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Exhibit 4.1  

 
 

FORM OF    
    
    AMENDED AND RESTATED DECLARATION OF TRUST
  AND
  TRUST AGREEMENT
  OF
  AIRSHARESTM EU CARBON ALLOWANCES FUND    
    

Dated as of September 10, 2008  

 By and Among  

 XSHARES ADVISORS LLC,

as Sponsor  

 WILMINGTON TRUST COMPANY

as Trustee  

 and  

 THE SHAREHOLDERS
  from time to time hereunder 

  

 
 

TABLE OF CONTENTS    
    

	 
	 	 
	 	Page

	ARTICLE I DEFINITIONS; THE TRUST	 	1
	 	SECTION 1.1	 	Definitions	 	1
	 	SECTION 1.2	 	Name	 	5
	 	SECTION 1.3	 	Delaware Trustee; Business Offices	 	5
	 	SECTION 1.4	 	Declaration of Trust	 	5
	 	SECTION 1.5	 	Purposes and Powers	 	5
	 	SECTION 1.6	 	Legal Title	 	6
	ARTICLE II THE TRUSTEE	 	6
	 	SECTION 2.1	 	Term; Resignation	 	6
	 	SECTION 2.2	 	Powers	 	6
	 	SECTION 2.3	 	Compensation and Expenses of the Trustee	 	6
	 	SECTION 2.4	 	Indemnification	 	6
	 	SECTION 2.5	 	Successor Trustee	 	7
	 	SECTION 2.6	 	Liability of Trustee	 	7
	 	SECTION 2.7	 	Reliance; Advice of Counsel	 	9
	 	SECTION 2.8	 	Payments to the Trustee	 	9
	ARTICLE III SHARES; CAPITAL CONTRIBUTIONS	 	9
	 	SECTION 3.1	 	General	 	9
	 	SECTION 3.2	 	Initial Order	 	10
	 	SECTION 3.3	 	Procedures for Creation and Issuance of Creation Baskets	 	10
	 	SECTION 3.4	 	Book-Entry-Only System, Global Security	 	11
	 	SECTION 3.5	 	Assets	 	13
	 	SECTION 3.6	 	Liabilities	 	14
	 	SECTION 3.7	 	Distributions	 	14
	 	SECTION 3.8	 	Voting Rights	 	14
	 	SECTION 3.9	 	Equality	 	14
	ARTICLE IV THE SPONSOR	 	14
	 	SECTION 4.1	 	Management of the Trust	 	14
	 	SECTION 4.2	 	Authority of Sponsor	 	14
	 	SECTION 4.3	 	Obligations of the Sponsor	 	15
	 	SECTION 4.4	 	Liability of Covered Persons	 	16
	 	SECTION 4.5	 	Fiduciary Duty	 	16
	 	SECTION 4.6	 	Indemnification of the Sponsor	 	17
	 	SECTION 4.7	 	Expenses and Limitations Thereon	 	18
	 	SECTION 4.8	 	Compensation to the Sponsor	 	19
	 	SECTION 4.9	 	Other Business of Shareholders	 	19
	 	SECTION 4.10	 	Voluntary Withdrawal of the Sponsor	 	19
	 	SECTION 4.11	 	Authorization of Registration Statements	 	19
	 	SECTION 4.12	 	Litigation	 	19
	ARTICLE V RESERVED	 	20
	 	SECTION 5.1	 	Reserved	 	20
	ARTICLE VI RESERVED	 	20
	 	SECTION 6.1	 	Reserved	 	20
	ARTICLE VII REDEMPTIONS	 	20
	 	SECTION 7.1	 	Redemption of Redemption Baskets	 	20
	 	SECTION 7.2	 	Other Redemption Procedures	 	21

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	ARTICLE VIII THE LIMITED OWNERS	 	21
	 	SECTION 8.1	 	No Management or Control; Limited Liability; Exercise of Rights Through DTC	 	21
	 	SECTION 8.2	 	Rights and Duties	 	22
	 	SECTION 8.3	 	Limitation on Liability	 	22
	ARTICLE IX BOOKS OF ACCOUNT AND REPORTS	 	23
	 	SECTION 9.1	 	Books of Account	 	23
	 	SECTION 9.2	 	Annual Reports and Monthly Statements	 	23
	 	SECTION 9.3	 	Calculation of Net Asset Value	 	23
	 	SECTION 9.4	 	Maintenance of Records	 	23
	 	SECTION 9.5	 	Certificate of Trust	 	23
	ARTICLE X FISCAL YEAR	 	24
	 	SECTION 10.1	 	Fiscal Year	 	24
	ARTICLE XI AMENDMENT OF TRUST AGREEMENT; MEETINGS	 	24
	 	SECTION 11.1	 	Amendments to the Trust Agreement	 	24
	 	SECTION 11.2	 	Meetings of the Trust	 	25
	 	SECTION 11.3	 	Solicitations; Action Without a Meeting	 	25
	ARTICLE XII TERM	 	26
	 	SECTION 12.1	 	Term	 	26
	ARTICLE XIII TERMINATION	 	26
	 	SECTION 13.1	 	Events Requiring Dissolution of the Trust	 	26
	 	SECTION 13.2	 	Distributions on Dissolution	 	27
	 	SECTION 13.3	 	Termination; Certificate of Cancellation	 	27
	ARTICLE XIV POWER OF ATTORNEY	 	27
	 	SECTION 14.1	 	Power of Attorney Executed Concurrently	 	27
	 	SECTION 14.2	 	Effect of Power of Attorney	 	28
	 	SECTION 14.3	 	Limitation on Power of Attorney	 	28
	ARTICLE XV MISCELLANEOUS	 	28
	 	SECTION 15.1	 	Governing Law	 	28
	 	SECTION 15.2	 	Provisions In Conflict With Law or Regulations	 	29
	 	SECTION 15.3	 	Construction	 	29
	 	SECTION 15.4	 	Notices	 	29
	 	SECTION 15.5	 	Counterparts	 	30
	 	SECTION 15.6	 	Binding Nature of Trust Agreement	 	30
	 	SECTION 15.7	 	No Legal Title to Trust Estate	 	30
	 	SECTION 15.8	 	Creditors	 	30
	 	SECTION 15.9	 	Integration	 	30
	 	SECTION 15.10	 	Goodwill; Use of Name	 	30
	EXHIBIT A	 	Form of Certificate of Trust of AirSharesTM EU Carbon Allowances Fund	 	32
	EXHIBIT B	 	Form of Global Certificate	 	33
	EXHIBIT C	 	Form of Authorized Participant Agreement	 	35

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AIRSHARESTM EU CARBON ALLOWANCES FUND  

 AMENDED AND RESTATED DECLARATION OF TRUST

AND TRUST AGREEMENT  

        This AMENDED AND RESTATED DECLARATION OF TRUST AND TRUST AGREEMENT of AIRSHARESTM EU CARBON ALLOWANCES FUND is made and entered into as of the
10th day of September, 2008, by and among XSHARES ADVISORS LLC, a Delaware limited liability company, as sponsor, WILMINGTON TRUST COMPANY, a Delaware banking corporation, as
trustee, and the SHAREHOLDERS from time to time hereunder. 

        WHEREAS,
XShares Advisors LLC and Wilmington Trust Company have heretofore created a Delaware statutory trust pursuant to the Delaware Trust Statute (as hereinafter defined) by
entering into a declaration of trust, dated as of August 13, 2007 (the "Original Trust Agreement"), and by executing and filing with the Secretary of State of the State of Delaware the
Certificate of Trust; and 

        WHEREAS,
the parties hereto desire to amend and restate the Original Trust Agreement in its entirety and to provide for the matters set forth herein. 

        NOW,
THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each party hereby amends and restates the Original Trust Agreement in its entirety and agrees 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 to provide administrative services to the Trust pursuant to authority delegated by the Sponsor. 

        "Affiliate"—with
respect to a Person 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. 

        "Basket"
means a Creation Basket or a Redemption Basket, as the context may require. 

        "Beneficial
Owner" shall have the meaning assigned to such term in Section 3.4(d). 

        "Business
Day" any day on which the Listing Exchange and each of the exchanges on which the Trust's futures contracts are traded are open for trading. 

        "Capital
Contributions" means the amounts of cash contributed and agreed to be contributed to the Trust by any Participant or by the Sponsor, as applicable, in accordance with
Article III hereof. 

        "Carbon
Futures Contract" means any futures contract providing for the delivery or receipt at a future date of a specified amount of EUAs at a specified price and delivery point, or any
other futures contract or option thereon approved for trading by U.S. persons. 

        "CE
Act" means the Commodity Exchange Act, as amended. 

        "Certificate
of Trust" means the Certificate of Trust of the Trust 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 United States Commodity Futures Trading Commission. 

        "Code"
means the United States Internal Revenue Code of 1986, as amended. 

        "Commodity
Trading Advisor" means any Person from time to time who engages in commodity trading and related activities for the benefit of the Trust pursuant to authority delegated by the
Sponsor. 

        "Continuous
Offering Period" means the period during which Limited Shares may be created and sold in Creation Baskets pursuant to this Trust Agreement. 

        "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 Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust Administration. 

        "Covered
Person" means the Trustee, the Sponsor and their respective Affiliates. 

        "Creation
Basket" means the minimum number of Limited Shares which may be created and issued at any time, which shall initially be 100,000 Limited Shares, or such greater or lesser
number of Limited Shares as the Sponsor may determine from time to time. 

        "Creation
Basket Capital Contribution" means the amount of the Capital Contribution made by a Participant in connection with a Purchase Order Subscription Agreement for one or more
Creation Baskets, such Capital Contribution being an amount equal to the sum of (i) the cost of establishing the futures positions underlying a Creation Basket (excluding futures commissions
costs) and (ii) an amount determined by the Administrator to be the excess of the allocable portion of the Trust's uninvested cash and accrued but unearned interest attributable to that
Creation Basket over accrued but unpaid expenses attributable to that Creation Basket. 

        "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, New York, New York, or such other depository of Limited Shares as may be selected by the Sponsor as specified herein. 

        "Depository
Agreement" means the Letter of Representations from the Sponsor to the Depository, dated as of June 30, 2008, as the same may be amended or supplemented from time to
time. 

        "Distributor"
means any Person from time to time engaged to provide distribution or related services to the Trust pursuant to authority delegated by the Sponsor. 

        "DTC"
shall have the meaning assigned to such term in Section 3.4(b). 

        "DTC
Participants" shall have the meaning assigned to such term in Section 3.4(c). 

        "ERISA"
means the Employee Retirement Income Security Act of 1974, as amended. 

        "EU
ETS" means the European Union Greenhouse Gas Emissions Trading Scheme based on Directive 2003/87/EV of the European Parliament and of the Council of the European Union, as the same
may be amended or supplemented from time to time. 

        "EUA"
means an allowance issued under the EU ETS, representing the right to emit one metric tonne of carbon dioxide equivalent during a specified period. 

        "Event
of Withdrawal" shall have the meaning assigned to such term in Section 13.1(a). 

        "Fiscal
Quarter" shall mean each period ending on the last day of October, January, April and July of each Fiscal Year. 

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        "Fiscal
Year" shall have the meaning assigned to such term in Article X hereof. 

        "Global
Security" means the global certificate or certificates issued to the Depository as provided in the Depository Agreement, each of which shall be in substantially the form attached
hereto as Exhibit B. 

        "Indirect
Participants" shall have the meaning assigned to such term in Section 3.4(c). 

        "Internal
Revenue Service" or "IRS" means the U.S. Internal Revenue Service. 

        "Limited
Owner" means any Person holding Limited Shares. 

        "Limited
Shares" means Shares held by any Person other than the Sponsor. 

        "Liquidating
Trustee" shall have the meaning assigned to such term in Section 13.2. 

        "Listing
Exchange" means NYSE Arca or, if the Limited Shares shall cease to be listed on the NYSE Arca and are listed on one or more other exchanges, the exchange on which the Limited
Shares are principally traded, as determined by the Sponsor. 

        "Management
Fee" shall have the meaning assigned to such term in Section 4.8. 

        "Minimum
Subscription Amount" shall have the meaning assigned to such term in Section 3.2(b). 

        "Net
Asset Value" at any time means the total assets of the Trust less total expenses and liabilities of the Trust, each determined on the basis of generally accepted accounting
principles in the United States, consistently applied under the accrual method of accounting. 

        "Net
Asset Value Per Basket" means, at any time, the product obtained by multiplying the Net Asset Value Per Share by the number of Limited Shares comprising a Basket at such time. 

        "Net
Asset Value Per Share" means the Net Asset Value divided by the number of Shares outstanding on the date of calculation. 

        "NFA"
means the National Futures Association. 

        "Order
Cut-Off Time" means such time as disclosed in the Prospectus by which orders for creation or redemption of Baskets must be placed. 

        "Organization
and Offering Expenses" shall have the meaning assigned to such term in Section 4.7(a)(ii). 

        "Original
Trust Agreement" has the meaning assigned to such term in the preamble. 

        "Participant"
means a Person that is a DTC Participant and that has entered into a Participant Agreement which, at the relevant time, is in full force and effect. 

        "Participant
Agreement" means an Authorized Participant Agreement, including all attachments thereto, among the Trust, the Sponsor and a Participant, substantially in the form of
Exhibit C hereto, as the same may be amended or supplemented from time to time. 

        "Person"
means any natural person, partnership, limited liability company, statutory trust, corporation, association, or other legal entity. 

        "Prospectus"
means the final prospectus and disclosure document of the Trust, constituting a part of the Registration Statement, as filed with the SEC and declared effective thereby, as
the same may at any time and from time to time be amended or supplemented. 

        "Purchase
Order" shall have the meaning assigned to such term in Section 3.3(a)(i). 

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        "Purchase
Order Subscription Agreement" shall mean a purchase order subscription agreement in the form attached as an annex to a Participant Agreement, as the same may be amended or
supplemented from time to time. 

        "Purchase
Order Subscription Date" shall have the meaning assigned to such term in Section 3.3(a)(i). 

        "Reconstituted
Trust" shall have the meaning assigned to such term in Section 13.1(a). 

        "Redemption
Basket" means the minimum number of Limited Shares that may be redeemed pursuant to Section 7.1, which shall be the number of Limited Shares constituting a Creation
Basket on the relevant Redemption Order Date. 

        "Redemption
Distribution" means the cash to be delivered in satisfaction of a redemption of a Redemption Basket as specified in Section 7.1(c). 

        "Redemption
Order" shall have the meaning assigned to such term in Section 7.1(a). 

        "Redemption
Order Date" shall have the meaning assigned to such term in Section 7.1(b). 

        "Redemption
Order Form" shall mean a redemption order form in the form attached as an annex to a Participant Agreement, as the same may be amended or supplemented from time to time. 

        "Redemption
Settlement Time" shall have the meaning assigned to such term in Section 7.1(d). 

        "Registration
Statement" means a registration statement filed with the SEC under the Securities Act of 1933, as amended, as such registration statement may be amended from time to time,
pursuant to which the Trust has registered the offer and sale of Limited Shares. 

        "SEC"
means the Securities and Exchange Commission. 

        "Shareholders"
means the Sponsor and all Limited Owners, as holders of the Shares, where no distinction is required by the context in which the term is used. 

        "Shares"
means the units of fractional undivided beneficial interest in the profits, losses, distributions, capital and assets of, and ownership of, the Trust. 

        "Sponsor"
means XShares Advisors LLC, any successor thereto, or any substitute therefor as provided herein. 

        "Sponsor
Shares" means Shares owned by the Sponsor. 

        "Subscribing
Participant" means a Participant who has submitted a Purchase Order Subscription Agreement to create one or more Creation Baskets that has not yet been accepted and filled
by the Trust. 

        "Suspended
Redemption Order" shall have the meaning assigned thereto in Section 7.1(d). 

        "Tax
Returns" means any return, declaration, report or similar statement required to be filed with respect to any taxes (including any attached schedules), including any information
return, claim for refund, declaration of estimated tax, and any amendment to any of the foregoing. 

        "Transaction
Fee" shall have the meaning assigned thereto in Section 3.3(d). 

        "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. 

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        "Trust"
means AirSharesTM EU Carbon Allowances Fund, the Delaware statutory trust formed pursuant to the Certificate of Trust, the business and affairs of which are governed
by this Trust Agreement. 

        "Trust
Agreement" means this Amended and Restated Declaration of Trust and Trust Agreement as the same may be amended from time to time. 

        "Trustee"
means Wilmington Trust Company or any successor thereto as provided herein, acting not in its individual capacity but solely as trustee of the Trust. 

        "Trust
Estate" means all property and cash held by the Trust, and all proceeds therefrom. 

        SECTION 1.2    Name.    The name of the Trust shall continue to be "AirSharesTM EU Carbon Allowances
Fund" in which name the Trustee and the Sponsor may engage in the business of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued on behalf of the
Trust. 

        SECTION 1.3    Delaware Trustee; Business Offices.    

        (a)   The
sole Trustee of the Trust is Wilmington 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 Sponsor. The Trustee shall receive service of process on the Trust in the State of Delaware at the foregoing address. 

        (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 420 Lexington Ave., New York, New York
10170. 

        SECTION 1.4    Declaration of Trust.    In connection with the creation of the Trust pursuant to the Original
Trust Agreement, the Trust has received the sum of $1000.00 in bank accounts in the name of the Trust, controlled by the Sponsor, from the Sponsor as grantor of the Trust, and the Sponsor hereby
declares that it shall hold such sum in trust, upon and subject to the conditions set forth herein for the use and benefit of the Shareholders. It is the intention of the parties hereto that the Trust
shall continue to be a statutory trust under the Delaware Trust Statute and that this Trust Agreement shall constitute the governing instrument of the Trust. The parties hereto expressly agree that
this Trust Agreement completely amends and restates the Original Trust Agreement in its entirety. 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. 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, to the extent not inconsistent with this Trust Agreement, 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.    The purpose and powers of the Trust shall be: (a) to implement
the investment strategy of the Trust as contemplated by the Prospectus; (b) to enter into any lawful transaction and engage in any lawful activities as the Sponsor may deem appropriate in
furtherance of or incidental to the foregoing purposes; and (c) as determined from time to time by the Sponsor, to engage in any other lawful business or activity for which a statutory trust
may be organized under the Delaware Trust Statute. The Trust shall have all of the powers specified in this Section 1.5 hereof, including, without limitation, all of the powers which may be
exercised by a Trustee or Sponsor on behalf of the Trust under this Trust Agreement. 

