EXHIBIT (h)(i)
PACHOLDER FUND, INC.
2,375,662 Shares of Common Stock Issuable Upon Exercise
of Non-Transferable Rights to Subscribe for
Such Shares of Common Stock
DEALER MANAGER AGREEMENT
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February __, 0000
Xxxxxx Xxxxxxxxxx, Inc.
0000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Dear Sirs:
Pacholder Fund, Inc., a Maryland corporation (the "Fund"), is a closed-end,
diversified management investment company registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"). The Fund
proposes to issue to holders of its common stock, par value $.01 per share (the
"Common Stock"), of record as of the close of business on February 23, 1999
("Record Date Shareholders") rights (the "Rights") to subscribe for an aggregate
of 2,375,662 shares (the "Shares") of Common Stock.
The Fund appoints Xxxxxx Associates, Inc. (the "Dealer Manager") as
exclusive dealer manager in connection with the offer of the Shares contemplated
by the proposed issuance of the Rights (the "Offer"), and the Dealer Manager
accepts such appointment. The Dealer Manager represents and warrants that it is
a broker-dealer registered under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Pacholder & Company, LLC, an affiliate of the Dealer
Manager (the "Adviser"), manages the investments of the Fund pursuant to an
Investment Advisory Agreement with the Fund, dated August 20, 1998 (the
"Advisory Agreement"). Pacholder Associates, Inc. ("Pacholder Associates") is
the majority member of the Adviser.
In connection with the Offer, each Record Date Shareholder will be issued
one Right for each full share of Common Stock held on February 23, 1999 (the
"Record Date"). No fractional Rights will be issued. The Rights will entitle
shareholders to acquire at the subscription price per Share described in the
Prospectus (as hereinafter defined) one Share for each three Rights held. The
period of subscription (the "Subscription Period") will commence on February __,
1999 and end at 5:00 p.m., Eastern time, on March __, 1999, unless extended by
the Fund (the "Expiration Date"). Any Record Date Shareholder who fully
exercises all Rights held by him will be entitled to subscribe for Shares that
were not otherwise subscribed for by others during the Subscription Period (the
"Over-Subscription Privilege"). Additional terms and conditions of the Offer are
set out in the registration statement with respect to the Rights and Shares
filed by the Fund with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Securities Act"), and the
Investment Company Act and the rules and regulations (the "Rules and
Regulations") of the Commission thereunder.
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the Fund, the
Adviser and the Dealer Manager hereby agree as follows:
1. Representations and Warranties of the Fund and the Adviser.
(a) The Fund represents and warrants as follows:
(i) The registration statement on Form N-2 (Nos. 333-70767; 811-5639) with
respect to the Rights and Shares has been carefully prepared by the Fund in
conformity with the requirements of the Securities Act and the Investment
Company Act and the Rules and Regulations. Copies of such registration
statement, including any amendments thereto, the preliminary prospectuses
(meeting the requirements of Rule 430A under the Securities Act) contained
therein and the exhibits, financial statements and schedules, as finally
amended and revised, have heretofore been delivered by the Fund to the
Dealer Manager. Such registration statement, herein referred to as the
"Registration Statement," which shall be deemed to include all information
omitted therefrom in reliance upon Rule 430A under the Securities Act and
contained in the Prospectus referred to below, has been declared effective
by the Commission under the Securities Act and no post-effective amendment
to the Registration Statement has been filed as of the date of this
Agreement. The form of prospectus first filed by the Fund with the
Commission pursuant to its Rule 497(b) or (h) and Rule 430A is herein
referred to as the "Prospectus." Each preliminary prospectus included in
the Registration Statement prior to the time it becomes effective is
hereinafter referred to as a "Preliminary Prospectus."
(ii) The Fund has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Maryland, with
corporate power and authority to own its properties and conduct its
business as described in the Registration Statement; and the Fund is duly
qualified to transact business in all jurisdictions in which the conduct of
its business requires such qualification.
(iii) The Fund's authorized capitalization is as set forth in the
Prospectus; the outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable; the
Shares have been duly authorized and when issued, delivered and paid for as
described in the Registration Statement, will be validly issued, fully paid
and non-assessable; and no preemptive rights of stockholders exist with
respect to any of the Shares or the issue and sale thereof.
(iv) The Rights and Shares conform to the statements concerning them in the
Registration Statement.
(v) The Commission has not issued an order preventing or suspending the use
of any Preliminary Prospectus or the Prospectus relating to the Offer nor
instituted proceedings for that purpose. The Registration Statement
contains, and the Prospectus and any amendments or supplements thereto will
contain, all statements which are required to be stated therein by, and in
all respects conforms or will conform, as the case may be, to the
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requirements of, the Securities Act, the Investment Company Act and the
Rules and Regulations. Neither the Registration Statement nor any amendment
thereto, and neither the Prospectus, nor any supplement thereto, contains
or will contain any untrue statement of a material fact or omits or will
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading; provided, however, that the Fund makes no
representations or warranties as to information contained in or omitted
from the Registration Statement or the Prospectus, or any such amendment or
supplement, in reliance upon, and in conformity with, written information
furnished to the Fund by or on behalf of the Dealer Manager, specifically
for use in the preparation thereof.
(vi) The Fund has not, directly or indirectly, (A) taken any action
designed to cause or to result in, or that 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 sale or resale of
the Shares, or (B) since the filing of the Registration Statement (1) sold,
bid for, purchased, or paid anyone any compensation for soliciting
purchases of, the Shares or (2) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the
Fund, except as contemplated by this Agreement or the Fund's dividend
reinvestment plan or as disclosed in writing to the Dealer Manager.
