Document:

Exhibit 10.3

EMPLOYMENT AGREEMENT

          THIS EMPLOYMENT AGREEMENT (the
“Agreement”)
is made as of the 1st day of June, 2009, by and among UNIVERSAL POWER GROUP, INC., a Texas
corporation (the “Company”), having its principal place of business at
1720 Hayden Drive, Carrollton, Texas 75006, on the one hand, and IAN EDMONDS, residing at
___________________ (the “Executive”), on the other.

WITNESSETH

          WHEREAS,
the Executive has been employed by the Company in an executive capacity since
_______; and

          WHEREAS, the Company, recognizing the unique
skills and abilities of the Executive, wishes to insure that the Executive will
continue to be employed by the Company; and

          WHEREAS, the Executive desires to continue in
the employment of the Company; and

          WHEREAS, the parties desire, by this
Agreement, to set forth the terms and conditions of the employment relationship
between the Company and the Executive.

          NOW,
THEREFORE, in consideration of the foregoing and the
mutual covenants in this Agreement, the Company and the Executive agree as
follows:

          1.
Employment and Duties. 

                    (a)
The Company hereby employs the
Executive as its Chief Executive Officer and President on the terms and
conditions provided in this Agreement and Executive agrees to accept such
employment subject to the terms and conditions of this Agreement. The Executive
shall be the senior executive officer of the Company and, as such, shall be
responsible for the overall management and operations of the Company, shall
perform the duties and responsibilities as are customary for the officer of a
corporation in such positions, and shall perform such other duties and
responsibilities as are reasonably determined from time to time by the
Company’s Board of Directors (the “Board”). 

                    (b)
The Executive shall report to and be
supervised by the Board. 

                    (c)
The Executive shall be based at the Company’s principal place of business
provided that such principal place of business shall be within a fifty (50)
mile radius of 1720 Hayden Drive, Carrollton, Texas and, except for business
travel incident to his employment under this Agreement, the Company agrees the
Executive shall not be required to relocate. 

                    (d)
The Executive agrees to devote substantially all his attention and time during
normal business hours to the business and affairs of the Company and to use his
reasonable best efforts to perform faithfully and efficiently the duties and
responsibilities of his positions and to accomplish the goals and objectives of
the Company as may be established by the Board. Notwithstanding the foregoing,
the Executive may engage in the following activities (and shall be entitled to
retain all economic benefits thereof including fees paid in connection
therewith) as long as they do not interfere in any material respect with the
performance of the Executive’s duties and responsibilities hereunder and, with
respect to subsections (i) and (ii) below, that such activity is pre-approved
by the Chairman of the Board: (i) serve on corporate, civic, religious,
educational and/or charitable boards or committees, provided that the Executive
shall not serve on any board or committee of any corporation or other business
which competes with the Business (as defined in Section 10(a) below); and (ii)
make investments in businesses or enterprises and manage his personal
investments; provided that with respect to such activities Executive shall
comply with any business conduct and ethics policy applicable to employees of
the Company.

          2. Term. The term of this Agreement
shall commence on June 1, 2009 (the “Commencement Date”), and shall
terminate on May 31, 2014, unless extended or earlier terminated in accordance
with the terms of this Agreement. Commencing on June 1, 2010 and continuing on
June 1 of each year thereafter (each such date an “Anniversary Date”),
this Agreement shall automatically renew for one additional year such that the
remaining term shall be five years unless either party notifies the other in
writing at least 180 days prior to the Anniversary Date that it is electing not
to renew the Agreement, in which case the Agreement shall terminate at the end
of the fourth year following the next Anniversary Date. The date on which this
Agreement terminates, would terminate or is terminated by either party is
herein referred to as the “Termination Date”. The period beginning on
the Commencement Date and ending on the Termination Date is herein sometimes
referred to as the “Employment Term”. 

          3.
Compensation. As compensation for performing
the services required by this Agreement, and during the term of this Agreement,
the Executive shall be compensated as follows:

                    (a)
Base Compensation. The Company
shall pay to the Executive an annual salary (“Base Compensation”) of
$250,000, payable in equal installments pursuant to the Company’s customary
payroll procedures in effect for its executive personnel at the time of
payment, but in no

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event less
frequently than monthly, subject to withholding for applicable federal, state,
and local income and employment related taxes. The Executive may be entitled to
such increases in Base Compensation with respect to each calendar year during the
term of this Agreement, as shall be determined by the Company’s Compensation
Committee (the “Committee”), in its sole and absolute discretion, based
on an annual review of the Executive’s performance.

                    (b)
Incentive Compensation. In addition to Base
Compensation, for each calendar year ending within the Employment Term, the
Executive shall be entitled to receive additional compensation (“Incentive
Compensation”) in an amount equal to 7.5% of the Company’s “Adjusted
Pre-Tax Income” (as defined below) for such year, provided such Adjusted
Pre-Tax Income shall exceed the Target Amount established by the Committee for
such calendar year. The Committee shall use its reasonable best efforts to
establish the Target Amount on or before March 31 of such year. In the event
the Company exercises its right not to renew this Agreement, as provided in
Section 2, in addition to any amounts to which he would be entitled under
Section 8(g), the Executive shall be entitled to receive his Pro Rata Share (as
defined in subsection 8(a)(ii)) of Incentive Compensation for the year in which
the Termination Date occurs.

          Adjusted
Pre-Tax Income means the Company’s Net Income Before Provision for Income Taxes
for such calendar year as set forth on the Company’s audited Statement of
Income for such calendar year adjusted as follows: 

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 Add-back any
 bonuses accrued by the Company within such year; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 Add-back any
 non-cash compensation expense incurred by the Company that the Company is
 required to expense under U.S. Generally Accepted Accounting Principles (“GAAP”)
 within such year;

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 Add-back any
 expenses related to the acquisition of any entity, business or assets
 incurred by the Company that the Company is required to expense in such year
 under GAAP;

 
	
  

 	
  

 	
  

 
	
  

 	
 (iv)

 	
 Add-back any
 item of expense reported by the Company under GAAP within such year with
 respect to the Separation Agreement, dated January 21, 2009, between the
 Company 

 

3

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 and Randy
 Hardin and with respect to the Agreement, dated March 9, 2009, between the
 Company and Stan Battat;

 
	
  

 	
  

 	
  

 
	
  

 	
 (v)

 	
 Add-back or
 subtract any other items of expense or any other adjustments determined by
 the Committee. 

 

          4.
Employee Benefits. During the Employment Term
and subject to the limitations set forth in this Section 4, the Executive and
his eligible dependents shall have the right to participate in any retirement
plans (qualified and non-qualified), pension, insurance, health, disability or
other benefit plan or program that has been or is hereafter adopted by the
Company (or in which the Company participates), according to the terms of such
plan or program, on terms no less favorable than the most favorable terms
granted to senior executives of the Company. 

