Aberdeen Standard Silver ETF Trust 8-K [sivr-8k_032919.htm]

 

Exhibit 10.2

 

JPMORGAN CHASE BANK, N.A.

 

and

 

THE BANK OF NEW YORK MELLON

solely in its capacity as trustee of the Aberdeen Standard Silver ETF Trust

and not individually 

 

 

  

UNALLOCATED ACCOUNT AGREEMENT 

 

 

 

 

 

 

This UNALLOCATED ACCOUNT AGREEMENT (this “Agreement”) is made with effect on and
from 29 March, 2019.

 

BETWEEN

 

(1)JPMORGAN CHASE BANK, N.A, whose principal place of business in England is at
25 Bank Street, Canary Wharf, London E14 5JP (the “Custodian”); and

 

(2)THE BANK OF NEW YORK MELLON, a New York banking corporation, solely in its
capacity as trustee of the Aberdeen Standard Silver ETF Trust (the “Trust”)
created under the Trust Agreement identified below and not individually (the
“Trustee”), which expression shall, wherever the context so admits, include the
named Trustee and all other persons or companies for the time being the trustee
or trustees of the Trust Agreement (as defined below) as trustee for the
Shareholders (as defined below).

 

INTRODUCTION

 

(1)The Trustee has agreed to act as trustee for the Shareholders of the Shares
pursuant to the Trust Agreement.

 

(2)An Authorized Participant may apply to become a Shareholder by: (i) applying
for Shares in accordance with an Authorized Participant Agreement and (ii)
depositing the relevant amount of Bullion into the Unallocated Account.

 

(3)The Custodian has agreed to transfer Bullion deposited into the Unallocated
Account to the Allocated Account and where applicable, other accounts, pursuant
to the terms of this Agreement.

 

(4)In order to effect redemptions of Shares, Bullion must be transferred from
the Allocated Account to the Unallocated Account by way of de-allocation, and
must then be delivered to the Shareholder Account.

 

(5)The Trustee has agreed that the Unallocated Account will be established by
the Trustee for the account of the Trust, and that the Trustee will have the
sole right to give instructions for the making of any payments into or out of
the Unallocated Account.

 

1 

 

 

IT IS AGREED AS FOLLOWS

 

1.INTERPRETATION

 

1.1Definitions: Words and expressions defined in the Prospectus, unless
otherwise defined herein, have the same meanings when used in this Agreement. In
addition, in this Agreement, unless there is anything in the subject or context
inconsistent therewith the following expressions shall have the following
meanings:

 

“Affiliate” means an entity that directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with
the Custodian;

 

“Allocated Account” means the allocated Bullion account, number 14290,
established in the name of the Trustee with the Custodian pursuant to the
Allocated Account Agreement;

 

“Allocated Account Agreement” means the Allocated Account Agreement dated 29
March 2019 between the Trustee and the Custodian pursuant to which the Allocated
Account is established and operated;

 

“AP Account” means a loco London account maintained on an unallocated basis by
the Custodian or a Bullion clearing bank for the Authorized Participant, as
specified in the applicable Transfer Notice;

 

“Application” means an offer by an Authorized Participant to the Trust (in the
form prescribed by the Trust) to subscribe for Shares, being an offer on terms
referred to in the Prospectus and in accordance with the provisions of the
relevant Authorized Participant Agreement;

 

“Application Date” means the New York Business Day on which a valid Application
Form is received (or deemed to be received) by the Trustee in accordance with
the relevant Authorized Participant Agreement;

 

“Application Form” means a Purchase Order as defined in the Authorized
Participant Agreement;

 

“Authorized Participant” means a person which has entered into an Authorized
Participant Agreement with the Sponsor and the Trustee in relation to Shares and
which: (a) is a person who (i) is a registered broker-dealer or other securities
market participant such as a bank or other financial institution which is not
required to register as a broker-dealer to engage in securities transactions and
(ii) is a participant in DTC; (b) is approved by the Sponsor (in its absolute
discretion); and (c) has established an AP Account;

 

“Authorized Participant Agreement” means a written agreement between the
Trustee, the Sponsor and another person under which such person is appointed to
act as an “Authorized Participant,” in relation to Shares and if such agreement
is subject to conditions precedent, provided that such conditions have been
satisfied;

 

“Availability Date” means the Business Day on which the Trustee requests the
Custodian to credit to the Unallocated Account Bullion debited from the
Allocated Account;

 

2 

 

 

“Benchmark Price” means, as of any day, that publicly available per ounce price
of Bullion used by the Trust on such day to value the Trust’s Bullion, which is
expected to be the LBMA silver price administered by ICE Benchmark
administration but is subject to change by the Sponsor in accordance with the
Trust Agreement;

 

“Bullion” means silver in physical form complying with the Rules of the Relevant
Association held by the Custodian or any Sub-Custodian under the Allocated
Account Agreement and/or any credit balance in the Unallocated Account as the
context requires;

 

“Business Day” means a day (other than a Saturday or a Sunday or a public
holiday in England) on which commercial banks generally and the London bullion
market are open for the transaction of business in London;

 

“Conditions” means the terms and conditions on and subject to which Shares are
issued in the form or substantially in the form set out in the Trust Agreement;

 

“General Notice” means any notice given in accordance with this Agreement other
than a Transfer Notice;

 

“Loco London” means in respect of an account holding Bullion, the custody,
trading or clearing of such Bullion in London, United Kingdom;

 

“Management Fee” means the amount of Bullion which may be debited from the Metal
Accounts at the end of each month and paid to the Sponsor Account in accordance
with the terms of the Prospectus;

 

“Metal Accounts” means the Allocated Account and the Unallocated Account;

 

“Metal Entitlement” means as at any date and in relation to any Share the
amount(s) of Bullion to which the Shareholder is entitled on Redemption of that
Share on that date in accordance with the Conditions;

 

“New York Business Day” means a “Business Day” as defined in the Trust
Agreement;

 

“Point of Delivery” means such date and time that the recipient (or its agent)
acknowledges in written form its receipt of delivery of Bullion;

 

“Prospectus” means the prospectus constituting a part of the registration
statement filed on Form S-1 for the Trust with the Securities Exchange
Commission in accordance with the U.S. Securities Act of 1933, as amended, in
relation to the Shares as the same may be modified, supplemented or amended from
time to time;

 

“Redemption” means the redemption of Shares by the Trust in accordance with the
Conditions;

 

3 

 

 

“Redemption Obligations” means the obligation of the Trust on Redemption of a
Share to make payment or deliver Bullion to the relevant Authorized Participant
or Shareholder in accordance with the Conditions;

 

“Relevant Association” means the London Bullion Market Association or its
successors;

 

“Rules” means the rules, regulations, practices and customs of the Relevant
Association (including without limitation the requirements of “Good Delivery”
under the rules of the Relevant Association), the Bank of England and such other
regulatory authority or other body as shall affect the activities contemplated
by this Agreement or the Trust;

 

“Shareholder” means the beneficial owner of one or more Shares;

 

“Shareholder Account” means a loco London account maintained on an unallocated
basis by the Custodian or a Bullion clearing bank, as applicable, for an
Authorized Participant or a Shareholder, as specified in the applicable
Redemption Notice;

 

“Shares” means the units of fractional undivided beneficial interest in and
ownership of the Trust which are issued by the Trust, named “Aberdeen Standard
Physical Silver Shares” and created pursuant to and constituted by the Trust
Agreement;

 

“Sponsor” means Aberdeen Standard Investments ETFs Sponsor LLC, its successors
and assigns and any successor Sponsor appointed pursuant to the Trust Agreement;

 

“Sponsor Account” means a loco London account maintained on an unallocated basis
by the Custodian or a Bullion clearing bank, as applicable, for the Sponsor;

 

“Transfer Notice” means any notice of a deposit or withdrawal made pursuant to
clause 3 or clause 4 of this Agreement;

 

“Trust” means the Aberdeen Standard Silver ETF Trust formed pursuant to the
Trust Agreement;

 

“Trust Agreement” means the Depositary Trust Agreement of the Trust dated on or
about July 20, 2009, as amended from time to time, between the Sponsor and the
Trustee;

 

“Unallocated Account” means the loco London unallocated Bullion account, number
14289, established in the name of the Trustee, with the Custodian pursuant to
this Agreement on an Unallocated Basis;

 

“Unallocated Basis” means, with respect to an Unallocated Account maintained
with the Custodian, that the person in whose name the account is held is
entitled to delivery in accordance with the Rules of an amount of Bullion equal
to the amount of Bullion standing to the credit of the person’s account but is
an unsecured creditor in any Bullion that the Custodian owns or holds;

 

4 

 

 

“VAT” means value added tax as provided for in the Value Added Tax Act 1994 (as
amended or re-enacted from time to time) and legislation supplemental thereto
and any other tax (whether imposed in the United Kingdom in substitution thereof
or in addition thereto or elsewhere) of a similar fiscal nature; and

 

“Withdrawal Date” means the Business Day on which the Trustee wishes a
withdrawal of Bullion from the Unallocated Account to take place.

 

1.2Headings: The headings in this Agreement do not affect its interpretation.

 

1.3Singular and plural: References to the singular include the plural and vice
versa.

 

2.UNALLOCATED ACCOUNT

 

2.1Opening Unallocated Account: The Custodian shall open and maintain the
Unallocated Account in the name of the Trustee (in its capacity as trustee for
the Shareholders).

 

2.2Denomination of Unallocated Account: The Unallocated Account will hold
deposits of Bullion and will be denominated in troy ounces.

 

2.3Unallocated Account Reports: For each Business Day, by no later than the
following Business Day, the Custodian will provide the Trustee access to
information showing the increases and decreases to the Bullion standing to the
Trustee’s credit in the Unallocated Account, and identifying separately each
transaction and the New York or London Business Day on which it occurred. On
each Business Day on which Bullion is deposited or that is a Withdrawal Date,
the Custodian will send the Trustee a notification of (i) each separate
transaction transferring Bullion to the Unallocated Account, including the
amount of Bullion transferred to the Unallocated Account and the AP Account or
Shareholder Account from which such Bullion is transferred, (ii) the amount of
Bullion transferred from the Unallocated Account to the Allocated Account or to
any AP Account or Shareholder Account and (iii) the amount of any remaining
Bullion in the Unallocated Account, and the Custodian will use commercially
reasonable efforts to send the notification by 9:00 a.m. (New York time). In
addition, the Custodian will provide the Trustee such information about the
increases and decreases to the Bullion standing to the Trustee’s credit in the
Unallocated Account on a same-day basis at such other times and in such other
form as the Trustee and the Custodian shall agree. For each calendar month, the
Custodian will provide the Trustee within a reasonable time after the end of the
month a statement of account for the Unallocated Account. Such reports will be
made available to the Trustee by means of the Custodian’s proprietary electronic
Bullion Transfer System website (“eBTS”). In the event eBTS is unavailable for
any reason, the Trustee and the Custodian will agree upon a temporary
notification system for making such reports available to the Trustee.

 

5 

 

 

2.4Reversal of Entries: The Custodian shall reverse any provisional or erroneous
entries to the Unallocated Account which it discovers or of which it is notified
with effect back-valued to the date upon which the final or correct entry (or no
entry) should have been made (including, without limitation, where the Custodian
has credited a deposit made pursuant to clause 3.1(b) and on receipt by the
Custodian of the Bullion if it is determined that the Bullion does not comply
with the Rules or that it is not the required weight) and will notify the
Trustee of any reversals as soon as reasonably practicable.

 

2.5Provision of Information: The Custodian agrees that it will forthwith notify
the Trustee in writing of any encumbrance of which it is aware is or is
purported to have been created over or in respect of the Unallocated Account or
any of the amounts standing to the credit thereof.

