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EXHIBIT (h)
The First Australia Prime Income Fund, Inc.
(a Maryland corporation)
64,914,776* Shares of Common Stock Issuable Upon
Exercise of Non-Transferable Rights to Subscribe for
Such Shares of Common Stock
(Common Stock Par Value $0.01 Per Share)
DEALER MANAGER AGREEMENT
September 28, 1998
PRUDENTIAL SECURITIES INCORPORATED
X.X. XXXXXXX & SONS, INC.
XXXXXXX XXXXX BARNEY INC.
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The First Australia Prime Income Fund, Inc., a Maryland corporation (the
"Fund"), EquitiLink International Management Limited, a Jersey, Channel Islands
corporation (the "Manager") and EquitiLink Australia Limited, a New South Wales,
Australia corporation (the "Adviser") each confirms its agreement with and
appointment of Prudential Securities Incorporated, X.X. Xxxxxxx & Sons, Inc. and
Xxxxxxx Xxxxx Barney Inc. (together the "Dealer Managers") to act as dealer
managers 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 each Holder one-third of a 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 full
Right exercised on the terms and conditions set forth in such Prospectus.
Pursuant to the
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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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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. EquitiLink Holdings Limited, a New South Wales, Australia
corporation, wholly owns the Adviser through its wholly-owned subsidiary,
EquitiLink Limited, a New South Wales, Australia corporation, which in turn,
wholly owns the Adviser and joins in this Agreement with respect to the
provisions of Section 7 and 8 hereof.
The Fund has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (No. 333-61841) and a related
preliminary prospectus for the registration of the Shares under the Securities
Act of 1933, as amended (the "1933 Act"), 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. The Fund will prepare
and file such additional amendments thereto and such amended prospectuses as may
hereafter be required. The Fund previously filed a notification on Form N-8A of
registration of the Fund as an investment company under the Investment Company
Act of 1940, as amended (the "1940 Act"), and the rules and regulations of the
Commission under the 1940 Act (together with the rules and regulations under the
1933 Act, the "Rules and Regulations"). The registration statement (as amended,
if applicable) and the prospectus constituting a part thereof, as from time to
time amended or supplemented pursuant to the 1933 Act, are herein referred to as
the "Registration Statement" and the "Prospectus", respectively, except that if
any revised prospectus shall be provided to the Dealer Managers by the Fund for
use 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 by the Fund pursuant to Rule
497(c) or Rule 497(h) of the Rules and Regulations), the term "Prospectus" shall
refer to each such revised prospectus from and after the time it is first
provided to the Dealer Managers for such use. The Prospectus and letters to
beneficial owners of Common Stock, forms used to exercise rights, any letters
from the Fund to securities dealers, commercial banks, trust companies 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) The Fund, the Manager and the Adviser each severally represents
and warrants to each Dealer Manager as of the date hereof and as of the date of
the commencement of the Offer (such later date being hereinafter referred to as
the "Representation Date") as follows:
(i) At the time the Registration Statement becomes effective
and at the Representation Date, the Registration Statement will comply
in all material respects with the requirements of the 1933 Act, the 1940
Act and the Rules and Regulations and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading. At the time the Registration Statement becomes effective
through the expiration date of the Offer set forth in the Prospectus
(the "Expiration Date"), the Prospectus (unless the term "Prospectus"
refers to a prospectus which has been provided to the Dealer Managers by
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the Fund for use in connection with the Offer which differs from the
Prospectus on file with the Commission at the time the Registration
Statement becomes effective, in which case at the time such prospectus
is first provided to the Dealer Managers for such use) and the Offering
Materials 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 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 Managers expressly for use in the Registration Statement
or Prospectus.
(ii) The accountants who certified the financial statements
included in the Registration Statement are independent public
accountants as required by the 1933 Act and the Rules and Regulations.
(iii) The financial statements included in the Registration
Statement 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 heading "Portfolio Composition" sets forth the
composition of the investment portfolio of the Fund on the date
indicated.
(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 dividends on the outstanding shares of Common
Stock and on the outstanding shares of preferred stock, par value $0.01
per share and liquidation preference of $25,000 per share (the
"Preferred Stock") of the Fund, there has been no dividend or
distribution of any kind declared, paid or made by the Fund on any class
of its 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 corporate power and authority to own, lease and operate
its properties and conduct its business as described in the Registration
Statement; 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 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
1940 Act as a closed-end non-diversified management investment company,
and no order of suspension
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or revocation of such registration has been issued or proceedings
therefor initiated or threatened by the Commission.
(vii) The authorized, issued and outstanding capital stock
of the Fund at July 31, 1998 is as set forth in the Prospectus
under the caption "Capital Stock"; the outstanding Common Stock and
Preferred Stock have been duly authorized by all requisite corporate
action on the part of the Fund and are validly issued and 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 and fully paid and
nonassessable; the Common Stock, the Preferred Stock, the Rights and the
Shares conform in all material respects to the descriptions thereof set
forth in the Prospectus under the captions "Capital Stock" and "The
Offer"; and the issuance of each of the Rights and the Shares is not
subject to preemptive rights.
(viii) The Fund is not in violation of its Articles of
Amendment and Restatement, 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 or
its properties may be bound; and the execution and delivery of this
Agreement, and the Subscription Agency Agreement referred to in the
Registration Statement (as used herein, the "Subscription Agency
Agreement") and the consummation of the transactions contemplated herein
and therein 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, to the best knowledge of the Fund, the Manager or
the Adviser, any law, administrative regulation or administrative or
court decree applicable to the Fund; and no consent, approval,
authorization or order of any court or governmental authority or agency
is required for the consummation by the Fund of the transactions
contemplated by this Agreement and the Subscription Agency Agreement
except such as has been obtained under the 1940 Act or as may be
required under the 1933 Act, state securities or Blue Sky laws or
foreign securities laws in connection with the Offer.
(ix) The Fund owns or possesses or has obtained all material
governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to lease or own, as the case may be, and to
operate its properties and to carry on its businesses as contemplated in
the Prospectus and the Fund has not received any notice of proceedings
relating to the revocation or modification of any such licenses,
permits, consents, orders, approvals or authorizations.
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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, the Manager or the Adviser threatened
against or affecting, the Fund, which might result in any material
adverse change in the condition, financial or otherwise, business
affairs or business prospects of the Fund, or 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 1933 Act, the
1940 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 intends to direct the investment of the
proceeds of the offering described in the Registration Statement in such
a manner as to comply with the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended ("Subchapter M of the Code"),
and intends to continue to qualify as a regulated investment company
under Subchapter M of the Code.
(xiii) This Agreement, the Management Agreement referred to in
the Registration Statement (the "Management Agreement"), the Advisory
Agreement referred to in the Registration Statement (the "Advisory
Agreement"), the Administration Agreement referred to in the
Registration Statement (the "Administration Agreement") and the
Custodian Agreement referred to in the Registration Statement (the
"Custodian Agreement") have each been duly authorized by all requisite
corporate action on the part of the Fund, executed and delivered by the
Fund and each complies with all applicable provisions of the 1940 Act,
except that with respect to this Agreement no representation is made as
to compliance with Section 17(i) of the 1940 Act.
(xiv) The Shares have been approved for listing, subject to
official notice of issuance, on the American Stock Exchange and the
Pacific Stock Exchange.
(xv) The Fund has not, directly or indirectly, (i) taken 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
sale or resale of the Shares or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Common Stock or (B) paid
or agreed to pay to 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).
