EXHIBIT (h)(3)
This
Authorized Participant Agreement (the “Agreement”) is entered into by and
between ALPS Distributors, Inc. (the “Distributor”) and ___________________ (the
“Participant”) and is subject to acceptance by The Bank of New York, as transfer
agent and custodian (the “Transfer Agent”) for the Bear Xxxxxxx Active ETF Trust
(the “Trust”). Capitalized terms not otherwise defined herein are defined in
Section 14 of this Agreement or in the Prospectus.
WHEREAS,
the Distributor serves as the principal underwriter of the Trust in connection with the
sale and distribution of shares of beneficial interest (“Shares”) of each series
of the Trust (each, a “Fund”); and
WHEREAS,
the Transfer Agent serves as the transfer agent and custodian for the Funds; and
WHEREAS, the
Shares of any Fund may be purchased or redeemed from the Trust only by or through a DTC
Participant who has entered into an Authorized Participant Agreement; and
WHEREAS,
the Distributor, the Transfer Agent and the Participant acknowledge and agree that the
Trust and each Fund shall be a third party beneficiary of this Agreement and shall receive
the benefits contemplated by this Agreement to the extent specified herein.
NOW
THEREFORE, the parties hereto, in consideration of the premises and of the mutual
agreements contained herein, agree as follows:
| 1. |
ORDERS
FOR PURCHASE AND REDEMPTION |
| |
a. |
Creation
Units. The Shares of any Fund may be purchased or redeemed only
in aggregations of a specified number of Shares, as stated in the Prospectus,
referred to herein as a “Creation Unit”. The Participant is hereby
authorized to purchase and redeem Creation Units of any Fund listed in the
Prospectus except for those Funds set forth in Annex I, which may be revised by
the Trust from time to time. |
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b. |
Procedures
for Orders. The Participant may purchase and/or redeem Creation
Units of Shares only through the Manual DTC Process. The procedures for placing
and processing an order to purchase Shares (each a “Purchase Order”)
and a request to redeem Shares (each a “Redemption Request”)
(together, referred to as “Orders”) are described in the Prospectus.
All Orders shall be made in accordance with the terms and procedures set forth
in the Prospectus. Each party hereto agrees to comply with the provisions of
the Prospectus to the extent applicable to it. The Trust reserves the right to
issue procedures relating to the manner of purchasing or redeeming Creation
Units, and the Participant, the Distributor and the Transfer Agent agree to
comply with such procedures as may be issued from time to time upon reasonable
notice thereof. |
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c. |
Consent
to Recording. It is contemplated that the phone lines used by
the Distributor, the Transfer Agent, the Trust or their affiliated persons will
be recorded, and the Participant hereby consents to the recording of all calls
with any of those parties. In the event that the Distributor, the Transfer
Agent, the Trust or any of their affiliated persons becomes legally compelled
to disclose to any third party any recording involving communications with the
Participant, the Distributor agrees to provide the Participant with reasonable
advance written notice identifying the recordings to be so disclosed, together
with copies of such recordings, so that the Participant may seek a protective
order or other appropriate remedy with respect to the recordings or waive its
right to do so. In the event that such protective order or other remedy is not
obtained, or the Participant waives its right to seek such protective order or
remedy, the Distributor, the Transfer Agent, or the Trust, or any of their
affiliated persons, as the case may be, agrees to furnish only that portion of
the recorded conversation that, according to legal custom, is legally required
to be furnished and will exercise commercially reasonable efforts to obtain a
protective order or other reliable assurance that confidential treatment will
be accorded the recorded conversation. The Distributor, the Transfer Agent, the
Trust and their affiliated persons shall not otherwise disclose to any third
party any recording involving communications with the Participant without the
Participant’s express written consent, except the Distributor, the
Transfer Agent, the Trust and their affiliated persons may disclose to any
regulatory or self-regulatory organization, to the extent required by
applicable rule or law, any recording involving communications with the
Participant, provided that the recorded communications relate to the Participant’s
transactions in, and activities with respect to, Shares under this Agreement. |
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d. |
Irrevocability. The
Trust reserves the absolute right to reject any Purchase Order for the reasons
specified in this Agreement or in the Prospectus. The Trust and the Distributor
shall promptly notify the Participant of a rejection or revocation of any
