XXXXX & STEERS EQUITY INCOME FUND, INC.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
August __, 1997
Xxxxx & Steers Securities, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Underwriting Agreement
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Dear Sirs:
Xxxxx & Steers Equity Income Fund, Inc. (the "Company"), a Maryland
corporation, is engaged in the business of an investment company. Its Board of
Directors has selected you to act as principal underwriter (as such term is
defined in Section 2(a)(29) of the Investment Company Act of 1940, as amended)
of the Company's common stock (the "Shares") and you are willing to act as such
principal underwriter and to perform the duties and functions of underwriter in
the manner and on the conditions hereinafter set forth. Accordingly, the Company
hereby agrees with you as follows:
1. Copies of Corporate Documents. The Company will furnish you promptly
with copies of any registration statements filed by it with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, together with any financial
statements and exhibits included therein, and all amendments or supplements
thereto hereafter filed.
2. Registration and Sale of Additional Shares. The Company will from
time to time use its best efforts to register under the Securities Act of 1933,
as amended, such authorized Shares not already so registered as you may
reasonably be expected to sell as agent on behalf of the Company. To the end
that there will be available for sale such number of Shares as you may
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reasonably be expected to sell, the Company will, from time to time as may be
necessary, increase the number of authorized shares. This agreement relates to
the issue and sale of Shares that are duly authorized and registered and
available for sale by the Company, including repurchased and redeemed Shares if
and to the extent that they may be legally sold and if, but only if, the Company
sees fit to sell them. You and the Company will cooperate in taking such action
as may be necessary from time to time to qualify Shares for sale in New York and
in any other states mutually agreeable to you and the Company, and to maintain
such qualification, provided that such shares are duly registered under the
Securities Act of 1933, as amended.
3. Solicitation of Orders. You will use your best efforts (but only in
states in which you may lawfully do so) to obtain from investors orders for
Shares authorized for issue by the Company and registered under the Securities
Act of 1933, as amended, provided that you may in your discretion refuse to
accept orders for shares from any particular applicant. You may, as agent for
the Company, solicit dealers for orders to purchase Shares and may enter into
selling agreements to be as mutually agreed upon, from time to time, by you and
the Company. Each dealer must be a member of the National Association of
Securities Dealers, Inc. or a foreign dealer not eligible for membership in such
Association who has agreed in acting under the selling agreement to abide by the
rules and regulations of such Association and not to use the United States mails
or any means of interstate commerce in connection with the sales of such shares
unless such foreign dealer is registered under the Securities Exchange Act of
1934.
4. Sale of Shares. Subject to the provisions of paragraph 5 hereof and
to such minimum purchase requirements as may from time to time be currently
indicated in the Company's prospectus, you are authorized to sell as agent on
behalf of the Company authorized and unissued Shares registered under the
Securities Act of 1933, as amended. Such sales may be made by you on behalf of
the Company by accepting orders to purchase such shares placed with you by
investors. The sales price of such shares shall be the public offering price as
defined in
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paragraph 6 hereof.
5. Sale of Shares to Investors. Any right granted to you to accept
orders for Shares or make sales on behalf of the Company will not apply to
Shares issued in connection with the merger or consolidation of any other
investment company with the Company or its acquisition, by purchase or
otherwise, of all or substantially all the assets of any investment company or
substantially all the outstanding shares of any such company, and such right
shall not apply to Shares that may be offered by the Company to shareholders by
virtue of their being shareholders of the Company, including shares issued in
payment of any dividend or distribution by the Company.
6. Public Offering Price. All Shares sold to investors by you as agent
for the Company will be sold at the public offering price. The public offering
price for all accepted orders will be the net asset value per Share next
computed after receipt of such an order, plus any applicable sales charge
adjusted to the nearest full cent, as may from time to time be currently
indicated in the Company's prospectus with respect to such order. Net asset
value per Share shall be computed in the manner provided in the Company's
Articles of Incorporation, as now in effect or as it may be amended. The time of
receipt of such an order shall be the time of its receipt by you or by a dealer
selected by you as provided in paragraph 3 if transmitted on the day of receipt
by such dealer to you prior to the close of your business on that day. The
Company will not, without your prior consent, change the sales charges or dealer
discounts applicable to the sales of its Shares from those set forth in its
Prospectus dated [August] ___, 1997. You may also purchase as principal Shares
at net asset value and sell such shares at the public offering price.
