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EXHIBIT 6.B
PARTICIPANT AGREEMENT
This Participant Agreement (the "Agreement") is entered into by and
between ALPS Mutual Funds Services, Inc. (the "Distributor"), State Street Bank
and Trust Company, as transfer agent (the "Transfer Agent") and (the
"Participant") and is subject to acceptance by The Select Sector SPDR(R) Trust
(the "Trust"). The Distributor has been retained to provide certain services
with respect to acting as principal underwriter of the Trust in connection with
the creation and distribution of shares of series of the Trust (each a "Fund"
and together, the "Funds"). The Transfer Agent has been retained to provide
certain services with respect to the creation and redemption of shares of the
Funds. As specified in the Trust's prospectus and Statement of Additional
Information (together, the "Prospectus"), shares of each Fund may be created or
redeemed only in aggregations of 50,000 shares, referred to therein and herein
as a "Creation Unit". The Prospectus provides that Creation Units be shall
issued in exchange for a Fund Deposit delivered by the Participant on behalf of
the investor (which may be the Participant) to the Trust. The Prospectus also
provides that Creation Units shall be redeemed in exchange for Fund Securities
and an amount of cash. Capitalized terms not otherwise defined herein are used
herein as defined in the Prospectus.
This Agreement is intended to set forth certain premises and the
procedures by which the Participant may create and/or redeem Creation Units (i)
through the Continuous Net Settlement ("CNS") clearing process of NSCC as such
processes have been enhanced to effect creations 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 of Participant. The Participant hereby represents,
covenants and warrants that (i) with respect to orders for the
creation or redemption of Creation Units by means of the
Clearing Process, it is a member of NSCC and a participant in
the CNS System of NSCC (as defined in the Prospectus, a
"Participating Party"); and (ii) with respect to orders for
the creation or redemption of Creation Units outside the
Clearing Process, it is a DTC Participant (as defined in the
Prospectus, a "DTC Participant"). The Participant may place
orders for the creation or redemption of Creation Units either
through the Clearing Process or outside the Clearing Process,
subject to the procedures for creation and redemption referred
to in paragraph 2 of this Agreement ("Execution of Orders").
Any change in the foregoing status of Participant shall
terminate this Agreement and Participant shall give notice to
the Distributor, Transfer Agent and the Trust of such change.
2. Execution of Orders. All orders for the creation or redemption
of Creation Units shall be handled by each party hereto in
accordance with the terms of the Prospectus and the procedures
described in Attachment A to this Agreement. Each party hereto
agrees to comply with the provisions of such documents to the
extent applicable to it. In the event the procedures include
the use of recorded telephone lines, the Participant hereby
consents to such use. The Trust reserves the right to issue
additional or other procedures relating to the manner of
creating or redeeming Creation Units and the Participant, the
Transfer Agent and the Distributor each agrees to comply with
such procedures as may be issued from time to time.
3. NSCC. Solely with respect to orders for the creation or
redemption of Creation Units through the Clearing Process, the
Participant as a Participating Party hereby authorizes the
Transfer Agent to transmit to NSCC on behalf of the
Participant such instructions, including share and cash
amounts as are necessary with respect to the creation and
redemption of Creation Units consistent with the
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instructions issued by the Participant to the telephone
representative of the Distributor. The Participant agrees to
be bound by the terms of such instructions issued by the
Transfer Agent (or the Distributor on behalf of the Trust) and
reported to NSCC as though such instructions were issued by
the Participant directly to NSCC.
4. Role of Participant. The Participant shall have no authority
in any transaction to act as agent of the Distributor,
Transfer Agent or the Trust.
5. Fees. In connection with the creation or redemption of
Creation Units, the Trust shall charge and the Participant
agrees to pay on behalf of the investor to the Trust the
Transaction Fee prescribed in the Prospectus applicable to
creation or redemption through the Clearing Process, or the
Transaction Fee and such additional fee as may be prescribed
pursuant to the Prospectus applicable to creation or
redemption outside the Clearing Process. The Trust reserves
the right to adjust the Transaction Fee subject to any
limitation as prescribed in the Prospectus.
6. Authorized Persons. 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, setting forth the names and signatures of all
persons authorized to give instructions relating to 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 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 Distributor and the
Trust of a superseding certificate bearing a subsequent date.
The Distributor shall issue to each Authorized Person a unique
personal identification number ("PIN Number") by which such
Authorized Person and the Participant shall be identified and
instructions issued by the Participant hereunder shall be
authenticated. Upon the termination or revocation of authority
of such Authorized Person by the Participant, the Participant
shall give immediate written notice of such fact to the
Distributor and the Trust and such notice shall be effective
upon receipt by the Distributor and the Trust.
