Exhibit (9)(c)
Service Agreement between
Rydex Series Trust and
PADCO Service Company, Inc.
PAGE
Amendments,
Dated September 25, 1996,
to
Service Agreement
Between Rydex Series Trust
and PADCO Service Company, Inc.,
Dated September 19, 1995
PAGE
Amendments to
SERVICE AGREEMENT
between
RYDEX SERIES TRUST
and
PADCO SERVICE COMPANY, INC.
Amendments to Delete Provisions Relating to Schedule IV and
Services Provided Thereunder. The following Amendments are
made to the Service Agreement between Rydex Series Trust (the
"Trust") and PADCO Service Company, Inc. (the "Servicer"),
dated September 19, 1995, and as amended on March 8, 1996 (the
"Service Agreement"), in contemplation of the Trust entering
into a separate Portfolio Accounting Services Agreement with
the Servicer, and these Amendments are hereby incorporated
into and made a part of the Service Agreement:
The following fourth WHEREAS clause of the
Service Agreement is deleted in its entirety,
effective September 25, 1996:
WHEREAS, the Trust desires to appoint the
Servicer as the Trust's accounting
services agent: (i) to perform certain
accounting and recordkeeping functions
required of a duly-registered investment
company; (ii) to file certain financial
reports; (iii) to maintain and preserve
certain books, accounts, and records as
the basis for such reports; and (iv) to
perform certain daily functions in
connection with such accounts and records;
and the Servicer is willing to perform
s u c h functions upon the terms and
conditions herein set forth;
Section 1 of the Service Agreement is amended,
effective September 25, 1996, to delete that
portion of the introductory language to that Section
referring to Schedule IV of the Agreement, and shall
read as follows:
In consideration of the compensation to
be paid by the Trust to the Servicer
PAGE
pursuant to Section 4 of this Agreement,
the Servicer will:
The following Section 1.d. of the Service Agreement is
deleted in its entirety, effective September 25, 1996:
d. Provide the Trust with certain accounting and
recordkeeping services, including, without
limitation, those services described on Schedule IV,
a t tached hereto. The Servicer will maintain
sufficient trained personnel and equipment and
supplies to perform such services in conformity with
the Controlling Documents and such other reasonable
standards of performance as the Trust may from time
to time specify, and otherwise in an accurate,
timely, and efficient manner.
The first paragraph of Section 4 of the Service Agreement
is amended to delete that portion of the language of that
Section referring to Schedule IV of the Agreement, and shall
read as follows:
A s consideration for the services provided
hereunder, the Trust will pay the Servicer a fee on
the last day of each month in which this Agreement
is in effect, at the following annual rates based on
the average daily net assets (the "Assets") of each
of the Trust's series for such month:
Schedule IV to the Service Agreement is deleted in its
entirety, effective September 25, 1996.
Amendment to Grant Authority to the Servicer to Engage Sub-
Servicers. The following amendment is made to the Service
Agreement between the Trust and the Servicer, and are hereby
incorporated into and made a part of the Service Agreement:
Paragraphs 11 through 16 are redesignated 12 through 17,
respectively.
A new paragraph 11 is added and shall read as follows:
11. Authority to Engage Sub-Servicers.
In providing the services and assuming the
obligations set forth herein, the Servicer
may, at its expense, employ one or more
sub-servicers, or may enter into such
service agreements as the Servicer deems
appropriate in connection with the
performance of the Servicer s duties and
obligations hereunder. Reference herein
to the duties and responsibilities of the
2
Servicer shall include any sub-servicer
employed by the to the extent that the
Servicer shall delegate such duties and
responsibilities to such sub-servicer.
