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EXHIBIT (h)
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The Xxxxx Total Return Fund, Inc.
a Maryland corporation
___________________* Shares of Common Stock Issuable Upon
Exercise of Non-Transferable Rights to Subscribe for
Such Shares of Common Stock
Common Stock Par Value $0.001 Per Share
DEALER MANAGER AGREEMENT
April___ , 1998
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
The Xxxxx Total Return Fund, Inc., a Maryland corporation (the
"Fund") and Xxxxx Total Return Advisors, Inc., a Delaware corporation (the
"Investment Adviser") each confirms the agreement with and appointment of
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (the
"Dealer Manager") to act as dealer manager in connection with the issuance by
the Fund to the holders of record (the "Holders") of the Fund's common stock,
par value $0.01 per share (the "Common Stock"), of non-transferable rights
entitling such Holders to subscribe for shares of Common Stock and, subject to
certain conditions, additional shares of Common Stock pursuant to an
over-subscription privilege (the "Offer"). The shares of Common Stock for which
Holders may subscribe pursuant to the Offer are herein referred to as the
"Shares." Pursuant to the terms of the Offer, the Fund is issuing to each Holder
one non-transferable right (each a "Right" and collectively, the "Rights") for
each share of Common Stock held on the record date set forth in the Prospectus
(as defined herein) (the "Record Date"). Such Rights entitle Holders to acquire
during the subscription period set forth in the Prospectus (as defined herein)
(the "Subscription Period"), at the price set forth in such Prospectus (the
"Subscription Price"), one Share for each seven Rights exercised on the terms
and conditions set forth in such Prospectus. Pursuant to the terms of the Offer,
such Rights also entitle Holders to acquire during the Subscription Period at
the Subscription Price
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* Pursuant to the over-subscription privilege in connection with the Offer,
the Fund may, at its discretion, increase the number of Shares subject to
subscription by up to 25%.
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certain additional Shares on the terms and conditions of the over-subscription
privilege as set forth in such Prospectus.
The Fund has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (Nos. 333-47371 and
811-05620) and a related preliminary prospectus under the Investment Company Act
of 1940, as amended (the "Investment Company Act"), the Securities Act of 1933,
as amended (the "Securities Act"), and the rules and regulations of the
Commission under the Investment Company Act and the Securities Act (the "Rules
and Regulations"), and has filed such amendments to such registration statement
on Form N-2, if any, and such amended preliminary prospectuses as may have been
required to the date hereof. If the registration statement has not become
effective, a further amendment to such registration statement, including forms
of a final prospectus necessary to permit such registration statement to become
effective will promptly be filed by the Fund with the Commission. If the
registration statement has become effective and any prospectus contained therein
omits certain information at the time of effectiveness pursuant to Rule 430A of
the Rules and Regulations, a final prospectus containing such omitted
information will promptly be filed by the Fund with the Commission in accordance
with Rule 497(h) of the Rules and Regulations. The registration statement, as
amended at the time it becomes or became effective, including financial
statements and all exhibits and all documents, if any, incorporated therein by
reference, and any information deemed to be included by Rule 430A, is called the
"Registration Statement." The term "Prospectus" means the final prospectus in
the form filed with the Commission pursuant to Rule 497(c), (e), (h) or (j) of
the Rules and Regulations, as the case may be, as from time to time amended or
supplemented pursuant to the Securities Act and all documents, if any,
incorporated by reference therein. The Prospectus and letters to beneficial
owners of the shares of Common Stock of the Fund, forms used to exercise rights,
any letters from the Fund to securities dealers, commercial banks and other
nominees and any newspaper announcements, press releases and other offering
materials and information that the Fund may use, approve, prepare or authorize
for use in connection with the Offer, are collectively referred to hereinafter
as the "Offering Materials."
SECTION 1. Representations and Warranties.
(a) Each of the Fund and the Investment Adviser represents and warrants to
the Dealer Manager as of the date hereof, as of the date of the commencement of
the Offer (such later date being hereinafter referred to as the "Representation
Date") and as of the Expiration Date (as defined below) that:
(i) The Fund meets the requirements for use of Form N-2 under
the Securities Act and the Investment Company Act and the Rules and
Regulations. At the time the Registration Statement became or becomes
effective, the Registration Statement did or will comply in all material
respects with the requirements of the Securities Act, the Investment
Company Act and the Rules and Regulations and did or will not contain an
untrue statement of a material fact or omit to state a material fact
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required to be stated therein or necessary to make the statements therein
in the light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties in
this subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Fund in writing by the Dealer
Manager expressly for use in the Registration Statement, Prospectus or
Offering Materials.
(ii) The accountants who certified the financial statements of
the Fund set forth or incorporated by reference in the Registration
Statement and the Prospectus are independent public accountants as
required by the Investment Company Act and the Rules and Regulations.
(iii) The financial statements of the Fund set forth or
incorporated by reference in the Registration Statement and the Prospectus
present fairly the financial position of the Fund as at the date indicated
and the results of its operations for the period specified; such financial
statements have been prepared in conformity with generally accepted
accounting principles; and the information in the Prospectus under the
headings "Fund Expenses" and "Financial Highlights" presents fairly in all
material respects the information stated therein.
(iv) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise
stated therein, (A) there has been no material adverse change, or any
development involving a prospective material adverse change, in the
condition (financial or otherwise) or management of the Fund, or in the
earnings, business affairs or business prospects of the Fund, whether or
not arising in the ordinary course of business, (B) there have been no
transactions entered into by the Fund which are material to the Fund other
than those in the ordinary course of business, and (C) except for regular
monthly distributions on the outstanding shares of Common Stock of the
Fund, there has been no special dividend or distribution of any kind paid
or declared in respect of the Fund's capital stock.
(v) The Fund has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Maryland
with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement and the Prospectus; the Fund currently maintains all
governmental licenses, permits, consents, orders, approvals, and other
authorizations (collectively, the "Licenses and Permits") necessary to
carry on its business as contemplated in the Prospectus, and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which the failure to so qualify, either
individually or in the aggregate, would have a material adverse effect
upon the operations or financial condition of the Fund; and the Fund has
no subsidiaries.
(vi) The Fund is registered with the Commission under the
Investment Company Act as a closed-end, diversified management investment
company, no order of suspension or revocation of such registration has
been issued or proceedings therefor initiated or threatened by the
Commission and all required action has been taken under the
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Securities Act and the Investment Company Act to consummate the issuance
of the Rights and the issuance and sale of the Shares.
(vii) The authorized, issued and outstanding capital stock of the
Fund at April ___, 1998 is as set forth in the Prospectus under the
caption "Common Stock"; the outstanding shares of Common Stock have been
duly authorized by all requisite corporate action on the part of the Fund
and are validly issued, fully paid and non-assessable; the Rights and the
Shares have been duly authorized by all requisite corporate action on the
part of the Fund for issuance pursuant to the Offer; the Shares have been
duly authorized by all requisite corporate action on the part of the Fund
for sale pursuant to the terms of the Offer and, when issued and delivered
by the Fund pursuant to the terms of the Offer against payment of the
consideration set forth in the Prospectus, will be validly issued, fully
paid and non-assessable; the Common Stock, the Rights and the Shares
conform in all material respects to the descriptions thereof set forth in
the Registration Statement, the Prospectus and the Offering Materials; and
the issuance of each of the Rights and the Shares is not subject to any
preemptive rights.
(viii) Each of this Agreement, the Investment Advisory Agreement
referred to in the Registration Statement (the "Investment Advisory
Agreement"), the Administration Agreement and Amendment thereto referred
to in the Registration Statement (the "Administration Agreement"), the
Subscription Agency Agreement referred to in the Registration Statement
(the "Subscription Agency Agreement") with State Street Bank & Trust Co.
(the "Subscription Agent"), the Custodian Agreement referred to in the
Registration Statement (the "Custodian Agreement"), the Information Agency
Agreement referred to in the Registration Statement (the "Information
Agency Agreement") with Xxxxxxxxx & Company Inc. (the "Information Agent")
and the Stock Transfer Agent Service Agreement referred to in the
Registration Statement (the "Stock Transfer Agent Service Agreement")
(collectively, all of the foregoing are the "Fund Agreements") has been
duly authorized by all requisite corporate action on the part of the Fund
and executed and delivered by the Fund, and each complies with all
applicable provisions of the Investment Company Act; and, assuming due
authorization, execution and delivery by the other parties thereto, each
of the Fund Agreements constitutes a legal, valid, binding and enforceable
obligation of the Fund, subject to the qualification that the
enforceability of the Fund's obligations thereunder may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights, and to
general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
(ix) Neither the execution or delivery by the Fund nor the
performance by the Fund of any of its obligations under any material
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it is bound contravenes or
constitutes a default under any provision contained in any law, rule or
regulation of any governmental or regulatory authority or any order or
regulation of any court by which the Fund or any of its assets is bound or
affected.