          5. Vacation and Leaves of Absence.
The Executive shall be entitled to the normal and customary amount of paid
vacation provided to senior executive officers of the Company, but in no event
less than twenty-five (25) days during each twelve (12) month period, beginning
on the Commencement Date of this Agreement. Any vacation days that are not
taken in a given twelve (12) month period shall not accrue or carry-over from
year to year. Upon any termination of this Agreement for any reason whatsoever,
accrued and unused vacation for the year in which this Agreement terminates
will be paid to the Executive within ten (10) days of such termination based on
his annual rate of Base Compensation in effect on the date of such termination.
In addition, the Executive may be granted leaves of absence with or without pay
for such valid and legitimate reasons as the Company in its sole and absolute
discretion may determine, and the Executive shall be entitled to the same sick
leave and holidays provided to other senior executives of the Company.

          6. Expenses.

                    (a)
Business Expenses. The Executive shall be
promptly reimbursed against presentation of vouchers or receipts for all
reasonable and necessary expenses incurred by him in connection with the
performance of his duties hereunder.

                    (b)
Automobile Expense. During the Employment Term,
in order to facilitate the performance of the Executive’s duties hereunder, and
otherwise for the convenience of the Company, the Company shall provide the
Executive with a Mercedes-Benz S550 4 Door Sedan or such other comparable
automobile, or shall reimburse the Executive for the cost of leasing an
automobile (provided that the lease payments with respect to such automobile
shall not exceed $2,500 per month

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or such
greater amount as shall be approved by the Board in advance) and shall pay or
reimburse Executive (upon presentation of vouchers or receipts) for the
reasonable cost of all maintenance, insurance, repairs, and other reasonable
expenses related to such automobile.

          7.
Indemnification.

                    (a)
General. The Company agrees that if the
Executive is made a party or is threatened to be made a party to any action,
suit or proceeding, whether civil, criminal, administrative or investigative (a
“Proceeding”), by reason of the fact that he is or was a director or
officer of the Company, is or was serving at the request of the Company as a
director, officer, member, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including, without
limitation, service with respect to employee benefit plans, whether or not the
basis of such Proceeding is alleged action in an official capacity as a
director, officer, member, employee or agent while serving as a director,
officer, member, employee or agent, the Executive shall be indemnified and held
harmless by the Company to the fullest extent authorized by applicable law (in
accordance with the certificate of incorporation and/or bylaws of the Company),
as the same exists or may hereafter be amended, against all Expenses (as
defined below) incurred or suffered by the Executive in connection therewith,
and such indemnification shall continue as to the Executive even if the
Executive has ceased to be an officer, director or agent, or is no longer
employed by the Company and shall inure to the benefit of his heirs, executors
and administrators.

                    (b) Expenses.
As used in this Agreement,
the term “Expenses” shall include, without limitation, damages, losses,
judgments, liabilities, fines, penalties, excise taxes, settlements and costs,
attorneys’ fees, accountants’ fees, and disbursements and costs of attachment
or similar bonds, investigations, and any expenses of establishing a right to
indemnification under this Agreement.

                    (c) Enforcement.
If a claim or request
under this Agreement is not paid by the Company, or on their behalf, within
fifteen days after a written claim or request has been received by the Company,
the Executive may at any time thereafter bring suit against the Company to
recover the unpaid amount of the claim or request and if successful in whole or
in part, the Executive shall be entitled to be paid also the expenses of
prosecuting such suit. The burden of proving that the Executive is not entitled
to indemnification for any reason shall be upon the Company.

                    (d)
Subrogation.
In the event of payment under this Agreement, the Company 

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shall be
subrogated to the extent of such payment to all of the rights of recovery of
the Executive.

                    (e)
Partial
Indemnification. If the Executive is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of any Expenses, but not, however, for the total amount thereof, the
Company shall nevertheless indemnify the Executive for the portion of such
Expenses to which the Executive is entitled.

                    (f) Advances
of Expenses. Expenses incurred
by the Executive in connection with any Proceeding shall be paid by the Company
in advance upon request of the Executive that the Company pay such Expenses.

                    (g) Notice
of Claim. The Executive shall
give to the Company notice of any claim made against his for which indemnity
will or could be sought under this Agreement. In addition, the Executive shall
give the Company such information and cooperation as it may reasonably require
and as shall be within the Executive’s power and at such times and places as
are convenient for the Executive.

                    (h) Defense
of Claim. With respect to any
Proceeding as to which the Executive notifies the Company of the commencement
thereof: (i) the Company will be
entitled to participate therein at its own expense; and (ii) except as otherwise provided below, to the extent that it
may wish, the Company jointly with any other indemnifying party similarly
notified will be entitled to assume the defense thereof, with counsel
reasonably satisfactory to the Executive. The Company shall not be entitled to
assume the defense of any action, suit or proceeding brought by or on behalf of
the Company or as to which the Executive shall have reasonably concluded that
there may be a conflict of interest between the Company and the Executive in
the conduct of the defense of such action.

                              The
Company shall not be liable to indemnify the Executive under this Agreement for
any amounts paid in settlement of any action or claim effected without its
written consent. The Company shall not settle any action or claim in any manner
which would impose any penalty or limitation on the Executive without
Executive’s written consent. Neither the Company nor the Executive shall
unreasonably withhold or delay their consent to any proposed settlement.

                    (i) Non-exclusivity.
The right to
indemnification and the payment of expenses incurred in defending a Proceeding
in advance of its final disposition conferred in this Section 7 shall not be
exclusive of any other right which the Executive may have or hereafter may
acquire under any 

6

statute,
provision of the certificate of incorporation, by laws, or other governing
documents of the Company, agreement, vote of stockholders, members or
disinterested directors or otherwise.

                    (j)
Directors
and Officers Liability Policy. The Company agrees to use
reasonable efforts to maintain directors and officers liability insurance
covering the Executive in a reasonable and adequate amount determined by the
Company.

          8.
Termination and Termination Benefits. 

                    (a)
Termination. (i) For Cause.
Notwithstanding any provision contained herein, the Company may terminate this
Agreement at any time during the Employment Term for “Cause” (as defined
below). Termination pursuant to this subsection 8(a)(i) shall be effective
immediately upon giving the Executive written notice thereof stating the reason
or reasons therefor with respect to clause (2) above, and thirty (30) days
after written notice thereof from the Company to the Executive specifying the
acts or omissions constituting the failure and requesting that they be remedied
with respect to clause (1) above, but only if the Executive has not cured such
failure within such thirty (30) day period. 

                              (ii)
Death and Disability. Notwithstanding
any other provision of this Agreement, this Agreement shall terminate on the
date of the Executive’s death. If due to illness, physical or mental
disability, or other incapacity, the Executive shall fail, for a total of any
six (6) consecutive months (“Disability”), to substantially perform the
principal duties required by this Agreement, the Company may terminate this
Agreement upon thirty (30) days’ written notice to the Executive.

                              (iii)
Without
Cause. The Company may terminate the Executive’s employment
hereunder without Cause at any time. 

                              (iv)
Good
Reason. The Executive may terminate his employment hereunder for
“Good Reason”. 

                    (b)
Termination
Benefits.

                              (i)
Termination
For Cause. In the event of a termination pursuant to Section
8(a)(i) above, the Executive shall be entitled to payment of his Base
Compensation and the benefits pursuant to Section 4 hereof up to the effective
date of such termination and it is also the intention and agreement of the
Company that Executive shall not be deprived by reason of

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termination
for Cause of any payments, options or benefits which have been vested or have
been earned or to which Executive is entitled as of the effective date of such
termination. 

