it may
have to its customers, to assist the Distributor and/or Trustee in ascertaining certain
information regarding sales of Shares made by or through Participant upon the request of the
Trustee or the Distributor necessary for the Fund to comply with its obligations to
distribute information to its shareholders as may be required from time to time under
applicable state or federal securities laws, or (ii) in lieu thereof, and at the option of
the Participant, the Participant may undertake to deliver to its customers that
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are
shareholders of the Fund, the Prospectuses, as may be amended or
supplemented from time to time, proxy material, annual and other reports of the Fund or other similar information that
the Fund is obligated or otherwise desire to deliver to its shareholders, after receipt from
the Fund or the Distributor of sufficient, reasonable quantities of the same to allow
mailing thereof to such customers.
d. Anti-Money Laundering. The Participant represents, covenants and warrants that it has
established an anti-money laundering program (“AML Program”) that, at a minimum, (i)
designates a compliance officer to administer and oversee the AML Program, (ii) provides
ongoing employee training, (iii) includes an independent audit function to test the
effectiveness of the AML Program, (iv) establishes internal policies, procedures, and
controls that are tailored to its particular business, (v) includes a customer
identification program consistent with the rules under section 326 of the USA Patriot Act,
(vi) provides for the filing of all necessary anti-money laundering reports including, but
not limited to, currency transaction reports and suspicious activity reports, (vii) provides
for screening all new and existing customers against reports and suspicious activity
reports, (vii) provides for screening all new and existing customers against the Office of
Foreign Asset Control list and any other government list that is or becomes required under
the USA Patriot Act, and (viii) allows for appropriate regulators to examine its anti-money
laundering books and records. The Participant agrees that, throughout the term of this
Agreement, it will maintain the AML Program in substantial conformity with the foregoing
provisions as may be amended or supplemented by applicable U.S. federal regulations. Any
change in the foregoing shall result in the automatic termination of this Agreement, and
Participant shall give prompt notice to the Distributor, Transfer Agent and the Trustee of
such change.
e. Marketing Materials. The Participant represents, warrants and agrees that it will not
make any representations concerning the Fund, Creation Units or Shares other than those
contained in the Prospectus or in any promotional materials or sales literature furnished to
the Participant by the Distributor. The Participant agrees not to furnish or cause to be
furnished to any person or display or publish any information or materials relating to the
Fund, Creation Units or Shares (including, without limitation, promotional materials and
sales literature, advertisements, press releases, announcements, statements, posters, signs
or other similar materials, but not including any materials prepared and used for the
Participant’s internal use only or brokerage communications prepared by the Participant in
the normal course of its business and consistent with the Prospectus and in accordance with
applicable laws and regulations) (“Marketing Materials”), except such Marketing Materials as
may be furnished to the Participant by the Distributor and such other Marketing Materials as
may be approved in writing by the Distributor. The Participant understands that the Fund may
not be advertised or marketed as an open-end investment company (i.e., as a mutual fund)
that offers redeemable securities, and that any advertising materials will prominently
disclose that the Shares are not individually redeemable shares of beneficial interest in
the Trust. In addition, the Participant understands that any advertising material that
addresses redemptions of Shares, including the Prospectus, will disclose that the owners of
Shares may acquire Shares and tender Shares for redemption to the Trust in Creation Unit
aggregations only. Notwithstanding the foregoing, the Participant or an affiliate of the
Participant may, without the written approval of the Distributor, prepare and circulate in
the regular course of its business research reports that include information, opinions or
recommendations relating to the Fund (i) for public dissemination, provided that such
research reports compare the relative merits and benefits of Shares with other products and
are not used for purposes of marketing Shares and (ii) for internal use by the Participant.
The Participant acknowledges that the Trustee, Distributor, Transfer Agent, the Trust’s
sponsor, PDR Services LLC (“Sponsor”) and their affiliates may disclose that the Participant
is acting as an authorized participant with respect to the Trust’s Shares and has entered
into this Agreement.
