Exhibit (9)(d)
Portfolio Accounting Services Agreement
Between Rydex Series Trust and
PADCO Service Company, Inc.
PAGE
ACCOUNTING SERVICES AGREEMENT
between
RYDEX SERIES TRUST
and
PADCO SERVICE COMPANY, INC.
This Agreement, dated the twenty-fifth day of September,
1996, made by and between the RYDEX SERIES TRUST (the
"Trust"), a business trust established under the laws of the
State of Delaware on February 10, 1993, and organized as an
open-end management investment company, and PADCO Service
Company, Inc. (the "Agent"), a company incorporated under the
laws of the State of Maryland on October 6, 1993.
W I T N E S S E T H:
WHEREAS, the Trust is registered with the Securities and
E x c hange Commission (the "Commission") as an open-end
management investment company pursuant to the provisions of
the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Agent is registered with the Commission as a
transfer agent under the Securities Exchange Act of 1934, as
amended;
WHEREAS, the Agreement and Declaration of Trust of the
Trust (the Trust Declaration ) authorizes the Trustees of the
Trust to create an unlimited number of series of shares of the
Trust;
WHEREAS, the Board of Trustees of the Trust , pursuant to
Article IV, Section 4.01(o), "Board of Trustees; Powers," of
the Trust Declaration, have created the following series of
shares of the Trust: The Nova Fund, The Ursa Fund, The OTC
Fund, The Precious Metals Fund, The Juno Fund, The U.S.
Government Bond Fund, The U.S. Government Money Market Fund,
The Rydex Institutional Money Market Fund, and The Rydex High
Yield Fund (collectively, the "Rydex Funds");
WHEREAS, the Trust desires to appoint the Agent as the
Trust's Accounting Services Agent and as the Accounting
Services Agent for each of the Rydex Funds and desires to have
the Agent, as said Accounting Services Agent, to perform
certain accounting and recordkeeping functions required of a
duly-registered investment company; to file certain financial
reports; to maintain and preserve certain books, accounts, and
records as the basis for such reports; and to perform certain
daily functions in connection with such accounts and records;
and
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WHEREAS, the Agent is willing to perform such functions
upon the terms and conditions herein set forth.
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. Accounts and Records of the Trust
a. The Trust shall provide to the Agent the necessary
and appropriate documents, information, instructions,
accounts, and records maintained or to be maintained by or for
the Trust. The Agent shall be entitled to rely exclusively on
the completeness and correctness of the accounts and records
provided to the Agent by the Trust; provided, that such
reliance is made in good faith, and the Trust shall indemnify
and hold the Agent harmless of and from any and all expenses
(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
t o provide any information to the Agent necessary or
appropriate to perform the Agent's functions hereunder.
b. Accounts, records, and other information shall
belong to the Trust and shall be considered confidential.
Accounts, records, and other information will not be disclosed
to other than Federal and state regulators without permission
from the Trust.
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2. Maintenance of Accounts and Records of the Trust
a. The Agent shall examine and review the Trust's
existing accounts, records, pertinent documents, and systems
in order to determine or recommend how such accounts, records,
documents, and systems shall be maintained.
b. Upon receipt of necessary and appropriate
information, instructions, accounts, records, and documents
from the Trust, the Agent shall maintain and keep current and
accurate the following books, accounts, records, journals, or
other records of original entry, relating to the business of
the Trust and each of the Rydex Funds and necessary or
a p propriate for compliance with applicable regulations,
including Rule 31a-1 and Rule 31a-2 of the 1940 Act, and as
may be mutually agreed to between the Trust and the Agent:
(1) Cash Receipts
(2) Cash Disbursements
(3) Dividend Record
(4) Purchase and Sales of Portfolio Securities
(5) Subscription and Redemption Journals
(6) Security Ledger
(7) Broker Ledger
(8) General Ledger
(9) Daily Expense Accruals
(10) Daily Interest Accruals
(11) S e curities and Monies borrowed or loaned and
collateral therefor
(12) Trial Balances
c. Unless appropriate information necessary to perform
the above functions is furnished to the Agent in a timely
manner, the Agent shall incur no liability to the Trust or any
other person. The Agent shall promptly notify the Trust in
writing of any discrepancy, error or non-compliance in items
(1) through (12) in Section 2(b), above, of which the Agent
has knowledge.
d. It shall be the responsibility of the Trust promptly
to furnish the Agent with the declaration, record, and payment
dates and amounts of any dividends or income and any other
special actions taken concerning the portfolio securities of
each of the Rydex Funds.
e. The Agent shall maintain all accounts and records
mentioned above as required by regulation and as agreed upon
between the Trust and the Agent.
3. Accounting Entries and Confirmations
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Upon receipt by the Agent of written or oral instructions
from the Trust, the Agent shall make proper accounting entries
in accordance with Generally Accepted Accounting Principles
and regulations of the Commission. The Trust shall direct
that each broker-dealer, or other person through whom a
transaction has occurred, shall send a confirmation thereof to
the Agent. The Agent shall verify this confirmation against
the written or oral instructions when received from the Trust
and forward the confirmation to the Trust's custodian (the
"Custodian"). The Agent shall promptly notify the Trust of
any discrepancy between the confirmation and the Trust's
written instructions when received from the Trust but shall
incur no responsibility or liability for such discrepancy.
The Trust shall cause any necessary corrections to be made and
shall advise the Agent and the Custodian accordingly.
4. Calculation of Net Asset Value
a. The Agent shall calculate the Trust s net asset
value for each of the Rydex Funds in accordance with the
Trust's currently-effective prospectuses, once daily.
b. The Agent shall prepare and maintain a daily
evaluation of securities for which market quotations are
available by the Agent's use of Bloomberg and ILX quotation
s e r vices; all other securities shall be evaluated in
accordance with the Trust's written instructions, and the
Agent shall have no responsibility or liability for the
accuracy of the information supplied by the Trust or provided
in the written instructions.
c. The Trust assumes all responsibility for computation
o f "amortized cost," valuation of securities, and all
valuations not ascertainable solely by mechanical procedures.
5. Statements From Custodian
At the end of each month, the Agent shall obtain from the
C u s t odian a monthly statement of cash and portfolio
transactions, which shall be reconciled with the Agent's
accounts and records maintained for the Trust. The Agent
shall report any discrepancies to the Custodian, and shall
report any unreconciled items to the Separate Account.
6. Daily and Periodic Reports
The Agent shall supply daily and periodic reports to the
Trust, as required by law or regulation, and as requested by
the Trust and agreed upon by the Agent.
7. Reports and Confirmations to the Trust s Transfer Agent
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a. The Trust shall report and confirm to the Trust s
transfer agent the (the "Transfer Agent") purchases and
redemptions for each of the Rydex Funds of which the Trust is
aware. The Agent shall obtain from the Transfer Agent daily
reports of Share purchases, redemptions, and total Shares
outstanding for each of the Rydex Funds.
b. The Agent shall reconcile outstanding Shares for
each of the Rydex Funds with the Transfer Agent periodically
and certify at least monthly to the Trust the reconciled Share
balance outstanding for each of the Rydex Funds.
8. Review of Accounts and Records of the Trust
The accounts and records of the Trust maintained by the
Agent shall be the property of the Trust, and shall be made
available to the Trust, within a reasonable period of time,
upon demand. The Agent shall assist the Trust's independent
auditors, and, upon approval of the Trust, or upon demand by
any governmental or quasi-governmental entity, assist any such
entity in any requested review of the Trust's accounts and
records, but shall be reimbursed for all expenses and employee
time invested in any such review outside of routine and normal
periodic reviews. Upon receipt from the Trust of the
necessary information, the Agent shall supply the necessary
data for the Trust's completion of any necessary tax returns,
questionnaires, periodic reports to shareholders, and such
other reports and information requests as the Trust and the
Agent shall agree upon from time to time.
9. Uniform Procedures
The Agent and the Trust, from time to time, may adopt
uniform or standard procedures, and the Agent may conclusively
assume that any procedure approved by the Trust, or directed
b y the Trust, does not conflict with or violate any
requirements of the Trust's prospectuses, the Trust By-laws,
or other governing documents of the Trust, or any rule or
regulation of any regulatory body or governmental agency. The
Trust shall be responsible to notify the Agent of any changes
in the Trust s By-laws or in regulations or rules which might
necessitate changes in the Agent's procedures.
10. Reliance
The Agent may rely upon the advice of the Trust and upon
statements of the Trust s accountants and other persons
believed by the Agent in good faith to be expert in matters
upon which such persons are consulted, and the Agent shall not
be liable for any actions taken in good faith upon such
statements.
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11. Indemnification and Liability
a. The Agent shall not be liable for any action taken
in good faith reliance upon any authorized oral instructions,
any written instructions, any certified copy of any resolution
of the Trustees of the Trust, or any other document reasonably
believed by the Agent to be genuine and to have been executed
or signed by the proper person or persons. The Trust will
send written instructions to confirm oral instructions, and
the Agent will compare the written instructions against the
oral instructions previously furnished. The Agent will inform
the Trust promptly of any noted discrepancy.
b. The Agent shall not be held to have notice of any
change or lack of authority of any officer, employee, or agent
of the Trust until receipt of written notification thereof by
the Trust.
c. The Trust shall indemnify the Agent and hold the
Agent harmless from and against all actions, suits, and
claims, whether groundless or otherwise, arising directly or
i n d irectly out of or in connection with the Agent'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 Agent in connection with any such action,
suit, or claim unless caused by the Agent's breach of this
Agreement, negligence, or willful misconduct. The Trust shall
not be liable under this indemnification provision with
respect to any claim made against the Agent unless the Agent
shall have notified the Trust in writing within a reasonable
time after the summons or other first legal process giving
information of the nature of the claim shall have been served
upon the Agent (or after the Agent shall have received notice
of such service on any designated agent), but failure to
notify the Trust of any such claim shall not relieve the Trust
from any liability which the Trust may have to the Agent
against whom such action is brought otherwise than on account
of this indemnification provision. In case any such action is
brought against the Agent, the Trust shall be entitled to
participate, at its own expense, in the defense of such
action. The Trust also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named
in the action. After notice from the Trust to such party of
the Trust s election to assume the defense thereof, the Agent
shall bear the fees and expenses of any additional counsel
retained by the Agent, and the Agent will not be liable to
such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable
costs of investigation. The Agent will promptly notify the
Trust of the commencement of any litigation or proceedings
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against the Agent in connection with the Shares or the
operations of the Rydex Funds.
d. The Agent shall indemnify the Trust and hold the
Trust harmless from all actions, suits, damages, claims,
d e m ands, losses, and liabilities (including reasonable
attorneys' and accountants' fees and expenses) incurred or
assessed against the Trust arising directly or indirectly from
the Agent's negligence, wilful misconduct, or breach of this
Agreement. The Agent shall not be liable under this
indemnification provision with respect to any claim made
against the Trust unless the Trust shall have notified the
Agent in writing within a reasonable time after the summons or
other first legal process giving information of the nature of
the claim shall have been served upon the Trust (or after the
Trust shall have received notice of such service on any
designated agent), but failure to notify the Agent of any such
claim shall not relieve the Agent from any liability which it
may have to the Trust against whom such action is brought
otherwise than on account of this indemnification provision.
In case any such action is brought against the Trust, the
Agent shall be entitled to participate, at its own expense, in
the defense of such action. The Agent also shall be entitled
to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Agent to
such party of the Agent's election to assume the defense
thereof, the Trust shall bear the fees and expenses of any
additional counsel retained by the Trust, and the Agent will
not be liable to such party under this Agreement for any legal
o r other expenses subsequently incurred by such party
independently in connection with the defense thereof other
than reasonable costs of investigation. The Trust will
p r omptly notify the Agent of the commencement of any
litigation or proceedings against the Trust in connection with
the Shares or the operations of the Rydex Funds.
e. The shareholders, Trustees, officers, employees, and
agents of the Trust shall not be personally bound by or liable
hereunder, nor shall resort be had to such person's private
property for the satisfaction of any obligation or claim
hereunder as provided for in the Trust s By-Laws.
12. Compensation
The Trust agrees to pay the Agent compensation for its
services and to reimburse the Agent for expenses, as set forth
in Schedule A attached hereto, or as shall be set forth in
amendments to such Schedule approved by the Trust and the
Agent.
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13. Days of Business
Nothing contained in this Agreement is intended to or
shall require the Agent, in any capacity hereunder, to perform
any functions or duties on any holiday or other day of special
observance on which the New York Stock Exchange is closed.
Functions or duties normally scheduled to be performed on such
days shall be performed on, and as of, the next business day
on which the New York Stock Exchange is open for business.
14. Term of Agreement
This Agreement is effective on the date hereof. This
Agreement shall remain in full force and effect until
September 25, 1997, 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 at Section
2(a)(42) of 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 services to be performed pursuant
to this Agreement are services required for the operation of
the Trust; (iii) that the Agent 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.
15. Termination
This Agreement may be terminated, without the payment of
any penalty, by either party hereto upon at least ninety (90)
days' written notice to the other party. Any termination by
the Trust will be pursuant to a vote of a majority of the
Trustees.
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16. Notices
a. Communications to the Agent shall be addressed to:
PADCO Service Company, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
b. Communications to the Trust shall be addressed to:
Rydex Series Trust
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 Agent, 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.
17. Governing Law
This Agreement is governed by the laws of the State of
Maryland (without reference to such state's conflict of law
rules).
18. 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.
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19. 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 Agent, or by the
Agent without the written consent of the Trust, in each case
authorized or approved by a resolution of the Trustees of the
Trust.
20. 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 Agent and the Trust effected in
accordance with the provisions of the 1940 Act, and the rules
thereunder, and Section 14 of this Agreement.
IN WITNESS WHEREOF, the Agent and the Trust have executed
this Agreement as of the date first written above.
RYDEX SERIES TRUST
By: /s/ Xxxxxx X. Xxxxxx Xx.
Xxxxxx X. Xxxxxx, Xx.
President
PADCO SERVICE COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
Xxxxxx X. Xxxxxx, Xx.
President
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SCHEDULE A
PADCO SERVICE COMPANY, INC.
FEE SCHEDULE FOR ACCOUNTING SERVICES
RYDEX SERIES TRUST - Each Separate Rydex Fund
A. MINIMUM ANNUAL FEE - (Based upon average net assets -
payable monthly) shall be the greater of:
First Year - $7,500
Second Year - $15,000
Third and Subsequent Years - $20,000
or
Basis Point Fee
10 Basis Points on first $30 million of assets
5 Basis Points on next $20 million of assets
3 Basis Points on next $50 million of assets
2 Basis Points on assets over $100 million
B. I n addition, all out-of-pocket expenses shall be
separately charged, shall include but not be limited to:
printed forms, postage, overnight mail and telephone
expense.
C. PADCO Service Company, Inc. warrants that the above rates
of compensation are guaranteed for a two-year period. At
that time, the Trust acknowledges that the Agent has the
right to revise the Agent's compensation schedule.
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