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(x) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Fund or the Investment Adviser threatened
against or affecting, the Fund, which might result in any material adverse
change in the condition, financial or otherwise, business affairs,
business prospects, net worth or results of operations of the Fund, or
which might materially and adversely affect the properties or assets of
the Fund; and there are no material contracts or documents of the Fund
which are required to be filed as exhibits to the Registration Statement
by the Securities Act, the Investment Company Act or by the Rules and
Regulations which have not been so filed.
(xi) The Fund owns or possesses, or can acquire on reasonable
terms, adequate trademarks, service marks and trade names necessary to
conduct its business as described in the Registration Statement, and the
Fund has not received any notice of infringement of or conflict with
asserted rights of others with respect to any trademarks, service marks or
trade names which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially adversely affect
the conduct of the business, operations, financial condition or income of
the Fund.
(xii) The Fund has complied in all previous tax years, and
intends to direct the investment of the proceeds of the offering described
in the Registration Statement and the Prospectus in such a manner as to
continue to comply, with the requirements of Subchapter M of the Internal
Revenue Code of 1986, as amended ("Subchapter M of the Code"), and has
qualified and intends to continue to qualify as a regulated investment
company under Subchapter M of the Code.
(xiii) The Fund is not in violation of its Articles of
Incorporation, as amended (the "Charter"), or its by-laws, as amended (the
"By-Laws") or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any material
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it may be bound; the
issuance of the Rights, the issuance and sale of the Shares and the
performance and consummation of the other transactions contemplated herein
and the other Fund Agreements have been duly authorized by all necessary
corporate action and will not conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Fund pursuant to any
material contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Fund is a party or by which it may be bound
or to which any of the property or assets of the Fund is subject, nor will
such action result in any violation of the provisions of the Charter or
By-Laws or any law, administrative regulation or administrative or court
decree applicable to the Fund.
(xiv) The Common Stock has been duly listed on the New York Stock
Exchange ("NYSE") and the Pacific Stock Exchange, Inc. ("PXE") and prior
to their issuance the Shares will have been duly approved for listing,
subject to official notice of issuance, on the NYSE and PXE.
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(xv) The Fund (A) has not taken, directly or indirectly, any
action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Fund to facilitate the
issuance of the Rights or the sale or resale of the Shares, (B) has not
since the filing of the Registration Statement sold, bid for or purchased,
or paid anyone any compensation for soliciting purchases of, shares of
Common Stock of the Fund (except for the solicitation of exercises of the
Rights pursuant to this Agreement) and (C) will not, until the later of
the expiration of the Rights or the completion of the distribution (within
the meaning of the anti-manipulation rules under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) of the Shares, sell, bid for
or purchase, pay or agree to pay to any person any compensation for
soliciting another to purchase any other securities of the Fund (except
for the solicitation of the exercises of Rights pursuant to this
Agreement); provided that any action in connection with the Fund's
Distribution Reinvestment and Cash Purchase Plan will not be deemed to be
within the terms of this Section 1(a)(xv).
(xvi) No consent, approval, authorization, notification or order
of, or filing with, any court or governmental agency or body, whether
foreign or domestic, is legally required for the consummation by the Fund
of the transactions contemplated by the Fund Agreements or the
Registration Statement, except such as have been obtained, or if the
registration statement filed with respect to the Shares is not effective
under the Securities Act as of the time of execution hereof, such as may
be required (and shall be obtained as provided in this Agreement) under
the Investment Company Act, the Securities Act, the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and state securities laws.
(b) The Investment Adviser represents and warrants to the Dealer Manager
as of the date hereof and as of the Representation Date and as of the Expiration
Date that:
(i) The Investment Adviser has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Delaware with full corporate power and authority to own, lease
and operate its properties and conduct its business as described in the
Registration Statement and the Prospectus; the Investment Adviser
currently maintains all Licenses and Permits necessary to carry on its
business as contemplated in the Prospectus, and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which the failure to so qualify, either individually or in
the aggregate, would have a material adverse effect upon the operations or
financial condition of the Investment Adviser; and the Investment Adviser
has no subsidiaries.
(ii) The Investment Adviser is duly registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and is not prohibited by the Advisers Act or the
Investment Company Act, or the rules and regulations under such Acts, from
acting as an investment adviser for the Fund as contemplated in the
Registration Statement and the Prospectus and the Investment Advisory
Agreement.
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(iii) The description of the Investment Adviser in the
Registration Statement and the Prospectus is true and correct and does not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading.
(iv) Each of this Agreement and the Investment Advisory
Agreement has been duly authorized, executed and delivered by the
Investment Adviser and complies with all applicable provisions of the
Advisers Act and the Investment Company Act, and is, assuming due
authorization, execution and delivery by the other parties thereto, a
legal, valid, binding and enforceable obligation of the Investment
Adviser, subject to the qualification that the enforceability of the
Investment Adviser's obligations thereunder may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights, and to general
principles of equity (regardless of whether enforceability is considered
in a proceeding in equity or at law).
(v) Neither the performance by the Investment Adviser of its
obligations under this Agreement or the Investment Advisory Agreement nor
the consummation of the transactions contemplated therein or in the
Registration Statement nor the fulfillment of the terms thereof will
conflict with, result in a breach or violation of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any properties or assets of the Investment Adviser under
the charter or by-laws of the Investment Adviser, or the terms and
provisions of any agreement, indenture, mortgage, lease or other
instrument to which the Investment Adviser is a party or by which it may
be bound or to which any of the property or assets of the Investment
Adviser is subject, nor will such action result in any violation of any
order, law, rule or regulation of any court or governmental agency or
body, whether foreign or domestic, having jurisdiction over the Investment
Adviser or any of its properties.
(vi) Except as set forth in the Registration Statement and the
Prospectus, there is no pending or, to the best knowledge of the
Investment Adviser, threatened action, suit or proceeding to which the
Investment Adviser is a party before or by any court or governmental
agency, authority or body or any arbitrator, whether foreign or domestic,
which might result in any material adverse change in the condition
(financial or other), business prospects, net worth or results of
operations of the Investment Adviser, or which might materially and
adversely affect the properties or assets thereof of a character required
to be disclosed in the Registration Statement or Prospectus.
(vii) The Investment Adviser does not require any governmental
licenses, permits, consents, orders, approvals or other authorizations to
enable the Investment Adviser to continue to supervise investments in
securities as contemplated in the Prospectus other than those which it has
already obtained.
(viii) No consent, approval, authorization, notification or order
of, or any filing with, any court or governmental agency or body is
required under federal law or the laws of any other jurisdiction, whether
foreign or domestic, for the consummation by the
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Investment Adviser of the transactions contemplated by this Agreement or
the Investment Advisory Agreement.
(ix) The Investment Adviser (A) has not taken, directly or
indirectly, any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Fund to
facilitate the issuance of the Rights or the sale or resale of the Shares,
(B) has not since the filing of the Registration Statement sold, bid for
or purchased, or paid anyone any compensation for soliciting purchases of,
shares of Common Stock of the Fund (except for the solicitation of
exercises of Rights pursuant to this Agreement) and (C) will not, until
the later of the expiration of the Rights or the completion of the
distribution (within the meaning of the anti-manipulation rules under the
Exchange Act) of the Shares, sell, bid for or purchase, pay or agree to
pay any person any compensation for soliciting another to purchase any
other securities of the Fund (except for the solicitation of exercises of
Rights pursuant to this Agreement); provided that any action in connection
with the Fund's Distribution Reinvestment and Cash Purchase Plan will not
be deemed to be within the terms of this Section 1(b)(ix).
(x) The Investment Adviser has the financial resources
available to it necessary for the performance of its services and
obligations as contemplated in the Registration Statement and the
Prospectus.
(xi) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise
stated therein, there has been no material adverse change, or any
development involving a prospective material adverse change, in the
condition (financial or otherwise) or management of the Investment
Adviser, or in the business affairs or business prospects of the
Investment Adviser, whether or not arising in the ordinary course of
business.
(c) Any certificate signed by any officer of the Fund or the Investment
Adviser and delivered to the Dealer Manager or counsel for the Dealer Manager
shall be deemed a representation and warranty by the Fund or the Investment
Adviser, as the case may be, to the Dealer Manager, as to the matters covered
thereby.
SECTION 2. Agreement to Act as Dealer Manager.
