Document:

EXHIBIT 4.1

           RYDEX SPECIALIZED PRODUCTS LLC, d/b/a "RYDEX INVESTMENTS",

                                   as Sponsor,

                              THE BANK OF NEW YORK,

                                   as Trustee,

          ALL REGISTERED OWNERS AND BENEFICIAL OWNERS OF BRITISH POUND
                    STERLING CURRENCYSHARES ISSUED HEREUNDER

                                       and

                                 ALL DEPOSITORS

                                   ----------

                           Depositary Trust Agreement

                 CurrencyShares(SM) British Pound Sterling Trust

                                   ----------

                           Dated as of _________, 2006

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
ARTICLE 1 DEFINITIONS AND RULES OF CONSTRUCTION..........................     2
   Section 1.1    Definitions............................................     2
   Section 1.2    Rules of Construction..................................     8

ARTICLE 2 STATEMENT OF PURPOSE; CREATION AND DECLARATION OF TRUST;
                  FORM OF CERTIFICATES; DEPOSIT OF BRITISH
                  POUNDS; DELIVERY, REGISTRATION OF TRANSFER AND
                  SURRENDER OF SHARES....................................     9
   Section 2.1    Statement of Purpose; Duties and Powers of the Trust...     9
   Section 2.2    Creation and Declaration of Trust; Business of the
                  Trust..................................................     9
   Section 2.3    Form of Certificates; Book-Entry System;
                  Transferability of Shares..............................    10
   Section 2.4    Deposit of British Pounds..............................    12
   Section 2.5    Delivery of Shares.....................................    14
   Section 2.6    Registration and Registration of Transfer of Shares;
                  Combination and Split-up of Certificates...............    14
   Section 2.7    Surrender of Shares and Withdrawal of Trust Property...    15
   Section 2.8    Limitations on Delivery, Registration of Transfer and
                  Surrender of Shares....................................    16
   Section 2.9    Lost Certificates, Etc.................................    17
   Section 2.10   Cancellation and Destruction of Surrendered
                  Certificates...........................................    17
   Section 2.11   Splits and Reverse Splits of Shares....................    18

ARTICLE 3 CERTAIN OBLIGATIONS OF REGISTERED OWNERS OF SHARES.............    18
   Section 3.1    Liability of Registered Owner for Taxes and Other
                  Governmental Charges...................................    18
   Section 3.2    Warranties on Deposit of British Pounds................    19

ARTICLE 4 ADMINISTRATION OF THE TRUST....................................    19
   Section 4.1    Evaluation of British Pounds; Calculation of Net
                  Asset Value............................................    19
   Section 4.2    Responsibility of the Trustee for Evaluations..........    20
   Section 4.3    Interest Account and Non-Interest Account..............    21
   Section 4.4    Cash Distributions.....................................    21
   Section 4.5    Distributions of Surplus Property......................    22
   Section 4.6    Fixing of Record Date..................................    22
   Section 4.7    Payment of Trust Expenses..............................    22
   Section 4.8    Statements and Reports.................................    24

                                        i

   Section 4.9    Further Provisions for Sales of Trust Property;
                  Currency Conversion....................................    24
   Section 4.10   Counsel................................................    26
   Section 4.11   Grantor Trust..........................................    26

ARTICLE 5 THE SPONSOR....................................................    27
   Section 5.1    Duties of the Sponsor..................................    27
   Section 5.2    Obligations of the Sponsor.............................    27
   Section 5.3    Prevention or Delay in Performance by the Sponsor......    28
   Section 5.4    Certain Matters Regarding Successor Sponsor............    29
   Section 5.5    Resignation of Sponsor; Successors.....................    29
   Section 5.6    Compensation of the Sponsor............................    30
   Section 5.7    Federal Securities Law Filings.........................    31
   Section 5.8    Discretionary Actions by Sponsor; Consultation.........    32

ARTICLE 6 THE TRUSTEE....................................................    32
   Section 6.1    Maintenance of Office and Transfer Books by the
                  Trustee................................................    32
   Section 6.2    Obligations of the Trustee.............................    33
   Section 6.3    Prevention or Delay in Performance by the Trustee......    34
   Section 6.4    Resignation or Removal of the Trustee; Appointment of
                  Successor Trustee......................................    34
   Section 6.5    Transfers Between Interest Account and Non-Interest
                  Account................................................    36
   Section 6.6    The Depository.........................................    37
   Section 6.7    Compensation of the Depository.........................    37
   Section 6.8    Retention of Trust Documents...........................    38
   Section 6.9    Prospectus Delivery....................................    38
   Section 6.10   Discretionary Actions by Trustee; Consultation.........    38

ARTICLE 7 INDEMNIFICATION................................................    39
   Section 7.1    Indemnification of the Sponsor and Trustee.............    39

ARTICLE 8 AMENDMENT AND TERMINATION......................................    42
   Section 8.1    Amendment..............................................    42
   Section 8.2    Termination............................................    43

ARTICLE 9 MISCELLANEOUS..................................................    46
   Section 9.1    Counterparts...........................................    46
   Section 9.2    Third-Party Beneficiaries..............................    47
   Section 9.3    Severability...........................................    47
   Section 9.4    Registered Owners, Beneficial Owners and Depositors as
                  Parties; Binding Effect................................    47
   Section 9.5    Notices................................................    47
   Section 9.6    Agent for Service; Submission to Jurisdiction..........    48
   Section 9.7    Governing Law..........................................    49

                                       ii

EXHIBIT A -DEPOSIT ACCOUNT AGREEMENT

EXHIBIT B -FORM OF CERTIFICATES

                                       iii

                           DEPOSITARY TRUST AGREEMENT

          THIS DEPOSITARY TRUST AGREEMENT dated as of [___________], 2006,
between Rydex Specialized Products LLC, a Delaware limited liability company
d/b/a "RYDEX INVESTMENTS", as sponsor, THE BANK OF NEW YORK, a New York banking
corporation, as trustee, all Registered Owners and Beneficial Owners from time
to time of British Pound Sterling CurrencyShares issued hereunder and all
Depositors.

                                   WITNESSETH:

          WHEREAS the Sponsor desires to establish a trust, to be known as the
"CurrencyShares(SM) British Pound Sterling Trust", pursuant to the laws of the
State of New York;

          WHEREAS the Sponsor desires to establish the terms on which British
Pounds (as herein defined) may be deposited in the trust and provide for the
creation of British Pound Sterling CurrencyShares in Baskets (as herein defined)
representing fractional undivided interests in the net assets of the trust and
the execution and delivery of Certificates (as herein defined) evidencing the
British Pound Sterling CurrencyShares; and

          WHEREAS the Sponsor desires to provide for other terms and conditions
upon which the trust shall be established and administered, as hereinafter
provided.

          NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the Sponsor and the Trustee hereby agree as
follows:

                                    ARTICLE 1

                      DEFINITIONS AND RULES OF CONSTRUCTION

          Section 1.1 Definitions.

          Except as otherwise specified in this Trust Agreement or as the
context may otherwise require, the following terms have the respective meanings
set forth below for all purposes of this Depositary Trust Agreement.

          "Agreement" means this Depositary Trust Agreement, as amended or
supplemented in accordance with its terms.

          "Authorized Participant" means a Person that, at the time of
submitting a Purchase Order or a Redemption Order, (i) is a registered
broker-dealer or other securities market participant, (ii) is a DTC Participant
or an Indirect Participant and (iii) has in effect a valid Authorized
Participant Agreement.

          "Authorized Participant Agreement" means an agreement among the
Trustee, the Sponsor and an Authorized Participant that authorizes the
Authorized Participant to submit Purchase Orders and Redemption Orders under
this Agreement.

          "Basket" means 50,000 Shares, except that the Trustee, in consultation
with the Sponsor, may from time to time increase or decrease the number of
Shares comprising a Basket.

          "Basket British Pound Amount" is the amount of British Pounds that
must be deposited for issuance of one Basket or that, subject to the exception
stated in Section 2.7, is deliverable upon Surrender of one Basket. The Basket
British Pound Amount will be determined as provided in Section 2.4(b).

          "Beneficial Owner" means any Person owning, through DTC, a DTC
Participant, or an Indirect Participant, a Share.

                                        2

          "British Pound" and "Great Britain Pound" mean the official currency
of the United Kingdom.

          "Certificate" means a certificate that may be executed and delivered
by the Trustee under this Agreement evidencing Shares.

          "Code" means the Internal Revenue Code of 1986, as amended.

          "Commission" means the Securities and Exchange Commission of the
United States or any successor governmental agency in the United States.

          "Corporate Trust Office" means the office of the Trustee at which its
depositary receipt business is administered which, at the date of this
Agreement, is located at 101 Barclay Street, New York, New York 10286.

          "Deliver" means (a) when used with respect to British Pounds, either
(i) a wire transfer of immediately available British Pounds to the account
specified by the Person entitled to the Delivery or (ii) if requested by the
Person entitled to the Delivery, delivery of a certified or official bank check
for British Pounds payable as requested by the person entitled to the Delivery
and (b) when used with respect to Shares, either (i) one or more book-entry
transfers of those Shares to an account or accounts at DTC designated by the
Person entitled to such delivery for further credit as specified by that Person
or (ii) in the circumstances specified in Section 2.3(e), execution and delivery
at the Corporate Trust Office of the Trustee of one or more Certificates
evidencing those Shares.

          "Deposit Account Agreement" means the Deposit Account Agreement
entered into between the Trustee and the Depository, substantially in the form
annexed hereto as Exhibit A, as it may be amended or supplemented in accordance
with this Agreement.

                                        3

          "Depositor" means any Authorized Participant that deposits British
Pounds into the Trust, either for its own account or on behalf of another Person
that is the owner or beneficial owner of those British Pounds.

          "Depository" means JPMorgan Chase Bank, N.A., London Branch.

          "Dollars" or "$" means the official currency of the United States of
America.

          "DTC" means The Depository Trust Company, its nominees and their
respective successors.

          "DTC Participant" means a Person that, pursuant to DTC's governing
documents, is entitled to deposit securities with DTC in its capacity as a
"participant."

          "Exchange" means the exchange on which the Shares are principally
traded, as specified by the Sponsor, initially the New York Stock Exchange.

          "Fiscal Year" means the annual accounting periods of the Trust which
will end on October 31 of each year.

          "Indemnified Amounts" is defined in Section 7.1.

          "Indemnitee" is defined in Section 7.1.

          "Indemnitor" is defined in Section 7.1.

          "Indirect Participant" means a Person that, by clearing securities
through, or maintaining a custodial relationship with, a DTC Participant, has
access to the DTC clearing system.

          "Interest Account" means the interest-bearing account for the Trust's
assets maintained with the Depository pursuant to the Deposit Account Agreement.

                                        4

          "London Business Day" means any day other than (i) a Saturday or
Sunday or (ii) a day which has been designated a bank holiday in England.

          "NAV" means the net asset value of the Trust determined under Section
4.1.

          "NAV per Basket" means the value of a Basket determined under Section
2.4.

          "NAV per Share" means the value of a Share determined under Section
4.1.

          "New York Business Day" means any day other than (i) a Saturday or
Sunday or (ii) a day on which the Exchange is not open for regular trading at
noon, New York time.

          "Non-Interest Account" means the non-interest-bearing account
maintained with the Depository pursuant to the Deposit Account Agreement.

          "Noon Buying Rate" means the Dollar/British Pound exchange rate, as
determined and published by the Federal Reserve Bank of New York each New York
Business Day at approximately 12:00 PM (New York time).

          "Order Cutoff Time" means (i) 4:00 PM (New York time) or (ii) another
time agreed to by the Sponsor and the Trustee and of which Registered Owners and
all existing Authorized Participants have been notified by the Trustee.

          "Order Date" means, with respect to a Purchase Order, the date
specified in Section 2.4(a) and, with respect to a Redemption Order, the date
specified in Section 2.7.

          "Person" means any natural person or any limited liability company,
corporation, partnership, joint venture, association, joint stock company,
trust,

                                        5

unincorporated organization or government or any agency or political subdivision
thereof.

          "Proceeding" is defined in Section 7.1.

          "Purchase Order" is defined in Section 2.4.

          "Qualified Bank" means a bank, trust company, corporation or national
banking association organized and doing business under the laws of the United
States or any State of the United States that is authorized under those laws to
exercise corporate trust powers and that (i) is a DTC Participant or a
participant in such other securities depository as is then acting with respect
to the Shares, (ii) unless counsel to the Sponsor determines that the following
requirement is not necessary for the exception under Section 408(m) of the Code
to apply, is a banking institution as defined in Section 408(n) of the Code and
(iii) had, as of the date of its most recent annual financial statements, an
aggregate capital, surplus and undivided profits of at least $500,000,000.

          "Redemption Order" is defined in Section 2.7.

          "Registered Owner" means the Person in whose name Shares are
registered on the books of the Trustee maintained for that purpose.

          "Registrar" means any bank or trust company that is appointed to
register Shares and transfers of Shares as herein provided.

          "Relevant Price" means the Noon Buying Rate, except as provided below.
If, on a particular evaluation day, the Federal Reserve Bank of New York does
not announce a Noon Buying Rate by 2:00 PM (New York time), then the most recent
Federal Reserve Bank of New York determination of the Noon Buying Rate will be
the "Relevant Price" and be used to determine the NAV of the Trust unless the
Trustee, in consultation with the Sponsor, determines that such price is
inappropriate to use as the basis for such valuation. In the event that the
Trustee and the Sponsor determine that the

                                        6

most recent Federal Reserve Bank of New York determination of the Noon Buying
Rate is not an appropriate basis for valuation of the Trust's British Pounds,
they shall determine an alternative basis for such evaluation to be employed by
the Trustee, which will be the "Relevant Price."

          "Settlement Date" means, with respect to a Purchase Order, the date
specified in Section 2.4(a) and, with respect to a Redemption Order, the date
specified in Section 2.7.

          "Shares" means British Pound Sterling CurrencyShares created under
this Agreement, each representing a fractional undivided ownership interest in
the net assets of the Trust, which interest shall equal a fraction, the
numerator of which is 1 and the denominator of which is the total number of
Shares outstanding.

          "Sponsor" means Rydex Specialized Products LLC, a Delaware limited
liability company, d/b/a "Rydex Investments".

          "Sponsor's Fee" means the fee to be paid to the Sponsor, which for
each day shall be equal to (.004/365 or 366, depending on the number of days in
the year) multiplied by (the British Pounds in the Trust as of the close of
business on the preceding London Business Day, which shall include all unpaid
interest but exclude unpaid fees, each as accrued through the immediately
preceding day).

          "Sponsor Indemnified Persons" is defined in Section 7.1.

          "Surplus Property" means any Trust Property other than (i) British
Pounds deposited by or on behalf of Authorized Participants pursuant to Section
2.4, in the Interest Account or the Non-Interest Account, (ii) British Pounds
received as interest on British Pounds in the Interest Account, (iii) amounts
withdrawn from the Interest Account in order to make a redemption described in
Section 2.7, or (iv) amounts being held for the payment of estimated Trust
expenses.

                                        7

          "Surrender" means, when used with respect to Shares, (a) one or more
book-entry transfers of Shares to the DTC account of the Trustee or (b)
surrender to the Trustee at its Corporate Trust Office of one or more
Certificates evidencing Shares.

          "Trust" means the CurrencyShares British Pound Sterling Trust, the
trust entity created by this Agreement.

          "Trust Property" means the British Pounds that are deposited under
this Agreement and any other money or other property that is received by the
Trustee in respect of Trust Property and that is being held under this
Agreement. Trust Property shall not include any property subject to distribution
for which the record date for determining Registered Owners entitled to such
distribution has passed.

          "Trustee" means The Bank of New York, a New York banking corporation,
in its capacity as trustee under this Agreement, or any successor as trustee
under this Agreement.

          "Trustee Indemnified Persons" is defined in Section 7.1.

          Section 1.2 Rules of Construction.

          Unless the context otherwise requires:

               (i) a term has the meaning assigned to it;

               (ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles as in
effect in the United States;

               (iii) "or" is not exclusive;

               (iv) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;

                                        8

               (v) "including" means including without limitation; and

               (vi) words in the singular include the plural and words in the
plural include the singular.

                                    ARTICLE 2

                              STATEMENT OF PURPOSE;
                       CREATION AND DECLARATION OF TRUST;
           FORM OF CERTIFICATES; DEPOSIT OF BRITISH POUNDS; DELIVERY,
                REGISTRATION OF TRANSFER AND SURRENDER OF SHARES

          Section 2.1 Statement of Purpose; Duties and Powers of the Trust.

          (a) The Trust is a passive investment vehicle that is not actively
managed. The sole purpose of the Trust is to hold British Pounds on behalf of
the Registered Owners. The Trust shall have no directors or persons acting in
similar capacity and no officers or employees, and shall act only through the
Trustee and the Sponsor.

          (b) The Trust shall have the power to receive and hold deposits of
British Pounds, issue Baskets representing those deposits, distribute British
Pounds upon surrenders of Baskets, and perform acts incidental to the foregoing
as provided in this Agreement, but the Trust shall not have the power to engage
in any other business activities.

          Section 2.2 Creation and Declaration of Trust; Business of the Trust.

          (a) The Trustee acknowledges that an initial deposit of 100 British
Pounds under and in accordance with this Agreement has been made in the Interest
Account by the Sponsor on the date hereof in exchange for one Share. The Sponsor
is purchasing the initial Share solely for the purpose of forming the Trust. The
Sponsor will redeem the initial Share for 100 British Pounds as promptly as
practicable after the Form S-1 registration statement filed with the Commission
with respect to the Shares is declared

                                        9

effective by the Commission and the Initial Purchaser, as defined in the
registration statement, deposits British Pounds in accordance with the
registration statement.

          (b) The Trustee declares that it will hold that initial deposit and
all other Trust Property as trustee for the benefit of the Registered Owners for
the purposes of, and subject to and limited by the terms and conditions set
forth in, this Agreement. The trust created by this Agreement shall be known as
the "CurrencyShares(SM) British Pound Sterling Trust".

          Section 2.3 Form of Certificates; Book-Entry System; Transferability
of Shares.

          (a) The Certificates evidencing Shares shall be substantially in the
form set forth in Exhibit B annexed to this Agreement, with appropriate
insertions, modifications and omissions, as hereinafter provided. No Shares
shall be entitled to any benefits under this Agreement or be valid or obligatory
for any purpose unless a Certificate evidencing those Shares has been executed
by the Trustee by the manual or facsimile signature of a duly authorized
signatory of the Trustee and, if a Registrar (other than the Trustee) for the
Shares shall have been appointed, countersigned by the manual signature of a
duly authorized officer of the Registrar. The Trustee shall maintain books on
which the registered ownership of each Share and transfers, if any, of such
registered ownership shall be recorded. Certificates evidencing Shares bearing
the manual or facsimile signature of a duly authorized signatory of the Trustee
and the manual signature of a duly authorized officer of the Registrar, if
applicable, who was, at the time such Certificates were executed, a proper
signatory of the Trustee or Registrar, if applicable, shall bind the Trustee,
notwithstanding that such signatory has ceased to hold such office prior to the
delivery of such Certificates.

