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EXHIBIT (h)
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The Xxxxx Fund, Inc.
a Maryland corporation
___________________* Shares of Common Stock Issuable Upon
Exercise of Non-Transferable Rights to Subscribe for
Such Shares of Common Stock
Common Stock Par Value $0.10 Per Share
DEALER MANAGER AGREEMENT
April , 1998
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
The Xxxxx Fund, Inc., a Maryland corporation (the "Fund") and
Xxxxx Advisors Inc., a Delaware corporation (the "Investment Adviser") each
confirms the agreement with and appointment of Xxxxxxx Xxxxx & Co., Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (the "Dealer Manager") to act as
dealer manager in connection with the issuance by the Fund to the holders of
record (the "Holders") of the Fund's common stock, par value $0.10 per share
(the "Common Stock"), of non-transferable rights entitling such Holders to
subscribe for shares of Common Stock and, subject to certain conditions,
additional shares of Common Stock pursuant to an over- subscription privilege
(the "Offer"). The shares of Common Stock for which Holders may subscribe
pursuant to the Offer are herein referred to as the "Shares." Pursuant to the
terms of the Offer, the Fund is issuing to each Holder one non-transferable
right (each a "Right" and collectively, the "Rights") for each share of Common
Stock held on the record date set forth in the Prospectus (as defined herein)
(the "Record Date"). Such Rights entitle Holders to acquire during the
subscription period set forth in the Prospectus (as defined herein) (the
"Subscription Period"), at the price set forth in such Prospectus (the
"Subscription Price"), one Share for each seven Rights exercised on the terms
and conditions set forth in such Prospectus. Pursuant to the terms of the Offer,
such
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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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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 Fund has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form N-2 (Nos. 333-46955 and
811-04739) and a related preliminary prospectus under the Investment Company Act
of 1940, as amended (the "Investment Company Act"), the Securities Act of 1933,
as amended (the "Securities Act"), and the rules and regulations of the
Commission under the Investment Company Act and the Securities Act (the "Rules
and Regulations"), and has filed such amendments to such registration statement
on Form N-2, if any, and such amended preliminary prospectuses as may have been
required to the date hereof. If the registration statement has not become
effective, a further amendment to such registration statement, including forms
of a final prospectus necessary to permit such registration statement to become
effective will promptly be filed by the Fund with the Commission. If the
registration statement has become effective and any prospectus contained therein
omits certain information at the time of effectiveness pursuant to Rule 430A of
the Rules and Regulations, a final prospectus containing such omitted
information will promptly be filed by the Fund with the Commission in accordance
with Rule 497(h) of the Rules and Regulations. The registration statement, as
amended at the time it becomes or became effective, including financial
statements and all exhibits and all documents, if any, incorporated therein by
reference, and any information deemed to be included by Rule 430A, is called the
"Registration Statement." The term "Prospectus" means the final prospectus in
the form filed with the Commission pursuant to Rule 497(c), (e), (h) or (j) of
the Rules and Regulations, as the case may be, as from time to time amended or
supplemented pursuant to the Securities Act and all documents, if any,
incorporated by reference therein. The Prospectus and letters to beneficial
owners of the shares of Common Stock of the Fund, forms used to exercise rights,
any letters from the Fund to securities dealers, commercial banks and other
nominees and any newspaper announcements, press releases and other offering
materials and information that the Fund may use, approve, prepare or authorize
for use in connection with the Offer, are collectively referred to hereinafter
as the "Offering Materials."
SECTION 1. Representations and Warranties.
(a) Each of the Fund and the Investment Adviser represents and warrants
to the Dealer Manager as of the date hereof, as of the date of the commencement
of the Offer (such later date being hereinafter referred to as the
"Representation Date") and as of the Expiration Date (as defined below) that:
(i) The Fund meets the requirements for use of Form
N-2 under the Securities Act and the Investment Company Act and the
Rules and Regulations. At the time the Registration Statement became or
becomes effective, the Registration Statement did or will comply in all
material respects with the requirements of the Securities Act, the
Investment Company Act and the Rules and Regulations and did or will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. From the time the Registration
Statement became or becomes effective through the expiration date of
the Offer set forth in the Prospectus (the "Expiration Date"), the
Prospectus and the Offering Materials
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will 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, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Fund in writing by the Dealer Manager expressly for
use in the Registration Statement, Prospectus or Offering Materials.
(ii) The accountants who certified the financial
statements of the Fund set forth or incorporated by reference in the
Registration Statement and the Prospectus are independent public
accountants as required by the Investment Company Act and the Rules and
Regulations.
(iii) The financial statements of the Fund set forth or
incorporated by reference in the Registration Statement and the
Prospectus present fairly the financial position of the Fund as at the
date indicated and the results of its operations for the period
specified; such financial statements have been prepared in conformity
with generally accepted accounting principles; and the information in
the Prospectus under the headings "Fund Expenses" and "Financial
Highlights" presents fairly in all material respects the information
stated therein.
(iv) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse
change, or any development involving a prospective material adverse
change, in the condition (financial or otherwise) or management of the
Fund, or in the 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 quarterly distributions on the outstanding
shares of Common Stock of the Fund, there has been no special dividend
or distribution of any kind paid or declared in respect of the Fund's
capital stock.
(v) The Fund has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Maryland with full corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement and the Prospectus; the Fund currently maintains
all governmental licenses, permits, consents, orders, approvals, and
other authorizations (collectively, the "Licenses and Permits")
necessary to carry on its business as contemplated in the Prospectus,
and is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which the failure to so
qualify, either individually or in the aggregate, would have a material
adverse effect upon the operations or financial condition of the Fund;
and the Fund has no subsidiaries.
(vi) The Fund is registered with the Commission under
the Investment Company Act as a closed-end, diversified management
investment company, no order of suspension or revocation of such
registration has been issued or proceedings therefor
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initiated or threatened by the Commission and all required action has
been taken under the Securities Act and the Investment Company Act to
consummate the issuance of the Rights and the issuance and sale of the
Shares.
(vii) The authorized, issued and outstanding capital
stock of the Fund at April __, 1998 is as set forth in the Prospectus
under the caption "Common Stock"; the outstanding shares of Common
Stock have been duly authorized by all requisite corporate action on
the part of the Fund and are validly issued, fully paid and
non-assessable; the Rights and the Shares have been duly authorized by
all requisite corporate action on the part of the Fund for issuance
pursuant to the Offer; the Shares have been duly authorized by all
requisite corporate action on the part of the Fund for sale pursuant to
the terms of the Offer and, when issued and delivered by the Fund
pursuant to the terms of the Offer against payment of the consideration
set forth in the Prospectus, will be validly issued, fully paid and
non-assessable; the Common Stock, the Rights and the Shares conform in
all material respects to the descriptions thereof set forth in the
Registration Statement, the Prospectus and the Offering Materials; and
the issuance of each of the Rights and the Shares is not subject to any
preemptive rights.
(viii) Each of this Agreement, the Investment Advisory
Agreement referred to in the Registration Statement (the "Investment
Advisory Agreement"), the Administration Agreement and Amendment
thereto referred to in the Registration Statement (the "Administration
Agreement"), the Subscription Agency Agreement referred to in the
Registration Statement (the "Subscription Agency Agreement") with State
Street Bank & Trust Co. (the "Subscription Agent"), the Custodian
Agreement referred to in the Registration Statement (the "Custodian
Agreement"), the Information Agency Agreement referred to in the
Registration Statement (the "Information Agency Agreement") with
Xxxxxxxxx & Company Inc. (the "Information Agent") and the Stock
Transfer Agent Service Agreement referred to in the Registration
Statement (the "Stock Transfer Agent Service Agreement") (collectively,
all of the foregoing are the "Fund Agreements") has been duly
authorized by all requisite corporate action on the part of the Fund
and executed and delivered by the Fund, and each complies with all
applicable provisions of the Investment Company Act; and, assuming due
authorization, execution and delivery by the other parties thereto,
each of the Fund Agreements constitutes a legal, valid, binding and
enforceable obligation of the Fund, subject to the qualification that
the enforceability of the Fund's obligations thereunder may be limited
by bankruptcy, insolvency, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors' rights,
and to general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
(ix) Neither the execution or delivery by the Fund nor
the performance by the Fund of any of its obligations under any
material contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which it is a party or by which it is bound
contravenes or constitutes a default under any provision contained in
any law, rule or regulation of any governmental or regulatory authority
or any order or regulation of any court by which the Fund or any of its
assets is bound or affected.
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(x) There is no action, suit or proceeding before or
by any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Fund or the Investment Adviser
threatened against or affecting, the Fund, which might result in any
material adverse change in the condition, financial or otherwise,
business affairs, business prospects, net worth or results of
operations of the Fund, or which might materially and adversely affect
the properties or assets of the Fund; and there are no material
contracts or documents of the Fund which are required to be filed as
exhibits to the Registration Statement by the Securities Act, the
Investment Company Act or by the Rules and Regulations which have not
been so filed.
(xi) The Fund owns or possesses, or can acquire on
reasonable terms, adequate trademarks, service marks and trade names
necessary to conduct its business as described in the Registration
Statement, and the Fund has not received any notice of infringement of
or conflict with asserted rights of others with respect to any
trademarks, service marks or trade names which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would materially adversely affect the conduct of the business,
operations, financial condition or income of the Fund.
