Exhibit 2(h)(1)
The High Yield Plus Fund, Inc.
(a Maryland corporation)
[3,800,000] Shares of Common Stock Issuable Upon
Exercise of Transferable Rights to Subscribe for
Such Shares of Common Stock
(Common Stock Par Value $.01 Per Share)
FORM OF
DEALER MANAGER AGREEMENT
December__, 1998
X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Managing Director
Investment Banking
Ladies and Gentlemen:
The High Yield Plus Fund, Inc., a Maryland corporation (the "Fund"),
confirms the agreement with and appointment of X.X. Xxxxxxx & Sons, Inc. (the
"Dealer Manager") to act as dealer manager in connection with the issuance by
the Fund to holders of record ("Record Date Stockholders"), at the close of
business on the record date (the "Record Date") set forth in the Prospectus (as
defined herein), of the Fund's common stock, par value $0.01 per share (the
"Common Stock"), of transferable rights (the "Rights," and individually, a
"Right") entitling such Record Date Stockholders to subscribe for shares of
Common Stock and, subject to certain conditions, additional shares of Common
Stock pursuant to an over-subscription privilege (the "Offer"). The shares of
Common Stock for which Record Date Shareholders and other holders of Rights
("Rightholders") may subscribe pursuant to the Offer are herein referred to as
the "Shares." Pursuant to the terms of the Offer, the Fund is issuing to each
Record Date Stockholder one Right for each three shares of Common Stock held.
Such Rights entitle Rightholders to acquire, at the price set forth in such
Prospectus (the "Subscription Price"), one Share for each Right exercised, on
the terms and conditions set forth in such Prospectus. No fractional Shares will
be issued. Any Rightholder who fully exercises all Rights held by such
Rightholder will be entitled to subscribe for, subject to allocation, additional
Shares (the "Over-Subscription Privilege") on the terms and conditions set forth
in the Prospectus. The Rights are transferable and are expected to be listed on
the New York Stock Exchange.
The Fund has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (Nos. 333-67339 and 811-5468)
and a related prospectus under the Investment Company Act of 1940, as amended
(the "Investment Company Act"), the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations of the Commission under the
Investment Company Act and the Securities Act (the "Rules and Regulations"), and
has filed such amendments to such registration statement on Form N-2, if any,
and such amended preliminary prospectuses as may have been required to the date
hereof. If the registration statement has not become effective, a further
amendment to such registration statement, including the form of final prospectus
necessary to permit such registration statement to become effective will
promptly be filed, upon resolution of any Commission comments, by the Fund with
the Commission. If the registration statement has become effective and any
prospectus contained therein omits certain information at the time of
effectiveness pursuant to Rule 430A of the Rules and Regulations, a final
prospectus containing such omitted information will promptly be filed by the
Fund with the Commission in accordance with Rule 497(h) of the Rules and
Regulations. The registration statement, as amended at the time it becomes or
became effective, including financial statements and all exhibits and all
documents, if any, incorporated therein by reference, and any information deemed
to be included by Rule 430A, is called the "Registration Statement." The term
"Prospectus" means the final prospectus in the form filed with the Commission
pursuant to Rule 497(c), (e), (h) or (j) of the Rules and Regulations, as the
case may be, as from time to time amended or supplemented pursuant to the
Securities Act and all documents, if any, incorporated by reference therein. The
Prospectus and letters to beneficial owners of the shares of Common Stock of the
Fund, forms used to exercise rights, any letters from the Fund to securities
dealers, commercial banks and other nominees and any newspaper announcements,
press releases and other offering materials and information that the Fund may
use, approve, prepare or authorize for use in connection with the Offer, are
collectively referred to hereinafter as the "Offering Materials."
Section 1. REPRESENTATIONS AND WARRANTIES.
a. The Fund represents and warrants to the Dealer Manager as of
the date hereof, as of the date of the commencement of the Offer (such later
date being hereinafter referred to as the "Representation Date") and as of the
Expiration Date (as defined below) that:
(i) The Fund meets the requirements for use of Form N-2 under the
Securities Act and the Investment Company Act and the Rules and Regulations. At
the time the Registration Statement became or becomes effective, the
Registration Statement did or will comply in all material respects with the
requirements of the Securities Act, the Investment Company Act and the Rules and
Regulations and did not or will not contain 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. From the time the Registration
Statement became or becomes effective through the expiration date of the Offer
set forth in the Prospectus (the "Expiration Date"), the Prospectus and the
Offering Materials will 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; PROVIDED, HOWEVER, that the
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representations and warranties in this subsection shall not apply to statements
in or omissions from the Registration Statement, Prospectus or the Offering
Materials made in reliance upon and in conformity with the information furnished
to the Fund in writing by the Dealer Manager expressly for use in the
Registration Statement, the Prospectus or the Offering Materials.
(ii) The accountants who certified the financial statements of the
Fund set forth or incorporated by reference in the Registration Statement and
the Prospectus are independent public accountants as required by the Investment
Company Act and the Rules and Regulations.
(iii) The financial statements of the Fund set forth or
incorporated by reference in the Registration Statement and the Prospectus
present fairly the financial position of the Fund as of the date indicated and
the results of its operations for the period specified; such financial
statements have been prepared in conformity with generally accepted accounting
principles; and the information in the Prospectus under the heading "Financial
Highlights" presents fairly in all material respects the information stated
therein.
(iv) All senior securities and other indebtedness of the Fund as
of a date specified in the Prospectus have been duly authorized and conform in
all material respects to the description thereof in the Prospectus under the
heading "Investment Policies and Limitations - Leverage and Borrowing."
(v) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, (A) the Fund has not incurred any liabilities or obligations, direct or
contingent, or entered into any transactions, other than in the ordinary course
of business, that are material to the business of the Fund, (B) there has been
no material change in the capital stock (other than as a result of the payment
of any dividends as set forth in (D) below), senior securities or other
indebtedness of the Fund or any material adverse change, or any development
involving a prospective material adverse change, in the condition (financial or
otherwise) or management of the Fund, or in the business affairs or business
prospects of the Fund, whether or not arising in the ordinary course of
business, (C) there have been no transactions entered into by the Fund which are
material to the Fund other than those in the ordinary course of business, and
(D) except for regular monthly distributions on the outstanding shares of Common
Stock of the Fund, there has been no special dividend or distribution of any
kind paid or declared in respect of the Fund's capital stock.
(vi) The Fund has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Maryland with
full corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement and the
Prospectus; the Fund currently maintains all governmental licenses, permits,
consents, orders, approvals, and other authorizations (collectively, the
"Licenses and Permits") necessary to carry on its business as contemplated in
the Prospectus, and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which the failure to so
qualify, either individually or in the aggregate, would have a material adverse
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effect upon the operations or financial condition of the Fund; and the Fund has
no subsidiaries.
(vii) The Fund is registered with the Commission under the
Investment Company Act as a closed-end, diversified management investment
company, no order of suspension or revocation of such registration has been
issued or proceedings therefor initiated or threatened by the Commission and all
required action has been taken under the Securities Act and the Investment
Company Act to consummate the issuance of the Rights and the issuance and sale
of the Shares, subject to the declaration of effectiveness of the Registration
Statement by the Commission, if such Registration Statement is not yet
effective.
(viii) The authorized capital stock of the Fund at December 31,
1998 is as set forth in the Prospectus under the caption "Description of Common
Stock" and the outstanding capital stock of the Fund as of December 31, 1998 is
as set forth in Prospectus under the caption "Summary - Important Terms of the
Offering"; the outstanding shares of Common Stock have been duly authorized by
all requisite corporate action on the part of the Fund and are validly issued,
fully paid and non-assessable; the Rights and the Shares have been duly
authorized by all requisite corporate action on the part of the Fund for
issuance pursuant to the Offer; the Shares have been duly authorized by all
requisite corporate action on the part of the Fund for sale pursuant to the
terms of the Offer and, when issued and delivered by the Fund pursuant to the
terms of the Offer against payment of the consideration set forth in the
Prospectus, will be validly issued, fully paid and non-assessable; the Common
Stock, the Rights and the Shares conform in all material respects to the
descriptions thereof set forth in the Registration Statement, the Prospectus and
the Offering Materials; and the issuance of each of the Rights and the Shares is
not subject to any preemptive rights.
(ix) Each of this Agreement, the Investment Advisory Agreement
referred to in the Registration Statement (the "Investment Advisory Agreement")
with Wellington Management Company LLP, the Administration Agreement referred to
in the Registration Statement (the "Administration Agreement") with Prudential
Investments Fund Management LLC, the Subscription Agency Agreement referred to
in the Registration Statement (the "Subscription Agency Agreement") with State
Street Bank and Trust Co. (the "Subscription Agent"), the Custodian Agreement
referred to in the Registration Statement (the "Custodian Agreement") with State
Street Bank and Trust Company, the Information Agency Agreement referred to in
the Registration Statement (the "Information Agency Agreement") with
Shareholders Communication Corporation (the "Information Agent"), the Stock
Transfer Agent Service Agreement referred to in the Registration Statement (the
"Stock Transfer Agent Service Agreement") with State Street Bank and Trust
Company (the "Stock Transfer Agent") and the Credit Agreement referred to in the
Registration Statement (the "Credit Agreement") with BankBoston, N.A.
