AUCTION PREFERRED SHARES
2,510 SHARES, SERIES A
2,510 SHARES, SERIES B
XXXXXXXXX XXXXXX INCOME OPPORTUNITY FUND INC.
UNDERWRITING AGREEMENT
----------------------
September 22, 2003
Citigroup Global Markets Inc.
As Representative of the Several Underwriters
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The undersigned, Xxxxxxxxx Xxxxxx Income Opportunity Fund Inc., a Maryland
corporation (the "Fund"), Xxxxxxxxx Xxxxxx Management Inc., a New York
corporation (the "Investment Adviser") and Xxxxxxxxx Xxxxxx, LLC, a Delaware
limited liability company (the "Subadviser" and, together with the Investment
Adviser, the "Advisers"), address you as Underwriter and as the representative
(the "Representative") of each of the other persons, firms and corporations, if
any, listed in Schedule I hereto (herein collectively called "Underwriters").
The Fund proposes, upon the terms and conditions set forth herein, to issue and
sell an aggregate of 2,510 shares of Series A Auction Preferred Shares and 2,510
shares of Series B Auction Preferred Shares, each $0.0001 par value per share,
$25,000 liquidation preference per share, of the Fund (collectively, the
"Preferred Shares"), to the several Underwriters. The Preferred Shares will be
authorized by, and subject to the terms and conditions of the Articles of
Incorporation of the Fund, including the Articles Supplementary, in the form
filed as an appendix to the statement of additional information that is part of
the Registration Statement referred to in Section 1 of this Agreement. Unless
otherwise stated, the term "you" as used herein means Citigroup Global Markets
Inc., individually on its own behalf.
The Fund and the Advisers 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 Preferred Shares by the
Underwriters.
The Fund has entered into an Investment Management Agreement with the
Investment Adviser dated June 24, 2003, an Administration Agreement with the
Investment Adviser dated June 24, 2003, a Custodian Contract with State Street
Bank and Trust Company dated June 24, 2003, a Transfer Agency Agreement with The
Bank of New York dated June 24, 2003 and an Auction Agency Agreement with The
Bank of New York dated September 25, 2003, and such agreements are herein
referred to as the "Management Agreement", the "Administration Agreement", the
"Custodian Agreement", the "Transfer Agency Agreement" and the "Auction Agency
Agreement", respectively. The Investment Adviser has entered into an investment
sub-advisory agreement with the Subadviser dated June 24, 2003, and such
agreement is herein referred to as the "Sub-Advisory Agreement". Collectively,
the Management Agreement, the Administration Agreement, the Custodian Agreement,
the Transfer Agency Agreement and the Auction Agency Agreement are herein
referred to as the "Fund Agreements". This Underwriting Agreement is herein
referred to as the "Agreement". In addition, the Fund has adopted a dividend
reinvestment plan (the "Dividend Reinvestment Plan") pursuant to which holders
of shares of common stock, par value $0.0001 per share, of the Fund (the "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. REGISTRATION STATEMENT AND PROSPECTUS. The Fund has prepared and filed
with the Securities and Exchange Commission (the "Commission") in accordance
with the provisions of the Securities Act of 1933, as amended (the "1933 Act"),
the Investment Company Act of 1940, as amended (the "1940 Act"), and the rules
and regulations of the Commission under the 1933 Act (the "1933 Act Rules and
Regulations") and the 1940 Act (the "1940 Act Rules and Regulations" and,
together with the 1933 Act Rules and Regulations, the "Rules and Regulations") a
registration statement on Form N-2 (File Nos. 333-107448 and 811-21334) under
the 1933 Act and the 1940 Act and may, pursuant to the Rules and Regulations,
prepare and file an additional registration statement relating to a portion of
the Preferred Shares pursuant to Rule 462(b) of the 1933 Act Rules and
Regulations (a "462(b) Registration Statement") (collectively, the "registration
statement"), including a prospectus (including any statement of additional
information) relating to the Preferred Shares and a notification of registration
of the Fund as an investment company under the 1940 Act on Form N-8A (the "1940
Act Notification"). The term "Registration Statement" as used in this Agreement
means the registration statement (including all financial schedules and
exhibits), as amended at the time it becomes effective under the 1933 Act or, if
the registration statement became effective under the 1933 Act prior to the
execution of this Agreement, as amended or supplemented, at the time it became
effective prior to the execution of this Agreement, and includes any information
deemed to be included by Rule 430A under the 1933 Act Rules and Regulations. If
it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed under the
1933 Act and must be declared effective before the offering of the Preferred
Shares may commence, the term "Registration Statement" as used in this Agreement
means the registration statement as amended by said post-effective amendment.
For the avoidance of doubt, if the Fund has filed a 462(b) Registration
Statement, the term "Registration Statement" as used in this Agreement shall
include such 462(b) Registration Statement. The term "Prospectus" as used in
this Agreement means the prospectus (including the statement of additional
information) in the form included in the Registration Statement or, if the
prospectus (including the statement of additional information) included in the
Registration Statement omits information in reliance on Rule 430A and such
information is included in a prospectus (including the statement of additional
information) filed with the Commission pursuant to Rule 497(h) under the 1933
Act Rules and Regulations, the term "Prospectus" as used in this Agreement means
the prospectus (including the statement of additional information) in the form
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included in the Registration Statement as supplemented by the addition of the
information contained in the prospectus (including the statement of additional
information) filed with the Commission pursuant to Rule 497(h). The term
"Prepricing Prospectus" as used in this Agreement means the prospectus
(including the statement of additional information) subject to completion in the
form included in the registration statement at the time of the initial filing of
the registration statement with the Commission and as such prospectus (including
the statement of additional information) shall have been amended from time to
time prior to the date of the Prospectus, together with any other prospectus
(including any other statement of additional information) relating to the Fund
other than the Prospectus.
The Fund has furnished the Representative with copies of such Registration
Statement, each amendment to such Registration Statement filed with the
Commission and each Prepricing Prospectus.