(vii) The financial statements of the Fund, together with the related notes
and schedules set forth in the Registration Statement, present fairly the
financial position of the Fund at the indicated dates. Such financial
statements have been prepared in accordance with generally accepted
principles of accounting.
(viii) There is no action or proceeding pending or, to the knowledge of the
Fund, threatened against the Fund before any court or administrative agency
which might result in any material adverse change in the business,
condition or prospects of the Fund.
(ix) Since the respective dates as of which information is given in the
Registration Statement, as it may be amended or supplemented, there has not
been any material change or any development involving a prospective
material adverse change in or affecting the condition, financial or
otherwise, of the Fund or the earnings, business affairs, management or
business prospects of the Fund, whether or not occurring in the ordinary
course of business, and there has not been any material transaction entered
into by the Fund, other than transactions in the ordinary course of
business and changes and transactions contemplated by the Registration
Statement, as it may be amended or supplemented. The Fund has no material
contingent obligations which are not disclosed in the Registration
Statement, as it may be amended or supplemented.
(x) The Fund is not in default under any agreement, lease, contract,
indenture or other instrument or obligation to which it is a party or by
which it or any of its properties is bound and which default is of material
significance in respect of the business or financial condition of the Fund.
The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of
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trust or other agreement or instrument to which the Fund is a party, the
charter or bylaws of the Fund or any order, rule or regulation applicable
to the Fund of any court or of any regulatory body or administrative agency
or other governmental body having jurisdiction.
(xi) Each approval, consent, order, authorization, designation, declaration
or filing by or with any regulatory, administrative or other governmental
body necessary in connection with the execution and delivery by the Fund
of, and the consummation of the transactions contemplated by, this
Agreement and the Fund Agreements (as hereinafter defined) (except such
additional steps as may be required by the National Association of
Securities Dealers, Inc. (the "NASD") or may be necessary to qualify the
Rights and Shares for public offering by the Fund under state securities or
"Blue Sky" laws) has been obtained or made and is in full force and effect.
(xii) The Fund holds all material licenses, certificates and permits from
governmental authorities which are necessary to the conduct of its
business.
(xiii) Deloitte & Touche LLP, who have certified the financial statements
of the Fund filed with the Commission as part of the Registration
Statement, are independent public accountants as required by the Securities
Act and the Rules and Regulations.
(xiv) The Fund is registered with the Commission pursuant to Section 8 of
the Investment Company Act as a closed-end, diversified management
investment company, and no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated or
threatened by the Commission.
(xv) The Advisory Agreement, the Administration Agreement dated as of June
5, 1996, between the Fund and Kenwood Administrative Management, Limited
Partnership (the "Administration Agreement"); the Accounting Services
Agreement dated as of May 20, 1991, as amended, between the Fund and
Pacholder Associates, Inc. (the "Accounting Services Agreement"); the
Custody Agreement dated as of May 1, 1996, between the Fund and Star Bank,
N. A. (the "Custodian Agreement"); the Transfer Agency and Service
Agreement dated as of January 1, 1999, between the Fund and Star Bank, N.
A. (the "Transfer Agency Agreement"); the Subscription Rights Agency
Agreement dated as of February __, 1999, between the Fund and BankBoston,
N.A. (the "Subscription Agent Agreement") and the Information Agent
Agreement dated as of February __, 1999, between the Fund and Shareholder
Communications Corporation (the "Information Agent Agreement")
(collectively, the "Fund Agreements") have been duly authorized, executed
and delivered on behalf of the Fund, are valid and binding obligations of
the Fund enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other laws affecting the rights of creditors generally and
such principles of equity as a court having jurisdiction may apply, and are
in all respects in full compliance with all applicable provisions of the
Exchange Act, the Investment Company Act and the Investment Advisers Act of
1940, as amended (the "Advisers Act").
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(xvi) The Common Stock has been duly listed on the American Stock Exchange,
Inc. and the Shares have been approved for listing, subject to official
notice of issuance.
(b) Pacholder Associates represents and warrants as follows:
(i) The Adviser has been duly organized and is validly existing as a
limited liability company in good standing under the laws of the State of
Ohio, with power and authority to own its properties and conduct its
business as described in the Prospectus; and the Adviser is duly qualified
to transact business in all jurisdictions in which the conduct of its
business requires such qualification.
(ii) The Commission has not issued an order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus relating to the Offer
nor instituted proceedings for that purpose. The Registration Statement
contains, and the Prospectus and any amendments or supplements thereto will
contain, all statements which are required to be stated therein by, and in
all respects conforms or will conform, as the case may be, to the
requirements of, the Securities Act, the Investment Company Act and the
Rules and Regulations. Nothing has come to the attention of Pacholder
Associates that causes Pacholder Associates to believe that the
Registration Statement or any amendment thereto, and the Prospectus or any
supplement thereto, contains or will contain any untrue statement of a
material fact or omits or will omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided,
however, that Pacholder Associates makes no representations or warranties
as to information contained in or omitted from the Registration Statement
or the Prospectus, or any such amendment or supplement, in reliance upon,
and in conformity with, written information furnished to the Fund by or on
behalf of the Dealer Manager specifically for use in the preparation
thereof; provided further, however, that with respect solely to information
contained in or omitted from the Registration Statement or the Prospectus,
or any such amendment or supplement, in reliance upon, and in conformity
with, written information furnished to the Fund by or on behalf of the
Adviser, specifically for use in the preparation thereof, Pacholder
Associates represents and warrants that such information does not contain
any untrue statement of a material fact and does not omit or will not omit
to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
(iii) Neither the Adviser nor Pacholder Associates has, directly or
indirectly, (A) taken any action designed to cause or to result in, or that
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 sale or resale of the Shares, or (B) since the filing of the
Registration Statement (1) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Shares or (2) paid or agreed
to pay to any person any compensation for soliciting another to purchase
any other securities of the Fund, except as contemplated by this Agreement
or the Fund's dividend reinvestment plan or as disclosed in writing to the
Dealer Manager.