(collectively, all of the foregoing are the "Fund Agreements") has been duly
authorized by all requisite corporate action on the part of the Fund and
executed and delivered by the Fund, and each complies with all applicable
provisions of the Investment Company Act; and, assuming due authorization,
execution and delivery by the other parties thereto, each of the Fund Agreements
constitutes a legal, valid, binding and enforceable obligation of the Fund,
subject to the qualification that the enforceability of the Fund's obligations
thereunder may be limited by bankruptcy, insolvency, reorganization, moratorium
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and similar laws of general applicability relating to or affecting creditors'
rights, to general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
(x) Neither the execution or delivery by the Fund nor the
performance by the Fund of any of its obligations under any material contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which it
is a party or by which it is bound contravenes or constitutes a default under
any provision contained in any law, rule or regulation of any governmental or
regulatory authority or any order or regulation of any court by which the Fund
or any of its assets is bound or affected.
(xi) There is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Fund threatened against or affecting, the Fund, which might
result in any material adverse change in the condition, financial or otherwise,
business affairs, business prospects, net worth or results of operations of the
Fund, or which might materially and adversely affect the properties or assets of
the Fund; and there are no material contracts or documents of the Fund which are
required to be filed as exhibits to the Registration Statement by the Securities
Act, the Investment Company Act or by the Rules and Regulations which have not
been or will not be so filed.
(xii) There are no franchises, contracts or other documents of the
Fund required to be described in the Registration Statement or the Prospectus,
or to be filed or incorporated by reference therein as permitted by the
Securities Act, the Investment Company Act or the Rules and Regulations, that
are not so described, filed or incorporated by reference.
(xiii) The Fund owns or possesses, or can acquire on reasonable
terms, any trademarks, service marks and trade names necessary to conduct its
business as described in the Registration Statement, and the Fund has not
received any notice of infringement of or conflict with asserted rights of
others with respect to any trademarks, service marks or trade names which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would materially adversely affect the conduct of the business,
operations, financial condition or income of the Fund.
(xiv) The Fund has complied in all previous tax years, and intends
to direct the investment of the proceeds of the offering described in the
Registration Statement and the Prospectus in such a manner as to continue to
comply, with the requirements of Subchapter M of the Internal Revenue Code of
1986, as amended ("Subchapter M of the Code"), and has qualified and intends to
continue to qualify as a regulated investment company under Subchapter M of the
Code.
(xv) The Fund is not in violation of its Articles of
Incorporation, as amended (the "Charter"), or its by-laws, as amended (the
"By-Laws") or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any material contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which it
is a party or by which it may be bound; the issuance of the Rights, the issuance
5
and sale of the Shares and the performance and consummation of the other
transactions contemplated herein and in the other Fund Agreements have been duly
authorized by all necessary corporate action and will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien (other than under the Credit Agreement), charge or
encumbrance upon any property or assets of the Fund pursuant to any material
contract, indenture, mortgage, loan agreement, note, lease or other instrument
to which the Fund is a party or by which it may be bound or to which any of the
property or assets of the Fund is subject, nor will such action result in any
violation of the provisions of the Charter or By-Laws or any law, administrative
regulation or administrative or court decree applicable to the Fund.
(xvi) The Common Stock is duly listed on the New York Stock
Exchange ("NYSE") and prior to their issuance the Rights and the Shares will
have been duly approved for listing, subject to official notice of issuance, on
the NYSE.
(xvii) The Fund (A) has not taken, directly or indirectly, any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Fund to facilitate the issuance of the Rights or
the sale or resale of the Shares, (B) has not since the filing of the
Registration Statement sold, bid for or purchased, or paid anyone any
compensation for soliciting purchases of, shares of Common Stock of the Fund
(except for the solicitation of exercises of the Rights pursuant to this
Agreement) and (C) will not, until the later of the expiration of the Rights or
the completion of the distribution (within the meaning of the anti-manipulation
rules under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) of the Shares, sell, bid for or purchase, pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Fund (except for the solicitation of the exercises of Rights pursuant to
this Agreement); PROVIDED, HOWEVER, that any action in connection with the
Fund's Dividend Reinvestment Plan will not be deemed to be within the terms of
this Section 1(a)(xvii).
(xviii) No consent, approval, authorization, notification or order
of, or filing with, any court or governmental agency or body, whether foreign or
domestic, is legally required for the consummation by the Fund of the
transactions contemplated by the Fund Agreements or the Registration Statement,
except such as have been obtained, or if the registration statement filed with
respect to the Shares is not effective under the Securities Act as of the time
of execution hereof, such as may be required (and shall be obtained as provided
in this Agreement) under the Investment Company Act, the Securities Act, the
Exchange Act , and state securities laws.
Section 2. AGREEMENT TO ACT AS DEALER MANAGER.
a. On the basis of the representations and warranties contained
herein, and subject to the terms and conditions of the Offer:
(i) The Fund hereby appoints the Dealer Manager and other
soliciting dealers entering into a Soliciting Dealer Agreement in the form
attached hereto as Exhibit A (the "Soliciting Dealer Agreement") with the Dealer
Manager (the "Soliciting Dealers"), to solicit, in accordance with the
Securities Act, the Investment Company Act and the Exchange Act, the rules and
regulations under those Acts, any applicable Blue Sky laws, and its customary
6
practice, the exercise of the Rights and the Over-Subscription Privilege,
subject to the terms and conditions of this Agreement, the procedures described
in the Registration Statement and the Prospectus and, where applicable, the
terms and conditions of such Soliciting Dealer Agreement and the Dealer Manager
and Soliciting Dealers agree to use their reasonable best efforts in soliciting
the exercise of the Rights and the Over-Subscription Privilege; and
(ii) The Fund agrees to furnish, or cause to be furnished, to the
Dealer Manager, lists, or copies of those lists, showing (to the knowledge of
the Fund) the names and addresses of, and number of shares of Common Stock held
by, Record Date Stockholders, and to use its best efforts to advise the Dealer
Manager, or cause it to be advised, on each day on which the NYSE is open for
trading during the subscription period set forth in the Prospectus, as to any
transfer of Rights or shares of Common Stock, and the Dealer Manager agrees to
use such information only in connection with the Offer, and not to furnish the
information to any other person, except that the Dealer Manager may furnish
necessary and appropriate information to securities brokers and dealers,
including, but not limited to, Soliciting Dealers, that the Dealer Manager has
requested to solicit exercises of Rights.
b. The Dealer Manager agrees to provide to the Fund, in addition
to the services described in paragraph (a) of this Section 2, financial advisory
and marketing services in connection with the Offer.
c. The Fund and the Dealer Manager agree that the Dealer Manager
is an independent contractor with respect to the solicitation of the exercise of
Rights and the performance of financial advisory and marketing services to the
Fund contemplated by this Agreement.
d. In rendering the services contemplated by this Agreement, the
Dealer Manager will not be subject to any liability to the Fund, or any of its
affiliates, for any act or omission on the part of any securities broker or
dealer (except with respect to the Dealer Manager acting in such capacity) or
any other person, and the Dealer Manager will not be liable to the Fund or any
of its affiliates for acts or omissions in performing its obligations under this
Agreement, except for any losses, claims, damages, liabilities or judgments
determined in a final judgment by a court of competent jurisdiction to have
resulted primarily from the Dealer Manager's gross negligence, willful
misconduct or bad faith in such acts or omissions.
Section 3. DEALER MANAGER FEES AND SOLICITING FEES. In full
payment for the financial advisory, marketing and soliciting services rendered
and to be rendered hereunder by the Dealer Manager, the Fund agrees to pay the
Dealer Manager a fee (the "Dealer Manager Fee") equal to (a) 3.50% of the
aggregate Subscription Price per Share for Shares issued pursuant to the
exercise of Rights and the Over-Subscription Privilege, less (b) the $25,000
retainer fee paid to the Dealer Manager by the Fund pursuant to the letter
agreement between the Fund and the Dealer Manager, dated as of October 16, 1998.
In full payment for the soliciting efforts to be rendered, the Dealer Manager
agrees to reallow soliciting fees (the "Soliciting Fees") to Soliciting Dealers,
equal to 2.50% of the aggregate Subscription Price per Share for Shares issued
pursuant to the exercise of Rights and the Over-Subscription Privilege. The
7
Dealer Manager agrees to pay the Soliciting Fees to the broker-dealers
designated on the applicable portion of the forms used by Rightholders to
exercise Rights and the Over-Subscription Privilege, and if, in any case, no
broker-dealer is so designated or a broker-dealer is otherwise not entitled to
receive compensation pursuant to the terms of the Soliciting Dealer Agreement,
then the Dealer Manager shall retain the Soliciting Fee that would otherwise
have been payable in such case. Payment to the Dealer Manager by the Fund will
be in the form of a wire transfer of same day funds to an account or accounts
identified by the Dealer Manager. Such payment will be made on the day after the
final payment for Shares is due as set forth in the Prospectus, to the extent
that the Fund has received and accepted such final payment from the exercising
Rightholders and, to the extent that the Fund receives and accepts such payment
from the exercising Rightholders after such date, one day after the Fund
receives and accepts each such payment. Payment to a Soliciting Dealer will be
made by the Dealer Manager directly to such Soliciting Dealer by check to an
address identified by such Soliciting Dealer. Such payment shall be made on or
before the tenth business day following the day the Fund issues Shares after the
Expiration Date.
Section 4. COVENANTS.
a. The Fund covenants with the Dealer Manager as follows:
(i) The Fund will use its best efforts to cause the Registration
Statement to become effective under the Securities Act, and will advise the
Dealer Manager promptly as to the time at which the Registration Statement and
any amendments thereto (including any post-effective amendment) becomes so
effective.