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| 6. | AUTHORIZED PERSONS. |
a. Certification. Concurrently with the execution of this Agreement and from time to time
thereafter, the Participant shall deliver to the Distributor, the Transfer Agent and the
Trust, duly certified as appropriate by its secretary or other duly authorized official, a
certificate, in the form set forth in Attachment B (or pursuant to other documentation
deemed acceptable by the Trust, Transfer Agent or Distributor in their sole discretion) (the
“Certificate”), setting forth the names, signatures and other requested information of all
persons authorized to give instructions relating to any activity contemplated hereby or any
other notice, request or instruction on behalf of the Participant (each an “Authorized
Person”). Such Certificate may be accepted and relied upon by the Transfer Agent, the
Distributor and the Trust as conclusive evidence of the facts set forth therein and shall be
considered to be in full force and effect until delivery to the Transfer Agent, the
Distributor and the Trust of a superseding Certificate bearing a subsequent date.
b. Personal Identification Number. The Transfer Agent or Distributor, as the case may be,
shall issue to each Authorized Person a unique personal identification number (“PIN”) by
which such Authorized Person and the Participant shall be identified and instructions issued
by the Participant hereunder shall be authenticated.
c. Termination of Authority. Upon the termination or revocation of authority of such
Authorized Person by the Participant, the Participant shall give prompt written notice of
such fact to the Distributor, Transfer Agent and the Trust and such notice shall be
effective upon receipt by the Distributor, Transfer Agent and the Trust.
d. Verification. The Transfer Agent and Distributor shall assume that all instructions
issued to them using a PIN have been properly placed by an Authorized Person, unless the
Transfer Agent or Distributor, as the case may be, has actual knowledge to the contrary or
the Participant has properly revoked such PIN as provided herein. Neither the Distributor
nor the Transfer Agent shall have any obligation to verify that an Order is being placed by
an Authorized Person.
| 7. | PAYMENT OF CERTAIN FEES AND TAXES. |
a. Transaction Fees. In connection with the purchase or redemption of Creation Units, the
Participant agrees to pay on behalf of itself or the Participant Client the Transaction Fee
prescribed in the Prospectus as applicable to the Participant’s transaction. The Trustee
reserves the right to adjust any Transaction Fee subject to any limitation as prescribed in
the Prospectus.
b. Other Fees and Taxes. In connection with the purchase or redemption of Creation Units,
the Participant acknowledges and agrees that the computation of any cash amount to be paid
by or to the Participant shall exclude any taxes or other fees and expenses payable upon the
transfer of beneficial ownership of Deposit Securities or Fund Securities. To the extent
any payment of any transfer tax, sales or use tax, stamp tax, recording tax, value added tax
or any other similar tax, fee or government charge (collectively, “Taxes”) applicable to the
purchase or redemption of any Creation Units made pursuant to this Agreement is imposed, the
Participant shall be also responsible for the payment of any such Taxes regardless of
whether or not such Taxes are imposed directly on the Participant. To the extent the Trust,
Trustee, Distributor or their agents pay any such Taxes or they are otherwise imposed, the
Participant agrees to promptly indemnify and pay such party for any such payment, together
with any applicable penalties, additions to tax or interest thereon. This section shall
survive the termination of this Agreement.
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| 8. | INDEMNIFICATION. |
This Section 8 shall survive the termination of this Agreement.