          (b) The Certificates may be endorsed with or have incorporated in the
text thereof such legends or recitals or modifications not inconsistent with the
provisions of this Agreement as may be required by the Trustee or required to
comply with any

                                       10

applicable law or regulations thereunder or with the rules and regulations of
the Exchange or to conform with any usage with respect thereto, or to indicate
any special limitations or restrictions to which the Shares evidenced by a
particular Certificate are subject.

          (c) The Sponsor and the Trustee will apply to DTC for acceptance of
the Shares in its book-entry settlement system. Shares deposited with DTC shall
be evidenced by one or more global Certificates which shall be registered in the
name of Cede & Co., as nominee for DTC, and shall bear the following legend:

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
          OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
          THE AGENT AUTHORIZED BY THE ISSUER FOR REGISTRATION OF TRANSFER,
          EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
          NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
          AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
          CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
          REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
          VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
          REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          (d) So long as the Shares are eligible for book-entry settlement with
DTC and such settlement is available, unless otherwise required by law,
notwithstanding the provisions of Section 2.3(a) and Section 2.3(b), all Shares
shall be evidenced by one or more global Certificates the Registered Owner of
which is DTC or a nominee of DTC and (i) no Beneficial Owner of Shares will be
entitled to receive a separate Certificate evidencing those Shares, (ii) the
interest of a Beneficial Owner in Shares represented by a global Certificate
will be shown only on, and transfer of that interest will be effected only
through, records maintained by DTC or a DTC Participant or Indirect Participant
through which the Beneficial Owner holds that interest and (iii) the rights of a
Beneficial Owner with respect to Shares represented by a global Certificate will
be exercised only to the

                                       11

extent allowed by, and in compliance with, the arrangements in effect between
such Beneficial Owner and DTC or the DTC Participant or Indirect Participant
through which that Beneficial Owner holds an interest in Shares.

          (e) If, at any time when Shares are evidenced by a global Certificate,
DTC ceases to make its book-entry settlement system available for such Shares,
the Trustee shall execute and deliver separate Certificates evidencing Shares to
the DTC Participants entitled thereto, with such additions, deletions and
modifications to this Agreement and to the form of Certificate evidencing Shares
as the Sponsor and the Trustee may agree.

          (f) Title to a Certificate evidencing Shares (and to the Shares
evidenced thereby), when properly endorsed or accompanied by proper instruments
of transfer, shall be transferable by delivery with the same effect as in the
case of a negotiable instrument under the laws of New York; provided, however,
that the Trustee, notwithstanding any notice to the contrary, may treat the
Registered Owner of Shares as the absolute owner thereof for the purpose of
determining the person entitled to any distribution or to any notice provided
for in this Agreement and for all other purposes.

          Section 2.4 Deposit of British Pounds.

          (a) After the deposit of British Pounds in the Trust by the Initial
Purchaser, as defined in the registration statement, the issuance and Delivery
of Shares will take place only in integral numbers of Baskets and in compliance
with the provisions of this Agreement, as supplemented by any procedures
attached to an applicable Authorized Participant Agreement, to the extent those
procedures are consistent with this Agreement. Authorized Participants wishing
to acquire from the Trustee one or more Baskets must place an order with the
Trustee (a "Purchase Order"). Purchase Orders received by the Trustee prior to
the Order Cutoff Time on a New York Business Day will have that day as the Order
Date. Purchase Orders received on a day that is not a New York Business Day or
received after the Order Cutoff Time on a New York Business Day will have the
next following New York Business Day as the Order Date. The "Settlement

                                       12

Date" for a Purchase Order shall be the third New York Business Day following
the Order Date unless that day is not a London Business Day, in which case the
Settlement Date shall be the next following day that is both a New York Business
Day and a London Business Day. As consideration for each Basket acquired,
Authorized Participants must deposit with the Depository the Basket British
Pound Amount determined by the Trustee on the Business Day prior to the
Settlement Date for the corresponding Purchase Order. The Basket British Pound
Amount shall be deposited in the Non-Interest Account. Pursuant to Section 6.5,
the Trustee shall contemporaneously instruct the Depository to transfer the
portion of the Basket British Pound Amount representing principal from the
Non-Interest Account to the Interest Account. The portion of the Basket British
Pound Amount representing a pro rata portion of accrued but unpaid interest will
remain in the Non-Interest Account.

          (b) The Trustee shall determine the Basket British Pound Amount for
each New York Business Day. The initial "Basket British Pound Amount" is
5,000,000 British Pounds. After the initial deposit, the "Basket British Pound
Amount" shall be an amount of British Pounds equal to the quotient obtained by
dividing the NAV per Basket on the date on which the determination is being made
by the Relevant Price on such date. For purposes of this computation, "NAV per
Basket" is the product obtained by multiplying (x) the NAV per Share determined
in compliance with Section 4.1, by (y) the number of Shares which constitute a
Basket on the date on which the determination is being made. Fractions of a
British Pound smaller than .001 shall be disregarded. The Sponsor intends to
publish, or may designate other persons to publish, for each New York Business
Day, the Basket British Pound Amount.

          (c) If the Trust Property includes Surplus Property, no deposits of
British Pounds will be accepted until after a record date for distribution of
that money or property, or proceeds from that property, has passed.

          (d) All deposited British Pounds shall be owned by the Trust and held
for the Trust by the Depository in the Interest Account or the Non-Interest
Account. Any

                                       13

assets of the Trust other than British Pounds shall be held by the Trustee or
the Depository at such place and in such manner as the Trustee shall determine.

          Section 2.5 Delivery of Shares.

          Upon receipt by the Trustee of any deposit in accordance with Section
2.4, together with a Purchase Order and the other documents required under this
Agreement, if any, and a confirmation from the Depository that the Basket
British Pound Amount has been Delivered to the Depository for each Basket of
Shares and the Depository is holding those British Pounds for the account of the
Trust, the Trustee, subject to the terms and conditions of this Agreement, shall
Deliver to the Depositor the number of Baskets of Shares issuable in respect of
such deposit as requested in the corresponding Purchase Order, but only upon
payment to the Trustee of the fees and expenses of the Trustee as provided in
Section 6.7 and of all taxes and governmental charges and fees payable in
connection with such deposit, the transfer of the British Pounds and the
issuance and Delivery of the Shares.

          Section 2.6 Registration and Registration of Transfer of Shares;
Combination and Split-up of Certificates.

          (a) The Trustee shall keep or cause to be kept a register of
Registered Owners of Shares and shall provide for the registration of Shares and
the registration of transfers of Shares.

          (b) The Trustee, subject to the terms and conditions of this
Agreement, shall register transfers of ownership of Shares on its transfer books
from time to time, upon any Surrender of a Certificate evidencing such Shares,
by the Registered Owner in person or by a duly authorized attorney, properly
endorsed or accompanied by proper instruments of transfer, and duly stamped as
may be required by the laws of the State of New York and of the United States of
America. Thereupon the Trustee shall execute a new Certificate or Certificates
evidencing such Shares, and deliver the same to or upon the order of the Person
entitled thereto.

                                       14

          (c) The Trustee, subject to the terms and conditions of this
Agreement, shall, upon Surrender of a Certificate or Certificates evidencing
Shares for the purposes of effecting a split-up or combination of that
certificate or certificates, execute and deliver one or more new Certificates
evidencing those Shares.

          (d) The Trustee may, with the written approval of the Sponsor (which
approval shall not be unreasonably withheld), appoint one or more co-transfer
agents for the purpose of effecting registration of transfers of Shares and
combinations and split-ups of Certificates at designated transfer offices on
behalf of the Trustee at the Trustee's expense. In carrying out its functions, a
co-transfer agent may require evidence of authority and compliance with
applicable laws and other requirements by Registered Owners or Persons entitled
to Shares and will be entitled to protection and indemnity to the same extent as
the Trustee.

          Section 2.7 Surrender of Shares and Withdrawal of Trust Property.

     Upon Surrender of any integral number of Baskets for the purpose of
withdrawal of the amount of Trust Property represented thereby, and upon payment
of the fee of the Trustee in connection with the Surrender of Shares as provided
in Section 6.7 and payment of all taxes and charges payable in connection with
such Surrender and withdrawal of Trust Property, and subject to the terms and
conditions of this Agreement, an Authorized Participant acting on authority of
the Registered Owner of those Shares will be entitled to Delivery, in accordance
with the provisions of this Agreement, as supplemented by any procedures
attached to an applicable Authorized Participant Agreement, to the extent those
procedures are consistent with this Agreement, of the amount of Trust Property
at the time represented by such Baskets, including the Basket British Pound
Amounts corresponding to such Baskets for the New York Business Day prior to the
Settlement Date (as defined below), but excluding from those Basket British
Pound Amounts any portion that represents the value of Trust Property that is
not held as British Pounds. Authorized Participants wishing to redeem one or
more Baskets must place an order with the Trustee (a "Redemption Order").
Redemption Orders received by

                                       15

the Trustee prior to the Order Cutoff Time on a New York Business Day will have
that day as the Order Date. Redemption Orders received by the Trustee after the
Order Cutoff Time on a New York Business Day or on a day that is not a New York
Business Day will have the next New York Business Day as the Order Date. The
"Settlement Date" for a Redemption Order shall be the third New York Business
Day following the Order Date unless that day is not a London Business Day, in
which case the Settlement Date shall be the next following day that is both a
New York Business Day and a London Business Day. Any Trust Property other than
British Pounds will be delivered by the Trustee.

     The Trustee may require that a Certificate evidencing Shares Surrendered
for the purpose of withdrawal is properly endorsed in blank or accompanied by
proper instruments of transfer in blank. Upon a Surrender of an integral number
of Baskets of Shares and satisfaction of all the conditions for withdrawal of
Trust Property, the Trustee shall instruct the Depository to Deliver, to or to
the order of the Surrendering Authorized Participant, the amount of British
Pounds represented by the Surrendered Baskets of Shares and the Depository or
the Trustee shall pay or deliver to or to the order of the Surrendering
Authorized Participant the amount of any other Trust Property represented by the
Surrendered Baskets of Shares. Any Delivery of British Pounds other than by wire
transfer or at the office of the Depository will be at the expense and risk of
the Authorized Participant.

          Section 2.8 Limitations on Delivery, Registration of Transfer and
Surrender of Shares.

          (a) As a condition precedent to the Delivery, registration of
transfer, split-up, combination or Surrender of any Shares or withdrawal of any
Trust Property, the Trustee or Registrar may require payment from the Depositor
or the Authorized Participant Surrendering the Shares of a sum sufficient to
reimburse it for any tax or other governmental charge and any stock transfer or
registration fee with respect thereto (including any such tax or charge and fee
with respect to any securities being withdrawn) and payment of any applicable
fees as herein provided, may require the production of

                                       16

proof satisfactory to it as to the identity and genuineness of any signature and
may also require compliance with any regulations the Trustee may establish
consistent with the provisions of this Agreement, including this Section 2.8.

          (b) The Delivery of Shares against deposits of British Pounds or the
registration of transfer of Shares may be suspended generally, or refused with
respect to particular requested Deliveries or transfers, during any period when
the transfer books of the Trustee are closed or if any such action is deemed
necessary or advisable by the Trustee or the Sponsor for any reason at any time
or from time to time.

          (c) The Surrender of Shares for purposes of withdrawing Trust Property
may be suspended by the Trustee only if (i) the Trust holds Surplus Property
that has not been distributed in accordance with Section 4.5 or (ii) the Trustee
determines, in its sole discretion, that a suspension is necessary or desirable.
In either case, the Trustee and the Depository shall consult with each other and
use good faith efforts to resume accepting and honoring Redemption Orders as
soon as possible.

          Section 2.9 Lost Certificates, Etc.

          The Trustee shall execute and deliver a new Certificate of like tenor
in exchange and substitution for a mutilated Certificate upon cancellation
thereof, or in lieu of and in substitution for a destroyed, lost or stolen
Certificate if the Registered Owner thereof has (a) filed with the Trustee (i) a
request for such execution and delivery before the Trustee has notice that the
Shares evidenced by the Certificate have been acquired by a protected purchaser
and (ii) a sufficient indemnity bond and (b) satisfied any other reasonable
requirements imposed by the Trustee.

          Section 2.10 Cancellation and Destruction of Surrendered Certificates.

          All Certificates Surrendered to the Trustee shall be canceled by the
Trustee. The Trustee is authorized to destroy Certificates so canceled.

                                       17

          Section 2.11 Splits and Reverse Splits of Shares.

          If requested in writing by the Sponsor, the Trustee shall effect a
split or reverse split of the Shares as of a record date set by the Trustee in
accordance with procedures determined by the Trustee.

          The Trustee is not required to distribute any fraction of a Share in
connection with a split or reverse split of the Shares. The Trustee may sell the
aggregated fractions of Shares that would otherwise be distributed in a split or
reverse split of the Shares or the amount of Trust Property that would be
represented by those Shares and distribute the net proceeds of those Shares or
that Trust Property to the Registered Owners entitled to them.

          The amount of Trust Property represented by each Share and the Basket
British Pound Amount shall be adjusted as appropriate as of the open of business
on the New York Business Day following the record date for a split or reverse
split of the Shares.

                                    ARTICLE 3

               CERTAIN OBLIGATIONS OF REGISTERED OWNERS OF SHARES

          Section 3.1 Liability of Registered Owner for Taxes and Other
Governmental Charges.

          If any tax or other governmental charge shall become payable by the
Trustee with respect to any transfer or redemption of Shares, such tax or other
governmental charge shall be payable by the Registered Owner of such Shares to
the Trustee. The Trustee shall refuse to effect any registration of transfer of
such Shares or any withdrawal of Trust Property represented by such Shares until
such payment is made, and may withhold any distributions, or may sell for the
account of the Registered Owner thereof Trust Property or Shares, and may apply
such distributions or the proceeds of any such sale in payment of such tax or
other governmental charge, and the Registered Owner

                                       18

of such Shares shall remain liable for any deficiency. The Trustee shall
distribute any net proceeds of a sale made under the preceding sentence that
remain, after payment of the tax or other governmental charge, to the Registered
Owners entitled thereto as in the case of a distribution in cash.

          Section 3.2 Warranties on Deposit of British Pounds.

          Every Person depositing British Pounds under this Agreement shall be
deemed thereby to represent and warrant that the Person making such deposit is
duly authorized to do so and that at the time of delivery, the British Pounds
are free and clear of any lien, pledge, encumbrance, right, charge or claim
(other than the rights created by this Agreement). All representations and
warranties deemed made under this Section 3.2 shall survive the deposit of
British Pounds, Delivery or Surrender of Shares or termination of this
Agreement.

                                    ARTICLE 4

                           ADMINISTRATION OF THE TRUST

          Section 4.1 Evaluation of British Pounds; Calculation of Net Asset
Value.

          As promptly as practicable after the determination of the Relevant
Price on each New York Business Day, ordinarily no later than 2:00 PM (New York
time), the Trustee will calculate, and the Sponsor or a person designated by the
Sponsor will publish, the Trust's net asset value ("NAV"). To calculate the NAV,
the Trustee will:

          (a) take the sum of British Pounds in the Interest Account and
Non-Interest Account as of the close of business on the preceding London
Business Day, as reported by the Depository;

          (b) add interest accrued but unpaid on the Interest Account through
the preceding day;

                                       19

          (c) subtract the accrued but unpaid Sponsor's Fee through the
preceding day;

          (d) add British Pounds receivable by the Trust under Purchase Orders
having Order Dates on or before the preceding New York Business Day;

          (e) subtract British Pounds payable by the Trust under Redemption
Orders having Order Dates on or before the preceding New York Business Day;

          (f) convert the result after step (e) into Dollars using the Relevant
Price;

          (g) add the Dollar value of any other assets included in the Trust
Property as of the close of business on the preceding New York Business Day; and

          (h) subtract the Dollar value of any other expenses and liabilities of
the Trust as of the close of business on the preceding New York Business Day.

          The result is the NAV of the Trust for that New York Business Day. The
Trustee shall also divide the NAV of the Trust by the number of Shares
outstanding for the date of the evaluation then being made, which figure is the
"NAV per Share." For purposes of the preceding sentence, the number of Shares
deemed outstanding shall include Shares to be Delivered under Purchase Orders
having Order Dates on or before the preceding New York Business Day and shall
exclude Shares to be Surrendered under Redemption Orders having Order Dates on
or before the preceding New York Business Day.

          Section 4.2 Responsibility of the Trustee for Evaluations.

          The Sponsor, Depositors, Registered Owners and Beneficial Owners may
rely on any evaluation or determination of any amount made by the Trustee, and
the Sponsor shall have no responsibility for the accuracy thereof. The
determinations made by the Trustee under this Agreement shall be made in good
faith upon the basis of, and the Trustee shall not be liable for any errors
contained in, information reasonably

                                       20

available to it. The Trustee shall be under no liability to the Sponsor, or to
Depositors, Registered Owners or Beneficial Owners, for errors in judgment;
provided, however, that this provision shall not protect the Trustee against any
liability to which it would otherwise be subject by reason of negligence or bad
faith in the performance of its duties.

          Section 4.3 Interest Account and Non-Interest Account.

          The Trustee will deposit all British Pounds into the Interest Account
or the Non-Interest Account in accordance with Section 6.5. The Interest Account
will accrue interest in accordance with the terms of the Deposit Account
Agreement. The Non-Interest Account will not accrue interest.

          Section 4.4 Cash Distributions.

          On the first London Business Day of each month, the Depository will
deposit into the Non-Interest Account the accrued but unpaid interest for the
previous month. On the first day of each month that is both a London Business
Day and a New York Business Day, the Trustee will make withdrawals from the
Non-Interest Account to pay the accrued Sponsor's Fee for the previous month
plus any other Trust expenses. In the event that the interest deposited exceeds
the sum of the Sponsor's Fee for the previous month plus other Trust expenses,
if any, then the Trustee shall convert the excess into Dollars in accordance
with Section 4.9, and, as promptly as practicable declare a record date and
distribute the net proceeds to Registered Owners on a pro rata basis (in
accordance with the number of Shares that they own); provided, however, that in
the event that the Trustee shall be required to withhold and does withhold from
such cash an amount on account of taxes, the amount distributed to the
Registered Owners shall be reduced accordingly; and provided, further, that the
Trustee shall round the amount paid to each Registered Owner to the nearest
whole cent.

                                       21

          Section 4.5 Distributions of Surplus Property.

          At any time that the Trust Property includes Surplus Property, the
Trustee shall, as promptly as practicable, (a) distribute all Surplus Property
consisting of Dollars to the Registered Owners in proportion to the number of
Shares held by them, and (b) convert into Dollars or sell for Dollars all other
Surplus Property and distribute the Dollar proceeds, net of the fees and
expenses of the Trustee, to the Registered Owners in proportion to the number of
Shares held by them. If the Trust Property includes any Surplus Property that is
not British Pounds, the Trustee shall suspend deposits of British Pounds for the
purpose of issuance of Shares until after a record date for distribution of that
Surplus Property, or proceeds of that Surplus Property, has passed.

