FETH 8-K
Fidelity Ethereum Fund (FETH)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement
Custodial Services Agreements
On August 7, 2026, Fidelity® Ethereum Fund (the “Trust”) and Anchorage Digital Bank NA (“Anchorage Digital”), a national trust bank regulated by the Office of the Comptroller of the Currency, entered into a custodial services agreement (the “Anchorage Digital Custodial Services Agreement”). On August 7, 2026, the Trust and BitGo Bank & Trust, N.A. (“BitGo” and collectively with Anchorage Digital, the “Custodians”), a national banking association, entered into a custodial services agreement (the “BitGo Custodial Services Agreement” and collectively with the Anchorage Digital Custodial Services Agreement, the “Custodial Services Agreements”).
Pursuant to the Custodial Services Agreements, the Custodians will provide services related to custody and safekeeping of the Trust’s ether. Additionally, FD Funds Management LLC, the sponsor of the Trust (the “Sponsor”), will utilize the services of the Custodians to stake, or cause to be staked, the Trust’s ether one or more trusted node operators.
A description of the material terms of each of the Custodial Services Agreements is included in the Pre-Effective Amendment No. 1 to the Trust’s Registration Statement on Form S-3 (File No. 333-297005) filed on July 24, 2026 (the “Registration Statement”), which such descriptions are incorporated herein by reference.
The Trust’s ongoing custodial arrangements with Fidelity Digital Assets, N.A. are unaffected by the entry into the Custodial Services Agreements.
Amendment to the Sponsor Agreement
On August 7, 2026, the Trust entered into an Amended and Restated Sponsor Agreement, by and between the Trust and the Sponsor (the “Amended Sponsor Agreement”), to contemplate the staking of the Trust’s ether. The Amended Sponsor Agreement provides that the Trust will pay to the Sponsor, as partial consideration for the Sponsor arranging for the staking of the Trust’s ether, 15% of the amount of staking rewards received by the Trust, such amounts to be subsequently shared amongst the Sponsor, Custodian(s), Node Operator(s) (in each case as defined in the Registration Statement) or other third-parties engaged by the Sponsor or the Trust to stake the Trust’s ether.
The foregoing descriptions of the Custodial Services Agreements and the Amended Sponsor Agreement are summaries, do not purport to be complete descriptions of the Custodial Services Agreements or the Amended Sponsor Agreement, and are qualified in their entirety by reference to the full text of the Custodial Services Agreements and the Amended Sponsor Agreement, copies of which are filed as Exhibits 10.3.1, 10.3.2, and 10.6 hereto, respectively, and are incorporated by reference herein.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
On August 7, 2026, the Sponsor and CSC Delaware Trust Company, the Trustee of the Trust, entered into a Third Amended and Restated Trust Agreement (the “Trust Agreement”) to allow for staking of the Trust’s ether. A copy of the Trust Agreement is filed as Exhibit 4.1 hereto and is incorporated by reference herein.
Item 8.01 Other Events
Commencement of Staking Program
The Sponsor expects to commence the Trust’s staking activities as soon as practicable following the effective date of the Registration Statement. Through the staking program, the Sponsor utilizes the services of the Custodians to stake, or cause to be staked, the Trust’s ether with one or more trusted node operators (each, a “Node Operator”). The Node Operators facilitate staking by establishing validator nodes and delegating the Trust’s ether to such nodes on the Ethereum network, which entitles the Trust to receive staking rewards. The Custodians maintain exclusive possession and control of the private keys associated with any staked ether at all times. The Trust retains 85% of all staking rewards received, with the remaining 15% paid as fees shared among the Sponsor, the Custodians, and the Node Operators.
In connection with the commencement of the Trust’s staking program, the Trust intends to make quarterly cash distributions of income generated from its staking activities to holders of the Trust’s shares of beneficial interest. The distributions will consist of net staking income after deduction of any Trust expenses. To fund the cash distributions, the Trust may sell staking rewards and/or a portion of its ether, which may affect the Trust’s exposure to ether and the market price and/or net asset value of the Shares.
For a complete description of the Trust’s staking program, including the risks associated with staking activities, see the Trust’s Registration Statement filed with the Securities and Exchange Commission, the disclosure of which is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
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Description |
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4.1 |
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10.3.1 |
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10.3.2 |
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10.6 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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FIDELITY ETHEREUM FUND FD Funds Management LLC, as Sponsor of the Fidelity Ethereum Fund |
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Date: August 10, 2026 |
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By: |
/s/ Cynthia Lo Bessette |
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Name: Cynthia Lo Bessette |
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Title: President (Principal Executive Officer) |
ETH-8-K-0826
1.9918684.102
Exhibit 4.1
THIRD AMENDED AND RESTATED
TRUST AGREEMENT
OF
FIDELITY ETHEREUM FUND
Dated as of August 7, 2026
By and Among
FD FUNDS MANAGEMENT LLC
CSC DELAWARE TRUST COMPANY
and
THE SHAREHOLDERS
FROM TIME TO TIME HEREUNDER
TABLE OF CONTENTS
ARTICLE I DEFINITIONS; THE TRUST |
2 |
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SECTION 1.1 |
Definitions |
2 |
SECTION 1.2 |
Name |
8 |
SECTION 1.3 |
Delaware Trustee; Offices |
8 |
SECTION 1.4 |
Declaration of Trust |
8 |
SECTION 1.5 |
Purposes and Powers |
8 |
SECTION 1.6 |
Tax Treatment |
9 |
SECTION 1.7 |
Legal Title |
9 |
ARTICLE II THE TRUSTEE |
10 |
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SECTION 2.1 |
Term; Resignation; Removal |
10 |
SECTION 2.2 |
Powers |
11 |
SECTION 2.3 |
Compensation and Expenses of the Trustee |
11 |
SECTION 2.4 |
Indemnification |
11 |
SECTION 2.5 |
Successor Trustee |
12 |
SECTION 2.6 |
Liability of Trustee |
12 |
SECTION 2.7 |
Reliance; Advice of Counsel |
14 |
SECTION 2.8 |
Payments to the Trustee |
15 |
ARTICLE III SHARES; CREATIONS AND ISSUANCE OF CREATION BASKETS |
15 |
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SECTION 3.1 |
General |
15 |
SECTION 3.2 |
Offer of Shares; Procedures for Creation and Issuance of Creation Units to Authorized Participants |
16 |
SECTION 3.3 |
Book‑Entry System |
17 |
SECTION 3.4 |
Assets of the Trust |
17 |
SECTION 3.5 |
Liabilities of the Trust |
18 |
SECTION 3.6 |
Distributions |
18 |
SECTION 3.7 |
Voting Rights |
18 |
SECTION 3.8 |
Equality |
18 |
ARTICLE IV TRANSFERS OF SHARES |
18 |
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SECTION 4.1 |
General Prohibition |
18 |
SECTION 4.2 |
[Reserved] |
19 |
SECTION 4.3 |
Transfer of Shares Generally |
19 |
ARTICLE V REDEMPTIONS |
19 |
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SECTION 5.1 |
Redemption of Creation Units |
19 |
ARTICLE VI THE SPONSOR |
20 |
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SECTION 6.1 |
Management of the Trust |
20 |
SECTION 6.2 |
Authority of Sponsor |
21 |
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SECTION 6.3 |
Obligations of the Sponsor |
22 |
SECTION 6.4 |
General Prohibitions |
24 |
SECTION 6.5 |
Liability of Covered Persons |
24 |
SECTION 6.6 |
Fiduciary Duty |
25 |
SECTION 6.7 |
Indemnification of the Sponsor |
26 |
SECTION 6.8 |
Expenses and Limitations Thereon |
27 |
SECTION 6.9 |
Voluntary Withdrawal of the Sponsor |
29 |
SECTION 6.10 |
Litigation |
29 |
SECTION 6.11 |
Bankruptcy; Merger of the Sponsor |
29 |
ARTICLE VII THE SHAREHOLDERS |
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SECTION 7.1 |
No Management or Control; Limited Liability; Exercise of Rights through an Authorized Participant |
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SECTION 7.2 |
Rights and Duties |
30 |
SECTION 7.3 |
Limitation of Liability |
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SECTION 7.4 |
Derivative Actions |
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SECTION 7.5 |
Appointment of Agents |
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SECTION 7.6 |
Business of Shareholders |
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SECTION 7.7 |
Authorization of Prospectus |
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ARTICLE VIII BOOKS OF ACCOUNT AND REPORTS |
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SECTION 8.1 |
Books of Account |
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SECTION 8.2 |
Annual Updates, Quarterly Updates and Account Statements |
33 |
SECTION 8.3 |
Tax Information |
33 |
SECTION 8.4 |
Calculation of Ether Holdings |
34 |
SECTION 8.5 |
Maintenance of Records |
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ARTICLE IX FISCAL YEAR |
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SECTION 9.1 |
Fiscal Year |
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ARTICLE X AMENDMENT OF TRUST AGREEMENT; MEETINGS |
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SECTION 10.1 |
Amendments to the Trust Agreement |
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SECTION 10.2 |
Meetings of the Trust |
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SECTION 10.3 |
Action Without a Meeting |
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ARTICLE XI TERM |
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SECTION 11.1 |
Term |
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ARTICLE XII TERMINATION |
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SECTION 12.1 |
Events Requiring Dissolution of the Trust |
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SECTION 12.2 |
Distributions on Dissolution |
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SECTION 12.3 |
Termination; Certificate of Cancellation |
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ARTICLE XIII MISCELLANEOUS |
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SECTION 13.1 |
Governing Law |
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SECTION 13.2 |
Provisions In Conflict With Law or Regulations |
40 |
SECTION 13.3 |
Merger and Consolidation |
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SECTION 13.4 |
Construction |
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SECTION 13.5 |
Notices |
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SECTION 13.6 |
Counterparts; Electronic Signatures |
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SECTION 13.7 |
Binding Nature of Trust Agreement |
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SECTION 13.8 |
No Legal Title to Trust Estate |
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SECTION 13.9 |
Creditors |
42 |
SECTION 13.10 |
Integration |
42 |
SECTION 13.11 |
Goodwill; Use of Name |
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SECTION 13.12 |
Patriot Act Compliance |
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SECTION 13.13 |
Corporate Transparency Act |
42 |
EXHIBIT A — Form of Certificate of Trust of Fidelity Ethereum Fund
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FIDELITY ETHEREUM FUND
THIRD AMENDED AND RESTATED TRUST AGREEMENT
This THIRD AMENDED AND RESTATED TRUST AGREEMENT of FIDELITY ETHEREUM FUND is made and entered into as of August 7, 2026 (“Trust Agreement”), by and among FD Funds Management LLC, a Delaware limited liability company (“Sponsor”), CSC Delaware Trust Company, a Delaware corporation, as trustee (“Trustee”), and the SHAREHOLDERS from time to time hereunder.
RECITALS
WHEREAS, with the filing of a Certificate of Trust on October 31, 2023 and entry into that certain original trust agreement with the Trustee, the Sponsor established a statutory trust, to be known as the “Fidelity Ethereum Fund”, pursuant to the Delaware Trust Statute; and
WHEREAS, the Sponsor and the Trustee entered into that certain First Amended and Restated Trust Agreement dated June 3, 2024 (the “First Amended and Restated Trust Agreement”); and
WHEREAS, the Sponsor and the Trustee entered into that certain Second Amended and Restated Trust Agreement dated July 21, 2025 (the “Second Amended and Restated Trust Agreement”); and
WHEREAS, the Sponsor and the Trustee desire to amend and restate the Second Amended and Restated Trust Agreement; and
WHEREAS, the Sponsor desires to establish the terms on which ether (as herein defined) may be deposited in the trust and provide for the creation of Shares in Creation Units (as herein defined) representing fractional undivided interests in the net assets of the trust and the execution and delivery of Certificates (as herein defined) evidencing the shares; and
WHEREAS, the Sponsor desires to provide for other terms and conditions upon which the trust shall be established and administered, as hereinafter provided;
NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, the Sponsor and the Trustee hereby amend and restate the Second Amended and Restated Trust Agreement and agree as follows:
ARTICLE I
DEFINITIONS; THE TRUST
SECTION 1.1 Definitions.
As used in this Trust Agreement, the following terms shall have the following meanings unless the context otherwise requires:
“Administrator” means any Person from time to time engaged by the Sponsor to assist in the administration of the Shares.
“Administrator Fee” means the fee payable to the Administrator for services it provides to the Trust, which the Sponsor shall pay the Administrator as a Sponsor-paid Expense.
“Affiliate” means (i) any Person directly or indirectly owning, controlling or holding with power to vote 10% or more of the outstanding voting securities of such Person, (ii) any Person 10% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with power to vote by such Person, (iii) any Person, directly or indirectly, controlling, controlled by or under common control of such Person, (iv) any employee, officer, director, member, manager or partner of such Person, or (v) if such Person is an employee, officer, director, member, manager or partner, any Person for which such Person acts in any such capacity.
“Annual Report” means (i) the Trust’s most recent annual report, if any, prepared and publicly disseminated pursuant to the standards of any Secondary Market on which the Shares are then listed, quoted or traded or (ii) if the Shares are then registered under the Exchange Act, the Trust’s most recent annual report prepared and filed in accordance with the rules and regulations of the SEC. At inception, the Trust shall not be required to prepare a Quarterly Report.
“Authorized Participant” means a Person that (i) is a registered broker-dealer or other securities market participant, such as a bank or other financial institution, that is not required to register as a broker-dealer to engage in securities transactions, (ii) is a DTC participant, and (iii) has entered into an Authorized Participant Agreement with the Sponsor and the Trust.
“Authorized Participant Agreement” means an agreement among the Distributor, the Transfer Agent and an Authorized Participant, as it may be amended or supplemented from time to time in accordance with its terms.
“Authorized Participant Designee” means an entity designated by an Authorized Participant to facilitate creations or redemptions of Shares on behalf of an Authorized Participant.
“Benchmark” means the Fidelity Ethereum Reference Rate, or such other benchmark or index as the Sponsor may designate from time to time.
“Beneficial Owners” means owners of beneficial interests in Shares.
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“Business Day” means any day other than a Saturday, Sunday or other day on which banks are permitted or required to close for business in New York, New York.
“Cash Creation Order” has the meaning assigned thereto in Section 3.2(a)(i).
“Cash Redemption Order” has the meaning assigned thereto in Section 5.1(a)(i).
“Certificate of Trust” means the Certificate of Trust of the Trust, including all amendments thereto, in the form attached hereto as Exhibit A, filed with the Secretary of State of the State of Delaware pursuant to Section 3810 of the Delaware Trust Statute.
“CFTC” means the Commodity Futures Trading Commission.
“Code” means the Internal Revenue Code of 1986, as amended.
“Corporate Trust Office” means the principal office at which at any particular time the corporate trust business of the Trustee is administered, which office at the date hereof is located at 251 Little Falls Drive, Wilmington, DE 19808.
“Covered Person” means the Sponsor and its Affiliates and their respective members, managers, directors, officers, employees, agents and controlling persons.
“Creation Unit” means a basket of 25,000 Shares.
“Creation Amount” means, in the case of a Creation Order in ether, the Creation Ether Amount, or, in the case of a Creation Order for cash, the Creation Cash Amount.
“Creation Ether Amount” means, on any Trade Date, the number of ether required as of such Trade Date for each Creation Unit, as determined by dividing (x) the number of ether owned by the Trust at 4:00 p.m., New York time, on such Trade Date, after deducting the number of ether representing accrued but unpaid fees and expenses of the Trust (in the case of any such fee and expense other than the Sponsor Fee, converted using the Benchmark at such time, and carried to the eighth decimal place), by (y) the number of Shares outstanding at such time (with the quotient so obtained calculated to one one‑hundred‑millionth of one ether (i.e., carried to the eighth decimal place)) and multiplying such quotient by 25,000.
“Creation Cash Amount” means, on any Trade Date, the amount of cash as of such Trade Date for each Creation Unit, as determined by dividing (x) the cash value of ether owned by the Trust at 4:00 p.m., New York time, on such Trade Date, converted using the Benchmark at such time, after deducting representing accrued but unpaid fees and expenses of the Trust (in the case of any such fee and expense denominated in ether, converted using the Benchmark at such time), by (y) the number of Shares outstanding at such time and multiplying by 25,000.
“Creation Order” has the meaning assigned thereto in Section 3.2(a)(i).
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“Creation Settlement Date” means, with respect to any Creation Order, the Business Day on which such Creation Order settles, as specified in the Authorized Participant Agreement.
“CTA” has the meaning given in Section 13.13 herein.
“Custodian” means Fidelity Digital Asset Services, LLC, or any other Person or Persons from time to time engaged to provide custodian, security or related services to the Trust pursuant to authority delegated by the Sponsor.
“Custodian Fee” means the fee payable to the Custodian for the services it provides to the Trust, which the Sponsor shall pay to the Custodian as a Sponsor-paid Expense.
“Delaware Trust Statute” means the Delaware Statutory Trust Act, Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. § 3801 et seq., as the same may be amended from time‑to‑time.
“Depository” means The Depository Trust Company, or such other depository of Shares as may be selected by the Sponsor as specified herein.
“Digital Assets” means digital representations of value or rights represented by cryptocurrency, cryptographic tokens or other forms of virtual currency or assets.
“Distributor” means any Person from time to time engaged to provide marketing and/or distribution services or related services to the Trust pursuant to authority delegated by the Sponsor.
“Distributor Fee” means the fee payable to the Distributor for services it provides to the Trust, which the Sponsor shall pay the Distributor as a Sponsor-paid Expense.
“ether” (in lowercase form) means ether, a type of virtual currency based on an open source cryptographic protocol existing on the Ethereum Network as determined by the Sponsor in accordance with Section 6.2, and the assets underlying the Trust’s Shares.
“Ether Account” means the Trust’s digital asset custody account with the Custodian.
“Ether Creation Order” has the meaning assigned thereto in Section 3.2(a)(i).
“Ethereum Network” (in capitalized form) means the online, end‑user‑to‑end‑user network hosting a public transaction ledger, known as a blockchain, and the source code comprising the basis for the cryptographic and algorithmic protocols governing the Ethereum Network.
“Ether Holdings” means, at any time, the quantity of the Trust’s ether, plus any cash or other assets held by the Trust represented in ether as calculated using the Benchmark price less its liabilities (which include estimated accrued but unpaid fees and expenses) represented in ether as calculated using the Benchmark price, calculated in accordance with Section 8.4.
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“Ether Redemption Order” has the meaning assigned thereto in Section 5.1(a)(i).
“Event of Withdrawal” has the meaning set forth in Section 12.1(a)(iii) hereof.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Expenses” has the meaning set forth in Section 2.4.
“Extraordinary Expenses” has the meaning set forth in Section 6.8(b).
“FinCEN” means the Financial Crimes Enforcement Network, a bureau of the U.S. Department of Treasury.
“First Amended and Restated Trust Agreement” has the meaning set forth in the recitals.
“Fiscal Year” has the meaning set forth in Article IX hereof.
“GAAP” means U.S. generally accepted accounting principles.
