SPECIAL CUSTODY AND PLEDGE AGREEMENT
(Short Sales)
THIS AGREEMENT, (hereinafter "Agreement") dated this 9th day of March,
2009, by and among RYDEX SERIES FUNDS - GLOBAL MARKET NEUTRAL FUND ("Customer"),
PERSHING LLC ("Broker"), PADCO ADVISORS, INC. ("Manager"), and U.S. BANK
NATIONAL ASSOCIATION, as Custodian hereunder ("Custodian").
WHEREAS, Broker is a member of several national securities exchanges;
and
WHEREAS, Customer has opened a margin account (the "Margin Account")
with Broker in which Customer may effect Short Sales and for that purpose has
executed a Prime Brokerage Customer Account Agreement with Broker (the "Margin
Agreement"); and
WHEREAS, Customer has appointed Manager as an investment advisor and
manager over certain of its assets with authority to effect Short Sales and to
act on Customer's behalf in connection with the pledge of assets to Broker to
secure performance of Customer's obligations with respect to Short Sales
effected for Customer's account with Broker; and
WHEREAS, Broker is required to comply with applicable laws and
regulations requiring the margining of Short Sales, including the margin
regulations of the Board of Governors of the Federal Reserve System and of any
relevant securities exchanges and other self-regulatory associations (the
"Margin Rules") and Broker's internal policies; and
WHEREAS, to facilitate Short Sales hereunder, Customer and Broker
desire to establish procedures for compliance with the Margin Rules; and
WHEREAS, Customer and Custodian have entered into an agreement
("Custodian Agreement") providing for the custody of the customer's assets in
conformity with the requirements of the Act of 1940 ("1940 Act") and the rules
thereunder, to which the Customer is subject, and Custodian is prepared to
assist Customer, Manager and Broker in complying with the Margin Rules by acting
as custodian for Collateral pursuant to the terms and conditions of this
Agreement;
NOW, THEREFORE, be it agreed as follows:
(1) As used herein, capitalized terms shall have the following
meanings unless otherwise defined herein:
"Adequate Performance Assurance" shall mean such Collateral placed in
the Special Custody Account as is adequate under the Margin Rules and Broker's
internal policies as in effect from time to time, notice of which shall be given
in writing to Customer and Manager.
"Advice from Broker" means a notice sent by an authorized
representative of Broker delivered to Customer, Manager and Custodian, as
applicable hereunder, communicated: (i) in writing; (ii) by a facsimile-sending
device; or (iii) in the case of a call for additional Collateral, or a notice
referred to in Paragraph 7 hereof, by telephone to a person designated by
Customer,
Manager or Custodian in writing as authorized to receive such advice
or, in the event that no such person is available, to any officer of Customer,
Manager or Custodian followed, in each case, with prompt notice to the others.
Authorized representatives from Broker is attached as Exhibit A.
"Business Day" means a day on which Custodian and Broker are open for
business.
"Collateral" means U.S. cash, U.S. Government securities,
margin-eligible securities (including foreign securities), the proceeds of short
sales, other financial assets or investment property and other property and
assets acceptable to Broker which are pledged to Broker as provided herein.
"Insolvency" means that: (i) an order, judgment or decree has been
entered under the bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law (the
"Bankruptcy Law") of any jurisdiction adjudicating Customer insolvent; or (ii)
Customer has petitioned or applied to any tribunal for, or consented to the
appointment of, or taking possession by, a trustee, receiver, liquidator or
similar official, of Customer, or commenced a voluntary case under the
Bankruptcy Law of the United States or any proceedings relating to Customer
under the Bankruptcy Law of any other jurisdiction, whether now or hereinafter
in effect; or (iii) any such petition or application has been filed, or any such
proceedings commenced, against Customer and Customer formally, in writing, has
indicated its approval thereof, consent thereto or acquiescence therein, or an
order for relief has been entered in an involuntary case under the Bankruptcy
Law of the United States or any other jurisdiction, as now or hereinafter
constituted, or an order, judgment or decree has been entered appointing any
such trustee, receiver, liquidator or similar official, or approving the
petition in any such proceedings, and such order, judgment or decree remains
unstayed and in effect for more than 30 days.
"Instructions from Customer" means a written request, direction or
certification signed in the name of Customer by a person authorized by Customer
(including Manager) and delivered to Custodian or transmitted to it by a
facsimile-sending device, except that instructions to pledge initial or
additional Collateral may be given by telephone and thereafter confirmed in a
writing signed in the name of Customer by a person authorized in writing by
Customer (including Manager). An officer of Customer will certify to Custodian
the names and signatures of those persons authorized to provide Instructions
from Customer, which certification may be amended in writing from time to time.