2. AGREEMENTS TO SELL AND PURCHASE. The Fund hereby agrees, subject to
all the terms and conditions set forth herein, to issue and to sell to each
Underwriter and, upon the basis of the representations, warranties and
agreements of the Fund and the Advisers herein contained and subject to all of
the other terms and conditions set forth herein, each Underwriter agrees,
severally and not jointly, to purchase from the Fund at a purchase price of
$25,000 per Preferred Share, the number of Preferred Shares set forth opposite
the name of such Underwriter in Schedule I hereto (or such number of Preferred
Shares increased as set forth in Section 10 hereof).
3. TERMS OF PUBLIC OFFERING. The Fund and the Advisers have been advised
by you that the Underwriters propose to make a public offering of their
respective portions of the Preferred Shares as soon after the Registration
Statement and this Agreement have become effective as in your judgment is
advisable and initially to offer the Preferred Shares upon the terms set forth
in the Prospectus.
4. DELIVERY OF PREFERRED SHARES AND PAYMENTS THEREFOR.
(a) Delivery to the Underwriters of and payment to the Fund for the
Preferred Shares and compensation of the Underwriters with respect thereto
shall be made at the office of Citigroup Global Markets Inc., 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or through the facilities of the
Depository Trust Company or another mutually agreeable facility, at 9:00
A.M., New York City time, on September 25, 2003 (the "Closing Date"). The
place of closing for the Preferred Shares and the Closing Date may be
varied by agreement between you and the Fund.
(b) Certificates for the Preferred Shares, if any, shall be
registered in such names and in such denominations as you shall request
prior to 1:00 P.M., New York City time on the second business day preceding
the Closing Date. Such certificates, if the Fund determines to issue any
certificates, will be made available to you in New York City for inspection
and packaging not later than 9:00 A.M., New York City time, on the business
day next preceding the Closing Date. The certificates, if any, evidencing
the Preferred Shares to be purchased hereunder shall be delivered to you on
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the Closing Date through the facilities of the Depository Trust Company or
another mutually agreeable facility, against payment of the purchase price
therefor in immediately available funds to the order of the Fund.
5. AGREEMENTS OF THE FUND AND THE ADVISERS. The Fund and the Advisers,
jointly and severally, agree with the several Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective under the 1933 Act before the offering of
the Preferred Shares may commence, the Fund will use its reasonable best
efforts to cause the Registration Statement or such post-effective
amendment to become effective under the 1933 Act as soon as possible. If
the Registration Statement has become effective and the Prospectus
contained therein omits certain information at the time of effectiveness
pursuant to Rule 430A of the 1933 Act Rules and Regulations, the Fund will
file a Prospectus including such information pursuant to Rule 497(h) of the
1933 Act Rules and Regulations, as promptly as practicable, but no later
than the second business day following the earlier of the date of the
determination of the offering price of the Preferred Shares or the date the
Prospectus is first used after the effective date of the Registration
Statement. If the Registration Statement has become effective and the
Prospectus contained therein does not so omit such information, the Fund
will file a Prospectus pursuant to Rule 497 (c) or (j) of the 1933 Act
Rules and Regulations as promptly as practicable, but no later than the
fifth business day following the date of the later of the effective date of
the Registration Statement or the commencement of the public offering of
the Preferred Shares after the effective date of the Registration
Statement. The Fund will advise you promptly and, if requested by you, will
confirm such advice in writing (i) when the Registration Statement or such
post-effective amendment has become effective and (ii) when the Prospectus
has been timely filed pursuant to Rule 497(c) or Rule 497(h) of the 1933
Act Rules and Regulations or the certification permitted pursuant to Rule
497(j) of the 1933 Act Rules and Regulations has been timely filed,
whichever is applicable.
(b) The Fund will advise you promptly and, if requested by you, will
confirm such advice in writing: (i) of any request made by the Commission
for amendment of or a supplement to the Registration Statement, any
Prepricing Prospectus or the Prospectus (or any amendment or supplement to
any of the foregoing) or for additional information, (ii) of the issuance
by the Commission, the NASD, Inc. (the "NASD") (to the extent received by
the Fund), 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 of any order
suspending the effectiveness of the Registration Statement, prohibiting or
suspending the use of the Prospectus or any Prepricing Prospectus, of any
notice pursuant to Section 8(e) of the 1940 Act, of the suspension of
qualification of the Preferred Shares for offering or sale in any
jurisdiction, or the initiation or contemplated initiation of any
proceeding for any such purposes, (iii) of receipt by the Fund, the
Advisers, any of their officers or any attorney of the Fund or the Advisers
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of any other material communication from 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 relating to the
Registration Statement, the 1940 Act Notification, the Prospectus or any
Prepricing Prospectus (or any amendment or supplement to any of the
foregoing), this Agreement or any of the Fund Agreements and (iv) within
the period of time referred to in paragraph (f) below, of any material,
adverse change in the condition (financial or other), business, business
prospects, properties, net assets or results of operations of the Fund
(other than as a result of changes in market conditions generally) or any
event which has or would reasonably be expected to have a material adverse
effect on the ability of the Adviser or the Sub-Adviser to perform their
respective obligations under this Agreement, the Management Agreement or
the Sub-Advisory Agreement, as the case may be, or of the happening of any
event (but as to each of the Fund or an Adviser, an event known to that
respective entity) which makes any statement of a material fact made in the
Registration Statement, the Prospectus or any Prepricing Prospectus (or any
amendment or supplement to any of the foregoing) untrue or which requires
the making of any additions to or changes in the Registration Statement,
the Prospectus or any Prepricing Prospectus (or any amendment or supplement
to any of the foregoing) in order to state a material fact required by the
1933 Act, the 1940 Act or the Rules and Regulations to be stated therein or
necessary in order to make the statements therein (in the case of a
Prospectus or Prepricing Prospectus, in light of the circumstances under
which they were made) not misleading or of the necessity to amend or
supplement the Registration Statement, the Prospectus or any Prepricing
Prospectus (or any amendment or supplement to any of the foregoing) to
comply with the 1933 Act, the 1940 Act, the Rules and Regulations or any
other law or order of any court or regulatory body. If at any time 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 shall
issue any order suspending the effectiveness of the Registration Statement,
prohibiting or suspending the use of the Prospectus or any Prepricing
Prospectus (or any amendment or supplement to any of the foregoing) or
suspending the qualification of the Preferred Shares for offering or sale
in any jurisdiction, the Fund will use its reasonable best efforts to
obtain the withdrawal of such order at the earliest possible time, and you,
on behalf of the Underwriters, shall cooperate with the Fund to obtain such
withdrawal.
