Exhibit h(b)
SELECTED DEALER AGREEMENT
_____, 1995
XxXXXXX SECURITIES COMPANY, As
Lead Dealer Manager
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Gentlemen:
In connection with a public offering (the "OFFERING") of Common Stock,
$.001 par value per share (the "SHARES"), of Southwest Small Cap Equity Fund,
Inc. (the "FUND") to be conducted after the date hereof, for which Offering
XxXxxxx Securities Company and Capital West Securities, Inc. (the "DEALER
MANAGERS") have been employed to use their best efforts to sell the Shares for
the Fund's account, the undersigned broker/dealer (the "DEALER") has been
offered the right to sell, as agent (subject to the limitations herein) and as a
selected broker/dealer for the Dealer Manager, the Shares being distributed to
the public. This will confirm the Dealer Managers' and Dealer's mutual
agreements as to the terms and conditions applicable to the Dealer's
participation in the selected dealer group being organized by the Dealer
Managers as set forth in this Agreement. Capitalized but undefined terms shall
have the meaning given such terms in that certain Selling Agreement among the
Dealer Managers, the Fund and the Investment Manager dated as of _____, 1995
(the "SELLING AGREEMENT"), a copy of which has been furnished or made available
to the Dealer.
1. _____ CONDITIONS OF OFFERING. The Offering will be subject to
issuance and delivery of the Shares by the Fund in compliance with the Selling
Agreement and the Escrow Agreement, and will be subject to the issuance of the
approving opinion of counsel for the Fund and to satisfaction or waiver of other
conditions set forth in the Selling Agreement. XxXxxxx Securities Company as
lead Dealer Manager ("XxXxxxx") will advise the Dealer by telefax, telegram,
telex or other form of written communication (a "DEALER NOTICE") of the
particular method of consummation of the Offering and any supplementary terms
and conditions of the Offering which, to the extent such supplementary terms and
conditions are inconsistent with any provision herein, shall supersede any such
provision. Unless otherwise indicated in any such Dealer Notice, communications
by the Dealer with respect to any Offering should be sent to the XxXxxxx at its
address given herein. XxXxxxx reserves the right to reject any subscription in
whole or in part.
The Public Offering price of the Shares shall be as indicated in the following
table, and XxXxxxx will disburse the sales commission indicated in the following
table to the Dealer:
SHARES PURCHASED PRICE PER SHARE DEALER SALES COMMISSION
100 to 29,999 $10.00 .60
25,000 to 49,999 9.90 .50
50,000 to 74,999 9.80 .40
75,000 to 99,999 9.70 .30
100,000 to 499,999 9.60 .20
500,000 or more 9.20 .00
In connection with any sales of shares hereunder, the Dealer shall
tender a Subscription Agreement completed by the Purchaser of such shares, in
the Form of Appendix A to the Prospectus and shall tender payment for shares
subscribed for thereby, in each case in accordance with the Prospectus and the
Escrow Agreement, a copy of which has been furnished or made available to the
Dealer. All checks will be payable to the Escrow Agent.
Payment of sales commissions for Shares sold by a Dealer is to be made
at the offices of XxXxxxx by certified or official bank checks issued
by the Escrow Agent for the account of the Fund in immediately available funds
payable as instructed by XxXxxxx in accordance with the terms of this
agreement, as amended or supplemented, for the benefit of the Dealers
individually with respect to the amount sold by each Dealer.
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) PROSPECTUSES. XxXxxxx shall provide the Dealer with such
number of copies of each preliminary prospectus, the Prospectus and any
amendment or supplement to any thereof relating to the Offering as the Dealer
may reasonably request for the purposes contemplated by the Securities Act of
1933 (the "SECURITIES ACT") and the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), and the applicable rules and regulations of the Securities
and Exchange Commission thereunder. The Dealer represents that the Dealer is
familiar with Rule 15c2-8 under the Exchange Act relating to the distribution of
preliminary and final prospectuses and agrees that the Dealer will comply
therewith. The Dealer agrees to keep an accurate record of its distribution
(including dates, number of copies and persons to whom sent) of copies of the
Prospectus or any preliminary prospectus (or any amendment or supplement to any
thereof), and, promptly upon request by XxXxxxx, to bring all subsequent changes
to the attention of anyone to whom such material shall have been furnished. The
Dealer agrees to furnish to persons who submit a Subscription Agreement and
tender payment for the proposed purchase of Shares a copy of the Prospectus
filed pursuant to Rule 424(b) or Rule 424(c) under the Securities Act. The
Dealer agrees that in connection with any offers, sales or purchases of Shares
in an Offering the Dealer will rely upon no statements whatsoever, written or
oral, other than the statements in the Prospectus delivered to the Dealer by
XxXxxxx. The Dealer will not be authorized by the Fund or by the Dealer Managers
to give any information or to make any representation not contained in the
Prospectus in connection with the offering or sale of the Shares.
(b) OPEN MARKET TRANSACTIONS. Until such time as the terms of
this
2
Agreement shall no longer apply to the Offering or until XxXxxxx notifies the
Dealer that the Dealer is released from this restriction, the Dealer agrees not
to deal, trade, bid for, purchase, attempt to purchase, or sell, directly or
indirectly, any Shares except as broker pursuant to unsolicited orders and as
otherwise provided in this Agreement.
