Document:

Exhibit
10.3

 

DISTRIBUTION SERVICES AGREEMENT

 

THIS DISTRIBUTION SERVICES
AGREEMENT (the “Agreement”) is
made and entered into effective the 6th day of August, 2008 (the “Effective
Date”) by and among AirSharesTM EU Carbon Allowances Fund, a Delaware statutory
trust (the “Fund”), ALPS Distributors, Inc., a Colorado corporation
and a registered broker-dealer under the Securities Exchange Act of 1934, as
amended (the “Distributor”), and XShares Advisors, LLC, a Delaware
limited liability company (the “Sponsor”).  Capitalized terms that are used but are not
defined herein shall have the same meanings ascribed to them in the Fund’s
Prospectus included in its Registration Statement on Form S-1
(Registration No. 333-145448), as such Prospectus may be amended or supplemented
from time to time.

 

WHEREAS, the Sponsor serves as the sole sponsor of the
Fund; and

 

WHEREAS, the Sponsor and the Fund wish to engage the Distributor to provide the
services listed on Schedule A hereto and such additional services as may
be agreed and added to such Schedule from time to time hereinafter, the “Services”).

 

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

 

1.                                       Provision of the Services.  The Distributor hereby agrees to
provide the Services to the Fund, and each of the Sponsor and the Fund accepts
the provision of the Services by the Distributor.

 

2.                                       Fees for the Services.  In exchange for the Distributor’s
provision of the Services, the Sponsor agrees to pay to the Distributor a fee as set
forth in Schedule B.

 

3.                                       Expenses
and Disbursements.  The Sponsor shall reimburse the Distributor for any
reasonable expenses or disbursements incurred by the Distributor in connection
with the performance by the Distributor of its Services hereunder. For any
expenses or disbursements in excess of $10,000, the Distributor will obtain the
prior written consent of the Sponsor.  Unless otherwise agreed to by the parties hereto
in writing, the Distributor shall not be responsible for the expenses and
disbursements incurred in connection with: (a) preparing, setting in type,
filing, printing and mailing to the public any Registration Statement,
Prospectus or Statement of Additional Information, and any amendments and
supplements to any of the foregoing, used in connection with the offering of
the Shares for sale to the public, and sending any such documents and
information to existing Fund shareholders; (b) preparing, setting in type,
printing and mailing any report (including annual and semi-annual reports) or
other communication to shareholders of the Fund; and (c) the “Blue Sky”
registration and qualification of the Shares for sale in the various states in
which the officers of the Fund shall determine it advisable to qualify such Shares
for sale (including registering the Fund as a broker or dealer or any officer
of the Fund as an agent or salesman in any such state).

 

4.                                       Documents.  To assist the Distributor in providing such Services, the Fund has
furnished, or will furnish upon the Distributor’s written request, the
Distributor with copies of the Fund’s Declaration of Trust, Advisory Agreement,
Custodian Agreement, Transfer Agency Agreement, Administration Agreement and
current Registration Statement, Prospectus and Statement of Additional
Information, and all forms relating to any plan, program or service offered by
the Fund. The Fund shall promptly furnish to the Distributor copies of any
amendment or supplement to any of the aforementioned documents. Upon the
Distributor’s written request, the Fund shall promptly furnish to the
Distributor any additional documents deemed by it to be reasonably necessary or
advisable in order for it to provide the Services hereunder. As used in this
Agreement, the terms “Registration Statement,” “Prospectus” and “Statement of
Additional Information” shall mean any registration statement, prospectus and
statement of 

 

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additional information filed by the Fund with the
Securities and Exchange Commission (“SEC”) and any amendments and
supplements thereto that are filed with the SEC.

 

5.                                       Authorized Representations.  The Distributor is not
authorized by the Fund to give any information or to make any representations
other than those contained in the Registration Statement, the Prospectus and
the Statement of Additional Information, or contained in shareholder reports or
other material that may be prepared by or on behalf of the Fund for the
Distributor’s use. Consistent with the foregoing, the Distributor may prepare
and distribute sales literature or other material as it may deem appropriate in
consultation with the Fund, provided that such sales literature complies with
applicable law and regulations.

 

6.                                       Registration of the Shares.  The Fund agrees that it will
take all action necessary to register the Shares under the Securities Act of
1933, as amended (the “1933 Act”) (subject to the necessary approval of
its shareholders). The Fund shall make available to the Distributor, at the
Distributor’s expense, such number of copies of the Fund’s Prospectus and
Statement of Additional Information as the Distributor may reasonably request.
The Fund shall furnish to the Distributor copies of all information, financial
statements and other papers which the Distributor may reasonably request in
writing for use in connection with the distribution of the Shares of the Fund.

 

7.                                       Use of the Distributor’s Name.  The Fund shall not use the name
of the Distributor, or any of its affiliates, in any Prospectus or Statement of
Additional Information, sales literature and other material relating to the
Fund in any manner without the prior written consent of the Distributor (which
consent shall not be unreasonably withheld); provided, however, that the
Distributor hereby approves all lawful uses of its name and the names of its
affiliates in the Prospectus and Statement of Additional Information of the
Fund and in all other materials which in each case merely refer to accurate
terms to the Distributor’s engagement hereunder or which are required by the
SEC, FINRA, the Options Clearing Corporation (the “OCC”) or any state
securities authority.

 

8.                                       Use of the Fund’s Name.  Neither the Distributor nor any
of its affiliates shall use the Fund’s name in any publicly disseminated materials,
including but specifically not limited to sales literature, in any manner
without the prior consent of the Fund (which consent shall not be unreasonably
withheld); provided, however, that the Fund hereby approves all lawful uses of
its name in any required regulatory filings of the Distributor which in each
case merely refer in accurate terms to the Distributor’s engagement hereunder,
or which are required by the SEC, FINRA, OCC or any state securities authority.

 

9.                                       Indemnification.

 

(a)  The Fund covenants and agrees to indemnify and
hold harmless the Distributor, its directors, officers, employees,
representatives and agents, and each person, if any, who “controls” the
Distributor (within the meaning of Section 15 of the 1933 Act), against
any loss, liability, claim, damages, claims or expenses (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages or expense and reasonable counsel fees incurred in connection
therewith) arising by reason of any person acquiring any of the Shares, based
upon the finding that the Registration Statement, Prospectus, Statement of
Additional Information, shareholder report or other information filed or made
public by the Fund (as any such material is from time to time amended or
supplemented) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make the
statements not misleading under the 1933 Act or any other statute or the common
law. However, the Fund does not agree to indemnify the Distributor or hold it
harmless to the extent that the statement or omission was made in reliance
upon, and in conformity with, information furnished to the Fund by or on behalf
of the Distributor.  In no case: (i) is
the indemnity of the Fund in favor of the Distributor or any person indemnified
hereunder to be deemed to protect the Distributor or any such person against
any liability to the Fund or its security holders to which the Distributor or
such person 

 

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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 its obligations and duties under this
Agreement; or (ii) is the Fund to be liable under its indemnity agreement
contained in this paragraph (a) with respect to any claim made against the
Distributor or any person indemnified unless the Distributor or person, as the
case may be, shall have notified the Fund in writing of the claim promptly
after the summons or other first written notification giving information of the
nature of the claims shall have been served upon the Distributor or any such
person (or after the Distributor or such person shall have received notice of
service on any designated agent). However, failure to notify the Fund of any
claim shall not relieve the Fund from any liability which it may have to any
person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Fund shall be entitled to
participate at its own expense in the defense, or, if it so elects, to assume
the defense of any suit brought to enforce any claims, and if the Fund elects
to assume the defense, then the defense shall be conducted by counsel chosen by
the Fund. If the Fund elects to assume the defense of any suit and retain
counsel, then the Distributor, its officers and directors, and any controlling
person(s), in their capacity as defendant(s) in the suit, shall bear the
fees and expenses of any additional counsel retained by them. If the Fund does
not elect to assume the defense of any suit, then it will reimburse the
Distributor, its officers and directors, and any controlling person(s) in
their capacity as defendant(s) in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Fund agrees to notify the
Distributor promptly of the commencement of any litigation or proceeding
against the Fund or any of its trustees, officers, managers, members,
employees, representatives and agents in connection with the issuance or sale
of any of the Shares.

