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By:
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/s/ John Ciampaglia
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John Ciampaglia
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Director
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Dated: November 13, 2020
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FOR IMMEDIATE RELEASE | NYSE: PSLV |
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TSX: PSLV AND PSLV.U |
ARTICLE 1 INTERPRETATION
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2
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1.1
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Definitions
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2
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1.2
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Article and Section Headings
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9
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1.3
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Statute References
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9
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1.4
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Business Day
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9
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1.5
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Number, Gender
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9
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1.6
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References to “Agreement” etc
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9
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1.7
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Time of Day
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9
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1.8
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Currency
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10
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1.9
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Exercise of Discretion
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10
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ARTICLE 2 ESTABLISHMENT OF THE TRUST
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10
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2.1
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Establishment of the Trust
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10
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2.2
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Appointment of the Trustee
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10
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2.3
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Constituency of the Trust
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10
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2.4
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Name of the Trust
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10
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2.5
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Head Office; Situs
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11
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2.6
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Purpose of the Trust
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11
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2.7
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Investment by the Trust
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11
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2.8
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Nature of the Trust
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11
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2.9
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Mutual Fund Trust Election
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12
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2.10
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U.S. Federal Income Tax Classification
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12
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2.11
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Term
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12
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ARTICLE 3 STRUCTURE OF THE TRUST
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12
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3.1
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Division of the Trust into Units
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12
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3.2
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Repurchase of Initial Unit
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13
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3.3
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Voting
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14
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3.4
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Consolidation and Subdivision
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14
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3.5
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Calculation of Net Asset Value of the Trust and Net Asset Value per Unit
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14
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3.6
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Calculation of Class Net Asset Value and Class Net Asset Value per Unit
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16
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3.7
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Suspension of Right of Redemption and Calculation of Net Asset Value
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18
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3.8
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Delegation by the Manager
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18
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ARTICLE 4 NET INCOME AND NET REALIZED CAPITAL GAINS
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18
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4.1
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Valuation on Distribution Date
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18
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4.2
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Computation of Net Income and Net Realized Capital Gains
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19
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4.3
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Distribution of Net Income and Net Realized Capital Gains to Unitholders
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19
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4.4
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Additional Distributions, Designations, Determinations, Allocations and Elections 20
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4.5
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Withholding Taxes
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20
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4.6
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Income Tax Statements
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21
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4.7
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Qualified Electing Trust Election and Reporting
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21
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4.8
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Tax Definitions
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21
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ARTICLE 5 SALE AND TRANSFER OF UNITS
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22
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5.1
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Allotment and Issue
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22
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5.2
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No Certificates
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22
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5.3
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Transfer of Units
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23
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5.4
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Successors in Interest of Unitholders
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23
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5.5
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Units held Jointly or in Fiduciary Capacity
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23
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5.6
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Purchases for Cancellation
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23
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5.7
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Death, Bankruptcy, Insolvency or Incompetence of a Unitholder
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24
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5.8
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Death of a Unitholder
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24
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5.9
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Lost Certificates
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24
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5.10
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Declaration as to Beneficial Owner
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25
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ARTICLE 6 REDEMPTION OF UNITS
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25
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6.1
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Redemption of Units for Silver Bullion
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25
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6.2
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Manner of Payment - Silver Bullion
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27
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6.3
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Redemption of Units for Cash
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28
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6.4
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Effect of Redemption
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29
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6.5
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Joint Holders
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29
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6.6
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Suspension of Redemption Right
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29
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6.7
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Performance of Trusts
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30
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ARTICLE 7 POWERS AND DUTIES OF THE TRUSTEE
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30
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7.1
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General Powers
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30
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7.2
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Specific Powers
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31
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7.3
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Forwarding Materials
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34
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7.4
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Dealing with Others and Self
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34
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ARTICLE 8 POWERS AND DUTIES OF THE MANAGER
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35
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8.1
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Powers of the Manager
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35
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8.2
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Duties of the Manager
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35
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8.3
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Portfolio Execution
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39
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8.4
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Soft Dollar Transactions
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40
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8.5
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Distributors
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40
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ARTICLE 9 INDEPENDENT REVIEW COMMITTEE
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40
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9.1
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Independent Review Committee
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40
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ARTICLE 10 FEES, COMPENSATION AND EXPENSES
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41
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10.1
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Trustee’s Fee
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41
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10.2
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Manager’s Fee
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42
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10.3
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Investment Manager’s Fee
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42
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10.4
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Silver Custodian and Custodian’s Fees
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42
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10.5
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Expenses of the Trust
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42
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ARTICLE 11 TRUSTEE LIABILITY AND INDEMNIFICATION
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43
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11.1
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Standard of Care
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43
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11.2
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Reliance
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43
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11.3
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General Disclaimer of Liability
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45
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11.4
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Indemnification of the Trustee
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45
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11.5
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Additional Indemnification of the Trustee
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46
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11.6
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Exception
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46
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ARTICLE 12 MANAGER LIABILITY AND INDEMNIFICATION
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46
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12.1
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Standard of Care
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46
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12.2
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Reliance
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47
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12.3
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Engaging in Competition
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47
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12.4
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Indemnification of the Manager
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47
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12.5
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Liability for Investment Decisions
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48
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ARTICLE 13 CHANGE OF TRUSTEE
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48
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13.1
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Resignation of Trustee
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48
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13.2
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Removal of Trustee
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48
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13.3
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Appointment of Successor
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49
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13.4
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Termination Upon Failure to Appoint Successor
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49
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ARTICLE 14 TERMINATION OF THE MANAGER
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49
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14.1
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Resignation, Insolvency or Bankruptcy of the Manager
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49
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14.2
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Successor Manager
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50
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ARTICLE 15 CONCERNING THE UNITHOLDERS
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50
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15.1
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Liability of Unitholders
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50
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15.2
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Indemnification of the Trust by the Manager
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50
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ARTICLE 16 MEETINGS OF UNITHOLDERS
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51
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16.1
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Time of Meetings
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51
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16.2
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Place of Meeting
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51
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16.3
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Notice of Meeting
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51
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16.4
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Meetings Without Notice
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51
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16.5
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Quorum
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51
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16.6
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Chairman, Secretary and Scrutineers
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52
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16.7
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Persons Entitled to be Present
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52
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16.8
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Right to Vote
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52
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16.9
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Votes to Govern
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52
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16.10
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Show of Hands
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52
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16.11
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Polls
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52
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16.12
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Adjournment
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52
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16.13
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Resolutions in Writing
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53
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16.14
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Record Dates
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53
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16.15
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Proxies
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53
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16.16
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Validity of Proxies
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53
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16.17
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Revocation of Proxy
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53
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16.18
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Solicitation of Proxies
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54
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16.19
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Form of Proxy Solicitation
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54
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16.20
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Resolutions Binding
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55
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16.21
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Minutes of Meetings
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55
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ARTICLE 17 SPECIAL FUNCTIONS
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55
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17.1
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Registrar and Transfer Agent
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55
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17.2
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Unit Register
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55
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17.3
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Auditors
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56
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17.4
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Valuation Agent
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57
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17.5
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Custodian of Silver Bullion
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57
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17.6
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Custodian of Trust Property Other Than Silver Bullion
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57
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ARTICLE 18 REPORTS AND EXECUTION OF DOCUMENTS
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60
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18.1
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Records
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60
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18.2
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Reports to Unitholders
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60
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18.3
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Material to be Furnished to the Trustee
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61
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18.4
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Documents Requiring Trustee’s Consent
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61
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18.5
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Execution of Documents
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62
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18.6
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Execution of Documents by the Manager
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62
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18.7
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Material to be Furnished to Unitholders
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62
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ARTICLE 19 NOTICE
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62
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19.1
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Notice to Unitholders
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62
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19.2
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Methods of Communication
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63
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19.3
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Deemed Delivery
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64
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19.4
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Telephone Directions
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64
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19.5
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Telephone Communications
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64
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19.6
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Internet
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64
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19.7
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Verification
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65
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ARTICLE 20 AMENDMENTS
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65
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20.1
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Non-Material Amendments
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65
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20.2
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Unitholder Approval
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66
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20.3
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Change of Auditors
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68
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20.4
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Notice to Unitholders
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68
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20.5
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Approval of Trustee
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69
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ARTICLE 21 TERMINATION OF THE TRUST
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69
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21.1
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Termination of the Trust
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69
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21.2
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Notice of Termination
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69
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21.3
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Effect of Termination
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69
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21.4
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Termination of Trust Agreement
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70
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ARTICLE 22 INVESTMENT POLICY
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70
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22.1
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Investment Objective
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70
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22.2
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Investment Strategy
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70
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22.3
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Investment and Operating Restrictions
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70
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22.4
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Investment and Reinvestment by the Trust
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72
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ARTICLE 23 GENERAL
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72
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23.1
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Compliance with Law and Policy
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72
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23.2
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Governing Law
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72
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23.3
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Computation of Time
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73
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23.4
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Omissions and Errors
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73
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23.5
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Time
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73
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23.6
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Counterparts and Facsimile
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73
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23.7
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Complete Agreement
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73
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23.8
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Severability
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73
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23.9
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Inspection of Documents
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73
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SPROTT ASSET MANAGEMENT LP,