“Incidental Rights” means any rights to claim or otherwise take possession of IR Assets that may result from a “hard fork” of the Ethereum Network, airdrop of Digital Assets or other future means of creating or disseminating Digital Assets, in each case as applicable to the Trust’s ether.
“Indemnified Persons” has the meaning assigned to such term in Section 2.4.
“IR Agent” means any party appointed by agreement to serve as an agent of the Shareholders for the distribution of Incidental Rights or IR Assets.
“IR Assets” means any Digital Assets that are entitled to be acquired by the Trust through the exercise (subject to Section 1.5(b) and Section 6.4(f)) of any Incidental Right.
“IRS” means the U.S. Internal Revenue Service or any successor thereto.
“Liquidating Trustee” has the meaning assigned thereto in Section 12.2.
“Liquidity Policy” means the written policies and procedures of the Trust, if any, adopted by the Sponsor on behalf of the Trust designed to comply with the rules of any Secondary Market on which the Shares are or will be listed and traded, as may be amended, modified, or supplemented by the Sponsor from time to time in its sole discretion.
“Percentage Interest” means, with respect to any Shareholder at any time, a fraction, the numerator of which is the number of Shares held by such Shareholder and the denominator of which is the total number of Shares outstanding, in each case as of 4:00 p.m., New York time, on the date of determination.
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“Person” means any natural person, partnership, limited liability company, statutory trust, corporation, association or other legal entity.
“Prospectus” means the most recent of any prospectus of the Trust that has been filed with the SEC as a part of the Registration Statement.
“Quarterly Report” means (i) the Trust’s most recent quarterly report, if any, prepared and publicly disseminated pursuant to the standards of any Secondary Market on which the Shares are then listed, quoted or traded or (ii) if the Shares are then registered under the Exchange Act, the Trust’s most recent quarterly report on Form 10‑Q prepared and filed in accordance with the rules and regulations of the SEC. At inception, the Trust shall not be required to prepare a Quarterly Report.
“Redemption Order” has the meaning assigned thereto in Section 5.1(a).
“Registration Statement” means the most recent registration statement of the Trust, if any, as filed with and declared effective by the SEC, as the same may at any time and from time to time be amended or supplemented. At inception, the Trust shall not file a Registration Statement.
“SEC” means the Securities and Exchange Commission.
“Second Amended and Restated Trust Agreement” has the meaning set forth in the recitals.
“Secondary Market” means any marketplace or other alternative trading system, as determined by the Sponsor, on which the Shares may then be listed, quoted or traded, including but not limited to, Cboe BZX Exchange, Inc. or any national securities exchange.
“Securities Act” means the Securities Act of 1933, as amended.
“Shareholder” means any Person that owns Shares.
“Shares” means the common units of fractional undivided beneficial interest in the profits, losses, distributions, capital and assets of, and ownership of, the Trust.
“Sponsor” means FD Funds Management LLC, or any substitute therefor as provided herein, or any successor thereto by merger or operation of law.
“Sponsor Agreement” means that certain Amended and Restated Sponsor Agreement by and between the Sponsor and the Trust, dated August 7, 2026, as may be amended from time to time.
“Sponsor Fee” has the meaning set forth in Section 6.8(a)(i).
“Sponsor-paid Expenses” have the meaning set forth in Section 6.8(a)(v).
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“Total Creation Amount” means, with respect to any Creation Order, the applicable Creation Amount multiplied by the number of Creation Units, as specified in such Creation Order.
“Total Redemption Amount” means, with respect to any Redemption Order, the applicable Creation Amount multiplied by the number of Creation Units being redeemed, as specified in such Redemption Order.
“Trade Date” means, for any Creation Order or Redemption Order, the Business Day on which the Total Creation Amount with respect to such Creation Order or Redemption Order is determined in accordance with the Authorized Participant Agreement.
“Transfer Agent” means any Person from time to time engaged to provide such services or related services to the Trust pursuant to authority delegated by the Sponsor.
“Transfer Agent Fee” means the fee payable to the Transfer Agent for services it provides to the Trust, which the Sponsor shall pay the Transfer Agent as a Sponsor-paid Expense.
“Treasury Regulations” means regulations, including proposed or temporary regulations, promulgated under the Code. References herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations.
“Trust” means Fidelity Ethereum Fund, a Delaware statutory trust formed pursuant to the Certificate of Trust, the affairs of which are governed by this Trust Agreement.
“Trust Agreement” means this Third Amended and Restated Trust Agreement, as it may at any time or from time‑to‑time be amended.
“Trustee” means CSC Delaware Trust Company, its successors and assigns, or any substitute therefor as provided herein, acting not in its individual capacity but solely as trustee of the Trust.
“Trust Estate” means (i) all the ether and cash in the Trust’s accounts, including the Ether Account and any staked ether, (ii) all Incidental Rights held by the Trust, (iii) all IR Assets in the Trust’s accounts, (iv) all proceeds from the sale of ether, Incidental Rights and IR Assets pending use of such cash for payment of Extraordinary Expenses or distribution to the Shareholders, and (v) any rights of the Trust pursuant to any agreements, other than this Trust Agreement, to which the Trust is a party.
“Trust Expense” has the meaning set forth in Section 2.3.
“U.S. Dollar” means United States dollars.
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SECTION 1.2 Name.
(a) The name of the Trust is “Fidelity Ethereum Fund” in which name the Trustee and the Sponsor shall cause the Trust to carry out its purposes as set forth in Section 1.5, make and execute contracts and other instruments in the name and on behalf of the Trust and sue and be sued in the name and on behalf of the Trust.
SECTION 1.3 Delaware Trustee; Offices.
(a) The sole Trustee of the Trust is CSC Delaware Trust Company, which is located at the Corporate Trust Office or at such other address in the State of Delaware as the Trustee may designate in writing to the Shareholders. The Trustee shall receive service of process on the Trust in the State of Delaware at the foregoing address. In the event CSC Delaware Trust Company resigns or is removed as the Trustee, the trustee of the Trust in the State of Delaware shall be the successor Trustee, subject to Section 2.1.
(b) The principal office of the Trust, and such additional offices as the Sponsor may establish, shall be located at such place or places inside or outside the State of Delaware as the Sponsor may designate from time to time in writing to the Trustee and the Shareholders. Initially, the principal office of the Trust shall be at 245 Summer Street V13E, Boston, MA 02210.
SECTION 1.4 Declaration of Trust
The Trust Estate shall be held in trust for the Shareholders. It is the intention of the parties hereto that the Trust shall be a statutory trust, under the Delaware Trust Statute and that this Trust Agreement shall constitute the governing instrument of the Trust. It is not the intention of the parties hereto to create a general partnership, limited partnership, limited liability company, joint stock association, corporation, bailment or any form of legal relationship other than a Delaware statutory trust that is treated as a grantor trust for U.S. federal income tax purposes and for purposes of applicable state and local tax laws. Nothing in this Trust Agreement shall be construed to make the Shareholders partners or members of a joint stock association. Effective as of the date hereof, the Trustee and the Sponsor shall have all of the rights, powers and duties set forth herein and in the Delaware Trust Statute with respect to accomplishing the purposes of the Trust. The Trustee has filed the Certificate of Trust required by Section 3810 of the Delaware Trust Statute in connection with the formation of the Trust under the Delaware Trust Statute.
SECTION 1.5 Purposes and Powers.
(a) The purposes of the Trust shall be to accept ether or cash for subscriptions of Shares in accordance with Article III hereof, to hold ether, cash, Incidental Rights and IR Assets, to distribute ether (or cash from the sale of ether) upon redemptions of Shares in accordance with Article V hereof and to distribute ether, Incidental Rights and IR Assets (or cash from the sale thereof) upon the liquidation of the Trust, and to enter into any lawful transaction and engage in any lawful activities in furtherance of or incidental to the foregoing. For the avoidance of doubt, such activities include any lawful action necessary or desirable in connection with the Trust’s ownership of Incidental Rights, including the acquisition of IR Assets, except if such action would be
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prohibited by Section 1.5(b) or any other provision of this Trust Agreement. The Trust shall not engage in any business activity and shall not intentionally acquire any assets other than ether or cash or own any assets other than ether, Incidental Rights and (if permissible under Section 1.5(b) and Section 6.4(f)) IR Assets, or take any of the actions set forth in Section 6.4. The Trust shall have all of the powers specified in Section 3.1 hereof as powers which may be exercised by a Sponsor on behalf of the Trust under this Trust Agreement.
(b) The Trust shall not take any action that could cause the Trust to be treated other than as a grantor trust for U.S. federal income tax purposes. Without limiting the generality of the foregoing, nothing in this Trust Agreement (including, for the avoidance of doubt, Section 1.5(a) and Section 6.2(b)) shall be construed to give the Trustee or the Sponsor the power to vary the investment of the Shareholders within the meaning of Section 301.7701‑4(c) or similar provisions of the Treasury Regulations, nor shall the Trustee or the Sponsor take any action that would vary the investment of the Shareholders. The Trust shall not seek to acquire Incidental Rights or IR Assets. However, if the Trust does acquire such assets by virtue of holding ether, the Trust shall sell such Incidental Rights or IR Assets, distribute such Incidental Rights or IR Assets, or pay expenses with such Incidental Rights or IR Assets as soon as practical after acquiring such Incidental Rights or IR Assets.
(c) To the extent not held or reserved pending fulfillment of a Redemption Order or to pay the expenses of the Trust, the Sponsor shall cause all cash proceeds received by the Trust in connection with purchase of Creation Units to be converted to ether as soon as reasonably practicable.
SECTION 1.6 Tax Treatment.
Each of the parties hereto, by entering into this Trust Agreement, (i) expresses its intention that the Shares will qualify under applicable tax law as interests in a grantor trust which holds the Trust Estate, (ii) agrees that it will file its own U.S. federal, state and local income, franchise and other tax returns in a manner that is consistent with clause (i) of this Section 1.6 and with the classification of the Trust as a grantor trust, and (iii) agrees to use reasonable efforts to notify the Sponsor promptly upon a receipt of any notice from any taxing authority having jurisdiction over such holders of Shares with respect to the treatment of the Shares as anything other than interests in a grantor trust.
SECTION 1.7 Legal Title.
Legal title to all of the Trust Estate shall be vested in the Trust as a separate legal entity; provided, however, that if applicable law in any jurisdiction requires legal title to any portion of the Trust Estate to be vested otherwise, the Sponsor may cause legal title to such portion of the Trust Estate to be held by or in the name of the Sponsor or any other Person (other than a Shareholder or the Trustee) as nominee.
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ARTICLE II
THE TRUSTEE
SECTION 2.1 Term; Resignation; Removal.
(a) CSC Delaware Trust Company has been appointed and hereby agrees to serve as the Trustee of the Trust. The Trust shall have only one Trustee unless otherwise determined by the Sponsor. The Trustee shall serve until such time as the Trust is terminated or if the Sponsor removes the Trustee or the Trustee resigns. The Trustee is appointed to serve as the trustee of the Trust in the State of Delaware and shall at all times satisfy the requirements of Section 3807(a) of the Delaware Trust Statute and be authorized to exercise corporate trust powers under the laws of Delaware, having a combined capital, surplus and undivided profits of at least $50,000,000 and subject to supervision or examination by federal or state authorities. If the Trustee publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Article II the combined capital, surplus and undivided profits of the Trustee shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible to serve as trustee of the Trust in accordance with the provisions of this Section 2.1, the Trustee shall resign promptly in the manner and with the effect specified in this Article II. The Trustee may have normal banking and trust relationships with the Sponsor and their respective Affiliates; provided that none of (i) the Sponsor, (ii) any Person involved in the organization or operation of the Sponsor or the Trust or (iii) any Affiliate of any of them may be the Trustee hereunder. The Trust shall have at least one trustee with a principal place of business in Delaware. It is understood and agreed by the parties hereto that the Trustee shall have none of the duties or liabilities of the Sponsor and shall have no obligation to supervise or monitor the Sponsor or otherwise manage the Trust.
(b) The Trustee is permitted to resign upon at least one hundred eighty (180) days’ notice to the Sponsor upon which date such resignation shall be effective.
(c) If at any time the Trustee shall cease to be eligible to serve as trustee of the Trust in accordance with the provisions of this Trust Agreement, or if at any time the Trustee shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Sponsor may remove the Trustee and appoint a successor trustee by written instrument, in duplicate, which instrument shall be delivered to the Trustee so removed and the successor trustee. The Sponsor may at any time, upon sixty (60) days’ prior notice to the Trustee, remove the Trustee and appoint a successor trustee by written instrument or instruments, in triplicate, signed by the Sponsor or its attorney‑in‑fact duly authorized, one complete set of which instruments shall be delivered to the Trustee so removed and one complete set to the successor so appointed.
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SECTION 2.2 Powers.
Except to the extent expressly set forth in Section 1.3 and this Article II, the duty and authority to manage the affairs of the Trust is vested in the Sponsor, which duty and authority the Sponsor may further delegate as provided herein, all pursuant to Section 3806(b)(7) of the Delaware Trust Statute. The duties of the Trustee shall be limited to (i) accepting legal process served on the Trust in the State of Delaware, (ii) the execution of any certificates required to be filed with the Secretary of State of the State of Delaware which the Trustee is required to execute under Section 3811 of the Delaware Trust Statute and (iii) any other duties specifically allocated to the Trustee in this Trust Agreement. The Trustee shall provide prompt notice to the Sponsor of its performance of any of the foregoing. The Sponsor shall reasonably keep the Trustee informed of any actions taken by the Sponsor with respect to the Trust that would reasonably be expected to affect the rights, obligations or liabilities of the Trustee hereunder or under the Delaware Trust Statute.
SECTION 2.3 Compensation and Expenses of the Trustee.
The Trustee shall be entitled to receive from the Sponsor, as a Sponsor-paid Expense, reasonable compensation for its services hereunder as set forth in a separate fee agreement and shall be entitled to be reimbursed by the Sponsor on behalf of the Trust for reasonable out‑of‑pocket expenses incurred by it in the performance of its duties hereunder, including without limitation, the reasonable compensation, out‑of‑pocket expenses and disbursements of counsel, any experts and such other agents as the Trustee may employ in connection with the exercise and performance of its rights and duties hereunder (together, the “Trust Expenses”). To the extent that the Sponsor fails to pay the Trust Expenses, the Trust will be responsible for such Trust Expenses.
SECTION 2.4 Indemnification.
(a) The Trust hereby agrees to be primary obligor and shall indemnify, defend and hold harmless the Trustee (including in its individual capacity) and any of the officers, directors, employees and agents of the Trustee (the “Indemnified Persons”) from and against any and all losses, damages, liabilities, claims, actions, suits, costs, expenses, disbursements (including the reasonable fees and expenses of counsel and fees and expenses incurred in connection with enforcement of its indemnification rights hereunder), taxes and penalties of any kind and nature whatsoever (collectively, “Expenses”), to the extent that such Expenses arise out of or are imposed upon or asserted at any time against such Indemnified Persons with respect to the performance of this Trust Agreement, the creation, operation or termination of the Trust or the transactions contemplated hereby; provided, however, that the Trust shall not be required to indemnify any Indemnified Person for any Expenses which are a result of the willful misconduct, bad faith or gross negligence of an Indemnified Person. If the Trust shall have insufficient assets or improperly refuses to pay an Indemnified Person within sixty (60) days of a request for payment owed hereunder, the Sponsor shall, as secondary obligor, compensate or reimburse the Trustee or indemnify, defend and hold harmless an Indemnified Person as if it were the primary obligor hereunder; provided, however, that the Sponsor shall not be required to indemnify any Indemnified Person for any Expenses which are a result of the willful misconduct, bad faith or gross negligence
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of an Indemnified Person. To the fullest extent permitted by law and by the requirement for treatment of the Trust as a grantor trust for tax purposes, Expenses to be incurred by an Indemnified Person shall, from time to time, be advanced by, or on behalf of, the Sponsor prior to the final disposition of any matter upon receipt by the Sponsor of an undertaking by, or on behalf of, such Indemnified Person to repay such amount if it shall be determined that the Indemnified Person is not entitled to be indemnified under this Trust Agreement.
(b) As security for any amounts owing to the Trustee hereunder, the Trustee shall have a lien against the Trust property, which lien shall be prior to the rights of the Sponsor or any other Shareholder. The obligations of the Sponsor and the Trust to indemnify the Indemnified Persons under this Section 2.4 shall survive the termination of this Trust Agreement.
SECTION 2.5 Successor Trustee.
Upon the resignation or removal of the Trustee, the Sponsor shall appoint a successor Trustee by delivering a written instrument to the outgoing Trustee. Any successor Trustee must satisfy the requirements of Section 3807 of the Delaware Trust Statute. The successor Trustee shall become fully vested with all of the rights, powers, duties and obligations of the outgoing Trustee under this Trust Agreement, with like effect as if originally named as Trustee, and the outgoing Trustee shall be discharged of its duties and obligations under this Trust Agreement. Any business entity into which the Trustee may be merged or converted or with which it may be consolidated, or any entity resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any entity succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, to the fullest extent permitted by law without the execution or filing of any paper or any further act on the part of any of the parties hereto. Any successor Trustee shall file any necessary amendments to the Certificate of Trust with the Secretary of State.
SECTION 2.6 Liability of Trustee.
