UNDERWRITING AGREEMENT
This UNDERWRITING AGREEMENT ("Agreement"), made this ___ day of February,
2005, by and between Xxxxxx Xxxxxx Select Fund, Inc., a Maryland corporation
(the "Fund") and Xxxxxx Xxxxxx & Company, Inc., a Tennessee corporation (the
"Distributor"):
WHEREAS, the Fund is registered with the Securities and Exchange Commission
as an open-end, diversified investment company under the Investment Company Act
of 1940, as amended (the "1940 Act") and has registered its shares of common
stock for sale to the public under the Securities Act of 1933, as amended (the
"1933 Act"), and has qualified its shares in accordance with the provisions of
various state securities laws; and
WHEREAS, the Fund intends to offer for public sale three distinct series of
shares of common stock, which have been designated Xxxxxx Xxxxxx Intermediate
Bond Fund, Xxxxxx Xxxxxx High Income Fund, and Xxxxxx Xxxxxx Short Term Bond
Fund (each a "Portfolio"); and
WHEREAS, the Fund has adopted distribution plans pursuant to Rule 12b-1 for
the shares of each Portfolio; and
WHEREAS, the Fund wishes to retain the Distributor as the principal
underwriter in connection with the offering and sale of the shares of each
Portfolio as now exists and as may hereafter may be established (the "Shares")
and to furnish certain other services to the Fund as specified in this
Agreement; and
WHEREAS, this Agreement has been approved by a vote of the Board of
Directors of the Fund (the "Board") and certain disinterested directors in
conformity with paragraph (b)(2) of Rule 12b-1 under the 1940 Act, as well as by
the disinterested directors in conformity with Section 15(c) of the 1940 Act;
and
WHEREAS, the Distributor is willing to act as principal underwriter and to
furnish such services on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. The Fund hereby appoints the Distributor as principal underwriter in
connection with the offering and sale of the Shares, and of all classes now or
hereafter created, on its behalf during the term of this Agreement. The Fund
authorizes the Distributor, as exclusive agent for the Fund, subject to
applicable federal and state law and the Articles of Incorporation and By-laws
of the Fund: (a) to promote the Fund; (b) to solicit orders for the purchase of
the Shares of subject to such terms and conditions as the Fund may specify; and
(c) to accept orders for the purchase of the Shares on behalf of the applicable
Portfolio. The Distributor shall comply with all applicable federal and state
laws and offer the Shares on an agency or "best efforts" basis under which the
Fund shall issue only such Shares as are actually sold.
2. The public offering price of the Shares shall be the net asset value
per share (as determined by the Fund) of the outstanding Shares, plus the
applicable sales charge, if any, determined as set forth in the Registration
Statement. The Fund shall furnish the Distributor with a statement of each
computation of net asset value and of the details entering into such
computation.
3. The sales charge, if any, set forth in the Fund's Registration
Statement shall constitute compensation of the Distributor. As additional
compensation for the services performed and the expenses assumed by the
Distributor under this Agreement, including, but not limited to, any commissions
paid for sales of the Shares, the Distributor shall receive from each Portfolio,
as promptly as possible after the last day of each month, a service fee and a
distribution fee, as applicable, each calculated daily pursuant to the
applicable distribution plan. The first payment of the service and distribution
fees shall be made as promptly as possible at the end of the month next
succeeding the effective date of this Agreement, and shall include a full
payment of the fees due the Distributor for all shareholder and distribution
services prior to that date. If this Agreement is terminated as of any date not
the last day of a month, such fees shall be paid as promptly as possible after
such date of termination, shall be based on the average daily net assets of each
Portfolio in that period from the beginning of such month to such date of
termination, and shall be that proportion of such average daily net assets as
the number of business days in such period bears to the number of business days
in such month. The average daily net assets of each Portfolio shall in all cases
be based only on business days and be computed as of the time of the regular
close of business of the New York Stock Exchange, or such other time as may be
determined by the Board. Each such payment shall be accompanied by a report of
the Fund prepared either by the Fund or by a reputable firm of independent
accountants which shall show the amount properly payable to the Distributor
under this Agreement and the detailed computation thereof.
4. As used in this Agreement, the term "Registration Statement" shall
mean the registration statement regarding the Portfolios most recently filed by
the Fund with the Securities and Exchange Commission and effective under the
1933 Act, as such Registration Statement is amended at the time in effect, and
the terms "Prospectus" and "Statement of Additional Information" shall mean the
forms of prospectus and statement of additional information, respectively, filed
by the Fund as part of the Registration Statement.
5. The Distributor, at no expense to the Fund, shall print and distribute
to prospective investors, the Prospectus and Statement of Additional
Information, and may print and distribute such other sales literature, reports,
forms and advertisements in connection with the sale of the Shares as comply
with the applicable provisions of federal and state law. In connection with such
sales and offers of sale, the Distributor shall only give such information and
make only such statements or representations as are contained in the Prospectus
or Statement of Additional Information or in information furnished in writing to
the Distributor by the Fund, and the Fund shall not be responsible in any way
for any other information, statements or representations given or made by the
Distributor or its representatives or agents. Except as specifically provided in
this Agreement, the Fund shall bear none of the expenses of the Distributor in
connection with its offer and sale of the Shares.
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6. The Fund agrees at its own expense to register the Shares under the
1933 Act, as amended, and under the securities laws of such states and
jurisdictions as the Distributor of the Fund shall agree, and to prepare and
file from time to time such Prospectuses and Statements of Additional
Information, amendments, reports and other documents as may be necessary to
maintain the Registration Statement. The Fund shall bear all expenses related to
preparing and typesetting such Prospectuses and other materials required by law
and such other expenses, including printing and mailing expenses, related to the
Fund's communications with persons who are shareholders of the Fund.