(c) The Fund will furnish to you, without charge, one signed copy of
the registration statement as originally filed with the Commission and of
each amendment thereto, including financial statements and all exhibits
thereto (except any post-effective amendment required by Rule 8b-16 of the
1940 Act Rules and Regulations which is filed with the Commission after the
later of (x) one year from the date of this Agreement and (y) the date on
which the distribution of the Preferred Shares is completed) and will also
furnish to you, without charge, such number of conformed copies of the
registration statement as originally filed and of each amendment thereto
(except any post-effective amendment required by Rule 8b-16 of the 1940 Act
Rules and Regulations which is filed with the Commission after the later of
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(x) one year from the date of this Agreement and (y) the date on which the
distribution of the Preferred Shares is completed), with or without
exhibits, as you may reasonably request.
(d) Within five years from the date hereof, the Fund will not (i)
file any amendment (except any post-effective amendment required by Rule
8b-16 of the 1940 Act which is filed with the Commission after the later of
(x) one year from the date of this Agreement or (y) the date on which the
distribution of the Preferred Shares is completed) to the Registration
Statement or make any amendment or supplement to the Prospectus or any
Prepricing Prospectus (or any amendment or supplement to any of the
foregoing) of which you shall not previously have been advised or to which
you shall reasonably object within a reasonable time after being so advised
or (ii) so long as, in the opinion of counsel for the Underwriters, a
Prospectus is required to be delivered in connection with sales of
Preferred Shares by any Underwriter or dealer, file any information,
documents or reports pursuant to the Securities Exchange Act of 1934, as
amended (the "1934 Act"), without delivering a copy of such information,
documents or reports to you, as Representative of the Underwriters, prior
to or concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the Fund
has delivered to you, without charge, in such quantities as you have
reasonably requested, copies of each form of any Prepricing Prospectus. The
Fund consents to the use, in accordance with the provisions of the 1933 Act
and with the securities or Blue Sky laws of the jurisdictions in which the
Preferred Shares are offered by the several Underwriters and by dealers,
prior to the date of the Prospectus, of each Prepricing Prospectus so
furnished by the Fund.
(f) As soon after the execution and delivery of this Agreement as
reasonably possible and thereafter from time to time, for such period as in
the opinion of counsel for the Underwriters a prospectus is required by the
1933 Act to be delivered in connection with sales of Preferred Shares by
any Underwriter or dealer, the Fund will expeditiously deliver to each
Underwriter and each dealer, without charge, as many copies of the
Prospectus (and of any amendment or supplement thereto) as you may
reasonably request. The Fund consents to the use of the Prospectus (and of
any amendments or supplements thereto) in accordance with the provisions of
the 1933 Act, with the securities or Blue Sky laws of the jurisdictions in
which the Preferred Shares are offered by the several Underwriters and by
all dealers to whom Preferred Shares may be sold and with other applicable
laws and regulations, both in connection with the offering or sale of the
Preferred Shares and for such period of time thereafter as the Prospectus
is required by law to be delivered in connection with sales of Preferred
Shares by any Underwriter or dealer. If during such period of time any
event shall occur that in the judgment of the Fund or in the reasonable
opinion of counsel for the Underwriters is required to be set forth in the
Prospectus (as then amended or supplemented) or should be set forth therein
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading or if it is necessary to
supplement or amend the Prospectus to comply with the 1933 Act, the 1940
Act, the Rules and Regulations or any other federal law, rule or regulation
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or any state securities or Blue Sky disclosure laws, rules or regulations,
the Fund will forthwith prepare and, subject to the provisions of paragraph
(d) above, file with the Commission an appropriate amendment or supplement
thereto and will furnish as expeditiously as reasonably possible to the
Underwriters and dealers, without charge, such number of copies thereof as
they shall reasonably request; provided, however, if such amendment or
supplement is required solely as a result of a material misstatement in or
material omission from the information furnished by or on behalf
of an Underwriter to the Fund or the Advisers expressly for use in the
Registration Statement or the Prospectus, then the Fund shall deliver such
amendment or supplement at cost. In the event that the Prospectus is to be
amended or supplemented, the Fund, if reasonably requested by you, will
promptly issue a press release announcing or disclosing any material
matters to be covered by the proposed amendment or supplement.
(g) The Fund will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification, if
necessary, of the Preferred Shares for offering and sale by the several
Underwriters and by dealers as may be required under the applicable
securities or Blue Sky laws of such jurisdictions as you may designate and
will file such consents to service of process or other documents, if any,
necessary or appropriate in order to effect such registration or
qualification; provided, however, that the foregoing shall not apply to the
extent that the Preferred Shares are "covered securities" that are exempt
from state regulation of securities offerings pursuant to Section 18 of the
1933 Act, and provided further 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 Preferred Shares, in any jurisdiction where it is not now so subject.
(h) The Fund will make generally available to its security holders an
earnings statement, which need not be audited, covering a twelve-month
period commencing after the effective date of the Registration Statement
and ending not later than 18 months thereafter, as soon as reasonably
practicable after the end of such period, which earnings statement shall
satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 of the
1933 Act Rules and Regulations.
(i) The Fund will comply with the undertaking set forth in paragraph
6 of Item 33 of Part C of the Registration Statement.
(j) During the period of three years hereafter, the Fund will furnish
to you (i) as soon as available, a copy of each report of the Fund mailed
to shareholders or filed with the Commission or furnished to the American
Stock Exchange ("AMEX") (other than reports on Form N-SAR or Form N-CSR),
provided such report or the information contained therein is publicly
available and (ii) from time to time such other information concerning the
Fund as you may reasonably request.
