THIRD AMENDED AND RESTATED
SERVICE AGREEMENT
THIS SERVICE AGREEMENT (the "Agreement"), dated as of May 1, 2000, and
amended and restated as of November 15, 2004 and August 29, 2005 and August 28,
2006, is entered into by and between Rydex Dynamic Funds, a Delaware business
trust (the "Trust"), and RYDEX FUND SERVICES, 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 of 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 Trust delegates to the
Servicer the performance, on behalf of the Trust, of the following Services and
the Servicer agrees to the foregoing delegation and agrees that it 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 and 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.
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.
d. Perform the anti-money laundering services (the "AML
Services") set forth in Schedule IV to this Agreement
concerning the shareholder accounts maintained by the Servicer
pursuant to the Agreement and in accordance with the Trust's
AML Program. In connection therewith, Servicer agrees to
maintain policies and procedures, and related internal
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controls, that are consistent with the Trust's AML Program and
the requirement that the Trust employ procedures reasonably
designed to achieve compliance with the applicable anti-money
laundering laws (the "Applicable AML Laws"), including the
requirement to have policies and procedures that can be
reasonably expected to detect and cause the reporting of
transactions under Section 5318 of the Bank Secrecy Act. The
Servicer also agrees to keep and maintain on behalf of the
Trust all books and records which the Trust and the Servicer
is, or may be, required to keep and maintain pursuant to any
applicable laws, regulations, and rules, including without
limitation Rules 31a-1 and 31a-2 under the 1940 Act, relating
to the maintenance of books and records in connection with the
AML services to be provided hereunder. The Servicer further
agrees that all such books and records shall be the property
of the Trust and to make such books and records available for
inspection by the Trust or by the Trust's regulators,
including the SEC, at reasonable times and otherwise to keep
confidential all books and records and other information
relative to the Trust and its shareholders consistent with the
requirements of Regulation S-P. Moreover, at least quarterly,
Servicer agrees to provide a report to the Trust containing
the information set forth in Schedule V to this Agreement.
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.
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c. The Trust shall turn over to the Servicer the accounts and
records previously maintained by or for the 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
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 to provide any information to the
Servicer necessary or appropriate to perform the Servicer's
functions 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. Notwithstanding any other provision of this Agreement, the
Trust will pay, or reimburse the Servicer for the payment of,
all fees and expenses (or a lesser amount as stipulated by the
Board of Trustees and recorded in the Trust's minutes)
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 and expenses of the
Trust (hereinafter called "Direct Expenses") whether or not
billed to the Trust, the Servicer, or any related entity:
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i. fees and expenses of custodian and depositories and
banking services fees and costs;
ii. fees and expenses of outside legal counsel and any
legal counsel directly employed by the Trust;
iii. fees and expenses of independent auditors and income
tax preparation and expenses of obtaining quotations
for the purpose of calculating the value of the
Trust's assets;
iv. all Federal, state, and local taxes (including,
without limitation, stamp, excise, income, and
franchise taxes);
v. costs of stock certificates and other expenses of
issuing and redeeming shares of the Trust ("Shares");
vi. costs incidental to or associated with shareholder
meetings;
vii. fees and expenses of registering or qualifying shares
for sale under Federal and state securities laws;
viii. costs (including postage) of printing and mailing
prospectuses, confirmations, proxy statements, and
other reports and notices to shareholders and to
governmental agencies;
ix. premiums on all insurance and bonds and other
expenses of fidelity and liability insurance and
bonding covering the Trust;
x. fees and expenses of the disinterested Trustees and
expenses incidental to the meetings of the Board; and
xi. dues and expenses associated with membership in the
Investment Company Institute and the Mutual Fund
Education Alliance; costs (including postage) of
printing and mailing prospectuses, confirmations,
proxy statements, annual, semi-annual and quarterly
reports, and other reports and notices to
shareholders and to governmental agencies;
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 annual rates based on the average daily net assets (the
"Assets") of each of the Trust 's series (a "Fund") for such month as set forth
in Schedule VI .
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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.
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 shall become effective as of the date the Trust commences its
investment operations and shall continue for an initial two-year term and shall
continue automatically from year-to-year thereafter unless terminated in
accordance with the provisions of Section 7 of this Agreement, 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 ▇▇▇▇ ▇▇▇) of the Trust and (ii) a majority of the Trustees who
are not "interested persons" (as defined at Section 2(a)(19) of the ▇▇▇▇ ▇▇▇);
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 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.
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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 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
the Servicer'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.
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10. SCOPE OF AUTHORITY.
a. Shares purchased by the Servicer on behalf of shareholders of
the Trust ("Shareholders") will be registered 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.
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 out of or in connection with the Servicer's
performance under this Agreement and from and against any and
all losses, damages, costs, charges, attorneys' and
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accountant'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 immediate 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 assessed
against the Trust arising from the Servicer's negligence,
willful misconduct, or breach of this Agreement.
13. NOTICES.
a. Communications to the Servicer from the Trust or the Board
shall be addressed to:
Rydex Dynamic Funds or Rydex Fund Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
b. Communications from the Servicer to the Trust shall be
addressed to:
Rydex Fund Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
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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).
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 and 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.
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.
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IN WITNESS WHEREOF, the Servicer and the Trust have executed this
Agreement as of the date above written.
RYDEX DYNAMIC FUNDS
By: /S/ ▇▇▇▇ ▇. VERBOCOEUR
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: President
RYDEX FUND SERVICES, INC.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: President
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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. Preparation of all annual, semi-annual and quarterly 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. Process payments of all fees and expenses of the Trust.
6. Perform appropriate IRS and SEC testing for the Trust.
7. Disseminate NAV and other relevant Fund information to external
parties.
8. Calculate Fund distributions to ensure compliance with IRS rules.
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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. Aggregating 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 financial 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 statutes, 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
reasonably request in connection with the operations of the
Trust.
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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 request (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.
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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:
a. Direct purchases
b. Wire order purchases
c. Direct redemptions
d. Wire order redemptions
e. Draft redemptions
f. Direct exchanges
g. Transfers
4. Quality control reviewing of transactions before 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:
a. Semi-annual and annual reports
b. I.R.S. Form 1099/yearend
shareholder reporting
c. Systematic withdrawal plan payments
d. Daily confirmations
8. Answering all service related telephone inquiries from shareholders,
including:
a. General and policy inquiries (research and resolve problems)
b. Trust yield inquiries
c. Taking shareholder processing requests and account maintenance
changes by telephone
d. Submitting pending requests to correspondence
e. Developing reports on telephone activity
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SCHEDULE IV
AML SERVICES
1. Respond promptly to requests from Financial Crimes Enforcement Network
("FinCEN"), a department of the U.S. Treasury, about accounts or
transactions by reporting to FinCEN the identity of the specified
individual or organization, the account number, all identifying
information provided by the account holder when the account was
established, and the date and type of transaction, after providing
notice to the Trust to the extent reasonably practical and allowed by
Applicable AML Laws.
2. Share information with the Trust, and other financial institutions as
requested by the Trust, regarding those suspected of terrorism and
money laundering for the purposes of identifying and reporting
activities that may involve terrorist acts or money laundering
activities in compliance with Applicable AML Laws.
3. File with FinCEN an initial notice before sharing any information with
any other financial institutions, including affiliates, and file annual
notices afterwards using forms made available at ▇▇▇.▇▇▇▇▇▇.▇▇▇ and
take reasonable steps to verify that the other financial institution
has submitted the requisite notice to FinCEN, either by obtaining
confirmation from the financial institution or by consulting a list of
such financial institutions that FinCEN will make available.
4. Identify and verify the identity of all shareholders upon the opening
of new accounts in compliance with Applicable AML Laws.
5. Perform additional due diligence to verify the identity of shareholders
with accounts that may pose a greater risk of terrorism or money
laundering activity, such as foreign accounts, domestic or foreign
corporate or business entity accounts, domestic or foreign trust
accounts, offshore accounts, intermediary accounts, accounts in high
risk and non-cooperative jurisdictions, and senior foreign government
or public official accounts in compliance with Applicable AML Laws.
6. Check shareholders against the Treasury's Office of Foreign Assets
Control ("OFAC") list of "Specifically Designated Nationals and Blocked
Persons List," and similar lists of terrorists received from
governmental agencies, and place holds on transactions in shareholder
accounts or freeze assets in shareholder accounts, as required by
Applicable AML Laws.
7. Provide notices to shareholders, prior to the opening of an account or
trading authority is granted, that Servicer will request information,
from either the shareholder or a third party, to verify the identity of
the shareholder in compliance with Applicable AML Laws.
8. Monitor, identify and report shareholder transactions and identify and
report suspicious activities that are required to be so identified and
reported, and provide other required reports to the Securities and
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Exchange Commission, the U.S. Treasury Department, the Internal Revenue
Service or each agency's designated agent, in each case consistent with
the Trust's AML Program.
9. Maintain the confidentiality of any reports provided to the Securities
and Exchange Commission, the U.S. Treasury Department, the Internal
Revenue Service or each agency's designated agent in compliance with
Applicable AML Laws.
10. Create documentation to provide a basis for law enforcement authorities
to trace illicit funds.