Except as otherwise provided in this Article II, in accepting the trust created hereby, CSC Delaware Trust Company acts solely as Trustee hereunder and not in its individual capacity, and all Persons having any claim against CSC Delaware Trust Company by reason of the transactions contemplated by this Trust Agreement and any other agreement to which the Trust is a party shall look only to the Trust Estate for payment or satisfaction thereof. The Trustee shall not be liable or accountable hereunder to the Trust or to any other Person or under any other agreement to which the Trust is a party, except for the Trustee’s own fraud, gross negligence, bad faith or willful misconduct. In particular, but not by way of limitation:
(a) The Trustee shall have no liability or responsibility for the validity or sufficiency of this Trust Agreement or for the form, character, genuineness, sufficiency, enforceability, collectability, location, existence, value or validity of the Trust Estate;
(b) The Trustee has not prepared or verified, and shall not be responsible or liable for, any information, disclosure or other statement in the Prospectus or in any other document issued or delivered in connection with the sale or transfer of the Shares;
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(c) The Trustee shall not be liable for any actions taken or omitted to be taken by it in accordance with the instructions of the Sponsor or the Liquidating Trustee;
(d) The Trustee shall not have any liability for the acts or omissions of the Sponsor, the Transfer Agent, the Custodian or their respective delegates;
(e) The Trustee shall have no duty or obligation to monitor or supervise the performance of any obligations of the Sponsor, the Custodian or their respective delegates or any Authorized Participant or any other Person;
(f) No provision of this Trust Agreement shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its rights or powers hereunder;
(g) Under no circumstances shall the Trustee be liable for any obligations, representations, warranties, covenants or indebtedness of the Trust arising under this Trust Agreement or any other agreements to which the Trust is a party;
(h) The Trustee shall be authorized but not obligated to take the actions of the Trust under this Agreement and the related documents and shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement, or to institute, conduct or defend any litigation under this Trust Agreement or any other agreements to which the Trust is a party, at the request, order or direction of the Sponsor unless the Sponsor has offered to CSC Delaware Trust Company (or any successor Trustee) (in its capacity as Trustee and individually) security or indemnity satisfactory to it against the costs, expenses and liabilities that may be incurred by CSC Delaware Trust Company (or such successor Trustee) (including, without limitation, the reasonable fees and expenses of its counsel) therein or thereby;
(i) Notwithstanding anything contained herein to the contrary, the Trustee shall not be required to take any action in any jurisdiction other than in the State of Delaware if the taking of such action will (i) require the consent or approval or authorization or order of, or the giving of notice to, or the registration with or taking of any action in respect of, any state or other governmental authority or agency of any jurisdiction other than the State of Delaware, (ii) result in any fee, tax or other governmental charge becoming payable by the Trustee under the laws of any jurisdiction or any political subdivision thereof other than the State of Delaware or (iii) subject the Trustee to personal jurisdiction, other than in the State of Delaware, for causes of action arising from personal acts unrelated to the consummation of the actions of the Trustee contemplated by this Trust Agreement;
(j) To the extent that, at law or in equity, the Trustee has duties (including fiduciary duties) and liabilities relating thereto to the Trust, the Shareholders, the Beneficial Owners, or any other Person, the Trustee, acting under this Trust Agreement, shall not be liable to the Trust, the Shareholders, the Beneficial Owners or any other Person for its good faith reliance on the provisions of this Trust Agreement, and the provisions of this Trust Agreement, to the extent that they restrict or eliminate the duties and liabilities of the Trustee otherwise existing at law or in equity are agreed by the parties hereto to replace such other duties and liabilities of the Trustee;
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(k) The Trustee shall not be liable for special, punitive, exemplary, consequential or similar damages for a breach of the Trust Agreement under any circumstances, including, without limitation, lost profits;
(l) If the Trustee is unsure of the application of any provision of this Agreement or any related agreement, then the Trustee may promptly deliver a notice to the Sponsor requesting written instructions as to the course of action desired by the Sponsor, and if the Trustee does not receive such instructions within ten Business Days after it has delivered such notice, or such shorter period of time set forth in such notice, it may, but shall be under no duty to, take or refrain from taking such action not inconsistent with this Agreement;
(m) The Trustee shall not be required to take any action if the Trustee shall reasonably determine, or shall have been advised by counsel, that such action is likely to result in personal liability, or is contrary to the terms hereof or of any document contemplated hereby to which the Trustee is a party or otherwise contrary to law;
(n) The Trustee shall have no duty or obligation to manage, control, use, sell, dispose of or otherwise deal with the Trust Estate, to prepare or file any document or report (including any securities or tax filings or reports, any financing or continuation statement, qualification to do business, licensing, commission filing or other filing for the Trust), or to otherwise perfect or maintain the perfection of any security interest or lien, or otherwise to take or refrain from taking any action under or in connection with this Agreement except as expressly required by the terms of this Agreement, and the right of the Trustee to perform any discretionary act enumerated in this Agreement or in any related document shall not be construed as a duty, and no implied duties (including fiduciary duties) or obligations shall be read into this Agreement or any related agreement against the Trustee;
(o) The Trustee shall not be liable for any action taken, or error of judgment made, in good faith by any officer or employee of the Trustee;
(p) In no event shall the Trustee be liable for forces beyond its control including strikes, work stoppages, acts of war or terrorism, insurrection, revolution, nuclear or natural catastrophes, epidemics or pandemics, or acts of God and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; and
(q) The Trustee may earn compensation in the form of short-term interest (“float”) on items like uncashed distribution checks (from the date issued until the date cashed), funds that the Trustee is directed not to invest and deposits awaiting investment direction or received too late to be invested overnight in previously directed investments.
SECTION 2.7 Reliance; Advice of Counsel.
(a) In the absence of bad faith, the Trustee may conclusively rely upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Trust Agreement in determining the truth of the statements and the correctness of the opinions contained therein, and shall incur no liability to anyone in acting or not acting on any signature, instrument, notice,
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resolution, request, consent, order, certificate, report, opinion, bond or other document or paper believed by it to be genuine and believed by it to be signed by the proper party or parties and need not investigate any fact or matter pertaining to, or contained in, any such document; provided, however, that the Trustee shall have examined any certificates and opinions so as to reasonably determine compliance of such certificates and opinions with the requirements of this Trust Agreement. The Trustee may accept a certified copy of a resolution of the board of directors or other governing body of any corporate party as conclusive evidence that such resolution has been duly adopted by such body and that such resolution is in full force and effect. As to any fact or matter the method of the determination of which is not specifically prescribed in this Trust Agreement, the Trustee may for all purposes hereof rely on a certificate, signed by the president, any vice president, the treasurer or any other authorized officers of the relevant party, as to such fact or matter, and such certificate shall constitute full protection to the Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the Trust hereunder and in the performance of its duties and obligations under this Trust Agreement, the Trustee, at the expense of the Trust (i) may act directly or through its agents, attorneys, custodians or nominees pursuant to agreements entered into with any of them, and the Trustee shall not be liable for the conduct or misconduct of such agents, attorneys, custodians or nominees if such agents, attorneys, custodians or nominees shall have been selected by the Trustee with reasonable care and (ii) may consult with counsel, accountants and other skilled professionals to be selected with reasonable care by it. The Trustee shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the opinion or advice of any such counsel, accountant or other such Persons.
SECTION 2.8 Payments to the Trustee.
Any amounts paid to the Trustee pursuant to this Article II shall be deemed not to be a part of the Trust Estate immediately after such payment. Any amounts owing to the Trustee under this Trust Agreement shall constitute a claim against the Trust Estate. Notwithstanding any other provision of this Trust Agreement, all payments to the Trustee, including fees, expenses and any amounts paid in connection with indemnification of the Trustee in accordance with the terms of this Trust Agreement will be payable only in U.S. Dollars.
ARTICLE III
SHARES; CREATIONS AND ISSUANCE OF CREATION BASKETS
SECTION 3.1 General.
The Sponsor shall have the power and authority, without action or approval by the Shareholders, to cause the Trust to issue Shares from time to time as it deems necessary or desirable. The number of Shares authorized shall be unlimited, and the Shares so authorized may be represented in part by fractional Shares, calculated to one one‑hundred‑millionth of one ether (i.e., carried to the eighth decimal place). From time to time, the Sponsor may cause the Trust to divide or combine the Shares into a greater or lesser number without thereby changing the
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proportionate beneficial interests in the Trust Estate, or in any way affecting the rights, of the Shareholders, without action or approval by the Shareholders. Except as set forth in Section 3.2(b), the Trust shall issue Shares solely in exchange for contributions of ether and/or an amount of cash equivalent to the number of ether (or for no consideration if pursuant to a Share distribution or split‑up); provided, however, the Sponsor may, in its sole discretion, determine to require such transactions to exclusively in ether or exclusively in cash. All Shares when so issued shall be fully paid and non‑assessable. Subject to the limitations upon, and requirements for, the issuance of Creation Units stated herein and in the Authorized Participant Agreement, the number of Creation Units that may be issued by the Trust is unlimited. Every Shareholder and Beneficial Owner, by virtue of having purchased or otherwise acquired a Share, shall be deemed to have expressly consented and agreed to be bound by the terms of this Trust Agreement.
SECTION 3.2 Offer of Shares; Procedures for Creation and Issuance of Creation Units to Authorized Participants.
(a) General. The following procedures, as supplemented by the more detailed procedures specified in each Authorized Participant Agreement, including all exhibits, annexes, attachments and procedures, as applicable, to each Authorized Participant Agreement, which may be amended from time to time in accordance with the provisions of the relevant Authorized Participant Agreement (provided that any such amendment shall not constitute an amendment of this Trust Agreement), shall govern the Trust with respect to the creation and issuance of Creation Units to Authorized Participants, subject to Section 3.2(b).
(i) On any Business Day, an Authorized Participant may place an order for one or more Creation Units (each, a “Creation Order”) in the manner provided in the Authorized Participant Agreement. The Sponsor may require, in its sole discretion, that a Creation Order be denominated in ether (a “Ether Creation Order”) or cash (a “Cash Creation Order”).
(ii) The Sponsor or its delegate shall process Creation Orders only from Authorized Participants with respect to which an Authorized Participant Agreement is in full force and effect and only in accordance with the Authorized Participant Agreement. The Sponsor or its delegate shall maintain and make available at the Trust’s principal offices during normal business hours a current list of the Authorized Participants with respect to which an Authorized Participant Agreement is in full force and effect.
(iii) The Trust shall create and issue Creation Units only in exchange for deposit in the account designated by the Sponsor on the applicable Creation Settlement Date of the applicable Total Creation Amount by the relevant Authorized Participant or Authorized Participant Designee, as applicable.
(iv) The Sponsor or its delegate has final determination of all questions as to the calculation of the Total Creation Amount at any time.
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(v) The expense and risk of delivery, ownership and safekeeping of ether, until such ether has been received and not rejected by the Trust, shall be borne solely by the Authorized Participant or an Authorized Participant Designee, as applicable.
(vi) Upon the receipt of the Total Creation Amount in the account designated by the Sponsor, the Sponsor or its delegate shall, or shall direct the Transfer Agent to, credit to the account designated by the Authorized Participant the number of Creation Units ordered by the Authorized Participant.
(vii) The Trust or its delegate may accept delivery of ether or cash by such other means as the Sponsor, from time to time, may determine to be acceptable for the Trust.
(b) Rejection or Suspension. The Sponsor or its delegate shall reject a Creation Order if the Creation Order is not in proper form as described in the relevant Authorized Participant Agreement or if the fulfillment of the Creation Order, in the opinion of its counsel, might be unlawful. The issuance of Creation Units may be suspended by the Sponsor generally, or refused with respect to a particular Creation Order, during any period when the transfer books of the Transfer Agent are closed or if circumstances outside the control of the Sponsor or its delegate make it for all practicable purposes not feasible to process Creation Orders or for any other reason at any time or from time to time. None of the Sponsor, its delegates or the Custodian shall be liable for the suspension or rejection of any Creation Order.
(c) Conflict. In the event of any conflict between the procedures described in this Section 3.2 and the Authorized Participant Agreement, the Authorized Participant Agreement shall control.
(d) Successor Custodian. If a successor to the Custodian shall be employed, the Trust and the Sponsor shall establish procedures acceptable to such successor with respect to the matters addressed in this Section 3.2.
SECTION 3.3 Book‑Entry System.
(a) Shares shall be held in book‑entry form by the Sponsor, its delegate, or the Transfer Agent. The Sponsor or its delegate shall, or shall direct the Transfer Agent, to (i) credit or debit the number of Creation Units to the account of the applicable Shareholder and (ii) issue or cancel Creation Units, as applicable, at the direction of the Sponsor or its delegate.
(b) The Sponsor or its delegate may cause the Trust to issue Shares in certificated form in its sole discretion.
SECTION 3.4 Assets of the Trust.
The Trust Estate shall irrevocably belong to the Trust for all purposes, subject only to the rights of creditors of the Trust and shall be so recorded upon the books of account of the Trust.
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SECTION 3.5 Liabilities of the Trust.
The Trust Estate shall be charged with the liabilities of the Trust and with all expenses, costs, charges and reserves attributable to the Trust. The Sponsor shall have full discretion, to the extent not inconsistent with applicable law, to determine which items shall be treated as income and which items as capital, and each such determination and allocation shall be conclusive and binding upon the Shareholders and Beneficial Owners.
SECTION 3.6 Distributions.
(a) The Trust may make distributions on Shares either in cash or in kind, including in such form as is necessary and permissible for the Trust to facilitate the distribution of Incidental Rights and/or IR Assets.
(b) Distributions on Shares, if any, may be made with such frequency as the Sponsor may determine, which may be daily or otherwise, to the Shareholders, from the Trust Estate, after providing for actual and accrued liabilities. All distributions on Shares shall be made pro rata to the Shareholders in proportion to their respective Percentage Interests at the date and time of record established for such distribution.
(c) If the Trust sells ether, Incidental Rights and/or IR Assets in order to pay Extraordinary Expenses, then any cash remaining from these sales after the payment of any Extraordinary Expenses shall promptly be distributed to the Shareholders.
SECTION 3.7 Voting Rights.
Notwithstanding any other provision hereof, on each matter submitted to a vote of the Shareholders, each Shareholder shall be entitled to a proportionate vote based upon its Percentage Interest at such time.
SECTION 3.8 Equality.
All Shares shall represent an equal proportionate beneficial interest in the Trust Estate subject to the liabilities of the Trust, and each Share’s interest in the Trust Estate shall be equal to each other Share.
ARTICLE IV
TRANSFERS OF SHARES
SECTION 4.1 General Prohibition.
A Shareholder may not sell, assign, transfer or otherwise dispose of, or pledge, hypothecate or in any manner encumber any or all of its Shares or any part of its right, title and interest in the Trust Estate except as permitted in this Article IV and any act in violation of this Article IV shall
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not be binding upon or recognized by the Trust (regardless of whether the Sponsor shall have knowledge thereof), unless approved in writing by the Sponsor.
SECTION 4.2 [Reserved].
SECTION 4.3 Transfer of Shares Generally.
Shares shall be transferable on the books of account for the Trust only by the record holder thereof or by his or her duly authorized agent upon delivery to the Sponsor or the Transfer Agent or similar agent of a duly executed instrument of transfer, and such evidence of the genuineness of each such execution and authorization and of such other matters as may be required by the Sponsor. Upon such delivery, and subject to any further requirements specified by the Sponsor, the transfer shall be recorded on the books of account for the Trust. Until a transfer is so recorded, the Shareholder of record of Shares shall be deemed to be the Shareholder with respect to such Shares for all purposes hereunder and neither the Sponsor nor the Trust, nor the Transfer Agent or any similar agent or registrar or any officer, employee or agent of the Trust, shall be affected by any notice of a proposed transfer.
ARTICLE V
REDEMPTIONS
SECTION 5.1 Redemption of Creation Units.
(a) General. The following procedures, as supplemented by the Authorized Participant Agreement, which may be amended from time to time in accordance with the provisions of the Authorized Participant Agreement (provided that any such amendment shall not constitute an amendment of this Trust Agreement), shall govern the Trust with respect to the redemption of Creation Units, subject to Section 5.1(b).
(i) On any Business Day, an Authorized Participant may place an order to redeem Creation Units (each, a “Redemption Order”) in the manner provided in the Authorized Participant Agreement. The Sponsor may require, in its sole discretion, that Redemption Orders may be denominated in ether (a “Ether Redemption Order”) or cash (a “Cash Redemption Order”).
(ii) The Sponsor or its delegates shall process Redemption Orders only from Authorized Participants with respect to which an Authorized Participant Agreement is in full force and effect.
(iii) The Sponsor or its delegate has final determination of all questions as to the determination of the Total Redemption Amount at any time.
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(iv) With respect to an Ether Redemption Order, the Total Redemption Amount shall be delivered only to the account or wallet designated by the applicable Authorized Participant.
(v) With respect to a Cash Creation Order, the Sponsor shall instruct the applicable Custodian to withdraw from the Ether Account ether in such quantity as may be necessary to permit payment of the Total Redemption Amount and may cause the Trust (or its delegate) to convert such ether into U.S. Dollars.
(vi) The Total Redemption Amount shall be subject to the deduction of any applicable tax or other governmental charges that may be due.
(b) Rejection or Suspension. The Sponsor or its delegate shall reject a Redemption Order if the Redemption Order is not in proper form as described in the relevant Authorized Participant Agreement or if the fulfillment of the Redemption Order, in the opinion of its counsel, might be unlawful. The redemption of Creation Units may be suspended by the Sponsor generally, or refused with respect to a particular Redemption Order, during any period when the transfer books of the Transfer Agent are closed or if circumstances outside the control of the Sponsor or its delegate make it for all practicable purposes not feasible to process Redemption Orders or for any other reason at any time or from time to time. None of the Sponsor, its delegates or the Custodian shall be liable for the suspension or rejection of any Redemption Order.
(c) Conflict. In the event of any conflict between the procedures described in this Section 5.1 and the Authorized Participant Agreement, the Authorized Participant Agreement shall control.
ARTICLE VI
THE SPONSOR
SECTION 6.1 Management of the Trust.
Pursuant to Section 3806(b)(7) of the Delaware Trust Statute, the Trust shall be managed by the Sponsor in accordance with this Trust Agreement. The Sponsor may delegate, as provided herein, the duty and authority to manage the affairs of the Trust. Any determination as to what is in the interests of the Trust made by the Sponsor in good faith shall be conclusive. In construing the provisions of this Trust Agreement, the presumption shall be in favor of a grant of power to the Sponsor, but subject, for the avoidance of doubt, to the restrictions, prohibitions and limitations expressly set forth in Section 1.5, Section 6.4(f) and otherwise in this Trust Agreement. The enumeration of any specific power in this Trust Agreement shall not be construed as limiting the aforesaid power.
SECTION 6.2 Authority of Sponsor.