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(k) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (other than pursuant to the
second paragraph of Section 10 hereof or by notice given by you terminating
this Agreement pursuant to Section 10 or Section 11 hereof) or if this
Agreement shall be terminated by the Underwriters because of any failure or
refusal on the part of the Fund or the Advisers to comply with any material
terms in this Agreement or because any of the conditions of this Agreement
required to be complied with or fulfilled by them are not satisfied, the
Fund and the Advisers, jointly and severally, agree to reimburse the
Representative for all reasonable out-of-pocket expenses (including
reasonable fees and expenses of counsel for the Underwriters) incurred by
you in connection herewith, but the Fund and the Advisers shall in no event
be liable for any internal cost of the Underwriters or any loss of
anticipated profits or speculative, consequential or similar damages for
such termination.
(l) The Fund will direct the investment of the net proceeds of the
offering of the Preferred Shares in such a manner as to comply with the
investment objectives, policies and restrictions of the Fund as described
in the Prospectus.
(m) The Fund will file the requisite copies of the Prospectus with
the Commission in a timely fashion pursuant to Rule 497(c) or Rule 497(h)
of the 1933 Act Rules and Regulations, whichever is applicable or, if
applicable, will file in a timely fashion the certification permitted by
Rule 497(j) of the 1933 Act Rules and Regulations and will advise you of
the time and manner of such filing.
(n) Except as provided in this Agreement or pursuant to any dividend
reinvestment plan of the Fund in effect on the date hereof, neither the
Fund nor the Advisers will sell, contract to sell or otherwise dispose of
or hedge, any senior securities (as defined in the 0000 Xxx) of the Fund or
grant any options or warrants to purchase senior securities of the Fund,
for a period of 180 days after the date of the Prospectus, without the
prior written consent of Citigroup Global Markets Inc.
(o) Except as stated in this Agreement and in the Prospectus, neither
the Fund nor the Advisers have taken, nor will any of them take, directly
or indirectly, any action designed to or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of the
Preferred Shares in violation of the federal securities laws to facilitate
the sale or resale of the Preferred Shares.
(p) The Fund will use its reasonable best efforts to cause the
Preferred Shares, on or prior to the Closing Date, to be assigned a rating
of `Aaa' by Xxxxx'x Investors Service, Inc. ("Moody's") and `AAA' by Fitch,
Inc. ("Fitch", and together with Moody's, the "Rating Agencies").
(q) No later than two business days after the Closing Date, the Fund
shall furnish to you a report showing compliance with the asset coverage
requirements of the 1940 Act and a Preferred Shares Basic Maintenance
Report (as defined in the Prospectus), each dated as of the Closing Date,
in form and provided by you to the Rating Agencies.
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(r) No later than the Closing Date, the Underwriters will provide,
and will cause any selling group member to whom they have sold Preferred
Shares to provide, The Bank of New York, as auction agent for the Preferred
Shares, with a list of the record names of the persons to whom they have
sold Preferred Shares, the number of Preferred Shares sold to each such
person, and the number of Preferred Shares they are holding as of the
Closing Date; provided that in lieu thereof, an Underwriter may provide The
Bank of New York with a list indicating itself as the sole holder of all
the Preferred Shares sold by such Underwriter.
6. REPRESENTATIONS AND WARRANTIES OF THE FUND AND THE ADVISERS. The Fund
and the Advisers, jointly and severally, represent and warrant to each
Underwriter that:
(a) Each Prepricing Prospectus complied when so filed in all material
respects with the provisions of the 1933 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 Prepricing Prospectus made in
reliance upon and in conformity with information relating to any
Underwriter furnished to the Fund by or on behalf of any Underwriter
through you expressly for use therein).
(b) The Registration Statement, in the form in which it became or
becomes effective and also in such form as it may be when any
post-effective amendment thereto shall become effective and the Prospectus
and any amendment or supplement thereto when filed with the Commission
under Rule 497 of the 1933 Act Rules and Regulations and the 1940 Act
Notification when originally filed with the Commission and any amendment or
supplement thereto when filed with the Commission complied or will comply
in all material respects with the provisions of the 1933 Act, the 1940 Act
and the Rules and Regulations and did not or will not at any such times
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein (in the case of a Prospectus or Prepricing Prospectus, in light of
the circumstances under which they were made) not misleading; except that
this representation and warranty does not apply to statements in or
omissions from the Registration Statement or the Prospectus (or any
amendment or supplement thereto) 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 or your counsel
expressly for use therein.
(c) All the outstanding Common Shares of the Fund have been duly
authorized and validly issued, are fully paid and, except as described in
the Registration Statement, nonassessable and are free of any preemptive or
similar rights; the Preferred Shares have been duly authorized and, when
issued and delivered to the Underwriters against payment therefor in
accordance with the terms hereof, will be validly issued, fully paid and,
except as described in the Registration Statement, nonassessable and free
of any preemptive or similar rights; the Preferred Shares conform in all
material respects to the description thereof in the Registration Statement
and the Prospectus (and any amendment or supplement thereto); and the
Common Shares conform in all material respects to the description thereof
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in the Registration Statement and the Prospectus (and any amendment or
supplement thereto).
(d) The Fund has been duly formed and is validly existing in good
standing as a corporation under the laws of the State of Maryland, with
full corporate 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 thereto) 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), business, business
prospects, properties, net assets or results of operations (a "Material
Adverse Effect") of the Fund. The Fund has no subsidiaries.
(e) There are no legal or governmental proceedings pending or, to the
knowledge of the Fund, threatened 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 (or any amendment or supplement
thereto) but are not described as required by the 1933 Act, the 1940 Act or
the Rules and Regulations and there are no agreements, contracts,
indentures, leases or other instruments that are required to be described
in the Registration Statement or the Prospectus (or any amendment or
supplement thereto) or to be filed as an exhibit to the Registration
Statement that are not described or filed therein as required by the 1933
Act, the 1940 Act or the Rules and Regulations.
(f) The Fund is not (i) in violation of its Articles of Incorporation
or By-Laws or (ii) in violation of any 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 or (iii) in breach
or default in any respect in the performance of any obligation, agreement
or condition contained in any bond, debenture, note or any other evidence
of indebtedness or in any 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, except, in the case of clauses (ii) and (iii) above, for violations,
breaches or defaults that do not or would not have, either individually or
in the aggregate, a Material Adverse Effect on the Fund.