"Short Sales" shall mean the sale by Customer of securities which Customer does
not own, and which is consummated by the delivery of securities borrowed from or
through the facilities of Broker, in accordance with the applicable provisions
of the Margin Rules, particularly Sections 220.10 and 220.12 of Regulation T of
the Board of Governors of the Federal Reserve.
(2) (a) Custodian, in its capacity as a securities intermediary as
defined in Article 8 of the Uniform Commercial Code as in effect from time to
time in the State of New York ("Article 8") to the extent the same may be
applicable, or in applicable federal law or regulations, shall open a separate
account on its books entitled "Special Custody Account for Pershing LLC as
Pledgee of RYDEX SERIES FUNDS - GLOBAL MARKET NEUTRAL FUND" (the "Special
Custody Account") and shall hold therein for Broker as pledgee upon the
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terms of this Agreement all Collateral received by Custodian and properly
identified for deposit from time to time pursuant to this Agreement and all
monies or other property paid or distributed with respect thereto. The Custodian
hereby agrees that any property held in the Special Custody Account shall be
deemed to be a financial asset for purposes of Article 8 to the extent the same
may be applicable. Manager agrees to instruct Custodian through Instructions
from Customer as to the cash and specific securities which Custodian is to
identify on its books and records as pledged to Broker as Collateral in the
Special Custody Account.
(b) Broker agrees to promptly deliver the proceeds of short
sales and other property of the Customer in the Margin Account to Custodian to
be kept in the Special Custody Account until released back or disposed of in
accordance with the term of this Agreement and the Margin Agreement.
(c) Customer agrees to provide and at all times maintain
Collateral at least equal in value to the amount that Broker initially and from
time to time advise Customer and Manager is necessary to constitute Adequate
Performance Assurance in the Special Custody Account pursuant to the terms and
conditions of this Agreement.
(d) Customer, Broker and Custodian agree that Collateral will
be held for Broker in the Special Custody Account by Custodian as agent of
Broker, that Custodian will take such actions with respect to any Collateral
(including without limitation the delivery thereof) as Broker shall direct in
accordance with this Agreement in an Advice from Broker or other entitlement
order (as defined in Article 8) and that in no event shall any consent of
Customer be required for the taking of any such action by Custodian. Broker and
Custodian further agree that Custodian shall not act unless Broker represents in
its Advice from Broker that all conditions precedent to its right to direct
custodian to act in conformity with its direction have been satisfied.
(e) To the extent authorized under the 1940 Act, Customer
hereby grants to Broker a continuing security interest to Broker (i) in the
Collateral and any proceeds thereof, and (ii) all other property in the Special
Custody Account to secure Customer's obligations to Broker hereunder. Custodian
shall have no responsibility for the creation, validity, priority or
enforceability of such security interest.
(3) Custodian shall make available to Broker, Manager and Customer
by use of a secured web site all pledges, deliveries, releases or substitutions
of Collateral. Custodian will provide a daily reconciliation statement to
Broker, Manager and Customer in a form and manner to be agreed to by the
parties. Custodian will also advise Broker, Manager and Customer, upon
reasonable request (and in any event at least monthly) and within a reasonable
time, of the kind and amount of Collateral pledged to Broker and held in the
Special Custody Account. Upon the request of Customer or Manager (and in any
event at least monthly), Broker will advise Customer or Manager of any excess
Collateral in the Special Custody Account. Upon Instructions from Customer to
Broker, Broker shall advise Custodian in writing to transfer such excess
Collateral out of the Special Custody Account to an account designated by
Customer.
(4) Custodian agrees to release Collateral to Customer from the
pledge hereunder only upon receipt of an Advice from Broker. Broker agrees, upon
request of Manager, to provide such an Advice from Broker with respect to
Collateral selected by Manager: (i) if said
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Collateral represents an excess in value of the Collateral necessary to
constitute Adequate Performance Assurance at that time; (ii) against receipt in
the Special Custody Account of substitute Collateral having a value at least
equal (with any remaining Collateral) to Adequate Performance Assurance; or
(iii) upon termination of Customer's accounts with Broker including the Margin
Account (if any) and settlement in full of all transactions therein and any
amounts owed to Broker with respect thereto. It is understood that Broker will
be responsible for determining whether the Collateral constitutes Adequate
Performance Assurance. Custodian at no time has any responsibility for
determining whether the value of Collateral is equal in value to Adequate
Performance Assurance.