Participant’s Indemnification of the Distributor, Transfer Agent, Trustee, Trust and
Sponsor. The Participant hereby agrees to indemnify and hold harmless the Distributor,
Transfer Agent, Trustee, Trust and Sponsor and their respective subsidiaries, affiliates,
directors, officers, partners, members, employees and agents, and each person, if any, who
controls such persons within the meaning of Section 15 of the 1933 Act (each an “AP
Indemnified Party”) from and against any loss, liability, cost or expense suffered or
incurred by such AP Indemnified Party resulting from, in connection with or arising out of
(i) any breach by the Participant of any provision of this Agreement, (ii) any failure by
Participant for any reason, fraudulent, negligent or otherwise, to comply with its
obligations under this Agreement, (iii) any failure by the Participant to comply with
applicable laws, including rules and regulations of self-regulatory organizations (“SROs”),
in relation to its role as Participant, (iv) any actions of such AP Indemnified Party in
reliance upon any instructions issued in accordance with the Procedures (as may be amended
from time to time) believed by the Distributor, the Transfer Agent and/or the Trust to be
genuine and to have been given by the Participant or (v)(1) any representation by the
Participant, its employees or its agents or other representatives about the Fund, Creation
Units, Shares or any AP Indemnified Party that is not consistent with the Trust’s
then-current Prospectus made in connection with the offer or the solicitation of an offer to
buy or sell Shares and (2) any untrue statement or alleged untrue statement of a material
fact contained in any research reports, Marketing Material or sales literature described in
Section 5.e. hereof or any alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading to the extent that
such statement or omission relates to the Fund, Creation Units, Shares or any AP Indemnified
Party unless, in either case, such representation, statement or omission was made or
included by the Participant at the written direction of the Trust or the Distributor or is
based upon any omission or alleged omission by the Trust or the Distributor to state a
material fact in connection with such representation, statement or omission necessary to
make such representation, statement or omission not misleading. Notwithstanding the
foregoing, the Participant shall not have any obligation to indemnify any AP Indemnified
Party under this Section 8 for any such losses, liabilities, damages, costs or expenses that
are incurred as a result of, or in connection with, any gross negligence, bad faith or
willful misconduct on the part of such AP Indemnified Party.
| 9. | LIMITATION OF LIABILITY. |
This Section 9 shall survive the termination of this Agreement.
a. Express Duties. The Distributor and the Transfer Agent undertake to perform such duties
and only such duties as are expressly set forth herein, or expressly incorporated herein by
reference, and no implied covenants or obligations shall be read into this Agreement against
the Distributor or the Transfer Agent. The parties understand and agree that the Trust (and
the Trustee acting on behalf of the Trust for such purposes) is a limited a party to this
Agreement for the sole purpose of accepting such Agreement. Accordingly, the Trust (and the
Trustee acting on behalf of the Trust for such purposes) has not agreed to undertake any
obligations under this Agreement nor made any representations or warranties under this
Agreement and no implied covenants or obligations shall be read into this Agreement against
either the Trustee or the Trust.
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The parties acknowledge that State Street Bank and Trust Company, defined as Trustee and
Transfer Agent herein, is acting in its capacity hereunder as trustee in accordance with and
pursuant to the Trust Agreement and not in its general corporate capacity.
The Distributor and the Transfer Agent each agree that no provision in this Section 9 shall
relieve such party from its obligations to the Trust under any servicing agreement that it
has entered into with the Trust.
b. Limited Liability. In the absence of bad faith, gross negligence or willful misconduct
on its part, neither the Distributor nor the Transfer Agent, whether acting directly or
through agents, affiliates or attorneys, shall be liable for any action taken, suffered or
omitted or for any error of judgment made by any of them in the performance of their duties
hereunder. Neither the Distributor nor the Transfer Agent shall be liable for any error of
judgment made in good faith unless the party exercising such shall have been grossly
negligent in ascertaining the pertinent facts necessary to make such judgment. In no event
shall the Distributor or the Transfer Agent be liable for any special, indirect, incidental,
exemplary, punitive or consequential loss or damage of any kind whatsoever (including but
not limited to loss of revenue, loss of actual or anticipated profit, loss of contracts,
loss of the use of money, loss of anticipated savings, loss of business, loss of
opportunity, loss of market share, loss of goodwill or loss of reputation), even if such
parties have been advised of the likelihood of such loss or damage and regardless of the
form of action. In no event shall the Distributor or the Transfer Agent be liable for: (i)
the acts or omissions of DTC, NSCC or any other securities depository or clearing
corporation; or (ii) losses incurred by the Participant or Participant Client as a result of
unauthorized use of any PIN. Further, the Distributor shall not be liable for any action or
failure to take any action with respect to the voting matters set forth in Section 1.h.
