Document:

a6479640ex10-2.htm

Exhibit 10.2

 

	
THE SIMSBURY BANK & TRUST COMPANY

Endorsement Split Dollar Insurance Agreement

 

 

THE SIMSBURY BANK & TRUST COMPANY

ENDORSEMENT SPLIT DOLLAR INSURANCE AGREEMENT

THIS ENDORSEMENT SPLIT DOLLAR INSURANCE AGREEMENT (this “Agreement”) is adopted this 20th day of October, 2010, by and between THE SIMSBURY BANK & TRUST COMPANY a state-chartered commercial bank located in SIMSBURY, CONNECTICUT (the “Bank”), and MARTIN J. GEITZ (the “Executive”).

The purpose of this Agreement is to retain and reward the Executive by dividing the death proceeds of certain life insurance policies which are owned by the Bank on the life of the Executive with the designated beneficiary of the Executive.  The Bank will pay the life insurance premiums from its general assets.

Article 1

Definitions

Whenever used in this Agreement, the following terms shall have the meanings specified:

	
1.1  

	
“Beneficiary” means each designated person, or the estate of the deceased Executive, entitled to benefits, if any, upon the death of the Executive.

	
1.2  

	
“Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Executive completes, signs and returns to the Plan Administrator to designate one or more Beneficiaries.

	
1.3  

	
“Board” means the Board of Directors of the Bank as from time to time constituted.

	
1.4  

	
“Code” means the Internal Revenue Code of 1986, as amended.

	
1.5  

	
“Effective Date” means October 20, 2010.

	
1.6  

	
“Executive’s Interest” means the benefit set forth in Section 2.2.

	
1.7  

	
“Insurer” means the insurance company issuing the Policy on the life of the Executive.

	
1.8  

	
“Net Death Proceeds” means the total death proceeds of the Policy minus the greater of (i) the cash surrender value or (ii) the aggregate premiums paid by the Bank.

	
1.9

	
“Plan Administrator” means the plan administrator described in Article 10.

	
1.10  

	
“Policy” or “Policies” means the individual insurance policy or policies adopted by the Bank for purposes of insuring the Executive’s life under this Agreement.

	
1.11

	
“Separation from Service” means termination of the Executive’s employment with the Bank for reasons other than death or disability.  Whether a Separation from Service has occurred is determined in accordance with the requirements of Code Section 409A based on whether the facts and circumstances indicate that the Bank and Executive reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Executive would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding thirty-six (36) month period (or the full period of services to the Bank if the Executive has been providing services to the Bank less than thirty-six (36) months).

 

  

  

  

 

	
THE SIMSBURY BANK & TRUST COMPANY

Endorsement Split Dollar Insurance Agreement

 

 

Article 2

Policy Ownership/Interests

	
2.1  

	
Bank’s Interest.  The Bank shall own the Policies and shall have the right to exercise all incidents of ownership, and the Bank may terminate a Policy without the consent of the Executive.  The Bank shall be the beneficiary of the remaining death proceeds of the Policies after the Executive’s Interest is determined according to Section 2.2.

	
2.2

	
Executive’s Interest.  The Executive, or the Executive’s assignee, shall have the right to designate the Beneficiary of an amount of death proceeds as specified in this Section 2.2.  The Executive shall also have the right to elect and change settlement options with respect to the Executive’s Interest by providing written notice to the Bank and the Insurer.

 

	
  

	
2.2.1

	

Death Prior to Separation from Service.  If the Executive dies prior to Separation from Service, the Beneficiary shall be entitled to a benefit equal to Seven Hundred Fifty Thousand Dollars ($750,000), increased by four percent (4%) on each annual anniversary of the Effective Date; provided however, such benefit shall not exceed the Net Death Proceeds.

 

	
  

	
2.2.2

	

Death After Other Separation from Service.  If the Executive dies after a Separation from Service, the Beneficiary shall be entitle to no benefit.

Article 3

Premiums and Imputed Income

	
3.1

	
Premium Payment.  The Bank shall pay all premiums due on all Policies.

	
3.2

	
Economic Benefit.  The Bank shall determine the economic benefit attributable to the Executive based on the life insurance premium factor for the Executive’s age multiplied by the aggregate death benefit payable to the Beneficiary.  The “life insurance premium factor’ is the minimum factor applicable under guidance published pursuant to Treasury Reg. § 1.61-22(d)(3)(ii) or any subsequent authority.

 

	
3.3

	
Imputed Income.  The Bank shall impute the economic benefit to the Executive on an annual basis, by adding the economic benefit to the Executive’s W-2, or if applicable, Form 1099.

 

  

1

  

 

	
THE SIMSBURY BANK & TRUST COMPANY

Endorsement Split Dollar Insurance Agreement

 

 

Article 4

General Limitations – Removal

 

	
4.1

	
Removal.  Notwithstanding any provision of this Agreement to the contrary, the Executive’s rights in the Agreement shall terminate if the Executive is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act ("FDIA").

	
4.2

	
Suicide or Misstatement.  No benefits shall be payable if the Executive commits suicide within two years after the date of the Agreement, or if the insurance company denies coverage (i) for material misstatements of fact made by the Executive on any application for life insurance purchased by the Bank, or (ii) for any other reason; provided, however that the Bank shall evaluate the reason for the denial, and upon advice of legal counsel and in its sole discretion, consider judicially challenging any denial.

 

Article 5

Beneficiaries

 

	
5.1

	
Beneficiary. The Executive shall have the right, at any time, to designate a Beneficiary to receive any benefits payable under the Agreement upon the death of the Executive.  The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designation under any other Agreement of the Bank in which the Executive participates.

	
5.2

	
Beneficiary Designation; Change.  The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form, and delivering it to the Bank or its designated agent.  The Executive’s beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved.  The Executive shall have the right to change a Beneficiary by completing, signing, and otherwise complying with the terms of the Beneficiary Designation Form and the Bank’s rules and procedures, as in effect from time to time.  Upon the acceptance by the Bank of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled.  The Bank shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Bank prior to the Executive’s death.

	
5.3

	
Acknowledgment.  No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Bank or its designated agent.

	
5.4

	
No Beneficiary Designation.  If the Executive dies without a valid designation of beneficiary, or if all designated Beneficiaries predecease the Executive, then the Executive’s surviving spouse shall be the designated Beneficiary.  If the Executive has no surviving spouse, the benefits shall be made payable to the Executive’s estate.

	
5.5

	
Facility of Payment.  If the Bank determines in its sole discretion that a benefit is to be paid to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of that person’s property, the Bank may direct payment of such benefit to the guardian or other legal representative of the person’s estate or to any trust created for the sole benefit of said person.  The Bank may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit.  Any payment of a benefit shall be a payment for the account of the Executive and the Executive’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such payment amount.

 

  

2

  

 

	
THE SIMSBURY BANK & TRUST COMPANY

Endorsement Split Dollar Insurance Agreement

 

Article 6

Assignment

The Executive may irrevocably assign without consideration all of the Executive’s Interest in this Agreement to any person, entity or trust.  In the event the Executive shall transfer all of the Executive’s Interest, then all of the Executive’s Interest in this Agreement shall be vested in the Executive’s transferee, who shall be substituted as a party hereunder, and the Executive shall have no further interest in this Agreement.

Article 7

Insurer

 

The Insurer shall be bound only by the terms of its given Policy.  The Insurer shall not be bound by or deemed to have notice of the provisions of this Agreement.  The Insurer shall have the right to rely on the Bank’s representations with regard to any definitions, interpretations or Policy interests as specified under this Agreement.

Article 8

Claims And Review Procedure

	
8.1

	
Claims Procedure.  The Executive or Beneficiary (“claimant”) who has not received benefits under the Agreement that he or she believes should be paid shall make a claim for such benefits as follows:

	
  

	
8.1.1

	
Initiation – Written Claim.  The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits.  If such a claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after such notice was received by the claimant.  All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred.  The claim must state with particularity the determination desired by the claimant.

 

	
  

	
8.1.2

	
Timing of Bank Response.  The Bank shall respond to such claimant within ninety (90) days after receiving the claim.  If the Bank determines that special circumstances require additional time for processing the claim, the Bank can extend the response period by an additional ninety (90) days by notifying the claimant in writing, prior to the end of the initial ninety (90) day period, that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Bank expects to render its decision.

 

  

3

  

 

	
THE SIMSBURY BANK & TRUST COMPANY

Endorsement Split Dollar Insurance Agreement

 

 

	
  

	
8.1.3

	
Notice of Decision.  If the Bank denies part or all of the claim, the Bank shall notify the claimant in writing of such denial.  The Bank shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

	
(a)      

	
The specific reasons for the denial;

	
(b)      

	
A reference to the specific provisions of the Agreement on which the denial is based;

	
(c)      

	
A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed; and

	
(d)      

	
An explanation of the Agreement’s review procedures and the time limits applicable to such procedures.

	
8.2

	
Review Procedure.  If the Bank denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Bank of the denial, as follows:

	
  

	
8.2.1

	
Initiation – Written Request.  To initiate the review, the claimant, within sixty (60) days after receiving the Bank’s notice of denial, must file with the Bank a written request for review.

	
  

	
8.2.2

	
Additional Submissions – Information Access.  The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim.  The Bank shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits.

	
  

	
8.2.3

	
Considerations on Review.  In considering the review, the Bank shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

	
  

	
8.2.4

	
Timing of Bank’s Response.  The Bank shall respond in writing to such claimant within sixty (60) days after receiving the request for review.  If the Bank determines that special circumstances require additional time for processing the claim, the Bank can extend the response period by an additional sixty (60) days by notifying the claimant in writing, prior to the end of the initial sixty (60) day period, that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Bank expects to render its decision.

 

  

4

  

 

	
THE SIMSBURY BANK & TRUST COMPANY

Endorsement Split Dollar Insurance Agreement

 

 

	
  

	
8.2.5

	
Notice of Decision.  The Bank shall notify the claimant in writing of its decision on review.  In the event the Bank determines that the claim should be denied as a result of its review, then the Bank shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

	
(a)      

	
The specific reasons for the denial;

	
(b)      

	
A reference to the specific provisions of the Agreement on which the denial is based; and

	
(c)      

	
A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits.

Article 9

Amendments And Termination

The Bank may amend or terminate the Agreement at any time, or may amend or terminate the Executive’s rights under the Agreement at any time prior to the Executive’s death, by providing written notice of such to the Executive.  In the event that the Bank decides to maintain the Policy after termination of the Agreement, the Bank shall be the direct beneficiary of the entire death proceeds of the Policy.

Article 10

Administration

	
10.1

	
Plan Administrator Duties.  This Agreement shall be administered by a Plan Administrator which shall consist of the Board, or such committee or persons as the Board may choose.  The Plan Administrator shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all ques­tions including interpretations of this Agreement, as may arise in connection with this Agreement.

	
10.2

	
Agents.  In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit, (including acting through a duly appointed representative), and may from time to time consult with counsel who may be counsel to the Bank.