(5) Customer represents and warrants to Broker that securities
pledged to Broker shall be in good deliverable form (or Custodian shall have the
unrestricted power to put such securities into good deliverable form), and that,
subject to Section (6) of this Agreement, Collateral will not be subject to any
liens or encumbrances other than the lien in favor of Broker contemplated by
this Agreement.
(6) Collateral shall at all times remain the property of Customer
subject only to the interest and rights therein of Broker as the pledgee and
secured party thereof and of Custodian as contemplated hereunder. Custodian
represents that Collateral is not subject to any other lien, charge, security
interest or other right or claim of Custodian or any person claiming through
Custodian, except for a lien for Custodian's fees and expenses in connection
herewith or under any other custodian agreement between Customer and Custodian.
Custodian shall use its best efforts to notify Broker, Manager and Customer as
soon as possible if Custodian receives any notice of levy, lien, court order or
other process purporting to affect the Collateral.
(7) The occurrence of any of the following constitutes a Customer
Default hereunder:
(a) failure by Customer to perform any material obligation
hereunder or under the Margin Agreement including, without
limitation, its obligation to maintain Adequate Performance
Assurance and its obligation, upon receiving notice from
Broker that it can no longer protect Customer's Short Sale, to
make timely delivery to Broker in accordance with applicable
laws, rules and regulations, of securities identical to the
securities sold short; or
(b) Customer's Insolvency.
Broker will immediately notify Customer and Manager in an Advice from Broker of
such Customer Default. No sooner than 2:00 p.m. on the next Business Day after
transmittal by Broker of such Advice from Broker, if the Customer Default
continues at the end of such period, Broker may thereupon take any action
permitted pursuant to the Margin Agreement, including without limitation the
conversion of any convertible securities or exercise of Customer's rights in
warrants (if any) held in the Margin Account and the Special Custody Account,
the buy-in of any securities of which the Margin Account may be short, and the
sale of any or all property or securities in the Margin Account and the Special
Custody Account to the extent necessary to satisfy Customer's obligations to
Broker (in which event such Collateral shall be delivered to Broker as directed
in an Advice from Broker). Any sale of Collateral made hereunder shall be made
in accordance with the provisions of the New York Uniform Commercial Code in the
principal market for the securities or, if such principal market is closed, such
sale shall be made
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in a manner reasonable for such Collateral. Customer shall be liable to Broker
for any deficiency which may exist after the exercise by Broker of its rights
and remedies as aforesaid. Any surplus resulting from the sale of Collateral
shall be transmitted to an account designated by Customer. Broker shall notify
Customer and Manager of any sale of Collateral or any other property in the
Margin Agreement and any deficiency or surplus remaining thereafter in an Advice
from Broker.
(8) Broker hereby covenants, for the benefit of Customer only,
that Broker will not instruct Custodian to deliver Collateral free of payment
with respect to any sale of Collateral pursuant to Paragraph 7 until after the
occurrence of the events and the expiration of the time periods set forth in
Paragraph 7. The foregoing covenant and the provisions of Paragraph 7 shall in
no way constitute a limitation on Broker's right at any time to instruct
Custodian pursuant to an Advice from Broker or other entitlement order and
Custodian's obligation to act upon such instructions. Custodian shall not be
required to make any determination as to whether such delivery is made in
accordance with any provisions of applicable law, this Agreement or any other
agreement between Broker and Customer. Custodian will, however, provide prompt
telephone notice to an officer of Customer of receipt by Custodian of an Advice
from Broker to deliver Collateral.
(9) It is understood that all determinations and directions for
Short Sales for the account of Customer pursuant to the terms of this Agreement,
the Margin Agreement shall be made by Manager. Customer is not relying upon
Broker to make recommendations with respect thereto.