(g) Neither the issuance and sale of the Preferred Shares, the
execution, delivery or performance of this Agreement nor any of the Fund
Agreements by the Fund, nor the consummation by the Fund of the
transactions contemplated hereby or thereby (i) requires the Fund to obtain
any consent, approval, authorization or other order of or registration or
filing which has not yet been obtained or made with the Commission, the
NASD, any national securities exchange, any arbitrator, any court or any
other governmental, regulatory, self-regulatory or administrative agency or
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any official having jurisdiction over the Fund (except such as may have
been obtained or made prior to this Agreement and except for compliance
with the securities or Blue Sky laws of various jurisdictions which have
been or will be effected in accordance with this Agreement and except for
compliance with the filing requirements of the NASD Division of Corporate
Finance) or conflicts or will conflict with or constitutes or will
constitute a breach of the Articles of Incorporation or By-Laws of the Fund
or (ii) conflicts or will conflict with or constitutes or will constitute a
breach of or a default under, any 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 violates or will violate any 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 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, except, in the case of clause (ii) above,
for conflicts, breaches, defaults, violations or encumbrances that do not
or would not have, either individually or in the aggregate, a Material
Adverse Effect on the Fund or a material adverse effect on the Fund's
ability to perform its obligations under this Agreement or the Fund
Agreements.
(h) Since the date as of which information is given in the
Registration Statement and the Prospectus (and any amendment or supplement
to either of them), except as otherwise stated therein, (i) there has been
no change, whether or not arising in the ordinary course of business that
has or would have a Material Adverse Effect on the Fund (other than as a
result of a change in the financial markets generally); (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 any amendment or supplement thereto) or as
contemplated by this Agreement and (iii) except for the two dividends
declared by the Fund on August 7, 2003, one paid on August 29, 2003 and the
other payable on September 30, 2003, each in the amount of $0.10625 per
Common Share, there has been no dividend or distribution of any kind
declared, paid or made by the Fund on its Common Shares.
(i) The accountants, Ernst & Young LLP, who have audited or shall
audit at or prior to the Closing Date the Statement of Assets and
Liabilities dated June 18, 2003 included in the Registration Statement and
the Prospectus (and any amendment or supplement thereto), are an
independent public accounting firm as required by the 1933 Act, the 1940
Act and the Rules and Regulations.
(j) The financial statements, together with related schedules and
notes, included or incorporated by reference in the Registration Statement
and the Prospectus (or any amendment or supplement to either of them)
present fairly the financial position of the Fund on the basis stated in
the Registration Statement and the Prospectus at the respective dates or
for the respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
11
involved except as disclosed therein; and the other financial and
statistical information and data included in the Registration Statement or
the Prospectus (or any amendment or supplement thereto) are accurately
derived from such financial statements and the books and records of the
Fund.
(k) The Fund, subject to the Registration Statement having been
declared effective and the filing of the Prospectus or a certification
under Rule 497 under the 1933 Act Rules and Regulations, has taken all
action required to be taken by it under the 1933 Act, the 1940 Act and the
Rules and Regulations to make the public offering and consummate the sale
of the Preferred Shares as contemplated by this Agreement.
(l) 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, assuming
due authorization, execution and delivery by the other parties hereto and
thereto, the Fund Agreements 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, fraudulent conveyance,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and by general equitable principles
(regardless of whether enforcement is sought in a proceeding in equity or
at law).
(m) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), the
Fund has not incurred any liability or obligation, direct or contingent, or
entered into any transaction, not in the ordinary course of business, that
is material to the Fund and there has not been any change in the capital
stock or material increase in the short-term debt or long-term debt of the
Fund or any change or development which should reasonably be expected to
have a Material Adverse Effect on the Fund.
(n) 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
Preferred Shares, will not distribute to the public in either printed or
electronic form any offering material in connection with the offering and
sale of the Preferred Shares other than the Registration Statement, the
Prepricing Prospectus included in Pre-Effective Amendment No. 1 to the
Registration Statement and the Prospectus.
(o) (i) 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 (and any amendment or supplement thereto); (ii) the Fund has
12
fulfilled and performed all its 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
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 (or any
amendment or supplement thereto); except, in the case of each of clauses
(i) and (ii), where the failure to obtain or perform its obligations with
respect to such permits, or the restrictions set forth in such permits,
either individually or in the aggregate, does not or would not have a
Material Adverse Effect on the Fund and (iii) except as described in the
Prospectus (or any amendment or supplement thereto), none of such permits
contains any restriction that would reasonably be expected to have a
Material Adverse Effect on the Fund.
(p) 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 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
account for assets is compared with existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(q) To the Fund's knowledge, neither the Fund nor any employee or
agent of the Fund has made any payment of funds of the Fund or received or
retained any funds, which payment, receipt or retention of such funds is of
a character required to be disclosed in the Prospectus and that is not so
disclosed.
(r) The conduct by the Fund of its business (as described in the
Prospectus) does not require it to be the owner, possessor or licensee or
otherwise require it to have the right to use any patents, patent licenses,
trademarks, service marks or trade names (collectively, "Intellectual
Property"), which it does not own, possess, license or otherwise have the
right to use, except where the failure to own, possess, license or
otherwise have the right to use such Intellectual Property, individually or
in the aggregate, does not or would not be reasonably expected to have a
Material Adverse Effect on the Fund.
(s) Except as stated in this Agreement and in the Prospectus (and any
amendment or supplement thereto), the Fund has not taken and will not 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 Preferred Shares in violation of federal
13
securities laws and the Fund is not aware of any such action taken or to be
taken by any affiliates of the Fund.
(t) The Fund is duly registered under the 1940 Act as a closed-end,
non-diversified management investment company and the 1940 Act Notification
has been duly filed with the Commission and, at the time of filing thereof
and at the time of filing any amendment or supplement thereto, conformed in
all material respects with all applicable provisions of the 1940 Act and
the 1940 Act Rules and Regulations. 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 (or any
amendment or supplement thereto).
