Exhibit H(3)
Draft 7/15/02
____________________ Shares
HYPERION STRATEGIC MORTGAGE INCOME FUND, INC.
Common Stock
($.01 Par Value Per Share)
SELECTED DEALER AGREEMENT
July, 2002
Ladies and Gentlemen:
Hyperion Strategic Mortgage Income Fund, Inc. (the "Company"), a
corporation formed pursuant to the laws of the State of Maryland is offering for
sale to the public __________ shares of its Common Stock (the "Primary Shares").
1. The several Underwriters named in the enclosed Prospectus, on whose behalf
we are acting as Representatives, have severally agreed to purchase from
the Company an aggregate of __________ Primary Shares and have an option to
purchase from the Company up to __________ additional shares of Common
Stock (the "Additional Shares"). The Primary Shares and the Additional
Shares are sometimes collectively called the "Shares." The purchase is
subject to the terms of the Underwriting Agreement. The Shares are more
fully described in the Prospectus. One or more of the several Underwriters,
acting through us, are severally offering a portion of the Shares to
certain dealers (the "Selling Group") as principals, subject to the terms
and conditions stated herein and in the Underwriting Agreement, subject to
modification or cancellation of the offering without notice, at the initial
public offering price hereinafter set forth on the cover page of the
Prospectus (the "Authorized Public Offering Price") less concession (the
"Selling Concession"). The Authorized Public Offering Price may be changed
at any time or from time to time in our discretion without notice.
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Authorized Public Offering $15.00 per Share
Price:
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Dealer's Selling Concession: $0.4875 per Share, payable or allowable
as set forth below.
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Re-allowance: You may re-allow not in excess of $0.10
per Share as a Selling Concession to
dealers who are members in good
standing of the National Association of
Securities Dealers, Inc.
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Delivery and Payment: July [ ], 2002, or such
other date as we advise you, by
certified or bank cashier's check or
wire transfer payable to the order of
_______________, against delivery of
the Shares. Shares shall be paid for in
full at the Authorized Public Offering
Price or, if we so advise you, at such
price less the dealer's Selling
Concession. If payment is at the
Authorized Public Offering Price, the
concession will be paid to you upon
termination of this Agreement.
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Termination: This Agreement will terminate _____
days from its date unless sooner
terminated or extended by us.
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2. Members of the Selling Group may immediately offer shares for sale and take
orders therefor at the Authorized Public Offering Price, subject to
confirmation and allotment by us. We, in turn, are prepared to receive
orders subject to confirmation and allotment by us. We reserve the right to
reject any order in whole or in part or to allot less than the number of
Shares applied for. Orders transmitted by telephone should be confirmed by
letter or telegram.
3. By becoming a member of the Selling Group, you agree (a) to take up and pay
for Shares allocated and confirmed to you, (b) not to use any such Shares
to reduce or cover any short position you may have, (c) not to confirm any
sale of Shares to any account over which you exercise discretionary
authority, and (d) upon our request, to advise us of the number of Shares
purchased from us as manager of the Selling Group remaining unsold by you
and to resell to us any and all such unsold Shares at the prices stated
above, less all of such part of the concession allowed you as we may
determine.
4. It is assumed that the Shares sold by you will be effectively placed for
investment. If we purchase in the open market, for the account of any
Underwriter, Shares sold to you and not effectively placed for investment,
we may determine not to allow you the dealer's concession on the Shares so
purchased or, if such concession has theretofore been allowed you, you
agree to pay it to us on demand.
5. Each Underwriter has consented that we, for our own account as one of the
Underwriters, in our discretion, may make purchases and sales of the
Shares. You further agree that until termination of this agreement, you
will not make purchases or sales of any Shares except (a) pursuant to this
Agreement, (b) purchases authorized by us, or (c) in the ordinary course of
business as broker or agent for a customer pursuant to an unsolicited
order.
6. Additional copies of the Prospectus will be supplied to you in reasonable
quantity upon request.
7. It is expected that public advertisement of this issue of Shares will be
made on or about the date hereof. After the date of appearance on such
advertisement, but not before, you are free to advertise over your own name
and at your own expense and risk.
8. The Shares are offered by us for delivery when, as, and if sold and
accepted by the Underwriters and subject to the terms stated herein and in
the Prospectus, to our right to vary the concession and terms of the
offering after their release for public sale, to the approval of counsel as
to legal matters and to withdrawal, cancellation, or modification of the
offer without notice.
9. You represent that you are a member in good standing of the National
Association of Securities Dealers, Inc. or, if a foreign dealer, that you
will conform to the Conduct Rules of such association in making sales in
the United States, particularly Rule 2420 of the Association's Conduct
Rules. You represent that you will comply with Rules 2730, 2740 and 2750 of
the Association's Conduct Rules and with the "Free-Riding and Withholding"
interpretation of the Board of Governors of the National Association of
Securities Dealers, Inc. You are not authorized to give any information or
make any representations other than as contained in the Prospectus, or to
act as agent for any Underwriter or for us. Nothing will constitute the
Selling Group an association or other separate entity or partners with the
Several Underwriters, with us, or with each other, but you will be
responsible for your share of any liability or expense based on any claim
to the contrary. Neither we nor any Underwriter will be under any liability
to you, except for obligations expressly assumed in this Agreement and any
liabilities under the Securities Act of 1933, as amended. No obligations on
our part will be implied or inferred herefrom.
10. Neither we nor any of the other Underwriters will have any responsibility
with respect to the right of any dealer to sell the Shares in any
jurisdiction, notwithstanding any information we may furnish in this
connection. Upon application to us, you will be informed as to the states
in which we have been advised by counsel that the Shares have been
qualified for sale or are exempt under the respective Blue Sky or
securities laws of such states. You agree that you will not offer or sell
such Shares in violation of any applicable law including, but not limited
to, the Blue Sky or securities laws of any state or jurisdiction in which
such Shares are offered or sold by you.
11. This Agreement will be governed and construed in accordance with the laws
of the State of Florida.
If you desire to become a member of the Selling Group, please advise to
that effect immediately by telegram and sign and return the enclosed copy
of this letter to ______________________________.
Very truly yours,
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As Representatives of the Several Underwriters
By: __________________________________________________________________
Name: _________________________________________________________________
Title: ________________________________________________________________
Confirmed as of the above date.
(Firm Name)
(Street Address)
(City, State and Zip Code)
By:
Name:
Title:
