RECORDKEEPING AND INVESTMENT
ACCOUNTING AGREEMENT
The parties to this Agreement are Security Management Company, LLC,
("Security Management"), a Kansas Corporation, having its principal place of
business at __________ on behalf of SECURITY INCOME FUND (the "TRUST") and
SECURITY CAPITAL PRESERVATION FUND (the "FUND"), a series of the Trust, and
BANKERS TRUST COMPANY ("BANKERS"), a New York banking corporation, having its
principal place of business at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000. This
Agreement is made effective as of _______________, 1999.
WITNESS
WHEREAS, the Trust is registered as an "investment company" under the
Investment Company Act of 1940 (the "1940 Act") and the Fund is a duly
authorized series of the Trust; and
WHEREAS, Bankers performs certain investment accounting and recordkeeping
services on a computerized accounting system (the "Portfolio Accounting System")
in connection with maintaining certain accounting records of the Fund;
WHEREAS, Security Management desires to appoint Bankers as recordkeeping and
investment accounting sub-agent for the Fund, and Bankers is willing to accept
such appointment;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties, intending to be legally bound, mutually covenant and
agree as follows:
1. APPOINTMENT OF INVESTMENT ACCOUNTING AND RECORDKEEPING SUB-AGENT. Security
Management hereby constitutes and appoints Bankers as investment accounting
and recordkeeping sub-agent for the Fund to perform accounting and
recordkeeping functions related to portfolio transactions required of the
Fund under Rule 31a-1 of the 1940 Act and to calculate the net asset value
of the Fund.
2. REPRESENTATIONS AND WARRANTIES OF SECURITY MANAGEMENT. Security Management
hereby represents, warrants and acknowledges to Bankers:
(a) That it is a corporation duly organized and existing and in good
standing under the laws of Kansas;
(b) That it has the requisite power and authority under applicable law, its
charter and its bylaws to enter into this Agreement; that it has taken
all requisite action necessary to appoint Bankers as investment
accounting and recordkeeping sub-agent for Fund; that this Agreement
has been duly executed and delivered by Security Management on behalf
of the Fund; and that this Agreement constitutes a legal, valid and
binding obligation of Security Management, enforceable in accordance
with its terms; and
(c) That it has determined to its satisfaction that the Portfolio
Accounting System is appropriate and suitable for its needs.
3. REPRESENTATIONS AND WARRANTIES OF BANKERS. Bankers hereby represents,
warrants and acknowledges to Security Management:
(a) That it is a New York banking corporation duly organized and existing
and in good standing under the laws of the State of New York;
(b) That it has the requisite power and authority under applicable law, its
charter and its bylaws to enter into and perform this Agreement; that
this Agreement has been duly executed and delivered by Bankers; and
that this Agreement constitutes a legal, valid and binding obligation
of Bankers, enforceable in accordance with its terms; and
(c) That the accounts and records maintained and preserved by Bankers shall
be the property of the Fund and that it will not use any information
made available to it under the terms hereof for any purpose other than
complying with its duties and responsibilities hereunder or as
specifically authorized by the Fund in writing.
4. DUTIES AND RESPONSIBILITIES OF THE FUND.
(a) Fund shall turn over to Bankers all of Fund's accounts and records
previously maintained, if any.
(b) Fund shall provide to Bankers the information necessary to perform
Bankers' duties and responsibilities hereunder in a written or printed
instrument, or an electronic equivalent acceptable to Bankers, prior to
the close of the New York Stock Exchange on each day on which Bankers
prices the Funds' securities and foreign currency holdings.
(c) Fund shall furnish Bankers with the declaration, record and payment
dates and amounts of any dividends or income and any other special
actions required concerning the securities in the portfolio when such
information is not readily available from generally accepted securities
industry services or publications.
(d) Fund shall pay to Bankers such compensation at such time as may from
time to time be agreed upon in writing by Bankers and Fund. The initial
compensation schedule is attached as Exhibit A.
(e) Fund shall provide to Bankers, as conclusive proof of any fact or
matter required to be ascertained from Fund as reasonably determined by
Bankers, a certificate signed by Fund's president or other officer of
Fund, or other authorized individual, as reasonably requested by
Bankers. Fund shall also provide to Bankers instructions with respect
to any matter concerning this Agreement requested by Bankers. Bankers
may rely upon any instruction or information furnished by any person
reasonably believed by it to be an officer or agent of Fund, and shall
not be held to have notice of any change of authority of any such
person until receipt of written notice thereof from Fund.
(f) Fund shall preserve the confidentiality of the Portfolio Accounting
System and the tapes, books, reference manuals, instructions, records,
programs, documentation and information of, and other materials
relevant to, the Portfolio Accounting System and the business of
Bankers (collectively, "Confidential Information"). Fund shall not
voluntarily disclose such Confidential Information to any other person
other than its own employees or agents who reasonably have a need to
know such information pursuant to this Agreement. Fund shall return all
such Confidential Information to Bankers upon termination or expiration
of this Agreement.
(g) If Bankers shall provide Fund direct access to the computerized
recordkeeping and reporting system used hereunder or if Bankers and
Fund shall agree to utilize any electronic system of communication,
Fund shall be fully responsible for any and all consequences of the use
or misuse of the terminal device, passwords, access instructions and
other means of access to such system(s) which are utilized by, assigned
to or otherwise made available to the Fund. Fund agrees to implement
and enforce appropriate security policies and procedures to prevent
unauthorized or improper access to or use of such system(s). Bankers
shall be fully protected in acting hereunder upon any instructions,
communications, data or other information received by Bankers by such
means as fully and to the same effect as if delivered to Bankers by
written instrument signed by the requisite authorized representative(s)
of the Fund.
5. DUTIES AND RESPONSIBILITIES OF BANKERS.
(a) Bankers shall calculate Fund's net asset value in accordance with
Fund's registration statement and applicable regulations.
(b) With the direction of Fund, or Fund's accountants, or other advisors,
Bankers shall prepare and maintain, in complete, accurate, and current
form, all accounts and records necessary as a basis for calculation of
Fund's net asset value, and shall preserve such records in the manner
and for the periods required by law or for such longer period as the
parties may agree upon in writing.
(c) Bankers shall make available to Fund for inspection or reproduction
within a reasonable time, upon demand, all accounts and records of Fund
maintained and preserved by Bankers.
(d) Bankers shall be entitled to rely conclusively on the completeness and
correctness of any and all accounts and records turned over to it by
Fund.
(e) Bankers shall assist Fund's independent accountants, or upon approval
of Fund or upon demand, any regulatory body, in any requested review of
Fund's accounts and records maintained by Bankers but shall be
reimbursed by Fund for all expenses and employee time invested in any
such review outside of routine and normal periodic reviews. Inspections
conducted by the Securities and Exchange Commission shall be considered
routine.
(f) Bankers shall respond to reasonable requests for information from Fund
books and records maintained by Bankers. Reasonable requests include
information necessary for Fund to prepare tax returns, questionnaires,
periodic reports to shareholders and other such other reports as Fund
and Bankers shall agree upon from time to time.
(g) Bankers shall not have any responsibility hereunder to Fund, Fund's
shareowners or any other person or entity for moneys or securities of
Fund, whether held by Fund or Fund's custodians.
6. INDEMNIFICATION.
(a) Fund shall indemnify and hold Bankers harmless from and against any and
all costs, expenses, losses, damages, charges, reasonable counsel fees,
payments and liabilities which may be asserted against or incurred by
Bankers, or for which it may be liable, arising out of or attributable
to:
1. Bankers' action or omission to act pursuant hereto, except for any
loss or damage arising from any negligent act or willful
misconduct of Bankers.
2. Bankers' payment of money as requested by Fund, or the taking of
any action which might make Bankers liable for payment of money;
provided, however, that Bankers shall not be obligated to expend
its own moneys or to take any such action except in Bankers' sole
discretion.