(10) Custodian's duties and responsibilities are set forth in this
Agreement. Custodian shall act only upon receipt of an Advice from Broker
regarding release of Collateral. Custodian shall not be liable or responsible
for anything done, or omitted to be done by it in good faith and in the absence
of negligence or willful misconduct and may rely and shall be protected in
acting upon any Advice from Broker or Instructions from Customer or any other
notice, instruction or other communications from Customer or Broker which it
believes to be genuine and authorized. Notwithstanding the foregoing, as between
Customer and Custodian, the terms of any custodian agreement between Customer
and Custodian shall apply with respect to any losses or liabilities of such
parties arising out of matters covered by this Agreement. As between Custodian
and Broker, Broker shall indemnify, defend and hold harmless Custodian with
regard to any direct loss, liability and reasonable expense of Custodian
(including reasonable outside counsel fees) incurred by Custodian arising solely
out of any act or omission of Custodian in accordance with any Advice from
Broker, except to the extent such loss, liability or expense is the result of
Custodian's own gross negligence or willful misconduct in the carrying out of
such Advice from Broker. In matters concerning or relating to this Agreement,
Custodian shall not be responsible for compliance with any statute, regulation
or other law regarding the establishment or maintenance of margin credit,
including, but not limited to, applicable Margin Rules, or any federal statutes,
rules or regulations, other than those governing custodial activities of a
national bank generally. Custodian shall not be liable for the acts or omissions
of any of the other parties to this Agreement unless such acts or omissions are
the result of Custodian's negligence, misfeasance or willful misconduct.
Custodian may hold the securities in the Special Custody Account in bearer,
nominee, book-entry, or other form and in any depository or clearing corporation
(including omnibus accounts), with or without indicating that the securities are
held hereunder; provided, however, that all securities held in the Special
Custody Account shall be
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identified on Custodian's records as subject to this Agreement and shall be in a
form that permits transfer at the direction of Broker without additional
authorization or consent of Customer in accordance with the terms of this
Agreement. Neither Broker nor Custodian shall be responsible or liable for any
losses caused directly or indirectly by suspension of trading, nationalization,
expropriation, devaluation, seizure, or similar action by any governmental
authority, de facto or de jure; enactment, promulgation, imposition or
enforcement by any governmental authority of currency restrictions, exchange
controls, levies or other charges affecting the property in the Special Custody
Account; acts of war, civil disturbances, strikes, terrorism, insurrection,
revolution, natural calamities, labor or material shortages or government
restrictions; delays in mail, delays or inaccuracies in the transmission of
orders or information; governmental, exchange or self-regulatory organization
laws, rules or actions; acts of God; or any other causes beyond the control of
such party or its agents. Neither Broker nor Custodian shall be liable for any
indirect, incidental, special, punitive or consequential damage, economic loss
or lost profits, even if advised of the possibility or likelihood thereof. This
Paragraph 10 shall survive the termination of this Agreement.
(11) All charges for Custodian's services under this Agreement
shall be paid by the Customer.
(12) Broker shall not be liable for any losses, costs, damages,
liabilities or expenses suffered or incurred by Customer as a result of any
transaction executed hereunder, or any other action taken or not taken by Broker
hereunder for Customer's account at Customer's direction or otherwise, except to
the extent that such loss, cost, damage, liability or expense is the result of
Broker's own negligence, misfeasance or misconduct.
(13) No modification or amendment of this Agreement shall be
effective unless in writing and signed by an authorized officer of each of
Broker, Customer, Manager and Custodian.
(14) Except as otherwise specifically provided for herein, written
communications hereunder shall be telegraphed , sent by facsimile transmission,
hand delivered or mailed first class postage prepaid, except that written notice
of termination shall be sent by certified mail, in any such case addressed (and
oral communications shall be directed to the following telephone numbers):
(a) if to Custodian, to: U.S. Bank National Association
0000 X. Xxxxxxxxxxx Xx., XX-XX-X000
Xxxxxxxxx, XX 00000
Attn: Xxx Xxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
(b) if to Customer, to: Rydex Series Funds - Global 130/30
0000 Xxxxxxxxx Xx
Xxxxx 000
Xxxxxxxxx, XX 00000
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Attention: Acct Dept
Fax No.: 000-000-0000
Phone No.: 000-000-0000
(c) if to Broker, to: Pershing LLC
Xxx Xxxxxxxx Xxxxx
Xxxxxx Xxxx, XX
Attn: Pershing Prime Services
Fax No.:
Phone No.:
Copies of any written confirmations, statements and advices
required to be delivered by Custodian under Paragraph 3 should
be sent to:
Broker's address listed above.
(d) if to Manager, to: Padco Advisors, Inc.
0000 Xxxxxxxxx Xx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Portfolio Management Dept.
Fax No.: 000-000-0000
Phone No.: 000-000-0000
or, in the case of each party hereto, such other address as such party
shall notify to the other parties hereto in accordance with this Paragraph 14.