                    (ii)
Termination Without Cause, Upon Death, For Disability or For Good Reason.
If the Company terminates the Executive’s employment hereunder without Cause or
as a result of Disability, or if this Agreement is terminated by reason of the
Executive’s death, or if the Executive terminates his employment for Good
Reason, the Executive (or his estate, in the case of death) shall be paid: (i) his Base Compensation at the rate in
effect at the time of termination through the Termination Date; (ii) his Pro
Rata Share of any Incentive Compensation to which he would have been entitled
for the year in which such termination occurs; (iii) a lump sum payment equal
to the product of twenty-four (24) times the Monthly Salary Amount (as defined
below); (iv) any deferred compensation (including, without limitation, interest
or other credits on the deferred amounts) and any accrued vacation pay; (v)
continuation for a period of twelve months after such termination, of the
health and welfare benefits of the Executive and any long-term disability
insurance generally provided to senior executives of the Company (as provided
for by Section 4 of this Agreement) (or the Company shall provide the economic
equivalent thereof); provided, however, if the Executive obtains new employment
and such employment makes the Executive eligible for health and welfare or
long-term disability benefits which are equal to or greater in scope then the
benefits then being offered by the Company, then the Company shall no longer be
required to provide such benefits to the Executive; and (vi) any other compensation
and benefits as may be provided in accordance with the terms and provisions of
any applicable plans or programs of the Company. 

                    (c)
Non-exclusivity
of Rights. Nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any benefit, bonus, incentive
or other plan or program provided or maintained by the Company and for which
the Executive may qualify, nor shall anything herein limit or otherwise
prejudice such rights as the Executive may have under any other existing or
future agreements with the Company. Except as otherwise expressly provided for
in this Agreement, amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plans or programs of the Company at or
subsequent to the date of termination shall be payable in accordance with such
plans or programs. 

8

                    (d)
Vesting of Stock Grants and Stock Options. In
the event of any termination of this Agreement, Executive’s rights with regard
to any stock grants, loan agreements or stock options shall be as set forth in
the respective agreement containing the terms and conditions pertaining
thereto. Notwithstanding the foregoing, in the event that the Executive is
terminated for reasons other than for “Cause” or in the event the Executive
terminates this Agreement for “Good Reason” or in the event this Agreement is
terminated by reason of Executive’s death, any stock options then held by the
Executive shall immediately vest in the Executive and shall remain exercisable
for the period specified in the grant agreement notwithstanding any provision
therein to the contrary. 

                    (e)
Certain Additional Payments by the Company.
Anything in this Agreement to the contrary notwithstanding, in the event that
it shall be determined that any payment or distribution by the Company to or
for the benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue Code
of 1986 or any interest or penalties with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then the Executive shall
be entitled to receive an additional payment (an “Excise Gross-Up Payment”)
in an amount such that after payment by the Executive of all taxes (including
any interest or penalties imposed with respect to such taxes), including any
Excise Tax imposed upon the Excise Gross-Up Payment and any ordinary income tax
on the Excise Gross-Up Payment in order to put the Executive in the same net
after-tax position as if the payment were not subject to any Excise Tax. Subject
to the provisions of this Section 8(e), all determinations required to be made
hereunder, including whether an Excise Gross-Up Payment is required and the
amount of such Excise Gross-Up Payment, shall be made by such accounting firm
which at the time audits the financial statements of the Company (the “Accounting
Firm”) at the sole expense of the Company, which shall provide detailed
supporting calculations both to the Company and the Executive within fifteen
(15) business days of the date of termination of the Executive’s employment
under this Agreement, if applicable, or such earlier time as is requested by
the Company. 

          If
the Accounting Firm determines that no Excise Tax is payable by the Executive,
the Company shall use its reasonable best efforts to cause the Accounting Firm
to furnish the Executive 

9

with an
opinion that he has substantial authority not to report any Excise Tax on his
federal income tax return. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Excise
Gross-Up Payments, which will not have been made by the Company, should have
been made (an “Underpayment”) consistent with the calculations required
to be made hereunder. If the Company exhausts its remedies pursuant hereto and
the Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to or
for the benefit of the Executive. 

          The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company
of the Excise Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive knows of
such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. The Executive shall not pay
such claim prior to the expiration of the 30-day period following the date on
which it gives such notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall: (i) give the
Company any information reasonably requested by the Company relating to such
claim; (ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including
(without limitation) accepting legal representation with respect to such claim
by an attorney reasonably selected by the Company; (iii) cooperate with the
Company in good faith to contest effectively such claim; and (iv) permit the
Company to participate in any proceedings relating to such claim; provided that
the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax or income tax, including interest and penalties with respect
thereto, imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions hereof the Company
shall control all proceedings taken in connection with such contest and, at its
sole option, may pursue 

10

or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine, provided that if the Company directs the Executive to pay such claim
and sue for a refund, the Company shall advance the amount of such payment to
the Executive, on an interest-free basis and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any Excise Tax or income tax,
including interest or penalties with respect thereto, imposed with respect to
such advance or with respect to any imputed income with respect to such
advance, and further provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect
to which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company’s control of the contest shall be
limited to issues with respect to which an Excise Gross-Up Payment would be
payable hereunder and the Executive shall be entitled to settle or contest, as
the case may be, any other issue raised by the Internal Revenue Service or any
other taxing authority. 

          If,
after the receipt by the Executive of an amount advanced by the Company
pursuant hereto, the Executive becomes entitled to receive any refund with
respect to such claim, the Executive shall (subject to the Company’s complying
with the requirements hereof) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Executive of an amount
advanced by the Company pursuant hereto, a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and
the Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of thirty (30) days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Excise Gross-Up Payment required to be paid. 

                    (f)
Definitions. 

                              (i)
Cause. For purposes of this
subsection 8(a)(i), “Cause” shall mean (1) the continuing willful failure by
the Executive to substantially perform his duties hereunder for any reason
other than total or partial incapacity due to physical or mental illness, or
(2) gross negligence  

11

or gross
malfeasance on the part of the Executive in the performance of his duties
hereunder that causes material harm to the Company. 

                              (ii)
Pro Rata Share. The Executive’s “Pro Rata
Share” of Incentive Compensation for any calendar of the Company shall be a
fraction whose numerator shall be equal to the number of months (or parts of
months) during which the Executive was actually employed by the Company during
any such calendar year and whose denominator shall be the total number of
months in such calendar year.

                              (iii)
Monthly Salary Amount. “Monthly Salary
Amount” shall mean an amount equal to one-twelfth of the sum of (w) the
Executive’s then current annual Base Compensation plus (x) the highest Incentive
Compensation paid to the Executive during the most recent three calendar years.

