EX-99.E.2 5 ex99e2.txt DEALER AGREEMENT DEALER AGREEMENT Rydex Distributors, Inc. (the "Distributor") serves as the principal underwriter for the Rydex|SGI family of investment companies, including the open-end investment companies (the "Open-End Funds") and closed-end investment companies (the "Closed-End Funds") set forth on Schedule A to this Agreement (each, a "Fund," and collectively, the "Funds"), as such Schedule may be amended by notice from time to time. The Distributor and [DEALER FIRM]("Dealer") hereby agree that Dealer will participate in the distribution of shares ("Shares") of the Funds, subject to the terms of this Agreement. SECTION 1. LICENSING a. Dealer represents and warrants that: (i) it is a broker-dealer registered with the Securities and Exchange Commission ("SEC"); (ii) it is a member in good standing of the Financial Industry Regulatory Authority ("FINRA"); (iii) it is licensed by the appropriate regulatory agency of each state or other jurisdiction in which Dealer will offer and sell Shares of the Funds; and (iv) each of its partners, directors, officers, employees, and agents who will participate or otherwise be involved in the offer or sale of the Shares or the performance by Dealer of its duties and activities under this Agreement is either appropriately licensed or exempt from such licensing requirements by the appropriate regulatory agency of each state or other jurisdiction in which Dealer will offer and sell Shares of the Funds. b. Dealer agrees that: (i) termination or suspension of its registration with the SEC; (ii) termination or suspension of its membership with FINRA; or (iii) termination or suspension of its license to do business by any state or other jurisdiction shall immediately cause the termination of this Agreement. Dealer further agrees to notify the Distributor promptly in writing of any such action or event. c. Dealer agrees that this Agreement is in all respects subject to the Conduct Rules of FINRA and such Conduct Rules shall control any provision to the contrary in this Agreement. Without limiting the generality of the foregoing, Dealer acknowledges that it is solely responsible for all suitability determinations with respect to offers and sales of Shares of the Funds to Dealer's customers and that the Distributor has no responsibility for the manner of Dealer's performance of, or for Dealer's acts or omissions in connection with, the duties and activities Dealer performs under this Agreement. d. Dealer agrees to be bound by and to comply with all applicable federal and state laws and all rules and regulations promulgated thereunder generally affecting the sale or distribution of mutual fund shares or classes of such shares. SECTION 2. TERMS AND CONDITIONS APPLICABLE TO DISTRIBUTION OF THE FUNDS The following provisions relate to the offer and sale of Shares of the Funds. Unless otherwise noted, references to "Funds" in this Section 2 shall include both Open-End Funds and Closed-End Funds. a. Orders (i) Dealer agrees to offer and sell Shares of the Funds (including classes thereof) only at the regular public offering price applicable to such Shares and in effect at the time of each transaction. The procedures relating to all orders and the handling of each order (including the manner of computing the net asset value of Shares and the effective time of orders received from Dealer) are subject to: (A) the terms of the then-current prospectus and Statement of Additional Information (including any supplements, stickers or amendments thereto) relating to each Fund (or, as appropriate, class thereof), as filed with the SEC (collectively, the "Prospectus"); (B) the new account application for each Fund (or, as 1 appropriate, class thereof), as supplemented or amended from time to time; and (C) the Distributor's written instructions and multiple class pricing procedures and guidelines, if any, as provided to Dealer from time to time. To the extent that the Prospectus contains provisions that are inconsistent with this Agreement or any other document, the terms of the Prospectus shall be controlling. (ii) the Funds reserve the right at any time, and without notice to Dealer, to suspend the sale of Shares or to withdraw or limit the offering of Shares. (iii) In all offers and sales of the Shares to the public, Dealer is not authorized to act as broker or agent for, or employee of, the Distributor, any Fund or any other dealer, and Dealer shall not represent to any third party that Dealer has such authority or is acting in such capacity. Rather, Dealer agrees that it is acting as principal for Dealer's own account or as agent on behalf of Dealer's customers in all transactions in Shares, except as provided in Section 2.b(ix) hereof. (iv) All orders are subject to acceptance by the Distributor and the Funds in their discretion. The Distributor and the Funds reserve the unqualified right not to accept any specific order for the purchase or sale of Shares. (v) The Distributor agrees that it will accept from Dealer orders placed through a remote terminal or otherwise electronically transmitted via the National Securities Clearing Corporation ("NSCC") Fund/Serv Networking program, provided, however, that appropriate documentation thereof and agreements relating thereto are executed by both parties to this Agreement, including in particular the standard NSCC Networking Agreement and any other related agreements between the Distributor and Dealer deemed appropriate by the Distributor, and that all accounts opened or maintained pursuant to that program will be governed by applicable NSCC rules and procedures. Both parties further agree that, if the NSCC Fund/Serv Networking program is used to place orders, the standard NSCC Networking Agreement will control insofar as there is any conflict between any provision of this Dealer Agreement and the standard NSCC Networking Agreement. b. Duties of Dealer (i) Dealer agrees to purchase Shares only from the Distributor or from Dealer's customers. (ii) Dealer agrees to enter orders for the purchase of Shares only from the Distributor and only for the purpose of covering purchase orders Dealer has already received from its customers or for Dealer's own bona fide investment. (iii) Dealer agrees to date and time stamp all orders for the purchase or sale of Shares received by Dealer, and to promptly forward such orders to the Distributor in time for processing at the public offering price next determined after receipt of such orders by Dealer, in each case as described in the applicable Prospectus. All orders individually or with a combined total greater than the amount set out in Schedule C, per fund, are subject to the provisions set forth in Sections 2.c(i) and 2.c(ii) hereof. Dealer represents that it has procedures in place reasonably designed to ensure that orders received by Dealer are handled in a manner consistent with Rule 22c-1 under the Investment Company Act of 1940, as amended (the "1940 Act"), and any SEC staff positions or interpretations issued thereunder. (iv) Dealer agrees not to withhold placing orders for Shares with the Distributor so as to profit itself as a result of such inaction. (v) Dealer