above.
c. Force Majeure. Neither the Distributor nor the Transfer Agent shall be responsible or
liable for any failure or delay in the performance of their obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its reasonable
control, including without limitation, acts of God; earthquakes; fires; floods; wars; civil
or military disturbances; terrorism; sabotage; epidemics; riots; interruptions; loss or
malfunction of utilities, computer (hardware or software) or communications service;
accidents; labor disputes; acts of civil or military authority or governmental actions.
d. Reliance on Instructions. The Distributor and the Transfer Agent may conclusively rely
upon, and shall be fully protected in acting or refraining from acting upon, any
communication authorized under this Agreement and the Procedures and upon any written or
oral instruction, notice, request, direction or consent reasonably believed by them to be
genuine.
e. No Advancement by Transfer Agent. The Transfer Agent shall not be required to advance,
expend or risk its own funds or otherwise incur or become exposed to financial liability in
the performance of its duties hereunder, except as may be required as a result of its own
gross negligence, willful misconduct or bad faith.
f. Data Errors and Communication Delays. Neither the Distributor nor the Transfer Agent
shall be liable to the Participant or to any other person for any damages arising out of
mistakes or errors in data provided to the Distributor or the Transfer Agent by a third
party, or out of interruptions or delays of electronic means of communications with the
Distributor or the Transfer Agent.
10
| 10. | NOTICES. Except as otherwise specifically provided in this Agreement, all notices and amendments required or permitted to be given pursuant to this Agreement shall be given in writing and delivered by (i) personal delivery, (ii) postage prepaid registered or certified United States first class mail, return receipt requested, (iii) overnight traceable mail (e.g., Federal Express), (iv) facsimile, (v) electronic mail (e-mail) or (vi) similar means of same day delivery. Unless otherwise notified in writing, all notices to the Trust and Trustee shall be given or sent as follows: State Street Bank and Trust Company, XX Xxx 0000, Xxxxxx, XX 00000, Attn.: SPDR Dow Xxxxx Industrial Average ETF Trust. | |
| All notices to the Participant, Distributor or Transfer Agent, as the case may be, shall be directed to the address, telephone, facsimile numbers or e-mail addresses indicated below the signature line of such party; provided, however, in the case of communications by the Distributor or Transfer Agent to the Participant with respect to any Order as detailed in the Procedures, the Distributor and Transfer Agent shall contact an Authorized Person or other Participant designee at such telephone number, e-mail address or facsimile number provided by such person. |
| 11. | TERMINATION AND AMENDMENT. This Agreement shall become effective in this form as of the date accepted by the Trust and may be terminated at any time by any party upon thirty days prior notice to the other parties (i) unless earlier terminated by the Trust in the event of a breach of this Agreement or the Procedures described herein by the Participant or (ii) in the event that the Trust is terminated for any reason. | |
| This Agreement may be amended by the Trust from time to time by the following procedure: the Trust will provide a copy of any such amendment to the Distributor, the Transfer Agent and the Participant. If neither the Distributor, the Transfer Agent nor the Participant objects in writing to the amendment within ten (10) days, the amendment will become part of this Agreement in accordance with its terms. Notwithstanding the foregoing, the Trust reserves the right to revise the Procedures or issue additional procedures relating to the manner of creating or redeeming Creation Units and the Participant, the Transfer Agent and the Distributor each agree to comply with such Procedures as may be issued from time to time. |