7. Underwriting Discount. The Company shall receive from you the
applicable net asset value on all orders for sales of Shares accepted by you as
agent of the Company if the net sale price thereof has been deemed, in
accordance with the Company's Articles of Incorporation, to be an asset of the
Company in connection with a computation of net asset value for the sale of
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any other shares or the purchase or redemption of any shares. You shall be
entitled to retain so much of the difference between the public offering price
and the applicable net asset value as is not reallowed by you as a discount to
dealers. Such reallowance shall be the same for all dealers and shall conform to
such dealer discounts, if any, as may from time to time be currently indicated
in the Company's prospectus. You will reimburse the Company for any increase in
any issue tax paid by it which is attributable to such sales charge.
8. Notice of Sale; Delivery of Payments. You will promptly notify the
Company's transfer agent of any orders for sales of Shares accepted by you, and
you will deliver to the Company's transfer agent all payments pursuant to orders
for sales accepted by you no later than the first business day following the
receipt by you in your home office of such payments, and, unless payment is not
required under paragraph 7, in no event later than seven days after the receipt
by you of such order, or, in case an extension of time is granted by the
National Association of Securities Dealers, Inc., to the dealer submitting the
order, in no event later than the expiration of such extension of time.
9. Purchase of Shares. You are authorized to purchase as agent on behalf
of the Company Shares from record holders thereof. Such purchases may be made by
you on behalf of the Company by accepting orders placed with you by such
holders. The purchase price per share for all accepted orders will be the net
asset value per share next computed after receipt of such an order, in the
manner provided in the Company's Articles of Incorporation, as now in effect or
as it may be amended, less any applicable redemption charge. The time of receipt
of such an order shall be the time of its receipt by you or by a dealer selected
by you as provided in paragraph 3 if transmitted on the day of receipt by such
dealer to the Company's transfer agent prior to the close of its business on
that day. You will promptly notify the Company's transfer agent of any such
order accepted by you and will, if the Shares subject to such order have been
deemed to be no longer outstanding in connection with a computation of net asset
value for the sale of any Shares
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by the Company or the purchase or redemption of any shares by it, deliver to
such agent a proper request for purchase of such shares by the Company and any
stock certificates for such shares not later than the first business day
following the receipt by you in your home office of such request and
certificates, and in no event later than seven days after the receipt by you of
such order.
10. Suspension of Sales and Purchases. If and whenever the determination
of asset value is suspended pursuant to the Company's Articles of Incorporation,
and such suspension has become effective, until such suspension is terminated no
further orders for the sale or purchase of Shares shall be accepted by you
except such orders placed with you before you had knowledge of the suspension.
In addition, the Company reserves the right to suspend sales and purchases and
your authority to accept orders for sales and purchases of Shares on behalf of
the Company if, in the judgment of a majority of its Board of Directors or a
majority of the Executive Committee of its Board of Directors, if such Committee
exists, it is in the best interests of the Company to do so, such suspension to
continue for such period as may be determined by such majority; and in that
event, no Shares will be sold or purchased by the Company or by you on behalf of
the Company while such suspension remains in effect except for shares necessary
to cover orders accepted by you before you had knowledge of the suspension. The
Company will notify you promptly of any such suspension of the determination of
net asset value or of any such suspension of sales and purchases of Shares.
11. Expenses. The Company will pay all fees and expenses in connection
with the preparation and filing of any registration statement and prospectus or
amendments thereto under the Securities Act of 1933, as amended, covering the
issue and sale of its Shares and in connection with the qualification of such
Shares for sale in the various states and countries in which the Company shall
determine it advisable to qualify such Shares for sale, the costs of all stock
certificates and the fees and expenses of its transfer agent or registrar. It
will also pay any issue taxes (subject to partial reimbursement under paragraph
7 hereof). You will pay all
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expenses of printing prospectuses and other sales literature (except copies of
prospectuses and other sales literature which may from time to time be sent to
existing shareholders of the Fund and except as may otherwise be provided
pursuant to a plan of distribution adopted by the Company pursuant to Rule 126-1
under the Investment Company Act of 1940), all fees and expenses in connection
with your qualification as a dealer in the various states and countries, and all
other expenses in connection with the sale and offering for sale of the Shares
of the Company which are not payable by the Company pursuant to the provisions
of this paragraph 11.
12. Conformity with Law. You agree that in selling and purchasing the
Shares you will duly conform in all respects with the laws of the United States
and any state or country in which such shares may be offered for sale by you
pursuant to this agreement.