agrees to maintain records of all purchases and sales of Shares made through Dealer and to furnish the Distributor or regulatory authorities with copies of such records upon 2 request. In that regard, Dealer agrees that, unless Dealer holds Shares as nominee for its customers or participates in the NSCC Fund/Serv Networking program, at certain matrix levels, it will provide the Distributor with all necessary information to comply properly with all applicable federal, state and local reporting requirements, including, without limitation, backup and nonresident alien withholding requirements for its customer accounts. Dealer represents and agrees that all Taxpayer Identification Numbers ("TINs") provided are certified, and that no account that requires a certified TIN will be established without such certified TIN. With respect to all other accounts, including Shares held by Dealer in omnibus accounts and Shares purchased or sold through the NSCC Fund/Serv Networking program, at certain matrix levels, Dealer agrees to perform all federal, state and local tax reporting with respect to such accounts, including, without limitation, redemptions and exchanges. (vi) Dealer agrees to distribute or cause to be delivered to its customers Prospectuses, proxy solicitation materials and related information and proxy cards, semi-annual and annual shareholder reports and any other materials in compliance with applicable legal requirements, except to the extent that the Distributor expressly undertakes in writing to do so on Dealer's behalf. (vii) Dealer agrees that payment for Shares ordered from the Distributor shall be in Fed Funds, New York clearinghouse or other immediately available funds and that such funds shall be received by the Distributor by the earlier of: (A) the end of the third (3rd) business day following Dealer's receipt of the customer's order to purchase such Shares; or (B) the settlement date established in accordance with Rule 15c6-1 under the Securities Exchange Act of 1934, as amended (the "1934 Act"). If such payment is not received by the Distributor by such date, Dealer shall forfeit its right to any compensation with respect to such order, and the Distributor reserves the right, without notice, to cancel the sale, or, at its option (in the case of Open-End Funds), to sell the Shares ordered back to the Fund, in which case the Distributor may hold Dealer responsible for any loss, including loss of profit, suffered by the Distributor resulting from Dealer's failure to make payment. If a purchase is made by check, the purchase is deemed made upon conversion of the purchase instrument into Fed Funds, New York clearinghouse or other immediately available funds. (viii) Dealer agrees that it shall assume responsibility for any loss to the Fund caused by a correction to any order placed by Dealer that is made subsequent to the trade date for the order, to the extent such order correction was not based on any negligence on the Distributor's part. Dealer further agrees that it will immediately pay such loss to the Fund upon notification. (ix) Dealer agrees that, in connection with orders for the purchase of Shares on behalf of any IRAs, 401(k) plans or other retirement plan accounts, by mail, telephone, or wire, Dealer shall act as agent for the custodian or trustee of such plans (solely with respect to the time of receipt of the application and payments), and Dealer shall not place such an order with the Distributor until it has received from its customer payment for such purchase and, if such purchase represents the first contribution to such a retirement plan account, the completed documents necessary to establish the retirement plan. (x) Dealer agrees that it will not make any conditional orders for the purchase or redemption of Shares and acknowledges that the Distributor will not accept conditional orders for Shares. (xi) Dealer agrees that all out-of-pocket expenses incurred by it in connection with its activities under this Agreement will be borne by Dealer. c. Estimate Requirements (i) Dealer, or in the event that dealer employs agents, dealer's agent, agrees to communicate directly to Rydex|SGI, all orders individually or with a combined total per fund, greater 3 than the amount set by Rydex|SGI as listed in Schedule C, for all Rydex|SGI funds. Such communication must be made on the trade date of the order, prior to the telephone cut-off times of each respective fund as listed in the prospectus. (ii) Failure, by the registered representative, to adhere to the requirements set forth in Section 2.c(i) may lead to rejection of purchase or exchange order(s) and possibly suspension or termination of trading privileges for the registered agent of record on such accounts. (iii) In the event that dealer utilizes brokers or agents to sell shares of the Funds, failure to adhere to the requirements set forth in Section 2c.(i), will not subject dealer to suspension or termination of trading privileges. d. Multiple Classes of Shares; Reduced Sales Charges (i) Dealer acknowledges that the Funds may offer multiple classes of Shares, including classes offering different sales charges, Rule 12b-1 Plan or Shareholder Services Plan (as described below) fees or other operating expenses. Dealer agrees that it is solely responsible for all suitability determinations with respect to offers and sales of Shares of Funds to Dealer's customers. (ii) In accordance with the terms of each applicable Prospectus, Dealer acknowledges that a reduced sales charge or no sales charge (collectively, "discounts") may be available to purchasers of Shares. Dealer agrees to: (A) obtain all necessary information from its customers to allow Dealer to provide all available discounts; (B) inform its customers of applicable discount opportunities and inquire about other qualifying holdings that might entitle customers to receive discounts; and (C) advise the Distributor, contemporaneously with each purchase as to amounts of any and all purchases of Shares made by Dealer, as agent for its customers, qualifying for discounts. Dealer further agrees that it will not combine customer orders to reach "breakpoints" in commissions or other applicable discounts for any purposes whatsoever, unless authorized by the then current Prospectus in respect of Shares of a particular class or by the Distributor in writing. (iii) Dealer agrees that it has, and will maintain during the term of this Agreement, adequate written supervisory procedures, controls, and exception reports to ensure that Dealer's customers receive all available discounts. e. Dealer Compensation (i) In return for providing the services set forth in this Agreement, Dealer shall be entitled to any concessions and/or sales charges (collectively, "Concessions") set forth in the Prospectus of the applicable Fund or class thereof. In addition, the Distributor may pay Dealer a fee, as established by the Distributor from time to time in its sole discretion and as set forth on Schedule B to this Agreement, for performing distribution-related services and/or shareholder services with respect to Shares. Dealer acknowledges and agrees that (A) with respect to Shares of any Open-End Fund, any compensation to be paid for performing distribution-related services shall be paid pursuant to the Fund's "Rule 12b-1 Plan" and any compensation to be paid for performing shareholder services shall be paid pursuant to the Fund's "Shareholder Services Plan," and (B) with respect to Shares of any Closed-End Fund, any compensation to be paid for performing distribution-related services and/or shareholder services shall be paid pursuant to the terms described in such Fund's Prospectus. In determining the amount payable to Dealer hereunder, the Distributor reserves the right to exclude any sales which it reasonably determines are not made in accordance with the terms of the Prospectus and provisions of this Agreement. 