 

2.6Access: The Custodian will allow the Sponsor and the Trustee and their
Bullion auditors (currently Inspectorate International Limited) access to its
premises during normal business hours, to examine the Bullion and such records,
as they may reasonably require to perform their respective duties with regard to
investors in Shares. The Trustee agrees that any such access shall be subject to
execution of a confidentiality agreement and agreement to the Custodian’s
security procedures, and such audit shall be at the Trust’s expense, and there
shall be a minimum of two audits in a calendar year, provided however that any
additional visit within the same calendar year shall be subject to the consent
of the Custodian, such consent not to be unreasonably withheld.

 

3.DEPOSITS

 

3.1Procedure: The Custodian shall receive deposits of Bullion into the
Unallocated Account (in the manner and accompanied by such documentation as the
Custodian may require) by:

 

(a)de-allocation of Bullion held in the Allocated Account on redemption of
Shares by a Shareholder or Authorized Participant or for any other purpose
authorized by the Trust Agreement; or

 

(b)de-allocation of Bullion held in the Allocated Account for payment of the
Management Fee; or

 

(c)transfer of Bullion from an AP Account relating to the same kind of Bullion
and having the same denomination as that to which the Unallocated Account
relates on Application by an Authorized Participant for Shares.

 

No other methods of deposit are permitted.

 

3.2Notice Requirements: Notice of intended deposit must be received by the
Custodian from the Trustee no later than 3:00 p.m. (London time) one Business
Day prior to the Availability Date and specify the weight (in troy ounces of
silver) to be credited to the Unallocated Account, the Availability Date, the
account from which such deposit will be transferred, and any other information
which the Custodian may, with the agreement of the Trustee, from time to time
require. When, by reference to the Trustee’s notifications and instructions to
the Custodian, the Custodian reasonably believes an amount of Bullion has been
credited to the Unallocated Account in error, the Custodian will notify the
Trustee promptly and, pending a joint resolution of the error, will treat such
amount as not being subject to the standing instruction in clause 5.2.

 

6 

 

 

3.3Right to Amend Procedure: The Custodian may amend the procedure in relation
to the deposit of Bullion only where such amendment is caused by a change in the
Rules or procedures of the Relevant Association. The Custodian will, whenever
practicable, notify the Trustee and the Sponsor within a commercially reasonable
time before the Custodian amends its procedures or imposes additional ones in
relation to the transfer of Bullion into and from the Unallocated Account, and
in doing so the Custodian will consider the Trustee’s needs to communicate any
such change to Authorized Participants and others.

 

4.WITHDRAWALS

 

4.1Procedure: The Trustee may at any time give instructions to the Custodian for
the withdrawal of Bullion standing to the credit of the Unallocated Account in
such form as may be agreed by the parties from time to time, provided that a
withdrawal may be made only by:

 

(a)transfer to a Shareholder Account relating to the same kind of Bullion and
having the same denomination as that to which the Unallocated Account relates
when Shares are redeemed; or

 

(b)transfer to the Sponsor Account for payment of the Management Fee; or

 

(c)transfer of Bullion to the Allocated Account; or

 

(d)the collection of Bullion from the Custodian at its vault premises, or such
other location as the Custodian may direct by notice to the party taking
delivery received not later than one Business Day prior to the Availability
Date, at the Trust’s expense and risk; or

 

(e)delivery of Bullion to such location as the Trustee directs, at the Trust’s
expense and risk; or

 

(f)transfer to an account maintained by the Custodian or by a third party on an
unallocated basis in connection with the sale of Bullion or other transfers
permitted under the Trust Agreement.

 

The Trustee agrees to exercise its rights under clauses 4.1(d) and (e) on an
exceptional basis only. Any Bullion made available to the relevant person (as
instructed by the Trustee) pursuant to clauses 4.1(d) and (e) will be in a form
which complies with the Rules or in such other form as may be agreed between the
Trustee and the Custodian the combined weight of which will not exceed the
number of ounces of Bullion the Trustee has instructed the Custodian to debit.
The Custodian is entitled to select the Bullion to be made available to the
relevant person (as instructed by the Trustee) provided it is in the same form
as that deposited. To the extent that the Trustee is authorized to sell Bullion
under the Trust Agreement, the Custodian may, but is not required to, purchase
such Bullion; provided that the Custodian’s purchase price for such Bullion must
be the Benchmark Price.

 

7 

 

 

4.2Notice Requirements: Any notice relating to a withdrawal of Bullion must be
in writing and:

 

(a)if it relates to a withdrawal pursuant to clauses 4.1(a), 4.1(b) or 4.1(f),
to be in such form as may be agreed by the parties from time to time, and in all
cases be received by the Custodian no later than 3:00 p.m (London time) on the
Withdrawal Date unless otherwise agreed.

 

(b)if it relates to a transfer pursuant to clause 4.1(c), be in the form of an
Application (which shall be sufficient instruction for the purposes of this
Agreement) and be received by the Custodian no later than 3:00p.m. (London time)
on the day which is one Business Day prior to the Withdrawal Date.

 

(c)if it relates to a withdrawal pursuant to clause 4.1(d) or (e), be received
by the Custodian no later than 11:30 a.m. (London time) not less than two
Business Days prior to the Withdrawal Date unless otherwise agreed and specify
the name of the person or carrier that will collect the Bullion from the
Custodian or the identity of the person to whom delivery is to be made, as the
case may be;

 

and in all cases, specify the weight (in troy ounces of silver) of the Bullion
to be debited from the Unallocated Account, the Withdrawal Date and any other
information which the Custodian may, with the agreement of the Trustee, from
time to time require.

 

4.3Right to Amend Procedure: The Custodian may amend the procedure for the
withdrawal of Bullion from the Unallocated Account only where such amendment is
caused by a change in the Rules or procedures of the Relevant Association. Any
such amendment will be subject to the notification conditions of the preceding
clause 3.3 and will be promptly notified to the Sponsor and the Trustee, such
notice to be given in advance of implementation whenever practicable.

