EXHIBIT (h)(3)
SUBLICENSE AGREEMENT
This Sublicense Agreement (the "Agreement") is made as of April 11, 2003,
by and between PADCO Advisors, Inc., d/b/a Rydex Global Advisors, a corporation
with offices at 0000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000
("Rydex") and Rydex ETF Trust, a Delaware statutory trust ("ETF Trust").
RECITALS
WHEREAS, pursuant to the license agreement dated October __, 2002 (the
"License Agreement") between The XxXxxx-Xxxx Companies, Inc., a New York
corporation, acting through its unincorporated division Standard & Poor's
("S&P") and Rydex, Rydex obtained a license to use in connection with "LICENSEE
Funds" (as that term is defined in the License Agreement) certain stock indexes
owned and managed by S&P (the "S&P Indexes"), along with associated marks (the
"S&P Marks"); and
WHEREAS, Rydex has the right pursuant to Section 3 of the License Agreement
to sublicense its rights thereunder to any LICENSEE Fund, of which ETF Trust is
one; and
WHEREAS, ETF Trust wishes to use the S&P Indexes and the S&P Marks in
connection with the establishment of an exchange traded fund, based on a S&P
Index, and to use the S&P Marks in connection with the identification and
marketing of the exchange traded fund and in connection with making disclosures
about the exchange traded fund under applicable laws, rules and regulations; and
WHEREAS, Rydex wishes to grant a sublicense to ETF Trust for the use of the
S&P Indexes and S&P Marks;
NOW THEREFORE, the parties agree as follows:
1. GRANT OF SUBLICENSE.
Subject to the terms and conditions of this Agreement, Rydex hereby grants
to ETF Trust a sublicense to use the S&P Indexes (and associated data and
information) and the S&P Marks listed on Exhibit A in the manner set forth in,
and subject to the terms of, the License Agreement, including without limitation
the restriction in Section 3 of the License Agreement that ETF Trust will not
have the further power to sublicense third parties to use the S&P Indexes and
the S&P Marks.
2. PERFORMANCE OF OBLIGATIONS UNDER THE LICENSE.
ETF Trust will be responsible for performing all of Rydex's executory
obligations under the License Agreement (other than the payment of license
fees), as such obligations relate to use of the S&P Indexes and the S&P Marks in
connection with the
formation and operation of LICENSEE Funds (as that term is defined in the
License Agreement).
3. FEES.
ETF Trust shall have no obligation to pay any sublicense fees to Rydex or
S&P under this sublicense agreement.
4. TERMINATION.
This Agreement shall terminate if (a) the License Agreement terminates, or
(b) Rydex or a Rydex Affiliate ceases to exercise investment discretion over the
ETF Trust or any ETF in its capacity as manager, investment adviser, trustee, or
other comparable capacity. Rydex shall notify ETF Trust as soon as reasonably
practicable of the occurrence of an event described in (a) above. Upon
termination of this Agreement, ETF Trust's right to use the S&P Indexes and the
S&P Marks shall terminate consistent with Section 8(e) of the License Agreement.
5. INDEMNIFICATION.
ETF Trust shall indemnify and hold harmless Rydex and its affiliates, and
their officers, employees, agents, successors, and assigns against all
judgments, damages, costs or losses of any kind (including reasonable attorneys'
and experts' fees) resulting from any claim, action or proceeding (collectively
"claims") that arises out of or relates to (a) the creation, marketing,
advertising, selling, and operation of the ETF Trust or interests therein, or
(b) any breach by Rydex of its covenants, representations, and warranties under
the License Agreement caused by the actions or inactions of ETF Trust, or (c)
errors in the calculation of any S&P Index, or delays in the dissemination of
any S&P Index, or (d) any breach of this Agreement by the ETF Trust or (e) any
violation of applicable laws (including, but not limited to, banking,
commodities, and securities laws) arising out of the offer, sale, operation, or
trading of the ETF Trust or interests therein, except to the extent such claims
result from the negligence, gross negligence or willful misconduct of Rydex or
its affiliates. The provisions of this section shall survive termination of this
Agreement.
6. ASSIGNMENT.
ETF Trust will not make, or purport to make, any assignment or other
transfer of this Agreement. Rydex may assign its rights and obligations under
this Agreement effective upon the giving of written notice to ETF Trust.
7. AMENDMENT.
No provision of this Agreement may be waived, altered, or amended except by
written agreement of the parties.
8. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof.
9. CONSTRUCTION.
Headings used in this Agreement are for convenience only, and shall not
affect the construction or interpretation of any of its provisions. Each of the
provisions of this Agreement is severable, and the invalidity or inapplicability
of one or more provisions, in whole or in part, shall not affect any other
provision. To the extent not preempted by federal law, this Agreement shall be
construed and interpreted under the laws of the State of Delaware.
10. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts together shall
constitute only one instrument.
I IN WITNESS WHEREOF the parties have caused this Agreement to be
executed as of the date first above written, with intent to be bound hereby.
PADCO ADVISORS, INC., D/B/A RYDEX RYDEX ETF TRUST
GLOBAL ADVISORS
By: By:
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Title: Title:
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EXHIBIT A
S&P INDEX
S&P Equal Weight Index
S&P MARKS
Standard & Poor's
S&P
S&P 500