Amendment to Include the Rydex High Yield Fund Under This
Agreement. The following Amendment is made to Section 4 of
the Service Agreement between the Trust and the Servicer, and
is hereby incorporated into and made a part of the Service
Agreement:
Section 4 of the Service Agreement is amended,
effective September 25, 1996, to read as follows:
"As consideration for the services
provided hereunder, the Trust will pay the
Servicer a fee on the last day of each
month in which this Agreement is in
effect, at the following annual rates
based on the average daily net assets (the
"Assets") of each of the Trust's series
for such month:
The Nova Fund
0.25% of Assets
The Rydex U.S. Government Money Market
Fund
0.20% of Assets
The Rydex Precious Metals Fund
0.20% of Assets
The Ursa Fund
0.25% of Assets
The Rydex U.S. Government Bond Fund
0.20% of Assets
The Rydex OTC Fund
0.20% of Assets
The Juno Fund
0.25% of Assets
The Rydex Institutional Money Market Fund
3
0.20% of Assets
The Rydex High Yield Fund
0.20% of Assets
In the event that this Agreement commences
on a date other than on the beginning of
any calendar month, or if this Agreement
terminates on a date other than the end of
any calendar month, the fees payable
hereunder by the Trust shall be
proportionately reduced according to the
number of days during such month that
services were not rendered hereunder by
the Servicer."
In witness whereof, the parties hereto have caused this
Amendment to be executed in their names and on their behalf
and through their duly-authorized officers as of the 25th day
of September, 1996.
RYDEX SERIES TRUST
/s/ Xxxxxx X. Xxxxxx, Xx.
By: Xxxxxx X. Xxxxxx, Xx.
Title: President
PADCO SERVICE COMPANY, INC.
/s/ Xxxxxx X. Xxxxxx, Xx.
By: Xxxxxx X. Xxxxxx, Xx.
Title: President
4
Amended and Restated
Service Agreement
Between Rydex Series Trust
and PADCO Service Company, Inc.,
Dated September 25, 1996
PAGE
AMENDED AND RESTATED
SERVICE AGREEMENT
THIS AMENDED AND RESTATED SERVICE AGREEMENT (the
"Agreement"), dated as of September 25, 1996, is entered into
by and between RYDEX SERIES TRUST, a Delaware business trust
(the "Trust"), and PADCO SERVICE COMPANY, INC., a Maryland
corporation (the "Servicer").
W I T N E S S E T H:
WHEREAS, the Trust is an investment company registered
under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, the Servicer is registered as a transfer agent
under the Securities Exchange Act of 1934, as amended; and
WHEREAS, the Trust wishes to have the Servicer perform
general administrative, shareholder, dividend disbursement,
transfer agent, and registrar and other services for the Trust
and to act in such capacity in the manner set forth in this
Agreement, and the Servicer is willing to act in such capacity
in accordance with the provisions of this Agreement.
NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein contained, and for other good and
valuable consideration, the receipt, sufficiency, and adequacy
o f which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree and promise as follows:
1. Services To Be Provided.
In consideration of the compensation to be paid by the
Trust to the Servicer pursuant to Section 4 of this Agreement,
the Servicer will:
a. Manage, supervise, and conduct the affairs and
business of the Trust and matters incidental thereto. In the
performance of its duties, the Servicer will comply with the
Trust's Prospectus and its Statement of Additional
Information, as the same may be amended from time to time, all
as delivered to the Servicer (collectively, the "Controlling
Documents"). The Servicer will also use its best efforts to
safeguard and promote the welfare of the Trust and to comply
with other policies which the Board of Trustees of the Trust
(the "Board") may from time to time specify. The Servicer
will furnish or provide to the Trust general administrative
services as the Trust may reasonably require in the conduct of
its affairs and business, including, without limitation, the
services described on Schedule I attached hereto.
b. Provide the Trust with all required shareholder
a n d dividend disbursement services, including, without
limitation, those services described on Schedule II, attached
hereto. The Servicer will maintain sufficient trained
personnel and equipment and supplies to perform such services
in conformity with the Controlling Documents and such other
reasonable standards of performance as the Trust may from time
to time specify, and otherwise in an accurate, timely, and
efficient manner.