In addition to, and not in limitation of, any rights and powers conferred by law or other provisions of this Trust Agreement, and except as limited, restricted or prohibited by the express
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provisions of this Trust Agreement or the Delaware Trust Statute, the Sponsor shall have, and may exercise on behalf of the Trust, all powers and rights necessary, proper, convenient or advisable to effectuate and carry out the purposes of the Trust, which powers and rights shall include, without limitation, the following:
(a) To direct the Trustee pursuant to this Agreement and to enter into, execute, accept, deliver and maintain, and to cause the Trust to perform its obligations under, contracts, agreements and any or all other documents and instruments incidental to the Trust’s purposes, and to do and perform all such acts as may be in furtherance of the Trust’s purposes, or necessary or appropriate for the offer and sale of the Shares, including, but not limited to, causing the Trust to enter into (i) contracts or agreements with the Sponsor or an Affiliate, provided that any such contract or agreement does not conflict with the provisions of Section 1.5(b) of this Trust Agreement, Section 6.4 of this Trust Agreement or clause (ii) of this Section 6.2(a) and (ii) contracts with third parties for various services, it being understood that any document or instrument executed or accepted by the Sponsor in the Sponsor’s name shall be deemed executed and accepted on behalf of the Trust by the Sponsor;
(b) To cause the Trust to engage in staking activities and/or enter into arrangements with third parties to cause the Trust’s ether to be staked by such third parties or their agents or designees, and to set the Sponsor’s own compensation for establishing such arrangements as provided for in the Sponsor Agreement;
(c) To establish, maintain, deposit into, and sign checks and/or otherwise draw upon, accounts on behalf of the Trust with appropriate banking and savings institutions;
(d) To deposit, withdraw, pay, retain and distribute the Trust Estate or any portion thereof in any manner consistent with the provisions of this Trust Agreement;
(e) To supervise the preparation of the Prospectus and supplements and amendments thereto;
(f) To make or authorize the making of distributions to the Shareholders and expenses of the Trust out of the Trust Estate;
(g) To cause the Trust to appoint an agent to act on behalf of the Shareholders pursuant to Section 7.5;
(h) To prepare, or cause to be prepared, and file, or cause to be filed, an application to register any Shares under the Securities Act and/or the Exchange Act and to take any other action and execute and deliver any certificates or documents that may be necessary to effectuate such registration;
(i) To prepare, or cause to be prepared, and file, or cause to be filed, an application to enable the Shares to be listed, quoted or traded on any Secondary Market and to take any other action and execute and deliver any certificates or documents that may be necessary to effectuate such listing, quotation or trading;
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(j) To appoint one or more Custodians, banks or other security vendors, including itself or an Affiliate, to provide for custodian security services, or to determine not to appoint any Custodian, bank or other security vendors, and to otherwise take any action with respect to the Custodians, banks or other security vendors to safeguard the Trust Estate;
(k) In the sole and absolute discretion of the Sponsor, to admit an Affiliate or Affiliates of the Sponsor as additional Sponsors;
(l) To delegate those of its duties hereunder as it shall determine from time to time to one or more Distributors, and add any additional service providers, if needed and as applicable;
(m) To perform such other services as the Sponsor believes that the Trust may from time to time require;
(n) Interact with the Depository as required;
(o) Prepare and adopt, on behalf of the Trust, a Liquidity Policy, which such policy shall be deemed to be a part of this Trust Agreement and be binding upon the Trust, and to make such amendments or modifications to such Liquidity Policy from time to time as determined by the Sponsor in its sole discretion, and to take any action determined by the Sponsor to be necessary or appropriate to cause the Trust to comply with such Liquidity Policy; and
(p) In general, but subject to Section 1.5 and Section 6.4 of this Trust Agreement, to do everything necessary, suitable or proper for the accomplishment of any purpose or the furtherance of any power herein set forth, either alone or in association with others, and to do every other act or thing incidental or appurtenant to, or growing out of or connected with, the aforesaid purposes or powers.
SECTION 6.3 Obligations of the Sponsor.
In addition to the obligations expressly provided by the Delaware Trust Statute or this Trust Agreement, the Sponsor shall:
(a) Devote such of its time to the affairs of the Trust as it shall, in its discretion exercised in good faith, determine to be necessary to carry out the purposes of the Trust, as set forth in Section 1.5, for the benefit of the Shareholders;
(b) Execute, file, record and/or publish all certificates, statements and other documents and do any and all other things as may be appropriate for the formation, qualification and operation of the Trust and for the conduct of its affairs in all appropriate jurisdictions;
(c) Retain independent public accountants to audit the accounts of the Trust;
(d) Employ attorneys to represent the Sponsor and, as necessary, the Trust;
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(e) Select and enter into agreements with the Trustee and any other service provider to the Trust;
(f) Use its best efforts to maintain the status of the Trust as a grantor trust for U.S. federal income tax purposes under Subpart E, Part I of Subchapter J of the Code;
(g) Monitor all fees charged to the Trust, and the services rendered by the service providers to the Trust, to determine whether the fees paid by, and the services rendered to, the Trust are at competitive rates and are the best price and services available under the circumstances, and if necessary, renegotiate the fee structure to obtain such rates and services for the Trust;
(h) Provide for the safekeeping and use of the Trust Estate, whether or not in the Sponsor’s immediate possession or control;
(i) Not employ or permit others to employ the Trust Estate in any manner except for the benefit of the Trust, including, among other things, the utilization of any portion of the Trust Estate as compensating balances for the exclusive benefit of the Sponsor;
(j) At all times act with integrity and good faith and exercise due diligence in all activities relating to the Trust and in resolving conflicts of interest;
(k) Enter into directly or through its delegates an Authorized Participant Agreement with each Authorized Participant and discharge the duties and responsibilities of the Trust and the Sponsor thereunder;
(l) Receive directly or through its delegates from Authorized Participants and process properly submitted Creation Orders, as described in Section 3.2(a);
(m) Receive directly or through its delegates from Authorized Participants and process properly submitted Redemption Orders (if authorized), as described in Section 5.1(a);
(n) Interact with the Custodian and any other party as required;
(o) If the Shares are listed, quoted or traded on any Secondary Market, cause the Trust to comply with all rules, orders and regulations of such Secondary Market to which the Trust is subject as a result of the listing, quotation or trading of the Shares on such Secondary Market, and take all such other actions that may reasonably be taken and are necessary for the Shares to remain listed, quoted or traded on such Secondary Market until the Trust is terminated or the Shares are no longer listed, quoted or traded on such Secondary Market;
(p) If the Shares are transferred in a transaction registered under the Securities Act or registered under the Exchange Act, cause the Trust to comply with all rules, orders and regulations of the SEC and take all such other actions as may reasonably be taken and are necessary for the Shares to remain registered under the Exchange Act until the Trust is terminated or the Shares are no longer registered under the Exchange Act; and
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(q) Take all actions to prepare and, to the extent required by this Trust Agreement or by law, deliver to Shareholders and/or Beneficial Owners, as applicable, press releases or statements, financial or otherwise, that the Sponsor determines are required to be provided to Shareholders by applicable law or governmental regulation or the requirements of any Secondary Market on which the Shares are listed, quoted or traded or, if any Shares are transferred in a transaction registered under the Securities Act or registered under the Exchange Act, the SEC, as applicable.
The foregoing clauses of Section 6.2 and Section 6.3 shall be construed as powers, and the foregoing enumeration of specific powers shall not be held to limit or restrict in any manner the general powers of the Sponsor. Any action by the Sponsor hereunder shall be deemed an action on behalf of the Trust, and not an action in an individual capacity.
SECTION 6.4 General Prohibitions.
The Trust shall not, and the Sponsor shall not have the power to cause the Trust to:
(a) Receive any property other than ether or cash upon the issuance of Shares;
(b) Hold any property other than (i) ether, Incidental Rights and IR Assets, (ii) cash and (iii) interests in any liquidating trust or other vehicle formed to hold Incidental Rights or IR Assets pending distribution of such interests to the Shareholders;
(c) Hold any cash from the sale of ether, Incidental Rights or IR Assets for more than thirty (30) Business Days prior to using such cash to pay Extraordinary Expenses or satisfying Redemption Orders and distributing any remaining cash to the Shareholders;
(d) redeem the Shares other than (i) to satisfy a Redemption Order from an Authorized Participant, (ii) as provided in Section 5.1 or (iii) upon the dissolution of the Trust;
(e) Elect to be treated as an association taxable as a corporation for U.S. federal income tax purposes; or
(f) Notwithstanding any other provision of this Trust Agreement, including Section 6.4(b), take any action that could cause the Trust to be treated other than as a grantor trust for U.S. federal income tax purposes.
SECTION 6.5 Liability of Covered Persons.
A Covered Person shall have no liability to the Trust or to any Shareholder, Beneficial Owner or other Covered Person for any loss suffered by the Trust which arises out of any action or inaction of such Covered Person if such Covered Person, in good faith, determined that such course of conduct was in the best interest of the Trust and such course of conduct did not constitute fraud, gross negligence, bad faith or willful misconduct of such Covered Person. Subject to the foregoing, neither the Sponsor nor any other Covered Person shall be personally liable for the return or repayment of all or any portion of the ether transferred, or the purchase price otherwise
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paid, by a Shareholder for its Shares, it being expressly agreed that any such return made pursuant to this Trust Agreement shall be made solely from the assets of the Trust without any rights of contribution from the Sponsor or any other Covered Person. A Covered Person shall not be liable for the conduct or misconduct of any delegatee selected by the Sponsor with reasonable care.
SECTION 6.6 Fiduciary Duty.
(a) To the extent that, at law or in equity, the Sponsor has duties (including fiduciary duties) and liabilities relating thereto to the Trust, the Shareholders, the Beneficial Owners or any other Person, the Sponsor acting under this Trust Agreement shall not be liable to the Trust, the Shareholders, the Beneficial Owners or any other Person for its good faith reliance on the provisions of this Trust Agreement subject to the standard of care set forth in Section 6.5 herein. The provisions of this Trust Agreement, to the extent that they restrict or eliminate the duties and liabilities of the Sponsor otherwise existing at law or in equity are agreed by the parties hereto to replace such other duties and liabilities of the Sponsor. To the fullest extent permitted by law, no Person other than the Sponsor and the Trustee shall have any duties (including fiduciary duties) or liabilities at law or in equity to the Trust, the Shareholders, the Beneficial Owners or any other Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between the Sponsor or any of its Affiliates, on the one hand, and the Trust, any Shareholder, and Beneficial Owner or any other Person, on the other hand; or
(ii) whenever this Trust Agreement or any other agreement contemplated herein provides that the Sponsor shall act in a manner that is, or provides terms that are, fair and reasonable to the Trust, any Shareholder, any Beneficial Owner or any other Person,
the Sponsor shall resolve such conflict of interest, take such action or provide such terms, considering in each case the relative interest of each party (including its own interest) to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry practices, and any applicable generally accepted accounting practices or principles. In the absence of bad faith by the Sponsor, the resolution, action or terms so made, taken or provided by the Sponsor shall not constitute a breach of this Trust Agreement or any other agreement contemplated herein or of any duty or obligation of the Sponsor at law or in equity or otherwise.
(c) The Sponsor and any Affiliate of the Sponsor may engage in or possess an interest in profit‑seeking or business ventures of any nature or description, independently or with others, whether or not such ventures are competitive with the Trust and the doctrine of corporate opportunity, or any analogous doctrine, shall not apply to the Sponsor. If the Sponsor acquires knowledge of a potential transaction, agreement, arrangement or other matter that may be an opportunity for the Trust, it shall have no duty to communicate or offer such opportunity to the Trust, and the Sponsor shall not be liable to the Trust, the Shareholders or the Beneficial Owners for breach of any fiduciary or other duty by reason of the fact that the Sponsor pursues or acquires
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for, or directs such opportunity to, another Person or does not communicate such opportunity or information to the Trust. Neither the Trust, any Shareholder nor any Beneficial Owner shall have any rights or obligations by virtue of this Trust Agreement or the trust relationship created hereby in or to such independent ventures or the income or profits or losses derived therefrom, and the pursuit of such ventures, even if competitive with the purposes of the Trust, shall not be deemed wrongful or improper. Except to the extent expressly provided herein, the Sponsor may engage or be interested in any financial or other transaction with the Trust, the Shareholders, the Beneficial Owners or any Affiliate of the Trust, the Shareholders or the Beneficial Owners.
(d) To the fullest extent permitted by law and notwithstanding any other provision of this Trust Agreement or in any agreement contemplated herein or applicable provisions of law or equity or otherwise, whenever in this Trust Agreement a Person is permitted or required to make a decision (a) in its “sole discretion” or “discretion” or under a grant of similar authority or latitude, the Person shall be entitled to consider only such interests and factors as it desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Trust, the Shareholders, the Beneficial Owners or any other Person, or (b) in its “good faith” or under another express standard, the Person shall act under such express standard and shall not be subject to any other or different standard. The term “good faith” as used in this Trust Agreement shall mean subjective good faith as such term is understood and interpreted under Delaware law.
SECTION 6.7 Indemnification of the Sponsor.
(a) The Sponsor shall be indemnified by the Trust against any losses, judgments, liabilities, expenses and amounts paid in settlement of any claims sustained by it in connection with its activities for the Trust, provided that (i) the Sponsor was acting on behalf of, or performing services for, the Trust and has determined, in good faith, that such course of conduct was in the best interests of the Trust and such liability or loss was not the result of fraud, gross negligence, bad faith, willful misconduct, or a material breach of this Trust Agreement on the part of the Sponsor and (ii) any such indemnification will be recoverable only from the Trust Estate. All rights to indemnification permitted herein and payment of associated expenses shall not be affected by the dissolution or other cessation of existence of the Sponsor, or the withdrawal, adjudication of bankruptcy or insolvency of the Sponsor, or the filing of a voluntary or involuntary petition in bankruptcy under Title 11 of the United States Code by or against the Sponsor.
(b) Notwithstanding the provisions of Section 6.7(a) above, the Sponsor, any Authorized Participant and any other Person acting as a broker‑dealer for the Trust shall not be indemnified for any losses, liabilities or expenses arising from or out of an alleged violation of U.S. federal or state securities laws unless (i) there has been a successful adjudication on the merits of each count involving alleged securities law violations as to the particular indemnitee and the court approves the indemnification of such expenses (including, without limitation, litigation costs), (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee and the court approves the indemnification of such expenses (including, without limitation, litigation costs) or (iii) a court of competent jurisdiction approves a settlement of the claims against a particular indemnitee and finds that indemnification of the settlement and related costs should be made.
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(c) The Trust shall not incur the cost of that portion of any insurance that insures any party against any liability, the indemnification of which is herein prohibited.
(d) Expenses incurred in defending a threatened or pending civil, administrative or criminal action suit or proceeding against the Sponsor shall be paid by the Trust in advance of the final disposition of such action, suit or proceeding if (i) the legal action relates to the performance of duties or services by the Sponsor on behalf of the Trust; (ii) the legal action is initiated by a third party who is not a Shareholder or the legal action is initiated by a Shareholder and a court of competent jurisdiction specifically approves such advance; and (iii) the Sponsor undertakes to repay the advanced funds with interest to the Trust in cases in which it is not entitled to indemnification under this Section 6.7.
(e) The term “Sponsor” as used only in this Section 6.7 shall include, in addition to the Sponsor, any other Covered Person performing services on behalf of the Trust and acting within the scope of the Sponsor’s authority as set forth in this Trust Agreement.
(f) In the event the Trust is made a party to any claim, dispute, demand or litigation or otherwise incurs any loss, liability, damage, cost or expense as a result of or in connection with any Shareholder’s (or assignee’s) or Beneficial Owner’s (or assignee’s) obligations or liabilities unrelated to Trust affairs, such Shareholder or Beneficial Owner (or assignees cumulatively) shall indemnify, defend, hold harmless, and reimburse the Trust for all such loss, liability, damage, cost and expense incurred, including attorneys’ and accountants’ fees.
SECTION 6.8 Expenses and Limitations Thereon.
(a) Sponsor Fee.
(i) The Trust shall pay to the Sponsor a unified fee (the “Sponsor Fee”) as set forth in the Sponsor Agreement. The Sponsor Fee will be calculated daily, accrued daily in ether and be payable monthly in ether or cash. The Sponsor may agree to waive or reduce the Sponsor Fee in its sole discretion without Shareholder consent or approval.
(ii) Except as provided in Section 6.8(a)(iv), to cause the Trust to pay the Sponsor Fee, the Sponsor or its delegate shall instruct the Custodian to withdraw the number of ether or cash equal to the accrued but unpaid Sponsor Fee and transfer such ether or cash to the Sponsor’s account at such times as the Sponsor determines in its absolute discretion.
(iii) After the payment of the Sponsor Fee to the Sponsor, the Sponsor may elect to convert the ether it receives into U.S. Dollars. The Shareholders acknowledge that the rate at which the Sponsor converts such ether to U.S. Dollars may differ from the Benchmark. The Trust shall not be responsible for any fees and expenses incurred by the Sponsor to convert ether received in payment of the Sponsor Fee into U.S. Dollars.
(iv) The Sponsor may, from time to time, temporarily waive all or a portion of the Sponsor Fee in its sole discretion.
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(v) As partial consideration for receipt of the Sponsor Fee, the Sponsor shall assume and pay all fees and other expenses incurred by the Trust in the ordinary course of its affairs, excluding taxes, but including: (i) the Distributor Fee; (ii) the Administrator Fee; (iii) the Custodian Fee; (iv) the Transfer Agent Fee; (v) the Trustee fee; (vi) the fees and expenses related to the listing, quotation or trading of the Shares on any Secondary Market (including customary marketing expenses); (vii) ordinary course legal fees and expenses; (viii) audit fees; (ix) regulatory fees, including, if applicable, any fees relating to the registration of the Shares under the Securities Act or the Exchange Act; (x) printing and mailing costs; (xi) costs of maintaining the Trust’s website and (xii) applicable license fees (each, an “Sponsor-paid Expense” and, together, the “Sponsor-paid Expenses”), provided that any expense that qualifies as an Extraordinary Expense as set forth in Section 6.8(b) shall be deemed to be an Extraordinary Expenses and not a Sponsor-paid Expense.
(b) Extraordinary Expenses.
(i) The Trust shall pay any expenses incurred by the Trust in addition to the Sponsor Fee that are not Sponsor-paid Expenses, including, but not limited to, (i) brokerage and transaction costs associated with the sale or transfer of ether not covered by an Authorized Participant, (ii) taxes and governmental charges; (iii) expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Trust to protect the Trust or the interests of Shareholders (including in connection with any Incidental Rights and any IR Assets); (iv) any indemnification of the Custodian, Administrator or other agents, service providers or counterparties of the Trust; (v) extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters and (vi) other extraordinary expenses not included as Sponsor-paid Expenses (collectively, “Extraordinary Expenses”).
(ii) To cause the Trust to pay the Extraordinary Expenses, if any, the Sponsor or its delegates (i) shall instruct the Custodian to withdraw from the Ether Account, ether in such quantity as may be necessary to permit payment of such Extraordinary Expenses and (ii) may either (x) cause the Trust (or its delegate) to convert such ether into U.S. Dollars or other fiat currencies or (y) cause the Trust (or its delegate) to deliver such ether in kind in satisfaction of such Extraordinary Expenses.
(iii) If the Trust holds any Incidental Rights and/or IR Assets at any time, the Trust may pay any Extraordinary Expenses, in whole or in part, with such Incidental Rights and/or IR Assets by entering into an agreement with the relevant payee and transferring such Incidental Rights and/or IR Assets to that payee at a value to be determined pursuant to such agreement; provided that the Trust shall use Incidental Rights and/or IR Assets to pay Extraordinary Expenses only if such agreement and transfer does not otherwise conflict with the terms of this Trust Agreement. If the Trust pays the Extraordinary Expenses in Incidental Rights and/or IR Assets, in whole or in part, the amount of ether that would otherwise have been used to satisfy such payment shall be correspondingly reduced.
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(c) The Sponsor or any Affiliate of the Sponsor may be reimbursed only for the actual cost to the Sponsor or such Affiliate of any expenses that it advances on behalf of the Trust for payment of which the Trust is responsible. In addition, payment to the Sponsor or such Affiliate for indirect expenses incurred in performing services for the Trust in its capacity as the Sponsor (or an Affiliate of the Sponsor) of the Trust, such as salaries and fringe benefits of officers and directors, rent or depreciation, utilities and other administrative items generally falling within the category of the Sponsor’s “overhead,” is prohibited.
(d) As partial consideration for arranging for the staking of the Trust’s ether, the Sponsor shall be entitled to such additional compensation from the Trust or another third party as set forth in the Sponsor Agreement.
SECTION 6.9 Voluntary Withdrawal of the Sponsor.
