Document:

hme8kexhibit102.htm

  

  

  

Exhibit 10.2

 

GUARANTY

THIS GUARANTY dated as of September 1, 2009 (this “Guaranty”), executed and delivered by each of the undersigned and the other Persons from time to time party hereto pursuant to the execution and delivery of an Accession Agreement in the form of Annex I hereto (all of the undersigned,
together with such other Persons each a “Guarantor” and collectively, the “Guarantors”) in favor of Manufacturers and Traders Trust Company, as Administrative Agent (the “Agent”) for the Lenders (as defined below) under that certain Credit Agreement dated as of September 1, 2009 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; capitalized terms used herein and not otherwise defined herein shall have their respective
defined meanings given them in the Credit Agreement), by and among Home Properties, L.P. (the “Borrower”), Home Properties, Inc. (the “Company”), the lenders party thereto and their assignees under Section 9.04. thereof (the “Lenders”), the Agent and the other parties thereto, for the benefit of the Agent, the Lenders and the Issuing Bank (the Agent, the Lenders and the Issuing Bank, together with their respective successors and assigns, each individually a “Guarantied
Party” and collectively the “Guarantied Parties”).

WHEREAS, pursuant to the Credit Agreement, the Agent, the Lenders and the Issuing Bank have agreed to make available to the Borrower certain financial accommodations on the terms and conditions set forth in the Credit Agreement;

WHEREAS, the Borrower and each of the Guarantors, though separate legal entities, are mutually dependent on each other in the conduct of their respective businesses as an integrated operation and have determined it to be in their mutual best interests to obtain financing from the Agent, the
Lenders and the Issuing Bank through their collective efforts;

WHEREAS, each Guarantor acknowledges that it will receive direct and indirect benefits from the Agent, the Lenders and the Issuing Bank’s making such financial accommodations available to the Borrower under the Credit Agreement and, accordingly, each Guarantor is willing to guarantee
the Borrower’s obligations to the Agent, the Lenders and the Issuing Bank on the terms and conditions contained herein; and

WHEREAS, each Guarantor’s execution and delivery of this Guaranty is a condition to the Agent, the Lenders and the Issuing Bank’s making, and continuing to make, such financial accommodations to the Borrower.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Guarantor, each Guarantor agrees as follows:

 

 

 

1.           Guaranty.  (a)  Each Guarantor hereby absolutely, unconditionally and irrevocably guarantees, and each Guarantor hereby agrees to be liable
for, the full, indefeasible, prompt and punctual payment and performance when due, whether at stated maturity, by acceleration or otherwise, of all of the following (all of which are collectively referred to herein as the “Guaranteed Obligations”): (i) all obligations, liabilities and indebtedness of any kind, nature and description of the Borrower to any Guarantied Party arising at any time under the Credit Agreement or under any other Loan Document whether now existing or hereafter arising including,
without limitation, principal, interest, late charges, other charges, fees, reimbursement obligations, costs and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether now existing or hereafter arising, whether arising after the commencement of any case with respect to the Borrower under the Bankruptcy Code or any similar statute (including, without limitation, the payment of interest and other amounts, which would accrue and become due but for the commencement of
such case and including loans, interest, fees, charges and expenses related thereto and all other obligations under the Loan Documents of the Borrower or its successors to any Guarantied Party arising after the commencement of such case), whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, secured or unsecured, (ii) all expenses (including, without limitation, reasonable attorneys’ fees and legal expenses) incurred
by the Agent and/or any other Guarantied Party in connection with the preparation, execution, delivery, recording, administration, collection, liquidation, enforcement and defense of the Borrower’s and/or any Guarantor’s obligations, liabilities and indebtedness as aforesaid to the Guarantied Parties, and the rights of the Guarantied Parties in collateral, if any, under any of the Loan Documents or in any way involving claims by or against the Agent or any other Guarantied Party directly or indirectly
arising out of or related to the relationships between the Borrower, the Guarantors and the Guarantied Parties under the Loan Documents, whenever such expenses are incurred, including after the commencement of any case with respect to the Borrower or the Guarantor under the Bankruptcy Code or any similar statute, except for such expenses to the extent resulting from the gross negligence of the Agent or any other Guarantied Party proven by clear and convincing evidence (and not merely a preponderance of the evidence)
or willful misconduct of the Agent or any other Guarantied Party, and (iii) all other Obligations.

(b)           This Guaranty is and shall be construed to be an absolute, unconditional, irrevocable, present and continuing guaranty of payment of the Guaranteed Obligations and not of collection and the liability of each Guarantor is
the liability of a surety and, is in no way conditioned or contingent upon any attempt to collect any Guaranteed Obligations from the Borrower, any other Guarantor or any other Person, to realize upon collateral, if any, or upon any other condition or contingency; and, accordingly, in the event that any of the Guaranteed Obligations shall not be paid in full when the same becomes due and payable whether by maturity, acceleration or otherwise, or at any time thereafter, the Agent, for its benefit and the benefit
of the other Guarantied Parties, shall have the right to proceed against any Guarantor.  Notwithstanding the above, in the event of the commencement of any case with respect to the Borrower under the Bankruptcy Code or any similar statute (a “Bankruptcy Action”), or the Agent, for its benefit and the benefit of the other Guarantied Parties, is otherwise prohibited or delayed from taking or continuing action against the Borrower, the Agent, for its benefit and the benefit of the other Guarantied
Parties, shall have the right to proceed against each Guarantor immediately without taking any action or proceeding of any kind against the Borrower, any other Guarantor or any other Person to enforce the Guarantied Parties’ rights under the Loan Documents.  This Guaranty shall continue in full force and effect until (i) the Commitments shall have terminated and (ii) all the Guaranteed Obligations have been indefeasibly paid and satisfied in full. Nothing shall discharge or satisfy the liability
of the Guarantors hereunder or limit the same except the termination of the Commitments and the full and indefeasible payment and satisfaction of all Guaranteed Obligations.  At any time that the amounts received by the Agent in respect of the Guaranteed Obligations are insufficient to pay fully all of Guarantied Obligations, the Agent shall apply the amounts received in accordance with Section 2.16(b) of the Credit Agreement.

 

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(c)           Any payment by any Guarantor shall be made to the Agent at 255 East Avenue, Rochester, New York, 14604, Attention: Ms. Lisa Plescia, Vice President (the “Payment Office”). Each Guarantor shall make all payments
to the Agent on the Guaranteed Obligations free and clear of, and without deduction or withholding for or on account of, any setoff, counterclaim, defense, duties, taxes, levies, imposts, fees, deductions, withholding, restrictions, or conditions of any kind.

2.           Waivers.  (a)  Each Guarantor hereby waives: (i) notice of acceptance of this Guaranty, notice of the making of Loans to the Borrower, notice
of the issuance of Letters of Credit at the request of the Borrower and presentment, demand, dishonor, protest, notice of protest, promptness, diligence, notice of nonpayment or default, notice of any change in Borrower’s financial condition, notice of any change in the payment terms of the Guaranteed Obligations or any part thereof, notice of any modification to the Credit Agreement or to any other Loan Document, and all other notices of any nature or kind to which the Borrower or such Guarantor might
otherwise be entitled; (ii) any requirement that the Agent or any other Guarantied Party protect, secure, perfect or insure any security interest in or other lien on any assets of the Borrower or exhaust any right or action against the Borrower or any other Person or any collateral in connection with the Credit Agreement, the other Loan Documents and the transactions contemplated thereby; (iii) the filing of any claim with a court in the event of receivership of bankruptcy of the Borrower; (iv) the benefit of
any statute of limitations; and (v) all demands whatsoever (and any requirement that same be made on the Borrower as a condition precedent to such Guarantor’s obligations hereunder).

(b)           Each Guarantor agrees that notwithstanding the foregoing and without limiting the generality of the foregoing if, after the occurrence and during the continuance of an Event of Default, the Guarantied Parties or any one
of them is prevented by applicable law from exercising the rights of the Guarantied Parties to accelerate the maturity of the Guaranteed Obligations, to collect interest on the Guaranteed Obligations, or to enforce or exercise any other right or remedy with respect to the Guaranteed Obligations by reason of any automatic stay or otherwise, each Guarantor shall pay to the Agent, for its benefit and the benefit of the other Guarantied Parties, upon demand therefor, the amount that would otherwise have been due
and payable had such rights and remedies been permitted to be exercised by the Guarantied Parties.

(c)           Each Guarantor hereby assumes responsibility for continuously keeping itself informed of the financial condition of the Borrower, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations
or any part thereof that diligent inquiry would reveal. Each Guarantor hereby agrees that neither the Agent nor any other Guarantied Party shall have any duty to advise such Guarantor of information known to the Agent or any other Guarantied Party regarding Borrower’s financial or other condition or any other circumstance. In the event that the Agent or any other Guarantied Party in its sole discretion undertakes at any time or from time to time to provide any such information to the Guarantors, neither
the Agent nor such other Guarantied Party shall be under any obligation to (i) undertake any investigation not a part of its regular business routine, (ii) disclose any information which, pursuant to accepted or reasonable banking or commercial finance practice, the Agent or such Guarantied Party wishes to maintain confidential or (iii) make any other or future disclosure of such information or any other information to the Guarantors.

 

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(d)           Each Guarantor consents and agrees that neither the Agent nor any other Guarantied party shall be under any obligation to marshal any assets in favor of such Guarantor or otherwise in connection with obtaining payment of
any or all of the Guaranteed Obligations from such Guarantor or from any other Person or source.

3.           Guaranty Absolute.  (a)  Each Guarantor guaranties that the Guaranteed Obligations will be paid strictly in accordance with the terms of
the Credit Agreement and the other Loan Documents, regardless of any law, regulation or order now or hereinafter in effect in any jurisdiction affecting any of such terms or the rights of the Guarantied Parties with respect thereto. The amount of the Guaranteed Obligations shall not be diminished by, and the liability of each Guarantor under this Guaranty shall be absolute and unconditional irrespective of:

(i)           Any amendment, modification, supplement, extension, renewal, restatement or waiver of all or any part of the Credit Agreement,  any of the other Loan Documents or any other document or instrument evidencing or relating to any Guaranteed Obligations, including,
without limitation, extensions or any other change of time, manner or place of payment of or increase or decrease in the amount of any of the Guaranteed Obligations, and this Guaranty shall apply to the Credit Agreement and the other Loan Documents and the Guaranteed Obligations as so amended, modified, supplemented, renewed, rested or extended, increased or decreased;

(ii)           The taking, exchange, surrender and releasing of collateral, if any, or guarantees now or at any time held by or available to the Guarantied Parties for the obligations of the Borrower or any other party at any time liable on or in respect of the Guaranteed Obligations;
any failure or delay by the Agent or any other Guarantied Party to protect, secure, insure, perfect or realize upon, or any negligence by the Agent or any other Guarantied Party with respect to, or any substitution or release, in whole or in part, of security, if any, for the Loan Documents or this Guaranty, hereunder or otherwise which may be held at any time by any of the Guarantied Parties or any of their respective successors or assigns;

(iii)           The exercise of, or refraining from the exercise of, except as required in this Guaranty, any rights, powers or remedies (A) against the Borrower, any Guarantor or any other Person or any assets of any of them of (B) under, or in respect of the Loan Documents or any
security held by the Agent or the other Guarantied Parties, if any, with respect thereto;

(iv)           The settlement, compromise or release of, or the waiver of any default with respect to, any of the Guaranteed Obligations, any security therefor, or any liability of any other party with respect to the Guaranteed Obligations, or any subordination of the payment of the
Guaranteed Obligations to the payment of any other liability of the Borrower or any other Guarantor;

 

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(v)           Any bankruptcy, insolvency, reorganization, arrangement, adjustment, composition, liquidation, or other like proceeding relating to any Guarantor, the Borrower, any affiliate of the Guarantors or any other Person, or any action taken with respect to this Guaranty by
any trustee or receiver, or by any court, in any such proceeding;

(vi)           Any limitation of the Borrower’s liability under the Loan Documents or any limitation of the Borrower’s liability which may now or hereafter be imposed by any statute, regulation or rule of law, or any illegality, irregularity, invalidity or unenforceability,
in whole or in part, of the Loan Documents or any term thereof;

(vii)           Any sale, lease or transfer of any or all of the assets of the Borrower to any other Person;

(viii)           Any invalidity, illegality, irregularity or unenforceability of all or any part of the Credit Agreement, the Loan Documents or the Guaranteed Obligations or any other circumstance which might otherwise constitute a defense available to or legal or equitable discharge
of the Borrower in respect of any of the Credit Agreement, the Loan Documents or the Guaranteed Obligations, or any Guarantor in respect of this Guaranty;

(ix)           Any furnishing to the Agent or any other Guarantied Party of any security for the Guaranteed Obligations, or any sale, exchange, release or surrender of, or realization on, any collateral securing any of the Obligations;

(x)           Any election by the Agent and/or the other Guarantied Parties in any proceeding under chapter 11 of the Bankruptcy Code of the application of section 1111(b)(2) of the Bankruptcy Code;

(xi)           Any borrowing or grant of a security interest by the Borrower, as debtor-in-possession, under section 364 of the Bankruptcy Code or any consent to the use of cash collateral by the Guarantied Parties under Section 363 of the Bankruptcy Code;

(xii)           The disallowance, under section 502 of the Bankruptcy Code, of all or any portion of the claims of the Guarantied Parties for payment of any of the Guaranteed Obligations;

(xiii)           Any act or failure to act by the Borrower or any other Person which may adversely affect any Guarantor’s subrogation rights, if any, against the Borrower to recover payments made under this Guaranty;

(xiv)           any nonperfection or impairment of any security interest or other Lien on any collateral, if any, securing in any way any of the Obligations;

 

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(xv)           any application of sums paid by the Borrower, any Guarantor or any other Person with respect to the liabilities of the Borrower to the Agent and the Guarantied Parties, regardless of what liabilities of the Borrower remain unpaid;

(xvi)           any defect, limitation or insufficiency in the borrowing powers of the Borrower or in the exercise thereof;

(xvii)           any defense, set-off, claim or counterclaim (other than indefeasible payment and performance in full) which may at any time be available to or be asserted by the Borrower or any other Person against the Agent or any other Guarantied Party;

(xviii)           any change in the corporate or partnership existence, as the case may be, structure or ownership of the Borrower, any Guarantor or any other Person;

(xix)           any statement, representation or warranty made or deemed made by or on behalf of the Borrower, any Guarantor or any other Person under any Loan Document, or any amendment hereto or thereto, proves to have been incorrect or misleading in any respect; or

(xx)           Any other circumstance, whether or not any Guarantor shall have had notice or knowledge thereof.

(b)           Each Guarantor shall be liable for all (including but not limited to attorneys’ fees of the Agent and the Guarantied Parties) fees and expenses which would have been payable by the Borrower pursuant to the terms of
the Credit Agreement or any of the Loan Documents, whether arising before or after the commencement of any case with respect to the Borrower under the Bankruptcy Code or any similar statute, even if the Borrower’s liability for such amounts does not, or ceases to, exist by operation of law. Each Guarantor shall also be liable to the Agent and the other Guarantied Parties for payment of all attorneys’ fees, disbursements and other expenses incurred and to be incurred by the Agent and the other Guarantied
Parties in connection with the enforcement of Agent’s and other Guarantied Parties’ rights under this Guaranty.

4.           Subordination; Subrogation.  (a) Until the Commitments shall have been terminated and all Guaranteed Obligations have been indefeasibly paid
and satisfied in full, in cash, each Guarantor expressly covenants and agrees for the benefit of the Guarantied Parties that payment of all amounts now or hereafter owed to such Guarantor by the Borrower (the “Junior Claims”) is hereby subordinated and junior in right of payment to all Guarantied Obligations.  All Junior Claims, and any security and guarantees therefore, now or hereafter owed to any Guarantor by the Borrower is hereby assigned to the Lenders as security for the Guaranteed
Obligations.  Notwithstanding the foregoing, the Borrower shall be entitled to make, and each Guarantor to receive, scheduled payments with respect to Junior Claims until a Default or Event of Default shall have occurred under the Credit Agreement.

 

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(b)           Nothing herein contained is intended or shall be construed to give to any Guarantor, until the Guaranteed Obligations are indefeasibly paid in full to the Guaranteed Party, any right of subrogation in or under the Loan Documents,
or any right to participate in any way therein, or in the right, title or interest of any Guarantied Party in any assets of the Borrower. Notwithstanding any payments made under this Guaranty, all rights of subrogation and participation are hereby expressly waived until such time as the Commitments shall have terminated and all the Guaranteed Obligations have been indefeasibly paid and satisfied in full, and each Guarantor irrevocably and unconditionally agrees that such Guarantor shall not assert or enforce
(i) statutory, contractual, common law, equitable and all other claims against the Borrower or any assets of the Borrower, for subrogation, reimbursement, exoneration, contribution, indemnification, setoff or other recourse in respect to sums paid or payable to the Agent for the benefit of the Guarantied Parties by such Guarantor hereunder and (ii) any and all other benefits which such Guarantor might otherwise directly or indirectly receive or be entitled to receive by reason of any amounts paid by or collected
or due from the Borrower upon the Guaranteed Obligations or realized from their property.

5.           Acceleration. Upon occurrence of an “Event of Default” as defined in any of the Loan Documents and in accordance with the terms of the Credit Agreement, the Agent may, without notice to any Guarantor,
cause the obligations and liabilities of the Borrower to the Guarantied Parties, whether or not then immediately due and payable, to become immediately due and payable hereunder as to the Borrower or as to any Guarantor, and the Agent, for the benefit of the Guarantied Parties, shall thereupon be entitled to enforce the Obligations of the Borrower under the Loan Documents and of any Guarantor hereunder. In the event that the Agent and/or any other Guarantied Party shall be stayed or otherwise precluded by any
law or rule, or any order of any court, from declaring or causing such Obligations or liabilities to become immediately due and payable with respect to the Borrower, each Guarantor hereby agrees, to the fullest extent permitted by law, that for purposes of this Guaranty, the Agent may nevertheless cause such Obligations and liabilities to become immediately due and payable by such Guarantor by notice to such effect to such Guarantor and such Guarantor shall thereupon pay all Guaranteed Obligations in full or,
as the Agent may direct, at the Agents’ sole option, purchase all Guaranteed Obligations (without recourse) by paying the full amount thereof to the Lenders in cash.

6.           Account Stated. The books and records of any Guarantied Party showing the account between such Guarantied Party and the Borrower shall be admissible in evidence
in any action or proceeding against or involving any Guarantor as prima facie evidence of the items therein set forth, and any periodic statements of any Guarantied Party rendered to the Borrower shall be deemed conclusively correct and constitute an account stated between such Guarantied Party and the Borrower and be binding on each Guarantor, absent manifest errors or omissions.

7.           Reinstatement/Claims. If after receipt of any payment of any of the Guaranteed Obligations, the Agent and/or any other Guarantied Party is required to surrender
or return such payment or proceeds to any Person for any reason including, without limitation, by reason of (a) any judgment, decree or order of any court or administrative body having jurisdiction over the the Agent or such other Guarantied Party, as the case may be, or any of its property, or (b) any settlement or compromise of any such claim effected in good faith by the Agent or such other Guarantied Party with any such claimant, including the Borrower and any trustee, custodian or receiver for the Borrower
or its property (items (a) and (b) referred to herein as “Claims”), then the Guaranteed Obligations intended to be satisfied by such payment or proceeds shall be deemed reinstated and continue, and this Guaranty shall continue in full force and effect as if such payment or proceeds had not been received by the Agent and/or such other Guarantied Party, notwithstanding the return or destruction of this Guaranty, delivery of any release to any Guarantor, to Borrower or to any other Person, or any other
matter.  In addition, with respect to any Claims, the Agent and/or such other Guarantied Party, as the case may be, shall notify each Guarantor and extend to them reasonable opportunity to defend the same at their expense, and if the Agent and/or such other Guarantied Party repays all or part of said amount by reason of such Claims, then and in such event each Guarantor agrees that any such judgment, decree, order, settlement or compromise shall be binding upon such Guarantor, notwithstanding the cancellation
or termination of any of the Loan Documents or any other instrument evidencing any of said obligations, and such Guarantor shall be and remain liable to the Agent and/or such other Guarantied Party hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by the Agent and/or such other Guarantied Party, notwithstanding the destruction or return of this Guaranty to Guarantors, Borrower or any Person of any release or any other matter.  Each
Guarantor shall be liable to pay to the Agent and each other Guarantied Party, and does hereby indemnify and hold the Agent and each other Guarantied Party harmless for the amount of any payments or proceeds surrendered or returned. This Section 7 shall remain effective notwithstanding any contrary action, which may be taken by the Agent and the Guarantied Parties in reliance upon such payment or proceeds. This Section 7 shall survive the termination of this Guaranty.

 

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8.           Amendments and Waivers. Neither this Guaranty nor any provision hereof shall be amended, modified, waived or discharged orally or by course of conduct, but
only by a written agreement, signed by an authorized officer of the Agent, subject to Section 9.02 of the Credit Agreement. Neither the Agent nor any other Guarantied Party shall, by any act, delay, omission or otherwise be deemed to have expressly or impliedly waived any of its rights, powers or remedies unless such waiver shall be in writing and signed by an authorized officer of the Agent, subject to Section 9.02 of the Credit Agreement. Any such waiver shall be enforceable only to the extent specifically
set forth therein. A waiver by the Agent and the other Guarantied Parties of any right, power or remedy on any one occasion shall not be construed as a bar to or waiver of any such right, power or remedy that the Agent or the other Guarantied Parties would otherwise have on any future occasion, whether similar in kind or otherwise.

9.           Governing Law; Choice of Forum; Service of Process: Jury Trial Waiver.

(a)           THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

(b)           Each Guarantor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in Monroe County and of the United States District Court of the Western District of New York,
and any appellate court from any thereof, or such other jurisdiction or venue as the Required Lenders may determine, in any action or proceeding arising out of or relating to this Guaranty, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court, or in such other jurisdiction
or venue as the Required Lenders may so determine. Each Guarantor hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Guaranty shall affect any right that the Agent or any other Guarantied Party may otherwise have to bring any action or proceeding relating to this Guaranty against any Guarantor or its properties in the courts of any jurisdiction.

 

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(c)           Each Guarantor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Guaranty
in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d)           Each party to this Guaranty irrevocably consents to service of process in the manner provided for notices in Section 13 of this Guaranty. Nothing in this Guaranty will affect the right of any party to this Guaranty to serve process in any other manner permitted by law.

(e)           WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

(e)           Neither the Agent nor any other Guarantied Party shall have any liability to any Guarantor (whether in tort, contract, equity or otherwise) for losses suffered by such Guarantor in connection with, arising out of, or in
any way related to the transactions or relationships contemplated by this Guaranty, or any act, omission or event occurring in connection herewith, unless it is determined by clear and convincing evidence (and not merely a preponderance of the evidence) or court order binding on the Agent and/or any other Guarantied Party that the losses were the result of acts or omissions constituting gross negligence or willful misconduct or the Agent and/or such other Guarantied Party. In any such litigation, the Agent and/or
any other Guarantied Party shall be entitled to the benefit of the rebuttable presumption that it acted in good faith and with the exercise of ordinary care in the performance by it of terms of the Credit Agreement and the other Loan Documents.

 

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10.           Set-off; Deposit Balances. Each Guarantor further agrees that any money or property at any time in the possession of any Guarantied Party belonging to such
Guarantor, including any deposit balances (general or special, time or demand, provisional or final), and all property or the proceeds thereof held by any Guarantied Party for any purpose including safekeeping, custody, transmission, collection or pledge (other than those accounts in which such Guarantor is holding such monies solely as custodian or agent or in trust, such as tenant security deposit accounts, reserve accounts under existing financing and payroll accounts), is being held as collateral security
for the payment of any liability of such Guarantor to the Guarantied Parties under this Guaranty, whether due or not, with full power and authority to apply any deposit balances to the extinguishment of any such liability and to sell, enforce, collect or otherwise realize on said money or property in accordance with applicable law. Until the occurrence of an Event of Default under the Credit Agreement, the Notes or under any other Loan Document, each Guarantor shall have full access and use of such money or property
in possession of any of the Guarantied Parties. Nothing in this Section 10 or otherwise, however, modifies, limits or abridges any common law right of set-off that any Guarantied Party has or might have. The provisions of this Guaranty shall override any inconsistent provisions of any custody agreement or investment management agreement with any Guarantied Party, whether heretofore or hereafter executed.

11.           Powers. Each Guarantor agrees that neither the Agent nor any other Guarantied Party is obligated in any manner to inquire into the powers of the Borrower or
any other Guarantor, or its successors, its or their directors, officers, or agents, acting or purporting to act on its or their behalf, and any liabilities purporting to be contracted for the Borrower or such Guarantor, or its successors, by its or their directors, officers or agents, in the professed exercise of such powers, shall be deemed to form a part of the Guaranteed Obligations even though the incurrence of such liabilities be in excess of the powers of the Borrower, its successors, its or their directors,
officers or agents aforesaid, or shall be in any way irregular, defective or informal.

12.  Avoidance Provisions.  It is the intent of each Guarantor, the Agent and each other Guarantied Party that in any Bankruptcy Action, such Guarantor’s maximum obligation hereunder shall equal, but not exceed, the maximum amount which would not
otherwise cause the obligations of such Guarantor hereunder (or any other obligations of such Guarantor to the Agent and the other Guarantied Parties) to be avoidable or unenforceable against such Guarantor in such Bankruptcy Action as a result of applicable law, including without limitation, (a) Section 548 of the Bankruptcy Code and (b) any state fraudulent transfer or fraudulent conveyance act or statute applied in such Bankruptcy Action, whether by virtue of Section 544 of the Bankruptcy
Code or otherwise.  The applicable laws under which the possible avoidance or unenforceability of the obligations of each Guarantor hereunder (or any other obligations of such Guarantor to the Agent and the Lenders) shall be determined in any such Bankruptcy Action are referred to as the “Avoidance Provisions”.  Accordingly, to the extent that the obligations of any Guarantor hereunder would otherwise be subject to avoidance under the Avoidance Provisions, the maximum Guarantied
Obligations for which such Guarantor shall be liable hereunder shall be reduced to that amount which, as of the time any of the Guarantied Obligations are deemed to have been incurred under the Avoidance Provisions, would not cause the obligations of such Guarantor hereunder (or any other obligations of such Guarantor to the Guarantied Parties), to be subject to avoidance under the Avoidance Provisions.  This Section is intended solely to preserve the rights of the Agent and the other Guarantied Parties
hereunder to the maximum extent that would not cause the obligations of any Guarantor hereunder to be subject to avoidance under the Avoidance Provisions, and no Guarantor or any other Person shall have any right or claim under this Section as against the Agent or any other Guarantied Party that would not otherwise be available to such Person under the Avoidance Provisions.

 

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13.           Notices. All notices, requests and demands hereunder shall be in writing and (a) made to the Agent, on behalf of the Agent and the other Guarantied Parties,
at the Payment Office and to each Guarantor at its address set forth below its signature page hereto, or to such other address as either party may designate by written notice to the other in accordance with this provision, and (b) deemed to have been given or made on receipt if delivered (i) in person, (ii) by telecopier, (iii) by overnight courier service and (iv) by certified or registered mail, return receipt requested.

14.           Partial Invalidity. If any term or provision of this Guaranty is held to be invalid or unenforceable, such invalidity or unenforceability shall not invalidate
this Guaranty as a whole, but this Guaranty shall be construed as though it did not contain the particular provision held to be invalid or unenforceable and the rights and obligations of the parties shall be construed and enforced only to such extent as shall be permitted by applicable law.

15.           Entire Agreement. This Guaranty represents the entire agreement and understanding of the Agent, the other Guarantied Parties and the Guarantors concerning
the subject matter hereof and supercedes all other prior agreements, understandings, negotiations and discussions, representations, warranties, commitments, proposals, offers and contracts concerning the subject matter hereof, whether oral or written.

16.           Successors and Assigns. This Guaranty shall be binding upon the Guarantors and its successors and assigns and shall inure to the benefit of the Agent, the
other Guarantied Parties and their successors, endorsees, transferees and assigns.

17.           Construction. All references to the term “Guarantor” wherever used herein shall include Guarantor’s successors and assigns, individually
and collectively (including, without limitation, any receiver, trustee or custodian for the Guarantor or any of its assets or the Guarantor in its capacity as debtor or debtor-in-possession under the Bankruptcy Code). All references to the term “Guarantied Parties” whenever used herein shall mean the Guarantied Parties and their respective successors and assigns, and all references to the term “Borrower” wherever used herein shall mean the Borrower and its successors and assigns (including,
without limitation, any receiver, trustee or custodian for the Borrower or any of its assets or Borrower in its capacity as debtor or debtor-in-possession under the Bankruptcy Code). All references to the plural shall also mean the singular and to the singular shall also mean the plural.

 

  

11

  

IN WITNESS WHEREOF, each Guarantor has executed and delivered this Guaranty by its duly authorized officer as of the day and year first above written.

HOME PROPERTIES, INC.

By:  /s/ David P. Gardner                                                                    

Name:  David P. Gardner

Title:  Executive Vice President and

           Chief Financial Officer

Address for Notices:

850 Clinton Square

Rochester, New York  14604

Attention: David P. Gardner, CFO

Telecopy Number: (505) 546-5433

Telephone Number:  (505) 246-4113

  

12

  

HOME PROPERTIES CAMBRIDGE VILLAGE, LLC

HOME PROPERTIES COURTYARD VILLAGE, LLC

HOME PROPERTIES GARDENCREST, LLC

HOME PROPERTIES HERITAGE SQUARE, LLC

HOME PROPERTIES HOLIDAY SQUARE, LLC

JACOB FORD VILLAGE, L.L.C.

HOME PROPERTIES LIBERTY COMMONS, LLC

HOME PROPERTIES MORNINGSIDE HEIGHTS, LLC

HOME PROPERTIES MORNINGSIDE NORTH, LLC

HOME PROPERTIES MORNINGSIDE SIX, LLC

HOME PROPERTIES SHERWOOD GARDENS, LLC

HOME PROPERTIES STOUGHTON, LLC

THE COLONY OF HOME PROPERTIES, LLC

HOME PROPERTIES CHANNEL TOWNHOMES, LLC

HOME PROPERTIES COVE TOWNHOMES, LLC

HOME PROPERTIES LIGHTHOUSE TOWNHOMES, LLC

HOME PROPERTIES BEVERLY, LLC

HOME PROPERTIES MARSHFIELD, LLC

HOME PROPERTIES TREXLER PARK WEST, LLC

HOME PROPERTIES WOODLEAF, LLC

HOME PROPERTIES YORKSHIRE VILLAGE, LLC

               By:  Home Properties, L.P., member

               By:  Home Properties, Inc.

                       General Partner

By:    /s/ David P. Gardner

                 David P. Gardner

                  Executive Vice President and

                  Chief Financial Officer

VALLEY PARK SOUTH PARTNERSHIP

              By:  Home Properties, L.P., general partner

   By:  Home Properties, Inc.

                                 General Partner

By:    /s/ David P. Gardner

                 David P. Gardner

                  Executive Vice President and

                  Chief Financial Officer

  

13Exhibit 4.1

EXECUTION COPY

	
 

	
DEPOSITARY TRUST AGREEMENT

	
 

	
ETF SECURITIES USA LLC,

	
 

	
as Sponsor

	
 

	
and

	
 

	
THE BANK OF NEW YORK MELLON,

	
 

	
as Trustee

	
 

	

	
 

	
Depositary Trust Agreement

	
 

	
ETFS Gold Trust

	
 

	

	
 

	
Dated as of September 1, 2009

TABLE OF CONTENTS

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Page

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
Article I. DEFINITIONS
 AND RULES OF CONSTRUCTION

	
 

	
1

	
 

	
 

	
 

	
 

	
 

	
Section 1.1

	
 

	
Definitions

	
 

	
1

	
 

	
 

	
 

	
 

	
 

	
Section 1.2

	
 

	
Rules of Construction

	
 

	
5

	
 

	
 

	
 

	
 

	
 

	
Article II. CREATION AND
 DECLARATION OF TRUSTS; FORM OF CERTIFICATES; DEPOSIT OF GOLD; DELIVERY,
 REGISTRATION OF TRANSFER AND SURRENDER OF SHARES

	
 

	
6

	
 

	
 

	
 

	
Section 2.1

	
 

	
Creation and Declaration of Trust; Business
 of the Trust

	
 

	
6

	
 

	
 

	
 

	
 

	
 

	
Section 2.2

	
 

	
Form of Certificates; Book-Entry System;
 Transferability of Shares

	
 

	
6

	
 

	
 

	
 

	
 

	
 

	
Section 2.3

	
 

	
Deposit of Gold

	
 

	
8

	
 

	
 

	
 

	
 

	
 

	
Section 2.4

	
 

	
Delivery of Shares

	
 

	
9

	
 

	
 

	
 

	
 

	
 

	
Section 2.5

	
 

	
Registration and Registration of Transfer
 of Shares; Combination and Split-up of Certificates

	
 

	
9

	
 

	
 

	
 

	
 

	
 

	
Section 2.6

	
 

	
Surrender of Shares and Withdrawal of Trust
 Property

	
 

	
10

	
 

	
 

	
 

	
 

	
 

	
Section 2.7

	
 

	
Limitations on Delivery, Registration of
 Transfer and Surrender of Shares

	
 

	
11

	
 

	
 

	
 

	
 

	
 

	
Section 2.8

	
 

	
Lost Certificates, Etc

	
 

	
11

	
 

	
 

	
 

	
 

	
 

	
Section 2.9

	
 

	
Cancellation and Destruction of Surrendered
 Certificates

	
 

	
11

	
 

	
 

	
 

	
 

	
 

	
Section 2.10

	
 

	
Splits and Reverse Splits of Shares

	
 

	
11

	
 

	
 

	
 

	
 

	
 

	
Article III. CERTAIN
 OBLIGATIONS OF REGISTERED OWNERS OF SHARES

	
 

	
12

	
 

	
 

	
 

	
Section 3.1

	
 

	
Liability of Registered Owner for Taxes and
 Other Governmental Charges

	
 

	
12

	
 

	
 

	
 

	
 

	
 

	
Section 3.2

	
 

	
Warranties on Deposit of Gold

	
 

	
12

	
 

	
 

	
 

	
 

	
 

	
Article IV.
 ADMINISTRATION OF THE TRUST

	
 

	
12

	
 

	
 

	
 

	
Section 4.1

	
 

	
Evaluation of Gold

	
 

	
12

	
 

	
 

	
 

	
 

	
 

	
Section 4.2

	
 

	
Responsibility of the Trustee for
 Evaluations

	
 

	
13

i

	
 

	
 

	
 

	
 

	
 

	
Section 4.3

	
 

	
Trust Evaluation

	
 

	
13

	
 

	
 

	
 

	
 

	
 

	
Section 4.4

	
 

	
Cash Distributions

	
 

	
14

	
 

	
 

	
 

	
 

	
 

	
Section 4.5

	
 

	
Other Distributions

	
 

	
14

	
 

	
 

	
 

	
 

	
 

	
Section 4.6

	
 

	
Fixing of Record Date

	
 

	
14

	
 

	
 

	
 

	
 

	
 

	
Section 4.7

	
 

	
Payment of Expenses; Gold Sales

	
 

	
15

	
 

	
 

	
 

	
 

	
 

	
Section 4.8

	
 

	
Statements and Reports

	
 

	
16

	
 

	
 

	
 

	
 

	
 

	
Section 4.9

	
 

	
Further Provisions for Gold Sales

	
 

	
16

	
 

	
 

	
 

	
 

	
 

	
Section 4.10

	
 

	
Counsel

	
 

	
16

	
 

	
 

	
 

	
 

	
 

	
Section 4.11

	
 

	
Grantor Trust

	
 

	
17

	
 

	
 

	
 

	
 

	
 

	
Article V. THE TRUSTEE AND THE SPONSOR

	
 

	
17

	
 

	
 

	
 

	
 

	
Section 5.1

	
 

	
Maintenance of Office and Transfer Books by
 the Trustee

	
 

	
17

	
 

	
 

	
 

	
 

	
 

	
Section 5.2

	
 

	
Prevention or Delay in Performance by the
 Sponsor or the Trustee

	
 

	
17

	
 

	
 

	
 

	
 

	
 

	
Section 5.3

	
 

	
Obligations of the Sponsor and the Trustee

	
 

	
18

	
 

	
 

	
 

	
 

	
 

	
Section 5.4

	
 

	
Resignation or Removal of the Trustee;
 Appointment of Successor Trustee

	
 

	
22

	
 

	
 

	
 

	
 

	
 

	
Section 5.5

	
 

	
The Custodian

	
 

	
23

	
 

	
 

	
 

	
 

	
 

	
Section 5.6

	
 

	
Indemnification

	
 

	
24

	
 

	
 

	
 

	
 

	
 

	
Section 5.7

	
 

	
Charges of Trustee

	
 

	
25

	
 

	
 

	
 

	
 

	
 

	
Section 5.8

	
 

	
Charges of Sponsor

	
 

	
26

	
 

	
 

	
 

	
 

	
 

	
Section 5.9

	
 

	
Retention of Trust Documents

	
 

	
26

	
 

	
 

	
 

	
 

	
 

	
Section 5.10

	
 

	
Federal Securities Law Filings

	
 

	
26

	
 

	
 

	
 

	
 

	
 

	
Section 5.11

	
 

	
Prospectus Delivery

	
 

	
27

	
 

	
 

	
 

	
 

	
 

	
Section 5.12

	
 

	
Discretionary Actions by Trustee;
 Consultation

	
 

	
27

	
 

	
 

	
 

	
 

	
 

	
Section 5.13

	
 

	
Dissolution of the Sponsor Not to Terminate
 Trust

	
 

	
28

	
 

	
 

	
 

	
 

	
 

	
Article VI. AMENDMENT AND TERMINATION

	
 

	
28

ii

	
 

	
 

	
 

	
 

	
 

	
Section 6.1

	
 

	
Amendment

	
 

	
28

	
 

	
 

	
 

	
 

	
 

	
Section 6.2

	
 

	
Termination

	
 

	
28

	
 

	
 

	
 

	
 

	
 

	
Article VII. MISCELLANEOUS

	
 

	
30

	
 

	
 

	
 

	
Section 7.1

	
 

	
Counterparts

	
 

	
30

	
 

	
 

	
 

	
 

	
 

	
Section 7.2

	
 

	
Third-Party Beneficiaries

	
 

	
30

	
 

	
 

	
 

	
 

	
 

	
Section 7.3

	
 

	
Severability

	
 

	
30

	
 

	
 

	
 

	
 

	
 

	
Section 7.4

	
 

	
Certain Matters Relating to Beneficial
 Owners

	
 

	
31

	
 

	
 

	
 

	
 

	
 

	
Section 7.5

	
 

	
Notices

	
 

	
31

	
 

	
 

	
 

	
 

	
 

	
Section 7.6

	
 

	
Agent for Service; Submission to
 Jurisdiction

	
 

	
32

	
 

	
 

	
 

	
 

	
 

	
Section 7.7

	
 

	
Governing Law

	
 

	
33

iii

DEPOSITARY TRUST AGREEMENT

          THIS
DEPOSITARY TRUST AGREEMENT dated as of September 1, 2009, between ETF
SECURITIES USA LLC, a Delaware limited liability company, as sponsor, and THE
BANK OF NEW YORK MELLON, a New York banking corporation, as trustee. 

W I T N E S S E T H:

          WHEREAS
the Sponsor desires to establish a trust, to be known as the “ETFS Gold Trust”,
pursuant to the laws of the State of New York; and 

          WHEREAS
the Sponsor desires to establish the terms on which Gold (as herein defined)
may be deposited in the trust and provide for the creation of ETFS Physical
Swiss Gold Shares in Baskets (as herein defined) representing fractional
undivided interests in the net assets of the trust and the execution and
delivery of Certificates (as herein defined) evidencing the ETFS Physical Swiss
Gold Shares; and 

          WHEREAS
the Sponsor desires to provide for other terms and conditions upon which the
trust shall be established and administered, as hereinafter provided; 

          NOW,
THEREFORE, in consideration of the premises and of the mutual agreements herein
contained, the Sponsor and the Trustee hereby agree as follows: 

ARTICLE I.

DEFINITIONS AND RULES OF CONSTRUCTION

          Section 1.1 Definitions.

          Except
as otherwise specified in this Depositary Trust Agreement or as the context may
otherwise require, the following terms have the respective meanings set forth
below for all purposes of this Depositary Trust Agreement. 

          “Adjusted
Net Asset Value” means the adjusted net asset value of the Trust as determined
under Section 4.3. 

          “Agreement”
means this Depositary Trust Agreement, as amended or supplemented in accordance
with its terms. 

          “Authorized
Participant” means a Person that, at the time of submitting a Purchase Order or
a Redemption Order (i) is a registered broker-dealer, (ii) is a DTC Participant
or an Indirect Participant and (iii) has in effect a valid Authorized
Participant Agreement. 

          “Authorized
Participant Agreement” means an agreement among the Trustee, the Sponsor and an
Authorized Participant that authorizes the Authorized Participant to submit
Purchase Orders and Redemption Orders under this Agreement. 

          “Basket”
means 50,000 Shares, except that the Trustee, in consultation with the Sponsor,
may from time to time increase or decrease the number of Shares comprising a
Basket. 

1

          “Basket
Gold Amount” is the amount of Gold that must be deposited for issuance of one
Basket or that is deliverable upon Surrender of one Basket. The Basket Gold
Amount will be determined as provided in Section 2.3(b). 

          “Benchmark
Price” means, as of any day, (i) such day’s London’s PM Fix; or (ii) other
publicly available price as the Sponsor may determine fairly represents the
commercial value of Gold held by the Trust. 

          “Beneficial
Owner” means any Person owning a beneficial interest in any Shares. 

          “Business
Day” means any day other than (i) a Saturday or Sunday or (ii) a day on which
the Exchange is not open for regular trading. 

          “Certificate”
means a certificate that is executed and delivered by the Trustee under this
Agreement evidencing Shares. 

          “CFTC”
means the Commodity Futures Trading Commission or any successor governmental
agency in the United States. 

          “Commission”
means the Securities and Exchange Commission of the United States or any
successor governmental agency in the United States. 

          “Corporate
Trust Office” means the office of the Trustee at which its depositary receipt
business is administered which, at the date of this Agreement, is located at
101 Barclay Street, New York, New York 10286. 

          “Custodian”
means the Initial Custodian and any substitute or additional Custodian
appointed by the Trustee at the direction of or as approved by the Sponsor as
provided in Section 5.5 and, where the context permits, any sub-custodians
employed by the Initial Custodian, including the Zurich Sub-Custodian, or any
such substitute or additional Custodian. 

          “Custody
Agreements” shall mean the Trust Unallocated Account Agreement and the Trust
Allocated Account Agreement and any custody agreement entered into pursuant to
Section 5.5 with a substitute or additional Custodian. 

          “Delivery”
means (a) when used with respect to Gold, obtaining an acknowledgement from the
Custodian of a credit of Gold on an Unallocated Basis to the account of the
Person entitled to that delivery and (b) when used with respect to Shares, one
or more book-entry transfers of those Shares to an account or accounts at the
Depository designated by the Person entitled to such delivery for further
credit as specified by that Person. 

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

          “Depository”
means DTC and such other successor depository of Shares as may be selected by
the Sponsor and the Trustee as provided herein. 

2

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

          “DTC
Participant” means a Person that, pursuant to DTC’s governing documents, is
entitled to deposit securities with DTC in its capacity as a “participant”. 

          “Exchange”
means the exchange or other securities market on which the Shares are
principally traded, as specified from time to time by the Sponsor. 

          “Exchange
Act” has the meaning ascribed to such term in Section 4.8(b) hereof. 

          “Gold”
means (a) gold bullion that meets the requirements of “good delivery” under the
rules of the LBMA and (b) credit to an account on an Unallocated Basis
representing the right to receive gold bullion that meets the requirements of
part (a) of this definition. 

          “Indirect
Participant” means a Person that, by clearing securities through, or
maintaining a custodial relationship with, a DTC participant, has access to the
DTC clearing system. 

          “Initial
Custodian” means HSBC Bank USA National Association, London Branch, as
Custodian under the Custody Agreements. 

          “Initial
Sub-Custodian” means UBS A.G., as the initial Zurich Sub-Custodian under the
Trust Allocated Account Agreement. 

          “Internal
Control Over Financial Reporting” has the meaning ascribed to such term in
Rules 13a-15(f) and 15(d)-15(f) adopted by the Commission under the Exchange
Act. 

          “LBMA”
means the London Bullion Market Association. 

          “London
PM Fix” means the afternoon session of the twice daily fix of the price of an
ounce of gold which starts at 3:00 PM London, England time and is performed in
London by the five members of the London gold fix. 

          “Net
Asset Value” means the net value of the Trust determined under Section 4.3. 

          “Net
Asset Value per Share” means the value of a Share determined under Section 4.3.

          “Order
Cutoff Time” means, with respect to any Business Day, (i) 4:00 p.m. (New York
time) on such Business Day or (ii) another time agreed to by the Sponsor and
the Trustee and of which Registered Owners and all existing Authorized
Participants have been notified by the Trustee. 

          “Order
Date” means, with respect to a Purchase Order, the date specified in Section
2.3(a) and, with respect to a Redemption Order, the date specified in Section
2.6(a). 

          “Ounce”
means a troy ounce, equal to 1.0971428 ounces avoirdupois, with a minimum
fineness of 995.0 parts per 1,000 gold. 

3

          “Person”
means 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. 

          “Procedures”
means the procedures for Purchase Orders and Redemption Orders attached to the
Authorized Participant Agreement, as modified by the Trustee from time to time.

          “Purchase
Order” is defined in Section 2.3. 

          “Qualified
Bank” means a bank, trust company, corporation or national banking association
organized and doing business under the laws of the United States or any State
of the United States that is authorized under those laws to exercise corporate
trust powers and that (i) is a DTC Participant or a participant in such other
Depository as is then acting with respect to the Shares; (ii) unless counsel to
the Sponsor, the appointment of which is acceptable to the Trustee, determines
that the following requirement is not necessary for the exception under Section
408(m) of the Internal Revenue Code of 1986, as amended (the “Code”), to apply,
is a banking institution as defined in Section 408(n) of the Code and (iii)
had, as of the date of its most recent annual financial statements, an
aggregate capital, surplus and undivided profits of at least $150,000,000. 

          “Redemption
Order” is defined in Section 2.6. 

          “Registered
Owner” means the Person in whose name Shares are registered on the books of the
Trustee maintained for that purpose. 

          “Registrar”
means any bank or trust company that is appointed to register Shares and
transfers of Shares as herein provided. 

          “Shares”
means ETFS Physical Swiss Gold Shares created under this Agreement, each
representing a fractional undivided ownership interest in the net assets of the
Trust, which interest shall equal a fraction, the numerator of which is 1 and
the denominator of which is the total number of Shares outstanding. 

          “Sponsor”
means ETF Securities USA LLC, a Delaware limited liability company, or its
successor. 

          “Surrender”
means, when used with respect to Shares, one or more book-entry transfers of
Shares to the Depository account of the Trustee. 

          “Trust”
means the ETFS Gold Trust, the trust entity created by this Agreement. 

          “Trust
Allocated Account” shall mean the account maintained for the Trust by the
Initial Custodian pursuant to the Trust Allocated Account Agreement, or another
account maintained for the Trust by a successor Custodian on an allocated
basis, as the case may be. 

          “Trust
Allocated Account Agreement” shall mean the Allocated Account Agreement of even
date herewith between the Custodian and the Trustee the form of which is
attached as Exhibit B. 

4

          “Trust
Unallocated Account” shall mean the loco London account or the loco Zurich
account, each maintained for the Trust by the Initial Custodian pursuant to the
Trust Unallocated Account Agreement, or another account maintained for the
Trust by a successor Custodian on an Unallocated Basis, as the case may be 

          “Trust
Unallocated Account Agreement” shall mean the Unallocated Account Agreement of
even date herewith between the Custodian and the Trustee the form of which is
attached as Exhibit C. 

          “Trustee”
means The Bank of New York Mellon, a New York banking corporation, in its
capacity as trustee under this Agreement, or any successor as trustee under
this Agreement. 

          “Trust
Property” means the Gold that the Custodian credits to the Trust Allocated
Account and the Trust Unallocated Account in accordance with the Custody
Agreements, all other property held by the Custodian for the account of the
Trust and any cash or other property that is received by the Trustee in respect
thereof or which is otherwise being held by or for it under this Agreement. 

          “Unallocated
Basis” means that the Person in whose name Gold is so held is entitled to
receive delivery of Gold standing to the credit of that Person’s account, but
that Person has no ownership interest in any particular Gold that the custodian
maintaining that account owns or holds. 

          “Zurich
Sub-Custodian” means any firm, including the Initial Zurich Sub-Custodian,
selected by the Custodian to hold Gold on behalf of the Custodian in such
firm’s Zurich vault premises on a segregated basis in the manner provided for
in the Trust Allocated Account Agreement. 

          Section 1.2 Rules of
Construction. 

          Unless
the context otherwise requires: 

                              (i)
a term has the meaning assigned to it; 

                              (ii)
an accounting term not otherwise defined has the meaning assigned to it in
accordance with generally accepted accounting principles as in effect in the
United States; 

                              (iii)
“or” is not exclusive; 

                              (iv)
the words “herein,” “hereof,” “hereunder” and other words of similar import
refer to this Agreement as a whole and not to any particular Article, Section
or other subdivision; 

                              (v)
“including” means including without limitation; 

                              (vi)
words in the singular include the plural and words in the plural include the
singular; and 

5

                              (vii)
a term defined in any part of speech shall have the corresponding meaning when
capitalized and used herein in another part of speech. 

ARTICLE II.

CREATION AND DECLARATION OF TRUSTS;

FORM OF CERTIFICATES; DEPOSIT OF GOLD; 

DELIVERY, REGISTRATION OF TRANSFER AND SURRENDER OF SHARES

          Section 2.1 Creation and Declaration
of Trust; Business of the
Trust. 

                    (a)
The Trustee acknowledges that it has received confirmation from the Custodian
that the Custodian has received an initial deposit of Gold from Kellogg
Specialist Group LLC, the initial purchaser of the first Basket of Shares, and
has credited such deposit to the Trust Allocated Account and Trust Unallocated
Account. The Trustee declares that the initial deposit and all other Trust
Property shall be owned by the Trust and the Trustee as trustee thereof for the
benefit of the Registered Owners for the purposes of, and subject to and
limited by the terms and conditions set forth in, this Agreement. The trust
created by this Agreement shall be known as the “ETFS Gold Trust”. 

                    (b)
The Trust shall not engage in any business or activities other than those
authorized by this Agreement or incidental and necessary to carry out the
duties and responsibilities set forth in this Agreement. Other than issuance of
the Shares, the Trust shall not issue or sell any certificates or other
obligations or, except as provided in this Agreement, otherwise incur, assume
or guarantee any indebtedness for money borrowed. 

          Section 2.2 Form of Certificates;
Book-Entry System;
Transferability of Shares. 

                    (a)
The Certificates evidencing Shares shall be substantially in the form set forth
in Exhibit A annexed to this Agreement, with appropriate insertions, modifications
and omissions, as hereinafter provided. No Shares shall be entitled to any
benefits under this Agreement or be valid or obligatory for any purpose unless
a Certificate evidencing those Shares has been executed by the Trustee by the
manual or facsimile signature of a duly authorized signatory of the Trustee
and, if a Registrar (other than the Trustee) for the Shares shall have been
appointed, countersigned by the manual signature of a duly authorized officer
of the Registrar. The Trustee shall maintain books on which the registered
ownership of each Share and transfers, if any, of such registered ownership
shall be recorded. Certificates evidencing Shares bearing the manual or
facsimile signature of a duly authorized signatory of the Trustee and the
manual signature of a duly authorized officer of the Registrar, if applicable,
who was, at the time such Certificates were executed, a proper signatory of the
Trustee or Registrar, if applicable, shall bind the Trustee, notwithstanding
that such signatory has ceased to hold such office prior to the delivery of
such Certificates. 

                    (b)
The Certificates may be endorsed with or have incorporated in the text thereof
such legends or recitals or modifications not inconsistent with the provisions
of this Agreement as may be required by the Trustee or required to comply with
any applicable law or regulations thereunder or with the rules and regulations
of any securities exchange upon which 

6

Shares may be
listed or to conform with any usage with respect thereto, or to indicate any
special limitations or restrictions to which the Shares evidenced by a
particular Certificate are subject. 

                    (c)
The Sponsor and the Trustee will apply to DTC for acceptance of the Shares in
its book-entry settlement system. Shares deposited with DTC shall be evidenced
by one or more global Certificates which shall be registered in the name of
Cede & Co., as nominee for DTC, and shall bear the following legend: 

	
 

	
 

	
 

	
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
 OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE AGENT
 AUTHORIZED BY THE ISSUER FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
 AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
 SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
 ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
 BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
 HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
 REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 

                    (d)
So long as the Shares are eligible for book-entry settlement with DTC and such
settlement is available, unless otherwise required by law, notwithstanding the
provisions of Sections 2.2(a) and (b), all Shares shall be evidenced by one or
more global Certificates the Registered Owner of which is DTC or a nominee of
DTC and (i) no Beneficial Owner of Shares will be entitled to receive a
separate Certificate evidencing those Shares, (ii) the interest of a Beneficial
Owner in Shares represented by a global Certificate will be shown only on, and
transfer of that interest will be effected only through, records maintained by
DTC or a DTC Participant or Indirect Participant through which the Beneficial
Owner holds that interest and (iii) the rights of a Beneficial Owner with
respect to Shares represented by a global Certificate will be exercised only to
the extent allowed by, and in compliance with, the arrangements in effect
between such Beneficial Owner and DTC or the DTC Participant or Indirect
Participant through which that Beneficial Owner holds an interest in Shares. So
long as DTC or another authorized Depository selected by the Sponsor or the
Trustee is the Registered Owner, the Trustee and the Sponsor may treat DTC or
such other Depository as the absolute owner of the Shares for all purposes
whatsoever, including without limitation, the payment of distributions, and the
giving of notices of redemption, tender and other matters with respect to the
Shares. 

                    (e)
If, at any time when Shares are evidenced by a global Certificate, DTC ceases
to make its book-entry settlement system available for such Shares, the Trustee
shall execute and deliver separate Certificates evidencing Shares to a
successor authorized Depository identified by the Sponsor and available to act,
or, if no successor Depository is identified and able to act, the Trustee shall
terminate the Trust in accordance with Section 6.2. 

                    (f)
Title to a Certificate evidencing Shares (and to the Shares evidenced thereby),
when properly endorsed or accompanied by proper instruments of transfer, shall
be 

7

transferable
by delivery with the same effect as in the case of a negotiable instrument
under the laws of New York; provided, however, that the Trustee,
notwithstanding any notice to the contrary, may treat the Registered Owner of
Shares as the absolute owner thereof for the purpose of determining the person
entitled to any distribution or to any notice provided for in this Agreement
and for all other purposes. 

          Section 2.3 Deposit of Gold.

                    (a)
After the initial deposit of Gold in the Trust, the issuance and Delivery of
Shares will take place only in integral numbers of Baskets and in compliance
with the provisions of this Agreement, as supplemented by the Procedures, to
the extent those Procedures are consistent with this Agreement. Authorized
Participants wishing to acquire from the Trustee one or more Baskets must place
an order with the Trustee (a “Purchase Order”) no later than 3:59:59 p.m. (New
York time) on any Business Day. Purchase Orders received by the Trustee prior to
the Order Cutoff Time on a Business Day on which the Benchmark Price is
announced will have that Business Day as the Order Date. Purchase Orders
received by the Trustee on or after the Order Cutoff Time on a Business Day, or
on a Business Day on which the Benchmark Price is not announced, will have as
their Order Date the next Business Day on which the Benchmark Price is
announced. As consideration for each Basket acquired, Authorized Participants
must deposit with the Custodian, from an account of the Authorized Participant
maintained by the Custodian, or, if otherwise expressly permitted by the
Procedures, other LBMA-member custodian identified by the Authorized
Participant to the Custodian and the Trustee, the Basket Gold Amount determined
by the Trustee on the Order Date of the corresponding Purchase Order. Gold must
be Delivered to the Custodian by credit to the Trust Unallocated Account only,
with any Gold Delivered to the loco London Trust Unallocated Account to be
transferred by the Custodian to the loco Zurich Trust Unallocated Account in
accordance with the Trust Unallocated Account Agreement. 

                    (b)
The Trustee shall determine the Basket Gold Amount for each Business Day, and
the Trustee’s determination of the Basket Gold Amount and resolution of
questions concerning the composition of such Basket Gold Amount shall be final
and binding on all persons interested in the Trust. The initial “Basket Gold
Amount” is 5,000 Ounces of Gold. After the initial deposit, the “Basket Gold
Amount” for each Business Day shall be an amount of Gold equal to the result
obtained by subtracting the number of Ounces of Gold constituting the unpaid
expense accrual from the total Ounces of Gold in the Trust and then dividing by
the number of Baskets outstanding. Fractions of an Ounce of Gold included in
the Basket Gold Amount smaller than 0.001 Ounce shall be disregarded. The
Sponsor intends to publish, or may designate other persons to publish, for each
Business Day, the Basket Gold Amount. 

                    (c)
If the Trust Property includes money or any property other than Gold, no
deposits of Gold will be accepted until after a record date for distribution of
that money or property, or proceeds of that property, has passed. 

                    (d)
All deposited Gold shall be owned by the Trust and held for the Trust by the
Custodian. Pursuant to the Unallocated Account Agreement, the Custodian agrees
to use reasonable efforts to minimize the amount of Gold held for the Trust on
an Unallocated Basis at all times and the Custodian must allocate ownership of
Gold bars to the Trust such that no more 

8

than 430
Ounces of Gold are held on an Unallocated Basis for the Trust at the end of
each business day of the Custodian. Cash and any assets of the Trust other than
Gold shall be held by the Trustee at such place and in such manner as the
Trustee shall determine. 

          Section 2.4 Delivery of Shares.

          Upon
receipt by the Trustee of a Purchase Order and the other documents required as
above specified, if any, and a confirmation from the Custodian that the Basket
Gold Amount has been Delivered to the Custodian for each Basket of Shares
requested in such Purchase Order and the Custodian is holding that Gold for the
account of the Trust, the Trustee, subject to the terms and conditions of this
Agreement and the Procedures, shall Deliver to the Depositor the number of
Baskets of Shares issuable in respect of such deposit as requested in the
corresponding Purchase Order, but only upon payment to the Trustee of the fees
and expenses of the Trustee as provided in Section 5.7 and of all taxes and
governmental charges and fees payable in connection with such deposit, the
transfer of the Gold and the issuance and Delivery of the Shares. 

          Section 2.5 Registration and
Registration of Transfer of
Shares; Combination and Split-up of Certificates. 

                    (a)
The Trustee shall keep or cause to be kept a register of Registered Owners of
Shares and shall provide for the registration of Shares and the registration of
transfers of Shares. 

                    (b)
The Trustee, subject to the terms and conditions of this Agreement, shall
register transfers of ownership of Shares on its transfer books from time to
time, upon any surrender of a Certificate evidencing such Shares, by the
Registered Owner in person or by a duly authorized attorney, properly endorsed
or accompanied by proper instruments of transfer, and duly stamped as may be
required by the laws of the State of New York and of the United States of
America. Thereupon, the Trustee shall execute a new Certificate or Certificates
evidencing such Shares, and deliver the same to or upon the order of the Person
entitled thereto. 

                    (c)
The Trustee, subject to the terms and conditions of this Agreement, shall, upon
surrender of a Certificate or Certificates evidencing Shares for the purposes
of effecting a split-up or combination of that certificate or certificates,
execute and deliver one or more new Certificates evidencing those Shares. 

                    (d)
The Trustee may, with the written approval of the Sponsor (which approval shall
not be unreasonably withheld), appoint one or more co-transfer agents for the
purpose of effecting registration of transfers of Shares and combinations and
split-ups of Certificates at designated transfer offices on behalf of the
Trustee. In carrying out its functions, a co-transfer agent may require
evidence of authority and compliance with applicable laws and other
requirements by Registered Owners or Persons entitled to Shares and will be
entitled to protection and indemnity to the same extent as the Trustee. 

                    (e)
The previous paragraphs of this Section notwithstanding, so long as the Shares
are eligible for deposit with a Depository, the sole Registered Owners shall be
such Depository or its nominee and transfer of Shares shall be effected solely
by the Depository in accordance with its customary practices in effect from
time to time. 

9

          Section 2.6 Surrender of Shares and
Withdrawal of Trust
Property. 

                    (a)
Upon Surrender of any integral number of Baskets for the purpose of withdrawal
of the amount of Trust Property represented thereby, and upon payment of the
fee of the Trustee in connection with the Surrender of Shares as provided in
Section 5.7 and payment of all taxes and charges payable in connection with
such Surrender and withdrawal of Trust Property, and subject to the terms and
conditions of this Agreement, the Procedures and the practices of the
Depository, an Authorized Participant acting on authority of the Registered
Owner of those Shares will be entitled to Delivery, in accordance with the
provisions of this Agreement, as supplemented by any procedures attached to an
applicable Authorized Participant Agreement, to the extent those procedures are
consistent with this Agreement, of the amount of Trust Property at the time
represented by such Baskets, including the Basket Gold Amounts corresponding to
such Baskets on the applicable Order Date (determined as provided below).
Authorized Participants wishing to redeem one or more Baskets must place an
order with the Trustee (a “Redemption Order”) no later than 3:59:59 p.m. (New
York time) on any Business Day. Redemption Orders received by the Trustee prior
to the Order Cutoff Time on a Business Day on which the Benchmark Price is
announced will have that Business Day as the Order Date. Redemption Orders
received by the Trustee on or after the Order Cutoff Time on any Business Day,
or on a Business Day on which the Benchmark Price is not announced, will have
as their Order Date the next Business Day on which the Benchmark Price is
announced. Gold will be Delivered by the Custodian only by credit to an account
of the Authorized Participant maintained by the Custodian or, if otherwise
expressly permitted by the Procedures, other LBMA-member custodian identified
by the Authorized Participant to the Custodian and the Trustee on an
Unallocated Basis. The Authorized Participant shall bear all risk of any loss
from the time the Gold is paid from the Trust Unallocated Account to the
Authorized Participant and neither the Trustee nor the Trust shall have any
liability for any such loss. 

                    (b)
The Trustee may require that a Certificate evidencing Shares Surrendered for
the purpose of withdrawal is properly endorsed in blank or accompanied by
proper instruments of transfer in blank. Upon a Surrender of an integral number
of Baskets of Shares and satisfaction of all the conditions for withdrawal of
Trust Property, the Trustee shall instruct the Custodian to Deliver, as
provided in the preceding paragraph, to or to the order of the Surrendering
Authorized Participant the amount of Gold represented by the Surrendered
Baskets of Shares and the Trustee shall pay or deliver to or to the order of
the Surrendering Authorized Participant the amount of any other Trust Property
represented by the Surrendered Baskets of Shares. Any Delivery of Gold other
than by credit to an account of the Authorized Participant maintained by the
Custodian on an Unallocated Basis will be at the expense and risk of the
Authorized Participant. The Trustee is not required to effect any physical
movement of Gold from one custody location to another to meet any request by a
Surrendering Authorized Participant as to where Gold will be Delivered. 

                    (c)
The Sponsor and the Trustee may, but shall have no obligation to, amend this
Agreement to provide for redemption of any quantity of Shares for quantities of
Gold that may be smaller or larger than a Basket Gold Amount by Beneficial
Owners who are not Authorized Participants. 

10

                    (d)
The Sponsor and the Trustee may, but shall have no obligation to, amend this
Agreement to provide for the sale of Gold to pay cash proceeds upon the
redemption of Shares. 

          Section 2.7 Limitations on Delivery,
Registration of Transfer
and Surrender of Shares. 

                    (a)
As a condition precedent to the Delivery, registration of transfer, split-up,
combination or Surrender of any Shares or withdrawal of any Trust Property, the
Trustee or Registrar may require payment from the Depositor or the Authorized
Participant Surrendering the Shares of a sum sufficient to reimburse it for any
tax or other governmental charges and any stock transfer or registration fee
with respect thereto (including any such tax or charge and fee with respect to
any securities being withdrawn) and payment of any applicable fees as herein
provided, may require the production of proof satisfactory to it as to the
identity and genuineness of any signature and may also require compliance with
any regulations the Trustee may establish consistent with the provisions of
this Agreement, including, without limitation, this Section 2.7. 

                    (b)
The Delivery of Shares against deposits of Gold and the registration of
transfer of Shares may be suspended generally, or refused with respect to
particular requested Deliveries, during any period when the transfer books of
the Trustee are closed or if any such action is deemed necessary or advisable
by the Trustee or the Sponsor for any reason at any time or from time to time.
Except as otherwise provided elsewhere in this Agreement, the Surrender of
Shares for purposes of withdrawing Trust Property may be suspended only (i)
during any period in which regular trading on the Exchange is suspended or
restricted or the Exchange is closed (other than scheduled holiday or weekend
closings), or (ii) during an emergency as a result of which Delivery, disposal
or evaluation of Gold is not reasonably practicable. 

          Section 2.8 Lost Certificates,
Etc. 

          The
Trustee shall execute and deliver a new Certificate of like tenor in exchange
and substitution for a mutilated Certificate upon cancellation thereof, or in
lieu of and in substitution for a destroyed, lost or stolen Certificate if the
Registered Owner thereof has (a) filed with the Trustee (i) a request for such
execution and delivery before the Trustee has notice that the Shares evidenced
by the Certificate have been acquired by a protected purchaser and (ii) a
sufficient indemnity bond, and (b) satisfied any other reasonable requirements
imposed by the Trustee. 

          Section 2.9 Cancellation and
Destruction of Surrendered
Certificates. 

          All
Certificates Surrendered to the Trustee shall be canceled by the Trustee. The
Trustee is authorized to destroy certificates so canceled. 

          Section 2.10 Splits and Reverse
Splits of Shares. 

          If
requested in writing by the Sponsor, the Trustee shall effect a split or
reverse split of the Shares as of a record date set by the Trustee in
accordance with procedures determined by the Trustee and the Depository. 

          If
so directed by the Sponsor, the Trustee shall not distribute any fraction of a
Share in connection with a split or reverse split of the Shares. The Trustee
may sell the aggregated 

11

fractions of
Shares that would otherwise be distributed in a split or reverse split of the
Shares or the amount of Trust Property that would be represented by those
Shares and distribute the net proceeds of those Shares or that Trust Property
to the Record Owners entitled to them. 

          The
amount of Trust Property represented by each Share and the Basket Gold Amount
shall be adjusted as appropriate as of the open of business on the Business Day
following the record date for a split or reverse split of the Shares. 

ARTICLE III.

CERTAIN OBLIGATIONS OF REGISTERED OWNERS OF
SHARES

          Section 3.1 Liability of Registered
Owner for Taxes and Other
Governmental Charges. 

          If
any tax or other governmental charge shall become payable by the Trustee with
respect to any transfer or redemption of Shares, such tax or other governmental
charge shall be payable by the Registered Owner of such Shares to the Trustee.
The Trustee shall refuse to effect any registration of transfer of such Shares
or any withdrawal of Trust Property represented by such Shares until such
payment is made, and may withhold any distributions, or may sell for the
account of the Registered Owner thereof Trust Property or Shares, and may apply
such distributions or the proceeds of any such sale in payment of such tax or
other governmental charge, and the Registered Owner of such Shares shall remain
liable for any deficiency. The Trustee shall distribute any net proceeds of a
sale made under the preceding sentence that remain, after payment of the tax or
other governmental charge, to the Registered Owners entitled thereto as in the
case of a distribution in cash. 

          Section 3.2 Warranties on Deposit of
Gold. 

          Every
Person depositing Gold under this Agreement shall be deemed thereby to
represent and warrant that the Gold meets the requirements to be Gold and contains
the required number of Ounces, that the person making such deposit is duly
authorized to do so and that, at the time of delivery, the Gold is free and
clear of any lien, pledge, encumbrance, right, charge or claim (other than the
rights created by this Agreement). All representations and warranties deemed
made under this Section 3.2 shall survive the deposit of Gold, Delivery or
Surrender of Shares or termination of this Agreement. 

ARTICLE IV.

ADMINISTRATION OF THE TRUST

          Section 4.1 Evaluation of Gold.

          As
promptly as practicable after 4:00 p.m. (New York time), on each Business Day,
the Trustee shall determine the value of the Gold held or receivable by the
Trust on the basis of the Benchmark Price for that day. If no Benchmark Price
is announced on a Business Day, the Trustee shall determine the value of the
Gold held or receivable by the Trust for that day on the basis of the most
recently announced Benchmark Price prior to the evaluation time. However, if
the Sponsor determines that the price specified in the two preceding sentences
is inappropriate as

12

a basis for
evaluation, it shall identify an alternative basis for evaluation to be
employed by the Trustee. Gold deliverable under a Purchase Order shall be
included in the evaluation beginning on the Order Date. Gold deliverable under
a Redemption Order shall not be included in the evaluation on and after the
Order Date. Neither the Trustee nor the Sponsor shall be liable to any Person
for the determination that the most recently announced Benchmark Price is not
appropriate as a basis for evaluation of the Gold held or receivable by the
Trust or for any determination as to the alternative basis for evaluation,
provided that such determination is made in good faith. 

          If
the Sponsor determines that Benchmark Price will have the meaning set forth in
part (ii) of the definition of that term, the Trustee shall give notice to the
Registered Owners, and the Trustee shall not apply the new definition of
Benchmark Price until 60 days after the date of that notice. 

          Section 4.2 Responsibility of the
Trustee for Evaluations. 

          The
Sponsor, Depositors, Registered Owners and Beneficial Owners may rely on any
evaluation or determination of any amount made by the Trustee, and the Sponsor
shall have no responsibility for the accuracy thereof. The determinations made
by the Trustee under this Agreement shall be made in good faith upon the basis
of, and the Trustee shall not be liable for any errors contained in, information
reasonably available to it. The Trustee shall be under no liability to the
Sponsor, or to Depositors, Registered Owners or Beneficial Owners, for errors
in judgment; provided, however, that this provision shall not protect the
Trustee against any liability to which it would otherwise be subject by reason
of gross negligence or bad faith in the performance of its duties. 

          Section 4.3 Trust Evaluation.

          As
promptly as practicable after completion of the evaluation required under Section
4.1 on each Business Day, the Trustee shall subtract all accrued fees (other
than the fees accruing for such Business Day computed by reference to the value
of the Trust or its assets), expenses and other liabilities of the Trust from
the total value of the deposited Gold determined by the Trustee pursuant to
Section 4.1 and all other assets of the Trust. The resulting figure is the
“Adjusted Net Asset Value” of the Trust. All fees accruing for any Business Day
computed by reference to the value of the Trust or its assets shall be
calculated on the Adjusted Net Asset Value calculated for such Business Day.
The Trustee shall subtract from the Adjusted Net Asset Value the amount of
accrued fees so computed and the resulting figure is the “Net Asset Value” of
the Trust. The Trustee shall also divide the Net Asset Value of the Trust by
the number of Shares outstanding as of the close of business on the date of the
evaluation then being made, which figure is the “Net Asset Value per Share.”
All fees, expenses and other liabilities of the Trust that are or will be
incurred or accrued through the close of business on a Business Day shall be
included in the calculations required by this Section 4.3 for that Business
Day. Shares deliverable under a Purchase Order shall be considered to be
outstanding for purposes of this Section 4.3 beginning on the Order Date.
Shares deliverable under a Redemption Order shall not be considered to be
outstanding for purposes of this Section 4.3 on and after the Order Date. 

13

          Adjusted
Net Asset Value, Net Asset Value and Net Asset Value per Share shall be
computed in accordance with generally accepted accounting principles in the
United States. Any estimate of the expenses and liabilities of the Trust for
purposes of the computations required by this Section made by the Trustee in
good faith shall be conclusive upon all Persons interested in the Trust, and no
revision or correction in any computation made under this Agreement will be
required by reason of any difference in amounts estimated from those actually
paid. 

          Section 4.4 Cash Distributions.

          Whenever
the Trustee distributes any cash, the Trustee shall distribute the amount
available for the distribution to the Registered Owners entitled thereto, in
proportion to the number of Shares held by them respectively; provided,
however, that in the event that the Trustee shall be required to withhold and
does withhold from such cash an amount on account of taxes, the amount
distributed to the Registered Owners shall be reduced accordingly. The Trustee
shall distribute only such amount, however, as can be distributed without
attributing to any Registered Owner a fraction of one cent. Any such fractional
amounts shall be rounded down to the nearest whole cent and so distributed to
Registered Owners entitled thereto. 

          Section 4.5 Other Distributions.

          Whenever
the Trustee receives any property in respect of Trust Property other than cash
proceeds of a sale of Trust Property (including any claim that accrues in favor
of the Trust on account of any loss of deposited Gold or other Trust Property),
the Trustee shall cause the securities or other property received by it to be
distributed to the Registered Owners entitled thereto, in proportion to the
number of Shares held by them respectively, after deduction or upon payment of
the expenses of the Trustee, in any manner that the Trustee may deem lawful,
equitable and feasible for accomplishing such distribution; provided, however,
that if in the opinion of the Trustee such distribution cannot be made
proportionately among the Registered Owners entitled thereto, or if for any
other reason (including, but not limited to, any requirement that the Trustee
withhold an amount on account of taxes or other governmental charges or that
securities must be registered under the Securities Act of 1933 in order to be
distributed to Registered Owners) the Trustee deems such distribution not to be
lawful and feasible, the Trustee shall adopt such method as it deems lawful,
equitable and feasible for the purpose of effecting such distribution, after
deduction or upon payment of the expenses of the Trustee, including, but not
limited to, the public or private sale of the securities or property thus
received, or any part thereof, and the net proceeds of any such sale shall be
distributed by the Trustee to the Registered Owners entitled thereto as in the
case of a distribution received in cash. The Trustee shall not be liable for
any loss or depreciation resulting from any sale or other disposition of
property made by the Trustee pursuant to the Sponsor’s instruction or otherwise
made by the Trustee in good faith. 

          Section 4.6 Fixing of Record
Date. 

          Whenever
any distribution will be made, or whenever the Trustee receives notice of any
solicitation of proxies or consents from Registered Owners, or whenever for any
reason there is split, reverse split or other change in the outstanding Shares,
or whenever the Trustee shall find it 

14

necessary or convenient
in respect of any matter, the Trustee, in consultation with the Sponsor, shall
fix a record date for the determination of the Registered Owners who shall be
(i) entitled to receive such distribution or the net proceeds of the sale
thereof, (ii) entitled to give such proxies or consents in respect of any such
solicitation or (iii) entitled to act in respect of any other matter for which
the record date was set. 

          Section 4.7 Payment of Expenses; Gold
Sales. 

                    (a)
The following charges are or may be accrued and paid by the Trust: 

                              (i)
the service fee payable to the Sponsor as set forth in Section 5.8; 

                              (ii)
expenses of the Trust not assumed by the Sponsor pursuant to Section 5.3(g); 

                              (iii)
taxes and other governmental charges; 

                              (iv)
expenses and costs of any extraordinary services performed by the Trustee or
the Sponsor on behalf of the Trust or action taken by the Trustee or the
Sponsor to protect the Trust or the interests of Registered Owners; 

                              (v)
indemnification of the Trustee as provided in Section 5.6(a); and 

                              (vi)
indemnification of the Sponsor as provided in Section 5.6(b). 

                    (b)
Subject to paragraph (d) of this Section, the Trustee will endeavor to sell the
smallest amounts of Gold needed to pay expenses in order to minimize the
Trust’s holdings of assets other than Gold. 

          The
Trustee shall, when directed by the Sponsor, and, in the absence of such
direction, may, in its discretion, sell Gold in such quantity and at such times
as may be necessary to permit payment of expenses under this Agreement. The
Trustee is authorized to sell Gold at such times and in the smallest amounts
required to permit payment of expenses as they come due, it being the intention
to avoid or minimize the Trust’s holdings of assets other than Gold. Neither
the Trustee nor the Sponsor shall have any liability for loss or depreciation
resulting from sales of Gold so made. The Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by reason of any sale
made pursuant to the Sponsor’s direction or otherwise in accordance with this
Section. 

                    (c)
If at any time and from time to time, the Trustee and Sponsor determine that
the amount of cash included in the Trust Property exceeds the anticipated
expenses of the Trust during the following month, the Trustee shall distribute
the excess to the Registered Owners under Section 4.4. 

                    (d)
Payment of the fees of the Sponsor provided in Section 5.8(a) hereof shall be
made by delivery to an account maintained by the Custodian for the Sponsor on
an Unallocated Basis, monthly on the first Business Day of the month in respect
of fees payable in respect of the prior month, of that number of Ounces of Gold
which shall equal the daily accrual 

15

of the
Sponsor’s fee for such prior month calculated at the Benchmark Price for the
day of accrual. 

          Section 4.8 Statements and
Reports. 

                    (a)
After the end of each fiscal year and within the time period required by
applicable laws, rules and regulations, at the Sponsor’s expense, the Trustee
shall send to the Registered Owners at the end of such fiscal year, an annual
report of the Trust containing financial statements that will be prepared by
the Trustee and audited by independent accountants designated by the Sponsor and
such other information as may be required by such laws, rules and regulations
or otherwise, or which the Sponsor determines shall be included. The Trustee
may distribute the annual report by any means acceptable to the Registered
Owners. 

                    (b)
The Trustee shall provide the Sponsor with such certifications, supporting
documents and other evidence regarding the Internal Control Over Financial
Reporting established and maintained by the Trust, and used by the Trustee in
connection with its preparation of the financial statements of the Trust, as
may be reasonably necessary in order to enable the Sponsor to prepare and file
or furnish to the Commission any certifications regarding such matters which
may be required to be included with the Trust’s periodic reports under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). 

                    (c)
The fiscal year of the Trust shall initially be the period ending December 31
of each year. The Sponsor shall have the continuing right to select an
alternate fiscal year. 

          Section 4.9 Further Provisions for
Gold Sales. 

          In
addition to selling Gold in accordance with Section 4.7, the Trustee shall sell
Gold whenever any one or more of the following conditions exists: 

                    (a)
the Sponsor has notified the Trustee that such sale is required by applicable
law or regulation; or 

                    (b)
this Agreement has been terminated and the Trust Property is to be liquidated
in accordance with Section 6.2. 

          When
selling Gold, the Trustee shall endeavor to place orders with dealers (which
may include the Custodian) as directed by the Sponsor, or in the absence of
such direction, with dealers through which the Trustee may reasonably expect to
obtain a favorable price and good execution of orders. The Custodian may be the
purchaser at the Benchmark Price. 

          The
Trustee and the Sponsor shall not be liable or responsible in any way for
depreciation or loss incurred by reason of any sale made pursuant to this
Section 4.9. 

          Section 4.10 Counsel. 

          The
Sponsor may from time to time employ counsel to act on behalf of the Trust and
perform any legal services in connection with the Gold and the Trust, including
any legal matters 

16

relating to
the possible disposition or acquisition of any Gold. The fees and expenses of
such counsel shall be paid by the Sponsor. 

          Section 4.11 Grantor Trust.

          Nothing
in this Agreement, any agreement with a Custodian, or otherwise, shall be
construed to give the Trustee the power to vary the investment of the
Beneficial Owners within the meaning of Section 301.7701-4(c) under the Code or
any similar or successor provision of the regulations under the Code, nor shall
the Sponsor give the Trustee any direction that would vary the investment of
the Beneficial Owners. However, the Trustee shall not be liable to any Person
for any failure of the Trust to qualify as a grantor trust under the Code or
any comparable provision of the laws of any State or other jurisdiction where
that treatment is sought, except that this sentence shall not limit the
Trustee’s responsibility for the administration of the Trust in accordance with
this Agreement. 

ARTICLE V.

THE TRUSTEE AND THE SPONSOR

          Section 5.1 Maintenance of Office and
Transfer Books by the
Trustee. 

                    (a)
Until termination of this Agreement in accordance with its terms, the Trustee
shall maintain facilities for the execution and Delivery, registration, registration
of transfers and Surrender of Shares in accordance with the provisions of this
Agreement. 

                    (b)
The Trustee shall keep a copy of this Agreement and books for the registration
of Shares and registration of transfers of Shares which at all reasonable times
shall be open for inspection by the Registered Owners. 

                    (c)
The Trustee may, and at the reasonable written request of the Sponsor shall,
close the transfer books at any time or from time to time if such action is
deemed necessary or advisable in the reasonable judgment of the Trustee or the
Sponsor. 

                    (d)
If any Shares are listed on one or more stock exchanges in the United States,
the Trustee shall act as Registrar or, with the written approval of the Sponsor
(which approval shall not be unreasonably withheld), appoint a registrar or one
or more co-registrars for registry of such Shares in accordance with any
requirements of such exchange or exchanges. 

          Section 5.2 Prevention or Delay in
Performance by the Sponsor
or the Trustee. 

          Neither
the Sponsor nor the Trustee nor any of their respective directors, employees,
agents or affiliates shall incur any liability to any Registered Owner,
Beneficial Owner or Depositor if, by reason of any provision of any present or
future law or regulation of the United States or any other country, or of any
governmental or regulatory authority or stock exchange, or by reason of any act
of God or war or terrorism or other circumstances beyond its control, the
Sponsor or the Trustee is prevented or forbidden from, or would be subject to
any civil or criminal penalty on account of, or is delayed in, doing or
performing any act or thing which by the terms of this Agreement it is provided
shall be done or performed and accordingly the Sponsor or the Trustee does not
do that thing or does that thing at a later time than would 

17

otherwise be
required. The Sponsor and the Trustee will not incur any liability to any
Registered Owner or Beneficial Owner or Depositor by reason of any
non-performance or delay in the performance of any act or thing which by the
terms of this Agreement it is provided may be done or performed, by reason of
any exercise of, or failure to exercise, any discretion provided for in this
Agreement. 

          Section 5.3 Obligations
of the Sponsor and the Trustee. 

                    (a)
Neither the Sponsor nor the Trustee assumes any obligation nor shall either of
them be subject to any liability under this Agreement to any Registered Owner
or Beneficial Owner or Depositor (including, without limitation, liability with
respect to the worth of the Trust Property), except that each of them agrees to
perform its obligations specifically set forth in this Agreement without gross
negligence, willful misconduct or bad faith. 

                    (b)
Neither the Sponsor nor the Trustee shall be under any obligation to prosecute
any action, suit or other proceeding in respect of any Trust Property or in
respect of the Shares on behalf of a Registered Owner, Beneficial Owner,
Depositor or other Person. 

                    (c)
Neither the Sponsor nor the Trustee shall be liable for any action or
non-action by it in reliance upon the advice of or information from legal
counsel, accountants, any Depositor, any Registered Owner or any other person
believed by it in good faith to be competent to give such advice or information.

                    (d)     (i)
The Trustee shall not be liable for any acts or omissions made by a successor
Trustee whether in connection with a previous act or omission of the Trustee or
in connection with any matter arising wholly after the resignation of the
Trustee, provided that in connection with the issue out of which such potential
liability arises the Trustee performed its obligations without gross
negligence, willful misconduct or bad faith while it acted as Trustee. 

                              (ii)
The Sponsor is authorized to negotiate the terms of the Authorized Participant
Agreement to be entered into with each Authorized Participant and shall have no
liability for any loss or damage incurred by the Trust resulting from any such
agreement negotiated in good faith. The Trustee shall have no liability with
respect to the negotiation of the terms of any Authorized Participant Agreement
or the form of any Authorized Participant Agreement (other than the Trustee’s
due execution, delivery and performance thereof). The terms of an Authorized
Participant Agreement shall not adversely affect the duties, rights and
responsibilities of the Trustee unless the Trustee expressly consents thereto,
which consent shall be evidenced by the Trustee’s execution and delivery of
such Authorized Participant Agreement. 

                    (e)
The Trustee and the Sponsor shall have no obligation to comply with any
direction or instruction from any Registered Owner or Beneficial Owner or
Depositor regarding Shares except to the extent specifically provided in this
Agreement. 

                    (f)
The Trustee shall be a fiduciary under this Agreement; provided, however, that
the fiduciary duties and responsibilities and liabilities of the Trustee shall
be limited by, and shall be only those specifically set forth in, this
Agreement. Without limiting the foregoing, all duties, rights, privileges and
liabilities of the Trustee set forth in this Agreement are subject to the
following:

18

                              (i)
The Trustee shall not be under any obligation to appear in, prosecute or defend
any action that in its opinion may involve it in expense or liability, unless
it shall be furnished with reasonable security and indemnity against such expense
or liability. Subject to the foregoing, the Trustee shall, in its discretion,
undertake such action as it may deem necessary at any and all times to protect
the Trust and the rights and interest of all Beneficial Owners pursuant to the
terms of this Agreement. 

                              (ii)
Trust Assets of the Trust, exclusive of Gold or cash, shall be held by the
Trustee either directly or through the Federal Reserve/ Treasury Book Entry
System for United States and federal agency securities (the “Book Entry System”),
DTC, or through any other clearing agency or similar system (a “Clearing
Agency”), if available. The Trustee shall have no responsibility and shall not
be liable for ascertaining or acting upon any calls, conversions, exchange
offers, tenders, interest rates changes, or similar matters relating to
securities held at the Depository or with any Clearing Agency unless the
Trustee shall have received actual and timely written notice of the same, nor
shall the Trustee have any responsibility or liability for the actions or
omissions to act of the Book Entry System, the Depository or any Clearing
Agency. All moneys held by the Trustee hereunder shall be held by it, without
interest thereon or investment thereof, as a deposit for the account of the
Trust. Such monies held hereunder shall be deemed segregated by maintaining
such monies in an account or accounts for the exclusive benefit of the Trust.
The Trustee may also employ custodians for Trust assets other than Gold,
agents, attorneys, accountants, auditors and other professionals and shall not
be answerable for the default or misconduct of any such custodians, agents,
attorneys, accountants, auditors and other professionals if such custodians,
agents, attorneys, accountants, auditors or other professionals shall have been
selected with reasonable care. 

                              (iii)
If at any time the Trustee is served with any judicial or administrative order,
judgment, decree, writ or other form of judicial or administrative process that
in any way affects the Trust or its property (including but not limited to
orders of attachment or garnishment or other forms of levies or injunctions or
stays relating to the transfer of any assets of the Trust), the Trustee is
authorized to comply therewith in any manner that it or legal counsel of its
own choosing deems appropriate; however, the Trustee to the extent practicable
will inform the Sponsor of such order, judgment, decree, writ or other form of
judicial or administrative process that in any way affects the Trust and
consult in good faith with the Sponsor as to the course of action by the
Trustee. If the Trustee complies with any such judicial or administrative
order, judgment, decree, writ or other form of judicial or administrative
process, the Trustee shall not be liable to any of the parties hereto or to any
other person or entity even though such order, judgment, decree, writ or
process may be subsequently modified or vacated or otherwise determined to have
been without legal force or effect. 

                              (iv)
In no event shall the Trustee be liable for acting in accordance with or
conclusively relying upon any instruction, notice, demand, certificate or
document (a) from the Sponsor or a Custodian, or any entity acting on behalf of
either, which the Trustee believes is given pursuant to or is authorized by
this Agreement or a Custody Agreement, respectively; or (b) from or on behalf
of any Authorized Participant which the Trustee believes is given pursuant to
or is authorized by an Authorized Participant Agreement (provided that the
Trustee has complied with the verification procedures specified in the
Authorized Participant Agreement); for any indirect, consequential, punitive or
special damages, regardless of the form of action and 

19

whether or not
any such damages were foreseeable or contemplated; or for an amount in excess
of the value of the assets of the Trust. The Trustee may consult with legal
counsel of its own choosing as to any matter relating to this Agreement and the
Trustee shall not incur any liability in acting in good faith in accordance
with any advice from such counsel. The expense of such counsel shall be paid as
provided in Section 5.7(b) and (c), as applicable. 

                              (v)
The Trustee shall be entitled to rely conclusively upon any order, judgment,
certification, demand, notice, instrument or other writing delivered to it
under this Agreement without being required to determine the authenticity or
the correctness of any fact stated therein or the propriety or validity or the
service thereof. The Trustee may act in conclusive reliance upon any instrument
or signature reasonably believed by it to be genuine and may assume that any
person purporting to give receipt or advice or to make any statement or execute
any document in connection with the provisions of this Agreement or any
Authorized Participant Agreement has been duly authorized to do so, provided,
however, that where a list of authorized officials of a person and their
signatures are on file with the Trustee, the Trustee shall compare such manual
signatures to the signature on any such documents. Such requirement shall not
apply to “personal identification numbers” or “PINS” or other forms of
electronic security devices which function as a proxy for a manual signature. 

                              (vi)
The Trustee shall not be responsible for or in respect of the recitals herein,
the validity or sufficiency of this Agreement, the Custody Agreements, any
Authorized Participant Agreement or any other custody or other agreement
entered into by the Trustee at the direction or with the approval of the
Sponsor or otherwise in connection with the Trustee’s administration of the
Trust, or for the due execution hereof by the Sponsor or of the Custody
Agreements by the Initial Custodian, or for the due execution of any other
agreement entered into by the Trustee in connection with the administration of
the Trust by any party thereto other than the Trustee. 

                              (vii)
The Trustee shall not be responsible in any respect for the form, execution,
validity, value, collectibility or genuineness of documents, instruments or
securities deposited with or delivered to or held by it under this Agreement,
or for any description therein, or for the identity, authority or rights of
persons executing or delivering or purporting to execute or deliver any such
document, instrument or security. 

                              (viii)
At any time the Trustee may request an instruction in writing in English from
the Sponsor or an Authorized Participant with respect to any action which the
Sponsor or an Authorized Participant is authorized to direct the Trustee
hereunder, or under the Custody Agreements, any Authorized Participant
Agreement or any other agreement entered into by the Trustee in connection with
the Trustee’s administration of the Trust, and may, at its own option, include
in such request the course of action it proposes to take and the date on which
it proposes to act, regarding any matter arising in connection with its duties
and obligations under any such agreement. The Trustee shall not be liable for
acting in accordance with such a proposal on or after the date specified
therein, provided that the specified date shall be at least three (3) Business
Days after the Sponsor or Authorized Participant receives the Trustee’s request
for instructions and its proposed course of action, and provided further that,
prior to so acting, the Trustee has not received the written instructions requested.

20

                              (ix)
When the Trustee acts on any information, instructions, communications
(including communications with respect to the delivery of securities or the
wire transfer of funds) sent by telex, facsimile, email or other form of
electronic or data transmission, the Trustee, absent gross negligence, shall
not be responsible or liable in the event such communication is not an
authorized or authentic communication of the party sending it or is not in the
form the party sent or intended to send (whether due to fraud, distortion or
otherwise), provided that this paragraph shall not limit the Trustee’s
obligation to obtain such confirmations as may be specified in this Agreement
or any Authorized Participant Agreement. The Trustee shall be indemnified as
provided in Section 5.6 hereof against any loss, liability, claim or expense
(including legal fees and expenses) it may incur in acting in accordance with
any such communication. 

                              (x)
The Trustee may construe any provision of this Agreement that it believes to be
ambiguous or inconsistent with any other provisions hereof, and any reasonable
construction of any such provision hereof by the Trustee in good faith shall be
binding upon the parties hereto, each Authorized Participant and all Beneficial
Owners. In the event of any ambiguity or inconsistency or any other uncertainty
in any notice, instruction or other communication received by the Trustee under
this Agreement, the Trustee shall notify the Sponsor and the giver thereof, and
may, in its sole discretion, refrain from taking any action other than to
retain possession of the property of the Trust, unless the Trustee receives
such further written instructions, from the Sponsor or otherwise, that
eliminate such ambiguity, inconsistency or uncertainty. 

                              (xi)
The Trustee shall have no responsibility for the contents of any writing of the
arbitrators or any third party that may be used as a means to resolve disputes
among third parties with respect to their interest in the Trust, Trust Property
or Shares and may conclusively rely without any liability upon the contents
thereof. 

                              (xii)
In no event shall the Trustee be personally liable for any taxes or other
governmental charges imposed upon or in respect of the Gold or its custody,
moneys or other assets from time to time held hereunder, or on the income
therefrom or the sale or proceeds of sale thereof, or upon it as Trustee
hereunder or upon or in respect of the Trust or the Shares, which it may be
required to pay under any present or future law of the United States of America
or of any other taxing authority having jurisdiction in the premises. For all
such taxes and charges and for any expenses, including counsel’s fees, which
the Trustee may sustain or incur with respect to such taxes or charges, the
Trustee shall be reimbursed and indemnified out of the assets of the Trust and
the payment of such amounts shall be secured by a lien on the Trust. This
paragraph shall survive notwithstanding any termination of this Agreement and
the Trust or the resignation or removal of the Trustee. 

                              (xiii)
The Trustee shall not be answerable for the default of the Initial Custodian or
any Custodian employed at the direction of the Sponsor or selected by the
Trustee with reasonable care. The Trustee may also employ custodians for Trust
assets other than Gold, agents, attorneys, accountants, auditors and other
professionals and shall not be answerable for the default or misconduct of any
such custodians, agents, attorneys, accountants, auditors and other
professionals if such custodians, agents, attorneys, accountants, auditors or
other professionals shall have been selected with reasonable care. The fees and
expenses charged by 

21

such agents,
attorneys, accountants, auditors or other professionals, exclusive of fees for
services to be performed by the Trustee, shall be paid as provided in Section
5.7(b) and 5.7(c), as applicable. Fees paid for custody of assets other than
Gold shall be an expense of the Trustee. 

                              (xiv)
The Trustee in its individual or any other capacity may own or hold Shares, or
be an underwriter or dealer in respect of Shares, and may deal in any manner
with the same with the same rights and powers as if it were not the Trustee
hereunder. 

                    (g)
The Sponsor shall be responsible for all organizational expenses of the Trust,
and for the following administrative and marketing expenses of the Trust: fees
for the Trustee’s ordinary services and reimbursement of its out-of-pocket
expenses as provided in Section 5.7(b), the Custodian’s fee and expenses
reimbursable to a Custodian pursuant to a Custody Agreement (including, for
avoidance of doubt, any fees paid to the Initial Custodian under the Trust
Allocated Account Agreement and Trust Unallocated Account Agreement but
excluding taxes, other governmental charges and Custodian indemnification
obligations assumed by the Trustee in the Custody Agreements), listing fees of
the Exchange, registration fees charged by the Commission, printing and mailing
costs, audit fees and expenses and legal fees and expenses not in excess of
$100,000 per year. 

          Section 5.4 Resignation
or Removal of the Trustee; Appointment
of Successor Trustee. 

                    (a)
The Trustee may at any time resign as Trustee hereunder by written notice of
its election so to do, delivered to the Sponsor, and such resignation shall
take effect upon the appointment of a successor Trustee and its acceptance of
such appointment as hereinafter provided. 

                    (b)
The Sponsor may remove the Trustee in its discretion by written notice
delivered to the Trustee in the manner provided in Section 7.5 at least 90 days
prior to the fifth anniversary of the date of this Agreement or, thereafter, by
written notice delivered to the Trustee at least 90 days prior to the last day
of any subsequent three-year period. 

                    (c)
If at any time the Trustee 

                              (i)
ceases to be a Qualified Bank, 

                              (ii)
is in material breach of its obligations under this Agreement and fails to cure
such breach within 30 days after receipt of written notice from the Sponsor or
Registered Owners acting on behalf of at least 25% of the outstanding Shares
specifying such default and requiring the Trustee to cure such default, or 

                              (iii)
fails to consent to the implementation of an amendment to the Trust’s initial
Internal Control Over Financial Reporting deemed necessary by the Sponsor and,
after consultations with the Sponsor, the Sponsor and the Trustee fail to
resolve their differences regarding such proposed amendment, the Sponsor,
acting on behalf of the Registered Owners, may remove the Trustee by written
notice delivered to the Trustee in the manner provided in Section 7.5, and such
removal shall take effect upon the appointment of a successor Trustee and its
acceptance of such appointment as hereinafter provided. 

22

                    (d)
If the Trustee acting hereunder resigns or is removed, the Sponsor, acting on
behalf of the Registered Owners, shall use its reasonable efforts to appoint a
successor Trustee, which shall be a Qualified Bank. Every successor Trustee
shall execute and deliver to its predecessor and to the Sponsor, acting on
behalf of the Registered Owners, an instrument in writing accepting its
appointment hereunder, and thereupon such successor Trustee, without any
further act or deed, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor; but such predecessor, nevertheless,
upon payment of all sums due it and on the written request of the Sponsor,
acting on behalf of the Registered Owners, shall execute and deliver an
instrument transferring to such successor all rights and powers of such
predecessor hereunder, shall duly assign, transfer and deliver all right, title
and interest in the Trust Property to such successor, and shall deliver to such
successor a list of the Registered Owners of all outstanding Shares. The
Sponsor or any such successor Trustee shall promptly mail notice of the
appointment of such successor Trustee to the Registered Owners. 

                    (e)
Any corporation into which the Trustee may be merged, consolidated or converted
in a transaction in which the Trustee is not the surviving corporation shall be
the successor of the Trustee without the execution or filing of any document or
any further act. During the 90-day period following the effectiveness of a
merger, consolidation or conversion described in the preceding sentence, the
Sponsor may, by written notice to the Trustee, remove the Trustee and designate
a successor Trustee in compliance with the provisions of subsection (c) above. 

          Section 5.5 The
Custodian. 

                    (a)
The Trustee is hereby directed to enter into the Trust Allocated Account
Agreement and the Trust Unallocated Account Agreement with the Initial
Custodian. The Initial Custodian will be subject to the directions of the
Trustee as provided in such Custody Agreements, and will be responsible solely
to it and to Beneficial Owners to the extent UK law requires. If upon the
resignation of any Custodian there would be no Custodian acting hereunder, the
Trustee shall, promptly after receiving such notice of such resignation,
appoint a substitute custodian or custodians selected by the Sponsor pursuant
to custody agreements approved by the Sponsor (provided, however, that the
rights and duties of the Trustee hereunder and under the Custody Agreements
shall not be materially altered without its consent), each of which shall
thereafter be a Custodian hereunder. When directed by the Sponsor or if the
Trustee in its discretion determines that it is in the best interest of the
Registered Owners to do so and with the written approval of the Sponsor (which
approval shall not be unreasonably withheld or delayed), the Trustee shall
appoint a substitute or additional custodian or custodians, which shall
thereafter be one of the Custodians hereunder. After the date of this
Agreement, the Trustee shall not enter into or amend any Custody Agreement with
a Custodian without the written approval of the Sponsor (which approval shall
not be unreasonably withheld or delayed). When instructed by the Sponsor, the
Trustee shall demand that a Custodian deliver such of the Gold held by it as is
requested of it to any other Custodian or such substitute or additional
custodian or custodians directed by the Sponsor. In connection with such
delivery the Trustee will, solely if and in the manner directed by the Sponsor,
cause the Gold to be weighed or assayed and any such weighing and assay shall
be an expense of the Trust pursuant to Section 4.7(a)(ii) hereof. The Trustee
shall have no liability for any delivery of Gold or weighing or assaying of
delivered Gold directed by the Sponsor pursuant to the preceding provisions of
this paragraph and in the absence of such 

23

direction
shall have no obligation to effect such a delivery or to cause the delivered
Gold to be weighed, assayed or otherwise validated. Each such substitute or
additional custodian shall, forthwith upon its appointment, enter into a
Custody Agreement in form and substance approved by the Sponsor. 

                    (b)
The Trustee shall have no obligation to monitor the activities of any Custodian
other than to receive and review such reports of the Gold held for the Trust by
such Custodian and of transactions in Gold held for the account of the Trust
made by such Custodian pursuant to the Custody Agreements. The accounts and
operations of each Custodian shall be audited or examined by accountants or
other inspectors selected by the Sponsor at such times as directed by the
Sponsor as permitted by the Custody Agreements. In no event shall the Trustee
be liable for (i) any loss or damage resulting from the actions or omissions of
any Custodian or loss or damage to the Gold while in the possession of, or in
transit to or from, any Custodian, (ii) the amount, validity or adequacy of
insurance maintained by any Custodian, (iii) any defect in Gold held by a
Custodian, (iv) any failure of Gold to conform to the requirements of “good
delivery” under the rules of LBMA, or (v) any failure of Gold to conform to a
description thereof provided by the Custodian to the Trustee. 

                    (c)
Upon the appointment of any successor Trustee hereunder, each Custodian then
acting hereunder shall forthwith become, without any further act or writing,
the agent hereunder of such successor Trustee and the appointment of such
successor Trustee shall in no way impair the authority of each Custodian
hereunder; but the successor Trustee so appointed shall, nevertheless, on the
written request of any Custodian, execute and deliver to such Custodian all
such instruments as may be proper to give to such Custodian full and complete
power and authority as agent hereunder of such successor Trustee. 

          Section 5.6
Indemnification. 

                    (a)
The Trustee, its directors, employees and agents (each, a “Trustee Indemnified
Party”) shall be indemnified from the Trust and held harmless against any loss,
liability or expense (including, but not limited to, the reasonable fees and
expenses of counsel) arising out of or in connection with the performance of
its obligations under this Agreement and under each other agreement entered
into by the Trustee in furtherance of the administration of the Trust
(including, without limiting the scope of the foregoing, the Custody Agreements
and any Authorized Participant Agreement, including the Trustee’s
indemnification obligations thereunder) or by reason of the Trustee’s
acceptance of the Trust incurred without (1) gross negligence, bad faith, willful
misconduct or willful malfeasance on the part of such Trustee Indemnified Party
in connection with the performance of its obligations under this Agreement or
any such other agreement or any actions taken in accordance with the provisions
of this Agreement or any such other agreement or (2) reckless disregard on the
part of such Trustee Indemnified Party of its obligations and duties under this
Agreement or any such other agreement. Such indemnity shall include payment
from the Trust of the costs and expenses incurred by such Trustee Indemnified
Party in defending itself against any claim or liability in its capacity as
Trustee. Any amounts payable to a Trustee Indemnified Party under this Section
5.6(a) may be payable in advance or shall be secured by a lien on the Trust. 

24

                    (b)
The Sponsor and its members, managers, directors, officers, employees,
affiliates (as such term is defined under the Securities Act of 1933, as
amended) and subsidiaries (each, a “Sponsor Indemnified Party”) shall be
indemnified from the Trust and held harmless against any loss, liability or
expense (including, but not limited to, the reasonable fees and expenses of
counsel) arising out of or in connection with the performance of its
obligations under this Agreement and under each other agreement entered into by
the Sponsor, in furtherance of the administration of the Trust (including,
without limiting the scope of the foregoing, Authorized Participant Agreements
to which the Sponsor is a party, including the Sponsor’s indemnification
obligations thereunder) or any actions taken in accordance with the provisions
of this Agreement incurred without (1) gross negligence, bad faith, willful
misconduct or willful malfeasance on the part of such Sponsor Indemnified Party
in connection with the performance of its obligations under this Agreement or
any such other agreement or any actions taken in accordance with the provisions
of this Agreement or any such other agreement or (2) reckless disregard on the
part of such Sponsor Indemnified Party of its obligations and duties under this
Agreement. Such indemnity shall include payment from the Trust of the costs and
expenses incurred by such Sponsor Indemnified Party in defending itself against
any claim or liability in its capacity as Sponsor. Any amounts payable to a
Sponsor Indemnified Party under this Section 5.6(b) may be payable in advance
or shall be secured by a lien on the Trust. The Sponsor may, in its discretion,
undertake any action which it may deem necessary or desirable in respect of
this Agreement and the rights and duties of the parties hereto and the
interests of the Registered Owners and, in such event, the legal expenses and
costs of any such actions shall be expenses and costs of the Trust and the Sponsor
shall be entitled to be reimbursed therefor by the Trust. 

                    (c)
The indemnities provided by this section shall survive notwithstanding any
termination of this Agreement and the Trust or the resignation or removal of
the Trustee or the Sponsor, respectively. 

          Section 5.7 Charges of
Trustee. 

                    (a)
Each Depositor, and each person surrendering Shares for the purpose of
withdrawing Trust Property, shall pay to the Trustee a fee of $500 per
transaction for the Delivery of Shares pursuant to Section 2.4 and the
Surrender of Baskets of Shares pursuant to Section 2.6 or 6.2 (or such other
fee as the Trustee, with the prior written consent of the Sponsor, may from
time to time announce). 

                    (b)
The Trustee is entitled to receive from the Sponsor fees for its ordinary
services and reimbursement for its out-of-pocket expenses in accordance with
written agreements between the Sponsor and the Trustee. Should the Sponsor fail
to pay the same, the Trustee shall be authorized to charge the same to the
Trust to the extent of amounts which could be charged to the Trust under
Section 5.8(a) hereof in respect of the Sponsor’s fee (and the Trustee may
charge the same to the Trust to such extent without regard to whether, because
of the Sponsor’s default, fee waiver or other reason, the Sponsor may not then
be entitled to payment pursuant to Section 5.8(a)), and any amount paid to the
Sponsor pursuant to Section 5.8(a) shall be net of amounts so withheld. The
Trustee’s right of reimbursement shall be secured by a lien on amounts
chargeable to the Trust under Section 5.8(a), without giving effect to any fee
waiver then in effect, prior to the interest of the Sponsor, the Beneficial
Owners and any other Person. 

25

                    (c)
The Trustee is entitled to charge the Trust for all expenses and disbursements
incurred by it hereunder exclusive of amounts specified in the preceding
Section 5.7(b), including the fees and disbursements of its legal counsel and
those expenses identified in any Custody Agreement as payable by the Trustee,
except that the Trustee is not entitled to charge the Trust for (i) expenses
and disbursements incurred by it prior to the commencement of trading of Shares
on the Exchange and (ii) fees of agents for performing services the Trustee is
required to perform under this Agreement. The Trustee’s right of reimbursement
for expenses and disbursements under this paragraph shall be deductible from,
and constitute a lien against, the assets of the Trust. 

                    (d)
Any pecuniary cost of the Trustee resulting from actions taken to protect the
Trust and the rights and interest of the Registered Owners pursuant to the
terms of this Agreement, including, without limitation, the Trustee’s appearance
in, prosecution of or defense of any action that it considers necessary or
desirable to protect the Trust or the interests of the Beneficial Owners, shall
be deductible from, and constitute a lien against, the assets of the Trust. 

          Section 5.8 Charges of
Sponsor. 

                    (a)
The Sponsor is entitled to receive from the Trust, chargeable as an expense of
the Trust, a fee for services that will accrue daily and be paid monthly in
arrears in the manner provided in Section 4.7(d) at an annualized rate of 0.39
% of Adjusted Net Asset Value. The Sponsor may, at its sole discretion and from
time to time, waive all or a portion of its fee payable under this Section
5.8(a) for such periods of time as shall be specified in the Sponsor’s written
notice of such fee waiver to the Trustee. The Sponsor is under no obligation to
waiver its fees hereunder, and any such waiver shall create no obligation to
waive fees during any period not covered by the applicable waiver. Any fee
waiver by the Sponsor shall not operate to reduce Sponsor’s obligations
hereunder, including, but not limited to, the Sponsor’s obligations under
Section 5.3(g). 

                    (b)
The Sponsor is entitled to receive reimbursement from the Trust for all
expenses and disbursements incurred by it under the last sentence of Section
5.6(b) or that are of the type described in Sections 4.7(a)(ii), (iii), (iv),
and (vi) of this Agreement, except that the Sponsor is not entitled to charge
the Trust for (i) expenses and disbursements incurred by it prior to the
commencement of trading of Shares on the Exchange and (ii) fees of agents for
performing services the Sponsor is required to perform under this Agreement. 

          Section 5.9 Retention of
Trust Documents. 

          The
Trustee is authorized to destroy those documents, records, bills and other data
compiled during the term of this Agreement at the times permitted by the laws
or regulations governing the Trustee, unless the Sponsor reasonably requests
the Trustee in writing to retain those items for a longer period. 

          Section 5.10 Federal
Securities Law Filings. 

                    (a)
The Sponsor shall (i) prepare and file a registration statement with the
Commission and take such action as is necessary from time to time to qualify
the Shares for offering and sale under the federal securities laws of the
United States, including the preparation 

26

and filing of amendments and supplements to such
registration statement, (ii) promptly notify the Trustee of any amendment or
supplement to the registration statement or prospectus, of any order preventing
or suspending the use of any prospectus, of any request for the amending or
supplementing of the registration statement or prospectus or if any event or
circumstance occurs which is known to the Sponsor as a result of which the
registration statement or prospectus, as then amended or supplemented, would include
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, (iii) provide the Trustee from time
to time with copies, including copies in electronic form, of the prospectus, as
amended and supplemented, in such quantities as the Trustee may reasonably
request and (iv) prepare and file any periodic reports or updates that may be
required under the Exchange Act. The Trustee shall furnish to the Sponsor any
information from the records of the Trust that the Sponsor reasonably requests
in writing that is needed to prepare any filing or submission that the Sponsor
or the Trust is required to make under the federal securities laws of the
United States, and the Sponsor is entitled to rely on such information so
furnished by the Trustee. 

                    (b)
The Sponsor shall have all necessary and exclusive power and authority to (i)
from time to time adopt, implement or amend such disclosure controls and
procedures as are necessary or desirable, in the Sponsor’s reasonable judgment,
to ensure compliance with the disclosure and ongoing reporting obligations
under any applicable securities laws; (ii) appoint and remove the auditors of
the Trust; and (iii) seek from the relevant securities or other regulatory
authorities such relief, clarification or other action as the Sponsor shall
deem necessary or desirable regarding the disclosure or financial reporting
obligations of the Trust. 

                    (c)
The policies and procedures comprising the Trust’s initial Internal Control
Over Financial Reporting have been adopted as of the date of this Agreement and
copies thereof have been delivered to the appropriate officers of the Sponsor
and the Trustee. Amendments to such initial Internal Control Over Financial
Reporting may be proposed from time to time by the Sponsor, but such amendments
may not be adopted in connection with the preparation of the Trust’s financial
statements without the Trustee’s consent (which consent will not be
unreasonably withheld or delayed). 

          Section 5.11 Prospectus Delivery.

          The
Trustee shall, if required by the federal securities laws of the United States,
in any manner permitted by such laws, deliver at the time of issuance of
Shares, a copy of the relevant prospectus, as most recently furnished to the
Trustee by the Sponsor, to each Depositor. 

          Section 5.12 Discretionary Actions by
Trustee; Consultation.

                    (a)
The Trustee may, in its discretion, undertake any action that it considers
necessary or desirable to protect the Trust or the interests of the Registered
Owners. The expenses incurred by the Trustee in connection with taking any
action under the preceding sentence (including the fees and disbursements of
legal counsel) shall be expenses of the Trust, and the Trustee shall be
entitled to be reimbursed for those expenses by the Trust. 

27

                    (b)
The Trustee shall notify and consult with the Sponsor before undertaking any
action under subsection (a) above
or if the Trustee becomes aware of any development or event that affects the
administration of the Trust but is not contemplated or provided for in this
Agreement. 

                    (c)
The Sponsor shall notify and consult with the Trustee before undertaking any
action under the last sentence of Section 5.6(b) or if the Sponsor becomes
aware of any development or event that affects the administration of the Trust
but is not contemplated or provided for in this Agreement. 

          Section 5.13 Dissolution of the
Sponsor Not to Terminate Trust.

          The
dissolution of the Sponsor, or its ceasing to exist as a legal entity from, or
for, any cause, shall not operate to terminate this Agreement insofar as the
duties and obligations of the Trustee are concerned unless the Trust is
terminated pursuant to Section 6.2.

ARTICLE VI.

AMENDMENT AND TERMINATION

          Section 6.1 Amendment. 

          Subject
to Section 4.11 hereof, the Trustee and the Sponsor may amend any provisions of
this Agreement without the consent of any Registered Owner. Any amendment that
imposes or increases any fees or charges (other than taxes and other
governmental charges, registration fees or other such expenses), or that
otherwise prejudices any substantial existing right of the Registered Owners
will not become effective as to outstanding Shares until 30 days after notice
of such amendment is given to the Registered Owners. Amendments pursuant to
Sections 2.6(c) or (d) shall not require notice pursuant to the preceding
sentence. Every Registered Owner and Beneficial Owner, at the time any
amendment so becomes effective, shall be deemed, by continuing to hold any
Shares or an interest therein, to consent and agree to such amendment and to be
bound by this Agreement as amended thereby. In no event shall any amendment
impair the right of the Registered Owner of Shares to Surrender Baskets of
Shares and receive therefor the amount of Trust Property represented thereby,
except in order to comply with mandatory provisions of applicable law. 

          Section 6.2 Termination.

                    (a)
The Trustee shall set a date on which this Agreement will terminate and mail
notice of that termination to the Registered Owners at least 30 days prior to
the date set for termination if any of the following occurs: 

                         (i)
The Trustee is notified that the Shares are delisted from a national securities
exchange and are not approved for listing on another national securities
exchange within five business days of their delisting; 

28

                              (ii)
Registered Owners acting in respect of at least 75% of the outstanding Shares
notify the Trustee that they elect to terminate the Trust; 

                              (iii)
60 days have elapsed since the Trustee notified the Sponsor of the Trustee’s
election to resign and a successor trustee has not been appointed and accepted
its appointment as provided in Section 5.4; 

                              (iv)
the Commission determines that the Trust is an investment company under the
Investment Company Act of 1940, as amended, and the Trustee has actual
knowledge of such Commission determination; 

                              (v)
the aggregate market capitalization of the Trust, based on the closing price
for the Shares, was less than $350 million (as adjusted for inflation by
reference to the Consumer Price Index as published by the Bureau of Labor
Statistics) at any time after the first anniversary after the Trust’s formation
and the Trustee receives, within six months after the last of those trading
days, notice from the Sponsor of its decision to terminate the Trust; 

                              (vi)
the CFTC determines that the Trust is a commodity pool under the Commodity
Exchange Act of 1936, as amended, and the Trustee has actual knowledge of that
determination; 

                              (vii)
the Trust fails to qualify for treatment, or ceases to be treated, for United States
federal income tax purposes, as a grantor trust, and the Trustee receives
notice from the Sponsor that the Sponsor determines that, because of that tax
treatment or change in tax treatment, termination of the Trust is advisable;

                              (viii)
60 days have elapsed since DTC ceases to act as depository with respect to the
Shares and the Sponsor has not identified another Depository which is willing
to act in such capacity; or

                              (ix)
as provided in paragraph (c) of this Section 6.2.

                    (b)
On and after the date of termination of this Agreement, the Registered Owner of
Shares will, upon (i) Surrender of those Shares, (ii) payment of the fee of the
Trustee for the Surrender of Shares provided in Section 5.7, and (iii) payment
of any applicable taxes or other governmental charges, be entitled to Delivery,
to him or upon his order, of the amount of Trust Property represented by those
Shares. The Trustee shall not accept any deposits of Gold after the date of
termination of this Agreement. If any Shares remain outstanding after the date
of termination of this Agreement, the Trustee thereafter shall discontinue the
registration of transfers of Shares, shall not make any distributions to Registered
Owners, and shall not give any further notices or perform any further acts
under this Agreement, except that the Trustee shall continue to collect
distributions pertaining to Trust Property and hold the same uninvested and
without liability for interest, pay the Trust’s expenses and sell Gold as
necessary to meet those expenses and shall continue to deliver Trust Property,
together with any distributions received with respect thereto and the net
proceeds of the sale of any other property, in exchange for Shares Surrendered
to the Trustee (after deducting or upon payment of, in each case, the fee of
the Trustee set forth in 5.7 for the Surrender of Shares, any expenses for the
account of the Registered Owner of such Shares in accordance with the terms and
conditions of this Agreement, 

29

and any applicable taxes or other governmental
charges). At any time after the expiration of 90 days following the date of
termination of this Agreement, the Trustee may sell the Trust Property then
held under this Agreement and may thereafter hold the net proceeds of any such
sale, together with any other cash then held by it under this Agreement,
without liability for interest, for the pro rata benefit of the Registered
Owners of Shares that have not theretofore been Surrendered. After making such
sale, the Trustee shall be discharged from all obligations under this
Agreement, except to account for such net proceeds and other cash (after
deducting, in each case, any fees, expenses, taxes or other governmental
charges payable by the Trust, the fee of the Trustee for the Surrender of
Shares and any expenses for the account of the Registered Owner of such Shares
in accordance with the terms and conditions of this Agreement, and any
applicable taxes or other governmental charges). Upon the termination of this
Agreement, the Sponsor shall be discharged from all obligations under this
Agreement except for its obligations to the Trustee under Sections 5.6, 5.7 and
5.8 shall survive termination of this Agreement. 

                    (c)
If the Sponsor shall be adjudged bankrupt or insolvent, or a receiver of the
Sponsor or of its property shall be appointed, or a trustee or liquidator or
any public officer shall take charge or control of the Sponsor or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then in any such case the Sponsor shall be deemed conclusively to
have resigned with such resignation being effective immediately upon the
occurrence of any of the specified events, and the Trustee may terminate and
liquidate the Trust and distribute its remaining assets pursuant to this
Section 6.2. The Trustee shall have no obligation to appoint a successor
Sponsor or to assume the duties of the Sponsor and shall have no liability to
any person because the Trust is or is not terminated pursuant to this
paragraph. 

ARTICLE VII.

MISCELLANEOUS

          Section 7.1 Counterparts.

          This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original and all of such counterparts shall constitute one and the
same instrument. Copies of this Agreement shall be filed with the Trustee and
shall be open to inspection by any Registered Owner during the Trustee’s
business hours. 

          Section 7.2 Third-Party
Beneficiaries. 

          This
Agreement is for the exclusive benefit of the parties hereto, any Sponsor
Indemnified Party or any Trustee Indemnified Party and the Beneficial Owners,
and shall not be deemed to give any legal or equitable right, remedy or claim
whatsoever to any other person. 

          Section 7.3 Severability.

          In
case any one or more of the provisions contained in this Agreement should be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions of this Agreement shall in no
way be affected, prejudiced or disturbed thereby. 

30

          Section 7.4 Certain Matters Relating
to Beneficial Owners.

                    (a)
By the purchase and acceptance or other lawful delivery and acceptance of
Shares, each Beneficial Owner thereof shall be deemed to be a beneficiary of
the Trust created by this Agreement and vested with beneficial undivided
interest in the Trust to the extent of the Shares owned beneficially by such
Beneficial Owner, subject to the terms and conditions of this Agreement. Upon
issuance as provided herein, Shares shall be fully paid and non-assessable.

                    (b)
Subject to and in accordance with Section 2.6, Shares may at any time prior to
the date specified by the Trustee in connection with the termination of the
Trust be tendered to the Trustee for redemption.

                    (c)
The death or incapacity of any Beneficial Owner shall not operate to terminate
this Agreement or the Trust, nor entitle such Beneficial Owner’s legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them. Each Beneficial Owner expressly waives any right such
Beneficial Owner may have under any rule of law, or the provisions of any
statute, or otherwise, to require the Trustee at any time to account, in any
manner other than as expressly provided in the Agreement, in respect of the
Trust Property from time to time received, held and applied by the Trustee
hereunder.

                    (d)
No Beneficial Owner shall have any right to vote or in any manner otherwise to
control the operation and management of the Trust, or the obligations of the
parties hereto. Nothing set forth in this Agreement shall be construed so as to
constitute the Beneficial Owners from time to time as partners or members of an
association; nor shall any Beneficial Owner ever be liable to any third person
by reason of any action taken by the parties to this Agreement, or for any
other cause whatsoever. 

                    (e)
The rights of Beneficial Owners must be exercised by DTC Participants or Participants
of any successor Depository acting on their behalf in accordance with its rules
and procedures

          Section 7.5 Notices. 

                    (a)
All notices given under this Agreement must be in writing. 

                    (b)
Any and all notices to be given to the Trustee or the Sponsor shall be deemed
to have been duly given (i) when it is actually delivered by a messenger or
recognized courier service, (ii) five days after it is mailed by registered or
certified mail, postage paid or (iii) when receipt of a facsimile transmission
is acknowledged via a return receipt or receipt confirmation as requested by
the original transmission, in each case to or at the address set forth below: 

To the Trustee: 

	
  

 	
  

 
	
  

 	
 THE BANK OF NEW YORK MELLON

 
	
  

 	
 2 Hanson Place

 

31

	
  

 	
  

 
	
  

 	
 Brooklyn, New York 11217

 
	
  

 	
 Attention: Donald Guire

 
	
  

 	
 Telephone: 718-315-4927 

 
	
  

 	
 Facsimile: 718-315-4850

 
	
  

 	
  

 
	
 or any other place to which the Trustee may have
 transferred its Corporate Trust Office with notice to the Sponsor. 

 
	
  

 
	
 To the Sponsor: 

 
	
  

 
	
  

 	
 ETF SECURITIES USA LLC

 
	
  

 	
 c/o ETF Securities Representative Office

 
	
  

 	
 6th Floor

 
	
  

 	
 2 London Wall Buildings

 
	
  

 	
 London, EC2M 5UU

 
	
  

 	
 UK

 
	
  

 	
 Telephone: 011 44 207 448-4330

 
	
  

 	
 Attention: President

 
	
  

 
	
      with a copy to:

 
	
  

 
	
  

 	
 Katten Muchin Rosenman LLP

 
	
  

 	
 575 Madison Avenue

 
	
  

 	
 New York, New York 10022

 
	
  

 	
 Attention: Peter J. Shea, Esq.

 

or any other place to which the Sponsor may have
transferred its principal office with notice to the Trustee. 

                    (c)
Any and all
notices to be given to a Registered Owner shall be deemed to have been duly
given (i) when actually delivered by messenger or a recognized courier service,
(ii) when mailed, postage prepaid or (iii) when sent by facsimile
transmission confirmed by letter, in each case at or to the address of such
Registered Owner as it appears on the transfer books of the Trustee, or, if
such Registered Owner shall have filed with the Trustee a written
request that any notice or communication intended for such Registered Owner be
delivered to some other address, at the address designated in such request.
Notices to Beneficial Owners shall be delivered to Authorized Participants and
DTC Participants designated by DTC or any successor Depository.

          Section 7.6 Agent for Service;
Submission to Jurisdiction.

          The
Sponsor hereby (i) irrevocably designates and appoints Katten Muchin Rosenman
LLP, located at 575 Madison Avenue, New York, New York 10022, in the State of
New York, as the Sponsor’s authorized agent upon which process may be served in
any suit or proceeding arising out of or relating to the Shares, the Trust
Property or this Agreement, (ii) consents and submits to the jurisdiction of
any state or federal court in The City of New York, State of New York, in which
any such suit or proceeding may be instituted, and (iii) agrees that service of

32

process upon said authorized agent shall be deemed in
every respect effective service of process upon the Sponsor in any such suit or
proceeding. The Sponsor agrees to deliver, upon the execution and delivery of
this Agreement, a written acceptance by such agent of its appointment as such
agent. The Sponsor further agrees to take any and all action, including the
filing of any and all such documents and instruments, as may be necessary to
continue such designation and appointment in full force and effect for so long
as any Shares remain outstanding or this Agreement remains in force. In the
event the Sponsor fails to continue such designation and appointment in full
force and effect, the Sponsor hereby waives personal service of process upon it
and consents that any such service of process may be made by certified or
registered mail, return receipt requested, directed to the Sponsor at its
address last specified for notices hereunder, and service so made shall be
deemed completed five (5) days after the same shall have been so mailed. 

          Each
party hereto, each Authorized Participant by its delivery of an Authorized
Participant Agreement and each Beneficial Owner by the acceptance of a Share,
irrevocably consents to the jurisdiction of the courts of the State of New York
and of any Federal Court located in the Borough of Manhattan in such State in
connection with any action, suit or other proceeding arising out of or relating
to this Agreement or any action taken or omitted hereunder, and waives any
claim of forum non conveniens and any objections as to laying of venue. Each
party further waives personal service of any summons, complaint or other
process and agrees that service thereof may be made by certified or registered
mail directed to such person at such person’s address for purposes of notices
hereunder.

          Section 7.7 Governing Law.

          This
Agreement shall be interpreted under, and all rights and duties under this
Agreement shall be governed by, the internal substantive laws (but not the
choice of law rules) of the State of New York. 

33

          IN
WITNESS WHEREOF, ETF SECURITIES USA LLC and THE BANK OF NEW YORK MELLON have
duly executed this Depositary Trust Agreement as of the day and year first set
forth above. 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ETF SECURITIES USA LLC

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:  

 	
 /s/ Graham Tuckwell

 
	
  

 	
  

 	
  

 	
 

 
	
  

 	
  

 	
 Name: Graham Tuckwell

 
	
  

 	
  

 	
 Title: President & Chief Executive Officer

 
	
  

 	
  

 	
  

 
	
 WITNESSED:

 	
  

 	
 WITNESSED:

 
	
                          /s/ Graeme Ross

 	
  

 	
                          /s/ Greg Burgess

 
	
 

 	
  

 	
 

 
	
 Name:  Graeme Ross

 	
  

 	
 Name:  Greg Burgess

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 THE BANK OF NEW YORK MELLON,

 
	
  

 	
  

 	
 as Trustee

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:  

 	
 /s/ Andrew Pfeifer

 
	
  

 	
  

 	
  

 	
 

 
	
  

 	
  

 	
 Name:  Andrew Pfeifer 

 
	
  

 	
  

 	
 Title:    Vice President

 

[Signature Page to ETFS Gold
Depositary Trust Agreement]

[Depositary Trust Agreement acknowledgment, Trustee]

 

 

	STATE OF NEW YORK)	 
	 	:ss.:
	
            COUNTY OF NEW YORK)
 	
            
 

 

 

On this 31ST day of August, 2009 before me, the undersigned, personally appeared ANDREW PFEIFER, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

 

SHIRLEY CHIEU

Notary Public

 

(Notarial Seal)

 

 

 

 

EXHIBIT
A

[Form of
Certificate]

THE SHARES EVIDENCED HEREBY REPRESENT RIGHTS WITH
RESPECT TO UNDERLYING TRUST PROPERTY (AS DEFINED IN THE DEPOSITARY TRUST
AGREEMENT REFERRED TO HEREIN) HELD BY THE TRUST AND DO NOT EVIDENCE AN
OBLIGATION OF, OR AN INTEREST IN, AND ARE NOT GUARANTEED BY THE SPONSOR OR THE
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE SHARES NOR THE
UNDERLYING TRUST PROPERTY ARE INSURED UNDER ANY AGREEMENT THAT DIRECTLY
BENEFITS THE TRUST OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER
PERSON. 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
TO THE AGENT AUTHORIZED BY THE ISSUER FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN. 

A-1

ETFS
PHYSICAL SWISS GOLD SHARES

ISSUED BY

ETFS GOLD TRUST

REPRESENTING

FRACTIONAL INTERESTS IN DEPOSITED GOLD AND ANY OTHER TRUST
PROPERTY

THE
BANK OF NEW YORK MELLON, as Trustee

	
  

 	
  

 	
  

 
	
  

 	
 No.

 	
 * Shares

 
	
  

 	
  

 	
  

 
	
  

 	
 CUSIP:

 	
  

 

          THE
BANK OF NEW YORK MELLON, as Trustee (hereinafter called the Trustee), hereby
certifies that CEDE & CO., as nominee of The Depository Trust Company, or
registered assigns, is the owner of * Shares issued by ETFS Gold Trust, each
representing a fractional undivided interest in the net assets of the Trust, as
provided in the Agreement referred to below. At the time of delivery of the
Agreement, each 50,000 Shares represented an interest in 5,000 Ounces of Gold
that are deposited under the Agreement and held by the Custodian referred to in
the Agreement. The amount of Gold in which each 50,000 Shares represents an
interest will decline over time as provided in the Agreement. The Trustee’s
Corporate Trust Office is located at a different address than its principal executive
office. Its Corporate Trust Office is located at 2 Hanson Place, Brooklyn, New
York 11217, and its principal executive office is located at One Wall Street,
New York, New York 10286. 

          This
Certificate is issued upon the terms and conditions set forth in the Depositary
Trust Agreement dated as of September 1, 2009 (the “Agreement”) between ETF
Securities USA LLC (herein called the Sponsor) and the Trustee. By becoming a
Registered Owner or Beneficial Owner, or by depositing Gold, a Person is bound
by all the terms and conditions of the Agreement. The Agreement sets forth the
rights of Depositors and Registered Owners and the rights and duties of the
Trustee and the Sponsor. Copies of the Agreement are on file at the Trustee’s
Corporate Trust Office in New York City. 

	
  

 	
  

 
	
 *

 	
 That number of Shares held at The Depository Trust
 Company at any given point in time. 

 

A-2

          The
Agreement is hereby incorporated by reference into and made a part of this
Certificate as if set forth in full in this place. Capitalized terms not
defined herein shall have the meanings set forth in the Agreement. 

          This
Certificate shall not be entitled to any benefits under the Agreement or be
valid or obligatory for any purpose unless it is executed by the Trustee by the
manual or facsimile signature of a duly authorized signatory of the Trustee
and, if a Registrar (other than the Trustee) for the Shares shall have been
appointed, countersigned by the manual signature of a duly authorized officer
of the Registrar. 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Dated:

 	
  

 	
  

 	
 THE BANK OF NEW YORK MELLON,

 as Trustee

 
	
  

 	
 

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
  

 	
 

 

THE
TRUSTEE’S CORPORATE TRUST OFFICE ADDRESS IS

2 HANSON PLACE, BROOKLYN, NEW YORK 11217

A-3

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