| 12. | ENTIRE AGREEMENT. This Agreement and the Procedures, which are hereby incorporated herein by reference, supersede any prior agreement between or among the parties with respect to the subject matter contained herein and constitute the entire agreement among the parties regarding the matters contained herein. |
| 13. | ASSIGNMENT. No party may assign its rights or obligations under this Agreement (in whole or in part) without the prior written consent of the other parties, which shall not be unreasonably withheld; provided that, any party may assign its rights and obligations hereunder (in whole, but not in part) without such consent to an entity acquiring all, or substantially all of its assets or business or to an affiliate so long as the acquiring entity is able to comply and fulfill the duties and obligations under this Agreement. |
| 14. | SEVERANCE. If any provision of this Agreement is held by any court or any act, regulation, rule or decision of any other governmental or supranational body or authority or regulatory or self-regulatory organization to be invalid, illegal or unenforceable for any reason, it shall be invalid, illegal or unenforceable only to the extent so held and shall not affect the validity, |
11
| legality or enforceability of the other provisions of this Agreement so long as this Agreement, as so modified, continues to express, without material change, the original intentions of the parties as to the subject matter of this Agreement and the deletion of such portion of this Agreement will not substantially impair the respective benefits, obligations, or expectations of the parties to this Agreement. | ||
| 15. | COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be an original and all shall constitute but one and the same instrument. |
| 16. | GOVERNING LAW. This Agreement shall be governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts without regard to the conflicts of laws provisions thereof. The parties irrevocably submit to the personal jurisdiction and service and venue of any federal or state court within the Commonwealth of Massachusetts having subject matter jurisdiction, for the purpose of any action, suit or proceeding arising out of or relating to this Agreement. |
| 17. | TRUST AS THIRD PARTY BENEFICIARY. The parties understand and agree that the Trust (including the Trustee acting on its behalf), as a third party beneficiary to this Agreement, is entitled and intend to proceed directly against the Participant in the event that the Participant fails to honor any of its obligations pursuant to this Agreement that benefit the Trust. |
| 18. | INTERPRETATION. Titles and section headings are included solely for convenient reference and are not a part of this Agreement. |
See next page for signatures
12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
day of
, 2010.
| ALPS DISTRIBUTORS, INC. | ||||
| BY: | ||||
| PRINTED NAME: | ||||
| TITLE: | ||||
| ADDRESS: | 0000 Xxxxxxxx, Xxxxx 0000 | |||
| Xxxxxx, XX 00000 | ||||
| TELEPHONE: | (000) 000-0000 | |||
| FACSIMILE: | (000) 000-0000 | |||
| STATE STREET BANK
AND TRUST COMPANY, not in its general corporate capacity but solely as Trustee of the Trust with respect to transfer agency matters |
||||
| BY: | ||||
| PRINTED NAME: | Xxxxxxx Xxxxxx | |||
| TITLE: | Executive Vice President | |||
| ADDRESS: | X.X. Xxx 0000 | |||
| Xxxxxx, XX 00000-0000 | ||||
| TELEPHONE: | (000) 000-0000 | |||
| FACSIMILE: | (000) 000-0000 | |||
| PARTICIPANT: | ||||
| NAME: | ||||
| NSCC#: | ||||
| TAX ID#: | ||||
| BY: | ||||
| PRINTED NAME: | ||||
| TITLE: | ||||
| ADDRESS: | ||||
| TELEPHONE: | ||||
| FACSIMILE: | ||||
| E-MAIL: | ||||
13
| ACCEPTED BY: | |||||||
| SPDR DOW XXXXX INDUSTRIAL AVERAGE ETF TRUST | |||||||
| BY: | STATE STREET BANK
AND TRUST COMPANY, not in its general corporate capacity but solely as Trustee of the Trust |
||||||
| BY: | |||||||
| PRINTED NAME: | Xxxxxxx Xxxxxx | ||||||
| TITLE: | Executive Vice President | ||||||
14
ATTACHMENT A
This document supplements the Prospectus with respect to the procedures to be used by (i) the
Transfer Agent and Distributor in processing orders for the purchase of Creation Units of the Fund
(“Creation Orders”) and (ii) the Transfer Agent in processing orders redeeming Creation units of
the Fund (“Redemption Orders,” and together with Creation Orders, “Orders”).