2
c. Provide the Trust with all required stock transfer
agent and registrar services, including, without limitation,
those services described on Schedule III attached hereto. The
Servicer will maintain sufficient trained personnel and
equipment and supplies to perform such services in conformity
with the Controlling Documents and such other reasonable
standards of performance as the Trust may from time to time
specify, and otherwise in an accurate, timely, and efficient
manner.
2. Obligations of the Trust.
The Trust will have the following obligations under
this Agreement:
a. The Trust shall keep the Servicer continuously and
fully informed as to the composition of the Trust's investment
portfolio and the nature of all of the Trust's assets and
liabilities, and shall cause the investment managers of the
Trust's series to cooperate with the Servicer in all matters
so as to enable the Servicer to perform the Servicer's
functions under this Agreement.
b. The Trust shall furnish the Servicer with any
materials or information which the Servicer may reasonably
request to enable the Servicer to perform the Servicer's
functions under this Agreement.
c. The Trust shall turn over to the Servicer the
accounts and records previously maintained by or for the
3
Trust. The Servicer shall be entitled to rely exclusively on
the completeness and correctness of the accounts and records
turned over to the Servicer by the Trust; provided, that such
reliance is made in good faith, and the Trust shall indemnify
and hold the Servicer harmless of and from any and all
e x penses (including, without limitation, attorneys' and
accountants' fees), damages, claims, suits, liabilities,
actions, demands, and losses whatsoever arising out of or in
connection with any error, omission, inaccuracy, or other
deficiency of such accounts and records or in connection with
the failure of the Trust to provide any portion of such
accounts and records or to provide any information to the
Servicer necessary or appropriate to perform the Servicer's
f u n ctions hereunder; and provided, further, that such
accounts, records, and other information shall belong to the
Trust and be considered confidential, and shall not be
disclosed to other than Federal and state regulators without
permission from the Trust.
3. Payment of Fees and Expenses.
a. The Servicer will pay all of the fees and expenses
incurred by the Servicer in providing the Trust with the
services and facilities described in this Agreement, except as
otherwise provided herein.
b. N o twithstanding any other provision of this
Agreement, the Trust will pay, or reimburse the Servicer for
4
the payment of, all fees and expenses incurred by the Servicer
not directly related to the Servicer's providing the Trust
with the services and facilities described in this Agreement,
including, but not limited to, the following described fees
a n d expenses of the Trust (hereinafter called "Direct
Expenses") whether or not billed to the Trust, the Servicer,
or any related entity:
(i) f e es and expenses relating to investment
advisory services;
(ii) fees and expenses of custodian and depositories
and banking services fees and costs;
(iii) fees and expenses of outside legal
counsel and any legal counsel directly
employed by the Trust;
(iv) fees and expenses of independent auditors and
i n c o me tax preparation and expenses of
o b t aining quotations for the purpose of
calculating the value of the Trust's assets;
(v) fees and expenses of consultants;
(vi) interest charges;
(vii) all Federal, state, and local taxes
(including, without limitation, stamp,
excise, income, and franchise taxes);
(viii) costs of stock certificates and other
expenses of issuing and redeeming shares
of the Trust ("Shares");
(ix) c o s t s incidental to or associated with
shareholder meetings;
(x) fees and expenses of registering or qualifying
s h ares for sale under Federal and state
securities laws;
(xi) costs (including postage) of printing and
m a iling prospectuses, confirmations, proxy
statements, and other reports and notices to
shareholders and to governmental agencies;
5
(xii) premiums on all insurance and bonds and
other expenses of fidelity and liability
i n surance and bonding covering the
Trust;
(xiii) fees and expenses of the disinterested
Trustees and expenses incidental to the
meetings of the Board;
(xiv) fees and expenses paid to any securities
pricing organization;
(xv) dues and expenses associated with membership in
the Investment Company Institute and the Mutual
Fund Education Alliance;
(xvi) costs for incoming telephone WATS lines;
and
(xvii) organizational costs.