5

 

        SECTION 1.6    Legal Title.    Legal title to all of the Trust Estate shall be vested in the Trust as a
separate legal entity; provided, however, that where applicable law in any jurisdiction requires any part of the Trust Estate to be vested otherwise, the Sponsor may cause legal title to the Trust
Estate or any portion thereof to be held by or in the name of (i) the Sponsor or (ii) any other Person (other than a Shareholder) as nominee. 

ARTICLE II  

 THE TRUSTEE  

        SECTION 2.1    Term; Resignation.    

        (a)   Wilmington
Trust Company has been appointed and hereby agrees to continue to serve as the initial 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 Sponsor removes the Trustee or the Trustee resigns and a successor Trustee is appointed by the Sponsor in accordance with the terms of Section 2.5
hereof. 

        (b)   The
Trustee may resign at any time upon the giving of at least 60 days' advance written notice to the Trust; provided, that such resignation shall not become
effective unless and until a successor Trustee shall have been appointed by the Sponsor in accordance with Section 2.5 hereof. If the Sponsor does not appoint a successor trustee within such
sixty (60) day period, the Trustee may apply, at the expense of the Trust, to the Court of Chancery of the State of Delaware for the appointment of a successor Trustee. 

        SECTION 2.2    Powers.    Except to the extent expressly set forth in Section 1.3(a) and this
Article II, the duty and authority to manage the business and affairs of the Trust is hereby vested in the Sponsor, which duty and authority the Sponsor may delegate as provided herein, all
pursuant to Section 3806(b)(7) of the Delaware Trust Statute. Notwithstanding any other provision of this Trust Agreement, the Trustee shall not be entitled to exercise any of the powers, nor
shall the Trustee have any of the duties and responsibilities, of the Sponsor or the Liquidating Trustee described in this Trust Agreement. The Trustee shall be a trustee for the sole and limited
purpose of fulfilling the requirements of Section 3807 of the Delaware Trust Statute. The Trustee shall have only the rights, obligations and liabilities specifically provided for herein and
shall have no implied rights, duties, obligations and liabilities with respect to the business and affairs of the Trust. The Trustee shall have the power and authority to execute and file certificates
as required by the Delaware Trust Statute and to accept service of process on the Trust in the State of Delaware. The Trustee shall provide prompt notice to the Sponsor of its performance of any of
the foregoing. The Sponsor shall keep the Trustee reasonably informed of any actions taken by the Sponsor with respect to the Trust that it reasonably believes would 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 or an Affiliate of the Sponsor (including the Trust) reasonable compensation for its services hereunder as set forth in a separate fee agreement and shall be entitled to be reimbursed by the
Sponsor or an Affiliate of the Sponsor (including 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 and such other agents as the Trustee may employ in connection with the exercise and
performance of its rights and duties hereunder. 

        SECTION 2.4    Indemnification.    The Sponsor agrees (and any additional Sponsor admitted pursuant to
Section 4.2(j) will be deemed to agree), whether or not any of the transactions contemplated hereby shall be consummated, to assume liability for, and does hereby indemnify, protect, save and
keep harmless Wilmington Trust Company (in its capacity as Trustee and individually) and its 

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successors,
assigns, legal representatives, officers, directors, shareholders, employees, agents and servants (the "Indemnified Parties") from and against any and all liabilities, obligations, losses,
damages, penalties, taxes (excluding any taxes payable by the Trustee on or measured by any compensation received by the Trustee for its services hereunder or any indemnity payments received by the
Trustee pursuant to this Section 2.4), claims, actions, suits, costs, expenses or disbursements (including legal fees and expenses) of any kind and nature whatsoever (collectively, "Expenses"),
which may be imposed on, incurred by or asserted against the Indemnified Parties in any way relating to or arising out of the formation, operation or termination of the Trust, the execution, delivery
and performance of any other agreements to which the Trust is a party or the action or inaction of the Trustee hereunder or thereunder, except for Expenses resulting from the fraud, bad faith, gross
negligence or willful misconduct of any of the Indemnified Parties. The indemnities contained in this Section 2.4 shall survive the termination of this Trust Agreement or the removal or
resignation of the Trustee. 

        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. Any
resignation or removal of the Trustee and appointment of a successor Trustee shall not become effective until a written acceptance of appointment is delivered by the successor Trustee to the outgoing
Trustee and the Sponsor and any fees and expenses due to the outgoing Trustee are paid. Following compliance with the preceding sentence, 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. 

        SECTION 2.6    Liability of Trustee.    Except as otherwise provided in this Article II, in accepting
the trust continued hereby, the Trustee acts solely as a trustee hereunder and not in its individual capacity, and all Persons having any claim against the Trustee 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 bad faith, gross negligence, fraud 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, any agreement contemplated hereunder, or for the form,
character, genuineness, sufficiency, value or validity of any portion of the Trust Estate or the Shares; 

        (b)   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; 

        (c)   The
Trustee shall not have any liability for the acts or omissions of the Sponsor or its delegatees, the Liquidating Trustee, or any other Person; 

        (d)   The
Trustee shall not have any duty or obligation to supervise the performance of any obligations of the Sponsor or its delegatees, any Participant, or any other Person; 

        (e)   No
provision of this Trust Agreement shall require the Trustee to act or expend or risk its own funds or otherwise incur any financial liability in the performance of
any of its rights or powers hereunder if the Trustee shall have reasonable grounds for believing that such action, repayment of such funds or adequate indemnity against such risk or liability is not
reasonably assured or provided to it; 

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        (f)    Under
no circumstances shall the Trustee be liable for indebtedness evidenced by or other obligations of the Trust arising under this Trust Agreement or any other
agreements to which the Trust is a party; 

        (g)   The
Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement, or to appear in, institute, conduct or defend any
action or 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 or the Liquidating Trustee unless the Sponsor
or the Liquidating Trustee has offered to the 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 the 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 (x) 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, (y) result in any fee, tax or other governmental charge under the laws of any
jurisdiction or any political subdivision thereof in existence as of the date hereof other than the State of Delaware becoming payable by the Trustee or (z) 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 transactions by the Trustee, as the case may be, contemplated
hereby; and 

        (ii)   To
the extent that, at law (common or statutory) or in equity, the Trustee has duties (including fiduciary duties) and liabilities relating thereto to the Trust, the
Shareholders or to any other Person, the Trustee acting under this Trust Agreement shall not be liable to the Trust, the Shareholders or to any other Person for its good faith reliance on the
provisions of this Trust Agreement. The provisions of this Trust Agreement, to the extent that they restrict the duties and liabilities of the Trustee otherwise existing at law (common or statutory)
or in equity, are agreed by the parties hereto to replace such other duties and liabilities of the Trustee. 

        (h)   The
Trustee shall incur no liability if, by reason of any provision of any present or future law or regulation thereunder, or by any force majeure event, including but
not limited to natural disaster, war or other circumstances beyond its reasonable control, the Trustee shall be prevented or forbidden from doing or performing any act or thing which the terms of this
Trust Agreement provide shall or may be done or performed by it, or by reason of any exercise of, or failure to exercise, any discretion provided for in this Trust Agreement. 

        (i)    The
Trustee shall not be required to take any action hereunder or otherwise if the Trustee shall have reasonably determined, or shall have been advised by counsel, that
such action is likely to result in liability on the part of the Trustee or is contrary to the terms hereof or is otherwise contrary to law. 

        (j)    Whenever
the Trustee is unable to decide between alternative courses of action permitted or required by the terms of this Trust Agreement, or is unsure as to the
application, intent, interpretation or meaning of any provision of this Trust Agreement, the Trustee shall promptly give notice (in such form as shall be appropriate under the circumstances) to the
Sponsor requesting instruction as to the course of action to be adopted, and, to the extent the Trustee acts in good faith in accordance with any such instruction received, the Trustee shall not be
liable on account of such action to any Person. If the Trustee shall not have received appropriate instructions within ten calendar days of sending such notice (or within such shorter period of time
as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under 

8

 

no
duty to, take or refrain from taking such action which is consistent, in its view, with this Trust Agreement, and the Trustee shall have no liability to any Person for any such action or inaction. 

        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 on any signature, instrument, notice,
resolutions, 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 in any such document; provided, however, that the Trustee shall have examined any certificates or opinions so as to reasonably determine compliance
of the same 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 the same is in full force and effect. As to any fact or matter the method of the determination of which is not
specifically prescribed herein, the Trustee may for all purposes hereof rely on a certificate, signed by the president or any vice president or by the treasurer or 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 Sponsor or an Affiliate of the Sponsor (including 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 shall be
deemed not to be a part of the Trust Estate immediately after such payment. 

ARTICLE III  

 SHARES; CAPITAL CONTRIBUTIONS  

        SECTION 3.1    General.    The Sponsor shall have the power and authority, without Shareholder approval, 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 four decimal places. From time to time, the Sponsor may divide or combine the issued and outstanding Shares into a greater or lesser number without thereby changing the proportionate
beneficial interests. The Sponsor may issue Shares for such consideration and on such terms as it may determine (or for no consideration if pursuant to a Share dividend or split-up), all
without action or approval of the Shareholders. All Shares when so issued on the terms determined by the Sponsor shall be fully paid and non-assessable. The Shares initially shall be
divided into two classes: Sponsor's Shares and Limited Shares. Every Shareholder, 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. 

9

 

        SECTION 3.2    Initial Order.    The initial order for Limited Shares shall be for a minimum of one Creation
Basket. The total payment required to create each Creation Basket comprising the initial order shall be $2,500,000 ($25.00 per Limited Share). 

        SECTION 3.3    Procedures for Creation and Issuance of Creation Baskets.    

        (a)   General.    The following procedures, as supplemented by the more detailed procedures specified in the
Participant Agreement, including Annex 1—Part A thereto, which may be amended from time to time in accordance with the provisions of the Participant Agreement (and any such
amendment will not constitute an amendment of this Trust Agreement), will govern the Trust with respect to the creation and issuance of Creation Baskets. Subject to the limitations upon and
requirements for issuance of Creation Baskets stated herein and in such more detailed procedures, the number of Creation Baskets which may be issued by the Trust is unlimited. 

        (i)    On
any Business Day, a Participant may telephone the Sponsor (or, at the election of the Sponsor, the Distributor or another Person to whom the Sponsor delegates such
authority) to subscribe for and purchase one or more Creation Baskets (such request by a Participant, a "Purchase Order") in the manner provided in the Participant Agreement. Purchase Orders must be
received by the Sponsor or its designee by the Order Cut-Off Time on a Business Day (the "Purchase Order Subscription Date"). After placing a Purchase Order, a Participant must promptly
deliver to the Sponsor a completed and signed Purchase Order Subscription Agreement. Purchase Orders will only be processed from Participants with respect to which a Participant Agreement is in full
force and effect. The Sponsor will, or will cause the Distributor to, maintain and make available at the Trust's principal offices or the offices of the Administrator during normal business hours a
current list of the Participants with respect to which a Participant Agreement is in full force and effect. The Sponsor will deliver (or cause to be delivered) a copy of the Prospectus to each
Participant prior to its execution and delivery of the Participant Agreement and prior to accepting any Purchase Order Subscription Agreement. 

        (ii)   Any
Purchase Order Subscription Agreement is subject to rejection by the Sponsor or its designee pursuant to Section 3.3(c). 

        (iii)  A
Participant shall pay to the Trust an amount per Creation Basket (the "Initial Payment Amount") equal to 105% of the end-of-day NAV per
Creation Basket as of the Business Day prior to the Purchase Order Subscription Date. On the Business Day next following the Purchase Order Subscription Date, the Trust will place an order for EUA
futures contracts in accordance with the procedures described in the Prospectus. The final settlement price for each Creation Basket shall be the sum of (i) the purchase price for those
contracts (excluding commission costs) and (ii) an amount determined by the Administrator to be the excess of the allocable portion of the Trust's uninvested cash and accrued but unearned
interest attributable to that Creation Basket over accrued but unpaid expenses attributable to that Creation Basket. 

        (iv)  The
Participant will be notified of the final settlement price by 5:30 p.m., New York time, on the next Business Day following the Purchase Order Subscription
Date for each Creation Basket. Any underpayment or overpayment, based on the difference between the Creation Basket Capital Contribution and the final settlement price will be paid or refunded, as
applicable, by 10:00 a.m. on the second Business Day after the Purchase Order Subscription Date. After accepting a Participant's Purchase Order Subscription Agreement, the Sponsor will issue
and deliver, or cause the issuance and delivery of, Shares attributable to each Creation Basket to fill such Participant's Purchase Order Subscription Agreement on the third Business Day immediately
following the Purchase Order Subscription Date, upon confirmation of receipt by the Trust of the full amount of the final settlement price. 

10

 

        (b)   Deposit with the Depository.    Upon issuing a Creation Basket pursuant to a Purchase Order Subscription
Agreement, the Sponsor will cause the Trust to deposit the Creation Basket with the Depository in accordance with the Depository's customary procedures, for credit to the account of the Participant
that submitted the related Purchase Order Subscription Agreement. 

        (c)   Rejection.    The Sponsor or its designee shall have the absolute right, but shall have no obligation, to
reject or revoke the acceptance of any Purchase Order Subscription Agreement of a Participant: (i) determined by the Sponsor not to be in proper form; (ii) the acceptance of which would,
in the opinion of counsel to the Sponsor, be unlawful; (iii) if circumstances outside the control of the Sponsor make it for all practical purposes not feasible to process creations of Creation
Baskets; or (iv) for any other reason set forth in the Participant Agreement entered into with that Participant. The Sponsor shall not be liable to any person by reason of the rejection or
revocation of any Purchase Order Subscription Agreement or Creation Basket Capital Contribution. 

        (d)   Transaction Fee.    A non-refundable transaction fee will be payable by each Participant to the
Trust in connection with each Purchase Order Subscription Agreement processed pursuant to this Section 3.3 and in connection with each Redemption Order processed pursuant to Section 7.1
(each a "Transaction Fee"). The Transaction Fee charged in connection with each such creation and redemption shall be $1,000 per Creation or Redemption Basket, but may be changed as provided below.
The Transaction Fee may be waived, modified, reduced, increased or otherwise changed at the discretion of the Sponsor. The Sponsor shall notify the Depository, the Distributor and the Administrator of
any change to the Transaction Fee and shall not implement any increase for redemptions of outstanding Limited Shares until five (5) days after the date of that notice. The Transaction Fee shall
be payable whether or not a Purchase Order Subscription Agreement is accepted or a Redemption Order is approved. 

        (e)   Global Certificate Only.    Physical certificates representing the Limited Shares constituting Creation Baskets
will not be issued, other than the Global Security issued to the Depository. So long as the Depository Agreement is in effect, Creation Baskets will be issued, Redemption Baskets will be redeemed and
Beneficial Interests in Limited Shares will be transferable solely through the book-entry systems of the Depository and the DTC Participants and their Indirect Participants as more fully
described in Section 3.4. The Depository may determine to discontinue providing its service with respect to Creation Baskets, Redemption Baskets and Beneficial Interests in Limited Shares by
giving notice to the Sponsor and Distributor pursuant to and in conformity with the provisions of the Depository Agreement and discharging its responsibilities with respect thereto under applicable
law. Under such circumstances, the Sponsor shall take action either to find a replacement for the Depository to perform its functions at a comparable cost and on terms acceptable to the Sponsor or, if
such a replacement is unavailable, to terminate the Trust. 

        SECTION 3.4    Book-Entry-Only System, Global Security.    

        (a)   Global Security.    The Trust and the Sponsor will enter into the Depository Agreement pursuant to which the
Depository will act as securities depository for Limited Shares. Limited Shares will be represented by the Global Security (which may consist of one or more certificates as required by the
Depository), which will be registered, as the Depository shall direct, in the name of Cede & Co., as nominee for the Depository and deposited with, or on behalf of, the Depository. No
other certificates evidencing Limited Shares will be issued. The Global Security shall be in the form attached hereto as Exhibit B and shall represent such Limited Shares as shall be specified
therein, and may provide that it shall represent the aggregate amount of outstanding Limited Shares from time to time endorsed thereon and that the aggregate amount of outstanding Limited Shares
represented thereby may from time to time be increased or decreased to reflect creations or redemptions of Baskets. Any endorsement of a Global Security to reflect the amount, 

11

 

or
any increase or decrease in the amount, of outstanding Limited Shares represented thereby shall be made in such manner and upon instructions given by the Sponsor on behalf of the Trust. 

        (b)   Legend.    Any Global Security issued to The Depository Trust Company or its nominee shall bear a legend
substantially to the following effect: "Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the Trust or its agent
for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other entity as is required by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein." 

        (c)   The Depository.    The Depository has advised the Trust and the Sponsor as follows: The Depository is a
limited-purpose trust company organized under the laws of the State of New York, a member of the U.S. Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. The Depository was created to hold securities
of its participants (the "DTC Participants") and to facilitate the clearance and settlement of securities transactions among the DTC Participants in such securities through electronic
book-entry changes in accounts of the DTC Participants, thereby eliminating the need for physical movement of securities certificates. DTC Participants include securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other organizations, some of whom (and/or their representatives) own the Depository. Access to the Depository's system is also
available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly ("Indirect
Participants"). 

        (d)   Beneficial Owners.    As provided in the Depository Agreement, upon the settlement date of any creation,
transfer or redemption of Limited Shares, the Depository will credit or debit, on its book-entry registration and transfer system, the number of Limited Shares so created, transferred or
redeemed to the accounts of the appropriate DTC Participants. In the case of a creation or redemption of Baskets, the accounts to be credited and charged shall be designated by the Sponsor or its
designee on behalf of the Trust and each Participant. Ownership of beneficial interest (a "Beneficial Interest") in Limited Shares will be limited to DTC Participants, Indirect Participants and
persons holding interests through DTC Participants and Indirect Participants. Owners of beneficial interests in Limited Shares ("Beneficial Owners") will be shown on, and the transfer of Beneficial
Interests by Beneficial Owners will be effected only through, in the case of DTC Participants, records maintained by the Depository and, in the case of Indirect Participants and related Beneficial
Owners holding through a DTC Participant or an Indirect Participant, through those records or the records of the relevant DTC Participants or Indirect Participants. 