                              (iv)
Good Reason. “Good Reason” means and
shall be deemed to exist if, without the prior express written consent of the
Executive, (a) the Company breaches this Agreement in any material respect; (b)
the Company fails to obtain the full assumption of this Agreement by a
successor; (c) the Company fails to use its reasonable best efforts to
maintain, or cause to be maintained directors and officers liability insurance
coverage for the Executive; (d) the Company purports to terminate the
Executive’s employment for Cause and such purported termination of employment
is not effected in accordance with the requirements of this Agreement, or (e) a
Change in Control shall have occurred; provided, however, that with respect to
items (a) through (d) above, within thirty (30) days of written notice of
termination by the Executive, the Company has not cured, or commenced to cure,
such failure or breach, and with respect to item (e) above, the Executive shall
have provided the Company with 180 days written notice of such termination.

                              (v)
Change in Control. “Change of Control”
shall mean (1) any merger by the Company into another corporation or
corporations which results in the stockholders of the Company immediately prior
to such transaction owning less than fifty (50%) percent of the surviving
Corporation; (2) any acquisition (by purchase, lease or otherwise) of all or
substantially all of the assets of the Company by any person, corporation or
other entity or group thereof acting jointly; (3) the acquisition of beneficial
ownership, directly or indirectly, of voting securities of the Company (defined
as Common Stock of the Company or any securities having voting rights that the
Company may issue in the future) and rights to acquire voting securities of the
Company (defined as including, 

12

without
limitation, securities that are convertible into voting securities of the Company
(as defined above) and rights, options warrants and other agreements or
arrangements to acquire such voting securities) by any person, corporation or
other entity or group thereof acting jointly, in such amount or amounts as
would permit such person, corporation or other entity or group thereof acting
jointly to elect a majority of the members of the Board of the Company, as then
constituted; or (4) the acquisition of beneficial ownership, directly or
indirectly, of voting securities and rights to acquire voting securities having
voting power equal to forty (40%) percent or more of the combined voting power
of the Company’s then outstanding voting securities by any person, corporation
or other entity or group
thereof acting jointly unless such acquisition as is described in this clause
(4) is expressly approved by resolution of the Board passed upon affirmative
vote of not less than a majority of the Board and adopted at a meeting of the
Board held not later than the date of the next regularly scheduled or special
meeting held following the date the Company obtains actual knowledge of such
acquisition (which approval may be limited in purpose and effect solely to
affecting the rights of Employee under this Agreement). Notwithstanding the
preceding sentence, any transaction that involves a mere change in identity
form or place of organization within the meaning of Section 368(a)(1)(F) of the
Internal Revenue Code of 1986, as amended, or a transaction of similar effect,
shall not constitute a Change in Control.

                    (g)
INTENTIONALLY OMITTED.

                    (h)
Payment. Except as otherwise provided in this
Agreement, any payments to which the Executive shall be entitled under this
Section 8, including, without limitation, any economic equivalent of any
benefit, shall be made as promptly as possible following the Date of
Termination. If the amount of any payment due to the Executive cannot be
finally determined within 90 days after the Date of Termination, such amount
shall be estimated on a good faith basis by the Company and the estimated
amount shall be paid no later than ninety (90) days after such Date of
Termination. As soon as practicable hereafter, the final determination of the
amount due shall be made and any adjustment requiring a payment to or from the
Executive shall be made as promptly as practicable.

                    (i)
No Mitigation. Except as otherwise specifically
provided in this Agreement, the Executive shall not be required to mitigate the
amount of any payments provided for by this Agreement by seeking employment or
otherwise, nor shall the amount of any payment or benefit 

13

provided in
this Agreement be reduced by any compensation or benefit earned by the
Executive after termination of his employment.

          9.
Company
Property. All confidential and proprietary information furnished
to the Executive by the Company or developed by the Executive on behalf of the
Company or at the Company’s direction or for the Company’s use or otherwise in
connection with the Executive’s employment hereunder, are and shall remain the
sole and confidential property of the Company; if the Company requests the
return of such materials at any time during or at or after the termination of
the Executive’s employment, the Executive shall immediately deliver the same to
the Company.

          10.
Covenant Not To Compete.

                    (a)
Covenants Against Competition. 

                              (i)
The Executive acknowledges that as of the execution of this Employment
Agreement (i) the Company is engaged in (A) the sale, distribution and
marketing of batteries, inverters, chargers and other portable power supply
products and accessories thereto, and related products and products and
components used in security systems and (B) in providing third party logistics
services (the “Business”); (ii) the Company’s Business is conducted
currently throughout the United States and may be expanded to other locations;
(iii) his employment with the Company will have given him access to confidential
information concerning the Company; and (iv) the agreements and covenants
contained in this Agreement are essential to protect the business and goodwill
of the Company. Accordingly, the Executive covenants and agrees as follows:

                              (ii)
Without the prior written consent of the Board, the
Executive shall not during the Restricted Period (as defined below) within the Restricted Area (as defined
below) (except in the Executive’s capacity as an officer of the Company
or any of its affiliates), (a) engage or participate in the Business; (b) enter
the employ of, or render any services (whether or not for a fee or other
compensation) to, any person engaged in the Business; or (c) acquire an equity
interest in any such person; provided, that the foregoing restrictions shall
not apply at any time if the Executive’s employment is terminated during the
Term by the Executive for Good Reason (as defined in Section 8(b) below) or by
the Company other than for “Cause”; provided, further, that during the
Restricted Period the Executive may own, directly or indirectly, solely as a
passive investment, securities of any company traded on any national securities
exchange or on the National Association of Securities Dealers Automated
Quotation System.

14

                              (iii)
As used herein: (A) “Restricted Period” shall mean
the period commencing on the Commencement Date and ending on the second
anniversary of the Executive’s termination of employment; and (B)
“Restricted Area” shall mean any place within the United States and any
other country in which the Company is then actively considering conducting Business.

                    (b)
Confidential Information; Personal Relationships. The
Executive acknowledges that the Company has a legitimate and continuing
proprietary interest in the protection of its confidential information and has
invested substantial sums and will continue to invest substantial sums to
develop, maintain and protect confidential information. The Executive agrees
that, during and after the Restricted Period, without the prior written consent
of the Board, the Executive shall keep secret and retain in strictest
confidence, and shall not knowingly use for the benefit of himself or others
all confidential matters relating to the Company’s Business including, without
limitation, operational methods, marketing or development plans or strategies,
business acquisition plans, joint venture proposals or plans, and new personnel
acquisition plans, learned by the Executive heretofore or hereafter (such
information shall be referred to herein collectively as “Confidential Information”);
provided, that nothing in this Agreement shall prohibit the Executive from
disclosing or using any Confidential Information (A) in the performance of his
duties hereunder, (B) as required by applicable law, (C) in connection with the
enforcement of his rights under this Agreement or any other agreement with the
Company, or (D) in connection with the defense or settlement of any claim,
suit or action brought or threatened against the Executive by or in the right
of the Company. Notwithstanding any provision contained herein to the contrary,
the term Confidential Information shall not be deemed to include any general
knowledge, skills or experience acquired by the Executive or any knowledge or
information known or available to the public in general. Moreover, the
Executive shall be permitted to retain copies of, or have access to, all such
Confidential Information relating to any disagreement, dispute or litigation
(pending or threatened) involving the Executive.