4. Compensation.
As consideration for the services provided hereunder, the
Trust will pay the Servicer a fee on the last day of each
month in which this Agreement is in effect, at the following
annual rates based on the average daily net assets (the
"Assets") of each of the Trust's series for such month:
The Nova Fund
0.25% of Assets
The Rydex U.S. Government Money Market Fund
0.20% of Assets
The Rydex Precious Metals Fund
0.20% of Assets
6
The Ursa Fund
0.25% of Assets
The Rydex U.S. Government Bond Fund
0.20% of Assets
The Rydex OTC Fund
0.20% of Assets
The Juno Fund
0.25% of Assets
The Rydex Institutional Money Market Fund
0.20% of Assets
The Rydex High Yield Fund
0.20% of Assets
In the event that this Agreement commences on a date
other than on the beginning of any calendar month, or if this
Agreement terminates on a date other than the end of any
calendar month, the fees payable hereunder by the Trust shall
be proportionately reduced according to the number of days
during such month that services were not rendered hereunder by
the Servicer.
7
5. Reports to the Board of Trustees.
The Servicer will consult with the Board at such times as
the Board reasonably requests with respect to the services
provided hereunder, and the Servicer will cause its officers
to attend such meetings with the Board, and to furnish such
oral or written reports to the Board, as the Board may
reasonably request. In addition, the Servicer agrees to
provide to the Board such reports and other information as the
Board may reasonably request in order to enable the Board to
perform a review of the Servicer's performance under this
Agreement.
6. Term of Agreement.
This Agreement is effective on the date hereof. This
Agreement will remain in full force and effect until September
19, 1996, unless terminated earlier in accordance with its
terms, and thereafter from year to year; provided, that: (a)
such continuance is approved by (i) either a vote of the
majority of the Trustees or a vote of a "majority of the
outstanding voting securities" (as defined in the 0000 Xxx) of
the Trust and (ii) a majority of the Trustees who are not
"interested persons" (as defined at Section 2(a)(19) of the
0000 Xxx); and (b) the following findings are made by a
majority of the Trustees who are not "interested persons" (as
defined at Section 2(a)(19) of the 1940 Act): (i) that this
Agreement is in the best interests of the Trust; (ii) that the
8
services to be performed pursuant to this Agreement are
services required for the operation of the Trust; (iii) that
the Servicer can provide services the nature and quality of
which are at least equal to those provided by others offering
the same or similar services; and (iv) that the fees for such
services are fair and reasonable in light of the usual and
customary charges made by others for services of the same
nature and quality.
7. Termination.
This Agreement may be terminated, without the payment of
any penalty, by either party hereto upon at least sixty (60)
days' written notice to the other party. Any termination by
the Trust will be pursuant to a vote of a majority of the
Trustees.
8. Standard of Care.
a. Except as provided by law, the Servicer will be
under no liability or obligation to anyone with respect to any
failure on the part of the Board or any investment manager to
perform any of their obligations under the Controlling
Documents, or for any error or omission whatsoever on the part
of the Board or any investment manager.
b. The Servicer will not be liable for any error of
judgment or mistake of law or for any loss caused by the Trust
in connection with the matters to which this Agreement
9
relates; provided, however, that the Servicer has acted in the
premises with the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent man acting in
like capacity and familiar with such matters would use in the
conduct of any enterprise of a like character and with like
aims, and in accordance with such other requirements of law;
provided, further, however, that nothing in this Agreement
will protect the Servicer against any liability to the Trust
to which the Servicer would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the
performance of the Servicer's duties hereunder or by reason of
t h e S ervicer's reckless disregard of the Servicer's
obligations and duties hereunder.
9. Other Activities of the Servicer.
Subject to the provisions of Section 5 of this Agreement,
with respect to advance notice of the Servicer's taking on of
new clients or ventures of material significance, nothing
herein contained will limit or restrict the right of the
Servicer to engage in any other business or to render services
of any kind to any other corporation, firm, individual, or
association.
