EXHIBIT (e)
UNDERWRITING AGREEMENT
This UNDERWRITING AGREEMENT ("Agreement"), made this _____ day of
___________, 1999, 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 two distinct series
of shares of common stock, which have been designated Xxxxxx Xxxxxx Intermediate
Bond Fund and Xxxxxx Xxxxxx High Income 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 Fund's Board
of Directors 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 of Directors of the Fund. 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 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 the Fund and State Street Bank and 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 in 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 of Directors of
the Fund 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 of Directors.
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 Fund's Board of
Directors or by vote of a majority of the outstanding voting securities of the
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Fund, (ii) by a vote of a majority of those members of the Fund's Board of
Directors 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 on such
approval; and (iii) by vote of a majority of those members of the Fund's Board
of Directors 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 Fund's Board of Directors, 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: By:
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Attest: XXXXXX XXXXXX & COMPANY, INC.
By: By:
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