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(xvi) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
or if the Prospectus is not in existence, the most recent Preliminary
Prospectus, there has not been any downgrading in the ratings of the
Preferred Stock or any action threatening such a downgrading or placing
the Fund under special surveillance by a "nationally recognized rating
agency" (as defined in Rule 436(g) under the 0000 Xxx); nor does the
Fund have any knowledge of any facts or circumstances that are likely to
cause such downgrading, threatened downgrading or the placing of the
Fund under such surveillance.
(b) The Manager represents and warrants to each Dealer Manager as of
the date hereof and as of the Representation Date as follows:
(i) The Manager has been duly organized as a corporation
under the laws of Jersey, Channel Islands with corporate power and
authority to conduct its business as described in the Prospectus.
(ii) The Manager 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 1940 Act, or the
rules and regulations under such acts, from acting under the Management
Agreement for the Fund as contemplated by the Prospectus.
(iii) The description of the Manager in 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; and
there are no pending legal proceedings that would be required to be
described under Item 12 of Form N-2.
(iv) Each of this Agreement and the Management Agreement has
been duly authorized, executed and delivered by the Manager; each of
this Agreement and the Management Agreement is in full force and effect
and constitutes a valid and binding obligation of the Manager,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization or other similar laws relating to
or affecting creditors' rights generally and to general equity
principles; and neither the execution and delivery of this Agreement nor
the performance by the Manager of its obligations hereunder or under the
Management Agreement 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 any
agreement or instrument to which the Manager is a party or by which the
Manager is bound, or any law, order, rule or regulation applicable to it
of any jurisdiction, court, federal or state regulatory body,
administrative agency or other governmental body, stock exchange or
securities association having jurisdiction over the Manager or its
respective properties or operations.
(v) The Manager has the financial resources available to it
necessary for the performance of its services and obligations as
contemplated in the Prospectus.
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(vi) The Fund will not be subject to taxation under the laws
of Jersey, Channel Islands by virtue of its relationship with the
Manager.
(vii) The Manager has not, directly or indirectly, (i) taken
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
sale or resale of the Shares or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Common Stock or (B) paid
or agreed to pay to 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).
(viii) 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 Manager, or in
the earnings, business affairs or business prospects of the Manager,
whether or not arising in the ordinary course of business.
(ix) 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, the Manager or the Adviser, threatened
against or affecting, the Manager, which might result in any material
adverse change in the condition, financial or otherwise, business
affairs or business prospects of the Manager, or might materially and
adversely affect the properties or assets of the Manager; and there are
no material contracts or documents of the Manager which are required to
be disclosed in the Registration Statement by the 1933 Act, the 1940 Act
or by the Rules and Regulations which have not been so disclosed
therein.
(c) The Adviser represents and warrants to each Dealer Manager as of
the date hereof and as of the Representation Date as follows:
(i) The Adviser has been duly organized as a corporation
under the laws of New South Wales, Australia with corporate power and
authority to conduct its business as described in the Prospectus.
(ii) The Adviser is duly registered as an investment adviser
under the Advisers Act, and is not prohibited by the Advisers Act or the
1940 Act, or the rules and regulations under such acts, from acting
under the Advisory Agreement for the Fund as contemplated by the
Prospectus.
(iii) The description of the Adviser in 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; and
there are no pending legal proceedings that would be required to be
described under Item 12 of Form N-2.
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(iv) Each of this Agreement and the Advisory Agreement has
been duly authorized, executed and delivered by the Adviser; each of
this Agreement and the Advisory Agreement is in full force and effect
and constitutes a valid and binding obligation of the Adviser,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization or other similar laws relating to
or affecting creditors' rights generally and to general equity
principles; and neither the execution and delivery of this Agreement nor
the performance by the Adviser of its obligations hereunder or under the
Advisory Agreement will conflict with, or result in a breach of, any of
the terms and provisions of, or constitute, with or without giving
notice or lapse of time or both, a default under any agreement or
instrument to which the Adviser is a party or by which the Adviser is
bound, or any law, order, rule or regulation applicable to it of any
jurisdiction, court, federal or state regulatory body, administrative
agency or other governmental body, stock exchange or securities
association having jurisdiction over the Adviser or its properties or
operations.
(v) The Adviser has the financial resources available to it
necessary for the performance of its services and obligations as
contemplated in the Prospectus.
(vi) The Fund will be regarded as a non-resident of Australia
for purposes of Australian tax laws. Pursuant to the United States
Australia Double Tax Agreement, (i) the Fund will not be regarded as
having a permanent establishment in Australia, (ii) the Fund will not
acquire assets which would be regarded as "taxable Australian assets,"
and (iii) none of the Fund's profits arising from the disposal of its
assets will be subject to Australian taxes.
(vii) The Adviser has not, directly or indirectly, (i) taken
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
sale or resale of the Shares or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Common Stock or (B) paid
or agreed to pay to 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).
(viii) 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 Adviser, or in
the earnings, business affairs or business prospects of the Adviser,
whether or not arising in the ordinary course of business.
(ix) 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, the Manager or the Adviser, threatened
against or affecting, the Adviser, which might result in any material
adverse change in the condition, financial or otherwise, business
affairs or business prospects of the Adviser, or might materially and
adversely affect the properties or assets of the Adviser; and there are
no material contracts or
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documents of the Adviser which are required to be disclosed in the
Registration Statement by the 1933 Act, the 1940 Act or by the Rules and
Regulations which have not been so disclosed therein.
(d) Any certificate signed by any officer of the Fund, the Manager
or the Adviser and delivered to the Dealer Managers or counsel for the Dealer
Managers shall be deemed a representation and warranty by the Fund, the Manager
or the Adviser, as the case may be, to the Dealer Managers, as to the matters
covered thereby.
SECTION 2. Agreement to Act as Dealer Managers.
(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 Managers 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 Managers (the "Soliciting Dealers"), to solicit, in
accordance with the 1933 Act, the 1940 Act and the Securities Exchange
Act of 1934 (the "Exchange Act") and their customary practice, the
exercise of the Rights, subject to the terms and conditions of this
Agreement and the procedures described in the Registration Statement;
and
(ii) the Fund agrees to furnish, or cause to be furnished, to
the Dealer Managers, lists, or copies of those lists, showing the names
and addresses of, and number of shares of Common Stock held by, Holders
as of the Record Date, and each of the Dealer Managers agrees to use
such information only in connection with the Offer, and not to furnish
the information to any other person except for securities brokers and
dealers that the Dealer Managers have requested to solicit exercises of
Rights.
(b) Each of the Dealer Managers 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 Managers agree that the Dealer Managers
are independent contractors 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, each
Dealer Manager will not be subject to any liability to the Fund, the Manager 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 such Dealer
Manager acting in such capacity) or any other person, and neither of the Dealer
Managers will be liable for its acts or omissions in performing its respective
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 such Dealer Manager's gross
negligence or willful misconduct in such acts or omissions.
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SECTION 3. Dealer Manager Fees and Reallowance. In full payment for
services rendered and to be rendered hereunder by the Dealer Managers, the Fund
agrees to pay the Dealer Managers a fee for their financial advisory, marketing
and soliciting services equal to 3.75% of the aggregate Subscription Price for
the Shares issued pursuant to the Offer (the "Dealer Manager Fee"). The Dealer
Managers agree with the Fund that the Dealer Managers will reallow a concession
of 2.50% of the Subscription Price per Share for each Share issued pursuant to
the Offer (a "Reallowance") to the broker-dealer designated on the applicable
portion of the form used by the Holder of such Share to exercise Rights;
provided, however, that the designated broker-dealer has executed a confirmation
accepting the terms of the Soliciting Dealer Agreement. As compensation for
their initial financial advisory services, Prudential Securities Incorporated
shall receive the first $300,000 of the Dealer Manager Fee remaining after the
payment of the Reallowance; the remainder of the Dealer Manager Fee after
payment of the Reallowance and of such $300,000 shall be divided proportionally
among the Dealer Managers according to the number of shares of Common Stock sold
by the respective Dealer Managers in the Offer. Payment to each 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 such Dealer Manager. Such payments will be
made on the day after the final payment for Shares is due as set forth in the
Prospectus. Payment of the Reallowance to Soliciting Dealers that executed a
confirmation will be made by the Dealer Managers or their agent directly to such
Soliciting Dealers 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
Managers.
SECTION 4. Covenants of the Fund. The Fund covenants with each Dealer
Manager as follows:
(a) The Fund will use its best efforts (i) to cause the Registration
Statement to become effective under the 1933 Act, and will advise the Dealer
Managers promptly as to the time at which the Registration Statement and any
amendments thereto (including any post-effective amendment) becomes so effective
and (ii) if required, to cause the issuance of any orders exempting the Fund
from any provisions of the 1940 Act and will advise the Dealer Managers promptly
as to the time at which any such orders are granted.
(b) The Fund will notify the Dealer Managers 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 1940 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
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such stop order or order of suspension or revocation is issued, to obtain the
lifting thereof at the earliest possible moment.
(c) The Fund will give the Dealer Managers 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
Managers 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)
or Rule 497(h) of the Rules and Regulations), whether pursuant to the 1940 Act,
the 1933 Act, or otherwise, and will furnish the Dealer Managers 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 Managers or counsel for the Dealer Managers
shall reasonably object.
(d) The Fund will deliver to the Dealer Managers, as soon as
practicable, two signed copies of the Registration Statement as originally filed
and of each amendment thereto, in each case with two sets of the exhibits filed
therewith.
(e) The Fund will furnish to each of the Dealer Managers, from time
to time during the period when the Prospectus is required to be delivered under
the 1933 Act, such number of copies of the Prospectus (as amended or
supplemented) as each of the Dealer Managers may reasonably request for the
purposes contemplated by the 1933 Act or the Rules and Regulations.
(f) If any event shall occur as a result of which it is necessary,
in the opinion of counsel for the Dealer Managers, 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 Managers 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 Managers) 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.
(g) The Fund will endeavor, in cooperation with the Dealer Managers,
to qualify the Shares for offering and sale under the applicable securities laws
of such states and other jurisdictions of the United States as the Dealer
Managers may designate, and will maintain such qualifications in effect for a
period of not less than one year after the date hereof. The Fund will file such
statements and reports as may be required by the laws of each jurisdiction in
which the Shares have been qualified as above provided.
(h) 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)
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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.
(i) For a period of 180 days from the date of this Agreement, the
Fund will not, without your prior consent, offer or sell, or enter into any
agreement to sell, any equity or equity related securities of the Fund other
than the Shares and the Common Stock issued in reinvestment of dividends or
distributions.
(j) The Fund will use its best efforts to maintain its qualification
as a regulated investment company under Subchapter M of the Code.
(k) The Fund will advise or cause the subscription agent for the
Offer (the "Subscription Agent") to advise the Dealer Managers 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
each Dealer Manager and each Soliciting Dealer, the number of Rights exercised
for Shares on exercise forms indicating such Dealer Manager or Soliciting Dealer
as the broker-dealer with respect to such exercise, and as to such other
information as the Dealer Managers may reasonably request; and will notify the
Dealer Managers 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 each Dealer Manager and Soliciting Dealer, the number
of Rights exercised for Shares on exercise forms indicating such Dealer Manager
or Soliciting Dealer as the broker-dealer with respect to such exercise, and as
to such other information as the Dealer Managers may reasonably request.
(l) The Fund, the Manager and the Adviser will not, directly or
indirectly, (i) take any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Fund to
facilitate the sale or resale of the Shares or (ii) sell, bid for, purchase, or
pay anyone any compensation for soliciting purchases of the Shares or pay or
agree to pay any person any compensation for soliciting another to purchase any
other securities of the Fund (except for the sale of Shares under this Agreement
or transactions in non-convertible preferred stock of the Fund).
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 Shares under securities laws in accordance with the provisions of Section
4(g) of this Agreement, including filing fees and any reasonable fees or
disbursements of counsel for the Dealer Managers in connection therewith and in
connection with the preparation of the Blue Sky Survey, (v) the
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printing and delivery to the Dealer Managers 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) the printing and delivery
of copies of the Blue Sky Survey, (vii) the fees and expenses incurred in
connection with the listing of the Shares on the American Stock Exchange and the
Pacific Stock Exchange, (viii) the filing fees of the Commission and (ix) the
printing, mailing and delivery expenses incurred in connection with Offering
Materials.
(b) In addition to any fees that may be payable to the Dealer
Managers under this Agreement, the Fund agrees to reimburse Prudential
Securities Incorporated upon request made from time to time for its reasonable
expenses incurred in connection with its activities under this Agreement not to
exceed an aggregate of $300,000, including the reasonable fees and disbursements
of legal counsel for the Dealer Managers.
(c) If this Agreement is terminated by the Dealer Managers in
accordance with the provisions of Section 6 or Section 9(a)(i) or 9(a)(ii), the
Fund shall reimburse the Dealer Managers for all of their reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Dealer Managers. 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 Manager agrees that, to the extent the Fund fails to fulfill
its obligations in paragraphs (b) and (c) of this Section 5, the Manager will
pay all the costs and expenses set forth in this Section 5. The Manager hereby
abandons and waives any rights that the Manager 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 Manager in respect
of the Manager's obligations under this paragraph (d) of this Section 5. The
Manager agrees that if at any time the Manager is sued in respect of its
obligations under this paragraph (d) of this Section 5 and the Fund is not also
sued in respect to its obligations under this Section 5, the Manager shall not
claim that the Fund be made a party to such proceedings against the Manager.
SECTION 6. Conditions of Dealer Managers' Obligations. The obligations
of the Dealer Managers hereunder are subject to the accuracy of the
representations and warranties of the Fund, the Manager and the Adviser herein
contained, to the performance by the Fund, the Manager and the 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 date of this Agreement, or at a later
time and date not later, however, than 5:30 P.M. on the first business day
following the date hereof, or at such later time and date as may be approved by
the Dealer Managers, and at the commencement of the Offer no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or threatened by the
Commission.
(b) On the date of this Agreement, the Dealer Managers shall have
received:
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(1) The favorable opinion, dated as of the date of this Agreement,
of Dechert Price & Xxxxxx, counsel for the Fund and special United States
counsel for the Manager and the Adviser, in form and substance satisfactory to
counsel for the Dealer Managers, 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 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 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.
(iv) The outstanding Common Stock and Preferred Stock have
been duly authorized by requisite corporate action on the part of the
Fund and have been validly issued and are fully paid and non-assessable.
