EXHIBIT (h)(7)
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Board of Trustees
Utilities Stock Portfolio
Meeder Asset Management, Inc.
and
Miller/Howard Investments, Inc.
P.O. Box 7177
6000 Memorial Drive
Dublin, Ohio 43017
We, Utilities Stock Portfolio (the "Portfolio"), Meeder Asset
Management, Inc., investment adviser for the Portfolio ("Meeder"), and
Miller/Howard Investments, Inc., investment sub-adviser for the Portfolio
("Miller/Howard"), invite you, Morgan Keegan Select Fund, Inc., (the "Company"),
on behalf of your series, Morgan Keegan Utility Fund (the "Fund"), to invest the
Fund's assets in the Portfolio in exchange for a beneficial interest in the
Portfolio ("Shares") on the following terms and conditions:
I
INVESTMENTS AND REDEMPTIONS
1.1 INVESTMENTS. The Fund will invest substantially all of its
investable assets in the Portfolio and, in exchange therefore, the Portfolio
will issue to the Fund Shares equal in value to the net value of the assets of
the Fund conveyed to the Portfolio. On or before the time the Fund makes its
investment (the "Time of Investment") in the Portfolio, the Fund will execute
and deliver to the Portfolio an Application substantially in the form of Exhibit
A to this Agreement. Except as otherwise provided in Paragraph 3.1(c) hereof,
the Fund may add to or reduce its investment in the Portfolio as described in
the registration statement of the Portfolio filed on Form N-1A. In connection
with each investment, the Portfolio shall deliver to the Fund such documents as
the Fund reasonably may request.
1.2 INVESTMENT DATE. Investments shall occur on such date as the
parties hereto agree upon and on subsequent Business Days as the Fund
determines. ("Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and on which the Portfolio calculates its net asset
value pursuant to the rules of the Securities and Exchange Commission ("SEC")).
All acts occurring on the date of investment shall be deemed to occur
simultaneously as of the last daily determination of the Portfolio's net asset
value on the date of investment.
1.3 REDEMPTIONS. The Portfolio will redeem any full or fractional
Shares of the Portfolio when requested by the Fund in accordance with the
operational procedures mutually agreed to by the Portfolio and the Fund from
time to time and the provisions of the registration statement of the Portfolio
filed on Form N-1A. The Portfolio shall ensure that it makes payment for such
Shares in the manner it establishes from time to time, but in no event shall
payment be delayed for a greater period than is permitted by the Investment
Company Act of 1940, as amended (the "1940 Act") (including any rule or order of
the SEC thereunder).
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1.4 PURCHASE AND REDEMPTION PROCEDURES. The Portfolio shall accept
purchase and redemption orders from the Fund on each Business Day, provided that
such orders are sent by the Fund and received by the Portfolio prior to 9:00
a.m. (Eastern time) on such Business Day and reflect purchase and redemption
orders received from the Fund's shareholders in good order prior to the time the
net asset value of the Portfolio is priced (the Portfolio's "valuation time") on
the prior Business Day. Any such purchase or redemption order received after the
Portfolio's valuation time on a Business Day shall be deemed received prior to
9:00 a.m. (Eastern time) on the next succeeding Business Day. Purchase and
redemption orders shall be provided to the Portfolio in such written or
electronic form (including facsimile) as may be mutually acceptable to the
Portfolio and the Fund. The Portfolio may reject purchase and redemption orders
that are not in proper form.
1.5 TAX NOTICES. The Portfolio shall furnish prompt notice to the
Fund of any income, dividends or capital gain distribution payable on Shares.
The Fund shall receive all such income, dividends and capital gain distributions
as are payable in additional Shares. The Portfolio shall notify the Fund of
the number of Shares so issued as payment of such dividends and distributions.
1.6 NET ASSET VALUE DATA. The Portfolio shall make the net asset
value per Share available to the Fund on a daily basis as soon as reasonably
practical after such net asset value per share is calculated.
1.7 CONDITIONS PRECEDENT. The obligations of each party to consummate
the transactions provided for herein shall be subject to:
(a) performance by the other parties of all the obligations to be
performed by the other parties hereunder on or before the Time of Investment,
(b) all representations and warranties of the other parties contained
in this Agreement being true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Time of Investment, with the same force and effect as
if made on and as of the Time of Investment, and
(c) the further condition that on or before the Time of Investment all
necessary filings shall have been made with the SEC and state securities
authorities, and no order or directive shall have been received that any other
or further action is required to permit the parties to carry out the
transactions contemplated hereby.
II
REPRESENTATIONS AND WARRANTIES
2.1 THE PORTFOLIO. The Portfolio represents and warrants as follows:
(a) ORGANIZATION. The Portfolio is duly organized and validly
existing under the laws of the State of New York as a business trust. The
Portfolio has the requisite power and authority to own property and conduct its
business as proposed to be conducted pursuant to this Agreement.
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(b) AUTHORIZATION OF AGREEMENT. The execution and delivery of this
Agreement by the Portfolio and the consummation of the transactions contemplated
hereby have been duly authorized by the Portfolio's Board of Trustees.
(c) AUTHORIZATION OF ISSUANCE OF INTEREST. The issuance by the
Portfolio of Shares in exchange for the Investment by the Fund has been duly
authorized by the Portfolio's Board of Trustees. When issued in accordance with
the terms of this Agreement, the Shares will be validly issued, fully paid and
non-assessable by the Portfolio.
(d) NO BANKRUPTCY PROCEEDINGS. The Portfolio is not under the
jurisdiction of a court in a proceeding under Title 11 of the Bankruptcy Code or
similar case within the meaning of Section 368(a)(3)(A) of the Bankruptcy Code.
(e) FISCAL YEAR. The fiscal year end of the Portfolio is December
31.
(f) AUDITORS. The Portfolio has appointed KPMG LLP as its
independent public accountant to certify the Portfolio's financial statements in
accordance with Section 32 of the 1940 Act, and shall promptly notify the Fund
if any other independent public accountant is designated to perform this
function.
(g) SEC FILINGS. The Portfolio has duly filed all forms, reports,
proxy statements and other documents (collectively, "SEC Filings") required to
be filed with the SEC pursuant to the Securities Exchange Act of 1934 (the "1934
Act") and 1940 Act (collectively, the "Securities Laws") in connection with any
meetings of its investors and its registration as an investment company. Shares
are not required to be registered under the Securities Act of 1933, as amended
(the "1933 Act"), because such Shares are offered solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. The SEC Filings were prepared in accordance with
the requirements of the Securities Laws, as applicable, and the rules and
regulations thereunder, and do not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(h) SEC REGISTRATION STATEMENT. The registration statement of the
Portfolio filed on Form N-1A (including amendments and supplements thereto) does
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(i) 1940 ACT REGISTRATION. The Portfolio is duly registered as an
open-end management investment company under the 1940 Act, and its registration
is in full force and effect.
(j) TAX STATUS. The Portfolio is taxable as a partnership under
the Internal Revenue Code of 1986, as amended (the "Code").
(k) PRICING AND IN-KIND REDEMPTION PROCEDURES. The Portfolio has
adopted pricing and valuation procedures that comply with the 1940 Act and
in-kind redemption procedures that comply with the 1940 Act and any related
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interpretations issued by the SEC staff.
(l) ONGOING REPRESENTATIONS. The representations contained in this
Section 2.1 shall be deemed to be repeated upon each investment by the Fund in
the Portfolio.
2.2 MEEDER. Meeder represents and warrants as follows:
(a) ORGANIZATION. Meeder is a corporation duly organized, validly
existing and in good standing under the laws of Ohio and has the requisite power
and authority to conduct its business as contemplated by this Agreement.
(b) AUTHORIZATION OF AGREEMENT. The execution and delivery of this
Agreement by Meeder has been duly authorized by all necessary actions by Meeder.
(c) INVESTMENT ADVISER. Meeder is duly registered as an investment
adviser with the SEC in good standing under the Investment Advisers Act of 1940
and in all jurisdictions where such registration is required to conduct the
activities contemplated herein.
(d) SEC REGISTRATION STATEMENT. The registration statement of the
Company (relating to the Fund) filed on Form N-1A (including amendments and
supplements thereto), with respect to information about Meeder and its
affiliates (including information regarding each of the principals of Meeder and
any investment performance information relating to Meeder and its affiliates),
does not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
2.3 MILLER/HOWARD. Miller/Howard represents and warrants as follows:
(a) ORGANIZATION. Miller/Howard is a corporation duly organized,
validly existing and in good standing under the laws of ______________ and has
the requisite power and authority to conduct its business as contemplated by
this Agreement.
(b) AUTHORIZATION OF AGREEMENT. The execution and delivery of this
Agreement by Miller/Howard has been duly authorized by all necessary actions by
Miller/Howard.