13. Indemnification. You agree to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act of
1933, as amended, against any and all losses, claims, damages, liabilities or
litigation expenses (including legal and other expenses) to which the Company or
such directors, officers or controlling person may become subject under such
Act, under any other statute, at common law or otherwise, arising out of the
acquisition of any shares by any person or the sale of any shares by any person
to the Company through you which (i) may be based upon any wrongful act by you
or any of your employees or representatives, or (ii) may be based upon any
untrue statement or alleged untrue statement of a material fact contained in a
registration statement or prospectus covering shares of the Company or any
amendment thereof or supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading if such statement or omission was made in
reliance upon information furnished or confirmed in writing to the Company by
you, provided, however, that in no case is your indemnity in favor of a director
or officer or any other person deemed to protect such director or officer or
other person against any
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liability to which any such person would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of his
duties or by reason of his reckless disregard of obligations and duties under
this agreement.
The Company agrees to indemnify and hold harmless you and each of your
directors and officers and each person, if any, who controls you within the
meaning of Section 15 of the Securities Act of 1933, as amended, against any and
all losses, claims, damages, liabilities or litigation expenses (including legal
and other expenses) to which you or such directors, officers or controlling
person may become subject under such Act, under any other statute, at common law
or otherwise, arising out of the acquisition of any shares by any person or the
sale of any shares by any person to the Company through you which (i) may be
based upon any wrongful act by the Company or any of its employees or
representatives, or (ii) except as described in clause (ii) of the preceding
paragraph, may be based upon any untrue statement or alleged untrue statement or
a material fact contained in a registration statement or prospectus covering
shares of the Company or any amendment thereof or supplement thereto or omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, provided,
however, that in no case is the Company's indemnity in favor of a director or
officer or any other person deemed to protect such director or officer or other
person against any liability to which any such person would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of his duties or by reason of his reckless disregard of obligations
and duties under this Agreement. You hereby waive any rights to indemnification
concerning your obligations and duties hereunder to which you might be entitled
under the Company's By-Laws.
You are not authorized to give any information or to make any
representations on behalf of the Company in connection with the sale or purchase
of shares of the Company other than the information and representations
contained in a registration statement or prospectus covering
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shares of the Company, as such registration statement and prospectus may be
amended or supplemented from time to time. No person other than you is
authorized to act as agent for the Company in connection with the offering or
sale of shares of the Company to the public or otherwise.
14. Duration and Termination of This Agreement. This agreement shall
remain in force until December 31, 1998 and from year to year thereafter, but
only so long as such continuance is specifically approved at least annually by
the Board of Directors of the Company or by vote of a majority of the
outstanding voting securities of the Company. In addition, the Company may not
renew or perform this agreement unless the terms thereof and any renewal thereof
have been approved by the vote of a majority of directors of the Company who are
not interested persons of you or of the Company cast in person at a meeting
called for the purpose of voting on such approval. This agreement may, on 60
days' written notice, be terminated at any time without the payment of any
penalty, by the Board of Directors of the Company, by vote of a majority of the
outstanding voting securities of the Company, or by you. This agreement shall
automatically terminate in the event of its assignment. In interpreting the
provisions of this paragraph 11, the definitions contained in Section 2(a) of
the 1940 Act, as amended, and Rules thereunder (particularly the definitions of
"interested person," "assignment," "voting security" and "vote of a majority of
the outstanding voting securities") shall be applied.
15. Amendment of This Agreement. No provision of this agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver
discharge or termination is sought. If the Company should at any time deem it
necessary or advisable in the best interests of the Company that any amendment
of this agreement be made in order to comply with the recommendations or
requirements of the Securities and Exchange Commission or other governmental
authority or to obtain any advantage under state or federal tax laws and should
notify you of the form of such
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amendment, and the reasons therefor, and if you should decline to assent to
such amendment, the Company may terminate this agreement forthwith. If you
should at any time request that a change be made in the Company's Articles of
Incorporation or By-Laws, or in its methods of doing business, in order to
comply with any requirements of federal law or regulations of the Securities
and Exchange Commission or of a national securities association of which you are
or may be a member, relating to the sale of shares of the Company, and the
Company should not make such necessary change within a reasonable time, you
may terminate this agreement forthwith.
16. Miscellaneous. The captions in this agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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If you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Company, whereupon this letter shall become a binding
contract.
Yours very truly,
XXXXX & STEERS EQUITY INCOME FUND, INC.
By:_________________________________________
Name:
Title:
The foregoing agreement is
hereby accepted as of the
date thereof.
XXXXX & STEERS SECURITIES, INC.
By:____________________________
Name:
Title:
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