(v) The Rights and the Shares have been duly authorized for
issuance pursuant to the Offer; the Shares have been duly authorized for
sale pursuant to the Offer and, when the Shares are issued and delivered
by the Fund pursuant to the Offer against payment of the consideration
set forth in the Prospectus, the Shares will be validly issued and fully
paid and nonassessable; the issuance of the Rights and the Shares is not
subject to any preemptive or other rights to subscribe for any of the
Shares under any indenture, mortgage, deed of trust, lease or other
agreement or instrument to which the Fund is a party or by which the
Fund or any of its properties are bound that has been filed as an
exhibit to the Registration Statement (which are the only such
instruments which have been specifically identified to such counsel by
the Fund as material to the business or financial condition of the
Fund), or under the Charter or By-Laws of the Fund, or under the
Maryland Corporation Law; the statements set forth in the Prospectus
under the headings "Description of Common Stock" and "Capital Stock",
insofar as such statements constitute a summary of legal matters or
documents referred to therein, provide a fair summary of such legal
matters or documents.
(vi) This Agreement and the Subscription Agency Agreement
have been duly authorized, executed and delivered by the Fund and comply
with all applicable provisions of the 1940 Act (except that such counsel
need express no opinion as to compliance with Section 17(i) of the 1940
Act).
(vii) The Registration Statement is effective under the 1933
Act and, to the best of their knowledge and information, no stop order
suspending the effectiveness of the Registration Statement has been
issued under the 1933 Act or proceedings therefor have been initiated or
threatened by the Commission.
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(viii) The Registration Statement and the Prospectus (other
than the financial statements included therein, as to which no opinion
need be rendered) comply as to form in all material respects with the
requirements of the 1933 Act and the 1940 Act and the Rules and
Regulations.
(ix) To the best of their knowledge and information, there
are no legal or governmental proceedings pending or threatened against
the Fund, the Manager or the Adviser that are required to be disclosed
in the Registration Statement, other than those disclosed therein.
(x) 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 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.
(xi) 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 1933 Act, the 1940 Act or the Rules and Regulations
or such as may be required under state securities laws; and to the best
of their knowledge and information, the execution and delivery of this
Agreement and the Subscription Agency Agreement 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 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.
(xii) The Management Agreement, the Advisory Agreement, the
Custody Agreement and the Administration Agreement have each been duly
authorized and approved by the Fund and comply as to form in all
material respects with all applicable provisions of the 1940 Act, and
each is in full force and effect.
(xiii) The Fund is registered with the Commission under the
1940 Act as a closed-end non-diversified management investment company,
and all required action has been taken by the Fund under the 1933 Act,
the 1940 Act and the Rules and Regulations to make and consummate the
Offer; the provisions of the Charter
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and By-Laws of the Fund comply as to form in all material respects with
the requirements of the 1940 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 1940
Act, pursuant to Section 8(e) of the 1940 Act, has been issued or
proceedings therefor initiated or threatened by the Commission.
(xiv) The information in the Prospectus under the caption
"Taxation -- United States Taxes", 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 Manager is duly registered as an investment adviser
under the Advisers Act and is not prohibited by the Advisers Act or the
1940 Act, or the rules and regulations under such acts, from acting
under the Management Agreement for the Fund as contemplated by the
Prospectus.
(xvi) The Adviser is duly registered as an investment adviser
under the Advisers Act and is not prohibited by the Advisers Act or the
1940 Act, or the rules and regulations under such acts, from acting
under the Advisory Agreement for the Fund as contemplated by the
Prospectus.
(2) The favorable opinion, dated as of the date of this Agreement,
of Mourant du Feu & Jeune, counsel to the Manager, in form and substance
satisfactory to counsel for the Dealer Managers, to the effect that:
(i) The Manager has been duly organized as a company
incorporated under the laws of Jersey, Channel Islands, with corporate
power and authority to conduct its business as described in the
Registration Statement and the Prospectus.
(ii) Each of this Agreement and the Management Agreement has
been duly authorized, executed and delivered by the Manager; each of
this Agreement and the Management Agreement constitutes a valid and
binding obligation of the Manager; no consent, approval, authorization
or order of any Jersey, Channel Islands court or governmental authority
or agency is required which has not been obtained for the performance of
this Agreement or the Management Agreement by the Manager; and neither
the execution and delivery of this Agreement or the Management Agreement
nor the performance by the Manager 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 Manager's Memorandum
and Articles of Association or, to the best of such counsel's knowledge
and information, any agreement or instrument to which the Manager is a
party or by which the Manager is bound, or any law, order, rule or
regulation applicable to the Manager of any jurisdiction, court, federal
or state regulatory body, administrative agency or other governmental
body having jurisdiction over the Manager or its properties or
operations; there is no stock exchange or securities association in
Jersey having jurisdiction over the Manager or its properties or
operations.
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(iii) To the best of such counsel's knowledge and information,
the description of the Manager 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 or
necessary to make the statements therein not misleading.
(iv) The Fund will not be subject to taxation under the laws
of Jersey, Channel Islands by virtue of its relationship with the
Manager pursuant to the Management Agreement and this Agreement.
(v) To the best of such counsel's knowledge and information,
there are no legal or governmental proceedings pending or threatened
against the Fund, the Manager or the Adviser that are required to be
disclosed in the Registration Statement, other than those disclosed
therein.
(3) The favorable opinion, dated as of the date of this Agreement,
of Stikeman, Elliott, Australian counsel to the Fund and the Adviser, in form
and substance satisfactory to counsel for the Dealer Managers, to the effect
that:
(i) The Adviser has been duly organized as a corporation
under the laws of New South Wales, Australia with corporate power and
authority to conduct its business as described in the Prospectus.
(ii) Each of this Agreement and the Advisory Agreement has
been duly authorized, executed and delivered by the Adviser; each of
this Agreement and the Advisory Agreement constitutes a valid and
binding obligation of the 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
Advisory Agreement by the Adviser; and neither the execution and
delivery of this Agreement or the Advisory Agreement nor the performance
by the 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 Adviser's Memorandum and Articles of
Association or, to the best of such counsel's knowledge and information,
any agreement or instrument to which the Adviser is a party or by which
the Adviser is bound, or any law, order, rule or regulation applicable
to the 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 Adviser or its
properties or operations; and if this Agreement were to be governed by
the laws of New South Wales (the domestic law of the Adviser) it would
(subject to it being duly stamped in accordance with the Stamp Duties
Act of New South Wales) be enforceable according to its terms.
(iii) Pursuant to the United States Australia Double Tax
Agreement, (A) the Fund will not be regarded as having a permanent
establishment in Australia and (B) assuming the Fund does not acquire
assets which would be
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regarded as "taxable Australian assets," none of the Fund's profits
arising from the disposal of its assets will be subject to Australian
taxes.
(iv) The information in the Prospectus under the caption
"Taxation -- Australian Taxes," to the extent that it covers matters of
Australian law or legal conclusions thereunder, has been reviewed by
them and is confirmed.
(v) To the best of such counsel's knowledge and information,
the description of the 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 or
necessary to make the statements therein not misleading.
(vi) This Agreement has been duly authorized, executed and
delivered by EquitiLink Holdings Limited and constitutes a valid and
binding obligation of EquitiLink Holdings Limited.
(vii) To the best of such counsel's knowledge and information,
there are no legal or governmental proceedings pending or threatened
against the Fund, the Manager or the Adviser that are required to be
disclosed in the Registration Statement, other than those disclosed
therein.
(4) The favorable opinion, dated as of the date of this Agreement,
of Xxxxx & Wood LLP, counsel for the Dealer Managers, with respect to the
issuance and sale of the Shares, and such other related matters as the Dealer
Managers may reasonably require.
(5) In giving their opinions required by subsection (b)(1) of this
Section, Dechert Price & Xxxxxx shall additionally state that nothing has come
to their attention that would lead them to believe that the Registration
Statement (other than the financial statements included therein, as to which no
belief need be stated), at the date of this Agreement, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus (other than the financial statement included therein, as to
which no belief need be stated), at the date of this Agreement, included an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. In rendering their
opinion, Dechert Price & Xxxxxx may rely, as to matters of Maryland law, on the
opinion of Xxxxxxx, Baetjer and Xxxxxx, LLP, dated as of the date of this
Agreement, provided that Dechert Price & Xxxxxx shall state that such opinion is
satisfactory in form and substance to such counsel and that the Dealer Managers
are justified in relying on it.
(6) In giving their opinion required by subsection (b)(3) of this
Section, Stikeman, Xxxxxxx shall additionally state that nothing has come to
their attention that would lead them to believe that Appendix A - "Australian
Economy" in the Registration Statement and the Prospectus, at the date of this
Agreement, contained an untrue
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statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(c) At the date of this Agreement, (i) the Registration Statement
and the Prospectus shall contain all statements which are required to be stated
therein in accordance with the 1933 Act, the 1940 Act and the Rules and
Regulations and in all material respects shall conform to the requirements of
the 1933 Act, the 1940 Act and the Rules and Regulations and the Prospectus
shall not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and no action, suit or
proceeding at law or in equity shall be pending or, to the knowledge of the
Fund, the Manager or the Adviser, threatened against the Fund, the Manager or
the Adviser that would be required to be set forth in the Prospectus other than
as set forth therein, (ii) there shall not have been, since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, any material adverse change in the condition, financial or
otherwise, of the Fund, the Manager or the Adviser, as applicable, or in its
earnings, business affairs or business prospects, whether or not arising in the
ordinary course of business, from that set forth in the Registration Statement
and Prospectus, (iii) the Manager and the Adviser shall each have the financial
resources available to it necessary for the performance of its services and
obligations as contemplated in the Registration Statement and the Prospectus and
(iv) no proceedings shall be pending or, to the knowledge of the Fund, the
Manager or the Adviser, threatened against the Fund, the Manager or the Adviser
before or by any Federal, state or other commission, board or administrative
agency wherein an unfavorable decision, ruling or finding would materially and
adversely affect the business, property, financial condition or income of either
the Fund, the Manager or the Adviser other than as set forth in the Registration
Statement and the Prospectus; and the Dealer Managers shall have received, at
the commencement date of the Offer, a certificate of the President or Treasurer
of the Fund and of the Managing Director of each of the Manager and the Adviser
dated as of such date, confirming the respective representations and warranties
contained in Section 1 of this Agreement and evidencing, to the best of their
knowledge and belief, after reasonable investigation, compliance with the
appropriate provisions of this subsection (c).
(d) At the time of execution of this Agreement, the Dealer Managers
shall have received from PricewaterhouseCoopers LLP a letter, dated such date in
form and substance satisfactory to the Dealer Managers, to the effect that:
(i) they are independent accountants with respect to the
Fund within the meaning of the 1933 Act and the Rules and Regulations;
(ii) in their opinion, the audited financial statements
examined by them and included in the Registration Statement comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1940 Act and the Rules and
Regulations;
(iii) they have performed specified procedures, not
constituting an audit, including a reading of the latest available
interim financial statements of the Fund, a reading of the minute books
of the Fund, inquiries of officials of the Fund responsible for
financial accounting matters and such other inquiries and procedures as
may be specified
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in such letter, and on the basis of such inquiries and procedures
nothing came to their attention that caused them to believe that (A) the
unaudited financial statements as of April 30, 1998 included in the
Registration Statement do not comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act and the 1940
Act and the Rules and Regulations applicable to unaudited interim
financial statements included in registration statements or are not in
conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited financial
statements included in the Registration Statement, and (B) during the
period from April 30, 1998 to a specified date not more than three days
prior to the date of this Agreement, there was any change in the capital
stock or net assets of the Fund, or any increase in the long-term debt
of the Fund, as compared with amounts shown on the unaudited financial
statements included in the Registration Statement, except for changes
which the Registration Statement discloses have occurred or may occur;
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
you 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.
(e) At the date of this Agreement, counsel for the Dealer Managers
shall have been furnished with such 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, the Manager and the 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 Managers and counsel for the Dealer Managers.
(f) On (i) the date of this Agreement and (ii) the day immediately
prior to the commencement date of the Offer, the Fund, the Manager, the Adviser
and Dechert Price & Xxxxxx shall have furnished to the Dealer Managers such
further information, certificates and documents, dated as of, respectively, (i)
the date of this Agreement and (ii) the commencement date of the Offer, as the
Dealer Managers may reasonably request to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions
herein contained.
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 Managers by notice to the Fund at any time at or prior to the
termination of the Offer, and such termination shall be without liability of any
party to any other party except as provided in Section 5.
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SECTION 7. Indemnification and Contribution.
(a) The Fund and the Manager, jointly and severally, agree to
indemnify and hold harmless each of the Dealer Managers and their affiliates and
their respective directors, officers, employees, agents and controlling persons
(each of the Dealer Managers and each such person being an "Indemnified Party")
as follows:
(i) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, joint or several, to which
such Indemnified Party may become subject under any applicable federal
or state law, or otherwise, and related to or arising out of (A) an
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto) or
the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary in order to make the statements
therein not misleading, (B) an untrue statement or alleged untrue
statement of a material fact contained in the Offering Materials (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a 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, (C) any breach by the Fund, the
Adviser or the Manager of any of their respective representations,
warranties and agreements contained in this Agreement or in any
certificate or document furnished pursuant to Section 6(c), 6(e) or 6(f)
hereof, (D) the Fund's failure to make the Offer, or its withdrawal,
termination or extension of the Offer or any other failure on its part
to comply with the terms and conditions specified in the Registration
Statement or the Offering Materials, (E) the Offer, the engagement of
the Dealer Managers pursuant to, and the performance by the Dealer
Managers 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 investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon the occurrence of any matter described in
clause (i) above, if such settlement is effected with the written
consent of the Fund or the Manager; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the Dealer
Managers), reasonably 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 based upon the occurrence of any matter described in clause
(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 Manager, to the extent that any such expense
is not paid under clause (i) or (ii) above.
This indemnity agreement will be in addition to any liability which the Fund or
the Manager may otherwise have.
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The Fund and the Manager shall not, however, be liable to an Indemnified
Party for any loss, liability, claim, settlement, damage or expense under (A)
clauses (i)(A) and (B) of this subsection 7(a) to the extent arising out of an
untrue statement or omission or alleged untrue statement or omission made in the
Registration Statement or the Offering Materials in reliance upon and in
conformity with written information furnished to the Fund by or on behalf of the
Dealer Managers expressly for use in the Registration Statement (or any
amendment thereto) or any Offering Materials (or any amendment or supplement
thereto) and (B) clause (i)(E) of this subsection 7(a) that is found in a final
judgment by a court of competent jurisdiction to have resulted from the
respective Dealer Manager's bad faith or gross negligence.