10. Scope of Authority.
a. Shares purchased by the Servicer on behalf of
shareholders of the Trust ("Shareholders") will be registered
10
with the Servicer, as the Trust's transfer agent, in the
Servicer's name or in the name of the Servicer's nominee. The
Shareholder will be the beneficial owner of Shares purchased
and held by the Servicer in accordance with the Shareholder's
instructions and the Shareholder may exercise all rights of a
Shareholder of the Trust.
b. Neither the Servicer nor any of the Servicer's
officers, employees, agents, or assigns are authorized to make
any representations concerning the Trust or the Shares, except
for those representations contained in the Trust's then-
current prospectus for such Shares, copies of which will be
supplied by the Trust to the Servicer, or in such supplemental
literature or advertising as may be authorized by the Trust in
writing.
11. Authority to Engage Sub-Servicers.
In providing the services and assuming the obligations
set forth herein, the Servicer may, at the sole expense of the
Servicer, employ one or more sub-servicers, or may enter into
such service agreements as the Servicer deems appropriate in
connection with the performance of the Servicer s duties and
obligations hereunder. Reference herein to the duties and
responsibilities of the Servicer shall include the duties and
responsibilities of any sub-servicers employed by the Servicer
to the extent that the Servicer shall delegate such duties and
responsibilities to such sub-servicer.
11
12. Indemnification.
a. The Trust shall indemnify the Servicer and hold the
Servicer harmless from and against all actions, suits, and
claims, whether groundless or otherwise, arising directly or
indirectly our of or in connection with the Servicer's
performance under this Agreement and from and against any and
a l l l osses, damages, costs, charges, attorneys' and
a c c ountant's fees, payments, expenses, and liabilities
incurred by the Servicer in connection with any such action,
suit, or claim unless caused by the Servicer's breach of this
Agreement, negligence, or willful misconduct. The Servicer
shall not be under any obligation to prosecute or to defend
any action, suit, or claim arising out of or in connection
with the Servicer's performance under this Agreement, which,
in the opinion of the Servicer's counsel, may involve the
Servicer in expense or liability, and the Trust shall, so
often as reasonably requested, furnish the Servicer with
satisfactory indemnity against such expense or liability, and
upon request of the Servicer, the Trust shall assume the
entire defense of any action, suit, or claim subject to the
foregoing indemnity; provided, however, that the Servicer
shall give the Trust notice of any such action, suit, or claim
brought against the Servicer.
b. The Servicer shall indemnify the Trust and hold the
Trust harmless from all claims and liabilities (including
reasonable attorneys' and accountants' expenses) incurred or
12
assessed against the Trust arising from the Servicer's
negligence, wilful misconduct, or breach of this Agreement.
13. Notices.
a. Communications to the Servicer from the Trust or the
Board shall be addressed to:
Rydex Series Trust
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
b. Communications from the Servicer to the Trust
shall be addressed to:
PADCO Service Company, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
c. In the event of a change of address, communications
will be addressed to such new address as designated in a
written notice from the Trust or the Servicer, as the case may
be. All communications addressed in the above manner and by
registered mail or delivered by hand will be sufficient under
this Agreement.
14. Law Governing.
This Agreement is governed by the laws of the State of
Maryland (without reference to such state's conflict of law
rules).
13
15. Counterparts.
This Agreement may be executed in counterparts, each of
which shall be deemed an original, but which together shall
constitute one and the same instrument.
16. Binding Effect and Assignment.
This Agreement shall be binding upon the parties hereto
a n d their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the
Trust without the written consent of the Servicer, or by the
Servicer without the written consent of the Trust, in each
case authorized or approved by a resolution of the Trust's
Trustees.
14
17. Amendment, Modification, and Waiver.
No term or provision of this Agreement may be amended,
modified, or waived without the affirmative vote or action by
written consent of the Servicer and the Trust effected in
accordance with the 1940 Act and Section 6 of this Agreement.
IN WITNESS WHEREOF, the Servicer and the Trust have
executed this Agreement as of the date first written above.
RYDEX SERIES TRUST
By: /s/ Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxx X. Xxxxxx, Xx.
Title: President
PADCO SERVICE COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxx X. Xxxxxx, Xx.
