Exhibit 10.3


 


VALUATION SERVICES AGREEMENT


 


THIS AGREEMENT made and entered into as of the · day of ·, 2009


 


BETWEEN:


 


SPROTT ASSET MANAGEMENT LP,


a limited partnership
formed under the laws of the Province of Ontario


 


(hereinafter referred to as the “Manager”)


 


OF THE FIRST PART


 


- and -


 


RBC DEXIA INVESTOR SERVICES TRUST,


a trust company incorporated under the federal laws
of Canada


 


(hereinafter referred to as the “Valuation Agent”)


 


OF
THE SECOND PART


 


WHEREAS Sprott
Physical Gold Trust (the “Trust”) is a closed-end
mutual fund trust established under the laws of the Province of Ontario
pursuant to a trust agreement dated as of August 28, 2009, as amended and
restated as of December 7, 2009 (the “Trust Agreement”);


 


AND
WHEREAS pursuant to the Trust Agreement, RBC Dexia Investor
Services Trust and the Manager were appointed as the trustee and the manager of
the Trust, respectively;


 


AND WHEREAS pursuant to the Trust
Agreement, the Manager has the full authority and exclusive power to manage and
direct the business and affairs of the Trust including, without limitation, to
provide the Trust with all necessary investment management services and all
management and administrative services, and to provide such other services and
facilities as described in the Trust Agreement;


 


AND WHEREAS pursuant
to the Trust Agreement, the Manager has the ultimate responsibility to
calculate the Net Asset Value of the Trust, the Net Asset Value per Unit, the Class Net
Asset Value and the Class Net Asset Value per Unit, and to determine the
Net Income and the Net Realized Capital Gains for the Trust (as all such terms
are hereinafter defined) and, in conjunction therewith, may appoint a service
provider to perform some or all of such calculations and determinations on
behalf of the Trust;


 


AND WHEREAS the Manager wishes to
retain the Valuation Agent, in its capacity as a service provider to the Trust,
to provide certain valuation services (collectively, the “Services”)
for the Trust, subject to, and in accordance with, the terms and conditions
hereinafter set forth with effect from the date first written above;


 


AND WHEREAS the Valuation Agent, in its
capacity as a service provider, has agreed to provide such Services for the
Trust, subject to, and in accordance with, the terms and conditions of this
Agreement.


 

















 


NOW THEREFORE in consideration of the
mutual covenants and agreements contained herein and for other good and
valuable consideration (the receipt and sufficiency of which is hereby
acknowledged) the parties hereto agree as follows:


 


1.             Definitions


 


Unless
otherwise defined in this Agreement, the following terms shall have the meaning
as set out in the Trust Agreement:


 


(a)           “Affiliate”
has the meaning ascribed thereto in the Securities Act (Ontario), as amended from time to time;


 


(b)           “Agreement”
means this valuation services agreement dated as of the day and year first
above written as the same may be amended, restated or supplemented from time to
time and “herein”, “hereof”, “hereby”, “hereunder” and similar expressions refer to
this Agreement and include every instrument supplemental or ancillary to this
Agreement and, except where the context otherwise requires, not to any
particular article, section or subsection thereof;


 


(c)           “Applicable
Laws” means, unless the context otherwise dictates, any applicable
statute of Canada or of a province or territory of Canada or any applicable
statute of the United States of America or of a state or territory of the
United States of America or any applicable regulations, orders, instruments,
policies or other laws made under statutory authority by any governmental or
regulatory body or agency having jurisdiction over the Trust including, but not
limited to, Securities Legislation and the Tax Act;


 


(d)           “Business Day”
means any day on which the New York Stock Exchange Arca or the Toronto Stock
Exchange are open for trading;


 


(e)           “Class Expenses”
in respect of any particular class or series of a class of Units means the
expenses of the Trust (including Management Fees) that are allocated only to
that class or series of a class;


 


(f)            “Class Net
Asset Value” in respect of any particular class or series of a class
of Units is the portion of the Net Asset Value of the Trust attributed to such
class or series of a class determined in accordance with  Section 3.1
and Section 3.2 hereof;


 


(g)           “Class Net
Asset Value per Unit” in respect of any particular class or series
of a class of Units is the portion of the Class Net Asset Value of the
Trust attributed to each Unit of such class or series of a class determined in
accordance with  Section 3.1 and Section 3.2
hereof;


 


(h)           “Common
Expenses” means those expenses of the Trust other than Class Expenses;


 


(i)            “Directions”
means all directions, authorizations, notices, requests and instructions given
in accordance with Section 5 by any director, officer, employee or other
representative authorized to act on behalf of the Manager or any Third Party
Valuation Agent, as the case may be;


 


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(j)            “Distribution
Date” has the meaning ascribed thereto in Section 4.1 hereof;


 


(k)           “Fiscal Year” means the fiscal year of
the Trust ending on the last day of December in each year or such other
date as may be determined from time to time by the Manager;


 


(l)            “Gold Bullion”
means physical gold bullion in London Good Delivery bar form that is
unencumbered, fully allocated and stored at the Gold Custodian by or on behalf
of the Trust;


 


(m)          “Gold Custodian” means the Royal Canadian
Mint, acting as the custodian of the Gold Bullion, and any sub-custodians
appointed by the Royal Canadian Mint, in accordance with the Storage Agreement,
or any successor custodian of the Gold Bullion appointed in accordance with the
Trust Agreement or pursuant to a separate written custodial agreement;


 


(n)           “IFRS”
means International Financial Reporting Standards as issued by the
International Accounting Standards Board;


 


(o)           “Indemnified
Party” has the meaning ascribed thereto in Section 7.4 hereof;


 


(p)           “Management Agreement” means the management agreement between the Manager and the Trust to be
dated on or about the date of filing the (final) prospectus and the
registration statement with the applicable Securities Authorities, as the same
may be amended, restated or supplemented from time to time;


 


(q)           “Management
Fee” means the monthly management fee payable to the Manager
pursuant to the Management Agreement;


 


(r)            “Manager” means Sprott Asset Management LP,
acting as the manager of the Trust, or any successor manager appointed in
accordance with the Trust Agreement and subject to the Management Agreement;


 


(s)           “Net Asset
Value of the Trust” is the amount determined from time to time in
accordance with Section 3.1 hereof;


 


(t)            “Net Asset
Value per Unit” is the amount determined from time to time in accordance
with Section 3.1 hereof;


 


(u)           “Net Change
in Non-Portfolio Assets” on a Valuation Date means:


 


(i)            the aggregate of all income accrued by the Trust as
of that Valuation Date, including cash dividends and distributions, interest
and compensation since the last calculation of Class Net Asset Value or Class Net
Asset Value per Unit, as the case may be; minus


 


(ii)           the Common Expenses to be
accrued by the Trust as of that Valuation Date which have been accrued since
the last calculation of Class Net Asset Value or Class Net Asset
Value per Unit, as the case may be; plus or minus


 