Each of the Fund and the Manager also agrees that no Indemnified Party
shall have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Fund, the Manager or their respective security holders or
creditors related to or arising out of the Offer or the engagement of the Dealer
Managers pursuant to, or the performance by the Dealer Managers of the services
contemplated by, this Agreement except to the extent that any loss, liability,
claim, damage or expense is found in a final judgment by a court of competent
jurisdiction to have resulted from the bad faith or gross negligence of such
Indemnified Party.
Each of the Fund and the Manager agrees that, without each of the Dealer
Managers' prior written consent, it will not settle, compromise or consent to
the entry of any judgment in any pending or threatened claim, action or
proceeding in respect of which indemnification could be sought under the
indemnification provisions of this Section 7 (whether or not the Dealer Managers
or any other Indemnified Party is an actual or potential party to such claim,
action or proceeding), unless such settlement, compromise or consent includes an
unconditional release of each Indemnified Party from all liability arising out
of such claim, action or proceeding.
(b) In circumstances in which the indemnity agreement provided for
in the preceding paragraphs of this Section 7 is unavailable or insufficient,
for any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the Offer or (ii) if the allocation provided
by the foregoing clause (i) is not permitted by applicable law, not only such
relative benefits but also the relative fault of the indemnifying party or
parties on the one hand and the indemnified party on the other in connection
with the statements or omissions or alleged statements or omissions that
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Fund and the Manager on the one hand and the Dealer
Managers on the other shall be deemed to be in the same proportion as the total
proceeds from the Offer (before deducting expenses) received by the Fund bear to
the total compensation received by the Dealer Managers. The relative fault of
the parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Fund or
a Dealer Manager, the parties' relative intents, knowledge, access to
information and opportunity to correct or prevent such statement or omission,
and any other equitable considerations appropriate in the circumstances. The
Fund,
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the Manager and the Dealer Managers agree that it would not be equitable
if the amount of such contribution were determined by pro rata or per capita
allocation (even if the Dealer Managers were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to above in this paragraph (b).
Notwithstanding any other provision of this paragraph (b), no Dealer Manager
shall be obligated to make contributions hereunder that in the aggregate exceed
the respective amount of the compensation paid to such Dealer Manager under this
Agreement, less the aggregate amount of any damages that such Dealer Manager has
otherwise been required to pay in respect of the same or any substantially
similar claim, and no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this paragraph (b), each person, if any, who controls the Fund, the Manager or a
Dealer Manager within the meaning of Section 15 of the 1933 Act or Section 20 of
the Exchange Act shall have the same rights to contribution as the Fund, the
Manager or such Dealer Manager, as the case may be.
(c) In the event that 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 in which such Indemnified Party is not named as a defendant, the Fund and
the Manager, jointly and severally, agree to reimburse the respective Dealer
Manager for all expenses incurred by it in connection with such Indemnified
Party's appearing and preparing to appear as a witness, including, without
limitation, the fees and disbursements of its legal counsel, and to compensate
the respective Dealer Manager in an amount to be mutually agreed upon.
(d) Each of the Fund and the Manager agrees to notify the respective
Dealer Manager promptly of the assertion against it or any other person of any
claim or the commencement of any action or proceeding relating to a transaction
contemplated by this Agreement. Promptly after receipt by an Indemnified Party
of written notice of any claim or commencement of any action or proceeding with
respect to which indemnification is being sought hereunder, such Indemnified
Party will notify the Fund in writing of such claim or of the commencement of
such action or proceeding, but failure so to notify the Fund will not relieve
either the Fund or the Manager from any liability which it may have to such
Indemnified Party under this indemnification agreement except to the extent that
the Fund or the Manager is materially prejudiced by such failure, and will not
relieve the Fund or the Manager from any other liability that it may have to
such Indemnified Party.
(e) The Fund and the Manager, 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 Manager may otherwise have.
(f) EquitiLink Holdings Limited and the Adviser agree that, to the
extent that the Fund or the Manager fails to indemnify each Indemnified Person
or person referred to in subsection (e) of this Section 7, in accordance with
the provisions of subsection (a), (c) and (e) of this Section 7, EquitiLink
Holdings Limited and the Adviser will indemnify and hold harmless each
Indemnified Person or person referred to in subsection (e) of this Section 7, to
the extent
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provided in such subsections (a), (c) and (e), respectively. This indemnity
agreement will be in addition to any liability which EquitiLink Holdings Limited
or the 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, the Manager or
the 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
Managers or any controlling person, or by or on behalf of the Fund, the Manager
or the Adviser and shall survive delivery of the Shares pursuant to the Offer.
SECTION 9. Termination of Agreement.
(a) This Agreement may be terminated in the sole discretion of the
Dealer Managers by notice to the Fund given at or prior to the termination of
the Offer in the event that the Fund or the Manager 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, the Manager or the 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
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, the
Manager or the Adviser, as the case may be), in the condition (financial
or otherwise), business prospects, net worth or results of operations of
the Fund, the Manager or the Adviser, except in each case as described
in or contemplated by 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, the American Stock Exchange or the Pacific Stock Exchange;
(iii) there has occurred any material adverse change in the
existing political or economic conditions or in the financial markets in
the United States or elsewhere or any outbreak of hostilities or other
calamity or crisis or any escalation of existing hostilities the effect
of which is such as to make it, in the Dealer Managers' judgment,
impracticable to market the Shares or enforce contracts for the sale of
the Shares; or
(iv) trading generally on the American Stock Exchange, the
Pacific Stock Exchange, the New York Stock Exchange, the National
Association of Securities Dealers Automated Quotations System or the
Sydney Stock Exchange shall have been suspended, 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 or
Australian or New Zealand federal authorities.
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(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. Jurisdiction of Courts of New York. The Manager, the Adviser
and EquitiLink Holdings Limited each hereby appoints EquitiLink U.S.A., Inc., 00
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 as its authorized agent (the "Authorized
Agent") upon which process may be served in any action by any of the Dealer
Managers, arising out of or based upon this Agreement which may be instituted in
any state or federal court in The City of New York, and the Manager, the Adviser
and EquitiLink Holdings Limited each expressly accepts the jurisdiction of any
such court in respect of such action. Such appointments shall be irrevocable
unless and until the appointment of a successor Authorized Agent and such
successor's acceptance of such appointment. The Manager, the Adviser and
EquitiLink Holdings Limited each will take any and all action, including the
filing of any and all documents and instruments, that may be necessary to
continue such appointment or appointments in full force and effect as aforesaid
and will appoint a successor Authorized Agent if the Authorized Agent named
above ceases operations in The City of New York. Service of process upon the
Authorized Agent and written notice of such service mailed or delivered to the
Manager, the Adviser or EquitiLink Holdings Limited at its address set forth in
Section 11 hereof shall be deemed in every respect service of process upon the
Manager, the Adviser or EquitiLink Holdings Limited, as the case may be.
SECTION 11. 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 Managers shall be directed to Prudential Securities Incorporated, Xxx Xxx
Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Transactions Group;
notices to the Fund shall be directed to the Fund, Attention: Xxxxxxxx Xxxxxxxx
c/o Prudential Investments Fund Management LLC, 000 Xxxxxxxx Xxxxxx, Xxxxxxx
Xxxxxx 0, Xxxxxx, Xxx Xxxxxx 00000; notices to the Manager shall be sent to the
Manager at Xxxxx Xxxxx, Xxxxx Xxxxxx, Xx. Helier, Jersey, Channel Islands,
Attention: Xxxxx Xxxxxxx; notices to the Adviser shall be sent to the Adviser at
Xxxxx 0, 000 Xxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxx Xxxxx, Xxxxxxxxx, Attention:
Xxxxxxxx Xxxxxxxx; and notices to EquitiLink Holdings Limited shall be sent to
EquitiLink Holdings Limited at Xxxxx 0, 000 Xxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxx
Xxxxx, Xxxxxxxxx, Attention: Xxxxxxxx Xxxxxxxx.