 

(b)  The Distributor covenants and agrees to
indemnify and hold harmless the Fund, the Sponsor and each of their respective
trustees, officers, managers, members, employees, representatives and agents,
and each person, if any, who “controls” the Fund or the Sponsor (within the
meaning of Section 15 of the 1933 Act) (each, an “Indemnified Party”),
against any loss, liability, damages, claims or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages or expense (and reasonable counsel fees incurred in connection
therewith) arising by reason of any person acquiring any of the Shares, based
upon the 1933 Act or any other statute or common law, alleging: (a) any
wrongful act of the Distributor or any of its directors, officers, employees,
representatives or agents; or (b) that any sales literature,
advertisements, information, statements or representations used or made by the
Distributor or any of its affiliates or employees or that the Registration
Statement, Prospectus or Statement of Additional Information (as each of the
foregoing is from time to time amended or supplemented) included an untrue
statement of a material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements not misleading, insofar as
the statement or omission was made in reliance upon, and in conformity with,
information furnished to the Fund or the Sponsor by or on behalf of the
Distributor.  In no case: (i) is the
indemnity of the Distributor in favor of an Indemnified Party to be deemed to
protect any such Indemnified Party against any liability to which the Indemnified
Party 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 its obligations and duties under this Agreement, or (ii) is
the Distributor to be liable under its indemnity agreement contained in this
paragraph (b) with respect to any claim made against any Indemnified Party
unless such Indemnified Party shall have notified the Distributor in writing of
the claim promptly after the summons or other first written notification giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of service on any designated agent). However, failure to notify the Distributor
of any claim shall not relieve the Distributor from any liability which it may
have to the Indemnified Party against whom the action is brought otherwise than
on account of its indemnity agreement contained in this paragraph. In the case
of any notice to the Distributor it shall be entitled to participate, at its
own expense, in the defense or, if it so elects, to assume the defense of any
suit brought to enforce the claim, and if the Distributor elects to assume the
defense, then the defense shall be conducted by counsel chosen by it and
satisfactory to the Indemnified Party, in its capacity as a defendant in the
suit. If the Distributor 

 

3

 

elects to assume the defense of any suit and retain
counsel, then the Indemnified Party, in its capacity as a defendant in the
suit, shall bear the fees and expense of any additional counsel retained by it.
If the Distributor does not elect to assume the defense of any suit, then it
will reimburse the Indemnified Party for the reasonable fees and expenses of
any counsel retained by it. The Distributor agrees to notify the Indemnified
Party promptly of the commencement of any litigation or proceedings against it
in connection with the issuance or sale of any of the Shares.

 

10.                                 Supplemental
Information.

 

(a)  The Distributor and the Fund shall regularly
consult with each other regarding the Distributor’s performance of its
obligations under this Agreement. In connection therewith, the Fund shall
submit to the Distributor at a reasonable time in advance of filing with the
SEC reasonably final copies of any amended or supplemented Registration
Statement (including exhibits) under the 1933 Act; provided, however, that
nothing contained in this Agreement shall in any way limit the Fund’s right to
file at any time such amendments to any Registration Statement and/or
supplements to any Prospectus or Statement of Additional Information, of
whatever character, as the Fund may deem advisable, such right being in all
respects absolute and unconditional.