Order. Once accepted, all Orders are irrevocable. |
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e. |
Prospectus
Delivery. The Participant consents to the delivery of Fund
prospectuses (each, a “Prospectus”) electronically. The Participant
understands that current Prospectuses and all required reports for each
applicable Fund are available at the Funds’ website at xxx.xxxxxxxxxx.xxx/xxx. The
Participant can revoke this consent to delivering Fund Prospectuses
electronically at any time by calling 1-866-YYY-9160. The Participant agrees
to maintain a valid e-mail address, and further agrees to promptly notify the
Distributor if its e-mail address changes. The Participant’s current
e-mail address for delivery of Prospectuses is Xxxxxxxxxx-xx@xx.xxxxx.xx.xxx. |
| 2. |
EXECUTION
OF PURCHASE ORDERS |
| |
a. |
Purchase
Orders for Funds. To effect the purchase of a Creation Unit of a
particular Fund, the Participant agrees on behalf of itself, and any
Participant Client, to deliver to the Fund the Cash Amount. The Distributor
acknowledges and agrees to provide Participant with reasonable advance notice
of any applicable transaction fee, or adjustment thereof, in the event the Fund
charges such a fee in connection with the creation of Creation Units. |
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b. |
Rejection
of Purchase Orders. The Trust or Distributor may reject any Purchase
Order that is not submitted in “proper form,” as is defined in the
Prospectus. In addition, the Distributor on behalf of each Fund may reject any
Purchase Order (based on information provided by the Transfer Agent, the
Advisor or the Trust or obtained by the Distributor, as the case may be), if: |
| |
(1) |
the
purchaser or group of purchasers, upon obtaining the Shares ordered, would own
80% or more of the currently outstanding Shares; |
| |
(2) |
the
acceptance of the Purchase Order would, in the opinion of counsel, be unlawful,
as in the case of a purchaser who was banned from trading in securities; |
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(3) |
the
acceptance of the Purchase Order would otherwise, in the discretion of the
Trust or the Advisor, have an adverse effect on the Trust or the particular
Fund or on the rights of the shareholders, including but not limited to the
Beneficial Owner of the Shares; |
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(4) |
the
value of the Creation Units to be created exceeds a purchase authorization
limit afforded to the Participant by the Custodian and the Participant has not
deposited an amount in excess of such purchase authorization with the Custodian
prior to 1:00 p.m., Eastern Time, on the transmittal date; or |
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(5) |
there
exist circumstances outside the control of the Trust, the Distributor and the
Advisor that make it impossible to process purchases of Shares for all
practical purposes. Examples of such circumstances include: acts of God or
public service or utility problems such as fires, floods, extreme weather
conditions and power outages resulting in telephone, telecopy and computer
failures, market conditions or activities causing trading halts, systems
failures involving computer or other information systems affecting the Trust,
the Advisor, the Transfer Agent, the Custodian, the Distributor, DTC, or any
other participant in the purchase process, and similar extraordinary events. |
| 3. |
EXECUTION
OF REDEMPTION REQUESTS |
| |
a. |
Redemption
Requests. To effect the redemption of a Creation Unit of a particular
Fund, the Participant agrees on behalf of itself and any Participant Client to
deliver to the Transfer Agent the requisite number of Shares comprising the
number of Creation Units being redeemed. Proceeds of the redemption of a
Creation Unit shall be paid in cash. The Distributor acknowledges and agrees to
provide Participant with reasonable advance notice of any applicable
transaction fee, or adjustment thereof, in the event the Fund charges such a
fee in connection with the redemption of Creation Units. |
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| |
b. |
Failure
to Deliver Shares. The Participant understands and agrees that
in the event Shares are not transferred to the Fund, a Redemption Request may
be rejected by the Fund and the Participant will be solely responsible for all
costs and losses and fees reasonably incurred by the Fund, the Transfer Agent
or the Distributor related to the rejected Order. The Participant will not,
however, be responsible for costs incurred by the Transfer Agent or the
Distributor related to trade breaks or where the failure to transfer Shares is
due to negligence or bad faith of the Transfer Agent or the Distributor, an act
of God, or is unrelated to any act or omission of the Participant. |
| |
c. |
Legal
and Beneficial Ownership. The Participant represents and
warrants that it will not attempt to place a Redemption Request for the purpose
of redeeming any Creation Unit of Shares of any Fund unless it or the