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SECTION 12. Parties. This Agreement shall inure to the benefit of and be
binding upon the Dealer Managers, the Fund, the Adviser, the Manager 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 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 13. 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. Specified times of day refer to New York City time.
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If the foregoing is in accordance with your understanding of our
Agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a single binding agreement
among the Dealer Managers, the Fund, the Manager and the Adviser in accordance
with its terms.
Very truly yours,
THE FIRST AUSTRALIA PRIME INCOME
FUND, INC.
By:
-----------------------------
Name:
Title:
EQUITILINK INTERNATIONAL
MANAGEMENT LIMITED
By:
-----------------------------
Name:
Title:
EQUITILINK AUSTRALIA LIMITED
By:
-----------------------------
Name:
Title:
EQUITILINK HOLDINGS LIMITED
By:
-----------------------------
Name:
Title:
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28
Confirmed and Accepted, as of the
date first above written:
PRUDENTIAL SECURITIES INCORPORATED
By:
--------------------------
Xxxx-Xxxxxx Canfin
Managing Director
X.X. XXXXXXX & SONS, INC.
By:
--------------------------
Name:
Title:
XXXXXXX XXXXX XXXXXX INC.
By:
--------------------------
Name:
Title:
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29
EXHIBIT A
September 28, 1998
SOLICITING DEALER AGREEMENT
Ladies and Gentlemen:
The First Australia Prime Income Fund, Inc., a Maryland corporation (the
"Fund"), proposes to issue to holders of record (the "Holders") as of the close
of business on September 25, 1998 (the "Record Date") 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-third of a 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 full right held on the
terms and subject to the conditions set forth in the Prospectus. Pursuant to the
terms of the Offer, such Rights also entitle Holders to acquire during the
Subscription Period at the Subscription Price certain additional Shares on the
terms and conditions of the over-subscription privilege as set forth in such
Prospectus.
The undersigned, as the dealer managers (the "Dealer Managers") named in
the Prospectus, have entered into a Dealer Manager Agreement dated September 28,
1998 with the Fund, EquitiLink International Management Limited, a Jersey,
Channel Islands corporation (the "Manager"), EquitiLink Australia Limited, a New
South Wales, Australia corporation (the "Adviser") and EquitiLink Holdings
Limited, a New South Wales, Australia corporation, pursuant to which the
undersigned have agreed to form and manage, for purposes of soliciting exercises
of Rights pursuant to the Offer, a group of soliciting dealers, including the
undersigned, consisting of brokers and dealers who shall be members in good
standing of the National Association of Securities Dealers, Inc. (the "NASD") or
brokers or dealers not registered under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") with their principal place of business located
outside the United States, its territories or possessions who agree to solicit
exercises of Rights only in accordance with the laws applicable to such
activities and agree to solicit no exercises of Rights within the United States,
its territories or its possessions or from persons who are nationals thereof or
residents therein and who agree, although not members of the NASD, to conform to
the Conduct Rules of the NASD, in soliciting exercises of Rights outside the
Untied States, its territories and possessions, to the same extent as though
they were members thereof (the members of such group being hereinafter called
the "Soliciting Dealers"). You are invited to become one of the Soliciting
Dealers and by your confirmation hereof you agree to act in such capacity, in
accordance with the terms and
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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
Exchange Act, and the applicable rules and regulations of the Securities and
Exchange Commission. Accompanying this Agreement are copies of the following
documents: the Prospectus describing the terms of the Offer, an Exercise Form
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. As compensation for the
services of the Soliciting Dealers hereunder, the Dealer Managers will reallow
to each Soliciting Dealer a concession of 2.50% of the Subscription Price per
Share purchased pursuant to the Offer through such Soliciting Dealer's efforts
(excluding the exercise of Rights by a Soliciting Dealer for its own account or
for the account of any affiliate, other than a natural person, pursuant to the
Offer) (a "Reallowance"); provided that the aggregate reallowance paid to any
Soliciting Dealer hereunder may not exceed the product of (i) 2.50% of the
Subscription Price per Share, times (ii) the aggregate number of shares of
Common Stock held in such Soliciting Dealer's participant accounts with The
Depository Trust Company on the Record Date divided by three. A Soliciting
Dealer, other than the Dealer Managers acting in such capacity, shall be
entitled to a Reallowance only where the insertion of such Soliciting Dealer's
name has been made on the Exercise Form in the place so provided and where the
Dealer Managers shall have received from such Soliciting Dealer an executed copy
of this Agreement in the form hereof. Payment of such Reallowance will be made
by the Dealer Managers or their agent directly to such Soliciting Dealer by U.S.
dollar check drawn upon an account at a bank in New York City. Such payments to
Soliciting Dealers shall be made as soon as practicable after payment of the
Dealer Manager Fee is made to the Dealer Managers.
No Reallowance shall be payable in respect of any particular
exercise of Rights if, in the opinion of counsel for the Dealer Managers, such
Reallowance 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 Reallowance payable to any
Soliciting Dealer hereunder or as to the proper recipient of any such
Reallowance, the decision of the Dealer Managers shall be conclusive. The
payment of any Reallowance to Soliciting Dealers shall be solely the
responsibility of the Dealer Managers, but the Dealer Managers shall have no
obligation or liability to any Soliciting Dealer for any obligation of the Fund
hereunder.
For the purpose of this Section 2, the Offer will expire on the
expiration date set forth in the Prospectus. No Reallowance will be payable to
Soliciting Dealers with respect to Rights exercised after expiration of the
Offer.
3. Trading. You represent to the Fund and the Dealer Managers that
you have not engaged, and agree that you will not engage, in any activity in
respect of the Rights or the Shares
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in violation of the Exchange Act, including Regulation M thereunder. Your
acceptance of a Reallowance will constitute a representation that you are
eligible to receive such Reallowance and that you have complied with the
preceding sentence and your other agreements hereunder.
4. Unauthorized Information and Representations. Neither you nor
any other person is authorized by the Fund or the Dealer Managers 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 Managers, 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 Managers not to publish,
circulate or otherwise use any other advertisement or solicitation material
without the prior approval of the Fund and the Dealer Managers. You are not
authorized to act as agent of the Fund or the Dealer Managers 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 Managers 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 Managers assume 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 Survey indicates the states in which it
is believed that acceptances of the Offer may be solicited under the applicable
Blue Sky or securities laws. Under no circumstances will you as a Soliciting
Dealer engage in any activities hereunder in any state (a) that is not listed in
said enclosed Blue Sky Survey as a state in which acceptances of the Offer may
be solicited under the Blue Sky or securities law of such state or (b) in which
you may not lawfully so engage. The Blue Sky Survey shall not be considered
solicitation material as that term is herein used. You authorize the undersigned
to cause to be filed in the Department of State of the State of New York a
Further State Notice with respect to the Shares complying with the provisions of
Article 23-A of the General Business Law of the State of New York, if required
by such provisions. 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 Managers, or to the Dealer Managers
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 Managers of the obligation to pay when due any Reallowance payable to you
hereunder with respect to Shares acquired pursuant to the exercise of Rights
through the close of business on the date of such termination that are
thereafter exercised pursuant to the Offer or relieve the Fund, the Manager, the
Investment Adviser or EquitiLink Limited 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.