 

(b)  The Distributor acknowledges that the only
information provided to it by the Fund is that contained in the Registration
Statement, the Prospectus, the Statement of Additional Information and reports
and financial information referred to herein. Neither the Distributor nor any
other person is authorized by the Fund to give any information or to make any
representations, other than those contained in such documents and any sales
literature or advertisements specifically approved by appropriate
representatives of the Fund.

 

11.                                 Term.  This Agreement is effective as
of the Effective Date and shall continue for two (2) years following such
date (the “Initial Term”), unless sooner terminated as provided
herein.  Following the expiration of the
Initial Term, this Agreement shall continue automatically for successive one (1) year
periods (each, a “Renewal Term”), provided that such continuance is
specifically approved at least annually by the Sponsor.  This Agreement is terminable without penalty
on sixty (60) days’ written notice by the Sponsor or by the Distributor. This
Agreement shall automatically terminate in the event of its assignment.  Upon the termination of this Agreement, the
Distributor, at the Fund’s expense and direction, shall transfer to such
successor distributor as the Fund shall specify all relevant books, records and
other data established or maintained by the Distributor under this Agreement.

 

12.                                 Notice.  Any notice required or permitted
to be given by any party to the other parties hereunder shall be deemed
sufficient if sent by (i) telecopier (receipt confirmed) or electronic
(email) delivery, (ii) overnight courier service such as United Parcel
Service of Federal Express, or (iii) registered or certified mail, postage
prepaid, addressed by the party giving notice to the other parties at the last
address furnished by the other parties to the party giving notice:

 

	
  if to the Fund or the Sponsor, at:

  
	
   

  
	
  420 Lexington Ave.

  
	
  New York, NY 10170

  
	
  Attention: David W. Jaffin

  
	
  Facsimile No.:  212-867-3857

  
	
   

  
	
  if to the Distributor, at:

  
	
   

  
	
  1290 Broadway, Suite 1100,

  
	
  Denver, Colorado, 80203

  
	
  Attn: General Counsel

  
	
  Facsimile No.: 
  303-623-7850

  

 

4

 

or such other telecopier number, email address or street
address as may be furnished by one party to the other.

 

13.                                 Confidential
Information.  The Distributor and its officers, directors,
employees and agents will treat confidentially and as proprietary information
of the Fund all records and other information relative to the Fund and with
respect to the Fund’s prior or present shareholders or to those persons or
entities who respond to the Distributor’s inquiries concerning investment in
the Fund, and will not use such records and information for any purposes other
than in the performance of its Services hereunder. If the Distributor is
requested or required by, but not limited to, depositions, 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, then the
Distributor will provide the Fund with prompt written notice of any such
request or requirement so that the Fund may seek an appropriate protective
order or other appropriate remedy and/or waive compliance with this Section 13.
If such order or other remedy is not sought or obtained, or if a waiver is not
received within a reasonable period following such notice, then the Distributor
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 to disclose in the reasonable opinion of the Distributor’s
counsel.

 

14.                                 Limitation
of Liability.

 

(a)  The Distributor agrees that the obligations
assumed by the Fund under this Agreement shall be limited in all cases to the
Fund and its assets, except as expressly set forth herein. The Distributor
agrees that it shall not seek satisfaction of any such obligation from the Fund’s
shareholders, from any individual shareholder, or from the trustees, officers,
representatives or agents of the Fund, nor shall the Distributor seek
satisfaction of any such obligations from the Sponsor or its members, managers,
directors or officers.

 

(b)  Any obligations of the Fund entered into in
its name or on its behalf by the Sponsor through its members, managers,
officers, representatives or agents are not made individually but are made in
such capacities, and are not binding upon any of the Sponsor or its members,
managers, officers, representatives or agents personally, but bind only the
Fund property, and all persons dealing with the Fund must look solely to the
Fund property for the enforcement of any claims against the Fund.