A Participant is required to have signed the Participant Agreement. Upon acceptance by the
Trustee of the Participant Agreement, the Transfer Agent or Distributor, as the case may be, will
assign a personal identification number (“PIN”) to each Authorized Person authorized to act for the
Participant. This will allow a Participant through its Authorized Person(s) to place an order with
respect to Creation Units.
TO PLACE AN ORDER FOR PURCHASE OR REDEMPTION OF CREATION UNITS
| 1. | Orders by Telephone. |
a. Order Number. Call to Receive an Order Number. An Authorized Person for the Participant
will call the telephone representative at the number listed on the Fund’s order form (“Order
Form”) not later than the cut-off time for placing Orders with the Fund as set forth in the
Order Form (the “Order Cut-Off Time”) to receive an Order Number. Non-standard Orders
generally must be arranged with the Trust in advance of Order placement. The Order Form (as
may be revised from time to time) is incorporated into and made a part of this Agreement.
Upon verifying the authenticity of the caller (as determined by the use of the appropriate
PIN) and the terms of the Order, the telephone representative will issue a unique Order
Number. All Orders with respect to the purchase or redemption of Creation Units are
required to be in writing and accompanied by the designated Order Number. Incoming
telephone calls are queued and will be handled in the sequence received. Calls placed
before the Order Cut-Off Time will be processed even if the call is taken after this cut-off
time. ACCORDINGLY, DO NOT HANG UP AND REDIAL. INCOMING CALLS THAT ARE ATTEMPTED LATER THAN
THE ORDER CUT-OFF TIME WILL NOT BE ACCEPTED.
NOTE THAT THE TELEPHONE CALL IN WHICH THE ORDER NUMBER IS ISSUED INITIATES THE ORDER PROCESS
BUT DOES NOT ALONE CONSTITUTE THE ORDER. AN ORDER IS ONLY COMPLETED AND PROCESSED UPON
RECEIPT OF WRITTEN INSTRUCTIONS VIA THE ORDER FORM CONTAINING THE DESIGNATED ORDER NUMBER,
AUTHORIZED INDIVIDUALS’ SIGNATURES AND TRANSMITTED BY FACSIMILE.
b. Place the Order. An Order Number is only valid for a limited time. The Order Form for
purchase or redemption of Creation Units must be sent by facsimile to the telephone
representative within 20 minutes of the issuance of the Order Number. In the event that the
Order Form is not received within such time period, the telephone representative will
attempt to contact the Participant to request immediate transmission of the Order. Unless
the Order Form is received by the telephone representative upon the earlier of (i) within 15
minutes of contact with the Participant or (ii) 45 minutes after the Order Cut-Off Time, the
Order will be deemed invalid.
A-1
c. Await Receipt of Confirmation.
| (i) | Clearing Process. The Distributor (in the case of purchases) or the Transfer Agent (in the case of redemptions) shall issue a confirmation of Order acceptance within approximately 15 minutes of its receipt of an Order Form received in good form. In the event the Participant does not receive a timely confirmation from the Distributor or the Transfer Agent, it should contact the telephone representative at the business number indicated. | ||
| (ii) | Outside the Clearing Process. In lieu of receiving a confirmation of Order acceptance, the DTC Participant will receive an acknowledgment of Order acceptance. The DTC Participant shall deliver on settlement date the Deposit Securities and/or cash (in the case of purchases) or the Creation Unit size aggregation of Shares on trade date plus one (in the case of redemptions) to the Trust through DTC. The Trust shall settle the transaction on the prescribed settlement date. |
d. Ambiguous Instructions. In the event that an Order Form contains terms that differ from
the information provided in the telephone call at the time of issuance of the Order Number,
the telephone representative will attempt to contact the Participant to request confirmation
of the terms of the Order. If an Authorized Person confirms the terms as they appear in the
Order Form then the Order will be accepted and processed. If an Authorized Person
contradicts its terms, the Order will be deemed invalid and a corrected Order Form must be
received by the telephone representative not later than the earlier of (i) within 15 minutes
of such contact with the Participant or (ii) 45 minutes after the Order Cut-Off Time. If
the telephone representative is not able to contact an Authorized Person, then the Order
shall be accepted and processed in accordance with the terms of the Order Form
notwithstanding any inconsistency from the terms of the telephone information. In the event
that an Order Form contains terms that are illegible, as determined in the sole discretion
of the Transfer Agent or Distributor (in the case of a Creation Order) or the Transfer Agent
(in the case of a Redemption Order), the Order will be deemed invalid and will not be
processed. A telephone representative will attempt to contact the Participant to request
retransmission of the Order Form, and a corrected Order Form must be received by the
telephone representative not later than the earlier of (i) within 15 minutes of such contact
with the Participant or (ii) 45 minutes after the Order Cut-Off Time.
