Document:

exhibit_10-17.htm

 

 

 

 

Deferred Compensation Plan for Outside Directors

Callon Petroleum Company

 

Effective as of January 1, 2011

 

 

Contents

 

Article 1. Statement of Purpose 

Article 2. Definitions

Article 3. Eligibility and Participation 

Article 4. Deferrals 

Article 5. Accounts 

Article 6. Distributions 

Article 7. Administration of the Plan 

Article 8. Amendment and Termination 

Article 9. General Provisions 

  

EX 10.17 - Page 1

  

Callon Petroleum Company

 

Article 1. Statement of Purpose

 

1.1       Purpose.  The purpose of this Plan is to provide non-employee directors of Callon Petroleum Company (the “Company”) with the opportunity to defer receipt of compensation earned as a Director (defined below) to a date following Separation from Service (defined below).  This deferral opportunity is designed to help the Company to attract and retain outstanding individuals as Directors of the Company through enhancement of the value of the fees paid to such individuals.

Article 2. Definitions

 

When used herein, the following terms shall have the meanings indicated unless a different meaning is clearly required by the context.

 

	
  

	
(a)

	
“Account” or “Account Balance” means for each Participant, the account established for his benefit under the Plan, which reflects the number of vested Phantom Stock Units credited to the Account multiplied by the Fair Market Value as of the Valuation Date.  The Account Balance, and any specific account or sub-account thereunder, shall be a bookkeeping entry only and shall be used solely as a device for the measurement and determination of the amount to be paid to a Participant, or his designated Beneficiary, pursuant to the Plan.

 

	
  

	
(b)

	
“Affiliate” means any entity required to be aggregated with the Company pursuant to regulations adopted under Code Section 409A, or any other entity under common control with the Company that is designated as an Affiliate by the Company.

 

	
  

	
(c)

	
“Award” means the term that has the same meaning prescribed for that term (or any equivalent term) in any Stock Incentive Plan or any other plan maintained by the Company under which stock-based awards denominated in shares of Common Stock, such as, for example, shares of restricted stock and restricted stock units, are granted to Directors.  For purposes of this Plan, an Award does not include an award granted under such Stock Incentive Plan (as other plan) if the deferral of the tax recognition event for such award under a deferral election made pursuant to this Plan would cause taxation or penalty under Code Section 409A, such as, for example, an award of a stock option to the Participant.

 

	
  

	
(d)

	
“Beneficiary” means that person who becomes entitled to receive a distribution of benefits under the Plan in the event of the death of a Participant prior to distribution of all benefits to which the Participant is entitled.

 

	
  

	
(e)

	
“Board” means the Board of Directors of the Company.

 

	
  

	
(f)

	
“Cash Compensation” means compensation payable by the Company to a Director in cash for serving as a Director, including attending Board and committee meetings as a Director, during a Plan Year, but excluding any expense reimbursements.

 

	
  

	
(g)

	
“Change in Control”

 

	
  

	
 For all purposes of the Plan, a “Change in Control” of the Company occurs upon a change in the Company’s ownership, its effective control, or the ownership of a substantial portion of its assets, as follows:

 

	
  

	
(i)

	
Change in Ownership. A change in ownership of the Company occurs on the date that any “Person” (as defined below), other than (A) the Company or any of its Subsidiaries, (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its SEC Affiliates (as defined below), (C) an underwriter temporarily holding stock pursuant to an offering of such stock, or (D) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of the Company’s stock, acquires ownership of the Company’s stock that, together with stock held by such Person, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the Company’s stock.  However, if, as of the Effective Date, any Person is considered to already own more than fifty percent (50%) of the total fair market value or total voting power of the Company’s stock, the acquisition of additional stock by the same Person is not considered to be a Change of Control.  In addition, if any Person has effective control of the Company through ownership of thirty percent (30%) or more of the total voting power of the Company’s stock, as discussed in paragraph (ii) below, the acquisition of additional control of the Company by the same Person is not considered to cause a Change in Control pursuant to this paragraph (i); or

 

	
  

	
(ii)

	
Change in Effective Control. Even though the Company may not have undergone a change in ownership under paragraph (i) above, a change in the effective control of the Company occurs on either of the following dates:

 

	
  

	
(A)

	
The date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such Person) ownership of the Company’s stock possessing thirty percent (30%) or more of the total voting power of the Company’s stock.  However, if, as of the Effective Date, any Person owns thirty percent (30%) or more of the total voting power of the Company’s stock, the acquisition of additional control of the Company by the same Person is not considered to cause a Change in Control pursuant to this subparagraph (ii)(A); or

 

	
  

	
(B)

	
The date during any twelve (12) month period when a majority of members of the Board is replaced by directors whose appointment or election is not endorsed by a majority of the Board before the date of the appointment or election; provided, however, that any such director shall not be considered to be endorsed by the Board if his or her initial assumption of office occurs as a result of an actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

 

	
  

	
(iii)

	
Change in Ownership of Substantial Portion of Assets.  A change in the ownership of a substantial portion of the Company’s assets occurs on the date that a Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such Person) assets of the Company, that have a total gross fair market value equal to at least forty percent (40%) of the total gross fair market value of all of the Company’s assets immediately before such acquisition or acquisitions.  However, there is no Change in Control when there is such a transfer to an entity that is controlled by the shareholders of the Company immediately after the transfer, through a transfer to (A) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock; (B) an entity, at least fifty percent (50%) of the total value or voting power of the stock of which is owned, directly or indirectly, by the Company; (C) an entity that owns directly or indirectly, at least fifty percent (50%) of the total value or voting power of the Company’s outstanding stock; or (D) an entity, at least fifty percent (50%) of the total value or voting power of the stock of which is owned by a Person that owns, directly or indirectly, at least fifty percent (50%) of the total value or voting power of the Company’s outstanding stock.

 

Only for purposes of the foregoing definition of Change of Control:

 

	
  

	
(i)

	
“Person” shall have the meaning set forth in Code Section 7701(a)(1).  Person shall include more than one Person acting as a group as defined by the Final Treasury Regulations issued under Code Section 409A.

 

	
  

	
(ii)

	
“SEC Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Securities Exchange Act of 1934, as amended.

 

It is intended that a Change in Control, as defined herein, shall also be considered a “change in the ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets of the corporation”, as defined under Code Section 409A, and such definition shall be construed in compliance with such requirements under Code Section 409A.

 

  

EX 10.17 - Page 2

  

	
  

	
(h)

	
“Code” means the Internal Revenue Code of 1986 and amendments thereto.  Reference to a section of the Code shall include that section and any comparable section or sections of any future legislation that amends, supplements, or supersedes said section, and any regulations and other authoritative guidance issued by the appropriate governmental entity under such section of the Code.

 

	
  

	
(i)

	
“Committee” means the Administrative Committee under the Plan, the members of which are appointed by the Board to oversee the administration of this Plan.

 

	
  

	
(j)

	
“Common Stock” means common stock, $.01 par value per share, of the Company.

 

	
  

	
(k)

	
“Company” means Callon Petroleum Company, a corporation organized and existing under the laws of the State of Delaware, or its successor or successors.

 

	
  

	
(l)

	
“Company Group” means the Company and any Affiliate.

 

	
  

	
(m)

	
“Director” means any person who is serving as a voting member of the Board and is not an employee of the Company or any of its Affiliates.

 

	
  

	
(n)

	
“Effective Date” means January 1, 2011, the initial effective date of the Plan.

 

	
  

	
(o)

	
“Employer” means the Company or any Affiliate which participates in the Plan.

 

	
  

	
(p)

	
“Fair Market Value” means the closing benchmark price of the Company’s Common Stock as reported on the New York Stock Exchange for any given Valuation Date, or if such date is not a trading date, the immediately preceding trading date.

 

	
  

	
(q)

	
“Insolvent” means either (a) the Employer is unable to pay its debts as they become due, or (b) the Employer is subject to a pending proceeding as a debtor under the United States Bankruptcy Code.

 

	
  

	
(r)

	
“Participant” means a Director who has commenced participation in the Plan in accordance with Article 3, or who still has an undistributed Account Balance under the Plan following his Separation from Service.

 

	
  

	
(s)

	
“Person” means any individual, firm, corporation, partnership, limited liability company, trust, or other entity, including any successor (by merger or otherwise) of such entity.

 

	
  

	
(t)

	
“Phantom Stock Unit” means an economic unit that is equal in value to one share of the Company’s Common Stock on the Valuation Date, which is issued to a Director as compensation for services performed as a Director, including Cash Compensation and Awards that are deferred by a Participant hereunder and converted into Phantom Stock Units.

 

	
  

	
(u)

	
“Phantom Stock Unit Account” means, for each Participant, the account established for his or her benefit under the Plan, which reflects the credit on the records of the Company that is equal to the number of Phantom Stock Units that are deferred under the Plan by the Participant and not yet distributed from the Plan.

 

	
  

	
(v)

	
“Plan” means the “Callon Petroleum Company Deferred Compensation Plan for Outside Directors”, as contained herein, and as it may be amended from time to time hereafter, together with any election and beneficiary designation forms that the Committee requires a Participant to complete.

 

	
  

	
(w)

	
“Plan Administrator” means the Company.

 

	
  

	
(x)

	
“Plan Year” means the calendar year.

 

	
  

	
(y)

	
“Separation from Service” means “separation of service” of the Director which shall be a termination of his directorship with the Company for whatever reason, and as further interpreted in a manner that is consistent with the use of such term under Code Section 409A.

 

	
  

	
(z)

	
“Unforeseeable Emergency” shall mean a financial hardship of the Participant resulting from: (i) an illness or accident of the Participant, the Participant’s spouse, the Participant’s Beneficiary, or the Participant’s dependent; (ii) a loss of the Participant’s property due to casualty; or (iii) such other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined in the sole discretion of the Committee.  Notwithstanding the foregoing provisions, an Unforeseeable Emergency must meet the standards under Code Section 409A, as determined by the Committee.

 

	
  

	
(aa)

	
“Valuation Date” means, except as may otherwise provided herein, each day of the Plan Year that the New York Stock Exchange is open for trading of shares of the Common Stock.

 

Article 3. Eligibility and Participation

 

3.1             Eligibility. Any Director who is a voting member of the Board and is not an Employee of the Company or any of its Affiliates is eligible to participate in the Plan.

 

3.2             Failure of Eligibility. If the Board determines, in its sole and absolute discretion, that any Participant is no longer eligible to be an active Participant in the Plan, the Participant shall cease active participation in the Plan and the Participant will no longer be entitled to make any deferral elections under the Plan.  The Board’s determination shall be final and binding on all Persons.

 

3.3             Enrollment. Each eligible Director who wishes to participate in the Plan for a Plan Year must make an irrevocable election as to the deferral of (a) Cash Compensation and/or (b) the receipt of Phantom Stock Units in lieu of Awards for such Plan Year, by timely completing, executing and returning to the Plan Administrator such election forms (or other enrollment materials) as the Committee requires, as follows:

 

	
  

	
(a)

	
In the case of a Director who first becomes eligible to participate in the Plan (i) as of the first day of a Plan Year or (ii) for the first Plan Year only, prior to the Effective Date, then the Director’s election must be made either (A) on or prior to December 31st of the immediately prior Plan Year or (B) prior to the Effective Date, as applicable; and

	
  

	
(b)

	
In the case of a Director who first becomes eligible to participate in the Plan after the first day of a Plan Year, the election must be made within thirty (30) days after the date the Director first becomes eligible to participate.

If a Director fails to timely complete such election forms (or other enrollment materials), the Director shall not participate in the Plan until the first day of the first Plan Year next following the date on which the Director timely completes, executes and returns such election forms (or other enrollment materials) to the Committee (or its delegate).

 

  

EX 10.17 - Page 3

  

Article 4. Deferrals

 

4.1           Election Forms and Enrollment Materials. In order to make deferrals, a Participant must complete the election forms (or other enrollment materials) as required by the Committee.  A Participant may agree to defer any portion of his Cash Compensation and Awards for the Plan Year in exchange for Phantom Stock Units credited under the Plan.  A Participant’s deferral of Cash Compensation into Phantom Stock Units shall be made as of the Valuation Date on which such Cash Compensation would otherwise have been paid to the Director absent his deferral election, and deferrals of Awards that are credited as Phantom Stock Units hereunder shall be made as of the Valuation Date on which such Award is granted to the Director, provided that a valid deferral election form is in effect for that Plan Year.

 

An election made by a Participant pursuant to the election forms shall be irrevocable with respect to the Plan Year covered by such election.  Notwithstanding the foregoing, the Committee may permit a Participant to revoke an election if the Participant has experienced an Unforeseeable Emergency, but only to the extent that revoking the election is required by the Participant to satisfy the Unforeseeable Emergency.

 

4.2           Amount of Deferrals. In connection with a Participant’s enrollment in the Plan pursuant to Section 3.3, the Participant shall make an irrevocable election for the Plan Year in which the Participant commences participation (a) to defer up to one hundred percent (100%) of his or her Cash Compensation and convert that amount into Phantom Stock Units, and/or (b) to receive Phantom Stock Units in lieu of the grant of Awards that the Participant would otherwise have been granted during the Plan Year for which such deferral election is effective.  The Participant’s initial deferral election under this Section 4.2 shall apply solely to compensation that is earned with respect to services performed as a Director on or after the date of the Participant’s enrollment in the Plan, and shall continue to apply for all succeeding Plan Years.  If the Participant fails to timely complete, execute and return such election forms or other enrollment materials, as required by the Committee in accordance with Section 3.3, then the Participant shall not be permitted to defer any Cash Compensation or Awards, or receive any Phantom Stock Units, under the Plan for such Plan Year.

 

4.3           Subsequent Plan Years. For each succeeding Plan Year, the Participant may, prior to December 31st of the immediately preceding Plan Year (or such earlier deadline as may be established by the Committee in its sole discretion), make an irrevocable election to modify or revoke the Participant’s existing election to (a) defer (or not to defer) up to one hundred percent (100%) of his or her Cash Compensation for succeeding Plan Years, and/or (b) receive (or not to receive) Phantom Stock in lieu of the grant of Awards that the Participant would otherwise be entitled to receive for succeeding Plan Years.  Any such new election shall remain in effect for all succeeding Plan Years, unless and until timely revoked or modified by the Participant in accordance with this Section.  Any such modification shall apply prospectively only and shall not apply to Cash Compensation previously credited under the Plan and converted into Phantom Stock Units or any Phantom Stock Units previously credited due to the previous deferral of Awards.

 

Article 5. Accounts

 

5.1           Establishment of Accounts. The Company shall establish an Account for each Participant.  The Account shall reflect the value of the Cash Compensation converted into Phantom Stock Units as well as the Phantom Stock Units issued to the Participant in lieu of Awards for each applicable Plan Year.

 

5.2           Status of Accounts. The Account shall be a record-keeping device utilized for the sole purpose of determining benefits payable under this Plan, and will not constitute a separate fund of assets.  All Account Balances shall continue, for all purposes, to be part of the general, unrestricted assets of the Company and its Affiliates, subject to the claims of their general creditors.

 

Article 6. Distributions

 

6.1           Limitation on Right to Receive Payment. A Participant (or the Participant’s Beneficiary in the case of the Participant’s death) shall not be entitled to receive a distribution prior to the first to occur of the following events:

(a)           The Participant’s Separation from Service;

 

	
  

	
(b)

	
The Participant’s death;

	
  

	
(c)

	
An Unforeseeable Emergency; or

	
  

	
(d)

	
A Change in Control.

 

6.2           General Right to Receive Payment. Upon a Participant’s Separation from Service, death, Unforeseeable Emergency, or Change in Control, the Participant’s Account Balance will be distributed to the Participant in the manner provided in Section 6.3 (Form of Payment), and, as applicable, at the time provided in Section 6.5 (Time of Payment) or Section 6.6 (Payment Upon Unforeseeable Emergency).

 

6.3           Form of Payment. Any payment due under the Plan shall be distributed in cash in a single lump-sum payment.  Distributions shall be subject to such uniform rules and procedures as may be adopted by the Plan Administrator or Committee from time to time.

 

6.4           Amount of Payment. Except as provided under Section 6.6, the gross amount of the cash payment shall be equal to the Participant’s Account Balance as of the Valuation Date immediately preceding the date of payment.

 

6.5           Time of Payment. Except as provided under Section 6.6, payment under the Plan shall be made within sixty (60) days following the date of the first to occur of (i) the Participant’s Separation from Service or death, or (ii) the occurrence of a Change in Control.

 

6.6           Payment Upon Unforeseeable Emergency. Notwithstanding any provision of the Plan to the contrary, if a Participant incurs an Unforeseeable Emergency, the Participant may request a withdrawal from the Participant’s Account.  Distribution shall only be made on account of Unforeseeable Emergency if, as determined by the Committee (with the Participant being recused from any such discussion and vote if he is a member of the Committee), the amount distributed with respect to the Unforeseeable Emergency does not exceed the amount necessary to satisfy such emergency need, plus any additional amount necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved:  

 

	
  

	
(a)

	
Through reimbursement or compensation by insurance or otherwise;

 

	
  

	
(b)

	
By liquidation of the Participant’s other assets, to the extent the liquidation of such assets would not itself cause severe financial hardship; or

 

	
  

	
(c)

	
By cessation of deferrals under the Plan.

 

All distributions upon Unforceable Emergency shall be made in accordance with the requirements of Code Section 409A.

 

6.7           Withholding. All distributions will be subject to applicable tax and other withholding requirements (if any).

 

6.8           Ban on Acceleration of Benefits. Notwithstanding any other provision of the Plan to the contrary, neither the time nor the schedule of any payment under the Plan may be accelerated except as permitted under Code Section 409A.

 

  

EX 10.17 - Page 4

  

Article 7. Administration of the Plan

 

7.1           General. The Plan Administrator shall perform the duties and exercise its powers and discretion hereunder and in accordance with applicable law.  The decisions and actions of the Plan Administrator shall be final and conclusive as to all Persons affected thereby.  The Employer shall furnish the Plan Administrator with all data and other information that it may reasonably require in order to perform its functions.  The Plan Administrator may rely without question upon any such data or other information.

 

7.2           Administration of Plan. The Plan Administrator shall interpret, construe and construct the Plan, including correcting any defect, supplying any omission or reconciling any inconsistency.  The Plan Administrator shall have all powers necessary or appropriate to implement and administer the terms and provisions of the Plan, including the power to make findings of fact.  The determination of the Plan Administrator as to the proper interpretation, construction, or application of any term or provision of the Plan shall be final, binding, and conclusive with respect to all Participants and other interested Persons.  The Plan Administrator shall direct all matters relating to the distribution to Participants and Beneficiaries of the benefits to which they are entitled, as determined by the Plan Administrator, in accordance with the terms and conditions of the Plan.

 

7.3           Delegation and Indemnity. The Board, Committee or Plan Administrator may, in its discretion, delegate one or more of its duties to its designated agents or to employees of an Employer; provided, however, the Board may not delegate its authority to make the determinations specified in Section 3.2.  The Plan Administrator may engage recordkeepers to assist the Plan Administrator with its duties, and may engage legal counsel who may be counsel for an Employer.  The Plan Administrator shall not be responsible for any reasonable action taken or omitted to be taken on the advice of such counsel, including written opinions or certificates of any agent, counsel, actuary, or physician.

 

The Company shall indemnify, defend and hold harmless any employee or former employee of an Employer who serves, or has served, as the Plan Administrator or as a Committee member, or as an agent or delegate of the Plan Administrator or Committee hereunder, with respect to all liabilities, claims, causes of action, damages, expenses and costs, including reasonable attorney’s fees and expenses, arising out of, or in connection with, the Plan, which are incurred, or expected to be incurred, by such individual as the result of his performance or non-performance of duties hereunder, except if directly resulting from such individual’s gross negligence or intentional misconduct in the performance or non-performance of a material duty hereunder.

 

7.4           Allocations. The Plan Administrator is given specific authority to allocate or delegate responsibilities to others and to revoke such authority.  When the Plan Administrator has properly allocated or delegated any specific authority pursuant to this Section, the Plan Administrator is not to be liable for the acts or omissions of the Person to whom such authority has been allocated or delegated.

 

7.5           Reliance Upon Information. The Board, Committee and the Plan Administrator (and their members and delegates) shall not be liable for any decision, action, omission, or mistake in judgment, provided that such Person acted in good faith in connection with the administration of the Plan.  Without limiting the generality of the foregoing, any decision or action taken by such Person in reasonable reliance upon any information supplied to it by any employee of the Company Group, legal counsel for an Employer, or the independent accountants for an Employer, shall be deemed to have been taken in good faith.

 

7.6           Disputes. Any and all disputes that may arise involving Participants or Beneficiaries shall be referred to the Plan Administrator, and its decision in such matters shall be final and binding on all Persons.

 

7.7           Insurance. At the Plan Administrator’s request, the Company shall purchase liability insurance to cover the activities of the Plan Administrator and the Committee, and their delegates hereunder.

 

7.8           Records. The Plan Administrator shall supervise the establishment and maintenance of records by its agents and the Employer, which contain all relevant data pertaining to the rights of any Person under the Plan.  In addition, the Plan Administrator may, in its discretion, establish a system for complete or partial electronic administration of the Plan and may replace any written documents described in the Plan with electronic counterparts as it deems appropriate.

 

7.9           Electronic Administration. The Plan Administrator shall have the authority to employ alternative means (including, but not limited to, electronic, Internet, intranet, voice response, or telephonic) by which Participants may submit elections, directions, and forms required for participation in, and the administration of, the Plan.  If the Plan Administrator chooses to use these alternative means, any elections, directions, or forms submitted in accordance with the rules and procedures promulgated by the Plan Administrator will be deemed to satisfy any provision of the Plan calling for the submission of a written election, direction, or form.

 

7.10           Other Authority. The foregoing list of powers and duties of the Plan Administrator is not intended to be exhaustive, and the Plan Administrator shall, in addition, exercise such other powers and perform such other duties as it deems advisable in the administration of the Plan, unless such powers or duties are expressly assigned to another Person pursuant to the provisions of the Plan.

 

Article 8. Amendment and Termination

 

8.1           Amendment. The Company, by action of the Board, reserves the right to amend the Plan at any time in its sole discretion.

 

8.2           Effect of Amendment. Any amendment of the Plan shall not, directly or indirectly, reduce the Account Balance of any Participant as of the later of the adoption date or the effective date of such amendment, without obtaining such Participant’s express written consent.

 

8.3           Termination. The Company, by action of the Board, reserves the right to terminate the Plan at any time in its discretion.  In the event of termination, the Company shall specify whether termination will change the time at which distributions are made; provided that any acceleration of a distribution does not result in the assessment of tax under Code Section 409A.  In the absence of such specification, the timing of distributions shall be unaffected by termination.

 

  

EX 10.17 - Page 5

  

Article 9. General Provisions

 

9.1           Participant’s Rights Unsecured.  The Plan at all times shall be entirely unfunded and no provision shall at any time be made with respect to segregating any assets of any Employer for payment of any distributions hereunder.  The right of a Participant, or his or her Beneficiary, to receive a distribution hereunder shall be an unsecured claim against the general assets of the Company, and neither the Participant nor Beneficiary shall have any rights in or against any specific assets of any Employer.  All amounts credited to a Participant’s Account hereunder shall constitute general assets of the Company and may be disposed of by the Company at such time and for such purposes as it may deem appropriate.  Nothing in this Section shall preclude the Company from establishing a “rabbi trust” (as described in Code Sections 671-677), but the assets in the “rabbi trust” must be available to pay the claims of the Employer’s general creditors in the event of Insolvency.

 

9.2.           Beneficiary Designations. Each Employee, upon becoming a Participant, shall file with the Plan Administrator (or its delegate) a designation of one or more Beneficiaries to whom benefits otherwise payable to the Participant shall be made in the event of his death prior to the complete distribution of his Account Balance.  A Beneficiary designation shall be on the form prescribed by the Plan Administrator and shall be effective when received and accepted by the Plan Administrator (or its delegate).  A Participant may, from time to time, revoke or change his Beneficiary designation by filing a new designation form with the Plan Administrator.  The last valid designation that was received and accepted by the Plan Administrator prior to the Participant’s death shall be controlling.  No Beneficiary designation, change, or revocation shall be effective prior to its actual receipt and acceptance by the Plan Administrator.

 

Notwithstanding any contrary provision of this Section 9.2, no Beneficiary designation made by a married Participant, other than one under which the surviving lawful spouse of such Participant is designated as the sole 100% primary Beneficiary, shall be valid and effective without the prior written consent of such spouse to the designation of another primary Beneficiary on a form provided by the Plan Administrator for such purpose.  However, in the event of Participant’s divorce, any designation of his former spouse as his Beneficiary shall be automatically revoked hereunder, without the necessity of any further action, unless and until the Participant should affirmatively re-designate his former spouse as his Beneficiary.

 

If no valid and effective Beneficiary designation exists at the time of the Participant’s death, or if no designated Beneficiary survives the Participant, or if such designation conflicts with applicable law, payment of the Participant’s remaining Account Balance shall be made to the Participant’s surviving lawful spouse, if any.  If there is no surviving spouse, then payment of the Account Balance shall be made to the executor or administrator of the Participant’s estate, or if there is no administration of Participant’s estate, in accordance with the laws of descent and distribution, as determined by the Company.  If the Beneficiary dies before receiving all benefit payments to which he is entitled, the remaining payments shall automatically be made to the Beneficiary’s estate in a lump sum distribution.

 

If the Plan Administrator is in doubt as to the right of any person to receive any amount, it may direct that the amount be paid into any court of competent jurisdiction in an interpleader action, and such payment shall be a full and complete discharge of any liability or obligation under the Plan to the full extent of such payment.

 

9.3           No Guaranty of Benefits. Nothing contained in the Plan shall constitute a guaranty by any Employer, the Board, Plan Administrator, Committee or any other Person that the assets of the Company will be sufficient to pay any benefit hereunder.

 

9.4           Spendthrift Provision. No interest of any Person in, or right to receive a distribution under, the Plan shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or other alienation or encumbrance of any kind; nor shall any such interest or right to receive a distribution be taken, either voluntarily or involuntarily, for the satisfaction of the debts of, or other obligations or claims against, such Person, including claims in bankruptcy proceedings.

 

Phantom Stock Units credited to a Participant’s Account cannot be transferred, assigned, pledged, hypothecated, or otherwise encumbered or disposed of other than by will or by the laws of descent and distribution.  If the Participant attempts to transfer, assign, pledge, hypothecate, or otherwise encumber or dispose of his Phantom Stock Units or any right thereunder, except as expressly permitted under the Plan, or in the event of any levy, attachment, execution, or similar process upon the right or interest conferred by the Plan, the Company may terminate the Participant’s Phantom Stock Units by notice to him, and such Phantom Stock Units shall thereupon expire and be null and void.

 

This Section shall not preclude arrangements for the withholding of taxes from deferrals, credits, or benefit payments, arrangements for the recovery of benefit overpayments, arrangements for the transfer of benefit rights to another plan, or arrangements for direct deposit of benefit payments to an account in a bank, savings and loan association or credit union (provided that such arrangement is not part of an arrangement constituting an assignment or alienation).

 

9.5           Domestic Relations Orders. Notwithstanding the provisions of Section 9.4 (Spendthrift Provision) to the contrary, and to the extent permitted by law, the amounts payable pursuant to the Plan may be assigned or alienated pursuant to a “Domestic Relations Order” (as such term is defined in Code Section 414(p)(1)(B)), in the complete discretion of the Plan Administrator based on its advance review and approval of such an Order that is submitted by a Participant.

 

9.6           Incapacity of Recipient. If the Plan Administrator is served with a court order holding that a Person entitled to a distribution under the Plan is incapable of personally receiving and giving a valid receipt for such distribution, the Plan Administrator shall postpone payment until such time as a claim therefore shall have been made by a duly appointed guardian or other legal representative of such Person.  The Plan Administrator is under no obligation to inquire or investigate as to the competency of any Person entitled to a distribution.  Any payment to an appointed guardian or other legal representative under this Section shall be a payment for the account of the incapacitated Person and a complete discharge of any liability of the Employer and the Plan to the full extent of such payment.

 

9.7.           Powers of the Company. The existence of outstanding and unpaid benefits under the Plan shall not affect in any way the right or power of the Company to make or authorize any adjustments, recapitalization, reorganization or other changes in the Company’s capital structure or in its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, common or preferred stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other act or corporate proceeding, whether of a similar character or otherwise.

 

9.8           Successors. The Plan shall be binding upon and inure to the benefit of the Company and its successors, as well as upon any person or entity acquiring, whether by merger, consolidation, purchase of assets, dissolution or otherwise, all or substantially all of the stock or other equity interests, business and/or assets of the Company (or its successor), regardless of whether the Company (or its successor) is the surviving or resulting entity.  The Plan shall be binding upon the heirs, Beneficiaries, and personal representatives of the Participants hereunder.

 

Should any adopting Employer (or any successor thereto), other than the Company, elect to dissolve, enter into a sale of its assets, or enter into any reorganization incident to which it is not the surviving entity, unless the surviving or successor entity shall formally agree to assume and continue the Plan (with the consent of the Board), the Plan shall terminate with respect to such Employer (or any successor thereto) on the closing date of such transaction.  In such event, there shall be no active Participants with respect to that Employer, and the Account Balance of any affected Participant shall not become distributable at that time except in accordance with Article 6 and Code Section 409A.

 

9.9           Waiver. No term or condition of this Plan shall be deemed to have been waived, nor shall there be an estoppel against the enforcement of any provision of this Plan, except by written instrument of the Person charged with such waiver or estoppel.  No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

 

9.10           Intention to Comply with Code Section 409A. This Plan is intended to comply with Code Section 409A, and any ambiguous provision will be construed in a manner that is compliant with, or exempt from, the application of Code Section 409A.  If any provision of this Plan would cause a Participant to incur taxation or interest under Code Section 409A, the Company may reform such provision to comply with Section 409A, or an exemption or exception thereunder, to the full extent permitted under Code Section 409A.

 

  

EX 10.17 - Page 6

  

9.11           Compliance with Other Laws and Regulations. The Company may obtain such agreements or undertakings as the Company deems to be necessary or advisable to assure compliance with any law or regulation of any governmental authority or any securities exchange on which the shares of Common Stock are traded.  The Plan and the conversion of Phantom Stock Units hereunder shall be subject to all applicable federal and state laws, rules and regulations, and to any required approvals by any government or regulatory agency.

 

9.12           Nature of Units; No Rights as Equity Owner under the Plan. The Phantom Stock Units shall be used solely as a device for the measurement and determination of the amount of any payment.  The Phantom Stock Units shall not constitute, or be treated as, property or as a trust fund of any kind.  The Participants’ rights hereunder are limited exclusively to the right to receive cash as provided in the Plan, and shall confer no voting rights or any similar rights commonly enjoyed by a beneficial owner of Common Stock.  No Participant shall have any rights as an equity owner of the Company with respect to any Phantom Stock Units credited under the Plan.  All benefits under the Plan shall be payable solely from the general assets of the Company, and no separate or special funds shall be established and no segregation of assets shall be made to assure the payment of benefits from the Plan.  The Participants shall have no right, title, or interest in or to any investments which the Company or an Affiliate may make to aid in meeting its obligations under the Plan.  The rights of Participants with respect to Phantom Stock Units shall be limited to those rights that are specifically enumerated in the Plan and the Phantom Stock Units, with such rights being on parity with the rights of other unsecured general creditors of the Company.  No liability or obligation of the Company under the Plan shall be deemed to be secured by any pledge or other encumbrance on any property of the Company or an Affiliate.

 

9.13           Investment Intent. The Company may require that there be presented to any Participant and/or filed with the Company under the Plan, such evidence that it deems to be necessary or appropriate to establish that the Phantom Stock Units credited under the Plan are being acquired for investment and not with a view to their distribution.

 

9.14           Effect of the Plan. Neither the adoption of this Plan, nor any action of the Company hereunder, shall be deemed to give any Director any right to be granted an Award or any other rights, except as may be evidenced by the terms of this Plan.

 

9.15           Compliance With Other Laws and Regulations. Notwithstanding anything contained herein to the contrary, the Company shall not be required to credit Phantom Stock Units if the issuance thereof would constitute a violation by the Participant or the Company of any law or regulation of any governmental authority or any national securities exchange or other forum in which the Common Stock is traded (including Section 16 of the Securities Exchange Act of 1934).  As a condition precedent to the crediting of any Phantom Stock Unit, the Company may require any agreement or undertaking that it deems necessary or advisable to assure compliance with any such law or regulation.  As determined by the Company, (a) the Plan itself, (b) the conversion and crediting of Phantom Stock Units, and (c) the delivery of Phantom Stock Units, shall be subject to all applicable federal and state laws, rules and regulations and to approval by any government or regulatory agency to the extent required.

 

9.16           No Guarantee of Tax Consequences.  The Employer, Board, Plan Administrator, Committee and any other Person do not make any commitment or guarantee that any federal, state, local, or foreign tax treatment will apply or be available to any Participant or any other Person.

 

9.17           Complete Plan. The terms and provisions of the Plan shall supersede and replace, in its entirety, any prior agreements, promises, understandings, and representations, oral or written, between the Company and its Affiliates and any Director or Participant, with respect to the subject matter of the Plan.

 

9.18           Severability. In the event that any term or provision of the Plan is declared invalid and unenforceable in a final decree or order issued by a court of competent jurisdiction, such declaration shall not affect the validity of the other provisions of the Plan to which such declaration of invalidity does not relate, and such other provisions shall remain in full force and effect.

 

9.19           Gender, Tense and Headings. Whenever the context requires, words of the masculine gender used herein shall include the feminine and neuter, and words used in the singular shall include the plural.  The words “hereof,” “hereunder,” “herein,” and similar compounds of the word “here” shall refer to the entire Plan and not to any particular term or provision of the Plan.  Headings of Sections, as used herein, are inserted solely for convenience and reference and shall not affect the meaning, interpretation or scope of the Plan.

 

9.20           Governing Law. The Plan shall be subject to and governed by the laws of the State of Delaware (other than such laws relating to choice of laws), except to the extent preempted by the Code or other controlling federal law.

 

 

IN WITNESS WHEREOF, the undersigned, a duly authorized officer of the Company, has executed this Plan on this 1st day of January, 2011, by and on behalf of the Company.

ATTEST:                                                                      CALLON PETROLEUM COMPANY

By: /s/ Robert A. Mayfield                                                                         By: /s/ Fred L. Callon

Name:  Robert A. Mayfield                                                               Name:  Fred L. Callon                                                           

Title:   Corporate Secretary                                                               Title:   President and CEO                                                           

 

 

 

 

 

EX 10.17 - Page 7Exhibit 4.2

AUTHORIZED
PARTICIPANT AGREEMENT

 

          AUTHORIZED
PARTICIPANT AGREEMENT (this “Agreement”) dated as of [DATE] among (i)
[AUTHORIZED PARTICIPANT], a [company] organized under the laws of [JURISDICTION
OF AP] (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.
[AUTHORIZED PARTICIPANT] 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 either (i) 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) or (ii) through the Trustee’s electronic order entry
system, as such may be made available and constituted from time to time, the
use of which shall be subject to the terms and conditions attached thereto as
Annex II. 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-A 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
Market 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
or facsimile (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) 315-7500 

 
	
  

 	
 Facsimile:
 (732) 667-9478

 
	
  

 	
 E-Mail: jarvis.joseph@bnymellon.com 

 
	
  

 	
  

 
	
  

 	
 (ii) If to
 the Sponsor:

 
	
  

 	
  

 
	
  

 	
 ETF Securities USA LLC 

 
	
  

 	
 c/o ETF
 Securities Limited 

 
	
  

 	
 Ordnance
 House

 

2

	
  

 	
  

 
	
  

 	
 31 Pier Road

 
	
  

 	
 Jersey

 
	
  

 	
 JE4 8PW

 
	
  

 	
 Channel
 Islands

 
	
  

 	
 Attn: Legal
 and Compliance 

 
	
  

 	
 Telephone:
 +44 1543 825 200

 
	
  

 	
 Facsimile:
 [to be provided]

 
	
  

 	
 E-Mail:
 legal.compliance@etfsl.com 

 
	
  

 	
 
(iii) If to
 the Authorized Participant: 

 
	
  

 	
  

 
	
  

 	
 [AUTHORIZED
 PARTICIPANT]

 
	
  

 	
 Attn:

 
	
  

 	
 [AP’S
 ADDRESS]

 
	
  

 	
 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 fifteen (15) 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

3

hereto, which shall not be unreasonably 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 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 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 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 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 between the Trustee and the Sponsor, as may be
 amended from time to time. 

 
	
  

 	
  

 
	
 •

 	
 ETFS
 Precious Metals Basket Trust, a trust created under New York law pursuant to
 that certain Depositary Trust Agreement between the Trustee and the Sponsor,
 as may be amended from time to time. 

 
	
  

 	
  

 
	
 •

 	
 ETFS White
 Metals Basket Trust, a trust created under New York law pursuant to that
 certain Depositary Trust Agreement between the Trustee and the Sponsor, as
 may be amended from time to time. 

 
	
  

 	
  

 
	
 •

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

 

 [Delivery Locations, Basket Sizes and Bullion
Ounces per Share on Next Page]

6

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
 (Silver)

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ETFS Physical Swiss Gold
 Shares

 	
  

 	
 Loco-Zurich/London

 	
  

 	
 50,000

 	
  

 	
 0.1
 (Gold)

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ETFS Physical Platinum
 Shares

 	
  

 	
 Loco-Zurich/London

 	
  

 	
 50,000

 	
  

 	
 0.1
 (Platinum)

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ETFS Physical Palladium
 Shares

 	
  

 	
 Loco-Zurich/London

 	
  

 	
 50,000

 	
  

 	
 0.1
 (Palladium)

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 0.03
 (Gold) &

 
	
 ETFS Physical PM Basket
 Shares

 	
  

 	
 Loco-London

 	
  

 	
 50,000

 	
  

 	
 1.1
 (Silver);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Loco-Zurich/London

 	
  

 	
  

 	
  

 	
 0.004
 (Platinum) &

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 0.006(Palladium)

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ETFS Physical WM Basket Shares

 	
  

 	
 Loco-London

 	
  

 	
 50,000

 	
  

 	
 1.0
 (Silver);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Loco-Zurich/London

 	
  

 	
  

 	
  

 	
 0.01
 (Platinum) &

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 0.008
 (Palladium)

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ETFS Physical Asian Gold
 Shares

 	
  

 	
 Loco-London/Singapore

 	
  

 	
 50,000

 	
  

 	
 0.1
 (Gold)

 

7

SCHEDULE 1- CREATION AND REDEMPTION
PROCEDURES

8

TABLE OF CONTENTS - SCHEDULE 1

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE I
 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 	
  

 	
  

 
	
 Section 1.01

 	
 Definitions

 	
  

 	
 2

 
	
 Section 1.02

 	
 Interpretation

 	
  

 	
 6

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE II
 CREATION PROCEDURES

 	
  

 	
  

 
	
 Section 2.01

 	
 Initial
 Creation of Shares

 	
  

 	
 7

 
	
 Section 2.02

 	
 Subsequent
 Creation of Shares

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE III
 REDEMPTION PROCEDURES

 	
  

 	
  

 
	
 Section 3.01

 	
 Redemption
 of Shares

 	
  

 	
 9

 
	
  

 	
  

 	
  

 	
  

 
	
 ANNEX I TO
 CREATION AND REDEMPTION PROCEDURES

 	
  

 	
  

 
	
 Creation/Redemption Order Form

 	
  

 	
 14

 
	
  

 	
  

 	
  

 	
  

 
	
 ANNEX II TO
 CREATION AND REDEMPTION PROCEDURES

 	
  

 	
  

 
	
 Order Entry System Terms and Conditions

 	
  

 	
 16

 

S1-1

SECOND AMENDED AND RESTATED 

CREATION AND REDEMPTION PROCEDURES

          Adopted by
the Sponsor and Trustee (each as defined below) as of September 27, 2010 

ARTICLE I

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

          Section
1.01. Definitions. For 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. 

“AP Indemnified Party”
shall have the meaning ascribed to such term in Section 6.01.a of the Standard
Terms. 

“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 Creation and
Redemption Procedures are attached as Schedule 1 and the Standard Terms and
Conditions attached as Schedule 2 shall have been incorporated by reference. 

“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; 

S1-2

the “Basket Gold Amount” in the case of the ETFS Gold Trust and the ETFS
Asian Gold Trust; the “Basket Platinum Amount” in the case of the ETFS Platinum
Trust; the “Basket Palladium Amount” in the case of the ETFS Palladium Trust;
and the “Basket Bullion Amount” in the case of the ETFS Precious Metals Basket
Trust and the ETFS White Metals Basket Trust). 

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

 “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, if and as applicable, (i) each day the exchange on which the relevant
Shares trade is open for regular trading, and/or (ii) a London Business Day, and/or
(iii) a Zurich Business Day, and/or (iv) a Singapore Business Day. 

 “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 specified
in Annex I of the Procedures or otherwise communicated to each Authorized
Participant in compliance with the notice provisions of the respective
Authorized Participant Agreement. 

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

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

 “Custodian” shall
mean, with respect to the ETFS Silver Trust, HSBC Bank USA National
Association, London Branch and, with respect to the ETFS Gold Trust, the ETFS
Platinum Trust, the ETFS Palladium Trust, the ETFS Precious Metals Basket Trust,
the ETFS White Metals Basket Trust and the ETFS Asian Gold Trust, JPMorgan
Chase Bank, N.A., each in their capacity as custodian under the Custodian
Agreements and any successor thereto or additional or other custodian appointed
in compliance with the provisions of the relevant Trust Agreements and relevant
Custodian Agreement(s). 

 “Custodian Agreement”
or “Custodian Agreements” shall
mean the applicable Custodian Agreement by and between the Trustee and the
Custodian with respect to the applicable 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. 

S1-3

 “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. 

 “FINRA” means the
Financial Industry Regulatory Authority. 

 “Gold” shall have
the meaning ascribed to the term in Section 1.1 of the Trust Agreements of the
ETFS Gold Trust, the ETFS Precious Metals Basket Trust and the ETFS Asian Gold
Trust, as applicable, relating to gold. 

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

 “LBMA” shall mean
the London Bullion Market 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, the ETFS Precious Metals Basket Trust and
the ETFS White Metals Basket Trust, and gold, with respect to the ETFS Gold
Trust, the ETFS Precious Metals Basket Trust and the ETFS Asian Gold Trust,
each as coordinated by the LBMA, and in platinum, with respect to the ETFS
Platinum Trust, the ETFS Precious Metals Basket Trust and the ETFS White Metals
Basket Trust, and palladium, with respect to the ETFS Palladium Trust, the ETFS
Precious Metals Basket Trust and the ETFS White Metals Basket Trust, each as
coordinated by the LPPM, are open for the transaction of business in London. 

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

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

 “Order Cutoff 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(a) of the relevant Trust Agreement; and (ii) with respect to a
Redemption Order, the meaning ascribed to the term in Section 2.6(a) of the
relevant Trust Agreement. 

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

S1-4

“Palladium” shall have the
meaning ascribed to the term in Section 1.1 of the Trust Agreements of the ETFS
Palladium Trust, the ETFS Precious Metals Basket Trust and the ETFS White
Metals Trust, as applicable, 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 Agreements of the ETFS
Platinum Trust, the ETFS Precious Metals Basket Trust and the ETFS White Metals
Trust, as applicable, relating to platinum. 

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

“Prospectus” or “Prospectuses” 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 Agreements of the ETFS
Silver Trust, the ETFS Precious Metals Basket Trust and the ETFS White Metals
Trust, as applicable, relating to silver. 

“Singapore Business Day”
shall mean a day (other than a Saturday, Sunday or a public holiday in
Singapore) on which commercial banks generally and the over-the-counter markets
in gold, with respect to the ETFS Asian Gold Trust, are open for the
transaction of business in Singapore.

“Sponsor” shall mean ETF
Securities USA LLC, a Delaware limited liability company. 

“Sponsor Indemnified Party”
shall have the meaning ascribed to such term in Section 6.01.b of the Standard
Terms. 

“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. 

S1-5

“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)”. 

“Zurich Business Day”
shall mean a day (other than a Saturday, Sunday or a public holiday in
Switzerland) on which commercial banks generally and the over-the-counter
markets in gold, with respect to the ETFS Gold Trust, platinum, with respect to
the ETFS Platinum Trust, the ETFS Precious Metals Basket Trust and the ETFS
White Metals Basket Trust, and palladium, with respect to the ETFS Palladium
Trust, the ETFS Precious Metals Basket Trust and the ETFS White Metals Basket
Trust, are open for the transaction of business in Zurich.

           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. 

          To the
extent that term(s) defined in Section 1.01 apply to a Trust that has not
commenced operations as of any relevant date and such Trust is listed or to be
listed on Schedule A of the Authorized Participant Agreement, such term(s)
shall not be operative and any provisions relating to such a Trust and its
Shares contained in the Authorized Participant Agreement shall have no effect until
such Trust commences operations and its Trust Agreement and applicable
Custodian Agreement have been executed and delivered whereupon such terms and
provisions shall become automatically operative and effective without any
further action by the parties to the Authorized Participant Agreement. 

          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. 

S1-6

           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. 

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 Cutoff 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 Section 2.02a. 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 and has received
 an Order Number from the Trustee for insertion in the Purchase Order, 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, in the
case of a telephone order, within 15 minutes following such telephone call the
Trustee shall have received a properly completed, irrevocable Purchase Order in
the form set out in Annex I to these Procedures executed by an Authorized
Representative of such Authorized Participant, via facsimile at the number
specified in such Annex I. 

          c. The Trustee shall provide a written summary to
the Sponsor and the Custodian of all accepted Purchase Orders for such Order
Date no later than 5:30 p.m. (New York time). 

          d. As soon as reasonably practicable following
receipt of a properly completed Purchase Order but not later than 5:30 p.m.
(New York time) on the Order Date for such Purchase Order, the Trustee shall
send to the Authorized Participant (with copy to the 

S1-7

Custodian), via facsimile or electronic mail message, 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 or any other
party. Following the transmission of the Trustee’s acceptance as specified
above, a Purchase Order will be a binding agreement among the Trust and the
Authorized Participant for the creation and purchase of Baskets of Shares and
the deposit of Bullion pursuant to the terms of the Purchase Order and these
Procedures. If a Purchase Order is rejected, the Trustee shall send to the Authorized
Participant (with copy to the Custodian), via facsimile or electronic mail
message, as soon as reasonably practicable, but not later than 5:30 p.m. (New
York time) on the Order Date for such Purchase Order, a copy of the
corresponding Purchase Order endorsed “Declined” by the Trustee and indicating
the reason. The preceding sentence notwithstanding, Purchase Orders not
accepted by 5:30 p.m. (New York time) on the Order Date shall be deemed
cancelled. A Purchase Order which is not properly completed will be deemed
invalid and rejected by the Trustee; the Authorized Participant may submit a
corrected Purchase Order within the time period specified in Section 1.09 of
the Standard Terms. 

          e. Each Purchase Order shall settle on the third
Business Day following the Order Date. The Basket Amount corresponding to each
Basket must be deposited in the Custodial Unallocated Account in unallocated
Bullion (i) loco London with respect to Silver for the ETFS Silver Trust, the
ETFS Precious Metals Basket Trust and the ETFS White Metals Basket Trust, (ii)
loco London with respect to Gold for the ETFS Precious Metals Basket Trust,
(iii) loco Zurich or loco London with respect to Gold for the ETFS Gold Trust,
(iv) loco Zurich or loco London with respect to Platinum and Palladium for the
ETFS Platinum Trust, the ETFS Palladium Trust, the ETFS Precious Metals Basket
Trust and the ETFS White Metals Basket Trust, and (v) loco Singapore or loco
London with respect to Gold for the ETFS Asian Gold Trust, , no later than
11:00 a.m. (London time) on the third Business Day following the Order Date.
With respect to Gold for the ETFS Gold Trust and the ETFS Asian Gold Trust and
where the Authorized Participant elects loco London, the Authorized Participant
must first agree to the cost of the loco swap with the Custodian and reimburse
the Custodian for any amount owed under such swap. 

          f. The Custodian shall advise the Trustee in
writing of the deposits made to the Custodial Allocated Account in connection
with each Purchase Order. Upon receipt of such advice, the Trustee shall
determine whether a deposit of Bullion required to be made pursuant to Section
2.02e. has not been noted as deposited in the Trustee’s Custodial Unallocated
Account. In such event, the Trustee shall, by the Trustee’s close of business
on the second Business Day following the Order Date, (i) send to the Custodian,
via electronic mail message, a request that the Custodian confirm that the
Custodian did not receive the anticipated deposit of Bullion, and (ii) send to
the Authorized Participant whose deposit was not received, via facsimile at the
facsimile number specified by the Authorized Participant in the Purchase Order,
a concurrent copy of such request. 

          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 absolute discretion may agree with 

S1-8

the Authorized Participant, 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 required amount of Bullion has been deposited in the Trustee’s
 Custodial Unallocated Account in compliance with the provisions of Section
 2.02e. above and 

 
	
  

 	
  

 
	
  

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

 

          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 all of the
conditions set forth in clauses (i) and (ii) of Section 2.02g. above shall have
been met. In the event that, by 11:00 a.m. (New York time) on the third
Business Day following the Order Date of a Purchase Order, the Trustee’s
Custodial Unallocated Account shall not have been credited with the required
amount of Bullion in compliance with the provisions of section 2.02e. above,
the Trustee shall send to the Authorized Participant and the Custodian via fax
or electronic mail message notice of such fact and the Authorized Participant
shall have two (2) Business Days following receipt of such notice to correct
such failure. If such failure is not cured within such two (2) Business Day
period, the Trustee shall, unless the Sponsor shall otherwise direct, cancel
such Purchase Order and will send via fax or electronic mail message notice of
such cancellation to the Authorized Participant and the Custodian, 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.

          i. The foregoing provisions notwithstanding,
neither the Trustee nor the Custodian shall be liable for any failure or delay
in making Delivery of Shares in respect of a Purchase Order arising from
nuclear fission or fusion, radioactivity, war, terrorist event, invasion,
insurrection, civil commotion, riot, strike, act of government, public
authority, public service or utility problems, power outages resulting in
telephone, telecopy and computer failures, act of God such as fires, floods,
extreme weather conditions, market conditions or activities causing trading
halts, systems failures involving computer or other information systems
affecting a Trust, the Trustee, the Custodian or sub-custodian, metal clearing
bank delays and similar extraordinary events beyond the Trustee’s control. In
the event of any such delay, the time to complete Delivery in respect of a
Purchase Order will be extended for a period equal to that during which the
inability to perform continues. 

          j. Except as provided in Sections 2.02d., 2.02f.
and 2.02h., none of the Trustee, the Sponsor, the Custodian, nor any
sub-custodian are under any duty, to give notification of any defects or
irregularities in any Purchase Order or the delivery of the Basket Amount, and
shall not incur any liability for the failure to give any such notification. 

S1-9

          k. Purchase
Orders may be rejected under the circumstances specified in the applicable
Prospectus. 

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 Cutoff 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 Section 3.01a. 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 and has received
 an Order Number from the Trustee for insertion in the Redemption Order, 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, in
the case of a telephone order, within 15 minutes following such telephone call
the Trustee shall have received a duly completed, irrevocable Redemption Order
in the form set out in Annex I to these Procedures executed by an Authorized
Representative of such Authorized Participant, via facsimile at the number
specified in such Annex I. 

          c. Upon receipt of a properly completed
Redemption Order, the Trustee shall send to the Authorized Participant (with
copy to the Custodian), via facsimile or electronic mail message, as soon as
reasonably practicable, but not later than 5:30 p.m. (New York time) on the
Order Date for such Redemption Order a 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. The Trustee shall, by the Trustee’s close of
business on the second Business Day following the Order Date of a Redemption
Order, confirm in writing to the Custodian whether each of the following has
occurred: 

S1-10

	
  

 	
  

 
	
  

 	
           (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; and 

 
	
  

 	
  

 
	
  

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

 

Provided that the Custodian has received written confirmation from the
Trustee that the conditions set forth in clauses (i) and (ii) of Section 3.01d.
above have been satisfied, the Custodian shall: 

          (1) on the
next following Business Day, Deliver: 

	
  

 	
  

 	
  

 
	
  

 	
  •

 	
 unallocated Silver loco London;

 
	
 

 	
 •

 	
 unallocated Gold loco London (for the ETFS Precious Metals Basket
 Trust only);

 
	
  

 	
  •

 	
 unallocated Gold loco Zurich (for the ETFS Gold Trust only);

 
	
  

 	
 •

 	
 unallocated Gold loco Singapore (for the ETFS Asian Gold Trust only);

 
	
  

 	
  •

 	
 unallocated Platinum loco Zurich;

 
	
  

 	
  •

 	
 unallocated Platinum loco London;

 
	
  

 	
 •

 	
 unallocated Palladium loco Zurich; and/or

 
	
  

 	
 •

 	
 unallocated Palladium loco London

 

          (as
applicable to the specific Redemption Order); and 

          (2) within
the next following three Business Days, Deliver: 

	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 unallocated Gold loco London (for the ETFS Gold Trust and ETFS Asian
 Gold Trust only) 

 

          (as
applicable to the specific Redemption Order) 

in the amounts specified
in the communication sent in compliance with Section 3.01c. above, to the
account indicated by the redeeming Authorized Participant in its Redemption
Order (which shall be an appropriate bullion account with an LBMA member
or LPPM member, as applicable for the type of Bullion involved). With respect
to Gold from the ETFS Gold Trust and ETFS Asian Gold Trust and where the
Authorized Participant elects loco London delivery, the Authorized Participant
must first agree to the cost of the loco swap with the Custodian and reimburse
the Custodian for any amount owed under such swap. Having made such Delivery,
the Custodian shall send written confirmation thereof to the Trustee who shall
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 that the
conditions set forth in clauses (i) and (ii) of Section 3.01d. above have been
satisfied. 

S1-11

          f. The foregoing provisions notwithstanding,
neither the Trustee nor the Custodian shall 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, public service or utility problems, power outages resulting in
telephone, telecopy and computer failures, act of God such as fires, floods,
extreme weather conditions, market conditions or activities causing trading
halts, systems failures involving computer or other information systems
affecting a Trust, the Trustee, the Custodian or sub-custodian, metal clearing
bank delays and similar extraordinary events beyond the Trustee’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 shall send to the Authorized
Participant and the Custodian via fax or electronic mail message notice of such
fact and the Authorized Participant shall have two (2) Business Days following
receipt of such notice to correct such failure. If such failure is not cured
within such two (2) Business Day period, the Trustee (in consultation with the
Sponsor) will cancel such Redemption Order and will send via fax or electronic
mail message notice of such cancellation to the Authorized Participant and the
Custodian, 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. The Trustee is authorized to Deliver the Basket Amount for a
Redemption Order notwithstanding that the Basket(s) to be redeemed are not
credited to the Trustee’s DTC account by 9:00 a.m. (New York time) on the third
Business Day following the Order Date of a Redemption Order if the Authorized
Participant has collateralized its obligation to deliver the Baskets through
DTC’s book entry system on such terms as the Sponsor and the Trustee may from
time to time agree upon. 

          h. The redemption of Shares may be suspended or
rejected under the circumstances specified in the applicable Prospectus. 

[Signatures
Follow on Next Page]

S1-12

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

	
  

 	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 By:

 	
  

 
	
  

 	

 

 	
  

 
	
 Name:

 	
  

 
	
 Title:

 	
  

 
	
  

 	
  

 	
  

 
	
 ETF
 SECURITIES USA LLC, in its capacity as Sponsor

 
	
  

 	
  

 	
  

 
	
 By:

 	
  

 
	
  

 	

 

 	
  

 
	
 Name:

 	
  

 
	
 Title:

 	
  

 

 [Second Amended and Restated Creation and
Redemption Procedures Signature Page]

S1-13

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)
 315-7500

 
	
 Fax order
 number:

 	
 (732)
 667-9478

 

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

I. TO BE COMPLETED BY
PARTICIPANT: 

Name of Trust:
____________________________________________ 

	
  

 	
  

 	
  

 
	
 Date:
 ________________________________

 	
  

 	
 Time:
 ___________________________________________________________

 
	
 Broker Name:
 _________________________

 	
  

 	
 Authorized
 Participant Firm Name: ___________________________________

 
	
 DTC
 Participant Number: _______________

 	
  

 	
 Fax Number:
 _____________________________________________________

 
	
 Telephone
 Number: ____________________

 	
  

 	
 Symbol:
 _________________________________________________________

 

Type of order
(Check Creation or Redemption please) 

	
  

 	
  

 	
  

 
	
 Creation:
 _____________________________

 	
  

 	
 Redemption:
 _____________________________________________________

 
	
  

 	
  

 	
  

 
	
 # of
 Baskets: __________________________

 	
  

 	
 Number of
 Baskets written out: ______________________________________

 
	
  

 	
  

 	
  

 
	
 Order #
 ______________________________

 	
  

 	
  

 

Please
indicate Bullion clearing agent: 

For Silver involving the ETFS Silver Trust
only

HSBC     o

For Silver involving the ETFS Precious Metals
Basket Trust or the ETFS White Metals Basket Trust and for Gold, Palladium and
Platinum 

JP
Morgan          o          Other
(please specify clearing agent): ____________________

Account number
for Bullion delivery:
_______________________________________________________________

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (With
 respect to Silver only):

 	
 loco London

 	
 o

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (With
 respect to Gold involving the ETFS Precious Metals Basket Trust only):

 	
 loco London

 	
 o

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (With
 respect to Gold involving the ETFS Gold Trust only):

 	
 loco London

 	
 o

 	
 loco Zurich

 	
 o

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (With
 respect to Gold involving the ETFS Asian Gold Trust only):

 	
 loco London

 	
 o

 	
 loco
 Singapore

 	
 o

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (With
 respect to Platinum only):

 	
 loco London

 	
 o

 	
 loco Zurich

 	
 o

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (With
 respect to Palladium only):

 	
 loco London

 	
 o

 	
 loco Zurich

 	
 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 

S1-14

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 (1) once accepted by the Trustee, this Purchase or
Redemption Order will become a legally binding contract for the delivery by the
Authorized Participant of the Basket Amount per Basket for a Purchase Order, or
the number of Baskets for a Redemption Order, 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 if required
pursuant to the Authorized Participant Agreement.

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
 Authorized
 Representative’s Signature

 	
  

 	
 Date

 	
  

 

S1-15

II. TO BE COMPLETED
BY TRUSTEE: 

This certifies
that the above order has been: 

	
  

 	
  

 	
  

 
	
  

 	
 Accepted by
 the Trustee 

 
	

 

 	
  

 
	
  

 	
  

 
	
  

 	
 Declined-Reason:

 	
  

 
	

 

 	
  

 	

 

 

Final # of
Ounces: 

	
  

 	
  

 
	
  

 	
 (Gold)

 
	

 

 	
  

 
	
  

 	
  

 
	
  

 	
 (Silver)

 
	

 

 	
  

 
	
  

 	
  

 
	
  

 	
 (Platinum)

 
	

 

 	
  

 
	
  

 	
  

 
	
  

 	
 (Palladium)

 
	

 

 	
  

 

	
  

 	
  

 
	
 Final # of
 Shares: 

 	

  

 
	
  

 	

 

 

	
  

 	
  

 
	
 Final Cash
 Due to BNYM 

 	
  

 
	
  

 	

 

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 	
  

 	

 

 	
  

 	

 

 
	
 Date

 	
  

 	
 Time

 	
  

 	
 Authorized
 Signature of Trustee

 

S1-16

ANNEX II TO CREATION AND REDEMPTION
PROCEDURES

ORDER ENTRY SYSTEM TERMS AND CONDITIONS

          This Annex
II shall govern use by Authorized Participant of the electronic order entry
system for placing Purchase Orders and Redemption Orders for Shares (the “System”). Capitalized terms used but not
otherwise defined herein shall have the meanings ascribed to such terms in
Schedule 1 of the Authorized Participant Agreement. In the event of any
conflict between the terms of this Annex II and the main body of the Authorized
Participant Agreement with respect to the placing of Purchase Orders and
Redemption Orders, the terms of this Annex II shall control. 

1. (a) Authorized
Participant shall provide to The Bank of New York Mellon a duly executed
authorization letter, in a form satisfactory to The Bank of New York Mellon,
identifying those authorized persons who will access the System (the “Authorized Persons”). Authorized
Participant shall notify The Bank of New York Mellon in writing in the event
that any person’s status as an Authorized Person is revoked or terminated as
soon as possible, in order to give The Bank of New York Mellon a reasonable
opportunity to terminate such Authorized Person’s access to the System. 

          (b) It is
understood and agreed that each Authorized Person shall be designated as an
authorized user of Authorized Participant for the purpose of the Authorized
Participant Agreement. Upon termination of the Authorized Participant
Agreement, the Authorized Participant’s and each Authorized Person’s access
rights with respect to System shall be immediately revoked. 

2. The Bank of New York Mellon grants to Authorized Participant a
personal, nontransferable and nonexclusive license to use the System solely for
the purpose of transmitting Purchase Orders and Redemption Orders and otherwise
communicating with The Bank of New York Mellon in connection with the same.
Authorized Participant shall use the System solely for its own internal and
proper business purposes. Except as set forth herein, no license or right of
any kind is granted to Authorized Participant with respect to the System.
Authorized Participant acknowledges that The Bank of New York Mellon and its
suppliers retain and have title and exclusive proprietary rights to the System.
Authorized Participant further acknowledges that all or a part of the System
may be copyrighted or trademarked (or a registration or claim made therefor) by
The Bank of New York Mellon or its suppliers. Authorized Participant shall not
take any action with respect to the System inconsistent with the foregoing
acknowledgments. Authorized Participant may not copy, distribute, sell, lease
or provide, directly or indirectly, the System or any portion thereof to any
other person or entity without The Bank of New York Mellon’s prior written
consent. Authorized Participant may not remove any statutory copyright notice
or other notice included in the System. Authorized Participant shall reproduce
any such notice on any reproduction of any portion of the System and shall add
any statutory copyright notice or other notice upon The Bank of New York
Mellon’s request. 

2. (a) Authorized Participant acknowledges that any user manuals or
other documentation (whether in hard copy or electronic form) (collectively,
the “Material”), which is
delivered or made available to Authorized Participant regarding the System is
the exclusive and confidential property of The Bank of New York Mellon.
Authorized Participant shall keep the Material confidential by using the same
care and discretion that Authorized Participant uses with respect to its own
confidential property and trade secrets, but in no event less than reasonable
care. Authorized Participant may make such copies of the Material as is
reasonably necessary for Authorized Participant to use the System and shall
reproduce The Bank of New York Mellon’s proprietary markings on any such copy.
The foregoing shall not in any way be deemed to affect the copyright status of
any of the Material which may be copyrighted and shall apply to all Material
whether or not copyrighted. THE BANK OF NEW YORK MELLON AND ITS SUPPLIERS MAKE
NO WARRANTIES, EXPRESS OR IMPLIED, CONCERNING THE MATERIAL OR ANY PRODUCT OR
SERVICE, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE. 

S1-17

(b) Upon termination of the Authorized Participant Agreement for any
reason, Authorized Participant shall return to The Bank of New York Mellon all
copies of the Material which is in Authorized Participant’s possession or under
its control. 

3. Authorized Participant agrees that it shall have sole responsibility
for maintaining adequate security and control of the user IDs, passwords and
codes for access to the System, which shall not be disclosed to any third party
without the prior written consent of The Bank of New York Mellon. The Bank of
New York Mellon shall be entitled to rely on the information received by it
from the Authorized Participant and The Bank of New York Mellon may assume that
all such information was transmitted by or on behalf of an Authorized Person
regardless of by whom it was actually transmitted. 

4. The Bank of New York Mellon shall have no liability in connection
with the use of the System, the access granted to the Authorized Participant
and its Authorized Persons hereunder, or any transaction effected or attempted
to be effected by the Authorized Participant hereunder, except for damages
incurred by the Authorized Participant as a direct result of The Bank of New
York Mellon’s gross negligence or willful misconduct. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, IT IS HEREBY AGREED THAT IN NO EVENT SHALL THE
BANK OF NEW YORK MELLON OR ANY MANUFACTURER OR SUPPLIER OF EQUIPMENT, SOFTWARE
OR SERVICES BE RESPONSIBLE OR LIABLE FOR ANY SPECIAL, INDIRECT, OR
CONSEQUENTIAL DAMAGES WHICH THE AUTHORIZED PARTICIPANT MAY INCUR OR EXPERIENCE
BY REASON OF ITS HAVING ENTERED INTO OR RELIED ON THIS AGREEMENT, OR IN
CONNECTION WITH THE ACCESS GRANTED TO AUTHORIZED PARTICIPANT HEREUNDER, OR ANY
TRANSACTION EFFECTED OR ATTEMPTED TO BE EFFECTED BY AUTHORIZED PARTICIPANT
HEREUNDER, EVEN IF THE BANK OF NEW YORK MELLON OR SUCH MANUFACTURER OR SUPPLIER
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, NOR SHALL THE BANK OF NEW
YORK MELLON OR ANY SUCH MANUFACTURER OR SUPPLIER BE LIABLE FOR ACTS OF GOD,
MACHINE OR COMPUTER BREAKDOWN OR MALFUNCTION, INTERRUPTION OR MALFUNCTION OF
COMMUNICATION FACILITIES, LABOR DIFFICULTIES OR ANY OTHER SIMILAR OR DISSIMILAR
CAUSE BEYOND SUCH PERSON’S REASONABLE CONTROL. 

5. The Bank of New York Mellon reserves the right to revoke Authorized
Participant’s access to the System immediately and without notice upon any
breach by the Authorized Participant of the terms and conditions of this Annex
II. 

6. The Bank of New York Mellon shall acknowledge through the System its
receipt of each Purchase Order or Redemption Order communicated through the
System, and in the absence of such acknowledgment The Bank of New York Mellon
shall not be liable for any failure to act in accordance with such orders and
Authorized Participant may not claim that such Purchase Order or Redemption
Order was received by The Bank of New York Mellon. The Bank of New York Mellon
may in its discretion decline to act upon any instructions or communications
that are insufficient or incomplete or are not received by The Bank of New York
Mellon in sufficient time for The Bank of New York Mellon to act upon, or in
accordance with such instructions or communications. 

          7.
Authorized Participant agrees to use reasonable efforts to prevent the
transmission through the System of any software or file which contains any
viruses, worms, harmful component or corrupted data and agrees not to use any
device, software, or routine to interfere or attempt to interfere with the
proper working of the Systems. 

          8.
Authorized Participant acknowledges and agrees that encryption may not be
available for every communication through the System, or for all data.
Authorized Participant agrees that The Bank of New York Mellon may deactivate
any encryption features at any time, without notice or liability to Authorized
Participant, for the purpose of maintaining, repairing or troubleshooting its
systems. 

S1-18

SCHEDULE 2- STANDARD TERMS

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 TABLE OF CONTENTS - SCHEDULE 2

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	

 

 
	
 ARTICLE I
 ORDERS FOR PURCHASE AND REDEMPTION

 	
  

 	
  

 
	
  

 	
 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

 	
  

 	
 2

 
	
  

 	
 Section
 1.06.

 	
 Delivery of
 Property to the Trust

 	
  

 	
 2

 
	
  

 	
 Section
 1.07.

 	
 Title to
 Deposit Property and Shares Surrendered for Redemption 

 	
  

 	
 2

 
	
  

 	
 Section
 1.08.

 	
 Certain
 Payments or Distributions

 	
  

 	
 3

 
	
  

 	
 Section
 1.09.

 	
 Ambiguous
 Instructions

 	
  

 	
 3

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE II
 AUTHORIZED REPRESENTATIVES

 	
  

 	
  

 
	
  

 	
 Section
 2.01.

 	
 Certification

 	
  

 	
 4

 
	
  

 	
 Section
 2.02.

 	
 PIN Numbers

 	
  

 	
 4

 
	
  

 	
 Section
 2.03.

 	
 Termination
 of Authority

 	
  

 	
 4

 
	
  

 	
 Section
 2.04.

 	
 Verification

 	
  

 	
 5

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE III
 STATUS OF THE AUTHORIZED PARTICIPANT

 	
  

 	
  

 
	
  

 	
 Section
 3.01.

 	
 Clearing
 Status

 	
  

 	
 5

 
	
  

 	
 Section
 3.02.

 	
 Broker-Dealer
 Status

 	
  

 	
 5

 
	
  

 	
 Section
 3.03.

 	
 Foreign
 Status

 	
  

 	
 5

 
	
  

 	
 Section
 3.04.

 	
 Compliance
 with Certain Laws

 	
  

 	
 6

 
	
  

 	
 Section
 3.05.

 	
 Authorized
 Participant Status

 	
  

 	
 6

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IV
 ROLE OF AUTHORIZED PARTICIPANT

 	
  

 	
  

 
	
  

 	
 Section
 4.01.

 	
 No Agency

 	
  

 	
 6

 
	
  

 	
 Section
 4.02.

 	
 Rights and
 Obligations of DTC Participant

 	
  

 	
 6

 
	
  

 	
 Section
 4.03.

 	
 Beneficial
 Owner Communications

 	
  

 	
 6

 
	
  

 	
 Section
 4.04.

 	
 Authorized
 Participant Customer Information

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE V
 MARKETING MATERIALS AND REPRESENTATIONS AND WARRANTIES

 	
  

 	
  

 
	
  

 	
 Section
 5.01.

 	
 Authorized
 Participant’s Representation

 	
  

 	
 7

 
	
  

 	
 Section
 5.02.

 	
 Prospectus

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VI
 INDEMNIFICATION; LIMITATION OF LIABILITY

 	
  

 	
  

 
	
  

 	
 Section
 6.01.

 	
 Indemnification

 	
  

 	
 8

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VII
 MISCELLANEOUS

 	
  

 	
  

 
	
  

 	
 Section
 7.01.

 	
 Commencement
 of Trading

 	
  

 	
 10

 

i

                    FIRST
AMENDED AND RESTATED STANDARD TERMS FOR AUTHORIZED PARTICIPANT AGREEMENTS
(the “Standard Terms”) agreed to
as of September 27, 2010 by and between The Bank of New York Mellon, a New York
banking corporation (the “Trustee”),
and ETF Securities USA LLC, a Delaware limited liability company (the “Sponsor”). 

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 relevant Prospectus. 

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

          Section
1.03. Consent to Recording. The phone lines used by the Trustee, the
Custodian, the Sponsor and/or their affiliated persons may be recorded, and the
Authorized Participant hereby consents to the recording of all calls with any
of those parties. In the event that the Trustee, the Custodian, the Sponsor or
any of their affiliated persons becomes legally compelled to disclose to any
third party any recording involving communications with the Authorized
Participant, the Sponsor agrees to provide the Authorized Participant with
reasonable advance written notice identifying the recordings to be so disclosed
unless prohibited by applicable rule, law or order, together with copies of
such recordings, so that the Authorized Participant may seek a protective order
or other appropriate remedy with respect to the recordings or waive its right
to do so. In the event that such protective order or other remedy is not
obtained or the Authorized Participant waives its right to seek such protective
order or remedy, the Sponsor will use commercially reasonable efforts to obtain
reliable assurance that confidential treatment will be accorded the recorded
conversation. The Trustee, the Sponsor or any of their affiliated persons shall
not otherwise disclose to any third party any recording involving
communications with the Authorized Participant without the Authorized Participant’s
express written consent, except the Trustee and the Sponsor may disclose to any
regulatory or self-regulatory organization, to the extent required by
applicable rule or law, any recording involving communications with the
Authorized Participant. 

          Section
1.04. Irrevocability. The Authorized Participant agrees that delivery to
the Trustee of an Order shall be irrevocable; provided that the Trust will
reject any Order that is not properly completed. In the event that the purchase
or redemption of Baskets is suspended by the Trustee or the Sponsor and such
suspension affects any Order submitted by the Authorized Participant, the
Trustee or Sponsor, as applicable, will promptly notify the Authorized
Participant of such suspension. In such case, the Sponsor agrees to undertake
commercially reasonable efforts to accommodate any request by the Authorized
Participant to cancel a previously placed Order. 

          Section
1.05. Costs and Expenses. The Authorized Participant shall be responsible
for the expenses and costs incurred by the Trust that can be directly
attributable to Orders submitted by the Authorized Participant other than
ordinary course expenses and costs which are reimbursed

S2-1

through payment of the fee contemplated in Section 2.02(g) of the
Procedures. The Trustee or the Sponsor shall provide the Authorized Participant
with reasonably detailed information relating to such expenses and costs upon
request by the Authorized Participant. 

          Section
1.06. Delivery of Property to the Trust and Shares Surrendered for
Redemption. The Authorized Participant understands and agrees that in the
event Deposit Property is not transferred to the Trust by the time specified
for the Purchase Order, or Shares are not delivered to the Trustee by the time
specified for the Redemption Order and, in each such case, in compliance with
the Procedures and the relevant Prospectus, the Purchase Order or Redemption
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. The Authorized Participant will not, however,
be responsible for costs incurred by the Trust, the Trustee, or the Custodian
related to cancelled Orders where the failure to transfer Deposit Property to
the Trust is due to the gross negligence, bad faith, or reckless or willful
misconduct of the Trustee, the Sponsor, or the Custodian. The foregoing
provisions notwithstanding, the Authorized Participant shall not be liable for
any failure or delay in making Delivery of Bullion in respect of a Purchase
Order or for any failure or delay in surrendering Shares for redemption arising
from nuclear fission or fusion, radioactivity, war, terrorist event, invasion,
insurrection, civil commotion, riot, strike, act of government, public
authority, public service or utility problems, power outages resulting in
telephone, telecopy and computer failures, acts of God, such as fires, floods,
extreme weather conditions, market conditions or activities causing trading
halts, systems failures involving computer or other information systems
affecting the Authorized Participant, or similar extraordinary events beyond
the Authorized Participant’s control. In the event of any such delay, the time
to complete Delivery in respect of a Purchase Order or Redemption Order will be
extended for a period equal to that during which the inability to perform
continues. Upon the deposit of any Bullion, the Authorized Participant as Depositor
represents and warrants that (i) the Bullion meets the relevant requirements to
be such Bullion and contains the required number of Ounces, (ii) the Authorized
Participant is duly authorized to make such deposit of Bullion and (iii) at the
time of delivery, the Bullion is free and clear of any lien, pledge,
encumbrance, right, charge or claim.

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

	
  

 	
  

 
	
  

 	
           a. in
 connection with each Purchase Order, the Authorized Participant will have the
 right 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 sub-custodian 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 the
 right and authority to surrender to the Trustee for redemption the
 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, under such circumstances,
 would 

 

S2-2

	
  

 	
  

 
	
  

 	
 preclude the delivery of such Shares to the Trustee on the third
 Business Day following the date of the Redemption Order. 

 

          Section
1.08. Certain Payments or Distributions. 

	
  

 	
  

 
	
  

 	
           a. With
 respect to any Purchase Order, the Trustee acknowledges and agrees to return
 to the Authorized Participant or any Authorized Participant Client for which
 it is acting 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 or any Authorized Participant Client.
 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 Trustee 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. If, however, the
 Trustee so reduces an amount of any property appropriately due to the
 Authorized Participant, the Authorized Participant shall not be required to
 return to the Trust payments, distributions or other amounts equal to such
 reduction that has been paid to the Authorized Participant or the Authorized
 Participant Client as is contemplated in the first sentence of this Section
 1.08(b). 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. 

 

          Section
1.09. Ambiguous Instructions. In the event that a Purchase Order or
Redemption Order contains terms that differ from the information provided in
the related telephone call or email transmission, the Trustee will attempt to
contact the Authorized Participant to request confirmation of the terms of the
order at the telephone number indicated in the Purchase Order or Redemption
Order. If an Authorized Representative confirms the terms as they appear in the
Purchase Order or Redemption Order, then the order will be accepted and
processed. If an Authorized Representative contradicts the terms of the
Purchase Order or Redemption Order, the order will be deemed invalid, and a
corrected Purchase Order or Redemption Order must be received by the Trustee
not later than the earlier of (i) within fifteen (15) minutes of such contact
with the Authorized Representative or (ii) thirty (30) minutes after the Order
Cutoff Time. For the avoidance of doubt, notwithstanding the invalidation of
the initial Purchase Order or Redemption Order pursuant to this paragraph, a
Purchase Order or Redemption Order that is

S2-3

otherwise in proper form shall be deemed submitted at the time of its
initial submission for purposes of determining when orders are deemed
“received.” If the Trustee is not able to contact an Authorized Person, then
the Purchase Order or Redemption Order shall be accepted and processed in
accordance with its terms notwithstanding any inconsistency from the terms of
the telephone information. In the event that a Purchase Order or Redemption
Order contains terms that are illegible, the submission will be deemed invalid
and the Trustee will attempt to contact the Authorized Participant to request
retransmission. A corrected Purchase Order or Redemption Order must be received
by the Trustee, as applicable, not later than the earlier of (i) within fifteen
(15) minutes of such contact with the Authorized Participant or (ii) thirty
(30) minutes after the Order Cutoff Time. 

ARTICLE II

AUTHORIZED REPRESENTATIVES

          Section
2.01. Certification. Concurrently with the execution of the Authorized
Participant Agreement, the Authorized Participant shall deliver to the Trustee
a certificate in a form as attached at Schedule 3-A to the Authorized
Participant Agreement (an “Authorized
Representative Certificate”) signed by the Authorized Participant’s
Secretary or other duly authorized person setting forth the names, signatures,
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 Trustee as conclusive
evidence of the facts set forth therein and shall be considered to be in full
force and effect until (i) receipt by the Trustee of a superseding Authorized
Representative Certificate, or (ii) termination of the Authorized Participant
Agreement. After such Authorized Representative Certificate is accepted by the
Trustee, the Authorized Participant may authorize additional Authorized
Representatives to give instructions relating to any activity contemplated
hereby or any other notice, request or instruction on behalf of the Authorized
Participant by delivering to the Trustee an addendum to the certificate
described above in a form as attached at Schedule 3-B to 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. Except as otherwise
provided in these Standard Terms, the Authorized Participant agrees that,
absent the Trustee’s fraud, gross negligence, bad faith or reckless or willful
misconduct in failing 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
when the Authorized Participant provides

S2-4

notice to the Trustee of the termination or revocation of authority
pursuant to Section 2.03 and the Trustee has de-activated the PIN Number as
provided for in this paragraph. 

          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, as promptly as practicable under the
circumstances, 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 that uses a valid PIN Number. The Authorized Participant agrees
that the Trustee shall not be responsible, absent the Trustee’s fraud, gross
negligence, bad faith or reckless or willful misconduct, 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 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, if required under U.S. law, 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 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) to the extent the foregoing relates to the Authorized Participant’s
transactions in, and activities with respect to, Shares, and that it will not 

S2-5

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 and
to conduct its business in accordance with the FINRA Conduct Rules, to the
extent the foregoing relates to the Authorized Participant’s transactions in,
and activities with respect to, Shares. 

          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 (the “U.S.A. PATRIOT Act”),
the Authorized Participant has policies and procedures reasonably designed to
comply with the anti-money laundering and related provisions of the U.S.A.
PATRIOT Act. 

          Section
3.05. Authorized Participant Status. 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. 

ARTICLE IV

ROLE OF AUTHORIZED PARTICIPANT

          Section
4.01. No Agency. The Authorized Participant acknowledges and agrees that
for all purposes of the Authorized Participant Agreement, the Authorized
Participant 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 reasonable 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) the disclosure of which to third parties is
in violation of any applicable law or regulation or is otherwise prohibited, or
(ii) is confidential or proprietary in nature. 

          Section
4.02. Rights and Obligations of DTC Participant. The Authorized
Participant, as a DTC Participant, agrees that it 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
(i) subject to any limitations arising under federal or state securities laws
relating to privacy, its internal privacy policies, or other obligations it may
have to its customers, to assist the Trustee or the Sponsor in determining
certain information regarding sales of Shares made by or through the Authorized
Participant (including, without limitation, the ownership level of each
beneficial owner relating to positions in Shares that the Authorized
Participant may hold as record holder) upon the request of the Trustee or the
Sponsor that is necessary for the Trustee or Sponsor to

S2-6

comply with their obligations to distribute information to beneficial
owners of Shares under applicable state or federal securities laws or (ii) in
lieu thereof, and at the option of the Authorized Participant, to forward to
such beneficial owners written materials and communications received from the
Sponsor or the Trustee 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 applicable law or regulation or otherwise, or that the Sponsor or the
Trustee reasonably wishes to distribute to such beneficial owners, in each case
at the expense of the Sponsor and/or the Trust. 

          Section
4.04. Authorized Participant Customer Information. The Sponsor and the
Trustee agree that the names and addresses and other information concerning the
Authorized Participant’s customers are and shall remain the sole property of
the Authorized Participant, and none of the Sponsor, the Trust, or the Trustee,
or any of their respective affiliates shall use such names, addresses or other
information for any purpose except in connection with the performance of their
duties and responsibilities under the Authorized Participant Agreement, the
Procedures, the Standard Terms and the applicable Prospectus and except for
servicing and informational mailings related to the Trust(s) referred to in
Section 4.03 above. 

ARTICLE V

MARKETING MATERIALS AND REPRESENTATIONS AND
WARRANTIES

          Section
5.01. Authorized Participant’s Representation. The Authorized
Participant represents, warrants and agrees that, in connection with any sale
or solicitation of a sale of Shares, it will not make, or permit any of its
representatives to make on its behalf, any representations concerning Shares
other than those not inconsistent with the Trust’s then current Prospectus or
any promotional materials or sales literature furnished to the Authorized
Participant by the Sponsor. 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 (excluding, without limitation, promotional
materials and sales literature, advertisements, press releases, announcements,
statements, posters, signs or other similar materials not inconsistent with the
Trust’s then current Prospectus and in accordance with applicable laws and
regulations, and any materials prepared and used for the Authorized
Participant’s internal use only or brokerage communications prepared by the
Authorized Participant in the normal course of its business), 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 and its Affiliates and representatives may, without the approval of
the Sponsor, prepare and circulate in the regular course of their respective
businesses, research, reports, marketing materials, sales literature or similar
materials that include information, opinions or recommendations relating to
Shares (i) for public dissemination, provided that such reports, research,
marketing materials, sales literature or other similar materials comply with
applicable FINRA rules and (ii) for internal use by the Authorized Participant
and its Affiliates and representatives. 

S2-7

          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, as promptly as practicable under the circumstances, notify the Authorized
Participant when a revised, supplemented or amended Prospectus for the Shares
is available, and deliver or otherwise 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 will make such revised,
supplemented or amended Prospectus available to the Authorized Participant no
later than its effective date. 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, in its
 capacity as sponsor of the applicable Trust, the Trustee, the Trust and their
 respective Affiliates, subsidiaries, 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 “AP
 Indemnified Party”) from and
 against any loss, liability, cost and expense (including reasonable
 attorneys’ fees) incurred by such AP Indemnified Party as a result of (i) any
 breach by the Authorized Participant of any provision of the Authorized
 Participant Agreement that relates to the Authorized Participant; (ii) any failure
 on the part of the Authorized Participant to perform any of its obligations
 set forth in the Authorized Participant Agreement applicable to it; (iii) any
 failure by the Authorized Participant to comply in all material respects with
 applicable laws, including rules and regulations of self-regulatory
 organizations to the extent such laws, rules and regulations are applicable
 to the transactions being undertaken pursuant to the Authorized Participant
 Agreement; or (iv) actions of such AP Indemnified Party pursuant to any
 instructions issued in accordance with the relevant Prospectus, Authorized
 Participant Agreement, the Procedures, or the Standard Terms reasonably
 believed by the AP Indemnified Party to be genuine and to have been given by
 the Authorized Participant except to the extent that the Authorized
 Participant had previously revoked a PIN Number used in giving such
 instructions or representations (where applicable) and such revocation was
 given by the Authorized Participant and received by the Trustee in accordance
 with the terms of Section 2.03 hereto. The Authorized Participant shall not
 be liable under its indemnity agreement contained in this paragraph with
 respect to any claim made against any AP Indemnified Party unless the AP
 Indemnified Party shall have notified the Authorized Participant in writing
 of the claim within a reasonable time after the summons or other first
 written notification giving information of the nature of the claim was served
 upon the AP Indemnified Party (or after the AP Indemnified Party shall have
 received notice of service on any designated agent). However, failure to
 notify the Authorized Participant of any claim shall not relieve the
 Authorized Participant from any liability which it may

 

S2-8

	
  

 	
  

 
	
  

 	
 have to any AP Indemnified Party against whom such action is brought
 otherwise than on account of its indemnity agreement contained in this
 paragraph and shall only release it from such liability under this paragraph
 to the extent it has been materially prejudiced by such failure to give
 notice. The Authorized Participant shall be entitled to participate at its
 own expense in the defense, or, if it so elects, to assume the defense of any
 suit brought to enforce any claims, but if the Authorized Participant elects
 to assume the defense, the defense shall be conducted by counsel chosen by it
 and satisfactory to the AP Indemnified Parties in the suit and who shall not,
 except with consent of the AP Indemnified Parties, be counsel to the
 Authorized Participant. If the Authorized Participant does not elect to
 assume the defense of any suit, it will reimburse the AP Indemnified Parties
 in the suit for the reasonable fees and expenses of any counsel retained by
 them. 

 
	
  

 	
  

 
	
  

 	
           b. The
 Sponsor hereby agrees to indemnify and hold harmless the Authorized
 Participant, its Affiliates, subsidiaries, 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 a “Sponsor
 Indemnified Party”) from and against any loss, liability, cost and
 expense (including reasonable attorneys’ fees) incurred by such Sponsor
 Indemnified Party as a result of (i) any breach by the Sponsor of any
 provision of the Authorized Participant Agreement that relates to the Sponsor;
 (ii) any failure on the part of the Sponsor to perform any of its obligations
 set forth in the Authorized Participant Agreement applicable to it; (iii) any
 failure on the part of the Sponsor to comply in all material respects with
 applicable laws, including rules and regulations of self-regulatory
 organizations to the extent such laws, rules and regulations are applicable
 to the transactions being undertaken pursuant to the Authorized Participant
 Agreement; (iv) actions of such Sponsor Indemnified Party pursuant to any
 instructions issued or representations made in accordance with the relevant
 Prospectus, Authorized Participant Agreement, the Procedures, or the Standard
 Terms reasonably believed by the Sponsor Indemnified Party to be genuine and
 to have been given by the Sponsor; or (v) any untrue statements or omissions
 made in any promotional material or sales literature furnished to the
 Authorized Participant by the Sponsor or otherwise approved in writing by the
 Sponsor. The Sponsor shall not be liable under its indemnity agreement
 contained in this paragraph with respect to any claim made against any
 Sponsor Indemnified Party unless the Sponsor Indemnified Party shall have
 notified the Sponsor in writing of the claim within a reasonable time after
 the summons or other first written notification giving information of the
 nature of the claim shall have been served upon the Sponsor Indemnified Party
 (or after the Sponsor Indemnified Party shall have received notice of service
 on any designated agent). However, failure to notify the Sponsor of any claim
 shall not relieve the Sponsor from any liability which it may have to any
 Sponsor Indemnified Party against whom such action is brought otherwise than
 on account of its indemnity agreement contained in this paragraph and shall
 only release it from such liability under this paragraph to the extent it has
 been materially prejudiced by such failure to give notice. The Sponsor shall
 be entitled to participate at its own expense in the defense, or, if it so
 elects, to assume the defense of any suit brought to enforce any claims, but
 if the Sponsor elects to assume the defense, the defense shall be conducted
 by counsel chosen by it and satisfactory to the Sponsor Indemnified Parties
 in the suit and who shall not, except with the consent of the Sponsor
 Indemnified Parties, be counsel to the Sponsor. If the Sponsor does not elect
 to assume the defense of any suit, it will 

 

S2-9

	
  

 	
  

 
	
  

 	
 reimburse the Sponsor Indemnified Parties in the suit for the
 reasonable fees and expenses of any counsel retained by them. 

 
	
  

 	
  

 
	
  

 	
           d. No
 indemnifying party, as described in paragraphs (a) and (b) above, shall,
 without the written consent of the AP Indemnified Party or the Sponsor
 Indemnified Party, as the case may be, effect the settlement or compromise
 of, or consent to the entry of any judgment with respect to, any pending or
 threatened action or claim in respect of which indemnification may be sought
 hereunder (whether or not the indemnified party is an actual or potential
 party to such action or claim) unless such settlement, compromise or judgment
 (i) includes an unconditional release of the AP Indemnified Party or Sponsor
 Indemnified Party, as the case may be, from all liability arising out of such
 action or claim and (ii) does not include a statement as to or an admission
 of fault, culpability or a failure to act, by or on behalf of any AP
 Indemnified Party or Sponsor Indemnified Party, as the case may be. 

 
	
  

 	
  

 
	
  

 	
           e. The
 Authorized Participant shall not be liable to any AP 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 AP
 Indemnified Party. 

 
	
  

 	
  

 
	
  

 	
           f. The
 indemnification provided for in Section 6.01(a) shall not apply to the extent
 any such losses, liabilities, damages, costs and expenses are incurred as a
 result of any fraud, gross negligence, bad faith or reckless or willful
 misconduct on the part of an AP Indemnified Party. The indemnification
 provided for in Section 6.01(b) shall not apply to the extent any such
 losses, liabilities, damages, costs and expenses are incurred as a result of
 any fraud, gross negligence, bad faith or reckless or willful misconduct on
 the part of a Sponsor Indemnified Party. 

 
	
  

 	
  

 
	
  

 	
           f. The
 indemnity agreements contained in this Section 6.01 shall remain in full force
 and effect and shall survive any termination of this Agreement. The Sponsor
 and the Authorized Participant agree promptly to notify each other of the
 commencement of any Proceeding against it and against any of their officers
 or directors in connection with the issuance and sale of the Shares or in
 connection with the registration statement or the relevant Prospectus. 

 

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 relevant Prospectus. 

 

[Signatures
Follow on Next Page]

 

S2-10

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

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

	
  

 	
  

 	
  

 
	
 By:

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
 Name:

 	
  

 
	
 Title:

 	
  

 

ETF SECURITIES USA LLC,
in its capacity as Sponsor 

	
  

 	
  

 	
  

 
	
 By:

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
 Name:

 	
  

 
	
 Title:

 	
  

 

 

 [First Amended and Restated Standard Terms
Signature Page]

 

S2-11

SCHEDULE 3-A: AUTHORIZED REPRESENTATIVES OF
THE AUTHORIZED PARTICIPANT

Certificate of Authorized Representatives of the Authorized Participant

          The
following are the names, titles, signatures, phone numbers, and email addresses
of all persons (each, an “Authorized Representative”) authorized to give
instructions relating to any activity contemplated by the Authorized
Participant Agreement between [AUTHORIZED PARTICIPANT], The Bank of New York
Mellon and ETF Securities USA LLC dated [DATE] (the “Agreement”) or any other
notice, request or instruction on behalf of the Authorized Participant pursuant
to the Agreement. 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Name:

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
 Title:

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Signature:

 	
  

 	
  

 	
 Signature:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
 Phone:

 	
  

 	
  

 	
 Phone:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
 Email:

 	
  

 	
  

 	
 Email:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Name:

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
 Title:

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Signature:

 	
  

 	
  

 	
 Signature:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
 Phone:

 	
  

 	
  

 	
 Phone:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
 Email:

 	
  

 	
  

 	
 Email:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Name:

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
 Title:

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
 Signature:

 	
  

 	
  

 	
 Signature:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
 Phone:

 	
  

 	
  

 	
 Phone:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
 Email:

 	
  

 	
  

 	
 Email:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 

          The
undersigned, [AP’S AUTHORIZED SIGNATORY], 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:

 
	
 Date:

 

S3-1

SCHEDULE 3-B: ADDENDUM TO CERTIFICATE OF
AUTHORIZED
 REPRESENTATIVES OF THE AUTHORIZED
PARTICIPANT

 [On AP’s Firm Letterhead]

	
  

 
	
  [DATE]

 
	
 Attn: Jarvis Joseph 

 
	
 The Bank of New York
 Mellon 

 
	
 2 Hanson Place — Floor 9th
 

 
	
 Brooklyn, NY 11217 

 
	
 New York 

 

	
  

 	
  

 
	
 Re:

 	
 Addendum
 to the Certificate of Authorized Representatives for [AUTHORIZED PARTICIPANT]
 under the Authorized Participant Agreement for the relevant Trusts sponsored
 by ETF Securities USA LLC dated [DATE] (the “Agreement”) 

 
	

	

Ladies and Gentlemen: 

          Pursuant
to the Agreement, the following are the names, titles, signatures, phone
numbers, and email addresses of additional Authorized Representatives of
[AUTHORIZED PARTICIPANT] (the “AP”) authorized to give instructions relating to
any activity contemplated by the Agreement or any other notice, request or
instruction on behalf of the AP pursuant to the Agreement. This list of
Authorized Representatives is an addendum and adds further Authorized
Representatives to the AP’s most recently executed certificate (entitled
“Certificate of Authorized Representatives of the Authorized Participant”). 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Name:

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
 Title:

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Signature:

 	
  

 	
  

 	
 Signature:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
 Phone:

 	
  

 	
  

 	
 Phone:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
 Email:

 	
  

 	
  

 	
 Email:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Name:

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
 Title:

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Signature:

 	
  

 	
  

 	
 Signature:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
 Phone:

 	
  

 	
  

 	
 Phone:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 
	
 Email:

 	
  

 	
  

 	
 Email:

 	
  

 
	
  

 	

 

 	
  

 	
  

 	

 

 

          Please
provide PIN numbers for those listed above. 

          The
undersigned, [AP’S AUTHORIZED SIGNATORY], 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:

 
	
 Date:

 

S3-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00186-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00186-of-00352.parquet"}]]