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(iii)          any change in the value of
any non-portfolio assets or liabilities stated in any foreign currency accrued
on that Valuation Date since the last calculation of Class Net Asset Value
or Class Net Asset Value per Unit, as the case may be, including, without
limitation, cash, accrued dividends or interest and any receivables or
payables; plus or minus


 


(iv)          any other item
accrued on that Valuation Date determined by the Manager to be relevant in
determining the Net Change in Non-Portfolio Assets;


 


(v)           “Net Income”  has the meaning ascribed thereto in Subsection 4.2(a) hereof;


 


(w)          “Net Realized
Capital Gains”  has the
meaning ascribed thereto in Subsection 4.2(b) hereof;


 


(x)            “Person”
means any individual, partnership, limited partnership, joint venture,
syndicate, sole proprietorship, company or corporation with or without share
capital, unincorporated association, trust, trustee, executor, administrator or
other legal personal representative, regulatory body or agency, government or
governmental agency, authority or entity however designated or constituted;


 


(y)           “Proportionate
Share”, when used to describe (i) an amount to be allocated to
any one class or series of a class of Units, means the total amount to be
allocated to all classes or series of classes of Units multiplied by a
fraction, the numerator of which is the Class Net Asset Value of such
class or series of a class and the denominator of which is the Net Asset Value
of the Trust at such time, and (ii) a Unitholder’s interest in or share of
any amount, means, after an allocation has been made to each class or series of
a class of Units as provided in clause (i), that allocated amount
multiplied by a fraction, the numerator of which is the number of Units of that
class or series of a class registered in the name of that Unitholder and the
denominator of which is the total number of Units of that class or series of a
class then outstanding (if such Unitholder holds Units of more than one class
or series of a class, then such calculation is made in respect of each class or
series of a class of Units and aggregated);


 


(z)            “QEF”
has the meaning ascribed thereto in Section 4.7 hereof;


 


(aa)         “Registrar and Transfer Agent”  means Equity Transfer &
Trust Company, acting as the registrar and
transfer agent of the Units, and appointed by the Manager in accordance with
the Trust Agreement and pursuant to a transfer agent, registrar and disbursing
agent agreement to be dated on or about
the date of filing the (final) prospectus and the registration statement with
the applicable Securities Authorities, as the same may be amended, restated or
supplemented from time to time;


 


(bb)         “Securities Authorities”  means the Ontario Securities
Commission and equivalent securities regulatory authorities in each other
province and territory of Canada, and the United States Securities and Exchange
Commission;


 


(cc)         “Securities
Legislation” means the laws, regulations, rules, requirements and
policies of the Securities Authorities which are in effect from time to time
and applicable to the Trust including, but not limited to National Instrument
81-102 Mutual Funds, National


 


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Instrument 81-106 Investment Fund Continuous
Disclosure, National Instrument 81-107 Independent
Review Committee for Investment Funds and the United States Securities Act of 1933, as amended;


 


(dd)         “Services”
means certain valuation services provided for the Trust by the Valuation Agent,
in its capacity as a service provider to the Trust, subject to, and in
accordance with, the terms and conditions set forth in this Agreement;


 


(ee)         “Storage
Agreement” means the precious metals storage agreement between the Manager, on behalf of the Trust, and the
Gold Custodian, to be dated on or about the date of filing the (final)
prospectus and the registration statement of the Trust with the applicable
Securities Authorities, as the same may be amended, restated or supplemented
from time to time;


 


(ff)           “Tax Act”  means the  Income Tax Act (Canada) and the regulations, rules, and
policies promulgated thereunder, as amended from time to time;


 


(gg)         “Third Party
Data” has the meaning ascribed thereto in Section 3.4 hereof;


 


(hh)         “Third Party
Valuation Agent” means any investment dealers, investment managers
or advisors, consultants, custodians, registrar and transfer agents or other
agents appointed by the Manager from time to time in connection with its responsibilities
hereunder.  The Manager shall, or may, by
a Direction specify that such Third Party Valuation Agent shall direct the
Valuation Agent as to any matters in Sections 3 or 4 or any matter related
thereto, requiring the Manager’s Direction;


 


(ii)           “Trust”  means Sprott
Physical Gold Trust, a
closed-end mutual fund trust established under the laws of the Province of
Ontario and governed by the Trust Agreement;


 


(jj)           “Trust
Agreement” means the trust agreement of the Trust dated as of August 28,
2009, as amended and restated as of December 7, 2009, as the same may be
further amended, restated, supplemented or replaced from time to time;


 


(kk)         “Trust
Property” at any time, means any and all securities, cash (including
free credit balances), property and assets, real and personal, tangible and
intangible, transferred, conveyed or paid to the Trust including, without
limitation:


 


(i)            all funds realized from the
sale of Units;


 


(ii)           Gold Bullion from time to
time delivered to and received by the Trust or held for its account as directed
by the Manager and accepted by the Gold Custodian on behalf of the Trust in
accordance with the Storage Agreement;


 


(iii)          all investments, sums or
property of any type or description (other than the Gold Bullion) from time to
time delivered to and received by the Trust or held for its account as directed
by the Manager and accepted by the Trustee on behalf of the Trust in accordance
with the Trust Agreement;


 


(iv)          any proceeds of disposition
of any of the foregoing property and assets; and


 


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(v)           all income, interest,
profit, gains and accretions and additional rights arising from or accruing to
such foregoing property or such proceeds of disposition;


 


(ll)           “Trustee”  means RBC Dexia
Investor Services Trust, acting as the trustee of the Trust, or any successor
trustee appointed in accordance with the Trust Agreement;


 


(mm)       “Unit”
means a unit of beneficial interest, in any class or series of a class of the
Trust, as presently constituted pursuant to the Trust Agreement as the same may
from time to time hereinafter be constituted, and collectively referred to as
the “Units”;


 


(nn)         “Unitholders”
means Persons whose name appears as a registered holder of one or more Units or
fractions thereof in the register established and maintained by the Registrar
and Transfer Agent appointed by the Manager and “Unitholder”
means any one of them;


 


(oo)         “Valuation
Agent” means RBC Dexia Investor Services Trust, acting as a service
provider to the Trust, and appointed by the Manager in accordance with this
Agreement and the Trust Agreement;


 


(pp)         “Valuation Date”
means each Business Day, unless the Manager determines that the assets of the
Trust should be valued less frequently, either generally or in respect of one
or more specific instances, in which event “Valuation
Date” shall mean such Business Day or Business Days as the Manager
determines; and


 


(qq)         “Valuation
Time” means 4:00 p.m. (Toronto
time) on a Valuation Date or such other time on a Valuation Date as the Valuation
Agent in consultation with the Manager deems appropriate.


 


2.             Appointment of the Valuation Agent


 


2.1           Appointment


 


The Manager hereby retains the Valuation Agent, in
its capacity as a service provider to the Trust, and the Valuation Agent hereby
accepts such retainer, for the purpose of providing the Services for the Trust,
subject to, and in accordance with, the terms and conditions set forth in this
Agreement.


