Document:

Exhibit 10.2

 
	
  

 
	
 JPMORGAN CHASE BANK, N.A.

 
	
  

 
	
 and

 
	
  

 
	
 THE BANK OF NEW YORK MELLON

 
	
 solely in its capacity as trustee of the
 ETFS Precious Metals Basket Trust

 
	
 and not individually

 
	
  

 
	

 

 
	
  

 
	
 UNALLOCATED ACCOUNT AGREEMENT

 
	
  

 
	

 

 

THIS AGREEMENT is
made with effect on and from
[          ], 2010 

BETWEEN 

	
  

 	
  

 
	
 (1)

 	
 JPMORGAN CHASE BANK, N.A,
 whose principal place of business in England is at 125 London Wall, London
 EC2Y 5AJ (the “Custodian”); and 

 
	
  

 	
  

 
	
 (2)

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

 
	
  

 	
  

 
	
 INTRODUCTION 

 
	
  

 
	
 (1)

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

 
	
  

 	
  

 
	
 (2)

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

 
	
  

 	
  

 
	
 (3)

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

 
	
  

 	
  

 
	
 (4)

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

 
	
  

 	
  

 
	
 (5)

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

 
	
  

 	
  

 
	
 IT IS AGREED AS FOLLOWS 

 
	
  

 
	
 1.

 	
 INTERPRETATION 

 
	
  

 	
  

 
	
 1.1

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

 
	
  

 	
  

 
	
  

 	
  “Affiliate” means
 an entity that directly or indirectly through one or more 

 

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 intermediaries, controls, or is controlled by, or is under common
 control with the Custodian; 

 
	
  

 	
  

 
	
  

 	
  “Allocated Account”
 means the loco London allocated Bullion account, number [   ],
 or the loco Zurich allocated Bullion account, number [   ],
 each established in the name of the Trustee, with the Custodian pursuant to
 the Allocated Account Agreement; 

 
	
  

 	
  

 
	
  

 	
  “Allocated Account Agreement”
 means the Allocated Account Agreement dated on or about
 [         ], 2010 between the
 Trustee and the Custodian pursuant to which the Allocated Account is
 established and operated; 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  “Authorized Signatory” means,
 in relation to any person, an individual who is duly empowered to bind such
 person and whose authority is evidenced by a resolution of the board of
 directors (or any other appropriate means of authorisation) of such person,
 and, in relation to the Trustee, any individual named in the Trustee’s
 Authorized Signatory list having due authority to bind the Trustee, which
 list shall be provided by the Trustee from time to time; 

 
	
  

 	
  

 
	
  

 	
  “Availability Date” means
 the London/Zurich Business Day on which the 

 

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 Trustee requests the Custodian to credit to the Unallocated Account
 Bullion debited from the Allocated Account; 

 
	
  

 	
  

 
	
  

 	
  “Benchmark Price”
 means, as of any day, that publicly available per ounce price of Bullion used
 by the Trust on such day to value the Trust’s Bullion, which is expected to
 be, for each metal, the London fixing price published by the Relevant
 Association, but is subject to change by the Sponsor in accordance with the
 Trust Agreement; 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  “Loco Zurich”
 means in respect of an account holding Bullion, the custody, trading or
 clearing of such Bullion in Zurich, Switzerland; 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  “London/Zurich Business Day”
 means a day which is both a London Business Day and a Zurich Business Day; 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Prospectus” means
 the prospectus constituting a part of the registration statement filed on
 Form S-1, Registration Number 333-164769 with the Securities Exchange
 Commission in accordance with the U.S. Securities Act of 1933, as amended, in
 relation to the Shares dated on or about February 8, 2010 as the same may be
 modified, supplemented or amended from time to time; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Relevant Association”
 means: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 in respect of gold and silver, the London Bullion Market Association
 or its successors; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 in respect of platinum and palladium, the London Platinum and
 Palladium Market or its successors; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Shares” means the
 units of fractional undivided beneficial interest in and ownership of the
 Trust which are issued by the Trust and named “ETFS Physical PM Basket
 Shares” and created pursuant to and constituted by the Trust Agreement; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Sponsor” means
 ETF Securities USA LLC, its successors and assigns and any successor Sponsor
 appointed pursuant to the Trust Agreement; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

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

 

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  “Trust” means the
 ETFS Precious Metals Basket Trust formed pursuant to the Trust Agreement; 

 
	
  

 	
  

 
	
  

 	
  “Trust Agreement”
 means the Depositary Trust Agreement of the ETFS Precious Metals Basket Trust
 dated on or about
 [          ], 2010, as
 amended from time to time, between ETF Securities USA LLC, as Sponsor, and
 The Bank of New York Mellon, as Trustee; 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  “Zurich Business Day” means
 a day (other than a Saturday or a Sunday or a public holiday in Zurich) on which
 commercial banks generally and the Zurich platinum and palladium markets are
 open for the transaction of business in Zurich; and 

 
	
  

 	
  

 
	
  

 	
  “Zurich Sub-Custodian”
 means any firm selected by the Custodian to hold platinum or palladium on
 behalf of the Custodian in the firm’s Zurich vault premises on a segregated
 basis, in the manner provided in clauses 7.2 and 7.3 of the Allocated Account
 Agreement and whose appointment has been approved in writing by the Sponsor
 (such approval not to be unreasonably with held). 

 
	
  

 	
  

 
	
 1.2 

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

 
	
  

 	
  

 
	
 1.3 

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

 
	
  

 	
  

 
	
 2.

 	
 UNALLOCATED ACCOUNT

 

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 2.1

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

 
	
  

 	
  

 
	
 2.2

 	
 Denomination of
 Unallocated Account: The Unallocated Account
 will hold deposits of Bullion and will be denominated in fine troy ounces to
 three decimal places. 

 
	
  

 	
  

 
	
 2.3

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

 
	
  

 	
  

 
	
 2.4

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

 
	
  

 	
  

 
	
 2.5

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

 
	
  

 	
  

 
	
 2.6

 	
 Access:
 The Custodian will allow the Sponsor and the Trustee and their Bullion
 auditors (currently Inspectorate International Limited) access to its 

 

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 premises during normal business hours, to examine the Bullion and
 such records, as they may reasonably require to perform their respective
 duties with regard to investors in Shares. The Trustee agrees that any such
 access shall be subject to execution of a confidentiality agreement and
 agreement to the Custodian’s security procedures, and such audit shall be at
 the Trust’s expense and shall be limited to no more than twice a calendar
 year, provided however that any second visit within the same calendar year
 shall be subject to the consent of the Custodian, such consent not to be
 unreasonably withheld. 

 
	
  

 	
  

 
	
 3. DEPOSITS 

 
	
  

 	
  

 
	
 3.1

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

 
	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

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

 
	
  

 	
  

 
	
  

 	
 No other methods of deposit are permitted. 

 
	
  

 	
  

 
	
 3.2

 	
 Loco Designation
 for Deposits: The Custodian shall receive
 deposits of Bullion pursuant to clause 3.1 into the Unallocated Account
 either loco Zurich or loco London as follows: 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 For gold and silver, loco London; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 For platinum and palladium, either loco London or loco Zurich;
 provided, however, that the Custodian shall bear all costs, including all
 insurance costs, relating to any transfers between loco London and loco
 Zurich. 

 
	
  

 	
  

 	
  

 
	
 3.3

 	
 Notice
 Requirements: Notice of intended deposit must be received by the Custodian from
 the Trustee no later than 3:00 p.m. (London time) one London/Zurich Business
 Day prior to the Availability Date and specify the weight (in fine troy
 ounces of gold, silver, platinum or palladium) to be credited to the
 Unallocated Account, the Availability Date, the account from which such
 deposit will be transferred, and any other information which the Custodian
 may, with the agreement of the Trustee, from time to time require. When by
 reference to the Trustee’s notifications and instructions to the Custodian,
 the Custodian reasonably believes an amount of Bullion has been credited to
 the Unallocated Account in error, the Custodian will notify the Trustee
 promptly and, pending a joint resolution of the error, will treat such 

 

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 amount as
 not being subject to the standing instruction in clause 5.2 below.

 
	
  

 	
  

 	
  

 
	
 3.4

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

 
	
  

 	
  

 	
  

 
	
 4. WITHDRAWALS

 
	
  

 	
  

 	
  

 
	
 4.1

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 transfer of
 Bullion to the Allocated Account; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 and no other
 methods of withdrawal are permitted, save that the Trustee agrees to exercise
 its rights under clauses 4.1(d) and (e) on an exceptional basis only. Any
 Bullion made available to the relevant person (as instructed by the Trustee)
 pursuant to clauses 4.1(d) and (e) will be in a form which complies with the
 Rules or in such other form as may be agreed between the Trustee and the
 Custodian the combined fine weight of which will not exceed the number of
 fine ounces of Bullion the Trustee has instructed the Custodian to debit. The
 Custodian is entitled to select the Bullion to be made available to the
 relevant person (as instructed by the Trustee) provided it is in the same
 form as that deposited. The Custodian shall select Bullion in such ratio of
 gold, silver, platinum and palladium as designated by the Trustee. To the
 extent that the

 

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 Trustee is
 authorized to sell Bullion under the Trust Agreement, the Custodian may, but
 is not required to, purchase such Bullion; provided that the Custodian’s
 purchase price for such Bullion must be the Benchmark Price.

 
	
  

 	
  

 	
  

 
	
 4.2

 	
 Loco Designations for Withdrawals: The
 Custodian may transfer Bullion from the Unallocated Account loco Zurich or
 loco London for all withdrawals under clause 4.1 as follows: (a) for gold and
 silver, loco London, and (b) for platinum and palladium, either loco London
 or loco Zurich; provided, however, that the Custodian shall bear all costs,
 including all insurance costs, relating to any transfers between loco London
 and loco Zurich. 

 
	
  

 	
  

 	
  

 
	
 4.3

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
 4.4

 	
 Right to Amend Procedure:
 The Custodian may amend the procedure for the withdrawal of Bullion from the
 Unallocated Account only where such amendment is caused by a change in the
 Rules or procedures of the Relevant Association. Any such amendment will be
 subject to the notification conditions of the preceding clause 3.4 and will
 be promptly notified to the Sponsor and the Trustee, such notice to be given
 in advance of implementation whenever practicable. 

 
	
  

 	
  

 	
  

 
	
 4.5

 	
 Delivery Obligations:
 Unless otherwise instructed by the Trustee on behalf of the Trust or the
 relevant person, the Custodian shall make any transportation and insurance
 arrangements in respect of delivery of Bullion in accordance with its usual
 practice. Where instructions are given, the Custodian shall use all
 reasonable efforts to comply with the same. The Custodian shall not be 

 

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 obliged to
 effect any requested delivery if, in its reasonable opinion, this would cause
 the Custodian or its agents to be in breach of the Rules or other applicable
 law, court order or regulation; the costs incurred would be excessive or
 delivery is impracticable for any reason. With the exception of any delivery
 pursuant to clause 3.2 or clause 4.2, all insurance and transportation costs
 shall be for the account of the Trust. 

 
	
  

 	
  

 	
  

 
	
 4.6

 	
 Risk: With the
 exception of any transfer pursuant to clause 3.2 or clause 4.2, where there
 is a shipment from the Custodian of Bullion, all right, title and risk in and
 to such Bullion shall pass at the Point of Delivery to the relevant person
 for whose account the Bullion is being delivered. 

 
	
  

 	
  

 	
  

 
	
 4.7

 	
 Allocation:
 Subject to clause 5.2 below, in the case of a transfer under clause 4.1(c),
 the Custodian will use its commercially reasonable endeavours to complete the
 allocation of such deposits of Bullion by not later than 2:00 p.m. (London
 time) on the London/Zurich Business Day after receipt of notice given in the
 form prescribed in clause 4.3(b). Following the Custodian’s receipt of such
 notice, the Custodian shall identify bars or ingots for gold and silver and
 plates or ingots for platinum and palladium of a weight most closely
 approximating, but not exceeding, the balance in the Unallocated Account and
 shall transfer such weight from the Unallocated Account to the Allocated
 Account. The Trustee acknowledges that the process of allocation of Bullion
 to the Allocated Account from the Unallocated Account may involve minimal
 adjustments to the weights of Bullion to be allocated to adjust such weight
 to the number of whole bars available. 

 
	
  

 	
  

 	
  

 
	
 5. INSTRUCTIONS 

 
	
  

 	
  

 	
  

 
	
 5.1

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

 
	
  

 	
  

 	
  

 
	
 5.2

 	
 Continuous Allocation of Bullion:
 Without prejudice to clause 5.1 above, unless otherwise notified by the
 Trustee in writing, the Trustee hereby instructs the Custodian that, whenever
 Bullion is to be transferred from an AP Account to the Metal Accounts, it
 will combine such Bullion with any Bullion then standing to the credit of the
 Unallocated Account (excluding Bullion which has been de-allocated in order
 to effect delivery of Bullion to a redeeming Authorized Participant or
 Shareholder or pursuant to other withdrawals occurring on such day) and to
 the fullest extent possible, transfer such Bullion to the Allocated Account such
 that the amounts of gold, silver, platinum and palladium that remains
 standing to the credit of the Trustee in the 

 

10

	
  

 	
  

 
	
  

 	
 Unallocated
 Account does not exceed 430 fine ounces of gold, 1,100 fine ounces of silver,
 192 fine ounces of platinum and 192 fine ounces of palladium, respectively,
 at the close of each London/Zurich Business Day. 

 
	
  

 	
  

 
	
 5.3

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

 
	
  

 	
  

 
	
 5.4

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

 
	
  

 	
  

 
	
 5.5

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

 
	
  

 	
  

 
	
 5.6

 	
 Refusal to Execute:
 The Custodian will, where practicable, refuse to execute instructions if in
 the Custodian’s opinion they are or may be contrary to the Rules or any
 applicable law. 

 
	
  

 	
  

 
	
 6. CONFIDENTIALITY

 
	
  

 	
  

 
	
 6.1

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

 
	
  

 	
  

 
	
 6.2

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

 
	
  

 	
  

 
	
 7. CUSTODY SERVICES 

 

11

	
  

 	
  

 	
  

 
	
 7.1

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

 
	
  

 	
  

 	
  

 
	
 7.2

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

 
	
  

 	
  

 	
  

 
	
 7.3

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

 
	
  

 	
  

 	
  

 
	
 8. REPRESENTATIONS 

 
	
  

 	
  

 	
  

 
	
 8.1

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 the person
 entering into this Agreement on the Trustee’s behalf has been duly authorized
 to do so; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

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

 
	
  

 	
  

 	
  

 
	
 8.2

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 the person
 entering into this Agreement on behalf of the Custodian has been duly
 Authorized to do so; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

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

 
	
  

 	
  

 	
  

 
	
 9. FEES AND EXPENSES

 

12

	
  

 	
  

 
	
 9.1

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

 
	
  

 	
  

 
	
 9.2

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

 
	
  

 	
  

 
	
 9.3

 	
 Default Interest: If
 neither the Trustee nor the Sponsor, as the case may be, procures payment to
 the Custodian of any amount when it is due, the Custodian reserves the right
 to charge the relevant party interest (both before and after any judgment) on
 any such unpaid amount calculated at a rate equal to 1% above the overnight
 London Interbank Offered Rate (LIBOR) for the currency in which the amount is
 due. Interest will accrue on a daily basis and will be due and payable as a
 separate debt. 

 
	
  

 	
  

 
	
 9.4

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

 
	
  

 	
  

 
	
 9.5

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

 
	
  

 	
  

 
	
 10. VALUE ADDED TAX

 
	
  

 	
  

 
	
 10.1

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

 
	
  

 	
  

 
	
 10.2

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

 

13

	
  

 	
  

 
	
 11. SCOPE OF RESPONSIBILITY

 
	
  

 	
  

 
	
 11.1

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

 
	
  

 	
  

 
	
 11.2

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

 
	
  

 	
  

 
	
 11.3

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

 
	
  

 	
  

 
	
 11.4

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

 

14

	
  

 	
  

 	
  

 
	
  

 	
 Custodian
 from performing its obligations. 

 
	
  

 	
  

 	
  

 
	
 11.5

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

 
	
  

 	
  

 	
  

 
	
 11.6

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

 
	
  

 	
  

 	
  

 
	
 12. TERM AND TERMINATION 

 
	
  

 	
  

 	
  

 
	
 12.1

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 the date on
 which the termination will take effect; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 the person
 to whom the Bullion is to be made available; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

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

 
	
  

 	
  

 	
  

 
	
 12.2

 	
 Term: This
 Agreement shall have a fixed term up to and including five years and will
 automatically renew for a further term of five years thereafter unless
 terminated by the parties in accordance with this clause 12; provided
 that during such periods this Agreement may be terminated
 immediately upon written notice as follows: 

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

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

 

15

	
  

 	
  

 	
  

 
	
  

 	
 (2)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (6)

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

 
	
  

 	
  

 	
  

 
	
 12.3

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

 
	
  

 	
  

 	
  

 
	
 12.4

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

 
	
  

 	
  

 	
  

 
	
 12.5

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

 

16

13. NOTICES

	
  

 	
  

 
	
 13.1

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

 
	
  

 	
  

 
	
 13.2

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

 
	
  

 	
  

 
	
 13.3 

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

 

	
  

 	
  

 	
  

 
	
  

 	
 The Custodian:

 	
 JPMorgan Chase Bank, N.A. 

 
	
  

 	
  

 	
 125 London Wall, London EC2Y 5AJ

 
	
  

 	
  

 	
 Attention:
 Peter Smith – Global Commodities

 
	
  

 	
  

 	
 Facsimile
 No. +44 207 777 4915

 
	
  

 	
  

 	
  

 
	
  

 	
 The Trustee:

 	
  

 
	
  

 	
  

 	
 The Bank of
 New York Mellon

 
	
  

 	
  

 	
 2 Hanson
 Place

 
	
  

 	
  

 	
 Brooklyn,
 New York 11217

 
	
  

 	
  

 	
 Attention:
 Donald Guire

 
	
  

 	
  

 	
 Facsimile:
 718-315-4927

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 The Sponsor:

 	
  

 
	
  

 	
  

 	
 ETF
 Securities USA LLC

 
	
  

 	
  

 	
 Ordnance
 House

 
	
  

 	
  

 	
 31 Pier Road

 
	
  

 	
  

 	
 St. Helier,
 Jersey

 
	
  

 	
  

 	
 JE4 Channel
 Islands

 
	
  

 	
  

 	
 Fax:
 +441534825335

 
	
  

 	
  

 	
 Attention:
 US Fund Services

 

17

	
  

 	
  

 
	
 13.4

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

 
	
  

 	
  

 
	
 14. GENERAL 

 
	
  

 	
  

 
	
 14.1

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

 
	
  

 	
  

 
	
 14.2

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

 
	
  

 	
  

 
	
 14.3

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

 
	
  

 	
  

 
	
 14.4

 	
 Assignment:
 This Agreement is for the benefit of and binding upon the parties hereto and
 their respective successors and assigns. Save as expressly provided herein,
 no party may assign, transfer or encumber, or purport to assign, transfer or
 encumber, any right or obligation under this Agreement unless the other party
 otherwise agrees in writing except that consent is not required where the
 Custodian assigns, transfers or encumbers any right or obligation under this
 Agreement to an Affiliate. This clause shall not restrict the Custodian’s
 power to merge or consolidate with any party, or to dispose of all

 

18

	
  

 	
  

 
	
  

 	
 or part of
 its custody business and further provided that this clause shall not restrict
 the Trustee from assigning its rights hereunder to a Shareholder to the
 extent required for the Trust to fulfill its obligations under the Trust
 Agreement.

 
	
  

 	
  

 
	
 14.5

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

 
	
  

 	
  

 
	
 14.6

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

 
	
  

 	
  

 
	
 14.7

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

 
	
  

 	
  

 
	
 14.8

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

 
	
  

 	
  

 
	
 14.9

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

 
	
  

 	
  

 
	
 14.10

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

 
	
  

 	
  

 
	
 15. GOVERNING LAW AND JURISDICTION

 
	
  

 	
  

 
	
 15.1

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

 
	
  

 	
  

 
	
 15.2

 	
 Jurisdiction: The Trustee and the Custodian agree
 that the courts of the State of New York, in the United States of America,
 and the United States federal court located in the Borough of Manhattan in
 such state are to have jurisdiction

 

19

	
  

 	
  

 
	
  

 	
 to settle
 any disputes or claims which may arise out of or in connection with this Agreement
 and, for these purposes the Trustee and the Custodian irrevocably submits to
 the non-exclusive jurisdiction of such courts, waive any claim of forum non
 conveniens and any objection to laying of venue, and further waive any
 personal service. 

 
	
  

 	
  

 
	
 15.4

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

 
	
  

 	
  

 
	
 15.5

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

 

	
  

 	
  

 
	
  

 	
 Custodian’s Address for service of process:

 
	
  

 	
  

 
	
  

 	
 JPMorgan Chase Bank, N.A. 

 
	
  

 	
 125 London Wall, London EC2Y 5AJ

 
	
  

 	
 Facsimile
 No.          +44 207 777
 4915

 
	
  

 	
 Attention:
 Peter Smith – Global Commodities

 
	
  

 	
  

 
	
  

 	
 With a copy to:

 
	
  

 	
  

 
	
  

 	
 JPMorgan
 Chase Bank, N.A.

 
	
  

 	
 125 London
 Wall, 13th Floor

 
	
  

 	
 London EC2Y
 5AJ

 
	
  

 	
 Facsimile
 No.: +44 (0)20 7325 8150

 
	
  

 	
 Attention:
 Legal Department-FX and Derivatives Group

 
	
  

 	
  

 
	
  

 	
 Trustee’s Address
 for service of process:

 
	
  

 	
  

 
	
  

 	
 The Bank of
 New York Mellon

 
	
  

 	
 One Wall
 Street

 
	
  

 	
 New York,
 New York 10286 

 
	
  

 	
 Attention:
 Legal Department

 

20

EXECUTED by the
parties: 

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

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Signature 

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
  

 
	
 Name

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
  

 
	
 Title 

 	
  

 	
  

 
	
  

 	

 

 	
  

 

Signed on
behalf of and for 

THE BANK OF NEW YORK MELLON solely in its
capacity as 

trustee of the ETFS Precious Metals Basket Trust and not individually
by 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Signature 

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
  

 
	
 Name

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
  

 
	
 Title 

 	
  

 	
  

 
	
  

 	

 

 	
  

 

 [Signature Page to ETFS
Precious Metals Basket Unallocated Account Agreement]

21Exhibit 10.3

The Depository Trust Company 

A subsidiary of the Depository Trust & Clearing Corporation

BLANKET ISSUER LETTER OF REPRESENTATIONS 

ETFS PRECIOUS METALS BASKET TRUST

_______________

(Date)

Attention: Underwriting Department

The Depository Trust Company 

55 Water Street, 1SL 

New York, NY 10041-0099 

Ladies and Gentlemen: 

          This letter sets forth our understanding with respect to all issues (the “Securities”) that Issuer shall request to be made eligible for deposit by the Depository Trust Company (“DTC”). 

Issuer is formed under the laws of the State of New York. 

          To induce DTC to accept the Securities as eligible for deposit at DTC, and to act in accordance with DTC’s Rules with respect to the Securities, Issuer represents to DTC that issuer will comply with the requirements stated
in DTC’s Operational Arrangements, as they may be amended from time to time. 

	
Note:    	    	
      Very truly yours,    
	
Schedule A contains statements that DTC believes    	    	 	   
	
accurate describe DTC, the method of effecting      	    	
      ETFS PRECIOUS METALS BASKET TRUST,    
	
book-entry transfers of securities distributed      	    	 	   
	
through DTC, and certain related matters.   	    	
      by ETF Securities USA LLC, as sponsor        
	     
	
Received and Accepted      	    	By:	 
	
THE DEPOSITORY TRUST COMPANY        	    	 	
(Authorized Officer’s Signature”) 
	     
	
By:        	 	    	 	  
	       	 	 	 	(Print Name)
	         	    	 	 
	       	 	 	 	(Street Address)
	         	    	 	 
	                                   	 	 	(City, State, Country, Zip)
	    	 	 
	 	 	(Phone Number)
	    	 	 
	    	 	
(Email Address)     
	 	 	 

SCHEDULE A

(To Blanket Issuer Letter of Representations) 

SAMPLE OFFERING DOCUMENT
LANGUAGE

DESCRIBING BOOK-ENTRY-ONLY ISSUANCE

(Prepared by DTC—bracketed material may be
applicable only to certain issues)

          1.
The Depository Trust Company (“DTC”), New York, NY, will act as securities
depository for the securities (the “Securities”). The Securities will be issued
as fully-registered securities registered in the name of Cede & Co. (DTC’s
partnership nominee) or such other name as may be requested by an authorized
representative of DTC. One fully-registered Security certificate will be issued
for [each issue of] the Securities, [each] in the aggregate principal amount of
such issue, and will be deposited with DTC. [If, however, the aggregate
principal amount of [any] issue exceeds $500 million, one certificate will be
issued with respect to each $500 million of principal amount, and an additional
certificate will be issued with respect to any remaining principal amount of
such issue.]

          2.
DTC, the world’s largest securities depository, is a limited-purpose trust
company organized under the New York Banking Law, a “banking organization”
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a “clearing corporation” within the meaning of the New York Uniform
Commercial Code, and a “clearing agency” registered pursuant to the provisions
of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides
asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues,
corporate and municipal debt issues, and money market instruments (from over
100 countries) that DTC’s participants (“Direct Participants”) deposit with
DTC. DTC also facilitates the post-trade settlement among Direct Participants of
sales and other securities transactions in deposited securities, through
electronic computerized book-entry transfers and pledges between Direct
Participants’ accounts. This eliminates the need for physical movement of
securities certificates. Direct Participants include both U.S. and non-U.S.
securities brokers and dealers, banks, trust companies, clearing corporations,
and certain other organizations. DTC is a wholly-owned subsidiary of The
Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding
company for DTC, National Securities Clearing Corporation and Fixed Income
Clearing Corporation, all of which are registered clearing agencies. DTCC is
owned by the users of its regulated subsidiaries. Access to the DTC system is
also available to others such as both U.S. and non-U.S. securities brokers and
dealers, banks, trust companies, and clearing corporations that clear through
or maintain a custodial relationship with a Direct Participant, either directly
or indirectly (“Indirect Participants”). DTC has Standard & Poor’s highest
rating: AAA. The DTC Rules applicable to its Participants are on file with the
Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com
and www.dtc.org.

          3.
Purchases of Securities under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Securities on DTC’s records.
The ownership interest of each actual purchaser of each Security (“Beneficial
Owner”) is in turn to be recorded on the Direct and Indirect Participants’
records. Beneficial Owners will not receive written confirmation from DTC of
their purchase. Beneficial Owners are, however, expected to receive written
confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Securities are to be accomplished by entries made on the books
of Direct and Indirect Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in Securities, except in the event that use of the book-entry system
for the Securities is discontinued.

          4.
To facilitate subsequent transfers, all Securities deposited by Direct
Participants with DTC are registered in the name of DTC’s partnership nominee,
Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of Securities with DTC and their
registration in the name of Cede & Co. or such other DTC nominee do not
effect any change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Securities; DTC’s records reflect only the identity of
the Direct Participants to whose accounts such Securities are credited, which
may or may not be the Beneficial Owners. The Direct and Indirect Participants
will remain responsible for keeping account of their holdings on behalf of
their customers.

BLOR 03/25/08

SCHEDULE A

(To Blanket Issuer Letter of Representations) 

          5.
Conveyance of notices and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants, and by Direct Participants and
Indirect Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time. [Beneficial Owners of Securities may wish to take
certain steps to augment the transmission to them of notices of significant
events with respect to the Securities, such as redemptions, tenders, defaults,
and proposed amendments to the Security documents. For example, Beneficial
Owners of Securities may wish to ascertain that the nominee holding the
Securities for their benefit has agreed to obtain and transmit notices to
Beneficial Owners. In the alternative, Beneficial Owners may wish to provide
their names and addresses to the registrar and request that copies of notices
be provided directly to them.]

          [6.
Redemption notices shall be sent to DTC. If less than all of the Securities
within an issue are being redeemed, DTC’s practice is to determine by lot the
amount of the interest of each Direct Participant in such issue to be
redeemed.]

          7.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote
with respect to Securities unless authorized by a Direct Participant in
accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an
Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus
Proxy assigns Cede & Co.’s consenting or voting rights to those Direct
Participants to whose accounts Securities are credited on the record date
(identified in a listing attached to the Omnibus Proxy).

          8.
Redemption proceeds, distributions, and dividend payments on the Securities
will be made to Cede & Co., or such other nominee as may be requested by an
authorized representative of DTC. DTC’s practice is to credit Direct
Participants’ accounts upon DTC’s receipt of funds and corresponding detail
information from Issuer or Agent, on payable date in accordance with their
respective holdings shown on DTC’s records. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers in
bearer form or registered in “street name,” and will be the responsibility of
such Participant and not of DTC, Agent, or Issuer, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
redemption proceeds, distributions, and dividend payments to Cede & Co. (or
such other nominee as may be requested by an authorized representative of DTC)
is the responsibility of Issuer or Agent, disbursement of such payments to
Direct Participants will be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners will be the responsibility of Direct and
Indirect Participants.

          
[9. A Beneficial Owner shall give notice to elect to have its Securities
purchased or tendered, through its Participant, to [Tender/Remarketing] Agent,
and shall effect delivery of such Securities by causing the Direct Participant
to transfer the Participant’s interest in the Securities, on DTC’s records, to
[Tender/Remarketing] Agent. The requirement for physical delivery of Securities
in connection with an optional tender or a mandatory purchase will be deemed
satisfied when the ownership rights in the Securities are transferred by Direct
Participants on DTC’s records and followed by a book-entry credit of tendered
Securities to [Tender/Remarketing] Agent’s DTC account.]

          10.
DTC may discontinue providing its services as depository with respect to the
Securities at any time by giving reasonable notice to Issuer or Agent. Under
such circumstances, in the event that a successor depository is not obtained,
Security certificates are required to be printed and delivered.

          11.
Issuer may decide to discontinue use of the system of book-entry-only transfers
through DTC (or a successor securities depository). In that event, Security
certificates will be printed and delivered to DTC.

          12. The information in this section
concerning DTC and DTC’s book-entry system has been obtained from sources that
Issuer believes to be reliable, but Issuer takes no responsibility for the
accuracy thereof.

BLOR 03/25/08

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