PARTICIPANT AGREEMENT
This Participant Agreement (the "Agreement") is entered into by and between
Nuveen Investments, (the "Distributor"), State Street Bank and Trust Company, as
transfer agent (the "Transfer Agent") and ______________________ (the
"Participant") and is subject to acceptance by Nuveen Exchange-Traded Index
Trust (the "Trust"). The Trust is an open-end management investment company. The
Trust currently consists of five investment portfolios (each a "Fund" and
collectively the "Funds"). The Trust was organized as a Massachusetts business
trust under a Declaration of Trust dated June 9, 2000. 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 the Funds (the "Shares"). 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 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 shall be issued in exchange
for Deposit Securities and a Cash Component 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 a Cash Redemption Amount. 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. To place
orders with the Distributor, an entity must be: (i) a broker-dealer or other
participant in the Continuous Net Settlement ("CNS") clearing process of the
National Securities Clearing Corporation ("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 instructions issued by the Participant to the telephone
representative of the Distributor for purchases and the telephone
representative of the Transfer Agent for redemption. 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
Trust such as to cause the respective Fund of the 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 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,
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Transfer Agent and the Trust and their respective subsidiaries, affiliates,
directors, officers, employees and agents (each an "Indemnified Party")
from and against any loss, liability, cost or expense suffered or incurred
by such Indemnified Party resulting from, in connection with or arising out
of (i) any breach by the Participant of any provision of this Agreement; or
(ii) any failure by Participant, for any reason, fraudulent, negligent or
otherwise to comply with its obligations under this Agreement, (iii) any
action undertaken in accordance with the terms at the direction of or for
the benefit of the Participant, or (iv) 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, on the same business day
it is notified, or cause the beneficial owner(s) of the shares redeemed to
pay, on such day, 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, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn.: xxxxxxxxxxxxxxx
[Not sure to who's attention you would like this--i.e., Nuveen Exchange
Traded Index 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,
filed June 9, 2000. 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. LIMITATION OF LIABILITY. The Declaration of Trust dated June 9, 2000, which
is hereby referred to and a copy of which is on file with the Secretary of
The Commonwealth of Massachusetts, provides that the name Nuveen Exchange-
Traded Index Trust means the Trustees from time to time serving (as
Trustees but not personally) under such Declaration of Trust. It is
expressly acknowledged and agreed that the obligations of the Trust
hereunder shall not be binding upon any of the shareholders, Trustees,
officers, employees or agents of the Trust, personally, but shall bind only
the trust property of the Trust, as provided in its Declaration of
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Trust. The execution and delivery of this Agreement have been authorized by
the Trustees of the Trust and signed by an officer of the Trust, acting as
such, and neither such authorization by such Trustees nor such execution
and delivery by such officer shall be deemed to have been made by any of
them individually or to impose any liability on any of them personally, but
shall bind only the trust property of the Trust as provided in its
Declaration of Trust.
15. 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.
16. 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 day of _____________.
NUVEEN INVESTMENTS
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:
NUVEEN EXCHANGE-TRADED INDEX TRUST
BY: ____________________________________
TITLE: ____________________________________
ATTACHMENT A
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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 Nuveen Exchange-Traded Index Trust (each a
"Fund") and (ii) the Transfer Agent in processing an order for redemption of
Creation Units. To accommodate Participants with restricted securities in the
standard basket, or those Participants who wish to create baskets that deviate
from the standard basket for other reasons, State Street and the Trust have
developed custom creation and redemption baskets. For a Participant to transact
in a custom basket, the Participant must acknowledge the additional procedures
described in Appendix 1 relating to custom baskets
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
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1. Call to Receive an Order Number. For Creations, an Authorized Person for
the Participant will call the telephone representative at xxxxx 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 xxxxxxx 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. NOTE THAT NO
CREATION OR REDEMPTION ORDERS WILL BE PROCESSED AFTER THE CLOSE OF THE
NYSE.