 


2.2           Authority
of the Manager


 


The
Manager hereby represents, warrants and confirms to the Valuation Agent that it
has the power and authority to enter into this Agreement, to retain the
Valuation Agent to provide the Services to the Trust, and to otherwise perform
its obligations hereunder, and the Manager has obtained all authorizations and
approvals required of the Manager for the due execution, delivery and
performance by the Manager of this Agreement and the engagement of the
Valuation Agent to provide the Services hereunder.


 


2.3           Authority of the Valuation Agent


 


The
Valuation Agent hereby represents, warrants and confirms to the Manager that it
has the power and authority to enter into this Agreement and to perform its
obligations hereunder, and the Valuation Agent has obtained all authorizations
and approvals required of the Valuation Agent for the due execution, delivery
and performance by the Valuation Agent of this Agreement.


 


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3.             Determination
of Net Asset Value


 


3.1           Calculation
of Net Asset Value of the Trust and Net Asset Value per Unit


 


Pursuant
to the Trust Agreement, the Net Asset Value of the Trust shall be determined
for the purposes of subscriptions and redemptions as at the Valuation Time on
each Valuation Date in United States dollars. 
The Net Asset Value of the Trust determined on the last Valuation Date
of each year shall include all income, Common Expenses, Class Expenses or
any other items to be accrued to December 31st of each year
and since the last calculation of the Net Asset Value per Unit or the Class Net
Asset Value per Unit for the purpose of the distribution of Net Income and Net
Realized Capital Gains of the Trust to Unitholders.  The “Net Asset Value of the
Trust” as at the Valuation Time on each Valuation Date shall be the
amount obtained by deducting from the aggregate fair market value of the assets
of the Trust as of such Valuation Date an amount equal to the fair value of the
liabilities of the Trust (excluding all liabilities represented by outstanding
Units) as of such Valuation Date.  The “Net Asset
Value per Unit” shall be determined by dividing the Net Asset
Value of the Trust on a Valuation Date by the total number of Units then
outstanding on such Valuation Date. 
Subject to Directions from the Manager as required, the Net Asset Value
of the Trust as at the Valuation Time on a Valuation Date shall be determined
by the Valuation Agent in accordance with the following:


 


(a)           The assets of the Trust
shall be deemed to include the following property:


 


(i)            all Gold Bullion owned by or
contracted for the Trust;


 


(ii)           all cash on hand or on
deposit, including any interest accrued thereon adjusted for accruals deriving
from trades executed but not yet settled;


 


(iii)          all bills, notes and
accounts receivable;


 


(iv)          all interest accrued on any
interest-bearing securities owned by the Trust other than interest, the payment
of which is in default; and


 


(v)           prepaid expenses.


 


(b)           The market value of the
assets of the Trust shall be determined as follows:


 


(i)            the value of Gold
Bullion shall be its market value based on the price provided by a widely
recognized pricing service as directed by the Manager and, if such service is
not available, such Gold Bullion shall be valued at a price provided by another
pricing service as determined by the Manager in consultation with the Valuation
Agent;


 


(ii)           the value of any
cash on hand or on deposit, bills, demand notes, accounts receivable, prepaid
expenses, and interest accrued and not yet received, shall be deemed to be the
full amount thereof unless the Valuation Agent shall have determined that any
such deposit, bill, demand note, account receivable, prepaid expense or
interest is not worth the full amount thereof, in which event the value thereof
shall be deemed to be such value as the Valuation Agent in consultation with
the Manager shall determine to be the fair value thereof;


 


(iii)          short-term
investments including notes and money market instruments shall be valued at
cost plus accrued interest;


 


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(iv)          the value of any
security or other property for which no price quotations are available or, in
the opinion of the Manager, to which the above valuation principles cannot or
should not be applied, shall be the fair value thereof determined from time to
time in such manner as the Valuation Agent in consultation with the Manager
shall from time to time provide; and


 


(v)           the value of all
assets and liabilities of the Trust valued in terms of a currency other than
the currency used to calculate the Net Asset Value of the Trust shall be
converted to the currency used to calculate the Net Asset Value of the Trust by
applying the rate of exchange obtained from the best available sources to the Valuation
Agent as agreed upon by the Manager including, but not limited to, the Trustee
or any of its Affiliates.


 


(c)           The liabilities of the Trust shall be calculated on a
fair value basis and shall be deemed to include the following:


 


(i)            all bills, notes and
accounts payable;


 


(ii)           all fees (including
Management Fees) and administrative and operating expenses payable and/or
accrued by the Trust;


 


(iii)          all contractual obligations
for the payment of money or property, including distributions of Net Income and
Net Realized Capital Gains, if any, declared, accrued or credited to the Unitholders
but not yet paid on the day before the Valuation Date as of which the Net Asset
Value of the Trust is being determined;


 


(iv)          all allowances authorized or
approved by the Manager or the Trustee for taxes or contingencies; and


 


(v)           all other liabilities of the
Trust of whatsoever kind and nature, except liabilities represented by
outstanding Units.


 


(d)           For the
purposes of determining the market value of any security or property pursuant
to Subsection 3.1(b) to which, in the opinion of the Valuation Agent in
consultation with the Manager, the above valuation principles cannot be applied
(because no price or yield equivalent quotations are available as provided
above, or the current pricing option is not appropriate, or for any other
reason), shall be the fair value as determined in such manner by the Valuation
Agent in consultation with the Manager and generally adopted by the marketplace
from time to time, provided that any change to the standard pricing principles
as set out above shall require prior consultation and written agreement with the
Manager. For greater certainty, fair valuing an investment comprising the Trust
Property may be appropriate if: (i) market quotations do not accurately reflect
the fair value of an investment; (ii) an investment’s value has been materially
affected by events occurring after the close of the exchange or market on which
the investment is principally traded; (iii) a trading halt closes an exchange
or market early; or (iv) other events result in an exchange or market delaying
its normal close.


 


(e)            For the purposes of determining the value of Gold Bullion,
the Manager relies solely on weights provided to the Manager by third
parties.  The Manager, the Trustee or the
Valuation Agent shall not be required to make any investigation or inquiry as
to the accuracy or validity of such weights.


 


(f)            Portfolio transactions (investment purchases and sales) will
be reflected in the first computation of the Net Asset Value of the Trust made
after the date on which the transaction becomes binding.


 


(g)           The Net Asset Value of the Trust and Net Asset Value per
Unit on the first Business Day following a Valuation Date shall be deemed to be
equal to the Net Asset Value of the Trust (or per Unit, as the case may be) on
such Valuation Date after payment of all fees, including Management Fees, and
after processing of all subscriptions and redemptions of Units in respect of
such Valuation Date.


 


(h)           The Net Asset
Value of the Trust and the Net Asset Value per Unit determined by the Valuation
Agent in accordance with the provisions of this section shall be conclusive and binding on all Unitholders.


 


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(i)            The Manager and any investment manager retained by the
Manager as a Third Party Valuation Agent may determine such other rules regarding
the calculation of the Net Asset Value of the Trust and the Net Asset Value per
Unit which they deem necessary from time to time, which rules may deviate
from IFRS, and the Manager or such investment manager shall direct the
Valuation Agent on a timely basis.


