SECURITY LARGE CAP VALUE FUND
INSTITUTIONAL CLASS
DISTRIBUTION AGREEMENT
THIS AGREEMENT, made this 8th day of February 2008, between Security Large Cap
Value Fund, a Kansas corporation ("Company"), on behalf of Security Large Cap
Value Institutional 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
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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 LARGE CAP VALUE 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