ALL ASPECTS OF ORDER PROCESSING MUST BE COMPLETED BY THE CLOSE OF TRADING
ON THE NYSE. 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, and not later than the close of trading on
the NYSE. 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) by the NYSE
Closing Tine, 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 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 within 15 minutes of
such contact with the Participant or (ii) by the close of trading on the
NYSE, whichever comes first. 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 within 15 minutes of such contact
with the Participant or (ii) by the close of trading on the NYSE, whichever
comes first.
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 each series of Nuveen Exchange Traded Index Trust (each a "Fund")
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. eastern time such date and federal funds in
the appropriate amount are deposited with the Trust's Custodian by 11:00
a.m. eastern time the following Business Day. If the order is not placed in
proper form by 4:00 p.m. eastern time or federal funds in the appropriate
amount are not received by 11:00 a.m. eastern time 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 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. eastern time on
the third Business Day following the day on which the purchase order is
deemed received by the Distributor or in the event a ▇▇▇▇ 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, the Trust
shall charge and the Participant agrees to pay 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 delivery of Creation
Units of the 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.
APPENDIX 1--Procedures Specific to Custom Baskets
-------------------------------------------------
To accommodate Participants with restricted securities in the standard
basket of a Fund, and for certain other purposes, State Street and the Trust
have developed custom creation and redemption baskets (the "Custom Baskets").
Custom Baskets allow Participants with restricted issues in a particular Fund to
transact in that Fund using the Custom Basket process, and also allow
Participants to make certain other changes to the standard basket. The Custom
Basket process generally substitutes cash-in-lieu for the restricted securities
and continues to settle through the standard CNS process at NSCC. It is the
responsibility of the Participant to apply to the NSCC for auto-route function
to allow them to receive updates on the components of specific Custom Baskets as
well as the regular daily standard baskets (the "Standard Baskets"). To ensure
proper tracking of the Fund to its benchmark index the following guidelines must
be followed when transacting Custom Baskets:
1. On T-1, the Participant must request a Custom Basket from the Distributor
(for creations) or the Transfer Agent (for redemptions) by calling
xxxxxxxxxx. A telephone representative will fax a standard form on which
the Participant must identify the restricted securities to be omitted from
the creation or redemption basket, or other features of the Custom Basket
requested by the Participant. The Participant can request a Custom Basket
with a variety of changes, but any Custom Basket request must be approved
by both State Street and the Fund. Participants may request that the Custom
Basket be available for creations and redemptions for a one-time
transaction, a specific period or indefinitely. The Distributor and/or the
Transfer Agent will review the Custom Basket request and, if approved, will
deliver a confirmation back to the Participant.
2. On trade date, prior to the opening of the NYSE, State Street will notify
NSCC as to the components of the Custom Baskets available that day along
with the components of the Standard Basket. Each Custom Basket will be
identified by a separate NSCC assigned instruction CUSIP.
3. On trade date, the Participant will follow the directions regarding placing
orders outlined in Attachment A. A Participant wishing to create or redeem
a Custom Basket must identify the custom CUSIP on the order form in the
blank provided. Orders received without a custom CUSIP indicated will be
processed as orders for Standard Baskets. Participants placing orders for
Custom Baskets must note that the cut-off-time to create and redeem a
Custom Basket will be 3:00 p.m. New York time. Orders for Custom Baskets
will not be processed if received after 3:00 p.m. New York time.
IN WITNESS WHEREOF, the Participant acknowledges that he or she has read
the procedures relating to Custom Baskets and agrees to comply with all such
procedures. Failure to comply with the Custom Basket procedures will require the
transaction to be effected in the Standard Basket
PARTICIPANT: _____________________________
BY: _____________________________
TITLE: _____________________________
ADDRESS: _____________________________
TELEPHONE: _____________________________
FACSIMILE: _____________________________
TELEX: _____________________________
Date: _____________________________
ATTACHMENT B
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The following individuals are Authorized Persons pursuant to Section 6 of
the Participant Agreement between Nuveen Investments, State Street Bank and
Trust Company and [ ] ]:
[ ]
By: _______________________