 

4.4Delivery Obligations: Unless otherwise instructed by the Trustee on behalf of
the Trust or the relevant person, the Custodian shall make any transportation
and insurance arrangements in respect of delivery of Bullion in accordance with
its usual practice. Where instructions are given, the Custodian shall use all
reasonable efforts to comply with the same. The Custodian shall not be obliged
to effect any requested delivery if, in its reasonable opinion, this would cause
the Custodian or its agents to be in breach of the Rules or other applicable
law, court order or regulation; the costs incurred would be excessive or
delivery is impracticable for any reason. All insurance and transportation costs
shall be for the account of the Trust.

 

8 

 

 

4.5Risk: Where there is a shipment from the Custodian of Bullion, all right,
title and risk in and to such Bullion shall pass at the Point of Delivery to the
relevant person for whose account the Bullion is being delivered.

 

4.6Allocation: Without limiting clause 5.2, in the case of a transfer under
clause 4.1(c), the Custodian will use its commercially reasonable endeavours to
complete the allocation of such deposits of Bullion by not later than 2:00 p.m.
(London time) on the Business Day after receipt of notice given in the form
prescribed in clause 4.2(b). Following the Custodian’s receipt of such notice,
the Custodian shall identify bars or ingots of a weight most closely
approximating, but not exceeding, the balance in the Unallocated Account and
shall transfer such weight from the Unallocated Account to the Allocated
Account. The Trustee acknowledges that the process of allocation of Bullion to
the Allocated Account from the Unallocated Account may involve minimal
adjustments to the weights of Bullion to be allocated to adjust such weight to
the number of whole bars available.

 

5.INSTRUCTIONS

 

5.1Giving of Instructions: Only the Trustee shall have the right to give
instructions to the Custodian for deposit of Bullion to or withdrawal of Bullion
from the Unallocated Account. The Trustee shall notify the Custodian in writing
of the names of the people who are authorized to give instructions on the
Trustee’s behalf. Until the Custodian receives written notice to the contrary,
the Custodian is entitled to assume that any of those people have full and
unrestricted power to give instructions on the Trustee’s behalf. The Custodian
is also entitled to rely on any instructions which are from, or which purport to
emanate from, any person who appears to have such authority.

 

5.2Continuous Allocation of Bullion: Without prejudice to clause 5.1, unless
otherwise notified by the Trustee in writing, the Trustee hereby instructs the
Custodian that, whenever Bullion is to be transferred from an AP Account to the
Metal Accounts, it will combine such Bullion with any Bullion then standing to
the credit of the Unallocated Account (excluding Bullion which has been
de-allocated in order to effect delivery of Bullion to a redeeming Authorized
Participant or Shareholder or pursuant to other withdrawals occurring on such
day) and to the fullest extent possible, transfer such Bullion to the Allocated
Account such that the amount of Bullion that remains standing to the credit of
the Trustee in the Unallocated Account does not exceed, 1,100 troy ounces at the
close of each Business Day.

 

5.3Account not to be Overdrawn: The Unallocated Account may not at any time have
a debit balance thereon, and no instruction shall be valid to the extent that
the effect thereof would be for the Unallocated Account to have a debit balance
thereon.

 

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5.4Amendments: Once given, instructions continue in full force and effect until
they are cancelled, amended or superseded. Notice of amendment shall have effect
only upon actual receipt by the Custodian.

 

5.5Unclear or Ambiguous Instructions: If, in the Custodian’s opinion, any
instructions are unclear or ambiguous, the Custodian shall use reasonable
endeavours (taking into account any relevant time constraints) to obtain
clarification of those instructions from the Trustee and, failing that, the
Custodian may in its absolute discretion and without any liability on its part,
act upon what the Custodian believes in good faith such instructions to be or
refuse to take any action or execute such instructions until any ambiguity or
conflict has been resolved to the Custodian’s satisfaction.

 

5.6Refusal to Execute: The Custodian will, where practicable, refuse to execute
instructions if in the Custodian’s opinion they are or may be contrary to the
Rules or any applicable law and will notify the person or entity providing the
instructions of such refusal as soon as reasonably practicable.

 

6.CONFIDENTIALITY

 

6.1Disclosure to Others: Subject to clause 6.2, each of the Trustee and the
Custodian shall respect the confidentiality of information acquired under this
Agreement and will not, without the other party’s consent, disclose to any other
person any transaction or other information acquired about the other party, its
business or the Trust under this Agreement, in the event such other party has
made clear, at or before the time such information is provided, that such
information is being provided on a confidential basis.

 

6.2Permitted Disclosures: Each party accepts that from time to time any other
party may be required by law or the Rules, or requested by a government
department or agency, fiscal body or regulatory or listing authority or as
otherwise necessary in conducting the Trust’s business, to disclose information
acquired under this Agreement. In addition, the disclosure of such information
may be required by a party’s auditors, by its legal or other advisors, by a
company which is in the same group of companies as a party (i.e., a subsidiary
or holding company of a party) or (in the case of the Trustee) by any
beneficiary of the trusts constituted by the Trust Agreement. Each party
irrevocably authorises the others to make such disclosures without further
reference to such party.

 

7.CUSTODY SERVICES

 

7.1Appointment: The Trustee hereby appoints the Custodian to act as custodian of
the Bullion in accordance with this Agreement and any Rules which apply to the
Custodian.

 

7.2Safekeeping of Bullion: The Custodian will be responsible for the safekeeping
of the Bullion on the terms and conditions of this Agreement.

 

7.3Ownership of Bullion: The Custodian will identify in its books that the
Bullion belongs to the Trustee (on trust for the Shareholders).

