Document:

Exhibit 4.2

AUTHORIZED PARTICIPANT AGREEMENT

AUTHORIZED PARTICIPANT AGREEMENT (this “Agreement”) dated as of ____________, 2009 among (i) _________, a ________ [organized] under the laws of __________ (the “Authorized Participant”), (ii) The Bank of New York Mellon, a New York Banking corporation acting in its capacity as trustee (in such capacity, the “Trustee”) of the Trust(s) listed on the attached Schedule A, which is a part of this Agreement (each a “Trust” and collectively, the “Trusts”), each Trust created under New York law pursuant to its respective
Depositary Trust Agreement identified on the attached Schedule A (each a “Trust Agreement” and collectively, the “Trust Agreements”), and (iii) ETF Securities USA LLC, in its capacity as sponsor of each Trust (in such capacity, the “Sponsor”).

RECITALS

A. Pursuant to the provisions of the applicable Trust Agreements, each Trust may from time to time issue or redeem equity securities representing an interest in the assets of such Trust (“Shares”), in each case only in aggregate amounts as set out in Schedule A (such aggregate amount, a “Basket”), and integral multiples thereof, and only in transactions with a party who, at the time of the transaction, shall have signed and in effect an Authorized Participant Agreement with such Trust.

B. [     ] has requested to become an “Authorized Participant” with respect to each Trust (as such term is defined in the applicable Trust Agreement), and the Sponsor and the Trustee have agreed to such request.

NOW, THEREFORE, in consideration of the foregoing premises, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties, hereto, intending to be legally bound, agree as follows: 

Section 1. Procedures. The Authorized Participant will purchase or redeem Baskets of Shares of the relevant Trust in compliance with the relevant Trust Agreement as supplemented by the Creation and Redemption Procedures attached to this Agreement as Schedule 1 (such procedures, as the same may be amended or modified from time to time in compliance with the provisions hereof and thereof, the “Procedures”), using the form attached thereto as Annex I (a “Purchase Order”, in the case of an order to purchase one or more Baskets of Shares issued by a
specified Trust and a “Redemption Order”, in case of an order to redeem one or more Baskets of Shares issued by a specified Trust). All Purchase Orders and Redemption Orders (collectively, “Orders”) shall be placed and executed in accordance with the relevant Trust Agreement as supplemented by the Procedures. Capitalized terms used in this Agreement and not otherwise defined herein have the meaning ascribed to them in the Procedures. 

Section 2. Incorporation of Standard Terms. The Standard Terms attached hereto as Schedule 2 are hereby incorporated by reference into, and made a part of, this Agreement.

Section 3. Conflicts Rules. In case of any inconsistency between the provisions of this Agreement and an applicable Trust Agreement, the provisions of such Trust Agreement shall control.

 

In case of inconsistency between the provisions incorporated by reference into this Agreement pursuant to Section 2 above and any other provision of this Agreement, the latter will control.

Section 4. Authorized Representatives. Pursuant to Section 2.01 of the Standard Terms, attached hereto as Schedule 3 is a certificate listing the Authorized Representatives of the Authorized Participant.

Section 5. Additional Covenants. The Authorized Participant covenants and agrees: 

(a) To use its best efforts to ensure that any Delivery of applicable Bullion to the Custodian, or any withdrawal of applicable Bullion from the appropriate Trust, in connection with a Purchase Order or Redemption Order placed by the Authorized Participant will take place only through one or more members of the London Bullion Market Association and/or the London Platinum and Palladium Association as appropriate under the terms of the applicable Trust Agreement.

(b) Promptly upon written demand therefore (accompanied by such reasonable evidence as the Authorized Participant may request), to reimburse the relevant Trust or the Custodian the amount of any taxes (including value added taxes) that may be imposed on the relevant Trust or the Custodian in connection with any Delivery of Bullion by or on behalf of the Authorized Participant to the Custodian (in the case of a Purchase Order placed by the Authorized Participant), or any Delivery of Bullion to or for the account of the Authorized Participant (in the case of a Redemption Order placed by the Authorized Participant).

Section 6. Notices. Except as otherwise specifically provided in the Procedures, all notices required or permitted to be given pursuant hereto shall be given in writing and delivered by personal delivery or by postage prepaid registered or certified United States first class mail, return receipt requested, or by telex, telegram or facsimile or similar means of same day delivery (with a confirming copy by mail) addressed as follows: 

(i) If to the Trustee: 

The Bank of New York Mellon 

2 Hanson Place — Floor 9th 

Brooklyn, NY 11217 

Attn: Jarvis Joseph 

Telephone: (718) 315-4412 

Facsimile: (718) 315-3080

Telex: 

(ii) If to the Sponsor: ETF Securities USA LLC

555 California Street, Suite 2900

San Francisco, CA 94104

Attn: Fred Jheon

Telephone: (415) 404-6332

Facsimile: 

Telex:

 

 

2

 

(iii) If to the Authorized Participant: 

	
                         
 	
                        [  
 	
                        ]
 

Attn:

	
                         
 	
                        [  
 	
                        ]
 

Telephone:

Facsimile:

Telex:

or such other address as any of the parties hereto shall have communicated in writing to the remaining parties in compliance with the provisions hereof.

Section 7. Effectiveness, Termination and Amendment. This Agreement shall become effective upon execution and delivery by each of the parties hereto. This Agreement may be terminated at any time by any party upon sixty days prior written notice to the other parties and may be terminated earlier by the Trustee or the Sponsor at any time on the event of a breach by the Authorized Participant of any provision of this Agreement (including the Standard Terms incorporated by Section 2 hereof) or the Procedures. This Agreement, along with any other agreement or instrument delivered pursuant to this Agreement, supersedes any prior agreement between or among the parties concerning the matters governed hereby. This Agreement may be amended by the Trustee and the Sponsor from time to time without the consent of
the Authorized Participant or any Beneficial Owner by the following procedure: the Trustee or the Sponsor will mail a copy of the amendment to the Authorized Participant in compliance with the notice provisions of this Agreement; if the Authorized Participant does not object in writing to the amendment within ten (10) Business Days after receipt of the proposed amendment, the amendment will become part of this Agreement in accordance with its terms. Titles and section headings in this Agreement (and in the Standard Terms incorporated by Section 2 hereof and the Procedures) are included solely for convenient reference and are not a part of this Agreement. 

Section 8. Governing Law. This Agreement and all the transactions hereunder shall be governed by and interpreted in accordance with the laws of the State of New York (regardless of the laws that might otherwise govern under applicable New York conflict law principles) as to all matters including matters of validity, construction, effect, performance and remedies. The parties irrevocably submit to the non-exclusive jurisdiction of any New York State or United States Federal court sitting in New York City over any suit, action or proceeding arising out of, or relating to, this Agreement.

Section 9. Assignment. No party to this Agreement shall assign any rights, or delegate the performance of any obligations, arising hereunder without the prior written consent of the other parties hereto, which shall not be reasonably withheld; provided, that any entity into which a party hereto may be merged or converted, or with which it may be consolidated, or any entity resulting from any merger, consolidation or conversion to which a party hereunder shall be a party, shall be the successor of such party hereto. The party resulting from any such merger, conversion, consolidation or succession shall promptly notify the other parties hereto of the change. Any purported assignment or delegation in violation of these provisions shall be null and void. Notwithstanding the foregoing, any successor
Trustee appointed in compliance with the applicable Trust Agreement shall automatically become a

 

 

3

 

party hereto and shall assume all the obligations, and be entitled to all the rights and remedies of the Trustee hereunder with respect to the applicable Trust.

Section 10. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party.

Section 11. Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

[Signatures Follow on Next Page]

 

 

4

 

IN WITNESS WHEREOF, the parties hereto have executed this Authorized Participant Agreement as of the date set forth above.

THE BANK OF NEW YORK MELLON, in its capacity as 

Trustee of the Trusts listed on Schedule A hereto

 

	
      By: 
 	
                          
 	
                         
 	
                         
 	
                          
 
	
                         
 	
                        
 	
                         
 	
                         
 	
                         
 
	
                        Name: 
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Title: 
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Date: 
 	
                         
 	
                         
 	
                         
 	
                         
 

ETF SECURITIES USA LLC, in its capacity as 

Sponsor of the Trusts listed on Schedule A hereto

 

	
      By: 
 	
                          
 	
                         
 	
                         
 	
                          
 
	
                         
 	
                        
 	
                         
 	
                         
 	
                         
 
	
                        Name: 
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Title: 
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Date: 
 	
                         
 	
                         
 	
                         
 	
                         
 

[AUTHORIZED PARTICIPANT] 

 

	
      By: 
 	
                          
 	
                         
 	
                         
 	
                          
 
	
                        Name: 
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Title: 
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Date: 
 	
                         
 	
                         
 	
                         
 	
                         
 

 

 

5

 

SCHEDULE A – APPLICABLE TRUSTS

	
                        •
 	
                        ETFS Silver Trust, a trust created under New York law pursuant to that certain Depositary Trust Agreement dated as of ____, 2009, between the Trustee and the Sponsor, as may be amended from time to time.
 

	
                        •
 	
                        ETFS Gold Trust, a trust created under New York law pursuant to that certain Depositary Trust Agreement dated as of ____, 2009, between the Trustee and the Sponsor, as may be amended from time to time.
 

	
                        •
 	
                        ETFS Platinum Trust, a trust created under New York law pursuant to that certain Depositary Trust Agreement dated as of ____, 2009, between the Trustee and the Sponsor, as may be amended from time to time.
 

	
                        •
 	
                        ETFS Palladium Trust, a trust created under New York law pursuant to that certain Depositary Trust Agreement dated as of ____, 2009, between the Trustee and the Sponsor, as may be amended from time to time.
 

DELIVERY LOCATIONS, BASKET SIZES

AND BULLION OUNCES PER SHARE

Description of Delivery and Basket Sizes:

 

	
       
 	
       
 	
      Delivery of Bullion
 	
       
 	
      Shares Per Basket
 	
       
 	
      Oz. per Share at Inception
 
	
                         
 	
                         
 	
                        
 	
                         
 	
                        
 	
                         
 	
                        
 
	
                        ETFS Physical Silver Shares
 	
                         
 	
                        Loco-London
 	
                         
 	
                        100,000
 	
                         
 	
                        1.0
 
	
                        ETFS Physical Gold Shares
 	
                         
 	
                        Loco-London
 	
                         
 	
                          50,000
 	
                         
 	
                        0.1 
 
	
                        ETFS Physical Platinum Shares
 	
                         
 	
                        Loco-Zurich
 	
                         
 	
                          50,000
 	
                         
 	
                        0.1
 
	
                        ETFS Physical Palladium Shares
 	
                         
 	
                        Loco-Zurich
 	
                         
 	
                          50,000
 	
                         
 	
  0.1
 

 

 

6

 

SCHEDULE 1- CREATION AND REDEMPTION PROCEDURES

 

 

TABLE OF CONTENTS—SCHEDULE 1:

 

	
                         
 	
                         
 	
                        Page
 
	
                        ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION 
 	
                         
 	
                        1
 
	
                        Section 1.01 Definitions
 	
                         
 	
                        1
 
	
                        Section 1.02 Interpretation
 	
                         
 	
                        4
 
	
                        Section 1.03 Conflicts
 	
                         
 	
                        5
 
	
                        ARTICLE II CREATION PROCEDURES 
 	
                         
 	5

	
                        Section 2.01 Initial Creation of Shares
 	
                         
 	
                        5
 
	
                        Section 2.02 Subsequent Creation of Shares
 	
                         
 	
                        5
 
	
                        ARTICLE III REDEMPTION PROCEDURES 
 	
                         
 	7

	
                        Section 3.01 Redemption of Shares
 	
                         
 	
                        7
 

 

CREATION AND REDEMPTION PROCEDURES

                        Adopted by the Sponsor and Trustee (each as defined below) as of [          ], 2009  

                        ARTICLE I

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.01 Definitions. or purposes of these Procedures, and the Standard Terms incorporated by reference into the Authorized Participant Agreement to which these Procedures are attached, unless the context otherwise requires, the following terms will have the following meanings: 

“1933 Act” means the U.S. Securities Act of 1933, as amended.

“Affiliate” shall have the meaning given to it by Rule 501(b) under the 1933 Act. 

“Authorized Participant” shall have the meaning ascribed to the term in the introductory paragraph of the Authorized Participant Agreement.

“Authorized Participant Agreement” shall mean each Authorized Participant Agreement among the Authorized Participant, the Trustee and the Sponsor into which these Standard Terms shall have been incorporated by reference. Procedures are attached as Schedule 1.c

“Authorized Participant Client” means any party on whose behalf the Authorized Participant acts in connection with an Order (whether a customer or otherwise).

“Authorized Representative” shall mean, with respect to an Authorized Participant, each individual who, pursuant to the provisions of the Authorized Participant Agreement between such Authorized Participant, the Sponsor, and the Trustee, has the power and authority to act on behalf of the Authorized Participant in connection with the placement of Purchase Orders or Redemption Orders and is in possession of the personal identification number (PIN) assigned by the Trustee for use in any communications regarding Purchase or Redemption Orders on behalf of such Authorized Participant.

“Basket” shall have the meaning ascribed to the term in Section 1.1 of the relevant Trust Agreement.

“Basket Amount” shall mean the specific basket amount term defined in Section 1.1 of the relevant Trust Agreement (e.g., the “Basket Silver Amount” in the case of the ETFS Silver Trust). 

“Benchmark Price” shall have the meaning ascribed to the term in Section 1.1 of the relevant Trust Agreement.

 

 

S1-1

 

“Beneficial Owner” shall have the meaning given to it by Rule 16a-1(a)(2) of the Securities Exchange Act of 1934.

“Bullion” shall mean Silver, Gold, Platinum and/or Palladium as appropriate.

“Business Day” shall mean each day the exchange on which the relevant Shares trade is open for regular trading.

“Creation” means the process that begins when an Authorized Participant first indicates to the Trustee its intention to purchase one or more Baskets of a specified Trust pursuant to these Procedures and concludes with the issuance by the Trustee and Delivery to such Authorized Participant of the corresponding number of that Trust’s Shares.

“Creation and Redemption Line” shall mean a telephone number designated as such by the Trustee and communicated to each Authorized Participant in compliance with the notice provisions of the respective Authorized Participant Agreement.

“Custodial Unallocated Account” shall mean the unallocated bullion account established by the Trustee with the Custodian pursuant to the relevant Custodian Agreement.

“Custodial Allocated Account” shall mean the allocated bullion account established by the Trustee with the Custodian pursuant to the relevant Custodian Agreement.

“Custodian” shall mean HSBC Bank USA National Association, London Branch, in its capacity as custodian under the Custodian Agreements, and any successor thereto or additional custodian appointed in compliance with the provisions of the Trust Agreements and relevant Custodian Agreements.

“Custodian Day” shall mean a day on which the facilities at which a Delivery of Bullion is to take place to or by the Custodian on behalf of the Trusts are open for business.

“Custodian Agreement” or “Custodian Agreements” shall mean the Custodian Agreement dated as of ____________ , 2009 by and between the Trustee and the Custodian with respect to each Trust.

“Delivery” shall mean a delivery of Bullion or Shares, as applicable, in each case effected according to the definition of “Deliver” in Section 1.1 of the relevant Trust Agreement.

“Depositor” shall mean any Authorized Participant that deposits Bullion into the relevant Trust, either for its own account or on behalf of another Person that is the owner or beneficial owner of that Bullion.

“Deposit Property” means property which, in compliance with the provisions of the relevant Trust Agreement, must be transferred by the Authorized Participant to the relevant Trust in exchange for that Trust’s Shares.

“DTC” shall mean The Depository Trust Company, its nominees and their respective successors.

 

 

S1-2

 

“FINRA” means the Financial Industry Regulatory Authority.

“Gold” shall have the meaning ascribed to the term in Section 1.1 of the Trust Agreement of the ETFS Gold Trust relating to gold.

“Initial Creation” shall mean the initial creation of Shares pursuant to the provisions of Section 2.01.

“Indemnified Party” shall have the meaning ascribed to it in Section 6.01.a hereof.

“LBMA” shall mean the London Bullion Market Association.

“LPPM” shall mean the London Platinum and Palladium Association.

“London Business Day” shall mean a day (other than a Saturday, Sunday or a public holiday in England) on which commercial banks generally and the over-the-counter markets in silver, with respect to ETFS Silver Trust and the ETFS PM Basket Trust and gold, with respect to the ETFS Gold Trust and the ETFS PM Basket Trust, each as coordinated by the LBMA, and in platinum, with respect to the ETFS Platinum Trust and the ETFS PM Basket Trust, and palladium, with respect to the ETFS Palladium Trust and the ETFS PM Basket Trust, coordinated by the LPPM are open for the transaction of business in London.

“Order” shall have the meaning ascribed to it in Section 1 of the Authorized Participant Agreement.

“Order Cut-Off Time” shall have the meaning ascribed to the term in Section 1.1 of the relevant Trust Agreement.

“Order Date” shall have, (i) with respect to a Purchase Order, the meaning ascribed to the term in Section 2.3 of the relevant Trust Agreement; and (ii) with respect to a Redemption Order, the meaning ascribed to the term in Section 2.6 of the relevant Trust Agreement.

“Ounce” shall have the meaning ascribed to the term in Section 1.1 of the relevant Trust Agreement.

“Palladium” shall have the meaning ascribed to the term in Section 1.1 of the Trust Agreement of the ETFS Palladium Trust relating to palladium.

“Person” shall mean any natural person or any limited liability company, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

“Platinum” shall have the meaning ascribed to the term in Section 1.1 of the Trust Agreement of the ETFS Platinum Trust relating to platinum.

“PM Basket” shall mean precious metal Shares with a pro-rata share of Gold, Silver, Platinum and Palladium as set out in Schedule A [and as defined in Section 1.1 of the Trust Agreement of the ETFS PM Basket Trust].

 

 

S1-3

 

“Procedures” shall have the meaning ascribed to it in Section 1 of the Authorized Participant Agreement.

“Prospectus” means the current prospectus of the relevant Trust included in its effective registration statement, as supplemented or amended from time to time.

“Purchase Order” shall have the meaning ascribed to it in Section 1 of the Authorized Participant Agreement.

“Redemption Order” shall have the meaning ascribed to it in Section 1 of the Authorized Participant Agreement.

“Shares” means Shares issued by the relevant Trust pursuant to the provisions of the relevant Trust Agreement.

“Silver” shall have the meaning ascribed to the term in Section 1.1 of the Trust Agreement of the ETFS Silver Trust relating to silver.

“Sponsor” shall mean ETF Securities USA LLC, a Delaware company, in its capacity as sponsor under the Trust Agreements.

“Trustee” shall mean The Bank of New York Mellon, a New York banking corporation, in its capacity as Trustee under each Trust Agreement, and any successor thereto in compliance with the provisions thereof.

“Trust” or “Trusts” shall have the meanings ascribed to them in the introductory paragraph of the Authorized Participant Agreement.

“Trust Agreement” or “Trust Agreements” shall have the meanings ascribed to them in the introductory paragraph of the Authorized Participant Agreement.

“Unallocated Basis” shall have the meaning ascribed to the term in Section 1.1 of the relevant Trust Agreement.

“VAT” shall mean (a) any tax imposed pursuant to or in compliance with the Sixth Directive of the Council of the European Economic Communities (77/388/EEC) including, in relation to the United Kingdom, value added tax imposed by the Value Added Tax Act 1994 and legislation and regulations supplemental thereto; and (b) any other tax of a similar nature, whether imposed in a member state of the European Union or elsewhere, in substitution for, or levied in addition to, such tax referred to in “(a)”.

Section 1.02 Interpretation. In these Procedures: 

Unless otherwise indicated, all references to Sections, clauses, paragraphs, schedules or exhibits, are to Sections, clauses, paragraphs, schedules or exhibits in or to these Procedures.

 

 

S1-4

 

The words “hereof”, “herein”, “hereunder” and words of similar import shall refer to these Procedures as a whole, and not to any individual provision in which such words may appear.

A reference to any statute, law, decree, rule, regulation or other applicable norm shall be construed as a reference to such statute, law, decree, rule, regulation or other applicable norm as re-enacted, re-designated or amended from time to time.

A reference to any agreement, instrument or document shall be construed as a reference to such agreement, instrument or document as the same may have been amended from time to time in compliance with the provisions thereof.

Section 1.03 Conflicts. In case of conflict between any provision of these Procedures and the terms of an applicable Trust Agreement, the terms of the Trust Agreement shall control.

ARTICLE II

 

CREATION PROCEDURES

Section 2.01 Initial Creation of Shares. The initial creation of Shares of a Trust will take place in compliance with such procedures as the Trustee, the Sponsor and the initial Depositor may agree.

Section 2.02 Subsequent Creation of Shares. After the Initial Creation, the issuance and Delivery of Shares of a specified Trust shall take place only in integral numbers of Baskets in compliance with the following rules: 

	
                         
 	
                        a.
 	
                        Authorized Participants wishing to acquire from the Trustee one or more Baskets shall place a Purchase Order with the Trustee no later than 3:59:59 p.m. (New York time) on any Business Day. Purchase Orders received by the Trustee on or after the Order Cut-Off Time on a Business Day shall be considered received at the opening of business on the next Business Day and shall have as their Order Date such next Business Day.
 

	
                         
 	
                        b.
 	
                        For purposes of paragraph “a” above, a Purchase Order shall be deemed “received” by the Trustee only when either of the following has occurred no later than 3:59:59 p.m. (New York time): 
 

	
                         
 	
                        (i)
 	
                        Telephone/fax Order - An Authorized Representative shall have placed a telephone call to the Trustee’s Creation and Redemption Line, or 
 

	
                         
 	
                        (ii)
 	
                        Web-based Order – An Authorized Representative shall have accessed the Trustee’s online services (www.etfservices.bankofny.com)
 

in either case informing the Trustee that the Authorized Participant wishes to place a Purchase Order for a specified number of Baskets and the Trustee shall have received, via facsimile or electronic mail message, a duly completed, irrevocable Purchase Order executed by an Authorized Representative of such Authorized Participant.

 

 

S1-5

 

	
                         
 	
                        c.
 	
                        The Trustee shall provide a written summary to the Custodian of all Purchase Orders for such Order Date no later than 4:30 p.m. (New York time).
 

	
                         
 	
                        d.
 	
                        Upon receipt of a valid Purchase Order, the Trustee shall send to the Authorized Participant (with copy to the Custodian), via facsimile or electronic mail message, no later than 5:00 p.m. (New York time) on the Order Date for such Purchase Order a copy of the corresponding Purchase Order endorsed “Accepted” by the Trustee and indicating the Basket Amount that the Authorized Participant shall Deliver to the Custodian in respect of each Basket. Prior to the transmission of the Trustee’s acceptance as specified above, a Purchase Order will only represent the Authorized Participant’s unilateral offer to deposit Bullion in exchange for Baskets of Shares and will have no binding effect upon the Trust, the Trustee, the Custodian or any other party.
 

	
                         
 	
                        e.
 	
                        The Basket Amount corresponding to each Basket must be deposited in the Custodial Unallocated Account in unallocated Bullion  loco London with respect to Gold and Silver and loco Zurich with respect to Platinum and Palladium no later than 11:00 a.m. (London time) on the third Business Day following the Order Date. The Custodian will then allocate all the Bullion (other than an amount less than 430 Ounces for Gold, 1100 Ounces for Silver, 192 Ounces for Platinum and 192 Ounces for Palladium (or the pro-rata thereof for a PM Basket)) by transferring the Bullion to the Custodial Allocated Account. Allocation is generally expected to be completed the same day as deposit of Bullion into the Custodial Unallocated Account. 
 

	
                         
 	
                        f.
 	
                        The Custodian shall allocate Bullion  to the Trustee’s Custodial Account by (i) making entries in the Custodian’s books and records to identify such Bullion as being held for the Trust, it being understood that such entries shall identify, as applicable to the specific Order, each bar of Gold or Silver or each plate or ingot of Platinum or Palladium so allocated by refiner, assay, serial number and gross and fine weight; (ii) physically segregating from Bullion held by the Custodian for its own account or on behalf of other clients the Bullion so allocated to the Trustee’s Custodial Account; and (iii) sending to the Trustee, via signed facsimile and electronic mail message, a written confirmation of the allocation, including the identification of the bars, plates or ingots allocated as described above.
 

	
                         
 	
                        g.
 	
                        On the third Business Day following the Order Date corresponding to a Purchase Order, or on such earlier date and time as the Trustee in its discretion may agree, the Trustee shall issue the aggregate number of Shares corresponding to the Baskets ordered by the Authorized Participant and Deliver them, by credit to the account at DTC which the Authorized Participant shall have identified for such purpose in its Purchase Order, provided that, by 9:00 a.m. (New York time) on the date such issuance and Delivery is to take place: 
 

	
                         
 	
                        (i)
 	
                        the Custodian shall have reported in writing to the Trustee that the corresponding amount of Bullion has been deposited in the Trustee’s Custodian Unallocated Account in compliance with the provisions of paragraph “e” above; 
 

 

 

S1-6

 

	
                         
 	
                        (ii)
 	
                        the Authorized Participant shall have paid or agreed to pay the Trustee a per order transaction fee in the amount of US$500; 
 

	
                         
 	
                        (iii)
 	
                        the Authorized Participant shall have agreed to pay, or reimburse the Custodian or the relevant Trust the amount of, any applicable taxes (including VAT) which is or becomes due in connection with the Delivery of relevant Bullion to the Custodian; and 
 

	
                         
 	
                        (iv)
 	
                        any other conditions to the issuance under the Trust Agreement shall have been satisfied.
 

	
                         
 	
                        h.
 	
                        In all other cases, the Trustee shall issue the aggregate number of Shares corresponding to the Baskets ordered by the Authorized Participant and Deliver them by credit to the account at DTC which the Authorized Participant shall have identified for such purpose in its Purchase Order on the Business Day following the date on which the conditions set forth in clauses (i) to (iv) of paragraph “g” above shall have been met.
 

ARTICLE III

 

REDEMPTION PROCEDURES

Section 3.01  Redemption of Shares. Redemption of Shares of a specified Trust shall take place only in integral numbers of Baskets in compliance with the following rules:

	
                         
 	
                        a.
 	
                        Authorized Participants wishing to redeem one or more Baskets shall place a Redemption Order with the Trustee no later than 3:59:59 p.m. (New York time) on any Business Day. Redemption Orders received by the Trustee on or after the Order Cut-Off Time on any Business Day shall be considered received at the opening of business on the next Business Day and shall have as their Order Date such next Business Day.
 

	
                         
 	
                        b.
 	
                        For purposes of paragraph “a” above, a Redemption Order shall be deemed “received” by the Trustee only when either of the following has occurred no later than 3:59:59 p.m. (New York time): 
 

	
                         
 	
                        (i)
 	
                        Telephone/fax Order. - An Authorized Representative shall have placed a telephone call to the Trustee’s Creation and Redemption Line, or
 

	
                         
 	
                        (ii)
 	
                        Web-based Order. – An Authorized Representative shall have accessed the Trustee’s online services (www.etfservices.bankofny.com)
 

in either case informing the Trustee that the Authorized Participant wishes to place a Redemption Order for a specified number of Baskets and within one hour following such telephone call the Trustee shall have received, via facsimile or electronic mail message, a duly completed, irrevocable Redemption Order executed by an Authorized Representative of such Authorized Participant. 

	
                         
 	
                        c.
 	
                        Upon receipt of a valid Redemption Order, the Trustee shall send to the Authorized Participant (with copy to the Custodian), via facsimile or electronic mail message, no later than 5:00 p.m. (New York time) on the Order Date for such Redemption Order a 
 

 

 

S1-7

 

	 	 	copy of the corresponding Redemption Order endorsed “Accepted” by the Trustee and indicating the Basket Amount that the Custodian shall Deliver to the Authorized Participant in respect of each Basket being redeemed. 

	
                         
 	
                        d.
 	
                        Provided that by 4:00 p.m. (New York time) on the second Business Day following the Order Date of a Redemption Order, the Trustee shall have confirmed in writing to the Custodian that: 
 

	
                         
 	
                        (i)
 	
                        the Authorized Participant has Delivered to the Trustee’s account at DTC the total number of Shares to be redeemed by such Authorized Participant pursuant to such Redemption Order; 
 

	
                         
 	
                        (ii)
 	
                        the Authorized Participant has paid or agreed to pay the Trustee a per order transaction fee of US$500; 
 

	
                         
 	
                        (iii)
 	
                        the Authorized Participant has agreed to pay, or reimburse the Custodian or the Trust the amount of, any applicable taxes (including VAT) which is or becomes due in connection with the Delivery of Relevant Bullion to the Authorized Participant; and 
 

	
                         
 	
                        (iv)
 	
                        any other conditions to the redemption under the Trust Agreement have been satisfied, the Custodian will on the next following London Business Day Deliver, as applicable to the specific Redemption Order, unallocated Silver or Gold loco London or unallocated Platinum or Palladium loco Zurich in the amounts specified in the communication sent in compliance with paragraph “c” above, to the account indicated by the redeeming Authorized Participant in its Redemption Order (which shall be an appropriate a bullion account in London with an LBMA member or LPPM member, as applicable for the type of Bullion involved). Having made such Delivery, the Custodian will send written confirmation thereof to the Trustee who will then cancel the Shares so redeemed.
 

	
                         
 	
                        e.
 	
                        In all other cases, Delivery must be completed by the Custodian as soon as, in the reasonable judgment of the Custodian, it is practicable following receipt of written confirmation from the Trustee as described in clauses “i” to “iv” of paragraph “d” above.
 

	
                         
 	
                        f.
 	
                        The foregoing provisions notwithstanding, the Custodian shall not be liable for any failure or delay in making Delivery of Bullion in respect of a Redemption Order arising from nuclear fission or fusion, radioactivity, war, terrorist event, invasion, insurrection, civil commotion, riot, strike, act of government, public authority or act of God, or a similar cause that is beyond the Custodian’s control. In the event of any such delay, the time to complete Delivery in respect of a Redemption Order will be extended for a period equal to that during which the inability to perform continues.
 

	
                         
 	
                        g.
 	
                        In the event that, by 4:00 p.m. (New York time) on the second Business Day following the Order Date of a Redemption Order, Trustee’s account at DTC shall not have been credited with the total number of Shares corresponding to the total number of Baskets to be redeemed pursuant to such Redemption Order, the Trustee (in consultation with the Sponsor) will cancel such Redemption Order and will send via fax or electronic mail 
 

 

 

S1-8

 

  message notice of such cancellation to the respective Authorized Participant and the Custodian.

	
                         
 	
                        h.
 	
                        The Custodian is not a clearing bank for platinum and palladium and will be reliant on its Zurich clearing agent in Zurich to credit its own account at that bank in order to effect creations and redemptions of Shares involving Platinum or Palladium. In the case of redemptions, it may take longer than three business days for Platinum or Palladium to be credited to such account and if so the settlement will be delayed.
 

IN WITNESS WHEREOF, the Sponsor and the Trustee have executed these Creation and Redemption Procedures as of the date set forth above.

THE BANK OF NEW YORK MELLON, in its capacity as 

Trustee 

 

  	 
	 
	 

	By: 
	/s/ 
	 
	 
	 

	 
	

      	 
	 
	 

	Name:
	 
	 
	 
	 

	Title:
	 
	 
	 
	 

 

 

  	ETF SECURITIES USA LLC, in its capacity as 

              Sponsor
	 
	 

	 
	 
	 

	By: 
	

              /s/ 
	 
	 
	 

	 
	
      	 
	 
	 

	Name:
	 
	 
	 
	 

	Title:
	 
	 
	 
	 

 

 

S1-9

ANNEX I TO CREATION AND REDEMPTION PROCEDURES

THE BANK OF NEW YORK MELLON, TRUSTEE

CREATION/REDEMPTION ORDER FORM

UNALLOCATED ORDERS ONLY

 

	
                        CONTACT INFORMATION FOR ORDER EXECUTION:
 
	
                        Telephone order number
 	
                         
 	
                        (718) 315-4811 / 315-4512
 
	
                        Fax order number:
 	
                         
 	
                        (718) 315-4881
 
	
                        Custodian Instruction:
 	
                         
 	
                         
 

Participant must complete all items in Part 1. The Trustee in its discretion may reject any order not submitted in complete form.

I. TO BE COMPLETED BY PARTICIPANT: 

Name of Trust: ____________________________________________

 

	
      Date: __________________________
 	
       
 	
      Time: _________________________
 
	
                        Broker Name: ___________________
 	
                         
 	
                        Firm Name: ____________________
 
	
                        DTC Participant Number: _________
 	
                         
 	
                        Fax Number: ___________________
 
	
                        Telephone Number: _______________
 	
                         
 	
  Symbol: _______________________
 

Type of order (Check Creation or Redemption please)  

 

	Creation: ______________________________
	 
	Redemption: _________________________

	# of Baskets: 
	 
	Number: ____________________________

	Order # 
	 
	Number written out: ___________________

Please indicate Bullion clearing agent: 

	
      JP Morgan
 	
                        o
 	
                        Deutsche Bank
 	
                        o
 	
      HSBC
 	
                        o
 	
      Bank of Nova Scotia
 	
                        o
 	
      UBS
 	
      o
 

	
      Other
 	o
	
      ________________
 

This Purchase or Redemption Order is subject to the terms and conditions of the Trust Agreement of the Shares of the Trust as currently in effect and the Authorized Participant Agreement between the Authorized Participant, the Trustee and the Sponsor named therein. All representations and warranties of the Authorized Participant set forth in such Trust Agreement (including, if this is a Purchase Order, the representations in Section 3.2 of the Trust Agreement).and in the Authorized Participant Agreement are incorporated herein by reference and are true and accurate as of the date hereof.

The undersigned does hereby certify as of the date set forth below that he/she is an Authorized Representative under the Authorized Participant Agreement and that he/she is authorized to deliver this Purchase or Redemption Order to the Trustee on behalf of the Authorized Participant. The Authorized Participant acknowledges and agrees that that (1) once accepted by the Trustee, this Purchase or Redemption Order will become a legally binding contract for the delivery of the Basket Amount per Basket, or the number of Baskets, indicated above, and that the final Basket Amount will be announced at the conclusion of the trading day, and (2) any taxes (including Value Added Taxes) incurred in connection with this transaction will be the responsibility of, and will be reimbursed upon demand from the Custodian or the Trust by, the Authorized Participant.

 

	
                         
 	
                         
 	
       
 	
                         
 	
                         
 
	
                        
 	
                         
 	
                        
 	
                         
 	
                        
 
	
                         
 	
                         
 	
                        Authorized Representative’s Signature
 	
                         
 	
                        Date
 

 

 

S1-10

 

II. TO BE COMPLETED BY TRUSTEE AND CUSTODIAN: 

This certifies that the above order has been: 

______________________Accepted by the Trustee

______________________Accepted by Custodian 

______________________Declined-Reason: ____________________________________________

	
                        Final # of Ounces: ______________________
 	
                        Final # of Shares: ______________________
 

Final Cash Due to BNYM ________________

 

	
                         
 	
                         
 	
                         
 	
                         
 	
       
 
	
                        
 	
                         
 	
                        
 	
                         
 	
                        
 
	
                        Date
 	
                         
 	
                        Time
 	
                         
 	
                        Authorized Signature of Custodian
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        
 	
                         
 	
                        
 	
                         
 	
                        
 
	
                        Date
 	
                         
 	
                        Time
 	
                         
 	
                        Authorized Signature of Trustee
 

 

 

S1-11

 

SCHEDULE 2- STANDARD TERMS

 

TABLE OF CONTENTS—SCHEDULE 1

 

	
       
 	
                         
 	
                        Page
 
	
                         
 	
                         
 	
                        
 
	
                        ARTICLE I ORDERS FOR PURCHASE AND REDEMPTION
 	
                         
 	
                        1
 
	
                        Section 1.01. Authorization to Purchase and Redeem Baskets
 	
                         
 	
                        1
 
	
                        Section 1.02. Procedures for Orders
 	
                         
 	
                        1
 
	
                        Section 1.03. Consent to Recording
 	
                         
 	
                        1
 
	
                        Section 1.04. Irrevocability
 	
                         
 	
                        1
 
	
                        Section 1.05. Costs and Expenses
 	
                         
 	
                        1
 
	
                        Section 1.06. Delivery of Property to the Trust
 	
                         
 	
                        1
 
	
                        Section 1.07. Title to Deposit Property and Shares Surrendered for Redemption
 	
                         
 	
                        1
 
	
                        Section 1.08. Certain Payments or Distributions.
 	
                         
 	
                        2
 
	
                        ARTICLE II AUTHORIZED REPRESENTATIVES
 	
                         
 	
                        2
 
	
                        Section 2.01. Certification
 	
                         
 	
                        2
 
	
                        Section 2.02. PIN Numbers
 	
                         
 	
                        3
 
	
                        Section 2.03. Termination of Authority
 	
                         
 	
                        3
 
	
                        Section 2.04. Verification
 	
                         
 	
                        3
 
	
                        ARTICLE III STATUS OF THE AUTHORIZED PARTICIPANT
 	
                         
 	
                        3
 
	
                        Section 3.01. Clearing Status
 	
                         
 	
                        3
 
	
                        Section 3.02. Broker-Dealer Status
 	
                         
 	
                        4
 
	
                        Section 3.03. Foreign Status
 	
                         
 	
                        4
 
	
                        Section 3.04. Compliance with Certain Laws
 	
                         
 	
                        4
 
	
                        Section 3.05. Authorized Participant Status
 	
                         
 	
                        4
 
	
                        ARTICLE IV ROLE OF AUTHORIZED PARTICIPANT
 	
                         
 	
                        5
 
	
                        Section 4.01. Independent Contractor
 	
                         
 	
                        5
 
	
                        Section 4.02. Rights and Obligations of DTC Participant
 	
                         
 	
                        5
 
	
                        Section 4.03. Beneficial Owner Communications
 	
                         
 	
                        5
 
	
                        ARTICLE V MARKETING MATERIALS AND REPRESENTATIONS
 	
                         
 	
                        5
 
	
                        Section 5.01. Authorized Participant’s Representation
 	
                         
 	
                        5
 
	
                        Section 5.02. Prospectus
 	
                         
 	
                        6
 
	
                        ARTICLE VI INDEMNIFICATION; LIMITATION OF LIABILITY
 	
                         
 	
                        6
 
	
                        Section 6.01. Indemnification
 	
                         
 	
                        6
 
	
                        ARTICLE VII MISCELLANEOUS
 	
                         
 	
                        7
 
	
                        Section 7.01. Commencement of Trading
 	
                         
 	
                        7
 

 

 

i

 

STANDARD TERMS FOR AUTHORIZED PARTICIPANT AGREEMENTS (the “Standard Terms”) agreed to as of [               ], 2009 by and between The Bank of New York Mellon, a New York banking corporation, and ETF Securities USA LLC, a Delaware corporation.

ARTICLE I

ORDERS FOR PURCHASE AND REDEMPTION

Section 1.01. Authorization to Purchase and Redeem Baskets. Subject to the provisions of the Authorized Participant Agreement, during the term of the Authorized Participant Agreement the Authorized Participant will be authorized to purchase and redeem Baskets of Shares in compliance with the provisions of the Trust Agreement.

Section 1.02. Procedures for Orders. Each party hereto agrees to comply with the provisions of the Trust Agreement and the Procedures to the extent applicable to it.

Section 1.03. Consent to Recording. The phone lines used by the Trustee, the Custodian or their affiliated persons may be recorded, and the Authorized Participant hereby consents to the recording of all calls with any of those parties.

Section 1.04. Irrevocability. The Authorized Participant agrees on behalf of itself and any Authorized Participant Client that delivery to the Trustee of an Order shall be irrevocable; provided that each of the Trust and the Sponsor reserves the right to reject any Order in compliance with the provisions of the Trust Agreement.

Section 1.05. Costs and Expenses. The Authorized Participant shall be responsible for any and all expenses and costs incurred by the Trust in connection with any Orders.

Section 1.06. Delivery of Property to the Trust. The Authorized Participant understands and agrees that in the event Deposit Property is not transferred to the Trust by the time specified in the Purchase Order and in compliance with the Procedures and the Trust Agreement, a Purchase Order may be cancelled by the Trustee and the Authorized Participant will be solely responsible for all costs incurred by the Trust, the Trustee or the Custodian related to the cancelled Order.

Section 1.07. Title to Deposit Property and Shares Surrendered for Redemption. The Authorized Participant represents and warrants to the Trustee that 

a. in connection with each Purchase Order, the Authorized Participant will have full power and authority to transfer to the Trust the corresponding Deposit Property, and that upon delivery of such Deposit Property to the Custodian and/or the relevant subcustodian in accordance with the Procedures, the Trust will acquire good and unencumbered title to such property, free and clear of all liens, charges, duties imposed on the transfer of assets and encumbrances and not subject to any adverse claims or transferability restrictions, whether arising by operation of law or otherwise; and 

b. in connection with a Redemption Order, the Authorized Participant will have full power and authority to surrender to the Trustee for redemption the

 

 

S2-1

 

corresponding Shares, and upon such surrender the Trust will acquire good and unencumbered title to such Shares, free and clear of all liens, charges, duties imposed on the transfer of assets and encumbrances and not subject to any adverse claims, transferability restrictions (whether arising by operation of law or otherwise), loan, pledge, repurchase or securities lending agreements or other arrangements which would preclude the delivery of such Shares on a “regular way” basis.

Section 1.08. Certain Payments or Distributions.

a. With respect to any Purchase Order, the Trust acknowledges and agrees to return to the Authorized Participant any payment, distribution or other amount paid to the Trust in respect of any Deposit Property transferred to the Trust that, based on the valuation of such Deposit Property at the time of transfer, should have been paid to the Authorized Participant. Likewise, the Authorized Participant acknowledges and agrees to return to the Trust any payment, distribution or other amount paid to the Authorized Participant or any Authorized Participant Client in respect of any Deposit Property transferred to the Trust that, based on the valuation of such Deposit Property at the time of transfer, should have been paid to the Trust.

b. With respect to any Redemption Order, the Authorized Participant on behalf of itself and any Authorized Participant Client acknowledges and agrees to return to the Trust any payment, distribution or other amount paid to it or an Authorized Participant Client in respect of any property transferred to the Authorized Participant or any Authorized Participant Client that, based on the valuation of such property at the time of transfer, should have been paid to the Trust. The Trust is entitled to reduce the amount of any property due to the Authorized Participant or any Authorized Participant Client by an amount equal to any payment, distribution or other sum to be paid to the Authorized Participant or to the Authorized Participant Client in respect of any property transferred to the Authorized Participant or any Authorized Participant Client that, based on the
  valuation of such property at the time of transfer, should be paid to the Trust. Likewise, the Trust acknowledges and agrees to return to the Authorized Participant or any Authorized Participant Client any payment, distribution or other amount paid to it in respect of any Shares transferred to the Trust that, based on the valuation of such Shares at the time of transfer, should have been paid to the Authorized Participant or such Authorized Participant Client.

ARTICLE II

AUTHORIZED REPRESENTATIVES

Section 2.01. Certification. Concurrently with the execution of the Authorized Participant Agreement, and as requested from time to time by the Trustee but no less frequently than annually, the Authorized Participant shall deliver to the Trust a certificate signed by the Authorized Participant’s Secretary or other duly authorized official setting forth the names, e-mail addresses and telephone and facsimile numbers of all persons authorized to give instructions relating to any activity contemplated hereby or any other notice, request or instruction on behalf of the Authorized Participant (each an “Authorized Representative”). Such certificate may be accepted and relied upon by the Trust as conclusive evidence of the facts

 

 

S2-2

 

set forth therein and shall be considered to be in full force and effect until (i) receipt by the Trust of a superseding certificate in a form approved by the Trust bearing a subsequent date, or (ii) termination of the Authorized Participant Agreement.

Section 2.02. PIN Numbers. The Trustee shall issue to each Authorized Participant a unique personal identification number (“PIN Number”) by which such Authorized Participant shall be identified and instructions issued by the Authorized Participant shall be authenticated. The PIN Number shall be kept confidential and only provided to Authorized Representatives. The Authorized Participant may revoke the PIN Number at any time upon written notice to the Trustee, and the Authorized Participant shall be responsible for doing so in the event that it becomes aware that an unauthorized person has received access to its PIN Number or has or intends to use the PIN Number in an unauthorized manner. Upon receipt of such
written request, the Trustee shall, as promptly as practicable, de-activate the PIN Number. If an Authorized Participant’s PIN Number is changed, the new PIN Number will become effective on a date mutually agreed upon by the Authorized Participant and the Trustee. The Authorized Participant agrees that, absent the Trustee’s fraud, willful misconduct or failure to cancel the PIN Number promptly following a written request to do so from the Authorized Participant or the termination of the Authorized Participant Agreement, none of the Trust or the Trustee shall be liable for losses incurred by the Authorized Participant as a result of unauthorized use of the Authorized Participant’s PIN Number prior to the time the Authorized Participant provides notice to the Trustee of the termination or revocation of authority pursuant to Section 2.03.

Section 2.03. Termination of Authority. Upon the termination or revocation of authority of an Authorized Representative by the Authorized Participant, the Authorized Participant shall (i) give immediate written notice of such fact to the Trustee and such notice shall be effective upon receipt by the Trustee; and (ii) request a new PIN Number. The Trustee shall, as promptly as practicable, de-activate the PIN Number upon receipt of such written notice.

Section 2.04. Verification. The Trustee may assume that all instructions issued to it using the Authorized Participant’s PIN Number have been properly placed by Authorized Representatives, unless the Trustee has actual knowledge to the contrary or the Authorized Participant has revoked its PIN Number. The Trustee shall have no duty to verify that an Order is being placed by an Authorized Representative. The Authorized Participant agrees that the Trustee shall not be responsible for any losses incurred by the Authorized Participant as a result of an Authorized Representative identifying himself or herself as a different Authorized Representative or an unauthorized person identifying himself or herself as an Authorized Representative, unless the Trustee previously received from the Authorized
Participant written notice to revoke its PIN Number.

ARTICLE III

STATUS OF THE AUTHORIZED PARTICIPANT

Section 3.01. Clearing Status. The Authorized Participant represents, covenants and warrants that, as of the date of execution of the Authorized Participant Agreement, and at all times during the term of the Authorized Participant Agreement, the Authorized Participant is and will be entitled to use the clearing and settlement services of each of the national or international clearing and settlement organizations through which, in compliance with the Procedures, the

 

 

S2-3

 

transactions contemplated hereby will clear and settle. Any change in the foregoing status of the Authorized Participant shall terminate the Authorized Participant Agreement and the Authorized Participant shall give prompt written notice thereof to the Trustee.

Section 3.02. Broker-Dealer Status. The Authorized Participant represents and warrants that, unless the following paragraph is applicable to it, it is (i) registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, (ii) qualified to act as a broker or dealer in the states or other jurisdictions where it transacts business to the extent so required by applicable law, and (iii) a member in good standing with FINRA. The Authorized Participant agrees that it will maintain such registrations, qualifications, and membership in good standing and in full force and effect throughout the term of the Authorized Participant Agreement. The Authorized Participant further agrees to comply with all applicable U.S. federal laws, the laws of the states or other jurisdictions concerned, and the
rules and regulations promulgated thereunder, to the extent such laws and regulations are applicable to the Authorized Participant’s transactions in Shares, and with the Constitution, FINRA By-Laws and Conduct Rules of the NASD (or with comparable FINRA Conduct Rules, if such NASD Conduct Rules are subsequently repealed, rescinded, or are otherwise replaced by FINRA Conduct Rules) applicable to its activities as an Authorized Participant, and that it will not offer or sell Shares in any state or jurisdiction where they may not lawfully be offered and/or sold.

Section 3.03. Foreign Status. If the Authorized Participant is offering and selling Shares in jurisdictions outside the several states, territories and possessions of the United States and is not otherwise required to be registered, qualified, or a member of FINRA as set forth in the preceding paragraph, the Authorized Participant nevertheless agrees to observe the applicable laws of the jurisdiction in which such offer and/or sale is made (e.g., it will not offer or sell Shares of the Trust in any state or jurisdiction where they may not lawfully be offered and/or sold), to comply with the full disclosure requirements of the 1933 Act and the regulations promulgated thereunder and to conduct its business in accordance with the spirit of the FINRA Conduct Rules.

Section 3.04. Compliance with Certain Laws. If the Authorized Participant is subject to the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“U.S.A. PATRIOT Act”), the Authorized Purchaser is in compliance with the anti-money laundering and related provisions of the U.S.A. PATRIOT Act.

Section 3.05. Authorized Participant Status.

a. The Authorized Participant understands and acknowledges that the method by which Baskets of Shares will be created and traded may raise certain issues under applicable securities laws. For example, because new Baskets of Shares may be issued and sold by the Trust on an ongoing basis, at any point a “distribution”, as such term is used in the 1933 Act, may occur. The Authorized Participant understands and acknowledges that some activities on its part, depending on the circumstances, may result in its being deemed a participant in a distribution in a manner which could render it a statutory underwriter and subject it to the prospectus delivery and liability provisions of the 1933 Act.

 

 

S2-4

 

b. The Sponsor shall ensure that the Prospectus contains an accurate and current listing of Authorized Participants.

ARTICLE IV

ROLE OF AUTHORIZED PARTICIPANT

Section 4.01. Independent Contractor. The Authorized Participant acknowledges and agrees that for all purposes of the Authorized Participant Agreement, the Authorized Participant will be deemed to be an independent contractor, and will have no authority to act as agent for the Trust or the Trustee in any matter or in any respect. The Authorized Participant agrees to make itself and its employees available, upon request, during normal business hours to consult with the Trustee, the Sponsor or their designees concerning the performance of the Authorized Participant’s responsibilities under the Authorized Participant Agreement; provided, however, that the Authorized Participant shall be under no obligation to divulge or
otherwise disclose any information that the Authorized Participant reasonably believes (i) it is under legal obligation not to disclose, or (ii) it is confidential or proprietary in nature.

Section 4.02. Rights and Obligations of DTC Participant. In executing the Authorized Participant Agreement, the Authorized Participant agrees in connection with any purchase or redemption transactions in which it acts for an Authorized Participant Client or for any other DTC Participant or indirect participant, or any other Beneficial Owner, that it shall extend to any such party all of the rights, and shall be bound by all of the obligations, of a DTC Participant in addition to any obligations that it undertakes hereunder or in accordance with the Procedures.

Section 4.03. Beneficial Owner Communications. The Authorized Participant agrees, subject to any limitations arising under federal or state securities laws relating to privacy or other obligations it may have to its customers, to assist the Trustee or the Sponsor in determining the ownership level of each beneficial owner relating to positions in Shares that the Authorized Participant may hold as record holder. In addition, the Authorized Participant agrees, in accordance with applicable laws, rules and regulations, at the request of the Sponsor or the Trustee to forward to such beneficial owners written materials and communications received from the requesting party in sufficient quantities to allow mailing thereof to such beneficial owners, including notices, annual reports, disclosure or other
informational materials and any amendments or supplements thereto that may be required to be sent by the Sponsor or the Trustee to such beneficial owners pursuant to the Trust Agreement or applicable law or regulation, or that the Sponsor or the Trustee reasonably wishes to distribute, at its own expense, to such beneficial owners.

ARTICLE V

MARKETING MATERIALS AND REPRESENTATIONS

Section 5.01. Authorized Participant’s Representation. The Authorized Participant represents, warrants and agrees that it will not make, or permit any of its representatives to make, any representations concerning Shares other than those contained in the Trust’s then current Prospectus or in any promotional materials or sales literature furnished to the Authorized Participant by the Sponsor. The Authorized Participant agrees to provide each purchaser of

 

 

S2-5

 

Shares, whenever required by Rule 173 under the 1933 Act, a notice in compliance with the provisions of such Rule or a copy of the final Prospectus. The Authorized Participant agrees not to furnish or cause to be furnished to any person or display or publish any information or materials relating to Shares (including, without limitation, promotional materials and sales literature, advertisements, press releases, announcements, statements, posters, signs or other similar materials), except such information and materials as may be furnished to the Authorized Participant by the Sponsor and such other information and materials as may be approved in writing by the Sponsor. The Authorized Participant understands that the Trust will not be advertised as offering redeemable securities, and that any advertising materials will prominently disclose that the Shares are not redeemable units of beneficial
interest in the Trust. Notwithstanding the foregoing, the Authorized Participant may, without the written approval of the Sponsor, prepare and circulate in the regular course of its business reports, research or similar materials that include information, opinions or recommendations relating to Shares (i) for public dissemination, provided that such reports, research or similar materials compare the relative merits and benefits of Shares with other products and do not discuss Shares more prominently than such other products and (ii) for internal use by the Authorized Participant. Copies of the then current Prospectus of the Trust will be supplied by the Sponsor to the Authorized Participant in reasonable quantities upon request.

Section 5.02. Prospectus. The Sponsor will provide, or cause to be provided, to the Authorized Participant copies of the then current Prospectus and any printed supplemental information in reasonable quantities upon request. The Sponsor will notify the Authorized Participant when a revised, supplemented or amended Prospectus for the Shares is available, and make available to the Authorized Participant copies of such revised, supplemented or amended Prospectus at such time and in such quantities as may be reasonable to permit the Authorized Participant to comply with any obligation the Authorized Participant may have to deliver such Prospectus to its customers. The Sponsor shall be deemed to have complied with this Section 5.02 when the Authorized Participant has received such revised, supplemented or
amended Prospectus by e-mail, in printable form, with such number of hard copies as may be agreed from time to time by the parties promptly thereafter.

ARTICLE VI

INDEMNIFICATION; LIMITATION OF LIABILITY

Section 6.01. Indemnification. The provisions of this Section 6.01 shall survive termination of the Agreement.

a. The Authorized Participant shall indemnify and hold harmless the Sponsor, the Trustee, the Trust, the Custodian (which the parties agree is a third-party beneficiary under this Subsection 6.01(a)), their respective subsidiaries, Affiliates, directors, officers, employees and agents, and each person, if any, who controls such persons within the meaning of Section 15 of the 1933 Act (each an “Indemnified Party”) from and against any loss, liability, cost and expense (including attorneys’ fees) incurred by such Indemnified Party as a result of (i) any breach by the Authorized Participant of any representations or warranties of the Authorized Participant (including under Section 3.2 of the Trust Agreement); (ii) any failure on the part of the Authorized Participant to
perform any of its obligations set forth in the Authorized Participant

 

 

S2-6

 

Agreement; (iii) any failure by the Authorized Participant to comply with applicable laws, including rules and regulations of self-regulatory organizations, that apply to it; or (iv) actions of such Indemnified Party in reliance upon any instructions issued in accordance with the Procedures reasonably believed by such Indemnified Party to be genuine and to have been given by the Authorized Participant.

b. The Authorized Participant shall not be liable to any Indemnified Party for any damages arising out of (i) mistakes or errors in data provided in connection with purchase or redemption transactions except for data provided by the Authorized Participant, or (ii) mistakes or errors by, or arising out of interruptions or delays of communications with, the Trustee or any Indemnified Party.

ARTICLE VII

MISCELLANEOUS

Section 7.01. Commencement of Trading. The Authorized Participant may not submit an Order prior to the effectiveness of the registration statement, or amendment to the registration statement, filed with the Securities and Exchange Commission and pursuant to which the Authorized Participant is identified as such in the Prospectus.

IN WITNESS WHEREOF, the Sponsor and the Trustee have executed these Standard Terms as of the date set forth above.

THE BANK OF NEW YORK MELLON, in its capacity as Trustee 

 

	
                         
 	
                         
 	
                         
 
	
                        By: 
 	
                        
 /s/
 	
                         
 	
                         
 	
                          
 
	
                         
 	
                        
 	
                         
 	
                         
 	
                         
 
	
                        Name: 
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Title: 
 	
                         
 	
                         
 	
                         
 	
                         
 

 

ETF SECURITIES USA LLC, in its capacity as Sponsor 

 

	
                         
 	
                         
 	
                         
 
	
                        By: 
 	
                        
 /s/
 	
                         
 	
                         
 	
                          
 
	
                         
 	
                        
 	
                         
 	
                         
 	
                         
 
	
                        Name: 
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Title: 
 	
                         
 	
                         
 	
                         
 	
                         
 

 

 

S2-7

 

SCHEDULE 3- AUTHORIZED REPRESENTATIVES OF THE AUTHORIZED PARTICIPANT

Certificate of Authorized Representatives

Each of the following employees of [               ] (each, an “Authorized Representative”) is authorized, in accordance with the Authorized Participant Agreement dated [                    ], 2009 among [               ], the Sponsor and the Trustee, to submit Purchase Orders and Redemption Orders on behalf and in the name of [               ] and to give instructions or any other notice or request on behalf of [               ] with respect to such Orders or any other
activity contemplated by the Authorized Participant Agreement.

Name: ________________________________

E-mail Address: _________________________

Telephone: _____________________________

Fax: __________________________________

 

Name: ________________________________

E-mail Address: _________________________

Telephone: _____________________________

Fax: __________________________________

The undersigned, [               ], does hereby certify that the persons listed above have been duly authorized to act as Authorized Representatives pursuant to the Authorized Participant Agreement.

 

	
                         
 	
                         
 	
                         
 
	
                        By: 
 	
                          
 	
                         
 	
                         
 	
                          
 
	
                         
 	
                        
 	
                         
 	
                         
 	
                         
 
	
                        Name: 
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Title: 
 	
                         
 	
                         
 	
                         
 	
                         
 

 

 

S4-1Exhibit 10.1

HSBC BANK USA, NATIONAL ASSOCIATION, LONDON BRANCH

and

THE BANK OF NEW YORK MELLON

solely in its capacity as trustee of the ETFS Palladium Trust

and not individually

 

ALLOCATED ACCOUNT AGREEMENT

 

 

THIS AGREEMENT is made with effect on and from [   ] March 2009

BETWEEN

	
                        (1)
 	
                        HSBC BANK USA, NATIONAL ASSOCIATION, LONDON BRANCH, a National Association incorporated in the State of Delaware, United States of America, whose principal place of business in England is at 8 Canada Square, London E14 5HQ (the “Custodian”);
 

	
                        (2)
 	
                        THE BANK OF NEW YORK MELLON, a New York banking corporation, solely in its capacity as trustee of the ETFS Palladium 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 in the Trust Agreement). 
 

INTRODUCTION

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

	
                        (2)
 	
                        Shares may be issued by the Trust against delivery of Bullion made by way of payment for the issue of such Shares. The Trustee has agreed that Bullion delivered to it on subscription for Shares will be paid into the Metal Accounts.
 

	
                        (3)
 	
                        The Custodian has agreed to transfer Bullion from the Allocated Account into the Unallocated Account pursuant to the terms of this Agreement.
 

	
                        (5)
 	
                        The Trustee has agreed that the Allocated Account will be established by the Trustee in its name (for each Shareholder pursuant to the Trust Agreement), and that the Trustee will have the sole right to give instructions for the making of any payments out of the Allocated 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 intermediaries, controls, or is controlled by, or is under common control with the Custodian;

 

 

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

“Authorised 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 authorised 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 Business Day on which the Trustee requests the Custodian to credit to the Allocated Account Bullion debited from the Unallocated Account;

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

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

“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;

“HSBCnet” means the HSBC Group’s electronic system known as HSBCnet which the Custodian authorises its customers to use from time to time pursuant to the terms of a separate agreement entered into between the Custodian and the customer;

“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 Bullion market are open for the transaction of business in London;

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

“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 [   ] with the Securities and
    Exchange Commission in accordance with the U.S. Securities Act of 1933, as
    amended, in relation to the Shares dated on or about [   ]
    as the same may be modified, supplemented or amended from time to time;

 

 

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

“Redemption Form” means a notice in the form prescribed from time to time by the Trust requesting Redemption of Shares; 

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

“Relevant Association” – means 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 or the activities of a Sub-Custodian;

“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 Palladium Shares” created pursuant to and constituted by the Trust Agreement;

“Sub-Custodian” means a sub-custodian, agent or depository (including an entity within the Custodian’s corporate group) appointed by the Custodian pursuant to clause 9 to perform any of the Custodian’s duties under this Agreement including the custody and safekeeping of Bullion;

“Transfer Notice” means any notice of a deposit or withdrawal made pursuant to clause 4 or clause 5 of this Agreement;

“Trust” means the ETFS Palladium Trust formed pursuant to the Trust Agreement

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

“Unallocated Account” means the unallocated Bullion account number [   ] established in the name of the Trustee with the Custodian pursuant to the Unallocated Account Agreement;

“Unallocated Account Agreement” means the Unallocated Account Agreement dated [   ] March 2009 between the Trustee and the Custodian pursuant to which the Unallocated Account is established and operated;

“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;

 

 

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“Withdrawal Date” means the Business Day on which the Trustee wishes a withdrawal of Bullion from the Allocated 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 bullion market are open for the transaction of business in Zurich;

“Zurich Sub-Custodian” means any firm selected by the Custodian to hold platinum or palladium on behalf of the Custodian in the firm’s bonded Swiss vault premises on a segregated basis, in the manner provided in clauses 8.2, 8.3 and 9.3 and whose appointment has been approved in writing by the Trustee and the Company (not to be unreasonably with held).

	
                        2.2
 	
                        Headings: The headings in this Agreement do not affect its interpretation.
 

	
                        2.3
 	
                        Singular and plural: References to the singular include the plural and vice versa.
 

	
                        3.
 	
                        ALLOCATED ACCOUNT
 

	
                        3.1
 	
                        Opening Allocated Account: The Custodian shall open and maintain the Allocated Account in the name of the Trustee (in its capacity as trustee for the Shareholders). 
 

	
                        3.2
 	
                        Deposits and withdrawals: The Allocated Account shall evidence and record deposits and withdrawals of Bullion made pursuant to the terms of this Agreement. 
 

	
                        3.3
 	
                        Denomination of Allocated Account: The Allocated Account will hold deposits of Bullion and will be denominated in troy ounces to three decimal places.
 

	
                        3.4
 	
                        Reports: Account reports will be provided to the Trustee by the Custodian by fax or by e-mail (at the option of the Trustee) by the close of each Business Day should there be any credits or debits to the Allocated Account that same day. 
 

	
                        3.5
 	
                        Reversal of entries: The Custodian at all times reserves the right to reverse any provisional or erroneous entries to the Allocated Account with effect back-valued to the date upon which the final or correct entry (or no entry) should have been made.
 

	
                        3.6
 	
                        Provision of Information: The Custodian agrees that it will forthwith notify the Trustee in writing if (i) any encumbrance of which it is aware is or is purported to have been created over or in respect of the Allocated Account or any of the amounts standing to the credit thereof;.
 

	
                        3.7
 	
                        Access: The Custodian will allow the Sponsor and the Trustee and their Bullion auditors (currently Inspectorate International Limited), and will procure that any Zurich Sub-Custodian that it appoints, allows, only such access to its premises during normal business hours, to examine the Bullion and such records, as they
 

 

 

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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.

	
                        4.
 	
                        DEPOSITS
 

	
                        4.1
 	
                        Procedure: The Custodian shall receive deposits of Bullion into the Allocated Account relating to the same kind of Bullion and having the same denomination as that (or one of those) to which the Allocated Account relates only pursuant to transfers from the Unallocated Account. 
 

	
                        4.2
 	
                        Notice Requirements: A confirmation from the Trustee to the Custodian, given through HSBCnet (or such other authenticated method as may be agreed by the parties) or in writing, that a valid Redemption Form has been submitted for Shares shall be deemed an instruction given under Clause 5.1 unless otherwise notified in writing by the Trustee. Any other notice relating to a withdrawal of Bullion must be in writing. 
 

	
                        4.3
 	
                        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 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. 
 

	
                        4.4
 	
                        Allocation: 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.
 	
                        WITHDRAWALS
 

	
                        5.1
 	
                        Procedure: The Trustee may at any time give instructions to the Custodian for the withdrawal of Bullion from the Allocated Account but only by way of de-allocation to the Unallocated Account or such other account as the Trustee may instruct (subject to Clause 5.3 below). 
 

	
                        5.2
 	
                        Notice Requirements: A confirmation from the Trustee to the Custodian given through HSBCnet (or such other authenticated method as may be agreed by the parties) or in writing, that a valid Redemption Form has been submitted for Shares shall be deemed an instruction given under Clause 5.1 unless otherwise notified in writing by the Trustee. Any other notice relating to a withdrawal of Bullion must be in writing. 
 

	
                        5.3
 	
                        Right to amend procedure: The Custodian may amend the procedure for the withdrawal of Bullion only where such amendment is caused by a change in the
 

 

 

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Rules or procedures of the Relevant Association. Any such amendment will subject to the conditions of the preceding clause 4.3 and will be promptly notified to the Trust and the Trustee, such notice to be given in advance of implementation whenever practicable.

	
                        5.4
 	
                        Specification of Bullion: The Custodian may specify the serial numbers of the bars to be withdrawn once it receives instructions from the Trustee to effect a withdrawal of Bullion pursuant to Clause 5.1. The Custodian is entitled to select the Bullion to be made available to the Trustee; provided, however, that to the extent the Trustee provides specific serial numbers of bars to be so selected, the Custodian will take reasonable efforts to select such Bullion as specified by the Trustee. The Custodian may require more than two Business Days prior notice in the event that the Trustee does specify the serial numbers of bars to be withdrawn. 
 

	
                        5.5
 	
                        Collection of Bullion: The Trustee agrees that in the normal course ( which, for the avoidance of doubt, shall not include withdrawal in connection with the termination of this Agreement) withdrawal of Bullion from the Allocated Account shall be by way of de-allocation and subsequent credit of Bullion to the Unallocated Account.
 

	
                        5.6
 	
                        De-allocation: Following receipt by the Custodian of notice for the withdrawal of Bullion from the Allocated Account pursuant to Clause 5.1, the Custodian shall de-allocate sufficient Bullion from the Allocated Account to credit the Unallocated Account in the amount required. The Trustee acknowledges that the process of de-allocation of Bullion for withdrawal and/or credit to the Unallocated Account may involve minimal adjustments to the weight of Bullion to be withdrawn to adjust such weight to the whole bars available.
 

	
                        5.7
 	
                        Risk: Where there is a shipment to or 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.
 

	
                        6.
 	
                        INSTRUCTIONS
 

	
                        6.1
 	
                        Giving of instructions: It is hereby agreed that only the Trustee shall have the right to give instructions to the Custodian for withdrawal of Bullion from the Allocated Account. All instructions given by the Trustee to the Custodian shall be given in writing and signed by two Authorised Signatories of the Trustee. The Trustee shall notify the Custodian in writing of the names of the people who are authorised 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.
 

	
                        6.2
 	
                        Account not to be overdrawn: The Allocated Account may not at any time have a debit balance thereon, and it is hereby agreed that no instruction shall be valid to the extent that the effect thereof would be for the Allocated Account to have a debit balance thereon.
 

 

 

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                        6.3
 	
                        Amendments: Once given, instructions continue in full force and effect until they are cancelled, amended or superseded. Notice of amendment shall have effect only after actual receipt by the Custodian.
 

	
                        6.4
 	
                        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.
 

	
                        6.5
 	
                        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.
 

	
                        7.
 	
                        CONFIDENTIALITY
 

	
                        7.1
 	
                        Disclosure to others: Subject to clause 7.2, 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.
 

	
                        7.2
 	
                        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, 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), by a Sub-Custodian 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.
 

	
                        8.
 	
                        CUSTODY SERVICES
 

	
                        8.1
 	
                        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. 
 

	
                        8.2
 	
                        Segregation of Bullion: The Custodian will be responsible for the safekeeping of the Bullion on the terms and conditions of this Agreement. The Custodian will segregate the Bullion from any Bullion which the Custodian owns or holds for others by making appropriate entries in its books and records and will require Sub-Custodians to segregate the Bullion from any Palladium which they own or hold for others by making appropriate entries in their books and records. The
 

 

 

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Custodian shall be deemed to have required such segregation in relation to the Sub-Custodians named in Clause 9.1.

	
                        8.3
 	
                        Ownership of Bullion: The Custodian will identify in its books that the Bullion belongs to the Trustee (on trust for the Shareholders).
 

	
                        8.4
 	
                        Location of Bullion: Subject to and in accordance with Clause 9.1 and unless otherwise agreed between the Parties, Bullion must be held by the Custodian at its London vault premises. The Custodian agrees that it shall use, or where applicable procure any Sub-Custodian to use, commercially reasonable efforts promptly to transport any Bullion held for the Trustee to these locations at the Custodian’s cost and risk. The Custodian agrees that all delivery and packing shall be in accordance with the Rules and Relevant Association good market practices.
 

	
                        9.
 	
                        SUB-CUSTODIANS
 

	
                        9.1
 	
                        Sub-Custodians: The Custodian may employ Sub-Custodians solely for the temporary custody and safekeeping of Bullion until transported to the relevant vault premises as provided in Clause 8.4. The Sub-Custodians the Custodian selects may themselves select sub-custodians to provide such temporary custody and safekeeping of Bullion, but such sub-custodians shall not by such selection or otherwise be, or be considered to be, a Sub-Custodian as such term is used herein. The Custodian will use reasonable care in selecting any Sub-Custodian. As of the date of this Agreement, the Sub-Custodians that the Custodian uses are: The Bank of Nova Scotia (ScotiaMocatta), Deutsche Bank AG, JPMorganChase Bank, N.A., UBS AG, Barclays Bank PLC, Johnson Matthey plc, Brink’s Global Services Inc. and ViaMat
International. The Custodian will notify each of the Trustee if it selects any additional Sub-Custodian, or stops using any Sub-Custodian for such purpose. The receipt of notice by each of the Trustee and the Company that the Custodian has selected a Sub-Custodian (including those named in this clause 9.1) shall not be deemed to limit the Custodian’s responsibility in selecting such Sub-Custodian.
 

	
                        9.2
 	
                        Liability: Except for the Custodian’s obligation to make commercially reasonable efforts to obtain delivery of Bullion from Sub-Custodians, the Custodian shall not be liable in contract, tort or otherwise for any loss, damage or expense arising directly or indirectly from an act or omission, or insolvency, of any Sub-Custodian any further delegate of such Sub-Custodian unless the appointment of that Sub-Custodian was made by the Custodian negligently or in bad faith. 
 

	
                        9.3
 	
                        Zurich Sub-Custodians: The Custodian may employ Zurich Sub-Custodians for the custody and safekeeping of platinum and palladium in their bonded Swiss vault premises. The Custodian will use reasonable care in selecting any Zurich Sub-Custodian. As of the date of this Agreement, the Zurich Sub-Custodians that the Custodian uses are Brink’s Global Services Inc. and ViaMat International. The Custodian will notify each of the Trustee and the Company if it selects any additional Zurich Sub-Custodian, or stops using any Zurich Sub-Custodian for such purpose. The receipt of notice by each of the Trustee and the Company that
 

 

 

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the Custodian has selected a Zurich Sub-Custodian (including those named in this clause 9.3) shall not be deemed to limit the Custodian’s responsibility in selecting such Zurich Sub-Custodian. Nothing in clause 9.2 shall limit the Custodian’s liability with respect to platinum or palladium held by a Zurich Sub-Custodian. In addition to the requirements of Clauses 8.2 and 8.3, the Sub-Custodian shall require any Zurich Sub-Custodian to segregate the Bullion from any platinum or palladium which they hold for the Custodian and any other customers of the Custodian by making appropriate entries in their books and records. On entering into this Agreement and on the appointment of any subsequent Zurich Sub-Custodian, the Custodian shall give to such Zurich Sub-Custodian notices in the form of Schedule 1 and ensure that the Zurich Sub-Custodian delivers to the
Trustee (with a copy to the Issuer) acknowledgements in the form of Schedule 2 prior to delivery of any Bullion to it.

	
                        10.
 	
                        REPRESENTATIONS
 

	
                        10.1
 	
                        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 deposit of Bullion under this Agreement):
 

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

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

	
                         
 	
                        (3)
 	
                        this Agreement and the obligations created under it are binding upon and enforceable against the Trustee, as Trustee, 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.
 

	
                        10.2
 	
                        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 deposit of Bullion under this Agreement):
 

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

	
                         
 	
                        (2)
 	
                        the persons entering into this Agreement on behalf of the Custodian have been duly authorised 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 
 

 

 

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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.

	
                        11.
 	
                        FEES AND EXPENSES 
 

	
                        11.1
 	
                        Fees: For the Custodian’s services under this Agreement the Trustee shall procure the payment of a fee of [   ] basis points per annum.
 

The fee payable will be calculated daily by applying the above fee rate divided by 365 (366 in a leap year), to the Custodian’s end of Business Day balance in the Allocated Account. Such fee shall be paid monthly in arrears as determined by the Custodian in Bullion relating to the same kind of Bullion and having the same denomination as that (or one of those) to which the Account relates.

	
                        11.2
 	
                        Expenses: The Trustee shall procure the payment to the Custodian on demand of all costs, charges and expenses (including any relevant taxes other than VAT, duties and legal fees but excluding fees for storage and insurance of the Bullion and any fees and expenses of Sub-Custodians, which will be recovered under clause 11.1) incurred by the Custodian in connection with the performance of its duties and obligations under this Agreement or otherwise in connection with the Bullion.
 

	
                        11.3
 	
                        Default interest: If the Trustee fails to procure payment to the Custodian of any amount when it is due, the Custodian reserves the right to charge interest (both before and after any judgement) 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.
 

	
                        11.4
 	
                        Recovery from Trust: Save as provided in clause 17, amounts payable pursuant to this clause 11 shall not be debited from the Allocated 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 Allocated Account or to the Trustee individually in respect of any such amounts.
 

	
                        12.
 	
                        VALUE ADDED TAX
 

	
                        12.1
 	
                        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 Company pursuant to this Agreement.
 

	
                        12.2
 	
                        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.
 	
                        SCOPE OF RESPONSIBILITY
 

	
                        13.1
 	
                        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 
 

 

 

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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 the Custodian notifies the Trustee promptly after any discovery of such lost or damaged Bullion.

	
                        13.2
 	
                        No duty or obligation: The Custodian is under no duty or obligation to make or take, or require any Sub-Custodian to make or take, any special arrangements or precautions beyond those required by the Rules or as specifically set forth in this Agreement.
 

	
                        13.3
 	
                        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 any 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.
 

	
                        13.4
 	
                        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 organisation, for any reason, to perform its obligations.
 

	
                        13.5
 	
                        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) 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.
 

	
                        13.6
 	
                        Third Parties: Except with respect to the Trust, which shall be considered a beneficiary of this entire Agreement, and to the Sponsor, which shall be considered a beneficiary (as applicable) of clauses 3.7 and 13.3, the Custodian does not owe any duty or obligation or have any liability towards any person who is not a party to this Agreement. This Agreement does not confer a benefit on any person who is not a party to it. The parties hereto do not intend that any term of this Agreement shall be enforceable by any person who is not a party to it and do
 

 

 

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intend that the Contracts (Rights of Third Parties) 1999 Act shall not apply to this Agreement. 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. 

	
                        14.
 	
                        TERM AND TERMINATION
 

	
                        14.1
 	
                        Method: Subject to clauses 14.2 and 14.3 below, either the Trustee or the Custodian may terminate this Agreement for any reason or if the Custodian ceases to offer the services contemplated by this Agreement to its clients or proposes to withdraw from the Bullion business, by giving not less than 90 days’ written notice to the other party. Any such notice given by the Trustee must specify:  
 

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

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

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

	
                        14.2
 	
                        Term: This Agreement shall have a fixed term up to and including [  ] provided that during such period either the Trustee or the Custodian may terminate the agreement immediately upon written notice if:-
 

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

	
                         
 	
                        (2)
 	
                        it becomes unlawful for the Custodian to be a party to this Agreement or to offer its services on the terms contemplated by this Agreement or 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)
 	
                        there is any event which, in the Custodian’s sole view, indicates the Trust’s insolvency or impending insolvency; 
 

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

	
                         
 	
                        (5)
 	
                        the Trust is to be terminated; or
 

	
                         
 	
                        (6)
 	
                        if the Unallocated Account Agreement ceases to be in full force and effect at any time, the Custodian shall have the right, by service of written notice on the Trustee, to terminate this Agreement immediately.
 

	
                        14.3
 	
                        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 
 

 

 

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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.

	
                        14.4
 	
                        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 11. If the Trustee has not made arrangements acceptable to the Custodian for the redelivery of the Bullion within 6 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. 
 

	
                        14.5
 	
                        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.
 

	
                        15.
 	
                        NOTICES
 

	
                        15.1
 	
                        Transfer Notices: Any Transfer Notice shall be in writing in English and shall be marked “Urgent – This requires Immediate Attention” and  signed (unless sent by HSBCnet) by or on behalf of the party giving it (or its duly authorised representative). Any Transfer Notice shall be sent either by facsimile or via HSBCnet 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.
 

	
                        15.2 
 	
                        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 authorised 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 Business Days in the case of inland post or seven Business Days in the case of overseas post after despatch. Any General Notice sent by facsimile shall be deemed to have been given, made or served upon actual receipt by the recipient.
 

	
                        15.3
 	
                        The addresses and numbers of the parties for the purposes of clauses 15.1 and 15.2 are;
 

 

	
      The Custodian:
 	
      8 Canada Square
 London

      E14 5HQ
 
 Attention: Tony J Dean
 Facsimile No. +44 (0)20 7992 4489
 

 

 

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      The Trustee:
 	
      
 The Bank of New York Mellon
 101 Barclay Street, 22-W

      New York, New York 10286
 
 Attention: [ADR Administration]
 Facsimile: [(212) 571-3050]
 

or such other address or facsimile number as shall have been notified (in accordance with this clause) to the other party hereto.

	
                        15.4
 	
                        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.
 

	
                        16.
 	
                        GENERAL
 

	
                        16.1
 	
                        Role of Trustee: The Trustee is a party to this Agreement 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”) 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;
 

	
                        16.2
 	
                        No advice: The Custodian’s duties and obligations under this Agreement do not include providing the other parties hereto with investment advice. In asking the Custodian to open and maintain the Allocated Account, the Trustee acknowledges that it is acting in reliance on its own judgment and the Custodian shall not owe to 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 Allocated Account.
 

	
                        16.3
 	
                        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

 

	
                        16.4
 	
                        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 parties otherwise agree in writing, except that consent is not required where the Custodian assigns, transfers or encumbers any right or obligation under this Agreement to its Affiliate. This clause shall not restrict the Custodian’s power to merge or consolidate with any party, or to dispose of all or part of its custody business and further provided that this clause shall not restrict the Trust from assigning its rights hereunder to a Shareholder
to the extent required for the Trust to fulfil its obligations under the Trust Agreement.
 

	
                        16.5
 	
                        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.
 

	
                        16.6
 	
                        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.
 

	
                        16.7
 	
                        Entire agreement: This document represents the entire agreement between the parties hereto in respect of its subject matter, and excludes any prior agreements or representations save for any made with fraudulent intent.
 

	
                        16.8
 	
                        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.
 

	
                        16.9
 	
                        Business Days: If any obligation falls due to be performed on a day which is not a Business Day, then the relevant obligations shall be performed on the next succeeding Business Day.
 

	
                        16.10
 	
                        Prior Agreements: The Custodian, or any member of the HSBC group of companies (the “HSBC 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 HSBC 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 relating to the same subject matter.
 

	
                        17.
 	
                        GOVERNING LAW AND JURISDICTION 
 

	
                        17.1
 	
                        Governing law: This Agreement is governed by, and will be construed in accordance with, English law.
 

 

 

15

 

	
                        17.2
 	
                        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
                            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.
 

	
                        17.4
 	
                        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.
 

	
                        17.5
 	
                        Service of process: Process by which any proceedings are begun may be served on it 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: 

HSBC Bank USA, National Association, London Branch

8 Canada Square 

London, E14 5HQ, United Kingdom 

Attention: Precious Metals Department

Trustee’s Address for service of process:

The Bank of New York Mellon

101 Barclay Street, 22-W 

New York, New York 10286 

Attention: ADR Administration 

 

 

16

 

EXECUTED by the Parties: 

 

Signed on behalf of and for HSBC BANK USA, NATIONAL ASSOCIATION, LONDON BRANCH 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 Palladium Trust and not individually by 

 

	
                        Signature
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                        
 	
                         
 	
                         
 	
                         
 
	
                        Name 
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                        
 	
                         
 	
                         
 	
                         
 
	
                        Title 
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                        
 	
                         
 	
                         
 	
                         
 

 

 

	
                        Signature
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                        
 	
                         
 	
                         
 	
                         
 
	
                         Name 
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                        
 	
                         
 	
                         
 	
                         
 
	
                        Title 
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                        
 	
                         
 	
                         
 	
                         
 

 

 

17

 

Schedule 1

Notice to Zurich Sub-Custodians

	
                        From:
 	
                        HSBC Bank USA, National Association, London Branch 
 

8 Canada Square

London E14 5HQ 

	
                        To:
 	
                        [Zurich Sub-Custodian]
 

Date:

Dear Sirs

Allocated Account Agreement (the “Agreement”)

dated [   ] 2009 between

ETFS Palladium Trust (the “Issuer”), 

The Bank of New York Mellon (the “Trustee”) and 

HSBC Bank USA, National Association, London Branch (the “Custodian”)

We hereby give you notice that pursuant to the above-captioned Agreement certain of the platinum or palladium (“Bullion”) that we may deliver to you or arrange to be delivered to you belongs to the Issuer and/or the Trustee (as trustee for the holders of certain securities of the Issuer) and under such Agreement we have agreed to require you: (a) to segregate the Bullion from any platinum or palladium which you own or hold for others and (b) to segregate the Bullion from any platinum or palladium which you hold for the Custodian and any other customers of the Custodian, in each case by making appropriate entries in your books and records.

Please sign and return the enclosed copy of this notice to us and the Trustee (with a copy to the Issuer) by way of your confirmation that you have received this notice and will comply with the requirements of the above paragraph.

This letter is governed by English law.

Yours faithfully

 

 

	
                         
 	
                         
 
	
                        
 	
                         
 
	
                        for and on behalf of
 	
                         
 

HSBC Bank USA, National Association, London Branch 

 

 

18

 

Schedule 2

Acknowledgement from Zurich Sub-Custodians

	
                        From:
 	
                        [Zurich Sub-Custodian]
 

	
                        To:
 	
                        HSBC Bank USA, National Association, London Branch 
 

8 Canada Square

London E14 5HQ 

	
                        To:
 	
                        ETF Securities Limited
 

c/o R&H Fund Services (Jersey) Limited

Ordnance House

31 Pier Road

St. Helier, Jersey

Channel Islands

JE4 8PW

Date:

Dear Sirs

Allocated Account Agreement (the “Agreement”)

dated [   ] 2009 between

ETFS Palladium Trust (the “Issuer”), 

The Bank of New York Mellon (the “Trustee”) and 

HSBC Bank USA, National Association, London Branch (the “Custodian”)

We hereby acknowledge receipt of the letter of which the attached is a copy and undertake in relation to all Bullion (as defined in such letter):

	
                        (a)
 	
                        to segregate the Bullion from any platinum or palladium which we own or hold for others; and 
 

	
                        (b)
 	
                        to segregate the Bullion from any platinum or palladium which we hold for the Custodian and any other customers of the Custodian, 
 

and in each case we will make appropriate entries in our books and records.

Yours faithfully

 

 

	
                         
 	
                         
 
	
                        
 	
                         
 
	
                        duly authorised
 for and on behalf of
 [Zurich Sub-Custodian]
 	
                         
 

 

 

19

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