        (e)   Reliance on Procedures.    So long as Cede & Co., as nominee of the Depository, is the registered
owner of Limited Shares, references herein to the registered or record owners of Limited Shares shall mean Cede & Co. and shall not mean the DTC Participants, Indirect Participants, or
Beneficial Owners. Beneficial Owners will not be entitled to have Limited Shares registered in their names, will not receive or be entitled to receive physical delivery of certificates in definitive
form and will not be considered the record or registered holder of Limited Shares under this Trust Agreement. Accordingly, to exercise any rights as a Beneficial Owner, a Beneficial Owner must rely on
the procedures of the Depository, DTC Participant or Indirect Participant, as applicable, through which such Beneficial Owner holds its Beneficial Interest. The Trust and the Sponsor understand that
under existing industry practice, if the Trust requests any action of a Limited Owner, or a Limited Owner desires to take any action that the Depository, as the record 

12

 

owner
of all outstanding Limited Shares, is entitled to take, in the case of a Trust request, the Depository will notify the DTC Participants regarding such request, such DTC Participants will in turn
notify each Indirect Participant holding Beneficial Interests through it, with each successive Indirect Participant continuing to notify each person indirectly holding Beneficial Interests through it
until the request has reached the ultimate Beneficial Owner, and in the case of a request or authorization to act being sought or given by a Limited Owner, such request or authorization is given by
the ultimate Beneficial Owner and relayed back to the Trust through each Indirect Participant and DTC Participant through which such ultimate Beneficial Owner's Beneficial Interest is held. 

        (f)    Communication between the Trust and the Limited Owners.    As described above, the Trust will recognize the
nominee of the Depository as the owner of all Limited Shares for all purposes. All notices, statements and other communications to Limited Owners will be delivered to Cede & Co., as
nominee of the Depository. A Beneficial Owner must rely on the procedures of the Depository, DTC Participant or Indirect Participant, as applicable, through which such Beneficial Owner holds its
Beneficial Interest for its receipt of such notices, statements or other communications. 

        (g)   Distributions.    While the Sponsor does not currently intend to cause the Trust to make distributions (other
than Redemption Distributions), any distributions on Limited Shares pursuant to Section 3.9 would be made to the Depository or its nominee, Cede & Co., as the registered owner of
all Limited
Shares. The Trust and the Sponsor expect that the Depository or its nominee, upon receipt of any payment of distributions in respect of Limited Shares, shall credit immediately DTC Participants'
accounts with payments in amounts proportionate to their respective Beneficial Interests as shown on the records of the Depository or its nominee. The Trust and the Sponsor also expect that payments
by DTC Participants to Indirect Participants and Beneficial Owners held through such DTC Participants and Indirect Participants will be governed by standing instructions and customary practices, as is
now the case with securities held for the accounts of customers in bearer form or registered in a "street name," and will be the responsibility of such DTC Participants and Indirect Participants. None
of the Trust, the Trustee or the Sponsor will have any responsibility or liability for any aspects of the records relating to or notices to Beneficial Owners, or payments made on account of Beneficial
Interests, or for maintaining, supervising or reviewing any records relating to such Beneficial Interests or for any other aspect of the relationship between the Depository and the DTC Participants or
the relationship between such DTC Participants and the Indirect Participants and Beneficial Owners owning through such DTC Participants or Indirect Participants or between or among the Depository and
any Beneficial Owner. 

        (h)   Limitation of Liability.    The Global Security to be issued hereunder is executed and delivered solely on
behalf of the Trust by the Sponsor, as Sponsor, in the exercise of the powers and authority conferred and vested in it by this Trust Agreement. The representations, undertakings and agreements made on
the part of the Trust in the Global Security are made and intended not as personal representations, undertakings and agreements by the Sponsor or the Trustee, but are made and intended for the purpose
of binding only the Trust. Nothing in the Global Security shall be construed as creating any liability on the part of the Sponsor or the Trustee, individually or personally, to fulfill any
representation, undertaking or agreement other than as provided in this Trust Agreement. 

        (i)    Successor Depository.    If a successor to The Depository Trust Company shall be employed as Depository
hereunder, the Trust and the Sponsor shall establish procedures acceptable to such successor with respect to the matters addressed in this Section 3.4. 

        SECTION 3.5    Assets.    All consideration received by the Trust for the issue or sale of Shares together with
all of the Trust Estate in which such consideration is invested, all income, earnings, 

13

 

profits,
and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, shall belong to the Trust for all purposes, subject only to the rights of creditors
of the Trust and except as may otherwise be required by applicable tax laws, and shall be so recorded upon the books of account of the Trust. 

        SECTION 3.6    Liabilities.    The Trust Estate shall be charged with the liabilities of the Trust, and all
expenses, costs, charges and reserves attributable to the Trust. 

        SECTION 3.7    Distributions.    

        (a)   The
Sponsor does not currently intend to cause the Trust to make distributions. However, distributions on Shares to the Shareholders may be paid with such frequency as
the Sponsor may determine, and may be made from such of the income and capital gains, accrued or realized, of the Trust Estate as may be determined by the Sponsor, after providing for actual and
accrued liabilities and taking into account the applicable provisions of the Delaware Trust Act. All distributions on Shares thereof shall be distributed pro rata to the Shareholders in proportion to
the total outstanding Shares held by such Shareholders at the date and time of record established for the payment of such distribution and, in the case of Limited Shares, in accordance with
Section 3.4(g). Such distributions may be made in cash or Shares as determined by the Sponsor or pursuant to any program that the Sponsor may have in effect at the time for the election by each
Shareholder of the mode of the making of such distribution to that Shareholder. 

        (b)   The
Shares shall represent units of undivided beneficial interest in the Trust Estate. Each Shareholder shall be entitled to receive its pro rata share of any
distributions of income and capital gains in accordance with Section 3.9(a). 

        SECTION 3.8    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 the number of Shares, or fraction thereof, standing in its name on the books of the Trust. 

        SECTION 3.9    Equality.    Except as provided herein, all Shares shall represent an equal proportionate
beneficial interest in the assets of the Trust subject to the liabilities of the Trust, and each Share shall be equal to each other Share. The Sponsor may from time to time divide or combine the
issued and outstanding Shares into a greater or lesser number of Shares without thereby changing the proportionate beneficial interest in the assets of the Trust or in any way affecting the rights of
Shareholders. 

ARTICLE IV  

 THE SPONSOR  

        SECTION 4.1    Management of the Trust.    Pursuant to Section 3806(b)(7) of the Delaware Trust Statute,
the Trust shall be managed by the Sponsor and the conduct of the Trust's business shall be controlled and conducted solely by the Sponsor in accordance with this Trust Agreement. 

        SECTION 4.2    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 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, business and objectives of the Trust, which
shall include, without limitation, the following: 

        (a)   To
enter into, execute, deliver and maintain, and to cause the Trust to perform its obligations under, contracts, agreements and any or all other documents and
instruments, and to do and perform all such things as may be in furtherance of Trust purposes or necessary or appropriate for the offer and sale of the Shares and the conduct of Trust activities; 

14

  

        (b)   To
establish, maintain, deposit into, sign checks and/or otherwise draw upon accounts on behalf of the Trust with appropriate banking and savings institutions, and
execute and/or accept any instrument or agreement incidental to the Trust's business and in furtherance of its purposes, any such instrument or agreement so 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; 

        (c)   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; 

        (d)   To
supervise the preparation and filing of the Registration Statement; 

        (e)   To
adopt disclosure and financial reporting information gathering and control policies and procedures; 

        (f)    To
make any necessary determination or decision in connection with the preparation of the Trust's financial statements and amendments thereto, and the Prospectus; 

        (g)   To
prepare, file and distribute any periodic reports or updates that may be required under the Securities Exchange Act of 1934, the CE Act, or the rules and regulations
thereunder; 

        (h)   To
pay or authorize the payment of distributions to the Shareholders and expenses of the Trust; 

        (i)    To
make any elections on behalf of the Trust under the Code, or any other applicable U.S. federal or state tax law as the Sponsor shall determine to be in the best
interests of the Trust; 

        (j)    To
prepare or cause to be prepared and filed, all necessary Tax Returns; and 

        (k)   In
the sole discretion of the Sponsor, to admit to the Trust an Affiliate or Affiliates of the Sponsor as additional Sponsors. 

        SECTION 4.3    Obligations of the Sponsor.    In addition to the obligations expressly provided by the Delaware
Trust Statute or elsewhere in this Trust Agreement, the Sponsor shall: 

        (a)   devote
such of its time to the business and affairs of the Trust as it shall, in its discretion exercise in good faith, determine to be necessary to conduct the business
and affairs of the Trust for the benefit of the Trust and 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 business in all appropriate jurisdictions; 

        (c)   appoint
and remove independent public accountants to audit the accounts of the Trust; 

        (d)   employ
attorneys to represent the Trust; 

        (e)   adopt,
implement or amend, from time to time, such disclosure and financial reporting information gathering and control policies and procedures as are necessary or
desirable to ensure compliance with applicable disclosure and financial reporting obligations under any applicable securities laws; 

        (f)    use
its best efforts to maintain the status of the Trust as a "statutory trust" for state law purposes; 

        (g)   have
fiduciary responsibility for the safekeeping and use of the Trust Estate, whether or not in the Sponsor's immediate possession or control; 

        (h)   enter
into a Distribution Agreement with the Distributor and discharge the duties and responsibilities of the Trust and the Sponsor thereunder; 

15

 

        (i)    receive
from Participants and process, or cause the Distributor or another Person pursuant to delegated authority to process, properly submitted Purchase Order
Subscription Agreements, as described in Section 3.3(a)(i); 

        (j)    in
connection with Purchase Order Subscription Agreements, receive, or authorize the Distributor to receive, Creation Basket Capital Contributions from Participants; 

        (k)   in
connection with Purchase Order Subscription Agreements, deliver or cause the delivery of Creation Baskets to the Depository for the account of the Participant
submitting a Purchase Order Subscription Agreement for which the Trust has received the requisite Transaction Fee and the requisite Creation Basket Capital Contribution, as described in
Section 3.3(d); 

        (l)    receive
from Participants and process, or cause the Distributor or another Person pursuant to delegated authority to process, properly submitted Redemption Orders, as
described in Section 7.1(a), or as may from time to time be permitted by Section 7.2; 

        (m)  in
connection with Redemption Orders, receive from the redeeming Participant through the Depository, and thereupon cancel or cause to be cancelled, Shares corresponding
to the Redemption Baskets to be redeemed as described in Section 7.1, or as may from time to time be permitted by Section 7.2; 

        (n)   interact,
or authorize the Distributor to interact, with the Depository as required; 

        (o)   make
any necessary determination or decision in connection with the preparation of the financial statements of the Trust; and 

        (p)   delegate
those of its duties hereunder as it shall determine from time to time to one or more Administrators or Commodity Trading Advisors. 

        SECTION 4.4    Liability of Covered Persons.    A Covered Person shall have no liability to the Trust, any
Shareholder, any Person or any 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 negligence (and in the case of the Trustee, gross negligence) or 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 capital or
profits of any Shareholder or assignee thereof, it being expressly agreed that any such return of capital or profits 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 Administrator or other delegate selected by the Sponsor with reasonable care, provided, however, that the Trustee and its Affiliates shall not, under any circumstances be
liable for the conduct or misconduct of any Administrator or other delegatee or any other Person selected by the Sponsor to provide services to the Trust. 

        SECTION 4.5    Fiduciary Duty.    

        (a)   To
the extent that, at law (common or statutory) or in equity, the Sponsor has duties (including fiduciary duties) and liabilities relating thereto to the Trust, the
Shareholders or to any other Person, the Sponsor acting under this Trust Agreement shall not be liable to the Trust, the Shareholders or to any other Person for its good faith reliance on the
provisions of this Trust Agreement subject to the standard of care in Section 4.4 herein. The provisions of this Trust Agreement, to the extent that they restrict 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. 

16

 

        (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 any Shareholder 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 any Shareholder 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 other 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 or to the Shareholders for breach of any fiduciary or other duty by reason of the fact that the Sponsor pursues or acquires for, or
directs such opportunity to another Person or does not communicate such opportunity or information to the Trust. Neither the Trust nor any Shareholder shall have any rights or obligations by virtue of
this 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 activities 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 or any Affiliate of the Trust or the Shareholders. 

        SECTION 4.6    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 negligence, misconduct, or a breach of this Trust Agreement on the part of the Sponsor and
(ii) any such indemnification will only be recoverable 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 to exist 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 Bankruptcy Code by or against the Sponsor. The source of payments made in respect of indemnification under this Trust Agreement shall be the assets of the Trust. 

        (b)   Notwithstanding
the provisions of Section 4.6(a) above, the Sponsor and any Person acting as 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 

17

 

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. 

        (c)   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 4.6. 

        (d)   The
term "Sponsor," as used only in this Section 4.6, 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. 

        (e)   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) obligations or liabilities unrelated to Trust business, such Shareholder (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 4.7    Expenses and Limitations Thereon.    

        (a)   (i)
The Sponsor or an Affiliate of the Sponsor shall be responsible for the payment of all Organization and Offering Expenses incurred in connection with the creation of
the Trust and sale of Shares. 

        (ii)   "Organization
and Offering Expenses" shall mean those expenses incurred in connection with the formation, qualification and registration of the Trust and in
registering, qualifying, offering, distributing and processing the Shares under applicable U.S. federal and state law, and any other expenses actually incurred and, directly or indirectly, related to
the organization of the Trust and the continuous offering of the Shares, including, but not limited to, expenses such as: (i) initial and ongoing registration fees, filing fees, escrow fees and
stamp taxes, (ii) costs of preparing, printing (including typesetting), amending and supplementing the Registration Statement and the Exhibits thereto and mailing and distributing the
Prospectus during the Continuous Offering Period, (iii) the costs of qualifying, printing, (including typesetting), amending, supplementing, mailing and distributing sales materials used in
connection with the offering and issuance of the Shares during the Continuous Offering Period, (iv) travel, telegraph, telephone and other expenses in connection with the offering and issuance
of the Shares during the Continuous Offering Period, (v) accounting, auditing and legal fees (including disbursements related thereto) incurred in connection therewith, and (vi) any
extraordinary expenses (including, but not limited to, legal claims and liabilities and litigation costs and any permitted indemnification associated therewith) related thereto. 

        (b)   Except
as set forth in Article II and Section 4.7(a), all ongoing charges, costs and expenses of the Trust's operation shall be billed to and/or paid by
the Sponsor from its Management Fee. Such costs and expenses shall include, but not limited to, the routine expenses associated with (i) preparation of monthly, quarterly, annual and other
reports required by applicable U.S. federal and state regulatory authorities; (ii) Trust meetings and preparing, printing 

18

 

and
mailing of any required proxy statements and reports to Shareholders; (iii) the payment of any distributions related to redemption of Shares; (iv) routine services of the Trustee,
legal counsel and independent accountants; (v) routine accounting and bookkeeping services, whether performed by an outside service provider or by Affiliates of the Sponsor; (vi) postage
and insurance; (vii) client relations and services; (viii) computer equipment and system maintenance; (ix) the Management Fee; (x) brokerage and other fees and commissions
incurred in connection with the trading activities of the Trust, and (xi) the payment of all federal, state, local or foreign taxes payable on the income, assets or operations of the Trust and
the preparation of all tax returns related thereto. Except as set forth in Section 4.7(a), all extraordinary expenses (including, but not limited to, legal claims and liabilities and litigation
costs and any indemnification related thereto) shall be billed to and/or paid by the Trust. 

        (c)   The
Sponsor or any Affiliate of the Sponsor may only be reimbursed for the actual cost to the Sponsor or such Affiliate of any expenses which it advances on behalf of
the Trust for which payment 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 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. 

        SECTION 4.8    Compensation to the Sponsor.    The Trust shall pay to the Sponsor, monthly in arrears, a
management fee in an amount equal to 0.07083% (0.85% per annum) (the "Management Fee") of the Trust's Net Asset Value as of the end of each month. The Sponsor shall, in its capacity as a Shareholder,
be entitled to receive allocations and distributions pursuant to the provisions of this Trust Agreement. 

        SECTION 4.9    Other 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 which is a Shareholder, may engage in or possess an interest in other
business ventures of every nature and description, independently or with others, and the pursuit of such ventures, even if competitive with the business of the Trust, shall not be deemed wrongful or
improper. 

        SECTION 4.10    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 only Sponsor, Shareholders holding a majority
(over 50%) of the Shares (not including Shares held by the Sponsor or its Affiliates) 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 business of the Trust. In the event of its withdrawal, the Sponsor shall be entitled to a
redemption of its Shares at the Net Asset Value as of the date of such withdrawal. If the Sponsor withdraws and a successor Sponsor is named, the withdrawing Sponsor shall pay all expenses as a result
of its withdrawal. 

        SECTION 4.11    Authorization of Registration Statements.    Each Shareholder (or any permitted assignee
thereof) hereby agrees that the Sponsor is authorized to execute, deliver and perform the agreements, acts, transactions and matters contemplated hereby or described in or contemplated by the
Registration Statement 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. 

        SECTION 4.12    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 

19

 

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, and thereafter out of the
Trust's assets. 

ARTICLE V  

 RESERVED  

        SECTION 5.1    Reserved    

ARTICLE VI  

 RESERVED  

        SECTION 6.1    Reserved.    

ARTICLE VII  

 REDEMPTIONS  

        SECTION 7.1    Redemption of Redemption Baskets.    The following procedures, as supplemented by the more
detailed procedures specified in the Participant Agreement including Annex 1—Part B thereto, which may be amended from time to time in accordance with the provisions of the
Participant Agreement (and any such amendment will not constitute an amendment of this Trust Agreement), will govern the Trust with respect to the redemption of Redemption Baskets. 