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7. Liability of Dealer Managers. Nothing herein contained shall
constitute the Soliciting Dealers as partners with the Dealer Managers or with
one another, or agents of the Dealer Managers or the Fund, or shall render the
Fund liable for the obligations of the Dealer Managers or the obligations of any
Soliciting Dealers, or shall render the Dealer Managers liable for the
obligations of any Soliciting Dealers other than itself nor constitute the Fund
or the Dealer Managers the agent of any Soliciting Dealer. The Fund, the
Manager, the Adviser, EquitiLink Holdings Limited and the Dealer Managers 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, the Manager, the Adviser and EquitiLink Holdings Limited 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 or the Dealer Managers in any connection or
transaction relating to the Offer.
8. Indemnification. Under the Dealer Manager Agreement, each of the
Fund, the Manager, the Adviser and EquitiLink Holdings Limited has agreed, to
indemnify and hold harmless the Dealer Managers, each Soliciting Dealer and each
person, if any, controlling the Dealer Managers or any Soliciting Dealer within
the meaning of Section 15 of the Securities Act against certain liabilities,
including liabilities under the Securities Act and the Exchange Act. By
returning an executed copy of this Agreement, you agree to indemnify the Fund,
the Manager, the Adviser, EquitiLink Holdings Limited and the Dealer Managers
(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.
9. Delivery of Prospectus. You agree for the benefit of the Fund
and the Dealer Managers to deliver to each person who owns beneficially Common
Stock registered in your name, and who exercises Rights on an Exercise Form on
which your name, to your knowledge, has been inserted, a Prospectus prior to the
exercise of such person's Rights.
10. Status of Soliciting Dealer. Your acceptance of a Reallowance
will constitute a representation to the Fund and the Dealer Managers that you
(i) have not purported to act as agent of the Fund or the Dealer Managers in any
connection or in any transaction relating to the Offer, (ii) are not affiliated
with the Fund, (iii) will not accept a Reallowance from the Dealer Managers
pursuant to the terms hereof with respect to Shares purchased by you pursuant to
an exercise of Rights for your own account or the account of any affiliate,
other than a natural person, (iv) will not remit, directly or indirectly, any
part of any Reallowance to any beneficial owner of Shares purchased pursuant to
the Offer, (v) agree to the amount of the Reallowance and the terms and
conditions set forth herein with respect to receiving such Reallowance, (vi)
have read and reviewed the Prospectus, and (vii) are (a) a member in good
standing of the NASD and will comply with Rules 2420, 2730, 2740 and 2750 of the
Conduct Rules of the NASD or (b) a broker or dealer with your principal place of
business located outside the United States, its
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territories or its possessions and not registered under the Exchange Act, and
you agree for the benefit of the Fund and the Dealer Managers (1) to solicit
exercises of Rights only in accordance with the laws applicable to such
activities and to solicit no exercises of Rights within the United States, its
territories or possessions or from persons who are nationals thereof or
residents therein, and (2) that, although not a member of the NASD, in acting
under this Agreement you will conform to the Conduct Rules of the NASD,
including Rules 2420, 12730, 2740 and 2750 thereof, in soliciting exercises of
Rights outside the United States, its territories and possessions to the same
extent as though you were a member thereof.
11. Notices. Any notice hereunder shall be in writing or by telegram
and if to you as a Soliciting Dealer shall be deemed to have been duly given if
mailed or telegraphed to you at the address to which this letter is addressed,
and if to the Dealer Managers, if delivered or sent to Prudential Securities
Incorporated at Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Transactions Group.
12. Parties in Interest. The Agreement herein set forth is intended
for the benefit of the Dealer Managers, the Soliciting Dealers, the Fund, the
Manager, the Adviser and EquitiLink Holdings Limited.
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 ((000) 000-0000/1564) to Prudential Securities Incorporated,
Attention: Xx. Xxxxxxxx Xxxxxxxx, Equity Transactions Group.
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.
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NOTICE: IF A COPY OF THE CONFIRMATION REFERRED TO IN SECTION 13 HEREOF
IS NOT SIGNED, DATED AND RETURNED TO THE DEALER MANAGERS PRIOR TO THE EXPIRATION
OF THE OFFER, NO REALLOWANCE WILL BE PAYABLE HEREUNDER.
Very truly yours,
PRUDENTIAL SECURITIES INCORPORATED
X.X. XXXXXXX & SONS, INC.
XXXXXXX XXXXX XXXXXX INC.
As Dealer Managers
By: PRUDENTIAL SECURITIES INCORPORATED
By
-------------------------------------
Xxxx-Xxxxxx Canfin
Managing Director
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CONFIRMATION
PRUDENTIAL SECURITIES INCORPORATED
XXXXXXX XXXXX XXXXXX INC.
X.X. XXXXXXX & SONS, INC.
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxxx Xxxxxxxx
Equity Transactions Group
Facsimile: (000) 000-0000/1564
Dear Sirs:
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 First
Australia Prime Income 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 EquitiLink International
Management Limited (the "Manager") and upon no other representations whatsoever,
written or oral, (ii) have not purported to act as agent of the Fund or the
Dealer Managers in any connection or in any transaction relating to the Offer,
(iii) are not affiliated with the Fund, (iv) are not purchasing Shares for our
own account or the account of any of our affiliates, other than a natural
person, (v) will not remit, directly or indirectly, any part of any Reallowance
to any beneficial owner of Shares purchased pursuant to the Offer, and (vi)
agree to the amount of the Reallowance and the terms and conditions set forth in
this Agreement with respect to receiving such Reallowance. We also confirm that
we are a broker or dealer who is a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD") and will comply with Rules
2420, 2730, 2740, 2750 of the Conduct Rules of the NASD or a broker or dealer
not registered under the Securities Exchange Act of 1934 with its principal
place of business located outside the United States, its territories or
possessions who by signing below also (a) agrees to solicit exercises of Rights
only in accordance with the laws applicable to such activities and to solicit no
exercises of Rights within the United States, its territories or its
possessions, or from persons who are nationals thereof or residents therein and
(b) agrees, although not a member of the NASD, to conform to the Conduct Rules
of the NASD, including Rules 2420, 2730, 2740, 2750 of the Conduct Rules
thereof, in acting under this Agreement in soliciting exercises of Rights
outside the United States, its territories and possessions, to the same extent
as though we were a member thereof. In connection with the Offer, we represent
that we have complied, and agree that we will comply, with any applicable
requirements of the Securities Act of 1933, as amended, the Securities Exchange
Act of 1934, as amended, any applicable securities or Blue Sky laws and the
rules and regulations under the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and any applicable securities or
Blue Sky laws.
36
---------------------------------
Firm Name
By
-------------------------------
Name:
Title:
Address:
---------------------------------
---------------------------------
Telephone Number:
---------------------------------
Facsimile Number:
---------------------------------
DTC Number:
---------------------------------
Nominee Name:
---------------------------------
Dated: ______________, 1998
NOTICE: IF A COPY OF THIS CONFIRMATION IS NOT SIGNED, DATED AND RETURNED
TO THE DEALER MANAGERS PRIOR TO THE EXPIRATION OF THE OFFER, NO REALLOWANCE WILL
BE PAYABLE HEREUNDER.
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