XXXXX & STEERS SPECIAL EQUITY FUND, INC.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
March 13, 1997
Xxxxx & Steers Securities, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. In consideration of the agreements on your part herein
contained and of the payment by us to you of a fee of $1 per year and on the
terms and conditions set forth herein, we have agreed that you shall be, for the
period of this agreement, a distributor, as our agent, for the unsold portion of
such number of shares of our common stock, $.001 par value per share, as may be
effectively registered from time to time under the Securities Act of 1933, as
amended (hereinafter referred to as the "Act").
2. We hereby agree that you will act as our agent, and hereby
appoint you our agent, to offer, and to solicit offers to subscribe to, the
unsold balance of shares of our common stock as shall then be effectively
registered under the Act. All subscriptions for shares of our common stock
obtained by you shall be directed to us for acceptance and shall not be binding
on us until accepted by us. You shall have no authority to make binding
subscriptions on our behalf. We reserve the right to sell shares of our common
stock through other distributors or directly to investors through subscriptions
received by us at our
principal office in New York, New York. The right given to you under this
agreement shall not apply to shares of our common stock issued in connection
with (a) the merger or consolidation of any other investment company with us,
(b) our acquisition by purchase or otherwise of all or substantially all of the
assets or stock of any other investment company, or (c) the reinvestment in
shares of our common stock by our stockholders of dividends or other
distributions or any other offering by us of securities to our stockholders.
3. You will use your best efforts to obtain subscriptions to
shares of our common stock upon the terms and conditions contained herein and in
the then current Prospectus and Statement of Additional Information including
the offering price. You will send to us promptly all subscriptions placed with
you. We will advise you of the approximate net asset value per share or net
asset value per share (as used in the Prospectus or Statement of Additional
Information) on any date requested by you and at such other times as it shall
have been determined by us. We shall furnish you from time to time, for use in
connection with the offering of shares of our common stock, such other
information with respect to us and shares of our common stock as you may
reasonably request. We shall supply you with such copies of our current
Prospectus and Statement of Additional Information in effect from time to time
as you may request. You are not authorized to give any information or to make
any representations, other than those contained in the Registration Statement,
Prospectus or Statement or Additional Information, as then in effect, filed
under the Act covering shares of our common stock or which we may authorize in
writing. You may use employees, agents and other persons who may not be your
employees or agents, at your cost and expense, to assist you in carrying out
your obligations hereunder,
but no such employee, agent or other person shall be deemed to be your agent or
have any rights under this agreement.
4. We reserve the right to suspend the offering of shares of our
common stock at any time, in the absolute discretion of our Board of Directors,
and upon notice of such suspension you shall cease to offer shares of our common
stock hereunder.
5. Both of us will cooperate with each other in taking such
action as may be necessary to qualify shares of our common stock for sale under
the securities laws of such states as we may designate, provided, that you shall
not be required to register as a broker-dealer or file a consent to service of
process in any such state. Pursuant to our Investment Advisory Agreement dated
March 13, 1997, with Xxxxx & Steers Capital Management, Inc., we will pay all
fees and expenses of registering shares of our common stock under the Act and of
qualification of shares of our common stock and our qualification under
applicable state securities laws. You shall pay all expenses relating to your
broker-dealer qualification.
6. We represent to you that our Registration Statement,
Prospectus and Statement of Additional Information (as in effect from time to
time) under the Act have been or will be, as the case may be, carefully prepared
in conformity with the requirements of the Act and the rules and regulations of
the Securities and Exchange Commission thereunder. We represent and warrant to
you that your Registration Statement, Prospectus and Statement of Additional
Information contain or will contain all statements required to be stated therein
in accordance with the Act and the rules and regulations of said Commission, and
that all statements of fact contained or to be contained therein are or will be
true and correct at the time indicated or the effective date as the case may be;
that our Registration Statement,
Prospectus and Statement of Additional Information when any of them shall become
effective or be authorized for use, will not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of shares
of our common stock. We will from time to time file such amendment or amendments
to our Registration Statement, Prospectus and Statement of Additional
Information as, in the light of future developments, shall, in the opinion of
our counsel, be necessary in order to have our Registration Statement,
Prospectus and Statement of Additional Information at all times contain all
material facts required to be stated therein or necessary to make any statements
therein not misleading to a purchaser of shares of our common stock, but, if we
shall not file such amendment or amendments within fifteen days after receipt by
us of a written request from you to do so, you may, at your option, terminate
this agreement immediately. We shall not file any amendment to our Registration
Statement, Prospectus or Statement of Additional Information without giving you
reasonable notice thereof in advance; provided, however, that nothing contained
in this agreement shall in any way limit our right to file at any time such
amendments to our Registration Statement, Prospectus or Statement of Additional
Information of whatever character, as we may deem advisable, such right being in
all respects absolute and unconditional. We represent and warrant to you that
any amendment to our Registration Statement, Prospectus or Statement of
Additional Information hereafter filed by us will, when it becomes effective,
contain all statements required to be stated therein in accordance with the Act
and the rules and regulations of said Commission, that all statements of fact
contained therein will, when the same shall become effective, be true and
correct and that no such amendment, when it
becomes effective, will include an untrue statement of a material fact or will
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading to a purchaser of our shares.