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a limited partnership formed under the laws of the Province of Ontario
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(hereinafter referred to as the “Manager”)
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OF THE FIRST PART
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- and -
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RBC INVESTOR SERVICES TRUST,
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a trust company incorporated under the federal laws of Canada
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(hereinafter referred to as the “Trustee”)
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OF THE SECOND PART
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1.1 |
Definitions
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(a) |
“Additional Trustee Duties” has the meaning ascribed thereto in Section 11.5
hereof;
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(b) |
“Affiliate” has the meaning ascribed thereto in the Securities Act (Ontario), as amended from time to time;
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(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;
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(d) |
“Annual Certificate of Compliance” has the meaning ascribed thereto in clause
8.2(a)(xxxi) hereof and is substantially in the form of Schedule A attached hereto;
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(e) |
“Associate” has the meaning ascribed thereto in the Securities Act (Ontario), as amended from time to time;
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(f) |
“Auditors” means a firm of chartered accountants duly licensed and recognized
to practice in the Province of Ontario and appointed from time to time by the Manager pursuant to the provisions of Section 17.3 hereof. The initial Auditors shall be Ernst & Young LLP;
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(g) |
“Business Day” means any day on which the NYSE Arca or the TSX are open for
trading;
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(h) |
“Broker” means a CDS Participant in Canada or a DTC Participant in the United
States;
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(i) |
“Cash Redemption Notice” means a written request signed by a Unitholder, which
must be guaranteed by a Canadian chartered bank, or by a medallion signature guarantee from a member of a recognized Signature Medallion Guarantee Program, in accordance with Section 6.3 hereof substantially in the form of Schedule F attached
hereto, or in such other form as the Manager may from time to time in its sole discretion determine;
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(j) |
“CBCA” means the Canada Business Corporations Act, R.S.C. 1985, c.C-44, as amended from time to time;
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(k) |
“CBCA Corporation” means a corporation incorporated under the CBCA, any of the
securities of which (i) are or were part of a distribution to the public, (ii) remain outstanding, and (iii) are held by more than one Person;
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(l) |
“CDS” means CDS Clearing and Depository Services Inc.;
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(m) |
“CDS Participant” means a registered dealer or other financial institution in
Canada that is a direct or indirect participant in the CDS book-entry only system and a Person through whom the Unitholder deals directly to initiate any transaction in Units;
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(n) |
“Certificate of Authorized Signing Authorities” has the meaning ascribed
thereto in subsection 11.2(a) hereof and is substantially in the form of Schedule C attached hereto;
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(o) |
“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;
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(p) |
“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 3.5 and Section 3.6 hereof;
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(q) |
“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 3.5 and Section 3.6 hereof;
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(r) |
“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time;
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(s) |
“Common Expenses” means those expenses of the Trust other than Class Expenses;
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(t) |
“Corporate Action” means any conversion privileges, subscription rights,
warrants or other rights or options available in connection with any securities forming part of the Trust Property, including those relating to the reorganization, recapitalization, takeover, consolidation, amalgamation, merger, liquidation,
filing for or declaration of bankruptcy or plans of arrangement, of any corporation, association or other entity;
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(u) |
“Counsel” means any Person qualified and engaged in the practice of law in the
Province of Ontario;
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(v) |
“Court” means any court of competent jurisdiction in the Province of Ontario;
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(w) |
“Custodian” means the custodian of the Trust Property, other than the Silver
Bullion, appointed pursuant to Section 17.6 hereof and shall include the Trustee and any sub-custodians appointed by the Trustee which from time to time hold the Trust Property other than the Silver Bullion pursuant to this Trust Agreement or
a separate written custodial agreement;
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(x) |
“Depository” means any authorized domestic or foreign depository or clearing or
settlement agency or system, including a transnational book-based system, CDS or DTC;
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(y) |
“Designated Market” has the meaning ascribed thereto in Subsection 17.6(k)
hereof;
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(z) |
“Disclosure Documents” means any (final) prospectus of the Trust filed in all
provinces and territories of Canada and any registration statement of the Trust filed with the United States Securities and Exchange Commission, or similar offering documents as may be used by the Manager or required by applicable Securities
Legislation in connection with qualifying the distribution of the Units to the public, including any amendments to such
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(aa) |
“Distribution Date” has the meaning ascribed thereto in Section 4.1 hereof;
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(bb) |
“DTC” means The Depository Trust Company;
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(cc) |
“DTC Participant” means a registered broker/dealer or other financial
institution in the United States that is a direct or indirect participant in the DTC book-entry only system and a Person through whom the Unitholder deals directly to initiate any transaction in Units;
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(dd) |
“Extraordinary Resolution” means a resolution approved, in person or by proxy,
by Unitholders holding Units representing in aggregate not less than 66%% of the Net Asset Value of the Trust as determined in accordance with this Trust Agreement, at a duly constituted meeting of Unitholders, or at any adjournment thereof,
called and held in accordance with this Trust Agreement, or a written resolution signed by Unitholders holding Units representing in aggregate not less than 66%% of the Net Asset Value of the Trust as determined in accordance with this Trust
Agreement;
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(ee) |
“Fee Agreement” has the meaning ascribed thereto in Section 10.1 hereof;
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(ff) |
“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;
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(gg) |
“IFRS” means International Financial Reporting Standards as issued by the
International Accounting Standards Board;
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(hh) |
“Independent Review Committee” means the independent review committee of the
Trust established pursuant to NI 81-107;
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(ii) |
“Initial Unit” has the meaning ascribed thereto in Section 2.1 hereof;
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(jj) |
“Interim Certificate of Compliance” has the meaning ascribed thereto in clause
8.2(a)(xxxii) and is substantially in the form of Schedule B attached hereto;
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(kk) |
“Investment Manager” means the Person(s) appointed by the Manager, on behalf of
the Trust, from time to time pursuant to the provisions hereof and any portfolio management agreement, to determine, in its sole discretion, which securities or other assets shall be purchased, held or sold for the Trust and to execute or
cause the execution of purchase and sale orders in respect of such determinations;
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(ll) |
“Investment Policy” means the investment objective, the investment strategy,
and the investment and operating restrictions of the Trust, as described in Article 22 hereof;
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(mm) |
“London Good Delivery bar” means a bar that contains between 750 and 1,100 troy
ounces of silver with a minimum fineness of 999.0 parts per thousand silver or no less than the required minimum fineness related thereto as determined by the London Bullion Market Association from time to time;
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(nn) |
“Manager” means Sprott Asset Management LP, acting as the manager of the Trust,
or any successor manager appointed in accordance with this Trust Agreement and subject to the Management Agreement;
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(oo) |
“Management Agreement” means the management agreement between the Manager and
the Trust to be dated on or about the date of filing the final Disclosure Documents with the applicable Securities Authorities, as the same may be amended, restated or supplemented from time to time;
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(pp) |
“Management Fee” has the meaning ascribed thereto in Section 10.2 hereof;
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(qq) |
“Manager Reorganization” means any change of the Manager which occurs
primarily as a result of restructuring corporations, limited partnerships or other entities under similar control and ownership and which results in no material change to the day-to-day management, administration or operation of the Trust;
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(rr) |
“Monthly Redemption Date” means the last business day of a month when the NYSE
Arca is open for trading;
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(ss) |
“Net Asset Value of the Trust” is the amount determined from time to time in
accordance with Section 3.5 hereof;
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(tt) |
“Net Asset Value per Unit” is the amount determined from time to time in
accordance with Section 3.5 hereof;
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(uu) |
“Net Change in Non-Portfolio Assets” on a Valuation Date means:
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(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
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(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
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(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
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(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;
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(vv) |
“Net Income” has the meaning ascribed thereto in subsection 4.2(a) hereof;
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(ww) |
“Net Realized Capital Gains” has the meaning ascribed thereto in subsection
4.2(b) hereof;
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(xx) |
“NI 81-102” means National Instrument 81-102 Mutual Funds, as amended from time to time;
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(yy) |
“NI 81-106” means National Instrument 81-106 Investment Fund Continuous Disclosure, as amended from time to time;
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(zz) |
“NI 81-107” means National Instrument 81-107 Independent Review Committee for Investment Funds, as amended from time to time;
|
(aaa) |
“NYSE Arca” means the New York Stock Exchange Arca;
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(bbb) |
“Ordinary Resolution” means a resolution approved, in person or by proxy, by
Unitholders holding Units representing in aggregate not less than 50% of the Net Asset Value of the Trust as determined in accordance with this Trust Agreement, at a duly constituted meeting of Unitholders, or at any adjournment thereof,
called and held in accordance with this Trust Agreement, or a written resolution signed by Unitholders holding Units representing in aggregate not less than 50% of the Net Asset Value of the Trust as determined in accordance with this Trust
Agreement;
|
(ccc) |
“Original Trust Agreement” means the trust agreement dated as of June 30, 2010
among the Settlor, the Manager and the Trustee which established the Trust;
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(ddd) |
“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;
|
(eee) |
“PFIC” means a “passive foreign investment company” within the meaning of
Section 1297 of the Code;
|
(fff) |
“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 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);
|
(ggg) |
“QEF” has the meaning ascribed thereto in Section 4.7 hereof;
|
(hhh) |
“Register” means the register or registers of the Trust established and
maintained by the Registrar and Transfer Agent pursuant to Section 17.2 hereof;
|
(iii) |
“Registrar and Transfer Agent” means the registrar and transfer agent of the
Units appointed by the Manager in accordance with Section 17.1 hereof. The initial Registrar and Transfer Agent shall be Equity Transfer & Trust Company;
|
(jjj) |
“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;
|
(kkk) |
“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 NI 81-102, NI 81-106, NI 81-107 and the United States Securities Act of 1933, as amended;
|
(lll) |
“Settlor” means Sonia M. Yung, an individual resident in the Province of
Ontario;
|
(mmm) |
“Silver Bullion” means physical silver bullion in London Good Delivery bar form
that is unencumbered, fully allocated and stored at the Silver Custodian by or on behalf of the Trust;
|
(nnn) |
“Silver Custodian” means the custodian of the Silver Bullion appointed pursuant
to Section 17.5 hereof and shall include the Royal Canadian Mint and any sub-custodians appointed by the Royal Canadian Mint which from time to time hold the Silver Bullion pursuant to the Storage Agreement or a separate written custodial
agreement;
|
(ooo) |
“Silver Redemption Notice” means a written request signed by a Unitholder,
which must be guaranteed by a Canadian chartered bank, or by a medallion signature guarantee from a member of a recognized Signature Medallion Guarantee Program, as described in Section 6.1 hereof substantially in the form of Schedule E
attached hereto, or in such other form as the Manager may from time to time in its sole discretion determine;
|
(ppp) |
“Storage Agreement” means the silver storage agreement between the Manager, on
behalf of the Trust, and the Silver Custodian, to be dated on or about the date of filing the final Disclosure Documents with the applicable Securities Authorities, as the same may be amended, restated or supplemented from time to time;
|
(qqq) |
“Sub-Custodian Guidelines” has the meaning ascribed thereto in subsection
17.6(h) hereof;
|
(rrr) |
“Tax Act” means the Income Tax Act (Canada) and the regulations, rules, requirements and policies promulgated thereunder, as amended from time to time;
|
(sss) |
“Termination Event” has the meaning ascribed thereto in subsection 14.1(c)
hereof;
|
(ttt) |
“Trust” means Sprott Physical Silver Trust, a closed-end mutual fund trust
established under the laws of the Province of Ontario and governed by this Trust Agreement;
|
(uuu) |
“Trust Agreement” means this amended and restated trust agreement dated as of
February 27, 2015 between the Manager and the Trustee, as the same may be further amended, restated, supplemented or replaced from time to time;
|
(vvv) |
“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) |
Silver 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 Silver Custodian on behalf of
the Trust in accordance with the Storage Agreement;
|
(iii) |
all investments, sums or property of any type or description (other than the Silver 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 this 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;
|
(www) |
“Trustee” means RBC Investor Services Trust, acting as the trustee of the
Trust, or any successor trustee appointed in accordance with this Trust Agreement;
|
(xxx) |
“TSX” means the Toronto Stock Exchange;
|
(yyy) |
“Underwriters” means registered dealers that have entered into an Underwriting
Agreement with the Manager, on behalf of the Trust, in connection with the initial public offering of the Units, and “Underwriter” means any one
of them;
|
(zzz) |
“Underwriting Agreement” means an agreement between the Manager, on behalf of
the Trust, and the Underwriters to be dated on or about the date of filing the final Disclosure Documents with the applicable Securities Authorities relating to the initial public offering of the Units;
|
(aaaa) |
“Unit” means a unit of beneficial interest, in any class or series of a class
of the Trust, as presently constituted pursuant to Section 3.1 hereof as the same may from time to time hereinafter be constituted, and collectively referred to as the “Units”;
|
(bbbb) |
“Unitholders” means Persons whose name appears on the Register as a registered
holder of one or more Units or fractions thereof and “Unitholder” means any one of them;
|
(cccc) |
“Valuation Agent” means the service provider to the Trust appointed pursuant to
Section 17.4 hereof and the Valuation Services Agreement to provide certain valuation services for the Trust. The initial Valuation Agent shall be RBC Investor Services Trust;
|
(dddd) |
“Valuation Date” means each Business Day, unless the Manager determines that
the assets of the Trust should be valued less frequently, either generally or in respect of one or more specific instances, in which event “Valuation
Date” shall mean such Business Day or Business Days as the Manager determines;
|
(eeee) |
“Valuation Services Agreement” means the valuation services agreement between
the Manager and the Valuation Agent to be dated on or about the date of filing the final Disclosure Documents with the applicable Securities Authorities, as the same may be amended, restated or supplemented from time to time;
|
(ffff) |
“Valuation Time” means 4:00 p.m. (Toronto time) on a Valuation Date or such
other time on a Valuation Date as the Manager deems appropriate; and
|
(gggg) |
“Voting Materials” means all proxies, proxy solicitation materials and other
communications received by the Manager relating to the securities forming part of the Trust Property that call for voting.
|
1.2 |
Article and Section Headings
|
1.3 |
Statute References
|
1.4 |
Business Day
|
1.5 |
Number, Gender
|
1.6 |
References to “Agreement” etc.
|
1.7 |
Time of Day
|
1.8 |
Currency
|
1.9 |
Exercise of Discretion
|
2.1 |
Establishment of the Trust
|
2.2 |
Appointment of the Trustee
|
2.3 |
Constituency of the Trust
|
2.4 |
Name of the Trust
|
2.5 |
Head Office; Situs
|
2.6 |
Purpose of the Trust
|
2.7 |
Investment by the Trust
|
2.8 |
Nature of the Trust
|
(a) |
An interest in the Trust is represented by Units. The Trust, its Units and its property shall be governed by the general law of trusts, except as such general law of trusts
has been or is from time to time modified, altered or abridged for unit trusts and for the Trust by Applicable Laws or requirements imposed by applicable Securities Authorities or other regulatory authorities or by the terms, conditions and
trusts set forth in this Trust Agreement.
|
(b) |
Except as provided in Section 2.10 hereof with respect to the U.S. federal income tax classification of the Trust, the Trust is not, is not intended to be, shall not be deemed
to be, and shall not be treated as, a general partnership, limited partnership, syndicate, association, joint venture, agency, corporation or joint stock company nor shall the Trustee or the Unitholders or any of them for any purpose be, or
be deemed to be, treated in any way whatsoever to be liable or responsible hereunder as partners or joint ventures. The Unitholders shall be beneficiaries and their relationship to the Trustee shall be solely in that capacity in accordance
with the rights conferred and obligations imposed upon them hereunder. The Trustee shall not be, or be deemed to be, the agent of the Unitholders.
|
(c) |
The beneficial interest of a Unitholder shall be limited to the right to participate in distributions when and as declared by the Manager as contemplated by Article 4, and
distributions upon the termination of the Trust as contemplated in Article 21. The ownership of the Trust Property is vested in the Trustee and the right to conduct the affairs of the Trust is vested in the Trustee and the Manager, subject to
the provisions of this Trust Agreement, and the Unitholders shall have no interest in the assets of the Trust or right to intervene in the conduct of the affairs of the Trust except as expressly provided herein. In purchasing Units, a
Unitholder assumes no personal liability whatsoever to any Person in connection with the assets or affairs of the Trust. In the event a Unitholder should be required to satisfy any obligation of the Trust, such Unitholder shall be entitled to
reimbursement from any available assets of the Trust in accordance with Section 15.1 hereof.
|
2.9 |
Mutual Fund Trust Election
|
2.10 |
U.S. Federal Income Tax Classification
|
2.11 |
Term
|
3.1 |
Division of the Trust into Units
|
(a) |
each Unit shall be without nominal or par value;
|
(b) |
each whole Unit of a particular class or a series of a class shall entitle the holder thereof to one vote at all meetings of Unitholders where all classes and series of Units
vote together and to one vote at all meetings of Unitholders where that particular class or series of a class of Units votes separately as a class or series;
|
(c) |
each Unit of a particular class or series of a class shall entitle the holder thereof to participate pro rata, in accordance with the provisions hereof, with respect to all distributions made to that class or series of a class and, upon liquidation of the Trust, to participate pro rata with other Unitholders of that same class or series of a class in the Net Asset Value of the Trust remaining after the satisfaction of outstanding liabilities of the
Trust and the class or series of a class as provided in Article 21 hereof;
|
(d) |
distributions shall be allocated among the classes or series of a class of Units in such manner as the Manager considers appropriate and equitable;
|
(e) |
there shall be no pre-emptive rights attaching to the Units;
|
(f) |
there shall be no cancellation or surrender provisions attaching to the Units except as set out herein;
|
(g) |
once the Net Asset Value per Unit for the applicable class or series of a class, determined in accordance with Section 3.6 hereof, at the time of issuance has been paid, Units
shall be non-assessable so that there shall be no liability for future calls or assessments with respect to the Units;
|
(h) |
all Units shall be transferable, but only as contemplated herein;
|
(i) |
each Unit shall entitle the holder thereof to require the Trust to redeem the Unit as provided in Article 6;
|
(j) |
subject to limitations and requirements determined from time to time by the Manager and disclosed in the Disclosure Documents, each Unit of a particular class or series of a
class of the Trust may be redesignated by the Manager as a Unit of another class or series of the Trust based on the respective Net Asset Value per Unit for each such class or series of Units on the date of the redesignation;
|
(k) |
the number of Units and the classes and series of Units of the Trust that may be issued is unlimited; and
|
(l) |
fractional Units of a class or series of a class may be issued and shall be proportionately entitled to all the same rights as whole Units of that same class or series, except
voting rights (however fractional Units held by a single Unitholder may be combined).
|
3.2 |
Repurchase of Initial Unit
|
3.3 |
Voting
|
3.4 |
Consolidation and Subdivision
|
3.5 |
Calculation of Net Asset Value of the Trust and Net Asset Value per Unit
|
(a) |
The assets of the Trust shall be deemed to include the following property:
|
(i) |
all Silver 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.
|
(b) |
The market value of the assets of the Trust shall be determined as follows:
|
(i) |
the value of Silver Bullion shall be its market value based on the price provided by a widely recognized pricing service as directed by the Manager and, if such service is not
available, such Silver 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 any 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 Manager 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 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, 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 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.
|
(d) |
For the purposes of determining the market value of any security or property pursuant to Subsection 3.5(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
|
(e) |
For the purposes of determining the value of Silver 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 the 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 Manager in accordance with the provisions of this section shall be conclusive and binding
on all Unitholders.
|
(i) |
The Manager and any Investment Manager 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.
|
3.6 |
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
|
(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 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.
|
3.7 |
Suspension of Right of Redemption and Calculation of Net Asset Value
|
3.8 |
Delegation by the Manager
|
4.1 |
Valuation on Distribution Date
|
4.2 |
Computation of Net Income and Net Realized Capital Gains
|
(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 Manager; 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 taxation year exceeds:
|
(i) |
the aggregate of the capital losses of the Trust in the taxation year; and
|
(ii) |
the amount determined by the Manager 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 the sole discretion of the Manager, the Net Realized Capital Gains 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, 2010, 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, 2010, 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. All such distributions to Unitholders are in the discretion of the Trustee, acting on the direction of the Manager.
|
(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.
|
(c) |
The Manager may direct that such distribution or payment shall be due and payable by the Trust in cash or reinvested in additional Units. Where distributions are payable in
additional Units, the Registrar and Transfer Agent, acting on the direction of the Manager, may round up or round down the number of Units in order to avoid the Trust issuing fractional Units. Any additional Units that are issued in this
manner shall be of the same class or series of a class at a price equal to the Net Asset Value per Unit as at the Valuation Time on the applicable Distribution Date and the Units shall be immediately consolidated so that the number of
outstanding Units following the distribution shall equal the number of Units outstanding prior to the distribution, and the Manager is hereby irrevocably constituted attorney for each Unitholder to so apply such distributions on behalf of
each
|
(d) |
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 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, including as described in Subsection 6.4(b).
|
(e) |
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, Allocations and Elections
|
4.5 |
Withholding Taxes
|
4.6 |
Income Tax Statements
|
(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 Manger’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.
|
4.7 |
Qualified Electing Trust Election and Reporting
|
4.8 |
Tax Definitions
|
5.1 |
Allotment and Issue
|
(a) |
Within the limitations of this Article 5, the Registrar and Transfer Agent, on the direction of the Manager, shall allot and issue Units at such time or times at such price
and in such manner, and to such Person or Persons as the Manager in its sole discretion shall determine, having regard to such matters as would be considered by the board of directors of a CBCA Corporation when issuing shares in comparable
circumstances.
|
(b) |
Notwithstanding Subsection 5.1(a), the Trust’s initial public offering of Units shall be made at a price of $10.00 per Unit. The Manager shall not direct the Registrar and
Transfer Agent to allot and issue Units of the same class subsequent to the Trust’s initial public offering, except: (i) if the net proceeds per Unit to be received by the Trust are not less than 100% of the most recently calculated Net Asset
Value per Unit prior to, or upon, the determination of the pricing of such issuance; or (ii) by way of Unit distribution in connection with an income distribution. Immediately after a pro rata distribution of Units to all Unitholders in satisfaction of any non-cash distribution, the number of outstanding Units will be consolidated as described in Section 4.3 hereof such that
each Unitholder will hold, after the consolidation, the same number of Units as the Unitholder held before the non-cash distribution, subject to any reduction contemplated in Section 4.5 where withholding is required. Subject to the
foregoing, the Trust may also allot and issue additional classes of Units or series of Units within each class at such time or times, and in such manner, as the Manager in its sole discretion shall determine.
|
(c) |
Pursuant to Section 2.1 the Initial Unit shall be issued to the Settlor as fully paid in respect of the initial contribution to the Trust by the Settlor in order to settle the
Trust as a trust. Subscriptions for Units to be issued in any offering subsequent to the Trust’s initial public offering will be subject to rejection or allotment by the Manager in whole or in part. If the Manager has not approved the
subscription, the Manager shall so advise the subscriber within two days of the receipt of the subscription and forthwith return to the subscriber the amount tendered by the subscriber with his, her or its subscription without interest.
|
5.2 |
No Certificates
|
5.3 |
Transfer of Units
|
(a) |
Units shall be, for all purposes of the Trust and this Trust Agreement, personal and moveable property, and subject to Section 5.2 and Subsections 5.3(b) and (c) shall be
transferable at any time and from time to time by endorsement and delivery of such evidence or instrument of transfer as the Manager or the Registrar and Transfer Agent may accept. If Units in fully registered certificated form are issued to
Unitholders, transfers shall be recorded on the Register and shall only become effective when so recorded.
|
(b) |
The Units are freely transferable and the Manager shall not impose any restriction on the transfer of Units unless such restriction is necessary, in the opinion of Counsel to
the Trust, as a condition of obtaining or maintaining the status of the Trust as a “mutual fund trust” under the Tax Act or to obtain, maintain or renew any licences, rights, status or powers pursuant to any other Applicable Laws or comply
with Securities Legislation. If any such restriction is or becomes necessary, the Manager shall have the power to restrict the transfer of Units on the books of the Trust and shall promptly direct the Registrar and Transfer Agent, with notice
to the Trustee.
