MANAGEMENT SERVICES AGREEMENT
AGREEMENT, made this 30th day of April, 1999, between Security Income Fund, a
Kansas corporation (the "Fund"), and Security Management Company, LLC, a Kansas
corporation ("Manager").
WHEREAS, the Fund is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund is authorized to issue its shares in multiple series with
each such series representing a separate portfolio of securities and other
assets; and
WHEREAS, one of the series of the Fund is the Capital Preservation Series
(referred to hereinafter as the "Series"); and
WHEREAS, the Fund desires to engage the Manager to provide certain services
to the Series; and
WHEREAS, the Manager is willing, in accordance with the terms and conditions
hereof, to provide such services to the Series; and
NOW THEREFORE, in consideration of the mutual agreements set forth herein and
intending to be legally bound hereby, the parties agree as follows:
1. APPOINTMENT AND DUTIES OF MANAGER
(a) The Fund, on behalf of the Series, hereby employs the Manager to
perform the services set forth in this Agreement, subject to the
supervision of the Board of Directors of the Fund, for the period and
on the terms set forth in this Agreement. The Manager hereby accepts
such employment and undertakes to pay the salaries and expense of all
personnel of the Manager who perform services relating to the services
it performs hereunder. The Manager shall for all purposes herein be
deemed to be an independent contractor and shall, except as otherwise
expressly provided or authorized, have no authority to act for or
represent the Fund in any way or otherwise be deemed an agent of the
Fund.
(b) Notwithstanding the foregoing, the Manager shall not be deemed to have
assumed any duties hereunder with respect to, and shall not, by the
execution of this Agreement be responsible for, the management of the
Funds' assets or the rendering of investment advice and supervision
with respect thereto, or the distribution of shares of the Funds, nor
shall the Manager be deemed to have assumed any responsibility
hereunder with respect to functions specifically assumed by any
administrator, transfer agent, custodian or shareholder servicing agent
of the Fund or the Series.
(c) Without limiting the generality of the foregoing, the Manager shall
provide the following services to the Series (as well as the services
set forth in Section1(d) below):
i. Provide information to and coordinate the Series' relationship
with registered investment advisors and other securities
professionals who have discretionary authority over Series
shareholder accounts, assist in facilitating instructions
received by such persons relating to Fund business and furnish
facilities and personnel necessary to perform such activities.
ii. Assist as appropriate and coordinate with the Fund's service
providers in administering the affairs of the Series and perform
services on the Series' behalf.
iii. Pay the salaries and expenses of all officers and Directors of
the Fund who are employees of the Manager.
(d) It is intended that the assets of the Series will be invested in a
portfolio (the Portfolio") having substantially the same investment
objective, policies and restrictions as the Series. In addition to its
duties hereunder, set forth in paragraph 1(c), above, with respect to
the Series, the Manager shall perform the following:
i. Monitor the performance of the Portfolio;
ii. Coordinate the relationship of the Series with the Portfolio;
iii. Communicate with the Board of Directors of the Fund regarding the
performance of the Portfolio and the Series;
iv. Furnish reports regarding the Portfolio as reasonably requested
from time-to-time by the Fund's Board of Directors.
v. Perform such other necessary and desirable services regarding the
"Master Feeder" structure of the Series as the Directors may
reasonably request from time to time, including providing certain
indemnification to the Portfolio and the investment advisor on
behalf of the Series.
(e) In carrying out its responsibilities under this Agreement, the Manager
shall at all times act in accordance with applicable provisions of the
1940 Act and the rules and regulations promulgated thereunder and other
applicable federal securities laws.
(f) The Manager shall render regular reports as requested by the Board of
Directors, and will, at the reasonable request of the Board, attend
meetings of the board or its validly constituted committees, and will
make its officers and employees available to meet with the Board to
discuss its duties hereunder.
2. EXPENSES AND COMPENSATION
(a) Allocation of Expenses. The Manager shall, at its expense, employ or
associate with itself such persons as it believes appropriate to assist
in performing its obligations under this Agreement and provide all
services, equipment, facilities and personnel necessary to perform it
obligations under this Agreement. The Fund shall be responsible for all
its expenses and liabilities not otherwise specifically assumed by the
Manager hereunder.
(b) Compensation. For its services under this Agreement, Manager shall be
entitled to receive a fee at the annual rate of 20% of the average
daily net asset value of the Series payable monthly. For the purpose of
accruing compensation, the net asset value of the Series will be
determined in the manner provided in the then-current Prospectus of the
Fund.
3. LIABILITY OF MANAGER. Neither the Manager nor its officers, directors,
employees, agents or controlling person ("Associated Person") of the Manager
shall be liable for any error of judgment or mistake of law or for any loss
suffered by the Fund or Series in connection with the matters to which this
Agreement relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of Manager or such Associated Persons
in the performance of their duties or from reckless disregard by them of
their duties under this Agreement.
4. DURATION AND TERMINATION OF THIS AGREEMENT
(a) DURATION. This Agreement shall become effective on the date hereof.
Unless terminated as herein provided, this Agreement shall remain in
full force and effect for two years from the date hereof. Subsequent to
such initial period of effectiveness, this Agreement shall continue in
full force and effect for successive periods of one year thereafter so
long as such continuance is approved at least annually by the Directors
of the Fund, including the vote of a majority of the Directors of the
Fund who are not parties to this Agreement or "interested persons" (as
defined in the 0000 Xxx) of any such party.
(b) AMENDMENT. Any amendment to this Agreement shall become effective only
upon the written approval of the Manager and the Fund.
(c) TERMINATION. This Agreement may be terminated at any time, without
payment of any penalty, by vote of the Directors or by vote of a
majority of the outstanding voting securities (as defined in the 0000
Xxx) of the Series, or by the Manager, in each case upon sixty (60)
days' prior written notice to the other party. Any termination of this
Agreement will be without prejudice to the completion of transactions
already initiated by the Manager on behalf of the Series at the time of
such termination. The Manager shall take all steps reasonably necessary
after such termination to complete any such transactions and is hereby
authorized to take such steps.
(d) AUTOMATIC TERMINATION. This Agreement shall automatically and
immediately terminate in the event of its assignment (as defined in the
1940 Act).
5. SERVICES NOT EXCLUSIVE. The services of the Manager to the Series of the
Fund hereunder are not to be deemed exclusive, and the Manager shall be free
to render similar services to others so long as its services hereunder are
not impaired thereby.
6. MISCELLANEOUS
(a) NOTICE. Any notice under this Agreement shall be in writing, addressed
and delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate in writing for the receipt of
such notices.
(b) SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder
shall not be thereby affected.
(c) APPLICABLE LAW. This Agreement shall be construed in accordance with
and governed by the laws of Kansas.
Security Management Company, LLC Security Income Fund
XXXXX X. XXXXXXX XXXX X. XXXXXXX
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By: Xxxxx X. Xxxxxxx By: Xxxx X. Xxxxxxx
Title: President Title: President
Attest: XXX X. XXX Attest: XXX X. XXX
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Xxx X. Xxx, Secretary Xxx X. Xxx, Secretary
