Year
1
2
3
Hypothetical price per AVAX, beginning
$
100.00 $
100.00 $
100.00
Sponsor’s Fee
0.35 %
0.35 %
0.35 %
Shares of Trust, beginning AVAX in Trust, beginning
100,000.00 10,000.00
100,000.00 9,965.00
100,000.00 9,930.12
Hypothetical value of AVAX in Trust Beginning NAV of the Trust
$ 1,000,000.00 $ 996,500.00 $ 993,012.25 $ 1,000,000.00 $ 996,500.00 $ 993,012.25
AVAX to be delivered to cover the Sponsor’s Fee
35.00
34.88
34.76
AVAX in Trust, ending Ending NAV of the Trust Ending NAV per share
9,965.00
9,930.12
9,895.37
$ 996,500.00 $993,012.25 $989,536.71
$ $
9.97 $ 100.00 $
9.93 $ 100.00 $
9.90
Hypothetical price per AVAX, ending
100.00
Discretion of the Index Provider The Index Provider has sole discretion over the determination of Index Price and may change the methodologies for determining the Index Price from time to time. Description of the Trust Agreement The following is a description of the material terms of the Trust Agreement. The Trust Agreement establishes the roles, rights and duties of the Sponsor and the Trustee. The Sponsor Liability of the Sponsor and Indemnification Neither the Sponsor nor the Trust insure the Trust’s AVAX. The Sponsor and its affiliates (each a “Covered Person”) will not be liable to the Trust or any shareholder for any loss suffered by the Trust which arises out of any action or inaction of such Covered Person if such Covered Person determined in good faith that such course of conduct was in the best interests of the Trust. However, the preceding liability exclusion will not protect any Covered Person against any liability resulting from its own willful misconduct, bad faith or gross negligence in the performance of its duties. Each Covered Person will be indemnified by the Trust against any loss, judgment, liability, expense incurred or amount paid in settlement of any claim sustained by it in connection with the Covered Person’s activities for the Trust, provided that (i) the Covered Person was acting on behalf of, or performing services for, the Trust and had 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 the Trust Agreement on the part of such Covered Person and (ii) any such indemnification will be recoverable only from the property of the Trust. Any amounts payable to an indemnified party will be payable in advance under certain circumstances. Fiduciary and Regulatory Duties of the Sponsor The Sponsor is not effectively subject to the duties and restrictions imposed on “fiduciaries” under both statutory and common law. Rather, the general fiduciary duties that would apply to the Sponsor are defined and limited in scope by the Trust Agreement. Under Delaware law, a shareholder may bring a derivative action if the shareholder is a shareholder at the time the action is brought and either (i) was a shareholder at the time of the transaction at issue or (ii) acquired the status of shareholder by operation of law or the Trust’s governing instrument from a person who was a shareholder at the time of the transaction at issue. Additionally, Section 3816(e) of the Delaware Statutory Trust Act specifically provides that “a beneficial owner’s right to bring a derivative action may be subject to such additional standards and restrictions, if any, as are set forth in the governing instrument of the statutory trust, including, without limitation, the requirement that beneficial owners owning a specified beneficial interest in the statutory trust join in the bringing
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