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(iv) There is no action or proceeding pending or, to the knowledge of
Pacholder Associates, threatened against the Adviser before any court or
administrative agency which might result in any material adverse change in
the business, condition or prospects of the Adviser.
(v) Since the respective dates as of which information is given in the
Registration Statement, as it may be amended or supplemented, there has not
been any material change or any development involving a prospective
material adverse change in or affecting the condition, financial or
otherwise, of the Adviser or the earnings, business affairs, management or
business prospects of the Adviser, whether or not occurring in the ordinary
course of business, and there has not been any material transaction entered
into by the Adviser, other than transactions in the ordinary course of
business and changes and transactions contemplated by the Registration
Statement, as it may be amended or supplemented.
(vi) The Adviser is not in default under any agreement, lease, contract,
indenture or other instrument or obligation to which it is a party or by
which it or any of its properties is bound and which default is of material
significance in respect of the business or financial condition of the
Adviser. The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust or other agreement or instrument to
which the Adviser is a party, the limited liability company agreement of
the Adviser or any order, rule or regulation applicable to the Adviser of
any court or of any regulatory body or administrative agency or other
governmental body having jurisdiction.
(vii) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery
by Pacholder Associates of, and the consummation of the transactions
contemplated by, this Agreement and the Advisory Agreement (except such
additional steps as may be required by the NASD or may be necessary to
qualify the Rights and Shares for public offering by the Fund under state
securities or "Blue Sky" laws) has been obtained or made and is in full
force and effect.
(viii) The Adviser holds all material licenses, certificates and permits
from governmental authorities which are necessary to the conduct of its
business.
(ix) The Adviser is duly registered with the Commission under the Advisers
Act as an investment adviser, and there does not exist any proceeding or
any facts or circumstances the existence of which could lead to any
proceeding which would adversely affect the registration or good standing
of the Adviser with the Commission. The Adviser is not prohibited from
performing its obligations under the Advisory Agreement.
(x) The Advisory Agreement had been duly authorized, executed and delivered
on behalf of the Adviser, is a valid and binding obligation of the Adviser
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization,
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moratorium, fraudulent conveyance and other laws affecting the rights of
creditors generally and such principles of equity as a court having
jurisdiction may apply, and is in all respects in full compliance with all
applicable provisions of the Investment Company Act and the Advisers Act.
2. Agreement to Act as Dealer Manager.
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(a) On the basis of the representations and warranties, and subject to the
terms and conditions, set forth in this Agreement:
(i) The Dealer Manager agrees to engage and organize a group of securities
brokers and dealers ("Soliciting Dealers") who will enter into an agreement
with the Fund in the form attached hereto as Exhibit A (the "Soliciting
Dealer Agreement") and solicit, in accordance with the Securities Act, the
Exchange Act and the Investment Company Act, and their customary practice,
the exercise of the Rights, subject to the terms and conditions of this
Agreement, the Subscription Agent Agreement and the procedures described in
the Registration Statement.
(ii) The Fund agrees to furnish, or cause to be furnished, to the Dealer
Manager, lists, or copies of such lists, showing the names and addresses
of, and number of shares of Common Stock held by, Record Date Shareholders
as of the Record Date; 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 for securities brokers and dealers
that the Dealer Manager has requested to solicit exercises of Rights.
(iii) The Fund will advise or cause the subscription agent for the Offer to
advise the Dealer Manager and each Soliciting Dealer from day to day during
the Subscription Period, and promptly after the Expiration Date, as to the
names and addresses of all Record Date Shareholders exercising Rights, the
total number of Rights exercised by each Record Date Shareholder 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 each Soliciting Dealer, the number of Rights exercised
on subscription forms designating such 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., Eastern 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 each Soliciting Dealer, the number of Rights
exercised on subscription forms designating such Soliciting Dealer as the
broker-dealer with respect to such exercise, and as to such other
information as the Dealer Manager may reasonably request.
(iv) In addition to the services described in paragraph (a) (i) of this
Section 2, the Dealer Manager agrees to provide financial and marketing
advisory services to the Fund in connection with the Offer. No advisory
fee, other than the fees provided for in Section 3 of this Agreement and
the reimbursement of the Dealer Manager's out-of-pocket
7
expenses as described in Section 5 of this Agreement, shall be payable by
the Fund to the Dealer Manager in connection with the financial and
marketing advisory services provided by the Dealer Manager pursuant to this
paragraph (a)(iv).
(b) The Fund and the Dealer Manager agree that the Dealer Manager is an
independent contractor with respect to solicitation of the exercise of Rights
contemplated by this Agreement and the performance of the financial and
marketing advisory services to the Fund contemplated by this Agreement; and the
Dealer Manager represents and warrants that it is not a partner or agent of any
other securities broker, dealer or other person soliciting the exercise of
Rights contemplated by this Agreement, or of the Fund or any of its affiliates.