          Section 4.6 Fixing of Record Date.

          Whenever any distribution will be made, or whenever the Trustee
receives notice of any solicitation of proxies or consents from Registered
Owners, or whenever for any reason there is a split, reverse split or other
change in the outstanding Shares, or whenever the Trustee shall find it
necessary or convenient in respect of any matter, the Trustee, in consultation
with the Sponsor, shall fix a record date for the determination of the
Registered Owners who shall be (i) entitled to receive such distribution or the
net proceeds of the sale thereof, (ii) entitled to give such proxies or consents
in respect of any such solicitation or (iii) entitled to act in respect of any
other matter for which the record date was set.

          Section 4.7 Payment of Trust Expenses.

     (a) The following expenses are or may be accrued and paid by the Trust:

          (1) the Sponsor's Fee and other fees and expenses of the Sponsor set
forth in Section 5.6;

                                       22

          (2) expenses of the Trust not assumed by the Sponsor pursuant to
Section 5.1(b);

          (3) taxes and other governmental charges;

          (4) expenses and costs of any extraordinary services performed by the
Trustee or the Sponsor on behalf of the Trust or action taken by the Trustee or
the Sponsor to protect the Trust or the interests of Registered Owners; and

          (5) indemnification of the Sponsor as provided in Section 7.1(d).

     (b) On the first day of each month that is both a London Business Day and a
New York Business Day, the Trustee shall withdraw from the Non-Interest Account
amounts necessary to pay the Trust expenses provided for in Section 4.7(a) and
any otherwise unpaid expenses hereunder. In the event that the expenses exceed
the balance of the Non-Interest Account, such excess shall be withdrawn from the
Interest Account. The Trustee will withdraw and sell sufficient British Pounds
to purchase an amount of currency other than British Pounds sufficient to pay
any Trust expenses payable other than in British Pounds and the costs of
currency conversion.

     (c) Notwithstanding the foregoing, if requested by the Sponsor and agreed
to by the Trustee, the Trustee will advance amounts out of its own funds for the
payment of Trust expenses, provided that the amount advanced at any time shall
not exceed $20,000. The amount of such advances, together with interest thereon
at a percentage rate equal to then-current overnight federal funds rate, shall
be expenses of the Trust. The Trustee shall have a lien on the balances on hand
in the Interest Account and Non-Interest Account to the extent of all amounts
advanced by it pursuant to this Section 4.7(c), which lien shall be superior to
the interest of the Registered Owners.

     (d) The Trustee is conclusively authorized to sell British Pounds in the
smallest amounts required to permit payment of Trust expenses, it being the
intention to minimize the Trust's holdings of assets other than British Pounds.
Neither the Trustee

                                       23

nor the Sponsor shall have any liability for loss or depreciation resulting from
sales of British Pounds so made. The Trustee shall not be liable or responsible
in any way for depreciation or loss incurred by reason of any sale made in
accordance with this Section 4.7(d).

          Section 4.8 Statements and Reports.

          After the end of each Fiscal Year and within the time period required
by applicable laws, rules and regulations, at the Sponsor's expense, the Trustee
shall send to the Registered Owners as of the end of such Fiscal Year, an annual
report of the Trust containing financial statements audited by independent
accountants designated by the Sponsor and such other information as may be
required by such laws, rules and regulations or otherwise, or which the Sponsor
determines shall be included. The Trustee may distribute the annual report by
any means acceptable to the Registered Owners and that complies with applicable
laws, rules and regulations.

          Section 4.9 Further Provisions for Sales of Trust Property; Currency
Conversion.

          In addition to selling British Pounds in accordance with Section 4.7,
the Trustee shall sell British Pounds whenever any one or more of the following
conditions exist:

          (i) the Sponsor has notified the Trustee that such sale is required by
          applicable law or regulation; or

          (ii) the Trust is to be terminated and its assets liquidated in
          accordance with Section 8.2.

          When the Trustee is required or permitted to sell Trust Property, it
may sell that Trust Property by public or private sale in any manner and on any
terms that are (i) commercially reasonable in the circumstances and (ii)
reasonably calculated to

                                       24

maximize the value of the Trust Property while taking into account any duty of
the Trustee under this Agreement to sell that Trust Property as promptly as
practicable.

          However, whenever the Trustee is required or permitted to sell Trust
Property that is currency, if at the time the currency can, in the judgment of
the Trustee, be converted on a reasonable basis into the required currency that,
if applicable, is transferable to the United States, the Trustee shall place
orders with dealers (which may include the Depository or the Trustee or any of
their affiliates) through which it may reasonably expect to obtain a
commercially reasonable rate of exchange (net of commission) and good execution
of orders.

          If such conversion can be effected only with the approval or license
of any government or agency thereof, the Trustee shall file such application for
approval or license, if any, as it may deem desirable.

          If at any time the Trustee shall determine that in its judgment the
currency is not convertible on a reasonable basis into the required currency or
that, if applicable, is transferable to the United States, or if any approval or
license of any government or agency thereof which is required for such
conversion is denied or in the opinion of the Trustee is not obtainable, or if
any such approval or license is not obtained within a reasonable period as
determined by the Trustee, the Trustee may distribute the currency without
conversion (or an appropriate document evidencing the right to receive such
currency) to, or in its discretion may hold such currency for the respective
accounts of, the persons entitled to receive it. Any interest earned or
investment gains attributable to amounts withheld from distribution shall be
held by the Trustee for distribution to the Registered Owners entitled to the
amount to which the interest or gain is attributable.

          If any such conversion of currency, in whole or in part, cannot be
effected for distribution to some of the persons entitled to it, the Trustee
may, in its discretion, make such conversion and distribution to the extent
permissible to the persons entitled to it and may distribute the balance of the
currency without conversion to, or in its

                                       25

discretion may hold such currency for the respective accounts of, the persons
entitled to receive it. Any interest earned or investment gains attributable to
amounts withheld from distribution shall be held by the Trustee for distribution
to the Registered Owners entitled to the amount to which the interest or gain is
attributable.

          The Trustee and the Sponsor shall not be liable or responsible in any
way for depreciation or loss incurred by reason of any sale made pursuant to
this Section 4.9.

          Section 4.10 Counsel.

          The Sponsor may from time to time employ counsel to act on behalf of
the Trust and perform any legal services in connection with the British Pounds
and the Trust, including any legal matters relating to the possible disposition
or acquisition of any British Pounds. The reasonable fees and expenses of such
counsel shall be paid by the Sponsor up to an aggregate maximum of $100,000 per
year, with any excess amount to be paid by the Trust.

          Section 4.11 Grantor Trust.

          Nothing in this Agreement, any agreement with a Depository, or
otherwise, shall be construed to give the Trustee or Sponsor the power to vary
the investment of the Beneficial Owners within the meaning of Section
301.7701-4(c) of the regulations under the Code or any similar or successor
provision of the regulations under the Code, nor shall the Sponsor give the
Trustee any direction that would vary the investment of the Beneficial Owners.
However, the Trustee shall not be liable to any Person for any failure of the
Trust to qualify as a grantor trust under the Code or any comparable provision
of the laws of any State or other jurisdiction where that treatment is sought,
except that this sentence shall not limit the Trustee's responsibility for the
administration of the Trust in accordance with this Agreement. Neither the
Trustee nor the Sponsor will agree to any amendment of the Deposit Account
Agreement unless the Sponsor obtains and delivers to the Trustee a prior written
opinion of counsel to the effect

                                       26

that such amendment will have no adverse effect on the classification of the
Trust as a "grantor trust" under the Code.

                                    ARTICLE 5

                                   THE SPONSOR

          Section 5.1 Duties of the Sponsor.

          (a) The Sponsor shall select the Depository and shall be solely
responsible for that selection. The Sponsor is responsible for establishing the
Trust and for the registration of the Shares. The Sponsor will generally oversee
the performance of the Trustee and the Trust's principal service providers, but
will not exercise day-to-day oversight over the Trustee or such service
providers. The Sponsor will regularly communicate with the Trustee to monitor
the overall performance of the Trust. The Sponsor will also designate the
independent certified public accountants of the Trust and may from time to time
employ legal counsel for the Trust.

          (b) The Sponsor shall be responsible for all organizational expenses
of the Trust, and for the following administrative and marketing expenses of the
Trust: the Trustee's monthly fee, routine transaction and maintenance fees
charged by the Depository, listing fees of the Exchange, registration fees
charged by the Commission, printing and mailing costs, audit fees, legal
expenses not in excess of $100,000 per year and any applicable license fees.

          (c) The Sponsor will monitor the interest rate paid by the Depository
and has the right and duty to instruct the Trustee to terminate the Deposit
Account Agreement if the Sponsor considers the interest rate to be
noncompetitive.

          Section 5.2 Obligations of the Sponsor.

          (a) The Sponsor does not assume any obligation nor shall it be subject
to any liability under this Agreement to any Registered Owner or Beneficial
Owner or Depositor (including liability with respect to the worth of the Trust
Property), except that

                                       27

the Sponsor agrees to perform its obligations specifically set forth in this
Agreement without negligence or bad faith.

          (b) The Sponsor shall not be under any obligation to prosecute any
action, suit or other proceeding in respect of any Trust Property or in respect
of the Shares on behalf of a Registered Owner, Beneficial Owner, Depositor or
other Person.

          (c) The Sponsor shall not be liable for any action or non-action by it
in reliance upon the advice of or information from legal counsel, accountants,
any Depositor, any Registered Owner or any other person believed by it in good
faith to be competent to give such advice or information.

          (d) The Sponsor shall not be liable for any acts or omissions made by
a successor sponsor whether in connection with a previous act or omission of the
Sponsor or in connection with any matter arising wholly after the resignation of
the Sponsor, provided that in connection with the issue out of which such
potential liability arises the Sponsor performed its obligations without
negligence or bad faith while it acted as sponsor.

          (e) The Sponsor shall have no obligation to comply with any direction
or instruction from any Registered Owner or Beneficial Owner or Depositor
regarding Shares except to the extent specifically provided in this Agreement.

          Section 5.3 Prevention or Delay in Performance by the Sponsor.

          The Sponsor and its directors, employees, agents and affiliates shall
not incur any liability to any Registered Owner, Beneficial Owner or Depositor
if, by reason of any provision of any present or future law or regulation of the
United States or any other country, or of any governmental or regulatory
authority or stock exchange, or by reason of any act of God or war or terrorism
or other circumstances beyond its control, the Sponsor is prevented or forbidden
from, or would be subject to any civil or criminal penalty on account of, or is
delayed in, doing or performing any act or thing which by the

                                       28

terms of this Agreement it is provided shall be done or performed and
accordingly the Sponsor does not do that act or thing or does that act or thing
at a later time than would otherwise be required. The Sponsor will not incur any
liability to any Registered Owner or Beneficial Owner or Depositor by reason of
any non-performance or delay in the performance of any act or thing which by the
terms of this Agreement it is provided may be done or performed, or by reason of
any exercise of, or failure to exercise, any discretion provided for in this
Agreement.

          Section 5.4 Certain Matters Regarding Successor Sponsor.

          The covenants, provisions and agreements herein contained shall in
every case be binding upon any successor to the business of the Sponsor. The
Sponsor may transfer all or substantially all of its assets to an entity which
carries on the business of the Sponsor, if at the time of such transfer such
successor duly assumes all the obligations of the Sponsor under this Agreement,
and in such event, the Sponsor shall be relieved of all further liability under
this Agreement.

          Section 5.5 Resignation of Sponsor; Successors.

          If at any time the Sponsor desires to resign its position as Sponsor
hereunder, it may resign by delivering to the Trustee an instrument of
resignation executed by the Sponsor. Such resignation shall become effective
upon the earliest of the following: (i) the effective date of the appointment by
the Trustee of a successor sponsor and the acceptance by the successor sponsor
of that appointment, with such compensation from the Trust as the Trustee may
deem reasonable under the circumstances, by an instrument of appointment and
assumption executed by the Trustee and the successor sponsor; or (ii) an
agreement by the Trustee to act as sponsor hereunder succeeding to all the
rights and duties of the resigning Sponsor without appointing a successor
sponsor and without terminating this Agreement; or (iii) termination of this
Agreement in accordance with its terms and completion of distribution of all
remaining assets to Registered Owners. The Trustee shall have no obligation to
appoint a successor sponsor or to

                                       29

assume the duties of the Sponsor and shall have no liability to any person
because the Trust is terminated by reason of the Sponsor's resignation.

          If the Sponsor shall fail to undertake or perform or become incapable
of undertaking or performing its duties hereunder or shall become bankrupt or
its affairs shall be taken over by public authorities, the effect of that event
shall be the same as if the Sponsor had given a notice of resignation as
provided in the preceding paragraph.

          Upon its resignation becoming effective, the resigning Sponsor shall
be discharged and shall no longer be liable in any manner hereunder except as to
acts or omissions occurring before its resignation became effective, and the
successor sponsor shall thereupon undertake and perform all duties and be
entitled to all rights and compensation as sponsor under this Agreement. The
successor sponsor shall not be under any liability hereunder for acts or
omissions occurring prior to the effective date stated in the instrument
appointing it successor sponsor. The Trustee shall notify Registered Owners of
the appointment of a successor sponsor.

          Section 5.6 Compensation of the Sponsor.

          (a) The Sponsor is entitled to receive from the Trust, as an expense
of the Trust, the Sponsor's Fee. The Sponsor's Fee shall be accrued daily but
paid monthly in arrears.

          (b) In addition to the Sponsor's Fee, the Sponsor is entitled to
receive reimbursement from the Trust for all expenses and disbursements incurred
by it. Such reimbursement shall be made promptly after such expenses are
incurred by the Sponsor. Notwithstanding the foregoing, the Sponsor is not
entitled to charge the Trust for (i) expenses and disbursements incurred by it
prior to the commencement of trading of Shares on the Exchange and (ii) expenses
for performing, or fees of agents for performing, services the Sponsor is
required to perform under this Agreement.

                                       30

          (c) Within 30 days following the end of each Fiscal Year, the Sponsor
shall certify to the Trustee the amount of its actual expenses and disbursements
incurred by it during the preceding Fiscal Year by it in connection with action
taken by it pursuant to Section 5.8 and shall reimburse the Trust any amounts
received by it from the Trust that exceed the amount so certified.

          (d) The Trustee shall have no liability or responsibility for amounts
paid to the Sponsor pursuant to this Section 5.6.

          Section 5.7 Federal Securities Law Filings.

          The Sponsor shall (i) prepare and file a registration statement with
the Commission and take such action as is necessary from time to time to qualify
the Shares for offering and sale under the federal securities laws of the United
States, including the preparation and filing of amendments and supplements to
such registration statement, (ii) promptly notify the Trustee of any amendment
or supplement to the registration statement or prospectus, of any order
preventing or suspending the use of any prospectus, of any request for the
amending or supplementing of the registration statement or prospectus or if any
event or circumstance occurs that is known to the Sponsor as a result of which
the registration statement or prospectus, as then amended or supplemented, would
include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, (iii) provide the Trustee from time
to time with copies, including copies in electronic form, of the prospectus, as
amended and supplemented, in such quantities as the Trustee may reasonably
request and (iv) prepare and file any periodic reports or updates that may be
required under the Securities Exchange Act of 1934, as amended. The Trustee
shall furnish to the Sponsor any information from the records of the Trust that
the Sponsor reasonably requests in writing that is needed to prepare any filing
or submission that the Sponsor or the Trust is required to make under the
federal securities laws of the United States.

                                       31

          Section 5.8 Discretionary Actions by Sponsor; Consultation.

          (a) The Sponsor may, in its discretion, undertake any action which it
may deem necessary or desirable to protect the rights of the Registered Owners.
The expenses incurred by the Sponsor in connection with taking any action under
the preceding sentence (including the fees and disbursements of legal counsel)
shall be expenses of the Trust, and the Sponsor shall be entitled to be promptly
reimbursed for those expenses by the Trust.

          (b) The Sponsor shall promptly notify the Trustee (i) regarding any
action it takes pursuant to Section 5.8(a) or (ii) if the Sponsor becomes aware
of any development or event that affects the administration of the Trust but is
not contemplated or provided for in this Agreement.

                                    ARTICLE 6

                                   THE TRUSTEE

          Section 6.1 Maintenance of Office and Transfer Books by the Trustee.

          (a) Until termination of this Agreement in accordance with its terms,
the Trustee shall maintain facilities for the Delivery, registration,
registration of transfers and Surrender of Shares in accordance with the
provisions of this Agreement.

          (b) The Trustee shall keep books for the registration of Shares and
registration of transfers of Shares which at all reasonable times shall be open
for inspection by the Registered Owners.

          (c) Subject to the limitations set forth in Section 2.8(b), the
Trustee may, and at the reasonable written request of the Sponsor shall, close
the transfer books at any time or from time to time if such action is deemed
necessary or advisable in the reasonable judgment of the Trustee or the Sponsor.

                                       32

          (d) Pursuant to Section 2.8(c), the Trustee may, at its sole
discretion, suspend withdrawals of Trust Property if the Trustee, at its sole
discretion, determines that such a suspension is necessary or desirable.

          (e) If any Shares are listed on one or more stock exchanges in the
United States, the Trustee shall act as Registrar or, with the written approval
of the Sponsor (which approval shall not be unreasonably withheld), appoint a
registrar or one or more co-registrars for registry of such Shares in accordance
with any requirements of such exchange or exchanges.

          Section 6.2 Obligations of the Trustee.

          (a) The Trustee assumes no obligation nor shall it be subject to any
liability under this Agreement to any Registered Owner or Beneficial Owner or
Depositor (including liability with respect to the worth of the Trust Property),
except that the Trustee agrees to perform its obligations specifically set forth
in this Agreement without negligence or bad faith.

          (b) The Trustee shall not be under any obligation to prosecute any
action, suit or other proceeding in respect of any Trust Property or in respect
of the Shares on behalf of a Registered Owner, Beneficial Owner, Depositor or
other Person.

          (c) The Trustee shall not be liable for any action or non-action by it
in reliance upon the advice of or information from legal counsel, accountants,
any Depositor, any Registered Owner or any other person believed by it in good
faith to be competent to give such advice or information.

          (d) The Trustee shall not be liable for any acts or omissions made by
a successor trustee whether in connection with a previous act or omission of the
Trustee or in connection with any matter arising wholly after the resignation of
the Trustee, provided that in connection with the issue out of which such
potential liability arises the

                                       33

Trustee performed its obligations without negligence or bad faith while it acted
as Trustee.

          (e) The Trustee shall have no obligation to comply with any direction
or instruction from any Registered Owner or Beneficial Owner or Depositor
regarding Shares except to the extent specifically provided in this Agreement.

          Section 6.3 Prevention or Delay in Performance by the Trustee.

