Exhibit (k)(iv)
FORM OF CONSULTING SERVICES AGREEMENT
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AGREEMENT made this ___ day of _______, 2001, by and between Xxxxxx
Associates, Inc., an Ohio corporation ("Xxxxxx"), and Pacholder High Yield Fund,
Inc., a Maryland corporation (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is a closed-end diversified management investment company
registered under the Investment Company Act of 1940, as amended; and
WHEREAS, the Fund maintains a leveraged capital structure and currently has
outstanding cumulative preferred stock which is subject to mandatory redemption
on March 2, 2002; and
WHEREAS, the Fund has recently issued 3,175,092 shares of common stock
pursuant to a transferable rights offering (the "Rights Offering"); and
WHEREAS, the Fund desires to retain Xxxxxx to provide consulting services
related to the Fund's leveraged capital structure, and Xxxxxx is willing to
render such services on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties hereto agree as follows:
1. Retention of Xxxxxx. The Fund hereby retains Xxxxxx to provide
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consulting services in connection the releveraging of the Fund following
completion of the Rights Offering. Xxxxxx hereby accepts such employment and
agrees to perform the services described in Section 2 of this Agreement.
2. Consulting Services. The consulting services to be performed by
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Xxxxxx pursuant to this Agreement shall include the following:
(i) consultation and advice regarding the alternative financing
arrangements available for releveraging the Fund;
(ii) assistance in identifying and evaluating, and in negotiating the
terms and conditions of an underwriting agreement with, underwriters
for a public offering of auction rate preferred stock (the "Preferred
Offering");
(iii) assistance in identifying and evaluating, and in negotiating the
terms and conditions of agreements with, auction agents, dividend
paying agents and other service providers related to the auction rate
preferred stock;
(iv) providing information concerning the Fund and its outstanding
securities in responding to underwriters' due diligence of the Fund
and its investment adviser and to potential purchasers of the
auction rate preferred stock;
(v) assistance in the preparation and review of a registration
statement on Form N-2 filed by the Fund with the Securities and
Exchange Commission and other documentation and materials for and
in connection with the Preferred Offering;
(vi) assistance in obtaining a rating for the auction rate preferred
stock from one or more of the rating agencies;
(vii) consultation and advice, and assistance in identifying and
negotiating appropriate arrangements related to, hedging the
interest rate exposure of the auction rate preferred stock;
(viii) assistance in connection with the redemption and repayment of the
Fund's outstanding cumulative preferred stock (the "Preferred
Redemption");
(ix) assistance in coordinating the activities of service providers
(including the Fund's legal counsel and independent accountants) in
connection with the foregoing; and
(x) such other activities as the Board of the Directors of the Fund may
reasonably request in connection with the releveraging of the Fund.
3. Limitation on Services. The consulting services provided by Xxxxxx
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pursuant to this Agreement shall be limited to the releveraging of the Fund
following completion of the Rights Offering through the Preferred Offering and
Preferred Redemption. The Fund may request and Xxxxxx may agree to provide
consulting services related to other releveraging transactions on such terms and
conditions as may be agreed upon by the parties.
4. Expenses. Xxxxxx shall bear all expenses in connection with the
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performance of its services under this Agreement. The Fund shall bear all
expenses incurred by it in connection with the Preferred Offering and the
Preferred Redemption, including, without limitation, expenses of preparing
(including typesetting), printing and mailing the prospectus for the Preferred
Offering; the cost of registration of the shares of auction rate preferred stock
under federal and state securities laws and of obtaining a rating for the
auction rate preferred stock; fees and expenses of the auction agent, dividend
paying agent and other service providers for the auction rate preferred stock;
and fees and expenses of the Fund's legal counsel and independent accountants.
5. Compensation. As compensation for its services under this Agreement,
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the Fund shall pay Xxxxxx a fee equal to $ __________. Payment of Xxxxxx'x fee
hereunder shall be made at the closing of the Preferred Offering.