|
(c) |
Notwithstanding the foregoing, the Manager may determine not to take any of the actions described above if the Manager has been advised by its Counsel that the failure to take
any of such actions would not adversely impact the status of the Trust as a “mutual fund trust” for purposes of the Tax Act or, alternatively, may take such other action or actions as may be necessary to maintain the status of the Trust as a
“mutual fund trust” for purposes of the Tax Act.
|
5.4 |
Successors in Interest of Unitholders
|
5.5 |
Units held Jointly or in Fiduciary Capacity
|
5.6 |
Purchases for Cancellation
|
5.7 |
Death, Bankruptcy, Insolvency or Incompetence of a Unitholder
|
5.8 |
Death of a Unitholder
|
5.9 |
Lost Certificates
|
5.10 |
Declaration as to Beneficial Owner
|
6.1 |
Redemption of Units for Silver Bullion
|
(a) |
All redemptions of Units for Silver Bullion shall be determined using United States dollars, regardless of whether the Units to be redeemed were acquired on the NYSE Arca or
the TSX.
|
(b) |
Unitholders whose Units are redeemed for Silver Bullion will be entitled to receive a redemption price equal to 100% of the Class Net Asset Value of the redeemed Units as at
the Valuation Time on the applicable Monthly Redemption Date in respect of which the redemption request is processed.
|
(c) |
Redemption requests for Silver Bullion must be for amounts that are at least equivalent in value to ten London Good Delivery bars, or an integral multiple of one bar in excess
thereof, plus applicable expenses. Any fractional amount of redemption proceeds in excess of ten London Good Delivery bars, or an integral multiple of one bar in excess thereof, will be paid in cash at a rate equal to 100% of the Class Net
Asset Value of the redeemed Units as at the Valuation Time on the applicable Monthly Redemption Date that represents such excess amount.
|
(d) |
A Unitholder redeeming Units for Silver Bullion will be responsible for the expenses in connection with effecting the redemption and applicable delivery expenses, including
the handling of the Silver Redemption Notice, the delivery of the Silver Bullion for the Units that are being redeemed and the applicable Silver Bullion storage in-and-out fees charged by the Silver Custodian.
|
(e) |
A Unitholder that owns a sufficient number of Units who desires to exercise redemption privileges for Silver Bullion must do so by instructing his, her or its Broker, who must
be a direct or indirect DTC Participant or a CDS Participant, to deliver to the Registrar and Transfer Agent (at its office in Toronto, Ontario) on behalf of the Unitholder a Silver Redemption Notice of the Unitholder’s intention to redeem
Units for Silver Bullion. A Silver Redemption Notice must be received by the Registrar and Transfer Agent no later than 4:00 p.m. (Toronto time) on the 15th day of the month in which the Silver Redemption Notice will be processed
or, if such day is not a Business Day, then on the immediately following day that is a Business Day. Any Silver Redemption Notice received after such time will be processed on the next Monthly Redemption Date. Any Silver Redemption Notice
must include a valid signature guarantee to be deemed valid by the Trust.
|
(f) |
Except as provided under Section 6.6 and subject to Subsections (g) and (h) below, by instructing a Broker to deliver to the Registrar and Transfer Agent a Silver Redemption
Notice, the Unitholder shall be deemed to have irrevocably surrendered the Unitholder’s Units for redemption and appointed such Broker to act as the Unitholder’s exclusive settlement agent with respect to the exercise of such redemption
privilege and the receipt of payment in connection with the settlement of obligations arising from such exercise.
|
(g) |
Once a Silver Redemption Notice is received by the Registrar and Transfer Agent, the Registrar and Transfer Agent, together with the Manager, shall determine whether such
Silver Redemption Notice complies with the applicable requirements, is for an amount of Silver Bullion that is equal to at least ten London Good Delivery bars in the Trust’s inventory at the Silver Custodian plus applicable expenses, and
contains delivery instructions that are acceptable to the armoured service transportation carrier. If the Registrar and Transfer Agent and the Manager determine that the Silver Redemption Notice complies with all applicable requirements, the
Registrar and Transfer Agent will provide a notice to such redeeming Unitholder’s Broker confirming that the Silver Redemption Notice was received and determined to be complete.
|
(h) |
Any Silver Redemption Notice delivered to the Registrar and Transfer Agent regarding a Unitholder’s intent to redeem Units that the Registrar and Transfer Agent or the
Manager, in their sole discretion, determines to be incomplete, not in proper form, not duly executed or for an amount of Silver Bullion less than at least ten London Good Deliver bars held by the Trust at the Silver Custodian, or in an
amount that cannot be satisfied based on the bar sizes of Silver Bullion owned by the Trust shall for all purposes be void and of no effect, and the redemption privilege to which it relates shall be considered for all purposes not to have
been exercised thereby. If the Registrar and Transfer Agent and the Manager determine that the Silver Redemption Notice does not comply with the applicable requirements, the Registrar and Transfer Agent will provide a notice to such
Unitholder’s Broker explaining the deficiency.
|
(i) |
If the Silver Redemption Notice is determined to have complied with the foregoing requirements in this Section 6.1, the Registrar and Transfer Agent and the Manager will
determine as at the Valuation Time on the applicable Monthly Redemption Date the amount of Silver Bullion and the amount of cash that will be delivered to the redeeming Unitholder. Also on such Monthly Redemption Date, the redeeming
Unitholder’s Broker will deliver the redeemed Units to CDS or DTC, as the case may be, for cancellation. Due to the fact that London Good Delivery bars vary in weight from 750 to 1,100 troy ounces, the Registrar and Transfer Agent and the
Manager shall have some discretion on the amount of Silver Bullion the redeeming Unitholder will receive based on the weight of London Good Delivery bars owned by the Trust and the amount of cash necessary to cover the expenses associated
with the redemption and delivery that must be paid by the redeeming Unitholder. Once such determination has been made, the Registrar and Transfer Agent will inform the Broker through which the Unitholder has delivered its Silver Redemption
Notice of the amount of Silver Bullion and cash that the redeeming Unitholder will receive upon the redemption of the Unitholder’s Units.
|
(j) |
Based on instructions received from the Manager, the Silver Custodian will release the requisite amount of Silver Bullion from its custody to the armoured transportation
service carrier pursuant to Section 6.2.
|
(k) |
As directed by the Manager, any cash to be received by a redeeming Unitholder in connection with a redemption of Units for Silver Bullion pursuant to this Section 6.1 will be
delivered or caused to be delivered by the Manager to the Unitholder’s brokerage account within 10 Business Days after the month in which the redemption is processed.
|
6.1.1 |
Redemption for Silver Bullion - Exception
|
6.2 |
Manner of Payment - Silver Bullion
|
(a) |
A Unitholder redeeming Units for Silver Bullion will receive the Silver Bullion from the Silver Custodian. Silver Bullion received by a Unitholder as a result of a redemption
of Units will be delivered by armoured transportation service carrier pursuant to delivery instructions provided by the Unitholder to the Manager, provided that the delivery instructions are acceptable to the armoured transportation service
carrier. The armoured transportation service carrier will be engaged by, or on behalf of, the redeeming Unitholder. Such Silver Bullion can be delivered:
|
(i) |
to an account established by the Unitholder at an institution located in North America authorized to accept and hold London Good Delivery bars;
|
(ii) |
in the United States, to any physical address (subject to approval by the armoured transportation service carrier);
|
(iii) |
in Canada, to any business address (subject to approval by the armoured transportation service carrier); and
|
(iv) |
outside of the United States and Canada, to any address approved by the armoured transportation service carrier.
|
(b) |
Costs associated with the redemption of Units and the delivery of Silver Bullion will be borne by the redeeming Unitholder. Also, the redeeming Unitholder will be responsible
for reimbursing the Trust for in-and-out fees charged to the Trust by the Silver Custodian. Unitholders interested in redeeming Units for Silver Bullion should contact the Manager for current costs associated with the delivery of Silver
Bullion pursuant to the Unitholder’s delivery instructions.
|
(c) |
The armoured transportation service carrier will receive Silver Bullion in connection with a redemption of Units approximately 10 Business Days after the end of the month in
which the redemption notice is processed. Once the Silver Bullion representing the redeemed Units has been placed with the armoured transportation service carrier, the Silver Custodian will no longer bear the risk of loss of, and damage to,
such Silver Bullion. In the event of a loss after the Silver Bullion has been placed with the armoured transportation service carrier, the Unitholder will not have recourse against the Trust or the Silver Custodian.
|
6.3 |
Redemption of Units for Cash
|
(a) |
All redemptions of Units for cash shall be determined using United States dollars, regardless of whether the Units to be redeemed were acquired on the NYSE Arca or the TSX.
|
(b) |
Unitholders whose Units are redeemed for cash will be entitled to receive a redemption price per Unit equal to 95% of the lesser of:
|
(i) |
the volume-weighted average trading price of the Units traded on the NYSE Arca or, if trading has been suspended on the NYSE Arca, the volume-weighted average trading price of
the Units traded on the TSX, for the last five days on which the respective exchange is open for trading for the month in which the redemption request is processed; and
|
(ii) |
the Class Net Asset Value of the redeemed Units as at the Valuation Time on the applicable Monthly Redemption Date.
|
(c) |
Cash proceeds from the redemption of Units will be transferred to a redeeming Unitholder approximately three Business Days after the end of the month in which such redemption
request is processed by the Trust.
|
(d) |
To redeem Units for cash, a Unitholder must instruct the Unitholder’s Broker to deliver a Cash Redemption Notice to the Registrar and Transfer Agent (at its office in Toronto,
Ontario). A Cash Redemption Notice must be received by the Registrar and Transfer Agent no later than 4:00 p.m. (Toronto time) on the 15th day of the month in which the Cash Redemption Notice will be processed or, if such day is
not a Business Day, then on the immediately following day that is a Business Day. Any Cash Redemption Notice received after such time will be processed on the next Monthly Redemption Date. Any Cash Redemption Notice must include a valid
signature guarantee to be deemed valid by the Trust.
|
(e) |
Except as provided under Section 6.6 and Subsection 6.3(f) below, by instructing a Broker to deliver to the Registrar and Transfer Agent a Cash Redemption Notice, the
Unitholder shall be deemed to have irrevocably surrendered the Unitholder’s Units for redemption and appointed such Broker to act as the Unitholder’s exclusive settlement agent with respect to the exercise of such redemption privilege and the
receipt of payment in connection with the settlement of obligations arising from such exercise.
|
(f) |
Any Cash Redemption Notice delivered to the Registrar and Transfer Agent regarding a Unitholder’s intent to redeem Units that the Registrar and Transfer Agent or the Manager
determines to be incomplete, not in proper form or not duly executed shall for all purposes be void and of no effect and the redemption privilege to which it relates shall be considered for all purposes not to have been exercised thereby. For
each Cash Redemption Notice, the Registrar and Transfer Agent shall notify the redeeming Unitholder’s Broker that such Cash Redemption Notice has been deemed insufficient or accepted and duly processed, as the case may be.
|
(g) |
Upon receipt of the Cash Redemption Notice, the Registrar and Transfer Agent and the Manager will determine as at the Valuation Time on the applicable Monthly Redemption Date
the amount of cash that will be delivered to the redeeming Unitholder. Also on such Monthly Redemption Date, the redeeming Unitholder’s Broker will deliver the redeemed Units to CDS or DTC, as the case may be, for cancellation.
|
6.4 |
Effect of Redemption
|
(a) |
Determination of the Class Net Asset Value for the applicable class or series of a class of Units being redeemed under Section 6.1 or Section 6.3, as applicable, shall
constitute a redemption of the Units being so redeemed and the Unitholder shall thereafter cease to have any further rights with respect to such Units and, upon payment of the redemption proceeds (plus the amount of any distribution declared
but not paid on the Units redeemed as of the effective date of the Silver Redemption Notice or the Cash Redemption Notice), the Manager, the Trustee and the Trust shall be discharged from all liability to the Unitholder with respect to the
Units so redeemed and the amount so paid.
|
(b) |
In accordance with Article 4, where a Unitholder has requested a redemption during the year pursuant to Section 6.1 or Section 6.3 hereof, the Manager, in its sole discretion,
may allocate and, where applicable, designate to such Unitholder an amount equal to any Net Income or Net Realized Capital Gains realized by the Trust for the year as a result of the disposition of any Trust Property to satisfy the Silver
Redemption Notice or the Cash Redemption Notice, as the case may be, given by such Unitholder or such other amount that is determined by the Manager to be reasonable. Without limiting the generality of the foregoing, the Manager may also
allocate and, where applicable, designate to such Unitholder a portion of any income or capital gains of the Trust for the year that otherwise would only have been allocated under Subsection 4.3(d) to Unitholders who were Unitholders of
record as of 5:00 p.m. (Toronto time) on the last Business Day prior to a Distribution Date occurring in the year.
|
6.5 |
Joint Holders
|
6.6 |
Suspension of Redemption Right
|
(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 Silver 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 may apply to all requests for
|
(c) |
During any period in which the right of Unitholders to request a redemption of their Units for Silver Bullion and/or cash is suspended, 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. 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.
|
6.7 |
Performance of Trusts
|
7.1 |
General Powers
|
7.2 |
Specific Powers
|
(a) |
to hold the Trust Property other than the Silver Bullion that it may acquire hereunder exercising the same degree of care which it gives to its own property of a similar kind
under its own custody;
|
(b) |
to deliver any cash at any time held by it as directed by the Manager to purchase, or otherwise acquire, on behalf of the Trust, Silver Bullion and to retain the same in trust
hereunder in its capacity as Trustee; provided, however, that the Trustee shall have no responsibility for the custody, authenticity or validity of title of any Trust Property consisting of such Silver Bullion held by the Silver Custodian
including, without limitation, the weight, amount, purity, contents or any assaying thereof;
|
(c) |
subject to Subsection 8.1(b) and Subclause 11.2(b)(iii)(G) hereof, with any cash at any time held by it to purchase, or otherwise acquire, and to sell, on behalf of the Trust,
any securities, currencies, assets or other such Trust Property (other than the Silver Bullion) of a kind permitted pursuant to the Investment Policy and to hold and retain the same in trust hereunder in its capacity as Trustee;
|
(d) |
to enter into and settle foreign exchange transactions on behalf of the Trust for purposes of facilitating settlement of trades of such Trust Property held by it at any time
and any such transactions may be entered into with such counterparties as the Trustee may choose, in its sole discretion, including its Affiliates;
|
(e) |
to sell, convey, exchange for other securities or other property, convert, transfer, assign, pledge, encumber or otherwise dispose of any such Trust Property held by it at any
time, by any means considered reasonable by the Trustee and to receive the consideration and grant discharges therefor;
|
(f) |
to commence, defend, adjust or settle suits or legal proceedings in connection with the Trust and to represent the Trust in any such suits or legal proceedings and to keep the
Manager informed; provided, however, that the Trustee shall not be obliged or required to do so unless it has been indemnified to its satisfaction against all expenses and liabilities sustained or anticipated by the Trustee by reason thereof;
|
(g) |
subject to applicable Securities Legislation, to lend money whether secured or unsecured;
|
(h) |
to exercise any Corporate Action in connection with any such Trust Property at any time held by the Trustee, and to make any payments incidental thereto; to consent to, or
otherwise participate in or dissent from, the reorganization, consolidation, amalgamation or merger of any corporation, company or association, or to the sale, mortgage, pledge or lease of the property of any corporation, company or
association, or of any of the securities
|
(i) |
to vote personally, or by general or by limited proxy, any such Trust Property which may be held by it at any time, and similarly to exercise personally or by general or by
limited power of attorney any right appurtenant to any Trust Property held by it at any time, provided that where direction is not provided by the Manager within the time frame as set out in the Voting Materials forwarded to it in accordance
with Subsection 7.3(b), the Trustee shall take no action;
|
(j) |
to incur and pay out of such Trust Property held by it at any time any charges or expenses and disburse any assets of the Trust, which charges, expenses or disbursements are,
in the opinion of the Trustee or the Manager, as the case may be, necessary or incidental to or desirable for the carrying out of any of the purposes of the Trust or conducting the business of the Trust including, without limitation, the
Management Fee, fees payable to the Silver Custodian, the Custodian, the Valuation Agent and the Registrar and Transfer Agent, custodian settlement fees, any expenses related to the implementation and on-going operation of the Independent
Review Committee, brokerage fees and commissions, federal and provincial income taxes, goods and services taxes and withholding taxes, or other governmental levies, charges and assessments of whatever kind or nature, imposed upon or against
the Trustee in connection with the Trust or such Trust Property or upon or against such Trust Property or any part thereof and for any of the purposes herein;
|
(k) |
to renew or extend or participate in the renewal or extension of any such Trust Property held by it at any time, upon such terms as it may deem advisable, and to agree to a
reduction in the rate of interest on any such Trust Property or of any guarantee pertaining thereto, in any manner and to any extent that it may deem advisable; to waive any default whether in the performance of any covenant or condition of
any such Trust Property, or in the performance of any guarantee, or to enforce rights in respect of any such default in such manner and to such extent as it may deem advisable; to exercise and enforce any and all rights of foreclosure, to bid
on property on sale or foreclosure with or without paying a consideration therefore and in connection therewith to release the obligation on the covenant secured by such security and to exercise and enforce in any action, suit or proceeding
at law or in equity any rights or remedies in respect of any such security or guarantee pertaining thereto;
|
(l) |
to make, execute, acknowledge and deliver any and all deeds, leases, mortgages, conveyances, contracts, waivers, releases of other documents of transfer and any and all other
instruments in writing that may be necessary or proper for the accomplishment of any of the powers herein granted, whether for a term extending beyond the office of the Trustee or beyond the possible termination of the Trust or for a lesser
term;
|
(m) |
in its sole discretion, to advance monies to the Trust for the purposes of settlement of transactions and overdrafts against such Trust Property held by it at any time, on
such terms and conditions as the Trustee may, in its sole discretion, determine, provided that, in
|
(n) |
to purchase, hold, sell or exercise call or put options on securities, indices of shares or other securities, financial and stock index futures contracts, securities or
currency futures or forward contracts or other financial or derivative instruments, all whether or not any such options, indices, contracts or instruments are traded on a regular exchange and in connection therewith to deposit such Trust
Property held by it at any time with the counterparty as margin and to grant security interest therein;
|
(o) |
to deposit any such Trust Property, including securities and documents of title held by it hereunder, with the Custodian, including the Trustee, any of its Affiliates, a
sub-custodian appointed by the Trustee or a Depository;
|
(p) |
to employ in respect of the Trust such Counsel, auditors, advisors, agents or other Person as the Trustee may deem necessary from time to time for the purpose of discharging
its duties hereunder and to pay out of the Trust their reasonable expenses and compensation;
|
(q) |
to issue Units for consideration, and redeem Units, as set forth herein;
|
(r) |
to dispose of any Trust Property for the purpose of paying obligations of the Trust or for repaying any loan authorized hereby and the Trustee shall give prompt notice to the
Manager of any such disposition;
|
(s) |
to hold such portion of the such Trust Property held by it at any time that is uninvested in cash and, from time to time, to retain such cash balances on deposit with the
Trustee or any of its Affiliates or with a chartered bank or other Depository, in such account as the Trustee, in its sole discretion determines, whether or not such deposits will earn interest;
|
(t) |
to delegate any of the powers and duties of the Trustee to any one or more agents, representatives, officers, employees, independent contractors or other Persons without
liability to the Trustee except as specifically provided in this Trust Agreement; and
|
(u) |
to do all such acts, to take all such proceedings and to exercise all such rights and privileges, although not specifically mentioned herein, as the Trustee may deem necessary
to administer the Trust, and to carry out the purposes of the Trust established hereunder.
|
7.3 |
Forwarding Materials
|
(a) |
With respect to the Corporate Actions referred to in Subsection 7.2(h), the Trustee shall promptly forward to the Manager (or on direction from the Manager, to an Investment
Manager), a notice:
|
(i) |
that contains a summary of any information or materials which are actually received by the Trustee; and
|
(ii) |
which requests directions from the Manager with respect to such Corporate Action, where required.
|
(b) |
With respect to Voting Materials (including all proxies, proxy solicitation materials and other communications received by the Trustee relating to securities forming part of
the Trust Property), the Trustee shall promptly forward, or arrange to have promptly forwarded, to the Manager (or to such Investment Manager which the Manager has designated as having responsibility for a security which forms part of the
Trust Property) such materials.
|
(c) |
Other than as described in Subsections 7.3(a) and 7.3(b), the Trustee shall not be obligated to forward or summarize any securityholder communications, including
securityholder mailings, notices or reports.
|
(d) |
The Trustee shall have no responsibility or liability for ensuring the accuracy or adequacy of such third party information contained in any summary of Corporate Action
materials or information described in Subsection 7.3(a) or Voting Materials described in Subsection 7.3(b).
|
7.4 |
Dealing with Others and Self
|
(a) |
purchase, hold, sell, invest in or otherwise deal with securities or other property of the same class and nature as may be held by the Trust, whether on the Trustee’s own
account or for the account of another (in a fiduciary capacity or otherwise);
|
(b) |
use in other capacities, knowledge gained in its capacity as Trustee hereunder; provided that such use does not adversely affect the interests of the Trust and provided
further that the Trustee may not make use of any specific confidential information for its own benefit or advantage that, if generally known, might be expected to affect materially the value of the Trust Property or the Units;
|
(c) |
retain cash balances from time to time on hand in the Trust and pay interest to the Trust on such balances and the Trustee may, in its sole discretion:
|
(i) |
hold the same on a pooled basis and pay interest thereon at the rate from time to time established by the Trustee and paid with respect to cash balances so held for similar
accounts; or
|
(ii) |
hold such cash balances on deposit with a Canadian chartered bank or such other deposit-taking institution in any jurisdiction, including itself or its Affiliates, in such
interest bearing account as the Trustee, in its sole discretion, may determine; and,
|
(d) |
provide financial, investment or brokerage services related to any securities which form part of the Trust Property or to the issuer of any securities forming part of the
Trust Property, invest in the securities or other property of any body corporate with which the Trustee may be directly or indirectly associated, affiliated or interested, or earn profits from any of the activities listed herein,
|
8.1 |
Powers of the Manager
|
(a) |
The Manager hereby reserves and retains 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 to the Trust Property and all clerical, administrative and operational services to the Trust as set forth in this Article 8 or elsewhere in this Trust Agreement or in the Management
Agreement.
|
(b) |
For greater certainty, it is hereby confirmed that the Trustee shall have no responsibility for the investment management of the Trust Property or for any investment decisions
in respect of the Trust save and except for carrying out the instructions given to it pursuant to this Trust Agreement.
|
8.2 |
Duties of the Manager
|
(a) |
Except as otherwise expressly provided herein, the Manager shall have the following duties with respect to the Trust:
|
(i) |
to determine the investment objectives and strategies applicable to the Trust, including any restrictions on investments which it deems advisable and to implement such
Investment Policy, provided that the Investment Policy applicable to the Trust must concur with those set forth in Article 22 or any current Disclosure Document or like offering document of the Trust, or in any amendment thereto, or the
Management Agreement, and provided further that any material change in such Investment Policy shall be subject to the consent or approval of the Unitholders in the manner provided for in Article 20;
|
(ii) |
to ensure that the Trust complies with Applicable Laws including those relating to the investment of the Trust Property, the distribution of the Units and applicable stock
exchange listing requirements;
|
(iii) |
to monitor the performance of the Silver Bullion and other Trust Property;
|
(iv) |
to provide services in respect of the Trust’s daily operations, including the processing of and determination of procedures applicable to subscriptions and redemptions of
Units (including the acceptance and rejection of subscriptions, Silver Redemption Notices and Cash Redemption Notices) and to submit such subscriptions, Silver Redemption Notices and Cash Redemption Notices to the Registrar and Transfer Agent
for processing, and any other services not otherwise specifically contemplated by this Trust Agreement;
|
(v) |
to offer Units for sale to prospective purchasers including the power and authority to enter into arrangements regarding the distribution and sale of Units, including the
Underwriting Agreement, and other arrangements relating to the right to charge fees of any nature or kind (including, without limitation, sales commissions, redemption fees, distribution fees and transfer fees) in connection with the
distribution or sale of Units. Any such fees may be deducted from the amount of a subscription, redemption proceeds or a distribution if not paid separately by a Unitholder;
|
(vi) |
to determine from time to time the form of certificates that will represent the Units;
|
(vii) |
to conduct or cause to be conducted the day-to-day correspondence and administration of the Trust;
|
(viii) |
to provide to the Trust, adequate for carrying on the undertaking and business of the Trust, all requisite office accommodation, office facilities and personnel, telephone and
telecommunication services, stationery, office supplies, statistical and research services, record-keeping services, bookkeeping and internal accounting and audit services in respect of the operations of the Trust and other usual and ordinary
office services that may be required to properly and efficiently carry out its duties set forth in this Trust Agreement and the Management Agreement;
|
(ix) |
to provide to the Trust all other administrative and other services and facilities required by the Trust in relation to the Unitholders and be responsible for all aspects of
the Trust’s relationship with Unitholders, including the preparation for and holding of meetings of Unitholders, and other services for the provision of information to Unitholders;
|
(x) |
to establish general matters of policy and governance of the Trust subject, where specifically provided in this Trust Agreement, to the approval of the Trustee;
|
(xi) |
to establish the Trust’s operating expense budgets and to authorize the payment of actual operating expenses incurred;
|
(xii) |
to appoint the Auditors and to change the Auditors (with the prior consent of the Trustee and the Independent Review Committee, and after providing notice to the Unitholders
pursuant to Section 17.3);
|
(xiii) |
to maintain the accounting records for the Trust and to cause the financial statements of the Trust to be audited for each Fiscal Year;
|
(xiv) |
to appoint the bankers of the Trust and to establish banking procedures to be implemented by the Trustee;
|
(xv) |
to appoint the Silver Custodian to hold the Silver Bullion and the Custodian to hold the Trust Property other than the Silver Bullion, all of which appointments shall be
subject to the approval of the Trustee and any applicable Securities Authorities having jurisdiction over the Trust;
|
(xvi) |
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 in accordance with Sections 3.5,
3.6, 3.7 and 3.8 hereof, as applicable, to appoint the Valuation Agent and to review the valuation of the Trust Property as calculated by such Valuation Agent on each Valuation Date and, from time to time, consider the appropriateness of the
valuation policies adopted by the Trust;
|
(xvii) |
to appoint a Registrar and Transfer Agent and distribution disbursing agent (which may be the Registrar and Transfer Agent or an Affiliate thereof) to make distributions of
Net Income and Net Realized Capital Gains and other distributions in accordance with Article 4 and to pay cash redemption proceeds in accordance with Section 6.1 or Section 6.3 on behalf of the Trust;
|
(xviii) |
to authorize, negotiate, enter into and execute all agreements, instruments or other documents relating to the affairs of the Trust including, without limitation, any loan
agreement, granting of a security interest and supporting documentation, or to perform any act or deed which the Manager deems necessary or advisable in the best interests of the Trust;
|
(xix) |
to apply for listing of the Units on the NYSE Arca, the TSX and/or other recognized stock exchange(s) and to prepare, execute and file with the appropriate Securities
Authorities or stock exchanges any other documents that are required or appropriate under relevant Securities Legislation or stock exchange rules and regulations in respect of the Trust;
|
(xx) |
to prepare, execute and file with the appropriate Securities Authorities the Disclosure Documents, annual information forms, management reports of fund performance or such
other continuous disclosure documents relating to the Trust, and any amendments thereto, as may be required under applicable Securities Legislation;
|
(xxi) |
to prepare, certify, execute and distribute to Unitholders and file with the Securities Authorities and applicable tax authorities all such documents as may be necessary or
desirable in connection with the issue, sale and distribution of Units, including such interim financial statements, audited annual financial statements, reports to Unitholders and other disclosure as may be required under applicable
Securities Legislation, and to make all designations, elections, determinations, allocations and applications under the Tax Act as the Manager considers to be reasonable in the circumstances;
|
(xxii) |
to determine and compute for distribution purposes the Net Income and Net Realized Capital Gains of the Trust and, subject to Sections 4.3, 4.4 and 4.5, determine when, to
what extent, and in what manner distributions shall be made
|
(xxiii) |
to authorize the issuance of additional Units pursuant to Section 4.7 and the consolidation of the Units outstanding after such a distribution;
|
(xxiv) |
to direct the Registrar and Transfer Agent regarding the allotment and issue of Units in accordance with Section 5.1;
|
(xxv) |
to accept or reject any Units tendered for redemption in accordance with Article 6;
|
(xxvi) |
on or before March 31 in each year, other than a leap year in which case on or before March 30 in such year, to prepare and deliver to Unitholders the information pertaining
to the Trust, including all distributions and allocations which is required by the Tax Act or which is necessary to permit Unitholders to complete their individual tax returns for the preceding year;
|
(xxvii) |
on or before March 31 in each year, other than a leap year in which case on or before March 30 in such year, and such other date(s) in each year, to prepare and deliver to the
appropriate taxation authorities in Canada and the United States, all relevant tax filings and/or returns for the Trust that are required by Applicable Laws;
|
(xxviii) |
as set forth in full in Section 4.7 hereof, within 45 days from the end of each taxable year of the Trust, to provide Unitholders with all information necessary to enable
Unitholders or beneficial owners of Units, as applicable to elect to treat the Trust as a QEF for U.S. federal income tax purposes, including a completed “PFIC Annual Information Statement”;
|
(xxix) |
to use its best efforts to ensure that the Trust qualifies at all times as a “unit trust” pursuant to subsection 108(2) of the Tax Act and a “mutual fund trust” pursuant to
subsection 132(6) of the Tax Act;
|
(xxx) |
to keep proper records relating to the performance of its duties as Manager hereunder, which records shall be accessible for inspection by the Trustee, its agents, or the
Manager’s agents, including the Investment Manager and the Auditors, at any time, upon reasonable notice, during ordinary business hours;
|
(xxxi) |
on or before 90 days following December 31 in each year, to provide the Trustee with a certificate of compliance (“Annual Certificate of Compliance”) substantially in the form attached as Schedule A hereto and a copy of the audited annual financial statements of the Trust, together with the report of the
Auditors thereon;
|
(xxxii) |
on or before 90 days following June 30 in each year, to provide the Trustee with an interim certificate of compliance (“Interim Certificate of Compliance”) substantially in the form attached as Schedule B hereto;
|
(xxxiii) |
to delegate any or all of the powers and duties of the Manager contained in this Trust Agreement to one or more agents, representatives, officers, employees, independent
contractors or other Persons without liability to the Manager except as specifically provided in this Trust Agreement; and
|
(xxxiv) |
to do all such other acts and things as are incidental to the foregoing, and to exercise all powers which are necessary or useful to carry on the business of the Trust, to
promote any of the purposes for which the Trust is formed and to carry out the provisions of this Trust Agreement.
|
(b) |
The Manager may act as the Investment Manager to the Trust with responsibility for implementing the Investment Policy, including providing investment advisory and portfolio
management services to the Trust, or arrange for the implementation of such Investment Policy or portfolio management services by appointing, on behalf of the Trust, one or more Investment Managers, and delegating any of its investment
advisory responsibilities to such Investment Managers. The Manager, on behalf of the Trust, shall enter, in its sole discretion, into an investment management agreement with any such Investment Manager to act for all or part of the portfolio
investments of the Trust and shall advise the Trustee of such appointment. The appointment of any such Investment Manager shall be deemed to be effective upon the later of the date of receipt by the Trustee of a direction notifying the
Trustee of such appointment or the effective date specified therein and such appointment shall continue in force until receipt by the Trustee of a direction containing notice to the contrary. Any instructions from an Investment Manager shall
be deemed to be instructions of the Manager pursuant to the provisions hereof. The Trustee shall also be entitled to rely conclusively on and shall be fully protected in acting in accordance with the direction of the Investment Manager in the
exercise of powers conferred by this Trust Agreement. The Investment Manager will be a Person or Persons who, if required by Applicable Laws, will be duly registered and qualified as a portfolio manager under applicable Securities Legislation
and will determine, in its sole discretion, which portfolio securities and other assets of the Trust shall be purchased, held or sold and shall execute or cause the execution of purchase and sale orders in respect such determinations. The
Manager shall ensure that any Investment Manager appointed hereunder shall act in accordance with the Investment Policy and Applicable Laws.
|
(c) |
Any Investment Manager shall have the right to resign as Investment Manager of the Trust by giving notice in writing to the Manager and the Trustee not less than 60 days prior
to the date on which such resignation is to take effect. The Manager may at any time terminate the appointment of any Investment Manager of the Trust by giving notice in writing to the Trustee and the Investment Manager not less than 60 days
prior to the date on which such resignation is to take effect. The Manager, in its sole discretion, may appoint a successor investment manager of the Trust. If prior to the effective date of the Investment Manager’s resignation, a successor
investment manager is not appointed, the Manager shall assume the duties and responsibilities of such investment manager until such time as a successor shall be appointed and/or approved, as the case may be.