 

10 

 

 

8.REPRESENTATIONS

 

8.1Trustee’s Representations: The Trustee represents and warrants to the
Custodian that (such representations and warranties being deemed to be repeated
upon each occasion of withdrawal of Bullion under this Agreement):

 

(1)the Trustee has all necessary authority, powers, consents, licences and
authorisations (which have not been revoked) and has taken all necessary action
to enable it lawfully to enter into and perform its duties and obligations under
this Agreement;

 

(2)the persons entering into this Agreement on the Trustee’s behalf have been
duly authorized to do so; and

 

(3)this Agreement and the obligations created under it are binding upon and
enforceable against the Trustee, as trustee of the Trust, in accordance with its
terms (subject to applicable principles of equity) and do not and will not
violate the terms of the Rules or any order, charge or agreement by which the
Trustee is bound.

 

8.2Custodian’s Representations: The Custodian represents and warrants to the
Trust that (such representations and warranties being deemed to be repeated upon
each occasion of withdrawal of Bullion under this Agreement):

 

(1)the Custodian has all necessary authority, powers, consents, licences and
authorisations (which have not been revoked) and has taken all necessary action
to enable it lawfully to enter into and perform its duties and obligations under
this Agreement;

 

(2)the persons entering into this Agreement on behalf of the Custodian have been
duly Authorized to do so; and

 

(3)this Agreement and the obligations created under it are binding upon the
Custodian and enforceable against the Custodian in accordance with its terms
(subject to applicable principles of equity) and do not and will not violate the
terms of the Rules or any order, charge or agreement by which the Custodian is
bound.

 

9.FEES AND EXPENSES

 

9.1Fees: There will be no fees charged by the Custodian for the services
provided by it under this Agreement. Payment of such fees will be made by the
Sponsor under the Allocated Account Agreement.

 

9.2Expenses: Pursuant to a separate written agreement between the Sponsor and
the Custodian, to which the Custodian has agreed, the Sponsor shall pay to the
Custodian on demand all costs, charges and expenses (excluding (i) any relevant
taxes and VAT, duties and other governmental charges, (ii) fees for storage and
insurance of the Bullion, which will be recovered under the Allocated Account
Agreement, and (iii) indemnification obligations of the Trustee under clause
11.5, which will be paid under the following sentence) incurred by the Custodian
in connection with the performance of its duties and obligations under this
Agreement or otherwise in connection with the Bullion. The Trustee will procure
payment on demand, solely from and to the extent of the assets of the Trust, for
any other costs, charges and expenses not paid by the Sponsor under its
agreement with the Custodian referenced in this clause 9.2 (including any
relevant taxes (other than VAT, which is addressed in clause 10.1), duties,
other governmental charges and indemnification claims of the Custodian payable
by the Trustee pursuant to clause 11.5, but excluding fees for storage and
insurance of the Bullion, which will be recovered under the Allocated Account
Agreement) incurred by the Custodian in connection with the Bullion.

 

11 

 

 

9.3Default Interest: If the Sponsor or the Trustee, as may be applicable, fails
to procure payment to the Custodian any amount when it is due, the Custodian
reserves the right to charge interest (both before and after any judgment) on
any such unpaid amount calculated at a rate equal to 1% above the overnight
London Interbank Offered Rate (LIBOR) for the currency in which the amount is
due. Interest will accrue on a daily basis and will be due and payable as a
separate debt.

 

9.4Credit Balances: No interest or other amount will be paid by the Custodian on
any credit balance on an Unallocated Account.

 

9.5Recovery from Trust: Amounts payable pursuant to this clause 9 shall not be
debited from the Unallocated Account, but shall be payable by the Sponsor or the
Trustee, as may be applicable, on behalf of the Trust, and the Custodian hereby
acknowledges that it will have no recourse against Bullion standing to the
credit of the Unallocated Account or to the Trustee in respect of any such
amounts.

 

10.VALUE ADDED TAX

 

10.1VAT Inclusive: All sums payable under this Agreement by the Trust to the
Custodian shall be deemed to be inclusive of VAT if and to the extent VAT is
properly chargeable on any supplies made by the Custodian to the Trust pursuant
to this Agreement.

 

10.2VAT Invoice: If VAT is properly chargeable on any supplies made by the
Custodian to the Trust pursuant to this Agreement, the Custodian shall provide a
valid VAT invoice to the Trust.

 

11.SCOPE OF RESPONSIBILITY

 

11.1Exclusion of Liability: The Custodian will use reasonable care in the
performance of its duties under this Agreement and will only be responsible for
any loss or damage suffered as a direct result of any negligence, fraud or
wilful default on its part in the performance of its duties, and in which case
its liability will not exceed the market value of the Bullion lost or damaged at
the time such negligence, fraud or wilful default is discovered by the
Custodian, provided that the Custodian notifies the Trust and the Trustee
promptly after any discovery of such lost or damaged Bullion. If the Custodian
delivers from the Unallocated Account Bullion that is not of the weight the
Custodian has represented to the Trustee, recovery by the Trustee, to the extent
such recovery is otherwise allowed, shall not be barred by any delay in
asserting a claim because of the failure to discover such loss or damage
regardless of whether such loss or damage could or should have been discovered.

 

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11.2No Duty or Obligation: The Custodian is under no duty or obligation to make
or take any special arrangements or precautions beyond those required by the
Rules or as specifically set forth in this Agreement.

 

11.3Insurance: The Custodian (or one of its Affiliates) shall make such
insurance arrangements from time to time in connection with the Custodian’s
custodial obligations under this Agreement as the Custodian considers
appropriate and will be responsible for all costs, fees and expenses (including
any relevant taxes) in relation to such insurance policy or policies. Upon
reasonable prior written notice, in connection with the preparation of a
registration statement under the United States Securities Act of 1933, as
amended, covering any Shares, the Custodian will allow its insurance to be
reviewed by the Trustee and by the Sponsor. The Custodian also will allow the
Trustee and the Sponsor to review its insurance in connection with any amendment
to that initial registration statement and from time to time, in each case upon
reasonable prior written notice from the Trustee or the Sponsor. Any permission
to review the Custodian’s insurance is limited to the term of this Agreement and
is conditioned on the reviewing party executing a form of confidentiality
agreement provided by the Custodian, or if the confidentiality agreement is
already in force, acknowledging that the review is subject thereto.

 

11.4Force Majeure: The Custodian shall not be liable for any delay in
performance, or for the non-performance of any of its obligations under this
Agreement by reason of any cause beyond the Custodian’s reasonable control. This
includes any act of God or war or terrorism or any breakdown, malfunction or
failure of transmission, communication or computer facilities, industrial
action, acts and regulations of any governmental or supra national bodies or
authorities or regulatory or self-regulatory organization or failure of any such
body, authority or organization, for any reason, to perform its obligations;
provided, however, that the Custodian agrees to use reasonable efforts to assist
the Trustee in finding a replacement custodian (including, but not limited to,
agreeing to an assignment of its rights and obligations hereunder) should any
event described in this clause 11.4 so prevent the Custodian from performing its
obligations.

 

11.5Indemnity: The Trustee, solely from and to the extent of the assets of the
Trust, shall indemnify and keep indemnified the Custodian (on an after tax
basis) on demand against all costs and expenses, damages, liabilities and losses
(other than VAT, which is addressed in clause 10.1, and the expenses assumed by
the Sponsor under its agreement with the Custodian referenced in clause 9.2)
which the Custodian may suffer or incur, directly or indirectly in connection
with this Agreement except to the extent that such sums are due directly to the
negligence, wilful default or fraud of the Custodian.

 

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11.6Third Parties: Except with respect to the Trust, which shall be considered a
beneficiary of this entire Agreement, and the Sponsor, which shall be a
beneficiary (as applicable) of clauses 2.6, 3.3, 4.3 and 11.3, the Custodian
does not owe any duty or obligation or have any liability towards any person who
is not a party to this Agreement. Except as set forth in this clause 11.6, this
Agreement does not confer a benefit on any person who is not a party to it. The
parties to this Agreement do not intend that any term of this Agreement shall be
enforceable by any person who is not a party to it and do intend that the
Contracts (Rights of Third Parties) 1999 Act shall not apply to this Agreement,
provided that the Sponsor may enforce its rights under clauses 2.6, 3.3, 4.3 and
11.3. Nothing in this paragraph is intended to limit the obligations hereunder
of any successor Trustee of the Trust or to limit the right of any successor
Trustee of the Trust to enforce the Custodian’s obligations hereunder.

 

12.TERM AND TERMINATION

 

12.1Method: Subject to clause 12.2, either the Trustee or the Custodian may
terminate this Agreement for any reason including if the Custodian ceases to
offer the services contemplated by this Agreement to its clients or proposes to
withdraw from the Bullion business, by giving not less than 90 days’ written
notice to the other party. Any such notice given by the Trustee must specify:

 

(1)the date on which the termination will take effect;

 

(2)the person to whom the Bullion is to be made available; and

 

(3)all other necessary arrangements for the redelivery of the Bullion to the
order of the Trustee.

 

12.2Term: The term of this Agreement shall be until December 31, 2021 and will
continue thereafter on the same terms until amended in writing or unless
terminated by the parties in accordance with this clause 12. This Agreement may
be terminated immediately upon written notice as follows:

 

(1)by the Trustee, if the Custodian ceases to offer the services contemplated by
this Agreement to its clients or proposes to withdraw from the Bullion business;

 

(2)by the Trustee or the Custodian, if it becomes unlawful for the Custodian to
be a party to this Agreement or to offer its services to the Trust on the terms
contemplated by this Agreement or if it becomes unlawful for the Trustee or the
Trust to receive such services or for the Trustee to be a party to this
Agreement;

 

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(3)by the Custodian, if there is any event which, in the Custodian’s reasonable
view, indicates the Trust’s insolvency or impending insolvency;

 

(4)by the Trustee, if there is any event which, in the Trustee’s sole view,
indicates the Custodian’s insolvency or impending insolvency;

 

(5)by the Trustee, if the Trust is to be terminated; or

 

(6)by the Trustee or by the Custodian, if the Allocated Account Agreement ceases
to be in full force and effect at any time.

 

12.3Change in Trustee: If there is any change in the identity of the Trustee in
accordance with the Trust Agreement, then the Custodian, the Trustee and the
Trust shall execute such documents and shall take such actions as the new
Trustee and the outgoing Trustee may reasonably require for the purpose of
vesting in the new Trustee the rights and obligations of the outgoing Trustee,
and releasing the outgoing Trustee from its future obligations under this
Agreement.

 

12.4Redelivery Arrangements: If the Trustee does not make arrangements
acceptable to the Custodian for the redelivery of the Bullion the Custodian may
continue to store the Bullion, in which case the Custodian will continue to
charge the fees and expenses payable under clause 10 of the Allocated Account
Agreement. If the Trustee has not made arrangements acceptable to the Custodian
for the redelivery of the Bullion within six months of the date specified in the
termination notice as the date on which the termination will take effect, the
Custodian will be entitled to sell the Bullion and account to the Trustee for
the proceeds.

 

12.5Existing Rights: Termination shall not affect rights and obligations then
outstanding under this Agreement which shall continue to be governed by this
Agreement until all obligations have been fully performed.

 

13.NOTICES

 

13.1Transfer Notices: Subject to clause 5.1, any Transfer Notice shall be in
writing in English and shall be marked “Urgent – This Requires Immediate
Attention” and signed (unless sent via email) by or on behalf of the party
giving it (or its duly authorized representative). Any Transfer Notice shall be
sent either by email or such other authenticated method as may, from time to
time, be agreed between the parties. Any Transfer Notice shall be deemed to have
been given, made or served upon actual receipt by the recipient.