          The Trustee and its directors, employees, agents and affiliates shall
not incur any liability to any Registered Owner, Beneficial Owner or Depositor
if, by reason of any provision of any present or future law or regulation of the
United States or any other country, or of any governmental or regulatory
authority or stock exchange, or by reason of any act of God or war or terrorism
or other circumstances beyond its control, the Trustee is prevented or forbidden
from, or would be subject to any civil or criminal penalty on account of, or is
delayed in, doing or performing any act or thing which by the terms of this
Agreement it is provided shall be done or performed and accordingly the Trustee
does not do that act or thing or does that act or thing at a later time than
would otherwise be required. The Trustee will not incur any liability to any
Registered Owner or Beneficial Owner or Depositor by reason of any
non-performance or delay in the performance of any act or thing which by the
terms of this Agreement it is provided may be done or performed, or by reason of
any exercise of, or failure to exercise, any discretion provided for in this
Agreement.

          Section 6.4 Resignation or Removal of the Trustee; Appointment of
Successor Trustee.

          (a) Resignation. The Trustee may at any time resign as Trustee
hereunder by notice of its election so to do, delivered to the Sponsor, and such
resignation shall take effect upon the appointment of a successor trustee and
its acceptance of such appointment.

                                       34

          (b) Removal by the Sponsor. In case at any time the Trustee shall be
adjudged bankrupt or insolvent, or a receiver of the Trustee or of its property
shall be appointed, or a trustee or liquidator or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purposes
of rehabilitation, conservation or liquidation, then in any such case the
Sponsor shall, subject to the requirements of Section 6.4(e), remove the Trustee
by notice to the Trustee, and such removal shall take effect upon the
appointment of a successor trustee and its acceptance of such appointment.

          (c) Removal by Registered Owners. Registered Owners of at least
two-thirds (66-2/3 %) of the Shares then outstanding may at any time remove the
Trustee by a notice delivered to the Trustee and Sponsor, and such removal shall
take effect upon the appointment of a successor trustee and its acceptance of
such appointment.

          (d) Removal for Material Breach. If at any time the Trustee ceases to
be a Qualified Bank or is in material breach of its obligations under this
Agreement and the Trustee fails to cure such breach within 30 days after receipt
by the Trustee of notice from the Sponsor or Registered Owners acting on behalf
of at least 25% of the outstanding Shares specifying such default and requiring
the Trustee to cure such default, the Sponsor may remove the Trustee by notice
delivered to the Trustee, and such removal shall take effect upon the
appointment of a successor trustee and its acceptance of such appointment as
hereinafter provided.

          (e) Appointing Successor Trustees. If the Trustee acting hereunder
resigns or is removed, the Sponsor, acting on behalf of the Registered Owners,
shall use its reasonable efforts to appoint a successor trustee, which shall be
a Qualified Bank. Every successor trustee shall execute and deliver to its
predecessor and to the Sponsor, acting on behalf of the Registered Owners, an
instrument in writing accepting its appointment hereunder, and thereupon such
successor trustee, without any further act or deed, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor; but such
predecessor, nevertheless, upon payment of all sums due it and on

                                       35

the written request of the Sponsor, acting on behalf of the Registered Owners,
shall execute and deliver an instrument transferring to such successor all
rights and powers of such predecessor hereunder, shall duly assign, transfer and
deliver all right, title and interest in the Trust Property to such successor,
and shall deliver to such successor a list of the Registered Owners of all
outstanding Shares. The Sponsor or any such successor trustee shall promptly
notify the Registered Owners of the appointment of such successor trustee.

          (f) Liability of Trustee. Upon effective resignation hereunder, the
resigning or removed Trustee shall be discharged and shall no longer be liable
in any manner hereunder except as to acts or omissions occurring prior to such
resignation or removal, and the new trustee shall thereupon undertake and
perform all duties and be entitled to all rights and compensation as trustee
under this Agreement. The successor trustee shall not be under any liability
hereunder for acts or omissions occurring prior to execution of an instrument
accepting its appointment as trustee.

          (g) Effect of Merger of the Trustee. Any corporation into which the
Trustee may be merged, consolidated or converted in a transaction in which the
Trustee is not the surviving corporation shall be the successor of the Trustee
without the execution or filing of any document or any further act.

          Section 6.5 Transfers Between Interest Account and Non-Interest
Account.

          (a) Proceeds from creation of Baskets shall be deposited into the
Non-Interest Account. The Trustee shall contemporaneously instruct the
Depository to transfer the portion of the Basket British Pound Amount
representing principal from the Non-Interest Account to the Interest Account.
The portion of the Basket British Pound Amount representing a pro rata portion
of accrued but unpaid interest will remain in the Non-Interest Account.

          (b) Amounts payable upon Surrender of Shares in whole Baskets shall be
paid from the Non-Interest Account. The Trustee shall contemporaneously instruct
the

                                       36

Depository to transfer the portion of the Basket British Pound Amount
representing principal from the Interest Account to the Non-Interest Account.

          Section 6.6 The Depository.

          The parties acknowledge that the Depository was selected solely by the
Sponsor. The Trustee will have no duty or liability to any Person on account of
that selection or the terms of the Deposit Account Agreement. The Depository
will be subject at all times and in all respects to the directions of the
Trustee and will be responsible solely to it. The rights and duties of the
Depository with reference to the Trust will be determined by the Deposit Account
Agreement and applicable law. The Trustee shall not amend or terminate the
Deposit Account Agreement without the written consent of the Sponsor. The
Trustee shall terminate the Deposit Account Agreement if the Sponsor directs it
in writing to do so.

          Section 6.7 Compensation of the Depository.

          (a) Each Depositor, and each person surrendering Shares for the
purpose of withdrawing Trust Property, shall pay to the Trustee a fee of $500.00
per Purchase Order pursuant to Section 2.5 or Redemption Order pursuant to
Section 2.7 or surrender of Shares after termination of this Agreement pursuant
to Section 8.2(e).

          (b) The Trustee is entitled to receive from the Sponsor fees for its
services and reimbursement for its out-of-pocket expenses in accordance with
written agreements between the Sponsor and the Trustee.

          (c) The Trustee is entitled to charge the Trust for all expenses and
disbursements incurred by it in connection with action taken by it under Section
6.10(a) (including the reasonable fees and disbursements of its legal counsel),
except that the Trustee is not entitled to charge the Trust for (i) expenses and
disbursements incurred by it prior to the commencement of trading of Shares on
the Exchange and (ii) fees of agents for performing services the Trustee is
required to perform under this Agreement.

                                       37

          Section 6.8 Retention of Trust Documents.

          The Trustee is authorized to destroy those documents, records, bills
and other data compiled during the term of this Agreement at the times permitted
by the laws or regulations governing the Trustee, unless the Sponsor reasonably
requests the Trustee in writing to retain those items for a longer period.

          Section 6.9 Prospectus Delivery.

          The Trustee shall, if required by the federal securities laws of the
United States, in any manner permitted by such laws, deliver, at the time of
issuance of Shares, a copy of the relevant prospectus, as most recently
furnished to the Trustee by the Sponsor, to each Depositor.

          Section 6.10 Discretionary Actions by Trustee; Consultation.

          (a) The Trustee may, in its discretion, undertake any action which it
may deem necessary or desirable to protect the rights of the Registered Owners.
The expenses incurred by the Trustee in connection with taking any action under
the preceding sentence (including the fees and disbursements of legal counsel)
shall be expenses of the Trust, and the Trustee shall be entitled to be promptly
reimbursed for those expenses by the Trust.

          (b) The Trustee shall notify and consult with the Sponsor before
undertaking any action under subsection (a) above or if the Trustee becomes
aware of any development or event that affects the administration of the Trust
but is not contemplated or provided for in this Agreement.

                                       38

                                    ARTICLE 7

                                 INDEMNIFICATION

          Section 7.1 Indemnification of the Sponsor and Trustee.

          (a) The Sponsor shall indemnify the Trustee, its directors, employees
and agents (the "Trustee Indemnified Persons") against, and hold each of them
harmless from, any loss, liability, cost, expense or judgment (including, but
not limited to, the reasonable fees and expenses of counsel) (collectively
"Indemnified Amounts") that is incurred by any of them and that arises out of or
is related to (i) any offer or sale by the Trust of Baskets of Shares under this
Agreement, (ii) acts performed or omitted pursuant to the provisions of this
Agreement, as the same may be amended, modified or supplemented from time to
time, by (A) a Trustee Indemnified Person or (B) the Sponsor or (iii) any
filings with or submissions to the Commission in connection with or with respect
to the Shares (which, by way of illustration and not by way of limitation,
include any registration statement and any amendments or supplements thereto
filed with the Commission or any periodic reports or updates that may be filed
under the Securities Exchange Act of 1934, as amended, or any failure to make
any filings with or submissions to the Commission which are required to be made
in connection with or with respect to the Shares), except that the Sponsor shall
not have any obligations under this Section 7.1(a) to pay Indemnified Amounts
incurred as a result of and attributable to (x) the negligence or bad faith of,
or material breach of the terms of this Agreement by, the Trustee, (y) written
information furnished in writing by the Trustee to the Sponsor expressly for use
in the registration statement, or any amendment thereto, filed with the
Commission relating to the Shares that is not materially altered by the Sponsor
or (z) any misrepresentations or omissions made by a Depositor (other than
Sponsor) in connection with such Depositor's offer and sale of Shares.

          (b) The Trustee shall indemnify the Sponsor, its members, officers,
employees and agents against, and hold each of them harmless from, any
Indemnified Amounts (i) caused by the negligence or bad faith of the Trustee or
(ii) arising out of any

                                       39

information furnished in writing to the Sponsor by the Trustee expressly for use
in an registration statement, or any amendment thereto, a prospectus pursuant to
the Securities Act of 1933 Section 10(a) or Section 10(b), or a prospectus
supplement thereto with the Commission relating to the Shares that is not
materially altered by the Sponsor.

          (c) If the indemnification provided for in Section 7.1(a) or Section
7.1(b) is unavailable or insufficient to hold harmless the indemnified party
under subsection (a) or (b) above, then the indemnifying party shall contribute
to the Indemnified Amounts referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Sponsor on the one hand and the Trustee on the other hand from the fees each
receives that are attributable to the Shares which are the subject of the action
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Sponsor on the one hand and the Trustee on the other hand in connection with
the action, statement or omission which resulted in such Indemnified Amount as
well as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether any untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact from which the action arises relates to information supplied by
the Sponsor or the Trustee and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission or the act or omission from which the action arises. The amount of
Indemnified Amounts referred to in the first sentence of this subsection (c)
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any action
or claim which is the subject of this subsection (c).

          (d) The Sponsor and its shareholders, directors, officers, employees,
affiliates (as such term is defined under the Securities Act of 1933, as
amended) and subsidiaries (each, a "Sponsor Indemnified Party") shall be
indemnified from the Trust

                                       40

and held harmless against any loss, liability or expense incurred without (i)
negligence, bad faith, willful misconduct or willful malfeasance on the part of
the Sponsor arising out of or in connection with the performance of its
obligations under this Agreement or any actions taken in accordance with the
provisions of this Agreement or (ii) reckless disregard by the Sponsor of its
obligations and duties under this Agreement. Such indemnity shall include
payment from the Trust of the costs and expenses incurred by such Sponsor
Indemnified Party in defending itself against any claim or liability in its
capacity as Sponsor. Any amounts payable to a Sponsor Indemnified Party under
this Section 7.1(d) may be payable in advance or shall be secured by a lien on
the Trust.

          (e) If an action, proceeding (including, but not limited to, any
governmental investigation), claim or dispute (each, a "Proceeding") in respect
of which indemnity may be sought by either party is brought or asserted against
the other party, the party seeking indemnification (the "Indemnitee") shall
promptly (and in no event more than seven (7) days after receipt of notice of
such Proceeding) notify the party obligated to provide such indemnification (the
"Indemnitor") of such Proceeding. The failure of the Indemnitee to so notify the
Indemnitor shall not impair the Indemnitee's ability to seek indemnification
from the Indemnitor (but only for costs, expenses and liabilities incurred after
such notice) unless such failure adversely affects the Indemnitor's ability to
adequately oppose or defend such Proceeding. Upon receipt of such notice from
the Indemnitee, the Indemnitor shall be entitled to participate in such
Proceeding and, to the extent that it shall so desire and provided no conflict
of interest exists as specified in clause (i) below and there are no other
defenses available to Indemnitee as specified in clause (iii) below, to assume
the defense thereof with counsel reasonably satisfactory to the Indemnitee (in
which case all attorney's fees and expenses shall be borne by the Indemnitor and
the Indemnitor shall in good faith defend the Indemnitee). The Indemnitee shall
have the right to employ separate counsel in any such Proceeding and to
participate in the defense thereof, but, in such case, no fees and expenses of
such counsel shall be borne by the Indemnitor unless such fees and expenses are
otherwise required to be indemnified under Section 7.1(a), Section 7.1(b) or
Section 7.1(d), as applicable, and

                                       41

(i) there is such a conflict of interest between the Indemnitor and the
Indemnitee as would preclude, in compliance with the ethical rules in effect in
the jurisdiction in which the Proceeding was brought, one lawyer from
representing both parties simultaneously, (ii) the Indemnitor fails, within the
earlier of (x) twenty (20) days following receipt of notice of the Proceeding
from the Indemnitee or (y) seven (7) days prior to the date the first response
or appearance is required to be made in such Proceeding, to assume the defense
of such Proceeding with counsel reasonably satisfactory to the Indemnitee or
(iii) there are legal defenses available to Indemnitee that are different from
or are in addition to those available to the Indemnitor. No compromise or
settlement of such Proceeding may be effected by either party without the other
party's consent unless (m) there is no finding or admission of any violation of
law and no effect on any other claims that may be made against such other party
and (n) the sole relief provided is monetary damages that are paid in full by
the party seeking the settlement. Neither party shall have any liability with
respect to any compromise or settlement effected without its consent, which
shall not be unreasonably withheld. The Indemnitor shall have no obligation to
indemnify and hold harmless the Indemnitee from any loss, expense or liability
incurred by the Indemnitee as a result of a default judgment entered against the
Indemnitee unless such judgment was entered after the Indemnitor agreed, in
writing, to assume the defense of such Proceeding.

                                    ARTICLE 8

                            AMENDMENT AND TERMINATION

          Section 8.1 Amendment.

          The Trustee and the Sponsor may amend any provisions of this Agreement
without the consent of any Registered Owner; provided, however, that the
provisions of Section 2.6, Section 2.7, Section 2.10, Section 4.2 through
Section 4.7, this Section 8.1 and Section 8.2 may not be amended unless (i) the
provision relates solely to procedural or logistical matters (as distinguished
from core economic rights), or (ii) prior to the amendment, (a) the Sponsor
obtains and delivers to the Trustee a written opinion of counsel to the effect
that after such amendment the Trust will continue to be classified as

                                       42

a "grantor trust" under the Code, and (b) in the event that such opinion of
counsel assumes that certain actions are taken by the Sponsor or the Trustee in
connection with such amendment, such actions shall be taken by the Sponsor or
the Trustee, as the case may be. Any amendment that imposes or increases any
fees or charges (other than taxes and other governmental charges, registration
fees or other such expenses), or that otherwise prejudices any substantial
existing right of the Registered Owners, will not become effective as to
outstanding Shares until 30 days after notice of such amendment is given to the
Registered Owners. Every Registered Owner and Beneficial Owner, at the time any
amendment so becomes effective, shall be deemed, by continuing to hold any
Shares or an interest therein, to consent and agree to such amendment and to be
bound by this Agreement as amended thereby. In no event shall any amendment
impair the right of the Registered Owner of Shares to Surrender Baskets of
Shares and receive therefor the amount of Trust Property represented thereby,
except in order to comply with mandatory provisions of applicable law.

          Section 8.2 Termination.

          (a) The Trustee shall set a date on which this Agreement will
terminate and mail notice of that termination to the Registered Owners at least
30 days prior to the date set for termination, which date shall be no later than
90 days from the mailing of termination notice, if any of the following occurs:

               (i) the Sponsor has given notice of resignation or is unable to
perform its duties or becomes bankrupt or insolvent and the Trustee will not
appoint a successor sponsor or agree to act as Sponsor;

               (ii) Registered Owners holding at least 75% of the outstanding
Shares notify the Trustee that they elect to terminate the Trust;

               (iii) the United Kingdom chooses the euro as its currency, by an
act of parliament or by referendum, and the Council of the European Union adopts
an

                                       43

irrevocable conversion rate for British Pounds to euro and the Trustee has
actual knowledge of that action;

               (iv) the Depository resigns or is removed; or

               (v) the Trust receives notice from the Internal Revenue Service
or counsel for the Trust or the Sponsor that the Trust fails to qualify for
treatment, or will not be treated, as a grantor trust under the Code.

          (b) The Trustee shall set a date on which this Agreement will
terminate and mail notice of that termination to the Registered Owners at least
30 days prior to the date set for termination, which date shall be no later than
90 days from the mailing of termination notice, if any of the following occurs
and the Sponsor has notified the Trustee that it elects to terminate this
Agreement:

               (i) The Trustee is notified that the Shares are delisted from a
national securities exchange and are not approved for listing on another
national securities exchange within five New York Business Days of their
delisting;

               (ii) the Commission determines that the Trust is an investment
company under the Investment Company Act of 1940, as amended;

               (iii) the NAV of the Trust remains less than $100 million for 30
consecutive New York Business Days at any time after the first 90 days of the
Shares being traded on the Exchange;

               (iv) all of the Trust's assets are sold;

               (v) the aggregate market capitalization of the Trust, based on
the closing price for the Shares remains less than $300 million at any time for
five consecutive trading days beginning after the first anniversary of this
Agreement; or

                                       44

               (vi) DTC ceases providing book-entry settlement services for the
Shares.

          (c) If 60 days have elapsed since the Trustee gave the Sponsor notice
of its election to resign and no successor trustee appointed by the Sponsor has
accepted appointment as Trustee, the Trustee may set a date on which this
Agreement will terminate and mail notice of that termination to the Registered
Owners at least 30 days prior to the date set for termination.

          (d) If not terminated sooner, this Agreement shall terminate forty
years from the date of this Agreement, and the Trustee shall mail a notice of
that termination to the Registered Owners and the Sponsor at least 30 days
before the termination date.