3. Bankers' action or omission to act hereunder upon any
instructions, advice, notice, request, consent, certificate or
other instrument or paper appearing to it to be genuine and to
have been properly executed.
4. Bankers' action or omission to act in good faith reliance on the
advice or opinion of counsel acceptable to both the Fund and
Bankers.
5. Banker's action or omission to act in good faith reliance on
statements of counsel to the Fund, the Fund's independent
accountants, and the Fund's officers or other authorized
individuals provided by Fund resolution.
6. The legality of the issue, sale or purchase of any shares of the
Fund, the sufficiency of the purchase or sale price, or the
declaration of any dividend by the Fund, whether paid in cash or
stock.
7. Any error, omission, inaccuracy or other deficiency in Fund's
accounts and records or other information provided by or on behalf
of Fund to Bankers, or the failure of the Fund to provide, or
provide in a timely manner, the information needed by Bankers to
perform its functions.
8. The Fund's refusal or failure to comply with the terms of this
Agreement, the Fund's negligence or willful misconduct in
connection with the performance of its duties hereunder, or the
failure of any representation of the Fund hereunder to be and
remain true and correct in all respects at all times.
9. The use or misuse, whether authorized or unauthorized, of the
Portfolio Accounting System or other computerized recordkeeping
and reporting system to which Bankers provides Fund direct access
hereunder or of any other electronic system of communication used
hereunder by Fund or by any person who acquires access to such
system(s) through the terminal device, passwords, access
instruction or other means of access to such system(s) which are
utilized by, assigned to or otherwise made available to the Fund,
except to the extent attributable to any negligence or willful
misconduct by Bankers.
(b) Bankers shall indemnify and hold Fund harmless from and against any and
all costs, expenses, losses, damages, charges, reasonable counsel fees,
payments and liabilities which may be asserted against or incurred by
Fund or for which it may be liable, arising out of or attributable to:
1. Bankers' refusal to comply with the terms of this Agreement or the
failure of any representation or warranty of Bankers hereunder to
be and remain true and correct in all respects at all times.
2. Any negligent or willful misconduct of Bankers, including direct
losses occasioned by the negligent error of Bankers in calculating
the Fund's net asset value; provided, however, that the Fund shall
accept Bankers' offer to minimize or eliminate any resulting
monetary damages by employing such alternatives as reprocessing
fund shareowner transaction, which alternative shall be done at
the reasonable expense of Bankers.
3. The failure of Bankers to comply with applicable law in connection
with the performance of its duties hereunder.
(c) In no event shall Bankers or Fund be liable for consequential, special
or punitive damages.
7. FORCE MAJEURE. Bankers shall not be responsible or liable for its failure or
delay in performance of its obligations under this Agreement arising out of
or caused, directly or indirectly, by circumstances beyond its reasonable
control, including, without limitation: any interruption, loss or
malfunction of any utility, transportation, computer (hardware or software)
or communication service; inability to obtain labor, material, equipment or
transportation, or a delay in mails; governmental or exchange action,
statute, ordinance, rulings, regulations or direction; war, strike, riot,
emergency, civil disturbance, terrorism, vandalism, explosions, labor
disputes, freezes, floods, fires, tornadoes, acts of God or public enemy,
revolutions, or insurrection.
8. PROCEDURES. Bankers and Fund may from time to time adopt procedures as they
agree upon, and Bankers may conclusively assume that any procedure approved
or directed by Fund or its accountants or other advisors does not conflict
with or violate any requirements of Fund's prospectus, charter or
declaration of trust, bylaws, any applicable law, rule or regulation, or any
order, decree or agreement by which the Fund may be bound.
9. TERM AND TERMINATION. The initial term of this Agreement shall be a period
of one year commencing on the effective date hereof. This Agreement shall
continue thereafter until terminated by either party by notice in writing
received by the other party not less than ninety (90) days prior to the date
upon which such termination shall take effect. Upon termination of this
Agreement:
(a) Fund shall pay to Bankers its fees and compensation due hereunder.