                    (c)
Employees of the Company and its Affiliates.
During the Restricted Period, without the prior written consent of the Board of
the Company, the Executive shall not, directly or indirectly, hire or solicit,
or cause others to hire or solicit, for employment by any person other than the
Company or any affiliate or successor thereof, any employee of, or person
employed within the two years preceding the Executive’s hiring or solicitation
of such person by, the Company and its 

15

affiliates or
successors or encourage any such employee to leave his employment. For this
purpose, any person whose employment has been terminated involuntarily by the
Company shall be excluded from those persons protected by this Section for the
benefit of the Company.

                    (d)
Business Relationships. During the Restricted
Period, the Executive shall not, directly or indirectly, request or advise a
person that has a business relationship with the Company to curtail or cancel
such person’s business relationship with the Company.

                    (e)
Rights and Remedies Upon Breach. If the
Executive breaches, threatens to commit a breach of, any of the provisions
contained in Section 10 of this Agreement (the “Restrictive Covenants”),
the Company shall have the following rights and remedies, each of which rights
and remedies shall be independent of the others and severally enforceable, and
each of which is in addition to, and not in lieu of, any other rights and
remedies available to the Company under law or in equity:

                              (i)
Specific Performance. The right and remedy to
have the Restrictive Covenants specifically enforced by any court of competent
jurisdiction, it being agreed that any breach or threatened breach of the
Restrictive Covenants would cause irreparable injury to the Company and that
money damages would not provide an adequate remedy to the Company.

                              (ii)
Accounting. The right and remedy to require the
Executive to account for and pay over to the Company all compensation, profits,
monies, accruals, increments or other benefits derived or received by the
Executive as the result of any action constituting a breach of Restrictive
Covenants.

                    (f)
Severability of Covenants. The Executive
acknowledges and agrees that the Restrictive Covenants are reasonable and valid
in duration and geographical scope and in all other respects. If any court
determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive Covenants shall not
thereby be affected and shall be given full effect without regard to the
invalid portions. The provisions set forth in Section 10 above shall be in
addition to any other provisions of the business conduct and ethics policy
applicable to employees of the Company and its subsidiaries during the term of
Executive’s employment.

                    (g)
Saving Clause. If the period of time or the
area specified in subsection (a) above should be adjudged unreasonable in any
proceeding, then the period of time shall be reduced 

16

by such number
of months or the area shall be reduced by the elimination of such portion thereof
or both so that such restrictions may be enforced in such area and for such
time as is adjudged to be reasonable. If the Executive violates any of the
restrictions contained in the foregoing subsection (a), the restrictive period
shall not run in favor of the Executive from the time of the commencement of
any such violation until such time as such violation shall be cured by the
Executive to the satisfaction of Company.

          11.
Executive’s Representation and Warranties.
Executive represents and warrants that he has the full right and authority to
enter into this Agreement and fully perform his obligations hereunder, that he
is not subject to any non-competition agreement other than with the Company,
and that his past, present and anticipated future activities have not and will
not infringe on the proprietary rights of others. Executive further represents
and warrants that he is not obligated under any contract (including, but not
limited to, licenses, covenants or commitments of any nature) or other
agreement or subject to any judgment, decree or order of any court or
administrative agency which would conflict with his obligation to use his best
efforts to perform his duties hereunder or which would conflict with the
Company’s business and operations as presently conducted or proposed to be
conducted. Neither the execution nor delivery of this Agreement, nor the
carrying on of the Company’s business as officer and employee by Executive will
conflict with or result in a breach of the terms, conditions or provisions of
or constitute a default under any contract, covenant or instrument to which
Executive is currently a party.

          12.
Miscellaneous.

                    (a)
Integration; Amendment. This Agreement
constitutes the entire agreement between the parties hereto with respect to the
matters set forth herein and supersedes and renders of no force and effect all
prior understandings and agreements between the parties with respect to the
matters set forth herein. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties.

                    (b)
Severability. If any part of this Agreement is
contrary to, prohibited by, or deemed invalid under applicable law or
regulations, such provision shall be inapplicable and deemed omitted to the
extent so contrary, prohibited, or invalid, but the remainder of this Agreement
shall not be invalid and shall be given full force and effect so far as
possible.

17

                    (c)
Waivers. The failure or delay of any party at
any time to require performance by the other party of any provision of this
Agreement, even if known, shall not affect the right of such party to require
performance of that provision or to exercise any right, power, or remedy
hereunder, and any waiver by any party of any breach of any provision of this
Agreement shall not be construed as a waiver of any continuing or succeeding
breach of such provision, a waiver of the provision itself, or a waiver of any
right, power, or remedy under this Agreement. No notice to or demand on any
party in any case shall, of itself, entitle such party to other or further
notice or demand in similar or other circumstances.

                    (d)
Power and Authority. The Company represents and
warrants to the Executive that it has the requisite corporate power to enter
into this Agreement and perform the terms hereof; that the execution, delivery
and performance of this Agreement by it has been duly authorized by all
appropriate corporate action; and that this Agreement represents the valid and
legally binding obligation of the Company and is enforceable against it in
accordance with its terms.

                    (e)
Burden and Benefit; Survival. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, executors, personal and legal representatives, successors and
assigns. In addition to, and not in limitation of, anything contained in this
Agreement, it is expressly understood and agreed that the Company’s obligation
to pay Termination Compensation as set forth herein shall survive any
termination of this Agreement.

                    (f)
Governing Law; Headings. This Agreement and its
construction, performance, and enforceability shall be governed by, and construed
in accordance with, the laws of the State of Texas. Headings and titles herein
are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.

                    (g)
Arbitration; Remedies. Any dispute or
controversy arising under this Agreement or as a result of or in connection
with Executive’s employment (other than disputes arising under Section 10)
shall be arbitrated and settled pursuant to the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association which
are then in effect in a proceeding held in Dallas, Texas. This provision shall
also apply to any and all claims that may be brought under any federal or state
anti-discrimination or employment statute, rule or regulation, including, but
not limited to, claims under: the National Labor Relations Act; Title VII of
the Civil Rights Act; Sections 1981 through 1988 of Title 42 of the United
States Code; the 

18

Employee
Retirement Income Security Act; the Immigration Reform and Control Act; the
Americans With Disabilities Act; the Age Discrimination in Employment Act; the
Fair Labor Standards Act; the Occupational Safety and Health Act; the Family
and Medical Leave Act; and the Equal Pay Act. The decision of the arbitrator
and award, if any, is final and binding on the parties and the judgment may be
entered in any court having jurisdiction thereof. The parties will agree upon
an arbitrator from the list of labor arbitrators supplied by the American
Arbitration Association. The parties understand and agree, however, that
disputes arising under Section 10 of this Agreement may be brought in a court
of law or equity without submission to arbitration.

                    (h)
Jurisdiction. Except as otherwise
provided for herein, each of the parties (a) submits to the exclusive
jurisdiction of any state court sitting in Dallas, Texas or federal court
sitting in Dallas County in any action or proceeding arising out of or relating
to this Agreement, (b) agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court, (c) agrees not to
bring any action or proceeding arising out of or relating to this Agreement in
any other court and (d) waives any right such party may have to a trial by jury
with respect to any action or proceeding arising out of or relating to this
Agreement. Each of the parties waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond, surety
or other security that might be required of any other party with respect
thereto. Any party may make service on another party by sending or delivering a
copy of the process to the party to be served at the address and in the manner
provided for giving of notices in Section 12(i). Nothing in this Section,
however, shall affect the right of any party to serve legal process in any
other manner permitted by law. 