4 (ii) Dealer acknowledges and agrees that each Fund may, without prior notice, suspend or eliminate the payment of any compensation, including Rule 12b-1 Plan payments, Shareholder Service Plan payments or other dealer compensation, by amendment, sticker or supplement to the then current Prospectus for such Fund. The Distributor shall have no obligation to pay any compensation to Dealer for the sale of Shares of a Fund, whether pursuant to a Rule 12b-1 Plan, Shareholder Service Plan or otherwise, unless and until the Distributor receives the related compensation from the Fund, and the Distributor's liability to Dealer for such payments is limited solely to the related compensation that the Distributor receives from such Fund. f. Redemptions, Repurchases and Exchanges of Open-End Funds (i) Dealer agrees that it will not make any representations to shareholders relating to the redemption of their Shares other than the statements contained in the applicable Prospectus and the underlying organizational documents of the Open-End Fund to which it refers, and that Dealer will pay as redemption proceeds to shareholders the net asset value, minus any applicable redemption fee, determined after receipt of the order as discussed in the Prospectus. (ii) Dealer agrees not to repurchase any Shares from its customers at a price below that next quoted by an Open-End Fund for redemption or repurchase, i.e., at the net asset value of such Shares, less any applicable redemption fee, in accordance with the Open-End Fund's Prospectus. Dealer shall, however, be permitted to sell Shares for the account of the customer or record owner to an Open-End Fund at the repurchase price then currently in effect for such Shares and may charge the customer or record owner a fair service fee or commission for handling the transaction, provided Dealer discloses the fee or commission to the customer or record owner. Nevertheless, Dealer agrees that it shall not maintain a secondary market in such repurchased Shares. (iii) Dealer agrees that, with respect to a redemption order it has made, if instructions in proper form, including any outstanding certificates, are not received by the Distributor within the time customary or required by law, the redemption may be canceled without any responsibility or liability on the Distributor's part or on the part of any Open-End Fund, or the Distributor, at its option, may buy the shares redeemed on behalf of the Open-End Fund, in which latter case the Distributor may hold Dealer responsible for any loss, including loss of profit, suffered by the Distributor resulting from the Distributor's failure to settle the redemption. (iv) Dealer agrees that if any Share is repurchased by any Open-End Fund or is tendered for redemption within seven (7) business days after confirmation by the Distributor of the original purchase order from Dealer, Dealer shall forfeit its right to any compensation with respect to such Share and shall forthwith refund to the Distributor the full compensation, if any, paid to Dealer on the original sale. The Distributor agrees to notify Dealer of such repurchase or redemption within a reasonable time after settlement. Termination or cancellation of this Agreement shall not relieve Dealer from its obligation under this provision. (v) Dealer agrees that it will comply with any restrictions and limitations on exchanges described in each Open-End Fund's Prospectus, including any restrictions or prohibitions relating to frequent purchases and redemptions (i.e., market timing). 5 g. Repurchases and Tender Offers of Closed-End Funds (i) Dealer agrees that Shares of a Closed-End Fund will not be repurchased by either the Closed-End Fund (other than through tender offers from time to time, if any) or the Distributor, and that no secondary market for the Shares of the Closed-End Fund exists currently or is expected to develop. Dealer further agrees that, in the event any purchase order for shares of a Closed-End Fund is canceled after confirmation by the Distributor, such Shares may not be repurchased, remarketed or otherwise disposed of by or through the Distributor. (ii) Dealer agrees that, while a Closed-End Fund may consider tendering for all or a portion of its Shares on a periodic basis, there is no assurance that the Closed-End Fund will tender for Shares at any time, or that, following such a tender, Shares tendered will be repurchased by the Closed-End Fund. Dealer further agrees that, as set forth in the applicable Closed-End Fund's Prospectus, under certain circumstances an early withdrawal charge payable to the Distributor may be imposed on Shares accepted for tender. Any representation as to a tender offer by a Closed-End Fund, other than as set forth in the Closed-End Fund's Prospectus, is expressly prohibited. h. Fund Information (i) Dealer agrees that neither it nor any of its partners, directors, officers, employees, and agents is authorized to give any information or make any representations concerning Shares of any Fund except those contained in the Fund's Prospectus or in materials provided by the Distributor. (ii) The Distributor will supply to Dealer Prospectuses, reasonable quantities of sales literature, sales bulletins, and additional sales information as provided by the Distributor. Dealer agrees to use only advertising or sales material relating to the Funds that: (A) is supplied by the Distributor, or (B) conforms to the requirements of all applicable laws or regulations of any government or authorized agency having jurisdiction over the offering or sale of Shares of the Funds and is approved in writing by the Distributor in advance of its use. Such approval may be withdrawn by the Distributor in whole or in part upon written notice to Dealer, and Dealer shall, upon receipt of such notice, immediately discontinue the use of such sales literature, sales bulletins and advertising. Dealer is not authorized to modify or translate any such materials without the Distributor's prior written consent. SECTION 3. REGISTRATION OF SHARES a. The Distributor acts solely as agent for the Funds and the Distributor shall have no obligation or responsibility with respect to Dealer's right to purchase or sell Shares in any jurisdiction. b. The Distributor shall periodically furnish Dealer with information identifying the states or jurisdictions in which it is believed that all necessary notice, registration or exemptive filings