7. We agree to indemnify, defend and hold you, and any person who
controls you within the meaning of Section 15 of the 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 you or any such controlling
person may incur, under the Act, or under common law or otherwise, arising out
of or based upon any alleged untrue statement of a material fact contained in
our Registration Statement, Prospectus or Statement of Additional Information in
effect from time to time under the Act or arising out of or based upon any
alleged omission to state a material fact required to be stated in either
thereof or necessary to make the statements in either thereof not misleading;
provided, however, that in no event shall anything herein contained be so
construed as to protect you against any liability to us or our security holders
to which you would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of your duties, or by reason of
your reckless disregard of your obligations and duties under this agreement. Our
agreement to indemnify you and any such controlling person as aforesaid is
expressly conditioned upon our being notified of any action brought against you
or any such controlling person, such notification to be given by letter or by
telegram addressed to us at our principal
office in New York, New York, and sent to us by the person against whom such
action is brought within ten days after the summons or other first legal process
shall have been served. The failure so to notify us of any such action shall not
relieve us from any liability which we may have to the person against whom such
action is brought by reason of any such alleged untrue statement or omission
otherwise than on account of our indemnity agreement contained in this paragraph
7. We will be entitled to assume the defense of any suit brought to enforce any
such claim, and to retain counsel of good standing chosen by us and approved by
you. In the event we do elect to assume the defense of any such suit and retain
counsel of good standing approved by you, the defendant or defendants in such
suit shall bear the fees and expenses of any additional counsel retained by any
of them; but in case we do not elect to assume the defense of any such suit, or
in case you do not approve of counsel chosen by us, we will reimburse you or the
controlling person or persons named as defendant or defendants in such suit, for
the fees and expenses of any counsel retained by you or them. Our
indemnification agreement contained in this paragraph 7 and our representations
and warranties in this agreement shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of you or any
controlling person and shall survive the sale of any shares of our common stock
made pursuant to subscriptions obtained by you. This agreement of indemnity will
inure exclusively to your benefit, to the benefit of your successors and
assigns, and to the benefit of any controlling persons and their successors and
assigns. We agree promptly to notify you of the commencement of any litigation
or proceeding against us in connection with the issue and sale of any shares of
our common stock.
8. You agree to indemnify, defend and hold us, our several
officers and directors, and any person who controls us within the meaning of
Section 15 of the 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 reasonable counsel fees
incurred in connection therewith) which we, our officers or directors, or any
such controlling person may incur under the Act or under common law or
otherwise, but only to the extent that such liability, or expense incurred by
us, our officers or directors or such controlling person resulting from such
claims or demands shall arise out of or be based upon any alleged untrue
statement of a material fact contained in information furnished in writing by
you to us for use in our Registration Statement, Prospectus or Statement of
Additional Information in effect from time to time under the Act, or shall arise
out of or be based upon any alleged omission to state a material fact in
connection with such information required to be stated in the Registration
Statement, Prospectus or Statement of Additional Information or necessary to
make such information not misleading. Your agreement to indemnify us, our
officers or directors, and any such controlling person as aforesaid is expressly
conditioned upon your being notified of any action brought against us, our
officers or directors or any such controlling person, such notification to be
given by letter or telegram addressed to you at your principal office in New
York, New York, and sent to you by the person against whom such action is
brought, within ten days after the summons or other first legal process shall
have been served. You shall have a right to control the defense of such action,
with counsel of your own choosing, satisfactory to us, if such action is based
solely upon such alleged misstatement or omission on your part, and in any other
event you
and we, our officers or directors or such controlling person shall each have the
right to participate in the defense or preparation of the defense of any such
action. The failure so to notify you of any such action shall not relieve you
from any liability which you may have to us, to our officers or directors, or to
such controlling person by reason of any such untrue statement or omission on
your part otherwise than on account of your indemnity agreement contained in
this paragraph 8.
9. We agree to advise you immediately:
(a) of any request by the Securities and Exchange
Commission for amendments to our Registration Statement, Prospectus or Statement
of Additional Information or for additional information,
(b) in the event of the issuance by the Securities and
Exchange Commission of any stop order suspending the effectiveness of our
Registration Statement, Prospectus or Statement of Additional Information or the
initiation of any proceedings for that purpose,
(c) of the happening of any material event which makes
untrue any statement made in our Registration Statement, Prospectus or Statement
of Additional Information or which requires the making of a change in any
thereof in order to make the statements therein not misleading, and
(d) of all action of any Securities and Exchange
Commission with respect to any amendments to our Registration Statement,
Prospectus or Statement of Additional Information which may from time to time be
filed with the Securities and Exchange Commission under the Act.
10. This Agreement shall become effective on the date hereof and
shall remain in effect until December 31, 1998, and thereafter automatically for
successive twelve-month periods (computed from each January 1) provided that
such continuance is specifically approved at least annually by a vote of a
majority of our outstanding voting securities, as defined in the Investment
Company Act of 1940, as amended, or by our Board of Directors, and in either
case by a majority of our directors who are not parties to this agreement or
interested persons, as defined in the Investment Company Act of 1940, of any
such party. This agreement may be terminated at any time, without the payment of
any penalty, by vote of a majority of our outstanding voting securities (as so
defined), or by a vote of a majority of our Directors who are not parties to
this agreement or interested persons (as defined in the Investment Company Act
of 1940, as amended) of any party to this agreement, on sixty days' written
notice to you, or by you on sixty days' written notice to us.
11. This agreement may not be transferred, assigned, sold or in
any manner hypothecated or pledged by you and this agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge. The terms "transfer", "assignment", and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing law and any
interpretation thereof contained in rules or regulations promulgated by the
Securities and Exchange Commission thereunder.
12. Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, or
the right of any of your officers, directors or employees who may also be a
director, officer or employee of ours, to engage in any other business or to
devote time and attention to the management or other
aspects of any other business, whether of a similar or dissimilar nature, or to
render services of any kind to any other corporation, firm, individual or
association.
If the foregoing is in accordance with your understanding, will
you kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
Xxxxx & Steers Special Equity Fund, Inc.
By___________________________
Xxxxxx Xxxxx
President
Accepted:
Xxxxx & Steers Securities, Inc.
By_____________________________
Xxxxxx X. Xxxxxx
President