7. The Fund agrees to indemnify, defend and hold the Distributor, its
several officers and directors, and any person who controls the Distributor
within the meaning of Section 15 of the 1933 Act, free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Distributor, its
officers or directors, or any such controlling person may incur, under the 1933
Act or under common law or otherwise, arising out of or based upon any alleged
untrue statement of a material fact contained in the Registration Statement or
arising out of or based upon any alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, provided, however, that the Fund shall not indemnify or defend such
persons or hold them harmless with respect to any claims, demands, or
liabilities based on information provided to the Fund by the Distributor; and
provided further that this indemnification provision shall not inure to the
benefit of any person who is an officer or director of the Fund or who controls
the Fund within the meaning of Section 15 of the 1933 Act, as amended, unless a
court of competent jurisdiction shall determine, or it shall have been
determined by controlling precedent, that such result would not be against
public policy as expressed in the 1933 Act, as amended, and further provided
that in no event shall anything contained in this Agreement be construed so as
to protect the Distributor against any liability to the Fund or its 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, or
by reason of its reckless disregard of its obligations and duties under this
Agreement.
8. The Distributor agrees to indemnify, defend and hold the Fund, its
several officers and directors, and any person who controls the Fund within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which the Fund, its officers or
directors, or any such controlling person may incur, under the 1933 Act or under
common law or otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in information furnished in writing by
the Distributor to the Fund for use in the Registration Statement or arising out
of or based upon any alleged omission by the Distributor to state a material
fact in connection with such information required to be stated in the
Registration Statement or necessary to make such information not misleading.
9. The Fund reserves the right at any time to withdraw any or all
offerings of the Shares by written notice to the Distributor at its principal
office.
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10. The Fund shall not issue certificates representing the Shares unless
requested by a shareholder. If such request is transmitted through the
Distributor, the Fund will cause certificates evidencing the Shares owned to be
issued in such names and denominations as the Distributor shall from time to
time direct, provided that no certificates shall be issued for fractional
Shares.
11. The Distributor may at its sole discretion repurchase Shares offered
for sale by the shareholders. Repurchase of Shares by the Distributor shall be
at the net asset value next determined after a repurchase order has been
received. The Distributor will receive no commission or other remuneration for
repurchasing Shares other than the fees set forth in paragraph 3 hereof. At the
end of each business day, the Distributor shall notify by telex or in writing to
the Fund and State Street Bank & Trust Company, the Fund's custodian, of the
orders for repurchase of Shares received by the Distributor since the last such
report, the amount to be paid for such Shares, and the identity of the
shareholders offering Shares for repurchase. Upon such notice, the Fund shall
pay the Distributor such amounts as are required by the Distributor for the
repurchase of such Shares in cash or in the form of a credit against moneys due
the Fund from the Distributor as proceeds from the sale of Shares. The Fund
reserves the right to suspend such repurchase right upon written notice to the
Distributor. The Distributor further agrees to act as agent for the Fund to
receive and transmit promptly to the Fund's transfer agent shareholder requests
for redemption of Shares.
12. The Distributor is an independent contractor and shall be an agent for
the Fund only with respect to the sale and redemption of the Shares.
13. The Distributor represents and warrants that it is a broker-dealer
duly registered under the Securities Act of 1934 and applicable state securities
laws, that it is a member of the National Association of Securities Dealers and
has all licenses required to engage in the business it undertakes in this
Agreement to carry out. Additionally the Distributor represents and warrants
that it will notify the Fund promptly if any such registration, membership or
license is suspended, revoked, withdrawn or allowed to lapse.
14. The services of the Distributor to the Fund under this Agreement are
not to be deemed exclusive, and the Distributor shall be free to render similar
services or other services to others so long as its services hereunder are not
impaired thereby.
15. The Distributor shall prepare reports for the Board on a quarterly
basis showing such information concerning expenditures related to this Agreement
as from time to time shall be reasonably requested by the Board.
16. As used in this Agreement, the terms "securities" and "net assets"
shall have the meanings ascribed to them in the Articles of Incorporation of the
Fund.
17. This Agreement will remain in effect for one year from the date of its
execution and from year to year thereafter, provided that such continuance is
specifically approved, at least annually: (i) by the Board or by vote of a
majority of the outstanding voting securities of the Fund, (ii) by a vote of a
majority of those members of the Board who are not parties to this Agreement or
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interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval; and (iii) by vote of a majority of those
members of the Board who are not interested persons of the Fund and who have no
direct or indirect financial interest in this Agreement or in the Plan (the
"Independent Directors"). Notwithstanding the foregoing, this Agreement may be
terminated at any time by the Fund without penalty, on 60 days' written notice
to the Distributor, by vote of the Board, by vote of a majority of the
Independent Directors, or by a vote of a majority of the outstanding voting
securities of the Fund. This Agreement may be terminated by the Distributor at
any time, without the payment of any penalty, upon 60 days' written notice to
the Fund. This Agreement will automatically and immediately terminate in the
event of its assignment. As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested person" and "assignment" shall have
the same meaning as such terms have in the 1940 Act.
IN WITNESS WHEREOF, the parties hereto caused this Agreement to be executed
by their officers thereunto duly authorized.
Attest: XXXXXX XXXXXX SELECT FUND, INC.
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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Secretary
Attest: XXXXXX XXXXXX & COMPANY, INC.
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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Managing Director