(a) On the basis of the representations and warranties contained herein,
and subject to the terms and conditions of the Offer:
(i) The Fund hereby appoints the Dealer Manager and other
soliciting dealers entering into a Soliciting Dealer Agreement in the form
attached hereto as Exhibit A (the "Soliciting Dealer Agreement") with the
Dealer Manager (the "Soliciting Dealers"), to solicit, in accordance with
the Securities Act, the Investment Company Act and the Exchange Act, the
rules and regulations under those Acts, any applicable Blue Sky laws, and
its customary practice, the exercise of the Rights, and the
over-subscription privilege, subject to the terms and conditions of this
Agreement, the procedures described in the
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Registration Statement and the Prospectus and, where applicable, the terms
and conditions of such Soliciting Dealer Agreement; and
(ii) To the extent available, the Fund agrees to furnish, or
cause to be furnished, to the Dealer Manager, lists, or copies of those
lists, showing (to the knowledge of the Fund) the names and addresses of,
and number of shares of Common Stock held by, Holders 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 that the Dealer Manager may furnish necessary and
appropriate information to securities brokers and dealers that the Dealer
Manager has requested to solicit exercises of Rights.
(b) The Dealer Manager agrees to provide to the Fund, in addition to the
services described in paragraph (a) of this Section 2, financial advisory and
marketing services in connection with the Offer.
(c) The Fund and the Dealer Manager agree that the Dealer Manager is an
independent contractor with respect to the solicitation of the exercise of
Rights and the performance of financial advisory and marketing services to the
Fund contemplated by this Agreement.
(d) In rendering the services contemplated by this Agreement, the Dealer
Manager will not be subject to any liability to the Fund or the Investment
Adviser, or any of their affiliates, for any act or omission on the part of any
securities broker or dealer (except with respect to the Dealer Manager acting in
such capacity) or any other person, and the Dealer Manager will not be liable
for acts or omissions in performing its obligations under this Agreement, except
for any losses, claims, damages, liabilities and expenses determined in a final
judgment by a court of competent jurisdiction to have resulted directly from the
Dealer Manager's gross negligence or willful misconduct in such acts or
omissions.
SECTION 3. Dealer Manager Fees and Solicitation Fees. In full payment for
services rendered and to be rendered hereunder by the Dealer Manager (other than
solicitation efforts), the Fund agrees to pay the Dealer Manager a fee for its
financial advisory and marketing services equal to 1.25% of the aggregate
Subscription Price for the Shares issued pursuant to the Offer (the "Dealer
Manager Fee"). In full payment for the soliciting efforts to be rendered, the
Fund agrees to pay fees (the "Solicitation Fees") to either the Soliciting
Dealer or the Dealer Manager equal to 2.50% of the Subscription Price per Share
for each Share issued pursuant to the Offer (such Solicitation Fees paid to the
Dealer Manager are in addition to the Dealer Manager Fee). The Fund agrees to
pay the Solicitation Fees to the broker-dealer designated on the related
Subscription Certificate, provided that such designated broker-dealer has
executed a confirmation accepting the terms of the Soliciting Dealer Agreement,
and if no broker-dealer is so designated or a broker-dealer is otherwise not
entitled to receive compensation pursuant to the terms of the Soliciting Dealer
Agreement, then to pay the Dealer Manager the Solicitation Fee for Shares issued
pursuant to the Offer. Payment to the Dealer Manager by the Fund will be in the
form of a wire transfer of same day funds to an account or accounts identified
by the Dealer Manager. Such payments will be made on the day after the final
payment for Shares is due as set forth in the Prospectus, or when such payments
are actually received and the corresponding funds are available. Xxxxx
Securities Corp. will be such designated broker-dealer with respect to Shares
issued to participants in the Fund's Distribution Reinvestment
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and Cash Purchase Plan, unless the participant designates otherwise on the
related Subscription Certificate. Payment of the Solicitation Fees to a
Soliciting Dealer that executed a confirmation will be made by the Fund directly
to such Soliciting Dealer by U.S. dollar checks drawn upon an account at a bank
in New York City. Such payments to such Soliciting Dealers shall be made as soon
as practicable after payment of the Dealer Manager Fee is made to the Dealer
Manager.
SECTION 4. Covenants.
(a) The Fund covenants with the Dealer Manager as follows:
(i) The Fund will use its best efforts to cause the
Registration Statement to become effective under the Securities Act, and
will advise the Dealer Manager promptly as to the time at which the
Registration Statement and any amendments thereto (including any
post-effective amendment) becomes so effective.
(ii) The Fund will notify the Dealer Manager immediately, and
confirm the notice in writing, (i) of the effectiveness of the
Registration Statement and any amendment thereto (including any
post-effective amendment), (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the
Prospectus or for additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that
purpose, (v) of the issuance by the Commission of an order of suspension
or revocation of the notification on Form N-8A of registration of the Fund
as an investment company under the Investment Company Act or the
initiation of any proceeding for that purpose and (vi) of the suspension
of the qualification of the Shares or the Rights for offering or sale in
any jurisdiction. The Fund will make every reasonable effort to prevent
the issuance of any stop order described in subsection (iv) hereunder or
any order of suspension or revocation described in subsection (v) or
subsection (vi) hereunder and, if any such stop order or order of
suspension or revocation is issued, to obtain the lifting thereof at the
earliest possible moment.
(iii) The Fund will give the Dealer Manager notice of its
intention to file any amendment to the Registration Statement (including
any post-effective amendment) or any amendment or supplement to the
Prospectus (including any revised prospectus which the Fund proposes for
use by the Dealer Manager in connection with the Offer, which differs from
the prospectus on file at the Commission at the time the Registration
Statement becomes effective, whether such revised prospectus is required
to be filed pursuant to Rule 497(c), (e), (h) or (j) of the Rules and
Regulations), whether pursuant to the Investment Company Act, the
Securities Act, or otherwise, and will furnish the Dealer Manager with
copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not
file any such amendment or supplement to which the Dealer Manager or
counsel for the Dealer Manager shall reasonably object.
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(iv) The Fund will, without charge, deliver to the Dealer
Manager, as soon as practicable, the number of copies (one of which is
manually executed) of the Registration Statement as originally filed and
of each amendment thereto as it may reasonably request, in each case with
the exhibits filed therewith.
(v) The Fund will, without charge, furnish to the Dealer
Manager, from time to time during the period when the Prospectus is
required to be delivered under the Securities Act, such number of copies
of the Prospectus (as amended or supplemented) as the Dealer Manager may
reasonably request for the purposes contemplated by the Securities Act or
the Rules and Regulations.
(vi) If any event shall occur as a result of which it is
necessary, in the opinion of counsel for the Fund, to amend or supplement
the Registration Statement or the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances existing at
the time it is delivered to a purchaser, the Fund will forthwith amend or
supplement the Prospectus by preparing, filing with the Commission (and
furnishing to the Dealer Manager a reasonable number of copies of) an
amendment or amendments of the Registration Statement or an amendment or
amendments of or a supplement or supplements to, the Prospectus (in form
and substance satisfactory to counsel for the Dealer Manager) which will
amend or supplement the Registration Statement or the Prospectus so that
the Prospectus will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time the
Prospectus is delivered to a Holder, not misleading.
(vii) The Fund will endeavor, in cooperation with the Dealer
Manager, to qualify the Rights and the Shares for offering and sale under
the applicable securities laws (if any) of such states and other
jurisdictions of the United States as the Dealer Manager may designate,
and will maintain such qualifications in effect for the duration of the
Offer; provided, however, that the Fund will not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it
is not now so qualified. The Fund will file such statements and reports as
may be required by the laws of each jurisdiction in which the Rights and
the Shares have been qualified as above provided.
(viii) The Fund will make generally available to its security
holders as soon as practicable, but no later than 60 days after the close
of the period covered thereby, an earning statement (in form complying
with the provisions of Rule 158 of the Rules and Regulations) covering a
twelve-month period beginning not later than the first day of the Fund's
fiscal quarter next following the "effective" date (as defined in said
Rule 158) of the Registration Statement.
(ix) For a period of 180 days from the date of this Agreement,
the Fund will not, without the prior consent of the Dealer Manager, offer
or sell, or enter into any agreement to sell, any equity or equity related
securities of the Fund, or securities convertible into such securities,
other than the Rights and the Shares and the Common Stock issued in
reinvestment of dividends or distributions.
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(x) The Fund will apply the net proceeds from the Offer as set
forth under "Use of Proceeds" in the Prospectus.
(xi) The Fund will use its best efforts to cause the Shares to
be duly authorized for listing by the NYSE and PXE prior to the time the
Shares are issued.
(xii) The Fund will use its best efforts to maintain its
qualification as a regulated investment company under Subchapter M of the
Code.