(c) INVESTMENT ADVISER. Miller/Howard is duly registered as an
investment adviser with the SEC in good standing under the Investment Advisers
Act of 1940 and in all jurisdictions where such registration is required to
conduct the activities contemplated herein.
(d) SEC REGISTRATION STATEMENT. The registration statement of the
Company (relating to the Fund) filed on Form N-1A (including amendments and
supplements thereto), with respect to information about Miller/Howard and its
affiliates (including information regarding each of the principals of
Miller/Howard and any investment performance information relating to any of
them), does not include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
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2.4 THE FUND. The Fund represents and warrants as follows:
(a) ORGANIZATION. The Fund is a series of a Maryland corporation
duly organized, validly existing and in good standing under the laws of the
State of Maryland and has the requisite power and authority to own its property
and conduct its business as proposed to be conducted as described in its N-1A
Registration Statement filed with the SEC.
(b) AUTHORIZATION OF AGREEMENT. The execution and delivery of this
Agreement by the Fund, the performance by the Fund of its obligations hereunder,
and the consummation by the Fund of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of the Fund, and no
other action or proceeding is necessary for the execution and delivery of this
Agreement by the Fund, the performance by the Fund of its obligations hereunder,
and the consummation by the Fund of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Fund and constitutes a
legal, valid and binding obligation of the Fund, enforceable against it in
accordance with its terms.
(c) AUTHORIZATION OF INVESTMENT. The Investment has been duly
authorized by all necessary action on the part of the Board of Directors and
shareholders of the Fund.
(d) SEC FILINGS. The Fund has duly filed all SEC Filings required
to be filed with the SEC pursuant to the Securities Laws in connection with the
registration of its shares, any meetings of its shareholders and its
registration as an investment company. The SEC filings were prepared in
accordance with the requirements of the Securities Laws, as applicable, and did
not at the time they were filed contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(e) 1940 ACT REGISTRATION. The Fund is duly registered as an
open-end management investment company under the 1940 Act, and such registration
is in full force and effect.
(f) TAX STATUS. The Fund will qualify for treatment as a regulated
investment company ("RIC") under Subchapter M of the Code, for its current
taxable year.
(g) NO BANKRUPTCY PROCEEDINGS. The Fund is not under the
jurisdiction of a court in a proceeding under Title 11 of the United States Code
or similar case within the meaning of Section 368(a)(3)(A) of the Code.
(h) CASH. The Investment will consist solely of cash.
(i) FISCAL YEAR. The Fund shall, prior to the Time of Investment,
take appropriate action to adopt a fiscal year ending December 31. In addition,
so long as the Fund maintains its investment in the Portfolio, the Fund will not
change its fiscal year end so as to have a different fiscal year end from that
of the Portfolio without the prior written consent of the Portfolio.
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(j) AUDITORS. The Fund shall, prior to the Time of Investment,
take appropriate action to select KPMG LLP as the Fund's independent public
accountants to certify the Fund's financial statements in accordance with
Section 32 of the 1940 Act. In addition, so long as the Fund maintains its
investment in the Portfolio, the Fund will not appoint a different firm as its
independent public accountants without the prior written consent of the
Portfolio.
(k) ONGOING REPRESENTATIONS. The representations contained in this
Section 2.4 shall be deemed to be repeated upon each investment by the Fund in
the Portfolio.
III
COVENANTS
3.1 THE PORTFOLIO. The Portfolio covenants as follows:
(a) ADVANCE REVIEW OF FILINGS. The Portfolio will furnish to the
Fund, at least five business days prior to filing, draft amendments to the
registration statement of the Portfolio filed on Form N-1A.
(b) TAX STATUS. The Portfolio will qualify to be taxable as a
partnership under the Code for all periods during which this Agreement is in
effect, except to the extent that the failure to so qualify results from any
action or omission of the Fund.
(c) AVAILABILITY OF SHARES. Subject to compliance with the terms
of this Agreement, the Portfolio shall permit the Fund to make additional
investments in the Portfolio on each Business Day on which shares of the Fund
are sold to the public; provided, however, that the Portfolio may refuse to
permit the Fund to make additional investments on any day on which the Trustees
of the Portfolio reasonably determine that permitting additional investments by
a Fund would constitute a breach of their fiduciary duties to the Portfolio.
(d) INVESTMENT OBJECTIVE. The Portfolio will notify the Fund at
least 75 days prior to making any material changes to its investment objective
or policies.