                    (i)
Notices. All notices called for under this
Agreement shall be in writing and shall be deemed given upon receipt if
delivered personally or by confirmed facsimile transmission and followed
promptly by mail, or mailed by registered or certified mail (return receipt
requested), postage prepaid, to the parties at their respective addresses (or
at such other address for a party as shall be specified by like notice;
provided that notices of a change of address shall be effective only upon
receipt thereof) as set forth in the preamble to this Agreement or to any other
address or addressee as any party entitled to receive notice under this
Agreement shall designate, from time to time, to others in the manner provided
in this subsection 12(i) for the service of notices.

19

                    Any
notice delivered to the party hereto to whom it is addressed shall be deemed to
have been given and received on the day it was received; provided, however, that if
such day is not a business day then the notice shall be deemed to have been
given and received on the business day next following such day. Any notice sent
by facsimile transmission shall be deemed to have been given and received on
the business day next following the day of transmission.

                    (j)
Number of Days. In computing the number of days
for purposes of this Agreement, all days shall be counted, including Saturdays,
Sundays and holidays; provided, however, that if the final day
of any time period falls on a Saturday, Sunday or holiday on which federal
banks are or may elect to be closed, then the final day shall be deemed to be
the next day which is not a Saturday, Sunday or such holiday.

          IN
WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.

	
 

	
 

	
 

	
 

	
IAN EDMONDS

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
UNIVERSAL
 POWER GROUP, INC.

	
 

	
 

	
 

	
By: 

	
 

	
 

	
 

	

	
 

	
 

	
William Tan

	
 

	
 

	
Chairman

20Exhibit 10.4

ETFS GOLD TRUST

MARKETING AGENT AGREEMENT

 

MARKETING AGENT AGREEMENT (the “Agreement”) made as of __________ 2009, on behalf of ETFS Gold Trust, a New York trust (the “Fund” or the “Trust”), by and among ETFS Marketing, LLC, a Delaware limited liability company, as agent of the Fund (“ETFS Marketing”) and ALPS Distributors, Inc., a Colorado corporation (the “Marketing Agent”). Capitalized terms used but not defined in this Agreement shall have the meaning ascribed thereto in the Trust’s Prospectus included its Registration Statement on Form S-1 (Registration No. 333-158221), as it may be amended from time-to-time.

 

W I T N E S S E T H:

 

WHEREAS, ETF Securities USA LLC, as sponsor of the Trust (the “Sponsor”), on behalf of the Fund, has filed with the Securities and Exchange Commission (the “Commission” or “SEC”) a registration statement on Form S-1 (Registration No. 333-158221) and amendments thereto, including as part thereof a prospectus (the “Prospectus”), under the Securities Act of 1933, as amended (the “1933 Act”), the forms of which have heretofore been delivered to the Marketing Agent; and

 

WHEREAS, ETFS Marketing has been engaged to provide marketing services in the United States; and

 

WHEREAS, the Trust and ETFS Marketing wish to employ the Marketing Agent in connection with the performance of the services listed in Schedule A and additional services as may be agreed from time-to-time; 

 

NOW, THEREFORE, in consideration of the mutual promises and undertakings herein contained, the parties agree as follows:

 

1.            Registration — ETFS Marketing has furnished or will furnish, upon request, the Marketing Agent with copies of the Trust’s trust agreement, custodian agreements, transfer agency agreement, current prospectus, and all forms relating to any plan, program or service offered by the Trust. ETFS Marketing shall furnish, within a reasonable time period, to the Marketing Agent a copy of any amendment or supplement to any of the above-mentioned documents. Upon request, ETFS Marketing shall furnish promptly to the Marketing Agent any additional documents necessary or advisable to perform its functions hereunder. As used in this Agreement the terms “registration statement,” “prospectus” shall mean any registration statement and prospectus filed by the Trust with the SEC and any
amendments and supplements thereto that are filed with the SEC.

 

2.            Representations and Warranties of ETFS Marketing – ETFS Marketing represents and warrants and covenants the following:          

 

(a)ETFS Marketing has been duly organized and is validly existing as a limited liability company in good standing under the laws of the State of Delaware, with full power and authority to conduct its business as described in the Registration Statement and the Prospectus, and has all requisite power and authority to execute and deliver this Agreement;

 

(b)       the Fund and ETFS Marketing are duly qualified and are in good standing in each jurisdiction where the conduct of its business requires such qualification; and 

 

 

 

 

 

(d)     this Agreement has been duly authorized, executed and delivered by ETFS Marketing and constitutes the valid and binding obligations of ETFS Marketing, enforceable against ETFS Marketing in accordance with its terms.

 

3.         Representations and Warranties of the Marketing Agent -  The Marketing Agent represents and warrants and covenants the following: 

 

(a) The Marketing Agent is registered as a broker-dealer under the Exchange Act, and is a member in good standing of the Financial Industry Regulatory Authority (“FINRA”) and is qualified to act as a broker or dealer in the states or other jurisdictions where the nature of its business so requires; and has all other necessary licenses, authorizations, consents and approvals and has made all necessary filings required under any federal, state, local or foreign law, regulation or rule, and has obtained all necessary authorizations, consents and approvals from other Persons, in order to conduct its activities as contemplated by this Agreement. The Marketing Agent will maintain any such registrations, qualifications and membership in good standing and in full force and effect throughout the term of this Agreement. The Marketing Agent will comply with all applicable federal laws, including but not
limited to, federal securities and commodities 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;  

 

(b) The Marketing Agent (i) has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Colorado, with full power and authority to conduct its business and has all requisite power and authority to execute and deliver this Agreement and (ii) is duly qualified and is in good standing in each jurisdiction where the conduct of its business requires such qualification; and

 

(c) This Agreement has been duly authorized, executed and delivered by the Marketing Agent and constitutes the valid and binding obligations of the Marketing Agent, enforceable against the Marketing Agent in accordance with its terms.

 

4.            Fees and Trust Expenses — (a) In consideration of the services to be performed by the Marketing Agent hereunder as set forth on Schedule A attached hereto and as it may be amended from time-to-time, ETFS Marketing will pay the Marketing Agent an annual fee in the amount of $20,000 per annum to be paid in 1/12 equal monthly installments commencing on launch date of the Trust, subject to any limitation imposed by any law, rule or regulation applicable to any of the parties hereto.  The fee shall not exceed $100,000 for the five-year period beginning from the date of this agreement.