 


3.2           Calculation of Class Net
Asset Value and Class Net Asset Value per Unit


 


(a)           The Net Asset Value for a
particular class or series of a class of Units (the “Class Net
Asset Value”) as at the Valuation Time on a Valuation Date shall be
determined for the purposes of subscriptions and redemptions in accordance with
the following calculation:


 


(i)            the Class Net Asset
Value last calculated for that class or series of a class; plus


 


(ii)           the increase in the assets
attributable to that class or series of a class as a result of the issue of
Units of that class or series of a class or the redesignation of Units into
that class or series of a class since the last calculation; minus


 


(iii)          the decrease in the assets
attributable to that class or series of a class as a result of the redemption
of Units of that class or series of a class or the redesignation of Units out
of that class or series of a class since the last calculation; plus or minus


 


(iv)          the Proportionate Share of
the Net Change in Non-Portfolio Assets attributable to that class or series of
a class since the last calculation; plus or minus


 


(v)           the Proportionate
Share of market appreciation or depreciation of the portfolio assets
attributable to that class or series of a class since the last calculation;
minus


 


(vi)          the Proportionate Share of
the Common Expenses allocated to that class or series of a class since the last
calculation; minus


 


(vii)         any Class Expenses
allocated to that class or series of a class since the last calculation.


 


(b)           A Unit of a class or series of a class of the Trust
being issued or a Unit that has been redesignated as a part of that class or
series of a class shall be deemed to become outstanding as of the next
calculation of the applicable Class Net Asset Value immediately following
the Valuation Date at which the applicable Class Net Asset Value per Unit
that is the issue price or redesignation basis of such Unit is determined and
the issue price received or receivable for the issuance of the Unit shall then
be deemed to be an asset of the Trust attributable to the applicable class or
series of a class.


 


(c)           A Unit of a class or series of a class of the Trust
being redeemed or a Unit that has been redesignated as no longer being a part
of that class or series of a class shall be deemed to remain outstanding as
part of that class or series of a class until immediately following the
Valuation Date as of which the applicable Class Net Asset Value per Unit
that is the redemption price or redesignation basis of such Unit is determined;
thereafter, the redemption price of the Unit being redeemed, until paid, shall
be deemed to be a liability of the Trust attributable to the applicable class
or series of a class and the Unit which has


 


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been redesignated will be deemed to be outstanding as a part of the
class or series of a class into which it has been redesignated.


 


(d)           On any Valuation Date that a distribution is paid to
Unitholders of a class or series of a class of Units, a second Class Net
Asset Value shall be calculated for that class or series of a class, which
shall be equal to the first Class Net Asset Value calculated on that
Valuation Date minus the amount of the distribution.  For greater certainty, the second Class Net
Asset Value shall be used for determining the Class Net Asset Value per
Unit on such Valuation Date for purposes of determining the issue price and
redemption price for Units on such Valuation Date, as well as the redesignation
basis for Units being redesignated into or out of such class or series of a
class, and Units redeemed or redesignated out of that class or series of a
class as at such Valuation Date shall participate in such distribution while
Units subscribed for or redesignated into such class or series of a class as at
such Valuation Date shall not.


 


(e)           The Class Net Asset
Value per Unit of a particular class or series of a class of Units as at any
Valuation Date is the quotient obtained by dividing the applicable Class Net
Asset Value as at such Valuation Date by the total number of Units of that
class or series of a class outstanding at such Valuation Date. This calculation
shall be made without taking into account any issuance, redesignation or redemption
of Units of that class or series of a class to be processed by the Trust
immediately after the Valuation Time of such calculation on that Valuation
Date.  The Class Net Asset Value per
Unit for each class or series of a class of Units for the purpose of the issue
of Units or the redemption of Units shall be calculated on each Valuation Date
by or under the authority of the Manager as at the Valuation Time on every
Valuation Date as shall be fixed from time to time by the Manager and the Class Net
Asset Value per Unit so determined for each class or series of a class shall
remain in effect until the Valuation Time as of which the Class Net Asset
Value per Unit for that class or series of a class is next determined.


 


3.3           Suspension of Right of Redemption
and Calculation of Net Asset Value


 


(a)           The Manager, on behalf of
the Trust, may suspend the right of Unitholders to request a redemption of
their Units or postpone the date of delivery or payment of the redemption
proceeds (whether Gold Bullion and/or cash, as the case may be) with the prior
approval of Canadian Securities Authorities having jurisdiction, where
required, for any period during which the Manager determines that conditions
exist which render impractical the sale of assets of the Trust or which impair
the ability of the Manager to determine the Net Asset Value of the Trust and
the Net Asset Value per Unit or the redemption amount for the Units.


 


(b)           In the event of any such
suspension, the Manager shall issue a press release announcing the suspension
and shall advise the Trustee, the Valuation Agent and any other agents
appointed by the Manager, as applicable. 
The suspension shall terminate in any event on the first


 


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Business Day on which the
condition giving rise to the suspension has ceased to exist or when the Manager
has determined that such condition no longer exists, provided that no other
condition under which a suspension is authorized then exists, at which time the
Manager shall issue a press release announcing the termination of the
suspension and shall advise the Trustee, the Valuation Agent and any other agents
appointed by the Manager, as applicable. 
Subject to applicable Securities Legislation, any declaration of
suspension made by the Manager, on behalf of the Trust, shall be conclusive.


 


(c)           During any period in which the right of Unitholders
to request a redemption of their Units for Gold Bullion and/or cash is
suspended pursuant to the Trust Agreement, the Manager, on behalf of the Trust,
shall direct the Valuation Agent to suspend the calculation of the Net Asset
Value of the Trust, the Net Asset Value per Unit, the Class Net Asset
Value and the Class Net Asset Value per Unit for each class or series of a
class of Units.  During any such period
of suspension, the Trust shall not issue or redeem any Units.  The calculation of the Net Asset Value of the
Trust, the Net Asset Value per Unit, the Class Net Asset Value and the Class Net
Asset Value per Unit for each class or series of a class of Units shall resume
in compliance with applicable Securities Legislation or any approval granted by
Canadian Securities Authorities having jurisdiction.  As noted above, in the event of any such
suspension or termination thereof, the Manager shall issue a press release
announcing the suspension or the termination of such suspension, as the case
may be.  Further, the Manager shall
advise the Valuation Agent on a timely basis as to the date of the first
calculation of the Net Asset Value of the Trust, the Net Asset Value per Unit,
the Class Net Asset Value and the Class Net Asset Value per Unit for
each class or series of a class of Units following such termination of the
suspension.