Title: President
15
Schedule I
General Administrative Services
The Servicer agrees to provide the Trust with all
required general administrative services, including, without
limitation, the following:
1. Office space, equipment, and personnel.
2. Clerical and general back office services.
3. Bookkeeping, internal accounting, secretarial,
and other general administrative services.
4. P r eparation of all reports, prospectuses,
statements of additional information, proxy
statements, and all other materials required to
be filed or furnished by the Trust under
Federal and state securities laws.
5. Maintaining ledgers and determining net asset
values.
I-1
Schedule II
Shareholder and Dividend Disbursement Services
The Servicer agrees to provide the Trust and the
Shareholders with all required shareholder and dividend
disbursement services ("Services"), including, without
limitation, the following:
1. The Servicer shall provide the following services to the
Shareholders of the Trust:
a. A g g regating and processing purchases and
redemption requests for Trust Shares from
Shareholders.
b. Processing dividend payments from the Trust on
behalf of Shareholders.
c. Providing information periodically to
Shareholders showing their positions in Shares.
d. Arranging for bank wires.
e. Responding to Shareholder inquiries relating to
the services performed by the Servicer.
f. Providing subaccounting with respect to Shares
beneficially owned by Shareholders.
g. As required by law, forwarding shareholder
communications from the Trust (such as proxies,
shareholder reports, annual and semi-annual
f i n ancial statements, and dividend,
disbursement, and tax notices) to Shareholders.
h. Providing such other similar services as the
Trust may reasonably request to the extent the
Servicer is permitted to do so under applicable
statues, rules, or regulations.
i. Provide to Shareholders a schedule of any fees
that the Servicer may charge directly to the
Shareholders for such Services.
2. The Servicer shall also provide the following additional
Services:
a. Maintain all records required by law relating
to transactions in Shares and, upon request by
the Trust, promptly make such of these records
available to the Trust as the Trust may
II-1
reasonably request in connection with the
operations of the Trust.
b. Promptly notify the Trust if the Servicer
experiences any difficulty in maintaining the
records described in this Schedule II to the
Agreement in an accurate and complete manner.
c. Furnish the Trust or any designee of the Trust
("Designee") with such information relating to
the Servicer's performance under this Agreement
as the Trust or the Designee may reasonably
r e quest (including, without limitation,
periodic certifications confirming the
provision to Shareholders of the Services
described herein), and shall otherwise
cooperate with the Trust and the Trust's
Designees (including, without limitation, any
auditors designated by the Trust), in
connection with the preparation of reports to
the Board of Trustees concerning this Agreement
and the monies paid or payable by the Trust
pursuant hereto, as well as any other reports
or filings that may be required by law.
II-2
Schedule III
Transfer Agent and Registrar Services
The Servicer agrees to provide the Trust with all
required transfer agent and registrar services, including,
without limitation, the following:
1. Maintaining all shareholder accounts, including
processing of new accounts.
2. Posting address changes and other file maintenance
for shareholder accounts.
3. Posting all transactions to the shareholder file,
including:
- Direct purchases
- Wire order purchases
- Direct redemptions
- Wire order redemptions
- Draft redemptions
- Direct exchanges
- Transfers
4. Quality control reviewing of every transaction
b e f o r e the mailing of confirmations, checks, and/or
certificates to shareholders.
5. Issuing all checks and shipping and replacing lost
checks.
6. Mailing confirmations, checks, and/or certificates
resulting from transaction requests of shareholders.
7. Performing other mailings, including:
- Semi-annual and annual reports
- I.R.S. Form 1099/year-end shareholder reporting
- Systematic withdrawal plan payments
- Daily confirmations
8. Answering all service-related telephone inquiries
from shareholders, including:
- G e neral and policy inquiries (research and
resolve problems)
- Trust yield inquiries
- T a k ing shareholder processing requests and
account maintenance changes by telephone
- Submitting pending requests to correspondence
III-1
- Monitoring online statistical performance of
shares
- Developing reports on telephone activity
III-2
III-3