The Sponsor may withdraw voluntarily as the Sponsor of the Trust only upon one hundred and twenty (120) days’ prior written notice to all Shareholders and the Trustee. If the withdrawing Sponsor is the last remaining Sponsor, the Shareholders holding Shares equal to at least a majority (over 50%) of the Shares may vote to elect and appoint, effective as of a date on or prior to the withdrawal, a successor Sponsor who shall carry on the affairs of the Trust. If the Sponsor withdraws and a successor Sponsor is named, the withdrawing Sponsor shall pay all expenses as a result of its withdrawal.
SECTION 6.10 Litigation.
The Sponsor is hereby authorized to prosecute, defend, settle or compromise actions or claims at law or in equity as may be necessary or proper to enforce or protect the Trust’s interests. The Sponsor shall satisfy any judgment, decree or decision of any court, board or authority having jurisdiction or any settlement of any suit or claim prior to judgment or final decision thereon, first, out of any insurance proceeds available therefor, next, out of the Trust’s assets and, thereafter, out of the assets (to the extent that it is permitted to do so under the various other provisions of this Trust Agreement) of the Sponsor.
SECTION 6.11 Bankruptcy; Merger of the Sponsor.
(a) The Sponsor shall not cease to be a Sponsor of the Trust merely upon the occurrence of its making an assignment for the benefit of creditors, filing a voluntary petition in bankruptcy, filing a petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, filing an answer or other pleading admitting or failing to contest material allegations of a petition filed against it in any proceeding of this nature or seeking, consenting to or acquiescing in the appointment of a trustee, receiver or liquidator for itself or of all or any substantial part of its properties.
(b) To the fullest extent permitted by law, and on sixty (60) days’ prior written notice to the Shareholders of their right to vote thereon, if any such transaction is other than with an affiliated entity, nothing in this Trust Agreement shall be deemed to prevent the merger of the Sponsor with
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another corporation or other entity, the reorganization of the Sponsor into or with any other corporation or other entity, the transfer of all the capital stock of the Sponsor or the assumption of the rights, duties and liabilities of the Sponsor by, in the case of a merger, reorganization or consolidation, the surviving corporation or other entity by operation of law. Without limiting the foregoing, none of the transactions referenced in the preceding sentence shall be deemed to be a voluntary withdrawal for purposes of Section 6.9 or an Event of Withdrawal for purposes of Section 12.1(a)(iii).
ARTICLE VII
THE SHAREHOLDERS
SECTION 7.1 No Management or Control; Limited Liability; Exercise of Rights through an Authorized Participant.
The Shareholders shall not participate in the management or control of the Trust nor shall they enter into any transaction on behalf of the Trust or have the power to sign for or bind the Trust, said power being vested solely and exclusively in the Sponsor. Except as provided in Section 7.3 hereof, no Shareholder shall be bound by, or be personally liable for, the expenses, liabilities or obligations of the Trust in excess of its Percentage Interest of the Trust Estate. Except as provided in Section 7.3 hereof, each Share owned by a Shareholder shall be fully paid and no assessment shall be made against any Shareholder. No salary shall be paid to any Shareholder in its capacity as a Shareholder, nor shall any Shareholder have a drawing account or earn interest on its Percentage Interest of the Trust Estate. By the purchase and acceptance or other lawful delivery and acceptance of Shares, each owner of such Shares shall be deemed to be a Shareholder and beneficiary of the Trust and vested with beneficial undivided interest in the Trust to the extent of the Shares owned beneficially by such Shareholder, subject to the terms and conditions of this Trust Agreement.
SECTION 7.2 Rights and Duties.
The Shareholders shall have the following rights, powers, privileges, duties and liabilities:
(a) The Shareholders shall have the right to obtain from the Sponsor information on all things affecting the Trust, provided that such information is for a purpose reasonably related to the Shareholder’s interest as a beneficial owner of the Trust.
(b) The Shareholders shall receive the share of the distributions provided for in this Trust Agreement in the manner and at the times provided for in this Trust Agreement.
(c) Except for the Shareholders’ transfer rights set forth in Article IV and the Shareholders’ redemption rights set forth in Article V hereof, Shareholders shall have the right to demand a redemption of their Shares only upon the dissolution and winding up of the Trust and only to the extent of funds available therefor, as provided in Section 12.2. In no event shall a Shareholder be entitled to demand or receive property other than cash upon the dissolution and
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winding up of the Trust. No Shareholder shall have priority over any other Shareholder as to distributions. The Shareholder shall not have any right to bring an action for partition against the Trust.
(d) Shareholders holding Shares representing at least a majority (over 50%) of the Shares may vote to appoint a successor Sponsor as provided in Section 6.9 or to continue the Trust as provided in Section 12.1(a)(iv).
Except as set forth above, the Shareholders shall have no voting or other rights with respect to the Trust.
SECTION 7.3 Limitation of Liability.
(a) Except as provided in Section 6.7(f) hereof, and as otherwise provided under Delaware law, the Shareholders shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of Delaware and no Shareholder shall be liable for claims against or debts of the Trust in excess of its Percentage Interest of the Trust Estate, except in the case of a Shareholder that is an Authorized Participant, in the event that the liability is founded upon misstatements or omissions contained in such Shareholder’s Authorized Participant Agreement. In addition, and subject to the exceptions set forth in the immediately preceding sentence, the Trust shall not make a claim against a Shareholder with respect to amounts distributed to such Shareholder or amounts received by such Shareholder upon redemption of such Shareholder’s Shares unless, under Delaware law, such Shareholder is liable to repay such amount.
(b) The Trust shall indemnify to the full extent permitted by law and the other provisions of this Trust Agreement, and to the extent of the Trust Estate, each Shareholder against any claims of liability asserted against such Shareholder solely because it is a beneficial owner of one or more Shares as a Shareholder.
(c) Every written note, bond, contract, instrument, certificate or undertaking made or issued by the Sponsor on behalf of the Trust shall give notice to the effect that the same was executed or made by or on behalf of the Trust and that the obligations of such instrument are not binding upon the Shareholders individually but are binding only upon the assets and property of the Trust, and no resort shall be had to the Shareholders’ personal property for satisfaction of any obligation or claim thereunder, and appropriate references may be made to this Trust Agreement and may contain any further recital that the Sponsor deems appropriate, but the omission thereof shall not operate to bind the Shareholders individually or otherwise invalidate any such note, bond, contract, instrument, certificate or undertaking. Nothing contained in this Section 7.3 shall diminish the limitation on the liability of the Trust to the extent set forth in Section 3.5 hereof.
SECTION 7.4 Derivative Actions.
Subject to any other requirements of applicable law including Section 3816 of the Delaware Trust Statute, no Shareholder shall have the right, power or authority to bring or maintain a derivative action, suit or other proceeding on behalf of the Trust unless two or more Shareholders
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who (i) are not Affiliates of one another and (ii) collectively hold at least 10% of the outstanding Shares join in the bringing or maintaining of such action, suit or other proceeding. This Section 7.4 shall not apply to any derivative claims brought under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or the rules and regulations thereunder.
SECTION 7.5 Appointment of Agents.
(a) By the purchase and acceptance or other lawful delivery, acceptance or holding of the Shares, the Shareholders shall be deemed to agree that the Sponsor may cause the Trust to appoint an agent (an “IR Agent”) to act on their behalf in connection with any distribution of Incidental Rights and/or IR Assets if the Sponsor has determined in good faith that such appointment is reasonably necessary or in the best interests of the Trust and the Shareholders in order to facilitate the distribution of any Incidental Rights and/or IR Assets. For the avoidance of doubt, the Sponsor may cause the Trust to appoint the Sponsor or any of its Affiliates to act in such capacity, subject to Section 6.2(a) of this Trust Agreement. Any Person appointed as IR Agent of the Shareholders pursuant to this Section 7.5(a) shall receive an in‑kind distribution of Incidental Rights and/or IR Assets on behalf of the Shareholders of record with respect to such distribution and following receipt of any such distribution, shall determine, in such Person’s sole discretion and without any direction from the Trust or the Sponsor (in its capacity as Sponsor of the Trust), whether and when to sell the distributed Incidental Rights and/or IR Assets on behalf of the record date Shareholders.
(b) Any IR Agent appointed pursuant to Section 7.5(a) shall not receive any compensation in connection with its role as IR Agent. The foregoing notwithstanding, any such IR Agent shall be entitled to receive from any distribution of Incidental Rights and/or IR Assets, Incidental Rights and/or IR Assets with an aggregate fair market value equal to the amount of administrative and other reasonable expenses incurred by such IR Agent in connection with such in‑kind distribution of Incidental Rights and/or IR Assets, including expenses incurred by such IR Agent in connection with any post‑distribution sale of such Incidental Rights and/or IR Assets.
SECTION 7.6 Business of Shareholders.
Except as otherwise specifically provided herein, any of the Shareholders and any shareholder, officer, director, employee or other Person holding a legal or beneficial interest in an entity that is a Shareholder, may engage in or possess an interest in business ventures of every nature and description, independently or with others, and the pursuit of such ventures, even if competitive with the affairs of the Trust, shall not be deemed wrongful or improper.
SECTION 7.7 Authorization of Prospectus.
Each Shareholder (or any permitted assignee thereof) hereby agrees that the Trust, the Sponsor and the Trustee are authorized to execute, deliver and perform the agreements, acts, transactions and matters contemplated hereby or described in, or contemplated by, the Prospectus on behalf of the Trust without any further act, approval or vote of the Shareholders, notwithstanding any other provision of this Trust Agreement, the Delaware Trust Statute or any applicable law, rule or regulation.
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ARTICLE VIII
BOOKS OF ACCOUNT AND REPORTS
SECTION 8.1 Books of Account.
Proper books of account for the Trust shall be kept and shall be audited annually by an independent certified public accounting firm selected by the Sponsor in its sole discretion, and there shall be entered therein all transactions, matters and things relating to the Trust as are required by the applicable law and regulations and as are usually entered into books of account kept by trusts. The books of account shall be kept at the principal office of the Trust and each Shareholder (or any duly constituted designee of a Shareholder) shall have, at all times during normal business hours, free access to and the right to inspect and copy the same for any purpose reasonably related to the Shareholder’s interest as a beneficial owner of the Trust. Such books of account shall be kept, and the Trust shall report its profits and losses on, the accrual method of accounting for financial accounting purposes on a Fiscal Year basis as described in Article IX.
SECTION 8.2 Annual Updates, Quarterly Updates and Account Statements.
(a) If the Shares are not then listed, quoted or traded on any Secondary Market or registered under the Securities Act or the Exchange Act, the Sponsor shall furnish each Shareholder with an annual report of the Trust within one hundred and eighty (180) calendar days after the Trust’s fiscal year (or as soon as reasonably practicable thereafter) including, but not limited to, annual audited financial statements (including a statement of income and statement of financial condition), prepared in accordance with GAAP and accompanied by a report of the independent registered public accounting firm that audited such statements.
(b) If the Shares are then listed, quoted or traded on a Secondary Market or registered under the Securities Act or the Exchange Act, the Sponsor shall prepare and publish the Trust’s Annual Reports and Quarterly Reports as required by the rules and regulations of such Secondary Market or the SEC, as applicable.
SECTION 8.3 Tax Information.
Appropriate tax information (adequate to enable each Shareholder to complete and file its U.S. federal tax return) shall be delivered to each Shareholder following the end of each Fiscal Year but, to the extent possible, no later than April 1. All such information shall be prepared, and all of the Trust’s tax returns shall be filed, in a manner consistent with the treatment of the Trust as a grantor trust. The Trust’s taxable year shall be the calendar year. The Trust shall comply with all U.S. federal withholding requirements respecting distributions to, or receipts of amounts on behalf of, Shareholders that the Sponsor reasonably believes are applicable under the Code. The consent of Shareholders shall not be required for such withholding.
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SECTION 8.4 Calculation of Ether Holdings.
The Sponsor or its delegate shall calculate and publish the Trust’s Ether Holdings on each Business Day as of 4:00 p.m., New York time, or as soon as practicable thereafter, as set forth in and in accordance with the Prospectus.
SECTION 8.5 Maintenance of Records.
The Sponsor shall maintain for a period of at least six Fiscal Years (a) all books of account required by Section 8.1 hereof; (b) a list of the names and last known address of, and number of Shares owned by, all Shareholders; (c) a copy of the Certificate of Trust and all certificates of amendment thereto; (d) executed copies of any powers of attorney pursuant to which any certificate has been executed; (e) copies of the Trust’s U.S. federal, state and local income tax returns and reports, if any; (f) copies of any effective written Trust Agreements, Authorized Participant Agreements, including any amendments thereto; and (g) any financial statements of the Trust. The Sponsor may keep and maintain the books and records of the Trust in paper, magnetic, electronic or other format as the Sponsor may determine in its sole discretion, provided that the Sponsor shall use reasonable care to prevent the loss or destruction of such records. If there is a conflict between this Section 8.5 and the rules and regulations of any Secondary Market on which the Shares are listed, quoted or traded or, if applicable, the SEC with respect to the maintenance of records, the records shall be maintained pursuant to the rules and regulations of such Secondary Market or the SEC.
ARTICLE IX
FISCAL YEAR
SECTION 9.1 Fiscal Year.
The fiscal year of the Trust for financial accounting purposes (the “Fiscal Year”) shall begin on the first day of January and end on the last day of December of each year. The Fiscal Year in which the Trust shall terminate shall end on the date of such termination.
ARTICLE X
AMENDMENT OF TRUST AGREEMENT; MEETINGS
SECTION 10.1 Amendments to the Trust Agreement.
(a) Amendment Generally.
(i) Except as otherwise specifically provided in this Section 10.1, the Sponsor, in its sole discretion and without Shareholder consent, may amend or otherwise supplement this Trust Agreement by making an amendment, an agreement supplemental hereto, or an amended and restated declaration of trust and trust agreement. Any such restatement, amendment and/or
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supplement hereto shall be effective on such date as designated by the Sponsor in its sole discretion; provided that the Sponsor shall not be permitted to make any such amendment, or otherwise supplement this Trust Agreement, if such amendment or supplement would permit the Sponsor, the Trustee or any other Person to vary the investment of the Shareholders (within the meaning of Treasury Regulations Section 301.7701‑4(c)) or would otherwise adversely affect the status of the Trust as a grantor trust for U.S. federal income tax purposes.
(b) Without limitation of the foregoing, the Sponsor may, without the approval of the Shareholders, amend the provisions of this Trust Agreement if the Trust is advised at any time by the Trust’s accountants or legal counsel that the amendments made are necessary to ensure that the Trust’s status as a grantor trust will be respected for U.S. federal income tax purposes.
(c) No amendment affecting the rights or duties of the Trustee shall be binding upon or effective against the Trustee unless consented to by the Trustee in writing. No amendment shall be made to this Trust Agreement without the consent of the Trustee if the Trustee reasonably believes that such amendment adversely affects any of its rights, duties or liabilities. The Trustee shall be under no obligation to execute any amendment to the Trust Agreement or to any agreement to which the Trust is a party until it has received an instruction letter from the Sponsor, in form and substance reasonably satisfactory to the Trustee, (i) directing the Trustee to execute such amendment, (ii) representing and warranting to the Trustee that such execution is authorized and permitted by the terms of the Trust Agreement and (if applicable) such other agreement to which the Trust is a party and does not conflict with or violate any other agreement to which the Trust is a party and (iii) confirming that such execution and acts related thereto are covered by the indemnity provisions of the Trust Agreement in favor of the Trustee and do not adversely affect the Trustee.
(d) Upon amendment of this Trust Agreement, the Certificate of Trust shall also be amended, if required by the Delaware Trust Statute, to reflect such change. At the expense of the Sponsor, the Trustee shall execute and file any amendment to the Certificate of Trust, if so directed by the Sponsor.
(e) To the fullest extent permitted by law, no provision of this Trust Agreement may be amended, waived or otherwise modified orally but only by a written instrument adopted in accordance with this Section 10.1.
SECTION 10.2 Meetings of the Trust.
Meetings of the Shareholders may be called by the Sponsor in its sole discretion. The Sponsor shall furnish written notice to all Shareholders thereof of the meeting and the purpose of the meeting, which shall be held on a date not less than ten (10) nor more than sixty (60) days after the date of mailing of said notice, at a reasonable time and place. Any notice of meeting shall be accompanied by a description of the action to be taken at the meeting. Shareholders may vote in person or by proxy at any such meeting.
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SECTION 10.3 Action Without a Meeting.
Any action required or permitted to be taken by Shareholders by vote may be taken without a meeting by written consent setting forth the actions so taken. Such written consents shall be treated for all purposes as votes at a meeting. If the vote or consent of any Shareholder to any action of the Trust or any Shareholder, as contemplated by this Trust Agreement, is solicited by the Sponsor, the solicitation shall be effected by notice to each Shareholder given in the manner provided in Section 13.5. The vote or consent of each Shareholder so solicited shall be deemed conclusively to have been cast or granted as requested in the notice of solicitation, whether or not the notice of solicitation is actually received by that Shareholder, unless the Shareholder expresses written objection to the vote or consent by notice given in the manner provided in Section 13.5 and actually received by the Trust within twenty (20) days after the notice of solicitation is sent. The Covered Persons dealing with the Trust shall be entitled to act in reliance on any vote or consent that is deemed cast or granted pursuant to this Section 10.3 and shall be fully indemnified by the Trust in so doing. Any action taken or omitted in reliance on any such deemed vote or consent of one or more Shareholders shall not be void or voidable by reason of any communication made by or on behalf of all or any of such Shareholders in any manner other than as expressly provided in Section 13.5.
ARTICLE XI
TERM
SECTION 11.1 Term.
The term for which the Trust is to exist shall be perpetual, unless terminated pursuant to the provisions of Article XII hereof or as otherwise provided by law.
ARTICLE XII
TERMINATION
SECTION 12.1 Events Requiring Dissolution of the Trust.
(a) The Trust shall dissolve at any time upon the happening of any of the following events:
(i) a U.S. federal or state regulator requires the Trust to shut down or forces the Trust to liquidate its ether or seizes, impounds or otherwise restricts access to the Trust Estate;
(ii) any ongoing event exists that either prevents the Trust from converting or makes impractical the Trust’s reasonable efforts to convert ether to U.S. Dollars;
(iii) a certificate of dissolution or revocation of the Sponsor’s charter is filed (and ninety (90) days have passed after the date of notice to the Sponsor of revocation without a reinstatement of the Sponsor’s charter) or the withdrawal, removal, adjudication or admission of
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bankruptcy or insolvency of the Sponsor (each of the foregoing events an “Event of Withdrawal”) has occurred unless (i) at the time there is at least one remaining Sponsor or (ii) within ninety (90) days of such Event of Withdrawal Shareholders holding at least a majority (over 50%) of the Shares agree in writing to continue the affairs of the Trust and to select, effective as of the date of such event, one or more successor Sponsors; or
(iv) Shareholders holding at least 50% of the outstanding Shares, not including affiliated parties of the Sponsor for purposes of calculation of such percentage, notify the Sponsor that they elect to dissolve the Trust, notice of which is sent to the Sponsor not less than ninety (90) business days prior to the effective date of dissolution.
(b) The Sponsor may, in its sole discretion, dissolve the Trust if any of the following events occur:
(i) the SEC determines that the Trust is an investment company required to be registered under the Investment Company Act of 1940;
(ii) the CFTC determines that the Trust is a commodity pool under the Commodity Exchange Act;
(iii) the Trust is determined to be a “money service business” under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act and is required to comply with certain FinCEN regulations thereunder;
(iv) the Trust is required to obtain a license or make a registration under any state law regulating money transmitters, money services businesses, providers of prepaid or stored value or similar entities, or virtual currency businesses;
(v) the Trust becomes insolvent or bankrupt;
(vi) the Custodian resigns or is removed without replacement;
(vii) all of the Trust’s assets are sold;
(viii) the Sponsor determines that the size of the Trust Estate in relation to the expenses of the Trust makes it unreasonable or imprudent to continue the affairs of the Trust;
(ix) the Sponsor receives notice from the IRS or from counsel for the Trust or the Sponsor that the Trust fails to qualify for treatment, or will not be treated, as a grantor trust under the Code;
(x) the Trustee notifies the Sponsor of the Trustee’s election to resign and the Sponsor does not appoint a successor trustee within one hundred and eighty (180) days; or
(xi) the Sponsor determines, in its sole discretion, that it is desirable or advisable for any reason to discontinue the affairs of the Trust.
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(c) The death, legal disability, bankruptcy, insolvency, dissolution, or withdrawal of any Shareholder (as long as such Shareholder is not the sole Shareholder of the Trust) shall not result in the termination of the Trust, and such Shareholder, his or her estate, custodian or personal representative shall have no right to a redemption of such Shareholder’s Shares. Each Shareholder (and any assignee thereof) expressly agrees that in the event of his or her death, he or she waives on behalf of himself or herself and his or her estate, and he or she directs the legal representative of his or her estate and any person interested therein to waive the furnishing of any inventory, accounting or appraisal of the Trust Estate and any right to an audit or examination of the books of account for the Trust, except for such rights as are set forth in Article VIII hereof relating to the books of account and reports of the Trust.
SECTION 12.2 Distributions on Dissolution.
Upon the dissolution of the Trust, the Sponsor (or in the event there is no Sponsor, such person (the “Liquidating Trustee”) as the majority in interest of the Shareholders may propose and approve) shall take full charge of the Trust Estate. Any Liquidating Trustee so appointed shall have and may exercise, without further authorization or approval of any of the parties hereto, all of the powers conferred upon the Sponsor under the terms of this Trust Agreement, subject to all of the applicable limitations, contractual and otherwise, upon the exercise of such powers, and provided that the Liquidating Trustee shall not have general liability for the acts, omissions, obligations and expenses of the Trust. Thereafter, in accordance with Section 3808(e) of the Delaware Trust Statute, the affairs of the Trust shall be wound up by the Sponsor or the Liquidating Trustee and all assets owned by the Trust shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom shall be applied and distributed in the following order of priority: (a) to the expenses of liquidation and termination and to creditors, including Shareholders who are creditors, to the extent otherwise permitted by law, in satisfaction of liabilities of the Trust (whether by payment or the making of reasonable provision for payment thereof) other than liabilities for distributions to Shareholders, and (b) to the Shareholders pro rata in accordance with their respective Percentage Interests of the Trust Estate.
SECTION 12.3 Termination; Certificate of Cancellation.
Following the dissolution and distribution of the assets of the Trust, the Trust shall terminate and the Sponsor or the Liquidating Trustee, as the case may be, shall instruct the Trustee in writing to execute and cause such certificate of cancellation of the Certificate of Trust to be filed in accordance with the Delaware Trust Statute at the expense of the Sponsor or the Liquidating Trustee, as the case may be. Notwithstanding anything to the contrary contained in this Trust Agreement, the existence of the Trust as a separate legal entity shall continue until the filing of such certificate of cancellation.
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ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Governing Law.
The validity and construction of this Trust Agreement and all amendments hereto shall be governed by the laws of the State of Delaware, and the rights of all parties hereto and the effect of every provision hereof shall be subject to and construed according to the laws of the State of Delaware without regard to the conflict of laws provisions thereof; provided, however, that causes of action for violations of U.S. federal or state securities laws shall not be governed by this Section 13.1, and provided, further, that the parties hereto intend that the provisions hereof shall control over any contrary or limiting statutory or common law of the State of Delaware (other than the Delaware Trust Statute) and that, to the maximum extent permitted by applicable law, there shall not be applicable to the Trust, the Trustee, the Sponsor, the Shareholders or this Trust Agreement any provision of the laws (statutory or common) of the State of Delaware (other than the Delaware Trust Statute) pertaining to trusts that relate to or regulate in a manner inconsistent with the terms hereof: (a) the filing with any court or governmental body or agency of trustee accounts or schedules of trustee fees and charges, (b) affirmative requirements to post bonds for trustees, officers, agents, or employees of a trust, (c) the necessity for obtaining court or other governmental approval concerning the acquisition, holding or disposition of real or personal property, (d) fees or other sums payable to trustees, officers, agents or employees of a trust, (e) the allocation of receipts and expenditures to income or principal, (f) restrictions or limitations on the permissible nature, amount or concentration of trust investments or requirements relating to the titling, storage or other manner of holding of trust assets, or (g) the establishment of fiduciary or other standards or responsibilities or limitations on the acts or powers of trustees or managers that are inconsistent with the limitations on liability or authorities and powers of the Trustee or the Sponsor set forth or referenced in this Trust Agreement. Section 3540 of Title 12 of the Delaware Code shall not apply to the Trust. The Trust shall be of the type commonly called a “statutory trust,” and without limiting the provisions hereof, but subject to Section 1.5 and Section 1.6, the Trust may exercise all powers that are ordinarily exercised by such a statutory trust under Delaware law. Subject to Section 1.5 and Section 1.6, the Trust specifically reserves the right to exercise any of the powers or privileges afforded to statutory trusts and the absence of a specific reference herein to any such power, privilege or action shall not imply that the Trust may not exercise such power or privilege or take such actions.
SECTION 13.2 Provisions In Conflict With Law or Regulations.
(a) The provisions of this Trust Agreement are severable, and if the Sponsor shall determine, with the advice of counsel, that any one or more of such provisions (the “Conflicting Provisions”) are in conflict with the Code, the Delaware Trust Statute, the Securities Act, if applicable, or other applicable U.S. federal or state laws or the rules and regulations of any Secondary Market, the Conflicting Provisions shall be deemed never to have constituted a part of this Trust Agreement, even without any amendment of this Trust Agreement pursuant to this Trust Agreement; provided, however, that such determination by the Sponsor shall not affect or impair any of the remaining provisions of this Trust Agreement or render invalid or improper any action
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taken or omitted prior to such determination. No Sponsor or Trustee shall be liable for making or failing to make such a determination.
(b) If any provision of this Trust Agreement shall be held invalid or unenforceable in any jurisdiction, such holding shall not in any manner affect or render invalid or unenforceable such provision in any other jurisdiction or any other provision of this Trust Agreement in any jurisdiction.
SECTION 13.3 Merger and Consolidation.
Subject to the provisions of Section 1.5 and Section 1.6, the Sponsor may cause (i) the Trust to be merged into or consolidated with, converted to or to sell all or substantially all of its assets to, another trust or entity; (ii) the Shares of the Trust to be converted into beneficial interests in another statutory trust (or series thereof); or (iii) the Shares of the Trust to be exchanged for shares in another trust or company under or pursuant to any U.S. state or federal statute to the extent permitted by law. For the avoidance of doubt, subject to the provisions of Section 1.5, the Sponsor, with written notice to the Shareholders, may approve and effect any of the transactions contemplated under (i), (ii) and (iii) above without any vote or other action of the Shareholders.
SECTION 13.4 Construction.
In this Trust Agreement, unless the context otherwise requires, words used in the singular or in the plural include both the plural and singular and words denoting any gender include all genders. The title and headings of different parts are inserted for convenience and shall not affect the meaning, construction or effect of this Trust Agreement.
SECTION 13.5 Notices.
All notices or communications under this Trust Agreement (other than notices of pledge or encumbrance of Shares, and reports and notices by the Sponsor to the Shareholders) shall be in writing and shall be effective upon personal delivery, or if sent by mail, postage prepaid, or if sent electronically, by email, or by overnight courier, and addressed, in each such case, to the address set forth in the books and records of the Trust or such other address as may be specified in writing, of the party to whom such notice is to be given, upon the deposit of such notice in the United States mail, upon transmission and electronic confirmation thereof or upon deposit with a representative of an overnight courier, as the case may be. Notices of pledge or encumbrance of Shares shall be effective upon timely receipt by the Sponsor in writing. Any reports or notices by the Sponsor to the Shareholders which are given electronically shall be effective upon receipt without requirement of confirmation.
All notices that are required to be provided to the Trustee shall be sent to:
CSC Delaware Trust Company
Attn: Corporate Trust Administration
251 Little Falls Drive
Wilmington, DE 19808
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All notices that the Trustee is required to provide shall be sent to:
if to the Trust, at
Fidelity Ethereum Fund
245 Summer Street
Boston, MA 02210
Attention: Legal Department
if to the Sponsor, at
FD Funds Management LLC
245 Summer Street V13E
Boston, MA 02210
Attention: Cynthia Lo Bessette
SECTION 13.6 Counterparts; Electronic Signatures.
This Trust Agreement may be executed in one or more counterparts (including those by facsimile or other electronic means), all of which shall constitute one and the same instrument binding on all of the parties hereto, notwithstanding that all parties are not signatory to the original or the same counterpart. This Trust Agreement, to the extent signed and delivered by means of a facsimile machine or other electronic transmission, shall be treated in all manner and respects as an original agreement and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.
SECTION 13.7 Binding Nature of Trust Agreement.
The terms and provisions of this Trust Agreement shall be binding upon and inure to the benefit of the heirs, custodians, executors, estates, administrators, personal representatives, successors and permitted assigns of the respective Shareholders. For purposes of determining the rights of any Shareholder or assignee hereunder, the Trust and the Sponsor may rely upon the Trust records as to who are Shareholders and permitted assignees, and all Shareholders and assignees agree that the Trust and the Sponsor, in determining such rights, shall rely on such records and that Shareholders and their assignees shall be bound by such determination.
SECTION 13.8 No Legal Title to Trust Estate.
Subject to the provisions of Section 1.7 in the case of the Sponsor, the Shareholders shall not have legal title to any part of the Trust Estate.
SECTION 13.9 Creditors.
No creditors of any Shareholders shall have any right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the Trust Estate.
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SECTION 13.10 Integration.
This Trust Agreement constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements and understandings pertaining thereto.
SECTION 13.11 Goodwill; Use of Name.
No value shall be placed on the name or goodwill of the Trust, which shall belong exclusively to FD Funds Management LLC.
SECTION 13.12 Patriot Act Compliance.
The parties hereto acknowledge that in accordance with requirements established under the USA PATRIOT Act and its implementing regulations (collectively, the “Patriot Act”), the Trustee, in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. Each party hereby agrees that it shall provide the Trustee with such information in its possession as the Trustee may request from time to time in order to comply with any applicable requirements of the Patriot Act.
SECTION 13.13 Corporate Transparency Act.
The Corporate Transparency Act (31 U.S.C. § 5336) and its implementing regulations (collectively, the “CTA”), may require the Trust to file reports with Financial Crimes Enforcement Network. It shall be Sponsor’s duty and not the Trustee’s duty to prepare such filings, cause the Trust to make such filings, and to cause the Trust to comply with its obligations under the CTA, if any.
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IN WITNESS WHEREOF, the undersigned have duly executed this Trust Agreement as of the day and year first above written.
CSC DELAWARE TRUST COMPANY as Trustee |
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By: |
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/s/ James Grier |
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Name: James Grier |
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Title: Associate Director |
FD FUNDS MANAGEMENT LLC as Sponsor |
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By: |
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/s/ Cynthia Lo Bessette |
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Name: Cynthia Lo Bessette |
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Title: President |
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EXHIBIT A
FORM OF CERTIFICATE OF TRUST
CERTIFICATE OF TRUST
OF
FIDELITY ETHEREUM FUND
This Certificate of Trust of Fidelity Ethereum Fund (the “Trust”) is being duly executed and filed on behalf of the Trust by the undersigned, as trustee, to form a statutory trust under the Delaware Statutory Trust Act (12 Del. C. § 3801 et seq.) (the “Act”).
1. Name. The name of the statutory trust formed hereby is Fidelity Ethereum Fund.
2. Delaware Trustee. The name and business address of the trustee of the Trust in the State of Delaware are CSC Delaware Trust Company, 251 Little Falls Drive, Wilmington, DE 19808.
3. Effective Date. This Certificate of Trust shall be effective upon filing.
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate of Trust in accordance with Section 3811(a)(1) of the Act.
CSC DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee of the Trust |
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By: |
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Name: |
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Title: |
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A‑1
Exhibit 10.6
AMENDED AND RESTATED
SPONSOR AGREEMENT
THIS AMENDED AND RESTATED SPONSOR AGREEMENT (the “Agreement”), dated as of August 7, 2026, is made by and between FD Funds Management LLC, a Delaware limited liability company (“Sponsor”), and Fidelity Ethereum Fund, a statutory trust organized under the laws of Delaware (the “Trust”).
WHEREAS, the Sponsor and the Trust entered into that certain Original Sponsor Agreement dated June 3, 2024 (the “Original Sponsor Agreement”); and
WHEREAS, the Sponsor and the Trust desire to amend and restate the Original Sponsor Agreement in its entirety as set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, the Sponsor and the Trust hereby amend and restate the Original Sponsor Agreement and agree as follows:
1. The Trust. The Trust is not an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”) and it is not required to register thereunder. The Trust is not a commodity pool for purposes of the Commodity Exchange Act of 1936, as amended, and the Sponsor is not subject to regulation by the Commodity Futures Trading Commission as a commodity pool operator or a commodity trading advisor. The Sponsor is not registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and is not required to register thereunder.
2. Appointment. Pursuant to the terms of the Trust’s First Amended and Restated Trust Agreement (the “Trust Agreement”), Sponsor was appointed to serve as sponsor for the Trust, with full powers and rights to effectuate and carry out the purposes, activities and objectives of the Trust. Sponsor has accepted such appointment and hereby agrees to render such services to the Trust on the terms and conditions set forth in this Agreement and the Trust Agreement.
3. Duties. Sponsor will perform such duties for the Trust as set forth in Article VI of the Trust Agreement in accordance with Sponsor’s best judgment and as outlined in the Trust’s then-current registration statement filed with the U.S. Securities and Exchange Commission (“SEC”).
4. Execution of Trust Documents. Pursuant to the terms of the Trust Agreement, the Sponsor is authorized to execute documents for and on behalf of the Trust. For the avoidance of doubt, when a specified officer of the Trust is required to execute, or executes, a document, including but not limited to filings required to be made with regulatory authorities such as the SEC, the authorized officers of the Sponsor (or persons performing similar functions, including in the event of a vacancy in one or more of the specified Sponsor’s officer positions) shall be authorized to execute the document.
5. Reporting; Record Keeping. Sponsor will be available at reasonable times to discuss the activities of the Trust with the trustee of the Trust or its designee. Any written reports supplied by Sponsor to the Trust discussing the activities of the Trust are intended solely for the benefit of the Trust, and the Trust agrees that it will not disseminate such reports to any other party (other than the Trust’s service providers) without the prior consent of Sponsor, except as may be required by applicable law. Sponsor shall make or cause to be made, and shall maintain or cause to be maintained, all records as are required to be made or maintained by it in its capacity as Sponsor of the Trust.
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6. Other Accounts. The Trust understands and acknowledges that Sponsor may act as sponsor for various persons other than the Trust. The Trust acknowledges that Sponsor may give advice and take action concerning other persons that may be the same as, similar to or different from the advice given, or the timing and nature of action taken, concerning the Trust. The Trust also acknowledges that Sponsor may serve as a manager to other investment funds that invest in ether or other cryptocurrency with the same investment objective as the Trust, and the Sponsor or its affiliates may serve as a manager to other investment funds that invest in digital assets. Except to the extent necessary to perform Sponsor’s obligations under this Agreement, nothing herein shall be deemed to limit or restrict the right of Sponsor, or any affiliate of Sponsor or any employee of Sponsor to engage in any other business or to devote time and attention to the management or other aspects of any other business, whether of a similar or dissimilar nature, or to render services of any kind to any other corporation, firm, individual or association.
7. Sponsor’s Compensation. (a) The Trust shall pay to Sponsor a fee as described in Schedule A that is attached hereto and made a part hereof. Such fee shall be computed daily and paid not less than monthly in arrears by the Trust. Except as otherwise described below, no other compensation is paid to the Sponsor by the Trust. Sponsor’s compensation is paid in consideration of Sponsor’s (i) services under this Agreement and the Trust Agreement and (ii) the payment by Sponsor of the Trust expenses described in paragraph 8 below.
(b) As partial consideration for arranging for the staking of the Trust’s ether pursuant to Section 6.2(b) of the Trust Agreement, the Sponsor may in its sole and absolute discretion provide or arrange for additional compensation which shall be based on the rewards, income or proceeds generated from such activities, as described in Schedule A that is attached hereto and made a part hereof. The Sponsor may amend, modify, waive, defer or cancel such arrangements from time to time in its sole and absolute discretion.
8. Fees and Expenses. As partial consideration for its receipt of the Sponsor Fee, the Sponsor agrees to assume the Sponsor-paid Expenses of the Trust as provided in Section 6.8 of the Trust Agreement, as amended from time to time.
9. Liability and Indemnification. Sponsor will not be liable for losses to the Trust, and Sponsor shall be indemnified, to the extent provided in Article VI of the Trust Agreement.
10. Governing Law/Disputes. This Agreement is entered into in accordance with and shall be governed by the laws of the State of Delaware; provided, however, that in the event that any law of the State of Delaware shall require that the laws of another state or jurisdiction be applied in any proceeding, such Delaware law shall be superseded by this paragraph, and the remaining laws of the State of Delaware shall nonetheless be applied in such proceeding. Each party agrees that in the event that any dispute arising from or relating to this Agreement becomes subject to any judicial proceeding, such party waives any right it may otherwise have to (a) seek punitive damages, or (b) request a jury trial.
11. Termination. This Agreement may be terminated (i) by Sponsor at any time upon 30 days’ prior written notice; or (ii) by either party upon discovery of acts of fraud or willful malfeasance of the other party in performing its duties hereunder. Any obligation or liability of either party resulting from actions or inactions occurring prior to termination shall not be affected by termination of this Agreement.
12. Assignment. This Agreement may be assigned by either party upon prior notice to the other party.
13. Notices. All notices and other communications under this Agreement shall be in writing and shall be addressed to the parties at their respective addresses. Sponsor shall comply with, and be entitled to act on, any instructions reasonably believed to be from an authorized representative of the Trust. Sponsor and its employees and agents shall be fully protected from all liability in acting upon such instructions, without being required to determine the authenticity of the authorization or authority of the persons providing such instructions.