 


3.4           Third Party Data


 


Where,
for the purposes of the foregoing calculation of the Net Asset Value of the
Trust, the Net Asset Value per Unit, the Class Net Asset Value and the Class Net
Asset Value per Unit, and the calculation of any amounts for distribution
purposes hereunder, the Valuation Agent is provided with a value, quotation, or
other information related thereto by a third party (collectively, the “Third Party Data”) including, without limitation, the
Manager or any Third Party Valuation Agent, the Valuation Agent may rely on
such Third Party Data and shall not be required to make any investigation or
inquiry as to the accuracy, completeness or validity of such Third Party Data
unless such data on its face is manifestly incomplete or incorrect.  If such Third Party Data is not available to the Valuation Agent as of a
time reasonably proximate to the Valuation Date, such valuation of the Trust
Property shall be based on an estimate or estimates provided by the Manager or
a Third Party Valuation Agent.  Such
estimate or estimates shall be final and binding and shall be considered to be
the actual value of such Trust Property for the purposes of any distribution,
the Net Asset Value of the Trust, the Net Asset Value per Unit, the Class Net
Asset Value and the Class Net Asset Value per Unit calculations.  The Valuation Agent shall have no
responsibility or liability, whatsoever, for any loss or damage arising out of,
or in connection with, the Valuation Agent’s reliance on, or any failure to
provide, such Third Party Data or any such estimates except as provided in this
section.


 


4.             Determination of
Net Income and Net Realized Capital Gains


 


4.1           Valuation on
Distribution Date


 


As
at the Valuation Time on the last Valuation Date in each Fiscal Year or such
other date as the Manager may, in its sole discretion, determine (a “Distribution Date”), the Valuation Agent,
subject to


 


11

















 


Directions
from the Manager as required, shall, in the manner hereinafter provided,
determine the amount of the Net Income and the Net Realized Capital Gains of
the Trust for the period since the immediately preceding Distribution Date (or
in the case of the first Distribution Date, from the inception date of the
Trust).


 


4.2           Computation of
Net Income and Net Realized Capital Gains


 


The Net
Income and the Net Realized Capital Gains of the Trust shall be computed as of
the Valuation Time on each Distribution Date in accordance with the following:


 


(a)           “Net  Income”
for any taxation year of the Trust shall be the net income for the year
determined pursuant to the provisions of the Tax Act having regard to the
provisions thereof that relate to the calculation of income of a trust, other
than subsection 104(6), and taking into account such adjustments thereto as are
determined by the Valuation Agent; provided, however, that capital gains and
capital losses shall be excluded from the computation of net income.


 


(b)           “Net Realized Capital Gains”
of the Trust for any taxation year of the Trust shall be determined as the
amount, if any, by which the aggregate of the capital gains of the Trust in the
year exceeds:


 


(i)            the aggregate of the capital losses of the Trust in the taxation year; and


 


(ii)           the amount determined by the
Valuation Agent in respect of any unapplied net capital losses for prior
taxation years which the Trust is permitted by the Tax Act to deduct in
computing the taxable income of the Trust for the applicable taxation year and
provided that, in consultation with the Manager, the Net Realized Capital Gains
of the Trust for a taxation year may be calculated without subtracting the full
amount of the net capital losses of the Trust carried forward from previous
taxation years.


 


4.3           Distribution
of Net Income and Net Realized Capital Gains to Unitholders


 


(a)           Commencing with the Fiscal Year ending December 31, 2009, the Manager
intends to cause the Trust to make annual distributions to Unitholders of Net
Income, if any, for each year calculated in accordance with Section 4.2.  Commencing with the Fiscal Year ending December 31,
2009, the Manager also intends to cause the Trust to make annual distributions
to Unitholders of such portion of Net Realized Capital Gains, if any, for each
year as determined in accordance with Section 4.2 hereof. 


 


(b)           Having regard to the present intention of the Manager to allocate,
distribute and make payable to Unitholders all Net Income or Net Realized
Capital Gains so that the Trust will not have any liability for tax under Part I
of the Tax Act in any taxation year, it is the intention of the Manager that
the total amount due and payable pursuant to this Section 4.3 on the last
Distribution Date in any year shall not be less than the amount necessary to
ensure that the Trust will not be liable for income tax under Part I of
the Tax Act for such year after taking into account the Trust’s entitlement to
a capital gains refund, if any.


 


12

















 


(c)           Distributions, if any, of Net Income or Net Realized Capital Gains will
generally be made to Unitholders who were Unitholders of record as of 5:00 p.m.
(Toronto time) on the last Business Day prior to any relevant Distribution
Date.  The amounts to be paid to a
Unitholder shall be the amount of Net Income or Net Realized Capital Gains
determined as described in Section 4.2 and Section 4.3 divided by the
total number of Units outstanding on the Distribution Date multiplied by the
number of Units held by such Unitholder on the applicable Distribution
Date.  Notwithstanding the foregoing, the
Manager may adopt a method of allocating an appropriate proportion of Net
Income and Net Realized Capital Gains to  Unitholders
that redeemed Units during the year and, in any such event, shall advise the
Valuation Agent on a timely basis.


 


(d)           All distributions, if declared and paid, shall be calculated and, if a
cash distribution, paid in United States currency.


 


4.4           Additional
Distributions, Designations, Determinations and Allocations


 


In
addition to any distributions calculated by the Valuation Agent and distributed
by the Trust to Unitholders as described under Section 4.3 hereof, on the
Direction of the Manager, the Valuation Agent shall at such times and in
such manner as directed by the Manager determine such additional distributions
of monies or properties of the Trust including, without restriction, returns of
capital, in such amounts per Unit, payable at such time or times and to
Unitholders of record on such Distribution Date, as from time to time may be
determined by the Manager, and the Valuation Agent shall also make such
designations, determinations, allocations and elections for Canadian tax
purposes of amounts or portions of amounts which it has received, paid,
declared payable or allocated to Unitholders and of expenses incurred by the
Trust and of tax deductions of which the Trust may be entitled, as the Manager
may, in its sole discretion, determine.


 


13

















 


4.5           Income
Tax Statements to Unitholders


 


(a)           On or before March 31
in each year, or in the case of a leap year on or before March 30 in such
year, if applicable, or as otherwise required by the Tax Act, the Manager shall
prepare and deliver or make available electronically, or cause to be prepared
and delivered or made available electronically, to Unitholders information
pertaining to the Trust, including all distributions, designations,
determinations, allocations and elections, which is required or permitted by
the Tax Act or which is necessary to permit Unitholders to complete their
individual income tax returns for the preceding year.


 


(b)           It is the Manager’s
intention to claim the maximum amount of deduction available to the Trust under
paragraph 104(6)(b) of the Tax Act for each relevant Fiscal Year of the
Trust.  In the event that amounts that
were allocated, distributed or paid to Unitholders as capital gains or as
non-taxable payments are, for any reason, subsequently determined 
(including as a result of an assessment or reassessment by any
taxation authorities) to have been fully includible in the taxable
income of the Trust for the relevant Fiscal Year, then the Manager shall have
the discretion to increase its claim under paragraph 104(6)(b) of the
Tax Act for that Fiscal Year, which shall include the discretion to
issue new or amended  tax reporting slips to the relevant Unitholders
or former Unitholders and to declare that all or part of such amounts shall be
retroactively deemed to have been allocated, distributed and paid to
Unitholders out of the income of the Trust.


