PRECIDIAN ETFs TRUST
JOINT INSURANCE AGREEMENT
THIS AGREEMENT made and entered into this 29th day of June, 2011 by and between
Precidian ETFs Trust (the "Trust"), a Delaware statutory trust, on behalf of its
series specified in Appendix A (the "Fund" or "Funds"), and Precidian Funds LLC,
the investment adviser for the Trust (the "Advisor") (each an "Insured" and
together the "Joint Insureds").
WHEREAS, the Trust is an investment company to be registered under the
Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Advisor acts as investment adviser to the Trust and may,
from time to time hereafter, act in the same capacity with respect to
other clients, including other investment companies.
WHEREAS, pursuant to the requirement of Rule 17d-1(d)(7) of the 1940 Act
("Rule 17d-1(d)(7)"), the participation of the Trust in the joint liability
policy is in the best interest of the Trust; and the proposed premium for
the joint liability insurance to be allocated to the Trust, based upon the
Trust's proportionate share of the sum of the premiums that would have been
paid if said insurance was purchased separately by each of the insured parties,
is fair and reasonable to the Trust;
WHEREAS, the Joint Insureds, in order to be covered by a single fidelity bond
(the "Bond"), are required by Rule 17g-1 of the 1940 Act ("Rule 17g-1") to be
parties to an agreement that establishes the criteria by which premiums and
recoveries under the Bond shall be allocated among the Joint Insureds;
WHEREAS, the Trust and the Advisor are Joint Insureds under a directors and
officers, error and omissions liability policy (as it may be amended or
restated from time to time, the "D&O/E&O Policy" and, together with the Bond,
is referred to as the "Insurance") issued by Xxxxxx of Maryland, Inc.
or such other insurers as from time to time may provide the Insurance;
WHEREAS, the Joint Insureds desire to establish the criteria by which the
premium for, and coverage under, the D&O/E&O Policy shall be allocated; and
WHEREAS, the Board of Trustees of the Trust, with respect to the Fund that
comprises the initial series of the Trust, has determined that the Fund's
participation in the D&O/E&O Policy and this Agreement is in the best interest
the Fund, and that the allocation of premiums set forth in Section 1 of this
Agreement is fair and reasonable.
NOW, THEREFORE, it is agreed as follows:
1. Amount of Coverage Maintained.
(a) The amount of fidelity coverage under the Bond shall at all
times be at least equal in the amount to the sum of (i) the total amount
of coverage which the Trust, on behalf of each Fund, would have been
required to provide and maintain individually pursuant to the
schedule set forth in paragraph (d) of Rule 17g-1 had the Trust
not been a named insured under the Bond, plus (ii) the amount
of each bond which the Advisor would have been required to
provide and maintain pursuant to federal statutes or regulations
had it not been a named insured under the Bond. The amount
of fidelity coverage under the Bond shall be approved at least
annually by the Board of Trustees of the Trust, including a
majority of those Trustees who are not "interested persons"
of the Trust as defined by Section 2(a)(19) of the 1940
Act ("Section 2(a)(19)").
(b) The annual premium for the D&O/E&O
Policy shall be allocated among the Joint Insureds in
accordance with Rule 17d-1(d)(7). The portion of
the premium allocated to the Trust to be borne
by the Fund in each policy year shall be
determined at least annually by calculating
the proportion of net assets of the
Fund on an appropriate date as determined
by the Fund's Treasurer and applying said
proportion to the balance of the respective
premium, unless the parties determine
that it would be more equitable for the
Fund to pay a different amount.
2. Allocation of Recoveries. In the event an
actual pecuniary loss is suffered by
the Joint Insureds under circumstances
covered by the terms of the Insurance, any
recovery under the Insurance shall be
allocated among the Joint Insureds as follows:
(a) If the total amount of
coverage provided under the Insurance exceeds
or is equal to the amount of the combined
total amount of loss suffered by the Joint
Insureds suffering loss, then each such Insured
shall be entitled to recover the
amount of its actual loss.
(b) If the amount of loss
suffered by each Insured suffering loss
exceeds its minimum coverage requirement
under Rule 17g-1 and the amount of such
Joint Insureds' combined actual losses
exceeds the total amount of coverage
provided under the Insurance, then
each such Insured shall be entitled to recover
(i) its minimum coverage requirement
and (ii) to the extent there exists any excess
coverage, the proportion of such excess
coverage which its minimum coverage
requirements bears to the amount of
the combined minimum coverage
requirements of the Joint Insureds
suffering actual loss: provided, however,
that if the actual loss of any such Insureds
is less than the sum of (i) and (ii) above,
then such difference shall be recoverable
by the other Insured in proportion to their
relative minimum coverage requirements.
(c) If (i) the amount
of actual loss suffered by any Insured is less
than or equal to its minimum coverage
requirement, (ii) the amount of actual loss
of the other Insured exceeds its minimum
coverage requirement or requirements, and
(iii) the amount of the combined actual
losses of the Joint Insureds exceeds the
total amount of coverage provided
under the Bond, then any Insured which has
suffered an amount of actual loss less
than or equal to its minimum coverage
requirement shall be entitled to recover
its actual loss. If only one Insured has
suffered actual loss, it shall be entitled
to recover the remainder of the amount
of the coverage under the Insurance.
3. Allocation of Premiums. No premium
shall be paid under the Bond unless the
Board of Trustees of the Trust, including
a majority of those Trustees who are
not "interested persons" of the Trust
as defined by Section 2(a)(19), shall
approve the portion of the premium
to be paid by the Trust, on behalf of each Fund.
The premium payable on the Bond
shall be allocated between the Trust and
the Advisor as determined by the Board of
Trustees of the Trust.
4. Amendment. Each party hereby consents
to additional Funds and investment
companies advised or managed by the
Advisor being named as a Joint Insured under
the Insurance and this Agreement.
Appendix A shall be amended when
necessary to reflect the addition of new
Funds and investment companies. Otherwise this
Agreement may not be amended or
modified in any manner except by
a written agreement executed by the parties.
5. Filing with the Commission. A copy of
this Agreement and any amendment thereto
shall be filed with the Securities and
Exchange Commission (the "SEC") within
10 days after the execution thereof.
6. Applicable Law. This Agreement shall
be construed and the provisions thereof
interpreted under and in accordance
with the laws of the State of Delaware.
7. Notices. All Notices and other
communications hereunder shall be in writing
and shall be addressed to the
appropriate party at 000 Xxxx Xxxxxx, Xxxxx 0,
Xxxxxxxxxx, XX 00000.
8. Limitations of Liability of Trustees
and Shareholders. A copy of the
Declaration of Trust of the Trust,
and any amendments thereto, are on file
with the Secretary of State of Delaware,
and it is hereby agreed that this
Agreement is executed on behalf
of the Trustees of the Trust as Trustees
and not individually and that the
obligations of this Agreement are not
binding upon any of the Trustees,
officers or shareholders of the Trust
individually but are binding only
upon the assets and property of the Trust.
IN WITNESS WHEREOF____________, on
behalf of the Trust and the Advisor, has
caused this Agreement to be executed as
of the day and year first written.
PRECIDIAN ETFs Trust,
on behalf its Fund
By: /S/ Xxxx Xxxxxxxxxxx
------------------------
Name: Xxxx Xxxxxxxxxxx
Title: Principal Financial Officer
PRECIDIAN FUNDS LLC
By: /S/ Xxxx Xxxxxxxxxxx
------------------------
Name: Xxxx Xxxxxxxxxxx
Title: Chairman
APPENDIX A
MAXISSM Nikkei 225 Index Fund
As of June 29, 2011