for Shares have been made under applicable securities laws such that offers and sales of Shares may be made in such states or jurisdictions. The Distributor shall have no obligation to make such notice, registration or exemptive filings with respect to Shares in any state or jurisdiction. c. Dealer agrees not to transact orders for Shares in states or jurisdictions in which it has been informed that Shares may not be sold or in which it and its personnel are not authorized to sell Shares. d. The Distributor shall have no responsibility, under the laws regulating the sale of securities in the United States or any foreign jurisdiction, with respect to the qualification or status of Dealer or Dealer's personnel selling Fund Shares. The Distributor shall not, in any event, be liable or 6 responsible for the issue, form, validity, enforceability and value of such Shares or for any matter in connection therewith. e. Dealer agrees that it will make no offers or sales of Shares in any foreign jurisdiction, except with the express written consent of the Distributor. SECTION 4. INDEMNIFICATION a. Dealer agrees to indemnify, defend and hold harmless the Distributor and the Funds and their predecessors, successors, and affiliates, each current or former director, officer, employee, shareholder or agent and each person who controls or is controlled by the Distributor from any and all losses, claims, liabilities, costs, and expenses, including attorney fees, that may be assessed against or suffered or incurred by any of them howsoever they arise, and as they are incurred, which relate in any way to: (i) any alleged violation of any statute or regulation (including, without limitation, the securities laws and regulations of the United States or any state or jurisdiction) or any alleged tort or breach of contract, related to the offer or sale by Dealer of Shares of the Funds pursuant to this Agreement (except to the extent that the Distributor's negligence or failure to follow correct instructions received from Dealer is the cause of such loss, claim, liability, cost or expense); (ii) any redemption or exchange pursuant to instructions received from Dealer or its directors, partners, affiliates, officers, employees or agents; (iii) incorrect investment instructions received by the Distributor from Dealer; or (iv) the breach by Dealer of any of its representations and warranties specified herein or the Dealer's failure to comply with the terms and conditions of this Agreement, whether or not such action, failure, error, omission, misconduct or breach is committed by Dealer or its predecessor, successor, or affiliate, each current or former partner, officer, director, employee or agent and each person who controls or is controlled by Dealer. b. The Distributor agrees to indemnify, defend and hold harmless Dealer and its predecessors, successors and affiliates, each current or former director, officer, employee, shareholder or agent and each person who controls or is controlled by Dealer from any and all losses, claims liabilities, costs and expenses, including attorney fees, that may be assessed against or suffered or incurred by any of them howsoever they arise, and as they are incurred, which relate in any way to (i) any untrue statement of a material fact, or any omission to state a material fact, contained in a Prospectus or in any written sales literature or other marketing materials provided by the Distributor to the Dealer, or (ii) the breach by the Distributor of any of its representations and warranties specified herein or the Distributor's failure to comply with the terms and conditions of this Agreement, whether or not such action, failure, error, omission, misconduct or breach is committed by the Distributor or its predecessor, successor, or affiliate, each current or former partner, officer, director, employee or agent and each person who controls or is controlled by the Distributor. c. Dealer agrees to notify the Distributor, within a reasonable time, of any claim or complaint or any enforcement action or other proceeding with respect to Shares offered hereunder against Dealer or its partners, affiliates, officers, directors, employees or agents, or any person who controls Dealer, within the meaning of Section 15 of the 1933 Act. SECTION 5. TERMINATION; AMENDMENT a. In addition to the automatic termination of this Agreement specified in Section 1.b. of this Agreement, each party to this Agreement may unilaterally cancel its participation in this Agreement by giving thirty (30) days prior written notice to the other party. In addition, each party to this Agreement may, in the event of a material breach of this Agreement by the other party, terminate this Agreement immediately by giving written notice to the other party, which notice sets forth in reasonable detail the nature of the breach. Such notice shall be deemed to have been given and to be effective on the 7 date on which it was either delivered personally to the other party or any officer or member thereof, or was mailed postpaid or delivered to a telegraph office for transmission to the other party's designated person at the addresses shown herein. b. This Agreement shall terminate immediately upon the appointment of a Trustee under the Securities Investor Protection Act or any other act of insolvency by Dealer. c. The termination of this Agreement by any of the foregoing means shall have no effect upon transactions entered into prior to the effective date of termination and shall not relieve Dealer of its obligations, duties and indemnities specified in this Agreement. A trade placed by Dealer subsequent to its voluntary termination of this Agreement will not serve to reinstate the Agreement. Reinstatement, except in the case of a temporary suspension of Dealer, will only be effective upon written notification by the Distributor. d. Either party may, on thirty (30) day's prior written notice to the other party, assign or transfer this Agreement to any successor in interest, its affiliates, subsidiaries, and companies under common control. The Distributor may also transfer any of its duties under this Agreement to any entity that controls or is under common control with the Distributor. e. This Agreement may be amended by the Distributor at any time by written notice to Dealer. Dealer's placing of an order or accepting payment of any kind after the effective date and receipt of notice of such amendment shall constitute Dealer's acceptance of such amendment. SECTION 6. REPRESENTATIONS AND WARRANTIES a. The Distributor represents and warrants that: (i) It is a corporation duly organized and existing and in good standing under the laws of the state of Delaware and is duly registered or exempt from registration as a broker-dealer in all states and jurisdictions in which it provides services as a non-exclusive distributor for the Funds. (ii) It is a member in good standing of FINRA. (iii) It is empowered under applicable laws and by the Distributor's organizational documents to enter into this Agreement and perform all activities and services of the the Distributor provided for herein and that there are no impediments, prior or