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14. Severability. In the event any provision of this Agreement is adjudicated to be void, illegal, invalid or unenforceable, the remaining terms and provisions of this Agreement shall not be affected thereby, and each of such remaining terms and provisions shall be valid and enforceable to the fullest extent permitted by law, unless a party demonstrates by a preponderance of the evidence that the invalidated provision was an essential economic term of this Agreement.
15. Integration; Amendment. This Agreement together with any other written agreements between the parties entered into concurrently with this Agreement contain the entire agreement between the parties with respect to the transactions contemplated hereby and supersede all previous oral or written negotiations, commitments and understandings related thereto. This Agreement may not be amended or modified in any respect, nor may any provision be waived, without the written agreement of both parties. No waiver by one party of any obligation of the other hereunder shall be considered a waiver of any other obligation of such party.
16. Further Assurances. Each party hereto shall execute and deliver such other documents or agreements as may be necessary or desirable for the implementation of this Agreement and the consummation of the transactions contemplated hereby.
17. Headings. The headings of paragraphs herein are included solely for convenience and shall have no effect on the meaning of this Agreement.
18. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to be one and the same instrument.
19. Trustee. The Trust is a Delaware statutory trust and a separate legal entity under the Delaware Statutory Trust Act and pursuant to such act a trustee, when acting in such capacity, is not personally liable to any person (other than the statutory trust or any beneficial owner thereof) for any act, omission or obligation of a statutory trust. In furtherance thereof, (a) this Agreement is executed and delivered by CSC Delaware Trust Company, not individually or personally, but solely as Trustee of the Trust, (b) each of the representations, undertakings and agreements herein made on the part of the Trust is made and intended not as personal representations, undertakings and agreements by CSC Delaware Trust Company but is made and intended for the purpose of binding only the Trust, (c) nothing herein contained shall be construed as creating any liability on CSC Delaware Trust Company, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto, and (d) under no circumstances shall CSC Delaware Trust Company be personally liable for the payment of any indebtedness or expenses of the Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trust under this Agreement.
3
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
Fidelity Ethereum Fund
By: FD Funds Management LLC
By: /s/ Cynthia Lo Bessette
Name: Cynthia Lo Bessette
Title: President
FD Funds Management LLC
By: /s/ Cynthia Lo Bessette
Name: Cynthia Lo Bessette
Title: President
Signature Page – Sponsor Agreement
4
Exhibit 10.3.1
ORDER FORM
Anchorage Contact |
Client Contact |
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Name: |
Matthew Zablotny |
Name: |
Cynthia Lo Bessette |
Email: |
[redacted] |
Email: |
[redacted] |
This AMENDED AND RESTATED MASTER CUSTODY SERVICE AGREEMENT (“Agreement”) is made and entered into as of the Effective Date provided herein, by and between Anchorage Digital Bank N.A. (“Anchorage”,) and each fund listed on Schedule C (each a “Client”) (Anchorage and Client, each a “Party” and collectively, the “Parties”) and fully amends and restates the Master Custody Service Agreement (“Original Agreement”) entered into by the Parties dated September 22, 2025. Each Client, acting through FD Funds Management LLC (the “Agent”), severally and not jointly enters into this Agreement with Anchorage. This Agreement shall constitute separate agreements, each between a single Client and Anchorage, as if such Client had executed a separate Agreement naming only itself as the Client, and no Client shall have any liability for the obligations of any other Client. Any reference to "Agreement" shall be construed to refer to the respective Agreement between a Client and Anchorage.
The Agreement consists of the terms in this Order Form and the immediately following Standard Terms and Conditions, which together, shall form the Agreement.
1. Effective Date: |
May 29, 2026 |
2. Client(s). Each “Client” listed herein is subject to the Agreement as if this Agreement were between such individual Client and Anchorage, except specifically the Fees will be calculated on an aggregated basis, including the sum of all Clients’ Assets Under Custody. For the avoidance of doubt, notwithstanding anything herein to the contrary, each Client shall only be responsible for Fees and liabilities attributable to its assets held in its own Account pursuant to such Client's Agreement with Anchorage, and under no circumstances will any Client be responsible for the Fees or liabilities of any other Client or person. |
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[redacted]
To Agent: Invoice Email: [email protected]
Notice Email: [email protected]
Attention: Fund Operations
To Anchorage: [email protected] AND
Anchorage Digital Bank N.A.
101 S. Reid Street, Suite 329 Sioux Falls, South Dakota 57103
IN CONSIDERATION AND WITNESS WHEREOF, Anchorage and Client, by their duly authorized representatives, hereby execute this Agreement as of the Effective Date.
ANCHORAGE DIGITAL BANK N.A. |
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EACH CLIENT LISTED ON SCHEDULE C BY FD FUNDS MANAGEMENT LLC IN ITS CAPACITY AS AGENT |
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By: |
/s/ Jake Childs |
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By: |
/s/ Cynthia Lo Bessette |
Name: |
Jake Childs |
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Name: |
Cynthia Lo Bessette |
Title: |
Head of Asset Managemen |
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Title: |
Cynthia Lo Bessette |
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Company: |
FD Funds Managemen LLC |
FD FUNDS MANAGEMENT LLC ON ITS OWN BEHALF SOLELY WITH RESPECT TO SECTIONS 6.4 AND 5.2 (WITH RESPECT TO FEES ONLY) HEREOF |
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By: |
/s/ Cynthia Lo Bessette |
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Name: |
Cynthia Lo Bessette |
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Title: |
President |
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AFFILIATED BUSINESS DISCLOSURE
AND CONFLICT OF INTEREST WAIVER
Anchorage Digital Bank N.A. (“Anchorage”) is affiliated with Anchor Labs, Inc., Anchorage Hold LLC, Anchorage Digital Singapore Pte. Ltd., and other affiliates (each an “Anchorage Affiliate”), through common ownership and management. In particular, Anchor Labs, Inc. provides certain administrative, technology, marketing, and other support services for custodial accounts on behalf of Anchorage. Because Anchorage and Anchorage Affiliates are under common ownership and management, the owners of Anchor Labs, Inc. will receive an indirect benefit from any fees you pay to Anchorage. In addition, Anchorage and Anchorage Affiliates may each provide services to its own clients that are also participating in any additional optional services supported by both Anchorage and Anchorage Affiliates. Anchorage and Anchorage Affiliates may refer clients to each other, and cooperate with each other, for the performance of these shared services. If Anchorage offers additional optional services to clients to participate in a network of services offered by Anchorage Affiliates, and you choose to participate in such services, you hereby acknowledge and consent to the sharing of Client Data (as defined in this Agreement) between Anchorage and Anchorage Affiliates solely in order to provide such services to you. Any sharing of Client Data shall be subject to the data security and privacy requirements of Attachment 1 of this Agreement) as agreed between the applicable parties, and all applicable Laws. Your use of services of Anchorage may result in benefits from such referral to the other companies by virtue of the companies’ common ownership and management. For the avoidance of doubt, all relationships between Anchorage and Anchorage Affiliates, and all provision of Services to each Client, are in compliance with all applicable laws and regulations and industry best practices, including, without limitation, those concerning conflicts of interest, and this Agreement. To the extent applicable, the Anchorage Affiliates will comply with CFTC Rule 180.1 and other applicable law and do not engage in front-running.
ACKNOWLEDGEMENT
I, duly authorized and on behalf of each Client as set forth in the Order Form, have read this disclosure form, and I acknowledge and understand that Anchorage and Anchorage Affiliates are under common ownership and control. I further acknowledge and understand that by retaining Anchorage, I am providing an indirect financial benefit to the owners of Anchorage Affiliates. Understanding the common ownership and control of the companies, I agree to utilize the services of Anchorage of my own free will. I also understand and agree that Anchorage may share Client Data with any Anchorage Affiliate solely for the purpose of facilitating additional optional services to participate in a network of services offered by Anchorage, and Anchorage Affiliates, that Client has agreed in writing to receive. I acknowledge and understand that any referrals for services among Anchorage and Anchorage Affiliates may result in the owners of the referring company receiving an indirect financial benefit from the services provided.
AGENT ON BEHALF OF EACH CLIENT SET FORTH ON SCHEDULE C HERETO |
By: /s/ Cynthia Lo Bessette |
Name: Cynthia Lo Bessette |
Title: President |
Company: FD Funds Management LLC |
ANCHORAGE DIGITAL BANK STANDARD TERMS AND CONDITIONS
Capitalized terms not defined in the Order Form, body of these Terms and Conditions, or supporting Schedules are defined in Schedule A (Definitions).
(a) Subject to (i) Client’s successful completion of the account acceptance process as provided in Section 2.1, and
(ii) the terms of this Agreement, during the Term, Anchorage will provide the Services to Client.
(b) Anchorage will reasonably determine the requirements for any Direction, including Authenticated Instructions, and whether such requirements have been satisfied as to any Direction, at all times subject to this Agreement. Anchorage shall not act on a direction or instruction which is not an Authenticated Instruction. Subject to the terms of, and provided Anchorage complies with its obligations under, this Agreement, Anchorage is entitled to rely upon a Direction in all respects. Client and Anchorage agree and acknowledge that (i) Anchorage’s acceptance of Directions related to Client’s deposit and withdrawal of assets is based on the parameters of Authenticated Instructions and in accordance with Anchorage’s Services requirements under this Agreement; (ii) Anchorage has no duty to inquire into or investigate the legality, validity, or accuracy of any information, data, or instructions related to a Direction that it reasonably believes is genuine following authentication, subject to, and provided Anchorage complies with its obligations under, this Agreement; and (iii) Anchorage shall act in a commercially reasonable manner, and in conformance with the following: (a) Directions shall continue in full force and effect until executed, cancelled or superseded; (b) if any Directions are ambiguous or if in in Anchorage's reasonable opinion any Directions are likely to be inaccurate, Anchorage shall notify Client and may refuse to execute such Directions until any such ambiguity has been resolved to Anchorage's satisfaction; and (c) Anchorage may refuse to execute Directions if in Anchorage's reasonable opinion such Directions are outside the scope of its obligations under this Agreement or are contrary to any applicable laws, rules and regulations, and Anchorage will promptly notify Client of such refusal. Anchorage is responsible for losses resulting from its errors in executing a Direction from the Client (e.g., if Client provides the correct destination address for executing a withdrawal transaction, but Anchorage erroneously sends Client’s Digital Assets to another destination address).
2.5 Legal Compliance. Notwithstanding any other provision in this Agreement, and to the extent reasonably practicable and permitted by applicable Law, Client agrees at all times to (i) satisfy Anchorage’s reasonable information requests and other requirements, including but not limited to those relating to Authorized Persons or Digital Assets; (ii) comply with all applicable Laws, if any, to the extent relevant and material to its performance hereunder, including the BSA and all other Laws and regulations related to AML, KYC, counter-terrorist financing, sanctions screening requirements, or other legal obligations applicable to Client; (iii) notify Anchorage if Client is under a final enforcement order by a federal governmental agency, each to the extent related to Anchorage’s custody of Client’s assets under this Agreement; and (iv) if Anchorage receives a request for information during an inquiry or investigation made or conducted by the U.S. Office of the Comptroller of the Currency (“OCC”), and that request is directly related to the relationship contemplated by this Agreement and Client and its Accounts, and Anchorage is thereby required to provide the OCC any information that is in Client’s possession, Client will provide Anchorage copies of that information, again to the extent permitted by applicable Law, and subject to provisions reasonably designed to preserve the confidentiality of such information during and after the inquiry or investigation, including any Freedom of Information Act (FOIA) requests. If a Party confirms a sanctions match or otherwise blocks, rejects, or unblocks any asset, transfer, transaction or account for sanctions-related reasons, such Party will (i) inform the other within one Business Day of the action taken and (i) provide information related thereto as the other Party may request for the purpose of assessing and ensuring compliance with its own legal or business obligations.
Notwithstanding any other provision in this Agreement, Anchorage agrees at all times, subject to the Standard of Care set forth in Section 10 hereof, to (i) fully satisfy Client's information requests and other requirements, including but not limited to those relating to Authorized Persons, Anchorage Subcontractors (as defined in Section 12.12) or Digital Assets, or any such request from Client's accountants or auditors; (ii) fully comply with all applicable Laws, including the BSA and all other Laws and regulations related to AML, KYC, counter-terrorist financing, sanctions screening requirements, or other legal obligations; (iii) notify Client if Anchorage becomes a target of any BSA or Digital Asset related action, investigation or prosecution; (iv) notify Client of any changes in jurisdiction or material ownership; (v) provide Client full cooperation in connection with any inquiry or investigation made or conducted by any federal or state regulator. Anchorage agrees to immediately notify Client if it becomes aware of any suspicious activity or pattern of activity, or any activity which upon investigation may be a suspicious activity or pattern of activity under applicable Laws, involving Client's Account; (vi) notify Client if Anchorage is served or otherwise receives notice of any action, suit, proceeding,
inquiry or investigation, at law or in equity, before or by any court, public board or body, or governmental authority, involving the affairs of the Client, its sponsor or any of their affiliates; or is involved in any pending litigation or administrative proceeding brought against Anchorage or any of its management persons, Anchorage Subcontractors, or Affiliates; (vii) ensure that all staked assets in connection with the staking services will remain in the control of Anchorage; (viii) ensure that all staked assets will not be subject to any right, charge, security interest, lien or claim of any kind in favor of Anchorage, its Affiliates or Anchorage Subcontractors unless otherwise approved by Client; (ix) establish an industry-standard oversight program to monitor the risks of staking assets to third-party validators in connection with the provision of its staking services under this Agreement; and (x) promptly notify the Client of any material change in the risks associated with Anchorage’s staking services and/or its third party validators, including but not limited to risks revealed through information obtained in the course of Anchorage’s due diligence or oversight program of the third-party validators.
2.6 Acknowledgements. Client acknowledges that:
algorithms utilized by a Blockchain supporting a specific Digital Asset inoperative;
to large fluctuations in the future;
owning Digital Assets may result in significant loss over a short period of time;
The Fees and any other payments or compensation otherwise agreed to by Anchorage and Client represent reasonable compensation for Anchorage’s Services and expenses.
2.7 Fiat Currency Instructions and Acknowledgements; Undirected Cash Disclosures. Anchorage may, in its sole discretion, offer Fiat Services to Client. If Anchorage offers Fiat Services, and Client accepts Fiat Services and Anchorage will:
For the sub-account held for the benefit of Client, Anchorage will keep records to obtain pass-through FDIC coverage of up to the maximum coverage level of $250,000 per Client at a single Fiat Institution.
Each Deposit Account will be titled in the name of Anchorage, acting for the benefit of its customers, or a similar manner of recordation as required to enable Client to be eligible for pass-through insurance pursuant to 12 CFR 330.5. A Deposit Account may include funds beneficially owned by Client and other clients of Anchorage. As Custodian, Anchorage will maintain records of Client’s beneficial ownership of deposits in each Deposit Account.
Each Deposit Account will be maintained separately and apart from Anchorage’s business, operating, and reserve accounts. Anchorage will in no case or manner use funds beneficially owned by the Client in a Deposit Account for its own business purposes.
“Cause” shall mean: (i) Client materially breaches any provision of this Agreement and such breach remains uncured for a period of thirty (30) calendar days after notice of such breach is provided by Anchorage to Client; or (ii) a Bankruptcy Event (as defined below) occurs and is continuing with respect to Client.
“Bankruptcy Event” means the party is (i) dissolved (other than pursuant to a consolidation, amalgamation or merger); (ii) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (iii) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (iv) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation, and in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition
(I) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (II) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; (v) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (vi) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; (vii) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; (viii) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (i) to (vii) (inclusive); or (ix) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.
“Transition Period” means a 180-day period (or such extended period as agreed in writing by Anchorage and Client) commencing on the date Client is notified of any termination of the Agreement pursuant to this Section 4.2(c).
“Transition Services” means the Services consisting of (i) the custody of Client’s Digital Assets on Client’s behalf, the processing of deposits and withdrawals and the other Services, and (ii) access to the Technology Platform.
In addition, Anchorage represents, warrants and covenants as of the Effective Date and each calendar day during the Term that:
Client is and shall remain in good standing with all relevant government agencies, departments, regulatory, and supervisory bodies to the extent relevant and material to its performance hereunder;
crime.
6.7 Prohibition Against Nested Transactions. Deposits or withdrawals of assets to or from Client's Account shall be for Client's own benefit.
8.2 Notice and Settlement of a Claim. Anchorage will provide Client with prompt notice of any Claim for which indemnification will be sought hereunder and will cooperate in all reasonable respects with Client in connection with any such Claims, at Client’s expense. Client will defend Anchorage at Anchorage’s request, but failure to give notice will not relieve Client of its obligations under this Section 9. Client will be entitled to control the handling of any such Claim and to defend or settle any such Claim, in its sole discretion, with counsel of its own choosing, except that any settlement for other than money damages will be subject to the approval of the Anchorage, which approval will not be unreasonably withheld. Client may not settle any Claim without the prior written consent of Anchorage where such proposed settlement may limit, materially interfere with, or otherwise adversely affect the rights of Anchorage herein.
FOR THE AVOIDANCE OF DOUBT, THE LIMITATION OF LIABILITY IN THIS SECTION 10 IS A SEPARATE LIMITATION OF LIABILITY AS TO EACH CLIENT AND SHALL NOT INCLUDE ANY AMOUNT PAID BY CLIENTS IN THE AGGREGATE.
(ii) any Affiliate that controls, is controlled by, or is under common control; and (iii) any successor in a merger, acquisition, or reorganization, including any judicial reorganization provided that such Party provides advance notice to the other Party and any entity providing services pursuant to assignment under each of (i), (ii) and (iii) above possess the necessary licenses to perform such services in compliance with applicable law and any entity providing custody services pursuant to this Agreement shall be a qualified custodian as defined under the Advisers Act. Any purported assignment in violation of this Section 12.11 will be null and void, ab initio, and of no force or effect.
SCHEDULE A
DEFINITIONS
“Account” means an account established in the name of, or for the benefit of a Client, in which the ownership of Digital Assets is recorded and to which Digital Assets are credited. Each Account is recorded separately on Anchorage's books and records and has one or more unique wallet addresses on the relevant Blockchain (e.g., in the case of bitcoin, the Blockchain associated with the Bitcoin network). An organization may have one or more Accounts, and an Account may have one or more Vaults. The Authorized Persons and Quorum requirements for each Account may differ from those of other Accounts.
“Acceptable Device” means a hardware device with software configuration set forth in Schedule B. “Affiliate” means an entity controlling, controlled by or under common control with a Party.
“Anchorage API” means the application programming interface, as such may be modified from time to time, made available by Anchorage as part of the Services.
“Annual Basis Points” refers to the annual rate for custody fees. Monthly Custody Fees are charged at the rate of one-twelfth of the listed annual rate.