Participant Client, as the case may be, owns outright or has the authority or
right to tender for redemption the requisite number of Shares of the Fund, and
that such Shares have not been loaned or pledged by or to another party and are
not the subject of a repurchase agreement, securities lending agreement or any
other arrangement that, under the circumstances, would preclude the delivery of
such Shares to the Transfer Agent on a “regular way” basis. |
| 4. |
BENEFICIAL
OWNERSHIP. The Participant represents and warrants to the Distributor
and the Trust that either (i) it does not hold for its own account 80 percent
(80%) or more of outstanding Trust Shares of the relevant Fund or (ii) if it
does hold 80 percent (80%) or more of outstanding Trust Shares of the relevant
Fund in its own account that such a circumstance would not cause the Trust to
have a basis in any Fund Security (i.e., any security in which the Fund
invests) different from the fair market value of such security. |
| |
a. |
Certification. Concurrently
with the execution of this Agreement and as requested in writing from time to
time thereafter by the Fund and/or Distributor, the Participant shall deliver
to the Distributor and the Fund, with copies to the Transfer Agent, a
certificate (the form of which is set forth in Annex II) signed by a duly
authorized person of the Participant setting forth the names, e-mail addresses
and telephone and facsimile numbers of all persons authorized to give
instructions relating to any activity contemplated hereby or any other notice,
request or instruction on behalf of the Participant (each an “Authorized
Trader”). Such certificate may be accepted and relied upon by the
Distributor and the Fund as conclusive evidence of the facts set forth therein
and shall be considered to be in full force and effect until delivery to the
Distributor and the Fund of a superseding certificate in a form approved by the
Fund bearing a subsequent date. |
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b. |
PIN
Numbers. The Distributor shall issue to each Participant a
unique personal identification number (“PIN Number”) by which such
Participant shall be identified and instructions issued by the Participant
hereunder shall be authenticated. The PIN Number shall be kept confidential by
the Participant and shall only be provided to Authorized Traders. The
Participant may revoke the PIN Number at any time upon written notice to the
Distributor and the Fund. Upon receipt of such written request, the Distributor
shall promptly de-activate the PIN Number. If a Participant’s PIN Number
is changed, the new PIN Number will become effective on a date and time
mutually agreed upon by the Participant and the Distributor. |
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c. |
Termination
of Authority. In the event that the Participant becomes aware
that an unauthorized person has obtained access to its PIN Number or has or
intends to use the PIN Number in an unauthorized manner or upon the termination
or revocation of authority of such Authorized Trader by the Participant, the
Participant shall give prompt written notice of such fact to the Distributor
and the Fund and such notice shall be effective upon receipt by both the
Distributor and the Fund. Upon receipt of such written request, the Distributor
shall promptly de-activate the PIN Number. If a Participant’s PIN Number
is changed, the new PIN Number will become effective on a date and time
mutually agreed upon by the Participant and the Distributor. |
| |
d. |
Verification. The
Distributor shall assume that all instructions issued to it using the
Participant’s PIN Number have been properly placed by an Authorized
Trader, unless the Distributor has actual knowledge to the contrary or the
Participant has revoked its PIN Number. |
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e. |
Limitation
of Liability. The Participant agrees that the Distributor, the
Transfer Agent and the Trust shall not be liable, absent fraud, negligence, or
willful misconduct, for losses incurred by the Participant as a result of
unauthorized use of the Participant’s PIN Number, unless the Participant
previously submitted written notice to revoke its PIN Number in accordance with
the terms of this Agreement. |
| |
a. |
Clearing
Status. The Participant hereby represents, covenants and
warrants that it is and will continue to be a DTC Participant. Any change in
the foregoing status of the Participant shall terminate this Agreement and the
Participant shall give prompt written notice to the Distributor and the Trust
of such change. |
| |
b. |
Broker-Dealer
Status. The Participant hereby represents and warrants that it
is (i) registered as a broker-dealer under the Securities Exchange Act of 1934,
as amended, (ii) qualified to act as a broker or dealer, or is otherwise
exempt, according to all applicable state laws in which it conducts its
activities as defined hereunder, and (iii) a member in good standing of FINRA.
