FIRST AMENDMENT TO CUSTODIAN AGREEMENT
THIS FIRST AMENDMENT is made as of May 3, 2005, by and between RYDEX ETF
TRUST, a Delaware statutory trust (the "FUND") and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company (the "CUSTODIAN").
RECITALS
A. The Fund and the Custodian are parties to that certain Custodian
Agreement dated as of May 3, 2005 (the "Agreement") pursuant to which the
Custodian was appointed custodian of the Fund's assets;
B. The Fund and the Custodian wish to amend the terms of the Agreement as
set forth herein; and
C. All capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements set forth
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby jointly and severally acknowledged, the parties hereto agree
as follows:
1. AMENDMENT TO AGREEMENT. The Agreement is hereby amended to add the following
new Section 2.5A:
Section 2.5A. ALLOCATION OF DEPOSIT SECURITY SHORTFALLS. The Fund
acknowledges that the Custodian maintains only one account on the books of
the National Securities Clearing Corporation (the "NSCC") for the benefit
of all exchange traded funds for which the Custodian serves as custodian,
including the Fund (collectively, the "ETF CUSTODY CLIENTS"). In the event
that (a) two or more ETF Custody Clients require delivery of the same
Deposit Security in order to purchase a Creation Unit, and (b) the NSCC,
pursuant to its Continuous Net Settlement system, delivers to the
Custodian's NSCC account less than the full amount of such Deposit
Security necessary to satisfy in full each affected ETF Custody Client's
required amount (a "COMMON DEPOSIT SECURITY SHORTFALL"), THEN, until all
Common Deposit Security Shortfalls for a given Deposit Security are
satisfied in full, the Custodian will allocate to each affected ETF
Custody Client, on a PRO RATA basis, securities and/or cash received in
the Custodian's NSCC account relating to such shortfall, first to satisfy
any prior unsatisfied Common Deposit Security Shortfall, and then to
satisfy the current Common Deposit Security Shortfall.
2. NO OTHER MODIFICATIONS. Except to the extent amended hereby, the terms of the
Agreement shall remain unchanged and unaffected hereby and shall remain in full
force and effect to the extent of, and in accordance with, its terms.
3. GOVERNING LAW. This Amendment shall be governed by, subject to and construed
under the laws of the Commonwealth of Massachusetts without regard to the
conflict of laws provisions thereof.
4. COUNTERPARTS. This Amendment may be signed in counterparts, which shall
together with the Agreement constitute the original Agreement.
IN WITNESS WHEREOF, the parties hereto have caused to be duly executed
this Amendment as of the day and year written above.
RYDEX ETF TRUST
By: /s/ Xxxx Xxxxx
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Name (printed): Xxxx Xxxxx
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Title: VP & TREASURER
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STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Executive Vice President
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