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These excerpts taken from the GLD 10-K filed Nov 25, 2008. The
Marketing Agent
SSGM, a wholly-owned subsidiary of State Street Corporation,
acts as the Marketing Agent. The Marketing Agent is a registered
broker-dealer with the SEC, and is a member of FINRA, the
Municipal Securities Rulemaking Board, the National Futures
Association and the Boston Stock Exchange. The Marketing
Agent’s office is located at State Street Financial Center,
One Lincoln Street, Boston, Massachusetts 02111.
The
Marketing Agent’s Role
The Marketing Agent assists the Sponsor in: (1) developing
a marketing plan for the Trust on an ongoing basis,
(2) preparing marketing materials regarding the Shares,
including the content of the Trust’s website,
(3) executing the marketing plan for the Trust,
(4) incorporating gold into its strategic and tactical
exchange-traded fund research, and (5) sublicensing the
“SPDR®”
trademark.
Under the Marketing Agent Agreement, the Marketing Agent is paid
a fee for its services from the assets of the Trust in an amount
equal to 0.15% per year of the daily ANAV of the Trust, payable
monthly in arrears. If at the end of any month during the period
ending seven years from the date of the Trust Indenture or
upon the earlier termination of the Marketing Agent Agreement
the estimated
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ordinary expenses of the Trust exceed an amount equal to 0.40%
per year of the daily ANAV of the Trust for such month, the
Marketing Agent’s fee is subject to reduction. See
“Business of the
Trust— Trust Expenses—Fee Reduction.”
If the amount expended or allocated by either the Sponsor or the
Marketing Agent in any one year period on promoting and
marketing the Trust in the U.S. is 25% less than the yearly
average of such amount over the preceding two year period and
the amount of the shortfall of any such party is not spent
during the following 12 month period, the unspent amount
will be paid over to the other party who will add such unspent
amount to the amount the other party spends during the next
12 month period.
The Marketing Agent Agreement provides that the Marketing Agent
and the Sponsor will work together to develop similar and
related gold based exchange-traded funds in the U.S. The
Marketing Agent Agreement also provides that the Marketing Agent
and the Sponsor will jointly negotiate and share equally in any
revenue from the development of unlisted trading privileges and
dual listing rights relating to the Trust and any similar or
related gold based exchange-traded fund, as well as licensing
rights to list option contracts and other exchange-traded
derivatives that are specific to the Trust and any similar or
related gold based exchange-traded fund.
The Marketing Agent Agreement contains customary
representations, warranties and covenants. In addition, the
Sponsor has agreed to indemnify the Marketing Agent from and
against certain liabilities, including liabilities under the
Securities Act, and to contribute to payments that the Marketing
Agent may be required to make in respect thereof. The Trustee
has agreed to reimburse the Marketing Agent, solely from and to
the extent of the Trust’s assets, for indemnification and
contribution amounts due from the Sponsor in respect of such
liabilities to the extent the Sponsor has not paid such amounts
when due.
The Marketing Agent Agreement has a term of seven years and is
automatically renewed for successive three year periods, unless
terminated in accordance with the Marketing Agent Agreement by
either party prior to any such successive term. The Marketing
Agent Agreement may also be terminated by either party if the
Trust is terminated pursuant to the Trust Indenture or
either party becomes insolvent or enters into bankruptcy
proceedings. If the Marketing Agent Agreement is terminated by
the Sponsor, the Sponsor is required to pay the Marketing Agent
an amount equal to the present market value of the future
payments the Marketing Agent would otherwise receive under the
Marketing Agent Agreement over the subsequent 10 year
period.
The Sponsor can elect to exercise its buy-out option which will
terminate the Marketing Agent Agreement and remove the Marketing
Agent by paying an amount equal to the present fair market value
of the future payments the Marketing Agent would otherwise
receive from the Trust under the Marketing Agent Agreement over
the subsequent 10 year period, plus:
However, the Sponsor shall not have such right if, at the time
of such election, any competing exchange-traded fund has been
listed on an exchange in the U.S. for more than a year and the
competing exchange-traded fund is not controlled or sponsored by
either of the Sponsor or the Marketing Agent (or its
affiliates). Notwithstanding the foregoing, even if the
Trust’s average assets
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under management do not meet either the $1.25 billion,
$2.25 billion or $3.0 billion benchmarks described
above in the time periods described above, if the percentage
growth in the Trust’s assets for the relevant year is equal
to or greater than the percentage growth in the assets of any
competing exchange-traded fund described in the preceeding
sentence for the comparable 12 month period of operations,
the Sponsor will not have the right to terminate the Marketing
Agent Agreement and remove the Marketing Agent.
License
Agreement with the Marketing Agent
In connection with the Marketing Agent Agreement, the Sponsor
and the WGC have entered into a license agreement, dated as of
November 16, 2004, with the Marketing Agent. Under the
license agreement, the Sponsor and the WGC have granted the
Marketing Agent, a royalty-free, worldwide, non-exclusive,
non-transferable: (i) sublicense under the license
agreement among the Sponsor, the WGC and BNY, which is described
in “Business of the Trust—License Agreement,” to
BNY’s patents and patent applications that cover
securitized gold products in connection with the Marketing
Agent’s performance of its services under the Marketing
Agent Agreement; and (ii) a license to the Sponsor’s
and the WGC’s patents, patent applications and intellectual
property and trade name and trademark rights in connection with
the Marketing Agent’s performance of its services under the
Marketing Agent Agreement and for the purpose of establishing,
operating and marketing financial products involving the
securitization of gold.
The license agreement will expire upon the expiration or
termination of the Marketing Agent Agreement. Either party may
terminate the license agreement prior to such term if the other
party materially breaches the license agreement and fails to
cure such breach within 30 days following written notice of
such breach from the non-breaching party. The license agreement
contains customary representations, warranties and covenants. In
addition, the Sponsor, the WGC and the Marketing Agent have
agreed to indemnify each other for breaches of their respective
representations and warranties and the Sponsor and the WGC have
agreed to indemnify the Marketing Agent for violations of the
intellectual property rights of others as a result of the
Marketing Agent’s use of the licensed intellectual property.
SPDR
Sublicense Agreement
The Sponsor, the WGC, the Marketing Agent and State Street
Corporation entered into a sublicense agreement, dated
May 20, 2008, pursuant to which the Marketing Agent and
State Street Corporation granted the Sponsor and the WGC a
royalty-free, worldwide, non-exclusive, non-transferable
sublicense to use the
“SPDR®”
trademark (in accordance with the SPDR Trademark License
Agreement dated as of November 29, 2006, as amended,
between State Street Global Advisors, a division of State Street
Bank and Trust Company and Standard & Poors, a
division of the McGraw-Hill Companies, Inc.), for the purpose of
establishing and operating the Trust, issuing and distributing
the Shares, as part of the name of the Shares, and listing the
Shares on exchanges.
The sublicense agreement will expire upon the expiration or
termination of the earlier of (i) the Marketing Agent
Agreement or (ii) the SDPR Trademark License Agreement.
Either party may terminate the sublicense agreement prior to
such term if the other party materially breaches the license
agreement and fails to cure such breach within 30 days
following written notice of such breach from the non-breaching
party. The sublicense agreement contains customary
representations, warranties and covenants. In addition, the
Sponsor, the WGC, the Marketing Agent and State Street
Corporation have agreed to indemnify each other for breaches of
their respective representations, warranties and covenants.
The Marketing Agent and its affiliates may from time to time
become Authorized Participants or purchase or sell gold or
Shares for their own account, as agent for their customers and
for accounts over which they exercise investment discretion.
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The Marketing Agent SSGM, a wholly-owned subsidiary of State Street Corporation, acts as the Marketing Agent. The Marketing Agent is a registered broker-dealer with the SEC, and is a member of FINRA, the Municipal Securities Rulemaking Board, the National Futures Association and the Boston Stock Exchange. The Marketing Agent’s office is located at State Street Financial Center, One Lincoln Street, Boston, Massachusetts 02111. The Marketing Agent’s Role The Marketing Agent assists the Sponsor in: (1) developing a marketing plan for the Trust on an ongoing basis, (2) preparing marketing materials regarding the Shares, including the content of the Trust’s website, (3) executing the marketing plan for the Trust, (4) incorporating gold into its strategic and tactical exchange-traded fund research, and (5) sublicensing the “SPDR®” trademark. Under the Marketing Agent Agreement, the Marketing Agent is paid a fee for its services from the assets of the Trust in an amount equal to 0.15% per year of the daily ANAV of the Trust, payable monthly in arrears. If at the end of any month during the period ending seven years from the date of the Trust Indenture or upon the earlier termination of the Marketing Agent Agreement the estimated
Table of Contentsordinary expenses of the Trust exceed an amount equal to 0.40% per year of the daily ANAV of the Trust for such month, the Marketing Agent’s fee is subject to reduction. See “Business of the Trust— Trust Expenses—Fee Reduction.” If the amount expended or allocated by either the Sponsor or the Marketing Agent in any one year period on promoting and marketing the Trust in the U.S. is 25% less than the yearly average of such amount over the preceding two year period and the amount of the shortfall of any such party is not spent during the following 12 month period, the unspent amount will be paid over to the other party who will add such unspent amount to the amount the other party spends during the next 12 month period. The Marketing Agent Agreement provides that the Marketing Agent and the Sponsor will work together to develop similar and related gold based exchange-traded funds in the U.S. The Marketing Agent Agreement also provides that the Marketing Agent and the Sponsor will jointly negotiate and share equally in any revenue from the development of unlisted trading privileges and dual listing rights relating to the Trust and any similar or related gold based exchange-traded fund, as well as licensing rights to list option contracts and other exchange-traded derivatives that are specific to the Trust and any similar or related gold based exchange-traded fund. The Marketing Agent Agreement contains customary representations, warranties and covenants. In addition, the Sponsor has agreed to indemnify the Marketing Agent from and against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the Marketing Agent may be required to make in respect thereof. The Trustee has agreed to reimburse the Marketing Agent, solely from and to the extent of the Trust’s assets, for indemnification and contribution amounts due from the Sponsor in respect of such liabilities to the extent the Sponsor has not paid such amounts when due. The Marketing Agent Agreement has a term of seven years and is automatically renewed for successive three year periods, unless terminated in accordance with the Marketing Agent Agreement by either party prior to any such successive term. The Marketing Agent Agreement may also be terminated by either party if the Trust is terminated pursuant to the Trust Indenture or either party becomes insolvent or enters into bankruptcy proceedings. If the Marketing Agent Agreement is terminated by the Sponsor, the Sponsor is required to pay the Marketing Agent an amount equal to the present market value of the future payments the Marketing Agent would otherwise receive under the Marketing Agent Agreement over the subsequent 10 year period. The Sponsor can elect to exercise its buy-out option which will terminate the Marketing Agent Agreement and remove the Marketing Agent by paying an amount equal to the present fair market value of the future payments the Marketing Agent would otherwise receive from the Trust under the Marketing Agent Agreement over the subsequent 10 year period, plus:
However, the Sponsor shall not have such right if, at the time of such election, any competing exchange-traded fund has been listed on an exchange in the U.S. for more than a year and the competing exchange-traded fund is not controlled or sponsored by either of the Sponsor or the Marketing Agent (or its affiliates). Notwithstanding the foregoing, even if the Trust’s average assets
Table of Contentsunder management do not meet either the $1.25 billion, $2.25 billion or $3.0 billion benchmarks described above in the time periods described above, if the percentage growth in the Trust’s assets for the relevant year is equal to or greater than the percentage growth in the assets of any competing exchange-traded fund described in the preceeding sentence for the comparable 12 month period of operations, the Sponsor will not have the right to terminate the Marketing Agent Agreement and remove the Marketing Agent. License Agreement with the Marketing Agent In connection with the Marketing Agent Agreement, the Sponsor and the WGC have entered into a license agreement, dated as of November 16, 2004, with the Marketing Agent. Under the license agreement, the Sponsor and the WGC have granted the Marketing Agent, a royalty-free, worldwide, non-exclusive, non-transferable: (i) sublicense under the license agreement among the Sponsor, the WGC and BNY, which is described in “Business of the Trust—License Agreement,” to BNY’s patents and patent applications that cover securitized gold products in connection with the Marketing Agent’s performance of its services under the Marketing Agent Agreement; and (ii) a license to the Sponsor’s and the WGC’s patents, patent applications and intellectual property and trade name and trademark rights in connection with the Marketing Agent’s performance of its services under the Marketing Agent Agreement and for the purpose of establishing, operating and marketing financial products involving the securitization of gold. The license agreement will expire upon the expiration or termination of the Marketing Agent Agreement. Either party may terminate the license agreement prior to such term if the other party materially breaches the license agreement and fails to cure such breach within 30 days following written notice of such breach from the non-breaching party. The license agreement contains customary representations, warranties and covenants. In addition, the Sponsor, the WGC and the Marketing Agent have agreed to indemnify each other for breaches of their respective representations and warranties and the Sponsor and the WGC have agreed to indemnify the Marketing Agent for violations of the intellectual property rights of others as a result of the Marketing Agent’s use of the licensed intellectual property. SPDR Sublicense Agreement The Sponsor, the WGC, the Marketing Agent and State Street Corporation entered into a sublicense agreement, dated May 20, 2008, pursuant to which the Marketing Agent and State Street Corporation granted the Sponsor and the WGC a royalty-free, worldwide, non-exclusive, non-transferable sublicense to use the “SPDR®” trademark (in accordance with the SPDR Trademark License Agreement dated as of November 29, 2006, as amended, between State Street Global Advisors, a division of State Street Bank and Trust Company and Standard & Poors, a division of the McGraw-Hill Companies, Inc.), for the purpose of establishing and operating the Trust, issuing and distributing the Shares, as part of the name of the Shares, and listing the Shares on exchanges. The sublicense agreement will expire upon the expiration or termination of the earlier of (i) the Marketing Agent Agreement or (ii) the SDPR Trademark License Agreement. Either party may terminate the sublicense agreement prior to such term if the other party materially breaches the license agreement and fails to cure such breach within 30 days following written notice of such breach from the non-breaching party. The sublicense agreement contains customary representations, warranties and covenants. In addition, the Sponsor, the WGC, the Marketing Agent and State Street Corporation have agreed to indemnify each other for breaches of their respective representations, warranties and covenants. The Marketing Agent and its affiliates may from time to time become Authorized Participants or purchase or sell gold or Shares for their own account, as agent for their customers and for accounts over which they exercise investment discretion.
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