| 2. | Election to Place Orders by Internet. |
a. General. Notwithstanding the foregoing provisions, Orders may be submitted through the
Internet (“Web Order Site” or “Fund Connect”), but must be done so in accordance with the
terms of this Agreement, the Prospectus, the Web Order Site, the State Street Fund Connect
Buy-Side User Agreement (which must be separately entered into by the Participant) (the
“Fund Connect Agreement”) and the applicable Fund Connect User Guide (or any successor
documents). To the extent that any provision of this Agreement is inconsistent with any
provision of any Fund Connect Agreement, the Fund Connect Agreement shall control with
respect to State Street’s provision of the Web Order Site; provided, however, it is not the
intention of the parties to otherwise modify the rights, duties and obligations of the
parties under the Agreement, which shall remain in full force and effect until otherwise
expressly modified or terminated in accordance with its terms. Notwithstanding the forgoing,
the Participant acknowledges that references to the applicable Fund Connect User Guide (or
any successor documents) contained herein are for instructional purposes only, and such Fund
Connect User Guide (or any successor documents)
A-2
does not contain any additional representations, warranties or obligations by the Trust, the
Trustee, the Transfer Agent, the Distributor or their respective agents.
b. Certain Acknowledgements. The Participant acknowledges and agrees (i) that the Trust, the
Trustee, the Transfer Agent, the Distributor and their respective agents may elect to review
any Order placed through the Web Order Site manually before it is executed and that such
manual review may result in a delay in execution of such Order; (ii) that during periods of
heavy market activity or other times, it may be difficult to place Orders via the Web Order
Site and the Participant may place Orders as otherwise set forth in Attachment A; and (iii)
that any transaction information, content, or data downloaded or otherwise obtained through
the use of the Web Order Site are done at the Participant’s own discretion and risk.
EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THE FUND CONNECT AGREEMENT AND TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE WEB ORDER SITE
IS PROVIDED “AS IS,” “AS AVAILABLE” WITH ALL FAULTS AND WITHOUT ANY WARRANTY OF ANY KIND.
SPECIFICALLY, WITHOUT LIMITING THE FOREGOING, ALL WARRANTIES, CONDITIONS, OTHER CONTRACTUAL
TERMS, REPRESENTATIONS, INDEMNITIES AND GUARANTEES WITH RESPECT TO THE WEB ORDER SITE,
WHETHER EXPRESS, IMPLIED OR STATUTORY, ARISING BY LAW, CUSTOM, PRIOR ORAL OR WRITTEN
STATEMENTS BY THE TRUST, THE TRUSTEE, THE TRANSFER AGENT, THE DISTRIBUTOR OR THEIR
RESPECTIVE AGENTS, AFFILIATES, LICENSORS OR OTHERWISE (INCLUDING, BUT NOT LIMITED TO AS TO
TITLE, SATISFACTORY QUALITY, ACCURACY, COMPLETENESS, UNINTERRUPTED USE, NON-INFRINGEMENT,
TIMELINESS, TRUTHFULNESS, SEQUENCE, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR PARTICULAR
PURPOSE AND ANY IMPLIED WARRANTIES, CONDITIONS AND OTHER CONTRACTUAL TERMS ARISING FROM
TRADE USAGE, COURSE OF DEALING OR COURSE OF PERFORMANCE) ARE HEREBY OVERRIDDEN, EXCLUDED AND
DISCLAIMED.
