DISTRIBUTION AGREEMENT
Between
VALUE LINE HEDGED OPPORTUNITY FUND, INC.
and
VALUE LINE SECURITIES, INC.
, 1998
Value Line Securities, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, X.X. 00000
Dear Sirs:
VALUE LINE HEDGED OPPORTUNITY FUND, INC. (the "Fund"), a Maryland
corporation, is registered as an Investment Company under the Investment Company
Act of 1940 and has registered an indefinite number of shares of common stock
under the Securities Act of 1933, Registration Number 33- , to be offered
continuously for sale to the public in accordance with terms and conditions set
forth in the Prospectus included in such Registration Statement as it may be
amended from time to time.
In this connection, the Fund desires that your firm act as principal
underwriter and distributor (herein "distributor") of the Fund for the sale and
distribution of shares which have been registered as described above and any
additional shares which may become registered during the term of this Agreement.
You have advised the Fund that you are willing to act as distributor, and it is,
accordingly, agreed between us as follows:
1. The Fund hereby appoints you distributor for the sale of its shares,
pursuant to the aforesaid continuous public offering in connection with any
sales made to Fund investors in any states and/or jurisdictions in which you are
or shall from time to time become qualified as a broker/dealer, or through
securities dealers with whom you have entered into sales agreements.
2. You hereby accept such appointment and agree to use your best efforts
to sell such shares, provided, however, that when requested by the Fund at any
time because of market or other economic considerations or abnormal
circumstances of any kind, you will suspend such efforts. The Fund may also
withdraw the offering of the shares at any time when required by the provisions
of any statute, order, rule or regulation of any governmental body having
jurisdiction. It is understood that you do not undertake to sell all or any
specific portion of the shares of the Fund.
3. The shares shall be sold by you at net asset value as determined in
the Fund's Prospectus effective at the time of sale. Shares may be sold
directly to prospective purchasers or through securities dealers who have
entered into sales agreement with you. However, in no event will shares be
issued prior to the receipt by us of full payment for such shares.
4. You agree that the Fund shall have the right to accept or reject
orders for the purchase of shares of the Fund. Any consideration which you may
receive in connection with a rejected purchase order will be returned promptly.
In the event that any cancellation of a share purchase order, cancellation of a
redemption order or error in the timing of the acceptance of purchase or
redemption orders shall result in a gain or loss, you agree promptly to
reimburse the Fund for any amount by which losses shall exceed gains so arising;
to retain any net gains so arising for application against losses so arising in
future periods and, on the termination of this Agreement, to pay over to the
Fund the amount of any such net gains which may have accumulated. The Fund
shall register or cause to be registered all shares sold by you pursuant to the
provisions hereof in such name or names and amounts as you may request from time
to time, and the Fund shall issue or cause to be issued certificates evidencing
such shares for delivery to you or pursuant to your direction if, and to the
extent that, the shareholder requests issuance of such share certificate.
5. The Fund has delivered to you a copy of its initial Prospectus
dated as of the effective date of its Registration Statement pursuant to the
Securities Act of 1933. It agrees that it will use its best efforts to
continue the effectiveness of the Registration Statement under the Securities
Act of 1933. The Fund further agrees to prepare and file any amendments to
its Registration Statement as may be necessary and any supplemental data in
order to comply with the Securities Act of 1933.
6. The Fund is registered under the Investment Company Act of 1940 as an
investment company, and it will use its best efforts to maintain such
registration and to comply with the requirements of said Act.
7. You agree:
(a) That neither you nor any of your officers will take any short
position in the shares of the Fund.
(b) To furnish to the Fund any pertinent information required to be
included with respect to you as distributor within the meaning of the Securities
Act of 1933 in any reports or registration required to be filed with any
governmental authority.
(c) You will not give any information or make any representations
other than as contained in the Registration Statement or Prospectus filed under
the Securities Act of 1933, as in effect from time to time, or in any
supplemental sales literature authorized by the Fund for use in connection with
the sale of shares.
8. You shall pay all usual expenses of distribution, including
advertising and the costs of printing and mailing of Prospectuses, other than
those furnished to existing shareholders.
9. This Agreement will continue in effect for a period of two years and
shall continue in effect from year to year thereafter provided:
(a) Such continuation shall be specifically approved at least
annually by the Board of Directors, including the vote of majority of the
Directors of the Fund who are not parties to this Agreement or "interested
persons" (as defined in the Investment Company Act of 1940) of any such persons
cast in person at a meeting called for the purpose of voting on such approval or
by vote of the holders of a majority of the outstanding voting securities of the
Fund and by such vote of the Board of Directors.
(b) You shall have notified the Fund in writing at least sixty days
prior to the termination date that you shall not desire such continuation.
(c) We shall not have notified you in writing at least sixty days
prior to the termination date that we do not desire your continuation.
10. This Agreement may not be amended or changed except in writing and
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors, but this Agreement shall not be assigned by either
party and shall automatically terminate upon its assignment.
If the foregoing is in accordance with your understanding, kindly so
indicate by signing in the space provided below.
VALUE LINE HEDGED OPPORTUNITY
FUND, INC.
By:
--------------------------
Accepted:
Value Line Securities, Inc.
_______________________________