 

(b)           ETFS Marketing shall reimburse the Marketing Agent for any reasonable fees or disbursements incurred by the Marketing Agent in connection with the performance by the Marketing Agent of its duties under and pursuant to this Agreement including, but not limited to, the items identified as Out of Pocket Expenses in Schedule B of this agreement. These fees shall not exceed $92,725 for the five-year period beginning from the date of this agreement. Further, unless otherwise agreed to by the parties hereto in writing, the Marketing Agent shall not be responsible for fees and expenses in connection with (a) filing of any registration statement, printing and the distribution of any prospectus under the 1933 Act and amendments prepared for use in connection with the offering of shares for sale to the public,
preparing, setting in type, printing and mailing the prospectus, and any supplements thereto sent to shareholders of the Trust, (b) preparing, setting in type, printing and mailing any report (including annual and semi-annual reports) or other communication to shareholders of the Trust, and (c) the Blue Sky registration and qualification of shares of the Trust for sale in the various states in which the officers of the Trust shall determine it advisable to qualify such shares of the Trust for sale (including registering the Trust as a broker or dealer or any officer of the Trust or any Trust as agent or salesman in any state).  

 

 

2

 

 

 

5.            Use of the Marketing Agent’s Name — Neither the Trust nor ETFS Marketing, or any of their affiliates, shall use the name of the Marketing Agent, or any of its affiliates, in any prospectus, sales literature, and other material relating to the Trust in any manner without the prior written consent of the Marketing Agent (which shall not be unreasonably withheld); provided, however, that the Marketing Agent hereby approves all lawful uses of the names of the Marketing Agent and its affiliates in the prospectus of the Trust and in all other materials which merely refer to accurate terms to their appointment hereunder or which are required by the SEC, FINRA, OCC or any
state securities authority.

 

6.            Use of the Trust’s Name — Neither the Marketing Agent nor any of its affiliates shall use the name of the Trust in any publicly disseminated materials, including sales literature in any manner without the prior consent of ETFS Marketing (which shall not be unreasonably withheld); provided, however, that ETFS Marketing hereby approves all lawful uses of its or the Trust’s names in any required regulatory filings of the Marketing Agent which merely refer in accurate terms to the appointment of the Marketing Agent hereunder, or which are required by the SEC, FINRA, or any state securities authority.

 

7.            Indemnification of Marketing Agent - ETFS Marketing agrees to indemnify, defend and hold harmless the Marketing Agent, its partners, stockholders, members, directors, officers and employees of the foregoing, and the successors and assigns of all of the foregoing, from and against any loss, damage, expense, liability or claim (including the reasonable cost of investigation) which the Marketing Agent or any such person may incur under the 1933 Act, the Securities Exchange Act of 1934 (the “Exchange Act”), the common law or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon:

 

	
             
 	
            (a)
 	
            any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or in the Registration Statement as amended or supplemented) or in a Prospectus (the term Prospectus being deemed to include the Prospectus and the Prospectus as amended or supplemented), or arises out of or is based upon any omission or alleged omission to state a material fact required to be stated in either such Registration Statement or such Prospectus or necessary to make the statements made therein not misleading, except for any statements provided in writing, directly or indirectly through ETFS Marketing, by the Marketing Agent to the Sponsor for inclusion in such Registration Statement or such prospectus or any material omissions therefrom; 
 

 

	
             
 	
            (b)
 	
            any untrue statement or alleged untrue statement of a material fact or breach by ETFS Marketing of any representation or warranty contained in this Agreement;
 

 

	
             
 	
            (c)
 	
            the failure by ETFS Marketing to perform when and as required any agreement or covenant contained herein;
 

 

	
             
 	
            (d)
 	
            any untrue statement of any material fact contained in any audio or visual materials provided by ETFS Marketing or based upon written information furnished by or on behalf of ETFS Marketing including, without limitation, slides, videos, films or tape recordings used in connection with the marketing of the Trust;
 

 

	
             
 	
            (e)
 	
            the Marketing Agent’s performance of its duties under this Agreement except in the case of this clause (e), for any loss, damage, expense, liability or claim resulting from the gross negligence or willful misconduct of the Marketing Agent.  In no case is the indemnity of ETFS Marketing in favor of the Marketing Agent deemed to protect the Marketing Agent against any liability to ETFS Marketing to which the Marketing Agent would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of 
 

 

3

 

 

its duties or by reason of its reckless disregard of its obligations and duties under this Agreement.

 

If any action, suit or proceeding (each, a “Proceeding”) is brought against the Marketing Agent in respect of which indemnity may be sought against ETFS Marketing pursuant to the foregoing paragraph, the Marketing Agent shall promptly notify ETFS Marketing in writing of the institution of such Proceeding and ETFS Marketing shall assume the defense of such Proceeding, including the employment of counsel reasonably satisfactory to such indemnified party and payment of all fees and expenses; provided, however, that the omission to so notify ETFS Marketing shall not relieve ETFS Marketing from any liability which it may have to the Marketing Agent hereunder except to the extent that it has been materially prejudiced by such failure. The Marketing Agent shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the
expense of the Marketing Agent unless the employment of such counsel shall have been authorized in writing by ETFS Marketing in connection with the defense of such Proceeding or ETFS Marketing shall not have, within a reasonable period of time in light of the circumstances, employed counsel to have charge of the defense of such Proceeding or such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from, additional to or in conflict with those available to ETFS Marketing (in which case ETFS Marketing shall not have the right to direct the defense of such Proceeding on behalf of the indemnified party or parties), in any of which events such fees and expenses shall be borne by ETFS Marketing and paid as incurred (it being understood, however, that ETFS Marketing shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties who are parties to such Proceeding). 

 

ETFS Marketing shall not be liable for any settlement of any Proceeding effected without ETFS Marketing’s written consent, but if settled with ETFS Marketing’s written consent, ETFS Marketing agrees to indemnify and hold harmless the Marketing Agent from and against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second sentence of the foregoing paragraph, then the indemnifying party agrees that it shall be liable for any settlement of any Proceeding effected without its written consent if (i) such settlement is entered into more than 60 Business Days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall not have fully
reimbursed the indemnified party in accordance with such request prior to the date of such settlement and (iii) such indemnified party shall have given the indemnifying party at least 30 Business Days’ prior notice of its intention to settle. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened Proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such Proceeding and does not include an admission of fault, culpability or a failure to act, by or on behalf of such indemnified party.

 

8.            Indemnification of ETFS Marketing and the Trust - The Marketing Agent agrees to indemnify, defend and hold harmless ETFS Marketing and the Trust, their partners, shareholders, members, directors, officers and employees of the foregoing, and the controlling persons of all of the foregoing, within the meaning of Section 15 of the 1933 Act or Section 20 of the Exchange Act, and the successors and assigns of all of the foregoing, from and against any loss, damage, expense, liability or claim (including the 

 

4

 

 

reasonable cost of investigation) which ETFS Marketing may incur under the 1933 Act, the Exchange Act, the common law or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in and in conformity with information furnished in writing, directly or indirectly through ETFS Marketing, by or on behalf of the Marketing Agent to the Sponsor expressly for use in the Registration Statement (or in the Registration Statement as amended or supplemented by any post-effective amendment thereof) or in a Prospectus, or arises out of or is based upon any omission or alleged omission to state a material fact in connection with such information required to be stated in such Registration Statement or such Prospectus or necessary to make such information not misleading.