(u) The Fund has not used or distributed and will not use or
distribute (in each case, unless you so request in writing), any
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 Advisers for use in connection with the
offering and sale of the Preferred Shares.
(v) 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 Investment Advisers Act of 1940, as amended
(the "Advisers Act"), and the rules and regulations adopted by the
Commission under the Advisers Act (the "Advisers Act Rules and
Regulations").
(w) No holder of any security of the Fund has any right to require
registration of the Common Shares, Preferred Shares or any other security
of the Fund because of the filing of the registration statement or
consummation of the transactions contemplated by this Agreement.
(x) The Fund intends to direct the investment of the proceeds of the
offering of the Preferred Shares in such a manner as to comply with the
requirements of Subchapter M of the Code.
(y) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), to the Fund's
knowledge after due inquiry, no director of the Fund is an "interested
person" (as defined in the 0000 Xxx) of the Fund or an "affiliated person"
(as defined in the 0000 Xxx) of any Underwriter listed in Schedule I
hereto.
(z) The Common Shares are listed on the AMEX.
7. REPRESENTATIONS AND WARRANTIES OF THE ADVISERS. Each of the Investment
Adviser and the Subadviser, jointly and severally, represents and warrants to
each Underwriter as follows:
14
(a) Such Adviser is a corporation or limited liability company duly
organized and validly existing in good standing under the laws of its
jurisdiction of incorporation, with full corporate or limited liability
company, as the case may be, 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 thereto) 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 conduct of its business requires such registration or qualification,
except where the failure so to register or to qualify would not have a
material, adverse effect on the condition (financial or other), business,
properties, net assets or results of operations of such Adviser (an
"Adviser Material Adverse Effect").
(b) Such 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 Fund Agreements to which it is a party
for the Fund or the Sub-Advisory Agreement to which it is a party as
contemplated by the Registration Statement and the Prospectus (or any
amendment or supplement thereto).
(c) Such Adviser has full power and authority to enter into this
Agreement, the Fund Agreements to which it is a party and the Sub-Advisory
Agreement to which it is a party, the execution and delivery of, and the
performance by such Adviser of its obligations under, this Agreement, the
Fund Agreements to which it is a party and the Sub-Advisory Agreement to
which it is a party have been duly and validly authorized by such Adviser;
and this Agreement, the Fund Agreements to which it is a party and the
Sub-Advisory Agreement to which it is a party have been duly executed and
delivered by such Adviser and, assuming the due authorization, execution
and delivery by the other parties thereto, such Fund Agreements and
Sub-Advisory Agreement constitute the valid and legally binding agreements
of such Adviser, enforceable against such 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 such Adviser's obligations
hereunder and thereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights generally and by general equitable
principles (regardless of whether enforcement is sought in a proceeding in
equity or at law).
(d) Such Adviser has the financial resources available to it
necessary for the performance of its services and obligations as
contemplated in the Registration Statement and the Prospectus (or any
amendment or supplement thereto) and under this Agreement, the Additional
Compensation Agreement dated June 24, 2003 among the Investment Adviser and
certain underwriters party thereto (in the case of the Investment Adviser)
and the Fund Agreements to which it is a party and the Sub-Advisory
Agreement to which it is a party.
15
(e) The description of such Adviser and its business, and the
statements directly attributable to such Adviser, in the Registration
Statement and the Prospectus (and any amendment or supplement thereto)
complied and comply in all material respects with the provisions of the
1933 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
required to be stated therein or necessary to make the statements therein
(in the case of a Prospectus or Prepricing Prospectus, in light of the
circumstances under which they were made) not misleading.
(f) There are no legal or governmental proceedings pending or, to the
knowledge of such Adviser, threatened against such Adviser that are
required to be described in the Registration Statement or the Prospectus
(or any amendment or supplement thereto) but are not described as required
or that reasonably should be expected to result in an Adviser Material
Adverse Effect with respect to such Adviser or that reasonably should, if
determined adversely with respect to such Adviser, have a material, adverse
effect on the ability of such Adviser to fulfill its obligations hereunder
or under the Fund Agreements to which it is a party or under the
Sub-Advisory Agreement to which it is a party.
(g) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus (and any amendment or
supplement to either of them), except as otherwise stated therein, (i)
there has been no Adviser Material Adverse Effect with respect to such
Adviser, whether or not arising from the ordinary course of business and
(ii) there have been no transactions entered into by such Adviser which are
material to such Adviser other than those in the ordinary course of its
business as described in the Prospectus.
(h) Such 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; such Adviser has fulfilled and performed all its 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 impairment of the rights of such Adviser
under any such permit , subject in each case to such qualification as may
be set forth in the Prospectus (or any amendment or supplement thereto),
except where the failure to obtain or perform its obligations with respect
to such permits, or the restrictions set forth in such permits, either
individually or in the aggregate, does not or would not have an Adviser
Material Adverse Effect.
(i) This Agreement, the Fund Agreements to which such Adviser is a
party and the Sub-Advisory Agreement to which it is a party 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) Neither the execution, delivery or performance of this Agreement
or the Fund Agreements by such Adviser which is a party thereto or the
Sub-Advisory Agreement by such Adviser which is a party thereto, nor the
16
consummation by such Adviser of the transactions contemplated hereby or
thereby (i) requires such Adviser to obtain any consent, approval,
authorization or other order of or registration or filing with 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 such Adviser (except such as may have been obtained or
made prior to this Agreement and except for compliance with the securities
or Blue Sky laws of various jurisdictions which have been or will be
effected in accordance with this Agreement and except for compliance with
the filing requirements of the NASD Division of Corporate Finance) or
conflicts or will conflict with or constitutes or will constitute a breach
of or a default under, the Certificate of Incorporation or the Certificate
of Formation, as the case may be, By-Laws or the Limited Liability Company
Agreement, as the case may be or (ii) conflicts or will conflict with or
constitutes or will constitute a breach of or a default under, any
agreement, indenture, lease or other instrument to which such Adviser is a
party or by which it or any of its properties may be bound or materially
violates or will violate any statute, law, regulation or filing or
judgment, injunction, order or decree applicable to such Adviser or any of
its properties or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of such Adviser 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 such
Adviser is subject, except, in the case of clause (ii) above, for
conflicts, breaches, defaults, violations or encumbrances that do not or
would not have, either individually or in the aggregate, an Adviser
Material Adverse Effect, or a material adverse effect on the Adviser's
ability to perform its obligations under this Agreement or the Fund
Agreements to which it is a party.
(k) Except as stated in this Agreement and in the Prospectus (and in
any amendment or supplement thereto), such 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 Preferred
Shares in violation of federal securities laws and such Adviser is not
aware of any such action taken or to be taken by any affiliates of such
Adviser.
(l) In the event that the Fund or such 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
administered by such party or similar electronic means, such Adviser will
install and maintain pre-qualification and password-protection or similar
procedures which are reasonably designed to restrict access to such
promotional materials by persons other than qualified broker-dealers and
registered representatives thereof.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Fund and the Advisers, jointly and severally, agree to
indemnify and hold harmless each of you and each other Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section
17
15 of the 1933 Act or Section 20 of the 1934 Act, from and against any and
all losses, claims, damages, liabilities and reasonable expenses, joint or
several (including costs of investigation) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement, the Prospectus or any Prepricing Prospectus
(or any amendment or supplement to any of the foregoing) or arising out of
or based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein (in the case of a Prospectus or Prepricing Prospectus, in light of
the circumstances under which they were made) not misleading, except
insofar as such losses, claims, damages, liabilities or expenses arise out
of or are based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in
reliance upon and in conformity with the information relating to such
Underwriters furnished in writing to the Fund by or on behalf of any
Underwriter through you expressly for use in connection therewith provided,
however, that the foregoing indemnification contained in this paragraph
(a) with respect to the Prepricing Prospectus (or any amendment or
supplement thereto) shall not inure to the benefit of any Underwriter or
to the benefit of any person controlling such Underwriter) on account of
any such loss, claim, damage, liability or expense arising from the sale
of the Preferred Shares by such Underwriter to any person if it is shown
that a copy of any such amendment or supplement to the Prepricing
Prospectus or the Prospectus (which term as used in this proviso shall not
include any statement of additional information unless specifically
requested by such person) was not delivered or sent to such person within
the time required by the 1933 Act and the 1933 Act Rules and Regulations
and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in the Prepricing Prospectus was
corrected in the supplement or amendment to the Prepricing Prospectus or in
the Prospectus, provided that the Fund has delivered such supplements or
amendments or the Prospectus to the several Underwriters in requisite
quantity on a timely basis to permit proper delivery or sending. The
foregoing indemnity agreement shall be in addition to any liability which
the Fund or the Advisers may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Fund or the Advisers, such Underwriter
or such controlling person shall promptly notify the Fund or the Advisers
and the Fund or the Advisers shall assume the defense thereof, including
the employment of counsel and the payment of all fees and expenses. Such
Underwriter or any such controlling person shall have the right to employ
separate counsel in any such action, suit or proceeding and to participate
in the defense thereof, but the fees and expenses of such counsel shall be
at the expense of such Underwriter or controlling person unless (i) the
Fund or the Advisers have agreed in writing to pay such fees and expenses,
(ii) the Fund and the Advisers have failed within a reasonable time to
assume the defense and employ counsel or (iii) the named parties to any
such action, suit or proceeding (including any impleaded parties) include
both such Underwriter or such controlling person and the Fund or the
Advisers and such Underwriter or such controlling person shall have been
18
advised by its counsel that representation of such indemnified party and
the Fund or the Advisers by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the Fund and the
Advisers shall not have the right to assume the defense of such action,
suit or proceeding on behalf of such Underwriter or such controlling
person). It is understood, however, that the Fund and the Advisers shall,
in connection with any one such action, suit or proceeding or separate but
substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances
be liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel if there is any action, suit or
proceeding in more than one jurisdiction) at any time for all such
Underwriters and controlling persons not having actual or potential
differing interests with you or among themselves, which firm shall be
designated in writing by Citigroup Global Markets Inc. and that, subject to
the requirements of 1940 Act Release No. 11330 and Section 17(i) of the
1940 Act, all such fees and expenses shall be reimbursed promptly as they
are incurred. The Fund and the Advisers shall not be liable for any
settlement of any such action, suit or proceeding effected without the
written consent of the Fund or the Advisers (whether or not the Fund or the
Advisers are actual or potential parties to such action, suit or
proceeding), but if settled with such written consent or if there be a
final judgment for the plaintiff in any such action, suit or proceeding,
the Fund and the Advisers agree to indemnify and hold harmless any
Underwriter, to the extent provided in the preceding paragraph, and any
such controlling person from and against any loss, liability, damage or
expense by reason by such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Fund and the Advisers, their directors, members or
managers, any officers of the Fund who sign the Registration Statement and
any person who controls the Fund or the Advisers within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, to the same
extent as the foregoing indemnity from the Fund and the Advisers to each
Underwriter, but only with respect to information relating to such
Underwriter furnished in writing by or on behalf of such Underwriter
through you or your counsel expressly for use in the Registration
Statement, the Prospectus or the Prepricing Prospectus (or any amendment or
supplement to any of the foregoing). If any action, suit or proceeding
shall be brought against the Fund or the Advisers, any of their directors,
members or managers, any such officer or any such controlling person, based
on the Registration Statement, the Prospectus or the Prepricing Prospectus
(or any amendment or supplement to any of the foregoing) and in respect of
which indemnity may be sought against any Underwriter pursuant to this
paragraph (c), such Underwriter shall have the rights and duties given to
the Fund by paragraph (b) above (except that if the Fund or the Advisers
shall have assumed the defense thereof such Underwriter shall not be
required to do so, but may employ separate counsel therein and participate
in the defense thereof, but the fees and expenses of such counsel shall be
at such Underwriter's expense) and the Fund and the Advisers, their
19
directors, any such officer and any such controlling person shall have the
rights and duties given to the Underwriters by paragraph (b) above. The
foregoing indemnity agreement shall be in addition to any liability which
the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities
or expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Fund and the Advisers on the one hand
(treated jointly for this purpose as one person) and the Underwriters on
the other hand from the offering of the Preferred Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Fund and the Advisers on the one hand (treated jointly for this purpose as
one person) and of the Underwriters on the other hand in connection with
the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Fund and the Advisers
on the one hand (treated jointly for this purpose as one person) and the
Underwriters on the other hand shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses)
received by the Fund as set forth in the table on the cover page of the
Prospectus bear to the total underwriting discounts and commissions
received by the Underwriters with respect to the Preferred Shares as set
forth in the table on the cover page of the Prospectus. The relative fault
of the Fund and the Advisers on the one hand (treated jointly for this
purpose as one person) and of the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Fund and the Advisers on the one hand (treated jointly for this purpose as
one person) or by the Underwriters on the other hand and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The Fund, the Advisers and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in paragraph
(d) above. The amount paid or payable by an indemnified party as a result
of the losses, claims, damages, liabilities and expenses referred to in
paragraph (d) above shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating any claim or defending
any such action, suit or proceeding. Notwithstanding the provisions of this
Section 8, no Underwriter shall be required to contribute any amount in
20
excess of the amount by which the total price of the Preferred Shares
underwritten by it and distributed to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 8 are
several in proportion to the respective number of Preferred Shares set
forth opposite their names in Schedule I (or such numbers of Preferred
Shares increased as set forth in Section 10 hereof) and not joint.