(i) The Fund will notify the Dealer Manager immediately, and
confirm the notice in writing, (i) of the effectiveness of the Registration
Statement and any post-effective amendment thereto, (ii) of the receipt of any
comments from the Commission on the Registration Statement, (iii) of any request
by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, (iv) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose, (v) of the issuance by the Commission of an order of suspension or
revocation of the notification on Form N-8A of registration of the Fund as an
investment company under the Investment Company Act or the initiation of any
proceeding for that purpose and (vi) of the suspension of the qualification of
the Shares or the Rights for offering or sale in any jurisdiction. The Fund will
make every reasonable effort to prevent the issuance of any stop order described
in subsection (iv) hereunder or any order of suspension or revocation described
in subsection (v) or subsection (vi) hereunder and, if any such stop order or
order of suspension or revocation is issued, to obtain the lifting thereof at
the earliest possible moment.
(ii) The Fund will give the Dealer Manager notice of its intention
to file any amendment to the Registration Statement (including any
post-effective amendment) or any amendment or supplement to the Prospectus
(including any revised prospectus which the Fund proposes for use by the Dealer
Manager in connection with the Offer, which differs from the prospectus on file
8
at the Commission at the time the Registration Statement becomes effective,
whether such revised prospectus is required to be filed pursuant to Rule 497(c),
(e), (h) or (j) of the Rules and Regulations), whether pursuant to the
Investment Company Act, the Securities Act, or otherwise, and will furnish the
Dealer Manager with copies of any such amendment or supplement a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file any such amendment or supplement to which the Dealer Manager or
counsel for the Dealer Manager shall reasonably object; PROVIDED, however, in
the event of such an objection the Dealer Manager and its counsel agree to
cooperate with the Fund to ensure that an acceptable filing can be promptly
made.
(iii) The Fund will, without charge, deliver to the Dealer
Manager, as soon as practicable, the number of copies (one of which is manually
executed) of the Registration Statement as originally filed and of each
amendment thereto as it may reasonably request, in each case with the exhibits
filed therewith.
(iv) The Fund will, without charge, furnish to the Dealer Manager,
from time to time during the period when the Prospectus is required to be
delivered under the Securities Act, such number of copies of the Prospectus (as
amended or supplemented) as the Dealer Manager may reasonably request for the
purposes contemplated by the Securities Act or the Rules and Regulations.
(v) If any event shall occur as a result of which it is necessary,
in the opinion of counsel for the Fund, to amend or supplement the Registration
Statement or the Prospectus in order to make the Prospectus not misleading in
the light of the circumstances existing at the time it is delivered to a
purchaser, the Fund will forthwith amend or supplement the Prospectus by
preparing and filing with the Commission (and furnishing to the Dealer Manager a
reasonable number of copies of) an amendment or amendments of the Registration
Statement or an amendment or amendments of or a supplement or supplements to,
the Prospectus (in form and substance satisfactory to counsel for the Dealer
Manager) which will amend or supplement the Registration Statement or the
Prospectus so that the Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time the
Prospectus is delivered to a Rightholder, not misleading, and the Dealer Manager
and its counsel agree to cooperate with the Fund to ensure that an acceptable
filing can be promptly made.
(vi) The Fund will endeavor, in cooperation with the Dealer
Manager, to qualify the Rights and the Shares for offering and sale under the
applicable securities laws (if any) of such states and other jurisdictions of
the United States as the Dealer Manager may designate, and will maintain such
qualifications in effect for the duration of the Offer; PROVIDED, HOWEVER, that
the Fund will not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not now so qualified; PROVIDED, FURTHER, HOWEVER,
that the Fund shall rely solely on the advice of the Dealer Manager's counsel in
determining if any action under state law is required. The Fund will file such
statements and reports as may be required by the laws of each jurisdiction in
which the Rights and the Shares have been qualified as above provided.
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(vii) The Fund will make generally available to its security
holders as soon as practicable, but no later than 60 days after the close of the
period covered thereby, an earning statement (in form complying with the
provisions of Rule 158 of the Rules and Regulations) covering a twelve-month
period beginning not later than the first day of the Fund's fiscal quarter next
following the "effective" date (as defined in said Rule 158) of the Registration
Statement.
(viii) For a period of 180 days from the date of this Agreement,
the Fund will not, without the prior consent of the Dealer Manager, offer or
sell, or enter into any agreement to sell, any equity or equity related
securities of the Fund, or securities convertible into such securities, other
than the Rights and the Shares and the Common Stock issued in reinvestment of
dividends or distributions.
(ix) The Fund will apply the net proceeds from the Offer as set
forth under "Use of Proceeds" in the Prospectus.
(x) The Fund will use its best efforts to cause the Rights and the
Shares to be duly authorized for listing by the NYSE prior to the time the
Shares are issued.
(xi) The Fund will use its best efforts to maintain its
qualification as a regulated investment company under Subchapter M of the Code.
(xii) The Fund will advise or cause the Subscription Agent to
advise the Dealer Manager and each Soliciting Dealer from day to day during the
period of, and promptly after the termination of, the Offer, as to all names and
addresses of Rightholders exercising Rights, the total number of Rights
exercised by each Rightholder during the immediately preceding day, indicating
the total number of Rights verified to be in proper form for exercise, rejected
for exercise and being processed and, for the Dealer Manager and each Soliciting
Dealer, the number of Rights exercised for Shares on exercise forms indicating
the Dealer Manager or Soliciting Dealer as the broker-dealer with respect to
such exercise, and as to such other information as the Dealer Manager may
reasonably request; and will notify the Dealer Manager and each Soliciting
Dealer, not later than 5:00 P.M., New York City time, on the first business day
following the Expiration Date, of the total number of Rights exercised and
Shares related thereto, the total number of Rights verified to be in proper form
for exercise, rejected for exercise and being processed and, for the Dealer
Manager and Soliciting Dealer, the number of Rights exercised for Shares on
exercise forms indicating the Dealer Manager or Soliciting Dealer as the
broker-dealer with respect to such exercise, and as to such other information as
the Dealer Manager may reasonably request.
b. The Fund has not taken and will not take, directly or
indirectly, any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security issued by the Fund to
facilitate the issuance of the Rights or the sale or resale of the Shares;
PROVIDED, HOWEVER, that any action in connection with the Fund's Dividend
Reinvestment Plan will not be deemed to fall under the terms of this Section
4(b).
Section 5. PAYMENT OF EXPENSES.
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a. The Fund will pay all expenses incident to the performance of
its obligations under this Agreement, including, but not limited to, expenses
relating to (i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the preparation, issuance
and delivery of the certificates for the Shares, (iii) the fees and
disbursements of the Fund's counsel and accountants, (iv) the qualification of
the Rights and the Shares under securities laws in accordance with the
provisions of Section 4(a)(vii) of this Agreement, including filing fees and any
reasonable fees or disbursements of counsel for the Dealer Manager in connection
with such qualification, (v) the printing and delivery to the Dealer Manager of
copies of the Registration Statement as originally filed and of each amendment
thereto, of the preliminary prospectus, of the Prospectus and any amendments or
supplements thereto, of this Agreement and of the Soliciting Dealer Agreement,
provided that the number of copies that are printed of any documents do not
exceed the number that are reasonably necessary, (vi) the fees and expenses
incurred in connection with the listing of the Rights and the Shares on the
NYSE, (vii) the filing fees of the Commission, (viii) the fees and expenses
incurred with respect to filing with the National Association of Securities
Dealers, Inc., (ix) the printing, mailing and delivery expenses incurred in
connection with the Offering Materials, and (x) the fees and expenses incurred
with respect to the Subscription Agent and the Information Agent.
b. In addition to any fees that may be payable to the Dealer
Manager under this Agreement, the Fund agrees to reimburse the Dealer Manager
promptly upon request, up to a maximum of $50,000, for the reasonable
out-of-pocket costs and expenses (including, without limitation, reasonable
fees, disbursements, and other charges of legal counsel and other advisers)
incurred by the Dealer Manager in connection with this Agreement or the Offer;
PROVIDED, HOWEVER, that, in the event that fewer than 1,900,000 Shares are
issued upon the exercise of Rights in connection with the Offer, such
reimbursement by the Fund of such out-of-pocket costs and expenses shall be
limited to a maximum of $25,000. The Fund shall be entitled to receive adequate
documentation evidencing any such out-of-pocket costs and expenses prior to
reimbursement by the Fund.
c. If this Agreement is terminated by the Dealer Manager in
accordance with the provisions of Section 6 or Section 9(a)(i), 9(a)(ii) or
9(a)(iii), the Fund shall reimburse the Dealer Manager up to a maximum of
$50,000, for the reasonable out-of-pocket costs and expenses (including, without
limitation, reasonable fees, disbursements, and other charges of legal counsel
and other advisers) incurred by the Dealer Manager in connection with this
Agreement or the Offer. In the event the transactions contemplated hereunder are
not consummated for any reason other than as a result of a breach of this
Agreement by the Dealer Manager, the Fund agrees to pay all of the costs and
expenses set forth in paragraphs (a) and (b) of this Section 5 which the Fund
would have paid if such transactions had been consummated.
Section 6. CONDITIONS OF DEALER MANAGER'S OBLIGATIONS. The obligations of
the Dealer Manager hereunder are subject to the accuracy of the representations
and warranties of the Fund herein contained, to the performance by the Fund of
its covenants and obligations hereunder, and to the following further
conditions:
11
a. The Registration Statement shall have become effective not
later than 5:30 P.M., New York City time, on the Representation Date, or at such
later time and date as may be approved by the Dealer Manager; the Prospectus and
any amendment or supplement thereto shall have been filed with the Commission in
the manner and within the time period required by Rule 497(c), (e), (h) or (j),
as the case may be, under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement or any amendment thereto shall have
been issued, and no proceedings for that purpose shall have been instituted or
threatened or, to the knowledge of the Fund, the Investment Adviser or the
Dealer Manager, shall be contemplated by the Commission; and the Fund shall have
complied with any request of the Commission for additional information (to be
included in the Registration Statement, the Prospectus or otherwise).
b. On the Representation Date and the Expiration Date, the Dealer
Manager shall have received:
(1) The favorable opinion, dated the Representation Date and the
Expiration Date, of Xxxxxxxxxxx & Xxxxxxxx LLP, counsel for the Fund, in form
and substance satisfactory to counsel for the Dealer Manager, to the effect
that:
i) The Fund has been duly incorporated and is validly
existing as a corporation in good standing under the
laws of the State of Maryland.
ii) The Fund has full corporate power and authority to own,
lease and operate its properties and conduct its business as
described in the Registration Statement and the Prospectus.
iii) To its knowledge, the Fund currently maintains all
Licenses and Permits necessary to carry on its business as
contemplated in the Prospectus.
iv) The Fund is duly qualified as a foreign corporation to
transact business and is in good standing in the State of New
Jersey; and, to its knowledge, the Fund has no subsidiaries.
v) The outstanding shares of Common Stock have been duly
authorized by all requisite corporate action on the part of the Fund
and are validly issued, fully paid and non-assessable.
vi) The Fund's outstanding shares of Common Stock have been
listed on the NYSE and, to its knowledge, the Rights [for the
opinion on the Expiration Date only: and the Shares] have been duly
approved for listing on the NYSE, subject to official notice of
issuance.
vii) The Fund's authorized capitalization is as set forth in
the Prospectus under the heading "Description of Common Stock." The
Rights and the Shares have been duly authorized by all requisite
corporate action on the part of the Fund for issuance pursuant to
12
the Offer; the Shares have been duly authorized by all requisite
corporate action on the part of the Fund for sale pursuant to the
terms of the Offer and, when issued and delivered by the Fund
pursuant to the terms of the Offer against payment of the
consideration set forth in the Prospectus, will be validly issued,
fully paid and non-assessable; the Common Stock, the Rights and the
Shares conform in all material respects to the descriptions thereof
set forth in the Registration Statement and the Prospectus; and the
issuance of each of the Rights and the Shares is not subject to any
preemptive rights provided by law or under the Fund's Charter or
By-Laws.
viii)This Agreement and the other Fund Agreements have been
duly authorized, executed and delivered by the Fund, are valid and
binding obligations of the Fund, comply as to form in all material
respects with all applicable provisions of the Investment Company
Act and are in full force and effect.
ix) The Registration Statement is effective under the
Securities Act; any required filing of the Prospectus or any
supplement thereto pursuant to Rule 497(c), (e), (h) or (j) required
to be made to the date hereof has been made in the manner and within
the time period required by Rule 497(c), (e), (h) or (j), as the
case may be; to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued, and no proceedings for that purpose have been instituted or
threatened; and the Registration Statement, the Prospectus and each
amendment thereof or supplement thereto (other than the financial
statements, schedules, the notes thereto and the schedules and other
financial data contained or incorporated by reference therein or
omitted therefrom, as to which such counsel need express no opinion)
as to their respective effective or issue dates comply as to form in
all material respects with the applicable requirements of the
Securities Act and the Investment Company Act and the Rules and
Regulations.
x) Except as set forth in the Registration Statement and
Prospectus, to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding to which the Fund
is a party before or by any court or governmental agency, authority
or body or any arbitrator, whether foreign or domestic, which could
reasonably be expected to result in any material adverse change in
the condition (financial or other), business prospects, net worth or
results of operations of the Fund, or which could reasonably be
expected to materially and adversely affect the properties or assets
thereof which are of a character required to be disclosed in the
Registration Statement or the Prospectus.
xi) To its knowledge, there are no contracts, indentures,
mortgages, loan agreements, notes, leases or other instruments of
the Fund required to be described or referred to in the Prospectus
or the Registration Statement or to be filed as exhibits thereto
other than those respectively described or referred to therein or
filed as exhibits thereto, the descriptions thereof are correct in
all material respects, references thereto are correct, and no
13
default exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any
contract, indenture, loan agreement, note or lease so described,
referred to or filed.
xii) No consent, approval, authorization or order of any court
or governmental authority or agency is required in connection with
the sale of the Shares pursuant to the Offer, except such as has
been obtained under the Securities Act, the Investment Company Act
or the Rules and Regulations or such as may be required under state
securities laws; and to their knowledge, the execution and delivery
of the Dealer Manager Agreement and the Fund Agreements and the
consummation of the transactions contemplated herein and therein
will not conflict with or constitute a breach of, or default under,
or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Fund pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument known to such counsel to which the Fund is a party or by
which it may be bound or to which any of the property or assets of
the Fund is subject, nor will such action result in any violation of
the provisions of the Charter or By-Laws of the Fund, or to their
knowledge, any law, administrative regulation, or administrative or
court decree.
xiii)The Fund is registered with the Commission under the
Investment Company Act as a closed-end, diversified management
investment company, and all required action has been taken by the
Fund under the Securities Act, the Investment Company Act and the
Rules and Regulations to make and consummate the Offer; the
provisions of the Charter and By-Laws of the Fund comply as to form
in all material respects with the requirements of the Investment
Company Act and the rules and regulations thereunder; and, to their
knowledge, no order of suspension or revocation of such registration
under the Investment Company Act, pursuant to Section 8(e) of the
Investment Company Act, has been issued or proceedings therefor
initiated or threatened by the Commission.
xiv) The information in the Prospectus under the caption
"Federal Taxation," to the extent that it constitutes matters of law
or legal conclusions relating to Federal income tax matters, has
been reviewed by them and is correct in all material respects.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent they deem proper, on certificates of responsible
officers of the Fund or the Investment Adviser, as applicable, and public
officials. Such counsel may state that their opinion is limited to the
federal laws of the United States, the laws of the State of Maryland and
the laws of the Commonwealth of Massachusetts, as applicable, and that
they are expressing no opinion as to the effect of laws of any other
jurisdiction, except as specifically set forth in such opinion.
Such counsel shall also have stated that, while they have not
themselves checked the accuracy and completeness of or otherwise verified,
14
and are not passing upon and assume no responsibility for the accuracy or
completeness of, the statements contained in the Registration Statement or
the Prospectus, in the course of their review and in the course of
discussions of the contents of the Registration Statement and Prospectus
with certain officers and employees of the Fund and its independent
accountants, no facts have come to their attention which cause them to
believe that the Registration Statement, on the date it became effective,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements contained therein not misleading or that the Prospectus, as of
its date and on the Representation Date or the Expiration Date, as the
case may be, contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(2) The favorable opinion, dated the Representation Date and the
Expiration Date, of Xxxxx X. Xxxxx, General Counsel of the Investment Adviser,
in form and substance satisfactory to counsel for the Dealer Manager, to the
effect that:
i) The Investment Adviser is duly registered as an investment
adviser under the Advisers Act and is not prohibited by the Advisers
Act or the Investment Company Act, or the rules and regulations
under such acts, from acting under the Investment Advisory Agreement
for the Fund as contemplated by the Prospectus.
ii) The Investment Adviser has been duly organized and is
validly existing as a limited liability partnership in [good
standing] under the laws of the Commonwealth of Massachusetts.
iii) The Investment Adviser has all power and authority
necessary to own or hold its properties and to conduct its business
as described in the Registration Statement and the Prospectus.
iv) [To his knowledge, the Investment Adviser currently
maintains all Licenses and Permits necessary to carry on its
business as contemplated in the Prospectus.]
v) The Investment Advisory Agreement has been duly authorized,
executed and delivered by the Investment Adviser; the Investment
Advisory Agreement constitutes a valid and binding obligation of the
Investment Adviser, enforceable in accordance with its terms,
subject to the effects of bankruptcy, insolvency, reorganization or
other laws relating to or affecting creditors' rights and to general
equity principles; [no consent, approval, authorization or order of
any court or governmental authority or agency is required that has
not been obtained for the performance of the Investment Advisory
Agreement by the Investment Adviser]; and neither the execution and
delivery of the Investment Advisory Agreement nor the performance by
the Investment Adviser of its obligations under that agreement will
conflict with, or result in a breach of, any of the terms and
provisions of, or constitute, with or without the giving of notice
15
or the lapse of time or both, a default under, the [Investment
Adviser's Limited Liability Partnership Agreement] or, to such
counsel's knowledge, any agreement or instrument to which the
Investment Adviser is a party or by which the Investment Adviser is
bound, or to its knowledge, any law, order, rule or regulation
applicable to the Investment Adviser of any jurisdiction, court,
federal or state regulatory body, administrative agency or other
governmental body, stock exchange or securities association having
jurisdiction over the Investment Adviser or its properties or
operations.
vi) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the
Investment Adviser that are required to be disclosed in the
Registration Statement or the Prospectus, other than those disclosed
therein.
vii) [The Investment Advisory Agreement complies with all
applicable provisions of the Advisers Act.]
viii) The description of the Investment Adviser in the
Registration Statement and Prospectus does not contain an untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
contained therein not misleading.
[Such opinion shall also state that paragraphs (i) through (vii)
above also constitute representations of such General Counsel as an officer of
the Investment Adviser.]
(3) The favorable opinion, dated as of the Representation Date, of
Xxxxxx & Xxxxx LLP, counsel for the Dealer Manager, with respect to the issuance
and sale of the Shares, and such other related matters as the Dealer Manager may
reasonably require.
c. The Fund shall have furnished to the Dealer Manager certificates
of the Fund, signed by the President, the Treasurer, the Secretary, or the
Assistant Secretary of the Fund, dated as of the Representation Date and the
Expiration Date, to the effect that the signer of such certificate carefully
examined the Registration Statement, the Prospectus, any supplement to the
Prospectus and this Agreement and that, to the best of their knowledge:
(i) The representations and warranties of the Fund in this Agreement
are true and correct on and as of the Representation Date or the Expiration
Date, as the case may be, with the same effect as if made on the Representation
Date or the Expiration Date, as the case may be, and the Fund has complied with
all the agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Representation Date or the Expiration Date, as
the case may be;
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Fund's knowledge, threatened; and
16
(iii) Since the date of the most recent balance sheet included or
incorporated by reference in the Prospectus, there has been no material adverse
change in the condition (financial or other), business, prospects, net worth or
results of operations of the Fund (excluding fluctuations in the Fund's net
asset value due to investment activities in the ordinary course of business),
except as set forth in or contemplated in the Prospectus.
(iv) The Fund does not own any property or conduct its business in
any jurisdiction other than the State of New Jersey.
d. The Investment Adviser shall have furnished to the Dealer Manager
certificates of the Investment Adviser, signed by the President, Treasurer,
Secretary, Assistant Secretary or Vice President, dated as of the Representation
Date and the Expiration Date, to the effect that the signer of such certificate
has read the Registration Statement, the Prospectus, any supplement to the
Prospectus and this Agreement and, to the best knowledge of such signer, the
representations and warranties of the Investment Adviser in Exhibit C to this
Agreement are true and correct in all material respects on and as of the
Representation Date or the Expiration Date, as the case may be, with the same
effect as if made on the Representation Date or the Expiration Date, as the case
may be.
e. PricewaterhouseCoopers LLP shall have furnished to the Dealer
Manager letters, dated the Representation Date and the Expiration Date, in form
and substance satisfactory to the Dealer Manager, to the effect that:
(i) They are independent accountants with respect to the Fund within
the meaning of the Securities Act and the Rules and Regulations;
(ii) In their opinion, the audited financial statements examined by
them and included or incorporated by reference in the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act and the Investment Company Act and the Rules
and Regulations;
(iii) They have performed specified procedures, not constituting an
audit in accordance with generally accepted auditing standards, including a
reading of the latest available interim financial statements of the Fund, a
reading of the minute books of the Fund, inquiries of officials of the Fund
responsible for financial accounting matters and such other inquiries and
procedures as may be specified in such letter, and on the basis of such
inquiries and procedures nothing came to their attention that caused them to
believe that at the date of the latest available financial statements read by
such accountants, or at a subsequent specified date not more than three days
prior to the Representation Date and the Expiration Date, respectively, there
was any change in the capital stock or any decrease in the net assets of the
Fund as compared with amounts shown on the statement of net assets included or
incorporated by reference in the Registration Statement except as the
Registration Statement discloses has occurred or may occur, or they shall state
any specific changes or decreases; and
(iv) In addition to the procedures referred to in clause (iii)
above, they have performed other specified procedures, not constituting an
17
audit, with respect to certain amounts, percentages, numerical data, financial
information and financial statements appearing in the Registration Statement,
which have previously been specified by the Dealer Manager and which shall be
specified in such letter, and have compared certain of such items with, and have
found such items to be in agreement with, the accounting and financial records
of the Fund.
f. At the date of this Agreement, counsel for the Dealer Manager
shall have been furnished with such further documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the issuance of
the Rights and the Shares and the sale of the Shares as contemplated herein and
in the Registration Statement and to pass upon related proceedings, or in order
to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Fund in connection with the issuance of the Rights and the Shares
and sale of the Shares as contemplated herein and in the Registration Statement
shall be satisfactory in form and substance to the Dealer Manager and counsel
for the Dealer Manager.
g. Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall not have
been (i) any change or decrease specified in the letter or letters referred to
in paragraph (e)(iii) of this Section 6, or (ii) any change, or any development
involving a prospective change, in or affecting the business or properties of
the Fund, the effect of which, in any case referred to in clause (i) or (ii)
above, is, in the reasonable judgment of the Dealer Manager, so material and
adverse as to make it impractical or inadvisable to proceed with the Offer as
contemplated by the Registration Statement and the Prospectus.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Dealer Manager by notice to the Fund at any time at or prior to the
Representation Date by the Dealer Manager, and such termination shall be without
liability of any party to any other party except as provided in Section 5.
Section 7. INDEMNIFICATION AND CONTRIBUTION.
a. In connection with or arising out of or relating to the engagement
of the Dealer Manager pursuant to this Agreement, the Fund agrees to indemnify
and hold harmless each Indemnified Party (as defined below) from and against any
and all losses, claims, damages, liabilities, judgments, actions, suits,
investigations or proceedings of any kind or nature (collectively, "Losses") and
costs or expenses incurred by them of any kind or nature, in connection with the
investigation of, preparation for, or defense or settlement of any pending or
threatened claim, litigation, proceeding, appeal or other action (collectively,
"Expenses"), to which such Indemnified Party may become subject under the
Securities Act, the Exchange Act, the Investment Company Act, the Investment
Advisers Act, or other federal or state statutory law or otherwise, insofar as
such Losses and Expenses arise out of or are based on the following:
(i) Any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Prospectus, the Offering
Materials, or in any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Registration Statement, the Prospectus or the
18
Offering Materials, or in any application or other document executed by or on
behalf of the Fund or based on written information furnished by or on behalf of
the Fund and filed or submitted in any jurisdiction or filed with the
Commission;
(ii) The omission or alleged omission to state, in any or all such
documents, a material fact required to be stated therein or necessary to make
the statements therein not misleading; or
(iii) Any breach by the Fund of any of its representations,
warranties or agreements contained herein or in any certificate or document
furnished pursuant to Section 6(c), 6(d) or 6(f) hereof.
PROVIDED, HOWEVER, that the Fund will not be liable to the extent that such
Losses and Expenses are based on an untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity with
information relating to the Dealer Manager and furnished in writing to the Fund
by the Dealer Manager expressly for inclusion in the Registration Statement, the
Prospectus or the Offering Materials.
As used herein, the "Indemnified Parties" shall mean and include each and
all of the following: (i) the Dealer Manager; (ii) affiliates, the respective
directors, officers, agents, consultants and employees of and counsel to the
Dealer Manager and its affiliates; (iii) each person controlling (within the
meaning of the Securities Act) the Dealer Manager or any of its affiliates; and
(iv) the successors, assigns, heirs and personal representatives of any of the
foregoing.
b. The Dealer Manager will indemnify and hold harmless the Fund and the
Investment Adviser, their respective affiliates, the respective partners,
directors, officers, agents, consultants and employees of and counsel to the
Fund, the Investment Adviser and their respective affiliates, each person
controlling (within the meaning of the Securities Act) the Fund, the Investment
Adviser and their respective affiliates, and the successors, assigns, heirs and
personal representatives of any of the foregoing, to the same extent as the
foregoing indemnity from the Fund to the Indemnified Parties, but only insofar
as Losses and Expenses arise out of or are based on any untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to the Dealer Manager and furnished in
writing to the Fund by the Dealer Manager expressly for use in the Registration
Statement, the Prospectus or the Offering Materials.
c. If multiple claims are brought in arbitration in connection with or
arising out of or relating to the Offer or this Agreement, with respect to at
least one of which indemnification is provided for in this Agreement, any
arbitration award shall be conclusively deemed to be based on claims as to which
indemnification is provided for in this Agreement, except to the extent the
arbitration award expressly states that the award, or any portion thereof, is
based solely on a claim as to which indemnification is not available.
d. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Agreement is
19
applicable in accordance with its terms but for any reason is held to be
unavailable from the Fund or the Dealer Manager, the Fund, on the one hand, and
the Dealer Manager, on the other hand, shall contribute to the total Losses to
which the Fund, the Investment Adviser or the Indemnified Parties may be subject
in such proportion as shall be appropriate to reflect the relative benefits
received by the Fund, on the one hand, and the Dealer Manager and Indemnified
Parties, on the other hand. The relative benefits received by the Fund, on the
one hand, and the Dealer Manager and Indemnified Parties, on the other hand,
shall be deemed to be in the same proportion that the total net proceeds from
the Offering received by the Fund bear to the total discounts and commissions
received by the Dealer Manager and Indemnified Parties. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only such relative benefits referred to in the
foregoing sentence but also the relative fault of the Fund, on the one hand, and
the Dealer Manager and Indemnified Parties, on the other hand, with respect to
the untrue statements or omissions or alleged untrue statements or omissions
that resulted in the Losses, for which the contribution is sought, as well as
any other equitable considerations; PROVIDED, HOWEVER, that in no event shall
the contribution of the Dealer Manager exceed the amount of fees actually
received by the Dealer Manager pursuant to this Agreement; PROVIDED FURTHER,
HOWEVER, that no person found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7(d), each person, if any, who
controls the Dealer Manager within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act shall have the same rights to contribution
as the Dealer Manager, and each director of the Fund or partner of the
Investment Adviser and each person, if any, who controls the Fund or the
Investment Adviser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Fund and the Investment Adviser, as the case may be.
None of the Indemnified Parties shall have any liability whatsoever to the
Fund or its affiliates, directors, officers, employees, agents or shareholders,
directly or indirectly, in connection with or arising out of or related to the
Offer or this Agreement, except Losses incurred by the Fund which are finally
judicially determined, by a court of competent jurisdiction within the United
States, to have resulted primarily from the gross negligence, willful misconduct
or bad faith of the Indemnified Party in fulfilling its duties under this
Agreement. In no event, regardless of the theory advanced, shall the Fund, the
Investment Adviser or any of the Indemnified Parties be liable for any
consequential, indirect, incidental or special damages of any nature.
e. The Fund will not, without the prior written consent of the Dealer
Manager, settle, compromise or consent to the entry of any judgment in any
pending or threatened claim, litigation, proceeding, appeal or other action
related to the Offer or this Agreement unless the settlement, compromise or
consent includes an express unconditional release of the Indemnified Parties
from all liability and obligations arising therefrom.
f. The Fund's and the Dealer Manager's respective obligations referred
to herein shall be in addition to any rights that the Fund and any of the
20
Indemnified Parties may otherwise have. The Fund's and the Dealer Manager's
respective obligations referred to herein will remain operative regardless of
any termination or completion of the Dealer Manager's services.
g. In the event an Indemnified Party is requested or required to appear
as a witness in any action brought by or on behalf of or against the Fund, the
Fund agrees to reimburse the Dealer Manager for all reasonable expenses as
incurred by it in connection with such Indemnified Party's appearing and
preparing to appear as such a witness, including , without limitation, the
reasonable fees and disbursements of its legal counsel, and to compensate the
Dealer Manager in an amount to be mutually agreed upon. In addition, the Fund
agrees to compensate the Dealer Manager in an amount to be mutually agreed upon
per employee per day for each day that a Dealer Manager office or employee
is involved in preparation, discovery or testimony pertaining to any litigation,
discovery or investigation in connection with the Dealer Manager's engagement
under this agreement.
h. Promptly after receipt by an Indemnified Party of written notice of
any claim or commencement of an action or proceeding with respect to which
indemnification may be sought hereunder, such Indemnified Party will notify the
Fund in writing of such claim or of the commencement of such action or
proceeding, but failure so to notify the Fund will not relieve the Fund from any
liability which it may have to such Indemnified Party under this indemnification
agreement, and in any event will not relieve the Fund from any other liability
that it may have to such Indemnified Party. The Dealer Manager shall have the
right to select counsel in connection with any transaction for which any
Indemnified Party may be entitled to indemnification or contribution hereunder,
provided that in no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all Indemnified Parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
i. If at any time an Indemnified Party shall have requested an
indemnifying party to reimburse the Indemnified Party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such Indemnifying Party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
j. The Fund agrees to indemnify each Soliciting Dealer and its
affiliates and their respective directors, officers, employees, agents and
controlling persons to the same extent and subject to the same conditions and
to the same agreements, including with respect to contribution, provided for in
subsections (a) through (g) of this Section 7. This indemnity agreement will be
in addition to any liability which the Fund may otherwise have.
Section 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement, or
21
contained in certificates of officers of the Fund submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Dealer Manager or any controlling
person, or by or on behalf of the Fund or the Investment Adviser and shall
survive delivery of the Shares pursuant to the Offer. The provisions of Sections
5 and 7 hereof shall survive the termination or cancellation of this Agreement.
Section 9. TERMINATION OF AGREEMENT.
a. This Agreement may be terminated in the sole discretion of the
Dealer Manager by notice to the Fund given at or prior to the expiration of the
Offer in the event that the Fund shall have failed, refused or been unable to
perform all material obligations and satisfy all material conditions on its part
to be performed or satisfied hereunder at or prior thereto or, if at or prior to
the termination of the Offer,
(i) The Fund or the Investment Adviser shall have sustained any
material loss or interference with its business or properties from fire,
accident or other calamity, whether or not covered by insurance, or from any
labor dispute or any legal or governmental proceeding, or there shall have been
any material adverse change or any development involving a prospective material
adverse change (including without limitation a change in management or control
of the Fund or the Investment Adviser, as the case may be), in the condition,
financial or otherwise, or in the business affairs or business prospects of the
Fund or the Investment Adviser, whether or not arising in the ordinary course of
business, except in each case as described in or contemplated by the
Registration Statement and the Prospectus (exclusive of any amendment or
supplement thereto) and except for changes in the Fund's net asset value due to
its normal investment operations;
(ii) Trading in the Common Stock has been suspended by the
Commission or the NYSE;
(iii) There has occurred any material adverse change in the
financial markets in the United States or internationally or any outbreak of
hostilities or escalation thereof or other calamity or crisis, or any change or
development involving a prospective change in national or international
political, financial, or economic conditions, in each case the effect of which
is such as to make it, in the judgment of the Dealer Manager, impracticable to
market the Shares or to enforce contracts for the sale of the Shares; or
(iv) Trading generally on the NYSE or the National Association of
Securities Dealers Automated Quotations System shall have been suspended or
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by any of said exchanges or
by order of the Commission or any other governmental authority, or if a banking
moratorium has been declared by United States or New York authorities.
b. If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 5.
22
Section 10. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of written telecommunication. Notices to the
Dealer Manager shall be directed to X.X. Xxxxxxx & Sons, Inc., Xxx Xxxxxx Xxxxx,
Xxxxx 0000, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxx, Managing
Director, Investment Banking; notices to the Fund shall be directed to The High
Yield Plus Fund, Inc., c/o Xxxxxx X. Xxxxxx, President, Treasurer and Director,
The Greater Rochester Metro Chamber of Commerce, 00 Xx. Xxxx Xxxxxx, Xxxxxxxxx,
XX 00000; notices to the Investment Adviser shall be directed to Wellington
Management Company, LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Xxxxxx X. Xxxxx.
Section 11. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Dealer Manager, the Fund, and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the parties hereto
and their respective successors and the controlling persons and officers and
directors referred to in Section 7 and their heirs and legal representatives,
any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained. This Agreement and all conditions
and provisions hereof are intended to be for the sole and exclusive benefit of
the parties hereto and thereto and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
Section 12. GOVERNING LAW AND TIME. This Agreement shall be governed by
the laws of the State of New York applicable to agreements made and to be
performed in said State. Specified times of day refer to New York City time.
Section 13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
23
If the foregoing is in accordance with your understanding of our
agreement, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Fund and
the Dealer Manager.
Very truly yours,
The High Yield Plus Fund, Inc.
By:_________________________________________
Name: Xxxxxx X. Xxxxxx
Title: President and Treasurer
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
X.X. Xxxxxxx & Sons, Inc.
By:_____________________________
Name:
Title:
24
Exhibit A
THE HIGH YIELD PLUS FUND, INC.
Rights Offering for Shares of Common Stock
FORM OF
SOLICITING DEALER AGREEMENT
THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME
_____________, 1999*
Ladies and Gentlemen:
The High Yield Plus Fund, Inc., a Maryland corporation (the
"Fund"), proposes to issue to holders of record ("Record Date Stockholders") of
its common stock, par value $0.01 per share (the "Common Stock"), at the close
of business on the record date (the "Record Date") set forth in the Prospectus
(as defined herein), transferable rights (the "Rights," and individually, a
"Right") entitling such Record Date Stockholders to subscribe for shares of
Common Stock and, subject to certain conditions, additional shares of Common
Stock pursuant to an over-subscription privilege (the "Offer"). The shares of
Common Stock for which holders of Rights ("Rightholders") may subscribe pursuant
to the Offer are herein referred to as the "Shares." Pursuant to the terms of
the Offer, the Fund is issuing each Record Date Stockholder one Right for each
three shares of Common Stock held. Such Rights entitle Rightholders to acquire,
at the subscription price set forth in the Prospectus (the "Subscription
Price"), one share for each Right held on the terms and subject to the
conditions set forth in the Prospectus. No fractional Shares will be issued. Any
Rightholder who fully exercises all Rights held by such Rightholder will be
entitled to subscribe for, subject to allocation, additional Shares (the
"Over-Subscription Privilege") on the terms and conditions set forth in the
final prospectus of the Fund in the form filed with the Securities and Exchange
Commission pursuant to Rule 497(c), (e), (h) or (j) under the Securities Act (as
defined herein), as from time to time amended or supplemented pursuant to the
Securities Act and all documents, if any, incorporated by reference therein (the
"Prospectus").
The undersigned, as the dealer manager (the "Dealer Manager")
named in the Prospectus, has entered into a Dealer Manager Agreement dated
December __, 1998 with the Fund, pursuant to which the undersigned has agreed to
form and manage, for purposes of soliciting exercises of Rights pursuant to the
Offer, a group of soliciting dealers, including the undersigned, consisting of
brokers and dealers who shall be members in good standing of the National
Association of Securities Dealers, Inc. (the "NASD") or any foreign broker or
dealer not eligible for membership who agrees to conform to the Rules of Fair
Practice of the NASD, including Sections 2730, 2740, 2420 and 2750 thereof, in
making solicitations in the United States to the same extent as if it were a
member thereof (the members of such group being hereinafter called the
"Soliciting Dealers"). You are invited to become one of the Soliciting Dealers
-------------
* Unless extended to a date no later than ______________, 1999.
A-1
and by your confirmation hereof you agree to act in such capacity, in accordance
with the terms and conditions herein and in your confirmation hereof, to obtain
exercises of Rights pursuant to the Offer.
(1) SOLICITING AND SOLICITING MATERIAL. Soliciting and other
activities by you hereunder shall be undertaken only in accordance with this
Agreement, the Securities Act of 1933, as amended (the "Securities Act"), the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
applicable rules and regulations of the Securities and Exchange Commission and
only in those states and other jurisdictions where such solicitations and other
activities may lawfully be undertaken and in accordance with the laws thereof.
Accompanying this Agreement are copies of the following documents: the
Prospectus describing the terms of the Offer, a Subscription Certificate and
letters to stockholders. Additional copies of these documents will be supplied
in reasonable quantities upon your request. You agree that during the period of
the Offer you will not use any solicitation material other than that referred to
above and such as may hereafter be furnished to you by the Fund through us.