        (a)   On
any Business Day, a Participant may telephone the Sponsor (or, at the election of the Sponsor, the Distributor or another Person to whom the Sponsor delegates such
authority) to request the redemption of one or more Redemption Baskets standing to the credit of the Participant on the records of the Depository (such request by a Participant, a "Redemption
Request"). Redemption Orders must be received by the Sponsor or its designee by the Order Cut-Off Time on a Business Day (the "Redemption Order Date"). After placing a Redemption Order, a
Participant must promptly deliver to the Sponsor a completed and signed Redemption Order Form. Redemption Orders will only be processed from Participants with respect to which a Participant Agreement
is in full force and effect. The Sponsor will, or will cause the Distributor to, maintain and make available at the Trust's principal offices or the offices of the Administrator during normal business
hours a current list of the Participants with the respect to which a Participant Agreement is in full force and efforts. 

        (b)   The
Sponsor or its designee shall have the absolute right to reject any Redemption Order the fulfillment of which its counsel advises may be illegal under applicable
laws and regulations, and the Sponsor shall have no liability to any Person for rejecting a Redemption Order in such circumstances. 

        (c)   Subject
to deduction of any tax or other governmental charges due thereon, the redemption distribution ("Redemption Proceeds") for each Redemption Basket shall consist
of cash in an amount equal to the sum of (i) the proceeds from the liquidation of futures positions underlying such Redemption Basket plus (ii) an amount determined by the Administrator
to be the excess of the allocable portion of the Trust's uninvested cash and accrued but unearned interest attributable to that Redemption Basket, over accrued but unpaid expenses attributable to that
Redemption Basket. 

        (d)   The
Trust will pay the Participant an amount per Redemption Basket (the "Initial Redemption Payment Amount") equal to 95% of the end-of-day Net
Asset Value per Redemption Basket as of the Business Day prior to the Redemption Order Date. The Trust will only pay the Initial Redemption Payment Amount if, by 12:00 pm, New York time, on the
Business Day next following the Redemption Order Date, the Trust's DTC account has been credited with the 

20

 

Redemption
Baskets to be redeemed. On the Business Day next following the Redemption Order Date, the Trust will liquidate the EUA futures contracts attributable to the Redemption Baskets in accordance
with the procedures described in the Prospectus. The final settlement price for the Redemption Basket shall be the sum of (i) the proceeds from the liquidation of the contracts described in the
preceding sentence, plus (ii) an amount determined by the Administrator to be the excess of the allocable portion of the Trust's univested cash and accrued but unearned interest attributable to
that Redemption Basket, over accrued but unpaid expenses attributable to that Redemption Basket. Any underpayment or overpayment based on the difference between the Initial Redemption Payment Amount
and the final settlement price applicable to a Redemption Basket will be paid or refunded, as applicable, by 10:00 a.m. on the second Business Day after the applicable Redemption Order Date.
The Participant will be notified of the final settlement price by 5:30 p.m., New York time, on the Business Day next following the Redemption Order Day for each Redemption Basket. 

        (e)   The
Sponsor may, in its discretion, suspend the right of redemption, or postpone the Redemption Settlement Date, (i) for any period during which the Listing
Exchange is closed other than customary weekend or holiday closings, or trading is suspended or restricted; (ii) for any period during which an emergency exists as a result of which delivery,
disposal or evaluation of the Trust's assets is not reasonably practicable; or (iii) for such other period as the Sponsor determines to be necessary for the protection of Limited Owners. The
Sponsor shall not be liable to any Person or in any way for any loss or damages that may result from any such suspension or postponement. 

        (f)    Redemption
Baskets effectively redeemed pursuant to the provisions of this Section 7.1 shall be cancelled by the Trust in accordance with the Depository's
procedures, and the Limited Shares comprising such Baskets shall no longer be deemed outstanding for purposes of this Trust Agreement and the Delaware Trust Statute. 

        SECTION 7.2    Other Redemption Procedures.    The Sponsor from time to time may, but shall have no obligation
to, establish procedures with respect to redemption of Shares in lot sizes smaller than Redemption Basket and permit the Redemption Distribution to be in a form, and delivered in a manner, other than
that specified in Section 7.1. 

ARTICLE VIII  

 THE LIMITED OWNERS  

        SECTION 8.1    No Management or Control; Limited Liability; Exercise of Rights through DTC.    The Limited
Owners shall not participate in the management or control of the Trust's business nor shall they transact any business for 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 8.3 hereof, no Limited Owner shall be bound by, or be personally liable for, the expenses, liabilities or obligations
of the Trust in excess of its Capital Contribution plus its share of the Trust Estate, including undistributed profits. Except as provided in Section 8.3 hereof, each Limited Share owned by a
Limited Owner shall be fully paid and no assessment shall be made against any Limited Owner. No salary shall be paid to any Limited Owner in its capacity as a Limited Owner, nor shall any Limited
Owner have a drawing account or earn interest on its Capital Contribution. By the purchase and acceptance or other lawful delivery and acceptance of Limited Shares, each Limited Owner shall be deemed
to be a beneficiary of the Trust and vested with a beneficial undivided interest in the Trust to the extent of the Limited Shares owned by such Limited Owner, subject to the terms and conditions of
this Trust Agreement. The rights of Limited Owners under this Trust Agreement must be exercised by DTC acting on behalf of its Direct Participants, Indirect Participants and ultimate Beneficial
Owners, in accordance with the rules and procedures of the Depository, as provided in Section 3.4. 

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        SECTION 8.2    Rights and Duties.    The Limited Owners shall have the following rights, powers, privileges,
duties and liabilities: 

        (a)   The
Limited Owners shall have the right to obtain from the Sponsor information regarding the business and affairs of the Trust, provided that such is for a purpose
reasonably related to the Limited Owner's interest as an owner of Limited Shares, including, without limitation, such reports as are set forth in Article IX and the list of Participants
contemplated by Section 3.3(a)(i). In the event that the Sponsor neglects or refuses to produce or mail to a Limited Owner a copy of the list of Participants contemplated by
Section 3.3(a)(i), the Sponsor shall be liable to such Limited Owner for the costs, including reasonable attorney's fees, incurred by such Limited Owner to compel the production of such
information, and for any actual damages suffered by such Limited Owner as a result of such refusal or neglect; provided, however, it shall be a defense of the Sponsor that the actual purpose of the
Limited Owner's request for such information was not reasonably related to the Limited Owner's interest as an owner of Limited Shares (e.g., to secure such information in order to sell it, or
to use the same for a commercial purpose unrelated to the participation of such Limited Owner in the Trust). The foregoing rights are in addition to, and do not limit, other remedies available to
Limited Owners under U.S. federal or state law. 

        (b)   Except
for the Limited Owners' redemption rights set forth in Article VII hereof, Limited Owners shall have the right to demand the return of their capital only
upon the dissolution and winding up of the Trust and only to the extent of funds available therefor. In no event shall a Limited Owner be entitled to demand or receive property other than cash. No
Limited Owner shall have priority over any other Limited Owner either as to the return of capital or as to profits, losses or distributions. No Limited Owner shall have the right to bring an action
for partition against the Trust. 

        (c)   Limited
Owners shall have such voting and approval rights as are set forth in the Trust Agreement, including Sections 4.10, 11.1, 13.1(a), and 13.1(e) thereof. 

        Except
as expressly provided in this Trust Agreement, the Limited Owners shall have no voting or other rights with respect to the Trust. 

        SECTION 8.3    Limitation on Liability.    

        (a)   Except
as otherwise provided under Delaware law, the Limited Owners 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 Limited Owner shall be liable for claims against, or debts of the Trust in excess of his Capital Contribution and
his share of the Trust Estate, including undistributed profits. In addition, and subject to the exceptions set forth in the immediately preceding sentence, the Trust shall not make a claim against a
Limited Owner with respect to amounts distributed to such Limited Owner or amounts received by such Limited Owner upon redemption unless, under Delaware law, such Limited Owner is liable to repay such
amount. 

        (b)   The
Trust shall indemnify to the full extent permitted by law and the other provisions of this Agreement, and to the extent of the Trust Estate, each Limited Owner
against any claims of liability asserted against such Limited Owner solely because he is a holder of one or more Limited Shares. 

        (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 Limited Owners individually but are binding only upon the assets and
property of the Trust, and no resort shall be had to the Limited Owners' personal property for satisfaction of any 

22

 

obligation
or claim thereunder, and appropriate references may be made to this Trust Agreement and may contain any further recital which the Sponsor deems appropriate, but the omission thereof shall
not operate to bind the Limited Owners individually or otherwise invalidate any such note, bond, contract, instrument, certificate or undertaking. Nothing contained in this Section 8.3 shall
diminish the limitation on the liability of the Trust to the extent set forth in Section 3.7 and 3.8 hereof. 

ARTICLE IX  

 BOOKS OF ACCOUNT AND REPORTS  

        SECTION 9.1    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's business as are required by the CE Act and regulations promulgated thereunder, and all other applicable rules and regulations, and as are usually entered into books of account kept by Persons
engaged in a business of like character. 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,
including
such access as is required under CFTC rules and regulations. Such books of account shall be kept in accordance with the accrual method of accounting for financial accounting purposes on a Fiscal Year
basis as described in Article X. 

        SECTION 9.2    Annual Reports and Monthly Statements.    Each Shareholder shall be furnished as of the end of
each month and as of the end of each Fiscal Year with (a) such reports (in such detail) as are required to be given to Shareholders by the CFTC and the NFA, including an annual report of the
Trust containing financial statements that will be prepared by the Sponsor and audited by independent accountants designated by the Sponsor, (b) any other reports (in such detail) required to
be given to Shareholders by any other governmental authority which has jurisdiction over the activities of the Trust and (c) any other reports or information which the Sponsor, in its
discretion, determines to be necessary or appropriate. 

        SECTION 9.3    Calculation of Net Asset Value.    Net Asset Value shall be calculated at such times as the
Sponsor shall determine from time to time. 

        SECTION 9.4    Maintenance of Records.    The Sponsor shall maintain or cause to be maintained: (a) for
a period of at least six Fiscal Years all books of account required by Section 9.1 hereof; a list of the names and last known address of, and number of Shares owned by, all Shareholders, a copy
of the Certificate of Trust and all certificates of amendment thereto, together with executed copies of any powers of attorney pursuant to which any certificate has been executed; copies of the
Trust's federal, state and local income tax returns and reports, if any; and (b) for a period of at least six Fiscal Years copies of any effective written trust agreements, subscription
agreements and 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 the Sponsor uses reasonable care to prevent the loss or destruction of such records. 

        SECTION 9.5    Certificate of Trust.    Except as otherwise provided in the Delaware Trust Statute or this
Trust Agreement, the Sponsor shall not be required to mail a copy of any Certificate of Trust filed with the Secretary of State of the State of Delaware to each Shareholder; however, such certificates
shall be maintained at the principal office of the Trust and shall be available for inspection and copying by the Shareholders in accordance with this Trust Agreement. 

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ARTICLE X  

 FISCAL YEAR  

        SECTION 10.1    Fiscal Year.    The Fiscal Year shall begin on the 1st day of August and end on the
31st day of July of each year. The first Fiscal Year of the Trust commenced on August 13, 2007 and ended on the 31st day of July 2008. The Fiscal Year
in which the Trust shall terminate shall end on the date of termination. 

ARTICLE XI  

 AMENDMENT OF TRUST AGREEMENT; MEETINGS  

        SECTION 11.1    Amendments to the Trust Agreement.    

        (a)   Amendments
to this Trust Agreement may be proposed by the Sponsor or by Limited Owners holding at least 10% of the Limited Shares of the Trust. Any such proposal by
Limited Owners, and any action by the Depository in respect of any such proposal, shall be governed by Section 3.4(e) of this Agreement. Following any such proposal by the Sponsor or Limited
Owners holding at least 10% of the Limited Shares of the Trust, the Sponsor shall submit to the Limited Owner a verbatim statement of any proposed amendment, and statements concerning the legality of
such amendment and the effect of such amendment on the limited liability of the Limited Owners. The Sponsor shall include in any such submission its recommendations as to the proposed amendment. The
amendment shall become effective only upon (i) the written approval or affirmative vote of Limited Owners holding at least a majority (over 50%) of the Shares issued and outstanding (excluding
Shares held by the Sponsor and its Affiliates) or such higher percentage as may be required by applicable law, within sixty (60) days of the Sponsor's submission, in accordance with
Section 15.4, and (ii) receipt of an opinion of independent legal counsel to the effect that the amendment is legal, valid and binding and will not adversely affect the limitations on
liability of the Limited Owners as described in Section 8.3 of this Trust Agreement. Notwithstanding the foregoing, where any action taken or authorized pursuant to any provision of this Trust
Agreement requires the approval or affirmative vote of Limited Owners holding a greater interest in Shares than is required to amend this Trust Agreement under this Section 11.1, and/or the
approval or affirmative vote of the Sponsor(s), an amendment to such provision(s) shall be effective only upon the written approval or affirmative vote of the minimum number of Limited Owners which
would be required to take or authorize such action, or as may otherwise be required by applicable law, and upon receipt of an opinion of independent legal counsel as set forth above in this
Section 11.1. 

        (b)   Notwithstanding
any provision to the contrary contained in Section 11.1(a) hereof, the Sponsor may, without the approval of the Limited Owners, make such
amendments to this Trust Agreement which (i) are necessary to add to the representations, duties or obligations of the Sponsor or surrender any right or power granted to the Sponsor herein, for
the benefit of the Limited Owners, (ii) are necessary to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein or in the
Prospectus, or to make any other provisions with respect to matters or questions arising under this Trust Agreement or the Prospectus which will not be inconsistent with the provisions of the Trust
Agreement or the Prospectus, or (iii) the Sponsor deems advisable, provided, however, that no amendment shall be adopted pursuant to this clause (iii) unless the adoption thereof
(A) is not adverse, in any material respect, to the interests of the Limited Owners; (B) is consistent with Section 4.1 hereof; and (C) does not adversely affect the
limitations on liability of the Limited Owners, as described in Article VIII hereof. 

24

 

        (c)   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. 

        (d)   No
amendment shall be made to this Trust Agreement without the consent of the Trustee if it reasonably believes that such amendment adversely affects any of the rights,
duties or liabilities of the Trustee. 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 or if such amendment is
required in the opinion of the Trustee. 

        (e)   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 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. 

        (f)    No
provision of this Agreement may be amended, waived or otherwise modified orally but only by a written instrument adopted in accordance with this Section. 

        SECTION 11.2    Meetings of the Trust.    Meetings of the Limited Owners may be called by the Sponsor and will
be called by it upon the written request of Limited Owners holding at least 10% of the Shares. Such call for a meeting shall be deemed to have been made upon the receipt by the Sponsor of a
written request from the requisite percentage of Limited Owners. The Sponsor shall deposit in the United States mail, within 15 days after receipt of said request, written notice to all Limited
Owners thereof of the meeting and the purpose of the meeting, which shall be held on a date, not less than 30 nor more than 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 and an opinion of independent counsel as to the effect of such proposed action on
the liability of Limited Owners for the debts of the Trust. Limited Owners may vote in person or by proxy at any such meeting. 

        SECTION 11.3    Solicitations; Action Without a Meeting.    Any action required or permitted to be taken by
Limited Owners 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 Limited Owner to any action of the Trust or any Limited Owner, as contemplated by this Agreement, is solicited by the Sponsor, the solicitation shall be effected by notice to each
Limited Owner given in the manner provided in Section 15.4. The vote or consent of each Limited Owner 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 Limited Owner, unless the Limited Owner expresses written objection to the vote or consent by notice
given in the manner provided in Section 15.4 below and actually received by the Trust within 20 days after the notice of solicitation is effective in accordance with Section 15.4.
The Sponsor and all persons dealing with the Trust shall be entitled to act in reliance on any vote or consent which is deemed cast or granted pursuant to this Section 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 Limited Owners shall not be void or voidable by reason of timely communication made
by or on behalf of all or any of such Limited Owners in any manner other than as expressly provided in Section 15.4. 

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ARTICLE XII  

 TERM  

        SECTION 12.1    Term.    The term for which the Trust is to exist shall commence on the date of the filing of
the Certificate of Trust, and shall terminate pursuant to the provisions of Article XIII hereof or as otherwise provided by law. 

ARTICLE XIII  

 TERMINATION  

        SECTION 13.1    Events Requiring Dissolution of the Trust.    The Trust shall dissolve at any time upon the
happening of any of the following events: 

        (a)   The
filing of a certificate of dissolution or revocation of the Sponsor's charter (and the expiration of 90 days after the date of notice to the Sponsor of
revocation without a reinstatement of its charter) or upon the withdrawal, adjudication or admission of bankruptcy or insolvency of the Sponsor (each of the foregoing events an "Event of Withdrawal")
unless (i) at the time there is at least one remaining Sponsor and that remaining Sponsor carries on the business of the Trust or (ii) within 90 days of such Event of Withdrawal
all the remaining Limited Owners agree in writing to continue the business of the Trust and to select, effective as of the date of such event, one or more successor Sponsors. If the Trust is
terminated as the result of an Event of Withdrawal and a failure of all remaining Limited Owners to continue the business of the Trust and to appoint a successor Sponsor as provided in
clause (a)(ii) above, within 120 days of such Event of Withdrawal, Limited Owners holding at least a majority (over 50%) of the Shares (not including Shares held by the Sponsor and its
Affiliates) may elect to continue the business of the Trust by forming a new statutory trust (the "Reconstituted Trust") on the same terms and provisions as set forth in this Trust Agreement
(whereupon the parties hereto shall execute and deliver any documents or instruments as may be necessary to reform the Trust). Any such election must also provide for the election of a Sponsor to the
Reconstituted Trust. If such an election is made, all Limited Owners of the Trust shall be bound thereby and continue as Limited Owners of the Reconstituted Trust. 

        (b)   The
occurrence of any event which would make unlawful the continued existence of the Trust. 