7. Redemption. The Participant represents and warrants that it
will not obtain an Order Number (as described in Attachment A)
for the purpose of redeeming a Creation Unit unless it or the
party for which it is acting, as the case may be, first owns
the requisite number of shares to be redeemed as a Creation
Unit.
8. Beneficial Ownership. The Participant represents and warrants
to the Distributor, Transfer Agent and the Trust that it does
not hold for the account of any single Beneficial Owner of
shares of a given Fund of the Trust 80 percent (80%) or more
of outstanding shares of a given Fund of The Select Sector
SPDR Trust such as to cause the respective Fund of The Select
Sector SPDR Trust to have a basis in the Deposit Securities
deposited with the Trust different from the market value of
such Deposit Securities on the date of such deposit, pursuant
to Section 351 of the Internal Revenue Code. The Transfer
Agent shall have the right to require information from the
Participant regarding share ownership, and to rely thereon to
the extent necessary to make a determination regarding
ownership of 80 percent (80%) or more of outstanding shares of
a given Fund of The Select Sector SPDR Trust by a Beneficial
Owner as a condition to the acceptance of a Fund Deposit.
9. Indemnification. The Participant hereby agrees to indemnify
and hold harmless the Distributor, Transfer Agent and the
Trust and their respective subsidiaries, affiliates,
directors, officers,
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employees and agents (each an "Indemnified Party") from and
against any loss, liability, cost and expense incurred by such
Indemnified Party as a result of (i) any breach by the
Participant of any provision of this Agreement; or (ii) any
actions of such Indemnified Party in reliance upon any
instructions issued in accordance with Attachment A (as may be
amended from time to time) believed by the Distributor and/or
Trust to be genuine and to have been given by the Participant.
This paragraph shall survive the termination of this
Agreement.
10. Additional Payment on Redemption. In the event that the
Participant receives Fund Securities the value of which
exceeds net asset value at the time of redemption, the
Participant agrees to pay, or cause the beneficial owner(s) of
the shares redeemed to pay, to the Trust an amount in cash
equal to the difference.
11. Acknowledgment. The Participant acknowledges receipt of the
Prospectus and represents it has reviewed such document and
understands the terms thereof. The Distributor agrees to
process orders for creation in accordance with the provisions
of the Prospectus. The Transfer Agent agrees to process orders
for redemptions in accordance with the provisions of the
Prospectus.
12. Notices. Except as otherwise specifically provided in this
Agreement, all notices required or permitted to be given
pursuant to this Agreement shall be given in writing and
delivered by personal delivery or by postage prepaid
registered or certified United States first class mail, return
receipt requested, or by telex, telegram or facsimile or
similar means of same day delivery (with a confirming copy by
mail as provided herein). Unless otherwise notified in
writing, all notices to the Trust shall be given or sent as
follows: State Street Bank and Trust Company, Global Client
Support, X.X. Xxx 0000, Xxxxxx, XX 00000, Attn.: The Select
Sector SPDR Trust.
All notices to the Participant and the Distributor or the
Transfer Agent, as the case may be, shall be directed to the
address or telephone, facsimile or telex numbers indicated
below the signature line of such party.
13. 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
pursuant to the Trust's Declaration of Trust, dated June 10,
1998. This Agreement supersedes any prior such agreement
between the parties. This Agreement may be amended by the
Trust from time to time by the following procedure. The Trust
will mail a copy of the 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 days after its receipt,
the amendment will become part of this Agreement in accordance
with its terms.
14. Counterparts. This Agreement may be simultaneously executed in
several counterparts, each of which shall be an original and
all shall constitute but one and the same instrument.
15. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of The Commonwealth of
Massachusetts.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first written above.
ALPS MUTUAL FUNDS SERVICES, INC.
BY: ______________________________________________
TITLE: ______________________________________________
ADDRESS: ______________________________________________
TELEPHONE: ______________________________________________
FACSIMILE: ______________________________________________
TELEX: ______________________________________________
STATE STREET BANK AND TRUST COMPANY
BY: ______________________________________________
TITLE: ______________________________________________
ADDRESS: ______________________________________________
TELEPHONE: ______________________________________________
FACSIMILE: ______________________________________________
TELEX: ______________________________________________
[ ]
BY: ______________________________________________
TITLE: ______________________________________________
ADDRESS: ______________________________________________
TELEPHONE: ______________________________________________
FACSIMILE: ______________________________________________
TELEX: ______________________________________________
ACCEPTED BY:
THE SELECT SECTOR SPDR TRUST
BY: ______________________________________________
TITLE: ______________________________________________
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ATTACHMENT A
This document supplements the Prospectus with respect to the procedures
to be used by (i) the Distributor in processing an order for the creation of
Creation Units of each series of The Select Sector SPDR Trust (each a "Fund")
and (ii) the Transfer Agent in processing an order for redemption of Creation
Units.
