SOLICITING DEALER AGREEMENT
Ladies and Gentlemen:
H&Q Healthcare Investors, a Massachusetts business trust (the "Trust"),
proposes to issue to holders of record (the "Holders") of its outstanding shares
of beneficial interests (the "Shares"), non-transferable rights (the "Rights")
entitling such Holders to subscribe for Shares at the rate of one Share for each
three Rights held and, subject to certain conditions, additional Shares pursuant
to an over-subscription privilege (the "Offer"). Pursuant to the terms of the
Offer, the Trust is issuing each Holder one non-transferable right for each
Share held on the Record Date as defined in the accompanying Prospectus (the
"Prospectus"). Such Rights entitle Holders to acquire during the subscription
period set forth in the Prospectus (the "Subscription Period"), at the
subscription price set forth in the Prospectus (the "Subscription Price"), one
Share for each three Rights held on the terms and subject to the conditions set
forth in the Prospectus. Pursuant to the terms of the Offer, such Rights also
entitle Holders to acquire during the Subscription Period at the Subscription
Price certain additional Shares on the terms and conditions of the
over-subscription privilege as set forth in such Prospectus.
The undersigned, as the dealer manager (the "Dealer Manager") named in the
Prospectus, has entered into a Dealer Manager Agreement dated [ ] with the Trust
and Xxxxxxxxx & Xxxxx Capital Management Incorporated, a California corporation
(the "Investment Adviser"), pursuant to which the undersigned has agreed to form
and manage, for purposes of soliciting exercises of Rights pursuant to the
Offer, a group of soliciting dealers, including the undersigned, consisting of
brokers and dealers who shall be members in good standing of the National
Association of Securities Dealers, Inc. (the "NASD") or brokers or dealers not
registered under the Securities Exchange Act of 1934 with their principal place
of business located outside the United States, its territories or possession who
agree to solicit exercises of Rights only in accordance with the laws applicable
to such activities and agree to solicit no exercises of Rights within the United
States, its territories or its possessions or from persons who are nationals
thereof or residents therein and who agree, although not members of the NASD, to
conform to the Conduct Rules of the NASD, in soliciting exercises of Rights
outside the United States, its territories and possessions, to the same extent
as though they were members thereof (the members of such group being hereinafter
called the "Soliciting Dealers"). You are invited to become one of the
Soliciting Dealers and by your confirmation hereof you agree to act in such
capacity, in accordance with the terms and conditions herein and in your
confirmation hereof, to obtain exercises of Rights pursuant to the Offer.
1. Solicitation and Solicitation Material. Solicitation and other
activities by you hereunder shall be undertaken only in accordance with this
Agreement, the Securities Act of 1933 (the "Securities Act"), the Securities
Exchange Act of 1934 (the "Exchange Act"), and the applicable rules and
regulations of the Securities and Exchange Commission. Accompanying this
Agreement
are copies of the following documents: the Prospectus describing the terms of
the Offer, an exercise form for the exercise of the Rights (an "Exercise Form")
and letters to stockholders. Additional copies of these documents will be
supplied in reasonable quantities upon your request. You agree that during the
period of the Offer you will not use any solicitation material other than that
referred to above and such as may hereafter be furnished to you by the Trust
through us.
2. Compensation of Soliciting Dealers. As compensation for the services of
the Soliciting Dealers hereunder, the Dealer Manager will reallow to each
Soliciting Dealer a concession of 2.25% of the subscription price per Share
purchased pursuant to the Offer through such Soliciting Dealer's efforts,
(excluding the exercise of Rights by a Soliciting Dealer for its own account or
for the account of any affiliate, other than a natural person, pursuant to the
Offer) (a "Reallowance"). A Soliciting Dealer, other than Prudential Securities
Incorporated acting in such capacity, shall be entitled to a Reallowance only
where the insertion of such Soliciting Dealer's name has been made on the
Exercise Form in the place so provided and where the Dealer Manager shall have
received from such Soliciting Dealer an executed copy of this Agreement in the
form hereof. Payment of such Reallowance will be made by the Dealer Manager or
its agent directly to such Soliciting Dealer by U.S. Dollar check drawn upon an
account at a bank in New York City. Such payments to Soliciting Dealers shall be
made as soon as practicable after payment of the Dealer Manager Fee is made to
the Dealer Manager.
