Exhibit (h)
7,629,525 Shares of Common Stock
Issuable Upon Exercise of Transferable Rights
to Subscribe for such Shares
FORM OF DEALER MANAGER AGREEMENT
New York, New York
August __, 2001
UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Each of The Hyperion Total Return Fund, Inc., a Maryland corporation (the
"Fund"), Hyperion Capital Management, Inc., a Delaware corporation (the
"Investment Adviser"), and Pacholder Associates Inc., an Ohio corporation (the
"Investment Subadviser") hereby confirms the agreement with and appointment of
UBS Warburg LLC to act as dealer manager (the "Dealer Manager") in connection
with the issuance by the Fund to the holders of record (the "Holders") at the
close of business on the record date set forth in the Prospectus (as defined
herein) (the "Record Date") transferable rights entitling such Holders to
subscribe for up to three shares (each a "Share" and, collectively, the
"Shares") of the Fund's common stock, par value $0.01 per share (the "Common
Shares"), of the Fund (the "Offer"). Pursuant to the terms of the Offer, the
Fund is issuing each Holder one transferable right (each a "Right" and,
collectively, the "Rights") for each Common Share held by such Holder on the
Record Date. Such Rights entitle holders to acquire during the subscription
period set forth in the Prospectus (the "Subscription Period"), at the price set
forth in such Prospectus (the "Subscription Price"), one Share for each three
Rights exercised (except that any Holder who is issued fewer than three Rights
will be able to subscribe for one full Share pursuant to the primary
subscription), on the terms and conditions set forth in such Prospectus. No
fractional shares will be issued. Any Holder who fully exercises all Rights
initially issued to such Holder (other than those Rights that cannot be
exercised because they represent the right to acquire less than one Share) will
be entitled to subscribe for, subject to allocation, additional Shares (the
"Over-Subscription Privilege") on the terms and conditions set forth in the
Prospectus. The Rights are transferable and are expected to be listed on the New
York Stock Exchange, Inc. under the symbol "HTR.RT".
The Fund has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form N-2 (Nos. 333-64994 and
811-5482) and a related preliminary prospectus and preliminary statement of
additional information 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 and preliminary statements of
additional information 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 and final
statement of additional information 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 or statement of additional information contained therein omits
certain information at the time of effectiveness pursuant to Rule 430A of the
Rules and Regulations, a final prospectus and final statement of additional
information 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 term "Registration Statement" means 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. The term
"Prospectus" means the final prospectus and final statement of additional
information in the forms 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.
The Prospectus and letters to owners of Common Shares of the
Fund, subscription certificates and other forms used to exercise rights,
brochures, wrappers, 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".
1. Representations and Warranties.
a. Each of the Fund and the Investment Adviser represents and warrants
to, and agrees with, 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 contain
all statements required to be stated therein in accordance with
and 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 not or will not contain an
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading. 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 other Offering Materials will not contain
an 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, Prospectus or Offering Materials made in
reliance upon and in conformity with information relating to the
Dealer Manager furnished to the Fund in writing by the Dealer
Manager expressly for use in the Registration Statement,
Prospectus or Offering Materials.
ii. The Fund has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of
Maryland, has full corporate power and authority to conduct its
business as described in the Registration Statement and the
Prospectus, 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 to do business in each jurisdiction wherein it owns or
leases real property or in which the conduct of its business
requires such qualification, except where the failure to obtain
or maintain such Licenses and Permits or to be so qualified does
not involve a material adverse effect upon the Fund's business,
properties, financial position or results of operations. The Fund
has no subsidiaries.
iii. The Fund is duly registered with the Commission under the
Investment Company Act as a closed-end, diversified management
investment company, no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated
or, to the best of its knowledge, threatened by the Commission,
all required action has been taken under the Securities Act and
the Investment Company Act to make the public offering and to
consummate the issuance of the Rights and the issuance and sale
of the Shares by the Fund upon exercise of the Rights, and the
provisions of the Fund's charter and by-laws comply as to form in
all material respects with the requirements of the Investment
Company Act and the Rules and Regulations.
iv. PricewaterhouseCoopers LLP, 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.
v. The financial statements of the Fund set forth or incorporated by
reference in the Registration Statement and the Prospectus
present fairly in all material respects the financial condition
of the Fund as of the dates or for the periods indicated in
conformity with generally accepted accounting principles applied
on a consistent basis; and the information set forth in the
Prospectus under the headings "Fee Table" and "Financial
Highlights" presents fairly in all material respects the
information stated therein.
vi. The Fund has an authorized capitalization as set forth in the
Prospectus; the outstanding Common Shares have been duly
authorized and are validly issued, fully paid and non-assessable
and conform in all material respects to the description thereof
in the Prospectus under the heading "Description of Capital
Stock"; the Rights have been duly authorized by all requisite
action on the part of the Fund for issuance pursuant to the
Offer; the Shares have been duly authorized by all requisite
action on the part of the Fund for issuance and 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 Shares and the Rights
conform in all material respects to all statements relating
thereto contained in the Registration Statement, the Prospectus
and the other Offering Materials; and the issuance of each of the
Rights and the Shares is not subject to any preemptive rights.
vii. Except as set forth in the Prospectus, subsequent to the
respective dates as of which information is given in the
Registration Statement and the Prospectus, (A) the Fund has not
incurred any liabilities or obligations, direct or contingent, or
entered into any transactions, other than in the ordinary course
of business, that are material to the Fund, (B) there has not
been any material change in the Common Shares or long-term debt
of the Fund, or any material adverse change, or any development
involving a prospective 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) and (C) except for the regular monthly
dividend on the outstanding Common Shares, there have been no
dividends or distributions paid or declared in respect of the
Fund's Common Shares.
viii.Each of this agreement (the "Agreement"), the Subscription
Agency Agreement (the "Subscription Agency Agreement") dated as
of ________ __, 2001 between the Fund and _______(the
"Subscription Agent"), the Information Agent Agreement (the
"Information Agent Agreement") dated as of ________ __, 2001
between the Fund and __________ (the "Information Agent"), the
Investment Advisory Agreement dated as of August 4, 1989 between
the Fund and the Investment Adviser (the "Investment Advisory
Agreement"), the Investment Subadvisory Agreement dated as of
August 4, 1989 between the Adviser and the Subadviser ("the
Investment Subadvisory Agreement"), the Administration Agreement
dated as of December 1, 1996 between the Fund and Hyperion
Capital Management, Inc. (the "Administration Agreement"), the
Sub-Administration Agreement dated as of May 23, 2000 between
Hyperion Capital Management Inc. and State Street Bank and Trust
Company (the "Subadministration Agreement"), the Custodian
Agreement dated as of ________ __, 2001 between the Fund and
State Street Corp. (the "Custodian Agreement"), and the
Registrar, Transfer Agency and Service Agreement dated as of
________ __, 2001 between the Fund and Boston Equiserve, L.P.
(the "Transfer Agency Agreement") (collectively, all the
foregoing are the "Fund Agreements"), has been duly authorized,
executed and delivered by the Fund; each of the Fund Agreements
complies with all applicable provisions of the Investment Company
Act, the Investment Advisers Act of 1940, as amended (the
"Advisers Act") and the rules and regulations under such Acts;
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 issuance of the Rights, nor the issuance and sale of
the Shares, nor the execution, delivery, performance and
consummation by the Fund of any other of the transactions
contemplated in the Fund Agreements, or any sub-custodial
arrangements entered into pursuant to the Custodian Agreement,
nor the consummation of the transactions contemplated in the
Custodian Agreement or in the Registration Statement nor the
fulfillment of the terms thereof will conflict with or violate
the articles of incorporation, by-laws or similar organizational
documents of the Fund, or conflict with, result in a breach or
violation of, or constitute a default or an event of default
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any properties or assets of the Fund
under the charter, by-laws or similar organizational documents of
the Fund, or the terms and provisions of any agreement,
indenture, mortgage, loan agreement, note, insurance or surety
agreement, 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 any order, law, rule or regulation of any court or
governmental agency or body having jurisdiction over the Fund or
any of its properties.
x. Except as set forth in the Registration Statement, there is no
pending or, to the knowledge of the Fund or the Investment
Adviser, threatened action, suit or proceeding affecting the Fund
or to which the Fund is a party before or by any court or
governmental agency, authority or body or any arbitrator which
might result in any material adverse change in the condition
(financial or other), business prospects, net worth or 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. There are no franchises, contracts or other documents of the Fund
required to be described in the Registration Statement or the
Prospectus, or to be filed or incorporated by reference as
exhibits which are not described or filed or incorporated by
reference therein as permitted by the Securities Act, the
Investment Company Act or the Rules and Regulations.
xii. No consent, approval, authorization, notification or order of, or
filing with, any court or governmental agency or body is 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 and the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
xiii.The Common Shares have been duly listed on the New York Stock
Exchange, Inc. and prior to their issuance the Shares and the
Rights will have been duly approved for listing, subject to
official notice of issuance, on the New York Stock Exchange, Inc.
xiv. 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 Rights and 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, Common
Shares 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 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 exercises of the Rights pursuant
to this Agreement); provided that any action in connection with
the Fund's dividend reinvestment and cash purchase plan will not
be deemed to be within the terms of this Section 1.a.xiv.
xv. The Fund has complied in all previous tax years, except for tax
years for which the applicable statute of limitations has
expired, 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.
xvi. The Fund has complied in the last five 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 diversification and asset
coverage requirements of the Investment Company Act.
b. The Investment Adviser represents and warrants to, and agrees with, the
Dealer Manager as of the date hereof, 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, has full power and authority (corporate and
other) to own its properties and conduct its business as
described in the Registration Statement and the Prospectus,
currently maintains all governmental licenses, permits, consents,
orders, approvals and other authorizations to conduct its
business and to enable the Investment Adviser to continue to
supervise investments in securities as contemplated in the
Prospectus and is duly qualified to do business as a foreign
corporation in each jurisdiction wherein it owns or leases real
property or in which the conduct of its business requires such
qualification, except where the failure to be so qualified does
not involve a material adverse effect upon the Investment
Adviser's business, properties, financial position or operations.
ii. 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 as investment adviser
for the Fund as contemplated in the Prospectus and the Investment
Advisory Agreement.
iii. Each of this Agreement, the Investment Advisory Agreement and any
other Fund Agreement to which the Investment Adviser is a party
has been duly authorized, executed and delivered by the
Investment Adviser, and complies with all applicable provisions
of the Investment Company Act, the Advisers Act and the rules and
regulations under such Acts, 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).
iv. Neither the execution, delivery, performance and consummation by
the Investment Adviser of its obligations under this Agreement,
the Investment Advisory Agreement or any other Fund Agreement to
which the Investment Adviser is a party nor the consummation of
the transactions contemplated therein or in the Registration
Statement nor the fulfillment of the terms thereof will conflict
with or violate the charter, by-laws or similar organizational
documents of the Investment Adviser, or conflict with, result in
a breach or violation of, or constitute a default or an event of
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, bylaws or similar
organizational document, the terms and provisions of any
agreement, indenture, mortgage, loan agreement, note, insurance
or surety agreement, 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 having jurisdiction over the Investment Adviser or
any of its properties.
v. There is no pending or, to the best of the Investment Adviser's
knowledge, threatened action, suit or proceeding affecting the
Investment Adviser or to which the Investment Adviser is a party
before or by any court or governmental agency, authority or body
or any arbitrator which might result in any material adverse
change in the Investment Adviser's condition (financial or
other), business prospects, net worth or operations, 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.
vi. No consent, approval, authorization, notification or order of, or
filing with, any court or governmental agency or body is required
for the consummation by the Investment Adviser of the
transactions contemplated by this Agreement, the Investment
Advisory Agreement or any other Fund Agreement to which the
Investment Adviser is a party.
vii. 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 Rights and 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, Common
Shares 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 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 the Rights pursuant
to this Agreement); provided that any action in connection with
the Fund's dividend reinvestment and cash purchase plan will not
be deemed to be within the terms of this Section 1.b.vii.
c. The Investment Subadviser represents and warrants to, and agrees with, the
Dealer Manager as of the date hereof, as of the Representation Date and as
of the Expiration Date that:
i. The Investment Subadviser has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of Ohio, has full power and authority (corporate and
other) to own its properties and conduct its business as
described in the Registration Statement and the Prospectus,
currently maintains all governmental licenses, permits, consents,
orders, approvals and other authorizations to conduct its
business and to enable the Investment Subadviser to continue to
supervise investments in securities as contemplated in the
Prospectus and is duly qualified to do business as a foreign
corporation in each jurisdiction wherein it owns or leases real
property or in which the conduct of its business requires such
qualification, except where the failure to be so qualified does
not involve a material adverse effect upon the Investment
Subadviser's business, properties, financial position or
operations.
ii. The Investment Subadviser 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 as investment adviser
for the Fund as contemplated in the Prospectus and the Investment
Advisory Agreement.
iii. Each of this Agreement, the Investment Subadvisory Agreement and
any other Fund Agreement to which the Investment Subadviser is a
party has been duly authorized, executed and delivered by the
Investment Subadviser, and complies with all applicable
provisions of the Advisers Act and the rules and regulations
under such Acts, and is, assuming due authorization, execution
and delivery by the other parties thereto, a legal, valid,
binding and enforceable obligation of the Investment Subadviser,
subject to the qualification that the enforceability of the
Investment Subadviser'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).
iv. Neither the execution, delivery, performance and consummation by
the Investment Subadviser of its obligations under this
Agreement, the Investment Subadvisory Agreement or any other Fund
Agreement to which the Investment Subadviser is a party nor the
consummation of the transactions contemplated therein or in the
Registration Statement nor the fulfillment of the terms thereof
will conflict with or violate the charter, by-laws or similar
organizational documents of the Investment Subadviser, or
conflict with, result in a breach or violation of, or constitute
a default or an event of default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any
properties or assets of the Investment Subadviser under the
charter, bylaws or similar organizational document, the terms and
provisions of any agreement, indenture, mortgage, loan agreement,
note, insurance or surety agreement, lease or other instrument to
which the Investment Subadviser is a party or by which it may be
bound or to which any of the property or assets of the Investment
Subadviser 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 having jurisdiction over the
Investment Subadviser or any of its properties.
v. There is no pending or, to the best of the Investment
Subadviser's knowledge, threatened action, suit or proceeding
affecting the Investment Subadviser or to which the Investment
Subadviser is a party before or by any court or governmental
agency, authority or body or any arbitrator which might result in
any material adverse change in the Investment Subadviser's
condition (financial or other), business prospects, net worth or
operations, 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.
vi. No consent, approval, authorization, notification or order of, or
filing with, any court or governmental agency or body is required
for the consummation by the Investment Subadviser of the
transactions contemplated by this Agreement, the Investment
Subadvisory Agreement or any other Fund Agreement to which the
Investment Subadviser is a party.
vii. The Investment Subadviser (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 Rights and 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, Common Shares 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 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 the Rights pursuant to this Agreement); provided
that any action in connection with -------- ---- the Fund's
dividend reinvestment and cash purchase plan will not be deemed
to be within the terms of this Section 1.c.vii.
d. Any certificate required by this Agreement that is signed by any officer of
the Fund, the Investment Adviser or the Investment Subadviser and delivered
to the Dealer Manager or counsel for the Dealer Manager shall be deemed a
representation and warranty by the Fund, the Investment Adviser or the
Investment Subadviser, as the case may be, to the Dealer Manager, as to the
matters covered thereby.
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 to solicit the
exercise of Rights and authorizes the Dealer Manager to sell
Shares purchased by the Dealer Manager from the Fund though the
exercise of Rights as described herein; the Fund hereby
authorizes the Dealer Manager to form and manage a group of
selling broker-dealers (each a "Selling Group Member" and
collectively the "Selling Group") that enter into a Selling Group
Agreement with the Dealer Manager in the form attached hereto as
Exhibit A to solicit the exercise of Rights and to sell Shares
purchased by the Selling Group Member from the Dealer Manager as
described herein; and the Fund hereby authorizes other soliciting
broker-dealers (each a "Soliciting Dealer" and collectively the
"Soliciting Dealers") that enter into a Soliciting Dealer
Agreement with the Dealer Manager in the form attached hereto as
Exhibit B to solicit the exercise of Rights. The Dealer Manager
hereby agrees to solicit the exercise of Rights in accordance
with the Securities Act, the Investment Company Act and the
Exchange Act, and its customary practice subject to the terms and
conditions of this Agreement, the procedures described in the
Registration Statement, the Prospectus and, where applicable, the
terms and conditions of such Selling Group Agreement or
Soliciting Dealer Agreement; and the Dealer Manager hereby agrees
to form and manage the Selling Group to solicit the exercise of
Rights and to sell Shares to the Selling Group purchased by the
Dealer Manager from the Fund through the exercise of Rights as
described herein in accordance with the Securities Act, the
Investment Company Act and the Exchange Act, and its customary
practice subject to the terms and conditions of this Agreement,
the procedures described in the Registration Statement, the
Prospectus and, where applicable, the terms and conditions of the
Selling Group Agreement.
ii. The Fund hereby authorizes the Dealer Manager to buy and exercise
Rights, including unexercised Rights delivered to the
Subscription Agent for resale and Rights of Foreign Record Date
Shareholders (as defined in the Prospectus) held by the
Subscription Agent for which no instructions are received, on the
terms and conditions set forth in such Prospectus, and to sell
Shares to the public or to Selling Group Members at the offering
price set by the Dealer Manager from time to time. Sales of
Shares by the Dealer Manager or Selling Group Members shall not
be at a price higher than the offering price set by the Dealer
Manager from time to time.
b. The Fund agrees to furnish, or cause to be furnished, to the Dealer
Manager, lists, or copies of those lists, showing the names and
addresses of, and number of Common Shares 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 for securities brokers and dealers that
have been requested by the Dealer Manager to solicit exercises of
Rights.
c. The Dealer Manager agrees to provide to the Fund, in addition to the
services described in paragraph 2.a., financial advisory and marketing
services in connection with the Offer. No advisory fee, other than the
fees provided for in Section 3 of this Agreement and the reimbursement
of the Dealer Manager's out-of-pocket expenses as described in Section
5 of this Agreement, will be payable by the Fund, or any other party
hereto, to the Dealer Manager in connection with the financial
advisory and marketing services provided by the Dealer Manager
pursuant to this Section 2.c.
d. 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 for the Fund contemplated by this Agreement.
e. 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 the Investment Subadviser or any of their
affiliates, for any act or omission on the part of any soliciting
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 that are finally judicially determined to have resulted
primarily from the bad faith, willful misconduct or gross negligence
of the Dealer Manager or by reason of the reckless disregard of the
obligations and duties of the Dealer Manager under this Agreement.