|
8.3 |
Portfolio Execution
|
8.4 |
Soft Dollar Transactions
|
8.5 |
Distributors
|
9.1 |
Independent Review Committee
|
(a) |
Pursuant to the requirements contained in NI 81-107, the Manager shall establish an Independent Review Committee for the Trust. The Independent Review Committee shall consist
of at least three members, each of whom shall be independent of the Manager and its Affiliates, and free from any interest and any business or other relationship which could, or could be reasonably perceived to, materially interfere with the
exercise of an Independent Review Committee member’s judgement. The Independent Review Committee for the Trust may also act as the independent review committee for other investment funds managed by the Manager or any of its Affiliates.
|
(b) |
The Manager shall refer all conflict of interest matters to the Independent Review Committee for its review and/or approval. The Manager shall establish a written charter for
the Independent Review Committee which shall include its mandate, responsibilities and functions, and the written policies and procedures it will follow when performing its functions, including dealing with conflict of interest matters. The
Manager shall maintain records in respect of these matters and shall provide assistance to the Independent Review Committee in carrying out its functions. The Independent Review Committee shall conduct regular assessments and provide reports,
at least annually, to the Trust and to Unitholders in respect of its functions. The report prepared by the Independent Review Committee shall be made available on the Trust’s website (www.sprottphysicalsilvertrust.com) or, at a Unitholder’s request, sent to the Unitholder at no cost.
|
(c) |
The Independent Review Committee shall:
|
(i) |
review and provide input on the Manager’s written policies and procedures that deal with conflict of interest matters;
|
(ii) |
review conflict of interest matters referred to it by the Manager and make recommendations to the Manager regarding whether the Manager’s proposed actions in connection with
the conflict of interest matter achieve a fair and reasonable result for the Trust;
|
(iii) |
consider and, if deemed appropriate, approve the Manager’s decision on a conflict of interest matter that the Manager refers to the Independent Review Committee for approval;
and
|
(iv) |
perform such other duties as may be required of the Independent Review Committee under applicable Securities Legislation.
|
(d) |
All fees and expenses of the Independent Review Committee incurred in connection with its duties with respect to the Trust shall be paid by the Trust and the Independent
Review Committee shall have the authority to retain, at the expense of the Trust, independent counsel or other advisors if the Independent Review Committee deems it appropriate to do so. The members of the Independent Review Committee shall
be indemnified by the Trust, except in cases of wilful misconduct, bad faith, negligence or breach of their standard of care.
|
10.1 |
Trustee’s Fee
|
10.2 |
Manager’s Fee
|
10.3 |
Investment Manager’s Fee
|
10.4 |
Silver Custodian and Custodian’s Fees
|
10.5 |
Expenses of the Trust
|
(a) |
In connection with the Trust’s initial public offering of Units, the Trust will be responsible for paying the filing and listing fees of the applicable Securities Authorities
and stock exchanges, the fees and expenses payable to the Silver Custodian and the Registrar and Transfer Agent, auditing and printing expenses, and the selling commissions of the Underwriters as disclosed in the Disclosure Documents. All
other costs and expenses for the Trust’s initial public offering, including the costs of creating and organizing the Trust, the costs of preparing the Disclosure Documents, legal expenses, marketing expenses and other incidental expenses will
be paid by the Manager.
|
(b) |
Except as otherwise provided herein and subject to the Management Agreement, the Trust shall be responsible for all costs and expenses incurred in connection with the on-going
operation and administration of the Trust including, but not limited to: the fees and expenses payable to and incurred by the Trustee, the Manager, any Investment Manager, the Silver Custodian, the Custodian, any sub-custodians, the Registrar
and Transfer Agent, and the Valuation Agent; transaction and handling costs for the Silver Bullion; storage fees for the Silver Bullion; custodian settlement fees; counterparty fees; legal, audit, accounting, bookkeeping and record-keeping
fees and expenses; costs and expenses of reporting to Unitholders and conducting Unitholder meetings; printing and mailing costs; filing and listing fees payable to applicable Securities Authorities and stock exchanges; other administrative
expenses and costs incurred in connection with the Trust’s continuous disclosure public filing requirements and investor relations; any applicable Canadian taxes payable by the Trust or to which the Trust may be subject including federal and
provincial income taxes, goods and services tax, and withholding taxes; interest expenses and
|
(c) |
The Trust will be responsible for the fees and expenses of any action, suit or other proceedings in which, or in relation to which, the Trustee, the Manager, the Silver
Custodian, the Custodian, any sub-custodians, the Registrar and Transfer Agent, the Valuation Agent or the Underwriters and/or any of their respective officers, directors, employees, consultants or agents is entitled to indemnity by the
Trust.
|
11.1 |
Standard of Care
|
11.2 |
Reliance
|
(a) |
The Manager shall from time to time furnish the Trustee with a certificate of authorized signing authorities (“Certificate of Authorized Signing Authorities”) substantially in the form attached hereto as Schedule C, signed by its authorized officers setting out the name(s) and title(s) of the authorized officer(s) of
the Manager and of any other Person(s) or representative(s), including any Investment Manager appointed by the Manager, and authorized to act on behalf of the Manager at the time specified in such certificate, together with specimen
signatures of all such officers, Persons or representatives, and the Trustee shall be entitled to rely upon the identification of such Persons as specified in such certificate as the Person(s) entitled to act on behalf of the Manager for the
purposes of this Trust Agreement until a later certificate respecting the same is delivered to the Trustee.
|
(b) |
The Trustee shall:
|
(i) |
be fully protected in acting upon any instrument, certificate or other writing believed by it to be genuine and to be signed or presented by the proper Person or Persons;
|
(ii) |
be under no duty to make any investigation or inquiry as to any statement contained in any such writing but may accept the same as conclusive evidence of the truth and
accuracy of the statements therein contained;
|
(iii) |
not be responsible for or liable except as provided in accordance with this Trust Agreement for:
|
(A) |
the proper application by any Unitholder of any part of its interests in the Trust if payments are made in accordance with written directions of such Unitholder as herein
provided;
|
(B) |
the adequacy of the Trust to meet and discharge any and all payments and liabilities in respect of a Unitholder;
|
(C) |
the compliance by any Unitholder with the rules under the Tax Act or any Applicable Laws including limits on investments in non-Canadian securities;
|
(D) |
the validity of title to any Trust Property which the Trustee did not arrange itself to have registered;
|
(E) |
any act or omission (other than an act or omission related solely to the Trustee) required or demanded by any governmental, taxing regulatory or other competent authority in
any country in which all or part of the Trust Property is held or which has jurisdiction over the Trustee, the Manager or the Trust;
|
(F) |
any loss or damage of any nature whatsoever resulting from official action, war or threat of war, insurrection or civil disturbance, interruption in postal, telephone,
telegraph, telex or other electromechanical communication systems or power supply, or any other factor beyond the Trustee’s control which obstructs, affects, prohibits or delays the Trustee, its directors, officers, employees or agents in
carrying out the responsibilities provided for herein, in whole or in part;
|
(G) |
any ongoing monitoring of the Investment Policy of the Trust as set out in Section 22 hereof or any risk factor whatsoever related thereto;
|
(H) |
any Trust Property which it does not hold or which is not directly controlled by it, its Affiliates or its appointed agents (including any sub-custodians), including any
assets pledged or loaned to a third party or the Silver Bullion held by the Silver Custodian; or
|
(I) |
any compliance, reporting or filings in accordance with applicable Securities Legislation or United States tax laws, regulations, rules or policies that apply to the Trust,
including for greater certainty the Additional Trustee Duties.
|
(c) |
The Trustee may rely and act upon any statement, report or opinion prepared by or any advice received from the Auditors, Counsel or other professional advisors of the Trust
and shall not be responsible nor held liable for any loss or damage resulting from so relying or acting if the advice was within the area of professional competence of the Person from whom it was received, the Trustee acted in good faith in
relying thereon and the professional advisor was aware that the Trustee was receiving the advice in its capacity as trustee of the Trust and the Trustee acted in good faith in relying thereon.
|
(d) |
The Trustee shall in no way be responsible for, nor incur any liability based on, the action or failure to act or for acting pursuant to or in reliance on instructions of the
Manager, any Investment Manager, the Silver Custodian (if not the Trustee), the Custodian (if not the Trustee), the Valuation Agent (if not the Trustee), the Registrar and Transfer Agent (if not the Trustee), or any Person or organization to
whom its responsibilities are delegated pursuant to this Trust Agreement.
|
11.3 |
General Disclaimer of Liability
|
(a) |
The Trustee shall not be liable to the Trust or to any Unitholder for any loss or damage relating to any matter regarding the Trust, including any loss or diminution in the
Net Asset Value of the Trust or to any particular asset of the Trust, except to the extent that the Trustee does not meet its standard of care set out in Section 11.1 hereof. In no event shall the Trustee be liable for indirect, consequential
or special damages including, but not limited to, loss of reputation, good will or business.
|
(b) |
The Trustee shall not be liable to the Trust or to any Unitholder for the acts, omissions, receipts, neglects or defaults of any Person, firm or corporation employed or
engaged by it as permitted hereunder, or for joining in any receipt or act of conformity, or for any loss, damage or expense caused to the Trust through the insufficiency or deficiency of any security in or upon which any of the monies of or
belonging to the Trust shall be paid out or invested, or for any loss or damage arising from the bankruptcy, insolvency or tortious act of any Person, firm or corporation with whom or which any monies or Trust Property shall be lodged or
deposited, or for any loss occasioned by error in judgment or oversight on the part of the Trustee, or for any other loss, damage or misfortune which may happen in the execution by the Trustee of its duties hereunder, except to the extent
that the Trustee does not meet its standard of care set out in Section 11.1 hereof.
|
(c) |
For greater certainty, the Trustee shall not be liable to the Trust or to any Unitholder for the acts, omissions, receipts, neglect or default of the Silver Custodian or the
Registrar and Transfer Agent (unless the Trustee is the Registrar and Transfer Agent or the Silver Custodian and it has breached its standard of care set out in Section 11.1 in respect thereof).
|
(d) |
For greater certainty, the Trustee, in incurring any debts, liabilities or obligations, or in taking or omitting any other actions for or in connection with the affairs of the
Trust is, and will be conclusively deemed to be, acting for and on behalf of the Trust, and not in its own personal capacity.
|
11.4 |
Indemnification of the Trustee
|
(a) |
Without limiting any protection or indemnity of the Trustee under any other provision hereof, or otherwise at law, the Trustee, its Affiliates, nominees and agents and each of
their respective directors, officers and employees shall at all times be indemnified and held harmless by the Trust and to the extent that the Trust Property is insufficient for such purpose, by the Manager, from and against:
|
(i) |
all claims whatsoever (including costs, losses, damages, penalties, actions, suits, judgments, charges and expenses, including legal fees in connection therewith) brought,
commenced or prosecuted against any of them for or in respect of any act, deed, matter or thing whatsoever made, done, acquiesced in or omitted in or about or in relation to the execution of the Trustee’s duties as Trustee, and
|
(ii) |
all other liabilities, costs, charges and expenses which any of them sustains or incurs in or about or in relation to the affairs of the Trust.
|
(b) |
For greater certainty, the commencement of formal legal proceedings shall not be a precondition for indemnification hereunder. Further, none of the provisions of this Trust
Agreement shall require the Trustee 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 the Trustee is first indemnified to its satisfaction, acting reasonably. This provision shall survive the resignation or removal of the Trustee, or the termination of this Trust Agreement.
|
11.5 |
Additional Indemnification of the Trustee
|
(a) |
the Trustee shall not have any liability with respect to such Additional Trustee Duties; and
|
(b) |
in addition to the indemnity provided to the Trustee under Section 11.4 hereof, the Manager agrees to indemnify the Trustee and its directors, officers, employees and agents
for:
|
(i) |
all claims whatsoever (including costs, losses, damages, penalties, actions, suits, judgments, charges and expenses, including legal fees in connection therewith) brought,
commenced or prosecuted against any of them for or in respect of any act, deed, matter or thing whatsoever made, done, acquiesced in or omitted in or about or in relation to the Additional Trustee Duties; and
|
(ii) |
all other liabilities, costs, charges and expenses which any of them sustains or incurs in or about or in relation to such Additional Trustee Duties,
|
11.6 |
Exception
|
12.1 |
Standard of Care
|
(a) |
The Manager shall exercise the powers and discharge the duties of its office honestly, in good faith and in the best interests of the Trust and in connection therewith shall
exercise the degree of care, diligence and skill that a reasonably prudent professional manager would exercise in comparable circumstances.
|
(b) |
The Manager agrees that any information supplied to the Trust and/or the Trustee will be accurate and complete and will contain no misrepresentations; provided that,
respecting information derived by the Manager from a Person other than the Manager, the Manager’s obligation hereunder shall be subject to its standard of care and no liability shall be incurred by the Trust or the Trustee as a result of any
error in such information.
|
12.2 |
Reliance
|
(a) |
The Manager may employ or engage, and rely and act on information or advice received from the Auditors, the Underwriters, other distributors, Brokers, Depositories, the Silver
Custodian, the Custodian, electronic data processors, advisers, Counsel and others and shall not be responsible or liable for the acts or omissions of such Persons or for any other matter, including any loss or depreciation in the Net Asset
Value of the Trust or any particular asset of the Trust, provided that the Manager acted in good faith in accordance with its standard of care set out in Subsection 12.1(a) in relying on such information or advice.
|
(b) |
The Manager shall be entitled to assume that any information received from the Trustee, the Silver Custodian, the Custodian or any sub-custodian, or their respective
authorized representatives associated with the day-to-day operation of the Trust is accurate and complete and no liability shall be incurred by the Manager as a result of any error in such information or any failure to receive any notices
required to be delivered pursuant to this Trust Agreement, except to the extent that any such information provided to, or failure to receive any notices by, the Manager arises or results from the Manager’s failure to comply with the terms of
this Trust Agreement or the Management Agreement in providing any required directions or information related thereto.
|
12.3 |
Engaging in Competition
|
(a) |
In the event that the Manager, its partners, employees, associates and Affiliates or any of them now or hereafter carry on activities competitive with those of the Trust or
buy, sell or trade in assets and portfolio securities of the Trust or of other investment funds, none of them shall be under any liability to the Trust or to the Unitholders for so acting.
|
(b) |
It is agreed and understood that the Manager shall not be required to devote its efforts exclusively to or for the benefit of the Trust and may engage in other business
interests and may engage in other activities similar or in addition to those relating to the activities to be performed for the Trust.
|
12.4 |
Indemnification of the Manager
|
(a) |
The Manager, its Affiliates and agents, and their respective directors, partners, officers and employees shall at all times be indemnified and held harmless by the Trust from
and against all legal fees, judgments and amounts paid in settlement, actually and reasonably incurred by them in connection with the Manager’s services provided to the Trust pursuant to this Trust Agreement and the Management Agreement,
provided that the Trust has reasonable grounds to believe that the action or inaction that caused the payment of the legal fees, judgments and amounts paid in settlement was in the best interests of the Trust and provided that such Person(s)
shall not be indemnified by the Trust where:
|
(i) |
there has been negligence, wilful misconduct, wilful neglect, default, bad faith or
dishonesty on the part of the Manager or such other Person; |
(ii) |
a claim is made as a result of a misrepresentation contained in any current Disclosure Documents or continuous disclosure documents of the Trust distributed or filed in
connection with the issuance of the Units or under applicable Securities Legislation; or
|
(iii) |
the Manager has failed to fulfill its standard of care set out in Section 12.1 or its other obligations in accordance with Applicable Laws or the provisions set forth in this
Trust Agreement and the Management Agreement,
|
(b) |
In order for the Trust, acting through the Trustee, to satisfy itself as to whether the indemnification provided for in Subsection 12.4(a) is in the best interests of the
Trust, before paying out any such indemnity hereunder, the Trust, acting through the Trustee, may obtain a satisfactory legal opinion that the Trust has reasonable grounds to believe that the indemnification is in the best interests of the
Trust, and instead of or in addition to the obtainment of such a legal opinion, the Trustee in its sole discretion and at the expense of the Trust, may call a meeting of the Unitholders pursuant to this Trust Agreement to direct the Trustee
as to any such payments out of the Trust.