No Reallowance shall be payable in respect of any particular exercise of
Rights if, in the opinion of counsel for the Dealer Manager, such Reallowance
cannot legally by paid in respect of such exercise of Rights because of the
provisions of applicable state law or for any other reason. In case of any
dispute or disagreement as to the amount of Reallowance payable to any
Soliciting Dealer hereunder or as to the proper recipient of any such
Reallowance, the decision of the Dealer Manager shall be conclusive. The payment
of any Reallowance to Soliciting Dealers shall be solely the responsibility of
the Dealer Manager, but the Dealer Manager shall have no obligation or liability
to any Soliciting Dealer for any obligation of the Trust hereunder.
For the purpose of this Section 2, the Offer will expire on the expiration
date set forth in the Prospectus. No Reallowance will be payable to Soliciting
Dealers with respect to Rights exercised after expiration of the Offer.
3. Trading. You represent to the Trust and the Dealer Manager that you have
not engaged, and agree that you will not engage, in any activity in respect of
the Rights or the Shares in violation of the Exchange Act, including the rules
or regulations adopted thereunder. Your acceptance of a Reallowance will
constitute a representation that you are eligible to receive such Reallowance
and that you have complied with the preceding sentence and your other agreements
hereunder.
4. Unauthorized Information and Representations. Neither you nor any other
person is authorized by the Trust or the Dealer Manager to give any information
or make any representations in connection with this Agreement or the Offer other
than those contained in the Xxxx-
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pectus and other authorized solicitation material furnished by the Trust through
the Dealer Manager, and you hereby agree not to use any solicitation material
other than material referred to in this Section 4 and not to give any
unauthorized information or make any unauthorized representations. Without
limiting the generality of the foregoing, you agree for the benefit of the Trust
and the Dealer Manager not to publish, circulate or otherwise use any other
advertisement or solicitation material without the prior approval of the Trust
and the Dealer Manager. You are not authorized to act as agent of the Trust or
the Dealer Manager in any respect, and you agree not to act as such agent and
not to purport to act as such agent. On becoming a Soliciting Dealer and in
soliciting exercises of Rights, you agree for the benefit of the Trust and the
Dealer Manager to comply with any applicable requirements of the Securities Act,
the Exchange Act, the rules and regulations thereunder, any applicable
securities laws of any state or jurisdiction where such solicitations may
lawfully be made, and the applicable rules and regulations of any
self-regulatory organization or registered national securities exchange, and to
perform and comply with the agreements set forth in your confirmation of your
acceptance of this Agreement, a copy of the form of which is appended hereto.
5. Blue Sky and Securities Laws. The Dealer Manager assumes no obligation
or responsibility in respect of the qualification of the Shares issuable
pursuant to the Offer or the right to solicit Rights under the laws of any
jurisdiction. The enclosed Blue Sky Memorandum indicates the states in which it
is believed that acceptances of the Offer may be solicited under the applicable
Blue Sky or securities laws. Under no circumstances will you as a Soliciting
Dealer engage in any activities hereunder in any state (a) that is not listed in
said enclosed Blue Sky Memorandum as a state in which acceptances of the Offer
may be solicited under the Blue Sky or securities law of such state or (b) in
which you may not lawfully so engage. The Blue Sky Memorandum shall not be
considered solicitation material as that term is herein used. You agree that you
will not engage in any activities hereunder outside the United States except in
jurisdictions where such solicitations and other activities may lawfully be
undertaken and in accordance with the laws thereof.
6. Termination. This Agreement may be terminated by written or telegraphic
notice to you from the Dealer Manager, or to the Dealer Manager from you, and in
any case it will terminate upon the expiration or termination of the Offer;
provided, however, that such termination shall not relieve the Dealer Manager of
the obligation to pay when due any Reallowance payable to you hereunder with
respect to Shares acquired pursuant to the exercise of Rights through the close
of business on the date of such termination that are thereafter exercised
pursuant to the Offer or relieve the Trust or the Investment Adviser of each of
their obligations referred to under Section 8 hereof, and shall not relieve you
of any obligation or liability under Sections 3, 4, 9 and 10 hereof.