 

13.2General Notices: Any General Notice shall be in writing in English and shall
be marked “Urgent – This Requires Immediate Attention” and shall be signed
(unless sent via email) by or on behalf of the party giving it (or its duly
authorized representative). Any General Notice shall be given, made or served by
sending the same by pre-paid registered post (first class if inland, first class
airmail if overseas) or email. Any General Notice sent by pre-paid registered
post shall be deemed to have been received three Business Days in the case of
inland post or seven Business Days in the case of overseas post after dispatch.
Any General Notice sent by email shall be deemed to have been given, made or
served upon actual receipt by the recipient.

 

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13.3The addresses and numbers of the parties for the purposes of clauses 13.1
and 13.2 are:

 

The Custodian: JPMorgan Chase Bank, N.A.   25 Bank Street, Canary Wharf, E14 5JP
  Attention: John-Paul Crocker– Commodities   Email:
john-paul.a.crocker@jpmorgan.com     The Trustee: The Bank of New York Mellon  
2 Hanson Place   Brooklyn, New York 11217   Attention: Chris Yedreyeski   Email:
etfservicescom@bnymellon.com

  

or such other address as shall have been notified (in accordance with this
clause) to the other party hereto. The address and numbers of the Sponsor for
purposes of receiving notices under this Agreement is:

 

The Sponsor: Aberdeen Standard ETFs Sponsor LLC   c/o Aberdeen Standard
Investments Inc.   1735 Market Street, 32nd Floor   Philadelphia, PA 19103  
Attention: Legal   Email: legal.us@aberdeenstandard.com     With a copy to:    
    Aberdeen Standard ETFs Sponsor LLC   c/o Aberdeen Standard Investments Inc.
  712 Fifth Avenue, 49th Floor   New York, NY 10019   Attention: Adam Rezak  
Email: adam.rezak@aberdeenstandard.com

 

13.4Recording of Calls: Each of the Custodian and the Trustee may record
telephone conversations without use of a warning tone. Such records will be the
recording party’s sole property and accepted by the other parties hereto as
evidence of the orders or instructions given.

 

14.GENERAL

 

14.1Role of Trustee: The Trustee is a party to this Agreement solely in its
capacity as Trustee for the Shareholders and accordingly (i) the Trustee shall
only be liable to satisfy any obligations under this Agreement, including any
obligations or liabilities arising in connection with any default by the Trustee
under this Agreement, to the extent of the assets held from time to time by the
Trustee as trustee of the trusts constituted by the Trust Agreement (the “Trust
Assets”) to the extent authorized by the Trust Agreement and (ii) no recourse
shall be had to (a) any assets other than the Trust Assets, including any of the
assets held by the Trustee as trustee, co-trustee or nominee of a trust other
than the trusts constituted by the Trust Agreement, as owner in its individual
capacity or in any way other than as trustee of the trusts constituted by the
Trust Agreement; or (b) the Trustee for any assets that have been distributed by
the Trustee to the beneficiaries of the trusts constituted by the Trust
Agreement.

 

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14.2No Advice: The Custodian’s duties and obligations under this Agreement do
not include providing the other party hereto with investment advice. In asking
the Custodian to open and maintain the Unallocated Account, the Trustee
acknowledges that it is acting pursuant to the Trust Agreement and the Custodian
shall not owe the Trustee or the Trust any duty to exercise any judgment on
their behalf as to the merits or suitability of any deposits into, or
withdrawals from, the Unallocated Account.

 

14.3Rights and Remedies: The Custodian hereby waives any right it has or may
hereafter acquire to combine, consolidate or merge the Metal Accounts with any
other account of the Trust or the Trustee or to set off any liabilities of the
Trust or of the Trustee to the Custodian and agrees that it may not set off,
transfer or combine or withhold payment of any sum standing to the credit or to
be credited to the Metal Accounts in or towards or conditionally upon
satisfaction of any liabilities to it of the Trust or the Trustee. Subject
thereto, the Custodian’s rights under this Agreement are in addition to, and
independent of, any other rights which the Custodian may have at any time in
relation to the Bullion.

 

14.4Assignment: This Agreement is for the benefit of and binding upon the
parties hereto and their respective successors and assigns. Save as expressly
provided herein, no party may assign, transfer or encumber, or purport to
assign, transfer or encumber any right or obligation under this Agreement unless
the other party otherwise agrees in writing except that consent is not required
where the Custodian assigns, transfers or encumbers any right or obligation
under this Agreement to an Affiliate upon notice to the Trustee. This clause
shall not restrict the Custodian’s power to merge or consolidate with any party,
or to dispose of all or part of its custody business and further provided that
this clause shall not restrict the Trustee from assigning its rights hereunder
to a Shareholder to the extent required for the Trust to fulfill its obligations
under the Trust Agreement.

 

14.5Amendments: Any amendment to this Agreement must be agreed in writing and be
signed by all of the parties hereto. Unless otherwise agreed, an amendment will
not affect any legal rights or obligations which may already have arisen.

 

14.6Partial Invalidity: If any of the clauses (or part of a clause) of this
Agreement becomes invalid or unenforceable in any way under the Rules or any
law, the validity of the remaining clauses (or part of a clause) will not in any
way be affected or impaired.

 

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14.7Entire Agreement: This document represents the entire agreement between the
parties in respect of its subject matter save for any agreements made with
fraudulent intent, and excludes any prior agreements or representations. This
Agreement supersedes and replaces any prior existing agreement between the
parties hereto relating to the same subject matter.

 

14.8Counterparts: This Agreement may be executed in any number of counterparts
each of which when executed and delivered is an original, but all the
counterparts together constitute the same agreement.

 

14.9Business Days: If any obligation falls due to be performed on a day which is
not a New York Business Day or a Business Day, as the case may be, then the
relevant obligations shall be performed on the next succeeding Business Day.

 

14.10Prior Agreements: The Custodian or any member of the JP Morgan group of
companies (the “JP Morgan Group”) may trade in Shares for its own account as
principal, may have underwritten or may underwrite an issue of Shares or,
together with any such entities’ directors, officers or employees, may have a
long or short position in Shares or in any related security or instrument.
Brokerage or other fees may be earned by any member of the JP Morgan Group or
persons associated with them in respect of any business transacted by them in
all or any of the aforementioned securities or instruments. This Agreement
supersedes and replaces any prior existing agreement between the parties hereto
relating to the same subject matter.