existing, regulatory, self-regulatory, administrative, civil or criminal matters affecting the Distributor's ability to perform under this Agreement. (iv) All requisite actions have been taken to authorize the Distributor to enter into and perform this Agreement. b. In addition to the representations and warranties found elsewhere in this Agreement, Dealer represents and warrants that: (i) It is duly organized and existing and in good standing under the laws of the state, commonwealth or other jurisdiction in which Dealer is organized and that Dealer will not offer Shares of any Fund for sale in any state or jurisdiction where such Shares may not be legally sold or where Dealer is not qualified to act as a broker-dealer. (ii) It is empowered under applicable laws and by Dealer's organizational documents to enter into this Agreement and perform all activities and services of the Dealer provided for herein and 8 that there are no impediments, prior or existing, regulatory, self-regulatory, administrative, civil or criminal matters affecting Dealer's ability to perform under this Agreement. (iii) All requisite actions have been taken to authorize Dealer to enter into and perform this Agreement. (iv) It is not, at the time of the execution of this Agreement, subject to any enforcement or other proceeding with respect to its activities under state or federal securities laws, rules or regulations. (v) It has, and will maintain during the term of this Agreement, appropriate broker's blanket bond insurance policies covering any and all acts of Dealer's partners, directors, officers, employees, and agents adequate to reasonably protect and indemnify the Distributor and the Funds against any loss which any party may suffer or incur, directly or indirectly, as a result of any action or omission by Dealer or Dealer's partners, directors, officers, employees, and agents. SECTION 7. ANTI-MONEY LAUNDERING RESPONSIBILITY Dealer agrees that it will be responsible for complying with all applicable money laundering laws, regulations, and government guidance, including cash and suspicious activity reporting, customer identification programs and recordkeeping requirements, and to have adequate policies, procedures and internal controls in place to ensure compliance. Dealer will provide the Distributor, upon request and within a reasonable time, copies of its anti-money laundering compliance programs or materials, including policies and procedures for complying with the applicable anti-money laundering laws and regulations, "Know Your Customer" and/or customer identification policies and procedures, and procedures for identifying and reporting suspicious transactions. Any such request for information shall not in any way be construed or impose any obligation upon the Distributor to review and ensure the accuracy or adequacy of any of Dealer's policies or procedures. SECTION 8. PRIVACY Dealer represents that it has adopted and implemented procedures to safeguard customer information and records that are reasonably designed to: (a) ensure the security and confidentiality of customer records and information; (b) protect against any anticipated threats or hazards to the security or integrity of customer records and information; (c) protect against unauthorized access to or use of customer records or information that could result in substantial harm or inconvenience to any customer; (d) protect against unauthorized disclosure of non-public personal information to unaffiliated third parties; and (e) otherwise ensure Dealer's compliance with SEC Regulation S-P. SECTION 9. SETOFF; GOVERNING LAW a. Should any of Dealer's compensation accounts with the Distributor have a debit balance, or should Dealer otherwise owe any amounts to the Distributor, the Distributor shall be permitted to offset and recover the amount owed from any account Dealer has with the Distributor, without notice or demand to Dealer. b. This Agreement shall be governed and construed in accordance with the laws of the state of Delaware, without reference to the choice-of-law principles thereof. 9 SECTION 10. INVESTIGATIONS AND PROCEEDINGS The parties to this Agreement agree to cooperate fully in any securities regulatory investigation or proceeding or judicial proceeding with respect to each party's activities under this Agreement and promptly to notify the other party of any such investigation or proceeding. SECTION 11. CAPTIONS All captions used in this Agreement are for convenience only, are not a party hereof, and are not to be used in construing or interpreting any aspect hereof. SECTION 12. ENTIRE UNDERSTANDING This Agreement contains the entire understanding of the parties hereto with respect to the subject matter contained herein and supersedes all previous agreements. This Agreement shall be binding upon the parties hereto when signed by Dealer and accepted by the Distributor. SECTION 13. SEVERABILITY Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law. If, however, any provision of this Agreement is held under applicable law to be invalid, illegal, or unenforceable in any respect, such provision shall be ineffective only to the extent of such invalidity, and the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected or impaired in any way. SECTION 14. SURVIVAL The representations, warranties, covenants and agreements of the undersigned contained in this Agreement, including, without limitation, the indemnity agreement contained in Section 5 hereof, shall survive any termination of this Agreement. SECTION 15. NOTICES Unless otherwise agreed to by both parties, all notices under this Agreement will be given in writing and delivered by personal delivery or by postage prepaid, registered or certified United States first class mail, return receipt requested, or by facsimile, telecopier, telex or similar means of same day delivery (with a confirming copy by mail as provided herein). Unless otherwise notified in writing, all notices to the Distributor shall be given or sent to the Distributor at its offices, located at 9601 Blackwell Road, Rockville, MD 20850, and all notices to Dealer shall be given or sent to Dealer at the Dealer's address shown below. 10 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year set forth below. RYDEX DISTRIBUTORS, INC. By: _________________________________ (Signature) Name: _________________________________ Title: _________________________________ DEALER: [DEALER FIRM] By: _________________________________ (Signature) Name: _________________________________ Title: _________________________________ Address: Telephone: FINRA CRD # Date: _________________________________ 11 SCHEDULE A DATED 11/11/2009 TO THE RYDEX|SGI FAMILY OF FUNDS DEALER AGREEMENT LIST OF APPLICABLE FUNDS AND AUTHORIZED SHARE CLASSES
------------------------------------------------------------------------------------------------- INVESTOR/H CLASS ADVISOR CLASS A CLASS C CLASS ------------------------------------------------------------------------------------------------- -------------------------- FUND NAME FINRA CUSIP FUND ID FINRA CUSIP FUND FINRA CUSIP FUND ID FINRA CUSIP FUND ID SYMBOL SYMBOL ID SYMBOL SYMBOL -------------------------------------------------------------------------------------------------------------------------- All-Asset Aggressive RYGHX 78356A533 274 RYGGX 78356A590 774 RYGEX 78356A566 874 Strategy -------------------------------------------------------------------------------------------------------------------------- All-Asset Conservative RYEPX 78356A558 272 RYEOX 78356A624 772 RYEEX 78356A582 872 Strategy -------------------------------------------------------------------------------------------------------------------------- All-Asset Moderate RYMLX 78356A541 273 RYMOX 78356A616 773 RYMYX 78356A574 873 Strategy -------------------------------------------------------------------------------------------------------------------------- All-Cap Opportunity RYSRX 78355E833 258 RYAMX 78355E510 758 RYISX 78355E825 858 -------------------------------------------------------------------------------------------------------------------------- Alternative Strategies RYFOX 78356A269 280 RYFDX 78356A285 780 RYFFX 78356A277 880 Allocation -------------------------------------------------------------------------------------------------------------------------- Banking RYKIX 783554868 242 RYKAX 783554876 342 RYBKX 78355E379 742 RYKCX 783554314 842 -------------------------------------------------------------------------------------------------------------------------- Basic Materials RYBIX 783554843 235 RYBAX 783554850 335 RYBMX 78355E361 735 RYBCX 783554298 835 -------------------------------------------------------------------------------------------------------------------------- Biotechnology RYOIX 783554827 243 RYOAX 783554835 343 RYBOX 78355E353 743 RYCFX 783554280 843 -------------------------------------------------------------------------------------------------------------------------- Commodities Strategy RYMBX 78356A509 265 RYMEX 78356A301 765 RYMJX 78356A400 865 -------------------------------------------------------------------------------------------------------------------------- Consumer Products RYCIX 783554793 236 RYCAX 783554819 336 RYPDX 78355E346 736 RYCPX 783554272 836 -------------------------------------------------------------------------------------------------------------------------- Dow 2x Strategy RYCVX 78355Y201 248 RYLDX 78355Y888 748 RYCYX 78355Y102 848 -------------------------------------------------------------------------------------------------------------------------- Electronics RYSIX 783554777 244 RYSAX 783554785 344 RYELX 78355E338 744 RYSCX 783554264 844 -------------------------------------------------------------------------------------------------------------------------- Energy RYEIX 783554751 231 RYEAX 783554769 331 RYENX 78355E320 731 RYECX 783554256 831 -------------------------------------------------------------------------------------------------------------------------- Energy Services RYVIX 783554736 241 RYVAX 783554744 341 RYESX 78355E130 741 RYVCX 783554249 841 -------------------------------------------------------------------------------------------------------------------------- Europe 1.25x Strategy RYEUX 783554447 201 RYAEX 78355E692 701 RYCEX 783554116 801 -------------------------------------------------------------------------------------------------------------------------- Financial Services RYFIX 783554710 232 RYFAX 783554728 332 RYFNX 78355E312 732 RYFCX 783554231 832 -------------------------------------------------------------------------------------------------------------------------- Global 130/30 Strategy RYQMX 78355E783 259 RYASX 78355E494 759 RYQCX 78355E791 859 -------------------------------------------------------------------------------------------------------------------------- Global Market Neutral RYGNX 78356A194 282 RYGAX 78356A228 782 RYGMX 78356A210 882 -------------------------------------------------------------------------------------------------------------------------- Govt Long Bond 1.2x RYGBX 783554504 212 RYADX 78355E767 312 RYABX 78355E460 712 RYCGX 783554330 812 Strategy -------------------------------------------------------------------------------------------------------------------------- Health Care RYHIX 783554686 233 RYHAX 783554694 333 RYHEX 78355E296 733 RYHCX 783554223 833 -------------------------------------------------------------------------------------------------------------------------- High Yield Strategy RYHGX 78356A442 276 RYHDX 78356A483 776 RYHHX 78356A467 876 -------------------------------------------------------------------------------------------------------------------------- International OpportunityRYFHX 78356A392 278 RYFRX 78356A426 778 RYFWX 78356A418 878 -------------------------------------------------------------------------------------------------------------------------- Internet RYIIX 783554496 245 RYIAX 783554488 345 RYINX 78355E288 745 RYICX 783554215 845 -------------------------------------------------------------------------------------------------------------------------- Inverse Dow 2x Strategy RYCWX 78355Y409 249 RYIDX 78355Y870 749 RYCZX 78355Y300 849 -------------------------------------------------------------------------------------------------------------------------- Inverse Govt Long Bond RYJUX 783554702 214 RYJAX 78355E775 314 RYAQX 78355E429 714 RYJCX 783554322 814 Strategy -------------------------------------------------------------------------------------------------------------------------- Inverse High Yield RYIHX 78356A434 277 RYILX 78356A475 777 RYIYX 78356A459 877 Strategy -------------------------------------------------------------------------------------------------------------------------- Inverse Mid Cap Strategy RYMHX 78355E593 255 RYAGX 78355E627 755 RYCLX 78355E619 855 -------------------------------------------------------------------------------------------------------------------------- Inverse NASDAQ-100(R) 2x RYVNX 783554397 230 RYVTX 78355Y805 730 RYCDX 78355E502 830 Strategy -------------------------------------------------------------------------------------------------------------------------- Inverse NASDAQ-100(R) RYAIX 783554512 220 RYAAX 78355E759 320 RYAPX 78355E437 720 RYACX 783554348 820 Strategy -------------------------------------------------------------------------------------------------------------------------- Inverse Russell 2000 2x RYIRX 78356A699 271 RYIUX 78356A723 771 RYIZX 78356A715 871 Strategy -------------------------------------------------------------------------------------------------------------------------- Inverse Russell 2000 RYSHX 78355E528 250 RYAFX 78355E544 750 RYCQX 78355E536 850 Strategy -------------------------------------------------------------------------------------------------------------------------- Inverse S&P 500 2x RYTPX 783554421 227 RYTMX 78355Y607 727 RYCBX 78355E304 827 Strategy -------------------------------------------------------------------------------------------------------------------------- Inverse S&P 500 Strategy RYURX 783554405 217 RYUAX 783554538 317 RYARX 78355E718 717 RYUCX 783554363 817 -------------------------------------------------------------------------------------------------------------------------- Japan 2x Strategy RYJHX 78356A293 279 RYJSX 78356A368 779 RYJTX 78356A335 879 -------------------------------------------------------------------------------------------------------------------------- Leisure RYLIX 783554660 237 RYLAX 783554678 337 RYLSX 78355E270 737 RYLCX 783554199 837 -------------------------------------------------------------------------------------------------------------------------- Long/Short Commodities RYLFX 78356A251 281 RYLBX 78356A244 781 RYLEX 78356A236 881 Strategy -------------------------------------------------------------------------------------------------------------------------- Managed Futures Strategy RYMFX 78356A491 275 RYMTX 78356A517 775 RYMZX 78356A525 875 -------------------------------------------------------------------------------------------------------------------------- Mid Cap 1.5x Strategy RYMDX 78355E882 204 RYAHX 78355E486 704 RYDCX 78355E700 804 -------------------------------------------------------------------------------------------------------------------------- Money Market RYMXX 783554306 210 RYDXX 783554561 310 RYAXX 78355E395 710 RYCXX 78355E106 810 -------------------------------------------------------------------------------------------------------------------------- Multi-Hedge Strategies RYMSX 78356A780 267 RYMQX 78356A855 767 RYMRX 78356A848 867 -------------------------------------------------------------------------------------------------------------------------- NASDAQ-100(R) RYOCX 783554603 218 RYAOX 783554520 318 RYATX 78355E445 718 RYCOX 783554355 818 -------------------------------------------------------------------------------------------------------------------------- NASDAQ-100(R) 2x RYVYX 783554413 228 RYVLX 78355Y706 728 RYCCX 78355E403 828 Strategy -------------------------------------------------------------------------------------------------------------------------- Nova RYNVX 783554108 215 RYNAX 783554546 315 RYANX 78355E452 715 RYNCX 783554371 815 -------------------------------------------------------------------------------------------------------------------------- Precious Metals RYPMX 783554207 216 RYMPX 78355E858 316 RYMNX 78355E262 716 RYZCX 783554181 816 -------------------------------------------------------------------------------------------------------------------------- Real Estate RYHRX 78355E387 247 RYREX 78355E254 747 RYCRX 78355E809 847 -------------------------------------------------------------------------------------------------------------------------- Retailing RYRIX 783554645 238 RYRAX 783554652 338 RYRTX 78355E247 738 RYRCX 783554173 838 -------------------------------------------------------------------------------------------------------------------------- Russell 2000 RYRHX 78356A665 269 RYRRX 78356A681 769 RYROX 78356A673 869 -------------------------------------------------------------------------------------------------------------------------- Russell 2000 1.5x RYMKX 783554389 203 RYAKX 78355E478 703 RYCMX 78355E601 803 Strategy -------------------------------------------------------------------------------------------------------------------------- Russell 2000 2x Strategy RYRSX 78356A731 270 RYRUX 78356A756 770 RYRLX 78356A749 870 -------------------------------------------------------------------------------------------------------------------------- S&P 500 RYSPX 78356A632 268 RYSOX 78356A657 768 RYSYX 78356A640 868 -------------------------------------------------------------------------------------------------------------------------- S&P 500 2x Strategy RYTNX 783554439 225 RYTTX 78355Y508 725 RYCTX 78355E205 825 -------------------------------------------------------------------------------------------------------------------------- S&P 500 Pure Growth RYAWX 78355E650 257 RYLGX 78355E189 757 RYGRX 78355E668 857 -------------------------------------------------------------------------------------------------------------------------- S&P 500 Pure Value RYZAX 78355E676 256 RYLVX 78355E171 756 RYVVX 78355E684 856 -------------------------------------------------------------------------------------------------------------------------- S&P MidCap 400 Pure RYBHX 78355E726 254 RYMGX 78355E742 754 RYCKX 78355E734 854 Growth -------------------------------------------------------------------------------------------------------------------------- S&P MidCap 400 Pure Value RYAVX 78355E635 253 RYMVX 78355E163 753 RYMMX 78355E643 853 -------------------------------------------------------------------------------------------------------------------------- S&P SmallCap 600 Pure RYWAX 78355E551 252 RYSGX 78355E148 752 RYWCX 78355E569 852 Growth -------------------------------------------------------------------------------------------------------------------------- S&P SmallCap 600 Pure RYAZX 78355E577 251 RYSVX 78355E155 751 RYYCX 78355E585 851 Value -------------------------------------------------------------------------------------------------------------------------- Strengthening Dollar 2x RYSBX 78356A806 264 RYSDX 78356A608 764 RYSJX 78356A707 864 Strategy -------------------------------------------------------------------------------------------------------------------------- Technology RYTIX 783554629 234 RYTAX 783554637 334 RYTHX 78355E239 734 RYCHX 783554165 834 -------------------------------------------------------------------------------------------------------------------------- Telecommunications RYMIX 783554595 239 RYMAX 783554611 339 RYTLX 78355E221 739 RYCSX 783554157 839 -------------------------------------------------------------------------------------------------------------------------- Transportation RYPIX 783554579 240 RYPAX 783554587 340 RYTSX 78355E213 740 RYCNX 783554140 840 -------------------------------------------------------------------------------------------------------------------------- Utilities RYUIX 783554470 246 RYAUX 783554462 346 RYUTX 78355E197 746 RYCUX 783554132 846 -------------------------------------------------------------------------------------------------------------------------- Weakening Dollar 2x RYWBX 78356A863 263 RYWDX 78356A889 763 RYWJX 78356A871 863 Strategy --------------------------------------------------------------------------------------------------------------------------
12 LIST OF APPLICABLE FUNDS (FORMERLY KNOWN AS THE "SECURITY FUNDS") AND AUTHORIZED SHARE CLASSES