The Participant agrees that it will maintain such registrations,
qualifications, and membership in good standing and in full force and effect
throughout the term of this Agreement. The Participant further agrees to comply
with all applicable Federal laws, the laws of the states or other jurisdictions
concerned, and the rules and regulations promulgated thereunder and with the
FINRA By-Laws and NASD Conduct Rules (or of comparable FINRA Conduct Rules, if
such NASD Conduct Rules are subsequently renamed, repealed, rescinded, or are
otherwise replaced by FINRA Conduct Rules) to the extent the foregoing relates
to the Participant’s transactions in, and activities with respect to,
Shares, and that it will not offer or sell Shares of any Fund in any state or
jurisdiction where they may not lawfully be offered and/or sold. |
-5-
| |
c. |
Distributor
Status. The Participant understands and acknowledges that the
method by which Creation Units will be created and traded may raise certain
issues under applicable securities laws. For example, because new Creation
Units of Shares may be issued and sold by the Fund on an ongoing basis, at any
point a “distribution”, as such term is used in the 1933 Act, may
occur. The Participant understands and acknowledges that some activities on its
part, depending on the circumstances, may result in its being deemed a
participant in a distribution in a manner which could render it a statutory
underwriter and subject it to the prospectus delivery and liability provisions
of the 1933 Act. The Participant also understands and acknowledges that dealers
who are not “underwriters” but are effecting transactions in Shares,
whether or not participating in the distribution of Shares, are generally
required to deliver a prospectus. |
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a. |
Participant’s
Role. The Participant acknowledges and agrees that for all
purposes of this Agreement, the Participant shall have no authority to act as
agent for the Trust, the Transfer Agent or the Distributor in any matter or in
any respect. The Participant agrees to make itself and its employees available,
upon reasonable request, during normal business hours to consult with the
Trust, the Transfer Agent or the Distributor or their designees concerning the
performance of the Participant’s responsibilities under this Agreement,
provided that the Participant shall be under no obligation to divulge or
otherwise discuss any information that the Participant reasonably believes (i)
is confidential or proprietary in nature or (ii) the disclosure of which to
third parties is in violation of any applicable law or is otherwise prohibited. |
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b. |
Delivery
of Prospectuses. Participant agrees (i) subject to any privacy
obligations or other obligations arising under the federal or state securities
laws it may have to its customers, to assist the Distributor in ascertaining
certain information regarding sales of Trust Shares made by or through
Participant upon the request of the Trust or the Distributor necessary for the
Funds to comply with their obligations to distribute information to its
shareholders as may be required from time to time under applicable state or
federal securities laws; or (ii) in lieu thereof, and at the option of the
Participant, the Participant may undertake to deliver prospectuses, as may be
amended or supplemented from time to time, proxy material, annual and other
reports of the Funds or other similar information to Participant’s
customers that custody Shares with the Participant, after receipt from the
Funds or the Distributor of sufficient quantities to allow mailing thereof to
such customers. |
-6-
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c. |
Proprietary
Information. Distributor agrees that the names and addresses and
other information concerning Participant’s customers are and shall remain
the sole property of the Participant, and none of the Distributor, the Trust or
any of their respective affiliates shall use such names, addresses or other
information for any purpose except in connection with the performance of their
duties and responsibilities hereunder. |
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d. |
Privacy. The
Participant affirms that it has procedures in place reasonably designed to
protect the privacy of non-public personal consumer/customer financial
information to the extent required by applicable law, rule and regulation. |
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e. |
Anti-Money
Laundering. Participant represents that it has written policies,
procedures and internal controls reasonably designed to comply with applicable
anti-money laundering laws and regulations, including applicable provisions of
the USA PATRIOT Act of 2001 and the regulations administered by the U.S.
Department of the Treasury’s Office of Foreign Assets Control as the same
may be in effect from time to time. |
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f. |
Rights
and Obligations of DTC Participant. In executing this Agreement, the
Participant, as a DTC Participant, agrees that it shall be bound by those
obligations contractually imposed upon DTC Participants by the DTC, in addition
to any obligations that it undertakes hereunder or in accordance with the
Prospectus. |
| 8. |
MARKETING
MATERIALS, PROSPECTUS, AND REPRESENTATIONS |
| |
a. |
Participant. The
Participant represents, warrants and agrees that it will not make, in
connection with any sale or solicitation of a sale of Shares, any
representations concerning the Shares other than those not inconsistent with
the Trust’s then current Prospectus or any promotional materials or sales
literature furnished to the Participant by the Distributor or the Trust. The
Participant agrees not to furnish or cause to be furnished to any person or
display or publish any information or materials relating to the Shares
(including, without limitation, promotional materials and sales literature,
advertisements, press releases, announcements, statements, posters, signs or
other similar materials, but not including any materials prepared and used for
Participant’s internal use only or brokerage communications prepared by
Participant in the normal course of its business and consistent with the