(xiii) The Fund will advise or cause the Subscription Agent to
advise the Dealer Manager and each Soliciting Dealer from day to day
during the period of, and promptly after the termination of, the Offer, as
to all names and addresses of Holders exercising Rights, the total number
of Rights exercised by each Holder during the immediately preceding day,
indicating the total number of Rights verified to be in proper form for
exercise, rejected for exercise and being processed and, for the Dealer
Manager and each Soliciting Dealer, the number of Rights exercised for
Shares on exercise forms indicating the Dealer Manager or Soliciting
Dealer as the broker-dealer with respect to such exercise, and as to such
other information as the Dealer Manager may reasonably request; and will
notify the Dealer Manager and each Soliciting Dealer, not later than 5:00
P.M., New York City time, on the first business day following the
Expiration Date, of the total number of Rights exercised and Shares
related thereto, the total number of Rights verified to be in proper form
for exercise, rejected for exercise and being processed and, for the
Dealer Manager and Soliciting Dealer, the number of Rights exercised for
Shares on exercise forms indicating the Dealer Manager or Soliciting
Dealer as the broker-dealer with respect to such exercise, and as to such
other information as the Dealer Manager may reasonably request.
(b) Neither the Fund nor the Investment Adviser will take, directly or
indirectly, any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Fund to
facilitate the issuance of the Rights or the sale or resale of the Shares;
provided that any action in connection with the Fund's Distribution Reinvestment
and Cash Purchase Plan will not be deemed to be within the meaning of this
Section 4(b).
SECTION 5. Payment of Expenses.
(a) The Fund will pay all expenses incident to the performance of its
obligations under this Agreement, including, but not limited to, expenses
relating to (i) the printing and filing of the registration statement as
originally filed and of each amendment thereto, (ii) the preparation, issuance
and delivery of the certificates for the Shares, (iii) the fees and
disbursements of the Fund's counsel and accountants, (iv) the qualification of
the Rights and the Shares under securities laws in accordance with the
provisions of Section 4(a)(vii) of this Agreement, including filing fees and any
reasonable fees or disbursements of counsel for the Dealer Manager in connection
therewith, (v) the printing and delivery to the Dealer Manager of copies of the
registration statement as originally filed and of each amendment thereto, of the
preliminary prospectus, of the Prospectus and any amendments or supplements
thereto, of this Agreement and of the Soliciting Dealer Agreement, (vi)
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the printing and delivery of copies of the Blue Sky Letter, (vii) the fees and
expenses incurred in connection with the listing of the Shares on the NYSE and
PXE, (viii) the filing fees of the Commission, (ix) the fees and expenses
incurred with respect to filing with the National Association of Securities
Dealers, Inc. (x) the printing, mailing and delivery expenses incurred in
connection with the Offering Materials, and (xi) the fees and expenses incurred
with respect to the Subscription Agent and Information Agent.
(b) In addition to any fees that may be payable to the Dealer Manager
under this Agreement, the Fund agrees to reimburse the Dealer Manager upon
request made from time to time for its reasonable expenses up to $82,500
incurred in connection with its activities under this Agreement, including the
reasonable fees and disbursements of legal counsel for the Dealer Manager.
(c) If this Agreement is terminated by the Dealer Manager in accordance
with the provisions of Section 6 or Section 9(a)(i), 9(a)(ii) or 9(a)(iii), the
Fund shall reimburse the Dealer Manager for all of its reasonable out-of-pocket
expenses incurred in connection with its performance hereunder, including the
reasonable fees and disbursements of counsel for the Dealer Manager. 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.
(d) The Investment Adviser agrees that, to the extent the Fund fails to
fulfill its obligations in paragraphs (b) and (c) of this Section 5, the
Investment Adviser will pay all the costs and expenses set forth in this Section
5. The Investment Adviser hereby abandons and waives any rights that the
Investment Adviser may have at any time under any applicable laws, existing or
future, to require that recourse be made to the assets of the Fund before any
claim is enforced against the Investment Adviser in respect of the Investment
Adviser's obligations under this paragraph (d) of this Section 5. The Investment
Adviser agrees that if at any time the Investment Adviser is sued in respect of
its obligations under this paragraph (d) of this Section 5 and the Fund is not
also sued in respect of its obligations under this Section 5, the Investment
Adviser shall not claim that the Fund be made a party to such proceedings
against the Investment Adviser.
SECTION 6. Conditions of Dealer Manager's Obligations. The obligations of
the Dealer Manager hereunder are subject to the accuracy of the representations
and warranties of the Fund and the Investment Adviser herein contained, to the
performance by the Fund and the Investment Adviser of their respective
obligations hereunder, and to the following further conditions:
(a) The Registration Statement shall have become effective not later than
5:30 P.M., New York City time, on the Record Date, or at such later time and
date as may be approved by the Dealer Manager; the Prospectus and any amendment
or supplement thereto shall have been filed with the Commission in the manner
and within the time period required by Rule 497(c), (e), (h) or (j), as the case
may be, under the Securities Act; no stop order suspending the effectiveness of
the Registration Statement or any amendment thereto shall have been issued, and
no proceedings for that purpose shall have been instituted or threatened or, to
the knowledge of the Fund, the Investment Adviser or the Dealer Manager, shall
be contemplated by the Commission; and the Fund
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shall have complied with any request of the Commission for additional
information (to be included in the Registration Statement, the Prospectus or
otherwise).
(b) On the Representation Date and the Expiration Date, the Dealer Manager
shall have received:
(1) The favorable opinions, dated the Representation Date and the
Expiration Date, of Rosenman & Colin LLP, counsel for the Fund and the
Investment Adviser, in form and substance satisfactory to counsel for the
Dealer Manager, to the effect that:
[(i) The Fund has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Maryland.
(ii) The Fund has full corporate power and authority to own,
lease and operate its properties and conduct its business as
described in the Registration Statement and the Prospectus.
(iii) The Fund currently maintains all Licenses and Permits
necessary to carry on its business as contemplated in the
Prospectus.
(iv) The Fund is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which the failure to so qualify, either individually or in the
aggregate, would have a material adverse effect on the operations or
financial condition of the Fund; and the Fund has no subsidiaries.
(v) The outstanding Shares of Common Stock have been duly
authorized by all requisite corporate action on the part of the Fund
and are validly issued, fully paid and non-assessable.
(vi) The Fund's outstanding shares of Common Stock have been
duly listed on the NYSE and PXE and the Shares have been duly
approved for listing on the NYSE and PXE, subject to official notice
of issuance.
(vii) The Fund's authorized capitalization is as set forth in the
Prospectus under the heading "Common Stock." The Rights and the
Shares have been duly authorized by all requisite corporate action
on the part of the Fund for issuance pursuant to the Offer; the
Shares have been duly authorized by all requisite corporate action
on the part of the Fund for sale pursuant to the terms of the Offer
and, when issued and delivered by the Fund pursuant to the terms of
the Offer against payment of the consideration set forth in the
Prospectus, will be validly issued, fully paid and non-assessable;
the Common Stock, the Rights and the Shares conform in all material
respects to the descriptions thereof set forth in the Registration
Statement, the Prospectus and the Offering Materials; and the
issuance of each of the Rights and the Shares is not subject to any
preemptive rights.
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(viii) This Agreement and the other Fund Agreements have been duly
authorized, executed and delivered by the Fund, are valid and
binding obligations of the Fund, comply as to form in all material
respects with all applicable provisions of the Investment Company
Act and are in full force and effect.
(ix) The Registration Statement is effective under the
Securities Act; any required filing of the Prospectus or any
supplement thereto pursuant to Rule 497(c), (e), (h) or (j) required
to be made to the date hereof has been made in the manner and within
the time period required by Rule 497(c), (e), (h) or (j), as the
case may be; to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued, and no proceedings for that purpose have been instituted or
threatened; and the Registration Statement, the Prospectus and each
amendment thereof or supplement thereto (other than the financial
statements, schedules, the notes thereto and the schedules and other
financial data contained or incorporated by reference therein or
omitted therefrom, as to which such counsel need express no opinion)
as to their respective effective or issue dates comply as to form in
all material respects with the applicable requirements of the
Securities Act and the Investment Company Act and the Rules and
Regulations.
(x) Except as set forth in the Registration Statement and
Prospectus, to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding to which the Fund
is a party before or by any court or governmental agency, authority
or body or any arbitrator, whether foreign or domestic, which might
result in any material adverse change in the condition (financial or
other), business prospects, net worth or results of operations of
the Fund, or which might materially and adversely affect the
properties or assets thereof of a character required to be disclosed
in the Registration Statement or the Prospectus.
(xi) To the best of their knowledge and information, there are
no contracts, indentures, mortgages, loan agreements, notes, leases
or other instruments of the Fund required to be described or
referred to in the Prospectus or the Registration Statement or to be
filed as exhibits thereto other than those respectively described or
referred to therein or filed as exhibits thereto, the descriptions
thereof are correct in all material respects, references thereto are
correct, and no default exists in the due performance or observance
of any material obligation, agreement, covenant or condition
contained in any contract, indenture, loan agreement, note or lease
so described, referred to or filed.
