Exhibit h.1
CALAMOS STRATEGIC TOTAL RETURN FUND
_____ COMMON SHARES OF BENEFICIAL INTEREST
(no par value)
UNDERWRITING AGREEMENT
New York, New York
March __, 2004
Citigroup Global Markets Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
UBS Securities LLC
X.X. Xxxxxxx & Sons, Inc.
Advest, Inc.
H&R Block Financial Advisors, Inc.
Xxxxxx, Xxxxx Xxxxx, Incorporated
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
McDonald Investments Inc., a KeyCorp Company
Xxxxxxxxxxx & Co. Inc.
Quick & Xxxxxx, Inc. A FleetBoston Financial Company
RBC Capital Markets Corporation
TD Waterhouse Investor Services, Inc.
Wedbush Xxxxxx Securities Inc.
Xxxxx Fargo Securities, LLC
As Representatives of the several Underwriters
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned, Calamos Strategic Total Return Fund, a Delaware
statutory trust (the "Fund") and Calamos Asset Management, Inc., an Illinois
corporation (the "Adviser"), address you as underwriters and as the
representatives (the "Representatives") of each of the several underwriters
named on Schedule I hereto (the "Underwriters"). The Fund proposes to sell to
the Underwriters _____ shares (the "Underwritten Securities") of its common
shares of beneficial interest, no par value per share (the "Common Shares"). The
Fund also proposes to grant to the Underwriters an option to purchase up to
______ additional Common Shares to cover over-allotments (the "Option
Securities"). The Underwritten Securities and the Option
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Securities are hereinafter collectively referred to as the "Securities." Unless
otherwise stated, the term "you" as used herein means Citigroup Global Markets
Inc. individually on its own behalf and on behalf of the other Representatives.
Certain terms used herein are defined in Section 18 hereof.
The Fund and the Adviser wish to confirm as follows their agreements
with you and the other several Underwriters on whose behalf you are acting in
connection with the several purchases of the Securities by the Underwriters.
The Fund has entered into an Investment Management Agreement with
the Adviser dated as of _____, 2004, a Custodian Agreement with The Bank of New
York dated as of _____, 2004, and a Shareholder Transfer Agency and Service
Agreement with The Bank of New York dated as of _____, 2004 and a Fund
Accounting Services Agreement with State Street Bank and Trust Company dated as
of _____, 2004 and such agreements are herein referred to as the "Management
Agreement," the "Custodian Agreement, " the "Transfer Agency Agreement" and the
"Administration Agreement," respectively. Collectively, the Management
Agreement, the Custodian Agreement, the Transfer Agency Agreement and the
Administration Agreement are herein referred to as the "Fund Agreements." The
Adviser has entered into a Structuring Fee Agreement with Citigroup Global
Markets Inc. dated as of ______, 2004, a Structuring Fee Agreement with UBS
Securities LLC dated as of ______, 2004 (collectively, the "Structuring Fee
Agreements") and an Additional Compensation Agreement with Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated dated as of _____, 2004 (the "Additional
Compensation Agreement"). In addition, the Fund has adopted a dividend
reinvestment plan (the "Dividend Reinvestment Plan") pursuant to which holders
of Common Shares shall have their dividends automatically reinvested in
additional Common Shares of the Fund unless they elect to receive such dividends
in cash.
1. Representations and Warranties of the Fund and the Adviser. The
Fund and the Adviser, jointly and severally, represent and warrant to, and agree
with, each Underwriter as set forth below in this Section 1.
(a) The Fund has prepared and filed with the Commission a
registration statement (file numbers 333-111756 and 811-21484) on Form
N-2, including a related preliminary prospectus (including the statement
of additional information incorporated by reference therein), for
registration under the Act and the 1940 Act of the offering and sale of
the Securities. The Fund may have filed one or more amendments thereto,
including a related preliminary prospectus (including the statement of
additional information incorporated by reference therein), each of which
has previously been furnished to you. The Fund will next file with the
Commission one of the following: either (1) prior to the Effective Date of
such registration statement, a further amendment to such registration
statement (including the form of final prospectus (including the statement
of additional information incorporated by reference therein)) or (2) after
the Effective Date of such registration statement, a final prospectus
(including the statement of additional information incorporated by
reference therein) in accordance with Rules 430A and 497. In the case of
clause (2), the Fund has included in such registration statement, as
amended at the Effective Date, all information (other than Rule 430A
Information) required by the Act and the 1940 Act and the Rules and
Regulations to be included in
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such registration statement and the Prospectus. As filed, such amendment
and form of final prospectus (including the statement of additional
information incorporated by reference therein), or such final prospectus
(including the statement of additional information incorporated by
reference therein), shall contain all Rule 430A Information, together with
all other such required information, and, except to the extent the
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time, shall contain
only such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Fund has advised
you, prior to the Execution Time, will be included or made therein.
(b) Each Preliminary Prospectus complied when filed with the
Commission in all material respects with the provisions of the Act, the
1940 Act and the Rules and Regulations, except that this representation
and warranty does not apply to statements in or omissions from the
registration statement or the Preliminary Prospectus made in reliance upon
and in conformity with information relating to any Underwriter furnished
to the Fund in writing by or on behalf of any Underwriter through you
expressly for use therein. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus.
(c) On the Effective Date, the Registration Statement did or will,
and when the Prospectus (and any supplement thereto) is first filed (if
required) in accordance with Rule 497 it will, and the 1940 Act
Notification when originally filed with the Commission and any amendment
or supplement thereto when filed with the Commission did or will, comply
in all material respects with the applicable requirements of the Act, the
1940 Act and the Rules and Regulations and the Registration Statement on
the Effective Date did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus, if not filed
pursuant to Rule 497, and on the date of any filing pursuant to Rule 497,
will not include any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Fund makes no representations or warranties as
to the information contained in or omitted from the Registration
Statement, or the Prospectus (or any supplement thereto) in reliance upon
and in conformity with information furnished in writing to the Fund by or
on behalf of any Underwriter through the Representatives specifically for
inclusion in the Registration Statement or the Prospectus (or any
supplement thereto).
(d) The Fund has been duly formed and is validly existing in good
standing as a statutory trust under the laws of the State of Delaware,
with full power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them) and is duly
registered and qualified to conduct business and is in good standing in
each jurisdiction or place where the nature of its properties or the
conduct of its business requires such registration or qualification,
except where the failure so to register or to qualify does not have a
material, adverse effect on the condition (financial or other),
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business, prospects, properties, net assets or results of operations of
the Fund. The Fund has no subsidiaries.
(e) The Fund's authorized equity capitalization is as set forth in
the Prospectus; the capital stock of the Fund conforms in all material
respects to the description thereof contained in the Prospectus; all
outstanding Common Shares have been duly and validly authorized and issued
and are fully paid and, except as described in the Prospectus,
nonassessable; the Securities have been duly and validly authorized, and,
when issued and delivered to and paid for by the Underwriters pursuant to
this Agreement, will be fully paid and, except as described in the
Prospectus, nonassessable; the Securities are duly listed, and admitted
and authorized for trading, subject to official notice of issuance and
evidence of satisfactory distribution, on the New York Stock Exchange (the
"NYSE"); the certificates for the Securities are in valid and sufficient
form; the holders of outstanding Common Shares are not entitled to
preemptive or other rights to subscribe for the Securities; and, except as
set forth in the Prospectus, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to convert
any obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Fund are outstanding.
(f) The Fund's registration statement on Form 8-A under the Exchange
Act has become effective.
(g) The Fund, subject to the Registration Statement having been
declared effective and the filing of the Prospectus under Rule 497, has
taken all required action under the Act, the 1940 Act and the Rules and
Regulations to make the public offering and consummate the sale of the
Securities as contemplated by this Agreement.
(h) There are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration
Statement or the Prospectus, or to be filed as an exhibit thereto, which
are not described or filed as required; and the statements in the
Registration Statement and Prospectus, insofar as they are descriptions of
contracts, agreements or other legal documents or refer to statements of
law or legal conclusions, are accurate and present fairly the information
required to be shown.
(i) The execution and delivery of and the performance by the Fund of
its obligations under this Agreement and the Fund Agreements have been
duly and validly authorized by the Fund and this Agreement and the Fund
Agreements have been duly executed and delivered by the Fund and
constitute the valid and legally binding agreements of the Fund,
enforceable against the Fund in accordance with their terms, except as
rights to indemnity and contribution hereunder may be limited by federal
or state securities laws and subject to the qualification that the
enforceability of the Fund's obligations hereunder and thereunder may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and by general
equitable principles.
(j) The Fund is duly registered under the 1940 Act as a closed-end,
diversified management investment company and the 1940 Act Notification
has been duly filed with
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the Commission. The Fund has not received any notice from the Commission
pursuant to Section 8(e) of the 1940 Act with respect to the 1940 Act
Notification or the Registration Statement.
(k) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein or in the Fund Agreements, except such as
have been made or obtained under the Act, the 1940 Act and the rules and
regulations of the National Association of Securities Dealers, Inc. (the
"NASD"), and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters in the manner contemplated herein and in
the Prospectus.
(l) Neither the issuance and sale of the Securities, the execution,
delivery or performance of this Agreement or any of the Fund Agreements by
the Fund, nor the consummation by the Fund of the transactions
contemplated hereby or thereby (i) conflicts or will conflict with or
constitutes or will constitute a breach of the declaration of trust or
by-laws of the Fund, (ii) conflicts or will conflict with or constitutes
or will constitute a breach of or a default under, any material agreement,
indenture, lease or other instrument to which the Fund is a party or by
which it or any of its properties may be bound or (iii) materially
violates or will materially violate any material statute, law, regulation
or filing or judgment, injunction, order or decree applicable to the Fund
or any of its properties or will result in the creation or imposition of
any material lien, charge or encumbrance upon any property or assets of
the Fund pursuant to the terms of any agreement or instrument to which it
is a party or by which it may be bound or to which any of the property or
assets of the Fund is subject.
(m) No holders of securities of the Fund have rights to the
registration of such securities under the Registration Statement.
(n) The financial statements, together with related schedules and
notes, included in the Prospectus and the Registration Statement present
fairly in all material respects the financial condition and results of
operations of the Fund as of the dates and for the periods indicated,
comply as to form with the applicable accounting requirements of the Act
and the 1940 Act and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout
the periods involved (except as otherwise noted therein).
(o) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Fund or its property is pending or, to the knowledge of the Fund,
threatened that (i) could reasonably be expected to have a material
adverse effect on the performance of this Agreement or the consummation of
any of the transactions contemplated hereby or (ii) could reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Fund,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
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(p) The Fund is not (i) in violation of its declaration of trust or
by-laws, (ii) in breach or default in any material respect in the
performance of the terms of any material indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which it is a
party or bound or to which its property is subject or (iii) in material
violation of any material law, ordinance, administrative or governmental
rule or regulation applicable to the Fund, including, without limitation,
the applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the rules
and regulations promulgated in connection therewith, or of any material
decree of the Commission, the NASD, any state securities commission, any
national securities exchange, any arbitrator, any court or any other
governmental, regulatory, self-regulatory or administrative agency or any
official having jurisdiction over the Fund.
(q) Since the date as of which information is given in the
Prospectus, except as otherwise stated therein, (i) there has been no
material, adverse change in the condition (financial or other), business,
properties, net assets or results of operations of the Fund or business
prospects (other than as a result of a change in the financial markets
generally) of the Fund, whether or not arising in the ordinary course of
business, (ii) there have been no transactions entered into by the Fund
which are material to the Fund other than those in the ordinary course of
its business as described in the Prospectus and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Fund on
any class of its Common Shares.
(r) Deloitte & Touche LLP, who have audited the Statement of Assets
and Liabilities included in the Registration Statement and the Prospectus,
are independent public accountants with respect to the Fund within the
meaning of the Act, the 1940 Act and the Rules and Regulations.
(s) The Fund has not distributed and, prior to the later to occur of
(i) the Closing Date and (ii) completion of the distribution of the
Securities, will not distribute any offering material in connection with
the offering and sale of the Securities other than the Registration
Statement, the Preliminary Prospectus, the Prospectus or other materials
permitted by the Act, the 1940 Act or the Rules and Regulations.
(t) All advertising, sales literature or other promotional material
(including "prospectus wrappers", "broker kits", "road show slides" and
"road show scripts"), whether in printed or electronic form, authorized in
writing by or prepared by the Fund or the Adviser for use in connection
with the offering and sale of the Securities (collectively, "sales
material") complied and comply in all material respects with the
applicable requirements of the Act, the Act Rules and Regulations and the
rules and interpretations of the NASD and if required to be filed with the
NASD under the NASD's conduct rules were provided to Xxxxxxx Xxxxxxx &
Xxxxxxxx LLP, counsel for the Underwriters, for filing. No sales material
contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
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(u) The Fund's directors and officers/errors and omissions insurance
policy and its fidelity bond required by Rule 17g-1 of the 1940 Act Rules
and Regulations are in full force and effect; the Fund is in compliance
with the terms of such policy and fidelity bond in all material respects;
and there are no claims by the Fund under any such policy or fidelity bond
as to which any insurance company is denying liability or defending under
a reservation of rights clause; the Fund has not been refused any
insurance coverage sought or applied for; and the Fund has no reason to
believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not have a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the Fund,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(v) The Fund has such licenses, permits, and authorizations of
governmental or regulatory authorities ("permits") as are necessary to own
its property and to conduct its business in the manner described in the
Prospectus, except where the failure to hold any such permit does not have
a material, adverse effect on the condition (financial or other),
business, prospects, properties, net assets or results of operations of
the Fund; the Fund has fulfilled and performed all its material
obligations with respect to such permits and no event has occurred which
allows or, after notice or lapse of time, would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the Fund under any such permit, subject in each case to such
qualification as may be set forth in the Prospectus; and, except as
described in the Prospectus, none of such permits contains any restriction
that is materially burdensome to the Fund.
(w) The Fund maintains and will maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization and with the investment objectives, policies and
restrictions of the Fund and the applicable requirements of the 1940 Act,
the 1940 Act Rules and Regulations and the Internal Revenue Code of 1986,
as amended (the "Code"); (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles, to calculate net asset value, to maintain
accountability for assets and to maintain material compliance with the
books and records requirements under the 1940 Act and the 1940 Act Rules
and Regulations; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(x) Except as stated in this Agreement and the Prospectus, the Fund
has not taken, directly or indirectly, any action designed to or that
would constitute or that might reasonably be expected to cause or result
in, under the Exchange Act or otherwise, stabilization or manipulation of
the price of any security of the Fund to facilitate the sale or resale of
the Securities, and the Fund is not aware of any such action taken or to
be taken by any affiliates of the Fund.
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(y) This Agreement and each of the Fund Agreements complies in all
material respects with all applicable provisions of the 1940 Act, the 1940
Act Rules and Regulations, the Advisers Act and the Advisers Act Rules and
Regulations.
(z) The Fund intends to direct the investment of the proceeds of the
offering of the Securities in such a manner as to comply with the
requirements of Subchapter M of the Code.
(aa) The conduct by the Fund of its business (as described in the
Prospectus) does not require it to be the owner, possessor or licensee of
any patents, patent licenses, trademarks, service marks or trade names
which it does not own, possess or license, except where the failure to
own, possess or license any such patent, patent license, trademark,
service xxxx or trade name does not have a material, adverse effect on the
condition (financial or other), business, prospects, properties, net
assets or results of operations of the Fund.
Any certificate signed by any officer of the Fund and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Fund, as to matters covered thereby, to each Underwriter.
2. Representations and Warranties of the Adviser. The Adviser
represents and warrants to each Underwriter as follows:
(a) The Adviser has been duly formed and is validly existing in good
standing as a corporation under the laws of the State of Illinois, with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus, and
is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification, except where the failure to so qualify would not have a
material, adverse effect on the condition (financial or other), business,
prospects, properties, net assets or results of operations of the Adviser.
(b) The Adviser is duly registered as an investment adviser under
the Advisers Act and is not prohibited by the Advisers Act, the 1940 Act,
the Advisers Act Rules and Regulations or the 1940 Act Rules and
Regulations from acting under the Management Agreement, the Structuring
Fee Agreements or the Additional Compensation Agreement as contemplated by
the Prospectus.
(c) The Adviser has full power and authority to enter into this
Agreement, the Management Agreement, the Structuring Fee Agreements and
the Additional Compensation Agreement; the execution and delivery of, and
the performance by the Adviser of its obligations under, this Agreement,
the Management Agreement, the Structuring Fee Agreements and the
Additional Compensation Agreement have been duly and validly authorized by
the Adviser; and this Agreement, the Management Agreement, the Structuring
Fee Agreements and the Additional Compensation Agreement have been duly
executed and delivered by the Adviser and constitute the valid and legally
binding
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agreements of the Adviser, enforceable against the Adviser in accordance
with their terms, except as rights to indemnity and contribution hereunder
may be limited by federal or state securities laws and subject to the
qualification that the enforceability of the Adviser's obligations
hereunder and thereunder may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and by general equitable principles.
(d) The Adviser has the financial resources available to it
necessary for the performance of its services and obligations as
contemplated in the Prospectus and under this Agreement, the Management
Agreement, the Structuring Fee Agreements and the Additional Compensation
Agreement.
(e) The description of the Adviser and its business, and the
statements attributable to the Adviser, in the Prospectus complied and
comply in all material respects with the provisions of the Act, the 1940
Act, the Advisers Act, the Rules and Regulations and the Advisers Act
Rules and Regulations and did not and will not contain an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
(f) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Adviser or its property is pending or, to the best knowledge of the
Adviser, threatened that (i) is required to be described in the Prospectus
that is not so described as required, (ii) could reasonably be expected to
have a material adverse effect on the ability of the Adviser to fulfill
its obligations hereunder or under the Management Agreement, the
Structuring Fee Agreements or the Additional Compensation Agreement or
(iii) could reasonably be expected to have a material adverse effect on
the condition (financial or otherwise), prospects, earnings, business or
properties of the Adviser, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(g) Since the date as of which information is given in the
Prospectus, except as otherwise stated therein, (i) there has been no
material, adverse change in the condition (financial or other), business,
properties, net assets or results of operations or business prospects of
the Adviser, whether or not arising from the ordinary course of business
and (ii) there have been no transactions entered into by the Adviser which
are material to the Adviser other than those in the ordinary course of its
business as described in the Prospectus.
(h) The Adviser has such licenses, permits and authorizations of
governmental or regulatory authorities ("permits") as are necessary to own
its property and to conduct its business in the manner described in the
Prospectus, except where the failure to hold any such permit does not have
a material, adverse effect on the condition (financial or other),
business, prospects, properties, net assets or results of operations of
the Adviser or on the ability of the Adviser to perform its obligations
under this Agreement, the Management Agreement, the Structuring Fee
Agreements or the Additional Compensation Agreement;
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the Adviser has fulfilled and performed all its material obligations with
respect to such permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the Adviser
under any such permit.
(i) This Agreement, the Management Agreement, the Structuring Fee
Agreements and the Additional Compensation Agreement comply in all
material respects with all applicable provisions of the 1940 Act, the 1940
Act Rules and Regulations, the Advisers Act and the Advisers Act Rules and
Regulations.
(j) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein or in the Management Agreement, the
Structuring Fee Agreements or the Additional Compensation Agreement,
except such as have been made or obtained under the Act and the 1940 Act
and such as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated herein and in the Prospectus.
(k) Neither the execution, delivery or performance of this
Agreement, the Management Agreement, the Structuring Fee Agreements or the
Additional Compensation Agreement, nor the consummation by the Fund or the
Adviser of the transactions contemplated hereby or thereby (i) conflicts
or will conflict with or constitutes or will constitute a breach of the
certificate of incorporation or by-laws of the Adviser, (ii) conflicts or
will conflict with or constitutes or will constitute a breach of or a
default under, any material agreement, indenture, lease or other
instrument to which the Adviser is a party or by which it or any of its
properties may be bound or (iii) materially violates or will materially
violate any material statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Adviser or any of its
properties or will result in the creation or imposition of any material
lien, charge or encumbrance upon any property or assets of the Adviser
pursuant to the terms of any agreement or instrument to which the Adviser
is a party or by which the Adviser may be bound or to which any of the
property or assets of the Adviser is subject.
(l) Except as stated in this Agreement and in the Prospectus, the
Adviser has not taken and nor will it take, directly or indirectly, any
action designed to or which should reasonably be expected to cause or
result in or which will constitute, stabilization or manipulation of the
price of the any security of the Fund in violation of federal securities
laws and the Adviser is not aware of any such action taken or to be taken
by any affiliates of the Adviser.
(m) In the event that the Fund or the Adviser makes available any
promotional materials intended for use only by qualified broker-dealers
and registered representatives thereof by means of an Internet web site or
similar electronic means, the Adviser will install and maintain
pre-qualification and password-protection or similar procedures which are
reasonably designed to effectively prohibit access to such promotional
materials by persons other than qualified broker-dealers and registered
representatives thereof.
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3. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Fund
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Fund, at a purchase price of $14.325 per
share, the amount of the Underwritten Securities set forth opposite such
Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Fund hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
_____ Option Securities at the same purchase price per share as the Underwriters
shall pay for the Underwritten Securities. Said option may be exercised only to
cover over-allotments in the sale of the Underwritten Securities by the
Underwriters. Said option may be exercised in whole or in part at any time and
from time to time on or before the 45th day after the date of the Prospectus
upon written or telegraphic notice by the Representatives to the Fund setting
forth the number of shares of the Option Securities as to which the several
Underwriters are exercising the option and the date on which the Option
Securities are to be purchased, if such date is not the Closing Date (a
"settlement date"). The number of Option Securities to be purchased by each
Underwriter shall be the same percentage of the total number of shares of the
Option Securities to be purchased by the several Underwriters as such
Underwriter is purchasing of the Underwritten Securities, subject to such
adjustments as you in your absolute discretion shall make to eliminate any
fractional shares.
4. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 3(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
______, 2004 or at such time on such later date not more than three Business
Days after the foregoing date as the Representatives shall designate, which date
and time may be postponed by agreement between the Representatives and the Fund
or as provided in Section 10 hereof (such date and time of delivery and payment
for the Securities being herein called the "Closing Date"). Delivery of the
Securities shall be made to the Representatives for the respective accounts of
the several Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the Fund
by wire transfer payable in same-day funds to an account specified by the Fund.
Delivery of the Underwritten Securities and the Option Securities shall be made
through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
If the option provided for in Section 3(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Fund will deliver the
Option Securities (at the expense of the Fund) to the Representatives, at 000
Xxxxxxxxx Xx., Xxx Xxxx, Xxx Xxxx on the date specified by the Representatives
(which shall be within three Business Days after exercise of said option) for
the respective accounts of the several Underwriters, against payment by the
several Underwriters through the Representatives of the purchase price thereof
to or upon the order of the Fund by wire transfer payable in same-day funds to
an account specified by the Fund. If settlement for the Option Securities occurs
after the Closing Date, the Fund will deliver to the Representatives on the
settlement date for the Option Securities, and the obligation of the
Underwriters to purchase the Option Securities shall be conditioned upon receipt
of,
12
supplemental opinions, certificates and letters confirming as of such date the
opinions, certificates and letters delivered on the Closing Date pursuant to
Section 7 hereof.
5. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
6. Agreements of the Fund and the Adviser. The Fund and the Adviser,
jointly and severally, agree with the several Underwriters as follows:
(a) The Fund will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Fund will not file any amendment of the Registration
Statement or supplement to the Prospectus or any Rule 462(b) Registration
Statement unless the Fund has furnished you a copy for your review prior
to filing and will not file any such proposed amendment or supplement to
which you reasonably object. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectus is otherwise required under Rule 497,
the Fund will cause the Prospectus, properly completed, and any supplement
thereto to be filed in a form approved by the Representatives with the
Commission pursuant to Rule 497 within the time period prescribed and will
provide evidence satisfactory to the Representatives of such timely
filing. The Fund will promptly advise the Representatives (1) when the
Registration Statement, if not effective at the Execution Time, shall have
become effective, (2) when the Prospectus, and any supplement thereto,
shall have been filed (if required) with the Commission pursuant to Rule
497 or when any Rule 462(b) Registration Statement shall have been filed
with the Commission, (3) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have been
filed or become effective, (4) of any request by the Commission or its
staff for any amendment of the Registration Statement, or any Rule 462(b)
Registration Statement, or for any supplement to the Prospectus or for any
additional information, (5) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (6) of
the receipt by the Fund of any notification with respect to the suspension
of the qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The Fund
will use its best efforts to prevent the issuance of any such stop order
or the suspension of any such qualification and, if issued, to obtain as
soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which, in the judgment of the Fund or in the reasonable opinion of counsel
for the Underwriters, the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to
amend the Registration Statement or supplement the Prospectus to comply
with the Act, the 1940 Act and the Rules and Regulations, the Fund
promptly will (1) notify the Representatives of any such event; (2)
prepare and file with the Commission, subject to the second
13
sentence of paragraph (a) of this Section 6, an amendment or supplement
which will correct such statement or omission or effect such compliance;
and (3) supply any supplemented Prospectus to you in such quantities as
you may reasonably request.
(c) As soon as practicable, the Fund will make generally available
to its security holders and to the Representatives an earnings statement
or statements of the Fund which will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act.
(d) The Fund will furnish to the Representatives and counsel for the
Underwriters signed copies of the Registration Statement (including
exhibits thereto) and to each other Underwriter a copy of the Registration
Statement (without exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as many
copies of each Preliminary Prospectus and the Prospectus and any
supplement thereto as the Representatives may reasonably request.
(e) The Fund will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the
Securities for offering and sale by the several Underwriters and by
dealers with the NASD and under the securities or Blue Sky laws of such
jurisdictions as you may designate and will file such consents to service
of process or other documents necessary or appropriate in order to effect
such registration or qualification; provided that in no event shall the
Fund be obligated to qualify to do business in any jurisdiction where it
is not now so qualified or to take any action which would subject it to
service of process in suits, other than those arising out of the offering
or sale of the Shares, in any jurisdiction where it is not now so subject.
(f) Except as provided in this Agreement or pursuant to any dividend
reinvestment plan of the Fund in effect on the date hereof, the Fund will
not sell, contract to sell or otherwise dispose of, any Common Shares or
any securities convertible into or exercisable or exchangeable for Common
Shares or grant any options or warrants to purchase Common Shares, for a
period of 180 days after the date of the Prospectus, without the prior
written consent of Citigroup Global Markets Inc.
(g) Except as stated in this Agreement and the Prospectus, neither
the Fund nor the Adviser will take, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, stabilization
or manipulation of the price of any security of the Fund to facilitate the
sale or resale of the Securities.
(h) The Fund agrees to pay the costs and expenses relating to the
following matters: (i) the preparation, printing or reproduction and
filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), each Preliminary Prospectus,
the Prospectus and the 1940 Act Notification and each amendment or
supplement to any of them; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting
and packaging) of such copies of the Registration Statement, each
Preliminary Prospectus, the Prospectus, any sales material and all
amendments or supplements to any of them, as may, in each case, be
reasonably requested for use in connection with the offering and sale of
the Securities;
14
(iii) the preparation, printing, authentication, issuance and delivery of
certificates for the Securities, including any stamp or transfer taxes in
connection with the original issuance and sale of the Securities; (iv) the
printing (or reproduction) and delivery of this Agreement, any blue sky
memorandum, dealer agreements and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of
the Securities; (v) the registration of the Securities under the Exchange
Act and the listing of the Securities on the NYSE; (vi) any registration
or qualification of the Securities for offer and sale under the securities
or blue sky laws of the several states (including filing fees and the
reasonable fees and expenses of counsel for the Underwriters relating to
such registration and qualification); (vii) any filings required to be
made with the National Association of Securities Dealers, Inc. (including
filing fees and the reasonable fees and expenses of counsel for the
Underwriters relating to such filings); (viii) the transportation and
other expenses incurred by or on behalf of Fund representatives in
connection with presentations to prospective purchasers of the Securities;
(ix) the fees and expenses of the Fund's accountants and the fees and
expenses of counsel (including local and special counsel) for the Fund;
(x) all other costs and expenses incident to the performance by the Fund
of its obligations hereunder; and (xi) an amount equal to $.005 per Common
Share for each Common Share sold pursuant to this Agreement, payable no
later than 45 days from the date of this Agreement to the Underwriters in
partial reimbursement of their expenses (but not including reimbursement
for the cost of one tombstone advertisement in a newspaper that is
one-quarter of a newspaper page or less in size) in connection with the
offering. To the extent that the foregoing costs and expenses incidental
to the performance of the obligations of the Fund under this Agreement
exceed $0.03 per Common Share, the Adviser will pay all such costs and
expenses.
(i) The Fund will direct the investment of the net proceeds of the
offering of the Securities in such a manner as to comply with the
investment objectives, policies and restrictions of the Fund as described
in the Prospectus.
(j) The Fund will comply with the requirements of Subchapter M of
the Code to qualify as a regulated investment company under the Code.
(k) The Fund and the Adviser will use their reasonable best efforts
to perform all of the agreements required of them by this Agreement and
discharge all conditions of theirs to closing as set forth in this
Agreement.
7. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Fund and the Adviser contained
herein as of the Execution Time, the Closing Date and any settlement date
pursuant to Section 4 hereof, to the accuracy of the statements of the Fund made
in any certificates pursuant to the provisions hereof, to the performance by the
Fund or the Adviser of its obligations hereunder and to the following additional
conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time on the
15
date of determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or (ii)
9:30 AM on the Business Day following the day on which the public offering
price was determined, if such determination occurred after 3:00 PM New
York City time on such date; if filing of the Prospectus, or any
supplement thereto, is required pursuant to Rule 497, the Prospectus, and
any such supplement, will be filed in the manner and within the time
period required by Rule 497; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(b) You shall have received on the Closing Date an opinion of
Vedder, Price, Xxxxxxx & Kammholz, special counsel for the Fund, dated the
Closing Date and addressed to the Representatives, in substantially the
form attached as Exhibit A, which opinion may rely as to matters of
Delaware law on the opinion of Morris, Nichols, Arsht & Xxxxxxx, special
Delaware counsel for the Fund, dated the Closing Date and addressed to the
Representatives, in substantially the form attached as Exhibit B. The
opinion of Morris, Nichols, Arsht & Xxxxxxx shall state that Xxxxxxx
Xxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters, may rely on such
opinion as to matters of Delaware law for the purposes of rendering its
opinion referenced in Section 7(d).
(c) You shall have received on the Closing Date an opinion of
Vedder, Price, Xxxxxxx & Kammholz, special counsel for the Adviser, dated
the Closing Date and addressed to the Representatives, in substantially
the form attached as Exhibit C. The opinion of Vedder, Price, Xxxxxxx &
Kammholz shall state that Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the
Underwriters, may rely on such opinion as to matters of Illinois law for
the purposes of rendering its opinion referenced in Section 7(d).
(d) The Representatives shall have received from Xxxxxxx Xxxxxxx &
Xxxxxxxx LLP, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with respect
to the issuance and sale of the Securities, the Registration Statement,
the Prospectus (together with any supplement thereto) and other related
matters as the Representatives may reasonably require, and the Fund and
the Adviser shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(e) Each of the Fund and the Adviser shall have furnished to the
Representatives a certificate, signed by the president, any managing
director or any vice president and of the controller, treasurer or
assistant treasurer of each of the Fund and the Adviser, dated the Closing
Date, to the effect that the signers of such certificates have carefully
examined the Registration Statement, the Prospectus, any supplements to
the Prospectus and this Agreement and that:
(i) The representations and warranties of the Fund or the
Adviser, as the case may be, in this Agreement are true and correct
on and as of the Closing Date with the same effect as if made on the
Closing Date and the Fund or the Adviser, as the case may be, have
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing
Date;
16
(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 or the Adviser's
knowledge, as the case may be, threatened; and
(iii) Since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto)
(with respect to the Fund), and since the date of the Prospectus
(exclusive of any supplement thereto) (with respect to the Adviser),
there has been no material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or
properties of the Fund or the Adviser, as the case may be, whether
or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive
of any supplement thereto).
(f) The Fund shall have requested and caused Deloitte & Touche LLP
to have furnished to the Representatives, at the Execution Time and at the
Closing Date, letters, dated respectively as of the Execution Time and as
of the Closing Date, in form and substance heretofore approved by the
Representatives.
(g) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any material change specified in
the letter referred to in paragraph (f) of this Section 7 delivered on the
Closing Date from the letter delivered at the Execution time or (ii) any
change, or any development involving a prospective change, in or affecting
the condition (financial or otherwise), earnings, business or properties
of the Fund and the Adviser, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Prospectus (exclusive of any supplement thereto) the effect of which,
in any case referred to in clause (i) or (ii) above, is, in the sole
judgment of the Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto).
(h) The Securities shall have been listed and admitted and
authorized for trading on the NYSE, and satisfactory evidence of such
actions shall have been provided to the Representatives.
(i) Prior to the Closing Date, the Fund and the Adviser shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 7 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Representatives and counsel
for the Underwriters, this Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the
17
Representatives. Notice of such cancellation shall be given to the Fund in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 7 shall be
delivered at the office of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the
Underwriters, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, on the Closing
Date.
8. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 7 hereof is not satisfied,
because of any termination pursuant to Section 11 hereof or because of any
refusal, inability or failure on the part of the Fund or the Adviser to perform
any agreement herein or comply with any provision hereof other than by reason of
a default by any of the Underwriters, the Adviser will reimburse the
Underwriters severally through Citigroup Global Markets Inc. on demand for all
reasonable out-of-pocket expenses (including reasonable fees and disbursements
of counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities.
9. Indemnification and Contribution. (a) The Fund and the Adviser,
jointly and severally, agree to indemnify and hold harmless each of you and each
other Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls any Underwriter within the meaning of
either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several (including reasonable costs of investigation),
to which they or any of them may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, the
Prospectus, any Preliminary Prospectus, any sales material (or any amendment or
supplement to any of the foregoing), or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Fund and Adviser will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Fund or Adviser by or on behalf of any Underwriter
through the Representatives specifically for inclusion therein. This indemnity
agreement will be in addition to any liability which the Fund and Adviser may
otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless each of the Fund and the Adviser, each of their directors,
trustees, each officer who signs the Registration Statement, and each person who
controls the Fund or the Adviser within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Fund and
the Adviser to each Underwriter, but only with reference to written information
relating to such Underwriter furnished to the Fund or the Adviser by or on
behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any
18
liability which any Underwriter may otherwise have. The Fund and the Adviser
acknowledge that the statements set forth in the last paragraph of the cover
page regarding delivery of the Securities and, under the heading "Underwriting",
(i) the list of Underwriters and their respective participation in the sale of
the Securities, (ii) the sentences related to concessions and reallowances,
(iii) the paragraph related to stabilization, syndicate covering transactions
and penalty bids and (iv) the paragraph related to prospectuses in electronic
format in any Preliminary Prospectus and the Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters for
inclusion in any Preliminary Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 9, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 9 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Fund, the Adviser and the Underwriters
severally agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which the Fund,
the Adviser and one or more of the Underwriters may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Fund and the Adviser on the one hand (treated jointly for this purpose as one
person) and by the Underwriters on the other from the offering of the
Securities; provided, however, that in no case shall any Underwriter (except as
may be provided in any agreement among underwriters relating to the offering of
the Securities) be
19
responsible for any amount in excess of the underwriting discount or commission
applicable to the Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Fund, the Adviser and the Underwriters severally shall contribute in
such proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Fund and the Adviser on the one hand (treated
jointly for this purpose as one person) and of the Underwriters on the other in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Fund and the Adviser (treated jointly for this purpose as one person) shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses) received by it, and benefits received by the Underwriters shall be
deemed to be equal to the total underwriting discounts and commissions, in each
case as set forth on the cover page of the Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by the Fund and the
Adviser on the one hand (treated jointly for this purpose as one person) or the
Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Fund, the Adviser and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
9 were determined by pro rata allocation or any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 9, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Fund or the Adviser within the meaning of either the Act or the Exchange
Act, each officer of the Fund and the Adviser who shall have signed the
Registration Statement and each director of the Fund and the Adviser shall have
the same rights to contribution as the Fund and the Adviser, subject in each
case to the applicable terms and conditions of this paragraph (d).
(e) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or 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 from claimants on claims that are the
subject matter of such action, suit or proceeding.
(f) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 9 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Fund and the Adviser set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Fund, the Adviser or their shareholders,
trustees, directors, managers, members or officers or any person controlling the
Fund or the Adviser (control to be determined within the meaning of the Act or
the Exchange
20
Act), (ii) acceptance of any Securities and payment therefor hereunder and (iii)
any termination of this Agreement. A successor to any Underwriter or to the
Fund, the Adviser or their shareholders, trustees, directors, managers, members
or officers or any person controlling any Underwriter, the Fund or the Adviser
shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 9.
10. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters or in
such other proportion as you may specify in accordance with the Citigroup Global
Markets Inc. Master Agreement Among Underwriters) the Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase; provided,
however, that in the event that the aggregate amount of Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate amount of Securities set forth in Schedule I hereto,
the remaining Underwriters shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Securities, and if such
nondefaulting Underwriters do not purchase all the Securities, this Agreement
will terminate without liability to any nondefaulting Underwriter, the Fund or
the Adviser. In the event of a default by any Underwriter as set forth in this
Section 10, the Closing Date shall be postponed for such period, not exceeding
five Business Days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Fund and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
11. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, without liability on the part of
the Underwriters to the Fund or the Adviser, by notice given to the Fund or the
Adviser prior to delivery of and payment for the Securities, if at any time
prior to such time (i) trading in the Fund's Common Shares shall have been
suspended by the Commission or the NYSE or trading in securities generally on
the NYSE shall have been suspended or limited or minimum prices shall have been
established on the NYSE, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iii) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war, or other calamity or crisis the effect of
which on financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Prospectus (exclusive of any
supplement thereto).
12. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Fund and the Adviser or their officers and of the Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or the Fund or the
Adviser or any of the officers, trustees, directors, employees, agents or
controlling persons referred to in Section 9 hereof, and will survive delivery
of and payment for
21
the Securities. The provisions of Sections 8 and 9 hereof shall survive the
termination or cancellation of this Agreement.
13. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Citigroup Global
Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
General Counsel; or, if sent to the Fund or the Adviser, will be mailed,
delivered or telefaxed to: c/o Calamos Asset Management, Inc. at 0000 X.
Xxxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: General Counsel, (fax
no.: (000) 000-0000).
14. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, trustees, directors, employees, agents and controlling persons
referred to in Section 9 hereof, and no other person will have any right or
obligation hereunder.
15. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
16. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
17. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
18. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"1940 Act" shall mean the Investment Company Act of 1940, as
amended.
"1940 Act Rules and Regulations" shall mean the rules and
regulations of the Commission under the 1940 Act.
"1940 Act Notification" shall mean a notification of registration of
the Fund as an investment company under the 1940 Act on Form N-8A, as the
1940 Act Notification may be amended from time to time.
"Act" shall mean the Securities Act of 1933, as amended.
"Act Rules and Regulations" shall mean the rules and regulations of
the Commission under the Act.
"Advisers Act" shall mean the Investment Advisers Act of 1940, as
amended.
"Advisers Act Rules and Regulations" shall mean the rules and
regulations of the Commission under the Advisers Act.
22
"Business Day" shall mean any day other than a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust companies
are authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
(including the statement of additional information incorporated by
reference therein) referred to in paragraph 1(a) above and any preliminary
prospectus (including the statement of additional information incorporated
by reference therein) included in the Registration Statement at the
Effective Date that omits Rule 430A Information.
"Prospectus" shall mean the prospectus (including the statement of
additional information incorporated by reference therein) relating to the
Securities that is first filed pursuant to Rule 497 after the Execution
Time or, if no filing pursuant to Rule 497 is required, shall mean the
form of final prospectus (including the statement of additional
information incorporated by reference therein) relating to the Securities
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in
the event any post-effective amendment thereto or any Rule 462(b)
Registration Statement becomes effective prior to the Closing Date, shall
also mean such registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be. Such term shall include any
Rule 430A Information deemed to be included therein at the Effective Date
as provided by Rule 430A.
"Rule 430A" and "Rule 462" refer to such rules under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred to
in Section 1(a) hereof.
23
"Rule 497" refers to Rule 497(c) or 497(h) under the Act, as
applicable.
"Rules and Regulations" shall mean, collectively, the Act Rules and
Regulations and the 1940 Act Rules and Regulations.
24
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Fund, the Adviser and the several Underwriters.
Very truly yours,
CALAMOS STRATEGIC TOTAL RETURN FUND
By:
------------------------------
Name:
Title:
CALAMOS ASSET MANAGEMENT, INC.
By:
------------------------------
Name:
Title:
25
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Citigroup Global Markets Inc.
By:
Name:
Title:
For itself and the other several
Underwriters named in Schedule I
to the foregoing Agreement.
SCHEDULE I
NUMBER OF UNDERWRITTEN
SECURITIES TO BE
UNDERWRITERS PURCHASED
------------ ---------
Citigroup Global Markets Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
UBS Securities LLC
X.X. Xxxxxxx & Sons, Inc.
Advest, Inc.
H&R Block Financial Advisors, Inc.
Xxxxxx, Xxxxx Xxxxx, Incorporated
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
McDonald Investments Inc., a KeyCorp Company
Xxxxxxxxxxx & Co. Inc.
Quick & Xxxxxx, Inc. A FleetBoston Financial
Company
RBC Capital Markets Corporation
TD Waterhouse Investor Services, Inc.
Wedbush Xxxxxx Securities Inc.
Xxxxx Fargo Securities, LLC
--------
Total............................ ========
EXHIBIT A
Opinions of Vedder, Price, Xxxxxxx & Kammholz Regarding the Fund
1. The Fund has been duly formed and is validly existing in good standing
as a statutory trust under the Delaware Act. The Fund has the statutory trust
power and authority to own property and conduct its business as described in the
Prospectus;
2. Under the Delaware Act and the Declaration, the execution and delivery
of the Underwriting Agreement and each of the Fund Agreements by the Fund, and
the performance by the Fund of its obligations thereunder, have been duly
authorized by all requisite statutory trust action on the part of the Fund; the
Underwriting Agreement and each of the Fund Agreements have been duly executed
and delivered by the Fund; each of the Fund Agreements constitute the valid and
binding agreement of the Fund enforceable against the Fund in accordance with
its terms; and the Underwriting Agreement and each of the Fund Agreements comply
with all applicable provisions of the 1940 Act and the 1940 Act Rules and
Regulations and the Advisers Act and the Advisers Act Rules and Regulations;
3. To our knowledge, based solely on the Officer's Certificate (as that
term is defined in the opinion of Morris, Nichols, Arsht and Xxxxxxx), the ____
common shares of beneficial interest in the Fund purchased by the Adviser
pursuant to the Subscription Agreement between the Fund and the Adviser dated
____, 2004 (the "Investment Adviser Shares") are the only common shares of
beneficial interest in the Fund currently issued and outstanding other than any
Shares issued and sold pursuant to the Underwriting Agreement. The Investment
Adviser Shares have been duly authorized for issuance by the Fund, are validly
issued and, subject to the qualifications below, fully paid and non-assessable
beneficial interests in the Fund. The holder of the Investment Adviser Shares
will be, subject to the terms of the Declaration, entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware; provided, however, that we express no opinion with respect to the
liability of any holder of the Investment Adviser Shares who is, was or may
become a named Trustee of the Fund;
4. The Shares have been duly authorized for issuance by the Fund and, when
issued and delivered against payment therefor in accordance with the terms,
conditions, requirements and procedures set forth in the Underwriting Agreement,
will be validly issued and, subject to the qualifications below, fully paid and
non-assessable beneficial interests in the Fund. The holders of Shares will be,
subject to the terms of the Declaration, entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware; provided,
however, that we express no opinion with respect to the liability of any holder
of Shares who is, was or may become a named Trustee of the Fund;
5. Under the Declaration and the Delaware Act, the issuance of the Shares
is not subject to preemptive rights;
6. The form of certificate evidencing the Shares complies with all
applicable requirements of the Delaware Act and the NYSE;
A-1
7. The execution and delivery by the Fund of the Underwriting Agreement
and the Fund Agreements, the consummation by the Fund of the transactions
contemplated by the Underwriting Agreement and the Fund Agreements, the
performance by the Fund of its obligations thereunder, the issuance and sale by
the Fund of the Shares and the adoption of the Terms and Conditions of the
Automatic Dividend Reinvestment Plan of the Fund ("Automatic Dividend
Reinvestment Plan") will not violate (i) the Certificate or the Declaration or
(ii) any applicable Delaware law or administrative regulation;
8. None of the issuance and sale of the Shares by the Fund pursuant to the
Underwriting Agreement, the execution and delivery of the Underwriting Agreement
or any of the Fund Agreements by the Fund, or the performance by the Fund of its
agreements under the Underwriting Agreement or any of the Fund Agreements or the
adoption of the Automatic Dividend Reinvestment Plan (A) requires any consent,
approval, authorization or other order of or registration or filing with, the
Commission, the National Association of Securities Dealers, Inc., or any
national securities exchange, or governmental body or agency, or arbitrator or
court of the United States of America, or State of Illinois or State of Delaware
or, based solely on the Docket Search, an order of any Delaware Court (as that
term is defined in the opinion of Morris, Nichols, Arsht & Xxxxxxx) (except (1)
the absence of which, either individually or in the aggregate, would not have a
material adverse effect on the Fund or the offering of the Shares as
contemplated in the Underwriting Agreement; (2) such as may have been obtained
prior to the date hereof; and (3) such as may be required for compliance with
state securities or blue sky laws of various jurisdictions) or (B) violates or
will violate or constitutes or will constitute a breach of any of the provisions
of the Organizational Documents of the Fund or (C) violates or will violate or
constitutes or will constitute a breach of, or a default under, any material
agreement, indenture, lease or other instrument known to us to which the Fund is
party or by which it or any of its properties may be bound, or violates any
existing material United States of America or State of Illinois or State of
Delaware statute, law or regulation (assuming compliance with all applicable
state securities and blue sky laws, and except that, in the published opinion of
the Commission, the indemnification provisions in the Underwriting Agreement and
the Fund Agreements, insofar as they relate to indemnification for liabilities
arising under the 1933 Act, are against public policy as expressed in the 1933
Act and therefore unenforceable), or violates any judgment, injunction, order or
decree known to us to be applicable to the Fund or any of its properties, or
will result in the creation or imposition of any material lien, charge or
encumbrance upon any property or assets of the Fund pursuant to the terms of any
agreement or instrument known to us to which the Fund is a party or by which any
of its property or assets is bound. To the best of our knowledge, the Fund is
not subject to any order of any court or of any arbitrator, governmental
authority or administrative agency of the United States of America or the State
of Illinois;
9. Based solely on the Docket Search, there is not any Delaware court
action, suit or proceeding pending against the Fund.
10. The Registration Statement is effective under the 1933 Act and was
filed under the 1940 Act; any required filing of the Prospectus pursuant to Rule
497 of the 1933 Act Rules and Regulations has been made within the time periods
required by Rule 497; no stop-order suspending the effectiveness of the
Registration Statement or order pursuant to Section 8(e) of
A-2
the 1940 Act has been issued and to the best of our knowledge, no proceeding for
any such purpose has been instituted or is pending or threatened in writing by
the Commission;
11. The Fund is registered under the 1940 Act as a closed-end diversified
management investment company;
12. The description of the authorized shares of beneficial interest of the
Fund contained in the first paragraph under the caption "Description of Shares"
and under the caption "Description of Shares -- Common Shares" in the Prospectus
conforms in all material respects as to legal matters to the terms thereof
contained in the Fund's Declaration;
13. The statements made in the Prospectus under the captions "U.S. Federal
Income Tax Matters," insofar as they constitute matters of law or legal
conclusions, have been reviewed by us and constitute accurate statements of any
such matters of law or legal conclusions;
14. The Registration Statement and the Prospectus and each amendment or
supplement to the Registration Statement and the Prospectus as of their
respective issue dates (except the financial statements and other financial data
contained therein, as to which we express no opinion) comply as to form in all
material respects with the requirements of the 1933 Act, the 1940 Act and the
Rules and Regulations;
15. To the best of our knowledge, there are no legal or governmental
proceedings pending or threatened in writing against the Fund, or to which the
Fund or any of its properties is subject, that are required to be described in
the Registration Statement or the Prospectus, but are not described therein as
required;
16. To the best of our knowledge, there are no material agreements,
contracts, indentures, leases or other instruments that are required to be
described in the Registration Statement or the Prospectus, or to be filed as an
exhibit to the Registration Statement that are not described or filed as
required by the 1933 Act, the 1940 Act or the Rules and Regulations; and
17. The Shares are duly authorized for listing, subject to official notice
of issuance, on the NYSE and the Fund's registration statement on Form 8-A under
the 1934 Act is effective.
We have participated in conferences with officers and employees of the
Fund, Adviser, representatives of the independent auditors for the Fund, special
Delaware counsel to the Fund, the Underwriters and counsel for the Underwriters
at which the contents of the Registration Statement and the Prospectus and
related matters were discussed and, although we are not passing upon, and do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus, except to
the limited extent otherwise covered by paragraphs 12 and 13 hereof and have
made no independent check or verification thereof, on the basis of the
foregoing, no facts have come to our attention that would have led us to believe
that (a) the Registration Statement, at the time 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 therein not
misleading, (b) the Prospectus, as of its date and as of the Closing Date,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary to make the statements contained therein, in
the light of the circumstances under which they were made, not misleading, or
(c) the
A-3
1940 Act Notification as of ___, 2004 contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading,
except that in each case we express no belief with respect to the financial
statements, schedules and other financial information and statistical data
included therein or excluded therefrom or the exhibits to the Registration
Statement.
A-4
EXHIBIT B
Opinions of Morris, Nichols, Arsht & Xxxxxxx
1. The Fund has been duly formed and is validly existing in good standing
as a statutory trust under the Delaware Act. The Fund has the statutory trust
power and authority to own property and conduct its business as described in the
Prospectus.
2. Under the Delaware Act and the Governing Instrument, the execution and
delivery of the Underwriting Agreement and each of the Fund Agreements by the
Fund, and the performance by the Fund of its obligations thereunder, have been
duly authorized by all requisite statutory trust action on the part of the Fund.
3. To our knowledge, based solely on the Officer's Certificate, the
Investment Advisor Shares are the only Shares currently issued and outstanding
other than any Common Shares issued and sold pursuant to the Underwriting
Agreement. The Investment Advisor Shares have been duly authorized for issuance
by the Fund, are validly issued and, subject to the qualifications below, fully
paid and non-assessable beneficial interests in the Series. The holder of the
Investment Advisor Shares will be, subject to the terms of the Governing
Instrument, entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware; provided, however, that we express no
opinion with respect to the liability of any holder of the Investment Advisor
Shares who is, was or may become a named Trustee of the Fund.
4. The Common Shares have been duly authorized for issuance by the Fund
and, when issued and delivered against payment therefor in accordance with the
terms, conditions, requirements and procedures set forth in the Underwriting
Agreement, will be validly issued and, subject to the qualifications below,
fully paid and non-assessable beneficial interests in the Series. The holders of
Common Shares will be, subject to the terms of the Governing Instrument,
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware; provided, however, that we express no opinion with
respect to the liability of any holder of Common Shares who is, was or may
become a named Trustee of the Fund.
5. Under the Governing Instrument and the Delaware Act, the issuance of
the Common Shares is not subject to preemptive rights.
6. The form of Common Shares Certificate complies with all applicable
requirements of the Delaware Act.
7. No authorization, approval, consent or order of any governmental
authority or agency of the State of Delaware or, based solely on the Docket
Search, an order of any Delaware Court, is required to be obtained by the Fund
solely as a result of the issuance and sale of the Common Shares, the
consummation by the Fund of the transactions contemplated by the
B-1
Underwriting Agreement and the Fund Agreements or the performance by the Fund of
its obligations thereunder, or the adoption of the Automatic Dividend
Reinvestment Plan.
8. The execution and delivery by the Fund of the Underwriting Agreement
and the Fund Agreements, the consummation by the Fund of the transactions
contemplated by the Underwriting Agreement and the Fund Agreements, the
performance by the Fund of its obligations thereunder, the issuance and sale by
the Fund of the Common Shares and the adoption of the Automatic Dividend
Reinvestment Plan will not violate (i) the Certificate or the Governing
Instrument or (ii) any applicable Delaware law or administrative regulation.
9. Based solely on the Docket Search, there is not in any Delaware Court
any action, suit or proceeding pending against the Fund.
With respect to the opinions expressed in paragraphs 3 and 4 above, we
note that, pursuant to Section 2 of Article VIII of the Governing Instrument,
the Trustees have the power to cause each Shareholder, or each Shareholder of
any particular Series, to pay directly, in advance or arrears, for charges of
the Fund's custodian or transfer, shareholder servicing or similar agent, an
amount fixed from time to time by the Trustees, by setting off such charges due
from such Shareholder from declared but unpaid dividends owed such Shareholder
and/or by reducing the number of Shares in the account of such Shareholder by
that number of full and/or fractional Shares which represents the outstanding
amount of such charges due from such Shareholder.
B-2
EXHIBIT C
Opinions of Vedder, Price, Xxxxxxx & Kammholz Regarding the Adviser
1. The Adviser is validly existing as a corporation in good standing under
the laws of the State of Illinois.
2. The Adviser has full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Underwriting
Agreement, the Management Agreement, the Structuring Fee Agreements and the
Additional Compensation Agreement.
3. The Adviser is registered with the Commission as an investment adviser
under the Advisers Act and is not prohibited by the Advisers Act, the Advisers
Act Rules and Regulations, the 1940 Act or the 1940 Act Rules and Regulations
from acting under the Management Agreement, the Structuring Fee Agreements or
the Additional Compensation Agreement as contemplated by the Prospectus.
4. The Underwriting Agreement, the Management Agreement, the Structuring
Fee Agreements and the Additional Compensation Agreement have been duly
authorized by all requisite corporate action on the part of the Adviser, have
each been duly executed and delivered on behalf of the Adviser, and each of the
Management Agreement, the Structuring Fee Agreements and the Additional
Compensation Agreement constitutes a valid and binding obligation of the
Adviser, enforceable against the Adviser in accordance with its terms.
5. To the best of our knowledge, there is not pending or threatened in
writing any action, suit, proceeding, inquiry or investigation, to which the
Adviser is a party, or to which the property of the Adviser is subject, before
or brought by any court or governmental agency or body, which might reasonably
be expected to (i) result in any material adverse change in the condition,
financial or otherwise, earnings, business affairs or business prospects of the
Adviser, (ii) materially and adversely affect the properties or assets of the
Adviser or (iii) materially impair or adversely affect the ability of the
Adviser to function as an investment adviser or perform its obligations under
the Management Agreement, the Structuring Fee Agreements and the Additional
Compensation Agreement, or which is required to be disclosed in the Registration
Statement or the Prospectus.
6. No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency of the United States of America or the State of Illinois (other than (i)
under the 1933 Act, the 1940 Act and the Rules and Regulations; (ii) such as
have been obtained; and (iii) as may be required under the securities or blue
sky laws of the various states, as to each of which we express no opinion) is
necessary or required in connection with the performance by the Adviser of its
obligations under the Underwriting Agreement, the
C-1
Management Agreement, the Structuring Fee Agreements and the Additional
Compensation Agreement.
7. The execution and delivery of the Underwriting Agreement, the
Management Agreement, the Structuring Fee Agreements and the Additional
Compensation Agreement by the Adviser, and performance by the Adviser of its
obligations thereunder do not and will not, whether with or without the giving
of notice or lapse of time or both: (A) result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Adviser, or
(B) violate or constitute a breach of, or default under any material contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any
other material agreement or instrument known to us and to which the Adviser is a
party or by which it may be bound, or to which any of the property or assets of
the Adviser is subject, or (C) violate any applicable federal or State of
Illinois law, statute, rule, regulation, or any judgment, order, writ or decree,
known to us, of any governmental authority or administrative agency of the
United States of America or the State of Illinois (except in each case for such
violations, breaches or defaults or liens, charges or encumbrances that would
not have a material adverse effect on the ability of the Adviser to perform its
obligations under the Management Agreement, the Structuring Fee Agreements and
the Additional Compensation Agreement) nor will such action result in any
violation of the provisions of the Organizational Documents of the Adviser.
C-2