(2) COMPENSATION OF SOLICITING DEALERS. The Dealer Manager has
agreed to reallow soliciting fees ("Soliciting Fees") to qualified brokers or
dealers executing Soliciting Dealer Agreements who solicit the exercise of
Rights and the Over-Subscription Privilege in connection with the Offer and who
comply with the procedures described below. Upon timely delivery to State Street
Bank and Trust Company, the Fund's Subscription Agent for the Offer, of payment
for Shares purchased pursuant to the exercise of Rights and the
Over-Subscription Privilege and of properly completed and executed documentation
as set forth in this Soliciting Dealer Agreement, the Dealer Manager will pay to
Soliciting Dealers Soliciting Fees equal to 2.50% of the aggregate Subscription
Price for the Shares issued pursuant to such exercise of Rights and the
Over-Subscription Privilege; PROVIDED, HOWEVER, that no payment shall be due
with respect to the issuance of any Shares until payment therefor is actually
received by the Dealer Manager. The Dealer Manager agrees to pay the Soliciting
Fees to the broker-dealers designated on the applicable portion of the related
Subscription Certificate, if such broker-dealers have executed a confirmation
accepting the terms of the Soliciting Dealer Agreements; PROVIDED, HOWEVER, that
if, in any case, no broker-dealer is so designated or a broker-dealer is
otherwise not entitled to receive compensation pursuant to the Soliciting Dealer
Agreement, the Dealer Manager will retain the Soliciting Fee that would
otherwise have been payable in such case. Payment of the Soliciting Fees to
qualifying Soliciting Dealers will be made by the Dealer Manager directly to
such Soliciting Dealers by U.S. dollar checks drawn upon an account at a bank in
New York City. Such payments to such Soliciting Dealers shall be made as soon as
practicable after payment of the Dealer Manager Fee is made by the Fund to the
Dealer Manager. Payment to the Dealer Manager by the Fund will be in the form of
a wire transfer of same day funds to an account or accounts identified by the
Dealer Manager. Such payments will be made on the day after the final payment
for Shares is due as determined pursuant to in the Prospectus.
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No Soliciting Fees shall be payable to a Soliciting Dealer in
respect of any particular exercise of Rights if no Soliciting Dealer is so
designated on the Subscription Certificate in the place so provided, or if in
the opinion of counsel for the Dealer Manager, such Soliciting Fees cannot
legally be paid in respect of such exercise of Rights because of the provisions
of applicable state law or for any other reason. In case of any dispute or
disagreement as to the amount of Soliciting Fees payable to any Soliciting
Dealer hereunder or as to the proper recipient of any such Soliciting Fees, the
decision of the Dealer Manager shall be conclusive. The payment of any
Soliciting Fees to Soliciting Dealers shall be the responsibility of the Dealer
Manager, but the Dealer Manager shall have no other obligation or liability to
any Soliciting Dealer for any obligation of the Fund hereunder.
(3) The Offer will expire on the Expiration Date as set forth in
the Prospectus. In order for a Soliciting Dealer to receive the Soliciting Fees,
the Subscription Agent must have received from such Soliciting Dealer no later
than 5:00 P.M., New York City time, on the Expiration Date, either (i) a
properly completed and duly executed Subscription Certificate with respect to
Shares purchased pursuant to the exercise of Rights and the Over-Subscription
Privilege and full payment for such Shares; or (ii) a Notice of Guaranteed
Delivery guaranteeing delivery to the Subscription Agent by close of business on
the third business day after the Expiration Date, of (a) full payment for such
Shares and (b) a properly completed and duly executed Subscription Certificate
with respect to Shares purchased pursuant to the exercise of Rights. The
Soliciting Fees will only be paid after receipt by the Dealer Manager of a
properly completed and duly executed confirmation accepting the terms of the
Soliciting Dealer Agreement and by the Subscription Agent of a Subscription
Certificate designating the Soliciting Dealer in the applicable portion hereof.
In the case of a Notice of Guaranteed Delivery, the Soliciting Fees will only be
paid after delivery in accordance with such Notice of Guaranteed Delivery has
been effected.
(4) TRADING. You represent to the Fund and the Dealer Manager
that you have not engaged, and agree that you will not engage, in any activity
in respect of the Rights or the Shares in violation of the Exchange Act,
including Regulation M thereunder. Your acceptance of Soliciting Fees will
constitute a representation that you are eligible to receive such Soliciting
Fees and that you have complied with the preceding sentence and your other
agreements hereunder.
(5) UNAUTHORIZED INFORMATION AND REPRESENTATIONS. Neither you nor
any other person is authorized by the Fund or the Dealer Manager to give any
information or make any representations in connection with this Agreement or the
Offer other than those contained in the Prospectus and other authorized
solicitation material furnished by the Fund through the Dealer Manager, and you
hereby agree not to use any solicitation material other than material referred
to in this Section 5. Without limiting the generality of the foregoing, you
agree for the benefit of the Fund and the Dealer Manager not to publish,
circulate or otherwise use any other advertisement or solicitation material
without the prior written approval of the Fund and the Dealer Manager. You are
not authorized to act as agent of the Fund or the Dealer Manager in any respect,
A-3
and you agree not to act as such agent and not to purport to act as such agent.
On becoming a Soliciting Dealer and in soliciting exercises of Rights, you agree
for the benefit of the Fund and the Dealer Manager to comply with any applicable
requirements of the Securities Act, the Exchange Act, the rules and regulations
thereunder, any applicable securities laws of any state or jurisdiction where
such solicitations may lawfully be made, and the applicable rules and
regulations of any self-regulatory organization or registered national
securities exchange, and to perform and comply with the agreements set forth in
your confirmation of your acceptance of this Agreement, a copy of the form of
which is appended hereto.
(6) BLUE SKY AND SECURITIES LAWS. The Dealer Manager assumes no
obligation or responsibility in respect of the qualification of the Shares
issuable pursuant to the Offer or the right to solicit Rights under the laws of
any jurisdiction. The enclosed Blue Sky Letter indicates the states in which it
is believed that acceptances of the Offer may be solicited under the applicable
Blue Sky or securities laws. Under no circumstances will you as a Soliciting
Dealer engage in any activities hereunder in any state in which you may not
lawfully so engage. The Blue Sky Letter shall not be considered solicitation
material as that term is herein used. You agree that you will not engage in any
activities hereunder outside the United States except in jurisdictions where
such solicitations and other activities may lawfully be undertaken and in
accordance with the laws thereof.
(7) TERMINATION. This Agreement may be terminated by written or
telegraphic notice to you from the Dealer Manager, or to the Dealer Manager from
you, and in any case it will terminate upon the expiration or termination of the
Offer; PROVIDED, HOWEVER, that such termination shall not relieve the Dealer
Manager of the obligation to pay when due any Soliciting Fees payable to you
hereunder with respect to Shares acquired pursuant to the exercise of Rights
through the close of business on the date of such termination or relieve the
Fund of its obligations referred to under Section 9 hereof, and shall not
relieve you of any obligation or liability under Sections 1, 4, 5, 6, 10 and 11
hereof.
(8) LIABILITY OF DEALER MANAGER. Nothing herein contained shall
constitute the Soliciting Dealers as partners with the Dealer Manager or with
one another, or agents of the Dealer Manager or the Fund, or shall render the
Fund liable for the obligations of the Dealer Manager or the obligations of any
Soliciting Dealers, or shall render the Dealer Manager liable for the
obligations of any Soliciting Dealers nor constitute the Fund or the Dealer
Manager the agent of any Soliciting Dealer. The Fund and the Dealer Manager
shall be under no liability to any Soliciting Dealer or any other person for any
act or omission or any matter connected with this Agreement or the Offer, except
that the Fund shall be liable on the basis set forth in Section 9 hereof to
indemnify certain persons. You represent that you have not purported, and agree
that you will not purport, to act as agent of the Fund or the Dealer Manager in
any connection or transaction relating to the Offer.
(9) INDEMNIFICATION. Under the Dealer Manager Agreement, the Fund
has agreed to indemnify and hold harmless the Dealer Manager, each Soliciting
Dealer, and their respective directors, officers, employees, agents and each
person who controls the Dealer Manager or a Soliciting Dealer within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act against
A-4
certain liabilities, including liabilities under the Securities Act and the
Exchange Act. By returning an executed copy of this Agreement, you agree to
indemnify and hold harmless the Fund as an intended third-party beneficiary to
this Agreement, the Dealer Manager, and their respective directors, officers,
employees, agents and each person who controls the Fund or the Dealer Manager
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (the "Indemnified Persons") against losses, claims, damages and
liabilities to which the Indemnified Persons may become subject (a) as a result
of your breach of your representations or agreements made herein or (b) if you
(as custodian, trustee or fiduciary or in any other capacity) are acting on
behalf of another entity that is soliciting exercises of Rights pursuant to the
Offer (a "Soliciting Entity"), as a result of any breach by any such Soliciting
Entity of the representations or agreements made herein by the Soliciting
Dealers to the same extent as if such Soliciting Entity had executed the
confirmation referred to in Section 14 hereof and was therefore a Soliciting
Dealer that had directly made such representations and agreements. This
indemnity agreement will be in addition to any liability which you may otherwise
have.
(10) DELIVERY OF PROSPECTUS. You agree for the benefit of the
Fund and the Dealer Manager to deliver to each person who owns beneficially
Common Stock registered in your name, and who exercises Rights on a Subscription
Certificate on which your name, to your knowledge, has been inserted, a
Prospectus prior to the exercise of Rights by such person.
(11) STATUS OF SOLICITING DEALER. Your acceptance of Soliciting
Fees will constitute a representation to the Fund and the Dealer Manager that
you (i) have not purported to act as agent of the Fund or the Dealer Manager in
any connection or in any transaction relating to the Offer, (ii) are not
affiliated with the Fund or the Investment Adviser, (iii) will not accept
Soliciting Fees from the Dealer Manager pursuant to the terms hereof with
respect to Shares purchased by you pursuant to an exercise of Rights for your
own account or the account of any affiliate, other than a natural person, (iv)
will not remit, directly or indirectly, any part of any Soliciting Fees to any
beneficial owner of Shares purchased pursuant to the Offer, (v) agree to the
amount of the Soliciting Fees and the terms and conditions set forth herein with
respect to receiving such Soliciting Fees, (vi) have read and reviewed the
Prospectus, and (vii) are a member in good standing of the National Association
of Securities Dealers, Inc. (the "NASD") or are a foreign broker or dealer not
eligible for membership who agrees to conform to the Rules of Fair Practice of
the NASD, including Sections 2730, 2740, 2420 and 2750 thereof, in making
solicitations in the United States to the same extent as if you were a member
thereof.
(12) NOTICES. Any notice hereunder shall be in writing or by
telegram and if to you as a Soliciting Dealer shall be deemed to have been duly
given if mailed or telegraphed to you at the address to which this letter is
addressed, and if to the Dealer Manager, if delivered or sent to X.X. Xxxxxxx &
Sons, Inc., Xxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Xxxxxxx X. Xxxx, Managing Director, Investment Banking.
(13) PARTIES IN INTEREST. The Agreement herein set forth is
intended for the benefit of the Dealer Manager, the Soliciting Dealers and the
Fund.
A-5
(14) CONFIRMATION. Please confirm your agreement to become one of
the Soliciting Dealers under the terms and conditions set forth herein and in
attached confirmation by completing and executing the confirmation and sending
it via facsimile (617-523-1845) to X.X. Xxxxxxx & Sons, Inc., Attention: Xxxxxxx
X. Xxxx, Managing Director.
(15) GOVERNING LAW AND TIME. This Agreement shall be governed by
the laws of the State of New York applicable to agreements made and to be
performed in said State.
A-6
Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Dealer Manager Agreement or, if not defined
therein, in the Prospectus.
NOTICE: IF A COPY OF THE CONFIRMATION REFERRED TO IN SECTION 14
HEREOF IS NOT SIGNED, DATED AND RETURNED TO THE DEALER MANAGER PRIOR TO THE
EXPIRATION OF THE OFFER, NO SOLICITATION FEES WILL BE PAYABLE TO A SOLICITING
DEALER HEREUNDER.
Very truly yours,
X.X. Xxxxxxx & Sons, Inc.
as Dealer Manager
By: _______________________
Name:______________________
Title:_____________________
A-7
EXHIBIT B
CONFIRMATION
X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Managing Director
Investment Banking
Facsimile: (000) 000-0000
Ladies and Gentlemen:
We hereby confirm our acceptance of the terms and conditions of
the letter captioned "Soliciting Dealer Agreement" which was attached hereto
upon our receipt hereof (this "Agreement") with reference to the Offer of The
High Yield Plus Fund, Inc. (the "Fund") described therein.
We hereby acknowledge that we (i) have received, read and
reviewed the Prospectus and other solicitation material referred to in this
Agreement, and confirm that in executing this confirmation we have relied upon
such Prospectus and other solicitation material authorized by the Fund and upon
no other representations whatsoever, written or oral, (ii) have not purported to
act as agent of the Fund or the Dealer Manager in any connection or in any
transaction relating to the Offer, (iii) are not affiliated with the Fund, (iv)
are not purchasing Shares for our own account or the account of any of our
affiliates, other than a natural person, (v) will not remit, directly or
indirectly, any part of any Soliciting Fees to any beneficial owner of Shares
purchased pursuant to the Offer, and (vi) agree to the amount of the Soliciting
Fees and the terms and conditions set forth in this Agreement with respect to
receiving such Soliciting Fees. We also confirm that we are a broker or dealer
who is a member in good standing of the National Association of Securities
Dealers, Inc. (the "NASD") or are a foreign broker or dealer not eligible for
membership who agrees to conform to the Rules of Fair Practice of the NASD,
including Sections 2730, 2740, 2420 and 2750 thereof, in making solicitations in
the United States to the same extent as if we were a member thereof.
B-1
In connection with the Offer, we represent that we have complied,
and agree that we will comply, with any applicable requirements of the
Securities Act of 1933, the Securities Exchange Act of 1934, any applicable
securities or Blue Sky laws and the rules and regulations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and any applicable securities
or Blue Sky laws.
------------------------------------
Firm Name
By__________________________________
Authorized Signature
Address:
------------------------------------
------------------------------------
DTC Number:
------------------------------------
Nominee Name:
------------------------------------
------------------------------------
Dated: __________________, 1998
NOTICE: IF A COPY OF THIS CONFIRMATION IS NOT SIGNED, DATED AND RETURNED
TO THE DEALER MANAGER PRIOR TO THE EXPIRATION OF THE OFFER, NO SOLICITATION FEES
WILL BE PAYABLE TO A SOLICITING DEALER HEREUNDER.
B-2
EXHIBIT C
REPRESENTATION AND WARRANTIES OF THE INVESTMENT ADVISOR
(i) [The Investment Adviser has been duly formed and is validly
existing as a limited liability partnership in good standing under the laws of
the Commonwealth of Massachusetts with full power and authority to own, lease
and operate its properties and conduct its business as described in the
Registration Statement and the Prospectus; the Investment Adviser currently
maintains all Licenses and Permits necessary to carry on its business as
contemplated in the Prospectus, and is duly qualified as a foreign limited
liability partnership to transact business and is in good standing in each
jurisdiction in which the failure to so qualify, either individually or in the
aggregate, would have a material adverse effect upon the operations or financial
condition of the Investment Adviser; and the Investment Adviser has no
subsidiaries.]
(i) [The Investment Adviser is duly registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), and is not prohibited by the Advisers Act or the Investment Company Act,
or the rules and regulations under such Acts, from acting as an investment
adviser for the Fund as contemplated in the Registration Statement and the
Prospectus and the Investment Advisory Agreement.]
(ii) The description of the Investment Adviser in the Registration
Statement and the Prospectus is true and correct and does 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 not
misleading.
(iii) [The Investment Advisory Agreement has been duly authorized,
executed and delivered by the Investment Adviser and complies with all
applicable provisions of the Advisers Act and the Investment Company Act, and
is, assuming due authorization, execution and delivery by the other parties
thereto, a legal, valid, binding and enforceable obligation of the Investment
Adviser, subject to the qualification that the enforceability of the Investment
Adviser's obligations thereunder may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights, and to general principles of equity (regardless
of whether enforceability is considered in a proceeding in equity or at law).]
(iv) [Neither the performance by the Investment Adviser of its
obligations under Investment Advisory Agreement nor the consummation of the
transactions contemplated therein or in the Registration Statement nor the
fulfillment of the terms thereof will conflict with, result in a breach or
violation of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any properties or assets of
the Investment Adviser under the [Limited Liability Partnership Agreement] of
the Investment Adviser, or the terms and provisions of any agreement, indenture,
mortgage, lease or other instrument to which the Investment Adviser is a party
or by which it may be bound or to which any of the property or assets of the
Investment Adviser is subject, nor will such action result in any violation of
C-1
any order, law, rule or regulation of any court or governmental agency or body,
whether foreign or domestic, having jurisdiction over the Investment Adviser or
any of its properties.]
(v) Except as set forth in the Registration Statement and the
Prospectus, there is no pending or, to the best knowledge of the Investment
Adviser, threatened action, suit or proceeding to which the Investment Adviser
is a party before or by any court or governmental agency, authority or body or
any arbitrator, whether foreign or domestic, which might result in any material
adverse change in the condition (financial or other), business prospects, net
worth or results of operations of the Investment Adviser, or which might
materially and adversely affect the properties or assets thereof of a character
required to be disclosed in the Registration Statement or Prospectus.
(vi) [The Investment Adviser does not require any governmental
licenses, permits, consents, orders, approvals or other authorizations to enable
the Investment Adviser to continue to supervise investments in securities as
contemplated in the Prospectus other than those which it has already obtained.]
(vii) [No consent, approval, authorization, notification or order
of, or any filing with, any court or governmental agency or body is required
under federal law or the laws of any other jurisdiction, whether foreign or
domestic, for the consummation by the Investment Adviser of the transactions
contemplated by the Investment Advisory Agreement.]
(viii) [The Investment Adviser (A) has not taken, directly or
indirectly, any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Fund to
facilitate the issuance of the Rights or the sale or resale of the Shares, (B)
has not since the filing of the Registration Statement sold, bid for or
purchased, or paid anyone any compensation for soliciting purchases of, shares
of Common Stock of the Fund (except for the solicitation of exercises of Rights
pursuant to this Agreement) and (C) will not, until the later of the expiration
of the Rights or the completion of the distribution (within the meaning of the
anti-manipulation rules under the Exchange Act) of the Shares, sell, bid for or
purchase, pay or agree to pay any person any compensation for soliciting another
to purchase any other securities of the Fund (except for the solicitation of
exercises of Rights pursuant to this Agreement); PROVIDED, HOWEVER, that any
action in connection with the Fund's Dividend Reinvestment Plan will not be
deemed to be within the terms of this paragraph (viii).]
(ix) The Investment Adviser has the financial resources available to
it necessary for the performance of its services and obligations as contemplated
in the Registration Statement and the Prospectus.
(x) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, there has been no material adverse change, or any development involving
a prospective material adverse change, in the condition (financial or otherwise)
or management of the Investment Adviser, or in the business affairs or business
prospects of the Investment Adviser, whether or not arising in the ordinary
course of business.
C-2