------------------------------------------------------------------------------------------------- CLASS A CLASS B CLASS C INSTITUTIONAL CLASS ------------------------------------------------------------------------------------------------- -------------------------- FUND NAME FINRA CUSIP FUND ID FINRA CUSIP FUND FINRA CUSIP FUND ID FINRA CUSIP FUND ID SYMBOL SYMBOL ID SYMBOL SYMBOL -------------------------------------------------------------------------------------------------------------------------- All Cap Value SESAX 814219382 --- --- SEVCX 814219374 SVSIX 814219366 -------------------------------------------------------------------------------------------------------------------------- Alpha Opportunity SAOAX 814219481 SAOBX 814219473 SAOCX 814219465 SAOIX -------------------------------------------------------------------------------------------------------------------------- Equity SECEX 814219101 SEQBX 814219200 SFECX 814219846 --- --- -------------------------------------------------------------------------------------------------------------------------- Global SEQAX 814219309 SGOBX 814219408 SFGCX 814219838 --- --- -------------------------------------------------------------------------------------------------------------------------- Global Institutional --- --- --- --- --- --- SGOLX 814219457 -------------------------------------------------------------------------------------------------------------------------- High Yield SIHAX 814291878 SIHBX 814291860 SIHSX 814291761 SHYIX 814291662 -------------------------------------------------------------------------------------------------------------------------- Large Cap Value SECIX 814289104 SECBX 814289203 SEGIX 814289302 --- --- -------------------------------------------------------------------------------------------------------------------------- Large Cap Value Institutional --- --- --- --- --- --- SLCIX 814289500 -------------------------------------------------------------------------------------------------------------------------- Mid Cap Growth SECUX 815174107 SEUBX 815174206 SUFCX 815174305 --- --- -------------------------------------------------------------------------------------------------------------------------- Mid Cap Value SEVAX 814219887 SVSBX 814219879 SEVSX 814219820 --- --- -------------------------------------------------------------------------------------------------------------------------- Mid Cap Value Institutional --- --- --- SVUIX 814219432 -------------------------------------------------------------------------------------------------------------------------- Select 25 SEFAX 814219739 SEFBX 814219721 SSSCX 814219713 --- --- -------------------------------------------------------------------------------------------------------------------------- Small Cap Growth SSCAX 814219861 SEPBX 814219853 SESCX 814219812 --- --- -------------------------------------------------------------------------------------------------------------------------- Small Cap Value SSUAX 814219416 --- --- SSVCX 814219390 SSUIX 814219424 -------------------------------------------------------------------------------------------------------------------------- U.S. Intermediate Bond (formerly Diversified Income) SIUSX 814291209 SUGBX 814291407 SDICX 814291779 --- --- --------------------------------------------------------------------------------------------------------------------------
13 SCHEDULE B DATED 11/11/2009 TO THE DEALER AGREEMENT DATED ________ BETWEEN RYDEX DISTRIBUTORS, INC. AND [DEALER FIRM] DISTRIBUTION AND SERVICE FEES. The following fees are due and payable monthly pursuant to Section 2.e. of the DEALER AGREEMENT between RYDEX DISTRIBUTORS, INC. (the "Distributor") and [DEALER FIRM] CLASS DISTRIBUTION AND SERVICE FEES (PURSUANT TO RULE 12B-1) Investor None Advisor 0.25% (25 basis points) A 0.25% (25 basis points) C 1.00% (divided into 75 basis points for distribution services and 25 basis points for shareholder services) H 0.25% (25 basis points) Institutional None In no event will the fee for performing distribution-related services exceed 0.25% (25 basis points) of average daily net assets with respect to Advisor Class, A-Class and H-Class Shares, or 0.75% (75 basis points) of average daily net assets with respect to C-Class Shares. In addition, in no event will the fee for performing shareholder services exceed 0.25% (25 basis points) of average daily net assets with respect to Advisor Class and C-Class Shares. To the extent the Distributor waives any payments payable to the Distributor under such Distribution Plan, the amounts payable to you will also be reduced. Agreed to and accepted by: RYDEX DISTRIBUTORS INC. [DEALER FIRM] Print Name: Print Name: ----------------------- --------------------------- Title: Title: ---------------------------- -------------------------------- Date: Date: ---------------------------- -------------------------------- 14 SCHEDULE B CONTINUED In addition to amounts paid as a sales commission, Rydex|SGI, at its expense, currently provides additional compensation to certain investment dealers who have sold shares of Rydex|SGI Funds. These payments may provide an incentive for dealers to sell shares of the Rydex|SGI Funds and promote the retention of their customer's assets in the Funds. Rydex|SGI determines the cash payments described above in response to requests from dealer firms, based on factors it deems relevant. (A number of factors will be considered in determining payments, including the dealer's sales, assets, share class utilized and the quality of the dealer's relationship with Rydex|SGI.) Rydex|SGI will, on an annual basis, determine the advisability of continuing these payments and the level of payments made to dealers in any given year will vary. Rydex|SGI may also pay expenses associated with meetings that facilitate educating financial advisers and shareholders about the Rydex|SGI Funds that are conducted by dealers. 15 SCHEDULE C DATED 11/11/2009 TO THE DEALER AGREEMENT DATED ________ BETWEEN RYDEX DISTRIBUTORS, INC. AND [DEALER FIRM] ESTIMATE REQUIREMENTS. For purposes of executing Section 2.c(i). of the DEALER AGREEMENT between RYDEX DISTRIBUTORS, INC. (the "Distributor") and [DEALER FIRM](the "Dealer"), the Distributor has determined the following: All orders individually or with a combined total greater than $250,000, are subject to the estimate requirements set forth in the aforementioned dealer agreement. The Distributor reserves the right to adjust the required estimate amount from time to time, as necessary. Distributor will promptly notify Dealer of any subsequent change in the required estimate amount. The Estimate Requirement does not apply with respect to orders for those Rydex|SGI Funds formerly known as the "Security Funds." Agreed to and accepted by: RYDEX DISTRIBUTORS INC. [DEALER FIRM] Print Name: Print Name: ----------------------- --------------------------- Title: Title: ---------------------------- -------------------------------- Date: Date: ---------------------------- -------------------------------- 16 SCHEDULE D DATED 11/11/2009 TO THE DEALER AGREEMENT AGREEMENT DATED _____________ BETWEEN RYDEX DISTRIBUTORS, INC. AND [DEALER FIRM] Each Rydex|SGI Fund is registered and its Shares are qualified for sale in the following states and jurisdictions(1) as of 11/11/2009. Alabama Montana Alaska Nebraska Arizona New Hampshire Arkansas New Jersey California New York Colorado Nevada Connecticut New Mexico Delaware North Carolina Florida North Dakota Georgia Ohio Hawaii Oklahoma Idaho Oregon Illinois Pennsylvania Indiana Puerto Rico Iowa Rhode Island Kansas South Carolina Kentucky South Dakota Louisiana Tennessee Maine Texas Maryland Utah Massachusetts Vermont Michigan Virginia Minnesota Washington Mississippi West Virginia Missouri Wisconsin Wyoming District of Columbia Guam(2) -------------------- (1) We assume no responsibility or obligation as to your right to offer or sell Shares in any state or jurisdiction. (2) Rydex|SGI Funds formerly known as the "Security Funds" are not qualified for sale in Guam 17