Trust’s then current Prospectus and in accordance with applicable laws and
regulations), except such information and materials as may be furnished to the
Participant by the Distributor or the Trust and such other information and
materials as may be approved in writing by the Distributor or as otherwise
permitted by the last sentence of this paragraph. The Participant understands
that the Funds comprising the Trust will not be advertised or marketed as
open-end investment companies, i.e., as mutual funds, which offer redeemable
securities, and that any advertising materials will prominently disclose that
the Shares are not individually redeemable units of beneficial interest in the
Trust. In addition, the Participant understands that any advertising material
that addresses redemptions of Shares, including the Trust’s Prospectus,
will disclose that the owners of Shares may acquire Shares and tender Shares
for redemption to the Trust in Creation Unit aggregations only. Notwithstanding
anything to the contrary in this Agreement, the Participant and its affiliates
may, without the approval of the Distributor or the Trust, prepare and
circulate in the regular course of their businesses research, reports and other
similar materials that include information, opinions or recommendations
relating to the Shares, provided that such reports comply with applicable NASD
rules (or of comparable FINRA rules, if such NASD rules are subsequently
renamed, repealed, rescinded, or are otherwise replaced by FINRA rules). |
-7-
| |
b. |
Distributor. Distributor
will provide to the Participant copies of the then current prospectus for each
Fund and any printed supplemental information in reasonable quantities upon
request. The Distributor represents, warrants and agrees that it will promptly
notify the Participant when a revised, supplemented or amended prospectus for
any Fund is available and deliver or otherwise make available to the
Participant (by sending an electronic copy to Xxxxxxxxxx-xx@xx.xxxxx.xx.xxx)
copies of such revised, supplemented or amended prospectus at such time and in
such numbers as to enable the Participant to comply with any obligation it may
have to deliver such prospectus to customers. As a general matter, the
Distributor will make such revised, supplemented or amended prospectus
available to the Participant on or before its effective date. The Distributor
represents and warrants that (i) the Registration Statement and the Prospectus
contained therein conforms in all respects to the requirements of the 1933 Act,
and the rules and regulations of the SEC thereunder and do not and will not, as
of the applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, 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; (ii) the sale and
distribution of the Shares as contemplated herein will not conflict with or
result in a breach or violation of any statute or any order, rule, or
regulation of any court or governmental agency or body having jurisdiction over
the Trust, any Fund or the Distributor; and (iii) no consent, approval,
authorization, order, registration or qualification of or with any such court
or governmental agency or body is required for the issuance and sale of the
Shares, except the registration under the 1933 Act of the Shares. |
| 9. |
INDEMNIFICATION;
LIMITATION OF LIABILITY. This paragraph shall survive the termination
of this Agreement. |
-8-
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a. |
The
Participant hereby agrees to indemnify and hold harmless the Distributor, in
its capacity as principal underwriter, the Trust, the Transfer Agent, their
respective subsidiaries, affiliates, directors, officers, employees and agents,
and each person, if any, who controls such persons within the meaning of
Section 15 of the 1933 Act (each an “AP Indemnified Party”) from and
against any loss, liability, cost and expense (including reasonable attorneys’ fees)
incurred by such AP Indemnified Party as a direct result of (i) any breach by
the Participant of any provision of this Agreement that relates to the
Participant; (ii) any failure on the part of the Participant to perform any of
its obligations set forth in the Agreement; (iii) any failure by the
Participant to comply with applicable laws, including rules and regulations of
self-regulatory organizations, to the extent the foregoing relates to the
Participant’s transactions in, and activities with respect to, Shares
under this Agreement, except that the Participant shall not be required to
indemnify an AP Indemnified Party to the extent that such failure was caused by
Participant’s adherence to instructions given or representations made by
the Distributor, the Transfer Agent or any AP Indemnified Party, as applicable;
or (iv) actions of such AP Indemnified Party in reasonable reliance upon any
instructions issued by Participant reasonably believed by such AP Indemnified
Party to be genuine and to have been given by the Participant except to the
extent that the Participant had previously revoked a PIN Number used in giving
such instructions or representations (where applicable) and such revocation was
given by the Participant and received by the Distributor and the Transfer Agent
in accordance with the terms of Section 5 hereto. The Participant shall not be
liable under its indemnity agreement contained in this paragraph with respect
to any claim made against any AP Indemnified Party unless the AP Indemnified
Party shall have notified the Participant in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the AP
Indemnified Party (or after the AP Indemnified Party shall have received notice
of service on any designated agent). However, failure to notify the Participant
of any claim shall not relieve the Participant from any liability which it may
have to any AP Indemnified Party against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph and
shall only release it from such liability under this paragraph to the extent it
has been materially prejudiced by such failure to give notice. The Participant
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 Participant elects to assume the defense, the defense shall be conducted
by counsel chosen by it and satisfactory to the AP Indemnified Party,
defendant, or defendants in the suit, and who shall not, except with the