	
10.3

	
Binding Effect of Decisions.  The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of this Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Agreement.

 

	
10.4

	
Indemnity of Plan Administrator.  The Bank shall indemnify and hold harmless the members of the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator or any of its members.

 

  

5

  

 

	
THE SIMSBURY BANK & TRUST COMPANY

Endorsement Split Dollar Insurance Agreement

	
10.5

	
Information.  To enable the Plan Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the retirement, disability, death or Separation from Service of the Executive, and such other pertinent information as the Plan Administrator may reasonably require.

Article 11

Miscellaneous

	
11.1

	
Binding Effect.  This Agreement shall bind the Executive and the Bank, their beneficiaries, survivors, executors, administrators, and transferees and any Beneficiary.

	
11.2

	
No Guarantee of Employment.  This Agreement is not a contract for employment.  It does not give the Executive the right to remain as an employee of the Bank, nor does it interfere with the Bank's right to discharge the Executive.  It also does not require the Executive to remain an employee nor interfere with the Executive’s right to terminate employment at any time.

	
11.3

	
Applicable Law.  The Agreement and all rights hereunder shall be governed by and construed according to the laws of the State of Connecticut, except to the extent preempted by the laws of the United States of America.

	
11.4

	
Reorganization.  The Bank shall not merge or consolidate into or with another company, or reorganize, or sell substantially all of its assets to another company, firm, or person unless such succeeding or continuing company, firm, or person agrees to assume and discharge the obligations of the Bank under this Agreement.  Upon the occurrence of such event, the term “Bank” as used in this Agreement shall be deemed to refer to the successor or survivor company.

	
11.5

	
Notice.  Any notice or filing required or permitted to be given to the Bank under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:

Compensation and Human Resources Committee Chairman

Board of Directors

Simsbury Bank and Trust Co., Inc.

760 Hopmeadow St.

Simsbury, CT 06070

 

  

6

  

	
THE SIMSBURY BANK & TRUST COMPANY

Endorsement Split Dollar Insurance Agreement

 

 

Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or the receipt for registration or certification.

Any notice or filing required or permitted to be given to the Executive under this Agreement shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Executive.

	
11.6

	
Entire Agreement.  This Agreement, along with the Executive’s Beneficiary Designation Form, constitutes the entire agreement between the Bank and the Executive as to the subject matter hereof.  No rights are granted to the Executive under this Agreement other than those specifically set forth herein.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated above.

 

	
EXECUTIVE

	
THE SIMSBURY BANK & TRUST COMPANY

	 	 
	 	 
	/s/ Martin J. Geitz	By:           Lincoln S. Young
	Martin J. Geitz	Title:        Chairman
	 	 

 

 

 

 

 

7dsa.htm

Exhibit 10.2

 

DISTRIBUTION SERVICES AGREEMENT

Registered Commodity Pools

 

This Distribution Services Agreement (the “Agreement”) is made this 15th day of October, 2010, by and among Teucrium Commodity Trust, a Delaware statutory trust (the “Trust”), having its principal place of business at 232 Hidden Lake Road, Building A, Brattleboro, VT 05301, Foreside Fund Services, LLC, a Delaware limited liability company (the “Distributor”), having its principal place of business at Three Canal Plaza, Suite 100, Portland, ME 04101, and Teucrium Trading, LLC, a Delaware limited liability company (the “Sponsor”), with its principal place of business at 232 Hidden Lake Road, Building A, Brattleboro, VT 05301.

 

WHEREAS, the Sponsor is registered with the Commodity Futures Trading Commission  (the “CFTC”) as a commodity pool operator, is a member of the National Futures Association (“NFA”), and is subject to the Commodity Exchange Act, as amended (the “CEA”), and all of the relevant rules and regulations promulgated thereunder (collectively, the “Commodities Rules”) and serves as the commodity pool operator of the Trust;

 

WHEREAS, the Trust is a statutory trust organized under the laws of the State of Delaware, and has separate series (each a “Fund” and collectively, the “Funds”), each of which issues common units representing fractional individual beneficial interests in such Fund (“Shares”)

 

WHEREAS, the Sponsor desires to retain Foreside to serve as the distributor of certain Funds as listed on Exhibit A hereto (as amended from time to time);

 

WHEREAS, the Sponsor, on behalf of the Trust, has filed, or will file, with the Securities and Exchange Commission (the “SEC”) a registration statement for each Fund on Form S-1 or Form S-3 under the Securities Act of 1933, as amended (the “1933 Act”);

 

WHEREAS, the Distributor is a registered broker-dealer under the Securities Exchange Act of 1934, as amended (the “1934 Act”), and a member of the Financial Industry Regulatory Authority (“FINRA”); and

 

WHEREAS, the Distributor desires to serve as distributor of the Funds and to provide the services described herein to the Funds.

 

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

 

	
1.  

	
Appointment.

 

The Sponsor, on behalf of the Trust, hereby appoints the Distributor as the exclusive distributor of the Funds in accordance with this Agreement, on the terms and for the period set forth in this Agreement and subject to the registration requirements of the federal securities laws and of the laws governing the sale of securities in the various states, and the Distributor hereby accepts such appointment and agrees to act in such capacity hereunder.

 

	
2.  

	
Definitions.

