Exhibit (h)(i)
PACHOLDER HIGH YIELD FUND, INC.
_________ Shares of Common Stock Issuable Upon Exercise
of Transferable Rights to Subscribe for
Such Shares of Common Stock
FORM OF DEALER MANAGER AGREEMENT
--------------------------------
_________, 2001
Xxxxxx Associates, Inc.
0000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Dear Sirs:
Pacholder High Yield 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 ___________, 2001
("Record Date Shareholders") rights (the "Rights") to subscribe for an aggregate
of _________ 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, as amended
(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 ___________, 2001
(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
___________, 2001 and end at 5:00 p.m., Eastern time, on ________, 2001, 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-_____; 811-5639)
with respect to the Rights and Shares has been carefully prepared by the
Fund in conformity with the requirements of the Securities
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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 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.
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(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 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,
Inc. (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 Firstar Bank, N.
A. (the "Custodian Agreement"); the Transfer Agency and Service
Agreement dated as of January 1, 1999, between the Fund and Firstar
Bank, N.A. (the "Transfer Agency Agreement"); the Subscription Rights
Agency Agreement dated as of __________ , 2001, between the Fund and
________________ (the "Subscription Agent Agreement") and the
Information Agent Agreement dated as of ___________, 2001, 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
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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").
(xvi) The Common Stock has been duly listed on the American Stock
Exchange, Inc. and the Shares and Rights 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.
(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
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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, 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.
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(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
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) ______ (____%) 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) _____ (___%) 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
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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 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 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
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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, the offer 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, the offer 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 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 $______.
(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
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of the 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:
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(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 Xxxxxxxxxxx & Xxxxxxxx
LLP, 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 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;
9
(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;
(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, Xxxxxxxxxxx & Xxxxxxxx LLP 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 states other than Maryland on local
counsel in such jurisdictions, provided that in each case Xxxxxxxxxxx & Xxxxxxxx
LLP 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).
(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
10
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 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.
(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 Xxxxxxxxxxx & Xxxxxxxx LLP 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 Xxxxxxxxxxx & Xxxxxxxx LLP 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:
11
(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 of 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 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).
12
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.
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.
(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
13
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 is 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 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.
14
(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 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.
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.
15
Very truly yours,
PACHOLDER HIGH YIELD 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
16