consent of the AP Indemnified Parties, be counsel to the Participant. If the
Participant does not elect to assume the defense of any suit, it will reimburse
the AP Indemnified Party, defendant or defendants in the suit, for the
reasonable fees and expenses of any counsel retained by them. |
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b. |
The
Distributor hereby agrees to indemnify and hold harmless the Participant, its
respective subsidiaries, affiliates, directors, officers, employees and agents,
and each person, if any, who controls such persons within the meaning of
Section 15 of the 1933 Act (each a “Distributor Indemnified Party”)
from and against any loss, liability, cost and expense (including reasonable
attorneys’ fees) incurred by such Distributor Indemnified Party as a
result of (i) any breach by the Distributor of any provision of this Agreement
that relates to the Distributor; (ii) any failure on the part of the
Distributor to perform any of its obligations set forth in this Agreement;
(iii) any failure by the Distributor to comply with applicable laws, including
rules and regulations of self-regulatory organizations; (iv) any untrue
statements or omissions made in any promotional material or sales literature
furnished to the Participant or otherwise approved in writing by the Trust or
the Fund; or (v) actions of such Distributor Indemnified Party in reasonable
reliance upon any instructions issued or representations made by the
Distributor, the Trust or the Fund reasonably believed by such Distributor
Indemnified Party to be genuine and to have been given by the Distributor, the
Trust or the Fund. In addition, the Distributor shall indemnify and hold
harmless each Distributor Indemnified Party from and against any loss,
liability, cost and expense (including reasonable attorneys’ fees),
incurred by such Indemnified Party as a result of any untrue statement, or
alleged untrue statement, of a material fact contained in the registration
statement, Prospectus, or statement of additional information, as each may be
amended from time to time, or any omission, or alleged omission, to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading. The Distributor shall not be liable under its indemnity
agreement contained in this paragraph with respect to any claim made against
any Distributor Indemnified Party unless the Distributor Indemnified Party
shall have notified the Distributor in writing of the claim within a reasonable
time after the summons or other first written notification giving information
of the nature of the claim shall have been served upon the Distributor
Indemnified Party (or after the Distributor Indemnified Party shall have
received notice of service on any designated agent). However, failure to notify
the Distributor of any claim shall not relieve the Distributor from any
liability which it may have to any Distributor Indemnified Party against whom
such action is brought otherwise than on account of its indemnity agreement
contained in this paragraph and shall only release it from such liability under
this paragraph to the extent it has been materially prejudiced by such failure
to give notice. 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 any claims, but if the Distributor elects to assume the
defense, the defense shall be conducted by counsel chosen by it and
satisfactory to the Distributor Indemnified Party, defendant, or defendants in
the suit and who shall not, except with the consent of the Distributor
Indemnified Parties, be counsel to the Distributor. If the Distributor does not
elect to assume the defense of any suit, it will reimburse the Distributor
Indemnified Party, defendant or defendants in the suit, for the reasonable fees
and expenses of any counsel retained by them. The Distributor agrees to notify
the Participant promptly of the commencement of any litigation or proceedings
against it or any of its officers or trustees in connection with the issuance
or sale of any of the Creation Units or the Shares. |
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c. |
No
indemnifying party, as described in paragraphs (a) and (b) above, shall,
without the written consent of the AP Indemnified Party or the Distributor
Indemnified Party, as the case may be, effect the settlement or compromise of,
or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the AP Indemnified Party or
Distributor Indemnified Party, as the case may be, from all liability arising
out of such action or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of any AP
Indemnified Party or Distributor Indemnified Party, as the case may be. |
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d. |
No
party to this Agreement shall be liable to any other party or to any other
person for any damages arising out of mistakes or errors in data provided to
such AP Indemnified Party or Distributor Indemnified Party, as the case may be,
by a third party, or arising out of interruptions or delays of electronic means
of communications with the AP Indemnified Party or the Distributor Indemnified
Party. |
| 10. |
TRUST
AS THIRD PARTY BENEFICIARY. The Participant and the Distributor
understand and agree that the Trust as a third party beneficiary to this
Agreement is entitled and intends to proceed directly against the Participant
in the event that the Participant fails to honor any of its obligations
pursuant to this Agreement that benefit the Trust, and the Participant agrees
to cooperate with the Trust and the Distributor if a request for information or
records is made to the Participant. |
| 11. |
ACKNOWLEDGMENT.
The Participant acknowledges receipt of the Prospectus and represents that it
has reviewed the Prospectus and understands the terms thereof, and further
acknowledges that the procedures contained therein pertaining to the creation
and redemption of Shares are incorporated herein by reference. The Distributor
agrees to process orders, or cause its agents to process orders, for creation
in accordance with the provisions of the Prospectus. The Transfer Agent
acknowledges that pursuant to the Transfer Agency Agreement between itself and
the Funds it is required to process orders for redemptions in accordance with
the provisions of the Prospectus. |
| 12. |
NOTICES.