(xii) No consent, approval, authorization or order of any court
or governmental authority or agency is required in connection with
the sale of the Shares pursuant to the Offer, except such as has
been obtained under the Securities Act, the Investment Company Act
or the Rules and Regulations or such as may be required under state
securities laws; and the execution and delivery of this Agreement
and the Fund Agreements and the consummation of the transactions
contemplated herein and therein will not conflict with or constitute
a breach of, or default under, or result in the creation or
imposition of any lien, charge or
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encumbrance upon any property or assets of the Fund pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument known to such counsel to which the Fund is a party or by
which it may be bound or to which any of the property or assets of
the Fund is subject, nor will such action result in any violation of
the provisions of the Charter or By-Laws of the Fund, or any law or
administrative regulation, or, to the best of their knowledge and
information, administrative or court decree.
(xiii) The Fund is registered with the Commission under the
Investment Company Act as a closed-end, diversified management
investment company, and all required action has been taken by the
Fund under the Securities Act, the Investment Company Act and the
Rules and Regulations to make and consummate the Offer; the
provisions of the Charter and By-Laws of the Fund comply as to form
in all material respects with the requirements of the Investment
Company Act and the rules and regulations thereunder; and, to the
best of their knowledge and information, no order of suspension or
revocation of such registration under the Investment Company Act,
pursuant to Section 8(e) of the Investment Company Act, has been
issued or proceedings therefor initiated or threatened by the
Commission.
(xiv) The information in the Prospectus under the caption
"Taxation", to the extent that it constitutes matters of law or
legal conclusions, has been reviewed by them and is correct in all
material respects.
(xv) The Investment Adviser is duly registered as an investment
adviser under the Advisers Act and is not prohibited by the Advisers
Act or the Investment Company Act, or the rules and regulations
under such acts, from acting under the Investment Advisory Agreement
for the Fund as contemplated by the Prospectus.
(xvi) The Investment Adviser has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Delaware.
(xvii) The Investment Adviser has full corporate power and
authority to own, lease and operate its properties and conduct its
business as described in the Registration Statement and the
Prospectus.
(xviii) The Investment Adviser currently maintains all Licenses and
Permits necessary to carry on its business as contemplated in the
Prospectus.
(xix) The Investment Adviser is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which the failure to so qualify, either individually
or in the aggregate, would have a material adverse effect on the
operations or financial condition of the Investment Adviser.
(xx) Each of this Agreement and the Investment Advisory
Agreement has been duly authorized, executed and delivered by the
Investment Adviser; each of this Agreement and the Investment
Advisory Agreement constitutes a valid and
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binding obligation of the Investment Adviser; no consent, approval,
authorization or order of any court or governmental authority or
agency is required that has not been obtained for the performance of
this Agreement or the Investment Advisory Agreement by the
Investment Adviser; and neither the execution and delivery of this
Agreement or the Investment Advisory Agreement nor the performance
by the Investment Adviser of its obligations hereunder or thereunder
will conflict with, or result in a breach of, any of the terms and
provisions of, or constitute, with or without the giving of notice
or the lapse of time or both, a default under, the Investment
Adviser's Charter or By-Laws or, to the best of such counsel's
knowledge and information, any agreement or instrument to which the
Investment Adviser is a party or by which the Investment Adviser is
bound, or any law, order, rule or regulation applicable to the
Investment Adviser of any jurisdiction, court, federal or state
regulatory body, administrative agency or other governmental body,
stock exchange or securities association having jurisdiction over
the Investment Adviser or its properties or operations.
(xxi) To the best of such counsel's knowledge and information,
the description of the Investment Adviser in the Registration
Statement and the Prospectus does not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein.
(xxii) To the best of such counsel's knowledge and information,
there are no legal or governmental proceedings pending or threatened
against the Investment Adviser that are required to be disclosed in
the Registration Statement or the Prospectus, other than those
disclosed therein.
(xxiii) Each of this Agreement and the Investment Advisory
Agreement complies with all applicable provisions of the Advisers
act.
In rendering such opinion, such counsel may rely as to matters of
Maryland law on the opinion of Xxxxxxx, Xxxxxxx & Xxxxxx LLP and as to
matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Fund and public officials. Such counsel may
state that, except with respect to matters of Maryland law covered by an
opinion of Xxxxxxx, Xxxxxxx & Xxxxxx LLP, their opinion is limited to the
federal laws of the United States and the laws of the State of New York
and that they are expressing no opinion as to the effect of laws of any
other jurisdiction, except as specifically set forth in such opinion.
Such counsel shall also have stated that, while they have not
themselves checked the accuracy and completeness of or otherwise verified,
and are not passing upon and assume no responsibility for the accuracy or
completeness of, the statements contained in the Registration Statement or
the Prospectus, in the course of their review and discussion of the
contents of the Registration Statement and Prospectus with certain
officers and employees of the Fund and its independent accountants, no
facts have come to their attention which cause them to believe that the
Registration Statement, on the date it became effective,
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contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements contained therein not misleading or that the Prospectus, as of
its date and on the Representation Date or the Expiration Date, as the
case may be, contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.]
(2) The favorable opinion, dated as of the date of this Agreement,
of Xxxxxx & Xxxxx LLP, counsel for the Dealer Manager, with respect to the
issuance and sale of the Shares, and such other related matters as the
Dealer Manager may reasonably require.
(c) The Fund shall have furnished to the Dealer Manager certificates of
the Fund, signed by the President, the Treasurer, the Secretary, or a Vice
President of the Fund, dated the Representation Date and the Expiration Date, to
the effect that the signer of such certificate carefully examined the
Registration Statement, the Prospectus, any supplement to the Prospectus and
this Agreement and that, to the best of their knowledge:
(i) The representations and warranties of the Fund in this
Agreement are true and correct on and as of the Representation Date or the
Expiration Date, as the case may be, with the same effect as if made on
the Representation Date or the Expiration Date, as the case may be, and
the Fund has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Representation Date or the Expiration Date, as the case may be;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been instituted or, to the Fund's knowledge, threatened; and
(iii) Since the date of the most recent balance sheet included or
incorporated by reference in the Prospectus, there has been no material
adverse change in the condition (financial or other), business, prospects,
net worth or results of operations of the Fund (excluding fluctuations in
the Fund's net asset value due to investment activities in the ordinary
course of business), except as set forth in or contemplated in the
Prospectus.
(d) The Investment Adviser shall have furnished to the Dealer Manager
certificates of the Investment Adviser, signed by the President, Treasurer,
Secretary or Vice President, dated the Representation Date and the Expiration
Date, to the effect that the signer of such certificate has read the
Registration Statement, the Prospectus, any supplement to the Prospectus and
this Agreement and, to the best knowledge of such signer, the representations
and warranties of the Investment Adviser in this Agreement are true and correct
in all material respects on and as of the Representation Date or the Expiration
Date, as the case may be, with the same effect as if made on the Representation
Date or the Expiration Date, as the case may be.
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(e) Coopers & Xxxxxxx L.L.P. shall have furnished to the Dealer Manager
letters, dated the Representation Date and the Expiration Date, in form and
substance satisfactory to the Dealer Manager, to the effect that:
(i) They are independent accountants with respect to the Fund
within the meaning of the Securities Act and the Rules and Regulations;
(ii) In their opinion, the audited financial statements examined
by them and included or incorporated by reference in the Registration
Statement comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Investment Company
Act and the Rules and Regulations;
(iii) They have performed specified procedures, not constituting
an audit in accordance with generally accepted auditing standards,
including a reading of the latest available interim financial statements
of the Fund, a reading of the minute books of the Fund, inquiries of
officials of the Fund responsible for financial accounting matters and
such other inquiries and procedures as may be specified in such letter,
and on the basis of such inquiries and procedures nothing came to their
attention that caused them to believe that at the date of the latest
available financial statements read by such accountants, or at a
subsequent specified date not more than three days prior to the
Representation Date, there was any change in the capital stock or any
decrease in the net assets of the Fund as compared with amounts shown on
the statement of net assets included or incorporated by reference in the
Registration Statement except as the Registration Statement discloses has
occurred or may occur, or they shall state any specific changes, increases
or decreases; and
(iv) In addition to the procedures referred to in clause (iii)
above, they have performed other specified procedures, not constituting an
audit, with respect to certain amounts, percentages, numerical data,
financial information and financial statements appearing in the
Registration Statement, which have previously been specified by the Dealer
Manager and which shall be specified in such letter, and have compared
certain of such items with, and have found such items to be in agreement
with, the accounting and financial records of the Fund.
(f) At the date of this Agreement, counsel for the Dealer Manager shall
have been furnished with such further documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the issuance of
the Rights and the Shares and the sale of the Shares as contemplated herein and
in the Registration Statement and to pass upon related proceedings, or in order
to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Fund and the Investment Adviser in connection with the issuance of
the Rights and the Shares and sale of the Shares as contemplated herein and in
the Registration Statement shall be satisfactory in form and substance to the
Dealer Manager and counsel for the Dealer Manager.
(g) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, there shall not have been (i) any
change, increase or decrease specified in the letter or letters referred to in
paragraph (e) of this Section 6, or (ii) any
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change, or any development involving a prospective change, in or affecting the
business or properties of the Fund, the effect of which, in any case referred to
in clause (i) or (ii) above, is, in the reasonable judgment of the Dealer
Managers, so material and adverse as to make it impractical or inadvisable to
proceed with the Offer as contemplated by the Registration Statement and the
Prospectus.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Dealer Manager by notice to the Fund at any time at or prior to the
Representation Date by the Dealer Manager, and such termination shall be without
liability of any party to any other party except as provided in Section 5.
SECTION 7. Indemnification and Contribution.
(a) The Fund and the Investment Adviser, jointly and severally, agree to
indemnify and hold harmless the Dealer Manager and its respective directors,
officers, employees, agents and each person who controls the Dealer Manager
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (the Dealer Manager and each such person being an "Indemnified
Party") as follows:
(i) From and against any and all losses, claims, damages,
liabilities and expenses whatsoever, joint or several, as incurred, to
which such Indemnified Party may become subject under any applicable
federal or state law, or otherwise, and related to, arising out of, or
based on (A) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (and any amendment
thereto), or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein
not misleading, (B) any untrue statement or alleged untrue statement of a
material fact contained in the Offering Materials or the omission or
alleged omission therefrom of a 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, (C) any breach
by the Fund or the Investment Adviser of any of their representations,
warranties or agreements contained herein or in any certificate or
document furnished pursuant to Section 6(c), 6(d) or 6(f) hereof, (D) the
Fund's failure to make the Offer or the withdrawal, rescission,
termination, amendment or extension of the Offer or any other failure on
the Fund's or the Investment Adviser's part to comply with the terms and
conditions contained in the Registration Statement or the Offering
Materials or (E) any transaction contemplated by this Agreement or the
engagement of the Dealer Manager pursuant to, and the performance by the
Dealer Manager of the services contemplated by, this Agreement;
(ii) Against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever related to, arising out of or based on any matter
described in (i) above; and
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(iii) Against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the Dealer
Manager), incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever related to, arising
out of or based on any matter described in (i) above, whether or not such
Indemnified Party is a party and whether or not such claim, action or
proceeding is initiated or brought by or on behalf of the Fund or the
Investment Adviser, to the extent that any such expense is not paid under
subparagraph (i) or (ii) above;
provided, however, that the Fund and the Investment Adviser shall not be liable
under clause (i)(A) to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission made in the Registration
Statement, Prospectus and Offering Materials in reliance upon and in conformity
with written information furnished to the Fund by the Dealer Manager expressly
for use in the Registration Statement, Prospectus and Offering Materials.
The Fund and the Investment Adviser agree that no Indemnified Party shall
have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Fund or the Investment Adviser, their security holders or
creditors relating to or arising out of the engagement of the Dealer Manager as
set forth in Section 7(a)(i)(E) hereof except to the extent that any loss,
claim, damage or liability or expense is found in a final non-appealable
judgment by a court of competent jurisdiction to have resulted primarily from
the Dealer Manager's willful misconduct, gross negligence or bad faith.
The Fund and the Investment Adviser agree that, without the Dealer
Manager's prior written consent, it will not settle, compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any action or claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 7 (whether or not the Dealer
Manager or any other Indemnified Party is an actual or potential party to such
claim, action or proceeding), unless such settlement, compromise or consent (i)
includes an unconditional release of each Indemnified Party from all liability
arising out of such litigation, investigation, proceeding, action or claim and
(ii) does not include a statement as to, or an admission of, fault, culpability
or a failure to act by or on behalf of an Indemnified Party.
(b) If the indemnification provided for in Section 7(a) hereof is for any
reason unavailable to or insufficient to hold harmless an Indemnified Party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
Indemnified Party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Fund and the Investment Adviser on
the one hand and the Dealer Manager on the other hand from the Offer or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Fund and the
Investment Adviser on the one hand and of the Dealer Manager on the other hand
in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Fund and the
Investment Adviser on
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the one hand and the Dealer Manager on the other hand in connection with the
Offer shall be deemed to be in the same proportion as the total proceeds from
the Offer (before deducting expenses) received by the Fund bears to the fees
actually received by the Dealer Manager hereunder. The relative fault of the
Fund or the Investment Adviser on the one hand and the Dealer Manager on the
other hand shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Fund or the Investment Adviser or by the Dealer Manager and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Fund, the Investment Adviser and the
Dealer Manager agree that it would not be just and equitable if contribution
pursuant to this Section 7(b) 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 in this Section 7(b). The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an Indemnified
Party and referred to above in this Section 7(b) shall be deemed to include any
legal or other expenses reasonably incurred by such Indemnified Party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission; provided, however, that to the extent
permitted by applicable law, in no event shall the Dealer Manager be required to
contribute any amount which, in the aggregate, exceeds the aggregate fees
received by the Dealer Manager under this Agreement. No investigation or failure
to investigate by any Indemnified Party shall impair the foregoing
indemnification and contribution agreement or any rights an Indemnified Party
may have. 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. For purposes
of this Section 7(b), each person, if any, who controls the Dealer Manager
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Dealer Manager,
and each director of the Fund or the Investment Adviser and each person, if any,
who controls the Fund or the Investment Adviser within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Fund and the Investment Adviser, as the case may
be.
(c) In the event an Indemnified Party is requested or required to appear
as a witness in any action brought by or on behalf of or against the Fund or the
Investment Adviser, the Fund and the Investment Adviser agree to reimburse the
Dealer Manager for all reasonable expenses as incurred by it in connection with
such Indemnified Party's appearing and preparing to appear as such a witness,
including, without limitation, the reasonable fees and disbursements of its
legal counsel, and to compensate the Dealer Manager in an amount to be mutually
agreed upon. In addition, the Fund and the Investment Adviser agree to
compensate the Dealer Manager in an amount to be mutually agreed upon per
employee per day for each day that a Dealer Manager officer or employee is
involved in preparation, discovery or testimony pertaining to any litigation,
discovery or investigation in connection with the Dealer Manager's engagement
under this agreement.
(d) Promptly after receipt by an Indemnified Party of written notice of
any claim or commencement of an action or proceeding with respect to which
indemnification may be sought hereunder, such Indemnified Party will notify the
Fund in writing of such claim or of the
22
24
commencement of such action or proceeding, but failure so to notify the Fund
will not relieve the Fund and the Investment Adviser from any liability which it
may have to such Indemnified Party under this indemnification agreement, and in
any event will not relieve the Fund from any other liability that it may have to
such Indemnified Party. The Dealer Manager shall have the right to select
counsel in connection with any transaction for which any Indemnified Party may
be entitled to indemnification or contribution hereunder, provided that in no
event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all Indemnified Parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
(e) If at any time an Indemnified Party shall have requested an
indemnifying party to reimburse the Indemnified Party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such Indemnifying Party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(f) The Fund and the Investment Adviser, jointly and severally, agree to
indemnify each Soliciting Dealer and its affiliates and their respective
directors, officers, employees, agents and controlling persons to the same
extent and subject to the same conditions and to the same agreements, including
with respect to contribution, provided for in subsections (a), (b) and (c) of
this Section 7. This indemnity agreement will be in addition to any liability
which the Fund or the Investment Adviser may otherwise have.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Fund or the Investment Adviser
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Dealer Manager or
any controlling person, or by or on behalf of the Fund or the Investment Adviser
and shall survive delivery of the Shares pursuant to the Offer. The provisions
of Sections 5 and 7 hereof shall survive the termination or cancellation of this
Agreement.
SECTION 9. Termination of Agreement.
(a) This Agreement may be terminated in the sole discretion of the Dealer
Manager by notice to the Fund given at or prior to the expiration of the Offer
in the event that the Fund or the Investment Adviser shall have failed, refused
or been unable to perform all material obligations and satisfy all material
conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the termination of the Offer,
(i) The Fund or the Investment Adviser shall have sustained any
material loss or interference with its business or properties from fire,
accident or other calamity, whether or not covered by insurance, or from
any labor dispute or any legal or governmental
23
25
proceeding, or there shall have been any material adverse change or any
development involving a prospective material adverse change (including
without limitation a change in management or control of the Fund or the
Investment Adviser, as the case may be), in the condition, financial or
otherwise, or in the business affairs or business prospects of the Fund or
the Investment Adviser, whether or not arising in the ordinary course of
business, except in each case as described in or contemplated by the
Registration Statement and the Prospectus (exclusive of any amendment or
supplement thereto) and except for changes in the Fund's net asset value
due to its normal investment operations;
(ii) Trading in the Common Stock has been suspended by the
Commission or the NYSE or PXE;
(iii) There has occurred any material adverse change in the
financial markets in the United States or internationally or any outbreak
of hostilities or escalation thereof or other calamity or crisis, or any
change or development involving a prospective change in national or
international political, financial, or economic conditions, in each case
the effect of which is such as to make it, in the judgment of the Dealer
Manager, impracticable to market the Shares or to enforce contracts for
the sale of the Shares; or
(iv) Trading generally on the NYSE, PXE, or the National
Association of Securities Dealers Automated Quotations System shall have
been suspended or limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices for securities have been
required, by any of said exchanges or by order of the Commission or any
other governmental authority, or if a banking moratorium has been declared
by United States or New York authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 5.
SECTION 10. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of written telecommunication. Notices to the
Dealer Manager shall be directed to Xxxxxxx Xxxxx & Co., Xxxxxxx Xxxxx World
Headquarters, North Tower, World Financial Center, New York, New York
10281-1201, Attention: Xxx Xxxxxxx, Vice President; notices to the Fund shall be
directed to The Xxxxx Total Return Fund, Inc., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxxx X. Xxxxxx, Esq.; notices to the Investment Adviser
shall be directed to Xxxxx Total Return Advisors, Inc., 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxx, Esq.
SECTION 11. Parties. This Agreement shall inure to the benefit of and be
binding upon the Dealer Manager, the Fund, the Investment Adviser and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors and the controlling
persons and officers and directors referred to in Section 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties hereto and thereto and their respective
successors, and
24
26
said controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
SECTION 12. Governing Law and Time; Waiver. This Agreement shall be
governed by the laws of the State of New York applicable to agreements made and
to be performed in said State. Specified times of day refer to New York City
time.
The Fund, Investment Adviser and the Dealer Manager (each on its own
behalf and, to the extent permitted by applicable law, on behalf of its
shareholders) waive all right to trial by jury in any suit, action, proceeding
or counterclaim (whether based upon contract, tort or otherwise) related to or
arising out of the engagement of the Dealer Manager pursuant to, or the
performance by the Dealer Manager of the services contemplated by, this
Agreement.
SECTION 13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
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27
If the foregoing is in accordance with your understanding of our
agreement, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Fund, the
Investment Adviser and the Dealer Manager.
Very truly yours,
The Xxxxx Total Return Fund, Inc.
By:_______________________________
Name:
Title:
Xxxxx Total Return Advisors, Inc.
By:_______________________________
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated
By:_______________________________
Name:
Title:
28
EXHIBIT A
_____________ , 1998
THE XXXXX TOTAL RETURN FUND, INC.
Rights Offering for Shares of Common Stock
SOLICITING DEALER AGREEMENT
THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME
May 8, 1998(1)
Ladies and Gentlemen:
The Xxxxx Total Return Fund, Inc., a Maryland corporation (the "Fund"),
proposes to issue to holders of record (the "Holders") of its outstanding shares
of common stock, par value $0.01 per share (the "Common Stock"),
non-transferable rights entitling such Holders to subscribe for shares of Common
Stock and, subject to certain conditions, additional shares of Common Stock
pursuant to an over-subscription privilege (the "Offer"). The shares of Common
Stock for which Holders may subscribe pursuant to the Offer are herein referred
to as the "Shares." Pursuant to the terms of the Offer, the Fund is issuing each
Holder one non-transferable right (each a "Right" and collectively, the
"Rights") for each share of Common Stock held on the record date set forth in
the accompanying Prospectus (the "Prospectus"). Such Rights entitle Holders to
acquire during the subscription period set forth in the Prospectus (the
"Subscription Period"), and at the subscription price set forth in the
Prospectus (the "Subscription Price"), one share for each seven 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 "Oversubscription Privilege").
The undersigned, as the dealer manager (the "Dealer Manager") named in the
Prospectus, has entered into a Dealer Manager Agreement dated April 13, 1998
with the Fund, and Xxxxx Total Return Advisors, Inc., a Delaware 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 any foreign broker or
dealer not eligible for membership who agrees to conform to the Rules of Fair
Practice of the NASD, including Sections 2730, 2740, 2420 and 2750 thereof, in
making solicitations in the United States to the same extent as if it were a
member thereof (the members of such group being hereinafter called the
"Soliciting Dealers"). You are
--------
(1) Unless extended to a date no later than May 15, 1998.
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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, as amended (the "Securities Act"), the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
applicable rules and regulations of the Securities and Exchange Commission and
only in those states and other jurisdictions where such solicitations and other
activities may lawfully be undertaken and in accordance with the laws thereof.
Accompanying this Agreement are copies of the following documents: the
Prospectus describing the terms of the Offer, a Subscription Certificate and
letters to stockholders. Additional copies of these documents will be supplied
in reasonable quantities upon your request. You agree that during the period of
the Offer you will not use any solicitation material other than that referred to
above and such as may hereafter be furnished to you by the Fund through us.
2. Compensation of Soliciting Dealers. In full payment for the soliciting
efforts to be rendered (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), the Fund agrees to pay fees (the "Solicitation
Fees") to either the Soliciting Dealer or the Dealer Manager equal to 2.50% of
the Subscription Price per Share for each Share issued pursuant to the Offer
(such Solicitation Fees paid to the Dealer Manager are in addition to the Dealer
Manager Fee). The Fund agrees to pay the Solicitation Fees to the broker-dealer
designated on the applicable portion of the related Subscription Certificate
provided that such broker dealer has executed a confirmation accepting the terms
of the Soliciting Dealer Agreement, and if no broker-dealer is so designated or
a broker-dealer is otherwise not entitled to receive compensation pursuant to
the terms of the Soliciting Dealer Agreement, then to pay the Dealer Manager the
Solicitation Fee for Shares issued pursuant to the Offer. Payment to the Dealer
Manager by the Fund will be in the form of a wire transfer of same day funds to
an account or accounts identified by the Dealer Manager. Such payments will be
made on the day after the final payment for Shares is due as set forth in the
Prospectus, or when such payments are actually received and the corresponding
funds are available. Xxxxx Securities Corp. will be such designated
broker-dealer with respect to Shares issued to participants in the Fund's
Distribution Reinvestment and Cash Purchase Plan, unless the participant
designates otherwise on the related Subscription Certificate. Payment of the
Solicitation Fees to a Soliciting Dealer that executed a confirmation will be
made by the Fund directly to such Soliciting Dealer by U.S. dollar checks drawn
upon an account at a bank in New York City. Such payments to such Soliciting
Dealers shall be made as soon as practicable after payment of the Dealer Manager
Fee is made to the Dealer Manager.
No Solicitation Fees shall be payable to a Soliciting Dealer in respect of
any particular exercise of Rights if no Soliciting Dealer is so designated on
the Subscription Certificate in the place so provided, and if in the opinion of
counsel for the Dealer Manager, such Solicitation Fees cannot legally be paid in
respect of such exercise of Rights because of the provisions of applicable state
law or for any other reason. In case of any dispute or disagreement as to the
amount of Solicitation Fees payable to any Soliciting Dealer hereunder or as to
the proper recipient of any such Solicitation Fees, the decision of the Dealer
Manager shall be conclusive. The payment of any
2
30
Solicitation Fees to Soliciting Dealers shall be solely the responsibility of
the Fund, but the Dealer Manager shall have no obligation or liability to any
Soliciting Dealer for any obligation of the Fund or the Investment Adviser
hereunder.
The Offer will expire on the Expiration Date as set forth in the
Prospectus. In order for a Soliciting Dealer to receive the Solicitation Fees,
the Subscription Agent must have received from such Soliciting Dealer no later
than 5:00 P.M., New York City time, on the Expiration Date, either (i) a
properly completed and duly executed Subscription Certificate with respect to
Shares purchased pursuant to the exercise of Rights and the Over-Subscription
Privilege and full payment for such Shares; or (ii) a Notice of Guaranteed
Delivery guaranteeing delivery to the Subscription Agent by close of business on
the third business day after the Expiration Date, of (a) full payment for such
Shares and (b) a properly completed and duly executed Subscription Certificate
with respect to Shares purchased pursuant to the exercise of Rights. The
Solicitation Fees will only be paid after receipt by the Subscription Agent of a
properly completed and duly executed Soliciting Dealer Agreement and
Subscription Certificate designating the Soliciting Dealer in the applicable
portion hereof. In the case of a Notice of Guaranteed Delivery, the Solicitation
Fees will only be paid after delivery in accordance with such Notice of
Guaranteed Delivery has been effected.
3. Trading. You represent to the Fund, the Investment Adviser and the
Dealer Manager that you have not engaged, and agree that you will not engage, in
any activity in respect of the Rights or the Shares in violation of the Exchange
Act, including Regulation M thereunder. Your acceptance of Solicitation Fees
will constitute a representation that you are eligible to receive such
Solicitation Fees 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 Fund or the Dealer Manager to give any information
or make any representations in connection with this Agreement or the Offer other
than those contained in the Prospectus and other authorized solicitation
material furnished by the Fund through the Dealer Manager, and you hereby agree
not to use any solicitation material other than material referred to in this
Section 4. Without limiting the generality of the foregoing, you agree for the
benefit of the Fund and the Dealer Manager not to publish, circulate or
otherwise use any other advertisement or solicitation material without the prior
written approval of the Fund and the Dealer Manager. You are not authorized to
act as agent of the Fund or the Dealer Manager in any respect, and you agree not
to act as such agent and not to purport to act as such agent. On becoming a
Soliciting Dealer and in soliciting exercises of Rights, you agree for the
benefit of the Fund and the Dealer Manager to comply with any applicable
requirements of the Securities Act, the Exchange Act, the rules and regulations
thereunder, any applicable securities laws of any state or jurisdiction where
such solicitations may lawfully be made, and the applicable rules and
regulations of any self-regulatory organization or registered national
securities exchange, and to perform and comply with the agreements set forth in
your confirmation of your acceptance of this Agreement, a copy of the form of
which is appended hereto.
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 Letter indicates the
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31
states in which it is believed that acceptances of the Offer may be solicited
under the applicable Blue Sky or securities laws. Under no circumstances will
you as a Soliciting Dealer engage in any activities hereunder in any state in
which you may not lawfully so engage. The Blue Sky Letter shall not be
considered solicitation material as that term is herein used. You agree that you
will not engage in any activities hereunder outside the United States except in
jurisdictions where such solicitations and other activities may lawfully be
undertaken and in accordance with the laws thereof.
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 Solicitation Fees payable to you hereunder
with respect to Shares acquired pursuant to the exercise of Rights through the
close of business on the date of such termination that are thereafter exercised
pursuant to the Offer or relieve the Fund, or the Investment Adviser of its
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 Dealer Manager. Nothing herein contained shall constitute
the Soliciting Dealers as partners with the Dealer Manager or with one another,
or agents of the Dealer Manager or the Fund, or shall render the Fund liable for
the obligations of the Dealer Manager or the obligations of any Soliciting
Dealers, or shall render the Dealer Manager liable for the obligations of any
Soliciting Dealers other than itself nor constitute the Fund or the Dealer
Manager the agent of any Soliciting Dealer. The Fund and the Investment Adviser
and the Dealer Manager shall be under no liability to any Soliciting Dealer or
any other person for any act or omission or any matter connected with this
Agreement or the Offer, except that the Fund 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 Fund, Investment Adviser or the Dealer Manager in any
connection or transaction relating to the Offer.
8. Indemnification. Under the Dealer Manager Agreement, each of the Fund
and the Investment Adviser has agreed, to indemnify and hold harmless the Dealer
Manager, each Soliciting Dealer, and their respective directors, officers,
employees, agents and each person who controls the Dealer Manager or a
Soliciting Dealer within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against 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 Fund, 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 which you may
otherwise have.
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32
9. Delivery of Prospectus. You agree for the benefit of the Fund and the
Dealer Manager to deliver to each person who owns beneficially Common Stock
registered in your name, and who exercises Rights on a Subscription Certificate
on which your name, to your knowledge, has been inserted, a Prospectus prior to
the exercise of such person's Rights.
10. Status of Soliciting Dealer. Your acceptance of Solicitation Fees will
constitute a representation to the Fund and the Dealer Manager that you (i) have
not purported to act as agent of the Fund or the Dealer Manager in any
connection or in any transaction relating to the Offer, (ii) are not affiliated
with the Fund or the Investment Adviser, (iii) will not accept Solicitation Fees
from the Dealer Manager pursuant to the terms hereof with respect to Shares
purchased by you pursuant to an exercise of Rights for your own account or the
account of any affiliate, other than a natural person, (iv) will not remit,
directly or indirectly, any part of any Solicitation Fees to any beneficial
owner of Shares purchased pursuant to the Offer, (v) agree to the amount of the
Solicitation Fees and the terms and conditions set forth herein with respect to
receiving such Solicitation Fees, (vi) have read and reviewed the Prospectus,
and (vii) are a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD") or are a foreign broker or dealer not
eligible for membership who agrees to conform to the Rules of Fair Practice of
the NASD, including Sections 2730, 2740, 2420 and 2750 thereof, in making
solicitations in the United States to the same extent as if you were a member
thereof.
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 Xxxxxxx Xxxxx & Co.,
Xxxxxxx Xxxxx World Headquarters, North Tower, World Financial Center, New York,
New York 10281-1201, Attention: Xxx Xxxxxxx, Vice President.
12. Parties in Interest. The Agreement herein set forth is intended for
the benefit of the Dealer Manager, the Soliciting Dealers, the Fund, 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 completing and executing the confirmation and sending
it via facsimile (212-449-6739) to Xxxxxxx Xxxxx & Co., Attention: Xxx Xxxxxxx,
Vice President.
14. Governing Law and Time. This Agreement shall be governed by the laws
of the State of New York applicable to agreements made and to be performed in
said State.
5
33
Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Dealer Manager Agreement or, if not defined therein, in
the Prospectus.
NOTICE: IF A COPY OF THE CONFIRMATION REFERRED TO IN SECTION 13 HEREOF IS
NOT SIGNED, DATED AND RETURNED TO THE DEALER MANAGER PRIOR TO THE EXPIRATION OF
THE OFFER, NO SOLICITATION FEES WILL BE PAYABLE TO A SOLICITING DEALER
HEREUNDER.
Very truly yours,
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, as Dealer Manager
By:_____________________________________
Name:
Title:
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34
CONFIRMATION
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxx Xxxxxxx
Vice President
Facsimile: (000) 000-0000
Ladies and Gentlemen:
We hereby confirm our acceptance of the terms and conditions of the letter
captioned "Soliciting Dealer Agreement" which was attached hereto upon our
receipt hereof (this "Agreement") with reference to the Offer of The Xxxxx Total
Return Fund, Inc. (the "Fund") described therein.
We hereby acknowledge that we (i) have received, read and reviewed the
Prospectus and other solicitation material referred to in this Agreement, and
confirm that in executing this confirmation we have relied upon such Prospectus
and other solicitation material authorized by the Fund or Xxxxx Total Return
Advisors, Inc. (the "Investment Adviser") and upon no other representations
whatsoever, written or oral, (ii) have not purported to act as agent of the Fund
or the Dealer Manager in any connection or in any transaction relating to the
Offer, (iii) are not affiliated with the Fund or the Investment Adviser, (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 Solicitation Fees to any beneficial owner of Shares
purchased pursuant to the Offer, and (vi) agree to the amount of the
Solicitation Fees and the terms and conditions set forth in this Agreement with
respect to receiving such Solicitation Fees. We also confirm that we are a
broker or dealer who is a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD") or are a foreign broker or dealer not
eligible for membership who agrees to conform to the Rules of Fair Practice of
the NASD, including Sections 2730, 2740, 2420 and 2750 thereof, in making
solicitations in the United States to the same extent as if we were a member
thereof. In connection with the Offer, we represent that we have complied, and
agree that we will comply, with any applicable requirements of the Securities
Act of 1933, the Securities Exchange Act of 1934, any applicable securities or
Blue Sky laws and the rules and regulations under the Securities Act of 1933,
the Securities Exchange Act of 1934 and any applicable securities or Blue Sky
laws.
Firm Name
By__________________________________
Authorized Signature
35
Address:
________________________________________________________________________________
________________________________________________________________________________
DTC Number:
________________________________________________________________________________
Nominee Name:
________________________________________________________________________________
________________________________________________________________________________
Dated: ______________ , 1998
NOTICE: IF A COPY OF THIS CONFIRMATION IS NOT SIGNED, DATED AND RETURNED
TO THE DEALER MANAGER PRIOR TO THE EXPIRATION OF THE OFFER, NO SOLICITATION FEES
WILL BE PAYABLE TO A SOLICITING DEALER HEREUNDER.
2