(c) In rendering the services contemplated by this Agreement, the Dealer
Manager shall not be subject to any liability to the Fund or the Adviser, or any
of their affiliates, for any act or omission on the part of any securities
broker or dealer (other than the Dealer Manager) or any other person, and the
Dealer Manager shall not have any liability (whether direct or indirect, in
contract or tort or otherwise) for or in connection with the performance of its
obligations under this Agreement, except for any such liability for losses,
claims, damages or liabilities incurred that are finally judicially determined
to have resulted primarily from the bad faith or gross negligence of the Dealer
Manager.
3. Dealer Manager and Soliciting Dealer Fees.
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(a) In full payment for the financial and marketing advisory services and
other services provided and to be provided hereunder by the Dealer Manager, the
Fund agrees to pay to the Dealer Manager a fee equal to the amount computed by
multiplying (i) 0.009 (0.90%) by (ii) the aggregate number of Shares purchased
in the Offer by (iii) the subscription price per Share described in the
Prospectus (the "Subscription Price").
(b) The Fund agrees to pay each Soliciting Dealer, as provided in the
Soliciting Dealer Agreement, a fee equal to the amount computed by multiplying
(i) 0.020 (2.0%) by (ii) the Subscription Price by (iii) (A) the aggregate
number of Shares purchased pursuant to subscription forms on which the
Soliciting Dealer is designated by name as having solicited the exercise of such
Rights plus (B) Shares purchased pursuant to the Offer through the Soliciting
Dealer by beneficial owners of the Fund's Common Stock on whose behalf the
Soliciting Dealer acts as nominee, either directly or through The Depository
Trust Company ("DTC") or any other applicable depository, as listed in the
Appendix to the Soliciting Dealer Agreement. In no event shall the number in
(iii)(B) above exceed, as applicable, the number of Shares reported as purchased
by beneficial owners through the Soliciting Dealer by DTC, or any other
applicable depository, or the number of Shares the Soliciting Dealer is entitled
to purchase as a Record Date Shareholder (excluding in either case Shares held
for its own account). If more than one Soliciting Dealer is identified as having
solicited the exercise of identical Rights, the fee described above shall be
shared equally by all such Soliciting Dealers.
(c) Payment to the Dealer Manager by the Fund shall be in the form of a
wire transfer of same day funds to an account or accounts identified by the
Dealer Manager. Such payment shall be made concurrently with the issuance of the
Shares on the date on which the Offer is
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consummated (the "Closing Date"). Payment to a Soliciting Dealer shall be made
by the Fund directly to such Soliciting Dealer by wire transfer of same day
funds to an account or accounts identified by such Soliciting Dealer. Such
payments shall be made on the Closing Date. The Fund shall be under no liability
for any payment made to any Soliciting Dealer which payment is made in
accordance with instructions received from the Dealer Manager.
4. Covenants of the Fund and Pacholder Associates.
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(a) The Fund covenants and agrees with the Dealer Manager that:
(i) The Fund will (A) prepare and timely file with the Commission under
Rule 497(b) and (h) of the Rules and Regulations a Prospectus containing
any information previously omitted at the time of the effectiveness of the
Registration Statement in reliance on Rule 430A of the Rules and
Regulations and (B) will not file any amendment to the Registration
Statement or supplement to the Prospectus of which the Dealer Manager shall
not previously have been advised and furnished with a copy or to which the
Dealer Manager shall have reasonably objected in writing or which is not in
compliance with the Rules and Regulations.
(ii) The Fund will advise the Dealer Manager promptly of any request of the
Commission for amendment of the Registration Statement or for supplement to
the Prospectus or for any additional information, or of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the use of the Prospectus or any order under
Section 8(e) of the Investment Company Act or of the institution of any
proceedings for those purposes, and the Fund will use its best efforts to
prevent the issuance of any orders preventing or suspending the use of the
Prospectus and to obtain as soon as possible the lifting thereof, if
issued.
(iii) The Fund will deliver to, upon the order of, the Dealer Manager
during the period when delivery of a prospectus is required under the
Securities Act, as many copies of the Prospectus in final form, or as
thereafter amended or supplemented, as the Dealer Manager may reasonably
request. The Fund will deliver to the Dealer Manager at or before the date
hereof, one signed copy of the Registration Statement and all amendments
thereto, including all exhibits filed therewith, and will deliver to the
Dealer Manager such number of copies of the Registration Statement, but
without exhibits, and of all amendments thereto, as the Dealer Manager may
reasonably request.
(iv) If, during the period in which a prospectus is required by law to be
delivered by the Fund or a Soliciting Dealer, any event shall occur as a
result of which, in the judgment of the Fund or in the opinion of counsel
for the Dealer Manager, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered, not
misleading, or if it is necessary at any time to amend or supplement the
Prospectus to comply with any law, the Fund promptly will prepare and file
with the Commission an appropriate amendment or supplement to the
Prospectus so that the Prospectus as so
9
amended or supplemented will not, in light of the circumstances when it is
so delivered, be misleading, or so that the Prospectus will comply with
such law.
(v) The Fund will cooperate with the Dealer Manager in endeavoring to
qualify the Shares for sale under the securities laws of such jurisdictions
as the Dealer Manager may reasonably have designated in writing and will
make such applications, file such documents, and furnish such information
as may be reasonably required for that purpose; provided, however, that the
Fund shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction where it is not
now so qualified or required to file such a consent. The Fund will, from
time to time, prepare and file such statements, reports and other documents
as are or may be required to continue such qualifications in effect during
the Subscription Period.
(vi) The Fund will not, directly or indirectly, take 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, except as contemplated by this Agreement or
the Fund's dividend reinvestment plan or as disclosed in writing to the
Dealer Manager.
(vii) The Fund will make generally available to its security holders, as
soon as it is practicable to do so, but in any event not later than 60 days
after the close of the period covered thereby, an earnings statement
covering a period of at least twelve consecutive months beginning after the
effective date of the Registration Statement, which earnings statement
shall satisfy the requirements of Section 1l(a) of the Securities Act and
Rule 158 thereunder.
(b) Pacholder Associates covenants and agrees with the Dealer Manager that
neither Pacholder Associates nor the Adviser will, directly or indirectly, take
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, except as contemplated by this Agreement or
the Fund's dividend reinvestment plan or as disclosed in writing to the Dealer
Manager.
5. Costs and Expenses.
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(a) The Fund will pay all costs, expenses and fees incident to the
performance of its obligations under this Agreement, including, without
limiting the generality of the foregoing, the following: accounting fees of
the Fund; the fees and disbursements of counsel for the Fund; the cost of
printing and delivering to, as requested by, the Dealer Manager copies of
the Registration Statement and the Prospectus, and any supplements or
amendments thereto, this Agreement, the Soliciting Dealer Agreement, any
sales literature distributed to Soliciting Dealers or shareholders,
certificates for the Shares and subscription forms relating to the exercise
of Rights; the filing fees of the Commission; the filing fees and expenses
incident to securing any required review by the NASD of the terms of the
sale of the Shares; the listing fee of the American Stock Exchange, Inc.;
the expenses, including the fees and disbursements of counsel, incurred in
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connection with the qualification of the Rights and the Shares under state
securities or "Blue Sky" laws and preparation of the Blue Sky Survey; and
the fees and expenses incurred pursuant to the Subscription Agent Agreement
and the Information Agent Agreement.
(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 upon request
made from time to time for its reasonable expenses incurred in connection with
its activities under this Agreement in an amount up to $50,000.
(c) If this Agreement is cancelled by the Dealer Manager in accordance with
the provisions of Section 6 or is terminated by the Dealer Manager in accordance
with the provisions of Section 10(a)(iii), the Fund agrees to reimburse the
Dealer Manager for all of its reasonable out-of-pocket expenses incurred in
connection with its performance hereunder. In the event the transactions
contemplated hereunder are not consummated, 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.
6. Conditions of Obligations of the Dealer Manager. The obligations of the
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Dealer Manager hereunder are subject to the accuracy of the representations and
warranties of the Fund and Pacholder Associates contained herein, to the
performance by the Fund and Pacholder Associates of their respective obligations
hereunder, and to the following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been taken or, to the knowledge of the Fund or the Adviser, shall be
contemplated by the Commission.
(b) The Dealer Manager shall have received on the date on which the Offer
commences (the "Commencement Date") the opinion of Piper & Marbury L.L.P.,
counsel for the Fund, dated the Commencement Date, addressed to the Dealer
Manager to the effect that:
(i) the Fund is a corporation duly incorporated and validly existing in
good standing under the laws of the State of Maryland, and has the
corporate power to own its properties and conduct its business as described
in the Prospectus; and the Fund is qualified to transact business in all
jurisdictions in which the conduct of its business requires such
qualification, or in which failure to qualify would have a material adverse
effect upon the business of the Fund;
(ii) the Fund has authorized and outstanding capital stock as set forth in
the Prospectus; the outstanding shares of Common Stock and the Rights have
been duly authorized and the outstanding shares of Common Stock have been
validly issued and are fully paid and non-assessable; the Rights and the
Shares conform to the descriptions thereof contained in the Prospectus; the
certificates for the Shares are in due and proper form; the Shares,
including the Shares to be issued pursuant to the Over-Subscription
Privilege, have been duly authorized and will be validly issued, fully paid
and non-assessable when issued and paid for as contemplated by the terms of
the Offer; and no
11
preemptive rights of stockholders exist with respect to any of the Rights
or the Shares or the issue and sale thereof;
(iii) the Registration Statement has become effective under the Securities
Act and, to the knowledge of such counsel, no stop order proceedings with
respect thereto have been instituted or are pending or threatened under the
Securities Act;
(iv) the Registration Statement and the Prospectus, and any amendments or
supplements thereto (other than the financial statements, schedules and
other financial information included therein, as to which such counsel need
express no opinion), comply as to form in all material respects with the
requirements of the Securities Act or the Investment Company Act, as
applicable, and the applicable rules and regulations thereunder;
(v) the statements under the captions "The Fund," "Investment Policies and
Limitations," "Dividends and Distributions," "Federal Taxation" and
"Description of Capital Stock" in the Prospectus to the extent that they
constitute matters of law or legal descriptions, are accurate, and fairly
and correctly present the information called for with respect to such
matters;
(vi) such counsel does not know of any contracts or documents required to
be filed as exhibits to the Registration Statement or described in the
Registration Statement or the Prospectus which are not so filed or
described as required, and such contracts and documents as are summarized
in the Registration Statement or the Prospectus are fairly summarized in
all material respects;
(vii) such counsel knows of no material legal proceedings pending or
threatened against the Fund;
(viii) this Agreement has been duly authorized, executed and delivered by
the Fund;
(ix) the execution and delivery of this Agreement and the consummation of
the transactions herein contemplated do not and will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, the charter or bylaws of the Fund, or any agreement or
instrument known to such counsel to which the Fund is a party or by which
the Fund may be bound;
(x) no approval, consent, order, authorization, designation, declaration or
filing by or with any regulatory, administrative or other governmental body
is necessary in connection with the execution and delivery of this
Agreement and the consummation by the Fund of the transactions herein
contemplated (other than as may be required by the NASD or as required by
state securities or "Blue Sky" laws as to which such counsel need express
no opinion) except such as have been obtained or made, specifying the same;
12
(xi) the Fund Agreements have each been duly authorized and approved by the
Fund and comply with all applicable provisions of the Investment Company
Act and the Advisers Act, and the Fund Agreements have each been duly
executed and delivered by the Fund and constitute the valid and binding
agreements of the Fund enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other laws affecting the rights of
creditors generally and such principles of equity as a court having
jurisdiction may apply;
(xii) the execution and delivery of the Fund Agreements and fulfillment of
the terms thereof will not result in a breach or violation of the terms and
provisions of, or constitute a default under, any agreement or instrument
known to such counsel to which the Fund is a party or of which its property
is the subject nor will such action result in any violation of the terms
and provisions of the charter or bylaws of the Fund or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Fund or any of its properties; and
(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 Exchange Act to make the public offering
and consummate the sale of the Shares as contemplated by the Offer; and the
provisions of the charter and bylaws of the Fund comply as to form in all
material respects with the requirements of the Investment Company Act.