(xii) The Fund has complied in all previous tax years,
and intends to direct the investment of the proceeds of the offering
described in the Registration Statement and the Prospectus in such a
manner as to continue to comply, with the requirements of Subchapter M
of the Internal Revenue Code of 1986, as amended ("Subchapter M of the
Code"), and has qualified and intends to continue to qualify as a
regulated investment company under Subchapter M of the Code.
(xiii) The Fund is not in violation of its Articles of
Incorporation, as amended (the "Charter"), or its by-laws, as amended
(the "By-Laws") or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
material contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which it is a party or by which it may be bound;
the issuance of the Rights, the issuance and sale of the Shares and the
performance and consummation of the other transactions contemplated
herein and the other Fund Agreements have been duly authorized by all
necessary corporate action and will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Fund
pursuant to any material contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Fund is a party or by
which it may be bound or to which any of the property or assets of the
Fund is subject, nor will such action result in any violation of the
provisions of the Charter or By-Laws or any law, administrative
regulation or administrative or court decree applicable to the Fund.
(xiv) The Common Stock has been duly listed on the New
York Stock Exchange ("NYSE") and the Pacific Exchange, Inc. ("PXE") and
prior to their issuance the Shares will have been duly approved for
listing, subject to official notice of issuance, on the NYSE and PXE.
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(xv) The Fund (A) has not taken, directly or
indirectly, any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Fund
to facilitate the issuance of the Rights or the sale or resale of the
Shares, (B) has not since the filing of the Registration Statement
sold, bid for or purchased, or paid anyone any compensation for
soliciting purchases of, shares of Common Stock of the Fund (except for
the solicitation of exercises of the Rights pursuant to this Agreement)
and (C) will not, until the later of the expiration of the Rights or
the completion of the distribution (within the meaning of the
anti-manipulation rules under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) of the Shares, sell, bid for or purchase,
pay or agree to pay to any person any compensation for soliciting
another to purchase any other securities of the Fund (except for the
solicitation of the exercises of Rights pursuant to this Agreement);
provided that any action in connection with the Fund's Distribution
Reinvestment and Cash Purchase Plan will not be deemed to be within the
terms of this Section 1(a)(xv).
(xvi) No consent, approval, authorization, notification
or order of, or filing with, any court or governmental agency or body,
whether foreign or domestic, is legally required for the consummation
by the Fund of the transactions contemplated by the Fund Agreements or
the Registration Statement, except such as have been obtained, or if
the registration statement filed with respect to the Shares is not
effective under the Securities Act as of the time of execution hereof,
such as may be required (and shall be obtained as provided in this
Agreement) under the Investment Company Act, the Securities Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
state securities laws.
(b) The Investment Adviser represents and warrants to the Dealer
Manager as of the date hereof and as of the Representation Date and as of the
Expiration Date that:
(i) The Investment Adviser has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the State of Delaware with full corporate power and authority
to own, lease and operate its properties and conduct its business as
described in the Registration Statement and the Prospectus; the
Investment Adviser currently maintains all Licenses and Permits
necessary to carry on its business as contemplated in the Prospectus,
and is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which the failure to so
qualify, either individually or in the aggregate, would have a material
adverse effect upon the operations or financial condition of the
Investment Adviser; and the Investment Adviser has no subsidiaries.
(ii) The Investment Adviser is duly registered as an
investment adviser under the Investment Advisers Act of 1940, as
amended (the "Advisers Act"), and is not prohibited by the Advisers Act
or the Investment Company Act, or the rules and regulations under such
Acts, from acting as an investment adviser for the Fund as contemplated
in the Registration Statement and the Prospectus and the Investment
Advisory Agreement.
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(iii) The description of the Investment Adviser in the
Registration Statement and the Prospectus is true and correct and does
not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order
to make the statements therein not misleading.
(iv) Each of this Agreement and the Investment Advisory
Agreement has been duly authorized, executed and delivered by the
Investment Adviser and complies with all applicable provisions of the
Advisers Act and the Investment Company Act, and is, assuming due
authorization, execution and delivery by the other parties thereto, a
legal, valid, binding and enforceable obligation of the Investment
Adviser, subject to the qualification that the enforceability of the
Investment Adviser's obligations thereunder may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights, and
to general principles of equity (regardless of whether enforceability
is considered in a proceeding in equity or at law).
(v) Neither the performance by the Investment Adviser
of its obligations under this Agreement or the Investment Advisory
Agreement nor the consummation of the transactions contemplated therein
or in the Registration Statement nor the fulfillment of the terms
thereof will conflict with, result in a breach or violation of, or
constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any properties or assets of the
Investment Adviser under the charter or by-laws of the Investment
Adviser, or the terms and provisions of any agreement, indenture,
mortgage, lease or other instrument to which the Investment Adviser is
a party or by which it may be bound or to which any of the property or
assets of the Investment Adviser is subject, nor will such action
result in any violation of any order, law, rule or regulation of any
court or governmental agency or body, whether foreign or domestic,
having jurisdiction over the Investment Adviser or any of its
properties.
(vi) Except as set forth in the Registration Statement
and the Prospectus, there is no pending or, to the best knowledge of
the Investment Adviser, threatened action, suit or proceeding to which
the Investment Adviser is a party before or by any court or
governmental agency, authority or body or any arbitrator, whether
foreign or domestic, which might result in any material adverse change
in the condition (financial or other), business prospects, net worth or
results of operations of the Investment Adviser, or which might
materially and adversely affect the properties or assets thereof of a
character required to be disclosed in the Registration Statement or
Prospectus.
(vii) The Investment Adviser does not require any
governmental licenses, permits, consents, orders, approvals or other
authorizations to enable the Investment Adviser to continue to
supervise investments in securities as contemplated in the Prospectus
other than those which it has already obtained.
(viii) No consent, approval, authorization, notification
or order of, or any filing with, any court or governmental agency or
body is required under federal law or the laws of any other
jurisdiction, whether foreign or domestic, for the consummation by the
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Investment Adviser of the transactions contemplated by this Agreement
or the Investment Advisory Agreement.
(ix) The Investment Adviser (A) has not taken, directly
or indirectly, any action designed to cause or to result in, or that
has constituted or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of any security of the
Fund to facilitate the issuance of the Rights or the sale or resale of
the Shares, (B) has not since the filing of the Registration Statement
sold, bid for or purchased, or paid anyone any compensation for
soliciting purchases of, shares of Common Stock of the Fund (except for
the solicitation of exercises of Rights pursuant to this Agreement) and
(C) will not, until the later of the expiration of the Rights or the
completion of the distribution (within the meaning of the
anti-manipulation rules under the Exchange Act) of the Shares, sell,
bid for or purchase, pay or agree to pay any person any compensation
for soliciting another to purchase any other securities of the Fund
(except for the solicitation of exercises of Rights pursuant to this
Agreement); provided that any action in connection with the Fund's
Distribution Reinvestment and Cash Purchase Plan will not be deemed to
be within the terms of this Section 1(b)(ix).
(x) The Investment Adviser has the financial resources
available to it necessary for the performance of its services and
obligations as contemplated in the Registration Statement and the
Prospectus.
(xi) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
otherwise stated therein, there has been no material adverse change, or
any development involving a prospective material adverse change, in the
condition (financial or otherwise) or management of the Investment
Adviser, or in the business affairs or business prospects of the
Investment Adviser, whether or not arising in the ordinary course of
business.
(c) Any certificate signed by any officer of the Fund or the Investment
Adviser and delivered to the Dealer Manager or counsel for the Dealer Manager
shall be deemed a representation and warranty by the Fund or the Investment
Adviser, as the case may be, to the Dealer Manager, as to the matters covered
thereby.
SECTION 2. Agreement to Act as Dealer Manager.
(a) On the basis of the representations and warranties contained
herein, and subject to the terms and conditions of the Offer:
(i) The Fund hereby appoints the Dealer Manager and
other soliciting dealers entering into a Soliciting Dealer Agreement in
the form attached hereto as Exhibit A (the "Soliciting Dealer
Agreement") with the Dealer Manager (the "Soliciting Dealers"), to
solicit, in accordance with the Securities Act, the Investment Company
Act and the Exchange Act, the rules and regulations under those Acts,
any applicable Blue Sky laws, and its customary practice, the exercise
of the Rights and the over-subscription privilege, subject to the terms
and conditions of this Agreement, the procedures described in the
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Registration Statement and the Prospectus and, where applicable, the
terms and conditions of such Soliciting Dealer Agreement; and
(ii) To the extent available, the Fund agrees to
furnish, or cause to be furnished, to the Dealer Manager, lists, or
copies of those lists, showing (to the knowledge of the Fund) the names
and addresses of, and number of shares of Common Stock held by, Holders
as of the Record Date, and the Dealer Manager agrees to use such
information only in connection with the Offer, and not to furnish the
information to any other person, except that the Dealer Manager may
furnish necessary and appropriate information to securities brokers and
dealers that the Dealer Manager has requested to solicit exercises of
Rights.