A Participant is required to have signed the Participant Agreement.
Upon acceptance of the Participant Agreement by the Trust, the Distributor will
assign a personal identification number 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 CREATION OR REDEMPTION OF CREATION UNITS
1. Call to Receive an Order Number. For creations, an Authorized Person
for the Participant will call the telephone representative at
000-000-0000 not later than the closing time of the regular trading
session on the New York Stock Exchange (the "NYSE Closing Time")
(ordinarily 4:00 p.m. New York time) to receive an Order Number. For
redemptions, an Authorized Person for the Participant will call the
telephone representative at 877-222-3639 not later than the NYSE
Closing Time to receive an Order Number.
Upon verifying the authenticity of the caller (as determined by the use
of the appropriate PIN Number) and the terms of the order, the
telephone representative will issue a unique Order Number. All orders
with respect to the creation 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 NYSE Closing 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 NYSE CLOSING 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 CONTAINING THE DESIGNATED ORDER NUMBER AND PIN NUMBER AND
TRANSMITTED BY FACSIMILE OR TELEX (the "Order").
2. Place the Order. An Order Number is only valid for a limited time. The
Order for creation or redemption of Creation Units must be sent by
facsimile or telex to the telephone representative within 20 minutes of
the issuance of the Order Number. In the event that the Order 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 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 NYSE Closing Time, the order
will be deemed invalid.
3. Await Receipt of Confirmation.
A. Clearing Process. The Distributor (in the case of creations)
or the Transfer Agent (in the case of redemptions) shall issue
a confirmation of Order acceptance within 15 minutes of its
receipt of an Order received in good form. In the event the
Participant does not receive
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a timely confirmation from the Distributor or the Transfer
Agent, it should contact the telephone representative at the
business number indicated.
B. 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 trade date plus one the Deposit
Securities and Cash Component (in the case of creations) or
the Creation Unit size aggregation of shares (in the case of
redemptions) to the Trust through DTC. The Trust shall settle
the transaction within three (3) Business Days.
4. Ambiguous Instructions. In the event that an Order 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 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 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 NYSE
Closing Time. If the telephone representative is not able to contact an
Authorized Person, then the Order shall be accepted and processed in
accordance with its terms notwithstanding any inconsistency from the
terms of the telephone information. In the event that an Order contains
terms that are illegible, as determined in the sole discretion of the
Distributor (in the case of creations) or the Transfer Agent (in the
case of redemptions), the Order will be deemed invalid and the
telephone representative will attempt to contact the Participant to
request retransmission of the Order. A corrected Order 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 NYSE Closing Time.
5. Processing an Order. The Distributor reserves the right to suspend an
Order in the event that its acceptance would appear to result in the
Participant or a Beneficial Owner owning 80 percent (80%) or more of
all outstanding shares of a given Fund. In such event, the telephone
representative will attempt to contact an Authorized Person for
purposes of confirmation of the fact that with respect to such
Participant no Beneficial Owner would own 80 percent (80%) or more of
all outstanding shares of a given Fund upon execution of the Order. In
the event that (i) the telephone representative is unable to contact an
Authorized Person or (ii) the Participant fails to transmit an
identical Order containing a representation and warranty as to such
fact, then the Order shall be deemed invalid.
6. Creation of Creation Units Prior to Receipt of Deposit Securities.
Creation Units of Select Sector SPDR Funds may be created 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, cash must be deposited in an
amount equal to the sum of (i) the Cash Component, plus (ii) 115% of
the market value of the 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 4:00 p.m. on such date and federal funds
in the appropriate amount are deposited with the Trust's Custodian by
11:00 a.m. the following Business Day. If the order is not placed in
proper form by 4:00 p.m. or federal funds in the appropriate amount are
not received by 11:00 a.m. the next Business Day, then the order may be
deemed to be rejected and the investor shall be liable to the Trust for
losses, if any, resulting therefrom. An additional amount of cash shall
be required to be
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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. To the extent that
missing Deposit Securities are not received by 1:00 p.m. on the third
Business Day following the day on which the purchase order is deemed
received by the Distributor or in the event a xxxx to market payment is
not made within one Business Day following notification by the
Distributor that such a payment is required, 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. 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 purchase 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. In addition, a transaction fee of $4,000 will be charged in all
cases. The delivery of Creation Units of Select Sector SPDR Funds so
created will occur no later than the third Business Day following the
day on which the purchase order is deemed received by the Distributor.
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ATTACHMENT B
The following individuals are Authorized Persons pursuant to Section 6
of the Participant Agreement between ALPS Mutual Funds Services, Inc., State
Street Bank and Trust Company and [ ]:
[ ]
By: _________________________________________
