Exhibit 10.3


 


VALUATION SERVICES AGREEMENT


 


THIS AGREEMENT made and entered
into as of the · day of ·, 2010


 


	
  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 Silver 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 June 30,
2010 (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 is 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;


 


2

















 


(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;


 


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


 


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


 


(n)                                 “Management Agreement” means the management agreement between the Manager and the Trust dated as
of ·, as the same may be amended, restated or supplemented from time to time;


 


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


 


(p)                                 “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;


 


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


 


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


 


(s)                                  “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


 


(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


 


3

















 


(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;


 


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


 


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


 


(v)                                 “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;


 


(w)                               “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);


 


(x)                                   “QEF” has the meaning ascribed thereto in Section 4.6
hereof;


 


(y)                                 “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 dated as of ·, as the same may be
amended, restated or supplemented from time to time;


 


(z)                                   “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;


 


(aa)                           “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 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;


 


(bb)                          “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;


 


4

















 


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


 


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


 


(ee)                            “Storage Agreement” means the silver storage agreement between the Manager, on behalf of the Trust, and the
Silver Custodian dated as of ·, as the same may be
amended, restated or supplemented from time to time;


 


(ff)                                “Sub-Custodian” means The Brink’s Company, acting through its
Canadian subsidiary, Brink’s Canada Limited, as the sub-custodian of the Silver
Bullion, appointed by the Silver Custodian pursuant to a written custodial
agreement between the Silver Custodian and the Sub-Custodian;


 


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


 


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


 


(ii)                                  “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;


 


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


 


(kk)                            “Trust Agreement” means the trust agreement of the Trust
dated as of June 30, 2010, as the same may be amended, restated,
supplemented or replaced from time to time;


 


(ll)                                  “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)                                  Silver 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 Silver Custodian on
behalf of the Trust in accordance with the Storage Agreement;


 


5

















 


(iii)                               all
investments, sums or property of any type or description (other than the Silver
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


 


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


 


(mm)                     “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;


 


(nn)                          “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”;


 


(oo)                          “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;


 


(pp)                          “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;


 


(qq)                          “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


 


(rr)                                “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 


 


6

















 


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.


 


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 Silver 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 Silver 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 Silver Bullion shall be valued at a
price provided by another pricing service as determined by the Manager in
consultation with the Valuation Agent;


 


7

















 


(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;


 


(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 


 


8

















 


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 Silver
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.


 


(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


 


9






 










 


(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 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 


 


10

















 


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 Silver 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 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 Silver
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 


 


11

















 


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 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.


 


12

















 


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


 


(a)                        Commencing with
the Fiscal Year ending December 31, 2010, 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, 2010, 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.


 


(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.


 


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 


 


13

















 


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 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.


 


14

















 


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.


 


(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.


 


15

















 


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


 


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


 


16

















 


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.


 


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.


 


17






 










 


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.


 


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 


 


18

















 


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, 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.


 


19

















 


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 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 


 


20

















 


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;


 


(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.


 


21

















 


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 otherwise provided in this Agreement, 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.


 


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.


 


22

















 


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.


 


[The
remainder of this page is intentionally left blank.]


 


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:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  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.]