(b) The Dealer Manager agrees to provide to the Fund, in addition to
the services described in paragraph (a) of this Section 2, financial advisory
and marketing services in connection with the Offer.
(c) The Fund and the Dealer Manager agree that the Dealer Manager is an
independent contractor with respect to the solicitation of the exercise of
Rights and the performance of financial advisory and marketing services to the
Fund contemplated by this Agreement.
(d) In rendering the services contemplated by this Agreement, the
Dealer Manager will not be subject to any liability to the Fund or the
Investment Adviser, or any of their affiliates, for any act or omission on the
part of any securities broker or dealer (except with respect to the Dealer
Manager acting in such capacity) or any other person, and the Dealer Manager
will not be liable for acts or omissions in performing its obligations under
this Agreement, except for any losses, claims, damages, liabilities and expenses
determined in a final judgment by a court of competent jurisdiction to have
resulted directly from the Dealer Manager's gross negligence or willful
misconduct in such acts or omissions.
SECTION 3. Dealer Manager Fees and Solicitation Fees. In full payment
for services rendered and to be rendered hereunder by the Dealer Manager (other
than solicitation efforts), the Fund agrees to pay the Dealer Manager a fee for
its financial advisory and marketing services equal to 1.25% of the aggregate
Subscription Price for the Shares issued pursuant to the Offer (the "Dealer
Manager Fee"). In full payment for the soliciting efforts to be rendered, the
Fund agrees to pay fees (the "Solicitation Fees") to either the Soliciting
Dealer or the Dealer Manager equal to 2.50% of the Subscription Price per Share
for each Share issued pursuant to the Offer (such Solicitation Fees paid to the
Dealer Manager are in addition to the Dealer Manager Fee). The Fund agrees to
pay the Solicitation Fees to the broker-dealer designated on the related
Subscription Certificate, provided that such designated broker-dealer has
executed a confirmation accepting the terms of the Soliciting Dealer Agreement,
and if no broker-dealer is so designated or a broker-dealer is otherwise not
entitled to receive compensation pursuant to the terms of the Soliciting Dealer
Agreement, then to pay the Dealer Manager the Solicitation Fee for Shares issued
pursuant to the Offer. Payment to the Dealer Manager by the Fund will be in the
form of a wire transfer of same day funds to an account or accounts identified
by the Dealer Manager. Such payments will be made on the day after the final
payment for Shares is due as set forth in the Prospectus, or when such payments
are actually received and the corresponding funds are available. Xxxxx
Securities Corp. will be such designated broker-dealer with respect to Shares
issued to participants in the Fund's Distribution Reinvestment
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and Cash Purchase Plan, unless the participant designates otherwise on the
related Subscription Certificate. Payment of the Solicitation Fees to a
Soliciting Dealer that executed a confirmation will be made by the Fund directly
to such Soliciting Dealer by U.S. dollar checks drawn upon an account at a bank
in New York City. Such payments to such Soliciting Dealers shall be made as soon
as practicable after payment of the Dealer Manager Fee is made to the Dealer
Manager.
SECTION 4. Covenants.
(a) The Fund covenants with the Dealer Manager as follows:
(i) The Fund will use its best efforts to cause the
Registration Statement to become effective under the Securities Act,
and will advise the Dealer Manager promptly as to the time at which the
Registration Statement and any amendments thereto (including any
post-effective amendment) becomes so effective.
(ii) The Fund will notify the Dealer Manager
immediately, and confirm the notice in writing, (i) of the
effectiveness of the Registration Statement and any amendment thereto
(including any post-effective amendment), (ii) of the receipt of any
comments from the Commission, (iii) of any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose, (v) of the issuance by the Commission of
an order of suspension or revocation of the notification on Form N-8A
of registration of the Fund as an investment company under the
Investment Company Act or the initiation of any proceeding for that
purpose and (vi) of the suspension of the qualification of the Shares
or the Rights for offering or sale in any jurisdiction. The Fund will
make every reasonable effort to prevent the issuance of any stop order
described in subsection (iv) hereunder or any order of suspension or
revocation described in subsection (v) or subsection (vi) hereunder
and, if any such stop order or order of suspension or revocation is
issued, to obtain the lifting thereof at the earliest possible moment.
(iii) The Fund will give the Dealer Manager notice of
its intention to file any amendment to the Registration Statement
(including any post-effective amendment) or any amendment or supplement
to the Prospectus (including any revised prospectus which the Fund
proposes for use by the Dealer Manager in connection with the Offer,
which differs from the prospectus on file at the Commission at the time
the Registration Statement becomes effective, whether such revised
prospectus is required to be filed pursuant to Rule 497(c), (e), (h) or
(j) of the Rules and Regulations), whether pursuant to the Investment
Company Act, the Securities Act, or otherwise, and will furnish the
Dealer Manager with copies of any such amendment or supplement a
reasonable amount of time prior to such proposed filing or use, as the
case may be, and will not file any such amendment or supplement to
which the Dealer Manager or counsel for the Dealer Manager shall
reasonably object.
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(iv) The Fund will, without charge, deliver to the
Dealer Manager, as soon as practicable, the number of copies (one of
which is manually executed) of the Registration Statement as originally
filed and of each amendment thereto as it may reasonably request, in
each case with the exhibits filed therewith.
(v) The Fund will, without charge, furnish to the
Dealer Manager, from time to time during the period when the Prospectus
is required to be delivered under the Securities Act, such number of
copies of the Prospectus (as amended or supplemented) as the Dealer
Manager may reasonably request for the purposes contemplated by the
Securities Act or the Rules and Regulations.
(vi) If any event shall occur as a result of which it
is necessary, in the opinion of counsel for the Fund, to amend or
supplement the Registration Statement or the Prospectus in order to
make the Prospectus not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, the Fund will
forthwith amend or supplement the Prospectus by preparing, filing with
the Commission (and furnishing to the Dealer Manager a reasonable
number of copies of) an amendment or amendments of the Registration
Statement or an amendment or amendments of or a supplement or
supplements to, the Prospectus (in form and substance satisfactory to
counsel for the Dealer Manager) which will amend or supplement the
Registration Statement or the Prospectus so that the Prospectus will
not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances existing at the time the Prospectus is
delivered to a Holder, not misleading.
(vii) The Fund will endeavor, in cooperation with the
Dealer Manager, to qualify the Rights and the Shares for offering and
sale under the applicable securities laws (if any) of such states and
other jurisdictions of the United States as the Dealer Manager may
designate, and will maintain such qualifications in effect for the
duration of the Offer; provided, however, that the Fund will not be
obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not now so qualified. The Fund will file
such statements and reports as may be required by the laws of each
jurisdiction in which the Rights and the Shares have been qualified as
above provided.
(viii) The Fund will make generally available to its
security holders as soon as practicable, but no later than 60 days
after the close of the period covered thereby, an earning statement (in
form complying with the provisions of Rule 158 of the Rules and
Regulations) covering a twelve-month period beginning not later than
the first day of the Fund's fiscal quarter next following the
"effective" date (as defined in said Rule 158) of the Registration
Statement.
(ix) For a period of 180 days from the date of this
Agreement, the Fund will not, without the prior consent of the Dealer
Manager, offer or sell, or enter into any agreement to sell, any equity
or equity related securities of the Fund, or securities convertible
into such securities, other than the Rights and the Shares and the
Common Stock issued in reinvestment of dividends or distributions.
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(x) The Fund will apply the net proceeds from the
Offer as set forth under "Use of Proceeds" in the Prospectus.
(xi) The Fund will use its best efforts to cause the
Shares to be duly authorized for listing by the NYSE and PXE prior to
the time the Shares are issued.
(xii) The Fund will use its best efforts to maintain its
qualification as a regulated investment company under Subchapter M of
the Code.
(xiii) The Fund will advise or cause the Subscription
Agent to advise the Dealer Manager and each Soliciting Dealer from day
to day during the period of, and promptly after the termination of, the
Offer, as to all names and addresses of Holders exercising Rights, the
total number of Rights exercised by each Holder during the immediately
preceding day, indicating the total number of Rights verified to be in
proper form for exercise, rejected for exercise and being processed
and, for the Dealer Manager and each Soliciting Dealer, the number of
Rights exercised for Shares on exercise forms indicating the Dealer
Manager or Soliciting Dealer as the broker-dealer with respect to such
exercise, and as to such other information as the Dealer Manager may
reasonably request; and will notify the Dealer Manager and each
Soliciting Dealer, not later than 5:00 P.M., New York City time, on the
first business day following the Expiration Date, of the total number
of Rights exercised and Shares related thereto, the total number of
Rights verified to be in proper form for exercise, rejected for
exercise and being processed and, for the Dealer Manager and Soliciting
Dealer, the number of Rights exercised for Shares on exercise forms
indicating the Dealer Manager or Soliciting Dealer as the broker-dealer
with respect to such exercise, and as to such other information as the
Dealer Manager may reasonably request.
(b) Neither the Fund nor the Investment Adviser will take, directly or
indirectly, any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Fund to
facilitate the issuance of the Rights or the sale or resale of the Shares;
provided that any action in connection with the Fund's Distribution Reinvestment
and Cash Purchase Plan will not be deemed to be within the meaning of this
Section 4(b).
SECTION 5. Payment of Expenses.