“AUC” or “Assets Under Custody” means the average daily balance across all Clients’ Digital Assets in Anchorage’s custody each month, calculated after the conclusion of each month, where the average daily balance is determined by adding each Client’s daily balances together and dividing the sum of the daily balances by the number of days in such month (or in the case of the first month, by the number of days in such month following the Fees Commencement Date). Daily balances are calculated in U.S. Dollars by applying closing prices, as provided by CryptoCompare.com at 4:00 PM Eastern Time, or if unavailable, other reliable, reputable third party pricing services, selected by Anchorage in its sole discretion, to the end of day holdings in the Account. If such source(s)’ closing prices for certain Digital Assets are unavailable, or Anchorage reasonably determines that such prices are unreliable due to low or inconsistent trading volumes, Anchorage may use fixed pricing for such Digital Assets, which will be determined by prior written agreement with Client.
“Authenticated Instruction” means a Direction (i) regarding specific Digital Assets; (ii) to add or remove Authorized Persons; (iii) to generate or remove, or change permissions for, Anchorage API keys; or (iv) which is otherwise provided for by the Services; by (a) an Authorized Person that has received Quorum approval (where such Quorum approval is required) or (b) an authorized application using an Anchorage API key (generated by an Authorized Person). All Authenticated Instructions shall be received and authenticated by Anchorage in accordance with reasonable security procedures, or they shall not constitute Authenticated Instructions. Anchorage’s authentication processes and procedures, including security procedures defined herein, will be determined by Anchorage in its reasonable discretion, subject to this Agreement, and in accordance with applicable law and regulation and industry best practices of comparable custodians that are chartered banks and trust companies, from time to time, and will include various measures, including, without limitation, biometric authentication for each Authorized Person, which may include but are not limited to fingerprint, facial recognition, or voiceprint. Where the purpose of an Authenticated Instruction relates to Digital Assets, such an Authenticated Instruction is an entitlement order for purposes of Article 8.
“Authorized Person” means a person nominated by Agent acting on behalf of Client, and thereafter approved by Anchorage.
pursuant to Section 2.1. “Basis Point” means 1/100th of 1%.
“Bitcoin” or “BTC” (whether capitalized or not) is a type of Digital Asset that is the native asset of the Bitcoin network, which is
peer-to-peer network of nodes which implement the Bitcoin protocol.
“Blockchain” means software operating a distributed ledger which is maintained by a network of computers, and that records all transactions in a Digital Asset in theoretically unchangeable data packages known as blocks, each of which are timestamped to reference the previous block so that the blocks are linked in a chain that evidences the entire history of transactions in the Digital Asset.
“Client Data” means any or all of the following, and all copies thereof, regardless of the form or media: (i) Personal Information of Client or an Authorized Person; and (ii) any non-public data or information provided or submitted by or on behalf of Client or an Authorized Person as part of the Services.
“Confidential Information” has the meaning given in the body of this Agreement.
“Digital Asset” means a digital representation of value that may function as a medium of exchange or medium for investment, including both bitcoin and Ethereum, and which is evidenced on, and can be electronically received and stored using distributed ledger technology. For the avoidance of doubt, Digital Assets held by Anchorage for the Client are “Financial Assets” for purposes of the UCC and are not assets of Anchorage.
“Direction” means Authenticated Instructions, through the Anchorage application made by Authorized Persons, or the Anchorage API, relating to the storage or transfer of Digital Assets. All Directions shall be Authenticated Instructions or they shall not constitute Directions.
“Documentation” means all Client manuals, training and marketing materials, guides, product descriptions, product specifications, technical manuals, supporting materials, and other information relating to the Services and provided by Anchorage to Client.
“ETH”, "ether", or Ethereum (whether capitalized or not) means a type of Digital Asset called Ether that is the native asset of the Ethereum Mainnet. Ethereum can refer to either the Ethereum Mainnet itself or to the native asset of such network.
“Ethereum” (whether capitalized or not) means, depending on the context, the decentralized Blockchain network powered by ETH,
or the network's native asset (ETH).
“Ethereum Mainnet” means Ethereum’s main network and Blockchain also known as the Ethereum layer 1 (L1). “Fee” has the meaning provided in the Order Form.
“Fiat Services” means services related to the custody, management, and Directions related to fiat currencies owned by Client and held for Client’s benefit by Anchorage, including (i) holding Client’s fiat currency in an omnibus banking account held for the benefit of Anchorage’s clients, and (ii) transferring Client’s fiat currency as directed by Client or other Client designee.
“Force Majeure Event” has the meaning specified in the body of this Agreement.
“Fork” means (i) that the source code of a Digital Asset network as a whole has been changed in a way that makes it incompatible with the unchanged version of the Digital Asset network, (ii) a material population of miners, validators and/or node operators of the Digital Asset network accept the changes while the remainder do not, and (iii) that the two resulting Digital Asset networks have not been merged together in a timely manner, resulting in divergent blockchains for each. A Fork would create two separate Digital Asset networks (each, a “Forked Network”), and may result in Anchorage holding an identical amount of Digital Assets associated with each Forked Network.
"including" (irrespective of whether capitalized or not) means including, without limitation.
“Intellectual Property Right(s)” means, with respect to any thing, material or work (hereinafter, a “Work”): any and all (i) worldwide copyrights, trademarks, trade secrets and any other intellectual property and proprietary rights and legal protections in and to such Work including but not limited to all rights under treaties and conventions and applications related to any of the foregoing; (ii) all patents, patent applications, registrations and rights to make applications and registrations for the foregoing; (iii) all goodwill associated with the foregoing; (iv) all renewals, extensions, reversions or restorations of all such rights; (v) all works based upon, derived from, or incorporating the Work; (vi) all income, royalties, damages, claims, and payments now or hereafter due or payable with respect thereto; (vii) all causes of action, either in law or in equity for past, present or future infringement based on the Work; (viii) rights corresponding to each of the foregoing throughout the world; and (ix) all the rights embraced or embodied therein, including but not limited to, the right to duplicate, reproduce, copy, distribute, publicly perform, display, license, adapt, prepare derivative works from the Work, together with all physical or tangible embodiments of the Work.
“Laws” means all United States federal, state and local laws, statutes, ordinances, regulations, rules, executive orders, circulars, opinions, agency guidance, interpretive letters and other official releases, request, or recommendation of or by any government, or any authority, department or agency thereof.
“Monthly Custody Fee” means (Annual Basis Points x AUC)/12 as calculated using the fee table in the Order Form.
“Monthly Minimum Fee” refers to the fees as agreed by Parties in the Order Form.
“One-Time Onboarding Fee” refers to the fees for establishing Client as an Anchorage customer, including KYC/AML processes; one in-person training session; Authorized Person onboarding; and remote training for up to ten (10) individuals. Credit, if any, may be applied to Client Fees only above the Monthly Minimum Fee, and will be applied fully each month until the credit has been fully expended within the Initial Term. Any remaining credit after the Initial Term shall be forfeited.
“Personal Data Breach” has the meaning provided for in the Data Processing Addendum attached as Exhibit A.
“Personal Information” means any information relating to an identified or identifiable individual, such as name, postal address, email address, telephone number, date of birth, Social Security number (or its equivalent), driver’s license number, account number, personal identification number, health or medical information, fingerprint, voice print, or any other unique logical or biometric identifier specific to an individual, regardless of the media in which it is contained, that is: (i) disclosed to Anchorage, its Affiliates or Anchorage Representatives by Client or an Authorized Person in anticipation of, in connection with or incidental to the Services;
(ii) processed at any time by Anchorage, an Anchorage Affiliate or Anchorage Representatives in connection with or incidental to the performance of its obligations under this Agreement; or (iii) derived by Anchorage, an Anchorage Affiliate or Anchorage Representatives from the information described in (i) and (ii) above.]
“Private Key” means an alphanumeric string known only to the holder of a Digital Asset, which must be used to transact the Digital Asset represented by the corresponding Public Key on the applicable Blockchain.
“Public Key” means an alphanumeric string on a Blockchain that indicates ownership/possession of a specific amount of a Digital Asset by a specific network participant. The Public Key is visible to all participants in the Blockchain’s network.
“Quorum” means the minimum number of Authorized Persons required to approve a Direction which requires a quorum. Unless otherwise specified in an applicable control agreement or instructions provided in connection therewith, (i) Client may designate the total number and the minimum number of Authorized Persons required to approve an Authenticated Instruction or other Direction so long as Client designates at least three (3) Authorized Persons, with at least two (2) required to approve any Direction.
“Representative” means any employees, officers, directors, representatives, contractors, and agents of a Party.
“Services” means the services related to (i) the custody and settlement of Digital Assets provided by Anchorage to Client under this Agreement (including any attachments, schedules, exhibits, or addendums), including the Technology Platform and Support Services and (ii) the staking services contemplated by this Agreement in accordance with Schedules D. “Services” also includes Fiat Services or On-Chain Services if Anchorage has offered such services to Client, and Client has accepted such services. For the avoidance of doubt, “Services” expressly excludes the provision of legal, tax, brokerage, or investment advice or recommendations.
“Support Services” means services supporting the use of the Services, including access to Anchorage Representatives for support
related to Account(s), training, etc.
“Technology Platform” means the technology platform and application provided by Anchorage and made available to Client to access the Services and Account(s), including the Anchorage API, and any changes, improvements, extensions thereto or other versions thereof in order to: (i) store Client’s Digital Assets and provide related services; (ii) handle Digital Assets according to Authenticated Instructions; and (iii) determine the eligibility of Digital Assets for storage and continued storage. The Technology Platform includes but is not limited to (i) algorithms, computer programs, concepts, ideas, inventions, machines, mask works, procedures, processes, rates, security codes, and works of authorship in all cases whether or not patentable or copyrightable, that are owned or in-licensed by Anchorage or that otherwise are or have been created, developed, owned, incorporated or generated, in whole or in part, by or on behalf of Anchorage for or into or in connection with features, functions, tools or services to be provided pursuant to this Agreement, (ii) all data and other information that are or can be collected, compiled, or derived by or on behalf of Anchorage from any usage by Client or any other person of any work, invention, or other subject matter referred to in the foregoing, and (iii) any work, invention, or other subject matter that constitutes or relates to a suggestion, enhancement, modification, improvement, upgrade, or update regarding, or that is otherwise based on or derived from or related to, any work, invention, or other subject matter referred to in this the foregoing.
“Third Party” means a person(s) or any legal entity that is not a Party, a Representative of a Party, or an Affiliate of a Party.
“UCC” means the New York Uniform Commercial Code.
“UUC” or “Units Under Custody” means the average daily quantity of Client Digital Assets in Anchorage’s custody each month, calculated after the conclusion of each month, where the average daily quantity is determined by adding each daily quantity and dividing the sum of the daily quantity amounts by the number of days in such month (or in the case of the first month, by the number of days in such month following the Fees Commencement Date). The first invoice will be sent after the end of the calendar month including the Fees Commencement Date, unless otherwise agreed in writing by the Parties.
“Vault” means a subdivision of an Account. Each Vault is held separately on Anchorage's books and records and may have one or more unique wallet addresses on the relevant Blockchain. The Authorized Persons and Quorum requirements for each Vault may differ from those of other Vaults.
SCHEDULE B
TECHNICAL AND EQUIPMENT SPECIFICATIONS
[redacted]
SCHEDULE C
LIST OF CLIENTS
(Effective August 7, 2026)
SCHEDULE D
STAKING SERVICES ADDENDUM
(the “Staking Addendum”)
[redacted]
SCHEDULE F
BACKGROUND SCREENING CRITERIA
[redacted]
SCHEDULE G
INSURANCE REQUIREMENTS
[redacted]
SCHEDULE H
BUSINESS CONTINUITY PLANNING SUPPLEMENTAL TERMS
[redacted]
SCHEDULE I
LIST OF SUPPORTED DIGITAL ASSETS
EXHIBIT A
SERVICE LEVEL AGREEMENT
[redacted]
ADDENDUM 1
ADDITIONAL TERMS AND CONDITIONS
[redacted]
ATTACHMENT 1 TO ADDENDUM 1
Security Requirements (Version 2.6)
[redacted]
ATTACHMENT 2 TO ADDENDUM 1
LIST OF ANCHORAGE SUBCONTRACTORS
[redacted]
Exhibit 10.3.2
BITGO CUSTODIAL SERVICES AGREEMENT
WHEREAS;
NOW THEREFORE, in consideration of the mutual promises contained herein, the parties hereby agree:
This Custodial Services Agreement is made as of the later date of the signatures below (the “Effective Date”) by and between each fund specified on Schedule B (each a “Client” and collectively the “Clients”), by and through its sponsor and agent, FD Funds Management LLC, acting solely in its capacity as such (“Sponsor”), and Custodian, as defined below. This Agreement governs Client’s use of the Custodial Services, APIs, and Staking Services (each as defined below, and collectively, the “Services”) provided or made available by the Custodian. Each Client severally and not jointly enters into this Agreement with Custodian. This Agreement shall constitute separate agreements, each between a single Client and Custodian, as if such Client had executed a separate Agreement naming only itself as the Client, and no Client shall have any liability for the obligations of any other Client.
Definitions:
(a) “Agreement” means this Custodial Agreement, as it may be amended from time to time, and includes all schedules, appendices, attachments and exhibits to this Custodial Agreement, as they may be amended from time to time.
(b) “Applicable Law” means all applicable United States federal, state and local laws, statutes, ordinances, regulations, rules, executive orders, circulars, opinions, agency guidance interpretative letters and other official releases, requests, or recommendations of or by any government, or any authority, department or agency thereof.
(c) “Authorized Persons” means any person who is authorized by the Client to give instructions to the Custodian or perform other operations through the Company Site on behalf of the Client (i.e., viewer, admin, enterprise owner, viewer with additional video rights, etc.).
(d) “Bank” means a U.S. banking institution insured by the Federal Deposit Insurance Corporation (FDIC).
(e) “Custodian” or “BitGo” or “Supplier” means BitGo Trust Company, Inc., a South Dakota trust company duly organized and chartered under § 51A-6A-1(12A) of the South Dakota Banking Law and licensed to act as custodian of Client’s Digital Assets on Client’s behalf.
(f) “Digital Assets” means digital assets, virtual currencies, tokens, coins, commodities, or digital securities supported by the Custodian.
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(1) A DIGITAL ASSET IS NOT LEGAL TENDER, IS NOT BACKED BY THE GOVERNMENT, AND DIGITAL ASSET ACCOUNTS AND VALUE BALANCES IN DIGITAL ASSET ACCOUNTS ARE NOT SUBJECT TO FEDERAL DEPOSIT INSURANCE CORPORATION OR SECURITIES INVESTOR PROTECTION CORPORATION PROTECTIONS;
(2) LEGISLATIVE AND REGULATORY CHANGES OR ACTIONS AT THE STATE, FEDERAL, OR INTERNATIONAL LEVEL MAY ADVERSELY AFFECT THE USE, TRANSFER, EXCHANGE, AND VALUE OF DIGITAL ASSETS;
(3) TRANSACTIONS IN DIGITAL ASSETS MAY BE IRREVERSIBLE, AND LOSSES DUE TO FRAUDULENT OR ACCIDENTAL TRANSACTIONS MAY NOT BE RECOVERABLE;
(4) SOME DIGITAL ASSET TRANSACTIONS SHALL BE DEEMED TO BE EXECUTED WHEN RECORDED ON A PUBLIC LEDGER, WHICH MAY NOT NECESSARILY BE THE DATE OR TIME THAT THE CUSTOMER INITIATES THE TRANSACTION;
(5) THE VALUE OF DIGITAL ASSETS MAY BE DERIVED FROM THE CONTINUED WILLINGNESS OF MARKET PARTICIPANTS TO EXCHANGE FIAT CURRENCY FOR DIGITAL ASSETS, WHICH MAY RESULT IN THE POTENTIAL FOR PERMANENT AND TOTAL LOSS OF VALUE OF A PARTICULAR DIGITAL ASSET SHOULD THE MARKET FOR THAT DIGITAL ASSET DISAPPEAR;
(6) THERE ARE NO ASSURANCES THAT A PERSON WHO ACCEPTS DIGITAL ASSETS AS PAYMENT TODAY WILL CONTINUE TO DO SO IN THE FUTURE;
(7) THE VOLATILITY AND UNPREDICTABILITY OF THE PRICE OF DIGITAL ASSETS RELATIVE TO FIAT CURRENCY MAY RESULT IN A SIGNIFICANT LOSS OVER A SHORT PERIOD OF TIME;
(8) THE NATURE OF DIGITAL ASSETS MAY LEAD TO AN INCREASED RISK OF FRAUD OR CYBER ATTACK; AND
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(9) THE TECHNOLOGICAL NATURE OF DIGITAL ASSETS MEANS THAT ANY TECHNOLOGICAL DIFFICULTIES EXPERIENCED BY THE CUSTODIAN OR CLIENT MAY PREVENT THE ACCESS OR USE OF A CLIENT’S DIGITAL ASSETS.
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Custodian has implemented and will maintain a reasonable information security program that includes policies and procedures that are reasonably designed to safeguard Custodian’s electronic systems and Client’s Confidential Information from, among other things, unauthorized disclosure, access, or misuse, including, by Custodian and its affiliates. In the event of a data security incident, Custodian will provide all notices required under Applicable Law. Without limiting the generality of the foregoing, Custodian shall comply, and shall cause its employees and other personnel to comply, with the Security Requirements provided in Appendix 5 of this Agreement (the “Security Requirements”).
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[Remainder of page intentionally left blank. Signature page follows.]
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IN WITNESS WHEREOF, this Agreement is executed as of the Effective Date.
BITGO TRUST COMPANY, INC.
By: /s/ Jody Mettler
Name: Jody Mettler
Title: Chief Operating Officer
Date: October 3, 2025
Address for Notice:
6216 Pinnacle Place Suite 101 Sioux Falls, SD 57108 Attn: Legal
Email: [email protected]
|
FD FUNDS MANAGEMENT on behalf of the Clients identified on Schedule B
By: /s/ Cynthia Lo Bessette
Name: Cynthia Lo Bessette
Title: President
Date: October 3, 2025
Address for Notice:
245 Summer Street Attn: Fund Operations: Legal Email: [email protected] |
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APPENDIX 1
SERVICES AGREEMENT SECTIONS 2 AND 5
[redacted]
APPENDIX 2: FORK POLICY
[redacted]
APPENDIX 3: SERVICE LEVEL AGREEMENT
[redacted]
APPENDIX 4: STAKING & DELEGATION SERVICES TERMS
[redacted]
Exhibit 1 to Appendix 4
Additional Terms
[redacted]
APPENDIX 5: SECURITY REQUIREMENTS
[redacted]
SCHEDULE A: FEE SCHEDULE
[redacted]
SCHEDULE B
LIST OF CLIENTS
SCHEDULE C
INSURANCE REQUIREMENTS
[redacted]
SCHEDULE D
BUSINESS CONTINUITY PLAN
[redacted]
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SCHEDULE E
LIST OF BITGO VENDORS
[redacted]
SCHEDULE F
STAKING SERVICE PROVIDERS
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