(c) NASD. The Dealer represents that the Dealer is actually
engaged in the investment banking or securities business and the Dealer is
either a member in good standing of the NASD or, if not such a member, a foreign
dealer, bank or institution not eligible for membership. If the Dealer is such a
member, the Dealer agrees that in making sales of the Shares the Dealer will
comply with all applicable rules of the NASD, including without limitation, the
NASD's Interpretation with Respect to Free-Riding and Withholding and Section 24
of Article III of the NASD's Rules of Fair Practice. If the Dealer is such a
foreign dealer, bank or institution, the Dealer agrees not to offer or sell any
Shares in the United States of America except through XxXxxxx and in making
sales of Shares outside the United States of America the Dealer agrees to comply
as though the Dealer were a member with such Interpretation and Sections 8, 24
and 36 of Article III of the NASD's Rules of Fair Practice and to comply with
Section 25 of such Article III as it applies to nonmember brokers or dealers in
a foreign country.
(d) RELATIONSHIP AMONG DEALER MANAGERS AND SELECTED DEALERS.
Nothing contained herein shall constitute the Dealer as being a partner with the
Dealer Managers or with any other Dealer entering into a Selected Dealer
Agreement (a "Selected Dealer"). The Dealer Managers shall not be under any
obligation to the Dealer except for obligations assumed herein or in any Dealer
Notice in connection with any Offering. The Dealer agrees to pay its
proportionate share of any claim, demand or liability asserted against the
Dealer and the other Selected Dealers or any of them, or against the Dealer
Managers, based on any claim that the Dealer and such Selected Dealers or any of
them constitute an association, unincorporated business or other separate
entity, including, in each case, the Dealer's proportionate share of any expense
incurred in defending against any such claim, demand or liability.
(e) BLUE SKY LAWS. XxXxxxx will inform the Dealer as to the
jurisdictions in which the Shares have been qualified for sale under the
respective securities or "blue sky" laws of such jurisdictions. The Dealer
agrees that it will comply with the securities or "blue sky" laws applicable to
it in each jurisdiction in which the Dealer shall offer or sell any of the
Shares (including broker-dealer regulation requirements); XxXxxxx assumes no
responsibility or obligation as to the eligibility of the Shares for sale or the
Dealer's right to sell the Shares in any jurisdiction except for the obligation
to inform the Dealer of the qualification for sale as provided in the first
sentence.
(f) COMPLIANCE WITH LAW. The Dealer agrees that in selling
Shares (which agreement shall also be for the benefit of the Fund or other
seller of such Shares) the Dealer will comply with the applicable provisions of
the Securities Act and the Exchange Act, the applicable rules and regulations of
the Securities and Exchange Commission thereunder, the applicable rules and
regulations of the NASD and the applicable rules and regulations of The Chicago
Stock Exchange. XxXxxxx shall have full authority to take such action as XxXxxxx
and the other Dealer Managers may deem advisable in respect of all matters
pertaining to any Offering. The Dealer Manager shall not have any liability to
the Dealer, except for lack of good faith and for obligations expressly assumed
by the Dealer Manager in this Agreement; PROVIDED, HOWEVER, that
3
nothing in this sentence shall be deemed to relieve the Dealer Managers from any
liability imposed by the Securities Act.
3. TERMINATION; SUPPLEMENTS AND AMENDMENTS. This Agreement may be
terminated by either party hereto upon five business days' written notice to the
other party; PROVIDED, HOWEVER, that if a Dealer Notice was sent prior to such
notice, this Agreement shall remain in full force and effect and shall terminate
in accordance with the last sentence of this Section. This Agreement may be
supplemented or amended by XxXxxxx by written notice thereof to the Dealer, and
any such supplement or amendment to this Agreement shall be effective with
respect to any Offering to which this Agreement applies after the date of such
supplement or amendment. Each reference to "this Agreement" herein shall, as
appropriate, be to this Agreement as so amended or supplemented.
4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on, and
inure to the benefit of the parties hereto and the respective successors and
assigns of each of them.
5. ESCROW AGREEMENT. The Dealer agrees that it is bound by, and will
cause all offers to purchase Shares in respect of which it is acting hereunder
to be made in accordance with, the terms of the Escrow Agreement executed by
XxXxxxx, on behalf of the Dealer Managers, and the Fund.
6. GOVERNING LAW. This Agreement, together with such supplementary
terms and conditions with respect to such Offering as may be contained in any
Dealer Notice from XxXxxxx to the Dealer in connection therewith, shall be
governed by, and construed in accordance with, the laws of the State of Texas.
4
By signing this Agreement the Dealer confirms the Dealer's acceptance
of and agreement to the terms and conditions of this Agreement (as supplemented
or amended pursuant to SECTION 3), together with and subject to any
supplementary terms and conditions contained in any Dealer Notice from XxXxxxx,
all of which shall constitute (i) a binding agreement between the Dealer and the
Dealer Managers, (ii) confirmation that the Dealer's representations and
warranties set forth in SECTION 2 are true and correct at that time and (iii)
confirmation that the Dealer's agreements set forth herein have been and will be
fully performed by the Dealer to the extent and at the times required thereby.
Very truly yours,
__________________
(Name of Firm)
By: ______________
Name: ____________
Title: ___________
Confirmed as of the date first above written:
XxXXXXX SECURITIES COMPANY,
as lead Dealer Manager
By: ______________
Name: ____________
Title: ___________
0248688.05
119520/2132
5