3.2 INDEMNIFICATION BY THE PORTFOLIO.
(a) The Portfolio will indemnify and hold harmless the Company,
the Fund, and their directors, officers and employees and each other person who
controls the Fund, as the case may be, within the meaning of Section 15 of the
1933 Act (each a "Covered Person" and collectively "Covered Persons"), against
any and all losses, claims, demands, damages, liabilities and expenses (each a
"Liability" and collectively, the "Liabilities") (including the reasonable costs
of investigating and defending against any claims therefor and any counsel fees
incurred in connection therewith) which
(i) arise out of or are based upon any of the Securities Laws,
any other statute or common law or are incurred in connection with or as a
result of any formal or informal administrative proceeding or investigation by a
regulatory agency, insofar as such Liabilities arise out of or are based upon
any omission or commission by the Portfolio (either during the course of its
daily activities or in connection with the accuracy of its representations or
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warranties in this Agreement) that caused or continues to cause the Fund to
violate any federal or state securities laws or regulations or any other
applicable domestic or foreign law or regulations or common law duties or
obligations, but only to the extent that such Liabilities do not arise out of
and are not based upon an omission or commission of the Company or Fund (other
than an imputed act or omission based upon an act or omission of the Portfolio);
(ii) arise out of or are based upon an inaccurate calculation
of the Portfolio's net asset value (whether by the Portfolio or any party
retained by the Portfolio for that purpose);
(iii) arise out of (A) any untrue statement of a material fact
in the registration statement of the Portfolio filed on Form N-1A (including
amendments and supplements thereto) or omission of any material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, (B) any untrue
statement of a material fact in the registration statement of the Company
(relating to the Fund) filed on Form N-1A (including amendments and supplements
thereto) with respect to information about the Portfolio (including any
investment performance information of the Portfolio) that is furnished by the
Portfolio specifically for inclusion in the Company's Form N-1A, or omission of
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or (C) any untrue statement of a material fact in advertising or
sales literature used by the Company on behalf of the Fund, or an omission of
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, if included at the request, or with the written permission, of
the Portfolio;
(iv) arise out of the Portfolio's failure to qualify as a
regulated investment company under the Code;
(v) result from the failure of any representation or warranty
made by the Portfolio to be accurate when made or the failure of the Portfolio
to perform any covenant contained herein or to otherwise comply with the terms
of this Agreement;
(vii) arise out of any unlawful or negligent act by the
Portfolio, whether such act was committed against Meeder, Miller/Howard, the
Portfolio, the Fund or any third party;
(vii) arise out of any claim that the systems, methodologies,
or technology used in connection with operating the Portfolio, including the
technologies associated with maintaining the master-feeder structure of the
Portfolio, violates any license or infringes upon any patent or trademark;
(viii) arise out of any claim that the use of the names used
by the Portfolio or any corresponding use by the Fund of names used by the
Portfolio violates any license or infringes upon any trademark; or
(ix) result from any Liability of the Portfolio to any
investor in the Portfolio (or shareholder thereof), other than the Fund (and its
shareholders); provided, however, that in no case shall the Portfolio be liable
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with respect to any claim made against any such Covered Person unless such
Covered Person shall have notified the Portfolio in writing of the nature of the
claim within a reasonable time after the summons, other first legal process or
formal or informal initiation of a regulatory investigation or proceeding shall
have been served upon or provided to a Covered Person or any federal, state or
local tax deficiency has come to the attention of the Fund or a Covered Person.
Failure to notify the Portfolio of such claim shall not relieve it from any
liability that it may have to any Covered Person otherwise than on account of
the indemnification contained in this paragraph.
(b) INDEMNIFICATION OF MILLER/HOWARD. The Portfolio will indemnify
and hold harmless Miller/Howard, and each of its respective Trustees, directors
and officers and each person, if any, who controls Miller/Howard within the
meaning of Section 15 of the 1933 Act (each a "Miller/Howard Indemnified Party"
and collectively, the "Miller/Howard Indemnified Parties") against any and all
Liabilities (including the reasonable costs of investigating and defending
against any claims therefor and any counsel fees incurred in connection
therewith), which
(i) arise out of (A) any untrue statement of a material fact
in the registration statement of the Portfolio filed on Form N-1A (including
amendments and supplements thereto) or omission of any material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, (B) any untrue
statement of a material fact in advertising or sales literature used by
Miller/Howard, or an omission of any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, if included at the request, or with the
written permission, of the Portfolio;
(ii) result from the failure of any representation or warranty
made by the Portfolio to be accurate when made or the failure of the Portfolio
to perform any covenant contained herein or to otherwise comply with the terms
of this Agreement;
(iii) arise out of any unlawful or negligent act by the
Portfolio, whether such act was committed against Miller/Howard, the Fund, the
Company, the Portfolio, Meeder, or any third party.
3.3 THE FUND. The Fund covenants that:
(a) WRITTEN CONSENT OF SHAREHOLDERS. The Fund will obtain the unanimous
written consent of its shareholders to approve the Investment and to take all
other action necessary or advisable to implement the Investment.
(b) ADVANCE REVIEW OF CERTAIN DOCUMENTS. The Fund will furnish to the
Portfolio, at least 5 days prior to filing or first use, as the case may be,
drafts of the Fund's registration statement on Form N-1A (including amendments),
prospectus supplements and supplemental advertising. The Portfolio will,
however, in no way be liable for any errors or omissions in such documents
whether or not it makes any objection thereto.
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(c) INDEMNIFICATION OF THE PORTFOLIO AND MEEDER. The Fund will
indemnify and hold harmless the Portfolio and Meeder, and each of their
respective Trustees, directors and officers and each person, if any, who
controls the Portfolio or Meeder within the meaning of Section 15 of the 1933
Act (each a "Meeder Indemnified Party" and collectively, the "Meeder Indemnified
Parties") against any and all Liabilities (including the reasonable costs of
investigating and defending against any claims therefor and any counsel fees
incurred in connection therewith), which
(i) arise out of or are based upon any of the Securities Laws,
any other statute or common law or are incurred in connection with or as a
result of any formal or informal administrative proceeding or investigation by a
regulatory agency, insofar as such Liabilities arise out of or are based upon
any omission or commission by the Fund or the Company (either during the course
of their daily activities or in connection with the accuracy of their
representations or warranties in this Agreement) that caused or continues to
cause a Meeder Indemnified Party to violate any federal or state securities laws
or regulations or any other applicable domestic or foreign law or regulations or
common law duties or obligations, but only to the extent that such Liabilities
do not arise out of and are not based upon an omission or commission of the
Portfolio or Meeder (other than an imputed act or omission based upon an act or
omission of the Portfolio or Meeder);
(ii) arise out of (A) any untrue statement of a material fact
in the registration statement of the Fund filed on Form N-1A (including
amendments and supplements thereto) or omission of any material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, (B) any untrue
statement of a material fact in advertising or sales literature used by the
Portfolio or Meeder, or an omission of any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, if included at the
request, or with the written permission, of the Company or the Fund;
(iii) arise out of the Fund's failure to qualify as a
regulated investment company under the Code;
(iv) result from the failure of any representation or warranty
made by the Fund to be accurate when made or the failure of the Fund to perform
any covenant contained herein or to otherwise comply with the terms of this
Agreement;
(v) arise out of any unlawful or negligent act by the Fund or
the Company, whether such act was committed against the Fund, the Company, the
Portfolio, Meeder, Miller/Howard or any third party;
(vi) arise out of any claim that the use of the names used by
the Fund or the Company violates any license or infringes upon any trademark; or
(vii) result from any Liability of the Fund to any shareholder
in the Fund or any Liability of the Company to any shareholder in any other
series of the Company; provided, however, that in no case shall the Fund be
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liable with respect to any claim made against any Meeder Indemnified Party
unless such Meeder Indemnified Party shall have notified the Fund in writing of
the nature of the claim within a reasonable time after the summons, other first
legal process or formal or informal initiation of a regulatory investigation or
proceeding shall have been served upon or provided to any Meeder Indemnified
Party or any federal, state or local tax deficiency has come to the attention of
any Meeder Indemnified Party. Failure to notify the Fund of such claim shall not
relieve it from any liability that it may have to any Meeder Indemnified Party
otherwise than on account of the indemnification contained in this paragraph.
(d) INDEMNIFICATION OF MILLER/HOWARD. The Fund will indemnify and hold
harmless Miller/Howard, and each Miller/Howard Indemnified Party against any and
all Liabilities (including the reasonable costs of investigating and defending
against any claims therefor and any counsel fees incurred in connection
therewith), which
(i) arise out of (A) any untrue statement of a material fact
in the registration statement of the Fund filed on Form N-1A (including
amendments and supplements thereto) or omission of any material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, (B) any untrue
statement of a material fact in advertising or sales literature used by
Miller/Howard, or an omission of any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, if included at the request, or with the
written permission, of the Company or the Fund;
(ii) result from the failure of any representation or warranty
made by the Fund to be accurate when made or the failure of the Fund to perform
any covenant contained herein or to otherwise comply with the terms of this
Agreement;
(iii) arise out of any unlawful or negligent act by the Fund
or the Company, whether such act was committed against Miller/Howard, the Fund,
the Company, the Portfolio, Meeder, or any third party.