        (c)   In
the event of the suspension, revocation or termination of the Sponsor's registration as a commodity pool operator under the CE Act, or membership as a commodity pool
operator with the NFA (if, in either case, such registration or membership is required under the CE Act or the rules promulgated thereunder) unless at the time there is at least one remaining Sponsor
whose registration or membership has not been suspended, revoked or terminated (if, in either case, such registration or membership is required under the CE Act or the rules promulgated thereunder). 

        (d)   The
Trust becomes insolvent or bankrupt. 

        (e)   Limited
Owners holding at least seventy percent (70%) of the Shares (excluding the Shares of the Sponsor and its Affiliates) vote to dissolve the Trust, notice of which
is received by the Sponsor not less than ninety (90) days prior to the effective date of such dissolution. 

        (f)    Upon
written notice to the Trustee and the Limited Owners, by the Sponsor of its determination that the aggregate net assets of the Trust in relation to the operating
expenses of the Trust make it unreasonable or imprudent to continue the business of the Trust, or, in the exercise of its reasonable discretion, the determination by it to dissolve the Trust because
the aggregate Net Asset Value of the Trust as of the close of business on any Business Day declines below $10 million. 

26

 

        (g)   The
Trust is required to be registered as an investment company under the Investment Company Act of 1940. 

        (h)   DTC
is unable or unwilling to continue to perform its functions, and the Sponsor determines that a comparable replacement is unavailable. 

        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 estate, custodian or personal representative shall have no right to withdraw or value such Shareholder's Shares. Each Shareholder (and any
assignee thereof) expressly agrees that in the event of his death, he waives on behalf of himself and his estate, and he directs the legal representative of his estate and any person interested
therein to waive the furnishing of any inventory, accounting or appraisal of the assets of the Trust and any right to an audit or examination of the books of the Trust, except for such rights as are
set forth in Article IX hereof. 

        SECTION 13.2    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 Limited Owners 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 business and affairs of the Trust
shall be wound up and all assets 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 Sponsor and each Limited Owner pro rata in proportion to the relative number of Shares held by such Persons. 

        SECTION 13.3    Termination; Certificate of Cancellation.    Following the dissolution and distribution of the
assets of the Trust, the Trust shall terminate and the Sponsor or Liquidating Trustee, as the case may be, shall instruct the Trustee to execute and cause a certificate of cancellation of the
Certificate of Trust pursuant to Section 3810(d) to be filed at the expense of the Trust in accordance with the Delaware Trust Statute. 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. 

ARTICLE XIV  

 POWER OF ATTORNEY  

        SECTION 14.1    Power of Attorney Executed Concurrently.    Concurrently with the written acceptance and
adoption of the provisions of this Trust Agreement, each Participant, on its behalf and on behalf of each Beneficial Owner represented thereby, shall execute and deliver to the Sponsor a Power of
Attorney as part of the Purchase Order Subscription Agreement, or in such other form as may be prescribed by the Sponsor. Each Limited Owner, by its execution and delivery hereof, or its acceptance of
Limited Shares hereunder, irrevocably constitutes and appoints the Sponsor, and its successors and assigns, with full power of substitution, as the true and lawful
attorney-in-fact and agent for such Limited Owner with full power and authority to act in his name and on his behalf in the 

27

 

execution,
acknowledgment, filing and publishing of Trust documents, including, but not limited to, the following: 

        (a)   Any
certificates and other instruments, including but not limited to, any applications for authority to do business and amendments thereto, which the Sponsor deems
appropriate to qualify or continue the Trust as a business or statutory trust in the jurisdictions in which the Trust may conduct business, so long as such qualifications and continuations are in
accordance with the terms of this Trust Agreement or any amendment hereto, or which may be required to be filed by the Trust or the Limited Owners under the laws of any jurisdiction; 

        (b)   Any
instrument which may be required to be filed by the Trust under the laws of any state or by any governmental agency, or which the Sponsor deems advisable to file;
and 

        (c)   This
Trust Agreement and any documents which may be required to effect an amendment to this Trust Agreement approved under the terms of the Trust Agreement, and the
continuation of the Trust, the increase or decrease of the Global Security pursuant to Section 3.4, and the termination of the Trust, provided such continuation, increase, decrease or
termination is in accordance with the terms of this Trust Agreement. 

        SECTION 14.2    Effect of Power of Attorney.    The Power of Attorney concurrently granted by each Participant
and Limited Owner to the Sponsor: 

        (a)   Is
a special, irrevocable Power of Attorney coupled with an interest, and shall survive and not be affected by the death, disability, dissolution, liquidation,
termination or incapacity of the Limited Owner or any Beneficial Owner, as applicable; 

        (b)   May
be exercised by the Sponsor for each Limited Owner or Beneficial Owner, as applicable, by a facsimile signature of one of its officers or by a single signature of
one of its officers acting as attorney-in-fact for all of them; and 

        (c)   Shall
survive the delivery of an assignment by a Limited Owner or Beneficial Owner, as applicable, of the whole or any portion of its Shares or Beneficial Interests, as
applicable; except that where the records of a Direct Participant or Indirect Participant reflect a transfer by a Beneficial Owner of its Beneficial Interest, which has otherwise been effectuated in
accordance with the provisions of this Agreement, the Depository's procedures and the procedures of such Direct Participant or Indirect Participant, as applicable, the Power of Attorney of the
assignor shall survive the delivery of such assignment for the sole purpose of enabling the Sponsor to execute, acknowledge and file any instrument necessary to effect such transfer. 

        Each
Limited Owner or Beneficial Owner, as applicable, agrees to be bound by any representations made by the Sponsor and by any successor thereto, determined to be acting in good faith
pursuant to such Power of Attorney and not constituting negligence or misconduct. 

        SECTION 14.3    Limitation on Power of Attorney.    The Power of Attorney concurrently granted by each Limited
Owner or Beneficial Owner, as applicable, to the Sponsor shall not authorize the Sponsor to act on behalf thereof in any situation in which this Trust Agreement requires prior approval unless such
approval has been obtained as required by this Trust Agreement. In the event of any conflict between this Trust Agreement and any instruments filed by the Sponsor pursuant to this Power of Attorney,
this Trust Agreement shall control. 

ARTICLE XV  

 MISCELLANEOUS  

        SECTION 15.1    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 

28

 

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 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 which 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 or investing 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, as determined from time to time by the Sponsor, the Trust may exercise all powers that are ordinarily exercised by
such a trust under Delaware law. 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 15.2    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 or other applicable U.S. federal or state laws, 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 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 15.3    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 15.4    Notices.    All notices or communications under this Trust Agreement (other than requests for
redemption of Limited Shares, notices of assignment, transfer, pledge or encumbrance of Limited Shares, and reports by the Sponsor to the Limited Owners) shall be in writing and shall be delivered by
personal delivery, or by mail postage prepaid, or sent electronically by facsimile or by overnight courier; 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 

29

 

given,
and shall be effective upon personal delivery or upon the deposit of such notice in the United States mail, or upon transmission and electronic confirmation thereof or upon deposit with a
representative of an overnight courier, as the case may be. Requests for redemption, notices of assignment, transfer, pledge or encumbrance of Limited Shares shall be effective upon timely receipt by
the Sponsor in writing. 

        SECTION 15.5    Counterparts.    This Trust Agreement may be executed in several counterparts, and all so
executed shall constitute one agreement, binding on all of the parties hereto, notwithstanding that all the parties are not signatory to the original or the same counterpart. 

        SECTION 15.6    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 assignees shall be bound by such determination. 

        SECTION 15.7    No Legal Title to Trust Estate.    Subject to the provisions of  Section 1.6 in the case of the Sponsor, the
Shareholders shall not have legal title to any part of the Trust Estate. 

        SECTION 15.8    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. 

        SECTION 15.9    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 15.10    Goodwill; Use of Name.    No value shall be placed on the name or goodwill of the Trust, which
shall belong exclusively to XShares Advisors LLC. 

30

 

        IN WITNESS WHEREOF, the undersigned have duly executed this Amended and Restated Declaration of Trust and Trust Agreement as of the day
and year first above written. 

	

 	
 	
WILMINGTON TRUST COMPANY,
 as Trustee
	

 	
 	

By:	
 	

/s/  JOSEPH B. FELL      
 Name:  Joseph B. Fell

Title:    Vice President
	

 	
 	
XSHARES ADVISORS LLC,
 as Sponsor
	

 	
 	

By:	
 	

/s/  DAVID W. JAFFIN      
 Name:  David W. Jaffin

Title:    Chief Financial Officer
	

 	
 	

All Limited Owners now and hereafter admitted as Limited Owners of the Trust and all Participants and Beneficial Owners reflected in the records maintained by the Depository, the DTC Participants or the Indirect Participants, as the case may be, from
time to time
	

 	
 	

By:	
 	
XSHARES ADVISORS LLC,

as attorney-in-fact
	

 	
 	

By:	
 	

/s/  DAVID W. JAFFIN      
 Name:  David W. Jaffin

Title:    Chief Financial Officer

31

   EXHIBIT A  

CERTIFICATE OF TRUST

OF

AIRSHARESTM EU CARBON ALLOWANCES FUND  

        THIS Certificate of Trust of AirSharesTM EU Carbon Allowances 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 by this Certificate of Trust is AirSharesTM EU Carbon
Allowances Fund. 

        2.    Delaware Trustee.    The name and business address of the trustee of the Trust in the State of Delaware are
Wilmington Trust Company, 1100 North Market Street, Wilmington, DE 19890. 

        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. 

	

 	
 	

WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Trustee
	

 	
 	

By:	
 	

 Name:

Title:

32

 
EXHIBIT B  

 FORM OF GLOBAL CERTIFICATE  

 CERTIFICATE OF BENEFICIAL INTEREST

-Evidencing-

All Limited Shares

-in-  

 AIRSHARESTM EU CARBON ALLOWANCES FUND  

UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE,
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 

        This
is to certify that CEDE & CO. is the owner and registered holder of this Certificate evidencing the ownership of all issued and outstanding Limited Shares ("Limited
Shares"), each of which represents a fractional undivided unit of beneficial interest in AirSharesTM EU Carbon Allowances Fund (the "Trust"), a Delaware statutory trust existing under the
Delaware Statutory Trust Act (12 Del. C. § 3801 et seq.) pursuant to a Certificate of Trust, dated as of and filed in the offices of
the Secretary of State of the State of Delaware on August 13, 2007, and an Amended and Restated Declaration of Trust and Trust Agreement, dated as
of                                         
       , 2008, by
and among XShares Advisors LLC, a Delaware limited liability company, as Sponsor, Wilmington Trust Company, a Delaware banking corporation, as trustee, and the Shareholders from time to time
thereunder (hereinafter called the "Trust Agreement"), copies of which are available at the principal offices of the Trust. 

        At
any given time this Certificate shall represent all of the Limited Shares of the Trust that are issued and outstanding at such time. The Trust Agreement provides for the deposit of
cash with the Trust from time to time and the issuance by the Trust from time to time of Creation Baskets, representing a specified aggregation of Limited Shares. 

        The
registered holder of this Certificate is entitled at any time upon tender of this Certificate to the Trust, endorsed in blank or accompanied by all necessary instruments of
assignment and transfer in proper form, at its principal office in the State of New York and, upon payment of any tax or other governmental charges, to receive at the time and in the manner provided
in the Trust Agreement, such holder's ratable portion of the Net Asset Value of the Trust for each Redemption Basket tendered and evidenced by this Certificate. 

        The
holder of this Certificate, by virtue of the purchase and acceptance hereof, assents to and shall be bound by the terms of the Trust Agreement, copies of which are on file and
available for inspection at reasonable times during business hours at the principal office of the Trust, to which reference is made for all the terms, conditions and covenants thereof. 

        The
Trust may deem and treat the person in whose name this Certificate is registered upon the books of the Trust as the owner hereof for all purposes and the Trust shall not be affected
by any notice to the contrary. 

33

 

        The
Trust Agreement permits, with certain exceptions as therein provided, the amendment thereof, by the Sponsor with the consent of the Shareholders holding Shares equal to at least a
majority (over 50%) of the issued and outstanding Shares (excluding Shares held by the Sponsor and its Affiliates) or such higher percentage as may be required by applicable law, and upon receipt of
an opinion of independent legal counsel to the effect that the amendment will not adversely affect the limitations on liability of the Shareholders; provided, however that the Sponsor may, without the
approval of the Shareholders, make such amendments to the Trust Agreement which (i) are necessary to add to the representations, duties or obligations of the Sponsor or surrender any right or
power granted to the Sponsor in the Trust Agreement, for the benefit of the Shareholders, (ii) are necessary to cure any ambiguity, to correct or supplement any provision in the Trust Agreement
which may be inconsistent with any other provision in the Trust Agreement or in the Prospectus, or to make any other provisions with respect to matters or questions arising under the Trust Agreement
or the Prospectus which will not be inconsistent with the provisions of the Trust Agreement or the Prospectus, or (iii) the Sponsor deems advisable, provided, however, that no amendment shall
be adopted pursuant to clause (iii) unless the adoption thereof (A) is not adverse, in any material respects, to the interests of the Shareholders; and (B) is consistent with
Sponsor's control of and power to conduct the business of the Trust. Any such consent or waiver by the holder of Limited Shares shall be conclusive and binding upon such holder of Limited Shares and
upon all future holders of Limited Shares, and shall be binding upon any Limited Shares, whether evidenced by a Certificate or held in uncertificated form, issued upon the registration or transfer
hereof whether or not notation of such consent or waiver is made upon this Certificate and whether or not the Limited Shares evidenced hereby are at such time in uncertificated form. The Agreement
also permits the amendment thereof, in certain limited circumstances, without the consent of any holders of Limited Shares. 

        The
Trust Agreement and this Certificate are executed and delivered by XShares Advisors LLC, as Sponsor, in the exercise of the powers and authority conferred and vested in it by
the Trust Agreement. The representations, undertakings and agreements made on the part of the Trust in the Trust Agreement or this Certificate are made and intended not as personal representations,
undertakings and agreements by XShares Advisors LLC, but are made and intended for the purpose of binding only the Trust. Nothing in the Agreement or this Certificate shall be construed as
creating any liability on XShares Advisors LLC, individually or personally, to fulfill any representation, undertaking or agreement other than as provided in the Trust Agreement or this
Certificate. 

        This
Certificate shall not become valid or binding for any purpose until properly executed by the Sponsor pursuant to the Trust Agreement. 

        Terms
not defined herein have the same meaning as in the Trust Agreement. 

        IN
WITNESS WHEREOF, XShares Advisors LLC, as Sponsor, has caused this Certificate to be executed in its name by the manual or facsimile signature of one of its authorized
officers. 

	

 	
 	

XShares Advisors LLC,

as Sponsor
	

 	
 	

By:	
 	

 Authorized Officer
	

 	
 	

Date:                        , 2008

34

 
EXHIBIT C  

 FORM OF PARTICIPANT AGREEMENT  

35

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Exhibit 4.2  

 
 

FORM OF    
    
    AUTHORIZED PARTICIPANT AGREEMENT
  FOR
  AIRSHARESTM EU CARBON ALLOWANCES FUND    
    

        This Authorized Participant Agreement for AirSharesTM EU Carbon Allowances Fund (this "Agreement") is
entered into by and among the AirSharesTM EU Carbon Allowances Fund (the "Fund"), XShares Advisors LLC, a Delaware limited liability
company, sole sponsor of the Fund (the "Sponsor"), ALPS Distributors, Inc. (the "Distributor")
and [Insert Name of Authorized Participant] (the "Authorized Participant") and
is subject to acceptance by Brown Brothers Harriman & Co. (the "Administrator",  "Custodian" and "Transfer
Agent"). Brown Brothers Harriman & Co. serves as an agent for
the Fund. 

        As
described in the Fund's then-current prospectus as it may be supplemented or amended from time to time (the "Prospectus"),
the Fund will issue common units of beneficial interest, which represent Shares of fractional undivided beneficial interest in and ownership of the Fund (the
"Shares"). The Shares may be created or redeemed through the Distributor by the Authorized Participant in aggregations of 100,000 Shares (each
aggregation, a "Creation Basket" or "Redemption Basket," respectively; collectively,
"Baskets"). Creation Baskets are offered only pursuant to the registration statement of the Fund on Form S-1, as amended
(Registration No.: 333-145448), as declared effective by the Securities and Exchange Commission (the
"SEC")
on                                    , 2008 and as the same may be
amended and supplemented from time to time thereafter (collectively, the
"Registration Statement"). Authorized Participants are the only persons that may place orders to create and redeem Baskets. The Prospectus provides that
the Authorized Participant will pay a transaction fee of one thousand dollars ($1,000) per Basket to create or redeem Baskets. The Transaction Fee may be adjusted from time to time as set forth in the
Prospectus. All references to "cash" shall refer to U.S. Dollars ("USD"). 

        To
the extent there is a conflict between any provision of this Agreement, other than the indemnities provided in Section 9 herein and the provisions of the Prospectus, the
provisions of the Prospectus shall control. Capitalized terms not otherwise defined herein are used herein as defined in the Prospectus. 

        This
Agreement is intended to set forth certain premises and the procedures by which the Authorized Participant may purchase and/or redeem through the manual process of The Depository
Trust Company ("DTC") (the "DTC Process"). The procedures for processing an order to purchase Shares
(each a "Purchase Order") and an order to redeem Shares (each a "Redemption Order") are described in the
Fund's Prospectus and in Annexes I, I-A and I-B to this Agreement. A copy of the Purchase/Redemption Order Form is
attached hereto as Annex I-A. All Purchase and Redemption Orders must be made pursuant to the procedures set forth in the Prospectus
and Annexes I, I-A and I-B hereto, as each may be amended by the Sponsor or the Fund from time to time. An Authorized
Participant may not cancel a Purchase Order or a Redemption Order after an order is placed by the Authorized Participant. 