c. Election to Terminate Placing Orders by Internet. The Participant may elect at
any time to discontinue placing Orders through the Web Order Site without providing notice
under the Agreement.
| 3. | Acknowledgment Regarding Telephone and Internet Transactions. During periods of heavy market activity or other times, the Participant acknowledges it may be difficult to reach the Trust by telephone or to transact business over the Internet via the Web Order Site. Technological irregularities may also make the use of the Internet and Web Order Site slow or unavailable at times. The Trust may terminate the receipt of redemption or exchange Orders by telephone or the Internet at any time, in which case you may redeem or exchange Shares by other means. |
| 4. | Purchase of Creation Units Without Receipt of Deposit Securities. Creation Units of the Fund may be purchased in advance of receipt by the Trust of all or a portion of the applicable Deposit Securities, provided that the Participant deposits an initial deposit of cash with the Trust having a value greater than the net asset value of the Shares on the date the Order is placed in proper form. In addition to available Deposit Securities and cash that generally comprise a Creation Unit, cash must be deposited in an amount equal to 115% of the market value of any undelivered Deposit Securities (the “Additional Cash Deposit”). The Order shall be deemed to be received on the Business Day on which the Order is placed provided that the Order is placed in proper form prior to Order Cut-Off Time on such date and cash in the appropriate amount is |
A-3
| deposited with the Custodian by 1:00 p.m. Eastern Time or such other time as designated by the Custodian on settlement date. If the Order is not placed in proper form by Order Cut-Off Time or federal funds in the appropriate amount are not received by 1:00 p.m. Eastern Time on settlement date, then the Order may be deemed to be rejected and the Participant shall be liable to the Trust for losses, if any, resulting therefrom. An additional amount of cash shall be required to be deposited with the Trust, pending delivery of the missing Deposit Securities to the extent necessary to maintain an amount of cash on deposit with the Trust at least equal to 115% of the daily marked to market value of the missing Deposit Securities. In the event that additional cash is not paid, the Trust may use the cash on deposit to purchase the missing Deposit Securities. The Participant will be liable to the Trust for the costs incurred by the Trust in connection with any such purchases and the Participant shall be liable to the Trust for any shortfall between the cost to the Trust of purchasing any missing Deposit Securities and the value of the collateral. These costs will be deemed to include the amount by which the actual purchase price of the Deposit Securities exceeds the market value of such Deposit Securities on the day the Creation Order was deemed received by the Distributor plus the brokerage and related transaction costs associated with such purchases. The Trust will return any unused portion of the Additional Cash Deposit once all of the missing Deposit Securities have been properly received by the Custodian or purchased by the Trust and deposited into the Trust. The Trust shall charge and the Participant agrees to pay to the Trust the Transaction Fee and any additional fees prescribed in the Prospectus. The delivery of Creation Units of the Fund so created will occur no later than the prescribed settlement date following the day on which the Creation Order is deemed received by the Distributor. |
A-4
ATTACHMENT B
AUTHORIZED PERSONS
SPDR DOW XXXXX INDUSTRIAL AVERAGE ETF TRUST
The following individuals are Authorized Persons pursuant to Section 6 of the Participant
Agreement between ALPS Distributors, Inc., State Street Bank and Trust Company and
, |
||
Participant Name
|
NSCC # |
| TELEPHONE | CITY OF | |||||||||
| NAME(1) | TITLE(1) | SIGNATURE(1) | NUMBER(2) | ADDRESS(2) | BIRTH(2) | |||||
Date: |
||
Certified By (Signature): |
||
Print Name: |
||
Title: |
||
| (1) | Required information. | |
| (2) | Required information to use the Web Order Site. |
B-1