In rendering such opinion, Piper & Marbury L.L.P. may rely upon
certificates of officers of the Fund and of public officials as to matters of
fact, and may rely as to matters governed by the laws of states other than
Maryland or Federal laws on local counsel in such jurisdictions, provided that
in each case Piper & Marbury L.L.P. shall state that they believe that they and
the Dealer Manager are justified in relying on such other counsel.
In addition to the foregoing opinion, such counsel shall also advise the
Dealer Manager that, while they have not themselves checked the accuracy and
completeness of or otherwise verified, and are not passing upon and assume no
responsibility for the accuracy or completeness of, the statements contained in
the Registration Statement and the Prospectus, except to the limited extent
stated in paragraphs (ii) and (v) above, in the course of their review and
discussion of the contents of the Registration Statement and the Prospectus with
certain officers of the Fund and its independent accountants and others, no
facts have come to their attention which would cause them to believe that the
Registration Statement, at the time it became effective, or the Prospectus, at
the time it was filed with the Commission pursuant to Rule 497(b) and (h) of the
Rules and Regulations, or the Registration Statement and the Prospectus, at the
time they were first provided to the Dealer Manager, 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 (except that
such counsel need express no view as to financial statements, schedules and
other financial information included therein or excluded therefrom).
13
(c) The Dealer Manager shall have received on the Commencement Date the
opinion of Xxxxx X. Xxxxxxxx, Xx., Executive Vice president and General Counsel
of Pacholder Associates, dated the Commencement Date, addressed to the Dealer
Manager to the effect that:
(i) the Adviser is a limited liability company duly organized and validly
existing in good standing under the laws of the State of Ohio and has the
power to own its properties and conduct its business as described in the
Prospectus; and the Adviser is qualified to transact business in all
jurisdictions in which the conduct of its business requires such
qualification, or in which the failure to qualify would have a material
adverse effect upon its business;
(ii) such counsel knows of no material legal proceedings pending or
threatened against the Adviser; such counsel knows of no material legal
proceedings pending or threatened against any affiliate of the Adviser
which are required to be disclosed in the Prospectus;
(iii) this Agreement has been duly authorized, executed and delivered by
the Adviser;
(iv) the Adviser is registered with the Commission 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 as investment adviser to the Fund as contemplated by the Advisory
Agreement;
(v) the Advisory Agreement has been duly authorized, executed and delivered
on behalf of the Adviser and constitutes a valid and binding agreement of
the Adviser enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
and other laws affecting the rights of creditors generally and such
principles of equity as a court having jurisdiction may apply; and
(vi) the execution and delivery by the Adviser of this Agreement or the
Advisory Agreement and the performance by the Adviser of its obligations
thereunder or hereunder will not result in a breach or violation of the
terms and provisions of, or constitute a default under, any agreement or
instrument known to such counsel to which the Adviser is a party or of
which its property is the subject nor will such action result in any
violation of the provisions of the limited liability company agreement of
the Adviser or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Adviser or any of
its properties.
In rendering such opinion, Xx. Xxxxxxxx may rely upon certificates of
officers of Pacholder Associates and of public officials as to matters of fact,
and may rely as to matters governed by the laws of states other than Ohio or
Federal laws on local counsel in such jurisdictions, provided that in each case
he shall state that he believes that he and the Dealer Manager are justified in
relying on such other counsel.
14
(d) The Dealer Manager shall have received from Xxxxx X. Xxxxxxxx, Xx.,
Executive Vice President and General Counsel of the Dealer Manager, an opinion
dated the Commencement Date with respect to the organization and existence of
the Fund, the validity of the Rights and Shares and other matters as the Dealer
Manager may reasonably request. In rendering such opinion, Xx. Xxxxxxxx may rely
as to all matters governed by the laws of the State of Maryland on the opinion
of Piper & Marbury L.L.P. delivered to the Dealer Manager on the Commencement
Date. In addition, such opinion shall also include a statement to the effect
that nothing has come to the attention of such counsel which leads him to
believe that the Registration Statement or the Prospectus 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
(except that such counsel need express no view as to financial statements,
schedules and other financial information included therein or excluded
therefrom). With respect to such statement, Xx. Xxxxxxxx may state that his
belief is based upon the procedures set forth therein, but is without
independent check and verification.
(e) The Dealer Manager shall have received at or prior to the Commencement
Date from Piper & Marbury L.L.P. a memorandum or summary, in form and substance
satisfactory to the Dealer Manager, with respect to the qualification for
offering and sale by the Fund of the Rights and Shares under the state
securities or "Blue Sky'' laws of such jurisdictions as the Dealer Manager may
reasonably have designated to the Fund.
(f) The Dealer Manager shall have received on the Commencement Date a
signed letter from Deloitte & Touche LLP, dated the Commencement Date, in form
and substance satisfactory to the Dealer Manager, to the effect that:
(i) they are independent accountants with respect to the Fund under Rule
101 of the AICPA's Code of Professional Conduct, and its interpretations
and rulings within the meaning of the Securities Act and the Rules and
Regulations;
(ii) they have performed specified procedures, not constituting an audit,
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 five business days prior to the Commencement Date, there was any
change in the capital stock or net assets of the Fund as compared with
amounts shown on the audited financial statements included in the
Prospectus except as set forth in the letter.
(g) The Dealer Manager shall have received on the Commencement Date a
certificate or certificates of an executive officer of the Fund and an executive
officer Pacholder Associates to the effect that, as of the Commencement Date,
each of them severally represents as follows:
(i) The Registration Statement has become effective under the Securities
Act, and no order suspending the effectiveness of the Registration
Statement or under Section 8(e) of
15
the Investment Company Act has been issued, and no proceedings for such
purpose have been taken or are, to his knowledge, contemplated by the
Commission.
(ii) He does not know of any litigation instituted or threatened against
the Fund or the Adviser of a character required to be disclosed in the
Registration Statement which is not so disclosed; he does not know of any
material contract required to be filed as an exhibit to the Registration
Statement which is not so filed; and the representations and warranties of
the Fund and the Adviser contained in Section 1 hereof are true and correct
as of the Commencement Date.
(iii) He has carefully examined the Registration Statement and the
Prospectus and, in his opinion, as of the effective date of the
Registration Statement, the statements contained in the Registration
Statement and the Prospectus were true and correct, and such Registration
Statement and Prospectus did not omit to state a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading and, in his opinion, since the effective date of the
Registration Statement, no event has occurred which should have been set
forth in a supplement to or an amendment of the Prospectus which has not
been so set forth in such supplement or amendment.
(h) The Fund and Pacholder Associates shall have furnished to the Dealer
Manager such further certificates and documents confirming the representations
and warranties contained herein and related matters as the Dealer Manager may
reasonably have requested.
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects satisfactory to the Dealer Manager and to Xxxxx X. Xxxxxxxx, Xx.,
Executive Vice President and General Counsel of the Dealer Manager.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Dealer Manager and its counsel, this Agreement and all
obligations of the Dealer Manager hereunder may be cancelled by the Dealer
Manager by notifying the Fund of such cancellation in writing or by telegram at
or prior to the Commencement Date.
In such event, the Fund, Pacholder Associates and the Dealer Manager shall
not be under any obligation to each other (except to the extent provided in
Sections 5 and 8 hereof).
7. Conditions of the Obligations of the Fund.
-----------------------------------------
The obligations of the Fund under this Agreement are subject to the condition
that at the Closing Date no stop order suspending the effectiveness of the
Registration Statement or order under Section 8(e) of the Investment Company Act
shall have been issued and in effect or proceedings therefor initiated or
threatened.
16
8. Indemnification.
---------------
(a) The Fund and Pacholder Associates, jointly and severally, agree to
indemnify and hold harmless the Dealer Manager and each person, if any, who
controls the Dealer Manager within the meaning of the Securities Act against any
losses, claims, damages or liabilities to which the Dealer Manager or such
controlling person may become subject under the Securities Act, or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (x) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, (y) the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading or (z) the Fund or the Adviser not complying
with the Securities Act, the Exchange Act, the Investment Company Act, the
Advisers Act, or other applicable United States securities laws and regulations;
and will reimburse the Dealer Manager and each such controlling person for any
legal or other expenses reasonably incurred by the Dealer Manager or such
controlling person in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided, however, that the Fund
and Pacholder Associates will not be liable in any case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement, or alleged untrue statement, or omission or alleged omission, made in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Fund by or through the Dealer Manager specifically
for use in the preparation thereof. This indemnity agreement will be in addition
to any liability which the Fund or Pacholder Associates may otherwise have.
(b) The Dealer Manager will indemnify and hold harmless the Fund, each of
its directors, each of its officers who have signed the Registration Statement,
the Adviser and each person, if any, who controls the Fund or the Adviser within
the meaning of the Securities Act, against any losses, claims, damages or
liabilities to which the Fund, the Adviser or any such director, officer or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances under which they were made; and will reimburse any legal or
other expenses reasonably incurred by the Fund, the Adviser or any such
director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability action or proceeding;
provided, however, that the Dealer Manager will be liable in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission has been made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Fund by the Dealer Manager specifically for use in the
preparation thereof. This indemnity agreement will be in addition to any
liability which the Dealer Manager may otherwise have.