3. Dealer Manager Fees. In full payment for the financial advisory, marketing
and soliciting services rendered and to be rendered hereunder by the Dealer
Manager, the Fund agrees to pay the Dealer Manager a fee (the "Dealer
Manager Fee") equal to 3.75% of the aggregate Subscription Price for the
Shares issued pursuant to the exercise of Rights and the Over-Subscription
Privilege. In full payment for the soliciting efforts to be rendered, the
Dealer Manager agrees to reallow selling fees (the "Selling Fees") to
Selling Group Members equal to 2.50% of the Subscription Price per Share
for each Share issued pursuant to either (a) the exercise of Rights and the
Over-Subscription Privilege where such Selling Group Member is so
designated on the subscription form or (b) the purchase for resale from the
Dealer Manager in accordance with the Selling Group Agreement. In full
payment for the soliciting efforts to be rendered, the Dealer Manager
agrees to reallow soliciting fees (the "Soliciting Fees") to Soliciting
Dealers equal to 1.25% of the Subscription Price per Share for each Share
issued pursuant to the exercise of Rights and the Over-Subscription
Privilege where such Soliciting Dealer is so designated on the subscription
form, subject to a maximum fee based on the number of Common Shares held by
such Soliciting Dealer through The Depository Trust Company ("DTC") on the
Record Date. The Dealer Manager agrees to pay the Selling Fees or
Solicitation Fees, as the case may be, to the broker-dealer designated on
the applicable portion of the form used by the holder to exercise Rights
and the Over-Subscription Privilege, 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 Selling Group Agreement or
Soliciting Dealer Agreement, then the Dealer Manager shall retain such
Selling Fee or Solicitation Fee for Shares issued pursuant to the exercise
of Rights and the Over-Subscription Privilege. 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
payment will be made on each date on which the Fund issues Shares after the
Expiration Date. Payment to a Selling Group Member or Soliciting Dealer
will be made by the Dealer Manager directly to such Selling Group Member or
Soliciting Dealer by check to an address identified by such broker-dealer.
Such payments shall be made on or before the tenth business day following
the day the Fund issues Shares after the Expiration Date.
4. Other Agreements.
a. The Fund covenants with the Dealer Manager as follows:
i. The Fund will use its commercially reasonable best efforts to
cause the Registration Statement to become effective and maintain
its effectiveness 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, and confirm the notice in writing to, the
Dealer Manager immediately (A) of the effectiveness of the
Registration Statement and any amendment thereto (including any
post-effective amendment), (B) of the receipt of any comments
from the Commission, (C) 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, (D)
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, and (E) 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 (D) hereunder and, if any such stop order 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 or not such revised prospectus is required to
be filed pursuant to Rule 497(c), (e) or (h) 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.
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 reasonable opinion of counsel for the Dealer Manager, 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
Holder, the Fund will forthwith amend or supplement the
Prospectus by preparing and 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), at the Fund's expense, 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 required to be stated
therein or 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
and its counsel, to qualify the Rights and the Shares for
offering and sale under the applicable securities laws of such
states and other jurisdictions of the United States as the Dealer
Manager may designate and 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 end
of the Fund's fiscal semi-annual or fiscal year-end period
covered thereby, an earnings statement (which need not be
audited) (in form complying with the provisions of Rule 158 of
the Rules and Regulations of the Securities Act) covering a
twelve-month period beginning not later than the first day of the
Fund's fiscal semi-annual period 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 Shares issued in reinvestment of dividends or
distributions.
x. The Fund will use the net proceeds from the Offer to acquire
portfolio securities as set forth under "Use of Proceeds" in the
Prospectus.
xi. The Fund will use its commercially reasonable best efforts to
cause the Rights and the Shares to be duly authorized for listing
by the New York Stock Exchange, Inc. prior to the time the Rights
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 use its best efforts to apply the net proceeds
from the Offer in such a manner as to continue to comply with the
diversification and asset coverage requirements of the Prospectus
and the Investment Company Act.
xiv. The Fund will advise or cause the Subscription Agent (A) to
advise the Dealer Manager and, only where specifically noted,
each Selling Group Member who specifically requests, from day to
day during the period of, and promptly after the termination of,
the Offer, as to the names and addresses of all 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 Selling Group Member, the number of Rights
exercised on subscription certificates indicating the Dealer
Manager or such Selling Group Member, as the case may be, 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 Selling Group Member, 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 each Selling
Group Member, the number of Rights exercised on subscription
certificates indicating the Dealer Manager or such Selling Group
Member, as the case may be, as the broker-dealer with respect to
such exercise, and as to such other information as the Dealer
Manager may reasonably request; (B) to sell any Rights received
for resale from Holders exclusively to or through the Dealer
Manager, which may, at its election, purchase such Rights as
principal or act as agent for the resale thereof; and (C) to
issue Shares upon the Dealer Manager's exercise of Rights no
later than the close of business on the business day following
the day that full payment for such Shares has been received by
the Subscription Agent.
b. Neither the Fund, the Investment Adviser nor the Investment Subadviser
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 Rights or the Shares; provided that any
action in connection with the Fund's dividend reinvestment and cash
purchase plan will not be deemed to be within the meaning of this
Section 4.b.
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
and subscription certificates relating to the Rights, (iii) the fees
and disbursements of the Fund's counsel (including the fees and
disbursements of local 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, (v) the printing or other production and
delivery to the Dealer Manager of copies of the Registration Statement
as originally filed and of each amendment thereto and of the
Prospectus and any amendments or supplements thereto, (vi) the fees
and expenses incurred with respect to filing with the National
Association of Securities Dealers, Inc., (vii) the fees and expenses
incurred in connection with the listing of the Shares on the New York
Stock Exchange, Inc., (viii) the printing or other production, mailing
and delivery expenses incurred in connection with Offering Materials
and (ix) the fees and expenses incurred with respect to the
Subscription Agent and the 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
incurred in connection with its activities under this Agreement,
including the reasonable fees and disbursements of its legal counsel
(excluding Blue Sky filing fees which are paid directly by the Fund),
in an amount up to $100,000.
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 agrees to 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 5.a. and 5.b. which
the Fund would have paid if such transactions had been consummated.
6. Conditions of the Dealer Manager's Obligations. The obligations of the
Dealer Manager hereunder are subject to the accuracy of the respective
representations and warranties of the Fund, the Investment Adviser and the
Investment Subadviser contained herein, to the performance by the Fund, the
Investment Adviser and the Investment Subadviser 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 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:
i. The favorable opinions, dated the Representation Date and the
Expiration Date, of Xxxxxxxx & Worcester LLP, counsel for the
Fund, in form and substance satisfactory to counsel for the
Dealer Manager to the effect that:
(1) The Fund has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the
State of Maryland, has full corporate power and authority to
conduct its business as described in the Registration
Statement and the Prospectus, to such counsel's knowledge
after reasonable investigation currently maintains all
Licenses and Permits necessary and U.S. federal, or New York
or Maryland state law to carry on its business as
contemplated in the Prospectus (except that counsel need
express no opinion as to securities or "blue sky" laws of
any state), and is duly qualified to do business as a
foreign corporation in each jurisdiction wherein it owns or
leases real property or in which the conduct of its business
requires such qualification, except where the failure to be
so qualified or to maintain such Licenses and Permits does
not involve a material adverse effect upon the Fund's
business, properties, financial position or results of
operations.
(2) The Fund is registered with the Commission under the
Investment Company Act as a closed-end, diversified
management investment company, to the knowledge of such
counsel, no order of suspension or revocation of such
registration has been issued or proceedings therefor
initiated or, threatened by the Commission, all required
action has been taken under the Securities Act and the
Investment Company Act to make the public offering and
consummate the issuance of the Rights and the issuance and
sale of the Shares by the Fund upon exercise of the Rights,
and the provisions of the Fund's charter and by-laws comply
as to form in all material respects with the requirements of
the Investment Company Act and the Rules and Regulations.
(3) The Fund's authorized capitalization is as set forth in the
Prospectus; the outstanding Common Shares have been duly
authorized and are validly issued, fully paid and
non-assessable and conform in all material respects to the
description thereof in the Prospectus under the heading
"Description of Capital Stock"; the Rights have been duly
authorized by all requisite action on the part of the Fund
for issuance pursuant to the Offer; the Shares have been
duly authorized by all requisite action on the part of the
Fund for issuance and 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 Shares and the Rights conform
in all material respects to all statements relating thereto
contained in the Registration Statement, the Prospectus and
the other Offering Materials; and under Maryland General
Corporate Law or otherwise, to such counsel's knowledge, the
issuance of the Rights and the Shares is not subject to any
preemptive rights.
(4) Each of the Fund Agreements has been duly authorized,
executed and delivered by the Fund; each of the Fund
Agreements complies with all applicable provisions of the
Investment Company Act, the Advisers Act and the rules and
regulations under such Acts; 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).
(5) Neither the issuance of the Rights, nor the issuance and
sale of the Shares, nor the execution, delivery, performance
and consummation by the Fund of any other of the
transactions contemplated in the Fund Agreements, or any
sub-custodial arrangements entered into pursuant to the
Custodian Agreement, nor the consummation of the
transactions contemplated therein or in the Registration
Statement nor the fulfillment of the terms thereof will
conflict with or violate the charter, bylaws or similar
organizational documents of the Fund, or will result in a
breach or violation of, or constitute a default or an event
of default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any properties or
assets of the Fund under the charter, bylaws or similar
organizational documents of the Fund, or the terms and
provisions of any agreement, indenture, mortgage, loan
agreement, note, insurance or surety agreement, lease or
other instrument to which such counsel has knowledge of
after reasonable inquiry and 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 any order, law, rule or regulation of any U.S.
federal, or New York or Maryland state court or governmental
agency or body having jurisdiction over the Fund or any of
its properties.
(6) To the best knowledge of such counsel, there is no pending
or threatened action, suit or proceeding affecting the Fund
or to which the Fund is a party before or by any court or
governmental agency, authority or body or any arbitrator
which might result in any material adverse change in the
condition (financial or other), business prospects, net
worth or 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.
(7) To the best knowledge of such counsel after reasonable
inquiry, there are no franchises, contracts or other
documents of the Fund required to be described in the
Registration Statement or the Prospectus, or to be filed or
incorporated by reference as exhibits which are not
described or filed or incorporated by reference therein as
permitted by the Securities Act, the Investment Company Act
or the Rules and Regulations.
(8) To the best knowledge of such counsel after reasonable
inquiry, no consent, approval, authorization, notification
or order of, or filing with, any U.S. federal, or New York
or Maryland state court or governmental agency or body is
required for the consummation by the Fund of the
transactions contemplated by the Fund Agreements or the
Registration Statement, except (A) such as have been
obtained and (B) such as may be required under the blue sky
laws of any jurisdiction in connection with the transactions
contemplated hereby.
(9) The Common Shares have been duly listed on the New York
Stock Exchange, Inc. and the Shares and the Rights have been
duly approved for listing, subject to official notice of
issuance, on the New York Stock Exchange, Inc.
(10) 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 prior 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 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, economic and statistical data contained
or incorporated by reference therein or omitted therefrom,
as to which such counsel need express no opinion) as of
their respective effective or issue dates complied as to
form and appear on their face to be appropriately responsive
in all material respects with the applicable requirements of
the Securities Act and the Investment Company Act and the
Rules and Regulations.
(11) The statements in the Prospectus under the heading "Federal
Taxation" fairly present the information disclosed therein
in all material respects.
In rendering such opinion, such counsel may rely as to matters of
Maryland law on the opinion of Piper, Marbury, Xxxxxxx & Xxxx 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 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, 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 (except that such counsel need not
express any statement or belief with respect to the financial
statements, schedules or other financial or statistical data
included or incorporated by reference in the Registration
Statement, Prospectus or the Offering Materials) .
ii. The favorable opinions, dated the Representation Date and the
Expiration Date, of Xxxxxxxxxxx & Xxxxxxxx, counsel for the
Investment Adviser, in form and substance satisfactory to counsel
for the Dealer Manager to the effect that:
(1) 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, has full corporate power and
authority to own its properties and conduct its business as
described in the Registration Statement and the Prospectus,
currently maintains all governmental licenses, permits,
consents, orders, approvals, and other authorizations to
conduct its business and to enable the Investment Adviser to
continue to supervise investment in securities as
contemplated in the Investment Advisory Agreement, and is
duly qualified to do business as a foreign corporation in
each jurisdiction wherein it owns or leases real property or
in which the conduct of its business requires such
qualification, except where the failure to be so qualified
does not involve a material adverse effect upon the
Investment Adviser's business, properties, financial
position or operations.
(2) The Investment Adviser is 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 as investment
adviser for the Fund as contemplated in the Investment
Advisory Agreement.
(3) Each of this Agreement, the Investment Advisory Agreement
and any other Fund Agreement to which the Investment Adviser
is a party has been duly authorized, executed and delivered
by the Investment Adviser and complies with all applicable
provisions of the Investment Company Act, the Advisers Act
and the rules and regulations under such Acts, 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).
(4) Neither the execution, delivery, performance and
consummation by the Investment Adviser of its obligations
under this Agreement, the Investment Advisory Agreement or
any other Fund Agreement to which the Investment Adviser is
a party nor the consummation of the transactions
contemplated therein or in the Registration Statement nor
the fulfillment of the terms thereof will conflict with or
violate the charter, by-laws or similar organizational
documents of the Investment Adviser, or conflict with,
result in a breach or violation of, or constitute a default
or an event of 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, by-laws or similar organizational documents of the
Investment Adviser, the terms and provisions of any
agreement, indenture, mortgage, loan agreement, note,
insurance or surety agreement, 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 U.S. federal, or New York or Delaware court or
governmental agency or body having jurisdiction over the
Investment Adviser or any of its properties.
(5) To the best knowledge of such counsel, there is no pending
or threatened action, suit or proceeding affecting the
Investment Adviser or to which the Investment Adviser is a
party before or by any U.S. federal, or New York or Delaware
court or governmental agency, authority or body or any
arbitrator which might result in any material adverse change
in the Investment Adviser's condition (financial or other),
business prospects, net worth or operations 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.
(6) No consent, approval, authorization, notification or order
of, or filing with any U.S. federal, or New York or Delaware
court or governmental agency or body is required for the
consummation by the Investment Adviser of the transactions
contemplated by this Agreement, the Investment Advisory
Agreement or any other Fund Agreement to which the
Investment Adviser is a party.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Investment Adviser and public
officials.
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 Investment Adviser and its affiliates, no facts have come to
their attention which cause them to believe that the Registration
Statement, on the date it became effective, 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.
iii. The favorable opinions, dated the Representation Date and the
Expiration Date, of [ ], counsel for the Investment Subadviser,
in form and substance satisfactory to counsel for the Dealer
Manager to the effect that:
(1) The Investment Subadviser has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Ohio, has full corporate power and
authority to own its properties and conduct its business as
described in the Registration Statement and the Prospectus,
currently maintains all governmental licenses, permits,
consents, orders, approvals, and other authorizations to
conduct its business and to enable the Investment Subadviser
to continue to supervise investment in securities as
contemplated in the Investment Subadvisory Agreement, and is
duly qualified to do business as a foreign corporation in
each jurisdiction wherein it owns or leases real property or
in which the conduct of its business requires such
qualification, except where the failure to be so qualified
does not involve a material adverse effect upon the
Investment Subadviser's business, properties, financial
position or operations.
(2) The Investment Subadviser is 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 as investment adviser for the Fund as
contemplated in the Investment Subadvisory Agreement.
(3) Each of this Agreement, the Investment Subadvisory
Agreement and any other Fund Agreement to which the
Investment Subadviser is a party has been duly
authorized, executed and delivered by the Investment
Subadviser and complies with all applicable provisions
of the Advisers Act and the rules and regulations under
such Acts, and is, assuming due authorization,
execution and delivery by the other parties thereto, a
legal, valid, binding and enforceable obligation of the
Investment Subadviser, subject to the qualification
that the enforceability of the Investment Subadviser'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).
(4) Neither the execution, delivery, performance and
consummation by the Investment Subadviser of its
obligations under this Agreement, the Investment
Subadvisory Agreement or any other Fund Agreement to
which the Investment Subadviser is a party nor the
consummation of the transactions contemplated therein
or in the Registration Statement nor the fulfillment of
the terms thereof will conflict with or violate the
charter, by-laws or similar organizational documents of
the Investment Subadviser, or conflict with, result in
a breach or violation of, or constitute a default or an
event of default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any
properties or assets of the Investment Subadviser under
the charter, by-laws or similar organizational
documents of the Investment Subadviser, the terms and
provisions of any agreement, indenture, mortgage, loan
agreement, note, insurance or surety agreement, lease
or other instrument to which the Investment Subadviser
is a party or by which it may be bound or to which any
of the property or assets of the Investment Subadviser
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 having
jurisdiction over the Investment Subadviser or any of
its properties.
(5) There is no pending or, to the best knowledge of such
counsel, threatened action, suit or proceeding
affecting the Investment Subadviser or to which the
Investment Subadviser is a party before or by any court
or governmental agency, authority or body or any
arbitrator which might result in any material adverse
change in the Investment Subadviser's condition
(financial or other), business prospects, net worth or
operations 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.