Except as otherwise specifically provided in this Agreement, all notices
required or permitted to be given pursuant to this Agreement shall be given in
writing and delivered by personal delivery or by postage prepaid registered or
certified United States first class mail, return receipt requested, or by
telex, telegram, or facsimile or similar means of same day delivery (with a
confirming copy by mail). Unless otherwise notified in writing, all notices
shall be at the address or telephone, facsimile or telex numbers as set forth
below in this Section 12, except in the case of communications by the
Distributor or Transfer Agent to the Participant during the order creation or
redemption process (especially the Distributor’s or Transfer Agent’s
attempt to contact an Authorized Trader of the Participant with respect to,
among other things, ambiguous instructions and the suspension or cancellation
of an order) in which case the Distributor and Transfer Agent agree to contact
a representative of the ETF Trading Desk of the Participant. |
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| DISTRIBUTOR: |
PARTICIPANT: |
Attn: General Counsel |
Attn: ETF Trading |
| ALPS Distributors, Inc. |
_________________ |
| 0000 Xxxxxxxx, Xxxxx 0000x |
| Xxxxxx, Xxxxxxxx 00000 |
|
Telephone: (___________ |
| Telephone: (303) ________ |
Facsimile: (___________ |
| Facsimile: (000) 000-0000 |
Telex: |
| Telex: |
|
| |
With a copy to: |
|
| TRANSFER AGENT AND FUND: |
Attn: General Counsel - ________ Division |
| Attn: The Bank of New York |
| _________________________ |
| New York, New York _____ |
Telephone: (___) ________ |
Telephone: (___________ |
| Facsimile: (___)_________ |
Facsimile: (___) ________ |
| Telex: |
Telex: |
|
| 13. |
COMMENCEMENT
OF TRADINGThe Participant may not submit an Order pursuant to this
Agreement until five Business Days after effectiveness of this Agreement (which
shall not take effect until acknowledged by the Transfer Agent) or such earlier
date agreed upon between the Distributor and the Participant. |
| 14. |
DEFINITIONS.
Unless otherwise defined in the Agreement or the Prospectus, the
capitalized terms used in this Agreement are defined as follows. |
| |
a. |
“1933
Act” means the Securities Act of 1933, as amended. |
| |
b. |
“1940
Act” means the Investment Company Act of 1940, as amended. |
| |
c. |
“Advisor” means
Bear Xxxxxxx Asset Management, Inc. |
| |
d. |
“Affiliated
Person” shall have the meaning given to it by Section 2(a) of the 1940
Act, subject to such exemptions as may be granted by the SEC by any rule,
regulation or order. |
| |
e. |
“Cash
Payment” will be an amount equal to the net asset value per Share of a
Fund multiplied by the number of Shares constituting a Creation Unit of such
Fund multiplied by the number of Creation Units of such Fund being purchased or
redeemed in a particular Order. |
-12-
| |
f. |
“Beneficial
Owner” shall have the meaning given to it by Rule 16a-1(a)(2) of the
Securities Exchange Act of 1934, as amended. |
| |
g. |
“Business
Day” shall mean each day the New York Stock Exchange is open for regular
trading and the Trust and the Custodian are open for business. |
| |
h. |
“Cash
Amount” means the Cash Payment plus the applicable transaction fee (if
any). |
| |
i. |
“Cash” shall
mean same day funds in United States dollars. |
| |
j. |
“Creation
Unit” means an aggregation of a specified number of Shares of a particular
Fund of the Trust as stated in the Prospectus. |
| |
k. |
“Custodian” means
the Fund’s custodian, The Bank of New York. |
| |
l. |
“Manual
DTC Process” means the process for effecting purchases orders or
redemption requests of Creation Units through DTC. |
| |
m. |
“DTC” means
The Depository Trust Company. |
| |
n. |
“FINRA” means
the Financial Industry Regulatory Authority. |
| |
o. |
“Participant
Client” means any party on whose behalf the Participant acts in connection
with an Order (whether a customer or otherwise). |
| |
p. |
“SEC” means
the United States Securities and Exchange Commission. |
| |
q. |
“Prospectus” means
the Trust’s then current prospectus and statement of additional
information included in its effective registration statement, as supplemented
or amended from time to time. |
| 15. |
EFFECTIVENESS,
TERMINATION, AND AMENDMENT. This Agreement shall become effective in
this form upon delivery to and execution by the Distributor. This Agreement may
be terminated at any time by any party upon thirty (30) days prior written
notice to the other parties and may be terminated earlier by the Trust or the
Distributor at any time in the event of a material breach by the Participant of
any provision of this Agreement or the procedures described or incorporated
herein. This Agreement supersedes any prior such agreement between or among the
parties with respect to the subject matter contained herein. For the purposes
of this Agreement, mail will be deemed received by the recipient thereof upon
the date that appears on a reasonably acceptable proof of receipt. Titles and
section headings are included solely for convenient reference and are not a
part of this Agreement. This Agreement constitutes the entire agreement between
the parties regarding the matters contained herein and may be amended or
modified only by a written document signed by an authorized representative of
each party. |
-13-
| 16. |
GOVERNING
LAW. This Agreement and all transactions hereunder shall be governed by
and interpreted in accordance with the laws of the State of New York without
reference to its conflicts of law doctrine. The parties irrevocably submit to
the personal jurisdiction and service and venue of any New York State or United
States Federal court sitting in New York, New York having subject matter
jurisdiction, for the purposes of any suit, action or proceeding arising out of
or relating to this Agreement. |
| 17. |
COUNTERPARTS.