|
12.5 |
Liability for Investment Decisions
|
13.1 |
Resignation of Trustee
|
13.2 |
Removal of Trustee
|
13.3 |
Appointment of Successor
|
13.4 |
Termination Upon Failure to Appoint Successor
|
14.1 |
Resignation, Insolvency or Bankruptcy of the Manager
|
(a) |
The Manager shall have the right to resign as Manager of the Trust by giving notice in writing to the Trustee and the Unitholders not less than 90 days prior to the date on
which such resignation is to take effect. Such resignation shall take effect on the date specified in such notice. Notwithstanding the foregoing, no approval of, or notice to, Unitholders is required to effect a Manager Reorganization. The
Manager shall appoint a successor manager of the Trust, and, unless the successor manager is an Affiliate of the Manager, such appointment must be approved by the Unitholders by an Ordinary Resolution.
|
(b) |
If, prior to the effective date of the Manager’s resignation, a successor manager is not appointed or the Unitholders do not approve of the appointment of the successor
manager as required hereunder, the Trust shall be terminated and dissolved upon the effective date of the resignation of the Manager (which shall be considered to be the effective date on which the Trust is to be terminated for the purposes
of Article 21) and, after providing for all liabilities of the Trust, the Trust Property shall be distributed to the Unitholders in accordance with the provisions of Article 21, and the Trustee and the Manager shall continue to act as trustee
and manager, respectively, of the Trust until such Trust Property has been so distributed.
|
(c) |
The Trust shall be terminated immediately following the occurrence of a Termination Event. On such termination, the Trust Property shall be distributed to Unitholders in
accordance with the provisions of Section 21.3. For the purposes of this Article 14 and Section 21.1 of this Trust Agreement, each of the following events shall be a “Termination Event”:
|
(i) |
the Manager is, in the opinion of the Trustee, in material default of its obligations
under this Trust Agreement and such default continues for 120 days from the date that the Manager receives notice of such default from the Trustee and no successor manager has been appointed by the Unitholders; |
(ii) |
the Manager has been declared bankrupt or insolvent or has entered into liquidation or winding-up, whether compulsory or voluntary (and not merely a voluntary liquidation for
the purposes of amalgamation or reconstruction);
|
(iii) |
the Manager makes a general assignment for the benefit of its creditors or otherwise acknowledges its insolvency; or
|
(iv) |
the assets of the Manager have become subject to seizure or confiscation by any public or governmental authority.
|
14.2 |
Successor Manager
|
15.1 |
Liability of Unitholders
|
15.2 |
Indemnification of the Trust by the Manager
|
16.1 |
Time of Meetings
|
16.2 |
Place of Meeting
|
16.3 |
Notice of Meeting
|
16.4 |
Meetings Without Notice
|
16.5 |
Quorum
|
16.6 |
Chairman, Secretary and Scrutineers
|
16.7 |
Persons Entitled to be Present
|
16.8 |
Right to Vote
|
16.9 |
Votes to Govern
|
16.10 |
Show of Hands
|
16.11 |
Polls
|
16.12 |
Adjournment
|
16.13 |
Resolutions in Writing
|
16.14 |
Record Dates
|
16.15 |
Proxies
|
16.16 |
Validity of Proxies
|
16.17 |
Revocation of Proxy
|
16.18 |
Solicitation of Proxies
|
16.19 |
Form of Proxy Solicitation
|
(a) |
the form of proxy sent to a Unitholder by a Person soliciting proxies shall indicate in bold-faced type by whom the proxy is being solicited and the form of proxy or the
information circular shall state the name, address and principal occupation or employment within the preceding five years of each Person soliciting proxies and shall disclose the beneficial ownership of Units of each such Person;
|
(b) |
the form of proxy shall provide means whereby the Unitholder whose proxy is solicited is afforded an opportunity to specify that his or her votes shall be cast by the nominees
in favour of or against, in accordance with such Unitholder’s choice, each matter or group of related matters identified therein or in the information circular as intended to be acted upon;
|
(c) |
no proxy shall confer authority to vote at any meeting other than the meeting specified in the notice of meeting or any adjournment thereof;
|
(d) |
the information circular or form of proxy shall state that the votes represented by the proxy shall be cast and that, where the Unitholder whose proxy is solicited specifies a
choice with respect to any matter to be acted upon pursuant to paragraph (b) above, the votes shall be cast in accordance with the specifications so made; and
|
(e) |
the information circular or form of proxy shall indicate in bold-faced type that the Unitholder has the right to appoint a person, who need not be a Unitholder, to attend and
act for him or her and on his or her behalf at the meeting other than the person, if any, designated in the form of proxy, and shall contain instructions as to the manner in which the Unitholder may exercise such right.
|
16.20 |
Resolutions Binding
|
16.21 |
Minutes of Meetings
|
17.1 |
Registrar and Transfer Agent
|
(a) |
The Manager shall appoint one or more chartered banks or banking institutions, trust companies, or other Persons, to act as the registrar and transfer agent (the “Registrar and Transfer Agent”) for the Units and may provide for the transfer of Units in one or more places within or outside Canada (provided that
if such appointments are made there shall be a Registrar and Transfer Agent within the Province of Ontario). Such Registrar and Transfer Agent shall perform those functions and duties usually performed by a registrar and transfer agent of
shares of corporations having share capital, including maintaining the Register as provided for in Section 17.2 and all other necessary or appropriate books (which may be kept on a computer or similar device) for recording original issuances
of Units and registering and transferring the Units. In the case of an original issuance of Units, the Registrar and Transfer Agent may rely and act upon the written instruction of the Manager without inquiry into the receipt by the Trust of,
or the sufficiency of, the consideration for such original issuance of Units.
|
(b) |
The Manager, on behalf of the Trust, will enter into a written agreement with such Registrar and Transfer Agent which agreement shall provide that any fees required to be paid
to the Registrar and Transfer Agent for services rendered, other than in respect of a transfer of Units, shall be the responsibility of the Trust.
|
17.2 |
Unit Register
|
(a) |
Subject to the approval or rejection by and direction from the Manager in connection with any purchase, redemption or transfer of Units hereunder, the Registrar and Transfer
Agent appointed pursuant to Section 17.1 shall maintain records (the “Register”) for and on behalf of the Trust which shall contain the name and
the latest known address of each Unitholder and the number of Units of each class and each series of a class from time to time held by the Unitholder, the certificate numbers of the certificates, if any, representing such Units and a record
of all transfers thereof, and such Register shall be available at the offices of the Registrar and Transfer Agent in Toronto, Ontario or in such other office in Canada as the Manager deems appropriate and to which the Trustee consents.
|
(b) |
As part of the Register, the Registrar and Transfer Agent shall maintain participation records for the Trust, showing with respect to each Unitholder:
|
(i) |
the date of each issue of Units to such Unitholder, the number of Units issued of each class and each series of a class and the applicable Class Net Asset Value per Unit for
which each Unit is issued;
|
(ii) |
the date of each transfer of Units to and from such Unitholder, and the number of Units of each class and each series of a class transferred;
|
(iii) |
the date of each redemption of Units, the number of Units redeemed of each class and each series of a class and the Class Net Asset Value per Unit at which each Unit is
redeemed;
|
(iv) |
the date of each redesignation of Units, the number of Units redesignated of each class and each series of a class and the Class Net Asset Value per Unit at which each Unit is
redesignated;
|
(v) |
the number of Units held immediately after any subdivision or consolidation of Units;
|
(vi) |
the number of Units of each class and each series of a class currently held; and
|
(vii) |
the date and details of each distribution of the Trust to the Unitholder.
|
(c) |
The Registrar and Transfer Agent shall deliver to the Manager within three Business Days following a Valuation Date, and at such other times as the Manager may request, a
certified list of the Unitholders which list shall contain the name, the last known address and the number of Units of each class and each series of a class currently held by each Unitholder.
|
(d) |
The Trust, the Trustee (in its capacity as such, regardless of the fact that the Trustee may be or may have been the Registrar and Transfer Agent) and the Manager shall at all
times be entitled to rely entirely upon the Register maintained by the Registrar and Transfer Agent as a record of ownership of the Trust and the registered Unitholders shall be deemed to be the true owners thereof for all purposes hereof.
|
(e) |
Only Unitholders whose Units are so recorded on the Register shall be entitled to receive distributions and to exercise or enjoy the rights of Unitholders hereunder. The
Person registered as a Unitholder on the Register shall be treated as the owner of such Unit for all purposes, including payment of any distributions, giving notice to Unitholders and determining the right to attend and vote at meetings of
Unitholders. Accordingly, the Manager shall not be bound to recognize any transfer or attempted transfer, pledge or other disposition of a Unit, or any equitable or other claim with respect thereto, whether or not the Trust or the Manager
shall have actual or other notice thereof, until such Unit shall have been transferred on the Register as herein provided.
|
17.3 |
Auditors
|
17.4 |
Valuation Agent
|
17.5 |
Custodian of Silver Bullion
|
(a) |
the degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances, or
|
(b) |
at least the same degree of care as the Silver Custodian exercises with respect to its own property of a similar kind, if this is a higher standard of care than the degree of
care referred to in Subsection 17.5(a).
|
17.6 |
Custodian of Trust Property Other Than Silver Bullion
|
(a) |
The Trustee shall be the Custodian of the Trust Property other than the Silver Bullion. In carrying out its duties and obligations as Custodian, the Trustee shall exercise:
(i) the degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances; or (ii) at least the same degree of care as the Trustee exercises with respect to its own property of a similar kind in
the relevant market, if this is a higher degree of care than the degree of care referred to above.
|
(b) |
Notwithstanding any other provision herein, the Trustee shall not be responsible for the holding or control of any Trust Property that is not directly held by the Trustee or
its appointed sub-custodians, including any assets pledged or loaned to a third party or the Silver Bullion held with the Silver Custodian.
|
(c) |
The Manager, in accordance with Applicable Law and with the consent of the Trustee, shall have the authority to appoint a replacement or an additional custodian of the Trust
Property other than the Silver Bullion and to make contractual arrangements for that purpose. In the event any Person other than the Trustee is appointed Custodian of such
|
(d) |
On the direction of the Manager, the Trustee shall register such Trust Property held by it at any time in its own name as trustee of the Trust or in the name or names of
nominees, including any sub-custodians appointed by the Trustee, CDS, DTC or in bearer form. The Trustee is hereby expressly empowered to keep such Trust Property, wholly or partly, in its principal office or in any one or more of its
branches in any province of Canada or at the office of any sub-custodian, including itself or its Affiliates, to hold securities constituting such Trust Property through the facilities of CDS or DTC or any other domestic or foreign depository
or clearing agency which is duly authorized to operate a book-based system (including a transnational book-based system) in the country, province, state or political subdivision of any country in which such depository or clearing agency is
located (provided that such depositories or clearing agencies shall not be deemed to be agents or sub-custodians of the Trustee), all as the Trustee may determine so long as such Trust Property at all times is kept distinct from the assets of
the Trustee and those of its sub-custodians, nominees or any other Person in the registers and other books of account kept by the Trustee or such Persons.
|
(e) |
Where such Trust Property is issued in bearer form, such Trust Property shall be designated or segregated by the Trustee or sub-custodian or their respective nominees so as to
establish that the beneficial ownership of such Trust Property is vested in the Trustee. Comparable provisions shall be included in any custodianship or sub-custodianship agreements entered into by or under authority of the Custodian. The
Trust Property registered in accordance with Subsection 17.6(d) or issued in accordance with this Subsection 17.6(e) shall be recorded in an account with an account number or other designation in the records of the Trustee or the
sub-custodian or their respective nominees sufficient to establish that the beneficial ownership of such Trust Property is vested in the Trust.
|
(f) |
The Trustee may appoint sub-custodians (who may be affiliated with or otherwise related to the Trustee) and enter into sub-custodianship agreements on terms consistent with
this Trust Agreement; provided, however, that written consent to such appointment has been provided by the Manager. For the purposes of this Trust Agreement, such consent is deemed to have been obtained in respect of the appointment of those
sub-custodians which are part of the Trustee’s international network of sub-custodians. Further, upon notice to the Manager of the appointment of any additional sub-custodians in the Trustee’s international network, the Manager will be deemed
to have consented to such appointment.
|
(g) |
A sub-custodian appointed by the Trustee shall be permitted to appoint a sub-sub-custodian only upon the prior written consent of the Trustee and the Manager, and further
provided that adequate provision is made in the sub-custodianship agreement for the Trust, acting directly or through the sub-custodian, to enforce its rights in respect of such Trust Property which is held by the appointed sub-sub-custodian.
|
(h) |
Any sub-custodian appointed by or under the authority of the Trustee shall meet any guideline for acting as a sub-custodian prescribed by Securities Authorities in Canada from
|
(i) |
Where required under Applicable Laws, the Trustee shall, within 60 days following the end of each Fiscal Year of the Trust, advise the Trust in writing of the names and
addresses of all sub-custodians of the Trust, whether this Trust Agreement and the sub-custodian agreements are in compliance with the Sub-Custodian Guidelines, and whether, to the best of the knowledge and belief of the Trustee, each
sub-custodian satisfies the applicable requirements of the Sub-Custodian Guidelines.
|
(j) |
The Trustee, in its capacity as Custodian, shall account for all such Trust Property received and held by it, shall disburse or retain any income received thereon and/or
capital pursuant to directions from the Manager and shall provide monthly statements of the account in such format as may be agreed to by the parties. Additional statements which are required to satisfy the requirements of any regulatory or
administrative agencies will also be provided as requested by, and at the expense of, the Manager. The Manager will within 30 days following the issue date of any such statement give the Trustee written notice of any alleged omissions from or
additions wrongly made to or inaccurate entries in any such statement. The Manager agrees that at the end of the 30-day period, the Trustee shall be fully released and discharged from any liability or accountability to anyone with respect to
acts or transactions disclosed in any such statement except as to any alleged errors of which the Manager has identified by giving written notice to the Trustee.
|
(k) |
If, in order to provide services to the Manager pursuant to this Trust Agreement, the Trustee is required to engage sub-custodians in certain markets which the Trustee has
identified as being high risk and has designated as “Designated Markets” by listing them in Schedule D attached hereto. A Designated Market is a
market where the risks of engaging a sub-custodian are significantly greater than they would be in more established markets. Notwithstanding any other provision of this Trust Agreement, in such Designated Markets where the Trustee is
providing custodial services (whether directly or through a sub-custodian) in respect of the Trust, the Trustee may not be able to accept some of the liabilities or responsibilities which are contemplated by the Trust Agreement. Under the
Trust Agreement, the Trustee is responsible for the negligence and wrongful acts of its sub-custodians. However, where the Trustee engages a sub-custodian in a Designated Market, the Manager hereby acknowledges and agrees that the Trustee
will not be responsible for the negligence or wrongful acts of such sub-custodians and that such negligence or wrongful acts will not be considered to be a breach by the Trustee of its standard of care or negligence for the purposes of this
Trust Agreement. Notwithstanding the aforementioned, the Trustee will continue to accept responsibility for the selection and on-going monitoring of its sub-custodians in all markets, except Designated Markets, in accordance with its standard
of care. From time to time, the Trustee may add to or delete markets from the list of Designated Markets attached as Schedule D hereto, and the Trustee will provide the Manager with written notice of such changes. The Manager agrees that it
will have 60 days from the date of any such notice to raise concerns regarding any new Designated Market
|
18.1 |
Records
|
18.2 |
Reports to Unitholders
|
(a) |
At the time of investment in Units, a statement shall be issued by the Registrar and Transfer Agent, in such form and on such terms and conditions as the Manager may, in its
sole discretion, determine, and such statement will be forwarded to each Unitholder, which statement will indicate the number of Units held by the Unitholder and such other information as may be required by Applicable Laws; provided, however,
that the information disclosed on such statements shall always be in accordance with the number of the Unitholder’s Units reflected on the Register.
|
(b) |
The Manager shall cause an audit of the financial statements of the Trust for each Fiscal Year to be made by the Auditors. The financial statements of the Trust so audited
shall include such statements as are required by Applicable Laws. A copy of such statements, together with the Auditors’ report thereon, shall be filed with the appropriate Securities Authorities pursuant to Applicable Laws unless and to the
extent an exemption from such filing is available under Applicable Laws.
|
(c) |
The Manager shall approve and forward to Unitholders such audited annual financial statements and unaudited interim financial statements as it is required under Applicable
Laws to deliver, within the time limits specified under such laws. The Trustee shall not be required to prepare or approve any audited financial statements of the Trust.
|
(d) |
In the absence of the filing in writing with the Manager or the Trustee of any objection to the statements or reports supplied in accordance with this Section 18.2 within 90
days of their mailing, Unitholders shall be deemed to have approved such statements or reports and the Trustee and the Manager shall be released, relieved and discharged with respect to all matters and things set forth in the statements and
reports (except for such matters or things with reference to which any objection in writing has been filed with the Manager and except for any loss or other diminution of the assets of the Trust resulting from the negligence, wilful
misconduct or lack of good faith of the Manager in preparing such statements or reports) as if they had been settled by the decree of a court of competent jurisdiction.