3.4 INDEMNIFICATION BY MEEDER. Meeder will indemnify and hold
harmless the Company, the Fund, and their Covered Persons, against any and
all Liabilities (including the reasonable costs of investigating and
defending against any claims therefor and any counsel fees incurred in
connection therewith), which
(a) arise out of or are based upon any of the Securities Laws, any
other statute or common law or are incurred in connection with or as a result of
any formal or informal administrative proceeding or investigation by a
regulatory agency, insofar as such Liabilities arise out of or are based upon
any omission or commission by Meeder or its affiliates (either during the course
of its daily activities or in connection with the accuracy of its
representations or its warranties in this Agreement) that caused or continues to
cause the Fund to violate any federal or state securities laws or regulations or
any other applicable domestic or foreign law or regulations or common law duties
or obligations, but only to the extent that such Liabilities do not arise out of
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and are not based upon an omission or commission of the Company or Fund (other
than an imputed act or omission based upon an act or omission of Meeder or its
affiliates);
(b) arise out of (A) any untrue statement of a material fact in
the registration statement of the Company (relating to the Fund) filed on Form
N-1A (including amendments and supplements thereto) with respect to information
about Meeder or its affiliates (including any investment performance information
of Meeder or its affiliates) that is furnished by Meeder or its affiliates
specifically for inclusion in the Company's Form N-1A or omission of any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or (B) any untrue statement of a material fact in advertising or
sales literature used by the Company on behalf of the Fund, or an omission of
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, if included at the request, or with the written permission, of
Meeder;
(c) result from the failure of any representation or warranty made
by Meeder to be accurate when made or the failure of Meeder to perform any
covenant contained herein or to otherwise comply with the terms of this
Agreement; or
(d) arise out of any unlawful or negligent act by Meeder or its
affiliates, whether such act was committed against Meeder, the Portfolio, the
Fund, Miller/Howard or any third party.
3.5 INDEMNIFICATION BY MILLER/HOWARD. Miller/Howard will indemnify
and hold harmless Meeder, the Portfolio, the Company, the Fund, and their
Covered Persons, against any and all Liabilities (including the reasonable
costs of investigating and defending against any claims therefor and any
counsel fees incurred in connection therewith), which
(a) arise out of any untrue statement of a material fact in the
registration statement of the Portfolio filed on Form N-1A (including amendments
and supplements thereto) with respect to information about Miller/Howard or its
affiliates (including any investment performance information of Miller/Howard or
its affiliates);
(b) arise out of (A) information that is furnished by
Miller/Howard or affiliates specifically for inclusion in the Company's Form
N-1A, in advertising or sales literature or omission of any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or (B)
any untrue statement of a material fact used by the Portfolio or the Company on
behalf of the Fund, or an omission of any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, if included at the
request, or with the written permission, of Miller/Howard;
(c) result from the failure of any representation or warranty made
by Miller/Howard to be accurate when made or the failure of Miller/Howard to
perform any covenant contained herein or to otherwise comply with the terms of
this Agreement; or
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(d) arise out of any unlawful or negligent act by Miller/Howard or
its affiliates, whether such act was committed against Miller/Howard, Meeder,
the Portfolio, the Fund or any third party.
3.6 ASSUMPTION OF DEFENSE. The indemnifying parties specified in
Sections 3.2, 3.4 and 3.5 and Paragraphs 3.3(c) and 3.3(d) hereof will be
entitled to participate at their own expense in the defense or, if they so
elect, to assume the defense of any suit brought to enforce any such liability,
but, if any such indemnifying parties elects to assume the defense of any such
suit and retain counsel, each Covered Person, Meeder Indemnified Party or
Miller/Howard Indemnified Party (each an "Indemnified Party" and collectively
the "Indemnified Parties"), as the case may be, and any other defendant or
defendants may retain additional counsel, but shall bear the fees and expenses
of such counsel unless (A) the indemnifying parties shall have specifically
authorized in writing the retaining of such counsel or (B) the parties to such
suit include any Indemnified Party and any indemnifying party, and any such
Indemnified Party has been advised by counsel that one or more legal defenses
may be available to it that may not be available to such indemnifying party, in
which case the indemnifying parties shall not be entitled to assume the defense
of such suit notwithstanding its obligation to bear the fees and expenses of
such counsel. The indemnifying parties shall not be liable to indemnify any
Indemnified Party for any settlement of any claims affected without their
written consent, which consent shall not be unreasonably withheld or delayed,
provided that such consent does not include any admission of wrongdoing by, or
restrictions on the future activities of, the indemnifying parties. The
indemnities set forth in this Agreement will be in addition to any liability
that the indemnifying parties might otherwise have to an Indemnified Party.