This Agreement may be simultaneously executed in several counterparts, each
of which shall be an original and all of which shall constitute but one and the
same instrument. |
| 18. |
ASSIGNMENT. No
party may assign its rights or obligations under this Agreement (in whole or in
part) without the prior written consent of the other parties, which shall not
be unreasonably withheld; provided, that any party may assign its rights
and obligations hereunder (in whole, but not in part) without such consent to
an entity acquiring all, or substantially all of its assets or business or to
an affiliate. |
| 19. |
SUCCESSORS
AND ASSIGNS. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns. |
| 20. |
NO
PROMOTION. Each of the Trust, the Distributor and the Transfer Agent
agrees that it will not, without the prior written consent of Participant in
each instance, (i) use in advertising, publicity, or otherwise the name of
Participant or any affiliate of Participant, or any partner or employee of
Participant, nor any trade name, trademark, trade device, service xxxx, symbol
or any abbreviation, contraction or simulation thereof owned by Participant or
its affiliates, or (ii) represent, directly or indirectly, that any product or
any service provided by the Trust, Distributor or Transfer Agent has been
approved or endorsed by Participant. This provision shall survive termination
or expiration of the Agreement. |
| 21. |
SEVERANCE. If
any provision of this Agreement is held by any court or any act, regulation,
rule or decision of any other governmental or supra national body or authority
or regulatory or self-regulatory organization to be invalid, illegal or
unenforceable for any reason, it shall be invalid, illegal or unenforceable
only to the extent so held and shall not affect the validity, legality or
enforceability of the other provisions of this Agreement so long as this
Agreement as so modified continues to express, without material change, the
original intentions of the parties as to the subject matter of this Agreement
and the deletion of such portion of this Agreement will not substantially
impair the respective benefits, obligations, or expectations of the parties to
this Agreement. |
| 22. |
NO
STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction will be applied against any party. |
-14-
IN WITNESS WHEREOF, the parties have
caused this Agreement to be executed and delivered as of the day and year written below.
| DATED: ______________________ |
|
ALPS DISTRIBUTORS, INC. |
_________________________CO. |
BY:______________________________ |
BY:______________________________ |
NAME:___________________________ |
NAME:___________________________ |
TITLE:____________________________ |
TITLE:____________________________ |
|
ACCEPTED BY: |
|
THE BANK OF NEW YORK (as Transfer Agent) |
|
BY:______________________________ |
|
NAME:___________________________ |
|
TITLE:____________________________ |
-15-
ANNEX I
FUNDS NOT AUTHORIZED
TO CREATE OR REDEEM
Pursuant
to Paragraph 1.a of the Authorized Participant Agreement, the Participant is not
authorized to purchase or redeem Creation Units of the following Funds of the Trust:
Not
applicable.
-16-
ANNEX II
AUTHORIZED TRADERS OF
PARTICIPANT
The
following employees of the Participant are authorized, subject to Paragraph 5 of the
Authorized Participant Agreement, to act as agent for the Participant, to submit purchase
and redemption requests to the Distributor on behalf of the Participant and in its name
with respect to those Funds subject to Paragraph 1.a of the Authorized Participant
Agreement.
|
| Name: |
|
|
| E-Mail Address: |
|
| Telephone: |
|
| Fax: |
|
|
| Name: |
|
|
| E-Mail Address: |
|
| Telephone: |
|
| Fax: |
|
|
| Name: |
|
|
| E-Mail Address: |
|
| Telephone: |
|
| Fax: |
|
|
| Name: |
|
|
| E-Mail Address: |
|
| Telephone: |
|
| Fax: |
|
|
| Name: |
|
|
| E-Mail Address: |
|
| Telephone: |
|
| Fax: |
|
|
Certified By:______________________________________ |
|
Name:___________________________________________ |
|
Title:____________________________________________ |
|
Date:____________________________________________ |
-17-