          (e) On and after the date of termination of this Agreement, the
Registered Owner of Shares will, upon (i) Surrender of those Shares, (ii)
payment of the fee of the Trustee for the Surrender of Shares provided in
Section 6.7, and (iii) payment of any applicable taxes or other governmental
charges, be entitled to Delivery, to the Registered Owner or upon the Registered
Owner's order, of the amount of Trust Property represented by those Shares. The
Trustee shall not accept any deposits of British Pounds after the date of
termination of this Agreement. If any Shares remain outstanding after the date
of termination of this Agreement, the Trustee thereafter shall discontinue the
registration of transfers of Shares, shall not make any distributions to
Registered Owners, and shall not give any further notices or perform any further
acts under this Agreement, except that the Trustee shall continue to collect
distributions pertaining to Trust Property and hold the same uninvested and
without liability for interest, pay the Trust's expenses and sell British Pounds
as necessary to meet those expenses and shall continue to deliver Trust
Property, together with any distributions received with respect thereto and the
net proceeds of the sale of any other property, in exchange for Shares
Surrendered to the Trustee (after deducting or upon payment of, in each case,
the fee of the Trustee set forth in 5.7 for the Surrender of Shares, any
expenses for the account of the Registered Owner of such Shares in accordance
with the terms and conditions of this Agreement, and any

                                       45

applicable taxes or other governmental charges). At any time after the
expiration of 90 days following the date of termination of this Agreement, the
Trustee may sell for Dollars the Trust Property for then held under this
Agreement and may thereafter hold uninvested the net proceeds of any such sale,
together with any other cash then held by it under this Agreement, unsegregated
and without liability for interest, for the pro rata benefit of the Registered
Owners of Shares that have not theretofore been Surrendered, such Registered
Owners thereupon becoming general creditors of the Trustee with respect to such
net proceeds. After making such sale, the Trustee shall be discharged from all
obligations under this Agreement, except to account for such net proceeds and
other cash (after deducting, in each case, any fees, expenses, taxes or other
governmental charges payable by the Trust, the fee of the Trustee for the
Surrender of Shares and any expenses for the account of the Registered Owner of
such Shares in accordance with the terms and conditions of this Agreement, and
any applicable taxes or other governmental charges), and the trust created by
this Agreement shall terminate. Upon the termination of this Agreement, the
Sponsor shall be discharged from all obligations under this Agreement except for
its obligations to the Trustee under Section 6.7 and Section 7.1, each of which
shall survive termination of this Agreement. Section 5.6 and this Section 8.1(e)
shall also survive termination of this Agreement.

                                    ARTICLE 9

                                  MISCELLANEOUS

          Section 9.1 Counterparts.

          This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of such counterparts shall constitute
one and the same instrument. Copies of this Agreement shall be filed with the
Trustee and shall be open to inspection by any Registered Owner during the
Trustee's business hours.

                                       46

          Section 9.2 Third-Party Beneficiaries.

          This Agreement is for the exclusive benefit of the parties hereto, and
shall not be deemed to give any legal or equitable right, remedy or claim
whatsoever to any other person.

          Section 9.3 Severability.

          In case any one or more of the provisions contained in this Agreement
should be or become invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions of this
Agreement shall in no way be affected, prejudiced or disturbed thereby.

          Section 9.4 Registered Owners, Beneficial Owners and Depositors as
Parties; Binding Effect.

          The Registered Owners, Beneficial Owners and Depositors from time to
time shall be parties to this Agreement and shall be bound by all of the terms
and conditions hereof by their acceptance of Shares or any interest therein or
by their depositing British Pounds, as the case may be.

          Section 9.5 Notices.

          (a) All notices given under this Agreement must be in writing.

          (b) Any and all notices to be given to the Trustee or the Sponsor
shall be deemed to have been duly given (i) when it is actually delivered by a
messenger or recognized courier service, (ii) five days after it is mailed by
registered or certified mail, postage paid or (iii) when receipt of a facsimile
transmission is acknowledged via a return receipt or receipt confirmation as
requested by the original transmission, in each case to or at the address set
forth below:

                                       47

          To the Trustee:

          The Bank of New York
          101 Barclay Street, 22-W
          New York, New York 10286
          Attention: ADR Administration
          Facsimile:  212-571-3050

or any other place to which the Trustee may have transferred its Corporate Trust
Office with notice to the Sponsor.

          To the Sponsor:

          Rydex Specialized Products LLC
          c/o Rydex Investments
          9601 Blackwell Road, Suite 500
          Rockville, Maryland 20850
          Attention:  Carl G. Verboncoeur, President
          Facsimile:  301-296-5112

or any other place to which the Sponsor may have transferred its principal
office with notice to the Trustee.

          (c) Any and all notices to be given to a Registered Owner shall be
deemed to have been duly given (i) when actually delivered by messenger or a
recognized courier service, (ii) when mailed, postage prepaid or (iii) when sent
by facsimile transmission confirmed by letter, in each case at or to the address
of such Registered Owner as it appears on the transfer books of the Trustee, or,
if such Registered Owner shall have filed with the Trustee a written request
that any notice or communication intended for such Registered Owner be delivered
to some other address, at the address designated in such request.

          Section 9.6 Agent for Service; Submission to Jurisdiction.

          The Sponsor hereby (i) irrevocably designates and appoints CT
Corporation, in the State of New York, as the Sponsor's authorized agent upon
which process may be served in any suit or proceeding arising out of or relating
to the Shares,

                                       48

the Trust Property or this Agreement, (ii) consents and submits to the
jurisdiction of any state or federal court in The City of New York, State of New
York, in which any such suit or proceeding may be instituted, and (iii) agrees
that service of process upon said authorized agent shall be deemed in every
respect effective service of process upon the Sponsor in any such suit or
proceeding. The Sponsor agrees to deliver, upon the execution and delivery of
this Agreement, a written acceptance by such agent of its appointment as such
agent. The Sponsor further agrees to take any and all action, including the
filing of any and all such documents and instruments, as may be necessary to
continue such designation and appointment in full force and effect for so long
as any Shares remain outstanding or this Agreement remains in force. In the
event the Sponsor fails to continue such designation and appointment in full
force and effect, the Sponsor hereby waives personal service of process upon it
and consents that any such service of process may be made by certified or
registered mail, return receipt requested, directed to the Sponsor at its
address last specified for notices hereunder, and service so made shall be
deemed completed five (5) days after the same shall have been so mailed.

          Section 9.7 Governing Law.

          This Agreement shall be interpreted under, and all rights and duties
under this Agreement shall be governed by, the laws of the State of New York.

          IN WITNESS WHEREOF, RYDEX SPECIALIZED PRODUCTS LLC and THE BANK OF NEW
YORK have duly executed this Agreement as of the day and year first set forth
above.

                                        RYDEX SPECIALIZED PRODUCTS LLC,
                                           as Sponsor

                                        By:
                                            ------------------------------------
                                            Name: Carl G. Verboncoeur
                                            Title: Chief Executive Officer and
                                                   Treasurer

                                       49

                                        THE BANK OF NEW YORK,
                                           as Trustee

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                       50

                                    EXHIBIT A

                        Form of Deposit Account Agreement

                                        1

                                    EXHIBIT B

                               Form of Certificate

THE SHARES EVIDENCED HEREBY REPRESENT RIGHTS WITH RESPECT TO UNDERLYING TRUST
PROPERTY (AS DEFINED IN THE TRUST AGREEMENT REFERRED TO HEREIN) HELD BY THE
TRUST AND DO NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND ARE NOT
GUARANTEED BY THE SPONSOR OR THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THE SHARES NOR THE UNDERLYING TRUST PROPERTY ARE INSURED UNDER ANY
AGREEMENT THAT DIRECTLY BENEFITS THE TRUST OR GUARANTEED BY ANY GOVERNMENTAL
AGENCY OR ANY OTHER PERSON.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE AGENT
AUTHORIZED BY THE ISSUER FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                                        2

                      BRITISH POUND STERLING CURRENCYSHARES
                                    ISSUED BY
                   CURRENCYSHARES BRITISH POUND STERLING TRUST
                                  REPRESENTING
  FRACTIONAL INTERESTS IN DEPOSITED BRITISH POUNDS AND ANY OTHER TRUST PROPERTY

                        THE BANK OF NEW YORK, as Trustee

No.____                                                                 * Shares

                                                             CUSIP: ____________

     THE BANK OF NEW YORK, as Trustee (hereinafter called the Trustee), hereby
certifies that CEDE & CO., as nominee of the Depository Trust Company, or
registered assigns, IS THE OWNER OF * Shares issued by CurrencyShares British
Pound Sterling Trust, each representing a fractional undivided interest in the
net assets of the Trust, as provided in the Agreement referred to below. At the
time of delivery of the Agreement, each 50,000 Shares represented an interest in
5,000,000 British Pounds that are deposited under the Agreement and held by the
Depository referred to in the Agreement. The amount of British Pounds in which
each 50,000 Shares represents an interest may change from time to time as
provided in the Agreement. The Trustee's Corporate Trust Office is located at a
different address than its principal executive office. Its Corporate Trust
Office is located at 101 Barclay Street, New York, New York 10286, and its
principal executive office is located at One Wall Street, New York, New York
10286.

     This Certificate is issued upon the terms and conditions set forth in the
Trust Agreement dated as of _________, 2006 (the "Agreement") among Rydex
Specialized Products LLC d/b/a "Rydex Investments" (herein called the Sponsor),
the Trustee, all Registered Owners and Beneficial Owners from time to time of
Shares issued thereunder and all Depositors. By becoming a Registered Owner or
Beneficial Owner, or by depositing British Pounds, a Person becomes a party to
the Agreement and is bound by all the terms and conditions of the Agreement. The
Agreement sets forth the rights of Depositors and Registered Owners and the
rights and duties of the Trustee and the Sponsor. Copies of the Agreement are on
file at the Trustee's Corporate Trust Office in New York City.

----------
*    That number of Shares held at The Depository Trust Company at any given
     point in time.

                                        3

     The Agreement is hereby incorporated by reference into and made a part of
this Certificate as if set forth in full in this place. Capitalized terms not
defined herein shall have the meanings set forth in the Agreement.

     This Certificate shall not be entitled to any benefits under the Agreement
or be valid or obligatory for any purpose unless it is executed by the Trustee
by the manual or facsimile signature of a duly authorized signatory of the
Trustee and, if a Registrar (other than the Trustee) for the Shares shall have
been appointed, countersigned by the manual signature of a duly authorized
officer of the Registrar.

Dated:                                  THE BANK OF NEW YORK,
       ------------------------------   as Trustee

                                        By:
                                            ------------------------------------
                                        Its:
                                             -----------------------------------

                 THE TRUSTEE'S CORPORATE TRUST OFFICE ADDRESS IS

                  101 BARCLAY STREET, NEW YORK, NEW YORK 10286

                                       4CURRENCYSHARES(SM) BRITISH POUND STERLING TRUST

                          FORM OF PARTICIPANT AGREEMENT

This Participant Agreement (this "Agreement"), dated as of [________], 2006, is
entered into by and between __________ (with respect to this Agreement, the
"Authorized Participant", and with respect to the Trust Agreement referred to
below, an "Authorized Participant"), The Bank of New York, a New York banking
corporation, not in its individual capacity but solely as trustee (the
"Trustee") of the CurrencyShares British Pound Sterling Trust (the "Trust"), and
Rydex Specialized Products LLC, d/b/a Rydex Investments, as sponsor (the
"Sponsor") of the Trust.

                                     SUMMARY

The Trustee serves as the trustee of the Trust pursuant to the Depositary Trust
Agreement dated as of [__________], 2006, among the Sponsor, the Trustee, the
registered owners and beneficial owners from time to time of British Pound
Shares issued thereunder and all depositors (the "Trust Agreement"). As provided
in the Trust Agreement and described in the Prospectus (defined below), units of
fractional undivided beneficial interests in and ownership of the Trust (the
"Shares") may be created or redeemed by the Trustee for an Authorized
Participant in aggregations of fifty thousand (50,000) Shares (each aggregation,
a "Basket"). Baskets are offered only pursuant to the registration statement of
the Trust on Form S-1, as amended (Registration No: 333-132361), as declared
effective by the Securities and Exchange Commission ("SEC") and as the same may
be amended from time to time thereafter (collectively, the "Registration
Statement") together with the prospectus of the Trust in the form first filed
with the SEC pursuant to Rule 424 (the "Prospectus") adopted under the
Securities Act of 1933, as amended (the "1933 Act"). Under the Trust Agreement,
the Trustee is authorized to issue Baskets to, and redeem Baskets from,
Authorized Participants under the Trust Agreement, only through the facilities
of The Depository Trust Company ("DTC") or a successor depository, and only in
exchange for an amount of British Pounds that is transferred between such
Authorized Participant and the Trust. Under the Trust Agreement, the Trustee
issues Baskets in exchange for British Pounds which are transferred by an
Authorized Participant to the London Branch of JPMorgan Chase Bank, N.A. (the
"Depository"), and when the Trustee redeems Baskets tendered for redemption by
an Authorized Participant in exchange for British Pounds, the British Pounds
held in the Trust Account are transferred to the Authorized Participant by the
Depository. The foregoing British Pound transfers are also governed by the
Deposit Account Agreement the Trust has entered into with the Depository (the
"Deposit Account Agreement"). This Agreement sets forth the specific procedures
by which an Authorized Participant may create or redeem Baskets.

Because new Shares can be created and issued on an ongoing basis, at any point
during the life of the Trust, a "distribution," as such term is used in the 1933
Act, may be occurring. The Authorized Participant is cautioned that some of its
activities may result in its being deemed a participant in a distribution in a
manner that would render it a statutory underwriter and subject it to the
prospectus-delivery and liability provisions of the 1933 Act. The Authorized
Participant should review the "Plan of Distribution" portion of the Prospectus
and consult with its own counsel in connection with entering into this Agreement
and placing an Order (defined below).

Capitalized terms used but not defined in this Agreement shall have the meanings
assigned to such terms in the Trust Agreement. To the extent there is a conflict
between any provision of this Agreement and the provisions of the Trust
Agreement, the provisions of the Trust Agreement shall control.

To give effect to the foregoing premises and in consideration of the mutual
covenants and agreements set forth below, the parties hereto agree as follows:

SECTION 1. ORDER PLACEMENT. To place orders for the Trustee to create or redeem
one or more Baskets, Authorized Participants must follow the procedures for
creation and redemption referred to in Section 3 of this Agreement and the
procedures described in Attachment A hereto (the "Procedures"), as each may be
amended, modified or supplemented from time to time.

SECTION 2. STATUS, REPRESENTATIONS AND WARRANTIES OF THE PARTIES.

           (a) The Authorized Participant represents and warrants and covenants
           the following on the date hereof and at each time of purchase by the
           Authorized Participant of a Basket from the Trust (each such time,
           the "Time of Purchase"), that:

                  (i) The Authorized Participant is a participant of DTC (as
                  such a participant, a "DTC Participant"). If the Authorized
                  Participant ceases to be a DTC Participant, the Authorized
                  Participant shall give immediate notice to the Trustee of such
                  event, and this Agreement shall terminate immediately as of
                  the date the Authorized Participant ceased to be a DTC
                  Participant.

                  (ii) Unless Section 2(a)(iii) applies, the Authorized
                  Participant either (A) is registered as a broker-dealer under
                  the Securities Exchange Act of 1934, as amended ("1934 Act"),
                  and is a member in good standing of the National Association
                  of Securities Dealers, Inc. (the "NASD"), or (B) is exempt
                  from being, or otherwise is not required to be, licensed as a
                  broker-dealer or a member of the NASD, and in either case is
                  qualified to act as a broker or dealer in the states or other
                  jurisdictions where the nature of its business so requires. In
                  connection with the purchase or redemption of Baskets and any
                  related offers or sales of Shares, the Authorized Participant
                  will maintain any such registrations, qualifications and
                  membership in good standing and in full force and effect
                  throughout the term of this Agreement. The Authorized
                  Participant will comply with all applicable federal laws, the
                  laws of the states or other jurisdictions concerned, and the
                  rules and regulations promulgated thereunder, and with the
                  Constitution, By-Laws and Conduct Rules of the NASD (if it is
                  a NASD member), and will not offer or sell Shares in any state
                  or jurisdiction where they may not lawfully be offered and/or
                  sold.

                  (iii) If the Authorized Participant is offering or selling
                  Shares in jurisdictions outside the several states,
                  territories and possessions of the United States and is not
                  otherwise required to be registered, qualified or a member of
                  the NASD as set forth in Section 2(a)(ii) above, the
                  Authorized Participant will, in connection with such offers
                  and sales, (A) observe the applicable laws of the jurisdiction
                  in which such offer and/or sale is made, (B) comply with the
                  prospectus delivery and other requirements of the 1933 Act,
                  and the regulations promulgated thereunder, and (C) conduct
                  its business in accordance with the NASD Conduct Rules.

                  (iv) The Authorized Participant is in compliance with the
                  money laundering and related provisions of the Uniting and
                  Strengthening America by Providing Appropriate Tools Required
                  to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001,
                  and the regulations promulgated thereunder, if the Authorized
                  Participant is subject to the requirements of the USA PATRIOT
                  Act.

                  (v) The Authorized Participant has the capability to send and
                  receive communications via authenticated telecommunication
                  facility to and from the Trustee. The Authorized Participant
                  shall confirm such capability to the satisfaction of the
                  Trustee by the end of the Business Day before placing its
                  first order with the Trustee (whether such order is to create
                  or to redeem Baskets).

           (b) The Sponsor represents and warrants that:

                  (i) on the effective date of the Registration Statement and at
                  each Time of Purchase, the Trust's Registration Statement
                  shall be effective and no stop order of the SEC with respect
                  thereto shall have been issued and no proceedings for such
                  purpose shall have been instituted or, to the Sponsor's
                  knowledge, will then be contemplated by the SEC; the
                  Registration Statement complies in all material respects with
                  the requirements of the 1933 Act, and the Prospectus complied
                  as of its date, and complies at the Time of Purchase, in all
                  material respects with the requirements of the 1933 Act; and
                  the conditions to the use of Form S-1 have been satisfied; the
                  Registration Statement does not contain an untrue statement of
                  a material fact or omit to state a material fact required to
                  be stated therein or necessary to make the statements therein
                  not misleading, the Prospectus will not, as of its date and at
                  the Time of Purchase, contain an untrue statement of a
                  material fact or omit to state a material fact required to be
                  stated therein or necessary in order to make the statements
                  therein, in the light of the circumstances under which they
                  were made, not misleading and, as of _____ a.m./p.m. on the
                  date of this Agreement (the "Time of Sale"), the documents
                  comprising the Disclosure Package (as defined below) did not
                  contain an untrue statement of a material fact or omit to
                  state a material fact required to be stated therein or
                  necessary in order to make the statements therein, in the
                  light of the circumstances under which they were made, not
                  misleading; provided, however, that the Sponsor makes no
                  warranty or representation with respect to any statement
                  contained in the Registration Statement, the Prospectus or the
                  Disclosure Package in reliance upon and in conformity with
                  information concerning the Authorized Participant and
                  furnished in writing by or on behalf of the Authorized
                  Participant to the Sponsor expressly for use therein. The
                  "Disclosure Package" is the Prospectus and any amendments and
                  supplements thereto at the Time of Sale and any free writing
                  prospectus as defined in Rule 405 of the 1933 Act (a "FWP")
                  prepared by, for or on behalf of the Sponsor before the Time
                  of Sale and intended for general distribution;

                  (ii) the Shares, when issued and delivered against payment of
                  consideration therefor, as provided in this Agreement, will be
                  duly and validly authorized, issued, fully paid and
                  non-assessable and free of statutory and contractual
                  preemptive rights, rights of first refusal and similar rights;

                  (iii) the Sponsor has been duly organized and, on the
                  effective date of the Registration Statement and at each Time
                  of Purchase, will be validly existing as a limited liability
                  company in good standing under the laws of the State of
                  Delaware, with full power and authority to act as the sponsor
                  of the Trust as described in the Registration Statement and
                  the Prospectus, and has all requisite power and authority to
                  execute and deliver this Agreement; and

                  (iv) at the time the Sponsor makes an offer of Shares
                  following the filing of the Registration Statement, neither
                  the Trust nor the Sponsor will be an "ineligible issuer" as
                  defined in Rule 405 of the 1933 Act.

SECTION 3. ORDERS.

           (a) All orders to create or redeem Baskets shall be made in
           accordance with the terms of the Trust Agreement, the Deposit Account
           Agreement, this Agreement and the Procedures. Each

           party will comply with such foregoing terms and procedures to the
           extent applicable to it. The Authorized Participant hereby consents
           to the use of recorded telephone lines whether or not such use is
           reflected in the Procedures. The Trustee and Sponsor may issue
           additional or other procedures from time to time relating to the
           manner of creating or redeeming Baskets which are not related to the
           Procedures, and the Authorized Participant will comply with such
           procedures of which it has received notice in accordance with Section
           18(c).

           (b) The Authorized Participant acknowledges and agrees that each
           order to create a Basket (a "Purchase Order") and each order to
           redeem a Basket (a "Redemption Order", and each Purchase Order and
           Redemption Order, an "Order") may not be revoked by the Authorized
           Participant upon its delivery to the Trustee. A form of Purchase
           Order is attached hereto as Exhibit B and a form of Redemption Order
           is attached hereto as Exhibit C.

           (c) The delivery of the Shares against deposits of British Pounds may
           be suspended generally, or refused with respect to particular
           requested deliveries, during any period when the transfer books of
           the Trustee are closed or if any such action is deemed necessary or
           advisable by the Trustee or the Sponsor for any reason at any time or
           from time to time. Except as otherwise provided in the Trust
           Agreement, the surrender of Shares for purposes of withdrawing
           British Pounds may not be suspended.

SECTION 4. BRITISH POUNDS TRANSFERS. Any British Pounds to be transferred in
connection with any Order shall be transferred between the Authorized
Participant's account and the Trust's deposit accounts established for such
transfers pursuant to the Deposit Account Agreement (the "Deposit Accounts") in
accordance with the Procedures. The Authorized Participant shall be responsible
for all costs and expenses relating to or connected with any transfer of British
Pounds between its account and the Deposit Accounts, including any late fees and
other charges, if any, for which the Trustee becomes responsible in the event
that British Pounds are not transferred from the Authorized Participant's
account in accordance with the Procedures.

SECTION 5. FEES. In connection with each Order by an Authorized Participant to
create or redeem one or more Baskets, the Trustee shall charge, and the
Authorized Participant shall pay to the Trustee, the transaction fee prescribed
in the Trust Agreement applicable to such creation or redemption. The initial
transaction fee shall be five hundred dollars ($500). The transaction fee may be
waived or otherwise adjusted from time to time as set forth in the Prospectus.

SECTION 6. AUTHORIZED PERSONS. Concurrently with the execution of this Agreement
and from time to time thereafter, the Authorized Participant shall deliver to
the Trustee notarized and duly certified as appropriate by its secretary or
other duly authorized official, a certificate in the form of Exhibit A setting
forth the names and signatures of all persons authorized to give instructions
relating to activity contemplated hereby or by any other notice, request or
instruction given on behalf of the Authorized Participant (each, an "Authorized
Person"). The Trustee may accept and rely upon such certificate as conclusive
evidence of the facts set forth therein and shall consider such certificate to
be in full force and effect until the Trustee receives a superseding certificate
bearing a subsequent date. Upon the termination or revocation of authority of
any Authorized Person by the Authorized Participant, the Authorized Participant
shall give immediate written notice of such fact to the Trustee and such notice
shall be effective upon receipt by the Trustee. The Trustee shall issue to each
Authorized Person a unique personal identification number (the "PIN") by which
such Authorized Person shall be identified and by which instructions issued by
the Authorized Participant hereunder shall be authenticated. The PIN shall be
kept confidential by the Authorized Participant and shall only be provided to
the Authorized Person. If, after issuance, the Authorized Person's PIN is
changed, the new PIN shall become effective on a date mutually agreed upon by
the Authorized Participant and the Trustee.

SECTION 7. REDEMPTION. The Authorized Participant represents and warrants that
it will not obtain an Order Number (as described in the Procedures) from the
Trustee for the purpose of redeeming a Basket unless it first ascertains that
(i) it owns outright or has full legal authority and legal and beneficial right
to tender for redemption the Baskets to be redeemed and to receive the entire
proceeds of the redemption, and (ii) such

Baskets have not been loaned or pledged to another party and are not the subject
of a repurchase agreement, securities lending agreement or any other arrangement
which would preclude the delivery of such Baskets to the Trustee on the third
Business Day following the date of the Redemption Order.

SECTION 8. ROLE OF AUTHORIZED PARTICIPANT.

           (a) The Authorized Participant acknowledges that, for all purposes of
           this Agreement and the Trust Agreement, the Authorized Participant is
           and shall be deemed to be an independent contractor and has and shall
           have no authority to act as agent for the Trust, the Sponsor, the
           Trustee or the Depository, in any matter or in any respect.

           (b) The Authorized Participant will make itself and its employees
           available, upon request, during normal business hours to consult with
           the Trustee, the Depository or their designees concerning the
           performance of the Authorized Participant's responsibilities under
           this Agreement.

           (c) The Authorized Participant will maintain records of all sales of
           Shares made by or through it as required by law and will furnish
           copies of such records to the Sponsor upon the reasonable request of
           the Sponsor, subject to any privacy or confidentiality obligations it
           may have to its customers arising under federal or state securities
           laws or the applicable rules of any self regulatory organization. The
           Sponsor will not use any information provided by the Authorized
           Participant pursuant to this paragraph or disclose such information
           to others except in connection with the performance of its duties and
           responsibilities hereunder, including making servicing and
           informational mailings related to the Trust, or except as may be
           required by applicable law.

SECTION 9. INDEMNIFICATION.

           (a) The Authorized Participant hereby indemnifies and holds harmless
           the Trustee, the Depository, the Trust, the Sponsor, their respective
           direct or indirect affiliates (as defined below) and their respective
           directors, officers, employees and agents (each, an "AP Indemnified
           Party") from and against any losses, liabilities, damages, costs and
           expenses (including attorney's fees and the reasonable cost of
           investigation) incurred by such AP Indemnified Party as a result of
           or in connection with: (i) any breach by the Authorized Participant
           of any provision of this Agreement, including any of its
           representations, warranties or covenants; (ii) any failure on the
           part of the Authorized Participant to perform any of its other
           obligations set forth in this Agreement; (iii) any failure by the
           Authorized Participant to comply with applicable laws and the rules
           and regulations of any governmental entity or any self-regulatory
           organization; (iv) any actions of such AP Indemnified Party in
           reliance upon any instructions issued in accordance with the
           Procedures reasonably believed by the AP Indemnified Party to be
           genuine and to have been given by the Authorized Participant; or (v)
           (A) any representation by the Authorized Participant, its employees
           or its agents or other representatives about the Shares, any AP
           Indemnified Party or the Trust that is not consistent with the
           Trust's Prospectus as then-supplemented made in connection with the
           offer or the solicitation of an offer to buy or sell Shares and (B)
           any untrue statement or alleged untrue statement of a material fact
           (1) contained in any research report, marketing material or sales
           literature described in Section 13(b) or in any FWP prepared by the
           Authorized Participant or (2) furnished by the Authorized Participant
           for use in a FWP prepared by, for or on behalf of the Sponsor, or any
           alleged omission to state therein a material fact required to be
           stated therein or necessary in order to make the statements therein
           not misleading to the extent that such statement or omission relates
           to the Shares, any AP Indemnified Party or the Trust, unless, in
           either case, such representation, statement or omission was made or
           included by the Authorized Participant at the written direction of
           the Sponsor or is based upon any omission or alleged omission by the
           Sponsor to state a material fact in connection with such
           representation, statement or omission necessary in order to make such
           representation, statement or omission not misleading.

           (b) The Sponsor hereby agrees to indemnify and hold harmless the
           Authorized Participant, its respective subsidiaries, affiliates,
           directors, officers, employees and agents, and each person, if any,
           who controls such persons within the meaning of Section 15 of the
           1933 Act (each, a

           "Sponsor Indemnified Party") from and against any losses,
           liabilities, damages, costs and expenses (including attorneys' fees
           and the reasonable cost of investigation) incurred by such Sponsor
           Indemnified Party as a result of (i) any breach by the Sponsor of any
           provision of this Agreement that relates to the Sponsor, including
           its representations, warranties and covenants; (ii) any failure on
           the part of the Sponsor to perform any other obligation of the
           Sponsor set forth in this Agreement; (iii) any failure by the Sponsor
           to comply with applicable laws; or (iv) any untrue statement or
           alleged untrue statement of a material fact contained in the
           Registration Statement or in any amendment thereof, or in the
           Prospectus, or in any amendment thereof or supplement thereto, or in
           any FWP prepared by, for or on behalf of the Sponsor, or arising out
           of or based upon the omission or alleged omission to state therein a
           material fact required to be stated therein or necessary in order to
           make the statements therein not misleading, except those statements
           based on information furnished in writing by or on behalf of the
           Authorized Participant expressly for use in the Registration
           Statement, amendment thereof, Prospectus, amendment thereof or
           supplement thereto, or FWP.

           (c) (i) This Section 9 shall not apply to any AP Indemnified Party or
           any Sponsor Indemnified Party (each, an "Indemnified Party") to the
           extent any such losses, liabilities, damages, costs and expenses are
           incurred as a result of, or in connection with, any action or failure
           to act that constitutes gross negligence, bad faith or willful
           misconduct on the part of the such Indemnified Party. (ii) The term
           "affiliate" in this Section 9 shall include, with respect to any
           person, entity or organization, any other person, entity or
           organization which directly, or indirectly through one or more
           intermediaries, controls, is controlled by or is under common control
           with such person, entity or organization.

           (d) If the indemnification provided for in this Section 9 is
           unavailable to an indemnified party under Sections 9(a) or 9(b) or
           insufficient to hold an indemnified party harmless in respect of any
           losses, liabilities, damages, costs and expenses referred to therein,
           then each applicable indemnifying party shall contribute to the
           amount paid or payable by such indemnified party as a result of such
           losses, liabilities, damages, costs and expenses (i) in such
           proportion as is appropriate to reflect the relative benefits
           received by the Sponsor and the Trust, on the one hand, and by the
           Authorized Participant, on the other hand, from the services provided
           hereunder or (ii) if the allocation provided by clause (i) above is
           not permitted by applicable law, in such proportion as is appropriate
           to reflect not only the relative benefits referred to in clause (i)
           above but also the relative fault of the Sponsor and the Trust, on
           the one hand, and of the Authorized Participant, on the other hand,
           in connection with, to the extent applicable, the statements or
           omissions which resulted in such losses, liabilities, damages, costs
           and expenses, as well as any other relevant equitable considerations.
           The relative benefits received by the Sponsor and the Trust, on the
           one hand, and the Authorized Participant, on the other hand, shall be
           deemed to be in the same respective proportions as the amount of
           British Pounds transferred to the Trust under this Agreement on the
           one hand (expressed in dollars) bears to the amount of economic
           benefit received by the Authorized Participant in connection with
           this Agreement on the other hand. To the extent applicable, the
           relative fault of the Sponsor on the one hand and of the Authorized
           Participant on the other shall be determined by reference to, among
           other things, whether the untrue statement or alleged untrue
           statement of a material fact or omission or alleged omission relates
           to information supplied by the Sponsor or by the Authorized
           Participant and the parties' relative intent, knowledge, access to
           information and opportunity to correct or prevent such statement or
           omission. The amount paid or payable by a party as a result of the
           losses, liabilities, damages, costs and expenses referred to in this
           Section 9(d) shall be deemed to include any legal or other fees or
           expenses reasonably incurred by such party in connection with
           investigating, preparing to defend or defending any action, suit or
           proceeding (each a "Proceeding") related to such losses, liabilities,
           damages, costs and expenses.

           (e) The Sponsor and the Authorized Participant agree that it would
           not be just and equitable if contribution pursuant to this Section 9
           were determined by pro rata allocation or by any other method of
           allocation that does not take account of the equitable considerations
           referred to in Section 9(d) above. The Authorized Participant shall
           not be required to contribute any amount in

           excess of the amount by which the total price at which the Shares
           created by the Authorized Participant and distributed to the public
           were offered to the public exceeds the amount of any damage which the
           Authorized Participant has otherwise been required to pay by reason
           of such untrue statement or alleged untrue statement or omission or
           alleged omission. No person guilty of fraudulent misrepresentation
           (within the meaning of Section 11(f) of the 1933 Act) shall be
           entitled to contribution from any person who was not guilty of such
           fraudulent misrepresentation.

           (f) The indemnity and contribution agreements contained in this
           Section 9 shall remain in full force and effect regardless of any
           investigation made by or on behalf of the Authorized Participant, its
           partners, stockholders, members, directors, officers, employees and
           or any person (including each partner, stockholder, member, director,
           officer or employee of such person) who controls the Authorized
           Participant within the meaning of Section 15 of the 1933 Act or
           Section 20 of the 1934 Act, or by or on behalf of the Sponsor, its
           partners, stockholders, members, directors, officers, employees or
           any person who controls the Sponsor within the meaning of Section 15
           of the 1933 Act or Section 20 of the 1934 Act, and shall survive any
           termination of this Agreement. The Sponsor and the Authorized
           Participant agree promptly to notify each other of the commencement
           of any Proceeding against it and, in the case of the Sponsor, against
           any of the Sponsor's officers or directors, in connection with the
           issuance and sale of the Shares or in connection with the
           Registration Statement or the Prospectus.

SECTION 10. LIABILITY.

           (a) Limitation of Liability. None of the Sponsor, the Trustee, the
           Authorized Participant, and the Depository shall be liable to each
           other or to any other person, including any party claiming by,
           through or on behalf of the Authorized Participant, for any losses,
           liabilities, damages, costs or expenses arising out of any mistake or
           error in data or other information provided to any of them by each
           other or any other person or out of any interruption or delay in the
           electronic means of communications used by them.

           (b) Tax Liability. The Authorized Participant shall be responsible
           for the payment of any transfer tax, sales or use tax, stamp tax,
           recording tax, value added tax and any other similar tax or
           government charge applicable to the creation or redemption of any
           Basket made pursuant to this Agreement, regardless of whether or not
           such tax or charge is imposed directly on the Authorized Participant.
           To the extent the Trustee, the Sponsor or the Trust is required by
           law to pay any such tax or charge, the Authorized Participant agrees
           to promptly indemnify such party for any such payment, together with
           any applicable penalties, additions to tax or interest thereon.

SECTION 11. ACKNOWLEDGMENT. The Authorized Participant acknowledges receipt of a
(i) copy of the Trust Agreement and (ii) the current Prospectus of the Trust,
and represents that it has reviewed and understands such documents.

SECTION 12. EFFECTIVENESS AND TERMINATION. Upon the execution of this Agreement
by the parties hereto, this Agreement shall become effective in this form as of
the Time of Sale, and may be terminated at any time by any party upon thirty
(30) days prior written notice to the other parties unless earlier terminated:
(i) in accordance with Section 2(a)(i); (ii) upon notice to the Authorized
Participant by the Trustee in the event of a breach by the Authorized
Participant of this Agreement or the procedures described or incorporated
herein; (iii) immediately in the circumstances described in Section 18(j); or
(iv) at such time as the Trust is terminated pursuant to the Trust Agreement.

SECTION 13. MARKETING MATERIALS; REPRESENTATIONS REGARDING SHARES;
IDENTIFICATION IN REGISTRATION STATEMENT.

           (a) The Authorized Participant represents, warrants and covenants
           that (i), without the written consent of the Sponsor, the Authorized
           Participant will not (A) make, or permit any of its representatives
           to make, any representations concerning the Shares or any AP
           Indemnified Party other than representations contained (1) in the
           Prospectus of the Trust, as then amended and

           supplemented, (2) in printed information approved by the Sponsor as
           information supplemental to such Prospectus or (3) in any promotional
           materials or sales literature furnished to the Authorized Participant
           by the Sponsor, or (B) issue any FWP pursuant to Rules 164 and 433 of
           the 1933 Act and (ii) the Authorized Participant will not furnish or
           cause to be furnished to any person or display or publish any
           information or material relating to the Shares, any AP Indemnified
           Person or the Trust that are not consistent with the Prospectus, as
           then amended and supplemented. Copies of the Prospectus of the Trust,
           as then amended and supplemented, and any such printed supplemental
           information will be supplied by the Sponsor to the Authorized
           Participant in reasonable quantities upon request.

           (b) Notwithstanding the foregoing, the Authorized Participant may
           without the written approval of the Sponsor prepare and circulate in
           the regular course of its business research reports, marketing
           material and sales literature, but in no event FWPs, that include
           information, opinions or recommendations relating to the Shares (i)
           for public dissemination, provided that such research reports,
           marketing material or sales literature is prepared in accordance with
           applicable rules and regulations of the 1933 Act, any applicable
           state securities laws and NASD rules; or (ii) for internal use by the
           Authorized Participant. The Authorized Participant will file all such
           research reports, marketing material and sales literature related to
           the Shares with the NASD to the extent required by the NASD Conduct
           Rules.

           (c) The Authorized Participant and its affiliates may prepare and
           circulate in the regular course of their businesses, without having
           to refer to the Shares or the Prospectus, as then amended and
           supplemented, data and information relating to the price of British
           Pounds.

           (d) The Authorized Participant hereby agrees that for the term of
           this Agreement the Sponsor may deliver the Prospectus, and any
           supplements or amendments thereto or recirculation thereof, to the
           Authorized Participant in Portable Document Format ("PDF") via
           electronic mail in lieu of delivering the Prospectus in paper form.
           The Authorized Participant may revoke the foregoing agreement at any
           time by delivering written notice to the Sponsor and, whether or not
           such agreement is in effect, the Authorized Participant may, at any
           time, request reasonable quantities of the Prospectus, and any
           supplements or amendments thereto or recirculation thereof, in paper
           form from the Sponsor. The Authorized Participant acknowledges that
           it has the capability to access, view, save and print material
           provided to it in PDF and that it will incur no appreciable extra
           costs by receiving the Prospectus in PDF instead of in paper form.
           The Sponsor will, when requested by the Authorized Participant, make
           available at no cost the software and technical assistance necessary
           to allow the Authorized Participant to access, view and print the PDF
           version of the Prospectus.