3.7 IN-KIND REDEMPTION. If the Fund desires to redeem all of its
Shares, unless otherwise agreed to by the parties hereto, the Portfolio will
effect such redemption "in kind" and in such a manner that the securities
delivered to the Fund's custodian for the account of the Fund will mirror, as
closely as practicable, the composition of the Portfolio immediately prior to
such redemption. Unless otherwise agreed to by the relevant parties hereto, no
other redemption of any Shares will be satisfied by means of an "in kind"
redemption except in compliance with Rule 18f-1 under the 1940 Act, provided,
however, that for purposes of determining compliance with Rule 18f-1, each
shareholder of the Fund redeeming shares of the Fund on a particular day will be
treated as a direct holder of Interests in the Portfolio being redeemed that
day.
3.8 REASONABLE ACTIONS. Each party covenants that it will, subject to
the provisions of this Agreement, from time to time, as and when requested by
another party or in its own discretion, as the case may be, execute and deliver
or cause to be executed and delivered all such assignments and other
instruments, take or cause to be taken such actions, and do or cause to be done
all things necessary, proper or advisable in order to consummate the
transactions contemplated by this Agreement and to carry out its intent and
purpose.
IV
ADDITIONAL AGREEMENTS
4.1 NOTIFICATION OF CERTAIN MATTERS. Each party will give prompt
notice to the other parties of (a) the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which would be likely to cause either
(i) any representation or warranty contained in this Agreement to be untrue or
12
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inaccurate, or (ii) any condition precedent set forth in Section 1.7 hereof to
be unsatisfied in any material respect at any time from the date hereof to the
Time of Investment and (b) any material failure of a party or any trustee,
director, officer, employee or agent thereof to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by such person
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 4.1 shall not limit or otherwise affect the remedies available,
hereunder or otherwise, to the party receiving such notice.
4.2 ACCESS TO INFORMATION. From the date hereof to the Time of
Investment, each party shall afford each other party access at all reasonable
times to such party's officers, employees, agents and offices and to all its
relevant books and records and shall furnish each other party with all relevant
financial and other data and information as such other party may reasonably
request.
4.3 CONFIDENTIALITY. Each party agrees that it shall hold in strict
confidence all data and information obtained from another party (unless such
information is or becomes readily ascertainable from public or published
information or trade sources) and shall ensure that its officers, employees and
authorized representatives do not disclose such information to others without
the prior written consent of the disclosing party, except if disclosure is
required by the SEC, any other regulatory body or the Fund's or Portfolio's
respective auditors, or in the opinion of counsel such disclosure is required by
law, and then only with as much prior written notice to the disclosing party as
is practical under the circumstances.
4.4 PUBLIC ANNOUNCEMENTS. Each party shall consult with the other
parties and with legal counsel before issuing any press release or otherwise
make any public statements with respect to the matters covered by this Agreement
and shall not issue any press release or make any public statement prior to such
consultation, except as may be required by law or the SEC.
V
TERMINATION AND AMENDMENT
5.1 TERMINATION. This Agreement may be terminated (a) by the Fund
upon five business days' notice to the Portfolio and Meeder, (b) at any time by
the Fund by redeeming all of the Fund's Shares, (c) on not less than 20 days'
prior written notice by the Portfolio and Meeder to the Fund, and (d) at any
time immediately upon written notice to the other parties in the event that
formal proceedings are instituted against another party to this Agreement by the
SEC or any other regulatory body, provided that the terminating party has a
reasonable belief that the institution of the proceeding is not without
foundation and will have a material adverse impact on the terminating party. The
indemnification obligations in Article III and the confidentiality provisions in
Section 4.3 shall survive the termination of this Agreement.
5.2 AMENDMENT. This Agreement may be amended, modified or
supplemented at any time in such manner as may be mutually agreed upon in
writing by the parties.
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VI
GENERAL PROVISIONS
6.1 NOTICES. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made when actually received in person or by facsimile, or three days after
being sent by certified or registered United States mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Fund: Morgan Keegan Select Fund, Inc.