 


(c)           In conjunction with the foregoing,
the Valuation Agent shall provide the Manager with any income and capital gain
or loss factors or other information determined in accordance with the Services
hereunder and required by the Manager for such purpose.


 


4.6           Qualified Electing Trust Election
and Reporting


 


Within 45 days from the end of each taxable year of
the Trust, the Manager shall provide or cause to be provided to Unitholders all
information necessary to enable Unitholders or beneficial owners of Units, as
applicable, to elect to treat the Trust as a “qualified electing fund” (a “QEF”) within the meaning of Section 1295 of the U.S. Internal Revenue Code of 1986, as amended from time to time,
for U.S. federal income tax purposes and to comply with any reporting or other
requirements incident to such election including, but not limited to, providing
or causing to be provided to Unitholders or beneficial owners of Units, as
applicable, a completed “PFIC Annual Information Statement” as required by U.S.
Treasury Regulations Section 1.1295-1(g). 
The Manager shall comply and cause the Trust to comply with all
applicable requirements of the U.S. Treasury Regulations necessary to enable
Unitholders or


 


14

















 


beneficial owners of Units, as applicable, to elect to treat the Trust
as a QEF.


 


4.7           Unaudited Fund Accounting
Statements


 


On the Direction of the Manager, the Valuation Agent shall, based on
information in its records, prepare annual and semi-annual draft unaudited fund
accounting statements for the Trust in respect of which the Manager shall
review and provide ongoing Directions, as required, to the Valuation Agent as
to any revisions or amendments thereto and shall approve the final version of
all such fund accounting statements for the Trust.


 


4.8           Tax
Reporting for the Trust


 


On the Direction of the Manager, the Valuation Agent shall, in
accordance with the prescribed Canadian tax filing deadlines and requirements
as set out in Applicable Laws, prepare and file on behalf of the Manager, applicable
Canadian tax and/or information returns for the Trust and provide a copy of
such tax reporting to the Manager upon its request.  For greater certainty hereunder, the Manager
shall be responsible for all United States tax reporting and elections to be
filed on behalf of the Trust pursuant to Applicable Laws; provided that, for
greater certainty, the Valuation Agent shall provide such agreed upon
accounting reports prepared in accordance with the Services hereunder and
required by the Manager for such purpose.


 


4.9           Tax Definitions


 


Unless the context otherwise requires, any term in
this Section 4 which is defined for the purposes of the Tax Act shall have
for the purposes of this Section 4 the meaning that it has for the
purposes of the Tax Act.


 


5.             Directions and Communications


 


5.1           Directions


 


(a)           Unless otherwise specified
herein, all communications (including, for greater certainty, Directions) given
under this Agreement shall be given in one of the methods authorized by Section 5.2
and shall be given by an authorized officer, Person or other representative of
the Manager or any Third Party Valuation Agent, as the case may be.  The Manager and any Third Party Valuation
Agent shall from time to time furnish the Valuation Agent with a Certificate of
Authorized Signing Authorities substantially in the form set out in Schedule A
attached hereto signed by the Chief Executive Officer, the Chief Financial
Officer or the Corporate Secretary of the general partner of the Manager
stating the name(s) and title(s) of the authorized officer(s), Person(s) or
representative(s) of the Manager and any Third Party Valuation Agent, as
the case may be, authorized to act on its behalf together with specimen
signatures of all such officers, Persons or representatives.  The Manager and any Third Party Valuation
Agent shall keep the Valuation Agent informed as to any changes in its
authorized signatories, and the Valuation Agent shall be entitled to rely upon
the identification of such Persons as specified in such certificates as the
Persons entitled to act on behalf of the Manager and any Third Party Valuation
Agent for the purposes of this Agreement until a later certificate respecting
the same is delivered to the Valuation Agent.


 


15

















 


(b)           The Valuation Agent shall:


 


(i)            be fully protected in acting upon any Direction
reasonably believed by it to be genuine and presented by the proper Person(s);


 


(ii)           be under no duty to monitor or verify whether any
Direction by the Manager is in compliance with the terms of the Trust’s
governing  documentation or with
Securities Legislation; and


 


(iii)          be under no duty to make any investigation or
inquiry as to any statement contained in any such Direction, but may accept
such statement as conclusive evidence of the truth and accuracy of such
statement.


 


(c)           Any Direction or telephone instruction, including a
Direction or telephone instruction from any Third Party Valuation Agent, is
deemed for all purposes of this Agreement to be a Direction from the Manager to
the Valuation Agent.


 


5.2           Methods
of Communication


 


(a)           Any notice to
be given or any document or instrument in writing to the Valuation Agent, the
Manager or any Third Party Valuation Agent (including for greater certainty,
all Directions) must be given through one of the following methods of
communication:


 


(i)            personal or courier
delivery;


 


(ii)           facsimile (in accordance
with the Manager’s guidelines);


 


(iii)          S.W.I.F.T.;


 


(iv)          one of the Valuation Agent’s
secured client access channels;


 


(v)           directly between
electromechanical or electronic terminals (other than the internet or unsecured
lines of communication);


 


(vi)          telephone (subject to
Sections 5.4 and 5.5); or


 


(vii)         internet (subject to Section 5.6).


 


(b)           Communications should be
addressed, as applicable, as follows:


 


(i)            in the case of the Valuation Agent:


 


RBC
Dexia Investor Services Trust


155
Wellington Street West, 5th Floor


RBC
Centre


Toronto,
Ontario M5V 3L3


 


16

















 


Attention:     Head of Funds


 


Telephone:   (416) 974-5273


Facsimile:    (416) 955-1240


 


(ii)           in the case of the Manager:


 


Sprott
Asset Management LP


Royal
Bank Plaza, South Tower


200
Bay Street


Suite 2700,
P.O.Box 27


Toronto,
Ontario M5J 2J1


 


Attention:    
Kirstin McTaggart, Chief Compliance Officer


 


Telephone:   (416) 943-4065


Facsimile:    (416) 943-6497


 


or at such other address and number as the
party to whom such communication is to be given shall have last notified the
party giving the same in the manner provided in this section.


 


5.3           Deemed
Delivery


 


Pursuant
to Section 5.2:


 


(a)                                  any
communication delivered personally shall be deemed to have been given and
received on the day it is so delivered (or if that day is not a Business Day,
on the next succeeding Business Day); and


 


(b)           any communication given by
facsimile, S.W.I.F.T., secured client access channels, directly between
electromechanical or electronic terminals (other than the internet or unsecured
lines of communication) or the internet (subject to Section 5.6) shall be
deemed to have been given and received on the Business Day it is transmitted
provided that it was received before 3:00 p.m. (Toronto time) and, if
received after 3:00 p.m. (Toronto time), it shall be deemed to have been
given and received on the Business Day following the day of transmission
provided in each case that confirmation of transmission is available from the
party giving the communication.