|
(e) |
The Manager shall prepare, file and deliver to Unitholders (if required) all management reports of fund performance and other continuous disclosure documents required by
applicable Securities Legislation.
|
(f) |
The Manager will make available to Unitholders as soon as practicable on its website an unaudited schedule of Class Net Asset Value per Unit for each class and series of a
class of Units as at the Valuation Time on each Valuation Date.
|
(g) |
No Unitholder shall be entitled to any other accounting with respect to the Trust or the Unitholder’s holding of Units in the Trust, except as may be required by Applicable
Laws.
|
18.3 |
Material to be Furnished to the Trustee
|
(a) |
a copy of each of the Disclosure Documents for investment in Units;
|
(b) |
a copy of each continuous disclosure document relating to the Trust filed with, furnished or otherwise provided to, any Securities Authority under applicable Securities
Legislation;
|
(c) |
on or before 90 days following December 31 of each year, a copy of the audited annual financial statement of the Trust, together with the report of the Auditors thereon;
|
(d) |
on or before 90 days following December 31 of each year, an Annual Certificate of Compliance, substantially in the form set out in Schedule A attached hereto, with respect to
the Trust;
|
(e) |
on or before 90 days following June 30 in each year, an Interim Certificate of Compliance, substantially in the form set out in Schedule B attached hereto, with respect to the
Trust; and
|
(f) |
a Certificate of Authorized Signing Authorities, substantially in the form set out in Schedule C attached hereto, specifying the names and titles of those Persons authorized
to give approvals, consents or directions on behalf of the Manager including specimen signatures of each such Person.
|
18.4 |
Documents Requiring Trustee’s Consent
|
18.5 |
Execution of Documents
|
18.6 |
Execution of Documents by the Manager
|
18.7 |
Material to be Furnished to Unitholders
|
(a) |
any change to the Investment Policy of the Trust;
|
(b) |
the Manager’s desire to change the Fiscal Year of the Trust;
|
(c) |
any change in the location of the principal office of the Trust;
|
(d) |
any change to the Person designated by the Manager as the Registrar and Transfer Agent or Valuation Agent of the Trust;
|
(e) |
any proposed change to the method of calculation of the Management Fee payable by the Trust;
|
(f) |
any meeting of the Unitholders of the Trust;
|
(g) |
the intention by the Manager to terminate and dissolve or reorganize the Trust; and
|
(h) |
any material amendment to the Trust Agreement governing the Trust, together with a written explanation for the reasons for such amendment.
|
19.1 |
Notice to Unitholders
|
19.2 |
Methods of Communication
|
(a) |
personal or courier delivery;
|
(b) |
facsimile (in accordance with the Manager’s guidelines);
|
(c) |
S.W.I.F.T.;
|
(d) |
one of the Trustee’s secured client access channels;
|
(e) |
directly between electromechanical or electronic terminals (other than the internet or unsecured lines of communication);
|
(f) |
telephone (subject to Sections 19.4, 19.5 and 19.7); or
|
(g) |
internet (subject to Sections 19.6 and 19.7).
|
in the case of the Trustee:
|
||
RBC Investor Services Trust
155 Wellington Street West, 2nd Floor RBC Centre Toronto, Ontario M5V 3L3 |
||
Attention:
|
Director or Senior Manager, Client Management - Funds
|
|
Telephone:
|
(416) 974-5273
|
|
Facsimile:
|
(416) 955-1240
|
|
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
|
19.3 |
Deemed Delivery
|
(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 Sections 19.6 and 19.7) 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.
|
19.4 |
Telephone Directions
|
19.5 |
Telephone Communications
|
19.6 |
Internet
|
19.7 |
Verification
|
(a) |
All directions and instructions shall be given in one of the methods authorized by Section 19.2 and shall be given by authorized officer(s) of the Manager and of any other
Person(s) or representative(s) including any Investment Manager appointed by the Manager and authorized to act on behalf of the Manager.
|
(b) |
Without limiting the provisions of this Trust Agreement and subject to Subsection 11.2(a) and Section 19.6 hereof, the Manager also agrees that the Trustee may rely and act
upon any instructions or directions received from authorized officer(s) of the Manager and of any other Person(s) or representative(s) including any Investment Manager appointed by the Manager and authorized to act on behalf of the Manager
without the Trustee having to take any further actions of any kind to verify or otherwise ascertain the validity of such instructions or directions except to verify such personnel is duly authorized by the Manager in accordance with the
Certificate of Authorized Signing Authorities then on file with the Trustee, and any such instructions or directions shall be binding on the Manager on whose behalf the instructions or directions shall have been given. The Trustee shall be
entitled to rely solely on such certificate then on file without further inquiry for verification purposes.
|
20.1 |
Non-Material Amendments
|
(a) |
Any provision of this Trust Agreement may be amended, deleted, expanded or varied by the Manager, with the approval of the Trustee, upon notice to Unitholders in accordance
with Section 20.4, if the amendment, in the opinion of Counsel for either the Trustee or the Manager, does not constitute a material change and does not relate to any of the matters specified in Section 20.2, but no amendment under this
Section 20.1 shall be made which adversely affects the pecuniary value of the interest of any Unitholder or restricts any protection provided to the Trustee or increases the responsibilities of the Trustee hereunder.
|
(b) |
This Trust Agreement may also be amended by the Manager without the approval of, or notice to, Unitholders for the following purposes:
|
(i) |
to remove any conflicts or other inconsistencies which may exist between any terms of this Trust Agreement and any provisions of any Applicable Law affecting the Trust;
|
(ii) |
to make any change or correction in this Trust Agreement which is of a typographical nature or is required to cure or correct any ambiguity or defective or inconsistent
provision, clerical omission, mistake or manifest error contained therein;
|
(iii) |
to bring this Trust Agreement into conformity with Applicable Laws, rules and policies of Securities Authorities, stock exchanges on which the Units are listed or with current
practice within the securities industry, provided that any such amendment does not adversely affect the rights, privileges or interests of any Unitholder;
|
(iv) |
to maintain, or permit the Manager to take such steps as may be desirable or necessary to maintain, the status of the Trust as a “mutual fund trust” for the purposes of the
Tax Act; or
|
(v) |
to provide added protection to Unitholders.
|
20.2 |
Unitholder Approval
|
(a) |
Subject to Subsections 20.2(b), (c) and (d) hereof, certain matters relating to the Trust require approval by the Unitholders. Such approval must be given at a meeting duly
called for that purpose or by written resolution pursuant to Article 16. Any provision of this Trust Agreement may be amended, deleted, expanded or varied with the approval of the Unitholders for the following purposes by resolution passed by
an Ordinary Resolution, other than Clauses 20.2(a)(i) and (ii) which require approval of Unitholders by an Extraordinary Resolution:
|
(i) |
a change in the fundamental investment objective of the Trust;
|
(ii) |
a change in the investment and operating restrictions of the Trust, unless such change or changes are necessary to ensure compliance with Applicable Laws or other requirements
imposed from time to time by applicable Securities Authorities or stock exchanges on which the Units are listed;
|
(v) |
a reduction in the frequency of calculating the Net Asset Value of the Trust, the Net Asset Value per Unit, the Class Net Asset Value or the Class Net Asset Value per Unit;
|
(vi) |
a change in the Manager, unless the successor manager is an Affiliate of the current Manager or the successor manager occurs primarily as a result of a Manager
Reorganization;
|
(vii) |
the Trust undertakes a reorganization with, or transfers its assets to, another investment fund, if
|
(A) |
the Trust ceases to continue after the reorganization or transfer of assets, and
|
(B) |
the transaction results in the Unitholders becoming unitholders in the other investment fund; or
|
(viii) |
the Trust undertakes a reorganization with, or acquires assets from, another investment fund, if
|
(A) |
the Trust continues after the reorganization or acquisition of assets,
|
(B) |
the transaction results in the unitholders of the other investment fund becoming Unitholders in the Trust, and
|
(C) |
the transaction would be a material change to the Trust.
|
(b) |
Despite Subsection 20.2(a), the approval of Unitholders is not required to be obtained for a change referred to in Clause 20.2(a)(iii) if
|
(i) |
the Trust is at arm’s length to the Person charging the fee or expense to the Trust which is changed,
|
(ii) |
the Disclosure Documents disclose that, although the approval of Unitholders will not be obtained before making the change, Unitholders will be sent a written notice at least
60 days before the effective date of the change that is to be made which could result in an increase in charges to the Trust, and
|
(iii) |
the notice referred to in Clause 20.2(b)(ii) is sent 60 days before the effective date of the change.
|
(c) |
Despite subsection 20.2(a), the approval of Unitholders is not required to be obtained for a change referred to in clause 20.2(a)(vii) if
|
(i) |
the Independent Review Committee has approved the change in accordance with NI 81-107,
|
(ii) |
the Trust is being reorganized with, or its assets are being transferred to, another investment fund to which NI 81-102 and NI 81-107 apply and that is managed by the Manager
or its Affiliate,
|
(iii) |
the reorganization or transfer of assets of the Trust complies with the criteria set forth in NI 81-102,
|
(iv) |
the Disclosure Documents disclose that, although the approval of Unitholders will not be obtained before making the change, Unitholders will be sent a written notice at least
60 days before the effective date of the change, and
|
(v) |
the notice to Unitholders referred to in Clause 20.2(c)(iv) is sent 60 days before the effective date of the change.
|
(d) |
Any reorganization or transfer of assets pursuant to Clauses 20.2(a)(vii) or (viii) above, including a transaction approved by the Independent Review Committee pursuant to
Clause 20.2(c)(i), must satisfy the following criteria:
|
(i) |
the reorganization of the Trust with another investment fund or the transfer of assets must be accomplished on a tax-deferred rollover basis for Unitholders and for
unitholders of the other investment fund and must be a tax-deferred transaction for U.S. federal income tax purposes for U.S. Unitholders and for unitholders of the other investment fund;
|
(ii) |
the investment fund with which the Trust is reorganized or which receives the Trust’s assets: (A) is classified as a corporation for U.S. federal income tax purposes, (B) does
not take any action inconsistent with its classification as a corporation for U.S. federal income tax purposes, and (C) does not elect to be treated as an entity other than a corporation for such purposes; and
|
(iii) |
the investment fund surviving the reorganization or the transfer of assets: (A) within 45 days from the end of each taxable year of the investment fund, determines, or causes
to be determined, whether the investment fund was a PFIC in such taxable year, (B) provides or causes to be provided to unitholders of the investment fund all information necessary to enable unitholders or beneficial owners of units of the
investment fund, as applicable, to elect to treat the investment fund as a QEF for U.S. federal income tax purposes and to comply with any reporting or other requirements incident to such election, and (C) within 45 days from the end of each
taxable year of the investment fund in which the investment fund is a PFIC, provides, or causes to be provided, to unitholders or beneficial owners of units of the investment fund, as applicable, a completed “PFIC Annual Information
Statement” as required by U.S. Treasury Regulations Section 1.1295-1(g) and otherwise complies with the applicable requirements of the U.S. Treasury Regulations.
|
(e) |
In addition, any material amendment, modification or variation in the provisions of, or rights attaching to, a particular class or series of a class of Units must be approved
by an Extraordinary Resolution of the Unitholders of that class or series of a class of Units, as the case may be.
|
20.3 |
Change of Auditors
|
(a) |
the Independent Review Committee has approved the change of Auditors in accordance with NI 81-107;
|
(b) |
the Disclosure Documents disclose that, although the approval of Unitholders will not be obtained before making the change, Unitholders will be sent a written notice at least
60 days before the effective date of the change; and
|
(c) |
the notice to Unitholders referred to in Subsection 20.3(b) is sent 60 days before the effective date of the change.
|
20.4 |
Notice to Unitholders
|
20.5 |
Approval of Trustee
|
(a) |
there are no outstanding Units;
|
(b) |
the Trustee resigns or is removed and no successor trustee is appointed by the Manager within the time limit prescribed in Section 13.4 hereof;
|
(c) |
the Manager resigns and no successor manager is appointed by the Manager and approved by Unitholders within the time limit prescribed in Section 14.1 hereof; or
|
(d) |
a Termination Event Occurs.
|
21.2 |
Notice of Termination
|
21.3 |
Effect of Termination
|
(a) |
In the event of the winding-up of the Trust, the rights of Unitholders to require redemption of any or all of their Units shall be suspended, and the Manager or, in the event
of Subsection 21.1(d), such other Person appointed by the Trustee, the Unitholders or a court of competent jurisdiction, as the case may be, shall make appropriate arrangements for converting the investments of the Trust into cash, and the
Trustee shall proceed to wind-up the affairs of the Trust in such manner as seems to it to be appropriate. The assets of the Trust remaining after paying or providing for all obligations and liabilities of the Trust shall be distributed among
the Unitholders named in the Register as at 4:00 p.m. (Toronto time) on the effective date on which the Trust is to be terminated in accordance with Article 21 hereof. Distributions of Net Income and Net Realized Capital Gains shall, to the
extent not inconsistent with the orderly realization of the assets of the Trust, continue to be made in accordance with this Trust Agreement until the Trust has been wound up.
|
(b) |
Notwithstanding the foregoing, if a notice of termination has been given by the Manager and if authorized by the vote of Unitholders holding Units representing in aggregate
not less than 50% of the Net Asset Value of the Units as determined in accordance with this Trust Agreement, the assets of the Trust may be, in the event of the winding-up the Trust, distributed to the Unitholders on the termination of the
Trust in specie in whole or in part, and the Trustee shall have complete discretion to determine the assets to be distributed to any Unitholder
and their values for distribution purposes.
|
(c) |
If after a period of six months from the effective date on which the Trust was terminated, the Registrar and Transfer Agent is unable to locate the owner of any Units as shown
on the Register, such amount as would be distributed to such Unitholder shall be deposited by the Registrar and Transfer Agent in an account in a chartered bank or trust company (including the Trustee) in Canada in the name and to the order
of such Unitholder upon presentation by such Unitholder of sufficient information determined by the chartered bank or trust company to be appropriate to verify such Unitholder’s entitlement to such amount. Upon such deposit being made, the
Units represented thereby shall be cancelled and the Registrar and Transfer Agent, the Manager and the Trustee shall thereupon be released from any and all further liability with respect to such moneys. Thereafter the Unitholder shall have no
rights as against the Registrar and Transfer Agent, the Manager or the Trustee to such moneys or an accounting therefor.
|
21.4 |
Termination of Trust Agreement
|
22.1 |
Investment Objective
|
22.2 |
Investment Strategy
|
22.3 |
Investment and Operating Restrictions
|
(a) |
will invest in and hold a minimum of 90% of the total net assets of the Trust in physical silver bullion in London Good Delivery bar form and hold no more than 10% of the
total net assets of the Trust, at the discretion of the Manager, in physical silver bullion (in
|
(b) |
will not invest in silver certificates or other financial instruments that represent silver or that may be exchanged for silver;
|
(c) |
will store all physical silver bullion owned by the Trust at the Silver Custodian (including at a facility located in Canada leased by the Silver Custodian for this purpose)
or in the treasury vaults of a Schedule I Canadian chartered bank or an Affiliate or division thereof in Canada on a fully allocated basis, provided that the physical silver bullion held in London Good Delivery bar form may be stored with a
custodian only if the physical silver bullion will remain London Good Delivery while with that custodian;
|
(d) |
will not hold any “taxable Canadian Property” within the meaning of the Tax Act;
|
(e) |
will not purchase, sell or hold derivatives;
|
(f) |
will not issue Units following the completion of the Trust’s initial public offering except (i) if the net proceeds per Unit to be received by the Trust are not less than 100%
of the most recently calculated Net Asset Value per Unit prior to, or upon, the determination of the pricing of such issuance or (ii) by way of Unit distribution in connection with an income distribution;
|
(g) |
will ensure that no part of the stored physical silver bullion may be delivered out of safekeeping by the Silver Custodian (except to an authorized sub-custodian) or, if the
physical silver bullion is held by another custodian, that custodian, without receipt of an instruction from the Manager in the form specified by the Silver Custodian or such other custodian indicating the purpose of the delivery and giving
direction with respect to the specific amount;
|
(h) |
will ensure that no director or officer of the Manager or the Manager’s general partner, or representative of the Trust or the Manager will be authorized to enter into the
physical silver bullion storage vaults without being accompanied by at least one representative of the Silver Custodian or, if the physical silver bullion is held by another custodian, that custodian, as the case may be;
|
(i) |
will ensure that the physical silver bullion remains unencumbered;
|
(j) |
will ensure that the physical silver bullion is subject to a physical count by a representative of the Manager periodically on a spot-inspection basis as well as subject to
audit procedures by the Auditors on at least an annual basis;
|
(k) |
will not guarantee the securities or obligations of any Person other than the Manager, and then only in respect of the activities of the Trust;
|
(l) |
in connection with requirements of the Tax Act, will not make or hold any investment that would result in the Trust failing to qualify as a “mutual fund trust” within the
meaning of the Tax Act;
|
(m) |
in connection with requirements of the Tax Act, will not invest in any security that would be a tax shelter investment within the meaning of section 143.2 of the Tax Act;
|
(n) |
in connection with requirements of the Tax Act, will not invest in the securities of any non-resident corporation, trust or other non-resident entity (or of any partnership
that holds such securities) if the Trust (or the partnership) would be required to include any significant amount in income under sections 94 or 94.1 of the Tax Act;
|
(o) |
in connection with requirements of the Tax Act, will not invest in any security of an issuer that would be a foreign Affiliate of the Trust for purposes of the Tax Act; and
|
(p) |
in connection with requirements of the Tax Act, will not carry on any business and make or hold any investments that would result in the Trust itself being subject to the tax
for SIFT trusts as provided for in section 122 of the Tax Act.