 

Wherever they are used herein, the following terms have the following meanings:

 

(a) “Prospectus” means any prospectus which constitutes part of the Registration Statement(s) of any Fund under the 1933 Act, as such Prospectus may be amended or supplemented and filed with the SEC from time to time;

 

(b) “Registration Statement” means the registration statement(s) under the 1933 Act filed with the SEC from time to time by the Trust on behalf of each Fund that has most recently been declared effective, including all documents filed as part thereof, and any amendments thereto at the time in effect;

 

(c) All capitalized terms used but not defined in this Agreement shall have the meanings ascribed to such terms in the Registration Statement and the Prospectus.

 

	
3.  

	
Duties of the Distributor

 

(a) The Distributor agrees to act as agent of the Funds and to work with the Funds’ transfer agent (the “Transfer Agent”) in connection with the receipt and processing of all orders for purchases and redemptions of common units of beneficial interest of each Fund (“Shares”) in aggregations of a predetermined number of Shares specified in the Fund’s Prospectus (“Baskets”) from DTC Participants that have executed a Participant Agreement (the “Authorized Participants”), as defined in paragraph 3(b) hereof, with the Funds and the Sponsor.  The Funds acknowledge that the Distributor will accept all orders for Baskets in proper form, subject to the terms and conditions of the applicable Participant Agreement and guidelines established by the Sponsor from time to time and provided that it has not been notified by the Sponsor not to accept any or all orders.  Nothing herein contained shall prevent the Distributor from entering into like distribution service arrangements with other exchange-traded funds.

 

(b) The Distributor agrees to use commercially reasonable efforts to act as agent of the Funds with respect to the continuous distribution of Baskets of the Funds as set forth in each Registration Statement and in accordance with the provisions thereof.  The Distributor further agrees as follows: (i) at the request of the Sponsor, the Distributor shall coordinate the process by which Authorized Participants, the Funds and the Sponsor enter into participant agreements (“Participant Agreements”) for transactions in Baskets of the Funds, in accordance with the Registration Statement and Prospectus; (ii) the Distributor shall generate, transmit and maintain copies of confirmations of Basket purchase and redemption order acceptances to the purchaser or redeemer (such confirmations will indicate the time such orders were accepted and will be made available to the Sponsor promptly upon request); (iii) the Distributor shall deliver copies of the Prospectus to Authorized Participants who have purchased Baskets in accordance with the Participant Agreements; and (iv) the Distributor shall maintain telephonic, facsimile and/or direct computer communications links with the Transfer Agent.

 

(c) The Sponsor, on behalf of the Funds, reserves the right to suspend the right of redemption, or postpone the redemption settlement date, (1) for any period during which the NYSE Arca or any exchange on which the futures contracts primarily invested in by a Fund are regularly traded is closed other than for customary weekend or holiday closings, or trading is suspended or restricted, (2) for any period during which an emergency exists as a result of which the delivery, disposal or evaluation of Treasury Securities is not reasonably practicable, or (3) for such other period as the Sponsor determines to be necessary for the protection of the Shareholders.

 

(d) The Distributor is not authorized by the Sponsor or the Trust to give any information or to make any representations other than those contained in the Registration Statement or Prospectus or contained in shareholder reports or other material that may be prepared by or on behalf of the Funds for the Distributor’s use.  The Distributor shall be entitled to rely on and shall not be responsible in any way for information provided to it by the Sponsor with respect to the Funds and their other service providers and shall not be liable or responsible for the errors and omissions of such service providers, provided that the foregoing shall not be construed to protect the Distributor against any liability to the Funds or the Funds’ shareholders to which the Distributor 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.

 

(e) The Distributor shall ensure that all requests by Authorized Participants for Prospectuses, product descriptions and periodic fund reports, as applicable, are fulfilled.  The Distributor will generally make it known in the brokerage community that Prospectuses and product descriptions are available, including by (i) advising the exchange on which the Shares are listed on behalf of its member firms of the same, (ii) making such disclosure in all marketing and advertising materials prepared and/or filed by the Distributor with FINRA, and (iii) as may otherwise be required by the SEC.  The Distributor shall not bear any costs associated with printing Prospectuses and all other such materials.

 

(f) The Distributor agrees to provide information to the Sponsor with regard to the ongoing distribution process and for such other purposes as may be requested by the Sponsor from time to time.

 

(g) The Distributor shall review and approve all sales and marketing materials for compliance with applicable securities laws and regulations, including applicable FINRA rules, and, when required or reasonably believed to be appropriate by the Distributor after consultation with the Sponsor, file such materials with FINRA.  For most sales material, the Distributor agrees to complete its review within three business days after receipt from the Sponsor, however, for pieces of greater complexity and length, the Sponsor may take up to five business days to complete its review.  Notwithstanding the foregoing, the Distributor shall not be responsible for the compliance of sales and marketing materials with the CEA or the Commodities Rules, and the Sponsor shall be responsible for ensuring that all sales and marketing materials have been reviewed for compliance with the CEA and the Commodities Rules and filed with the CFTC or NFA, if applicable.

 

(h) The Distributor shall provide training to employees of the Sponsor with respect to the marketing material review process for which the Distributor is responsible, the SEC and FINRA regulations, and the applicability of these regulations as they relate to sales and marketing materials.  Such training shall be provided on-site at any office of the Sponsor if requested by the Sponsor, provided that the Sponsor pay all reasonable travel expenses associated therewith.

 

(i)  The Distributor shall provide confirmations of purchase and redemption order acceptances to purchasers and redeemers of Baskets, and shall notify the Authorized Participant of the rejection of any order of that Authorized Participant.

 

(j)           The Distributor shall furnish to the Sponsor copies of such other information, materials or information that the Sponsor may reasonably request to enable it to perform its obligations under this Agreement or for use in connection with the distribution of Baskets.

	
4.  

	
Duties of the Funds.

 

(a) The Sponsor, on behalf of the Trust, agrees that it will take all reasonable action necessary to monitor the number Shares registered by each Fund under the 1933 Act that remain available for sale.  The Sponsor will make available to the Distributor such number of copies of the Funds’ then currently effective Prospectus as the Distributor may reasonably request.  The Sponsor shall furnish to the Distributor copies of such other information, materials or information that the Distributor may reasonably request to enable it to perform its obligations under this Agreement or for use in connection with the distribution of Baskets.

 

	
5.  

	
Fees and Expenses.

 

(a) The Distributor shall be entitled to receive compensation from the Trust related to its services hereunder or for additional services as may be agreed to between the Sponsor, on behalf of the Trust, and the Distributor, in accordance with the Fee Schedule attached hereto as Exhibit B;

 

(b) The Trust shall bear the cost and expenses of: (i) the registration of Shares for sale under the Securities Act; and (ii) the costs related to any filings required pursuant to the Commodities Rules, as applicable;

 

(c) The Distributor shall pay (i) all expenses relating to Distributor’s broker-dealer qualification and registration under the 1934 Act; and (ii) the expenses incurred by the Distributor in connection with routine FINRA filing fees;

 

(d) Notwithstanding anything in this Agreement to the contrary, the Distributor and its affiliates may receive compensation or reimbursement from the Trust with respect to any services not included under this Agreement, as may be agreed upon by the parties from time to time;

 

(e) Pursuant to FINRA Rule 2310, the payments to the Distributor under this Agreement and under any other agreement between the Distributor or any of its affiliates and the Funds or the Sponsor with respect to the Funds, will not, in the aggregate, exceed 10% of the aggregate dollar amount of the offering.  The Trust will advise the Distributor if the payments described hereunder must be limited, when combined with any selling commissions charged by other FINRA members and other payments that would constitute underwriting compensation under FINRA Rule 2310, in order to comply with the 10% limitation on underwriting compensation in such Rule; and

 

(f) The Sponsor shall provide to the Distributor on an on-going basis information reasonably necessary to enable Distributor to ensure compliance with FINRA Rule 2310, including the amount of the proceeds of the offering, any compensation paid to broker-dealers other than the Distributor and information on total organization and offering expenses.

 

	
6.  

	
Indemnification.

 

(a) The Trust agrees to indemnify and hold harmless the Distributor, its affiliates and each of their respective directors, officers and employees and agents and any person who controls the Distributor within the meaning of Section 15 of the 1933 Act (any of the Distributor, its officers, employees, agents and directors or such control persons, for purposes of this paragraph, a “Distributor Indemnitee”) against any loss, liability, claim, damages 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 out of or based upon (i) the Distributor providing services to the Funds in accordance with the standards in this Agreement; (ii) any claim that the Registration Statement, Prospectus, product description, shareholder reports, sales literature and advertisements specifically approved by the Funds and the Sponsor or other information filed or made public by the Funds (as from time to time amended), included an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein (and in the case of the Prospectus and product description, in light of the circumstances under which they were made) not misleading under the 1933 Act, or any other statute or the common law; (iii) the material breach by the Trust or any Fund of any obligation, representation or warranty contained in this Agreement; or (iv) the Trust’s or any Fund’s failure to comply in any material respect with applicable securities or commodities laws.

 

Notwithstanding the preceding paragraph, the Trust 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 Funds by or on behalf of the Distributor.  The Trust will also not indemnify any Distributor Indemnitee with respect to any untrue statement or omission made in the Registration Statement, Prospectus or product description that is subsequently corrected in such document (or an amendment thereof or supplement thereto) if a copy of the Prospectus (or such amendment or supplement) was not sent or given to the person asserting any such loss, liability, claim, damage or expense at or before the written confirmation to such person in any case where such delivery is required by the 1933 Act and the Trust had notified the Distributor of the amendment or supplement prior to the sending of the confirmation. In no case is the indemnity of the Trust in favor of any Distributor Indemnitee to be deemed to protect the Distributor Indemnitee against any liability to the Trust, the Funds or their respective shareholders to which the Distributor Indemnitee 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 under this Agreement.

 

Failure to notify the Trust of any claim shall not relieve the Trust from any liability that it may have to any Distributor Indemnitee against whom such action is brought unless failure or delay to so notify the trust prejudices the Trust’s ability to defend against such claim.  The Trust 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, but if the Trust elects to assume the defense, the defense shall be conducted by counsel chosen by the Trust and consented to by Distributor Indemnitee, defendant or defendants in the suit, which consent shall not be unreasonably withheld.  In the event the Trust elects to assume the defense of any suit and retain counsel, Distributor Indemnitee, defendant or defendants in the suit, shall bear the fees and expenses of any additional counsel retained by them.  If the Trust does not elect to assume the defense of any suit, it will reimburse the Distributor Indemnitee, defendant or defendants in the suit, for the reasonable fees and expenses of any counsel retained by them.  The Distributor agrees to notify the Sponsor and the Trust  promptly of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of any of the Creation Units or the Shares.

 

(b) The Distributor agrees to indemnify and hold harmless the Trust, the Sponsor and each of their managers and officers and any person who controls the Trust within the meaning of Section 15 of the 1933 Act (for purposes of this Section, the Funds, the Sponsor and each of their managers and officers and their controlling persons are collectively referred to as the “Trust Affiliates”) against any loss, liability, claim, damages 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 out of or based upon (i) the allegation of any wrongful act of the Distributor or any of its directors, officers, employees or affiliates in connection with its activities as Distributor pursuant to this Agreement; (ii) the material breach of any obligation, representation or warranty contained in this Agreement by the Distributor; (iii) the Distributor’s failure to comply in any material respect with applicable securities laws, including applicable FINRA regulations; or (iv) any allegation that the Registration Statement, Prospectus, product description, shareholder reports, any information or materials relating to the Funds (as described in section 3(g)) or other information filed or made public by the Trust (as from time to time amended) included an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements not misleading, insofar as such statement or omission was made in reliance upon, and in conformity with information furnished to the Trust by or on behalf of the Distributor.

 

In no case is the indemnity of the Distributor in favor of any Trust Affiliate to be deemed to protect any Trust Affiliate against any liability to the Funds or its security holders to which such Trust Affiliate 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.

 

Failure to notify the Distributor of any claim shall not relieve the Distributor from any liability that it may have to the Trust Affiliate against whom such action is brought on account of its indemnity agreement contained in this Section unless failure or delay to so notify the Distributor prejudices the Distributor’s ability to defend against such claim.  The Distributor 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, but if the Distributor elects to assume the defense, the defense shall be conducted by counsel chosen by it and consented to by the Trust Affiliate, defendant or defendants in the suit, which consent shall not be unreasonably withheld.  In the event that Distributor elects to assume the defense of any suit and retain counsel, the Funds or controlling person or persons, defendant or defendants in the suit, shall bear the fees and expenses of any additional counsel retained by them.  If the Distributor does not elect to assume the defense of any suit, it will reimburse the Funds, the Sponsor, their officers and managers or controlling person or persons, defendant or defendants in the suit, for the reasonable fees and expenses of any counsel retained by them.  The Trust and the Sponsor agrees to notify the Distributor promptly of the commencement of any litigation or proceedings against them or any of their officers in connection with the issuance or sale of any of the Baskets or the Shares.

 

(c) No indemnified party shall settle any claim against it for which it intends to seek indemnification from the indemnifying party, under the terms of section 6(a) or 6(b) above, without prior written notice to and consent from the indemnifying party, which consent shall not be unreasonably withheld.  No indemnified or indemnifying party shall settle any claim unless the settlement contains a full release of liability with respect to the other party in respect of such action.  This section 6 shall survive the termination of this Agreement.

 

	
7.  

	
Representations.

 

(a) The Distributor represents and warrants that (i) it is duly organized as a Delaware limited liability company and is and at all times will remain duly authorized and licensed under applicable law to carry out its services as contemplated herein; (ii) the execution, delivery and performance of this Agreement are within its power and have been duly authorized by all necessary action; (iii) its entering into this Agreement or providing the services contemplated hereby does not conflict with or constitute a default or require a consent under or breach of any provision of any agreement or document to which the Distributor is a party or by which it is bound; (iv) it is registered as a broker-dealer under the 1934 Act and is a member of FINRA, and (v) it is in material compliance with all laws, rules and regulations applicable to it, including but not limited to the rules and regulations promulgated by FINRA.

 

(b) The Distributor acknowledges that it is a financial institution subject to the USA Patriot Act of 2001 and the Bank Secrecy Act (collectively, the “AML Acts”), which require, among other things, that financial institutions adopt compliance programs to guard against money laundering.  The Distributor represents and warrants that it is in compliance with and will continue to comply with the AML Acts and applicable regulations in all relevant respects.  The Distributor agrees that it will take such further steps, and cooperate with the other as may be reasonably necessary, to facilitate compliance with the AML Acts, including but not limited to the provision of copies of its written procedures, policies and controls related thereto (“AML Operations”).  Notwithstanding the foregoing, it is expressly understood and agreed that neither the Sponsor nor any of its directors, officers, employees or agents, on its own behalf or on behalf of the Funds, shall have access to any of Distributor’s AML Operations, books or records pertaining solely to services of Distributor not performed for the Sponsor or the Funds or relating specifically to other clients of the Distributor.

 

(c) The Distributor and the Sponsor, on behalf of the Trust, each individually represent and warrant that it has in place and will maintain physical, electronic and procedural safeguards reasonably designed to protect the security, confidentiality and integrity of, and to prevent unauthorized access to or use of, records and information relating to consumers and customers of the Funds.  The Sponsor, on behalf of the Trust, further represents to the Distributor that it has adopted a statement of its privacy policies and practices as required by applicable Commodity Rules and agrees to provide to the Distributor a copy of that statement annually.

 

(d) The Sponsor, on its own behalf and on behalf of the Trust, represents and warrants that (i) the Trust is duly organized as a Delaware statutory trust and is and at all times will remain duly authorized to carry out its obligations as contemplated herein; (ii) the execution, delivery and performance of this Agreement are within the power of the Sponsor and the Trust and have been duly authorized by all necessary action; (iii) entering into this Agreement by the Sponsor and the Trust does not conflict with or constitute a default or require a consent under or breach of any provision of any agreement or document to which the Trust or the Sponsor is a party or by which either is bound; (iv) the Sponsor is duly registered with the NFA as a Commodity Pool Operator and the Sponsor will ensure compliance by the Trust with the CEA and all of the relevant Commodities Rules; (v) it possesses, licenses or has other rights to use all patents, patent applications, trademarks and service marks, trademark and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, know-how and other intellectual property (collectively, “Intellectual Property”) necessary for or used in the conduct of the Trust’s business and for the offer, issuance, distribution and sale of the Shares in accordance with the terms of the Prospectus and this Agreement, and such Intellectual Property does not and will not breach or infringe the terms of any Intellectual Property owned, held or licensed by any third party; (vi) the Registration Statement and the Prospectus have been prepared, and all sales literature and advertisements (“Sales Literature and Advertisements”) approved by the Sponsor with respect to the Funds or other materials prepared by or on behalf of the Funds shall be prepared, in all material respects, in conformity with the CEA, the Commodities Rules, the 1933 Act and the rules and regulations of the SEC (the “SEC Rules and Regulations”); (vii) the Registration Statement and the Prospectus contain, and all Sales Literature and Advertisements shall contain, all statements required to be stated therein in accordance with the CEA, the Commodities Rules, the 1933 Act, the SEC Rules and Regulations, and FINRA Rules and Regulations; and (viii) all statements of fact contained therein, or to be contained in all Sales Literature and Advertisements, are or will be true and correct in all material respects at the time indicated or the effective date, as the case may be, and none of the Registration Statement, any Fund’s Prospectus, nor any Sales Literature and Advertisements shall include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus in light of the circumstances in which made, not misleading.  Notwithstanding the above, the Sponsor makes no representation regarding information included in the Registration Statement or Prospectus in reliance upon and in conformity with information furnished to the Trust by or on behalf of the Distributor or regarding Sales Literature and Advertisements prepared by the Distributor.  The Trust shall, from time to time, file such amendment or amendments to the Registration Statement and the Prospectus as, in the light of future developments, shall, in the opinion of counsel to the Sponsor, be necessary in order to have the Registration Statement and the Prospectus at all times contain all material facts required to be stated therein or necessary to make the statements therein, in the case of the Prospectus in light of the circumstances in which made, not misleading. The Trust shall not file any amendment to the Registration Statement or the Prospectus without giving the Distributor reasonable notice thereof in advance and the Sponsor shall promptly notify the Distributor of any stop order suspending the effectiveness of the Registration Statement.  Notwithstanding the foregoing, the Trust shall not be deemed to make any representation or warranty as to any information or statement provided by the Distributor for inclusion in the Registration Statement or any Fund’s Prospectus.

 

	
8.  

	
Duration, Termination and Amendment.

 

(a) This Agreement shall be effective on the date set forth above, and unless terminated as provided herein, shall continue for two years from its effective date, and thereafter from year to year, provided such continuance is approved annually by the Sponsor.  This Agreement may be terminated at any time, without the payment of any penalty, as to each individual Fund by the Sponsor or by the Distributor, on at least sixty (60) days’ prior written notice.

 

(b) No provision of this Agreement may be changed, waived, discharged or terminated except by an instrument in writing signed by the party against which an enforcement of the change, waiver, discharge or termination is sought.

 

	
9.  

	
Notice.

 

Any notice or other communication authorized or required by this Agreement to be given to either party shall be in writing and deemed to have been given when delivered in person or by confirmed facsimile, or posted by certified mail, return receipt requested, to the following address (or such other address as a party may specify by written notice to the other):

 

If to the Distributor:

Foreside Fund Services, LLC

ATTN:  Legal/Compliance

Three Canal Plaza, Suite 100

Portland, ME  04101

Telephone:  (207) 553-7110

Facsimile:  (207) 553-7151

If to the Sponsor:

Teucrium Trading, LLC

ATTN:  Dale Riker

232 Hidden Lake Road

Building A

Brattleboro, VT 05301

Telephone:  (802) 257-1617

Facsimile:

If to the Trust:

Teucrium Commodity Trust

ATTN:  Dale Riker

232 Hidden Lake Road

Building A

Brattleboro, VT 05301

Telephone:  (802) 257-1617

Facsimile:

	
10.  

	
Choice of Law.

 

This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to the choice of laws provisions thereof.

 

	
11.  

	
Counterparts.

 

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

	
12.  

	
Severability.

 

If any provisions of this Agreement shall be held or made invalid, in whole or in part, then the other provisions of this Agreement shall remain in force.  Invalid provisions shall, in accordance with this Agreement’s intent and purpose, be amended, to the extent legally possible, in order to effectuate the intended results of such invalid provisions.

 

	
13.  

	
Confidentiality.

 

During the term of this Agreement, the Distributor and the Sponsor, on its own behalf and on behalf of the Trust, may have access to confidential information relating to such matters as either party’s business, trade secrets, systems, procedures, manuals, products, contracts, personnel, and clients.  As used in this Agreement, “Confidential Information” means information belonging to one of the parties that is of value to such party and the disclosure of which could result in a competitive or other disadvantage to such party.  Confidential Information may include, without limitation, financial information, proposal and presentations, reports, forecasts, inventions, improvements and other intellectual property; trade secrets; know-how; designs, processes or formulae; software; market or sales information or plans; customer lists; and business plans, prospects and opportunities (such as possible acquisitions or dispositions of businesses or facilities).  Confidential Information may include information developed by either party in the course of engaging in the activities provided for in this Agreement.  Confidential Information does not include: (i) information that is or becomes publicly known through lawful means; (ii) information that is disclosed to the other party without a confidential restriction by a third party who rightfully possesses the information and did not obtain it, either directly or indirectly, from one of the parties, as the case may be, or any of their respective principals, employees, affiliated persons, or affiliated entities.  The parties understand and agree that all Confidential Information shall be kept confidential by the other both during and after the term of this Agreement.  Each party shall maintain commercially reasonable information security policies and procedures for protecting Confidential Information.  The parties further agree that they will not, without the prior written approval by the other party, disclose such Confidential Information, or use such Confidential Information in any way, either during the term of this Agreement or at any time thereafter, except as required in the course of this Agreement and as provided by the other party or as required by law.  Upon termination of this Agreement for any reason, or as otherwise requested by the Sponsor, all Confidential Information of the Sponsor, the Trust or any Fund held by or on behalf of the Distributor shall be promptly returned to the Sponsor, or an authorized officer of the Distributor will certify to the Sponsor in writing that all such Confidential Information has been destroyed, provided that Distributor may retain Confidential Information to the extent required by regulatory record retention requirements applicable to it.  This section 13 shall survive the termination of this Agreement.  Notwithstanding the foregoing, a party may disclose the other’s Confidential Information if (i) required by law, regulation or legal process or if requested by the SEC, CFTC, NFA, FINRA or other governmental regulatory agency with jurisdiction over the parties hereto or (ii) requested to do so by the other party; provided that in the event of (i), the disclosing party shall give the other party reasonable prior notice of such disclosure to the extent reasonably practicable and shall reasonably cooperate with the other party (at such other party’s expense) in any efforts to prevent such disclosure.

 

	
14.  

	
Limitation of Liability.

 

This Agreement is executed by or on behalf of the Trust with respect to each Fund and the obligations hereunder are not binding upon any of the trustees, officers or shareholders of a Fund individually but are binding only upon each Fund to which such obligations pertain and the assets and property of such Fund.  Separate and distinct records are maintained for each Fund and the assets associated with any such Fund are held and accounted for separately from the other assets of any other Fund.  The debts, liabilities, obligations, and expenses incurred, contracted for, or otherwise existing with respect to a particular Fund shall be enforceable against the assets of that Fund only, and not against the assets of any other Fund, and none of the debts, liabilities, obligations, and expenses incurred, contracted for, or otherwise existing with respect to any other Fund shall be enforceable against the assets of that Fund.  The Trust’s Agreement and Declaration of Trust, as may be amended form time to time, is on file with the Sponsor.

 

	
15.  

	
Use of Names; Publicity.

 

The Funds shall not use the Distributor’s name, or any trade or service mark owned by or licensed to the Distributor, in any offering material, shareholder report, advertisement or other material relating to the Funds, other than for the purpose of merely identifying and describing the functions of the Distributor hereunder and under any Distribution Consulting and Marketing Services Agreement among the Sponsor, the Trust and the Distibutor, in a manner not approved by the Distributor in writing prior to such use, such approval not to be unreasonably withheld.  The Distributor hereby consents to all uses of its name required by the SEC, the CFTC, any state securities commission, or any federal or state regulatory authority.

 

The Distributor or its affiliates shall not use the name of the Trust or the Sponsor in any offering material, shareholder report, advertisement or other material relating to the Distributor, other than for the purpose of merely identifying the Funds hereunder, in a manner not approved by the Sponsor in writing prior to such use, provided that in no case shall such approval be unreasonably withheld.  The Sponsor and the Trust hereby consent to all uses of their names required by FINRA, the SEC, the CFTC or any state securities commission, or any federal or state regulatory authority.  The Sponsor and the Trust also hereby consent to the inclusion of the Sponsor’s and/or Trust’s names on the Distributor’s website noting such parties as clients of the Distributor.

 

None of the Sponsor, the Trust or the Distributor will disclose any of the economic terms of this Agreement, except as may be required by law.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below as of the date first set forth above.

	  	
TEUCRIUM TRADING, LLC, on behalf of the

	  	  	
Trust

	  	
By: /s/ Dale Riker                                                  

	  	  	
Name: Dale Riker

Title: Secretary/Treasurer

 

 

	  	
TEUCRIUM TRADING, LLC

	  	
By: /s/ Dale Riker                                                  

	  	  	
Name: Dale Riker

Title: Secretary/Treasurer

 

 

	  	
FORESIDE FUND SERVICES, LLC

	  	
By: /s/ Richard J. Berthy                                       

	  	  	
Name:Richard J. Berthy

Title:Vice President

 

  

  

  

EXHIBIT A

 

Teucrium Corn Fund

Teucrium WTI Crude Oil Fund

Teucrium Natural Gas Fund

 

 

 

 

 

  

  

  

EXHIBIT B

 

Fee Schedule*

 

Sponsor pays the Fixed Fee or the Asset-Based Fee (for the combined average net assets under management), whichever is greater.

	
Fixed FeeOne-time

	
Rate

	
Fixed Fee based on number of Funds

1)  One Operational Fund

2)  Two Operational Funds

3)  Three Operational Funds

	
$150,000 per annum, calculated and billed monthly ($12,500 per month)

$250,000 per annum, calculated and billed monthly ($20,833.33 per month)

$300,000 per annum, calculated and billed monthly ($25,000 per month)

	  	  
	
                                                                               OR

	  	  
	
Asset-Based Fee

	
Rate

	
 

All Assets under management for Funds listed in Exhibit A

	
 

10 basis points (0.10%) per annum on the total average net assets of the Funds listed in Exhibit A.  Such fee to be calculated and billed monthly.

 

Out-Of-Pocket and Related Expenses

The Adviser shall also reimburse Distributor for reasonable out-of-pocket and ancillary expenses incurred in the provision of services pursuant to this Agreement, including but not limited to the following: communications; postage and delivery services; record storage and retention; reproduction; reasonable travel expenses incurred in connection with the provision of the services pursuant to the Distribution Services Agreement; and any other expenses incurred in connection with the provision of the services pursuant to this Agreement.

*The fees set forth herein include compensation in full for the services provided by Distributor pursuant to this Agreement and the Distribution Consulting and Marketing Services Agreement entered into by and among Foreside, the Trust and the Sponsor and dated as of even date herewith.

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