 

15.                                 Miscellaneous.  Each party hereto agrees to
perform such further acts and to execute such further documents as are
necessary to effectuate the purposes hereof. This Agreement shall be governed
by, construed, interpreted and enforced in accordance with 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 a 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.  All activities by the
Distributor and its agents and employees as the distributor of the Shares shall
comply with all applicable laws, rules and regulations including, without
limitation, all rules and regulations made or adopted by the SEC or any
securities association registered under the Exchange Act.  The Distributor will promptly transmit to the
Fund’s transfer agent any orders received by the Distributor for the purchase,
redemption or exchange of the Shares.

 

5

 

Remainder of page intentionally
left blank.  Signature page follows.

 

6

 

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the date
set forth beneath the parties’ respective names below, with the Agreement to be
effective as of the Effective Date.

 

	
   

  	
  AIRSHARESTM EU CARBON ALLOWANCES

  FUND

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Daniel W. Jaffin

  
	
   

  	
   

  	
  Name: Daniel W. Jaffin

  
	
   

  	
   

  	
  Title: Chief Operating Officer

  
	
   

  	
  Dated: August 6, 2008

  
	
   

  	
   

  
	
   

  	
  ALPS DISTRIBUTORS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Thomas O. Carter

  
	
   

  	
   

  	
  Name: Thomas Carter

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
  Dated: August 6, 2008

  
	
   

  	
   

  
	
   

  	
  XSHARES ADVISORS LLC

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ James McCluskey

  
	
   

  	
   

  	
  Name: James McCluskey

  
	
   

  	
   

  	
  Title: Senior VP - Finance

  
	
   

  	
  Dated: August 6, 2008

  

 

7

 

Schedule A

 

List of Services

 

The
Distributor will provide the following Services to the Fund:

 

·                  Review distribution-related
legal documents and contracts.

 

·                  Coordinate the processing of
Share creations with Fund’s Transfer Agent.

 

·                  Coordinate and help to
maintain Fund creation and redemption records.

 

·                  Consult with the Sponsor’s
marketing staff on the development of compliant marketing campaigns.

 

·                  Review and file all
marketing materials (including internet sites) with the appropriate regulatory
agencies.

 

·                  Consult with the Sponsor on
marketing/sales strategy.

 

·                  800 line telephone
servicing.

 

8

 

Schedule B

 

Fees

 

The Sponsor shall pay the Distributor a flat fee
of $20,000 for the Fund per year.

 

Distribution fees will be waived for the Initial
Term of this Agreement.

 

9Filed by sedaredgar.com - Fox Petroleum Inc. - Exhibit 10.1

Any other expenses not mentioned herein, such as commercial travel,
  courier services, package delivery, television or radio spots, road shows and
  others shall be paid separately upon advance approval by Fox Petroleum

 6. Special Conditions

 6.1. Benaterra Communications will abide by all securities regulations
  and laws of the Canadian, American and European authorities and Securities Commissions.

 6.2. Benaterra Communications agrees that, without any express
  authorization from Fox Petroleum , neither it nor any affiliated persons will
  directly or indirectly disclose to any other person, firm or corporation, any
  confidential information, including, but not limited to concepts, ideas, procedures
  and future product development projects Benaterra Communications Inc. will be
  exposed to during the term of this Agreement, nor make available to others any
  documents, files or other papers concerning the business or financial affairs
  of the Corporation obligations under the Agreement.

 7. This is the entire agreement between the parties. It may
  only be modified in writing with the mutual consent of both parties.

8. This Agreement shall be governed by the laws of Alberta, Canada.

On behalf of:

 Benaterra Communications Inc.

 By: /s/ Robert Birmingham 

Robert Birmingham

 Title: President

  Date: September 1, 2008

 Fox Petroleum Inc.

 By: /s/ Alex Craven 

Alex Craven

 Title: Executive VP, Director

  Date: September 1, 2008

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