The parties hereto in consideration of the premises and of the mutual

agreements contained herein agree as follows:  

1.     STATUS OF AUTHORIZED PARTICIPANT.  

        (a)   The
Authorized Participant hereby represents, covenants and warrants that with respect to Purchase Orders or Redemption Orders of Shares of the Fund, it either
(i) is a participant in DTC (a "DTC Participant"), or (ii) maintains, either directly or indirectly, a custodial relationship with a DTC
Participant. The Authorized Participant may place Purchase Orders or Redemption Orders for Shares 

 

through
the DTC Process, subject to the procedures for purchase and redemption set forth in this Agreement, the Prospectus and Annexes I, I-A and
I-B hereto ("Execution of Orders"). Any change in the foregoing status of the Authorized Participant shall terminate
this Agreement, and the Authorized Participant shall give prompt written notice to the Distributor, the Fund and the Transfer Agent of such change. 

        (b)   The
Authorized Participant hereby represents and warrants that it, unless Section 1(c) is applicable, (i) is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), (ii) is qualified to act as a broker or dealer in the states or other jurisdictions
where it transacts business, and (iii) is a member in good standing of the Financial Industry Regulatory Authority ("FINRA"), and the Authorized
Participant agrees that it will maintain such registrations, qualifications and membership in good standing and in full force and effect throughout the term of this Agreement. The Authorized
Participant agrees to comply with all applicable United States federal laws, the laws of the states or other jurisdictions concerned and the rules and regulations promulgated thereunder and with all
FINRA rules and regulations, and that it will not offer or sell Shares of the Fund in any state or jurisdiction where they may not lawfully be offered and/or sold. 

        (c)   If
the Authorized Participant is offering or selling Shares of the Fund in jurisdictions outside the several states, territories and possessions of the United States and
is not otherwise required to be registered, qualified or a member of FINRA as set forth above, the Authorized Participant nevertheless agrees (i) to observe the applicable laws of the
jurisdiction in which such offer and/or sale is made, (ii) to comply with the full disclosure requirements of the Securities Act of 1933, as amended (the "1933
Act") and the regulations promulgated thereunder, and (iii) to conduct its business in accordance with the spirit of the Conduct Rules of the Financial Regulatory
Authority. 

        (d)   The
Authorized Participant represents, covenants and warrants that it has established and presently maintains an anti-money laundering program (the
"Program") reasonably designed to prevent the Authorized Participant from being used as a conduit for money laundering or other illicit purposes or the
financing of terrorist activities and is in compliance with the Program and all anti-money laundering laws, regulations and rules now or hereafter in effect that are applicable to it,
including, without limitation, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the "USA PATRIOT
ACT"). 

        (e)   The
Authorized Participant understands and acknowledges that the method by which Shares of the Fund will be created and traded may raise certain issues under applicable
securities laws. For example, because new Shares may be issued and sold by the Fund on an on-going basis, at any point a "distribution," as
such term is used in the 1933 Act, may be occurring. The Authorized Participant understands and acknowledges that some activities on its part, depending on the circumstances, may result in its being
deemed a participant in a distribution in a manner which could render it a statutory underwriter and subject it to the prospectus delivery and liability provisions of the 1933 Act. The Authorized
Participant should review the "Continuous Offering Period" section of the Prospectus and consult with its own counsel in connection with entering into
this Agreement and placing an order. The Authorized Participant also understands and acknowledges that dealers who are not "underwriters" but are
effecting transactions in the Shares, whether or not participating in the distribution of the Shares, are generally required to deliver a prospectus. 

        (f)    The
Authorized Participant has the capability to send and receive communications via authenticated telecommunication facility to and from (i) the Distributor,
(ii) the Transfer Agent, and (iii) the Authorized Participant's custodian. The Authorized Participant shall confirm such capability to the satisfaction of the Distributor and the
Transfer Agent prior to placing its first order with the Distributor. 

2

 

2.     EXECUTION OF PURCHASE ORDERS AND REDEMPTION ORDERS.  

        (a)   All
Purchase Orders or Redemption Orders shall be made in accordance with the terms of the Prospectus and the procedures described in  Annexes I, I-A and I-B hereto. Each party hereto agrees to comply
with the provisions of such documents to the extent
applicable to it. It is contemplated that the telephone lines used by the Distributor will be recorded, and the Authorized Participant hereby consents to the recording of all calls with the
Distributor. The Sponsor and the Distributor reserve the right to issue additional or other procedures relating to the manner of purchasing or redeeming Shares, and the Authorized Participant agrees
to comply with such procedures as may be issued from time to time. 

        (b)   The
Authorized Participant acknowledges and agrees on behalf of itself and any party for which it is acting (whether as a customer or otherwise) that delivery of a
Purchase Order or Redemption Order shall be irrevocable, provided that the Fund, the Distributor and the Sponsor reserve the right to reject any Purchase Order until the trade is released as
"affirmed" as described in Annexes I, I-A and I-B hereto and any
Redemption Order that is not in "proper form" as defined in these Annexes and in the Prospectus. 

3.     PROSPECTUS, MARKETING MATERIALS AND REPRESENTATIONS.  

        (a)   The
Distributor will provide to the Authorized Participant copies of the then-current Prospectus and any printed supplemental information in reasonable
quantities upon request. The Distributor represents, warrants and agrees that it will notify the Authorized Participant when a revised, supplemented or amended Prospectus for the Fund is available and
deliver or otherwise make available to the Authorized Participant copies of such revised, supplemented or amended Prospectus at such time and in such numbers as to enable the Authorized Participant to
comply with any obligation it may have to deliver such Prospectus to customers. The Distributor will make such revised, supplemented or amended Prospectus available to the Authorized Participant no
later than its effective date. The Distributor shall be deemed to have complied with this Section 3 when the Authorized Participant has received such revised, supplemented or amended prospectus
by email at [insert e-mail address], in printable form, with such number of hard copies as may be agreed from time
to time by the parties promptly thereafter. 

        (b)   The
Sponsor and the Fund represent and warrant that (i) the Registration Statement and the Prospectus contained therein conforms in all material respects to the
requirements of the 1933 Act and the rules and regulations of the Securities and Exchange Commission (the "SEC") thereunder and do not and will not, as
of the applicable effective date as to the Registration Statement and any amendment thereto and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, contain
an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the sale and distribution
of the Shares as contemplated herein will not conflict with or result in a breach or violation of any statute or any order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Sponsor or the Fund, and (iii) no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is
required for the issuance and sale of the Shares, except the registration under the 1933 Act of the Shares. 

        (c)   The
Authorized Participant represents, warrants and agrees that it will not make any representations concerning the Shares other than those contained in the Fund's
then-current Prospectus or in any promotional materials or sales literature furnished to the Authorized Participant by the Distributor. The Authorized Participant agrees not to furnish or
cause to be furnished to any person or display or publish any information or materials relating to the Shares (including, without limitation, promotional materials and sales literature,
advertisements, press releases, announcements, statements, posters, signs or other similar materials), except such information and materials as may be furnished to 

3

 

the
Authorized Participant by the Distributor and such other information and materials as may be approved in writing by the Distributor. The Authorized Participant understands that the Fund will not
be advertised or marketed as an open-end investment company (i.e., as a mutual fund), which offers redeemable securities and that any
advertising materials will prominently disclose that the Shares are not redeemable shares of the Fund. In addition, the Authorized Participant understands that any advertising material that addresses
redemptions of the Shares, including the Prospectus, will disclose that the Authorized Participants may acquire the Shares and tender the Shares for redemption to the Fund in Baskets of 100,000 Shares
only. 

        (d)   Notwithstanding
the foregoing, the Authorized Participant may without the written approval of the Distributor prepare and circulate in the regular course of its business
research reports that include information, opinions or recommendations relating to the Shares (i) for public dissemination, provided that such research reports compare the relative merits and
benefits of the Shares with other products and are not used for purposes of marketing the Shares and (ii) for internal use by the Authorized Participant, providing that neither the Sponsor, the
Fund nor the Distributor shall be liable for any untrue statements or omissions contained in any research reports prepared and circulated by the Authorized Participant in accordance with this
Section 3(d). 

4.     TRANSACTION FEE.  

        In connection with each order by the Authorized Participant to create or redeem one or more Baskets, the Fund shall charge, and the Authorized Participant shall
pay to the Fund, the Transaction Fee prescribed in the Fund's Prospectus applicable to such creation or redemption. The initial Transaction Fee shall be one thousand dollars ($1,000) per Basket to
create or redeem Baskets. The Transaction Fee may be adjusted from time to time as set forth in the Prospectus. 

5.     ROLE OF AUTHORIZED PARTICIPANT.  

        (a)   The
Authorized Participant acknowledges and agrees that for all purposes of this Agreement, the Authorized Participant will be deemed to be an independent contractor and
will have no authority to act as agent for the Sponsor, the Fund, the Distributor, the Transfer Agent or the Authorized Participant's custodian in any matter or in any respect. The Authorized
Participant agrees to make itself and its employees available, upon request, during normal business hours to consult with the Sponsor, the Fund, the Distributor, the Transfer Agent or the Authorized
Participant's custodian or their designees concerning the performance of the Authorized Participant's responsibilities under this Agreement. 

        (b)   In
executing this Agreement, the Authorized Participant agrees in connection with any purchase or redemption transactions in which it acts for a customer or for any
other Authorized Participant or indirect participant, or any other shareholder in an underlying shares account ("Beneficial Owner"), that it shall
extend to any such party all of the rights, and shall be bound by all of the obligations, of a DTC Participant in addition to any obligations that it undertakes hereunder or in accordance with the
Prospectus. 

        (c)   The
Authorized Participant agrees to maintain records of all sales of the Shares made by or through it and to furnish copies of such records to the Sponsor, the Fund or
the Distributor upon the request of any of these parties. 

6.     AUTHORIZED PERSONS OF THE AUTHORIZED PARTICIPANT.  

        Concurrently with the execution of this Agreement and from time to time thereafter as may be requested by the Sponsor, the Fund or the Distributor, the Authorized
Participant shall deliver to such parties, with copies to the Transfer Agent at the address specified below, duly certified as appropriate by its Secretary or other duly authorized official, a
certificate in a form approved by the Fund (see 

4

 

 Annex II to this Agreement) setting forth the names and signatures of all persons authorized to give instructions relating to any activity contemplated hereby or any
other notice, request or instruction on behalf of the Authorized Participant (each such person an "Authorized Person"). Such certificate may be accepted
and relied upon by the Sponsor, the Fund or the Distributor as conclusive evidence of the facts set forth therein and shall be considered to be in full force and effect until delivery to such parties
of a superseding certificate in a form approved by the Sponsor, the Fund or the Distributor bearing a subsequent date. Upon the termination or revocation of authority of such Authorized Person by the
Authorized Participant, the Authorized Participant shall give immediate written notice of such fact to the Sponsor, the Fund and the Distributor and such notice shall be effective upon receipt by each
of such parties. The Fund acting through its agent, the Distributor, shall issue to each Authorized Participant a unique personal identification number ("PIN
Number") by which such Authorized Participant shall be identified and instructions issued by the Authorized Participant hereunder shall be authenticated. The PIN Number shall
be kept confidential and only provided to Authorized Persons. If after issuance, an Authorized Participant's PIN Number is changed, the new PIN Number will become effective on a date mutually agreed
upon by the Authorized Participant and the Distributor. 

7.     CASH COMPONENT AND FEES  

        The Authorized Participant hereby agrees that as between the Fund and itself or any party for which it acts in connection with a Purchase Order, (i) upon
acceptance of each Purchase Order, the Authorized Participant will be charged a non-refundable transaction fee of $1,000 per Basket, which shall be paid to an account maintained by the
Custodian and shall be provided in same day or immediately available funds no later than 10:00 a.m. on the first Business Day following the date on which the Purchase Order is accepted;
(ii) the Authorized Participant will make available in same day funds for each purchase of Baskets an amount of cash sufficient to pay the Initial Cash Payment, as defined in Annex I,
which payment shall be made to an account maintained by the Custodian and shall be provided in same day or immediately available funds no later than 10:00 a.m. on the first Business Day
following the date on which the Purchase Order is accepted; and (iii) in the event that the Initial Cash Payment is less than the Final Settlement Price with respect to any Basket, the
Authorized
Participant will make available in same day funds that amount of any such shortfall, which payment shall be made to an account maintained by the Custodian and shall be provided in same day or
immediately available funds no later than 10:00 a.m. on the second Business Day following the date on which the Purchase Order is accepted. The Authorized Participant hereby agrees to ensure
that the Final Settlement Price be received by the Fund on or before 10:00 a.m. on the second Business Day following the date on which the Purchase Order is accepted, and in the event payment
of such Final Settlement Price has not been made by 10:00 a.m. on the second Business Day following the date on which the Purchase Order is accepted, the Authorized Participant agrees on behalf
of itself or any party for which it acts in connection with a Purchase Order to pay the Final Settlement Price, plus interest, computed at such reasonable rate as may be specified by the Fund from
time to time. The Authorized Participant may require its customer to enter into a written agreement with the Authorized Participant with respect to such matters. 

8.     REDEMPTION.  

        The Authorized Participant understands and agrees that Redemption Orders may be submitted only on days on which NYSE Arca and each of the exchanges on which the
Fund's futures contracts are traded are open for trading. The Authorized Participant represents and warrants that it will not attempt to place a Redemption Order for the purpose of redeeming any Unit
of the Fund unless it first ascertains that it or its customer, as the case may be, owns outright or has full legal authority and legal and beneficial right to tender for redemption the requisite
number of Shares of the Fund to be redeemed and to the entire proceeds of the redemption and that such Shares have not been loaned or pledged to another party and are not the subject of a repurchase
agreement, securities lending 

5

 

agreement
or any other arrangement that would preclude the delivery of such Shares to the Transfer Agent on behalf of the Fund in accordance with the Prospectus or as otherwise required by the Fund.
The Authorized Participant understands that the Shares may be redeemed only when one or more Baskets are held in the account of a single Authorized Participant. 

9.     BENEFICIAL OWNERSHIP.  

        (a)   With
respect to any creation or redemption transaction made by the Authorized Participant pursuant to this Agreement for the benefit of any customer or any other DTC
Participant or any other Beneficial Owner, the Authorized Participant shall extend to any such party all of the rights and shall be bound by all of the obligations of a DTC Participant in addition to
any obligations that it undertakes hereunder. 

        (b)   Upon
reasonable request by the Sponsor, the Authorized Participant will, subject to any limitations arising under federal or state securities laws relating to privacy or
other obligations it may have to its customers, provide the Sponsor written notice indicating the number of Fund shares that the Authorized Participant may hold as record holder and the amount of such
shares that it holds for the benefit of other broker-dealers that clear and settle transactions in Fund shares through the Authorized Participant, in each case as of the date of such request and with
respect to the Fund. In addition, the Authorized Participant agrees, upon request of the Sponsor, and subject to applicable laws, rules and regulations, to transmit to its account holders who are
beneficial owners of Fund shares, such written materials received from the Sponsor (including notices, annual reports, disclosure or other informational or tax materials and any amendments or
supplements thereto and communications) as may be required to be transmitted to Beneficial Owners pursuant to the Prospectus or applicable law, provided that the expenses associated with such
transmissions shall be borne by the Sponsor in accordance with usual custom and practice in respect of such communications. 

10.   INDEMNIFICATION.  

        This Section 9 shall survive the termination of this Agreement. 

        (a)   The
Authorized Participant hereby agrees to indemnify and hold harmless the Sponsor, the Distributor, the Fund and the Transfer Agent, and their respective subsidiaries,
affiliates, directors, officers, employees and agents, and each person, if any, who controls such persons within the meaning of Section 15 of the 1933 Act (each an "AP
Indemnified Party") from and against any loss, liability, cost and expense (including attorneys' fees) incurred by such AP Indemnified Party as a result of (i) any
breach by the Authorized Participant of any provision of this Agreement that relates to such Authorized Participant, (ii) any failure on the part of the Authorized Participant to perform any of
its obligations set forth in the Agreement, (iii) any failure by the Authorized Participant to comply with applicable laws, including rules and regulations of self-regulatory
organizations, (iv) actions of such AP Indemnified Party in reliance upon any instructions issued in accordance with Annexes I, I-A, I-B and II hereto (as each
may be amended from time to time) reasonably believed by such AP Indemnified Party to be genuine and to have been given by the Authorized Participant, or (v)(1) any representation by the Authorized
Participant, its employees or its agents or other representatives about the Shares or any AP Indemnified Party that is not consistent with the Fund's then-current Prospectus made in
connection with the offer or the solicitation of an offer to buy or sell the Shares and (2) any untrue statement or alleged untrue statement of a material fact contained in any research
reports, marketing material and sales literature described in Section 3 hereof or any alleged omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading to the extent that such statement or omission relates to the Shares or any AP Indemnified Party, unless, in either case, such representation, statement or omission
was made or included by an AP Indemnified Party at the written direction of the Fund or the Distributor or is based upon any omission or alleged omission by the Fund or the Distributor to state a
material fact in connection with such 

6

 

representation,
statement or omission necessary to make such representation, statement or omission not misleading. The Authorized Participant and the Distributor understand and agree that the Fund as
a third-party beneficiary to this Agreement is entitled and intends to proceed directly against the Authorized Participant in the event that the Authorized Participant fails to honor any of its
obligations pursuant to this Agreement that benefit the Fund. The Authorized Participant shall not be liable to the AP Indemnified Party for any damages arising out of mistakes or errors in data
provided to the Authorized Participant, or mistakes or errors by, or out of interruptions or delays of communications with the AP Indemnified Parties due to any action of a service provider to the
Fund. 

        (b)   The
Distributor hereby agrees to indemnify and hold harmless the Authorized Participant, its respective subsidiaries, affiliates, directors, officers, employees and
agents, and each person, if any, who controls such persons within the meaning of Section 15 of the 1933 Act (each a "Distributor Indemnified
Party") from and against any loss, liability, cost and expense (including attorneys' fees) incurred by such Distributor Indemnified Party as a result of (i) any breach
by the Distributor of any provision of this Agreement that relates to the Distributor, (ii) any failure on the part of the Distributor to perform any of its obligations set forth in this
Agreement, (iii) any failure by the Distributor to comply with applicable laws, including rules and regulations of self-regulatory organizations, (iv) actions of a
Distributor Indemnified Party in reliance upon any instructions issued or representations made in accordance with Annexes I, I-A, I-B and II hereto (as each may be
amended from time to time) reasonably believed by a Distributor Indemnified Party to be genuine and to have been given by the Distributor, or (v) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement of the Fund or in any amendment thereof, or in any prospectus or any statement of additional information, or any amendment thereof
or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not
misleading, in connection with the Authorized Participant's acting in its capacity as an Authorized Participant. The Distributor shall not be liable to any Distributor Indemnified Party for any
damages arising out of mistakes or errors in data provided to the Distributor, or mistakes or errors by, or out of interruptions or delays of communications with the Distributor Indemnified Parties,
due to any action of a service provider to the Fund. 

