NOTE 8 – INDEMNIFICATION

Under the Trust Agreement, the Trustee and any officer, affiliate, director or agent of the Trustee shall be indemnified by the Trust against any losses, claims, taxes, damages, reasonable expenses, and liabilities with respect to the creation, operation or termination of the Trust and the execution, delivery or performance of the Trust Agreement except that the Trust shall not be required to indemnify for any amounts incurred by the Trustee which are a result of willful misconduct, bad faith or gross negligence.

The Trust Agreement provides that the Sponsor shall not be under any liability to the Trust, the Trustee or any shareholder for any action taken or for refraining from the taking of any action in good faith pursuant to the Trust Agreement, or for errors in judgment or for depreciation or loss incurred; provided, however, that the Trust Agreement shall not protect the Sponsor against any liability to which it would otherwise be subject by reason of its own gross negligence, bad faith, or willful misconduct. The Sponsor may rely in good faith on any paper, order, notice, list, affidavit, receipt, evaluation, opinion, endorsement, assignment, draft or any other document of any kind prima facie properly executed and submitted to it by any other person for matters arising under the Trust Agreement. The Sponsor shall in no event be deemed to have assumed or incurred any liability, duty, or obligation to any shareholder or to the Trustee other than as expressly provided for in the Trust Agreement.

The Trust Agreement provides that the Sponsor, its affiliates, and their directors, officers, and employees shall be indemnified by the Trust against any losses, judgments, liabilities, expenses and amounts paid in settlement of any claims sustained by it in connection with its activities for the Trust, provided that (i) the Sponsor was acting on behalf of, or performing services for, the Trust and has determined, in good faith, that such course of conduct was in the best interests of the Trust and such liability or loss was not the result of fraud, gross negligence, bad faith, willful misconduct, or a material breach of the Trust Agreement on the part of the Sponsor and (ii) any such indemnification will be recoverable only from Trust assets.

The Trust has also agreed to indemnify certain of its other service providers, including the Administrator, the Distributor, and the Custodians for certain liabilities incurred by such parties in connection with their respective agreements to provide services to the Trust.

The Trust’s maximum exposure under these arrangements is unknown; however, the risk of material loss is currently considered to be remote.