7. Liability of the Dealer Manager. Nothing herein contained shall
constitute the Soliciting Dealers as partners with the Dealer Manager or with
one another, or agents of the Dealer Manager or the Trust, or shall render the
Trust liable for the obligations of the Dealer Manager or the obligations of any
Soliciting Dealers, or shall render the Dealer Manager liable for the
obligations of any Soliciting Dealers other than each of themselves nor
constitute the Trust or the Dealer Manager as the agent of any Soliciting
Dealer. The Trust, the Investment Adviser and
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the Dealer Manager shall be under no liability to any Soliciting Dealer or any
other person for any act or omission or any matter connected with this Agreement
or the Offer, except that the Trust and the Investment Adviser shall be liable
on the basis set forth in Section 8 hereof to indemnify certain persons. You
represent that you have not purported, and agree that you will not purport, to
act as agent of the Trust or the Dealer Manager in any connection or transaction
relating to the Offer.
8. Indemnification. Under the Dealer Manager Agreement, each of the Trust
and the Investment Adviser has agreed to indemnify and hold harmless the Dealer
Manager, each Soliciting Dealer and each person, if any, controlling the Dealer
Manager or any Soliciting Dealer within the meaning of Section 15 of the
Securities Act against certain liabilities, including liabilities under the
Securities Act and the Exchange Act. By returning an executed copy of this
Agreement, you agree to indemnify the Trust, the Investment Adviser and the
Dealer Manager (the "Indemnified Persons") against losses, claims, damages and
liabilities to which the Indemnified Persons may become subject (a) as a result
of your breach of your representations or agreements made herein or (b) if you
(as custodian, trustee or fiduciary or in any other capacity) are acting on
behalf of another entity that is soliciting exercises of Rights pursuant to the
Offer (a "Soliciting Entity"), as a result of any breach by any such Soliciting
Entity of the representations or agreements made herein by the Soliciting
Dealers to the same extent as if such Soliciting Entity had executed the
confirmation referred to in Section 13 hereof and was therefore a Soliciting
Dealer that had directly made such representations and agreements. This
indemnity agreement will be in addition to any liability that you may otherwise
have.
9. Delivery of Prospectus. You agree for the benefit of the Trust and the
Dealer Manager to deliver to each person who owns beneficially Shares registered
in your name, and who exercises Rights on an Exercise Form on which your name,
to your knowledge, has been inserted, a Prospectus prior to the exercise of such
person's Rights.
10. Status of Soliciting Dealer. Your acceptance of a Reallowance will
constitute a representation to the Trust and the Dealer Manager that you (i)
have not purported to act as agent of the Trust or the Dealer Manager in any
connection or in any transaction relating to the Offer, (ii) except to the
extent that you have given the Dealer Manager prior written notification, are
not affiliated with the Trust, (iii) will not accept a Reallowance from the
Dealer Manager pursuant to the terms hereof with respect to Shares purchased by
you pursuant to an exercise of Rights for your own account or the account of any
affiliate, other than a natural person, (iv) will not remit, directly or
indirectly, any part of any Reallowance to any beneficial owner of Shares
purchased pursuant to the Offer, (v) agree to the amount of the Reallowance and
the terms and conditions set forth herein with respect to receiving such
Reallowance, (vi) have read and reviewed the Prospectus, and (vii) are (a) a
member in good standing of the NASD and will comply with Rules 2730, 2740 and
2750 of the Conduct Rules of the NASD or (b) a broker or dealer with your
principal place of business located outside the United States, its territories
or its possessions and not registered under the Exchange Act, and you agree for
the benefit of the Trust and the Dealer Manager (1) to solicit exercises of
Rights only in accordance with the laws applicable to such activities and to
solicit no exercises of Rights within the United States, its territories or
possessions or from persons who are nationals thereof or
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residents therein, and (2) that, although not a member of the NASD, including
Rules 2420, 2730, 2740, and 2750 thereof, in soliciting exercises of Rights
outside the United States, its territories and possessions to the same extent as
though you were a member thereof.
11. Notices. Any notice hereunder shall be in writing or by telegram and if
to you as a Soliciting Dealer shall be deemed to have been duly given if mailed
or telegraphed to you at the address to which this letter is addressed, and if
to the Dealer Manager, if delivered or sent to Prudential Securities
Incorporated at Xxx Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attention:
Investment Banking.
12. Parties in Interest. The Agreement herein set forth is intended for the
benefit of the Dealer Manager, the Soliciting Dealers, the Trust, and the
Investment Adviser.
13. Confirmation. Please confirm your agreement to become one of the
Soliciting Dealers under the terms and conditions set forth herein and in the
attached confirmation by complet- ing and executing the confirmation and sending
it via facsimile (000) 000-0000 to Prudential Securities Incorporated,
Attention: Investment Banking.
14. Governing Law and Time. This Agreement shall be governed by the laws of
the Commonwealth of Massachusetts applicable to agreements made and to be
performed in said Commonwealth.
NOTICE: IF A COPY OF THE CONFIRMATION REFERRED TO IN SECTION 13 HEREOF IS NOT
SIGNED, DATED AND RETURNED TO THE DEALER MANAGER PRIOR TO THE EXPIRATION OF THE
OFFER, NO REALLOWANCE WILL BE PAYABLE HEREUNDER.
Very truly yours,
PRUDENTIAL SECURITIES INCORPORATED
As Dealer Manager
By:
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CONFIRMATION
PRUDENTIAL SECURITIES INCORPORATED
One Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention:
Ladies and Gentlemen:
We hereby confirm our acceptance of the terms and conditions of the letter
captioned "Soliciting Dealer Agreement" which was attached hereto upon our
receipt hereof (this "Agreement") with reference to the Offer of H&Q Healthcare
Investors (the "Trust") described therein. We hereby acknowledge that we (i)
have received, read and reviewed the Prospectus and other solicitation material
referred to in this Agreement, and confirm that in executing this confirmation
we have relied upon such Prospectus and other solicitation materials authorized
by the Trust or Xxxxxxxxx & Xxxxx Capital Management Incorporated (the
"Investment Adviser") and upon no other representations whatsoever, written or
oral, (ii) have not purported to act as agent of the Trust or the Dealer Manager
in any connection or in any transaction relating to the Offer, (iii) are not
affiliated with the Trust, (iv) are not purchasing Shares for our own account or
the account of any of our affiliates, other than a natural person, (v) will not
remit, directly or indirectly, any part of any Reallowance to any beneficial
owner of Shares purchased pursuant to the Offer, and (vi) agree to the amount of
the Reallowance and the terms and conditions set forth in this Agreement with
respect to receiving such Reallowance. We also confirm that we are a broker or
dealer who is a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD") and will comply with Rules 2730, 2740 and
2750 of the Conduct Rules of the NASD or a broker or dealer not registered under
the Securities Exchange Act of 1934 with its principal place of business located
outside the United States, its territories or possessions who by signing below
also (a) agrees to solicit exercises of Rights only in accordance with the laws
applicable to such activities and to solicit no exercises of Rights within the
United States, its territories or its possessions, or from persons who are
nationals thereof or resident therein and (b) agrees, although not a member of
the NASD, to conform to the Conduct Rules of the NASD, including Rules 2420,
2730, 2740, and 2750 thereof, in acting under this Agreement in soliciting
exercises of Rights outside the United States, its territories and possessions,
to the same extent as though we were a member thereof. In connection with the
Offer, we represent that we have
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complied, and agree that we will comply, with any applicable requirements of the
Securities Act of 1933, the Securities Exchange Act of 1934, any applicable
securities or Blue Sky laws, and the rules and regulations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and any applicable securities
or Blue Sky laws.
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Firm Name
Address:
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Telephone:
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Facsimile:
-------------------------
By:
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Officer/Authorized Signature
Name:
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Title:
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DTC Number:
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Nominee Name:
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Dated: _____________, 1997
NOTICE: IF A COPY OF THIS CONFIRMATION IS NOT SIGNED, DATED AND RETURNED TO THE
DEALER MANAGER PRIOR TO THE EXPIRATION OF THE OFFER, NO REALLOWANCE WILL BE
PAYABLE HEREUNDER.
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