(a) The Fund will pay all expenses incident to the performance of its
obligations under this Agreement, including, but not limited to, expenses
relating to (i) the printing and filing of the registration statement as
originally filed and of each amendment thereto, (ii) the preparation, issuance
and delivery of the certificates for the Shares, (iii) the fees and
disbursements of the Fund's counsel and accountants, (iv) the qualification of
the Rights and the Shares under securities laws in accordance with the
provisions of Section 4(a)(vii) of this Agreement, including filing fees and any
reasonable fees or disbursements of counsel for the Dealer Manager in connection
therewith, (v) the printing and delivery to the Dealer Manager of copies of the
registration statement as originally filed and of each amendment thereto, of the
preliminary prospectus, of the Prospectus and any amendments or supplements
thereto, of this Agreement and of the Soliciting Dealer Agreement, (vi)
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the printing and delivery of copies of the Blue Sky Letter, (vii) the fees and
expenses incurred in connection with the listing of the Shares on the NYSE and
PXE, (viii) the filing fees of the Commission, (ix) the fees and expenses
incurred with respect to filing with the National Association of Securities
Dealers, Inc. (x) the printing, mailing and delivery expenses incurred in
connection with the Offering Materials, and (xi) the fees and expenses incurred
with respect to the Subscription Agent and Information Agent.
(b) In addition to any fees that may be payable to the Dealer Manager
under this Agreement, the Fund agrees to reimburse the Dealer Manager upon
request made from time to time for its reasonable expenses up to $82,500
incurred in connection with its activities under this Agreement, including the
reasonable fees and disbursements of legal counsel for the Dealer Manager.
(c) If this Agreement is terminated by the Dealer Manager in accordance
with the provisions of Section 6 or Section 9(a)(i), 9(a)(ii) or 9(a)(iii), the
Fund shall reimburse the Dealer Manager for all of its reasonable out-of-pocket
expenses incurred in connection with its performance hereunder, including the
reasonable fees and disbursements of counsel for the Dealer Manager. In the
event the transactions contemplated hereunder are not consummated, the Fund
agrees to pay all of the costs and expenses set forth in paragraphs (a) and (b)
of this Section 5 which the Fund would have paid if such transactions had been
consummated.
(d) The Investment Adviser agrees that, to the extent the Fund fails to
fulfill its obligations in paragraphs (b) and (c) of this Section 5, the
Investment Adviser will pay all the costs and expenses set forth in this Section
5. The Investment Adviser hereby abandons and waives any rights that the
Investment Adviser may have at any time under any applicable laws, existing or
future, to require that recourse be made to the assets of the Fund before any
claim is enforced against the Investment Adviser in respect of the Investment
Adviser's obligations under this paragraph (d) of this Section 5. The Investment
Adviser agrees that if at any time the Investment Adviser is sued in respect of
its obligations under this paragraph (d) of this Section 5 and the Fund is not
also sued in respect of its obligations under this Section 5, the Investment
Adviser shall not claim that the Fund be made a party to such proceedings
against the Investment Adviser.
SECTION 6. Conditions of Dealer Manager's Obligations. The obligations
of the Dealer Manager hereunder are subject to the accuracy of the
representations and warranties of the Fund and the Investment Adviser herein
contained, to the performance by the Fund and the Investment Adviser of their
respective obligations hereunder, and to the following further conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 P.M., New York City time, on the Record Date, or at such later time
and date as may be approved by the Dealer Manager; the Prospectus and any
amendment or supplement thereto shall have been filed with the Commission in the
manner and within the time period required by Rule 497(c), (e), (h) or (j), as
the case may be, under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement or any amendment thereto shall have
been issued, and no proceedings for that purpose shall have been instituted or
threatened or, to the knowledge of the Fund, the Investment Adviser or the
Dealer Manager, shall be contemplated by the Commission; and the Fund
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shall have complied with any request of the Commission for additional
information (to be included in the Registration Statement, the Prospectus or
otherwise).
(b) On the Representation Date and the Expiration Date, the Dealer
Manager shall have received:
(1) The favorable opinions, dated the Representation Date and
the Expiration Date, of Rosenman & Colin LLP, counsel for the Fund and
the Investment Adviser, in form and substance satisfactory to counsel
for the Dealer Manager, to the effect that:
[(i) The Fund has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Maryland.
(ii) The Fund has full corporate power and authority to
own, lease and operate its properties and conduct its business
as described in the Registration Statement and the Prospectus.
(iii) The Fund currently maintains all Licenses and
Permits necessary to carry on its business as contemplated in
the Prospectus.
(iv) The Fund is duly qualified as a foreign
corporation to transact business and is in good standing in
each jurisdiction in which the failure to so qualify, either
individually or in the aggregate, would have a material
adverse effect on the operations or financial condition of the
Fund; and the Fund has no subsidiaries.
(v) The outstanding Shares of Common Stock have been
duly authorized by all requisite corporate action on the part
of the Fund and are validly issued, fully paid and
non-assessable.
(vi) The Fund's outstanding shares of Common Stock have
been duly listed on the NYSE and PXE and the Shares have been
duly approved for listing on the NYSE and PXE, subject to
official notice of issuance.
(vii) The Fund's authorized capitalization is as set
forth in the Prospectus under the heading "Common Stock." The
Rights and the Shares have been duly authorized by all
requisite corporate action on the part of the Fund for
issuance pursuant to the Offer; the Shares have been duly
authorized by all requisite corporate action on the part of
the Fund for sale pursuant to the terms of the Offer and, when
issued and delivered by the Fund pursuant to the terms of the
Offer against payment of the consideration set forth in the
Prospectus, will be validly issued, fully paid and
non-assessable; the Common Stock, the Rights and the Shares
conform in all material respects to the descriptions thereof
set forth in the Registration Statement, the Prospectus and
the Offering Materials; and the issuance of each of the Rights
and the Shares is not subject to any preemptive rights.
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(viii) This Agreement and the other Fund Agreements have
been duly authorized, executed and delivered by the Fund, are
valid and binding obligations of the Fund, comply as to form
in all material respects with all applicable provisions of the
Investment Company Act and are in full force and effect.
(ix) The Registration Statement is effective under the
Securities Act; any required filing of the Prospectus or any
supplement thereto pursuant to Rule 497(c), (e), (h) or (j)
required to be made to the date hereof has been made in the
manner and within the time period required by Rule 497(c),
(e), (h) or (j), as the case may be; to the best knowledge of
such counsel, no stop order suspending the effectiveness of
the Registration Statement has been issued, and no proceedings
for that purpose have been instituted or threatened; and the
Registration Statement, the Prospectus and each amendment
thereof or supplement thereto (other than the financial
statements, schedules, the notes thereto and the schedules and
other financial data contained or incorporated by reference
therein or omitted therefrom, as to which such counsel need
express no opinion) as to their respective effective or issue
dates comply as to form in all material respects with the
applicable requirements of the Securities Act and the
Investment Company Act and the Rules and Regulations.
(x) Except as set forth in the Registration Statement
and Prospectus, to the best knowledge of such counsel, there
is no pending or threatened action, suit or proceeding to
which the Fund is a party before or by any court or
governmental agency, authority or body or any arbitrator,
whether foreign or domestic, which might result in any
material adverse change in the condition (financial or other),
business prospects, net worth or results of operations of the
Fund, or which might materially and adversely affect the
properties or assets thereof of a character required to be
disclosed in the Registration Statement or the Prospectus.
(xi) To the best of their knowledge and information,
there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments of the Fund
required to be described or referred to in the Prospectus or
the Registration Statement or to be filed as exhibits thereto
other than those respectively described or referred to therein
or filed as exhibits thereto, the descriptions thereof are
correct in all material respects, references thereto are
correct, and no default exists in the due performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, loan
agreement, note or lease so described, referred to or filed.
(xii) No consent, approval, authorization or order of
any court or governmental authority or agency is required in
connection with the sale of the Shares pursuant to the Offer,
except such as has been obtained under the Securities Act, the
Investment Company Act or the Rules and Regulations or such as
may be required under state securities laws; and the execution
and delivery of this Agreement and the Fund Agreements and the
consummation of the transactions contemplated herein and
therein will not conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any
lien, charge or
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encumbrance upon any property or assets of the Fund pursuant
to, any contract, indenture, mortgage, loan agreement, note,
lease or other instrument known to such counsel to which the
Fund is a party or by which it may be bound or to which any of
the property or assets of the Fund is subject, nor will such
action result in any violation of the provisions of the
Charter or By-Laws of the Fund, or any law or administrative
regulation, or, to the best of their knowledge and
information, administrative or court decree.
(xiii) The Fund is registered with the Commission under
the Investment Company Act as a closed-end, diversified
management investment company, and all required action has
been taken by the Fund under the Securities Act, the
Investment Company Act and the Rules and Regulations to make
and consummate the Offer; the provisions of the Charter and
By-Laws of the Fund comply as to form in all material respects
with the requirements of the Investment Company Act and the
rules and regulations thereunder; and, to the best of their
knowledge and information, no order of suspension or
revocation of such registration under the Investment Company
Act, pursuant to Section 8(e) of the Investment Company Act,
has been issued or proceedings therefor initiated or
threatened by the Commission.
(xiv) The information in the Prospectus under the
caption "Taxation", to the extent that it constitutes matters
of law or legal conclusions, has been reviewed by them and is
correct in all material respects.
(xv) The Investment Adviser is duly registered as an
investment adviser under the Advisers Act and is not
prohibited by the Advisers Act or the Investment Company Act,
or the rules and regulations under such acts, from acting
under the Investment Advisory Agreement for the Fund as
contemplated by the Prospectus.
(xvi) The Investment Adviser has been duly incorporated
and is validly existing as a corporation in good standing
under the laws of the State of Delaware.
(xvii) The Investment Adviser has full corporate power
and authority to own, lease and operate its properties and
conduct its business as described in the Registration
Statement and the Prospectus.
(xviii) The Investment Adviser currently maintains all
Licenses and Permits necessary to carry on its business as
contemplated in the Prospectus.
(xix) The Investment Adviser is duly qualified as a
foreign corporation to transact business and is in good
standing in each jurisdiction in which the failure to so
qualify, either individually or in the aggregate, would have a
material adverse effect on the operations or financial
condition of the Investment Adviser.
(xx) Each of this Agreement and the Investment Advisory
Agreement has been duly authorized, executed and delivered by
the Investment Adviser; each of this Agreement and the
Investment Advisory Agreement constitutes a valid and
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binding obligation of the Investment Adviser; no consent,
approval, authorization or order of any court or governmental
authority or agency is required that has not been obtained for
the performance of this Agreement or the Investment Advisory
Agreement by the Investment Adviser; and neither the execution
and delivery of this Agreement or the Investment Advisory
Agreement nor the performance by the Investment Adviser of its
obligations hereunder or thereunder will conflict with, or
result in a breach of, any of the terms and provisions of, or
constitute, with or without the giving of notice or the lapse
of time or both, a default under, the Investment Adviser's
Charter or By-Laws or, to the best of such counsel's knowledge
and information, any agreement or instrument to which the
Investment Adviser is a party or by which the Investment
Adviser is bound, or any law, order, rule or regulation
applicable to the Investment Adviser of any jurisdiction,
court, federal or state regulatory body, administrative agency
or other governmental body, stock exchange or securities
association having jurisdiction over the Investment Adviser or
its properties or operations.
(xxi) To the best of such counsel's knowledge and
information, the description of the Investment Adviser in the
Registration Statement and the Prospectus does not contain any
untrue statement of a material fact or omit to state any
material fact required to be stated therein.
(xxii) To the best of such counsel's knowledge and
information, there are no legal or governmental proceedings
pending or threatened against the Investment Adviser that are
required to be disclosed in the Registration Statement or the
Prospectus, other than those disclosed therein.
(xxiii) Each of this Agreement and the Investment Advisory
Agreement complies with all applicable provisions of the
Advisers act.
In rendering such opinion, such counsel may rely as to matters
of Maryland law on the opinion of Xxxxxxx, Xxxxxxx & Xxxxxx LLP and as
to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Fund and public officials. Such counsel may
state that, except with respect to matters of Maryland law covered by
an opinion of Xxxxxxx, Xxxxxxx & Xxxxxx LLP, their opinion is limited
to the federal laws of the United States and the laws of the State of
New York and that they are expressing no opinion as to the effect of
laws of any other jurisdiction, except as specifically set forth in
such opinion.
Such counsel shall also have stated that, while they have not
themselves checked the accuracy and completeness of or otherwise
verified, and are not passing upon and assume no responsibility for the
accuracy or completeness of, the statements contained in the
Registration Statement or the Prospectus, in the course of their review
and discussion of the contents of the Registration Statement and
Prospectus with certain officers and employees of the Fund and its
independent accountants, no facts have come to their attention which
cause them to believe that the Registration Statement, on the date it
became effective,
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contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements contained therein not misleading or that the Prospectus,
as of its date and on the Representation Date or the Expiration Date,
as the case may be, contained any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.]
(2) The favorable opinion, dated as of the date of this
Agreement, of Xxxxxx & Xxxxx LLP, counsel for the Dealer Manager, with
respect to the issuance and sale of the Shares, and such other related
matters as the Dealer Manager may reasonably require.
(c) The Fund shall have furnished to the Dealer Manager certificates of
the Fund, signed by the President, the Treasurer, the Secretary, or a Vice
President of the Fund, dated the Representation Date and the Expiration Date, to
the effect that the signer of such certificate carefully examined the
Registration Statement, the Prospectus, any supplement to the Prospectus and
this Agreement and that, to the best of their knowledge:
(i) The representations and warranties of the Fund in
this Agreement are true and correct on and as of the Representation
Date or the Expiration Date, as the case may be, with the same effect
as if made on the Representation Date or the Expiration Date, as the
case may be, and the Fund has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Representation Date or the Expiration Date, as the
case may be;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Fund's knowledge, threatened;
and
(iii) Since the date of the most recent balance sheet
included or incorporated by reference in the Prospectus, there has been
no material adverse change in the condition (financial or other),
business, prospects, net worth or results of operations of the Fund
(excluding fluctuations in the Fund's net asset value due to investment
activities in the ordinary course of business), except as set forth in
or contemplated in the Prospectus.
(d) The Investment Adviser shall have furnished to the Dealer Manager
certificates of the Investment Adviser, signed by the President, Treasurer,
Secretary or Vice President, dated the Representation Date and the Expiration
Date, to the effect that the signer of such certificate has read the
Registration Statement, the Prospectus, any supplement to the Prospectus and
this Agreement and, to the best knowledge of such signer, the representations
and warranties of the Investment Adviser in this Agreement are true and correct
in all material respects on and as of the Representation Date or the Expiration
Date, as the case may be, with the same effect as if made on the Representation
Date or the Expiration Date, as the case may be.
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(e) Coopers & Xxxxxxx L.L.P. shall have furnished to the Dealer Manager
letters, dated the Representation Date and the Expiration Date, in form and
substance satisfactory to the Dealer Manager, to the effect that:
(i) They are independent accountants with respect to
the Fund within the meaning of the Securities Act and the Rules and
Regulations;
(ii) In their opinion, the audited financial statements
examined by them and included or incorporated by reference in the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the Securities Act and the
Investment Company Act and the Rules and Regulations;
(iii) They have performed specified procedures, not
constituting an audit in accordance with generally accepted auditing
standards, including a reading of the latest available interim
financial statements of the Fund, a reading of the minute books of the
Fund, inquiries of officials of the Fund responsible for financial
accounting matters and such other inquiries and procedures as may be
specified in such letter, and on the basis of such inquiries and
procedures nothing came to their attention that caused them to believe
that at the date of the latest available financial statements read by
such accountants, or at a subsequent specified date not more than three
days prior to the Representation Date, there was any change in the
capital stock or any decrease in the net assets of the Fund as compared
with amounts shown on the statement of net assets included or
incorporated by reference in the Registration Statement except as the
Registration Statement discloses has occurred or may occur, or they
shall state any specific changes, increases or decreases; and
(iv) In addition to the procedures referred to in
clause (iii) above, they have performed other specified procedures, not
constituting an audit, with respect to certain amounts, percentages,
numerical data, financial information and financial statements
appearing in the Registration Statement, which have previously been
specified by the Dealer Manager and which shall be specified in such
letter, and have compared certain of such items with, and have found
such items to be in agreement with, the accounting and financial
records of the Fund.
(f) At the date of this Agreement, counsel for the Dealer Manager shall
have been furnished with such further documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the issuance of
the Rights and the Shares and the sale of the Shares as contemplated herein and
in the Registration Statement and to pass upon related proceedings, or in order
to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Fund and the Investment Adviser in connection with the issuance of
the Rights and the Shares and sale of the Shares as contemplated herein and in
the Registration Statement shall be satisfactory in form and substance to the
Dealer Manager and counsel for the Dealer Manager.
(g) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, there shall not have been (i)
any change, increase or decrease specified in the letter or letters referred to
in paragraph (e) of this Section 6, or (ii) any
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change, or any development involving a prospective change, in or affecting the
business or properties of the Fund, the effect of which, in any case referred to
in clause (i) or (ii) above, is, in the reasonable judgment of the Dealer
Managers, so material and adverse as to make it impractical or inadvisable to
proceed with the Offer as contemplated by the Registration Statement and the
Prospectus.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Dealer Manager by notice to the Fund at any time at or prior to the
Representation Date by the Dealer Manager, and such termination shall be without
liability of any party to any other party except as provided in Section 5.
SECTION 7. Indemnification and Contribution.
(a) The Fund and the Investment Adviser, jointly and severally, agree
to indemnify and hold harmless the Dealer Manager and its respective directors,
officers, employees, agents and each person who controls the Dealer Manager
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (the Dealer Manager and each such person being an "Indemnified
Party") as follows:
(i) From and against any and all losses, claims,
damages, liabilities and expenses whatsoever, joint or several, as
incurred, to which such Indemnified Party may become subject under any
applicable federal or state law, or otherwise, and related to, arising
out of, or based on (A) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement
(and any amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading, (B) any untrue statement
or alleged untrue statement of a material fact contained in the
Offering Materials or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, (C) any breach by the Fund or the Investment
Adviser of any of their representations, warranties or agreements
contained herein or in any certificate or document furnished pursuant
to Section 6(c), 6(d) or 6(f) hereof, (D) the Fund's failure to make
the Offer or the withdrawal, rescission, termination, amendment or
extension of the Offer or any other failure on the Fund's or the
Investment Adviser's part to comply with the terms and conditions
contained in the Registration Statement or the Offering Materials or
(E) any transaction contemplated by this Agreement or the engagement of
the Dealer Manager pursuant to, and the performance by the Dealer
Manager of the services contemplated by, this Agreement;
(ii) Against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever related to, arising out of or based on any
matter described in (i) above; and
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(iii) Against any and all expense whatsoever, as
incurred (including the fees and disbursements of counsel chosen by the
Dealer Manager), incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever related to, arising out of or based on any matter described
in (i) above, whether or not such Indemnified Party is a party and
whether or not such claim, action or proceeding is initiated or brought
by or on behalf of the Fund or the Investment Adviser, to the extent
that any such expense is not paid under subparagraph (i) or (ii) above;
provided, however, that the Fund and the Investment Adviser shall not be liable
under clause (i)(A) to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission made in the Registration
Statement, Prospectus and Offering Materials in reliance upon and in conformity
with written information furnished to the Fund by the Dealer Manager expressly
for use in the Registration Statement, Prospectus and Offering Materials.
The Fund and the Investment Adviser agree that no Indemnified Party
shall have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Fund or the Investment Adviser, their security holders or
creditors relating to or arising out of the engagement of the Dealer Manager as
set forth in Section 7(a)(i)(E) hereof except to the extent that any loss,
claim, damage or liability or expense is found in a final non-appealable
judgment by a court of competent jurisdiction to have resulted primarily from
the Dealer Manager's willful misconduct, gross negligence or bad faith.
The Fund and the Investment Adviser agree that, without the Dealer
Manager's prior written consent, it will not settle, compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any action or claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 7 (whether or not the Dealer
Manager or any other Indemnified Party is an actual or potential party to such
claim, action or proceeding), unless such settlement, compromise or consent (i)
includes an unconditional release of each Indemnified Party from all liability
arising out of such litigation, investigation, proceeding, action or claim and
(ii) does not include a statement as to, or an admission of, fault, culpability
or a failure to act by or on behalf of an Indemnified Party.
(b) If the indemnification provided for in Section 7(a) hereof is for
any reason unavailable to or insufficient to hold harmless an Indemnified Party
in respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
Indemnified Party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Fund and the Investment Adviser on
the one hand and the Dealer Manager on the other hand from the Offer or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Fund and the
Investment Adviser on the one hand and of the Dealer Manager on the other hand
in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Fund and the
Investment Adviser on
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the one hand and the Dealer Manager on the other hand in connection with the
Offer shall be deemed to be in the same proportion as the total proceeds from
the Offer (before deducting expenses) received by the Fund bears to the fees
actually received by the Dealer Manager hereunder. The relative fault of the
Fund or the Investment Adviser on the one hand and the Dealer Manager on the
other hand shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Fund or the Investment Adviser or by the Dealer Manager and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Fund, the Investment Adviser and the
Dealer Manager agree that it would not be just and equitable if contribution
pursuant to this Section 7(b) were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this Section 7(b). The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an Indemnified
Party and referred to above in this Section 7(b) shall be deemed to include any
legal or other expenses reasonably incurred by such Indemnified Party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission; provided, however, that to the extent
permitted by applicable law, in no event shall the Dealer Manager be required to
contribute any amount which, in the aggregate, exceeds the aggregate fees
received by the Dealer Manager under this Agreement. No investigation or failure
to investigate by any Indemnified Party shall impair the foregoing
indemnification and contribution agreement or any rights an Indemnified Party
may have. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 7(b), each person, if any, who controls the Dealer Manager
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Dealer Manager,
and each director of the Fund or the Investment Adviser and each person, if any,
who controls the Fund or the Investment Adviser within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Fund and the Investment Adviser, as the case may
be.
(c) In the event an Indemnified Party is requested or required to
appear as a witness in any action brought by or on behalf of or against the Fund
or the Investment Adviser, the Fund and the Investment Adviser agree to
reimburse the Dealer Manager for all reasonable expenses as incurred by it in
connection with such Indemnified Party's appearing and preparing to appear as
such a witness, including, without limitation, the reasonable fees and
disbursements of its legal counsel, and to compensate the Dealer Manager in an
amount to be mutually agreed upon. In addition, the Fund and the Investment
Adviser agree to compensate the Dealer Manager in an amount to be mutually
agreed upon per employee per day for each day that a Dealer Manager officer or
employee is involved in preparation, discovery or testimony pertaining to any
litigation, discovery or investigation in connection with the Dealer Manager's
engagement under this agreement.
(d) Promptly after receipt by an Indemnified Party of written notice of
any claim or commencement of an action or proceeding with respect to which
indemnification may be sought hereunder, such Indemnified Party will notify the
Fund in writing of such claim or of the
22
24
commencement of such action or proceeding, but failure so to notify the Fund
will not relieve the Fund and the Investment Adviser from any liability which it
may have to such Indemnified Party under this indemnification agreement, and in
any event will not relieve the Fund from any other liability that it may have to
such Indemnified Party. The Dealer Manager shall have the right to select
counsel in connection with any transaction for which any Indemnified Party may
be entitled to indemnification or contribution hereunder, provided that in no
event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all Indemnified Parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
(e) If at any time an Indemnified Party shall have requested an
indemnifying party to reimburse the Indemnified Party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such Indemnifying Party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(f) The Fund and the Investment Adviser, jointly and severally, agree
to indemnify each Soliciting Dealer and its affiliates and their respective
directors, officers, employees, agents and controlling persons to the same
extent and subject to the same conditions and to the same agreements, including
with respect to contribution, provided for in subsections (a), (b) and (c) of
this Section 7. This indemnity agreement will be in addition to any liability
which the Fund or the Investment Adviser may otherwise have.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Fund or the
Investment Adviser submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of the
Dealer Manager or any controlling person, or by or on behalf of the Fund or the
Investment Adviser and shall survive delivery of the Shares pursuant to the
Offer. The provisions of Sections 5 and 7 hereof shall survive the termination
or cancellation of this Agreement.
SECTION 9. Termination of Agreement.
(a) This Agreement may be terminated in the sole discretion of the
Dealer Manager by notice to the Fund given at or prior to the expiration of the
Offer in the event that the Fund or the Investment Adviser shall have failed,
refused or been unable to perform all material obligations and satisfy all
material conditions on its part to be performed or satisfied hereunder at or
prior thereto or, if at or prior to the termination of the Offer,
(i) The Fund or the Investment Adviser shall have
sustained any material loss or interference with its business or
properties from fire, accident or other calamity, whether or not
covered by insurance, or from any labor dispute or any legal or
governmental
23
25
proceeding, or there shall have been any material adverse change or any
development involving a prospective material adverse change (including
without limitation a change in management or control of the Fund or the
Investment Adviser, as the case may be), in the condition, financial or
otherwise, or in the business affairs or business prospects of the Fund
or the Investment Adviser, whether or not arising in the ordinary
course of business, except in each case as described in or contemplated
by the Registration Statement and the Prospectus (exclusive of any
amendment or supplement thereto) and except for changes in the Fund's
net asset value due to its normal investment operations;
(ii) Trading in the Common Stock has been suspended by
the Commission or the NYSE or PXE;
(iii) There has occurred any material adverse change in
the financial markets in the United States or internationally or any
outbreak of hostilities or escalation thereof or other calamity or
crisis, or any change or development involving a prospective change in
national or international political, financial, or economic conditions,
in each case the effect of which is such as to make it, in the judgment
of the Dealer Manager, impracticable to market the Shares or to enforce
contracts for the sale of the Shares; or
(iv) Trading generally on the NYSE, PXE, or the
National Association of Securities Dealers Automated Quotations System
shall have been suspended or limited, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities
have been required, by any of said exchanges or by order of the
Commission or any other governmental authority, or if a banking
moratorium has been declared by United States or New York authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 5.
SECTION 10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of written telecommunication. Notices to the
Dealer Manager shall be directed to Xxxxxxx Xxxxx & Co., Xxxxxxx Xxxxx World
Headquarters, North Tower, World Financial Center, New York, New York
10281-1201, Attention: Xxx Xxxxxxx, Vice President; notices to the Fund shall be
directed to The Xxxxx Fund, Inc., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxx X. Xxxxxx, Esq.; notices to the Investment Adviser shall be
directed to Xxxxx Advisors Inc., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxx X. Xxxxxx, Esq.
SECTION 11. Parties. This Agreement shall inure to the benefit of and
be binding upon the Dealer Manager, the Fund, the Investment Adviser and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors and the controlling
persons and officers and directors referred to in Section 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties hereto and thereto and their respective
successors, and
24
26
said controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
SECTION 12. Governing Law and Time; Waiver. This Agreement shall be
governed by the laws of the State of New York applicable to agreements made and
to be performed in said State. Specified times of day refer to New York City
time.
The Fund, Investment Adviser and the Dealer Manager (each on its own
behalf and, to the extent permitted by applicable law, on behalf of its
shareholders) waive all right to trial by jury in any suit, action, proceeding
or counterclaim (whether based upon contract, tort or otherwise) related to or
arising out of the engagement of the Dealer Manager pursuant to, or the
performance by the Dealer Manager of the services contemplated by, this
Agreement.
SECTION 13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
25
27
If the foregoing is in accordance with your understanding of
our agreement, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Fund, the
Investment Adviser and the Dealer Manager.
Very truly yours,
The Xxxxx Fund, Inc.
By:
Name:
Title:
Xxxxx Advisors Inc.
By:
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date first
above written.
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated
By:
Name:
Title:
28
EXHIBIT A
_____________ , 1998
THE XXXXX FUND, INC.
Rights Offering for Shares of Common Stock
SOLICITING DEALER AGREEMENT
THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME
May 8, 1998(1)
Ladies and Gentlemen:
The Xxxxx Fund, Inc., a Maryland corporation (the "Fund"), proposes to
issue to holders of record (the "Holders") of its outstanding shares of common
stock, par value $0.10 per share (the "Common Stock"), non-transferable rights
entitling such Holders to subscribe for shares of Common Stock and, subject to
certain conditions, additional shares of Common Stock pursuant to an
over-subscription privilege (the "Offer"). The shares of Common Stock for which
Holders may subscribe pursuant to the Offer are herein referred to as the
"Shares." Pursuant to the terms of the Offer, the Fund is issuing each Holder
one non-transferable right (each a "Right" and collectively, the "Rights") for
each share of Common Stock held on the record date set forth in the accompanying
Prospectus (the "Prospectus"). Such Rights entitle Holders to acquire during the
subscription period set forth in the Prospectus (the "Subscription Period"), and
at the subscription price set forth in the Prospectus (the "Subscription
Price"), one share for each seven Rights held on the terms and subject to the
conditions set forth in the Prospectus. Pursuant to the terms of the Offer, such
Rights also entitle Holders to acquire during the Subscription Period at the
Subscription Price certain additional Shares on the terms and conditions of the
over-subscription privilege as set forth in such Prospectus (the
"Oversubscription Privilege").
The undersigned, as the dealer manager (the "Dealer Manager") named in
the Prospectus, has entered into a Dealer Manager Agreement dated April [13],
1998 with the Fund, and Xxxxx Advisors Inc., a Delaware corporation (the
"Investment Adviser"), pursuant to which the undersigned has agreed to form and
manage, for purposes of soliciting exercises of Rights pursuant to the Offer, a
group of soliciting dealers, including the undersigned, consisting of brokers
and dealers who shall be members in good standing of the National Association of
Securities Dealers, Inc. (the "NASD") or any foreign broker or dealer not
eligible for membership who agrees to conform to the Rules of Fair Practice of
the NASD, including Sections 2730, 2740, 2420 and 2750 thereof, in making
solicitations in the United States to the same extent as if it were a member
thereof (the members of such group being hereinafter called the "Soliciting
Dealers"). You are
----------------------
(1) Unless extended to a date no later than May 15, 1998.
A-1
29
invited to become one of the Soliciting Dealers and by your confirmation hereof
you agree to act in such capacity, in accordance with the terms and conditions
herein and in your confirmation hereof, to obtain exercises of Rights pursuant
to the Offer.
1. Solicitation and Solicitation Material. Solicitation and other
activities by you hereunder shall be undertaken only in accordance with this
Agreement, the Securities Act of 1933, as amended (the "Securities Act"), the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
applicable rules and regulations of the Securities and Exchange Commission and
only in those states and other jurisdictions where such solicitations and other
activities may lawfully be undertaken and in accordance with the laws thereof.
Accompanying this Agreement are copies of the following documents: the
Prospectus describing the terms of the Offer, a Subscription Certificate and
letters to stockholders. Additional copies of these documents will be supplied
in reasonable quantities upon your request. You agree that during the period of
the Offer you will not use any solicitation material other than that referred to
above and such as may hereafter be furnished to you by the Fund through us.
2. Compensation of Soliciting Dealers. In full payment for the
soliciting efforts to be rendered (excluding the exercise of Rights by a
Soliciting Dealer for its own account or for the account of any affiliate, other
than a natural person, pursuant to the Offer), the Fund agrees to pay fees (the
"Solicitation Fees") to either the Soliciting Dealer or the Dealer Manager equal
to 2.50% of the Subscription Price per Share for each Share issued pursuant to
the Offer (such Solicitation Fees paid to the Dealer Manager are in addition to
the Dealer Manager Fee). The Fund agrees to pay the Solicitation Fees to the
broker-dealer designated on the applicable portion of the related Subscription
Certificate provided that such broker dealer has executed a confirmation
accepting the terms of the Soliciting Dealer Agreement, and if no broker-dealer
is so designated or a broker-dealer is otherwise not entitled to receive
compensation pursuant to the terms of the Soliciting Dealer Agreement, then to
pay the Dealer Manager the Solicitation Fee for Shares issued pursuant to the
Offer. Payment to the Dealer Manager by the Fund will be in the form of a wire
transfer of same day funds to an account or accounts identified by the Dealer
Manager. Such payments will be made on the day after the final payment for
Shares is due as set forth in the Prospectus, or when such payments are actually
received and the corresponding funds are available. Xxxxx Securities Corp. will
be such designated broker-dealer with respect to Shares issued to participants
in the Fund's Distribution Reinvestment and Cash Purchase Plan, unless the
participant designates otherwise on the related Subscription Certificate.
Payment of the Solicitation Fees to a Soliciting Dealer that executed a
confirmation will be made by the Fund directly to such Soliciting Dealer by U.S.
dollar checks drawn upon an account at a bank in New York City. Such payments to
such Soliciting Dealers shall be made as soon as practicable after payment of
the Dealer Manager Fee is made to the Dealer Manager.
No Solicitation Fees shall be payable to a Soliciting Dealer in respect
of any particular exercise of Rights if no Soliciting Dealer is so designated on
the Subscription Certificate in the place so provided, and if in the opinion of
counsel for the Dealer Manager, such Solicitation Fees cannot legally be paid in
respect of such exercise of Rights because of the provisions of applicable state
law or for any other reason. In case of any dispute or disagreement as to the
amount of Solicitation Fees payable to any Soliciting Dealer hereunder or as to
the proper recipient of any such Solicitation Fees, the decision of the Dealer
Manager shall be conclusive. The payment of any
A-2
30
Solicitation Fees to Soliciting Dealers shall be solely the responsibility of
the Fund, but the Dealer Manager shall have no obligation or liability to any
Soliciting Dealer for any obligation of the Fund or the Investment Adviser
hereunder.
The Offer will expire on the Expiration Date as set forth in the
Prospectus. In order for a Soliciting Dealer to receive the Solicitation Fees,
the Subscription Agent must have received from such Soliciting Dealer no later
than 5:00 P.M., New York City time, on the Expiration Date, either (i) a
properly completed and duly executed Subscription Certificate with respect to
Shares purchased pursuant to the exercise of Rights and the Over-Subscription
Privilege and full payment for such Shares; or (ii) a Notice of Guaranteed
Delivery guaranteeing delivery to the Subscription Agent by close of business on
the third business day after the Expiration Date, of (a) full payment for such
Shares and (b) a properly completed and duly executed Subscription Certificate
with respect to Shares purchased pursuant to the exercise of Rights. The
Solicitation Fees will only be paid after receipt by the Subscription Agent of a
properly completed and duly executed Soliciting Dealer Agreement and
Subscription Certificate designating the Soliciting Dealer in the applicable
portion hereof. In the case of a Notice of Guaranteed Delivery, the Solicitation
Fees will only be paid after delivery in accordance with such Notice of
Guaranteed Delivery has been effected.
3. Trading. You represent to the Fund, the Investment Adviser and the
Dealer Manager that you have not engaged, and agree that you will not engage, in
any activity in respect of the Rights or the Shares in violation of the Exchange
Act, including Regulation M thereunder. Your acceptance of Solicitation Fees
will constitute a representation that you are eligible to receive such
Solicitation Fees and that you have complied with the preceding sentence and
your other agreements hereunder.
4. Unauthorized Information and Representations. Neither you nor any
other person is authorized by the Fund or the Dealer Manager to give any
information or make any representations in connection with this Agreement or the
Offer other than those contained in the Prospectus and other authorized
solicitation material furnished by the Fund through the Dealer Manager, and you
hereby agree not to use any solicitation material other than material referred
to in this Section 4. Without limiting the generality of the foregoing, you
agree for the benefit of the Fund and the Dealer Manager not to publish,
circulate or otherwise use any other advertisement or solicitation material
without the prior written approval of the Fund and the Dealer Manager. You are
not authorized to act as agent of the Fund or the Dealer Manager in any respect,
and you agree not to act as such agent and not to purport to act as such agent.
On becoming a Soliciting Dealer and in soliciting exercises of Rights, you agree
for the benefit of the Fund and the Dealer Manager to comply with any applicable
requirements of the Securities Act, the Exchange Act, the rules and regulations
thereunder, any applicable securities laws of any state or jurisdiction where
such solicitations may lawfully be made, and the applicable rules and
regulations of any self-regulatory organization or registered national
securities exchange, and to perform and comply with the agreements set forth in
your confirmation of your acceptance of this Agreement, a copy of the form of
which is appended hereto.
5. Blue Sky and Securities Laws. The Dealer Manager assumes no
obligation or responsibility in respect of the qualification of the Shares
issuable pursuant to the Offer or the right to solicit Rights under the laws of
any jurisdiction. The enclosed Blue Sky Letter indicates the
A-3
31
states in which it is believed that acceptances of the Offer may be solicited
under the applicable Blue Sky or securities laws. Under no circumstances will
you as a Soliciting Dealer engage in any activities hereunder in any state in
which you may not lawfully so engage. The Blue Sky Letter shall not be
considered solicitation material as that term is herein used. You agree that you
will not engage in any activities hereunder outside the United States except in
jurisdictions where such solicitations and other activities may lawfully be
undertaken and in accordance with the laws thereof.
6. Termination. This Agreement may be terminated by written or
telegraphic notice to you from the Dealer Manager, or to the Dealer Manager from
you, and in any case it will terminate upon the expiration or termination of the
Offer; provided, however, that such termination shall not relieve the Dealer
Manager of the obligation to pay when due any Solicitation Fees payable to you
hereunder with respect to Shares acquired pursuant to the exercise of Rights
through the close of business on the date of such termination that are
thereafter exercised pursuant to the Offer or relieve the Fund, or the
Investment Adviser of its obligations referred to under Section 8 hereof, and
shall not relieve you of any obligation or liability under Sections 3, 4, 9 and
10 hereof.
7. Liability of Dealer Manager. Nothing herein contained shall
constitute the Soliciting Dealers as partners with the Dealer Manager or with
one another, or agents of the Dealer Manager or the Fund, or shall render the
Fund liable for the obligations of the Dealer Manager or the obligations of any
Soliciting Dealers, or shall render the Dealer Manager liable for the
obligations of any Soliciting Dealers other than itself nor constitute the Fund
or the Dealer Manager the agent of any Soliciting Dealer. The Fund and the
Investment Adviser and the Dealer Manager shall be under no liability to any
Soliciting Dealer or any other person for any act or omission or any matter
connected with this Agreement or the Offer, except that the Fund and the
Investment Adviser shall be liable on the basis set forth in Section 8 hereof to
indemnify certain persons. You represent that you have not purported, and agree
that you will not purport, to act as agent of the Fund, Investment Adviser or
the Dealer Manager in any connection or transaction relating to the Offer.
8. Indemnification. Under the Dealer Manager Agreement, each of the
Fund and the Investment Adviser has agreed, to indemnify and hold harmless the
Dealer Manager, each Soliciting Dealer, and their respective directors,
officers, employees, agents and each person who controls the Dealer Manager or a
Soliciting Dealer within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against certain liabilities, including
liabilities under the Securities Act and the Exchange Act. By returning an
executed copy of this Agreement, you agree to indemnify the Fund, the Investment
Adviser and the Dealer Manager (the "Indemnified Persons") against losses,
claims, damages and liabilities to which the Indemnified Persons may become
subject (a) as a result of your breach of your representations or agreements
made herein or (b) if you (as custodian, trustee or fiduciary or in any other
capacity) are acting on behalf of another entity that is soliciting exercises of
Rights pursuant to the Offer (a "Soliciting Entity"), as a result of any breach
by any such Soliciting Entity of the representations or agreements made herein
by the Soliciting Dealers to the same extent as if such Soliciting Entity had
executed the confirmation referred to in Section 13 hereof and was therefore a
Soliciting Dealer that had directly made such representations and agreements.
This indemnity agreement will be in addition to any liability which you may
otherwise have.
A-4
32
9. Delivery of Prospectus. You agree for the benefit of the Fund and
the Dealer Manager to deliver to each person who owns beneficially Common Stock
registered in your name, and who exercises Rights on a Subscription Certificate
on which your name, to your knowledge, has been inserted, a Prospectus prior to
the exercise of such person's Rights.
10. Status of Soliciting Dealer. Your acceptance of Solicitation Fees
will constitute a representation to the Fund and the Dealer Manager that you (i)
have not purported to act as agent of the Fund or the Dealer Manager in any
connection or in any transaction relating to the Offer, (ii) are not affiliated
with the Fund or the Investment Adviser, (iii) will not accept Solicitation Fees
from the Dealer Manager pursuant to the terms hereof with respect to Shares
purchased by you pursuant to an exercise of Rights for your own account or the
account of any affiliate, other than a natural person, (iv) will not remit,
directly or indirectly, any part of any Solicitation Fees to any beneficial
owner of Shares purchased pursuant to the Offer, (v) agree to the amount of the
Solicitation Fees and the terms and conditions set forth herein with respect to
receiving such Solicitation Fees, (vi) have read and reviewed the Prospectus,
and (vii) are a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD") or are a foreign broker or dealer not
eligible for membership who agrees to conform to the Rules of Fair Practice of
the NASD, including Sections 2730, 2740, 2420 and 2750 thereof, in making
solicitations in the United States to the same extent as if you were a member
thereof.
11. Notices. Any notice hereunder shall be in writing or by telegram
and if to you as a Soliciting Dealer shall be deemed to have been duly given if
mailed or telegraphed to you at the address to which this letter is addressed,
and if to the Dealer Manager, if delivered or sent to Xxxxxxx Xxxxx & Co.,
Xxxxxxx Xxxxx World Headquarters, North Tower, World Financial Center, New York,
New York 10281-1201, Attention: Xxx Xxxxxxx, Vice President.
12. Parties in Interest. The Agreement herein set forth is intended for
the benefit of the Dealer Manager, the Soliciting Dealers, the Fund, and the
Investment Adviser.
13. Confirmation. Please confirm your agreement to become one of the
Soliciting Dealers under the terms and conditions set forth herein and in the
attached confirmation by completing and executing the confirmation and sending
it via facsimile (212-449-6739) to Xxxxxxx Xxxxx & Co., Attention: Xxx Xxxxxxx,
Vice President.
14. Governing Law and Time. This Agreement shall be governed by the
laws of the State of New York applicable to agreements made and to be performed
in said State.
A-5
33
Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Dealer Manager Agreement or, if not defined therein, in
the Prospectus.
NOTICE: IF A COPY OF THE CONFIRMATION REFERRED TO IN SECTION 13 HEREOF
IS NOT SIGNED, DATED AND RETURNED TO THE DEALER MANAGER PRIOR TO THE EXPIRATION
OF THE OFFER, NO SOLICITATION FEES WILL BE PAYABLE TO A SOLICITING DEALER
HEREUNDER.
Very truly yours,
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, as Dealer Manager
By:
Name:
Title:
A-6
34
CONFIRMATION
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxx Xxxxxxx
Vice President
Facsimile: (000) 000-0000
Ladies and Gentlemen:
We hereby confirm our acceptance of the terms and conditions of the
letter captioned "Soliciting Dealer Agreement" which was attached hereto upon
our receipt hereof (this "Agreement") with reference to the Offer of The Xxxxx
Fund, Inc. (the "Fund") described therein.
We hereby acknowledge that we (i) have received, read and reviewed the
Prospectus and other solicitation material referred to in this Agreement, and
confirm that in executing this confirmation we have relied upon such Prospectus
and other solicitation material authorized by the Fund or Xxxxx Advisors Inc.
(the "Investment Adviser") and upon no other representations whatsoever, written
or oral, (ii) have not purported to act as agent of the Fund or the Dealer
Manager in any connection or in any transaction relating to the Offer, (iii) are
not affiliated with the Fund or the Investment Adviser, (iv) are not purchasing
Shares for our own account or the account of any of our affiliates, other than a
natural person, (v) will not remit, directly or indirectly, any part of any
Solicitation Fees to any beneficial owner of Shares purchased pursuant to the
Offer, and (vi) agree to the amount of the Solicitation Fees and the terms and
conditions set forth in this Agreement with respect to receiving such
Solicitation Fees. We also confirm that we are a broker or dealer who is a
member in good standing of the National Association of Securities Dealers, Inc.
(the "NASD") or are a foreign broker or dealer not eligible for membership who
agrees to conform to the Rules of Fair Practice of the NASD, including Sections
2730, 2740, 2420 and 2750 thereof, in making solicitations in the United States
to the same extent as if we were a member thereof. In connection with the Offer,
we represent that we have complied, and agree that we will comply, with any
applicable requirements of the Securities Act of 1933, the Securities Exchange
Act of 1934, any applicable securities or Blue Sky laws and the rules and
regulations under the Securities Act of 1933, the Securities Exchange Act of
1934 and any applicable securities or Blue Sky laws.
Firm Name
35
By
Authorized Signature
Address:
DTC Number:
Nominee Name:
Dated: , 1998
NOTICE: IF A COPY OF THIS CONFIRMATION IS NOT SIGNED, DATED AND
RETURNED TO THE DEALER MANAGER PRIOR TO THE EXPIRATION OF THE OFFER, NO
SOLICITATION FEES WILL BE PAYABLE TO A SOLICITING DEALER HEREUNDER.