(6) No consent, approval, authorization, notification or
order of, or filing with any court or governmental
agency or body is required for the consummation by the
Investment Subadviser of the transactions contemplated
by this Agreement, the Investment Subadvisory Agreement
or any other Fund Agreement to which the Investment
Subadviser is a party.
In rendering such opinion, such counsel may rely as to
matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Investment
Subadviser and public officials.
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 Investment
Subadviser and its affiliates, no facts have come to their
attention which cause them to believe that the Registration
Statement, on the date it became effective, 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.
c. The Dealer Manager shall have received from Skadden, Arps, Slate,
Xxxxxxx & Xxxx (Illinois), counsel for the Dealer Manager, such
opinion or opinions, dated the Representation Date and the
Expiration Date, with respect to the Offer, the Registration
Statement, the Prospectus and other related matters as the Dealer
Manager may reasonably require, and the Fund shall have furnished
to such counsel such documents as they reasonably request for the
purpose of enabling them to pass upon such matters.
d. The Fund shall have furnished to the Dealer Manager certificates
of the Fund, signed by the President, the Treasurer, the
Assistant Treasurer, the Secretary, the Assistant Secretary or a
Vice President of the Fund, dated the Representation Date and the
Expiration Date, to the effect that the signer(s) 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 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, 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), earnings, 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.
e. 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.
f. The Investment Subadviser shall have furnished to the Dealer
Manager certificates of the Investment Subadviser, 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 Subadviser 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.
g. PricewaterhouseCoopers LLP 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
stating in effect that:
i. they are independent accountants with respect to the Fund
within the meaning of the Securities Act and the applicable
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
respective Rules and Regulations with respect to
registration statements on Form N-2;
iii. they have performed specified procedures, not constituting
an audit in accordance with generally accepted auditing
standards, including a reading of the latest available
unaudited financial information of the Fund, a reading of
the minute books of the Fund, and inquiries of officials of
the Fund responsible for financial and accounting matters
and on the basis of such inquiries and procedures nothing
came to their attention that caused them to believe that at
a specified date not more than five business days prior to
the Representation Date or the Expiration Date, as the case
may be, there was any change in the common shares, any
decrease in net assets or any increase in long-term debt of
the Fund as compared with amounts shown in the most recent
statement of assets and liabilities 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 compared certain dollar amounts (or
percentages as derived from such dollar amounts) and other
financial information regarding the operations of the Fund
appearing in the Registration Statement, which have
previously been specified by the Dealer Manager and which
shall be specified in such letter, and have found such items
to be in agreement with, the accounting and financial
records of the Fund.
h. 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 6.f.,
or (ii) any 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 Manager,
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.
i. Prior to the Representation Date, the Fund shall have furnished
to the Dealer Manager such further information, certificates and
documents as the Dealer Manager may reasonably request.
j. If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided
in this Agreement or waived by the Dealer Manager, or if any of
the opinions and certificates mentioned above or elsewhere in
this Agreement shall not be in all material respects satisfactory
in form and substance to the Dealer Manager and its counsel, this
Agreement and all obligations of the Dealer Manager hereunder may
be canceled at, or at any time prior to, the Expiration Date by
the Dealer Manager. Notice of such cancellation shall be given to
the Fund in writing or by telephone confirmed in writing.
7. Indemnity and Contribution.
a. Each of the Fund and the Investment Adviser, jointly and
severally, agrees to indemnify, defend and hold harmless the
Dealer Manager, its partners, directors and officers, and any
person who controls the Dealer Manager within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange
Act, and the successors and assigns of all of the foregoing
persons from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which the
Dealer Manager or any such person may incur under the Securities
Act, the Exchange Act, the Investment Company Act, the Advisers
Act, the common law or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by
the Fund) or in a Prospectus (the term Prospectus for the purpose
of this Section 7 being deemed to include any Preliminary
Prospectus, the Prospectus and the Prospectus as amended or
supplemented by the Fund), or arises out of or is based upon any
omission or alleged omission to state a material fact required to
be stated in either such Registration Statement or Prospectus or
necessary to make the statements made therein not misleading,
except insofar as any such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in
conformity with information furnished in writing by or on behalf
of the Dealer Manager to the Fund or the Investment Adviser
expressly for use with reference to the Dealer Manager in such
Registration Statement or such Prospectus or arises out of or is
based upon any omission or alleged omission to state a material
fact in connection with such information required to be stated in
such Registration Statement or such Prospectus or necessary to
make such information not misleading.
If any action, suit or proceeding (together, a "Proceeding") is
brought against the Dealer Manager or any such person in respect
of which indemnity may be sought against the Fund or the
Investment Adviser pursuant to the foregoing paragraph, the
Dealer Manager or such person shall promptly notify the Fund or
the Investment Adviser, as the case may be, in writing of the
institution of such Proceeding and the Fund or the Investment
Adviser shall assume the defense of such Proceeding, including
the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided,
however, that the omission to so notify the Fund or the
Investment Adviser shall not relieve the Fund or the Investment
Adviser from any liability which the Fund or the Investment
Adviser may have to the Dealer Manager or any such person or
otherwise. The Dealer Manager or such person shall have the right
to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of the
Dealer Manager or of such person unless the employment of such
counsel shall have been authorized in writing by the Fund or the
Investment Adviser, as the case may be, in connection with the
defense of such Proceeding or the Fund or the Investment Adviser
shall not have, within a reasonable period of time in light of
the circumstances, employed counsel to have charge of the defense
of such Proceeding or such indemnified party or parties shall
have reasonably concluded that there may be defenses available to
it or them which are different from, additional to or in conflict
with those available to the Fund or the Investment Adviser (in
which case the Fund or the Investment Adviser shall not have the
right to direct the defense of such Proceeding on behalf of the
indemnified party or parties), in any of which events such fees
and expenses shall be borne by the Fund or the Investment Adviser
and paid as incurred (it being understood, however, that the Fund
or the Investment Adviser shall not be liable for the expenses of
more than one separate counsel (in addition to any local counsel)
in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are
parties to such Proceeding). Neither the Fund nor the Investment
Adviser shall be liable for any settlement of any Proceeding
effected without its written consent but if settled with the
written consent of the Fund or the Investment Adviser, the Fund
or the Investment Adviser, as the case may be, agrees to
indemnify and hold harmless the Dealer Manager and any such
person from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any
time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph,
then the indemnifying party agrees that it shall be liable for
any settlement of any Proceeding effected without its written
consent if (i) such settlement is entered into more than 60
business days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request
prior to the date of such settlement and (iii) such indemnified
party shall have given the indemnifying party at least 30 days'
prior notice of its intention to settle. No indemnifying party
shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened
Proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder
by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all
liability on claims that are the subject matter of such
Proceeding and does not include an admission of fault,
culpability or a failure to act, by or on behalf of such
indemnified party.
b. The Dealer Manager agrees to indemnify, defend and hold harmless
the Fund and the Investment Adviser, its directors and officers,
and any person 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, and the successors and assigns of all of
the foregoing persons from and against any loss, damage, expense,
liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Fund or the
Investment Adviser or any such person may incur under the
Securities Act, the Exchange Act, the Investment Company Act, the
Advisers Act, the common law or otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a
material fact contained in and in conformity with information
furnished in writing by or on behalf of the Dealer Manager to the
Fund or the Investment Adviser expressly for use with reference
to the Dealer Manager in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment
thereof by the Fund) or in a Prospectus, or arises out of or is
based upon any omission or alleged omission to state a material
fact in connection with such information required to be stated in
such Registration Statement or such Prospectus or necessary to
make such information not misleading.
If any Proceeding is brought against the Fund, the Investment
Adviser or any such person in respect of which indemnity may be
sought against the Dealer Manager pursuant to the foregoing
paragraph, the Fund, the Investment Adviser or such person shall
promptly notify the Dealer Manager in writing of the institution
of such Proceeding and the Dealer Manager shall assume the
defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of
all fees and expenses; provided, however, that the omission to so
notify the Dealer Manager shall not relieve the Dealer Manager
from any liability which the Dealer Manager may have to the Fund,
the Investment Adviser or any such person or otherwise. The Fund,
the Investment Adviser or such person shall have the right to
employ its own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of the Fund, the
Investment Adviser or such person, as the case may be, unless the
employment of such counsel shall have been authorized in writing
by the Dealer Manager in connection with the defense of such
Proceeding or such Dealer Manager shall not have, within a
reasonable period of time in light of the circumstances, employed
counsel to have charge of the defense of such Proceeding or such
indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different
from or additional to or in conflict with those available to the
Dealer Manager (in which case the Dealer Manager shall not have
the right to direct the defense of such Proceeding on behalf of
the indemnified party or parties, but the Dealer Manager may
employ counsel and participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of the
Dealer Manager), in any of which events such fees and expenses
shall be borne by the Dealer Manager and paid as incurred (it
being understood, however, that the Dealer Manager shall not be
liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). The
Dealer Manager shall not be liable for any settlement of any such
Proceeding effected without the written consent of the Dealer
Manager but if settled with the written consent of the Dealer
Manager, the Dealer Manager agrees to indemnify and hold harmless
the Fund, the Investment Adviser and any such person from and
against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel
as contemplated by the second sentence of this paragraph, then
the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent
if (i) such settlement is entered into more than 60 business days
after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to
the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior
notice of its intention to settle. No indemnifying party shall,
without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened Proceeding in
respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all
liability on claims that are the subject matter of such
Proceeding.
c. If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under subsections (a) and (b)
of this Section 7 in respect of any losses, damages, expenses,
liabilities or claims referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, damages, expenses,
liabilities or claims (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 offering of the Shares or (ii) if the
allocation provided by clause (i) above 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 in
connection with the statements or omissions which resulted in
such losses, damages, expenses, liabilities or claims, as well as
any other relevant equitable considerations. The relative
benefits received by the Fund or the Investment Adviser on the
one hand and the Dealer Manager on the other shall be deemed to
be in the same respective proportions as the total proceeds from
the offering (net of the Dealer Manager Fee but before deducting
expenses) received by the Fund and the total underwriting
discounts and commissions received by the Dealer Manager, bear to
the aggregate public offering price of the Shares. The relative
fault of the Fund and the Investment Adviser on the one hand and
of the Dealer Manager on the other shall be determined by
reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or
alleged omission 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 amount paid
or payable by a party as a result of the losses, damages,
expenses, liabilities and claims referred to in this subsection
shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with
investigating, preparing to defend or defending any Proceeding.
d. The Fund and the Investment Adviser and the Dealer Manager agree
that it would not be just and equitable if contribution pursuant
to this Section 7 were determined by pro rata allocation or by
any other method of allocation that does not take account of the
equitable considerations referred to in subsection (c) above.
Notwithstanding the provisions of this Section 7, the Dealer
Manager shall not be required to contribute any amount in excess
of the fees received by it. 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.
e. Notwithstanding any other provisions in this Section 7, no party
shall be entitled to indemnification or contribution under this
Dealer Manager Agreement against any loss, claim, liability,
expense or damage arising by reason of such person's willful
misfeasance, or gross negligence in the performance of its duties
hereunder.
f. The indemnity and contribution agreements contained in this
Section 7 and the covenants, warranties and representations of
the Fund contained in this Agreement shall remain in full force
and effect regardless of any investigation made by or on behalf
of the Dealer Manager, its partners, directors or officers or any
person (including each partner, officer or director of such
person) who controls the Dealer Manager within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange
Act, or by or on behalf of the Fund or the Investment Adviser,
its directors or officers or any person 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, and shall
survive any termination of this Agreement or the issuance and
delivery of the Rights. The Fund or the Investment Adviser and
the Dealer Manager agree promptly to notify each other of the
commencement of any Proceeding against it and, in the case of the
Fund or the Investment Adviser, against any of the Fund's or the
Investment Adviser's officers or directors in connection with the
issuance of the Rights, or in connection with the Registration
Statement or Prospectus.
8. Representations, Warranties and Agreements to Survive Delivery. The
respective agreements, representations, warranties, indemnities and other
statements of the Fund or its officers, of the Investment Adviser, of the
Investment Subadviser and of the Dealer Manager set forth in or made
pursuant to this Agreement shall survive the Expiration Date and will
remain in full force and effect, regardless of any investigation made by or
on behalf of Dealer Manager or the Fund or any of the officers, directors
or controlling persons referred to in Section 7 hereof, and will survive
delivery of and payment for the Shares pursuant to the Offer. The
provisions of Sections 5 and 7 hereof shall survive the termination or
cancellation of this Agreement.
9. Termination of Agreement.
a. This Agreement shall be subject to termination in the absolute
discretion of the Dealer Manager, by notice given to the Fund prior to
the expiration of the Offer, if prior to such time (i) financial,
political, economic, currency, banking or social conditions in the
United States shall have undergone any material change the effect of
which on the financial markets makes it, in the Dealer Manager's
judgment, impracticable or inadvisable to proceed with the Offer, (ii)
there has occurred any outbreak or material escalation of hostilities
or other calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in the Dealer
Manager's judgment, impracticable or inadvisable to proceed with the
Offer, (iii) trading in the Common Shares shall have been suspended by
the Commission or the New York Stock Exchange, Inc., (iv) trading in
securities generally on the New York Stock Exchange, Inc. shall have
been suspended or limited or (v) a banking moratorium shall have been
declared either by Federal or New York State 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.
10. Notices. All communications hereunder will be in writing and effective only
on receipt, and, if sent to the Dealer Manager, will be mailed, delivered
or telegraphed and confirmed to UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0000, Attn: Syndicate Department and, if to the Fund or the
Investment Adviser, shall be sufficient in all respects if delivered or
sent to the Fund or the Investment Adviser at One Liberty Plaza, 000
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000-0000, Attention: Xxxxxxxx
Xxx and, if to the Investment Subadviser, shall be sufficient in all
respects if delivered or sent to the Investment Subadviser at 0000
Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxx 00000, Attention: [ ].
11. Successors. This Agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors and will inure to the
benefit of the officers and directors and controlling persons referred to
in Section 7 hereof, and no other person will have any right or obligation
hereunder.
12. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
13. Submission to Jurisdiction. Except as set forth below, no claim (a"Claim")
may be commenced, prosecuted or continued in any court other than the
courts of the State of New York located in the City and County of New York
or in the United States District Court for the Southern District of New
York, which courts shall have jurisdiction over the adjudication of such
matters, and each of the Fund, the Investment Adviser and the Investment
Subadviser consents to the jurisdiction of such courts and personal service
with respect thereto. Each of the Fund, the Investment Adviser and the
Investment Subadviser hereby consents to personal jurisdiction, service and
venue in any court in which any Claim arising out of or in any way relating
to this Agreement is brought by any third party against UBS Warburg or any
indemnified party. Each of UBS Warburg, the Fund (on its behalf and, to the
extent permitted by applicable law, on behalf of its stockholders and
affiliates), the Investment Adviser (on its behalf and, to the extent
permitted by applicable law, on behalf of its stockholders and affiliates)
and the Investment Subadviser (on its behalf and, to the extent permitted
by applicable law, on behalf of its stockholders and affiliates) waives all
right to trial by jury in any action, proceeding or counterclaim (whether
based upon contract, tort or otherwise) in any way arising out of or
relating to this Agreement. Each of the Fund, the Investment Adviser and
the Investment Subadviser agrees that a final judgment in any such action,
proceeding or counterclaim brought in any such court shall be conclusive
and binding upon the Fund or the Investment Adviser or the Investment
Subadviser, as the case may be, and may be enforced in any other courts in
the jurisdiction of which the Fund or the Investment Adviser or the
Investment Subadviser is or may be subject, by suit upon such judgment.
14. 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.
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, the Investment Subadviser and the Dealer Manager.
Very truly yours,
Hyperion Total Return Fund, Inc.
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
Hyperion Capital Management, Inc.
By:
--------------------------------
Name:
--------------------------
Title:
-------------------------
Pacholder Associates, Inc.
By:
--------------------------------
Name:
--------------------------
Title:
-------------------------
The foregoing Agreement is hereby confirmed and accepted as of
the date first above written.
UBS Warburg LLC
By:
-------------------------------------------------
Name:
--------------------------------------------
Title:
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Exhibit A
THE HYPERION TOTAL RETURN FUND, INC.
7,629,525 Shares of Common Stock
Issuable Upon Exercise of Transferable Rights
to Subscribe for Such Shares
SELLING GROUP AGREEMENT
New York, New York
August __, 2001
UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
We understand that The Hyperion Total Return Fund, Inc., a
Maryland corporation (the "Fund"), proposes to issue to holders of record (the
"Holders") at the close of business on the record date set forth in the
Prospectus (as defined herein) (the "Record Date") transferable rights entitling
such Holders to subscribe for up to three shares (each a "Share" and,
collectively, the "Shares") of the Fund's shares of common stock, par value
$0.01 per share (the "Common Shares"), of the Fund (the "Offer"). Pursuant to
the terms of the Offer, the Fund is issuing each Holder one transferable right
(each a "Right" and, collectively, the "Rights") for each Common Share held by
such Holder on the Record Date. Such Rights entitle holders to acquire during
the subscription period set forth in the Prospectus (the "Subscription Period"),
at the price set forth in such Prospectus (the "Subscription Price"), one Share
for each three Rights (except that any Holder who is issued fewer than three
Rights will be able to subscribe for one full Share pursuant to the primary
subscription), on the terms and conditions set forth in such Prospectus. No
fractional shares will be issued. Any Holder who fully exercises all Rights
initially issued to such Holder (other than those Rights that cannot be
exercised because they represent the right to acquire less than one Share) will
be entitled to subscribe for, subject to allocation, additional Shares (the
"Over-Subscription Privilege") on the terms and conditions set forth in such
Prospectus. The Rights are transferable and are expected to be listed on the New
York Stock Exchange, Inc.
The Hyperion Total Return Fund
Selling Group Agreement - Page 6
Transferable Rights Offer Expiring ___________, 2001, unless extended
We further understand that the Fund has appointed UBS Warburg
LLC to act as the dealer manager (the "Dealer Manager") in connection with the
Offer and has authorized the Dealer Manager to form and manage a group of
broker-dealers (each a "Selling Group Member" and collectively the "Selling
Group") to solicit the exercise of Rights and to sell Shares purchased by the
Dealer Manager from the Fund through the exercise of Rights.
We hereby express our interest in participating in the Offer
as a Selling Group Member.
We hereby agree with you as follows:
1. We have received and reviewed the Fund's prospectus dated
________ __ (the "Prospectus") relating to the Offer and we
understand that additional copies of the Prospectus (or of the
Prospectus as it may be subsequently supplemented or amended, if
applicable) and any other solicitation materials authorized by
the Fund relating to the Offer ("Offering Materials") will be
supplied to us in reasonable quantities upon our request therefor
to you. We agree that we will not use any solicitation material
other than the Prospectus (as supplemented or amended, if
applicable) and such Offering Materials and we agree not to make
any representation, oral or written, to any shareholders or
prospective shareholders of the Fund that are not contained in
the Prospectus, unless previously authorized to do so in writing
by the Fund.
2. From time to time during the period (the "Subscription Period")
commencing on August 27, 2001 and ending at 5:00 p.m., New York
City time, on the Expiration Date (the term "Expiration Date"
means September 21, 2001, unless and until the Fund shall, in its
sole discretion, have extended the period for which the Offer is
open, in which event the term "Expiration Date" with respect to
the Offer will mean the latest time and date on which the Offer,
as so extended by the Fund, will expire), we may solicit the
exercise of Rights in connection with the Offer. We will be
entitled to receive fees in the amounts and at the times
described in Section 4 of this Agreement with respect to Shares
purchased pursuant to the exercise of Rights and with respect to
which Equiserve (the "Subscription Agent") has received, no later
than 5:00 p.m., New York City time, on the Expiration Date,
either (i) a properly completed and executed Subscription
Certificate identifying us as the broker-dealer having been
instrumental in the exercise of such Rights, and full payment for
such Shares or (ii) a Notice of Guaranteed Delivery guaranteeing
to the Subscription Agent by the close of business of the third
business day after the Expiration Date of a properly completed
and duly executed Subscription Certificate, similarly identifying
us, and full payment for such Shares. We understand that we will
not be paid these fees with respect to Shares purchased pursuant
to an exercise of Rights for our own account or for the account
of any of our affiliates. We also understand and agree that we
are not entitled to receive any fees in connection with the
solicitation of the exercise of Rights other than pursuant to the
terms of this Agreement and, in particular, that we will not be
entitled to receive any fees under the Fund's Soliciting Dealer
Agreement. We agree to solicit the exercise of Rights in
accordance with the Securities Act of 1933, as amended (the
"Securities Act"), the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the Investment Company Act of
1940, as amended, and the rules and regulations under each such
Act, any applicable securities laws of any state or jurisdiction
where such solicitations may be lawfully made, the applicable
rules and regulations of any self-regulatory organization or
registered national securities exchange and customary practice
and subject to the terms of the Subscription Agent Agreement
between the Fund and the Subscription Agent and the procedures
described in the Fund's registration statement on Form N-2 (File
Nos. 333-64994 and 811-5482), as amended (the "Registration
Statement").
3. From time to time during the Subscription Period, we may indicate
interest in purchasing Shares from the Dealer Manager. We
understand that from time to time the Dealer Manager intends to
offer Shares obtained or to be obtained by the Dealer Manager
through the exercise of Rights to Selling Group Members who have
so indicated interest at prices which shall be determined by the
Dealer Manager (the "Offering Price"). We agree that with respect
to any such Shares purchased by us from the Dealer Manager the
sale of such Shares to us shall be irrevocable and we will offer
them to the public at the Offering Price at which we purchase
them from the Dealer Manager. Shares not sold by us at such
Offering Price may be offered by us after the next succeeding
Offering Price is set at the latest Offering Price set by the
Dealer Manager. The Dealer Manager agrees that, if requested by
any Selling Group Member, and subject to applicable law, the
Dealer Manager will set a new Offering Price prior to 4:00 p.m.,
New York City time, on any business day. We agree to advise the
Dealer Manager from time to time upon request, prior to the
termination of this Agreement, of the number of Shares remaining
unsold which were purchased by us from the Dealer Manager and, on
the Dealer Manager's request, we will resell to the Dealer
Manager any of such Shares remaining unsold at the purchase price
thereof if in the Dealer Manager's opinion such Shares are needed
to make delivery against sales made to other Selling Group
Members. Any shares purchased hereunder from the Dealer Manager
shall be subject to regular way settlement through the facilities
of the Depository Trust Company.
4. We understand that you will remit to us on or before the tenth
business day following the day the Fund issues Shares after the
Expiration Date, following receipt by you from the Fund of the
Dealer Manager Fee, a selling fee equal to [2.50]% of the
Subscription Price per Share for (A) each Share issued pursuant
to the exercise of Rights or the Over-Subscription Privilege
pursuant to each Subscription Certificate upon which we are
designated, as certified to you by the Subscription Agent, as a
result of our solicitation efforts in accordance with Section 2
and (B) each Share sold by the Dealer Manager to us in accordance
with Section 3 less any Shares resold to the Dealer Manager in
accordance with Section 3. Your only obligation with respect to
payment of the foregoing selling fee to us is to remit to us
amounts owing to us and actually received by you from the Fund.
Except as aforesaid, you shall be under no liability to make any
payments to us pursuant to this Agreement.
5. We agree that you, as Dealer Manager, have full authority to take
such action as may seem advisable to you in respect of all
matters pertaining to the Offer. You are authorized to approve on
our behalf any amendments or supplements to the Registration
Statement or the Prospectus.
6. We represent that we are a member in good standing of the NASD
and, in making sales of Shares, agree to comply with all
applicable rules of the National Association of Securities
Dealers, Inc. (the "NASD") including, without limitation, the
NASD's Interpretation with Respect to Free-Riding and
Withholding, as set forth in IM 2110-1 of the NASD's Conduct
Rules, and Rule 2740 of the NASD's Conduct Rules. We understand
that no action has been taken by you or the Fund to permit the
solicitation of the exercise of Rights or the sale of Shares in
any jurisdiction (other than the United States) where action
would be required for such purpose. We agree that we will not,
without your approval in advance, buy, sell, deal or trade in, on
a when-issued basis or otherwise, the Rights or the Shares or any
other option to acquire or sell Shares for our own account or for
the accounts of customers, except as provided in Sections 2 and 3
hereof and except that we may buy or sell Rights or Shares in
brokerage transactions on unsolicited orders which have not
resulted from activities on our part in connection with the
solicitation of the exercise of Rights and which are executed by
us in the ordinary course of our brokerage business. We will keep
an accurate record of the names and addresses of all persons to
whom we give copies of the Registration Statement, the
Prospectus, any preliminary prospectus (or any amendment or
supplement thereto) or any Offering Materials and, when furnished
with any subsequent amendment to the Registration Statement and
any subsequent prospectus, we will, upon your request, promptly
forward copies thereof to such persons.
7. Nothing contained in this Agreement will constitute the Selling
Group Members partners with the Dealer Manager or with one
another or create any association between those parties, or will
render the Dealer Manager or the Fund liable for the obligations
of any Selling Group Member. The Dealer Manager will be under no
liability to make any payment to any Selling Group Member other
than as provided in Section 4 of this Agreement, and will be
subject to no other liabilities to any Selling Group Member, and
no obligations of any sort will be implied. We agree to indemnify
and hold harmless you and each other Selling Group Member and
each person, if any, who controls you and any such Selling Group
Member within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, against loss or liability
caused by any breach by us of the terms of this Agreement.
8. We agree to pay any transfer taxes which may be assessed and paid
on account of any sales or transfers for our account.
9. All communications to you relating to the Offer will be addressed
to: UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000, Attn: Syndicate Department.
10. This Agreement will be governed by the internal laws of the State
of New York.
A signed copy of this Selling Group Agreement will be promptly returned
to the Selling Group Member at the address set forth below.
Very truly yours,
UBS Warburg LLC
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
PLEASE COMPLETE THE INFORMATION BELOW
Printed Firm Name Address
Contact at Selling Group Member
Authorized Signature Area Code and Telephone
Number
Name and Title Facsimile Number
Dated:
--------------------------------
Payment of the Selling Fee shall be mailed by check to the following address:
Exhibit B
THE HYPERION TOTAL RETURN FUND, INC.
Rights Offering for Shares of Common Stock
SOLICITING DEALER AGREEMENT
THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
September 21, 2001, UNLESS EXTENDED
To Securities Dealers and Brokers:
THE HYPERION TOTAL RETURN FUND, INC.
Soliciting Dealer Agreement - Page 6
Transferable Rights Offer Expiring _____________, 2001
The Hyperion Total Return Fund, Inc., (the "Fund") is issuing to its
shareholders of record ("Record Date Shareholders") as of the close of business
on August 27, 2001 (the "Record Date") transferable rights ("Rights") to
subscribe for an aggregate of up to three shares (the "Shares") of the Fund's
shares common stock, par value $0.01 per share (the "Common Shares"), of the
Fund upon the terms and subject to the conditions set forth in the Fund's
Prospectus (the "Prospectus") dated ________ __, 2001 (the "Offer"). Each such
Record Date Shareholder is being issued one Right for each full Common Share
owned on the Record Date. Such Rights entitle holders to acquire during the
Subscription Period (as hereinafter defined) at the Subscription Price (as
hereinafter defined), one Share for each three Rights (except that any Record
Date Shareholder who is issued fewer than three Rights will be able to subscribe
for one full Share pursuant to the primary subscription), on the terms and
conditions set forth in such Prospectus. No fractional shares will be issued.
Any Record Date Shareholder who fully exercises all Rights initially issued to
such holder (other than those Rights that cannot be exercised because they
represent the right to acquire less than one Share) will be entitled to
subscribe for, subject to allocation, additional Shares (the "Over-Subscription
Privilege") on the terms and conditions set forth in such Prospectus. The Rights
are transferable and are expected to be listed on the New York Stock Exchange,
Inc. The Subscription Price will be $____. The Subscription Period will commence
on August 27, 2001 and end at 5:00 p.m., New York City time on the Expiration
Date (the term "Expiration Date" means September 21, 2001, unless and until the
Fund shall, in its sole discretion, have extended the period for which the Offer
is open, in which event the term "Expiration Date" with respect to the Offer
will mean the latest time and date on which the Offer, as so extended by the
Fund, will expire).
For the duration of the Offer, the Fund has authorized and the
Dealer Manager has agreed to reallow a Solicitation Fee to any qualified broker
or dealer executing a Soliciting Dealer Agreement who solicits the exercise of
Rights and the Over-Subscription Privilege in connection with the Offer and who
complies with the procedures described below (a "Soliciting Dealer"). Upon
timely delivery to Equiserve, the Fund's Subscription Agent for the Offer, of
payment for Shares purchased pursuant to the exercise of Rights and the
Over-Subscription Privilege and of properly completed and executed documentation
as set forth in this Soliciting Dealer Agreement, a Soliciting Dealer will be
entitled to receive the Solicitation Fee equal to [0.50%] of the Subscription
Price per Share so purchased subject to a maximum fee based on the number of
Common Shares held by such Soliciting Dealer through The Depository Trust
Company ("DTC") on the Record Date; provided, however, that no payment shall be
due with respect to the issuance of any Shares until payment therefor is
actually received. A qualified broker or dealer is a broker or dealer which is a
member of a registered national securities exchange in the United States or the
National Association of Securities Dealers, Inc. ("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 Fund has authorized and the Dealer Manager has agreed to pay the
Solicitation Fees payable to the undersigned Soliciting Dealer and to indemnify
such Soliciting Dealer on the terms set forth in the Dealer Manager Agreement,
dated ________ __, 2001, among UBS Warburg LLC as the dealer manager (the
"Dealer Manager"), the Fund and others (the "Dealer Manager Agreement").
Solicitation and other activities by Soliciting Dealers may be undertaken only
in accordance with 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. Compensation will not be paid for solicitations in any
state or other jurisdiction in which the opinion of counsel to the Fund or
counsel to the Dealer Manager, such compensation may not lawfully be paid. No
Soliciting Dealer shall be paid Solicitation Fees with respect to Shares
purchased pursuant to an exercise of Rights and the Over-Subscription Privilege
for its own account or for the account of any affiliate of the Soliciting
Dealer. No Soliciting Dealer or any other person is authorized by the Fund or
the Dealer Manager to give any information or make any representations in
connection with the Offer other than those contained in the Prospectus and other
authorized solicitation material furnished by the Fund through the Dealer
Manager. No Soliciting Dealer is authorized to act as agent of the Fund or the
Dealer Manager in any connection or transaction. In addition, nothing herein
contained shall constitute the Soliciting Dealers partners with the Dealer
Manager or with one another, or agents of the Dealer Manager or of the Fund, or
create any association between such parties, or shall render the Dealer Manager
or the Fund liable for the obligations of any Soliciting Dealer. The Dealer
Manager shall be under no liability to make any payment to any Soliciting
Dealer, and shall be subject to no other liabilities to any Soliciting Dealer,
and no obligations of any sort shall be implied.
In order for a Soliciting Dealer to receive 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.
Solicitation Fees will only be paid after receipt by the Subscription Agent of a
properly completed and duly executed Soliciting Dealer Agreement and a
Subscription Certificate designating the Soliciting Dealer in the applicable
portion hereof. In the case of a Notice of Guaranteed Delivery, Solicitation
Fees will only be paid after delivery in accordance with such Notice of
Guaranteed Delivery has been effected. Solicitation Fees will be paid by the
Fund (through the Subscription Agent) to the Soliciting Dealer by check to an
address designated by the Soliciting Dealer below by the tenth business day
following the day the Fund issues Shares after the Expiration Date.
All questions as to the form, validity and eligibility
(including time of receipt) of this Soliciting Dealer Agreement will be
determined by the Fund, in its sole discretion, which determination shall be
final and binding. Unless waived, any irregularities in connection with a
Soliciting Dealer Agreement or delivery thereof must be cured within such time
as the Fund shall determine. None of the Fund, the Dealer Manager, the
Subscription Agent, the Information Agent for the Offer or any other person will
be under any duty to give notification of any defects or irregularities in any
Soliciting Dealer Agreement or incur any liability for failure to give such
notification.
The acceptance of Solicitation Fees from the Fund by the
undersigned Soliciting Dealer shall constitute a representation by such
Soliciting Dealer to the Fund that: (i) it has received and reviewed the
Prospectus; (ii) in soliciting purchases of Shares pursuant to the exercise of
the Rights and the Over-Subscription Privilege, it has complied with the
applicable requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the applicable rules and regulations thereunder, any applicable
securities laws of any state or jurisdiction where such solicitations were made,
and the applicable rules and regulations of any self-regulatory organization or
registered national securities exchange; (iii) in soliciting purchases of Shares
pursuant to the exercise of the Rights and the Over-Subscription Privilege, it
has not published, circulated or used any soliciting materials other than the
Prospectus and any other authorized solicitation material furnished by the Fund
through the Dealer Manager; (iv) it has not purported to act as agent of the
Fund or the Dealer Manager in any connection or transaction relating to the
Offer; (v) the information contained in this Soliciting Dealer Agreement is, to
its best knowledge, true and complete; (vi) it is not affiliated with the Fund;
(vii) it will not accept Solicitation Fees paid by the Fund pursuant to the
terms hereof with respect to Shares purchased by the Soliciting Dealer pursuant
to an exercise of Rights and the Over-Subscription Privilege for its own
account; (viii) it will not remit, directly or indirectly, any part of
Solicitation Fees paid by the Fund pursuant to the terms hereof to any
beneficial owner of Shares purchased pursuant to the Offer; and (ix) it has
agreed to the amount of the Solicitation Fees and the terms and conditions set
forth herein with respect to receiving such Solicitation Fees. By returning a
Soliciting Dealer Agreement and accepting Solicitation Fees, a Soliciting Dealer
will be deemed to have agreed to indemnify the Fund and the Dealer Manager
against losses, claims, damages and liabilities to which the Fund may become
subject as a result of the breach of such Soliciting Dealer's representations
made herein and described above. In making the foregoing representations,
Soliciting Dealers are reminded of the possible applicability of the
anti-manipulation rules under the Exchange Act if they have bought, sold, dealt
in or traded in any Shares for their own account since the commencement of the
Offer.
Upon expiration of the Offer, no Solicitation Fees will be
payable to Soliciting Dealers with respect to Shares purchased thereafter.
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.
This Soliciting Dealer Agreement will be governed by the laws
of the State of New York.
Please execute this Soliciting Dealer Agreement below
accepting the terms and conditions hereof and confirming that you are a member
firm of the NASD or a foreign broker or dealer not eligible for membership who
has conformed to the Rules of Fair Practice of the NASD, including Sections
2730, 2740, 2420 and 2750 thereof, in making solicitations of the type being
undertaken pursuant to the Offer in the United States to the same extent as if
you were a member thereof, and certifying that you have solicited the purchase
of the Shares pursuant to exercise of the Rights, all as described above, in
accordance with the terms and conditions set forth in this Soliciting Dealer
Agreement. Please forward two executed copies of this Soliciting Dealer
Agreement to: UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000,
Attn: Syndicate Department.
A signed copy of this Soliciting Dealer Agreement will be promptly
returned to the Soliciting Dealer at the address set forth below.
Very truly yours,
UBS Warburg LLC
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
PLEASE COMPLETE THE INFORMATION BELOW
Printed Firm Name Address
Contact at Soliciting Dealer
Authorized Signature Area Code and Telephone
Number
Name and Title Facsimile Number
Dated:
--------------------------------
Payment of the Solicitation Fee shall be mailed by check to the following
address:
