Document:

distagr.htm

Exhibit 10.1

 

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.dcmsa.htm

Exhibit 10.2

 DISTRIBUTION CONSULTING AND MARKETING SERVICES AGREEMENT

THIS AGREEMENT is made and entered into as of this 17th day of September, by and between Teucrium Trading, LLC, a Delaware limited liability company (the “Sponsor”), Teucrium Commodity Trust, a Delaware statutory trust, (the “Trust”) and Foreside Fund Services, LLC, a Delaware limited liability company (“Foreside”).

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 and

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 called “Shares”; and

WHEREAS, the Sponsor desires to retain Foreside to provide certain distribution consulting and marketing services in connection with the offering and sale of the Shares of the Funds listed on Exhibit A hereto (as amended from time to time); and

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

WHEREAS, Foreside is willing to provide certain distribution consulting and marketing services for the Sponsor on the terms and conditions hereinafter set forth; and

NOW THEREFORE, in consideration of the promises and mutual covenants herein contained, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:

1.           Services.

A.           Foreside, through its division Foreside Advisory Network, agrees to provide the distribution consulting and marketing services set forth in Exhibit B attached hereto (the “Services”).

B.           The Services furnished by Foreside hereunder are not to be deemed exclusive and Foreside shall be free to furnish similar services to others so long as its services under this Agreement are not impaired thereby (such impairment to be reasonably determined in the sole discretion of the Sponsor).

2.           Definitions.

 

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

 

A. “Preliminary Prospectus” means any prospectus dated prior to effectiveness of a Registration Statement relating to the Shares of any Fund that is provided to prospective Fund investors.

 

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

 

C. “Registration Statement” means the registration statement on Form S-1 or Form S-3 as most recently filed from time to time by the Trust on behalf of each Fund with the SEC, including all documents filed as a part thereof, and any amendments thereto;

 

D. All capitalized terms used but not defined in this Agreement shall have the meanings ascribed to such terms in the Preliminary Prospectus or Prospectus, as applicable.

 

3.              Delivery of Documents.  The Sponsor shall deliver to Foreside copies of the following documents contemporaneously with the effective date of this Agreement and at any time throughout the duration of this Agreement, where applicable:

	
Ø  

	
the then current Preliminary Prospectus or Prospectus for each Fund, as applicable;

	
Ø  

	
any relevant policies and procedures adopted by the Sponsor or the Fund or its service providers that are applicable to the services provided by Foreside;

	
Ø  

	
any filings with and correspondence from the SEC, FINRA, the CFTC and the NFA with respect to the Funds; and

	
Ø  

	
any other documents, materials or information that Foreside shall reasonably request to enable it to perform its duties pursuant to this Agreement.

Foreside shall deliver to the Sponsor copies of the following documents contemporaneously with this Agreement and at any time throughout the duration of this Agreement, where applicable:

	
Ø  

	
Foreside’s current Compliance Program Summaries;

	
Ø  

	
Foreside’s current Insider Trading and Related Procedures;

	
Ø  

	
Foreside’s current Privacy Policy and Practices;

	
Ø  

	
any correspondence from any state or federal regulator which would impact the Services provided to the Sponsor by Foreside; and

	
Ø  

	
any other documents, materials or information that the Sponsor shall reasonably request to enable it to perform its obligations pursuant to this Agreement.

Each party shall deliver to the other as soon as is reasonably practical any and all amendments and/or supplements to the documents required to be delivered under this Section.

4.           Representations, Warranties and Covenants of the Sponsor.

A.           The Sponsor hereby represents and warrants to Foreside, which representations and warranties shall be deemed to be continuing throughout the term of this Agreement, that:

	
  

	
(i)

	
it is duly organized and in good standing under the laws of its jurisdiction of incorporation/organization;

	
  

	
(ii)

	
this Agreement has been duly authorized, executed and delivered by the Sponsor and, when executed and delivered, will constitute a valid and legally binding obligation of the Sponsor, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties;

	
  

	
(iii)

	
it is conducting its business (including, without limitation, in connection with all matters relating to this Agreement) in compliance in all material respects with all applicable laws and regulations including, without limitation, state, federal, and any other jurisdictions concerned, as well as the rules and regulations of the NFA and any other self regulatory agencies, and has obtained all regulatory approvals necessary to carry on its business as conducted;

	
  

	
(iv)

	
each Registration Statement complies or will comply, in all material respects, with the requirements of the 1933 Act and the Prospectus and any Preliminary Prospectus complies or will comply, in all material respects with the requirements of the 1933 Act, the CEA and the NFA and any statutes and regulations; contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement have been and will be so described or filed; the conditions to the use of Form S-1 or Form S-3, as the case may be, have been satisfied; each Registration Statement does not, and will not when it becomes effective, contain an 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 not misleading and each Prospectus does not, or will not as of its date, contain an 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 light of the circumstances under which they were made, not misleading; provided, however, that the Sponsor makes no warranty or representation with respect to any statement contained in any Preliminary Prospectus, each Registration Statement or any Prospectus in reliance upon and in conformity with information concerning Foreside and furnished in writing by or on behalf of Foreside to the Sponsor expressly for use in a Registration Statement or a Preliminary Prospectus or Prospectus; and the Sponsor has not distributed nor will distribute, prior to the effective date of a Registration Statement or any subsequent registration statement for the registration of additional Shares, any offering material other than any Preliminary Prospectus unless such offering material and its distribution complies with Rule 433 under the 1933 Act or any other applicable rules;

 

	
  

	
(v)

	
the Sponsor is duly registered with the NFA as a Commodity Pool Operator and will adopt compliance procedures reasonably designed to ensure compliance by each Fund and each associated person of the Sponsor with the CEA and all of the relevant Commodities Rules;

	
  

	
(vi)

	
all sales literature, marketing material 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 and approved by the Sponsor, in all material respects, in conformity, as applicable, with the CEA, the Commodities Rules, the 1933 Act and the rules and regulations of the SEC; all advertising materials and sales literature that have been or will be furnished to Foreside by the Sponsor for use in Foreside’s performance of the Services are and will be current and accurate and shall not contain any untrue statement of material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and all statements or information furnished to Foreside pursuant to this Agreement shall be true and correct in all material respects, and will, if required, have been approved by a Fund’s distributor, if other than, Foreside, prior to use.  If Foreside prepares any Sales Literature and Advertisements in connection with its performance of the Services, it shall deliver such Sales Literature and Advertisements to the Sponsor and the applicable Fund’s distributor, if other than Foreside, for their written approval before it is used.  The Sponsor will make every reasonable effort to approve or disapprove such material within a reasonable period of time.  For a Fund for which Foreside does not serve as Distributor, Foreside shall complete its review of the material within three days of receipt of approval of the material by the Fund’s Distributor.  For Funds for which Foreside serves as Distributor, Foreside shall abide by the time frames set forth in the Distribution Agreement(s) between Foreside and such Funds.

	
  

	
(vii)

	
no approval, authorization, consent or order of or filing with any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency is required to be obtained by the Sponsor, the Trust or any Fund in connection with the issuance and sale of the Shares other than registration of the Shares under the 1933 Act, the registration of the Sponsor as a Commodity Pool Operator with the NFA under the CEA, the filing of the Prospectus with the NFA and any necessary qualification under the securities or blue sky laws of the various jurisdictions in which the Shares are being offered or any requirements for listing under the rules and regulations of the NYSE Arca, Inc. (“NYSE Arca”);

	
  

	
(viii)

	
except as set forth in the Registration Statement and the Prospectus, there are no actions, suits, claims, investigations or proceedings pending or threatened or, to the Sponsor’s knowledge after due inquiry, contemplated to which the Sponsor or the Trust is or would be a party;

	
  

	
(ix)

	
Rothstein, Kass & Company, P.C., whose report on the audited financial statements of the Funds is filed with the SEC as part of the Registration Statement and the Prospectus, are independent public accountants as required by the 1933 Act;

	
  

	
(x)

	
the audited financial statements of each Fund included in the applicable Prospectus, together with the related notes and schedules, present fairly the financial position of each Fund as of the date indicated and have been prepared in compliance with the requirements of the 1933 Act and in conformity with U.S. generally accepted accounting principles; there are no financial statements (historical or pro forma) that are required to be included in the Registration Statement or the Prospectus that are not included as required; and each Fund does not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), that are required to be disclosed in each Registration Statement and each Prospectus;

	
  

	
(xi)

	
each Fund has policies, procedures and internal controls in place designed to prevent and detect money laundering and any activity that facilitates money laundering, the funding of terrorist activities, or violations of U.S. Department of the Treasury’s Office of Foreign Assets Control regulations.  The Sponsor, on behalf of each Fund, agrees that it will take such further steps, and cooperate with Foreside as may be reasonably necessary, to facilitate compliance with the any applicable provisions of the USA Patriot Act of 2001 and the Bank Secrecy Act (collectively, the “AML Acts”), including but not limited to the provision of copies of its written procedures, policies and controls related thereto.

B.           The Sponsor hereby covenants and agrees:

	
  

	
(i)

	
to fully cooperate in the efforts of Foreside in the performance of the Services;

	
  

	
(ii)

	
to make available to Foreside, as soon as practicable after each Registration Statement is filed with the SEC, and thereafter from time to time, furnish to Foreside, as many copies of each Prospectus for each Fund (or of the Prospectus as amended or supplemented if any amendments or supplements have been made thereto) as Foreside may request for the purposes contemplated by the 1933 Act;

	
  

	
(iii)

	
to advise Foreside promptly when each Registration Statement and any post-effective amendment thereto becomes effective;

	
  

	
(iv)

	
to prepare such amendments or supplements to each Registration Statement or Prospectus and to file such amendments or supplements with the SEC, when and as required, by the 1933 Act, the Exchange Act, and the rules and regulations thereunder; and to advise Foreside promptly of notice of institution of proceedings for, or the entry of a stop order suspending the effectiveness of a Registration Statement and, if the SEC should enter a stop order suspending the effectiveness of a Registration Statement, to use its best efforts to obtain the lifting or removal of such order as soon as possible;

	
  

	
(v)

	
to file promptly all reports and any information statements required to be filed by any Fund with the SEC or the CFTC or NFA in order to comply with the Exchange Act and the CEA subsequent to the date of any Prospectus and for the term of this Agreement;

	
  

	
(vi)

	
to ensure that the Funds’ distributor, if other than Foreside, (a) provides a copy to Foreside of each FINRA letter received with respect to Sales Literature and Advertisements and (2) makes any required changes to any Sales Literature and Advertisements and provides such updated materials promptly to Foreside; and

	
  

	
(vii)

	
to advise Foreside promptly of the happening of any event during the term of this Agreement which could require the making of any change in the Prospectus or Sales Literature and Advertisements then being used so that such materials would not include an untrue statement of material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading, and, during such time, to prepare and furnish, at the expense of the Fund, to Foreside promptly such amendments or supplements to such materials as may be necessary to reflect any such change.

5.           Representations, Warranties and Covenants of Foreside.

Foreside hereby represents and warrants to the Sponsor, which representations and warranties shall be deemed to be continuing throughout the term of this Agreement, that:

 

	
  

	
(i)

	
it is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as conducted, to enter into this Agreement and to perform its obligations hereunder;

	
  

	
(ii)

	
this Agreement has been duly authorized, executed and delivered by Foreside and, when executed and delivered, will constitute a valid and legally binding obligation of Foreside, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties;

	
  

	
(iii)

	
it is conducting its business (including, without limitation in connection with all matters relating to this Agreement) in compliance in all material respects with all applicable laws and regulations, including, without limitation, state, federal, and any other jurisdictions concerned, as well as the Constitution, By-Laws and Conduct Rules of FINRA (including the Conduct Rules of FINRA, as applicable), and has obtained all regulatory approvals necessary to carry on its business as conducted;

	
  

	
(iv)

	
it is registered with the SEC as a broker-dealer under the 1934 Act and is a member in good standing of FINRA;

	
  

	
(v)

	
it shall commit sufficient resources to provide the Services under this Agreement in a commercially reasonable manner; and

 

	
  

	
(vi)

	
there are no actions, suits, claims, investigations or proceedings pending or threatened or, to Foreside’s knowledge after due inquiry, contemplated, to which Foreside is or would be a party, thereby requiring the Sponsor to disclose such information in a Registration Statement, Preliminary Prospectus or Prospectus.

6.           Compensation.  As compensation for the performance of the Services pursuant to this Agreement, Foreside shall be entitled to the fees and expenses (the “Fee”) set forth in Exhibit B of the Distribution Services Agreement (the “DSA”) by and among Foreside, the Trust and the Sponsor and dated as of the 17th of September, 2010 with and attached hereto as Exhibit C.

7.           Indemnification.

A.           The Sponsor shall indemnify, defend and hold Foreside, its affiliates and each of their respective members, managers, directors, officers, employees, representatives and any person who controls or previously controlled Foreside within the meaning of Section 15 of the 1933 Act (collectively, the “Foreside Indemnitees”), free and harmless from and against any and all losses, claims, demands, liabilities, damages and expenses (including the costs of investigating or defending any alleged losses, claims, demands, liabilities, damages or expenses and any reasonable counsel fees incurred in connection therewith) (collectively, “Losses”) that any Foreside Indemnitee may incur under the 1933 Act, the 1934 Act, the 1940 Act or any other statute (including Blue Sky laws) or any rule or regulation thereunder, or under common law or otherwise, arising out of or relating to (i) Foreside’s performance of the Services hereunder; (ii) the Sponsor’s breach of any of its obligations, representations, warranties or covenants contained in this Agreement; (iii) the Sponsor’s failure to comply with any applicable securities and commodities laws or regulations; or (iv) any claim that the Prospectus or the Registration Statement, sales literature and advertising materials or other information filed or made public by the Sponsor (as from time to time amended) include or 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 not misleading under the 1933 Act, the CEA or any other statute or the common law any violation of any rule of FINRA or of the SEC or any other jurisdiction wherein Shares are sold, provided, however, that the Sponsor’s obligation to indemnify any of the Foreside Indemnitees shall not be deemed to cover any Losses arising out of any untrue statement or alleged untrue statement or omission or alleged omission made in the Prospectus, Registration Statement or any such advertising materials or sales literature in reliance upon and in conformity with information relating to Foreside and furnished to the Sponsor or its counsel by Foreside in writing and acknowledging the purpose of its use  In no event shall anything contained herein be so construed as to protect Foreside against any liability to the Sponsor to which Foreside would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of its duties under this Agreement or by reason of its reckless disregard of its obligations under this Agreement.

The Sponsor’s agreement to indemnify the Foreside Indemnitees with respect to any action is expressly conditioned upon the Sponsor being notified of such action or claim of loss brought against any Foreside Indemnitee, within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Foreside Indemnitee, unless the failure to give notice does not prejudice the Sponsor.

B.           The Sponsor 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 such Losses, but if the Sponsor elects to assume the defense, such defense shall be conducted by counsel chosen by the Sponsor and approved by Foreside, which approval shall not be unreasonably withheld.  In the event the Sponsor elects to assume the defense of any such suit and retain such counsel, the Foreside Indemnitee(s) in such suit shall bear the fees and expenses of any additional counsel retained by them.  If the Sponsor does not elect to assume the defense of any such suit, or in case Foreside does not, in the exercise of reasonable judgment, approve of counsel chosen by the Sponsor or, if under prevailing law or legal codes of ethics, the same counsel cannot effectively represent the interests of both the Sponsor and the Foreside Indemnitee(s), the Sponsor will reimburse the Foreside Indemnitee(s) in such suit, for the fees and expenses of any counsel retained by Foreside and them.

C.           The Sponsor shall advance attorney’s fees and other expenses incurred by a Foreside Indemnitee in defending any claim, demand, action or suit which is the subject of a claim for indemnification pursuant to this Section 7 to the maximum extent permissible under applicable law.

D.           Foreside shall indemnify, defend and hold the Sponsor, the Trust or its affiliates, and each of their respective directors, officers, employees, representatives, and any person who controls or previously controlled the Sponsor within the meaning of Section 15 of the 1933 Act (collectively, the “Sponsor Indemnitees”), free and harmless from and against any and all Losses that any Sponsor Indemnitee may incur under the 1933 Act, the 1934 Act, the 1940 Act, any other statute (including Blue Sky laws) or any rule or regulation thereunder, or under common law or otherwise, arising out of or based upon (i) Foreside’s breach of any of its obligations, representations, warranties or covenants contained in this Agreement; (ii) Foreside’s failure to comply with any applicable securities laws or regulations; or (iii) any claim that the Prospectus, Registration Statement, sales literature and advertising materials or other information filed or made public by the Sponsor (as from time to time amended) include or 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 Sponsor by Foreside in writing.  In no event shall anything contained herein be so construed as to protect the Sponsor against any liability to Foreside to which the Sponsor would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of its duties under this Agreement or by reason of its reckless disregard of its obligations under this Agreement.

Foreside’s agreement to indemnify the Sponsor Indemnitees is expressly conditioned upon Foreside being notified of any action or claim of loss brought against a Sponsor Indemnitee, such notification to be given by letter or telegram addressed to Foreside’s Legal Department, within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon the Sponsor Indemnitee, unless the failure to give notice does not prejudice Foreside.

E.           Foreside 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 such Losses, but if Foreside elects to assume the defense, such defense shall be conducted by counsel chosen by Foreside and approved by the Sponsor Indemnitee, which approval shall not be unreasonably withheld.  In the event Foreside elects to assume the defense of any such suit and retain such counsel, the Sponsor Indemnitee(s) in such suit shall bear the fees and expenses of any additional counsel retained by them.  If Foreside does not elect to assume the defense of any such suit, or in case the Sponsor does not, in the exercise of reasonable judgment, approve of counsel chosen by Foreside or, if under prevailing law or legal codes of ethics, the same counsel cannot effectively represent the interests of both Foreside and the Sponsor Indemnitee(s), Foreside will reimburse the Sponsor Indemnitee(s) in such suit, for the fees and expenses of any counsel retained by the Sponsor and them.

8.           Limitations on Damages.  Neither Party shall be liable for any consequential, special or indirect losses or damages suffered by the other Party, whether or not the likelihood of such losses or damages was known by the Party.

9.           Force Majeure.  Neither Party shall be liable for losses, delays, failure, errors, interruption or loss of data occurring directly or indirectly by reason of circumstances beyond its reasonable control, including, without limitation, Acts of Nature (including fire, flood, earthquake, storm, hurricane or other natural disaster); action or inaction of civil or military authority; acts of foreign enemies; war; terrorism; riot; insurrection; sabotage; epidemics; labor disputes; civil commotion; or interruption, loss or malfunction of utilities, transportation, computer or communications capabilities, and the other Party shall have no right to terminate this Agreement in such circumstances except in accordance with Section 10 hereof.

10.           Duration and Termination.

A.           This Agreement shall become effective as of the date first set forth above.  Unless sooner terminated as provided herein, this Agreement shall continue in effect for two years from the date hereof.  Thereafter, if not terminated, this Agreement shall continue automatically in effect for successive one-year periods.

B.           Notwithstanding the foregoing, this Agreement may be terminated, without the payment of any penalty, upon no less than 60 days’ written notice, by either the Sponsor or by Foreside.

11.           Privacy.  In accordance with Regulation S-P, Foreside will not disclose any non-public personal information, as defined in Regulation S-P, received from the Sponsor or any Fund regarding any Fund shareholder; provided, however, that Foreside may disclose such information to any party as necessary in the ordinary course of business to carry out the purposes for which such information was disclosed to Foreside.  Foreside shall have in place and 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 each of the Funds.

The Sponsor represents to Foreside that it has adopted a Statement of its privacy policies and practices as required by applicable CFTC rules and agrees to provide to Foreside a copy of that statement annually.  Foreside agrees to use reasonable precautions to protect, and prevent the unintentional disclosure of, such non-public personal information.

12.           Confidentiality.  During the term of this Agreement, Foreside and the Sponsor may have access to confidential information relating to such matters as either party’s business, trade secrets, systems, procedures, manuals, products, contracts, personnel, and Sponsors.  As used in this Agreement, “Confidential Information” means information belonging to Foreside or the Sponsor which is of value to such party and the disclosure of which could result in a competitive or other disadvantage to either party, including, without limitation, financial information, business practices and policies, know-how, trade secrets, market or sales information or plans, customer lists, business plans, and all provisions of this Agreement.  Confidential Information does not include: (i) information that was known to the receiving Party before receipt thereof from or on behalf of the Disclosing Party; (ii) information that is disclosed to the Receiving Party by a third person who has a right to make such disclosure without any obligation of confidentiality to the Party seeking to enforce its rights under this Section; (iii) information that is or becomes generally known in the trade without violation of this Agreement by the Receiving Party; or (iv) information that is independently developed by the Receiving Party or its employees or affiliates without reference to the Disclosing Party’s information.

Each party will protect the other’s Confidential Information with at least the same degree of care it uses with respect to its own Confidential Information, and will not use the other party’s Confidential Information other than in connection with its obligations hereunder.  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 any Agency; (ii) it is advised by counsel that it may incur liability for failure to make such disclosure; (iii) requested to by the other party; provided that in the event of (i) or (ii) the disclosing party shall give the other party reasonable prior notice of such disclosure to the extent reasonably practicable and cooperate with the other party (at such other party’s expense) in any efforts to prevent such disclosure.

 

13.           Notices.  Any notice required or permitted to be given by any party to the others shall be in writing and shall be deemed to have been given on the date delivered personally or by courier service or 3 days after sent by registered or certified mail, postage prepaid, return receipt requested or on the date sent and confirmed received by facsimile transmission to the other party’s address as set forth below:

Notices to Foreside shall be sent to:

Foreside Fund Services, LLC

Attn: Legal/Compliance

Three Canal Plaza, Suite 100

Portland, ME 04101

(207) 553-7110

Fax: (207) 553-7151

Notices to the Sponsor shall be sent to:

Teucrium Trading, LLC

Attn:  Dale Riker

232 Hidden Lake Road, Building A

Brattleboro, Vermont 05301

Fax: 802-251-0847

14.           Modifications.  The terms of this Agreement shall not be waived, altered, modified, amended or supplemented in any manner whatsoever except by a written instrument signed by Foreside and the Sponsor.

15.           Governing Law.  This Agreement shall be construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law principles thereof.

16.           Assignment.  This Agreement may not be assigned by either Party without the prior written consent of the other Party.  This Agreement shall be binding upon and inure to the benefit of the Parties’ representatives, successors, heirs, and permitted assigns, as applicable.  A change in control shall not be construed to be an assignment.

17.           Entire Agreement.  This Agreement constitutes the entire agreement between the Parties hereto and supersedes all prior communications, understandings and agreements relating to the subject matter hereof, whether oral or written.

18.           Survival.  The provisions of Sections 7, 8, 11, and 12 of this Agreement shall survive any termination of this Agreement.

19.           Miscellaneous.  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.  Any provision of this Agreement which may be determined by competent authority to be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors.

20.           Counterparts.  This Agreement may be executed by the Parties hereto in any number of counterparts, and all of the counterparts taken together shall be deemed to constitute one and the same document.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by a duly authorized officer on one or more counterparts as of the date first above written.

	  	
FORESIDE FUND SERVICES, LLC

 

	  	
By: /s/ Richard J. Berthy                                       

 

                                      

	  	
TEUCRIUM TRADING, LLC

 

	  	
By: /s/ Dale Riker                                                   

 

                                              

	  	
TEUCRIUM COMMODITY TRUST

 

	  	
By: /s/ Dale Riker                                                  

 

 

  

  

  

EXHIBIT A

Funds

Teucrium Corn Fund

Teucrium WTI Crude Oil Fund

Teucrium Natural Gas Fund

 

9946837.1

  

  

  

Exhibit B

Services

	
Ø  

	
Marketing the Funds to financial intermediaries utilizing written, electronic, or telephonic communication with a view to providing information regarding, and increasing the financial intermediaries’ awareness of the Funds.

	
Ø  

	
Targeting professional buyers to include:

	
o  

	
Top holders of direct competitor Funds

	
o  

	
Registered investment advisers

	
o  

	
Registered representatives of broker-dealers, and

	
o  

	
Wealth management firms.

	
Ø  

	
Deploy sales team resources as needed to target market(s).

	
Ø  

	
Assist with the market positioning of your Funds.

	
Ø  

	
Attendance at relevant industry conferences, as appropriate.

	
Ø  

	
Scalable distribution solutions to match your stage of growth.

	
Ø  

	
Assist with building brand awareness and credibility.

 

	
Ø  

	
For a Fund for which Foreside does not serve as Distributor, Foreside shall complete its review of the sales and advertising material within three days of receipt of approval of the material by the Fund’s Distributor.  For Funds for which Foreside serves as Distributor, Foreside shall abide by the time frames set forth in the Distribution Agreement(s) between Foreside and such Funds.

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