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6. Indemnification. (a) The Fund agrees to indemnify and hold harmless
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Xxxxxx and its directors, officers, employees and agents from and against any
and all losses, claims, damages or liabilities to which Xxxxxx or any of its
directors, officers, employees or agents may become subject, insofar as such
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation), joint and several, arising out of or based upon the performance
by Xxxxxx of its duties under this Agreement. The foregoing indemnity agreement
shall be in addition to any liability which the Fund may otherwise have.
(b) If any action, suit or proceeding shall be brought against Xxxxxx or
any other person in respect of which indemnity may be sought against the Fund,
Xxxxxx or such indemnified person shall promptly notify the Fund, and the Fund
shall assume the defense thereof, including the employment of counsel and
payment of all fees and expenses. Xxxxxx or any such indemnified person shall
have the right to employ separate counsel in any such action, suit or proceeding
and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of Xxxxxx or such indemnified person unless (i)
the Fund has agreed in writing to pay such fees and expenses, (ii) the Fund has
failed to assume the defense and employ counsel, or (iii) the named parties to
any such action, suit or proceeding (including any impleaded parties) include
both Xxxxxx or such indemnified person and the Fund and Xxxxxx or such
indemnified person shall have been advised by its counsel that representation of
Xxxxxx or such indemnified person and the Fund by the same counsel would be
inappropriate under applicable standards of professional conduct (whether or not
such representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the Fund shall not
have the right to assume the defense of such action, suit or proceeding on
behalf of Xxxxxx or such indemnified person). It is understood, however, that
the Fund shall, in connection with any one such action, suit or proceeding or
separate by substantially similar or related actions, suits or proceedings in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
Xxxxxx and any indemnified person not having actual or potential differing
interests with the Fund or among themselves, which firm shall be designated in
writing by Xxxxxx, and that all such fees and expenses shall be reimbursed as
they are incurred. The Fund shall not be liable for any settlement of any such
action, suit or proceeding effected without its written consent, but if settled
with such consent, or if there is a final judgment for the plaintiff in any such
action, suit or proceeding, the Fund agrees to indemnify and hold harmless
Xxxxxx, to the extent provided in the preceding paragraph, and any such
indemnified person from and against any loss, claim, damage, liability or
expenses by reason of such settlement or judgment.
(c) Notwithstanding the foregoing, no indemnification provided for in this
Section 6 shall be available to protect any person against any liability to
which such person would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of his duties, or by reason of
his reckless disregard of his obligations and duties under this Agreement.
7. Notice. Notice given pursuant to any provision of this Agreement shall
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be in writing and shall be delivered (i) if to the Fund, to Pacholder High Yield
Fund, Inc., 0000 Xxxxxxxxxx
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Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxx 00000; or (ii) if to Xxxxxx, to Xxxxxx
Associates, Inc., 0000 Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxx 00000.
8. Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Ohio without giving effect to the
choice of law provisions thereof, provided that nothing herein shall be
construed as being inconsistent with applicable federal or state securities laws
or any rules, regulations or orders thereunder.
9. Miscellaneous. This Agreement constitutes the entire agreement of the
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parties pertaining to the subject matter hereof and supersedes all prior or
contemporaneous agreements, understandings, negotiations and discussions of the
parties, whether oral or written, and there are no warranties, representations
or other agreements between the parties in connection with the subject matter
hereof, except as specifically set forth herein. No amendment, supplement,
modification, waiver or termination of this Agreement shall be binding unless
executed in writing by the party to be bound thereby. This Agreement may be
executed in several parts, each of which shall be deemed to be an original and
all of which together shall constitute one and the same instrument. The
captions used in this Agreement are included for the convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction.
IN WITNESS WHEREOF, this Agreement has been executed for and on behalf of
the undersigned as of the day and year first above written.
PACHOLDER HIGH YIELD FUND, INC.
By: ________________________________
Name:
Title:
XXXXXX ASSOCIATES, INC.
By: ________________________________
Name:
Title:
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