(15) Any of the parties hereto may terminate this Agreement by
notice in writing to the other parties hereto; provided, however, that the
status of any Collateral pledged to Broker at the time of such notice shall not
be affected by such termination until the release of such pledge pursuant to the
terms of the Margin Agreement and any applicable Margin Rules.
(16) Nothing in this Agreement prohibits Broker, Customer or
Custodian from entering into similar agreements with others in order to
facilitate option contract transactions.
(17) THIS PARAGRAPH 17 SHALL APPLY TO BROKER, MANAGER AND CUSTOMER
ONLY AND SHALL IN NO WAY WHATSOEVER APPLY TO OR LIMIT CUSTODIAN.
THIS AGREEMENT CONTAINS A PREDISPUTE ARBITRATION CLAUSE. BY SIGNING AN
ARBITRATION AGREEMENT, CUSTOMER, MANAGER AND BROKER AGREE AS FOLLOWS:
(A) CUSTOMER, MANAGER AND BROKER ARE GIVING UP THE RIGHT TO XXX
EACH OTHER IN COURT FOR ISSUES RELATING TO THIS AGREEMENT, INCLUDING THE RIGHT
TO A TRIAL BY JURY, EXCEPT AS PROVIDED BY THE RULES OF THE ARBITRATION FORUM IN
WHICH A CLAIM IS FILED.
(B) ARBITRATION AWARDS ARE GENERALLY FINAL AND BINDING; A PARTY'S
ABILITY TO HAVE A COURT REVERSE OR MODIFY AN ARBITRATION AWARD IS VERY LIMITED.
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C) THE ABILITY OF THE PARTIES TO OBTAIN DOCUMENTS, WITNESS
STATEMENTS AND OTHER DISCOVERY IS GENERALLY MORE LIMITED IN ARBITRATION THAN IN
COURT PROCEEDINGS.
(D) THE ARBITRATORS DO NOT HAVE TO EXPLAIN THE REASON(S) FOR THEIR
AWARD.
(E) THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF
ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY, UNLESS
CUSTOMER IS A MEMBER OF THE ORGANIZATION SPONSORING THE ARBITRATION FACILITY, IN
WHICH CASE ALL ARBITRATORS MAY BE AFFILIATED WITH THE SECURITIES INDUSTRY.
(F) THE RULES OF SOME ARBITRATION FORUMS MAY IMPOSE TIME LIMITS
FOR BRINGING A CLAIM IN ARBITRATION. IN SOME CASES, A CLAIM THAT IS INELIGIBLE
FOR ARBITRATION MAY BE BROUGHT IN COURT.
(G) THE RULES OF THE ARBITRATION FORUM IN WHICH THE CLAIM IS
FILED, AND ANY AMENDMENTS THERETO, SHALL BE INCORPORATED INTO THIS AGREEMENT.
ANY CONTROVERSY BETWEEN BROKER (AND ANY OF BROKER'S AFFILIATES ALSO
INVOLVED IN SUCH CONTROVERSY) OR ANY OF ITS OR THEIR PARTNERS, OFFICERS,
MANAGING DIRECTORS, DIRECTORS OR EMPLOYEES ON THE ONE HAND, AND CUSTOMER OR
CUSTOMER'S AGENTS ON THE OTHER HAND, ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACCOUNTS ESTABLISHED
HEREUNDER, SHALL BE SETTLED BY ARBITRATION. THE ARBITRATION WILL BE CONDUCTED
BEFORE THE NEW YORK STOCK EXCHANGE, INC ("NYSE") OR THE NATIONAL ASSOCIATION OF
SECURITIES DEALERS, INC DISPUTE RESOLUTION ("NASD-DR) OR IF THE NYSE AND NASD-DR
DECLINE TO HEAR THE MATTER, BEFORE THE AMERICAN ARBITRATION ASSOCIATION, IN
ACCORDANCE WITH THEIR ARBITRATION RULES THEN IN FORCE. THE AWARD OF THE
ARBITRATOR SHALL BE FINAL, AND JUDGMENT UPON THE AWARD RENDERED MAY BE ENTERED
IN ANY COURT, STATE OR FEDERAL, HAVING JURISDICTION.
NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS ACTION TO
ARBITRATION NOR SEEK TO ENFORCE ANY PRO-DISPUTE ARBITRATION AGREEMENT AGAINST
ANY PERSON WHO HAS INITIATED IN COURT A PUTATIVE CLASS ACTION OR WHO IS A MEMBER
OF A PUTATIVE CLASS WHO HAS NOT OPTED OUT OF THE CLASS WITH RESPECT TO ANY
CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS ACTION UNTIL: (I) THE CLASS
CERTIFICATION IS DENIED; (II) THE CLASS IS DECERTIFIED; OR (III) CUSTOMER IS
EXCLUDED FROM THE CLASS BY THE COURT.
