FOCUSHARES TRUST
FIDELITY BOND SHARING AGREEMENT
THIS AGREEMENT made and entered into this 22nd day of
February, 2011 by and between FocusShares Trust ("Trust"),
an open-end management investment company, on behalf of each
of its series specified in Appendix A ("Funds") and FocusShares, LLC,
the investment advisor for the Trust ("Advisor").
WHEREAS, the Advisor acts as investment Advisor
to each of the Funds; and
WHEREAS, pursuant to the requirement of Rule 17g-1
of the Investment Company Act of 1940, as amended
(the "1940 Act"), the Trust, on behalf of each Fund, and the Advisor
have obtained fidelity bond coverage as named parties ("Insureds")
under a joint insured fidelity bond, as amended from time to time
to reflect any additions to Appendix A ("Bond"); and
WHEREAS, the Insureds, in order to be covered by a
single fidelity bond, are required by 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 Insureds;
NOW, THEREFORE, it is agreed as follows:
1. Amount of Coverage Maintained. 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 under
the 1940 Act 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.
2. Allocation of Recoveries. In the event an
actual pecuniary loss is suffered by any two or more of the Insureds
under circumstances covered by the terms of the Bond, any
recovery under the Bond shall be allocated among such Insureds
as follows:
(a) If the total amount of coverage
provided under the Bond exceeds or is equal to the amount of the
combined total amount of loss suffered by the 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 under the 1940 Act and the amount of such
Insureds' combined actual losses exceeds the total amount of coverage
provided under the Bond, 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 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 or Insureds 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
equirement, (ii) the amount of actual loss of another Insured or the
other Insureds exceeds its or their minimum coverage requirement
or requirements, and (iii) the amount of the combined actual losses
of the 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 other Insured has
suffered actual loss, it shall be entitled to recover the remainder of the
amount of the coverage under the Bond. If more than one other
Insured has suffered actual loss in excess of the remaining coverage,
then they shall allocate such remaining amount of coverage in
accordance with paragraph (b) of this Section 2.
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) of the 1940 Act, 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 Bond 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 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 Xxxxxx Xxxxxx, Xxxxx X00, Xxxxxxxx, 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, each of the parties has caused this Agreement
to be executed in its name and behalf by its authorized representative
effective as of the day and year first above written.
FocusShares Trust,
on behalf of each of its Funds
By: /s/ Xxxx Xxxx
____________________
Name: Xxxx Xxxx
Title: President
FocusShares, LLC
By: /s/ Xxxx Xxxx
____________________
Name: Xxxx Xxxx
Title: Chief Executive Officer
APPENDIX A
Focus Morningstar US Market Index ETF
Focus Morningstar Large Cap Index ETF
Focus Morningstar Mid Cap Index ETF
Focus Morningstar Small Cap Index ETF
Focus Morningstar Basic Materials Index ETF
Focus Morningstar Communication Services Index ETF
Focus Morningstar Consumer Cyclical Index ETF
Focus Morningstar Consumer Defensive Index ETF
Focus Morningstar Energy Index ETF
Focus Morningstar Financial Services Index ETF
Focus Morningstar Health Care Index ETF
Focus Morningstar Industrials Index ETF
Focus Morningstar Real Estate Index ETF
Focus Morningstar Technology Index ETF
Focus Morningstar Utilities Index ETF
As of February 22, 2011
