CLASS C
DISTRIBUTION AGREEMENT
THIS AGREEMENT, made this 30th day of April, 1999, between Security Income Fund,
a Kansas corporation (hereinafter referred to as the "Company"), and Security
Distributors, Inc., a Kansas corporation (hereinafter referred to as the
"Distributor").
WITNESSETH:
WHEREAS, the Company is engaged in business as an open-end, management
investment company registered under the federal Investment Company Act of 1940
(the "1940 Act");
WHEREAS, the Company issues its stock in several series; and
WHEREAS, the Distributor is willing to act as principal underwriter for the
Company to offer for sale, sell and deliver after sale, the Class C Shares of
the Company's Capital Preservation Series of common stock (hereinafter referred
to as the "Shares") on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
set forth, the parties hereto agree as follows:
1. Employment of Distributor. The Company hereby employs the Distributor to
act as principal underwriter for the Company with respect to its Class C
Shares and hereby agrees that during the term of this Agreement, and any
renewal or extension thereof, or until any prior termination thereof,
the Distributor shall have the exclusive right to offer for sale and to
distribute any and all of the Class C Shares issued or to be issued by
the Company. The Distributor hereby accepts such employment and agrees
to act as the distributor of the Class C Shares issued or to be issued
by the Company during the period this Agreement is in effect and agrees
during such period to offer for sale such Shares as long as such Shares
remain available for sale, unless the Distributor is unable legally to
make such offer for sale as the result of any law or governmental
regulation.
2. Offering Price and Commissions. Prior to the issuance of any Shares by
the Company pursuant to any subscription tendered by or through the
Distributor and confirmed for sale to or through the Distributor, the
Distributor shall pay or cause to be paid to the custodian of the
Company in cash, an amount equal to the net asset value of such Shares
at the time of acceptance of each such subscription and confirmation by
the Company of the sale of such Shares. All Shares shall be sold to the
public only at their public offering price at the time of such sale, and
the Company shall receive not less than the full net asset value
thereof.
3. Allocation of Expenses and Charges. During the period this Agreement is
in effect, the Company shall pay all costs and expenses in connection
with the registration of Shares under the Securities Act of 1933 (the
"1933 Act"), including all expenses in connection with the preparation
and printing of any registration statements and prospectuses necessary
for registration thereunder but excluding any additional costs and
expenses incurred in furnishing the Distributor with prospectuses.
The Company also will pay all costs, expenses and fees incurred in
connection with the qualification of the Shares under the applicable
Blue Sky laws of the states in which the Shares are offered.
During the period this Agreement is in effect, the Distributor will pay
or reimburse the Company for:
(a) All costs and expenses of printing and mailing prospectuses (other
than to existing shareholders) and confirmations, and all costs and
expenses of preparing, printing and mailing advertising material,
sales literature, circulars, applications, and other materials used
or to be used in connection with the offering for sale and the sale
of Shares; and
(b) All clerical and administrative costs in processing the
applications for and in connection with the sale of Shares.
The Distributor agrees to submit to the Company for its prior approval
all advertising material, sales literature, circulars and any other
material which the Distributor proposes to use in connection with the
offering for sale of Shares.
4. Redemption of Shares. The Distributor, as agent of and for the account
of the Fund, may redeem Shares of the Fund offered for resale to it at
the net asset value of such Shares (determined as provided in the
then-current registration statement of the Fund) and not in excess of
such maximum amounts as may be fixed from time to time by an officer of
the Fund. Whenever the officers of the Fund deem it advisable for the
protection of the shareholders of the Fund, they may suspend or cancel
such authority.
5. Sales Charges. A contingent deferred sales charge shall be retained by
the Distributor from the net asset value of Shares of the Fund that it
has redeemed, it being understood that such amounts will not be in
excess of that set forth in the then-current registration statement of
the Fund. Furthermore, the Distributor may retain any amounts authorized
for payment to it under the Fund's Distribution Plan.
6. Distributor May Act as Broker and Receive Commissions. Notwithstanding
any other provisions of this Agreement, it is understood and agreed that
the Distributor may act as a broker, on behalf of the Company, in the
purchase and sale of securities not effected on a securities exchange,
provided that any such transactions and any commission paid in
connection therewith shall comply in every respect with the requirements
of the 1940 Act and in particular with Section 17(e) of that Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
7. Agreements Subject to Applicable Law and Regulations. The parties hereto
agree that all provisions of this Agreement will be performed in strict
accordance with the requirements of: the 1940 Act, the 1933 Act, the
Securities Exchange Act of 1934, the rules and regulations of the
Securities and Exchange Commission under said statutes, all applicable
state Blue Sky laws and the rules and regulations thereunder, the rules
of the National Association of Securities Dealers, Inc., and, in strict
accordance with, the provisions of the Articles of Incorporation and
Bylaws of the Company.
8. Duration and Termination of Agreement. This Agreement shall become
effective at the date and time that the Company's prospectus, reflecting
the underwriting arrangements provided by this Agreement, shall become
effective under the 1933 Act, and shall, unless terminated as provided
herein, continue in force for two years from that date, and from year to
year thereafter, provided that such continuance for each successive year
is specifically approved in advance at least annually by either the
Board of Directors or by the vote of a majority (as defined in the 0000
Xxx) of the outstanding voting securities of the Class C shares of the
Series and, in either event, by the vote of a majority of the directors
of the Company who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting upon such approval. As used in the preceding sentence,
the words "interested persons" shall have the meaning set forth in
Section 2(a)(19) of the 1940 Act.
This Agreement may be terminated at any time without the payment of any
penalty by the Company by giving the Distributor at least sixty (60)
days' previous written notice of such intention to terminate. This
Agreement may be terminated by the Distributor at any time by giving the
Company at least sixty (60) days' previous written notice of such
intention to terminate.
This Agreement shall terminate automatically in the event of its
assignment. As used in the preceding sentence, the word "assignment"
shall have the meaning set forth in Section 2(a)(4) of the 1940 Act.
9. Construction of Agreement. No provision of this Agreement is intended to
or shall be construed as protecting the Distributor against any
liability to the Company or to the Company's security holders to which
the Distributor would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its
duties under this Agreement.
Terms or words used in the Agreement, which also occur in the Articles
of Incorporation or Bylaws of the Company, shall have the same meaning
herein as given to such terms or words in the Articles of Incorporation
or Bylaws of the Company.
10. Distributor an Independent Contractor. The Distributor shall be deemed
to be an independent contractor and, except as expressly provided or
authorized by the Company, shall have no authority to act for or
represent the Company.
11. Notice. Any notice required or permitted to be given hereunder to either
of the parties hereto shall be deemed to have been given if mailed by
certified mail in a postage-prepaid envelope addressed to the respective
party as follows, unless any such party has notified the other party
hereto that notices thereafter intended for such party shall be mailed
to some other address, in which event notices thereafter shall be
addressed to such party at the address designated in such request:
Security Income Fund
Security Benefit Group Building
000 Xxxxxxxx
Xxxxxx, Xxxxxx
Security Distributors, Inc.
Security Benefit Group Building
700 Xxxxxxxx
Topeka, Kansas
12. Amendment of Agreement. No amendment to this Agreement shall be
effective until approved by (a) a majority of the Board of Directors of
the Company and a majority of the directors of the Company who are not
parties to this Agreement or affiliated persons of any such party, or
(b) a vote of the holders of a majority of the outstanding voting
securities of the Class C shares of the Series.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by their respective corporate officers thereto duly authorized on the day, month
and year first above written.
SECURITY INCOME FUND
BY: XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx, Vice President
ATTEST:
XXX X. XXX
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Secretary
SECURITY DISTRIBUTORS, INC.
BY: XXXXXXX X XXXX
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Xxxxxxx X Xxxx, President
ATTEST:
XXX X. XXX
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Secretary