           (e) For as long as this Agreement is effective, the Authorized
           Participant agrees to be identified as an authorized participant of
           the Trust (i) in the section of the Prospectus included within the
           Registration Statement entitled "Creation and Redemption of Shares"
           (including identifying the Authorized Participant in such section by
           a supplement to the Prospectus) and in any other section as may be
           required by the SEC and (ii) on the Trust's website. Upon the
           termination of this Agreement, (i) during the period prior to when
           the Sponsor qualifies and elects to file on Form S-3, the Sponsor
           will remove such identification from the Prospectus in the amendment
           of the Registration Statement next occurring after the date of the
           termination of this Agreement and, during the period after when the
           Sponsor qualifies and elects to file on Form S-3, the Sponsor will
           promptly file a current report on Form 8-K indicating the withdrawal
           of the Authorized Participant as an authorized participant of the
           Trust and (ii) the Sponsor will promptly update the Trust's website
           to remove any identification of the Authorized Participant as an
           authorized participant of the Trust.

SECTION 14. TITLE TO BRITISH POUNDS. The Authorized Participant represents and
warrants that upon delivery of the Basket British Pound Amount (as defined in
the Trust Agreement) to the Trustee in accordance with the terms of the Trust
Agreement and this Agreement, the Trust will acquire good and unencumbered title
to the British Pounds which are the subject of such Basket British Pound Amount,
free

and clear of all pledges, security interests, liens, charges, taxes,
assessments, encumbrances, equities, claims, options or limitations of any kind
or nature, fixed or contingent, and not subject to any adverse claims, including
any restriction upon the sale or transfer of all or any part of such British
Pounds which is imposed by any agreement or arrangement entered into by the
Authorized Participant or any party for which it is acting in connection with a
Purchase Order.

SECTION 15. THIRD PARTY BENEFICIARIES. Each AP Indemnified Party, to the extent
it is not a party to this Agreement, is a third-party beneficiary of this
Agreement (each, a "Third Party Beneficiary") and may proceed directly against
the Authorized Participant (including by bringing proceedings against the
Authorized Participant in its own name) to enforce any obligation of the
Authorized Participant under this Agreement which directly or indirectly
benefits such Third Party Beneficiary.

SECTION 16. FORCE MAJEURE. No party to this Agreement shall incur any liability
for any delay in performance, or for the non-performance, of any of its
obligations under this Agreement by reason of any act of God or war or
terrorism, acts and regulations and rules of any governmental or supra national
bodies or authorities or regulatory or self-regulatory organization or failure
of any such body, authority or organization for any reason, to perform its
obligations, or any cause beyond its reasonable control, including, without
limitation, any breakdown, malfunction or failure of transmission in connection
with or other unavailability of any wire, communication or computer facilities,
any transport, port or airport disruption, or any industrial action.

SECTION 17. AMBIGUOUS INSTRUCTIONS. If a Purchase Order Form or a Redemption
Order Form otherwise in good form contains order terms that differ from the
information provided in the telephone call at the time of issuance of the
applicable order number, the Trustee will attempt to contact one of the
Authorized Persons of the Authorized Participant to request confirmation of the
terms of the Order. If an Authorized Person confirms the terms as they appear in
the Order, then the Order will be accepted and processed. If an Authorized
Person contradicts the Order terms, the Order will be deemed invalid, and a
corrected Order must be received by the Trustee. If the Trustee is not able to
contact an Authorized Person, then the Order shall be accepted and processed in
accordance with its terms notwithstanding any inconsistency from the terms of
the telephone information. In the event that an Order contains terms that are
not complete or are illegible, the Order will be deemed invalid and the Trustee
will attempt to contact one of the Authorized Persons of the Authorized
Participant to request retransmission of the Order.

SECTION 18. MISCELLANEOUS.

           (a) Amendment and Modification. This Agreement, the Procedures
           attached as Attachment A and the Exhibits hereto may be amended,
           modified or supplemented by the Trustee and the Sponsor, without
           consent of any Authorized Participant from time to time by the
           following procedure. After the amendment, modification or supplement
           has been agreed to, the Trustee will mail a copy of the proposed
           amendment, modification or supplement to the Authorized Participant.
           For the purposes of this Agreement, mail will be deemed received by
           the recipient thereof on the third (3rd) day following the deposit of
           such mail into the United States postal system. Within ten (10)
           calendar days after its deemed receipt, the amendment, modification
           or supplement will become part of this Agreement, the Attachments or
           the Exhibits, as the case may be, in accordance with its terms. If at
           any time there is any material amendment, modification or supplement
           of any Participant Agreement (other than this Agreement), the Trustee
           will promptly mail a copy of such amendment, modification or
           supplement to the Authorized Participant.

           (b) Waiver of Compliance. Any failure of any of the parties to comply
           with any obligation, covenant, agreement or condition herein may be
           waived by the party entitled to the benefits thereof only by a
           written instrument signed by the party granting such waiver, but any
           such written waiver, or the failure to insist upon strict compliance
           with any obligation, covenant, agreement or condition herein, shall
           not operate as a waiver of, or estoppel with respect to, any
           subsequent or other failure.

           (c) Notices. Except as otherwise specifically provided in this
           Agreement, all notices required or permitted to be given pursuant to
           this Agreement shall be given in writing and delivered by personal
           delivery, by postage prepaid registered or certified United States
           first class mail, return receipt requested, by nationally recognized
           overnight courier (delivery confirmation received) or by telex,
           telegram or telephonic facsimile or similar means of same day
           delivery (transmission confirmation received), with a confirming copy
           regular mailed, postage prepaid. For avoidance of doubt, notices may
           not be given or transmitted by electronic mail. Unless otherwise
           notified in writing, all notices to the Trust shall be given or sent
           to the Trustee. All notices shall be directed to the address or
           telephone or facsimile numbers indicated below the signature line of
           the parties on the signature page hereof.

           (d) Successors and Assigns. This Agreement and all of the provisions
           hereof shall be binding upon and inure to the benefit of the parties
           and their respective successors and permitted assigns.

           (e) Assignment. Neither this Agreement nor any of the rights,
           interests or obligations hereunder shall be assigned by any party
           without the prior written consent of the other parties, except that
           any entity into which a party hereto may be merged or converted or
           with which it may be consolidated or any entity resulting from any
           merger, conversion, or consolidation to which such party hereunder
           shall be a party, or any entity succeeding to all or substantially
           all of the business of the party, shall be the successor of the party
           under this Agreement. The party resulting from any such merger,
           conversion, consolidation or succession shall notify the other
           parties hereto of the change. Any purported assignment in violation
           of the provisions hereof shall be null and void. Notwithstanding the
           foregoing, this Agreement shall be automatically assigned to any
           successor Trustee or Sponsor at such time such successor qualifies as
           a successor Trustee or Sponsor under the terms of the Trust
           Agreement.

           (f) Governing Law; Consent to Jurisdiction. This Agreement shall be
           governed by and construed in accordance with the laws of the State of
           New York (regardless of the laws that might otherwise govern under
           applicable New York conflict of laws principles) as to all matters,
           including matters of validity, construction, effect, performance and
           remedies. Each party hereto irrevocably consents to the jurisdiction
           of the courts of the State of New York and of any federal court
           located in the Borough of Manhattan in such State in connection with
           any action, suit or other proceeding arising out of or relating to
           this Agreement or any action taken or omitted hereunder, and waives
           any claim of forum non convenient and any objections as to laying of
           venue. Each party further waives personal service of any summons,
           complaint or other process and agrees that service thereof may be
           made by certified or registered mail directed to such party at such
           party's address for purposes of notices hereunder. Each party hereby
           waives its right to a trial by jury of any claim arising under or in
           connection with this Agreement.

           (g) Counterparts. This Agreement may be executed in one or more
           counterparts, each of which will be deemed to be an original copy of
           this Agreement and all of which, when taken together, will be deemed
           to constitute one and the same agreement, and it shall not be
           necessary in making proof of this Agreement as to any party hereto to
           produce or account for more than one such counterpart executed and
           delivered by such party.

           (h) Interpretation. The article and section headings contained in
           this Agreement are solely for the purpose of reference, are not part
           of the agreement of the parties and shall not in any way affect the
           meaning or interpretation of this Agreement.

           (i) Entire Agreement. This Agreement and the Trust Agreement, along
           with any other agreement or instrument delivered pursuant to this
           Agreement and the Trust Agreement, supersede all prior agreements and
           understandings between the parties with respect to the subject matter
           hereof, provided, however, that the Authorized Participant shall not
           be deemed by this provision to be a party to the Trust Agreement.

           (j) Severance. If any provision of this Agreement is held by any
           court or any act, regulation, rule or decision of any other
           governmental or supra national body or authority or regulatory or
           self-regulatory organization to be invalid, illegal or unenforceable
           for any reason, it shall be invalid, illegal or unenforceable only to
           the extent so held and shall not affect the validity, legality or
           enforceability of the other provisions of this Agreement and this
           Agreement will be construed as if such invalid, illegal, or
           unenforceable provision had never been contained herein, unless the
           Sponsor determines in its discretion, after consulting with the
           Trustee, that the provision of this Agreement that was held invalid,
           illegal or unenforceable does affect the validity, legality or
           enforceability of one or more other provisions of this Agreement, and
           that this Agreement should not be continued without the provision
           that was held invalid, illegal or unenforceable, and in that case,
           upon the Sponsor's notification of the Trustee of such a
           determination, this Agreement shall immediately terminate and the
           Trustee will so notify the Authorized Participant immediately.

           (k) No Strict Construction. The language used in this Agreement will
           be deemed to be the language chosen by the parties to express their
           mutual intent, and no rule of strict construction will be applied
           against any party.

           (l) Survival. Sections 9 (Indemnification) and 15 (Third Party
           Beneficiaries) hereof shall survive the termination of this
           Agreement.

           (m) Other Usages. The following usages shall apply in interpreting
           this Agreement: (i) references to a governmental or quasigovernmental
           agency, authority or instrumentality shall also refer to a regulatory
           body that succeeds to the functions of such agency, authority or
           instrumentality; and (ii) "including" means "including, but not
           limited to."

                                  * * * * * * *

IN WITNESS WHEREOF, the Authorized Participant, the Sponsor and the Trustee, on
behalf of the Trust, have caused this Agreement to be executed by their duly
authorized representatives as of the date first set forth above.

THE BANK OF NEW YORK,                    [NAME OF AUTHORIZED PARTICIPANT]
not in its individual capacity,
but solely as Trustee of the
CurrencyShares British Pound Sterling Trust

By:     ______________________________   By:     ______________________________
        Name:                                    Name:
        Title                                    Title

Address:                                         Address:

Telephone:                                       Telephone:

Facsimile:                                       Facsimile:

RYDEX SPECIALIZED PRODUCTS LLC,
Sponsor of the CurrencyShares British Pound Sterling Trust

______________________________
Name:
Title:

Address:

Telephone:

Facsimile:

                                    EXHIBIT A

                CURRENCYSHARES(SM) BRITISH POUND STERLING TRUST

         FORM OF CERTIFIED AUTHORIZED PERSONS OF AUTHORIZED PARTICIPANT

The following are the names, titles and signatures of all persons (each an
"Authorized Person") authorized to give instructions relating to any activity
contemplated by the Participant Agreement or any other notice, request or
instruction on behalf of the Authorized Participant pursuant to the
CurrencyShares British Pound Sterling Trust Participant Agreement.

Authorized Participant:              ________________________

Name:                                         Name:

Title:                                        Title:

Signature:                                    Signature:

Name:                                         Name:

Title:                                        Title:

Signature:                                    Signature:

The undersigned, [name], [title] of [company], does hereby certify that the
persons listed above have been duly elected to the offices set forth beneath
their names, that they presently hold such offices, that they have been duly
authorized to act as Authorized Persons pursuant to the CurrencyShares British
Pound Sterling Trust Participant Agreement by and between [Authorized
Participant] and the Trustee and the Sponsor of the CurrencyShares British Pound
Sterling Trust, dated [_______], and that their signatures set forth above are
their own true and genuine signatures.

In Witness Whereof, the undersigned has hereby set his/her hand and the seal of
[Authorized Participant] on the date set forth below.

Subscribed and sworn to before me                         By:
this          day of              , 20
                                                          Name:

                                                          Title:

                                                          Date:

Notary Public

                                    EXHIBIT B

                 CURRENCYSHARES(SM) BRITISH POUND STERLING TRUST

                               PURCHASE ORDER FORM

                          THE BANK OF NEW YORK, TRUSTEE

--------------------------------------------------------------------------------
                        CONTACT INFORMATION FOR ORDER EXECUTION:
Telephone order number:  (718) 315-4970 or 4967
Fax order number:        (718) 315-4881
Depository Instructions  (000-000-0000)/SWIFT [_________]

--------------------------------------------------------------------------------
Participant must complete all items in Part I. The Trustee, in its discretion
may reject any order not submitted in complete form.

I. TO BE COMPLETED BY PARTICIPANT:

Date:________________________________         Time:_____________________________

Broker Name:_________________________         Firm Name:________________________

DTC Participant Number:______________         Fax Number:_______________________

Telephone Number:____________________
                                              (One Basket = 50,000 [FXB] Shares)

                                        Number of Baskets Transacted:___________

Order #______________________________         Number written out:_______________

This Purchase Order is subject to the terms and conditions of the Depositary
Trust Agreement of the CurrencyShares British Pound Sterling Trust as currently
in effect and the Participant Agreement between the Authorized Participant, the
Trustee and the Sponsor named therein. All representations and warranties of the
Authorized Participant set forth in such Depositary Trust Agreement and such
Participant Agreement are incorporated herein by reference and are true and
accurate as of the date hereof.

The undersigned does hereby certify as of the date set forth below that he/she
is an Authorized Person under the Participant Agreement and that he/she is
authorized to deliver this Purchase Order to the Trustee on behalf of the
Authorized Participant. The Authorized Participant enters into this agreement
based on an estimated Basket British Pound Amount disseminated the previous
business day and recognizes the final Basket British Pound Amount represented
will be decreased based on the Trust's daily accrual. At the conclusion of the
trading day a final NAV will be disseminated to all Authorized Participants, and
the Basket British Pound Amount required for the Purchase Order entered into on
this day will be finalized and this Purchase Order will serve as a legally
binding contract for settlement in 3 business days.

_____________________________________         __________________________________
      Date                                        Authorized Person's Signature

II. TO BE COMPLETED BY TRUSTEE:

This certifies that the above order has been:

_________Accepted by the Trustee

_________Declined-Reason:_______________________________________________________

Final # of BRITISH Pounds____________         Final # of [FXB] Shares___________

___________________           _______         __________________________________
Date                          Time            Authorized Signature of Trustee

                                    EXHIBIT C

                       CURRENCYSHARES BRITISH POUND STERLING TRUST

                              REDEMPTION ORDER FORM

                          THE BANK OF NEW YORK, TRUSTEE

--------------------------------------------------------------------------------
                        CONTACT INFORMATION FOR ORDER EXECUTION:
Telephone order number:  (718) 315-4970 or 4967
Fax order number:        (718) 315-4881
Depository Instructions  (000-000-0000)/SWIFT [__________]

--------------------------------------------------------------------------------
Participant must complete all items in Part I. The Trustee, in its discretion
may reject any order not submitted in complete form.

I. TO BE COMPLETED BY PARTICIPANT:

Date:________________________________         Time:_____________________________

Broker Name:_________________________         Firm Name:________________________

DTC Participant Number:______________         Fax Number:_______________________

Telephone Number:____________________
                                              (One Basket = 50,000 [FXB] Shares)

                                        Number of Baskets Surrendered:__________

Order #______________________________         Number written out:_______________

This Redemption Order is subject to the terms and conditions of the Depositary
Trust Agreement of the CurrencyShares British Pound Sterling Trust as currently
in effect and the Participant Agreement between the Authorized Participant, the
Trustee and the Sponsor named therein. All representations and warranties of the
Authorized Participant set forth in such Depositary Trust Agreement and such
Participant Agreement are incorporated herein by reference and are true and
accurate as of the date hereof.

The undersigned does hereby certify as of the date set forth below that he/she
is an Authorized Person under the Participant Agreement and that he/she is
authorized to deliver this Redemption Order to the Trustee on behalf of the
Authorized Participant. The Authorized Participant enters into this agreement
based on an estimated Basket British Pound Amount disseminated the previous
business day and recognizes the final Basket British Pound Amount represented
will be decreased based on the Trust's daily accrual. At the conclusion of the
trading day a final NAV will be disseminated to all Authorized Participants, and
the Basket British Pound Amount required for the Redemption Order entered into
on this day will be finalized and this Redemption Order will serve as a legally
binding contract for settlement in 3 business days.

_____________________________________         __________________________________
      Date                                        Authorized Person's Signature

II. TO BE COMPLETED BY TRUSTEE:

This certifies that the above order has been:

_________Accepted by the Trustee

_________Declined-Reason:_______________________________________________________

Final # of British Pounds____________         Final # of [FXB] Shares___________

___________________           _______         __________________________________
Date                          Time            Authorized Signature of Trustee

                                  ATTACHMENT A

               CREATION AND REDEMPTION OF BRITISH POUND SHARES AND
                       RELATED BRITISH POUNDS TRANSACTIONS

Scope of Procedures and Overview

These procedures (the "Procedures") describe the processes by which one or more
Baskets of British Pound Sterling Trust shares (the "Shares") issuable by The
Bank of New York, as trustee (the "Trustee") of the CurrencyShares British Pound
Sterling Trust (the "Trust"), may be purchased or, once Shares have been issued,
redeemed by an Authorized Participant. Shares may be created or redeemed only in
blocks of 50,000 Shares (each such block, a "Basket"). Because the issuance and
redemption of Baskets also involve the transfer of British Pounds between the
Authorized Participant and the Trust, certain processes relating to the
underlying transfers of British Pounds also are described.

Under these Procedures, Baskets may be issued only in consideration for British
Pounds transferred to and held in the Trust's accounts maintained in London,
England by London Branch of JPMorgan Chase Bank, N.A., as depository (the
"Depository"). Capitalized terms used in these Procedures without further
definition have the meanings assigned to them in the Depositary Trust Agreement,
dated as of [____________], 2006, between Rydex Specialized Products LLC (the
"Sponsor"), the Trustee, the registered owners and beneficial owners from time
to time of Shares issued thereunder and all depositors (the "Trust Agreement"),
or the Participant Agreement entered into by each Authorized Participant with
the Sponsor and the Trustee.

For purposes of these Procedures, a "Business Day" is defined as any day other
than (i) a Saturday or Sunday or (ii) a day on which the New York Stock Exchange
(the "NYSE") is not open for regular trading at noon New York City time.

The Prospectus describes the creation and redemption process and the Trust; it
will be delivered by the Sponsor to each Authorized Participant prior to its
execution of the Participant Agreement. Baskets are issued and redeemed in
accordance with the Trust Agreement and the Participant Agreement. Baskets may
be issued and redeemed on any Business Day by the Trustee in exchange for
British Pounds, which the Trustee receives from Authorized Participants or
transfers to Authorized Participants, in each case on behalf of the Trust.
Authorized Participants will be required to pay a nonrefundable per order
transaction fee of $500 to the Trustee (the "Transaction Fee").