 

The Marketing Agent will also indemnify ETFS Marketing and the Trust as stated above insofar as such loss, damage, expense, liability or claim arises out of or is based upon the Marketing Agent’s performance of its duties under this Agreement, except in the case of any loss, damage, expense, liability or claim resulting from the gross negligence or willful misconduct of ETFS Marketing or the Trust.  In no case is the indemnity of the Marketing Agent in favor of ETFS Marketing and the Trust  to be deemed to protect ETFS Marketing and the Trust against any liability to the Marketing Agent to which ETFS Marketing or the Trust would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of ETFS Marketing’s obligations and duties under this Agreement.

 

If any Proceeding is brought against ETFS Marketing or the Trust in respect of which indemnity may be sought against the Marketing Agent pursuant to the first paragraph of this Section 8, ETFS Marketing shall promptly notify the Marketing Agent in writing of the institution of such Proceeding and the Marketing Agent shall assume the defense of such Proceeding, including the employment of counsel reasonably satisfactory to such indemnified party and payment of all fees and expenses; provided, however, that the omission to so notify the Marketing Agent shall not relieve the Marketing Agent from any liability hereunder which it may have to ETFS Marketing except to the extent that it has been materially prejudiced by such failure.  ETFS Marketing and the Trust shall have the right to employ their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of ETFS Marketing
unless the employment of such counsel shall have been authorized in writing by the Marketing Agent in connection with the defense of such Proceeding or the Marketing Agent shall not have, within a reasonable period of time in light of the circumstances, employed counsel to defend such Proceeding or such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to or in conflict with those available to the Marketing Agent (in which case the Marketing Agent shall not have the right to direct the defense of such Proceeding on behalf of the indemnified party or parties, but the Marketing Agent may employ counsel and participate in the defense thereof but the fees and expenses of such counsel shall be at the expense of the Marketing Agent), in any of which events such fees and expenses shall be borne by the Marketing Agent and paid as incurred (it being understood, however, that the Marketing Agent
shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel) in any one Proceeding or series of related Proceedings in the same jurisdiction representing the indemnified parties who are parties to such Proceeding). 

 

The Marketing Agent shall not be liable for any settlement of any such Proceeding effected without the written consent of the Marketing Agent but if settled with the written consent of the Marketing Agent, the Marketing Agent agrees to indemnify and hold harmless ETFS Marketing and the Trust from and against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second sentence of the foregoing paragraph, then the indemnifying party agrees that it shall be liable for any settlement of any Proceeding effected without its written consent if (i) such settlement is entered into more than 60 Business Days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall not
have reimbursed the 

 

5

 

 

indemnified party in accordance with such request prior to the date of such settlement and (iii) such indemnified party shall have given the indemnifying party at least 30 Business Days’ prior notice of its intention to settle. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened Proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such Proceeding.

 

9.            Term — This Agreement shall become effective as of _________, 2009, and shall continue until two years from such date and thereafter shall continue automatically for successive annual periods, provided that such continuance is specifically approved at least annually by ETFS Marketing.  This Agreement is terminable without penalty on sixty (60) days’ written notice by ETFS Marketing or by the Marketing Agent. This Agreement shall automatically terminate in the event of its assignment.

 

Upon the termination of this Agreement, the Marketing Agent, at ETFS Marketing’s expense and direction, shall transfer to such successor, as ETFS Marketing shall specify, all relevant books, records and other data established or maintained by the Marketing Agent under this Agreement.

 

10.          Notice — Any notice required or permitted to be given by any party to the other shall be deemed sufficient if sent by (i) telecopier (fax) or (ii) registered or certified mail, postage prepaid, addressed by the party giving notice to the other party at the last address furnished by the other party to the party giving notice:

 

if to the Trust or ETFS Marketing, at:

 

ETFS Marketing LLC

555 California Street, Suite 2900

San Francisco, CA 94104

Attn: Fred Jheon

 

with a copy to

 

ETFS Gold Trust

c/o ETF Securities Representative Office

6th Floor

2 London Wall Buildings

London, EC2M 5UU

Telephone: 011 44 207 448-4330

Attention: President

 

if to the Marketing Agent at:

 

ALPS Distributors, Inc.

1290 Broadway, Suite 1100 

Denver, Colorado, 80203 

Attn: General Counsel

 

or such other telecopier (fax) number or address as may be furnished by one party to the other.

 

11.          Confidential Information — The Marketing Agent, its officers, directors, employees and agents will treat confidentially and as proprietary information of the Trust, all records and other information relative to the Trust.   If the Marketing Agent is requested or required by, but not limited to, depositions, 

 

6

 

 

interrogatories, requests for information or documents, subpoena, civil investigation, demand or other action, proceeding or process or as otherwise required by law, statute, regulation, writ, decree or the like to disclose such information, the Marketing Agent will provide ETFS Marketing with prompt written notice of any such request or requirement so that ETFS Marketing may seek an appropriate protective order or other appropriate remedy and/or waive compliance with this provision.  If such order or other remedy is not sought, or obtained, or waiver not received within a reasonable period following such notice, then the Marketing Agent may without liability hereunder, disclose to the person, entity or agency requesting or requiring the information, that portion of the information that is legally required in the reasonable opinion of the Marketing Agent’s counsel.

 

12.          Miscellaneous — Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof.  The Agreement shall be construed, interpreted, and enforced in accordance with and governed by the laws of the State of Colorado. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement may not be changed, waived, discharged or amended except by written instrument that shall make specific reference to this Agreement and which shall be signed by the party against which enforcement of such change, waiver, discharge or amendment is sought. This Agreement may be executed simultaneously
in two or more counterparts, each of which taken together shall constitute one and the same instrument.

 

ETFS Marketing shall provide all information to the Marketing Agent necessary for the Marketing Agent to perform its obligations under applicable securities laws and regulations as they relate to the transactions contemplated in this agreement; and agrees that its employees registered with and supervised by the Marketing Agent will comply with the Written Supervisory Procedures of the Marketing Agent, which may be amended from time to time.

 

IN WITNESS WHEREOF, each of the undersigned has executed this instrument in its name and behalf as of the date and year first above written.

 

 

ETFS MARKETING, LLC

 

	
     
 	
  By: ________________________________
 

Name:  Fred Jheon

	
     
 	
    Title:  
 	
  President & Chief Executive Officer
 

 

 

ALPS DISTRIBUTORS, INC.

 

By: ________________________________

Name:  Thomas A. Carter

	
     
 	
    Title:
 	
  President
 

 

 

 

7

 

 

 

Schedule A

Marketing Agent Services 

 

	
             
 	
            •
 	
            Review marketing related legal documents and contracts.
 

	
             
 	
            •
 	
            Consult with ETFS Marketing’s marketing staff and on development of FINRA compliant marketing campaigns.
 

	
             
 	
            •
 	
            Consult with Trust’s legal counsel on marketing materials that are deemed to qualify as a free-writing prospectus materials and appropriate disclosure associated with all marketing materials.
 

	
             
 	
            •
 	
            Review and file applicable marketing materials with FINRA that don’t otherwise qualify as free-writing prospectus materials.
 

	
             
 	
            •
 	
            Register and oversee supervisory activities of unlimited number of FINRA licensed registered representatives.
 

	
             
 	
            •
 	
            Maintain, reproduction and storage of applicable books and records related to the services provided under this Agreement.
 

 

 

8

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