Morgan Keegan Tower
Fifty Front Street
Memphis, Tennessee 38103
Attn: Allen B. Morgan, Jr.
If to the Portfolio: Utilities Stock Portfolio
P.O. Box 7177
6000 Memorial Drive
Dublin, Ohio 43017
Attn: President
If to Meeder: Meeder Asset Management, Inc.
P.O. Box 7177
6000 Memorial Drive
Dublin, Ohio 43017
Attn: President
If to Miller/Howard: Miller/Howard Investments, Inc.
141 Upper Byrdcliffe Road
P.O. Box 549
Woodstock, New York 12498
Each party to this Agreement may change the identity of the person to receive
notice by providing written notice thereof to the other party to the Agreement.
6.2 EXPENSES. Unless stated otherwise herein, all costs and expense
associated with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses.
6.3 HEADINGS. The headings and captions in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
6.4 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
14
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the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
6.5 ENTIRE AGREEMENT. This Agreement and the agreements and other
documents delivered pursuant hereto set forth the entire understanding among the
parties concerning the subject matter of this Agreement and incorporate or
supersede all prior understandings.
6.6 SUCCESSORS AND ASSIGNMENTS. Each and all of the provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and, except as otherwise specifically provided in this Agreement,
their respective successors and assigns. Notwithstanding the foregoing, no party
shall make any assignment of this Agreement or any rights or obligations
hereunder without the written consent of the other party. As used herein,
the term "assignment" shall have the meaning ascribed thereto in the 1940 Act.
6.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing one or more counterparts.
6.8 THIRD PARTIES. Nothing herein expressed or implied is intended or
shall be construed to confer upon or give any person, other than the parties
hereto and their successors or assigns, any rights or remedies under or by
reason of this Agreement.
6.9 INTERPRETATION. Any uncertainty or ambiguity existing herein
shall not presumptively be interpreted against any party, but shall be
interpreted according to the application of the rules of interpretation for
arm's length agreements.
6.10 ADDITIONAL LIMITATIONS OF LIABILITY. The Portfolio, Meeder and
Miller/Howard agree and acknowledge that the Company has entered into this
Agreement solely on behalf of the Fund and no other series of the Company shall
have any obligation hereunder with respect to any liability of the Company
arising hereunder.
15
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Very truly yours,
UTILITIES STOCK PORTFOLIO and MEEDER ASSET
MANAGEMENT, INC.
By: By:
--------------------------- -----------------------------
--------------------------- -----------------------------
Name Name
--------------------------- -----------------------------
Title Title
Date: Date:
------------------------- ---------------------------
and
MILLER/HOWARD INVESTMENTS, INC.
By:
---------------------------
---------------------------
Name
---------------------------
Title
Date:
-------------------------
Agreed to:
MORGAN KEEGAN SELECT
FUND, INC.
By:
---------------------------
---------------------------
Name
---------------------------
Title
Date:
-------------------------
16
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EXHIBIT A
___________, 2000
APPLICATION
for investment in
Utilities Stock Portfolio (the "Portfolio")
Name of Purchaser: Morgan Keegan Select Fund, Inc. - Morgan Keegan Utility Fund
Type of Organization: Maryland corporation
Address: Morgan Keegan Tower
Fifty Front Street
Memphis, TN 38103
Name of Authorized Contact: ______________
Telephone Number of Authorized Contact: (901) 524-____________
The undersigned hereby represents, warrants and agrees that:
1. It has reviewed the Portfolio's Declaration of Trust and the
Portfolio's Procedures for Allocations and Distributions and agrees
to be bound by their terms.
2. It has reviewed the Portfolio's Registration Statement on Form
N-1A, as filed with the U.S. Securities and Exchange Commission,
and agrees to the terms thereof.
3. It is not an individual, partnership, S corporation or grantor
trust which is beneficially owned by an individual, partnership or
S corporation as defined in the Internal Revenue Code of 1986, as
amended.
A-1
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4. Subsequent to the transfer of its assets to the Portfolio it will
own no investment security other than its interest in the
Portfolio.
5. It will seek instructions from its security holders with regard to
the voting of all proxies with respect to its interest in the
Portfolio and vote such proxies only in accordance with such
instructions, or vote its interest in the Portfolio in the same
proportion as the vote of all other investors in the Portfolio.
MORGAN KEEGAN FUND, INC.-
MORGAN KEEGAN
UTILITY FUND
By:___________________________
Its:___________________________
A-2
