SECURITY INCOME FUND
INSTITUTIONAL CLASS
DISTRIBUTION AGREEMENT
THIS AGREEMENT, made this 8th day of February, 2008, between Security Income
Fund, a Kansas corporation ("Company"), on behalf of Security High Yield Fund
(the "Fund"), and Security Distributors, Inc., a Kansas corporation (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 Distributor is willing to act as principal underwriter for the
Company to offer for sale, sell and deliver after sale, the Institutional Shares
of the Fund (the "Institutional Class 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 the
Fund's Institutional Class 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
Institutional Class Shares issued or to be issued by the Fund. The
Distributor hereby accepts such employment and agrees to act as the
distributor of the Institutional Class 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 Institutional Class
Shares as long as such Institutional Class Shares remain available for
sale by the Fund, unless the Distributor is unable legally to make
such offer for sale as the result of any law or governmental
regulation. The rights granted to the Distributor shall be
nonexclusive in that the Company reserves the right to sell its shares
to investors on the basis of applications received and accepted by the
Company or its agent or in connection with the merger or consolidation
of the Fund. It is recognized by the Company that the Fund's
investment adviser and/or its affiliates may use or allocate their
past profits and other resources to the Distributor in order to cover
expenses incurred in the distribution of Institutional Class Shares.
2. Offering Price. Prior to the issuance of any Institutional Class
Shares by the Fund 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
applicable Fund(s) in cash, an amount equal to the net asset value of
such Institutional Class Shares at the time of acceptance of each such
subscription and confirmation by the Company of the sale of such
Institutional Class Shares. All Institutional Class Shares shall be
sold to the public only at their public offering price at the time of
such sale, and the Fund
shall receive not less than the full net asset value thereof. The
Company reserves the right to suspend the sale and issuance of
Institutional Class Shares at any time.
3. Allocation of Expenses and Charges. While this Agreement is in effect,
the Fund shall pay all costs and expenses in connection with the
registration of the Institutional Class Shares under the Securities
Act of 1933 (the "1933 Act"), including all expenses in connection
with the preparation and printing of any registration statement
documents (including prospectuses and statements of additional
information) necessary for registration thereunder but excluding any
additional costs and expenses incurred in furnishing the Distributor
with prospectuses. The Fund will pay all costs and expenses of
printing and mailing prospectuses, statements of additional
information, reports and periodic statements to its existing
Institutional Class shareholders. The Fund also will pay all costs,
expenses and fees incurred in connection with the qualification of its
Institutional Class Shares under the applicable Blue Sky laws of the
states in which the Institutional Class Shares are offered.
While this Agreement is in effect, the Distributor will pay or
reimburse the Fund for:
(a) All costs and expenses of printing and mailing prospectuses to
prospective Institutional Class 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 Institutional Class Shares; and
(b) All clerical and administrative costs in processing the
applications for and in connection with the distribution of
Institutional Class 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 Institutional Class Shares.
4. Redemption of Institutional Class Shares. The Distributor, as agent of
and for the account of the Fund, may redeem Institutional Class Shares
offered for resale to it at the net asset value of such Institutional
Class Shares (determined as provided in the then-current registration
statement of the Fund). To the extent authorized under applicable law,
including the 1940 Act, whenever the officers of the Company deem it
advisable for the protection of the shareholders of the Fund, they may
suspend or cancel such authority.
5. 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 Fund, in
the purchase and sale of securities 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 U.S. Securities and Exchange Commission promulgated
thereunder. The Distributor will not, or cause the Fund to direct
remuneration from commissions by the Fund for portfolio securities
transactions to a broker or dealer for promoting or selling shares of
the Fund.
6. 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 U.S. Securities and Exchange Commission under said statutes,
applicable state Blue Sky laws and the rules and regulations
thereunder, the rules of the Financial Industry Regulatory Authority
and the Articles of Incorporation and Bylaws of the Company.
7. Duration and Termination of Agreement. This Agreement shall become
effective upon its execution, 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 annually by either the Board of
Directors or by the vote of a majority of the outstanding voting
securities of the Institutional Class shares of the Fund 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.
8. 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 the Fund or to the Fund's shareholders 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 or reckless disregard of its duties
hereunder.
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.
9. 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.
10. 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 Equity Fund
One Security Benefit Place
Topeka, Kansas 66636-0001
Security Distributors, Inc.
One Security Benefit Place
Topeka, Kansas 66636-0001
11. 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 or a vote of the holders of a majority of the
outstanding voting securities of the Institutional Class shares of the
Fund, and (b) a majority of the directors of the Company who are not
parties to this Agreement or interested persons of any such party.
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: XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx, President
ATTEST:
XXX X. XXX
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Xxx X. Xxx, Secretary
SECURITY DISTRIBUTORS, INC.
BY: XXXX X. XXXX
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Xxxx X. Xxxx, President
ATTEST:
XXX X. XXX
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Xxx X. Xxx, Secretary