 


5.4           Telephone
Directions


 


With respect to telephone
Directions, the Manager shall endeavor to forward Directions (other than by
telephone) confirming such telephone Directions on the same day that such
verbal Directions are given to the Valuation Agent.  The fact that such confirming Directions are
not received or that contrary Directions are received by the Valuation Agent
shall in no way affect the validity of transactions effected by the Valuation
Agent on the basis of the telephone Directions.


 


17

















 


5.5           Telephone
Communications


 


The Manager agrees that some or all telephone
conversations between the parties, including Directions or communication given
by telephone, may be recorded by the Valuation Agent and that, in the event of
any disagreement as to the content of any Directions or communication given by telephone,
such recording shall be conclusive and determinative of the contents of the
Directions or communication.


 


5.6           Internet


 


The Manager agrees and
confirms, in connection with the Services provided by the Valuation Agent to
the Trust, that the Valuation Agent may forward reports and information to the
Manager and/or to the Manager’s authorized agents, and may receive and act upon
communications and instructions (including, without limitation, Directions)
received from the Manager and/or the Manager’s authorized agents through the
use of such form of electronic means of communications (including the internet
which is not a secure means of communication) as may be agreed to from time to
time in writing.  Without limiting the
terms of this Agreement, the Manager agrees and acknowledges that the Valuation
Agent shall bear no responsibility or liability whatsoever for any errors and
omissions, or direct, indirect or consequential losses or damages that are
attributable to the use of the internet for the purposes set out herein and
resulting or arising from viruses or worms, or the interception, tampering or
breach of confidentiality of data or information transmitted which is not
encrypted and authenticated in accordance with the Valuation Agent’s encryption
standards.


 


6.             Fees and Statements


 


6.1           Fees
and Charges


 


In consideration
of the Services provided by the Valuation Agent hereunder, the Valuation Agent
shall be paid such compensation as may from time to time be agreed upon in
writing between the Manager and the Valuation Agent. In addition, the Valuation
Agent shall be reimbursed for any disbursements and expenses incurred in the
performance of its duties hereunder.


 


6.2           Statements


 


The
Valuation Agent shall send to the Manager itemized statements setting out the
amount of all compensation, disbursements and expenses provided for in Section 6.1,
and such amounts shall be due and payable within 30 days after the respective
dates on which such statements were issued by the Valuation Agent  hereunder.


 


7.             Standard of Care, Limitation of
Liability and Indemnification


 


7.1           Standard
of Care


 


In providing the
Services hereunder, the Valuation Agent shall exercise the powers and discharge
the duties of its office honestly and in good faith and in connection therewith
shall exercise the degree of care, diligence and skill that a reasonably
prudent person would exercise in comparable circumstances.


 


18

















 


7.2           Liability
of the Valuation Agent


 


The
Valuation Agent shall not be liable for any act or omission in the course of,
or connected with, rendering the Services hereunder, except to the extent that
such liability arises directly out of the negligence, wilful misconduct or lack
of good faith of the Valuation Agent.  In
no event shall the Valuation Agent be liable for any consequential or special
damages including, but not limited to, loss of reputation, goodwill or
business.  Notwithstanding the foregoing
or any other provision of this Agreement, the Valuation Agent’s liability
hereunder shall in no event exceed the aggregate amount of fees received by the
Valuation Agent from the Manager with respect to the Services provided during
the immediately preceding 12 months.


 


7.3           Limitation
of Responsibility


 


Without limiting the foregoing and except to
the extent that the Valuation Agent has not complied with its standard of care
set out in Section 7.1, the Valuation Agent shall not be responsible for:


 


(a)           any loss to, or diminution of, the Trust Property;


 


(b)           any act or
omission required or demanded by any governmental, taxing, regulatory or other competent authority which has
jurisdiction over the Valuation Agent or the Trust;


 


(c)           any loss resulting from official action (including
nationalisation and expropriation), currency restrictions or devaluations, acts
or threat of war or terrorism, insurrection, revolution or civil disturbance,
acts of God, strikes or work stoppages, inability of any settlement system to
settle transactions, interruptions in postal, telephone, facsimile and/or other
communication systems or in power supply, or any other event or factor beyond
the reasonable  control of the Valuation Agent;


 


(d)           any failure to act on Directions, if the Valuation
Agent reasonably believed that to do so might result in a breach of any
Applicable Laws or the terms of this Agreement;


 


(e)           any
action taken in accordance with a Direction from the Manager, or for failure to
act in the absence of a Direction from the Manager where a Direction is
required under this Agreement;


 


(f)            any
registrar, transfer agency or record-keeping services on behalf of the Trust or
any Unitholders;


 


(g)           any
preparation or filing of any audited financial statements or any compliance,
reporting or filings in accordance with applicable Securities Legislation or
any United States tax laws, regulations, rules or policies that apply to
the Trust pursuant to Applicable Laws; or


 


(h)           any
ongoing monitoring of investments of the Trust or any risk factors whatsoever
related thereto.


 


7.4           Indemnification
of the Valuation Agent


 


(a)           The Manager
shall indemnify and hold harmless the Valuation Agent, its Affiliates and
agents, and their respective directors, officers, and employees (each an “Indemnified Party”) from and against all taxes, duties,
charges, costs, expenses, damages, claims,


 


19

















 


actions,
demands and any other liability whatsoever to which the Indemnified Party, or
any of them, may become subject, including legal fees, judgments and amounts
paid in settlement in respect of anything done or omitted to be done in
connection with the Services provided hereunder, except to the extent incurred
as a result of the negligence, wilful misconduct or lack of good faith of any
Indemnified Party.  For greater certainty,
the foregoing does not make the commencement of formal legal proceedings a
precondition for indemnification hereunder.


 


(b)           Further, none
of the provisions of this Agreement shall require the Valuation Agent to expend
or risk its own funds, appear in, prosecute or defend proceedings, or otherwise
incur financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers hereunder, unless first indemnified to
its satisfaction.


 


8.             Amendments and Termination of the
Agreement


 


8.1           Amendments


 


This Agreement may not be
amended, changed, supplemented or otherwise modified in any respect except by
written instrument executed by the parties hereto or their respective
successors or permitted assigns.


 


8.2           Termination


 


(a)           Either party may at any time
terminate this Agreement without any penalty by giving at least 60 days’ prior
written notice to the other party of such termination unless the parties
mutually agree in writing to a different period.  Such prior notice is not required
and termination will be immediate upon the giving of notice in accordance with Section 5
hereof in the event that:


 


(i)            either party is declared
bankrupt or shall be insolvent;


 


(ii)           the assets or
the business of either party shall become liable to seizure or confiscation by
any public or governmental authority; or


 


(iii)          the Manager’s
power and authority to act on behalf of, or to represent, the Trust has been
revoked, terminated or is otherwise no longer in full force and effect.


 


(b)           Upon the termination of this
Agreement, the Valuation Agent shall forthwith deliver to the Manager, on
behalf of the Trust, all books of account and other records in the format
existing at the effective date of termination of this Agreement.  A receipt signed by the Manager, on behalf of
the Trust, shall be a valid discharge to the Valuation Agent in respect of its
obligations hereunder.