|
22.4 |
Investment and Reinvestment by the Trust
|
23.1 |
Compliance with Law and Policy
|
23.2 |
Governing Law
|
23.3 |
Computation of Time
|
23.4 |
Omissions and Errors
|
23.5 |
Time
|
23.6 |
Counterparts and Facsimile
|
23.7 |
Complete Agreement
|
23.8 |
Severability
|
23.9 |
Inspection of Documents
|
SPROTT ASSET MANAGEMENT LP, by its general partner, SPROTT ASSET MANAGEMENT GP INC., in its capacity as the Manager of the Trust
|
||
By:
|
/s/ John Ciampaglia
|
|
Name: John Ciampaglia
|
||
Title: Director
|
||
By:
|
/s/ Kevin Hibbert
|
|
Name: Kevin Hibbert
|
||
Title: Director
|
||
We have the authority to bind the Manager.
|
||
RBC INVESTOR SERVICES TRUST, in its capacity as the
Trustee of the Trust
|
||
By:
|
(signed) “Jasper Clarke”
|
|
Jasper Clarke
|
||
Manager, Client Service
|
||
By:
|
(signed) “Bibi Khan”
|
|
Bibi Khan
|
||
Senior Manager, Client Service
|
||
We have the authority to bind the Trustee.
|
||
TO: |
RBC INVESTOR SERVICES TRUST (the “Trustee”), in its capacity as the trustee of Sprott Physical Silver Trust
|
(a) |
All investments of the Trust are in compliance with the Investment Policy and other investment-related information disclosed in the Trust Agreement and the Disclosure
Documents, and are in compliance with any other regulatory restriction or policy applicable to investments by the Trust.
|
(b) |
The Manager has complied with its obligations specifically relating to the Silver Bullion as set out in the Trust Agreement including, for greater certainty, the Investment
Policy.
|
(c) |
The Silver Custodian or any sub-custodian of the Silver Bullion owned by the Trust has been appointed pursuant to the terms of a Storage Agreement or custodial agreement that
complies with all requirements in Part 6 of NI 81-102.
|
(d) |
In accordance with the Disclosure Documents and the Trust Agreement, the authenticity of all Silver Bullion held for the Trust by the Silver Custodian or any sub-custodian
appointed by the Silver Custodian is still verified as containing between 750 to 1,100 troy ounces of silver per London Good Delivery bar and all such bars retain their London Good Delivery status with a minimum fineness of 999.0 parts per
thousand silver or no less than the required minimum fineness related thereto as determined by the London Bullion Market Association from time to time.
|
(e) |
The Silver Custodian maintains adequate insurance coverage appropriate for, and consistent with, other custodians of Silver Bullion in the relevant markets where the Silver
Bullion is held and the Silver Custodian will not cancel such insurance except upon 30 days prior notice to the Manager. The material details of such insurance have been disclosed in the Disclosure Documents.
|
(f) |
All of the Silver Bullion owned by the Trust is stored and held by the Silver Custodian or by a sub-custodian appointed by the Silver Custodian on an unencumbered and fully
allocated basis in appropriate vault facilities verified by the Manager to be appropriate to hold and store the Silver Bullion in the relevant markets where the Silver Bullion is held, and there are no current storage constraints at the
facilities of the Silver Custodian or the facilities of such sub-custodian appointed by the Silver Custodian.
|
(g) |
The Silver Custodian maintains proper records, procedures and internal controls and safeguards relating to the holding and storage, recording, access to, and release of, the
Silver Bullion.
|
(h) |
The Silver Bullion owned by the Trust will be subject to a physical count by a representative of the Manager periodically on a spot-inspection basis as well as subject to
audit procedures by the Auditors on at least an annual basis.
|
(i) |
There are no material litigation, claims, fraud or audit issues presently outstanding against the Silver Custodian which have not been previously disclosed to the Trustee.
|
(j) |
The Silver Custodian continues to be a financially viable company in compliance with all Applicable Laws and in good standing with any regulatory authority and/or governing
body having jurisdiction over its corporate status, affairs and related services, including the handling and storage of Silver Bullion.
|
(k) |
The Silver Custodian continues to act as the custodian of the Silver Bullion owned by the Trust as of the date hereof.
|
(l) |
All confirmations, quarterly statements, tax receipts, and annual and interim financial statements of the Trust have been delivered to Unitholders as required under Applicable
Laws.
|
(m) |
All regulatory filings required to be made by the Trust, such as the annual and interim financial statements of the Trust, have been completed.
|
(n) |
All regulatory filings required to be made by the Manager, including annual renewals of its securities registration under Applicable Laws, have been completed. The Manager is
not under investigation by any regulatory authority.
|
(o) |
The Manager has complied with all of its obligations under Applicable Laws applicable to it and its duties and responsibilities under the Trust Agreement.
|
(p) |
There is no litigation pending against the Manager or the Trust which has not already been disclosed to the Trustee.
|
(q) |
The distribution of the Units by the Underwriters, the Manager or its selling agents is in compliance with Applicable Laws and regulatory requirements.
|
(r) |
All subscriptions, notices of redemption or transfers of Units were accepted by the Manager prior to the Valuation Time.
|
(s) |
The audited annual financial statements and the unaudited interim financial statements of the Trust have been prepared and are complete, accurate and approved as required.
|
(t) |
All documentation required to be forwarded to the Trustee by the Manager has been so forwarded (including, for greater certainty, annual and interim financial statements of
the Trust, including auditors report thereon, as applicable, both external and internal, statements of holdings of the Trust and internal control documents).
|
(u) |
The Manager has, on a regular basis, but not less frequently than monthly, reviewed the investments of the Trust to ensure, where applicable, that the Trust continues to
qualify as a registered investment under the Tax Act.
|
(v) |
The Manager has, on a regular basis, but not less frequently than monthly, where applicable, reviewed the investments of the Trust to determine if the Trust is subject to
penalty taxes imposed by Part X.2 of the Tax Act on certain investments made by a registered investment.
|
(w) |
The Trust qualifies as a “unit trust” pursuant to subsection 108(2) of the Tax Act and a “mutual fund trust” pursuant to subsection 132(6) of the Tax Act.
|
(x) |
The Manager has provided to the Trustee all necessary information to enable the Trustee to accurately complete the tax return(s) of the Trust by March 31 (or March 30 in the
case of a leap year) of each year or, alternatively, if the Trustee has not itself prepared and filed the tax return(s) of the Trust, the Manager has provided a copy of such tax return(s) of the Trust to the Trustee.
|
(y) |
Current certified copies of the Manager’s signing authorities have been provided to the Trustee and may be relied upon by the Trustee.
|
(z) |
The Manager shall promptly inform the Trustee should the Trust fail to comply with any restrictions and conditions hereto.
|
(aa) |
If applicable, the Trust is entitled to claim an exemption from U.S. withholding tax on the basis of the provisions of Article XXI of the U.S. / Canadian tax treaty and
certifies to the best of its knowledge and belief that all Unitholders are pension, retirement or employee benefit arrangements, or a trust or other arrangement whose unitholders are all pension, retirement or employee benefit arrangements.
|
SPROTT ASSET MANAGEMENT LP, by its general partner, SPROTT ASSET MANAGEMENT GP INC., in its capacity as the Manager of the Trust
|
||
By:
|
||
John Wilson
|
||
Chief Executive Officer
|
||
By:
|
||
Kirstin H. McTaggart
|
||
Corporate Secretary
|
||
TO: |
RBC INVESTOR SERVICES TRUST (the “Trustee”), in its capacity as the trustee of Sprott Physical Silver Trust
|
(a) |
The Manager has complied with its obligations specifically relating to the Silver Bullion as set out in the Trust Agreement including, for greater certainty, the Investment
Policy.
|
(b) |
The Silver Custodian or any sub-custodian of the Silver Bullion owned by the Trust has been appointed pursuant to the terms of a Storage Agreement or custodial agreement that
complies with all requirements in Part 6 of NI 81-102.
|
(c) |
In accordance with the Disclosure Documents and the Trust Agreement, the authenticity of all Silver Bullion held for the Trust by the Silver Custodian or any sub-custodian
appointed by the Silver Custodian is still verified as containing between 750 to 1,100 troy ounces of silver per London Good Delivery bar and all such bars retain their London Good Delivery status with a minimum fineness of 999.0 parts per
thousand silver or no less than the required minimum fineness related thereto as determined by the London Bullion Market Association from time to time.
|
(d) |
The Silver Custodian maintains adequate insurance coverage appropriate for, and consistent with, other custodians of Silver Bullion in the relevant markets where the Silver
Bullion is held and the Silver Custodian will not cancel such insurance except upon 30 days prior notice to the Manager. The material details of such insurance have been disclosed in the Disclosure Documents.
|
(e) |
All of the Silver Bullion owned by the Trust is stored and held by the Silver Custodian or by a sub-custodian appointed by the Silver Custodian on an unencumbered and fully
allocated basis in appropriate vault facilities verified by the Manager to be appropriate to hold and store the Silver Bullion in the relevant markets where the Silver Bullion is held, and there are no current storage constraints at the
facilities of the Silver Custodian or the facilities of such sub-custodian appointed by the Silver Custodian.
|
(f) |
The Silver Custodian maintains proper records, procedures and internal controls and safeguards relating to the holding and storage, recording, access to, and release of, the
Silver Bullion.
|
(g) |
The Silver Bullion owned by the Trust will be subject to a physical count by a representative of the Manager periodically on a spot-inspection basis as well as subject to
audit procedures by the Auditors on at least an annual basis.
|
(h) |
There are no material litigation, claims, fraud or audit issues presently outstanding against the Silver Custodian which have not been previously disclosed to the Trustee.
|
(i) |
The Silver Custodian continues to be a financially viable company in compliance with all Applicable Laws and in good standing with any regulatory authority and/or governing
body having jurisdiction over its corporate status, affairs and related services, including the handling and storage of Silver Bullion.
|
(j) |
The Silver Custodian continues to act as the custodian of the Silver Bullion owned by the Trust as of the date hereof.
|
SPROTT ASSET MANAGEMENT LP, by its general partner, SPROTT ASSET MANAGEMENT GP INC., in its capacity as the Manager of the Trust
|
||
By:
|
||
John Wilson
|
||
Chief Executive Officer
|
||
By:
|
||
Kirstin H. McTaggart
|
||
Corporate Secretary
|
||
TO:
|
Equity Transfer & Trust Company (“Equity Transfer”),
as the registrar and transfer agent of the Sprott Physical Silver Trust (the “Trust”)
|
||
Ticker Symbol: PHS.U (TSX) / PSLV (NYSE Arca)
|
CUSIP number: 85207K107
|
||
AND TO:
|
Sprott Asset Management LP (the “Manager”), as the manager
of the Trust
|
||
RE:
|
Silver Redemption Notice under Section 6.1 of the Trust Agreement of the Trust
|
||
Delivery Instructions:
|
|||
Signature of Unitholder
|
Signature Guarantee
|
||
Print Name
|
Unitholder’s Brokerage Account Number
|
||
Print Address
|
|||
Print Broker Name and DTC/CDS Number
|
Print Broker Contact Name and Telephone Number
|
||
NOTE:
|
The name and address of the Unitholder set forth in this Silver Redemption Notice must correspond with the name and address as recorded on the register of
the Trust maintained by Equity Transfer. The signature of the person executing this Silver Redemption Notice must be guaranteed by a Canadian chartered bank, or by a medallion signature guarantee from a member of a recognized Signature
Medallion Guarantee Program.
|
TO:
|
Equity Transfer & Trust Company (“Equity Transfer”),
as the registrar and transfer agent of the Sprott Physical Silver Trust (the “Trust”)
|
||
Ticker Symbol: PHS.U (TSX) / PSLV (NYSE Arca)
|
CUSIP number: 85207K107
|
||
AND TO:
|
Sprott Asset Management LP (the “Manager”), as the manager
of the Trust
|
||
RE:
|
Cash Redemption Notice under Section 6.3 of the Trust Agreement of the Trust
|
||
Wiring Instructions:
|
|||
Signature of Unitholder
|
|||
Signature Guarantee
|
|||
Print Name
|
|||
Print Address
|
NOTE:
|
The name and address of the Unitholder set forth in this Cash Redemption Notice must correspond with the name and address as recorded on the register of
the Trust maintained by Equity Transfer. The signature of the person executing this Cash Redemption Notice must be guaranteed by a Canadian chartered bank, or by a medallion signature guarantee from a member of a recognized Signature
Medallion Guarantee Program.
|
1. |
Definitions: All capitalized terms used in this Amendment No. 1 (including the recitals) but not otherwise defined
herein shall have the meanings given to them in the Trust Agreement. For the purposes of this Amendment No. 1, “Amendment Effective Date” means the later of, the date on which the United States
Securities and Exchange Commission publishes, and the operative date of, the rule change in respect of the Trust required under section 19(b)(1) of the United States Securities Exchange Act of 1934,
as amended, and Rule 19b-4 thereunder, in connection with the amendments set out herein.
|
2. |
Amendments: Effective as of the Amendment Effective Date, the Trust Agreement is amended as follows:
|
(a) |
The sentence “The armoured transportation service carrier will receive Silver Bullion in connection with a redemption of Units approximately 10 Business Days after
the end of the month in which the redemption is processed.” in Section 6.2(c) of the Trust Agreement shall be deleted.
|
3. |
Amendments to Trust Agreement; Conflicts: This Amendment No. 1 is supplemental to the Trust Agreement and shall
hereafter be read together and shall have effect, so far as practicable, as if all the provisions of the Trust Agreement and this Amendment No. 1 were contained in one instrument. The Trust Agreement is and shall remain in full force and
effect, except as the Trust Agreement is amended, superseded, modified or supplemented by this Amendment No. 1. If a provision of this Amendment No. 1 is inconsistent or conflicts with any provision of the Trust Agreement, the relevant
provision of this Amendment No. 1 shall prevail and be paramount.
|
4. |
Governing Law: This Amendment No. 1 shall be governed by, and construed in accordance with, the laws of the
Province of Ontario and the parties hereto irrevocably attorn to the non- exclusive jurisdiction of the courts of the Province of Ontario.
|
5. |
Successors and Assigns: This Amendment No. 1 and each and all of the provisions hereof shall be binding upon and
shall enure to the benefit of the Trustee, the Manager, the Unitholders and their respective successors and assigns.
|
6. |
Severability: If any provision of this Amendment No. 1 is or becomes illegal, invalid or unenforceable, in whole or in
part, in any jurisdiction, the illegality, invalidity or unenforceability of that provision will not affect (i) the legality, validity or enforceability of the remaining provisions of this Amendment No. 1 or (ii) the legality, validity or
enforceability of that provision in any other jurisdiction.
|
7. |
Counterparts and Facsimile: This Amendment No. 1 may be executed by signing a counterpart of this Amendment No. 1, and
such counterparts together shall constitute a single instrument. This Amendment No. 1 may be executed by facsimile or other electronic transmission.
|
SPROTT ASSET MANAGEMENT LP, by its general partner, SPROTT ASSET MANAGEMENT GP INC., in its capacity as the Manager of the Trust
|
||||||
By:
|
/s/ John Ciampaglia |
|||||
Name:
|
John Ciampaglia | |||||
Title:
|
Director |
|||||
By:
|
/s/ Kevin Hibbert |
|||||
Name:
|
Kevin Hibbert | |||||
Title:
|
Director | |||||
We have the authority to bind the Manager.
|
||||||