Document:

Exhibit 10.4

 

VALUATION SERVICES AGREEMENT

 

THIS AGREEMENT made and entered into as of the · day of ·, 2012

 

BETWEEN:

 

SPROTT ASSET MANAGEMENT LP,

a limited partnership formed under the laws of the Province of Ontario

 

(hereinafter referred to as the “Manager”)

 

OF THE FIRST PART

 

- and -

 

RBC DEXIA INVESTOR SERVICES TRUST,

a trust company incorporated under the federal laws of Canada

 

(hereinafter referred to as the “Valuation Agent”)

 

OF THE SECOND PART

 

WHEREAS Sprott Physical Platinum and Palladium Trust (the “Trust”) is a closed-end mutual fund trust established under the laws of the Province of Ontario pursuant to a trust agreement dated as of December 23, 2011, as amended and restated as of June 6, 2012 (the “Trust Agreement”);

 

AND WHEREAS pursuant to the Trust Agreement, RBC Dexia Investor Services Trust and the Manager were appointed as the trustee and the manager of the Trust, respectively;

 

AND WHEREAS pursuant to the Trust Agreement, the Manager has the full authority and exclusive power to manage and direct the business and affairs of the Trust including, without limitation, to provide the Trust with all necessary investment management services and all management and administrative services, and to provide such other services and facilities as described in the Trust Agreement;

 

AND WHEREAS pursuant to the Trust Agreement, the Manager has the ultimate responsibility to calculate the Net Asset Value of the Trust, the Net Asset Value per Unit, the Class Net Asset Value and the Class Net Asset Value per Unit, and to determine the Net Income and the Net Realized Capital Gains for the Trust (as all such terms are hereinafter defined) and, in conjunction therewith, may appoint a service provider to perform some or all of such calculations and determinations on behalf of the Trust;

 

AND WHEREAS the Manager wishes to retain the Valuation Agent, in its capacity as a service provider to the Trust, to provide certain valuation services (collectively, the “Services”) for the Trust, subject to, and in accordance with, the terms and conditions hereinafter set forth with effect from the date first written above;

 

AND WHEREAS the Valuation Agent, in its capacity as a service provider, has agreed to provide such Services for the Trust, subject to, and in accordance with, the terms and conditions of this Agreement.

 

 

NOW THEREFORE in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged) the parties hereto agree as follows:

 

1.                                      Definitions

 

Unless otherwise defined in this Agreement, the following terms shall have the meaning as set out in the Trust Agreement:

 

(a)                                  “Affiliate”  has the meaning ascribed thereto in the Securities Act (Ontario), as amended from time to time;

 

(b)                                 “Agreement” means this valuation services agreement dated as of the day and year first above written as the same may be amended, restated or supplemented from time to time and “herein”, “hereof”, “hereby”, “hereunder” and similar expressions refer to this Agreement and include every instrument supplemental or ancillary to this Agreement and, except where the context otherwise requires, not to any particular article, section or subsection thereof;

 

(c)                                  “Applicable Laws” means, unless the context otherwise dictates, any applicable statute of Canada or of a province or territory of Canada or any applicable statute of the United States of America or of a state or territory of the United States of America or any applicable regulations, orders, instruments, policies or other laws made under statutory authority by any governmental or regulatory body or agency having jurisdiction over the Trust including, but not limited to, Securities Legislation and the Tax Act;

 

(d)                                 “Bullion” means physical platinum and palladium bullion in Good Delivery plates and ingots that is unencumbered, fully allocated and stored at the Custodian by or on behalf of the Trust;

 

(e)                                  “Business Day” means any day on which either NYSE Arca or the Toronto Stock Exchange is open for trading;

 

(f)                                    “Class Expenses” in respect of any particular class or series of a class of Units means the expenses of the Trust (including Management Fees) that are allocated only to that class or series of a class;

 

(g)                                 “Class Net Asset Value” in respect of any particular class or series of a class of Units is the portion of the Net Asset Value of the Trust attributed to such class or series of a class determined in accordance with  Section 3.1 and Section 3.2 hereof;

 

(h)                                 “Class Net Asset Value per Unit” in respect of any particular class or series of a class of Units is the portion of the Class Net Asset Value of the Trust attributed to each Unit of such class or series of a class determined in accordance with  Section 3.1 and Section 3.2 hereof;

 

(i)                                     “Common Expenses” means those expenses of the Trust other than Class Expenses;

 

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

 

(k)                                  “Directions” means all directions, authorizations, notices, requests and instructions given in accordance with Section 5 hereof by any director, officer, employee or other representative authorized to act on behalf of the Manager or any Third Party Valuation Agent, as the case may be;

 

(l)                                     “Distribution Date” has the meaning ascribed thereto in Section 4.1 hereof;

 

(m)                               “Fiscal Year” means the fiscal year of the Trust ending on the last day of December in each year or such other date as may be determined from time to time by the Manager;

 

(n)                                 “Good Delivery” means Bullion conforming to Good Delivery Standards of the LPPM;

 

(o)                                 “Good Delivery Standards” means the specifications for weight, dimensions, fineness (or purity), identifying marks and appearance, being a minimum fineness (or purity) of 99.95% weighing between 32.151 and 192.904 troy ounces as set forth in “The Good Delivery Rules for Platinum and Palladium Plates and Ingots” published by the LPPM;

 

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

 

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

 

(r)                                    “LPPM” means the London Platinum and Palladium Market, the trade association that acts primarily in the function of establishing the Good Delivery Standards for platinum and palladium in plate or ingot form and maintenance of the “London/Zurich Good Delivery Lists”; acts as coordinator for activities conducted on behalf of its members and other participants in the London platinum and palladium markets; and acts as the principal point of contact between the market and its regulators;

 

(s)                                  “Management Agreement” means the management agreement between the Manager and the Trustee, for and on behalf of the Trust dated as of ·, 2012, as the same may be amended, restated or supplemented from time to time;

 

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

 

(u)                                 “Manager” means Sprott Asset Management LP, acting as the manager of the Trust, or any successor manager appointed in accordance with the Trust Agreement and subject to the Management Agreement;

 

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

 

(w)                               “Net Asset Value per Unit” is the amount determined from time to time in accordance

 

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with Section 3.1 hereof;

 

(x)                                   “Net Change in Non-Portfolio Assets” on a Valuation Date means:

 

(i)                          the aggregate of all income accrued by the Trust as of that Valuation Date, including cash dividends and distributions, interest and compensation since the last calculation of Class Net Asset Value or Class Net Asset Value per Unit, as the case may be; minus

 

(ii)                       the Common Expenses to be accrued by the Trust as of that Valuation Date which have been accrued since the last calculation of Class Net Asset Value or Class Net Asset Value per Unit, as the case may be; plus or minus

 

(iii)                    any change in the value of any non-portfolio assets or liabilities stated in any foreign currency accrued on that Valuation Date since the last calculation of Class Net Asset Value or Class Net Asset Value per Unit, as the case may be, including, without limitation, cash, accrued dividends or interest and any receivables or payables; plus or minus

 

(iv)                   any other item accrued on that Valuation Date determined by the Manager to be relevant in determining the Net Change in Non-Portfolio Assets;

 

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

 

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

 

(aa)                            “Palladium Storage Agreement” means the storage agreement in respect of the Trust’s physical palladium bullion held by the Custodian or its Sub-Custodian, as applicable, between the Manager, for and on behalf of the Trust, and the Custodian, dated on or about ·, 2012, as the same may be amended, restated or supplemented from time to time;

 

(bb)                          “Person” means any individual, partnership, limited partnership, joint venture, syndicate, sole proprietorship, company or corporation with or without share capital, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or governmental agency, authority or entity however designated or constituted;

 

(cc)                            “Platinum Storage Agreement” means the storage agreement in respect of the Trust’s physical platinum bullion held by the Custodian between the Manager, for and on behalf of the Trust, and the Custodian, dated on or about ·, 2012, as the same may be amended, restated or supplemented from time to time;

 

(dd)                          “Proportionate Share”, when used to describe (i) an amount to be allocated to any one class or series of a class of Units, means the total amount to be allocated to all classes or series of classes of Units multiplied by a fraction, the numerator of which is the Class Net Asset Value of such class or series of a class and the denominator of which is the Net Asset Value of the Trust at such time, and (ii) a Unitholder’s interest in or share of any amount, means, after an allocation has been made to each class or series of a class of Units as provided in clause (i), that allocated amount multiplied by a fraction, the

 

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numerator of which is the number of Units of that class or series of a class registered in the name of that Unitholder and the denominator of which is the total number of Units of that class or series of a class then outstanding (if such Unitholder holds Units of more than one class or series of a class, then such calculation is made in respect of each class or series of a class of Units and aggregated);

 

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

 

(ff)                                “Registrar and Transfer Agent”  means Equity Financial Trust Company,  acting as the registrar and transfer agent of the Units, and appointed by the Manager in accordance with the Trust Agreement and pursuant to a transfer agent, registrar and disbursing agent agreement dated as of ·, 2012, as the same may be amended, restated or supplemented from time to time;

 

(gg)                          “Securities Authorities”  means the Ontario Securities Commission and equivalent securities regulatory authorities in each other province and territory of Canada, and the United States Securities and Exchange Commission;

 

(hh)                         “Securities Legislation” means the laws, regulations, rules, requirements and policies of the Securities Authorities which are in effect from time to time and applicable to the Trust including, but not limited to National Instrument 81-102 Mutual Funds, National Instrument 81-106 Investment Fund Continuous Disclosure, National Instrument 81-107 Independent Review Committee for Investment Funds and the United States Securities Act of 1933, as amended;

 

(ii)                                  “Services” means certain valuation services provided for the Trust by the Valuation Agent, in its capacity as a service provider to the Trust, subject to, and in accordance with, the terms and conditions set forth in this Agreement;

 

(jj)                                  “Storage Agreements” means, collectively, the Palladium Storage Agreement and the Platinum Storage Agreement;

 

(kk)                            “Sub-Custodian” means Via Mat International AG, as the sub-custodian for certain of the physical palladium bullion held by the Trust, appointed by the Custodian pursuant to a written custodial agreement between the Custodian and the Sub-Custodian;

 

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

 

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

 

(nn)                          “Third Party Valuation Agent” means any investment dealers, investment managers or advisors, consultants, custodians, registrar and transfer agents or other agents appointed by the Manager from time to time in connection with its responsibilities hereunder.  The Manager shall, or may, by a Direction specify that such Third Party Valuation Agent shall direct the Valuation Agent as to any matters in Sections 3 or 4 or any matter related thereto, requiring the Manager’s Direction;

 

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(oo)                          “Trust Property” at any time, means any and all securities, cash (including free credit balances), property and assets, real and personal, tangible and intangible, transferred, conveyed or paid to the Trust including, without limitation:

 

(i)                                    all funds realized from the sale of Units;

 

(ii)                                 all Bullion from time to time delivered to and received by the Trust or held for its account as directed by the Manager and accepted by the Custodian or any sub-custodian on behalf of the Trust in accordance with the Storage Agreements or a separate written custodial agreement;

 

(iii)                              all investments, sums or property of any type or description (other than the Bullion) from time to time delivered to and received by the Trust or held for its account as directed by the Manager and accepted by the Trustee on behalf of the Trust in accordance with the Trust Agreement;

 

(iv)                             any proceeds of disposition of any of the foregoing property and assets; and

 

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

 

(pp)                         “Trustee”  means RBC Dexia Investor Services Trust, acting as the trustee of the Trust, or any successor trustee appointed in accordance with the Trust Agreement;

 

(qq)                          “Unit” means a unit of beneficial interest, in any class or series of a class of the Trust, as presently constituted pursuant to the Trust Agreement as the same may from time to time hereinafter be constituted, and collectively referred to as the “Units”;

 

(rr)                                “Unitholders” means Persons whose name appears as a registered holder of one or more Units or fractions thereof in the register established and maintained by the Registrar and Transfer Agent appointed by the Manager and “Unitholder” means any one of them;

 

(ss)                            “Valuation Agent” means the service provider to the Trust, appointed by the Manager in accordance with this Agreement and the Trust Agreement.  The initial Valuation Agent is RBC Dexia Investor Services Trust;

 

(tt)                                “Valuation Date” means each Business Day; and

 

(uu)                          “Valuation Time” means 4:00 p.m. (Toronto time) on a Valuation Date or such other time on a Valuation Date as the Valuation Agent deems appropriate.

 

2.                                      Appointment of the Valuation Agent

 

2.1                                 Appointment

 

The Manager hereby retains the Valuation Agent, in its capacity as a service provider to the Trust, and the Valuation Agent hereby accepts such retainer, for the purpose of providing the Services for the Trust, subject to, and in accordance with, the terms and conditions set forth in this Agreement.

 

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2.2                                 Authority of the Manager

 

The Manager hereby represents, warrants and confirms to the Valuation Agent that it has the power and authority to enter into this Agreement, to retain the Valuation Agent to provide the Services to the Trust, and to otherwise perform its obligations hereunder, and the Manager has obtained all authorizations and approvals required of the Manager for the due execution, delivery and performance by the Manager of this Agreement and the engagement of the Valuation Agent to provide the Services hereunder.

 

2.3                                 Authority of the Valuation Agent

 

The Valuation Agent hereby represents, warrants and confirms to the Manager that it has the power and authority to enter into this Agreement and to perform its obligations hereunder, and the Valuation Agent has obtained all authorizations and approvals required of the Valuation Agent for the due execution, delivery and performance by the Valuation Agent of this Agreement.

 

3.                                       Determination of Net Asset Value

 

3.1                                 Calculation of Net Asset Value of the Trust and Net Asset Value per Unit

 

Pursuant to the Trust Agreement, the Net Asset Value of the Trust shall be determined for the purposes of subscriptions and redemptions as of the Valuation Time on each Valuation Date in United States dollars.  The Net Asset Value of the Trust determined on the last Valuation Date of each year shall include all income, Common Expenses, Class Expenses or any other items to be accrued to December 31st of each year and since the last calculation of the Net Asset Value per Unit or the Class Net Asset Value per Unit for the purpose of the distribution of Net Income and Net Realized Capital Gains of the Trust to Unitholders.  The “Net Asset Value of the Trust” as at the Valuation Time on each Valuation Date shall be the amount obtained by deducting from the aggregate fair market value of the assets of the Trust as of such Valuation Date an amount equal to the fair value of the liabilities of the Trust (excluding all liabilities represented by outstanding Units) as of such Valuation Date.  The “Net Asset Value per Unit” shall be determined by dividing the Net Asset Value of the Trust on a Valuation Date by the total number of Units then outstanding on such Valuation Date.  Subject to Directions from the Manager as required, the Net Asset Value of the Trust as at the Valuation Time on a Valuation Date shall be determined by the Valuation Agent in accordance with the following:

 

(a)                        The assets of the Trust shall be deemed to include the following property:

 

(i)                           all Bullion owned by or contracted for the Trust;

 

(ii)                        all cash on hand or on deposit, including any interest accrued thereon adjusted for accruals deriving from trades executed but not yet settled;

 

(iii)                     all bills, notes and accounts receivable;

 

(iv)                    all interest accrued on any interest-bearing securities owned by the Trust other than interest, the payment of which is in default; and

 

(v)                       prepaid expenses.

 

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(b)                       The market value of the assets of the Trust shall be determined as follows:

 

(i)                           the value of Bullion shall be its market value based on the price provided by a widely recognized pricing service, such as Bloomberg, as directed by the Manager and, if such service is not available, such Bullion shall be valued at a price provided by another pricing service as determined by the Manager in consultation with the Valuation Agent;

 

(ii)                        the value of cash on hand or on deposit, bills, demand notes, accounts receivable, prepaid expenses, and interest accrued and not yet received, shall be deemed to be the full amount thereof unless the Valuation Agent shall have determined that any such deposit, bill, demand note, account receivable, prepaid expense or interest is not worth the full amount thereof, in which event the value thereof shall be deemed to be such value as the Valuation Agent in consultation with the Manager shall determine to be the fair value thereof;

 

(iii)                     short-term investments including notes and money market instruments shall be valued at cost plus accrued interest;

 

(iv)                    the value of any security or other property for which no price quotations are available or, in the opinion of the Manager (who may delegate such responsibility to the Valuation Agent under this Agreement), to which the above valuation principles cannot or should not be applied, shall be the fair value thereof determined from time to time in such manner as the Manager (or the Valuation Agent, as the case may be) shall from time to time provide; and

 

(v)                       the value of all assets and liabilities of the Trust valued in terms of a currency other than the currency used to calculate the Net Asset Value of the Trust shall be converted to the currency used to calculate the Net Asset Value of the Trust by applying the rate of exchange obtained from the best available sources to the Valuation Agent as agreed upon by the Manager including, but not limited to, the Trustee or any of its Affiliates.

 

(c)                        The liabilities of the Trust shall be calculated on a fair value basis and shall be deemed to include the following:

 

(i)                           all bills, notes and accounts payable;

 

(ii)                        all fees (including Management Fees) and administrative and operating expenses payable and/or accrued by the Trust;

 

(iii)                     all contractual obligations for the payment of money or property, including distributions of Net Income and Net Realized Capital Gains, if any, declared, accrued or credited to the Unitholders but not yet paid on the day before the Valuation Date as of which the Net Asset Value of the Trust is being determined;

 

(iv)                    all allowances authorized or approved by the Manager or the Trustee for taxes or contingencies; and

 

(v)                       all other liabilities of the Trust of whatsoever kind and nature, except liabilities represented by outstanding Units.

 

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(d)                       For the purposes of determining the market value of any security or property pursuant to Subsection 3.1(b) to which, in the opinion of the Valuation Agent in consultation with the Manager, the above valuation principles cannot be applied (because no price or yield equivalent quotations are available as provided above, or the current pricing option is not appropriate, or for any other reason), shall be the fair value as determined in such manner by the Valuation Agent in consultation with the Manager and generally adopted by the marketplace from time to time, provided that any change to the standard pricing principles as set out above shall require prior consultation and written agreement with the Manager.  For greater certainty, fair valuing an investment comprising the Trust Property may be appropriate if: (i) market quotations do not accurately reflect the fair value of an investment; (ii) an investment’s value has been materially affected by events occurring after the close of the exchange or market on which the investment is principally traded; (iii) a trading halt closes an exchange or market early; or (iv) other events result in an exchange or market delaying its normal close.

 

(e)                        For the purposes of determining the value of Bullion, the Manager relies solely on weights provided to the Manager by third parties.  The Manager, the Trustee or the Valuation Agent shall not be required to make any investigation or inquiry as to the accuracy or validity of such weights.

 

(f)                          Portfolio transactions (investment purchases and sales) will be reflected in the first computation of the Net Asset Value of the Trust made after the date on which the transaction becomes binding.

 

(g)                       The Net Asset Value of the Trust and Net Asset Value per Unit on the first Business Day following a Valuation Date shall be deemed to be equal to the Net Asset Value of the Trust (or per Unit, as the case may be) on such Valuation Date after payment of all fees, including Management Fees, and after processing of all subscriptions and redemptions of Units in respect of such Valuation Date.

 

(h)                       The Net Asset Value of the Trust and the Net Asset Value per Unit determined by the Valuation Agent in accordance with the provisions of this section shall be conclusive and binding on all Unitholders.

 

(i)                           The Manager and any investment manager retained by the Manager as a Third Party Valuation Agent may determine such other rules regarding the calculation of the Net Asset Value of the Trust and the Net Asset Value per Unit which they deem necessary from time to time, which rules may deviate from IFRS, and the Manager or such investment manager shall direct the Valuation Agent on a timely basis.

 

3.2                                 Calculation of Class Net Asset Value and Class Net Asset Value per Unit

 

(a)                        The Net Asset Value for a particular class or series of a class of Units (the “Class Net Asset Value”) as at the Valuation Time on a Valuation Date shall be determined for the purposes of subscriptions and redemptions in accordance with the following calculation:

 

(i)                           the Class Net Asset Value last calculated for that class or series of a class; plus

 

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(ii)                        the increase in the assets attributable to that class or series of a class as a result of the issue of Units of that class or series of a class or the redesignation of Units into that class or series of a class since the last calculation; minus

 

(iii)                     the decrease in the assets attributable to that class or series of a class as a result of the redemption of Units of that class or series of a class or the redesignation of Units out of that class or series of a class since the last calculation; plus or minus

 

(iv)                    the Proportionate Share of the Net Change in Non-Portfolio Assets attributable to that class or series of a class since the last calculation; plus or minus

 

(v)                     the Proportionate Share of market appreciation or depreciation of the portfolio assets attributable to that class or series of a class since the last calculation; minus

 

(vi)                    the Proportionate Share of the Common Expenses allocated to that class or series of a class since the last calculation; minus

 

(vii)                 any Class Expenses allocated to that class or series of a class since the last calculation.

 

(b)                       A Unit of a class or series of a class of the Trust being issued or a Unit that has been redesignated as a part of that class or series of a class shall be deemed to become outstanding as of the next calculation of the applicable Class Net Asset Value immediately following the Valuation Date at which the applicable Class Net Asset Value per Unit that is the issue price or redesignation basis of such Unit is determined and the issue price received or receivable for the issuance of the Unit shall then be deemed to be an asset of the Trust attributable to the applicable class or series of a class.

 

(c)                        A Unit of a class or series of a class of the Trust being redeemed or a Unit that has been redesignated as no longer being a part of that class or series of a class shall be deemed to remain outstanding as part of that class or series of a class until immediately following the Valuation Date as of which the applicable Class Net Asset Value per Unit that is the redemption price or redesignation basis of such Unit is determined; thereafter, the redemption price of the Unit being redeemed, until paid, shall be deemed to be a liability of the Trust attributable to the applicable class or series of a class and the Unit which has been redesignated will be deemed to be outstanding as a part of the class or series of a class into which it has been redesignated.

 

(d)                       On any Valuation Date that a distribution is paid to Unitholders of a class or series of a class of Units, a second Class Net Asset Value shall be calculated for that class or series of a class, which shall be equal to the first Class Net Asset Value calculated on that Valuation Date minus the amount of the distribution.  For greater certainty, the second Class Net Asset Value shall be used for determining the Class Net Asset Value per Unit on such Valuation Date for purposes of determining the issue price and redemption price for Units on such Valuation Date, as well as the redesignation basis for Units being redesignated into or out of such class or series of a class, and Units redeemed or redesignated out of that class or series of a class as at such Valuation Date shall participate in such distribution while Units subscribed for or redesignated into such class or series of a class as at such Valuation Date shall not.

 

(e)                        The Class Net Asset Value per Unit of a particular class or series of a class of Units as at

 

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any Valuation Date is the quotient obtained by dividing the applicable Class Net Asset Value as at such Valuation Date by the total number of Units of that class or series of a class outstanding at such Valuation Date. This calculation shall be made without taking into account any issuance, redesignation or redemption of Units of that class or series of a class to be processed by the Trust immediately after the Valuation Time of such calculation on that Valuation Date.  The Class Net Asset Value per Unit for each class or series of a class of Units for the purpose of the issue of Units or the redemption of Units shall be calculated on each Valuation Date by or under the authority of the Manager as at the Valuation Time on every Valuation Date as shall be fixed from time to time by the Manager and the Class Net Asset Value per Unit so determined for each class or series of a class shall remain in effect until the Valuation Time as of which the Class Net Asset Value per Unit for that class or series of a class is next determined.

 

3.3                                Suspension of Right of Redemption and Calculation of Net Asset Value

 

(a)                        The Manager, on behalf of the Trust, may suspend the right of Unitholders to request a redemption of their Units or postpone the date of delivery or payment of the redemption proceeds (whether Bullion and/or cash, as the case may be) with the prior approval of Canadian Securities Authorities having jurisdiction, where required, for any period during which the Manager determines that conditions exist which render impractical the sale of assets of the Trust or which impair the ability of the Manager to determine the Net Asset Value of the Trust and the Net Asset Value per Unit or the redemption amount for the Units.

 

(b)                   In the event of any such suspension, the Manager shall issue a press release announcing the suspension and shall advise the Trustee, the Valuation Agent and any other agents appointed by the Manager, as applicable.  The suspension shall terminate in any event on the first Business Day on which the condition giving rise to the suspension has ceased to exist or when the Manager has determined that such condition no longer exists, provided that no other condition under which a suspension is authorized then exists, at which time the Manager shall issue a press release announcing the termination of the suspension and shall advise the Trustee, the Valuation Agent and any other agents appointed by the Manager, as applicable.  Subject to applicable Securities Legislation, any declaration of suspension made by the Manager, on behalf of the Trust, shall be conclusive.

 

(c)                    During any period in which the right of Unitholders to request a redemption of their Units for Bullion and/or cash is suspended pursuant to the Trust Agreement, the Manager, on behalf of the Trust, shall direct the Valuation Agent to suspend the calculation of the Net Asset Value of the Trust, the Net Asset Value per Unit, the Class Net Asset Value and the Class Net Asset Value per Unit for each class or series of a class of Units.  During any such period of suspension, the Trust shall not issue or redeem any Units.  The calculation of the Net Asset Value of the Trust, the Net Asset Value per Unit, the Class Net Asset Value and the Class Net Asset Value per Unit for each class or series of a class of Units shall resume in compliance with applicable Securities Legislation or any approval granted by Canadian Securities Authorities having jurisdiction. As noted above, in the event of any such suspension or termination thereof, the Manager shall issue a press release announcing the suspension or the termination of such suspension, as the case may be.  Further, the Manager shall advise the Valuation Agent on a timely basis as to the date of the first calculation of the Net Asset Value of the Trust, the Net Asset Value per Unit, the Class Net Asset Value and the Class Net Asset Value per Unit for each class or series of a class of Units following such termination of the suspension.

 

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3.4                                Third Party Data

 

Where, for the purposes of the foregoing calculation of the Net Asset Value of the Trust, the Net Asset Value per Unit, the Class Net Asset Value and the Class Net Asset Value per Unit, and the calculation of any amounts for distribution purposes hereunder, the Valuation Agent is provided with a value, quotation, or other information related thereto by a third party (collectively, the “Third Party Data”) including, without limitation, the Manager or any Third Party Valuation Agent, the Valuation Agent may rely on such Third Party Data and shall not be required to make any investigation or inquiry as to the accuracy, completeness or validity of such Third Party Data unless such data on its face is manifestly incomplete or incorrect.  If such Third Party Data is not available to the Valuation Agent as of a time reasonably proximate to the Valuation Date, such valuation of the Trust Property shall be based on an estimate or estimates provided by the Manager or a Third Party Valuation Agent.  Such estimate or estimates shall be final and binding and shall be considered to be the actual value of such Trust Property for the purposes of any distribution, the Net Asset Value of the Trust, the Net Asset Value per Unit, the Class Net Asset Value and the Class Net Asset Value per Unit calculations.  The Valuation Agent shall have no responsibility or liability, whatsoever, for any loss or damage arising out of, or in connection with, the Valuation Agent’s reliance on, or any failure to provide, such Third Party Data or any such estimates except as provided in this section.

 

4.                                       Determination of Net Income and Net Realized Capital Gains

 

4.1                                 Valuation on Distribution Date

 

As at the Valuation Time on the last Valuation Date in each Fiscal Year or such other date as the Manager may, in its sole discretion, determine (a “Distribution Date”), the Valuation Agent, subject to Directions from the Manager as required, shall, in the manner hereinafter provided, determine the amount of the Net Income and the Net Realized Capital Gains of the Trust for the period since the immediately preceding Distribution Date (or in the case of the first Distribution Date, from the inception date of the Trust).

 

4.2                                 Computation of Net Income and Net Realized Capital Gains

 

The Net Income and the Net Realized Capital Gains of the Trust shall be computed as of the Valuation Time on each Distribution Date in accordance with the following:

 

(a)                        “Net  Income” for any taxation year of the Trust shall be the net income for the year determined pursuant to the provisions of the Tax Act having regard to the provisions thereof that relate to the calculation of income of a trust, other than subsection 104(6), and taking into account such adjustments thereto as are determined by the Valuation Agent; provided, however, that capital gains and capital losses shall be excluded from the computation of net income.

 

(b)                       “Net Realized Capital Gains” of the Trust for any taxation year of the Trust shall be determined as the amount, if any, by which the aggregate of the capital gains of the Trust in the year exceeds:

 

(i)                           the aggregate of the capital losses of the Trust in the taxation year; and

 

(ii)                        the amount determined by the Valuation Agent in respect of any unapplied net capital losses for prior taxation years which the Trust is permitted by the Tax Act to deduct in computing the taxable income of the Trust for the applicable taxation year and provided that, in consultation with the Manager, the Net Realized Capital Gains

 

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of the Trust for a taxation year may be calculated without subtracting the full amount of the net capital losses of the Trust carried forward from previous taxation years.

 

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

 

(a)                        Commencing with the Fiscal Year ending December 31, 2012, the Manager intends to cause the Trust to make annual distributions to Unitholders of Net Income, if any, for each year calculated in accordance with Section 4.2.  Commencing with the Fiscal Year ending December 31, 2012, the Manager also intends to cause the Trust to make annual distributions to Unitholders of such portion of Net Realized Capital Gains, if any, for each year as determined in accordance with Section 4.2 hereof.

 

(b)                       Having regard to the present intention of the Manager to allocate, distribute and make payable to Unitholders all Net Income or Net Realized Capital Gains so that the Trust will not have any liability for tax under Part I of the Tax Act in any taxation year, it is the intention of the Manager that the total amount due and payable pursuant to this Section 4.3 on the last Distribution Date in any year shall not be less than the amount necessary to ensure that the Trust will not be liable for income tax under Part I of the Tax Act for such year after taking into account the Trust’s entitlement to a capital gains refund, if any, and amounts of Net Realized Capital Gains or Net Income that are being allocated to Unitholders whose Units were redeemed in the year.

 

(c)                        Distributions, if any, of Net Income or Net Realized Capital Gains will generally be made to Unitholders who were Unitholders of record as of 5:00 p.m. (Toronto time) on the last Business Day prior to any relevant Distribution Date.  The amounts to be paid to a Unitholder shall be the amount of Net Income or Net Realized Capital Gains determined as described in Section 4.2 and Section 4.3 divided by the total number of Units outstanding on the Distribution Date multiplied by the number of Units held by such Unitholder as of 5:00 p.m. (Toronto time) on the applicable Distribution Date.  Notwithstanding the foregoing, the Manager may adopt a method of allocating an appropriate proportion of Net Income and Net Realized Capital Gains to  Unitholders that redeemed Units during the year and, in any such event, shall advise the Valuation Agent on a timely basis.

 

(d)                       All distributions, if declared and paid, shall be calculated and, if a cash distribution, paid in United States currency.

 

4.4                                 Additional Distributions, Designations, Determinations and Allocations

 

In addition to any distributions calculated by the Valuation Agent and distributed by the Trust to Unitholders as described under Section 4.3 hereof, on the Direction of the Manager, the Valuation Agent shall at such times and in such manner as directed by the Manager determine such additional distributions of monies or properties of the Trust including, without restriction, returns of capital, in such amounts per Unit, payable at such time or times and to Unitholders of record on such Distribution Date, as from time to time may be determined by the Manager, and the Valuation Agent shall also make such designations, determinations, allocations and elections for Canadian tax purposes of amounts or portions of amounts which it has received, paid, declared payable or allocated to Unitholders and of expenses incurred by the Trust and of tax deductions of which the Trust may be entitled, as the Manager may, in its sole discretion, determine.

 

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4.5                                 Income Tax Statements to Unitholders

 

(a)                        On or before March 31 in each year, or in the case of a leap year on or before March 30 in such year, if applicable, or as otherwise required by the Tax Act, the Manager shall prepare and deliver or make available electronically, or cause to be prepared and delivered or made available electronically, to Unitholders information pertaining to the Trust, including all distributions, designations, determinations, allocations and elections, which is required or permitted by the Tax Act or which is necessary to permit Unitholders to complete their individual income tax returns for the preceding year.

 

(b)                       It is the Manager’s intention to claim the maximum amount of deduction available to the Trust under paragraph 104(6)(b) of the Tax Act for each relevant Fiscal Year of the Trust.  In the event that amounts that were allocated, distributed or paid to Unitholders as capital gains or as non-taxable payments are, for any reason, subsequently determined  (including as a result of an assessment or reassessment by any taxation authorities) to have been fully includible in the taxable income of the Trust for the relevant Fiscal Year, then the Manager shall have the discretion to increase its claim under paragraph 104(6)(b) of the Tax Act for that Fiscal Year, which shall include the discretion to issue new or amended tax reporting slips to the relevant Unitholders or former Unitholders and to declare that all or part of such amounts shall be retroactively deemed to have been allocated, distributed and paid to Unitholders out of the income of the Trust.

 

(c)                       In conjunction with the foregoing, the Valuation Agent shall provide the Manager with any income and capital gain or loss factors or other information determined in accordance with the Services hereunder and required by the Manager for such purpose.

 

4.6                                 Qualified Electing Trust Election and Reporting

 

Within 45 days from the end of each taxable year of the Trust, the Manager shall provide or cause to be provided to Unitholders all information necessary to enable Unitholders or beneficial owners of Units, as applicable, to elect to treat the Trust as a “qualified electing fund” (a “QEF”) within the meaning of Section 1295 of the U.S. Internal Revenue Code of 1986, as amended from time to time, for U.S. federal income tax purposes and to comply with any reporting or other requirements incident to such election including, but not limited to, providing or causing to be provided to Unitholders or beneficial owners of Units, as applicable, a completed “PFIC Annual Information Statement” as required by U.S. Treasury Regulations Section 1.1295-1(g).  The Manager shall comply and cause the Trust to comply with all applicable requirements of the U.S. Treasury Regulations necessary to enable Unitholders or beneficial owners of Units, as applicable, to elect to treat the Trust as a QEF.

 

4.7                                 Unaudited Fund Accounting Statements

 

On the Direction of the Manager, the Valuation Agent shall, based on information in its records, prepare annual and semi-annual draft unaudited fund accounting statements for the Trust in respect of which the Manager shall review and provide ongoing Directions, as required, to the Valuation Agent as to any revisions or amendments thereto and shall approve the final version of all such fund accounting statements for the Trust.

 

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4.8          Tax Reporting for the Trust

 

On the Direction of the Manager, the Valuation Agent shall, in accordance with the prescribed Canadian tax filing deadlines and requirements as set out in Applicable Laws, prepare and file on behalf of the Manager, applicable Canadian tax and/or information returns for the Trust and provide a copy of such tax reporting to the Manager upon its request.  For greater certainty hereunder, the Manager shall be responsible for all United States tax reporting and elections to be filed on behalf of the Trust pursuant to Applicable Laws; provided that, for greater certainty, the Valuation Agent shall provide such agreed upon accounting reports prepared in accordance with the Services hereunder and required by the Manager for such purpose.

 

4.9          Tax Definitions

 

Unless the context otherwise requires, any term in this Section 4 which is defined for the purposes of the Tax Act shall have for the purposes of this Section 4 the meaning that it has for the purposes of the Tax Act.

 

5.             Directions and Communications

 

5.1          Directions

 

(a)        Unless otherwise specified herein, all communications (including, for greater certainty, Directions) given under this Agreement shall be given in one of the methods authorized by Section 5.2 and shall be given by an authorized officer, Person or other representative of the Manager or any Third Party Valuation Agent, as the case may be.  The Manager and any Third Party Valuation Agent shall from time to time furnish the Valuation Agent with a Certificate of Authorized Signing Authorities substantially in the form set out in Schedule A attached hereto signed by the Chief Executive Officer, the Chief Financial Officer or the Corporate Secretary of the general partner of the Manager stating the name(s) and title(s) of the authorized officer(s), Person(s) or representative(s) of the Manager and any Third Party Valuation Agent, as the case may be, authorized to act on its behalf together with specimen signatures of all such officers, Persons or representatives.  The Manager and any Third Party Valuation Agent shall keep the Valuation Agent informed as to any changes in its authorized signatories, and the Valuation Agent shall be entitled to rely upon the identification of such Persons as specified in such certificates as the Persons entitled to act on behalf of the Manager and any Third Party Valuation Agent for the purposes of this Agreement until a later certificate respecting the same is delivered to the Valuation Agent.

 

(b)        The Valuation Agent shall:

 

(i)         be fully protected in acting upon any Direction reasonably believed by it to be genuine and presented by the proper Person(s);

 

(ii)        be under no duty to monitor or verify whether any Direction by the Manager is in compliance with the terms of the Trust’s governing documentation or with Securities Legislation; and

 

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(iii)       be under no duty to make any investigation or inquiry as to any statement contained in any such Direction, but may accept such statement as conclusive evidence of the truth and accuracy of such statement.

 

(c)        Any Direction or telephone instruction, including a Direction or telephone instruction from any Third Party Valuation Agent, is deemed for all purposes of this Agreement to be a Direction from the Manager to the Valuation Agent.

 

5.2          Methods of Communication

 

(a)        Any notice to be given or any document or instrument in writing to the Valuation Agent, the Manager or any Third Party Valuation Agent (including for greater certainty, all Directions) must be given through one of the following methods of communication:

 

(i)         personal or courier delivery;

 

(ii)        facsimile (in accordance with the Manager’s guidelines);

 

(iii)       S.W.I.F.T.;

 

(iv)       one of the Valuation Agent’s secured client access channels;

 

(v)        directly between electromechanical or electronic terminals (other than the internet or unsecured lines of communication);

 

(vi)       telephone (subject to Sections 5.4 and 5.5); or

 

(vii)      internet (subject to Section 5.6).

 

(b)        Communications should be addressed, as applicable, as follows:

 

(i)         in the case of the Valuation Agent:

 

RBC Dexia Investor Services Trust

155 Wellington Street West, 5th Floor

RBC Centre

Toronto, Ontario M5V 3L3

 

Attention:     Head of Funds

 

Telephone: (416) 974-5273

Facsimile:     (416) 955-1240

 

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(ii)        in the case of the Manager:

 

Sprott Asset Management LP

Royal Bank Plaza, South Tower

200 Bay Street

Suite 2700, P.O.Box 27

Toronto, Ontario M5J 2J1

 

Attention:     Kirstin McTaggart, Chief Compliance Officer

 

Telephone: (416) 943-4065

Facsimile:     (416) 943-6497

 

or at such other address and number as the party to whom such communication is to be given shall have last notified the party giving the same in the manner provided in this section.

 

5.3          Deemed Delivery

 

Pursuant to Section 5.2:

 

(a)        any communication delivered personally shall be deemed to have been given and received on the day it is so delivered (or if that day is not a Business Day, on the next succeeding Business Day); and

 

(b)        any communication given by facsimile, S.W.I.F.T., secured client access channels, directly between electromechanical or electronic terminals (other than the internet or unsecured lines of communication) or the internet (subject to Section 5.6) shall be deemed to have been given and received on the Business Day it is transmitted provided that it was received before 3:00 p.m. (Toronto time) and, if received after 3:00 p.m. (Toronto time), it shall be deemed to have been given and received on the Business Day following the day of transmission provided in each case that confirmation of transmission is available from the party giving the communication.

 

5.4          Telephone Directions

 

With respect to telephone Directions, the Manager shall endeavor to forward Directions (other than by telephone) confirming such telephone Directions on the same day that such verbal Directions are given to the Valuation Agent.  The fact that such confirming Directions are not received or that contrary Directions are received by the Valuation Agent shall in no way affect the validity of transactions effected by the Valuation Agent on the basis of the telephone Directions.

 

5.5          Telephone Communications

 

The Manager agrees that some or all telephone conversations between the parties, including Directions or communication given by telephone, may be recorded by the Valuation Agent and that, in the event of any disagreement as to the content of any Directions or communication given by telephone, such recording shall be conclusive and determinative of the contents of the Directions or communication.

 

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5.6          Internet

 

The Manager agrees and confirms, in connection with the Services provided by the Valuation Agent to the Trust, that the Valuation Agent may forward reports and information to the Manager and/or to the Manager’s authorized agents, and may receive and act upon communications and instructions (including, without limitation, Directions) received from the Manager and/or the Manager’s authorized agents through the use of such form of electronic means of communications (including the internet which is not a secure means of communication) as may be agreed to from time to time in writing.  Without limiting the terms of this Agreement, the Manager agrees and acknowledges that the Valuation Agent shall bear no responsibility or liability whatsoever for any errors and omissions, or direct, indirect or consequential losses or damages that are attributable to the use of the internet for the purposes set out herein and resulting or arising from viruses or worms, or the interception, tampering or breach of confidentiality of data or information transmitted which is not encrypted and authenticated in accordance with the Valuation Agent’s encryption standards.

 

6.             Fees and Statements

 

6.1          Fees and Charges

 

In consideration of the Services provided by the Valuation Agent hereunder, the Valuation Agent shall be paid such compensation as may from time to time be agreed upon in writing between the Manager and the Valuation Agent. In addition, the Valuation Agent shall be reimbursed for any disbursements and expenses incurred in the performance of its duties hereunder.

 

6.2          Statements

 

The Valuation Agent shall send to the Manager itemized statements setting out the amount of all compensation, disbursements and expenses provided for in Section 6.1, and such amounts shall be due and payable within 30 days after the respective dates on which such statements were issued by the Valuation Agent hereunder.

 

7.             Standard of Care, Limitation of Liability and Indemnification

 

7.1          Standard of Care

 

In providing the Services hereunder, the Valuation Agent shall exercise the powers and discharge the duties of its office honestly and in good faith and in connection therewith shall exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

 

7.2          Liability of the Valuation Agent

 

The Valuation Agent shall not be liable for any act or omission in the course of, or connected with, rendering the Services hereunder, except to the extent that such liability arises directly out of the negligence, wilful misconduct or lack of good faith of the Valuation Agent.  In no event shall the Valuation Agent be liable for any consequential or special damages including, but not limited to, loss of reputation, goodwill or business.  Notwithstanding the foregoing or any other provision of this Agreement, the Valuation Agent’s liability hereunder shall in no event exceed the aggregate amount of fees received by the Valuation Agent from the Manager with respect to the Services provided during the immediately preceding 12 months.

 

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7.3          Limitation of Responsibility

 

Without limiting the foregoing and except to the extent that the Valuation Agent has not complied with its standard of care set out in Section 7.1, the Valuation Agent shall not be responsible for:

 

(a)        any loss to, or diminution of, the Trust Property;

 

(b)        any act or omission required or demanded by any governmental, taxing, regulatory or other competent authority which has jurisdiction over the Valuation Agent or the Trust;

 

(c)        any loss resulting from official action (including nationalisation and expropriation), currency restrictions or devaluations, acts or threat of war or terrorism, insurrection, revolution or civil disturbance, acts of God, strikes or work stoppages, inability of any settlement system to settle transactions, interruptions in postal, telephone, facsimile and/or other communication systems or in power supply, or any other event or factor beyond the reasonable  control of the Valuation Agent;

 

(d)        any failure to act on Directions, if the Valuation Agent reasonably believed that to do so might result in a breach of any Applicable Laws or the terms of this Agreement;

 

(e)        any action taken in accordance with a Direction from the Manager, or for failure to act in the absence of a Direction from the Manager where a Direction is required under this Agreement;

 

(f)        any registrar, transfer agency or record-keeping services on behalf of the Trust or any Unitholders;

 

(g)        any preparation or filing of any audited financial statements or any compliance, reporting or filings in accordance with applicable Securities Legislation or any United States tax laws, regulations, rules or policies that apply to the Trust pursuant to Applicable Laws; or

 

(h)        any ongoing monitoring of investments of the Trust or any risk factors whatsoever related thereto.

 

7.4          Indemnification of the Valuation Agent

 

(a)        The Manager shall indemnify and hold harmless the Valuation Agent, its Affiliates and agents, and their respective directors, officers, and employees (each an “Indemnified Party”) from and against all taxes, duties, charges, costs, expenses, damages, claims, actions, demands and any other liability whatsoever to which the Indemnified Party, or any of them, may become subject, including legal fees, judgments and amounts paid in settlement in respect of anything done or omitted to be done in connection with the Services provided hereunder, except to the extent incurred as a result of the negligence, wilful misconduct or lack of good faith of any Indemnified Party.  For greater certainty, the foregoing does not make the commencement of formal legal proceedings a precondition for indemnification hereunder.

 

(b)        Further, none of the provisions of this Agreement shall require the Valuation Agent to expend or risk its own funds, appear in, prosecute or defend proceedings, or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers hereunder, unless first indemnified to its satisfaction.

 

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8.             Amendments and Termination of the Agreement

 

8.1          Amendments

 

This Agreement may not be amended, changed, supplemented or otherwise modified in any respect except by written instrument executed by the parties hereto or their respective successors or permitted assigns.

 

8.2          Termination

 

(a)        Either party may at any time terminate this Agreement without any penalty by giving at least 60 days’ prior written notice to the other party of such termination unless the parties mutually agree in writing to a different period.  Such prior notice is not required and termination will be immediate upon the giving of notice in accordance with Section 5 hereof in the event that:

 

(i)         either party is declared bankrupt or shall be insolvent;

 

(ii)        the assets or the business of either party shall become liable to seizure or confiscation by any public or governmental authority; or

 

(iii)       the Manager’s power and authority to act on behalf of, or to represent, the Trust has been revoked, terminated or is otherwise no longer in full force and effect.

 

(b)        Upon the termination of this Agreement, the Valuation Agent shall forthwith deliver to the Manager, on behalf of the Trust, all books of account and other records in the format existing at the effective date of termination of this Agreement.  A receipt signed by the Manager, on behalf of the Trust, shall be a valid discharge to the Valuation Agent in respect of its obligations hereunder.

 

9.             Miscellaneous

 

9.1          Access to Records

 

On reasonable notice and during normal business hours, the Valuation Agent shall make available to and permit the authorized officers, employees and agents of the Manager, and such Securities Authorities or other regulatory authorities as may have lawful jurisdiction over the Trust and the Manager, to inspect and make copies of all accounts, books and records maintained by the Valuation Agent in connection with its duties under this Agreement, provided such Persons comply with the Valuation Agent’s reasonable requirements as to confidentiality and privacy.

 

9.2          Review of Statements

 

The Manager shall, within 30 days following the issuance of any statement by the Valuation Agent related to the provision of the Services hereunder,  provide the Valuation Agent with written notice of any alleged omissions from, or additions wrongly made to, or inaccurate entries in, such statement.  If such notification by the Manager is not received by the Valuation Agent within such 30-day period, the Valuation Agent shall be released and discharged from liability and accountability to anyone with respect to its acts and all transactions during the period covered by such statement, except as provided in this

 

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Agreement.

 

9.3          Self-Dealing

 

(a)        The Valuation Agent’s Services to the Manager and to the Trust are not exclusive and, subject to the limitations otherwise provided in this Agreement on the power and authorities of the Valuation Agent, the Valuation Agent may for any purpose, and is hereby expressly authorized from time to time in its discretion to, appoint, employ, invest in, contract or deal with any individual, firm, partnership, association, trust or body corporate including, without limitation, itself and any partnership, trust or body corporate with which it may directly or indirectly be affiliated or in which it may be directly or indirectly interested, whether on its own account or for the account of another (in a fiduciary capacity or otherwise), without being liable to account therefor and without being in breach of this Agreement.

 

(b)        Without limiting the generality of the foregoing, the Manager hereby authorizes the Valuation Agent to act hereunder notwithstanding that the Valuation Agent or any of its divisions, branches or Affiliates may:

 

(i)         have a material interest in the transaction or that circumstances are such that the Valuation Agent may have a potential conflict of duty or interest including the fact that the Valuation Agent or any of its Affiliates may:

 

(A)       purchase, hold, sell, invest in or otherwise deal with securities or other property or assets of the same class and nature as may be held in the Trust, whether on its own account or for the account of another (in a fiduciary capacity or otherwise);

 

(B)       act as a market maker in the securities that form part of the Trust Property to which any Directions relate;

 

(C)       provide brokerage services to other clients;

 

(D)       act as financial adviser to the issuer of such securities;

 

(E)       act in the same transaction as agent for more than one client;

 

(F)        have a material interest in the issue of securities that form part of the Trust Property;

 

(G)       use in other capacities knowledge gained in its capacity as a provider of Services hereunder; or

 

(H)       earn profits from any of the activities listed herein,

 

without being liable to account therefor and without being in breach of this Agreement provided that the Valuation Agent complies with Section 9.6 hereof.

 

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9.4          Assignment

 

Subject to Section 9.5, neither this Agreement nor any of the rights or obligations of either party hereunder may be assigned to any other Person without the prior written consent of the other party, such consent not to be unreasonably withheld or delayed.

 

9.5          Successors

 

This Agreement shall enure to the benefit of, and be binding upon, the parties hereto and their respective successors and permitted assigns.  For greater certainty, any trust company resulting from the merger or amalgamation of the Valuation Agent with one or more trust companies, or any trust company which succeeds to substantially all of the business of the Valuation Agent shall thereupon become the successor to the Valuation Agent hereunder without further act or formality.

 

9.6          Confidentiality

 

Except as otherwise provided in this Agreement, each party shall hold in confidence all information relating to the Trust and this Agreement and may only release such information to others where required by Applicable Law or pursuant to any Directions, if applicable, or as otherwise agreed between the parties.

 

9.7          Capacity

 

For greater certainty, the parties acknowledge that the Valuation Agent is not entering into this Agreement in a fiduciary capacity and the terms of this Agreement and the performance by the Valuation Agent of its obligations under this Agreement shall not result, directly or indirectly or in any manner whatsoever, in any fiduciary duties being imposed or inferred upon the Valuation Agent.

 

9.8          Headings

 

The inclusion of section headings in this Agreement is for convenience of reference only and shall not affect the construction or interpretation hereof.

 

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9.9          Governing Law

 

This Agreement shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein and shall be treated in all respects as an Ontario contract.  The parties hereto hereby attorn to the jurisdiction of the courts of Ontario for arbitration of any disputes between them with respect to the subject matter hereof.

 

9.10        Entire Agreement

 

This Agreement, including Schedule A attached hereto, and the Trust Agreement constitutes the entire agreement between the parties pertaining to the subject matter hereof and supersedes and replaces all prior understandings, agreements, negotiations or discussions, whether written or oral, between the parties with respect thereto.  There are no representations, warranties, terms, conditions, undertakings or collateral agreements or understanding, express or implied, between the parties other than those expressly set forth in this Agreement and the Trust Agreement.

 

9.11        Further Acts

 

Each of the Valuation Agent and the Manager shall promptly do, make, execute or deliver, or cause to be done, made, executed or delivered, all such further acts, documents and things as the other party hereto may reasonably require from time to time for the purpose of giving effect to this Agreement.

 

9.12        Invalidity of Provisions

 

Each of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof.  To the extent permitted by Applicable Law, the parties waive any provision of law which renders any provision of this Agreement invalid or unenforceable in any respect.

 

9.13        Counterparts

 

This Agreement may be executed in several counterparts, each of which when so executed shall be deemed to be an original and such counterparts together shall constitute one and the same instrument.

 

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

 

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IN WITNESS WHEREOF the parties have caused this Agreement to be executed by their respective duly authorized officers effective as of the day and year first above written.

 

	
 
    	
SPROTT ASSET MANAGEMENT LP, by its general partner, SPROTT ASSET   MANAGEMENT GP INC., in its capacity as the Manager of the Trust
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
We have the authority to bind the Manager.
    
	
 
    	
 
    
	
 
    	
RBC DEXIA INVESTOR SERVICES TRUST, in its capacity as the Valuation Agent of the Trust
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
We have the authority to bind the Valuation Agent.
    

 

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SCHEDULE A

 

CERTIFICATE OF AUTHORIZED SIGNING AUTHORITIES

 

[To be attached hereto.]Exhibit 10.5

 

TRANSFER AGENT, REGISTRAR AND DISBURSING AGENT AGREEMENT

 

THIS AGREEMENT made as of the · day of ·, 2012 in the City of Toronto, Province of Ontario

 

BETWEEN:

 

SPROTT ASSET MANAGEMENT LP,

a limited partnership existing under the laws of

Ontario, hereinafter referred to as the “Manager”

who is entering into this contract on behalf of

Sprott Physical Platinum and Palladium Trust

(hereinafter referred to as the “Issuer”)

 

- and -

 

EQUITY FINANCIAL TRUST COMPANY,

a company existing under the laws of Canada

(hereinafter referred to as “Equity”)

 

WHEREAS the Manager wishes to appoint Equity as transfer agent, registrar and disbursing agent of the Issuer and whereas Equity wishes to accept such appointments;

 

NOW THEREFORE in consideration of the mutual premises and Agreements contained in this Agreement the parties hereto agree and covenant with each other as follows:

 

1.                                      Authority of the Manager to Act for the Issuer

 

The Manager represents and warrants that:

 

(a)                               The Manager has been duly granted the power and authority to act on behalf of the Issuer;

 

(b)                               The Manager has been duly granted the power and authority to execute on behalf of the Issuer any document, agreement, certificate or instrument deliverable to Equity hereunder;

 

(c)                                The Manager has been duly granted the power and authority to take any actions as the Manager may deem necessary or advisable to accomplish the purposes of this Agreement; and

 

(d)                               The Manager on behalf of the Issuer, having taken all the necessary and required actions to properly authorize the execution, delivery and performance by it of this Agreement hereby appoints Equity as the Issuer’s transfer agent, registrar and

 

 

disbursing agent with respect to the issued and outstanding trust units (hereinafter the “Trust Units” or “Units”) as evidenced by a certificate or book entry on the issuer’s security register upon the terms and conditions set out in this Agreement.

 

2.                                      Equity’s Acceptance of Appointment

 

Equity accepts such appointment as transfer agent, registrar and disbursement agent and agrees to faithfully carry out and perform its duties hereunder. The effective date of the appointment of Equity Issuer shall be when all records have been duly delivered to Equity with arrangements being made for a book entry only registry with CDS for Canadian and non-North American unitholders and with DTC for U.S. unitholders.

 

3.                                      Equity’s Transfer Agency and Registrar Responsibilities

 

(a)                               Equity shall keep, at its office in Toronto, the Issuer’s register of holders of Trust Units (hereinafter the “Unitholders”). Subject to such general and particular instructions as may from time to time be given to Equity by or under the authority of the board of directors of the general partner of the Manager on behalf of the Issuer or any applicable law, Equity shall make such entries from time to time in the Registers as may be necessary in order that the accounts of each Unitholder shall be properly and accurately kept and transfers of Trust Units properly recorded.

 

(b)                               Equity shall furnish to the Issuer, upon reasonable request and at the expense of the Issuer, such statements, lists, entries, information and material, concerning transfers and other matters, as are maintained or prepared by it as transfer agent, registrar and disbursing agent of the Issuer.

 

4.                                      Dividend Disbursements

 

(a)                                The Manager on behalf of the Issuer hereby appoints Equity to disburse dividends in the form of cash distributions or other distributions (hereinafter the “Distributions”) for the benefit of the issued and outstanding Trust Units on the terms and conditions set out in this Agreement.  Equity shall disburse all Distributions which may be declared from time to time on the Trust Units, and Equity is hereby authorized and directed to pay such Distributions after receipt at its principal office in Toronto of:

 

(i)                                     a written and duly executed direction from the Manager, on behalf of the Issuer, stating that a Distribution has been declared and setting out all relevant particulars, including, without limitation, the date of the declaration, record date and the amount per unit of the Distribution. Such direction shall be delivered at least 5 business days before the record date for the Distribution; and

 

(ii)                                  the timely deposit of funds in an amount sufficient for the payment of Distributions to enable Equity to issue the cheques in order to effect a timely Distribution.

 

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(b)                                If any funds are received by Equity in the form of uncertified cheques, Equity shall be entitled to delay the time for release of such funds until such uncertified cheques shall be determined to have cleared the financial institution upon which the same are drawn. Equity shall hold any amount on account of distributions which are unclaimed or which cannot be paid for any reason and Equity shall be entitled to hold such funds in an interest bearing account and to retain for its own account any interest earned by the holding of same prior to its disposition in accordance with this Agreement.

 

(c)                                 Equity is fully authorized and empowered to deduct from any Distribution declared by any Issuer and to be disbursed by Equity any tax that is required to be withheld, pursuant to the Income Tax Act (Canada) with respect to the payment of Distributions and capital gains. Equity is also fully authorized and empowered to prepare on behalf of the Issuer and to file with the Canada Revenue Agency any information returns required by law under the Income Tax Act with respect to the payment of Distributions and returns of capital.

 

5.                                      Authority to Act and Reliance

 

(a)                                 The Manager shall provide to Equity a Certificate of Incumbency which shall contain certified specimens of the signatures of the directors and/or officers of the general partner of the Manager who are authorized to sign Trust Unit certificates and other documents and to give directions to Equity on behalf of the Issuer. The Manager shall promptly advise Equity, in writing, as to any changes in authorized signatories and shall simultaneously provide new certified specimen signatures to Equity for its permanent record. Notwithstanding the foregoing, the Manager agrees to provide such certified specimens of authorized signatures to Equity when requested to do so from time to time.

 

(b)                                 Equity may act upon any signature, certificate or other document believed by it to be genuine and to have been signed by the proper person or persons, or refuse to transfer a Trust Unit certificate if it is not satisfied as to the propriety of the requested transfer.  Equity may also act on the receipt of facsimile and similar electronic instructions that it believes to be genuine and to have been signed or initiated by the proper person or persons.

 

(c)                                  Equity may from time to time refer any documents, requests or questions which may arise in connection with the performance of its duties hereunder to legal counsel for the Issuer, at the expense of the Issuer, or to its own counsel, at the expense of the Issuer for an opinion thereon and shall be entitled to rely absolutely on such opinion and shall be indemnified and held harmless by the Issuer against and from any liability, cost and expense for any action taken by Equity or not taken by Equity in accordance with such instructions or advice. Notwithstanding the foregoing, Equity may accept and act on any documents which appear to it to be in order and, provided it has done so in the absence of bad faith, gross negligence or willful misconduct, shall be indemnified and held harmless by the Issuer against any liability, cost and expense.

 

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(d)                                 The Manager represents and warrants that all Trust Units of the Issuer issued and outstanding on the date of the appointment are issued as fully-paid and non-assessable and that the list of Unitholders for the Issuer provided to Equity is complete and accurate. The Manager agrees on behalf of the Issuer that with respect to future allotments and issuances of Trust Units, Equity shall issue and regard such Trust Units as fully-paid and non-assessable.

 

(e)                                  Equity may employ, at the expense of the Issuer, such counsel, consultants, experts, agents, agencies or advisors (hereinafter “Advisors”) as it may reasonably require for the purpose of performing its duties hereunder and shall not be responsible or held liable for any damages resulting from the actions, negligence or misconduct of any such Advisors so employed.

 

6.                                      Issue, Transfer and Cancellation of Certificates

 

(a)                                 The Issuer agrees that it will promptly furnish to Equity from time to time:

 

(i)                                     copies of all constating documents, amendments thereto and all relevant by-laws and resolutions relating to the creation, amendment, allotment and issuance of Trust Units; and

 

(ii)                                  copies of all relevant documents and proceedings relating to increases and reductions in the Issuer’s capital, the reorganization of or change in its capital or the bankruptcy, insolvency, winding-up or dissolution of the Issuer.

 

(b)                                 Upon receipt of a certified copy of a resolution of the board of directors of the Manager, on behalf of the Issuer, authorizing the issuance of Trust Units, together with written instructions from an authorized director or officer of the Manager, on behalf of the Issuer, giving particulars of the registered owners of such Trust Units, Equity shall register such Unitholders and countersign and deliver certificates representing such Trust Units in accordance with such instructions and Equity can rely that such instructions are in compliance with exchange or regulatory requirements as promulgated from time to time.

 

(c)                                  The Issuer agrees that, so long as this Agreement is in force, it shall issue no Trust Unit certificates without such Trust Unit certificates being countersigned by Equity in its capacity as transfer agent and registrar.

 

(d)                                 When a certificate is presented to Equity for the purpose of transfer, transfer of any of the Trust Units in respect of which such certificate was issued may be refused by Equity until it is satisfied that such certificate is valid, that the endorsement thereon is genuine (and, where required, properly guaranteed) and that the transfer requested is legally authorized.  In the absence of bad faith, gross negligence or willful misconduct, Equity shall not incur any liability in refusing to effect any transfer which, in its judgment, is improper or unauthorized, or in carrying out any transfer which, in its judgment, is proper or authorized. Equity

 

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shall incur no liability with respect to the delivery or non-delivery of any Trust Unit certificate whether delivered by hand, mail or other means.

 

(e)                                  Upon receipt of notice from the Issuer or from any Unitholder that a certificate has become lost, apparently destroyed or wrongfully taken, Equity agrees to place an appropriate notation on the register of Unitholders.  Equity shall not be required to issue a replacement certificate to the owner of a security for any certificate that has been lost, apparently destroyed or wrongfully taken unless:

 

(i)                                     neither the Issuer nor Equity has received notice that the security represented by the certificate has been acquired by a good faith purchaser;

 

(ii)                                  the owner has filed with Equity an indemnity bond sufficient, in Equity’s opinion, to protect the Issuer and Equity from any loss that either of the Issuer or Equity may suffer by complying with the request to issue a new certificate; and

 

(iii)                               the owner has satisfied all other requirements as Equity may from time to time impose, acting reasonably, including without limitation the delivery by the owner to the Issuer and Equity of a written indemnity together with a statutory declaration that the certificate was lost, apparently destroyed or wrongfully taken.

 

For this purpose, the Issuer hereby irrevocably delegates to Equity the power to determine the sufficiency of the indemnity bond so posted and to impose all such other reasonable requirements as Equity may from time to time require in this regard.

 

All Trust Unit certificates surrendered to Equity on any transfer of Trust Units or on exchanges of certificates in respect to any change in or reorganization of capital shall be cancelled by Equity and held by it for a period of 7 years.  Equity shall not be required to hold such certificates after the expiry of such period and Equity is hereby authorized to destroy such certificates forthwith after the end of the 7 year period.

 

(f)                                   In the case of monthly redemptions for cash the unitholder’s broker will advise CDS who will in turn follow a procedure as described in the prospectus which has been filed to register these units (hereinafter the “Prospectus”) and advise Equity by the delivery to Equity of a Cash Redemption Notice (as defined in the Prospectus), Equity will process the cancellation at the CDS level and will deliver the payment to CDS following the procedure described in the Prospectus.

 

(g)                                  In the case of quarterly redemptions for physical platinum or palladium bullion the unitholder’s broker will advise CDS who will in turn advise Equity by the delivery to Equity of a Bullion Redemption Notice (as such term is defined in the Prospectus), as applicable, following a procedure as described in the Prospectus; Equity will process the cancellation at the CDS level and will advise the Manager

 

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or the Trustee as defined in the Prospectus, who will then issue instructions as to the platinum or palladium delivery to the unitholders broker.

 

7.                                      Notice of Events

 

The Manager on behalf of the Issuer shall promptly advise Equity in writing of the following:

 

(a)                               proposed action with respect to payment or non-payment of Distributions;

 

(b)                               proposed actions with respect to retirement or redemption of any Units;

 

(c)                                the setting of all record dates; and

 

(d)                               any change in the form or nature of the Units or the rights or privileges of the holders.

 

8.                                      Fees

 

(a)                                 Equity’s fees for its services to the Issuer hereunder shall be those that are set out in “Schedule A” which is subject to revision during the term of this Agreement on 30 days’ written notice. The Issuer shall reimburse Equity for all costs and expenses incurred or expended by Equity in connection with the performance of its duties hereunder and such additional fees and expenses as are agreed between the parties to be warranted in order to comply with any laws it may be subject to as transfer agent, registrar and disbursing agent of the Issuer.  Any amount due hereunder and unpaid 30 days after being rendered will bear interest from the expiration of such period at a rate per annum equal to the then current rate charged by Equity, payable on demand.

 

(b)                                 The Issuer acknowledges that the fees of Equity are confidential information and shall not disclose such fees to a third party without the written consent of Equity except for disclosure (i) to the Issuer’s professional advisors, or (ii) as required by law.

 

9.                                      Indemnity

 

(a)                                 In addition to and without limiting any other indemnity specifically provided herein, the Issuer agrees to defend, indemnify and hold harmless Equity, its successors and assigns, and its and each of their respective directors, officers, employees and agents (the “Indemnified Parties”) against and from any demands, claims, assessments, proceedings, suits, actions, costs, judgments, penalties, interest, liabilities, losses, damages, debts, expenses and disbursements (including expert consultant and legal fees and disbursements on a substantial indemnity, or solicitor and client, basis) (collectively, the “Claims”) that the Indemnified Parties, or any of them, may suffer or incur or that may be asserted against them, or any of them, in consequence of, arising from or in any way relating to this Agreement (as the same may be amended, modified or supplemented from time to time) or Equity’s duties hereunder or any other

 

6

 

services that Equity may provide to the Issuer in connection with or in any way relating to this Agreement or Equity’s duties hereunder, except that no individual Indemnified Party shall be entitled to indemnification in the event such Indemnified Party is found to have acted negligently, in bad faith or engaged in willful misconduct For greater certainty, the Issuer agrees to indemnify and save harmless the Indemnified Parties against and from any present and future taxes (other than income taxes), duties, assessments or other charges imposed or levied on behalf of any governmental authority having the power to tax that are owed by the Issuer in connection with Equity’s duties hereunder. In addition, the Issuer agrees to reimburse, indemnify and save harmless the Indemnified Parties for, against and from all legal fees and disbursements (on a substantial indemnity basis) incurred by an Indemnified Party if the Issuer commences an action, or cross claims or counterclaims, against the Indemnified Party and the Indemnified Party is successful in defending such claim.

 

(b)                                 The Issuer agrees that its liability hereunder shall be absolute and unconditional to the Indemnified Parties regardless of the correctness of any representations of any third parties and regardless of any liability of third parties to the Indemnified Parties, and shall accrue and become enforceable without prior demand or any other precedent action or proceeding, and shall survive the resignation or removal of Equity or the termination of this Agreement.

 

(c)                                  Equity shall be under no obligation to prosecute or defend any action or suit in respect of its agency relationship under this Agreement, but will do so at the request of the Issuer provided that the Issuer furnishes an indemnity satisfactory to Equity against any liability, cost or expense which might be incurred.

 

(d)                                 In addition to the remedies provided herein, Equity shall be entitled to any other rights and recourses it may have against the Issuer.

 

10.                               Limitation on Liability

 

(a)                                 Equity shall not be liable for any error in judgment, for any act done or step taken or omitted by it in good faith, for any mistake of fact or law or for anything which it may do or refrain from doing in connection herewith except arising out of its gross negligence, bad faith or willful misconduct.  In particular, but without limiting the generality of the foregoing, with respect to meetings of Unitholders, Equity shall not be liable to the Issuer or to any other party for having relied upon or deferred to the instructions or decisions of the Issuer, its legal counsel, or the chairman of the meeting and shall be fully indemnified by the Issuer for any damages or liability flowing from such action or inaction by Equity in doing so.

 

(b)                                 In the event Equity is in breach of this Agreement or its duties hereunder or any Agreement or duties relating to any other services that Equity may provide to the Issuer pursuant to written instructions of the Issuer in connection with or in any way relating to this Agreement or Equity’s duties hereunder, Equity shall be liable for claims or damages only to an aggregate maximum amount equal to the amount

 

7

 

of fees paid by the Issuer to Equity hereunder in the twelve months preceding the last of the events giving rise to such claims or damages, except to the extent that Equity has acted grossly negligently, in bad faith, or engaged in willful misconduct.  In no event shall Equity be liable for indirect or consequential damages.

 

11.                               Amendment, Assignment and Termination

 

(a)                                 Subject to 11(b) and 11(c) and except as specifically provided herein, this Agreement may only be amended or assigned by a written agreement of the parties.

 

(b)                                 Any entity resulting from the merger, amalgamation or continuation of Equity or succeeding to all or substantially all of its transfer agency business (by sale of such business or otherwise), shall thereupon automatically become the transfer agent, registrar and disbursing agent hereunder, without further act or formality.

 

(c)                                  Any entity resulting from the merger, amalgamation or continuation of an Issuer shall thereupon automatically become the Issuer hereunder, without further act or formality.

 

(d)                                 This Agreement may be terminated by either party on 60 days’ notice in writing being given to the other at the address set out in this Agreement or at such other subsequent address of which notice has been subsequently given.

 

(e)                                  In the case of a termination of Equity’s services by the Manager on behalf of the Issuer pursuant to this Section, provided that the Issuer is in compliance with all of the terms of this Agreement including the payment of all amounts owing to Equity hereunder, Equity shall deliver over to the Issuer the books and registry of the Issuer and against a receipt executed by the Issuer.

 

(f)                                   Notwithstanding Section 11(d), this Agreement may be terminated by Equity on 30 days notice in writing to the Issuer in the event the Issuer refuses or fails to pay an invoice for fees and expenses, or other demand for payment issued or made pursuant to this Agreement by Equity, within 60 days of the original invoice or demand.

 

(g)                                  The provisions of Sections 8(b), 9 and 10 shall survive termination of this Agreement.

 

(h)                                 If at any time the name of Equity is changed and at such time any certificates have been countersigned but not delivered, Equity may adopt the countersignature under its prior name and deliver such certificates so countersigned; and in case at that time any certificates have not been countersigned, Equity may countersign such certificates either in its prior name or in its changed name; and in all such cases such certificates will be validly countersigned.

 

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(i)                                     If the Issuer terminates this Agreement under this Section of this Agreement, the Issuer shall be obliged to pay a termination fee to cover the cost of preparing the records for delivery to the Issuer or another Transfer Agent and ongoing communication with investors and the investment community. The fee will be equal to 20% of the previous twelve months billing for all transfer agency services.

 

(j)                                    Any notice or notification to be given by one party to this Agreement to the other shall be in writing and delivered by hand or sent by first class insured mail, prepaid courier or by facsimile transmission to the following address:

 

If to the Issuer:

 

c/o Sprott Asset Management LP

Suite 2700, South Tower

Royal Bank Plaza, 200 Bay Street

Toronto, Ontario, M5J 2J1

Attention:  Steven Rostowsky

 

If to Equity:

 

Equity Financial Trust Company

200 University Avenue,

Suite 400

Toronto, Ontario

M5H 4H1

Fax: 416 361 0470

Attention:  Helen Stratigeas

 

And all notices shall be deemed to have been effectively given on the date three (3) business days after the date of mailing or, if delivered by hand or sent by facsimile transmission or any other form of written recorded communication on the date of delivery or transmission.

 

12.                               General

 

(a)                                 This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein and the parties hereby attorn to the jurisdiction of the courts of the Province of Ontario.

 

(b)                                 This Agreement shall enure to the benefit of and be binding upon the parties hereto and their successors and assigns.

 

(c)                                  This Agreement may be executed in counterparts and may be delivered by facsimile transmission.

 

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IN WITNESS WHEREOF this Agreement has been duly executed by the parties hereto.

 

 

EQUITY FINANCIAL TRUST COMPANY

 

 

	
Per:
    	
 
    	
 
    
	
 
    	
Authorized Signing Officer
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Per:
    	
 
    	
 
    
	
 
    	
Authorized Signing Officer
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
SPROTT ASSET MANAGEMENT LP,
    
	
by its general partner, Sprott   Asset Management GP Inc.
    
	
 
    
	
On behalf of the Issuer.
    	
 
    
	
 
    	
 
    
	
Per:
    	
 
    	
 
    
	
 
    	
Authorized Signing Officer
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Per:
    	
 
    	
 
    
	
 
    	
Authorized Signing Officer
    	
 
    

 

10

 

Resolution Appointing Equity Financial Trust Company as

Transfer Agent, Registrar and Disbursing Agent

 

BE IT RESOLVED THAT:

 

	
1.
    	
Equity   Financial Trust Company (“Equity”), is hereby appointed the transfer agent,   registrar and disbursing agent for the Trust Units (“Trust Units”) of Sprott Physical   Platinum and Palladium Trust;
    
	
 
    	
 
    
	
2.
    	
the   register of transfers and register of holders of the Trust Units shall be   kept at the principal office of Equity in the City of Toronto;
    
	
 
    	
 
    
	
3.
    	
all   Trust Units shall be effectively and interchangeably transferable on the   register of transfers or on any branch register of transfers maintained by   Equity regardless of where or when the Trust Unit certificates therefore   shall have been issued, and entry of the transfer of any Trust Units on the   register of transfers or in any branch register of transfers shall for all   purposes be a complete and valid transfer; and
    
	
 
    	
 
    
	
4.
    	
any   director or officer of Sprott Asset Management GP Inc., as the general   partner of Sprott Asset Management LP the duly appointed Manager of Sprott   Physical Platinum and Palladium Trust is hereby authorized and directed, for   and on behalf of Sprott Physical Platinum and Palladium Trust to do any and   all such acts and things and to execute and deliver any and all agreements   and other documents in such form and terms as such director or officer may   approve, to carry out the provisions of this resolution and to evidence the   aforesaid appointment, such approval to be conclusively evidenced by such   director or officer’s execution and delivery of such agreements or other   documents.
    

 

* * * * * * 

 

CERTIFIED to be a true copy of a resolution of the board of directors of

Sprott Asset Management GP Inc. as Manager of Sprott Physical Platinum and

Palladium Trust

 

And which resolution is in full force and effect as of the date hereof.

 

	
 
    	
DATED:                   day of               , 2012
    

 

	
 
    	
 
    
	
 
    	
(Title)
    

 

 

CERTIFICATE OF INCUMBENCY

SPECIMEN SIGNATURES OF THE

OFFICERS AND DIRECTORS OF SPROTT ASSET MANAGEMENT GP INC.

 

I,                                                  of the City of Toronto

 

In the Province of Ontario

 

Herein Certify That I am the                                                 of

 

Sprott Asset Management GP Inc., the general partner of Sprott Asset Management LP, the duly appointed Manager of Sprott Physical Platinum and Palladium Trust.

 

The following persons are duly elected or appointed qualified directors or officers of Sprott Asset Management GP Inc. holding the office or offices indicated opposite their respective names, that they are authorized to give instructions to Equity Financial Trust Company and that the signatures appearing opposite their respective names are the genuine signatures of such persons:

 

	
Name
    	
 
    	
Position
    	
 
    	
Signature
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

	

    	
Certified by:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(Officer’s Signature, Name and Position)
    	
 
    

 

Dated effective the        day of                 , 2012.

 

 

LIST OF OFFICERS AND DIRECTORS

 

To: EQUITY FINANCIAL TRUST COMPANY

 

Dear Sirs:

 

I HEREBY CERTIFY that the following are the Officers and Directors of Sprott Asset Management GP Inc., general partner of Sprott Asset Managment LP, the Manager of Sprott Physical Platinum and Palladium Trust.

 

	
Name
    	
 
    	
Position
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    

 

 

Dated this        day of               , 2012.

 

 

	
 
    	
 
    
	
 
    	
Sprott   Asset Management GP Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Per:
    	
 
    
	
 
    	
 
    	
(Title)

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