        (c)   The
Sponsor and the Fund hereby agree to indemnify and hold harmless the Authorized Participant, and its respective subsidiaries, affiliates, directors, officers,
employees and agents, and each person, if any, who controls such persons within the meaning of Section 15 of the 1933 Act (each an "Sponsor Indemnified
Party") from and against any loss, liability, cost and expense (including attorneys' fees) incurred by such Sponsor Indemnified Party as a result of (i) any breach by
the Sponsor or the Fund of any provision of this Agreement that relates to the Sponsor or the Fund, (ii) any failure on the part of the Sponsor or the Fund to perform any of its obligations set
forth in the Agreement, (iii) any failure by the Sponsor or the Fund to comply with applicable laws, including rules and regulations of self-regulatory organizations,
(iv) actions of such Sponsor Indemnified Party in reliance upon any instructions issued in accordance with Annexes I, I-A, I-B and II hereto (as each may be
amended from time to time) reasonably believed by the Sponsor Indemnified Party to be genuine and to have been given by the Sponsor or the Fund, or (v)(1) any representation by the Sponsor or the
Funds or their employees or agents or other representatives about the Shares or any Sponsor Indemnified Party that is not consistent with the Fund's then-current Prospectus made in
connection with the offer or the solicitation of an offer to buy or sell the Shares and (2) any untrue statement or alleged untrue statement of a material fact contained in any research
reports, marketing material and sales literature described in Section 3 hereof or any alleged omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading to the extent that such statement or omission relates to the Shares or any Sponsor Indemnified Party, unless, in either case, such representation, statement or
omission was made or included by a Sponsor Indemnified Party at the written direction of the Fund or the Distributor or is based upon any omission 

7

 

or
alleged omission by the Fund or the Distributor to state a material fact in connection with such representation, statement or omission necessary to make such representation, statement or omission
not misleading. Neither the Sponsor nor the Fund shall be liable to the Sponsor Indemnified Party for any damages arising out of mistakes or errors in data provided to the Sponsor or the Fund by the
Sponsor Indemnified Party, or mistakes or errors by, or out of interruptions or delays of communications with the Sponsor Indemnified Parties, due to any action of a service provider to the Fund. 

        (d)   This
Section 9 shall not apply to the extent any such losses, liabilities, damages, costs and expenses are incurred as a result or in connection with any gross
negligence, bad faith or willful misconduct on the part of a AP Indemnified Party, a Distributor Indemnified Party or as Sponsor Indemnified Party, as the case may be. The term "affiliate" in this
Section 9 shall include, with respect to any person, entity or organization, any other person, entity or organization which directly, or indirectly through one or more intermediaries, controls,
is controlled by or is under common control with such person, entity or organization. 

11.   LIMITATION OF LIABILITY.  

        (a)   The
Distributor, the Sponsor and the Fund acting on its own behalf or through its agent, the Transfer Agent, undertake to perform such duties and only such duties as are
expressly set forth herein, or expressly incorporated herein by reference, and no implied covenants or obligations shall be read into this Agreement against the Distributor, the Sponsor or the Fund. 

        (b)   In
the absence of bad faith, negligence or willful misconduct on its part, neither the Distributor, the Sponsor nor the Fund, whether acting directly or through agents
(including the Transfer Agent) or attorneys as provided in paragraph (d) below, shall be liable for any action taken, suffered or omitted or for any error of judgment made by any of them in the
performance of their duties hereunder. Neither the Distributor, the Sponsor nor the Fund, acting on its own behalf or through its agent, the Transfer Agent, shall be liable for any error of judgment
made in good faith unless the party exercising such shall have been negligent in ascertaining the pertinent facts necessary to make such judgment. In no event shall the Distributor, the Sponsor or the
Fund, acting on its own behalf or through its agent, the Transfer Agent, be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost
profit), even if such parties have been advised of the likelihood of such loss or damage and regardless of the form of action. In no event shall the Distributor, the Sponsor or the Fund, acting on its
own behalf or through its agent, the Transfer Agent, be liable for the acts or omissions of DTC or any other securities depository or clearing corporation. 

        (c)   Neither
the Distributor, the Sponsor nor the Fund, acting on its own behalf or through its agent, the Transfer Agent, shall be responsible or liable for any failure or
delay in the performance of their obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including without limitation: acts
of God; earthquakes; fires; floods; wars; civil or military disturbances; terrorism; sabotage; epidemics; riots; interruptions; loss or malfunction of utilities, computer (hardware or software) or
communications service; accidents; labor disputes; acts of civil or military authority or governmental actions. 

        (d)   The
Distributor, the Sponsor and the Fund may conclusively rely upon, and shall be fully protected in acting or refraining from acting upon, any communication authorized
hereby and upon any written or oral instruction, notice, request, direction or consent reasonably believed by them to be genuine. 

        (e)   The
Transfer Agent shall not be required to advance, expend or risk its own funds or otherwise incur or become exposed to financial liability in the performance of its
duties hereunder, except as may be required as a result of its own gross negligence, willful misconduct or bad faith. 

8

   
        (f)    Tax Liability.    To the extent any payment of any transfer tax, sales or use tax, stamp tax, recording tax,
value added tax or any other similar tax or government charge applicable to the creation or redemption of any Basket made pursuant to this Agreement is imposed, the Authorized Participant shall be
responsible for the payment of such tax or government charge regardless of whether or not such tax or charge is imposed directly on the Authorized Participant. To the extent the Fund or the
Distributor is required by law to pay any such tax or charge, the Authorized Participant agrees to promptly indemnify such party for any such payment, together with any applicable penalties, additions
to tax or interest thereon. 

12.   ACKNOWLEDGMENT.  

        The Authorized Participant acknowledges receipt of the Prospectus and represents that it has reviewed and understands such documents. 

13.   NOTICES.  

        Except as otherwise specifically provided in this Agreement, all notices required or permitted to be given pursuant to this Agreement shall be given in writing
and delivered by personal delivery or by postage prepaid registered or certified United States first class mail, return receipt requested, or by telex, telegram or facsimile or similar means of same
day delivery (with a confirming copy by mail). Unless otherwise notified in writing, all notices to the Fund shall be at the address or telephone, facsimile or telex numbers as follows: 

	Attn:	 	AirSharesTM EU Carbon Allowances Fund

420 Lexington Ave., Suite 2550

New York, NY 10170

Attn: David W. Jaffin

P: (212) 867-7400

F: (212) 867-3857

        All
notices to the Sponsor, the Fund, the Authorized Participant, the Distributor and the Transfer Agent shall be directed to the address or telephone, facsimile or telex numbers
indicated below the signature line of such party. 

14.   EFFECTIVENESS, TERMINATION AND AMENDMENT.  

        (a)   This
Agreement shall become effective immediately after execution and delivery to the Distributor upon notice by the Distributor to the Authorized Participant. A
"Business Day" shall mean any day on which NYSE Arca and each of the exchanges on which the Fund's futures contracts are traded are open for trading.
This Agreement may be terminated at any time by any party upon sixty (60) days' prior written notice to the other parties and may be terminated earlier by the Distributor at any time in the
event of a breach by the Authorized Participant of any provision of this Agreement or the procedures described or incorporated herein. This Agreement supersedes any prior such agreement between or
among the parties. 

        (b)   This
Agreement may be amended by the parties from time to time without the consent of any Beneficial Owner by the following procedure. The Distributor will mail a copy
of the amendment to the Authorized Participant and the Transfer Agent. For purposes of this Agreement, mail will be deemed received by the recipient thereof on the fifth (5th) Business Day following
the deposit of such mail into the U.S. Postal system. If neither the Authorized Participant nor the Transfer Agent objects in writing to the amendment within five (5) days after its receipt,
the amendment will become part of this Agreement in accordance with its terms. 

9

 

15.   GOVERNING LAW; CONSENT TO JURISDICTION.  

        This Agreement shall be governed by and construed in accordance with the laws of the State of New York (regardless of the laws that might otherwise govern under
applicable New York conflict of laws principles) as to all matters, including matters of validity, construction, effect, performance and remedies. Each party hereto irrevocably consents to the
jurisdiction of the courts of the State of New York and of any federal court located in the Borough of Manhattan in such State in connection with any action, suit or other proceeding arising out of or
relating to this Agreement or any action taken or omitted hereunder, and waives any claim of forum non conveniens and any objections as to laying of venue. Each party further waives personal service
of any summons, complaint or other process and agrees that service thereof may be made by certified or registered mail directed to such party at such party's address for purposes of notices hereunder.
Each party hereto each hereby irrevocably waives any and all rights to trial by jury in any legal proceeding arising out of or relating to this Agreement. 

16.   SUCCESSORS AND ASSIGNS.  

        This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties and their respective successors and permitted
assigns. 

17.   ASSIGNMENT.  

        Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any party without the prior written consent of the other
parties, except that any entity into which a party hereto may be merged or converted or with which it may be consolidated or any entity resulting from any merger, conversion or consolidation to which
such party hereunder shall be a party, or any entity succeeding to all or substantially all of the business of the party, shall be the successor of the party under this Agreement. The party resulting
from any such merger, conversion, consolidation or succession shall notify the other parties hereto of the change. Any purported assignment in violation of the provisions hereof shall be null and
void. 

18.   INTERPRETATION.  

        The article and section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties and shall not
in any way affect the meaning or interpretation of this Agreement. 

19.   ENTIRE AGREEMENT.  

        This Agreement, along with any other agreement or instrument delivered pursuant to this Agreement, supersede all prior agreements and understandings between the
parties with respect to the subject matter hereof. 

20.   SEVERANCE.  

        If any provision of this Agreement is held by any court or any act, regulation, rule or decision of any other governmental or supra national body or authority or
regulatory or self-regulatory organization to be invalid, illegal or unenforceable for any reason, it shall be invalid, illegal or unenforceable only to the extent so held and shall not
affect the validity, legality or enforceability of the other provisions of this Agreement and this Agreement will be construed as if such invalid, illegal, or unenforceable provision had never been
contained herein, unless the Distributor determines in its discretion, after consulting with the Fund, that the provision of this Agreement that was held invalid, illegal or unenforceable does affect
the validity, legality or enforceability of one or more other provisions of this Agreement, and that this Agreement should not be continued without the provision that was held invalid, illegal or
unenforceable, and in that case, upon the Distributor's notification to 

10

 

the
Fund of such a determination, this Agreement shall immediately terminate and the Distributor will so notify the Authorized Participant immediately. 

21.   NO STRICT CONSTRUCTION.  

        The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction
will be applied against any party. 

22.   SURVIVAL.  

        Section 9 (Indemnification) hereof shall survive the termination of this Agreement. 

23.   OTHER USAGES.  

        The following usages shall apply in interpreting this Agreement: (i) references to a governmental or quasigovernmental agency, authority or instrumentality
shall also refer to a regulatory body that succeeds to the functions of such agency, authority or instrumentality; and (ii) "including" means "including, but not limited to." 

24.   COUNTERPARTS.  

        This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement. 

[Signature Pages Follow]  

11

 

        IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered as of the day and year
written below. 

	

 	
 	

 	
 	

 
	DATED:	 	 	 	 
	 	 	
	 	 
	
AirSharesTM EU Carbon Allowances Fund

By: XShares Advisors LLC, Sponsor	
 	

 
	
By:	
 	

	
 	

 
	Name:	 	 	 	 
	Title:	 	 	 	 
	Address:	 	 	 	 
	Telephone:	 	 	 	 
	Facsimile:	 	 	 	 
	
XShares Advisors LLC

By:	
 	

 
	
By:	
 	

	
 	

 
	Name:	 	 	 	 
	Title:	 	 	 	 
	Address:	 	 	 	 
	Telephone:	 	 	 	 
	Facsimile:	 	 	 	 
	
ALPS Distributors, Inc.	
 	

 
	
By:	
 	

	
 	

 
	Name:	 	 	 	 
	Title:	 	 	 	 
	Address:	 	1290 Broadway, Suite 1100

Denver, CO 80203	 	 
	Telephone:	 	303-623-2577	 	 
	Facsimile:	 	303-623-7850	 	 
	
[Insert Name of Authorized Participant]	
 	

 
	

By:	
 	

	
 	

 
	Name:	 	 	 	 
	Title:	 	 	 	 
	Address:	 	 	 	 
	Telephone:	 	 	 	 
	Facsimile:	 	 	 	 

12

 

	
Accepted by: Brown Brothers Harriman & Co., as the Fund's Administrator, Custodian and Transfer Agent	
 	

 
	
By:	
 	

	
 	

 
	Name:	 	 	 	 
	Title:	 	 	 	 
	Address:	 	 	 	 
	Telephone:	 	 	 	 
	Facsimile:	 	 	 	 

13

   ANNEX I

TO

AUTHORIZED PARTICIPANT AGREEMENT

FOR AIRSHARESTM EU CARBON ALLOWANCES FUND  

CREATION AND REDEMPTION PROCEDURES  

Scope
of Procedures and Overview 

        These
procedures (the "Procedures") describe the processes by which one or more Baskets of Shares of Airshares EU Carbon Allowances Fund
Shares (the "Shares") may be purchased by an Authorized Participant, or, once Shares have been issued, redeemed by an Authorized Participant. Baskets
may be created or redeemed only in blocks of 100,000 Shares (each such block, a "Basket"). Terms not defined in these Procedures shall have the same
meaning set forth in the Authorized Participant Agreement for AirSharesTM EU Carbon Allowances Fund by and among the AirSharesTM EU Carbon Allowances Fund (the
"Fund"), XShares Advisors LLC, a Delaware limited liability company, sole sponsor of the Fund (the
"Sponsor"), ALPS Distributors, Inc. (the "Distributor") and
[Insert Name of Authorized Participant] (the "Authorized Participant") and is
subject to acceptance by Brown Brothers Harriman & Co. (the "Administrator", "Custodian"
and "Transfer Agent") (the "Agreement"). 

        For
purposes of these Procedures, a "Business Day" means any day on which NYSE Arca and each of the exchanges on which the Fund's futures
contracts are traded are open for trading. 

        Baskets
are issued pursuant to the Prospectus, which will be delivered by the Distributor to the Authorized Participant, prior to its execution of the Agreement and are issued and
redeemed in accordance with the Agreement. Baskets may be issued and redeemed on any Business Day by the
Distributor in exchange for cash, which the Transfer Agent receives from the Authorized Participant or transfers to the Authorized Participant, in each case on behalf of the Fund. 

        Upon
the execution of the Agreement, the Distributor will assign a personal identification number (a "PIN number") to each Authorized
Person authorized to act for the Authorized Participant. This will allow the Authorized Participant through its Authorized Person(s) to place Purchase Order(s) or Redemption Order(s) for Baskets. 

        Important
Notes: 

	•
	Any
Order is subject to rejection by the Fund or the Distributor, as agent of the Fund, for the reasons set forth in the Agreement.

	•
	All
Orders are subject to the provisions of the Prospectus and the Agreement relating to unclear or ambiguous instructions.

	•
	The
Authorized Participant, and each distributor offering and selling Shares as part of the distribution of such Shares, shall comply with the prospectus delivery and
disclosure requirements of the 1933 Act as well as the analogous requirements under the CEA, including, the requirement that prospective investors provide an acknowledgement of receipt of such
disclosure materials prior to the payment for any Shares. 

CREATION PROCESS  

        An Order to purchase one or more Baskets placed by an Authorized Participant with the Distributor between 1:00 PM New York time and the close of regular trading
on NYSE Arca or 4:00 PM New York time (the "Order Cut-Off Time") on a Business Day (such day, "CREATION
T") results in the transfer to the Authorized Participant's account at The Depository Trust Company ("DTC") of 

1

 

Baskets
the Authorized Participant has purchased, in most instances, by 12:00 PM New York time on CREATION T+3. 

CREATION PROCEDURES  

        1.     By
the Order Cut-Off Time (the earlier of the close of regular trading on NYSE Arca or 4:00 PM New York time), an Authorized Person of the Authorized
Participant calls the Distributor at (303) 603-8212 to notify such agent that the Authorized Participant wishes to place a Purchase Order to create an identified number of Baskets
and to request that it be provided with an order number (an "Order Number"). The Authorized Person provides a PIN number as identification. The
Distributor provides the Authorized Participant with an Order Number for the Authorized Participant's Purchase Order form. The Authorized Participant then completes and faxes to the Distributor the
Purchase Order Form included as Annex I-A and Exhibit A to  Annex I-A to the Agreement. The
Purchase Order Form (Annex I-A)
and Exhibit A thereto must include the Authorized Person's signature, the number of Baskets being purchased and the Order Number. 

        2.     If
the Distributor has not received the Purchase Order Form (Annex I-A) and  Exhibit A thereto from the Authorized Participant within 15 minutes
after the Distributor receives the phone call from the Authorized Participant
referenced in item (1) above, the Distributor places a phone call to the Authorized Participant to enquire about the status of the Order. If the Authorized Participant does not fax the Purchase
Order Form (Annex I-A) and Exhibit A thereto to the Distributor within 15
minutes after the Distributor's phone call, the Authorized Participant's Order is cancelled. The Distributor will then notify the Authorized Participant that the Order has been cancelled via telephone
call. 

        3.     If
the Distributor has received the Authorized Participant's Purchase Order Form (Annex I-A) and  Exhibit A thereto on time in accordance with the
preceding timing rules, then by 5:00 PM New York time the Distributor returns to the Authorized
Participant a copy of the Purchase Order Form submitted, marking it "Affirmed." Signature from an authorized person of the Distributor is affirmation. 