(b) Fund shall designate a successor (which may be Fund) by notice in
writing to Bankers on or before the termination date.
(c) Bankers shall deliver to the successor, or if none has been designated,
to Fund, at Bankers' office, all records, funds and other properties of
Fund deposited with or held by Bankers hereunder. In the event that
neither a successor nor Fund takes delivery of all records, funds and
other properties of Fund by the termination date, Bankers' sole
obligation with respect thereto from the termination date until
delivery to a successor or Fund shall be to exercise reasonable care to
hold the same in custody in its form and condition as of the
termination date, and Bankers shall be entitled to reasonable
compensation therefor, including but not limited to all of its
out-of-pocket costs and expenses incurred in connection therewith.
10. NOTICES. All notices, requests, instructions and other writings shall be
deemed to have been properly given hereunder if addressed as follows:
If to the Fund:
_______________________________
_______________________________
Attention: ____________________
If to Bankers Trust Company
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
or to such other address as a party may designate, in writing, to each
other party.
11. MISCELLANEOUS.
(a) This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the
State of New York, without reference to the choice of laws principles
thereof.
(b) All terms and provisions of this Agreement shall be binding upon, inure
to the benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns.
(c) The representations and warranties and the indemnification extended
hereunder, are intended to and shall continue after and survive the
expiration, termination or cancellation of this Agreement.
(d) The confidentiality provisions of Sections 4.F., 4.G., 4.H. shall
continue after and survive the expiration, termination or cancellation
of this Agreement.
(e) No provisions of the Agreement may be amended or modified in any manner
except by a written agreement properly authorized and executed by each
party hereto.
(f) The failure of either party to insist upon the performance of any terms
or conditions of this Agreement or to enforce any rights resulting from
any breach of any of the terms or conditions of this Agreement,
including the payment of damages, shall not be construed as a
continuing or permanent waiver of any such terms, conditions, rights or
privileges, but the same shall continue and remain in full force and
effect as if no such forbearance or waiver had occurred.
(g) The captions in this Agreement are included for convenience of
reference only, and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect.
(h) This Agreement may be executed in two or more separate counterparts,
each of which shall be deemed an original but all of which together
shall constitute one and the same instrument.
(i) If any provision of this Agreement shall be determined to be invalid or
unenforceable, the remaining provisions of this Agreement shall not be
affected thereby, and every provision of this Agreement shall remain in
full force and effect and shall remain enforceable to the fullest
extent permitted by applicable law.
(j) This Agreement may not be assigned by either party hereto without the
prior written consent of the other. The parties hereby consent to the
acquisition of Bankers by Deutsche Bank AG or an affiliate of Deutsche
Bank AG.
(k) Neither the execution nor performance of this Agreement shall be deemed
to create a partnership or joint venture by and between Fund and
Bankers.
(l) Except as specifically provided herein, this Agreement does not in any
way affect any other agreements entered into among the parties hereto
and any actions taken or omitted by any party hereunder shall not
affect any rights or obligations of any other party hereunder.
(m) Notice is hereby given that a copy of Trust's declaration of trust and
all amendments thereto is on file with the Secretary of State of the
state of its organization; that this Agreement has been executed on
behalf of Fund by the undersigned duly authorized representative of
Fund in his/her capacity as such and not individually; and that the
obligations of this Agreement shall only be binding upon the assets and
property of Trust and shall not be binding upon any trustee, officer or
shareholder of Trust individually.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective and duly authorized officers, to be effective as of the day and
year first above written.
BANKERS TRUST COMPANY
By:
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Title: [ ]
SECURITY MANAGEMENT COMPANY, LLC
By:
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Title: [ ]
SECURITY INCOME FUND
By:
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Title: [ ]
SECURITY CAPITAL PRESERVATION FUND
By:
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Title: [ ]
EXHIBIT A
FEES
For one fund and one class of that fund $10,000.00
For each additional class $ 2,000 00.
