Distribution Services Agreement

Exhibit 10.3


DISTRIBUTION SERVICES AGREEMENT


THIS DISTRIBUTION SERVICES AGREEMENT (the " Agreement" ) is made and entered into effective the 6th day of August, 2008 (the " Effective Date" ) by and among AirShares99 EU Carbon Allowances Fund, a Delaware statutory trust (the " Fund" ), ALPS Distributors, Inc., a Colorado corporation and a registered broker-dealer under the Securities Exchange Act of 1934, as amended (the " Distributor" ), and XShares Advisors, LLC, a Delaware limited liability company (the " Sponsor" ). Capitalized terms that are used but are not defined herein shall have the same meanings ascribed to them in the Fund' s Prospectus included in its Registration Statement on Form S-1 (Registration No. 333-145448), as such Prospectus may be amended or supplemented from time to time.


WHEREAS , the Sponsor serves as the sole sponsor of the Fund; and


WHEREAS , the Sponsor and the Fund wish to engage the Distributor to provide the services listed on Schedule A hereto and such additional services as may be agreed and added to such Schedule from time to time hereinafter, the " Services" ).


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


1. Provision of the Services . The Distributor hereby agrees to provide the Services to the Fund, and each of the Sponsor and the Fund accepts the provision of the Services by the Distributor.


2. Fees for the Services . In exchange for the Distributor' s provision of the Services, the Sponsor agrees to pay to the Distributor a fee as set forth in Schedule B .


3. Expenses and Disbursements . The Sponsor shall reimburse the Distributor for any reasonable expenses or disbursements incurred by the Distributor in connection with the performance by the Distributor of its Services hereunder. For any expenses or disbursements in excess of $10,000, the Distributor will obtain the prior written consent of the Sponsor. Unless otherwise agreed to by the parties hereto in writing, the Distributor shall not be responsible for the expenses and disbursements incurred in connection with: (a) preparing, setting in type, filing, printing and mailing to the public any Registration Statement, Prospectus or Statement of Additional Information, and any amendments and supplements to any of the foregoing, used in connection with the offering of the Shares for sale to the public, and sending any such documents and information to existing Fund shareholders; (b) preparing, setting in type, printing and mailing any report (including annual and semi-annual reports) or other communication to shareholders of the Fund; and (c) the " Blue Sky" registration and qualification of the Shares for sale in the various states in which the officers of the Fund shall determine it advisable to qualify such Shares for sale (including registering the Fund as a broker or dealer or any officer of the Fund as an agent or salesman in any such state).


4. Documents . To assist the Distributor in providing such Services, the Fund has furnished, or will furnish upon the Distributor' s written request, the Distributor with copies of the Fund' s Declaration of Trust, Advisory Agreement, Custodian Agreement, Transfer Agency Agreement, Administration Agreement and current Registration Statement, Prospectus and Statement of Additional Information, and all forms relating to any plan, program or service offered by the Fund. The Fund shall promptly furnish to the Distributor copies of any amendment or supplement to any of the aforementioned documents. Upon the Distributor' s written request, the Fund shall promptly furnish to the Distributor any additional documents deemed by it to be reasonably necessary or advisable in order for it to provide the Services hereunder. As used in this Agreement, the terms " Registration Statement," " Prospectus" and " Statement of Additional Information" shall mean any registration statement, prospectus and statement of


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additional information filed by the Fund with the Securities and Exchange Commission (" SEC" ) and any amendments and supplements thereto that are filed with the SEC.


5. Authorized Representations . The Distributor is not authorized by the Fund to give any information or to make any representations other than those contained in the Registration Statement, the Prospectus and the Statement of Additional Information, or contained in shareholder reports or other material that may be prepared by or on behalf of the Fund for the Distributor' s use. Consistent with the foregoing, the Distributor may prepare and distribute sales literature or other material as it may deem appropriate in consultation with the Fund, provided that such sales literature complies with applicable law and regulations.


6. Registration of the Shares . The Fund agrees that it will take all action necessary to register the Shares under the Securities Act of 1933, as amended (the " 1933 Act" ) (subject to the necessary approval of its shareholders). The Fund shall make available to the Distributor, at the Distributor' s expense, such number of copies of the Fund' s Prospectus and Statement of Additional Information as the Distributor may reasonably request. The Fund shall furnish to the Distributor copies of all information, financial statements and other papers which the Distributor may reasonably request in writing for use in connection with the distribution of the Shares of the Fund.


7. Use of the Distributor' s Name . The Fund shall not use the name of the Distributor, or any of its affiliates, in any Prospectus or Statement of Additional Information, sales literature and other material relating to the Fund in any manner without the prior written consent of the Distributor (which consent shall not be unreasonably withheld); provided, however, that the Distributor hereby approves all lawful uses of its name and the names of its affiliates in the Prospectus and Statement of Additional Information of the Fund and in all other materials which in each case merely refer to accurate terms to the Distributor' s engagement hereunder or which are required by the SEC, FINRA, the Options Clearing Corporation (the " OCC" ) or any state securities authority.


8. Use of the Fund' s Name . Neither the Distributor nor any of its affiliates shall use the Fund' s name in any publicly disseminated materials, including but specifically not limited to sales literature, in any manner without the prior consent of the Fund (which consent shall not be unreasonably withheld); provided, however, that the Fund hereby approves all lawful uses of its name in any required regulatory filings of the Distributor which in each case merely refer in accurate terms to the Distributor' s engagement hereunder, or which are required by the SEC, FINRA, OCC or any state securities authority.


9. Indemnification .


(a) The Fund covenants and agrees to indemnify and hold harmless the Distributor, its directors, officers, employees, representatives and agents, and each person, if any, who " controls" the Distributor (within the meaning of Section 15 of the 1933 Act), against any loss, liability, claim, damages, claims or expenses (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 by reason of any person acquiring any of the Shares, based upon the finding that the Registration Statement, Prospectus, Statement of Additional Information, shareholder report or other information filed or m ...