 


9.             Miscellaneous


 


9.1           Access
to Records


 


On
reasonable notice and during normal business hours, the Valuation Agent shall
make available to and permit the authorized officers, employees and agents of
the Manager, and such Securities Authorities or other regulatory authorities as
may have lawful jurisdiction over the Trust and the


 


20














 


Manager, to inspect and make
copies of all accounts, books and records maintained by the Valuation Agent in
connection with its duties under this Agreement, provided such Persons comply
with the Valuation Agent’s reasonable requirements as to confidentiality and
privacy.


 


9.2           Review of Statements


 


The
Manager shall, within 30 days following the issuance of
any statement by the Valuation Agent related to the provision of the Services
hereunder, provide the Valuation Agent
with written notice of any alleged omissions from, or additions wrongly made
to, or inaccurate entries in, such statement. 
If such notification by the Manager is not received by the Valuation
Agent within such 30-day period, the Valuation Agent shall be released and
discharged from liability and accountability to anyone with respect to its acts
and all transactions during the period covered by such statement, except as
provided in this Agreement.


 


9.3           Self-Dealing


 


(a)        The Valuation Agent’s Services to the Manager and to the Trust are not exclusive
and, subject to the limitations otherwise provided in this Agreement on the
power and authorities of the Valuation Agent, the Valuation Agent may for any
purpose, and is hereby expressly authorized from time to time in its discretion
to, appoint, employ, invest in, contract or deal with any individual, firm,
partnership, association, trust or body corporate including, without
limitation, itself and any partnership, trust or body corporate with which it
may directly or indirectly be affiliated or in which it may be directly or
indirectly interested, whether on its own account or for the account of another
(in a fiduciary capacity or otherwise), without being liable to account
therefor and without being in breach of this Agreement.


 


(b)        Without limiting the
generality of the foregoing, the Manager hereby authorizes the Valuation Agent
to act hereunder notwithstanding that the Valuation Agent or any of its
divisions, branches or Affiliates may:


 


(i)         have a material interest in the transaction or that circumstances
are such that the Valuation Agent may have a potential conflict of duty or
interest including the fact that the Valuation Agent or any of its Affiliates
may:


 


(A)       purchase, hold, sell, invest in or otherwise
deal with securities or other property or assets of the same class and nature
as may be held in the Trust, whether on its own account or for the account of
another (in a fiduciary capacity or otherwise);


 


(B)       act as a market
maker in the securities that form part of the Trust Property to which any
Directions relate;


 


(C)       provide brokerage services to other clients;


 


(D)       act as financial adviser to the issuer of such
securities;


 


(E)        act in the same transaction as agent for more than one
client;


 


21

















 


(F)        have a material
interest in the issue of securities that form part of the Trust Property;


 


(G)       use in other
capacities knowledge gained in its capacity as a provider of Services
hereunder; or


 


(H)       earn profits from any of the activities listed herein,


 


without
being liable to account therefor and without being in breach of this Agreement
provided that the Valuation Agent complies with Section 9.6 hereof.


 


9.4           Assignment


 


Subject
to Section 9.5, neither this Agreement nor any of the rights or obligations
of either party hereunder may be assigned to any other Person without the prior
written consent of the other party, such consent not to be unreasonably
withheld or delayed.


 


9.5           Successors


 


This Agreement shall enure to the benefit of,
and be binding upon, the parties hereto and their respective successors and
permitted assigns.  For greater
certainty, any trust company resulting from the merger or amalgamation of the
Valuation Agent with one or more trust companies, or any trust company which
succeeds to substantially all of the business of the Valuation Agent shall
thereupon become the successor to the Valuation Agent hereunder without further
act or formality.


 


9.6           Confidentiality


 


Except as provided in Subsection
9.3(a)(vii) hereof, each party shall hold in confidence all information
relating to the Trust and this Agreement and may only release such information
to others where required by Applicable Law or pursuant to any Directions, if
applicable, or as otherwise agreed between the parties.


 


9.7           Capacity


 


For
greater certainty, the parties acknowledge that the Valuation Agent is not
entering into this Agreement in a fiduciary capacity and the terms of this
Agreement and the performance by the Valuation Agent of its obligations under
this Agreement shall not result, directly or indirectly or in any manner
whatsoever, in any fiduciary duties being imposed or inferred upon the
Valuation Agent.


 


9.8           Headings


 


The inclusion of section
headings in this Agreement is for convenience of reference only and shall not
affect the construction or interpretation hereof.


 


9.9           Governing Law


 


This Agreement shall be
governed by, and construed in accordance with, the laws of the Province of
Ontario and the federal laws of Canada applicable therein and shall be treated
in all respects as an Ontario contract. 
The parties hereto hereby attorn to the jurisdiction of the courts of
Ontario for arbitration of any disputes between them with respect to the
subject matter hereof.


 


22

















 


9.10         Entire Agreement


 


This Agreement, including
Schedule A attached hereto, and the Trust Agreement constitutes the entire
agreement between the parties pertaining to the subject matter hereof and
supersedes and replaces all prior understandings, agreements, negotiations or
discussions, whether written or oral, between the parties with respect
thereto.  There are no representations,
warranties, terms, conditions, undertakings or collateral agreements or understanding,
express or implied, between the parties other than those expressly set forth in
this Agreement and the Trust Agreement.


 


9.11         Further Acts


 


Each of the Valuation Agent
and the Manager shall promptly do, make, execute or deliver, or cause to be
done, made, executed or delivered, all such further acts, documents and things
as the other party hereto may reasonably require from time to time for the
purpose of giving effect to this Agreement.


 


9.12         Invalidity of Provisions


 


Each of the provisions
contained in this Agreement is distinct and severable and a declaration of
invalidity or unenforceability of any such provision or part thereof by a court
of competent jurisdiction shall not affect the validity or enforceability of
any other provision hereof.  To the
extent permitted by Applicable Law, the parties waive any provision of law
which renders any provision of this Agreement invalid or unenforceable in any
respect.


 


9.13         Counterparts


 


This Agreement may be
executed in several counterparts, each of which when so executed shall be
deemed to be an original and such counterparts together shall constitute one
and the same instrument.


 


23

















 


 


IN
WITNESS WHEREOF the parties have caused this Agreement to be
executed by their respective duly authorized officers effective as of the day
and year first above written.


 


	
   

  	
  SPROTT
  ASSET MANAGEMENT LP, by its general partner, SPROTT ASSET MANAGEMENT GP INC., in its capacity as the
  Manager of the Trust

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Eric
  S. Sprott

  
	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Kirstin
  H. McTaggart

  
	
   

  	
   

  	
  Corporate
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  We
  have the authority to bind the Manager.

  
	
   

  	
   

  	
   

  
	
   

  	
  RBC
  DEXIA INVESTOR SERVICES TRUST, in its capacity as the
  Valuation Agent of the Trust

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  We
  have the authority to bind the Valuation Agent.

  



 


24

















 


SCHEDULE A


 


CERTIFICATE OF AUTHORIZED SIGNING
AUTHORITIES


 


[To be attached hereto.]