11. Maintain all records or other documentation related to shareholder
accounts and transactions therein that are required to be prepared and
maintained pursuant to the Trust's AML Program, and make the same
available for inspection by (i) the Trust's AML Compliance Officer, the
Board, or the independent auditor of the Board, (ii) any auditor of the
Trust's AML Program or related procedures, policies or controls that
has been designated by the Trust in writing, or (iii) regulatory or law
enforcement authorities, and otherwise make said records or other
documents available at the direction of the Trust's AML Compliance
Officer.
12. Arrange for periodic reviews of the Servicer operations related to the
AML Services, at least annually, of the Servicer operations related to
the AML Services, which reviews are performed by internal auditors not
involved in the day-to-day operation of the Servicer's AML Program or
other qualified independent auditors chosen by Servicer.
13. Develop and implement an ongoing employee training program providing
training, at least annually, with regard to how to identify red flags
and signs of terrorism or money laundering activities, what to do if
such a red flag is identified, Servicer's AML record retention
policies, and the consequences of not complying with the requirements
of Servicer's AML policies and procedures.
14. Perform such other related services as are required by the Trust's AML
Program.
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SCHEDULE V
AML REPORTS
1. Following each quarterly period, Servicer will provide a written report
to the following effect pertaining to the AML Services rendered by
Servicer hereunder during such quarterly period:
a. performed good order review for all new and reregistered
accounts;
b. performed acceptance review for all monetary instruments
received;
c. administered signature guarantee policy in accordance with
prospectus requirements;
d. administered escrow hold policy in accordance with prospectus
requirements;
e. verified customer address changes;
f. verified customer identification for all new accounts and all
name changes on existing accounts;
g. monitored all purchase transactions made with cash equivalents
totaling in excess of $10,000, resulting in the filing of [x]
Form 8300 reports during the period. The Fund does not accept
cash or currency;
h. monitored all accounts for suspicious activity, resulting in
the filing of [x] Form SAR reports during the period;
i. reviewed shareholder names against lists of suspected
terrorist and terrorist organizations supplied by various
governmental organizations, such as the Office of Foreign
Asset Control, resulting in [x] number of matches and the
freezing and reporting of [x] accounts during the period;
j. created the documentation necessary to provide a basis for law
enforcement authorities to trace illicit funds;
k. maintained all records and other documentation related to
shareholder accounts and transactions required to be prepared
and maintained pursuant to the Fund's anti-money laundering
program for all Servicer transfer agent services;
2. The following items will be provided following each quarterly period,
to the extent applicable:
a. modified our anti-money laundering program (including a copy
of the revised program;
b. uncovered [x] material violations of our anti-money laundering
program involving [x] and took the following corrective
actions: [x];
c. made [x] discretionary decisions relating to the
implementation of its anti-money laundering program involving
[x].
d. performed the required due diligence to help prevent the
opening of any accounts for foreign shell banks during the
period either directly or through correspondent accounts,
resulting in [x] declined account openings; and
e. performed required due diligence on any new correspondent
accounts opened during the period, resulting [x] closed
correspondent accounts.
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3. Following each year, Servicer will provide the following documentation
pertaining to the AML Services rendered by Servicer hereunder during
such annual period:
a. a written report describing the operation and implementation
of the anti-money laundering program, including its customer
identification program;
b. a copy of the independent auditor's written report regarding
Servicer' operation and implementation of the anti-money
laundering program;
c. a written certification that, among other things, it has
implemented its anti-money laundering program and has
performed the specified requirements of the Trust's AML
Program and Servicer' anti-money laundering program, including
related customer identification program requirements;
d. written materials evidencing the implementation and
maintenance of, and compliance with, the Trust's and Servicer'
anti-money laundering program, including related customer
identification program requirements;
e. a written summary of any matters included in the quarterly
reports that Servicer provided to the Board during the annual
period;
f. a written report regarding developments in anti-money
laundering laws/regulations and money laundering activities;
and
g. a written report describing significant matters raised during
the AML Compliance Officer's training/education session for
that year.
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SCHEDULE VI
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 the 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 (a "Fund") for such month:
S&P 500 2X STRATEGY FUND
0.25% of Assets
INVERSE S&P 500 2X STRATEGY FUND
0.25% of Assets
INVERSE NASDAQ-100(R) 2X STRATEGY FUND
0.25% of Assets
NASDAQ-100(R) 2X STRATEGY FUND
0.25% of Assets
DOW 2X STRATEGY FUND
0.25% of Assets
INVERSE DOW 2X STRATEGY FUND
0.25% of Assets
▇▇▇▇▇▇▇ 2000(R) 2X STRATEGY FUND
0.25% of Assets
INVERSE ▇▇▇▇▇▇▇ 2000(R) 2X STRATEGY FUND
0.25% of Assets
20