Authorized Participants and the Trust Transfer British Pounds and Baskets of
Shares

Upon acceptance of the Participant Agreement by the Sponsor and the Trustee, the
Trustee will assign a personal identification number (a "PIN") to each person
authorized to act for the Authorized Participant (and "Authorized Person"). This
will allow the Authorized Participant through its Authorized Person(s) to place
Purchase Order(s) or Redemption Order(s) (together, "Orders") for Baskets.

Important Notes:

o     Any Purchase Order is subject to rejection by the Trustee for the reasons
      set forth in the Trust Agreement.

o     All Orders are subject to the provisions of the Participant Agreement
      relating to unclear or ambiguous instructions.

                                CREATION PROCESS
                                    OVERVIEW

      The following describes the process by which Baskets are created. In
summary, an order to purchase one or more Baskets of Shares is placed by an
Authorized Participant with the Trustee by 4:00 p.m. New York City ("NYC") time
on the Business Day that is the Order Date under the Trust Agreement ("CREATION
T"), and a Basket is created by 9:30 a.m. NYC time (usually 3:30 p.m. Central
European Time ("CET")) on the third Business Day following CREATION T ("CREATION
T+3"). In order for the creation of a Basket to occur, the Authorized
Participant must transfer to the Trust British Pounds and the Trustee will
transfer to the Authorized Participant's account at The Depository Trust Company
("DTC") Shares corresponding to the British Pounds the Participant has
transferred to the Trust.

C1    CREATION T (PURCHASE ORDER TRADE DATE)

      C1.1     By the 4:00 p.m. NYC time (the "Order Cut-Off Time"), the
Authorized Participant submits to the Trustee the Authorized Participant's order
to create one or more Baskets of Shares (a "Purchase Order") in accordance with
the following process.

      C1.1.1   By the Order Cut-Off Time, an Authorized Person of the Authorized
Participant calls the Trustee at 718-315-4970 or 4967, notifying the Trustee
that the Authorized Participant wishes to place a Purchase Order for the Trustee
to create an identified number of Baskets of Shares and requesting that the
Trustee provide an order number. The Authorized Person provides a PIN as
identification to the Trustee.

      C1.1.2   Incoming telephone calls are queued and will be handled in the
sequence received. The Trustee will process Purchase Orders if the phone call
initiated by the Authorized Person is placed before the Order Cut-Off Time, even
though the remainder of the order process is not completed until after the Order
Cut-Off Time. Accordingly, do not hang up and redial.

      C1.1.3   Purchase Orders initiated after the Order Cut-Off Time will be
rejected.

      C1.1.4   During the phone call from the Authorized Person of the
Authorized Participant to initiate a Purchase Order, the Trustee will give an
order number for the Authorized Participant's Purchase Order.

      C1.1.5   Within 15 minutes after receiving the order number from the
Trustee, the Authorized Participant will fax the Purchase Order to the Trustee
using the Purchase Order Form included as part of the Participant Agreement.

      C1.1.6   The Purchase Order Form provides, among other things, for the
number of Baskets that the Authorized Participant is ordering and the condition
that the Purchase Order is subject to the Trustee's receipt of the Transaction
Fee by (DTC SPO Charge) prior to delivery of the Baskets on CREATION T+3.

      C1.1.7   If the Trustee has not received the Purchase Order Form from the
Authorized Participant within 15 minutes after the Authorized Person placed the
phone call to the Trustee, the Trustee places a phone call to the Authorized
Participant to inquire about the status of the order. If the Authorized
Participant does not fax the Purchase Order Form to the Trustee within 15
minutes after the Trustee's phone call, the Authorized Participant's order is
cancelled, but the Authorized Participant will remain liable to the Trustee for
the Transaction Fee.

      C1.2     If the Trustee has received the Authorized Participant's Purchase
Order Form on time in accordance with the preceding timing rules, then by 5:00
p.m. NYC time on CREATION T, the Trustee will return to the Participant a copy
of the Purchase Order Form submitted, marking it "Affirmed subject to receipt of
the Transaction Fee prior to delivery of Baskets on CREATION T+3" and
indicating, on a

                                       A-2

preliminary basis subject to confirmation, the number of British Pounds the
Participant must transfer in exchange for the Basket(s).

      C1.3     The Participant ensures that by 3:30 p.m. CET (usually 9:30 a.m.
NYC time) on CREATION T+3 that sufficient British Pounds are wire transferred to
the Depository.

      C1.4     NOTES FOR AUTHORIZED PARTICIPANT (CREATION T)

      C1.4.1   The Authorized Participant must be a participating member of DTC.

      C1.4.2   The Authorized Participant must be able to transfer British
Pounds via (RTGSplus, EBA EURO1 or TARGET). SWIFT BIC - CHASGB2L.

      C1.4.3   The Authorized Participant must have signed and delivered the
Participant Agreement to the Trustee. The Trustee will accept an Authorized
Participant based on the representations made by the Authorized Participant in
the Participant Agreement. The Trustee will not perform other due diligence or
investigation of Authorized Participants.

      C1.4.4   The Authorized Participant must have in place, before a Purchase
Order can be processed, account instructions for British Pounds transfers with
its sending financial institution.

      C1.4.5   By 3:30 p.m. CET on CREATION T+3, British Pounds in the amount
needed to acquire the Shares must be standing to the credit of the Deposit
Account in order for the Authorized Participant to receive Shares on CREATION
T+3.

      C1.4.6   An Authorized Participant may only deliver British Pounds for
credit to the Depository in the following ways (RTGSplus, EBA EURO1 or TARGET).
SWIFT BIC - CHASGB2L.

      C1.4.7   Prior to the delivery of the Baskets by the Trustee on CREATION
T+3, the Authorized Participant must accept a DTC SPO Charge for the applicable
Transaction Fee from the Trustee. Purchase Orders for which the Trustee has not
received the Transaction Fee will be cancelled subject to handling pursuant to
supplemental procedures to be issued, but in any event the Authorized
Participant will remain obligated to the Trustee for the Transaction Fee.

      C1.5     NOTES FOR TRUSTEE (CREATION T)

      C1.5.1   Based on the Purchase Orders placed with it on CREATION T, the
Trustee sends an authenticated electronic message (SWIFT MT210) to the
Depository (by T+1) indicating the approximate total amount of British Pounds
that the Depository will receive from the Authorized Participant on CREATION
T+3.

C2    CREATION T+1

      C2.1     The Purchase Orders and instructions given on CREATION T are all
pending with the Trustee.

      C2.2     The Depository receives the Trustee's message (SWIFT MT210) about
the approximate total amount of British Pounds the Authorized Participant is
required to transfer not later than 3:30 p.m. CET on CREATION T+3.

C3    CREATION T+2

      On CREATION T+2 the Trustee notifies the Authorized Participant of the
final amount of British Pounds that must be deposited in the Deposit Account
(the "Basket British Pounds Amount") not later than 3:30 p.m. CET on CREATION
T+3 for creation of the Baskets on that day.

                                       A-3

C4    CREATION T+3

      C4.1     By 3:30 p.m. CET (usually 9:30 a.m. NYC time), the Depository has
received each Authorized Participant's wire transfer of the Basket British
Pounds Amount in the Deposit Account.

      C4.2     As of 3:30 p.m. CET time, the Depository notifies the Trustee
that the Basket British Pounds Amount has been transferred into the Deposit
Account by an authenticated electronic message (SWIFT MT910).

      C4.3     Prior to the delivery of the Baskets on CREATION T+3, the Trustee
must have received the Transaction Fee from the Authorized Participant (SPO/DTC
Charge).

      C4.4     At 11:00 a.m. NYC time, following receipt of the notice from the
Depository confirming the transfer of the Basket British Pounds Amount to the
Deposit Account, the Trustee authorizes the creation and issuance of the Baskets
ordered by each Authorized Participant on CREATION T for which the Trustee has
received confirmation from the Depository of receipt of the Basket British
Pounds Amount.

      C4.5     By 11:00 a.m. NYC time, following receipt of the notice from the
Depository confirming the transfer of the Basket British Pounds Amount to the
Deposit Account, the Trustee notifies its transfer agent service desk that it
has authorized the creation and issuance of Baskets in the number specified, and
to increase the number of Shares outstanding accordingly. By 11:00 a.m. NYC
time, following receipt of the notice from the Trustee that it has authorized
the creation and issuance of Shares in the number specified, the Trustee's
transfer agent service desk increases the number of Shares outstanding, and
notifies the Trustee and the Trustee's DTC operations desk that an increased
number of Shares is now outstanding and available for release in accordance with
the Trustee's instructions.

      C4.6     By 11:00 a.m. NYC time, following receipt of notice from the
Trustee's transfer agent service desk that the number of Shares now outstanding
has been increased, the Trustee notifies its DTC operations desk to release the
increased number of Shares through DTC to the DTC participant accounts of the
Authorized Participants scheduled to receive Baskets on CREATION T+3 for whom
the Trustee has received confirmation from the Depository that the Basket
British Pounds Amount has been received into the Deposit Account.

      C4.7     Following the close of business (usually 3:30 p.m. CET time) on
CREATION T+3, the Depository makes appropriate entries in its books and records
to reflect the creation of Baskets.

      C4.8     Following the close of business (usually 3:30 p.m. CET time) on
CREATION T+3, the Depository British Pounds system updates account records,
recording the movements of British Pounds in the Deposit Account and providing
updated balances in the affected accounts as of the close of business (usually
3:30 p.m. CET time) on CREATION T+3.

      C4.9     Following the close of business (usually 3:30 p.m. CET time) on
CREATION T+3, the Depository British Pounds system automatically generates
authenticated electronic messages constituting a statement of the activity
affecting the Deposit Account (SWIFT MT940 or SWIFT MT950), (received only by
the Trustee).

      C4.10    If the Authorized Participant fails to deliver British Pounds by
3:30 p.m. CET on CREATION T+3, (a) the Trustee will apply a late fee equal to
four (4) times the creation charge; and (b) the Depository may, in its
reasonable discretion, apply a late fee calculated in accordance with standard
industry practices pursuant to The European Interbank Compensation Guidelines,
as follows:

      (Principal Amount) x (_____+25bps) x (# calendar days that the funds are
late) divided by 360 x 100.

                                       A-4

      In the event any such late fees are assessed, the Trustee will coordinate
with the Authorized Participant to arrange payment of such fees.

                               REDEMPTION PROCESS
                                    OVERVIEW

      The following describes the process by which Baskets are redeemed. In
summary, an order to redeem one or more Baskets of Shares is placed by an
Authorized Participant with the Trustee by 4:00 p.m. NYC time on the Business
Day that is the Order Date under the Trust Agreement ("REDEMPTION T"), and a
Basket is redeemed by 3:30 p.m. CET (usually 9:30 a.m. NYC time) on the third
Business Day following REDEMPTION T ("REDEMPTION T+3"). In order for the
redemption of a Basket to occur, the Authorized Participant must pay a
transaction fee and the Trustee will instruct the Depository to transfer to the
Authorized Participant British Pounds corresponding to the Shares delivered for
redemption.

R1    REDEMPTION T (REDEMPTION ORDER TRADE DATE)

      R1.1     By the Order Cut-Off Time, the Authorized Participant submits to
the Trustee the Authorized Participant's order to redeem one or more Baskets of
Shares (a "Redemption Order") in accordance with the following process.

      R1.1.1   By the Order Cut-Off Time, an Authorized Person of the Authorized
Participant calls the Trustee at 718-315-4970 or 4967, notifying the Trustee
that the Authorized Participant wishes to place a Redemption Order for the
Trustee to redeem an identified number of Baskets of Shares and requesting that
the Trustee provide an order number. The Authorized Person provides a PIN as
identification to the Trustee.

      R1.1.2   Incoming telephone calls are queued and will be handled in the
sequence received. The Trustee will process the Redemption Order(s) if the phone
call initiated by the Authorized Person is placed before the Order Cut-Off Time,
even though the remainder of the order process is not completed until after the
Order Cut-Off Time. Accordingly, do not hang up and redial.

      R1.1.3   Redemption Orders initiated after the Order Cut-Off Time are
rejected.

      R1.1.4   During the phone call from the Authorized Person of the
Authorized Participant to initiate a Redemption Order, the Trustee will give an
order number for the Authorized Participant's Redemption Order.

      R1.1.5   Within 15 minutes after the phone call initiating the Redemption
Order, the Authorized Participant will fax the Redemption Order to the Trustee
using the Redemption Order Form included as part of the Participant Agreement.

      R1.1.6   The Redemption Order Form provides, among other things, for the
number of Baskets that the Authorized Participant is redeeming and the condition
that the Redemption Order is subject to Trustee's receipt of the Transaction Fee
by SPO/DTC Charge prior to the delivery of the British Pounds to the Authorized
Participant on REDEMPTION T+3.

      R1.1.7   If the Trustee has not received the Redemption Order Form from
the Authorized Participant within 15 minutes after the Authorized Person placed
the phone call to the Trustee, the Trustee places a phone call to the Authorized
Participant to inquire about the status of the order. If the Authorized
Participant does not fax the Redemption Order Form to the Trustee within 15
minutes after the Trustee's phone call, the Authorized Participant's order is
cancelled, but the Authorized Participant will remain liable to the Trustee for
the Transaction Fee.

                                       A-5

      R1.2     If the Trustee has received the Authorized Participant's
Redemption Order Form on time in accordance with the preceding timing rules,
then by 5:00 p.m. NYC time on REDEMPTION T, the Trustee will return to the
Authorized Participant a copy of the Redemption Order Form submitted, marking it
"Affirmed subject to receipt of Transaction Fee prior to delivery of the British
Pounds on REDEMPTION T+3" and indicating, on a preliminary basis subject to
confirmation, the number of British Pounds the Participant will receive upon
redemption of the indicated Basket(s) of Shares.

      R1.3     For each Redemption Order, the Trustee sends an authenticated
electronic message (SWIFT MT202 or MT103plus) to the Depository indicating the
amount of British Pounds to transfer from the Deposit Account by wire (RTGSplus,
EBA EURO1 or TARGET) to the Authorized Participant's designated account by 3:30
p.m. CET (usually 9:30 a.m. NYC time) on REDEMPTION T+3.

      R1.4     NOTES FOR TRUSTEE AND DEPOSITORY (REDEMPTION T)

      R1.4.1   The Trustee will prepare an authenticated electronic message
(SWIFT MT202 or MT103plus) containing instructions on REDEMPTION T specifying
REDEMPTION T+3 as the date on which the instructions will be executed.

      R1.4.2   The Trustee will only deliver the authenticated electronic
message (SWIFT MT202 or MT103plus) to the Depository on T+3 after confirming the
Trustee's receipt of Shares from the Authorized Participant through DTC.

R2    REDEMPTION T+1

      R2.1     Redemption Orders and related instructions are in process.

      R2.2     The Depository receives the authenticated electronic message
(SWIFT) or e-mail from the Trustee notifying the Depository of the approximate
amount of British Pounds needed to be remitted to each Authorized Participant
that has placed a Redemption Order on REDEMPTION T+3.

R3    REDEMPTION T+2

      On REDEMPTION T+2 the Trustee notifies the Authorized Participant of the
final amount of British Pounds the Authorized Participant will receive upon
redemption of the Basket(s) on Redemption T+3 (the "Basket British Pounds
Amount").

R4    REDEMPTION T+3

      R4.1     Prior to the delivery of the Basket British Pounds Amount on
REDEMPTION T+3, the Trustee must have received the Transaction Fee from the
Authorized Participant (SPO/DTC) Charge.

      R4.2     By 3:30 p.m. CET (usually 9:30 a.m. NYC time), the Authorized
Participant delivers free to the Trustee's participant account at DTC
(#___________) the Shares to be redeemed. The Authorized Participant telephones
the Trustee's DTC operations desk ((718) 315-4970 or 4967) to expect the
Authorized Participant's Shares through DTC.

      R4.2.1   By 3:30 p.m. CET (usually 9:30 a.m. NYC time), the Trustee's DTC
operations desk notifies the Trustee whether the Shares being redeemed by the
Authorized Participant have been received into the Trustee's participant account
at DTC.

      R4.2.2   By 3:30 p.m. CET (usually 9:30 a.m. NYC time), if the Shares
being redeemed by the Authorized Participant have been received into the
Trustee's participant account at DTC, the Trustee's DTC operations desk accepts
the Shares to be redeemed, notifies the Trustee that the Trustee has received
the Authorized Participant's Shares and identifies the Authorized Participant
from whom the Shares have been received.

                                       A-6

      R4.2.3   By 3:30 p.m. CET (usually 9:30 a.m. NYC time), if the Shares of a
redeeming Authorized Participant have not been received into the Trustee's
participant account at DTC, the Trustee's operations desk notifies the Trustee
that the Trustee has not received the Shares from the Authorized Participant,
and identifies the Authorized Participant from whom Shares have not been
received.

      R4.3     By 3:30 p.m. CET (usually 9:30 a.m. NYC time), the Trustee sends
an authenticated electronic message (SWIFT MT202 or MT103plus) to the Depository
directing the Depository to transfer the Basket British Pounds Amount to the
accounts of those Authorized Participants from whom the Trustee has received
Shares. The British Pounds will be sent to the designated accounts by wire
(RTGSplus, EBA EURO1 or TARGET).

      R4.4     As of 3:30 p.m. CET time(usually 9:30 a.m. NYC time), following
the receipt of the authenticated confirmatory electronic message from the
Trustee, the Depository executes the instructions from the Trustee to wire the
Basket British Pounds Amount from the Trust Account and to transfer the Basket
British Pounds Amount to the Authorized Participant's designated account.

      R4.4.1   By DTC free delivery cut-off time (usually 2:00 p.m. NYC time),
the Trustee's DTC operations desk instructs the Trustee's transfer agent
services desk to cancel Shares received for redemption.

      R4.4.2   By DTC free delivery cut-off time (usually 2:00 p.m. NYC time),
the Trustee's transfer agent services desk cancels the Authorized Participant's
Shares received for redemption and reduces the number of Trust Shares
outstanding.

      R4.5     Following the close of business (usually 3:30 p.m. CET) on
REDEMPTION T+3, the Depository makes the appropriate entries in its books and
records to reflect the redemptions.

      R4.6     Following the close of business (usually 3:30 p.m. CET) on
REDEMPTION T+3, the Depository British Pounds system updates its account
records, recording the movements of British Pounds in the Deposit Account and
providing updated balances in the affected accounts as of the close of business
(usually 3:30 p.m. CET) on REDEMPTION T+3.

      R4.7     Following the close of business (usually 3:30 p.m. CET) on
REDEMPTION T+3, the Depository British Pounds system automatically generates an
authenticated electronic message (SWIFT MT140 or Swift MT950) constituting a
statement of the activity affecting the Deposit Account (received only by the
Trustee).

                                       A-7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}]]