17
(c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to this Section 8, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party") in writing. No indemnification provided for in Section 8(a) or (b) shall
be available to any party who shall fail to give notice as provided in this
Section 8(c) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was prejudiced by the
failure to give such notice, but the failure to give such notice shall not
relieve the indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on account
of the provisions of Section 8(a) or (b). In case any such proceeding shall be
brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party and shall pay as incurred the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own counsel
at its own expense. Notwithstanding the foregoing, the indemnifying party shall
pay as incurred the fees and expenses of the counsel retained by the indemnified
party in the event (i) the indemnifying party and the indemnified party shall
have mutually agreed to the retention of such counsel or (ii) the named parties
to any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm for all such indemnified parties. Such firm shall be designated in
writing by the Dealer Manager in the case of parties indemnified pursuant to
Section 8(a) and by the Fund and the Adviser in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if settled
with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
(d) In no case shall the indemnification provided for in this Section 8 be
available to protect any person against any liability to which such person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its or his duties, or by reason of its or his
reckless disregard of its or his obligations and duties under this Agreement.
(e) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under Section 8(a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Fund and the Adviser on the one hand and
the Dealer Manager on the other from
18
the Offer. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under Section 8(c) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Fund and the Adviser on the one hand and the
Dealer Manager on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Fund and the Adviser on
the one hand and the Dealer Manager on the other hand shall be deemed to be in
the same proportion as the total net proceeds from the Offer (before deducting
expenses) received by the Fund and the Adviser bear to the fee received by the
Dealer Manager pursuant to Section 3(a) hereof. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Fund or the Adviser on
the one hand or the Dealer Manager on the other and the parties relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Fund, Pacholder Associates and the Dealer Manager agree that it would
not be just and equitable if contributions pursuant to this paragraph (e) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above to this
paragraph (e). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this paragraph (e) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this paragraph (e), (i) the Dealer Manager
shall not be required to contribute any amount in excess of the fee received
pursuant to Section 3(a) hereof and (ii) no person 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.
(f) In any proceeding relating to the Registration Statement, the
Prospectus, or any supplement or amendment thereto, each party against whom
contribution may be sought under this Section 8 hereby consents to the
jurisdiction of any court having jurisdiction over any other contributing party,
agrees that process issuing from such court may be served upon him or it by any
other contributing party and consents to the service of such process and agrees
that any other contributing party may join him or it as an additional defendant
in any such proceeding in which such other contributing party is a party.
(g) The Fund and Pacholder Associates agree to indemnify each Soliciting
Dealer and its 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 paragraphs (a), (b), (c), (d) and (e) of this Section 8.
9. Notices. All communications hereunder shall be in writing and, except
-------
as otherwise provided herein, shall be mailed, delivered or telegraphed and
confirmed as follows: if
19
to the Dealer Manager, to Xxxxxx Associates, Inc., 0000 Xxxxxxxxxx Xxxx, Xxxxx
000, Xxxxxxxxxx, Xxxx 00000; if to the Fund or Pacholder Associates, to
Pacholder Fund, Inc. or Pacholder Associates, Inc., as applicable, 0000
Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxx 00000.
10. Termination.
-----------
(a) This Agreement shall be subject to termination in the absolute
discretion of the Dealer Manager, by notice given to the Fund prior to the
Expiration Date, if prior to such time (i) financial, political, economic,
currency or banking conditions in the United States shall have undergone any
material change the effect of which on the financial markets makes it, in the
Dealer Manager's reasonable judgment, impracticable to proceed with the Offer,
(ii) there has occurred any outbreak or material escalation of hostilities or
other calamity or crisis the effect of which on the financial markets of the
United States is such as to make it, in the Dealer Manager's reasonable
judgment, impracticable to proceed with the Offer, (iii) trading in the shares
of Common Stock shall have been suspended by the Commission or the American
Stock Exchange, Inc., (iv) trading in securities generally on the New York Stock
Exchange, Inc. or the American Stock Exchange, Inc. shall have been suspended or
limited or minimum prices that, as of the date hereof, do not already exist,
shall have been established on such exchanges or (v) a banking moratorium shall
have been declared either by Federal or New York State 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.
11. Successors. This Agreement has been and is made solely for the benefit
----------
of the Dealer Manager, the Fund and the Adviser and their respective successors,
executors, administrators, heirs and assigns, and the officers, directors and
controlling persons referred to herein, and no other person will have any right
or obligation hereunder. The term "successors" shall not include any purchaser
of the Shares merely because of such purchase.
12. Survival of Representations, Warranties and Agreements. The respective
------------------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Fund or its officers, of Pacholder Associates or its officers and of the Dealer
Manager set forth in or made pursuant to this Agreement shall remain in full
force and effect, regardless of any (a) cancellation or termination of this
Agreement, (b) any investigation made by or on behalf of Dealer Manager, the
Fund or Pacholder Associates or any of the officers, directors or controlling
persons referred to in Section 8 hereof, and (c) delivery of and payment for the
Shares pursuant to the Offer.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Ohio.
20
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement among the Fund, the Adviser and the Dealer
Manager in accordance with its terms.
Very truly yours,
PACHOLDER FUND, INC.
By:
-----------------------------
Name:
Title:
PACHOLDER ASSOCIATES, INC.
By:
-----------------------------
Name:
Title:
Confirmed and Accepted,
as of the date first above written:
XXXXXX ASSOCIATES, INC.
as Dealer Manager
By:
-----------------------------
Xxxxx X. Xxxxxxxx, Xx.
Executive Vice President and
General Counsel
21