SUCH FORBEARANCE TO ENFORCE AN AGREEMENT TO ARBITRATE SHALL NOT
CONSTITUTE A WAIVER OF ANY RIGHTS UNDER THIS AGREEMENT EXCEPT TO THE EXTENT
STATED HEREIN.
(18) IF ANY PROVISION OR CONDITION OF THIS AGREEMENT SHALL BE HELD
TO BE INVALID OR UNENFORCEABLE BY ANY COURT, OR REGULATORY OR SELF-REGULATORY
AGENCY OR BODY, SUCH INVALIDITY OR UNENFORCEABILITY SHALL ATTACH ONLY TO SUCH
PROVISION OR CONDITION. THE VALIDITY OF THE REMAINING PROVISIONS AND CONDITIONS
SHALL NOT BE AFFECTED THEREBY AND THIS AGREEMENT SHALL BE CARRIED OUT AS IF ANY
SUCH INVALID OR UNENFORCEABLE PROVISION OR CONDITION WERE NOT CONTAINED HEREIN,
PROVIDED THAT THE ESSENTIAL PROVISIONS OF THIS AGREEMENT FOR EACH PARTY REMAIN
VALID, BINDING AND ENFORCEABLE.
(19) ALL REFER HEREIN TO TIMES OF DAY SHALL MEAN THE TIME IN NEW
YORK, NEW YORK, USA.
(20) THIS AGREEMENT AND ITS ENFORCEMENT (INCLUDING, WITHOUT
LIMITATION, THE ESTABLISHMENT AND MAINTENANCE OF THE SPECIAL CUSTODY ACCOUNT AND
ALL INTERESTS, DUTIES AND
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OBLIGATIONS RELATED THERETO) SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK. THIS AGREEMENT SHALL BE BINDING ON THE PARTIES AND ANY SUCCESSOR
ORGANIZATIONS THEREOF IRRESPECTIVE OF ANY CHANGE OR CHANGES IN PERSONNEL
THEREOF.
(21) THIS AGREEMENT MAY BE EXECUTED IN ONE OR MORE COUNTERPARTS,
ALL OF WHICH SHALL CONSTITUTE BUT ONE AND THE SAME INSTRUMENT.
(22) NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IN
NO EVENT SHALL CUSTODIAN BE REQUIRED TO ARBITRATE ANY DISPUTE WHICH MAY ARISE
HEREUNDER. AS BETWEEN CUSTODIAN AND ANY OTHER PARTY TO THIS AGREEMENT ALL
DISPUTES SHALL BE SUBJECT TO THE JURISDICTION OF THE FEDERAL AND STATE COURTS
SITUATED IN NEW YORK CITY, NEW YORK, AND CUSTODIAN, BROKER AND CUSTOMER EACH
HEREBY CONSENTS TO THE JURISDICTION OF SUCH COURTS AND HEREBY IRREVOCABLY WAIVES
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAY OF VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH
A COURT THAT SUCH PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. IN
CONNECTION WITH ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND INVOLVING CUSTODIAN, BROKER AND CUSTOMER EACH HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY.
THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE IN PARAGRAPH
17 APPLICABLE TO BROKER, MANAGER AND CUSTOMER.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the duly authorized representatives of the parties
have executed this Agreement as of the date and year first written above.
RYDEX SERIES FUNDS - GLOBAL MARKET NEUTRAL FUND:
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
------------------------------------
Title: Trustee
------------------------------------
PERSHING LLC:
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
------------------------------------
Title: Director
------------------------------------
U.S. BANK NATIONAL ASSOCIATION:
By: /s/ Xxx Xxxxxxx
------------------------------------
Name: Xxx Xxxxxxx
------------------------------------
Title: Executive Vice President
------------------------------------
PADCO ADVISORS, INC.:
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
------------------------------------
Title: Trustee
------------------------------------
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EXHIBIT A
TO THE SPECIAL CUSTODY AND PLEDGE AGREEMENT
AUTHORIZED PERSONS
Set forth below are the names and specimen signatures of the persons
authorized by the Broker
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AUTHORIZED PERSONS (PRINTED NAME) SPECIMEN SIGNATURES
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