        4.     Based
on the Purchase Orders placed with it on CREATION T, by 5:00 pm on CREATION T, the Distributor will send a facsimile to the Transfer Agent indicating the total
number of Baskets and total amount of "initial cash" for which the Distributor will require payment into the custodial account of the Fund by 10:00 a.m. New York time on Creation T+1. The
initial payment required to create each Basket (the "Initial Cash Payment") shall be 105% of the end of day NAV per Basket, as of CREATION T-1. The Administrator shall use the end of day
NAV per Share posted on the Fund's website to determine the Initial Cash Payment Amount. The Administrator shall notify the Authorized Participant by email no later than 6:30 p.m., New York
time, on CREATION T of the Initial Cash Payment due in connection with each Creation Basket. 

        5.     On
CREATION T+1, the Authorized Participant shall make available in same day funds for each purchase of Baskets an amount of cash sufficient to pay the Initial Cash
Payment and the applicable transaction fee (i.e., $1,000 per Creation Basket), which payment shall be made to an account maintained by the Custodian and
shall be provided in same day or immediately available funds no later than 10:00 a.m. on CREATION T+1. The final settlement price per Creation Basket (the "Final Settlement Price") shall be the
sum of (i) the purchase price for the contracts (excluding commission costs) and (ii) an amount determined by the Fund's administrator to be the excess of the allocable portion of the
Fund's uninvested cash and accrued but unearned interest attributable to that Creation Basket over accrued but unpaid expenses attributable to that Creation Basket. The Authorized Participant will be
notified of the Final Settlement Price by 5:30 p.m., New York time on Creation T+1, and any underpayment or overpayment, based on the difference between the Initial Cash Payment and Final
Settlement Price shall be paid or refunded, as applicable before 10:00 a.m., New York time, on CREATION T+2. Upon confirmation of receipt by the Fund of the full amount of the 

2

 

Final
Settlement Price applicable to a Creation Basket, the Sponsor will instruct the Custodian to issue Shares attributable to each Creation Basket to fill the Authorized Participant's Purchase Order
on CREATION T+3. 

REDEMPTION PROCESS  

        An order to redeem one or more Baskets placed by an Authorized Participant with the Distributor between 1:00 PM and 4:00 PM New York time on a Business Day (such
day, "REDEMPTION T") results in the following taking place by 12:00 PM New York time on REDEMPTION T+3. 

	•
	Transfer
to the account at DTC and the subsequent cancellation of the relevant number of the Authorized Participant's Baskets by T+1; and

	•
	Transfer
to the Authorized Participant by credit to the Authorized Participant's account of cash, if any, in the relevant amount(s) corresponding to the Baskets delivered
for redemption (the "Redemption Distribution"). 

REDEMPTION PROCEDURES  

REDEMPTION
T (REDEMPTION ORDER TRADE DATE) 

        1.     By
the Order Cut-off Time, an Authorized Person of the Authorized Participant calls the Distributor at (303) 603-8212 to notify the
Distributor that the Authorized Participant wishes to place a Redemption Order with the Distributor to redeem an identified number of Baskets and to request that the Distributor provide an Order
Number. The Authorized Person provides a PIN number as identification to the Distributor. The Distributor provides the Authorized Participant with an Order Number for the Authorized Participant's
Redemption Order Form. The Authorized Participant then completes and faxes to the Distributor the Redemption Order Form included as Exhibit B to the Authorized Participant Agreement. The
Redemption Order Form must include the Authorized Person's signature, the number of Baskets redeemed, and the Order Number previously provided by the Distributor. 

        2.     If
the Distributor has not received the Redemption Order Form from the Authorized Participant within 15 minutes after the Distributor receives the phone call from the
Authorized Participant referenced in item (1) above, the Distributor places a phone call to the Authorized Participant to enquire about the status of the Order. If the Authorized Participant
does not fax the Redemption Order Form to the Distributor within 15 minutes after the Distributor's phone call, the Authorized Participant's Order is cancelled. The Distributor will then notify the
Authorized Participant that the Order has been cancelled via telephone call. 

        3.     If
the Distributor has received the Authorized Participant's Redemption Order Form on time in accordance with the preceding timing rules, then by 5:00 PM New York time
the Distributor returns to the Authorized Participant a copy of the Redemption Order Form submitted, marking it "Affirmed." The Distributor also indicates on the Redemption Order Form the amount of
the initial redemption payment amount to be delivered. 

        4.     Based
on the Redemption Orders placed with it on REDEMPTION T, the Distributor will send a facsimile to the Transfer Agent indicating the total number of Redemption
Baskets to be delivered to the Fund, and the total amount of the "initial redemption payment" to be paid by the Fund to the account(s) of the redeeming Authorized Participants. The initial redemption
payment due in connection with each Redemption Basket (the "Initial Redemption Payment") that is timely delivered shall be 95% of the NAV per Basket, as of REDEMPTION T-1. The end of day
NAV per Share will be available on the Fund's website. The Administrator shall notify the Authorized Participant by email no later than 6:30 p.m., New York time, on REDEMPTION T of the Initial
Redemption Payment applicable to each Redemption Basket. 

3

 

        5.     By
10:00 a.m. on REDEMPTION T+1, the Authorized Participant shall deliver the Redemption Basket(s) to the Fund. By 12:00 p.m. New York time on REDEMPTION
T+1, the Fund shall pay to the account of the redeeming Authorized Participant the applicable Initial Redemption Amount, less the applicable transaction fee. On REDEMPTION T+1, the Fund will liquidate
the futures contracts attributable to the Redemption Baskets in accordance with the procedures described in the Prospectus. The Final Settlement Price for the Redemption Basket shall be the sum of
(i) the proceeds from the liquidation of the futures contracts, plus (ii) an amount determined by the Fund's administrator to be the excess of the allocable portion of the Fund's
uninvested cash and accrued but unearned interest attributable to that Redemption Basket, over accrued but unpaid expenses attributable to that Redemption Basket. The Authorized Participant will be
notified of the Final Settlement Price applicable to a Redemption Basket by 5:30 p.m., New York time, on REDEMPTION T+1. Any underpayment or overpayment, based on the difference between the
Initial Redemption Amount and the Final Settlement Price will be paid or refunded, as applicable, on REDEMPTION T+3. 

4

 
ANNEX I-A

TO

AUTHORIZED PARTICIPANT AGREEMENT

FOR AIRSHARESTM EU CARBON ALLOWANCES FUND  

PURCHASE/ REDEMPTION ORDER FORM  

CONTACT
INFORMATION FOR ORDER EXECUTION: 

	Telephone order number:	 	Telex Number:
	Facsimile number:	 	Business Number:

ALL
ITEMS IN PART I MUST BE COMPLETED BY AN AUTHORIZED PARTICIPANT. THE DISTRIBUTOR AND/OR THE FUND, IN THEIR DISCRETION, MAY REJECT ANY ORDER NOT SUBMITTED IN COMPLETE FORM OR CONTAINING AMBIGUOUS
INSTRUCTIONS. 

1.     TO BE COMPLETED BY AUTHORIZED PARTICIPANT  

	Date:	 	 	 	Time:	 	 
	 	 	
	 	 	 	

	Broker Name:	 	 	 	Firm Name:	 	 
	 	 	
	 	 	 	

	DTC Participant No:	 	 	 	Telex Number:	 	 
	 	 	
	 	 	 	

	Telephone Number:	 	 	 	Fax Number:	 	 
	 	 	
	 	 	 	

	Authorized Person:	 	 	 	 	 	 
	 	 	
	 	 	 	 
	

Type of Order (Check One)	
 	

 	
 	

 
	

Number of Creation Baskets (1 CB = 100,000 shares) being transacted:	
 	

 
	 	 	 	 	 	 	

	Number Written Out:	 	 	 	 	 	 
	 	 	
	 	 	 	 
	Number of Redemption Baskets (1 RB = 100,000 shares) being transacted:	 	 
	 	 	 	 	 	 	

	Number Written Out:	 	 	 	 	 	 
	 	 	
	 	 	 	 
	

In connection with any order to purchase one or more Baskets, the Authorized Participant shall deliver to the Distributor an executed copy of Exhibit A to this Annex I-A, along with this Purchase Order Form.
	

Order number:	
 	

 	
 	

 	
 	

 
	 	 	
	 	 	 	 
	(To be entered by Authorized Participant

After issuance by telephone representative)	 	 	 	 
	

Authorized Person's Signature	
 	

 	
 	

 
	 	 	 	 	
	 	 

II.    TO BE COMPLETED BY DISTRIBUTOR OR TRANSFER AGENT  

This
certifies that the above order has been: 

	 	 	Accepted by the Distributor (Creations)
	
	 	 	 	 
	 	 	Accepted by the Transfer Agent (Redemptions)
	
	 	 	 	 
	 	 	Declined—Reason:	 	 
	
	 	 	 	

	 

	
 Date	 	
 Time	 	
 Authorized Signature

5

   EXHIBIT A TO PURCHASE ORDER FORM (ANNEX I-A)  

        All Purchase Order Forms are subject to the terms and conditions of the Amended and Restated Declaration of Trust and Trust Agreement (the
"Trust Agreement") of AirSharesTM EU Carbon Allowances Fund (the "Trust") as currently in
effect and the AirSharesTM EU Carbon Allowances Fund Authorized Participant Agreement among the Trust, the Sponsor, the Authorized Participant and the Distributor. Capitalized terms used
but not defined herein have the meaning given in the Trust Agreement. 

        The
undersigned understands that by submitting this Purchase Order Form, he/she is making the following representations and warranties and is also granting an irrevocable Power of
Attorney: 

        1.    CFTC Registration Status.    The Authorized Participant either is not required to be registered with the
Commodity Futures Trading Commission ("CFTC") or to be a member of the National Futures Association
("NFA"), or, if required to be so registered, is duly registered with the CFTC and is a member in good standing of the NFA. The Authorized Participant
agrees to supply the Sponsor or the Distributor with such information as the Sponsor or the Distributor may reasonably request in order to verify the foregoing representation. Vehicles for collective
investment which acquire Shares may, as a result, themselves become "commodity pools" within the intent of applicable CFTC and NFA rules, and their sponsors, accordingly, will be required to register
as "commodity pool operators." 

        2.    Power of Attorney.    In connection with the Authorized Participant's acceptance of an interest in the Trust,
the Authorized Participant does hereby irrevocably constitute and appoint the Sponsor, and its successors and assigns, as its true and lawful Attorney-in-Fact, with full power
of substitution, in my name, place and stead, in the execution, acknowledgment, filing and publishing of Trust documents, including, but not limited to, the following: (i) any certificates and
other instruments, including but not limited to, any applications for authority to do business and amendments thereto, which the Sponsor deems appropriate to qualify or continue the Trust as a
business or statutory trust in the jurisdictions in which the Trust may conduct business, so long as such qualifications and continuations are in accordance with the terms of the Trust Agreement or
any amendment hereto, or which may be required to be filed by the Trust or the Shareholders under the laws of any jurisdiction; (ii) any instrument which may be required to be filed by the
Trust under the laws of any state or by any governmental agency, or which the Sponsor deems advisable to file; and (iii) the Trust Agreement and any documents which may be required to effect an
amendment to the Trust Agreement approved under the terms of the Trust Agreement, and the continuation of the Trust, the admission of the signer of the Power of Attorney as a Limited Owner or of
others as additional or substituted Limited Owners, or the termination of the Trust, provided such continuation, admission or termination is in accordance with the terms of the Trust Agreement. The
Power of Attorney granted
hereby shall be deemed to be coupled with an interest and shall be irrevocable and shall survive, and shall not be affected by, the Authorized Participant's subsequent insolvency or dissolution or any
delivery by the Authorized Participant of an assignment of the whole or any portion of the Authorized Participant's Shares. 

        2.    Redemption.    The Authorized Participant will not redeem a Creation Unit unless it, or the party for which it
is acting, as the case may be, first owns the requisite number of shares to be redeemed as a Creation Unit. 

        The
undersigned understands that its DTC account will be charged the Transaction Fee as set forth in the currently effective copy of the Prospectus. 

        The
undersigned does hereby certify as of the date set forth below that he/she is an Authorized Person under the AirSharesTM EU Carbon Allowances Fund Authorized Participant
Agreement and that 

6

 

he/she
is authorized to deliver this Purchase Order Form to the Distributor on behalf of the Authorized Participant. 

	

DATED:	
 	

 	
 	

 
	 	 	
	 	 
	

Accepted by
 AirSharesTM EU Carbon Allowances Fund

By: ALPS Distributors, Inc., as Distributor,

on behalf of XShares Advisors LLC, as Sponsor	
 	

 
	
By:	
 	

	
 	

 
	Name:	 	 	 	 
	Title:	 	 	 	 
	

[NAME OF AUTHORIZED PARTICIPANT]	
 	

 
	

By:	
 	

	
 	

 
	Name:	 	 	 	 
	Title:	 	 	 	 

7

 
ANNEX I-B

TO

AUTHORIZED PARTICIPANT AGREEMENT

FOR AIRSHARESTM EU CARBON ALLOWANCES FUND  

AIRSHARESTM EU CARBON ALLOWANCES FUND

FUNDS FLOW PROCESS  

        This Annex I-B supplements the Fund's Prospectus with respect to the procedures to be used by the Distributor and the Transfer Agent in
processing an order for the creation or redemption of the Shares. 

        A.    The
Authorized Participant is required to have (i) signed an Authorized Participant Agreement for the Fund and (ii) assigned a personal identification
number to each Authorized Person that the Authorized Participant has authorized to act for such Authorized Participant. This will allow an Authorized Participant through its Authorized Person(s) to
place a creation or redemption order with respect to the Shares of the Fund. 

        B.    The
Authorized Participant and the Distributor shall implement the "Funds Flow Process" as agreed to by the parties from time to time. 

        C.    Note
that trades placed through the DTC may only occur on any day that DTC is open for business ("DTC Business Day"). 

FUNDS FLOW PROCESS  

	ORIGINATOR
	 	ACTIVITY

	

1. The Authorized Participant calls on the Distributor's recorded number to place a Purchase and/or Redemption Order. These trades are to be placed between 1:00 PM and 4:00 PM New York time on any Business Day.	
 	

1. The Distributor greets caller.
	

2. Authorized Participant identifies his/her name, the Institution he/she represents and the PIN number.

The Authorized Participant states the Fund name(s) and relevant ticker symbol(s).	
 	

2. The Distributor will confirm the Authorized Participant's PIN number.

The Distributor records the PIN number and the order and provides the Authorized Participant with an order confirmation number.

The order confirmation constitutes a binding order, which may only be reversed by the Transfer Agent, the Distributor or the Fund.

8

 

	

3. Authorized Participant will fax a copy of the Order Form to the Distributor within 15 minutes from the time the call is made.

The signed Order Form will be sent as the physical receipt for the Authorized Participant that the order is confirmed.

The above procedures will be repeated until all orders have been placed by the Authorized Participant.	
 	

3. The Distributor will receive a copy of the completed Order Form from the Authorized Participant faxed within 15 minutes from the time the order is placed.

All orders received from the Authorized Participant's are time stamped by the Distributor at the time the order is placed.

The Distributor will verify that the appropriate disclaimers have been made by the Authorized Participant and validate the disclaimer by calculating the Authorized Participant's position, including the subscriptions requested, to the total fund
shares outstanding.

The Distributor will sign the Order Form and the signed Order Form will be sent as the physical receipt for the Authorized Participant that the order is confirmed.
	

4. The Authorized Participant receives the fax.

The Authorized Participant will assume responsibility for an incorrect trade.	
 	

4. The Authorized Participant will assume responsibility for an incorrect trade and contact the Distributor if necessary.

If trades are corrected, the Distributor will delete the first trade and reenter the corrected trade. A second affirmation will be faxed to the Authorized Participant with all trades placed that day. The corrected trade will be coded on the
affirmation so that the Authorized Participant can see the correction.

No corrections will be permitted after 4:00 PM New York time.

	*
	Times
may vary depending on the trade volume from Authorized Participants. 

9

 
ANNEX II

TO

AUTHORIZED PARTICIPANT AGREEMENT

FOR AIRSHARESTM EU CARBON ALLOWANCES FUND  

FORM OF CERTIFIED AUTHORIZED PERSONS

OF THE AUTHORIZED PARTICIPANT  

        The following are the names, titles and signatures of all persons (each an "Authorized Person") authorized to give
instructions relating to any activity contemplated by the Authorized Participant Agreement for Airshares EU Carbon Allowances Fund entered into by and among ALPS Distributors, Inc. and
[Insert Name of Authorized Participant] (the "Authorized Participant" or "AP"), accepted by Brown Brothers
Harriman & Co. (the "Transfer Agent")
(this "Agreement"), or any other notice, request or instruction on behalf of the Authorized Participant pursuant to this Agreement. 

	

Name:	
 	

 	
 	

 
	 	 	
	 	 
	Title:	 	 	 	 
	 	 	
	 	 
	Signature:	 	 	 	 
	 	 	
	 	 
	

Name:	
 	

 	
 	

 
	 	 	
	 	 
	Title:	 	 	 	 
	 	 	
	 	 
	Signature:	 	 	 	 
	 	 	
	 	 
	

Name:	
 	

 	
 	

 
	 	 	
	 	 
	Title:	 	 	 	 
	 	 	
	 	 
	Signature:	 	 	 	 
	 	 	
	 	 

        The
undersigned, [name], [title], [company], does hereby certify that the persons listed above have been duly
elected to the offices set forth beneath their names, that they presently hold such offices, that they have been duly authorized to act as Authorized Persons of
[Insert Name of Authorized Participant] in its capacity as an Authorized Participant pursuant to this Agreement and that their
signatures set forth above are their own true and genuine signatures. 

        IN
WITNESS WHEREOF, the undersigned has hereby set his/her hand and the seal of [company] on the date set forth below. 

Subscribed
and sworn to before me

this                        day
of                                    , 200  .
 

By:

Name:

Title: 

Notary
Public 

10

QuickLinks

FORM OF AUTHORIZED PARTICIPANT AGREEMENT FOR AIRSHARESTM EU CARBON ALLOWANCES FUND

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