 

14.11U.S. Resolution Stay. To the extent applicable to the assets held in
custody under this Agreement, the parties acknowledge and agree that (i) to the
extent that prior to the date hereof both parties have adhered to the 2018 ISDA
U.S. Resolution Stay Protocol (the “Protocol”), the terms of the Protocol are
incorporated into and form a part of this Agreement, and for such purposes this
Agreement shall be deemed a Protocol Covered Agreement, we (“J.P. Morgan”) shall
be deemed a Regulated Entity and you shall be deemed an Adhering Party; (ii) to
the extent that prior to the date hereof the parties have executed a separate
agreement the effect of which is to amend the qualified financial contracts
between them to conform with the requirements of the QFC Stay Rules (the
“Bilateral Agreement”), the terms of the Bilateral Agreement are incorporated
into and form a part of this Agreement, and for such purposes this Agreement
shall be deemed a Covered Agreement, J.P. Morgan shall be deemed a Covered
Entity and you shall be deemed a Counterparty Entity; or (iii) if clause (i) and
clause (ii) do not apply, the terms of Section 1 and Section 2 and the related
defined terms (together, the “Bilateral Terms”) of the form of bilateral
template entitled “Full-Length Omnibus (for use between U.S. G-SIBs and
Corporate Groups)” published by ISDA on November 2, 2018 (currently available on
the 2018 ISDA U.S. Resolution Stay Protocol page at www.isda.org and, a copy of
which is available upon request), the effect of which is to amend the qualified
financial contracts between the parties thereto to conform with the requirements
of the QFC Stay Rules, are hereby incorporated into and form a part of this
Agreement, and for such purposes this Agreement shall be deemed a “Covered
Agreement,” J.P. Morgan shall be deemed a “Covered Entity” and you shall be
deemed a “Counterparty Entity.” In the event that, after the date of this
Agreement, both parties hereto become adhering parties to the Protocol, the
terms of the Protocol will replace the terms of this paragraph. In the event of
any inconsistencies between this Agreement and the terms of the Protocol, the
Bilateral Agreement or the Bilateral Terms (each, the “QFC Stay Terms”), as
applicable, the QFC Stay Terms will govern. Terms used in this paragraph without
definition shall have the meanings assigned to them under the QFC Stay Rules.
For purposes of this paragraph, references to “this Agreement” include any
related credit enhancements entered into between the parties or provided by one
to the other. In addition, the parties agree that the terms of this paragraph
shall be incorporated into any related covered affiliate credit enhancements,
with all references to J.P. Morgan replaced by references to the covered
affiliate support provider.

 

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“QFC Stay Rules” means the regulations codified at 12 C.F.R. 252.2, 252.81–8, 12
C.F.R. 382.1-7 and 12 C.F.R. 47.1-8, which, subject to limited exceptions,
require an express recognition of the stay-and-transfer powers of the FDIC under
the Federal Deposit Insurance Act and the Orderly Liquidation Authority under
Title II of the Dodd Frank Wall Street Reform and Consumer Protection Act and
the override of default rights related directly or indirectly to the entry of an
affiliate into certain insolvency proceedings and any restrictions on the
transfer of any covered affiliate credit enhancements.

 

15.GOVERNING LAW AND JURISDICTION

 

15.1Governing Law: This Agreement is governed by, and will be construed in
accordance with, English law.

 

15.2Jurisdiction: The Trustee and the Custodian agree that the courts of the
State of New York, in the United States of America, and the United States
federal court located in the Borough of Manhattan in such state are to have
jurisdiction to settle any disputes or claims which may arise out of or in
connection with this Agreement and, for these purposes the Trustee and the
Custodian irrevocably submits to the non-exclusive jurisdiction of such courts,
waive any claim of forum non conveniens and any objection to laying of venue,
and further waive any personal service.

 

15.4Waiver of Immunity: To the extent that the Trustee may in any jurisdiction
claim for it as Trustee, the Trust or its assets any immunity from suit,
judgment, enforcement or otherwise howsoever, the Trustee agrees not to claim
and irrevocably waives any such immunity which it would otherwise be entitled to
(whether on grounds of sovereignty or otherwise) to the full extent permitted by
the laws of such jurisdiction.

 

15.5Service of Process: Process by which any proceedings are begun may be served
on a party by being delivered to the party’s specified below. This does not
affect any right to serve process in another manner permitted by law.

 

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Custodian’s Address for service of process:

 

JPMorgan Chase Bank, N.A.

25 Bank Street, Canary Wharf, E14 5JP, London

Attention: Peter Smith – Global Commodities

 

Trustee’s Address for service of process:

 

BNY Mellon

1 Canada Square 

London E14 5AL, United Kingdom

Attention: Legal Department

 

With a copy to:

 

The Bank of New York Mellon

2 Hanson Place

Brooklyn, New York 11217

Attention: ETF Services

 

With a copy to:

 

Aberdeen Standard Investments ETFs Sponsor LLC

712 Fifth Avenue, 49th Floor

New York, NY 10019

Attention: Adam Rezak 

Email: adam.rezak@aberdeenstandard.com

 

AND

 

1735 Market Street, 32nd Floor

Philadelphia, PA 19103

Attention: Legal US

Email: legal.us@aberdeenstandard.com

 

[Signature Page Follows]

 

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EXECUTED by the parties:

 

Signed on behalf of and for
JPMORGAN CHASE BANK, N.A. by

 

Signature:  /s/ Peter L. Smith   Name: Peter L. Smith   Title: Managing Director
 

 

Signed on behalf of and for

The Bank of New York Mellon, solely in its capacity as trustee of the Aberdeen
Standard Silver ETF Trust and not individually, by

 

Signature:  /s/ Thomas Porrazzo   Name: Thomas Porrazzo   Title: Managing
Director  

 

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