(f) 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.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall, subject to the requirements of Release No. 11330 and
Section 17(i) of the 1940 Act, 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 8 and the representations and warranties of the Fund and the
Advisers 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
Advisers or their directors, members, managers or officers or any person
controlling the Fund or the Advisers, (ii) acceptance of any Preferred
Shares and payment therefor hereunder and (iii) any termination of this
Agreement. A successor to any Underwriter or to the Fund, the Advisers or
their directors or officers or any person controlling any Underwriter, the
Fund or the Advisers shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 8.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase any Preferred Shares hereunder are subject to the
accuracy of and compliance with the representations, warranties and agreements
of and by the Fund and the Advisers contained herein on and as of the date
hereof, the date on which the Registration Statement becomes or became
effective, the date of the Prospectus (and of any amendment or supplement
thereto) and the Closing Date; to the accuracy and completeness of all
statements made by the Fund, the Advisers or any of their officers in any
certificate delivered to the Representative or its counsel pursuant to this
Agreement and to the following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective before the offering of the Preferred
Shares may commence, the Registration Statement or such post-effective
21
amendment shall have become effective not later than 5:30 p.m., New York
City time, on the date hereof or at such later date and time as shall be
consented to in writing by you and all filings, if any, required by Rules
497 and 430A under the 1933 Act Rules and Regulations shall have been
timely made; no order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall
have been instituted or, to the knowledge of the Fund, the Advisers or any
Underwriter, threatened by the Commission and any request of the Commission
for additional information (to be included in the Registration Statement or
the Prospectus or otherwise) shall have been complied with to your
satisfaction.
(b) You shall have received on the Closing Date an opinion of
Xxxxxxxxxxx & Xxxxxxxx LLP, counsel for the Fund, dated the Closing Date
and addressed to you, as Representative of the several Underwriters, to the
effect that:
(i) The Fund is a corporation duly established, validly existing
and in good standing under the laws of the State of Maryland with full
power and authority to own and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus (and
any amendment or supplement thereto through the delivery of this opinion)
and is qualified to do business as a foreign corporation in the State of
New York, which we have been advised by an officer of the Fund is the only
state in which the Fund maintains an office for the conduct of its
business;
(ii) The Fund has, or at the relevant time had, the corporate
power and authority to enter into the Underwriting Agreement and the Fund
Agreements and to issue, sell and deliver the Preferred Shares to the
Underwriters as provided in the Underwriting Agreement and the Underwriting
Agreement and each of the Fund Agreements have been duly authorized,
executed and delivered by the Fund;
(iii) The number of authorized shares of capital stock of the
Fund is as set forth in the Registration Statement and Prospectus (or any
amendment or supplement thereto through the delivery of this opinion) under
the caption "The Fund;" and the description of the authorized capital stock
of the Fund contained in the Prospectus (or any amendment or supplement
thereto through the delivery of this opinion) under the caption
"Description of Preferred Shares" conforms in all material respects as to
legal matters to the terms thereof contained in the Fund's Articles of
Incorporation;
(iv) All of the shares of capital stock of the Fund outstanding
prior to the issuance of the Preferred Shares have been duly authorized and
validly issued and are fully paid and nonassessable;
(v) The Preferred Shares have been duly authorized for issuance
and sale to the Underwriters pursuant to the Underwriting Agreement and,
when issued and delivered to the Underwriters by the Fund pursuant to the
Underwriting Agreement against payment of the consideration set forth in
the Underwriting Agreement, will be validly issued, fully paid and
nonassessable and not subject to any preemptive rights that entitle or will
entitle any person to acquire any Preferred Shares upon the issuance
thereof by the Fund;
22
(vi) The Registration Statement and all post-effective
amendments, if any, filed through the delivery of this opinion have become
effective under the 1933 Act and, to our knowledge, no order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose are pending before the Commission; and any
filing of the Prospectus and any amendments or supplements thereto required
pursuant to Rule 497 of the 1933 Act Rules and Regulations prior to the
date of such opinion has been made in accordance with Rule 497;
(vii) The Fund is duly registered with the Commission under the
1940 Act as a closed-end, non-diversified management investment company;
(viii) Other than with respect to financial statements and
related notes and schedules and any other financial, accounting and
statistical information that is included or incorporated by reference in,
or omitted from, the following documents, as to which we express no
opinion: (i) the Registration Statement and the Prospectus (and any
amendment or supplement thereto through the delivery of this opinion)
comply as to form in all material respects with the requirements of the
1933 Act, the 1940 Act and the Rules and Regulations; and (ii) the Fund's
notification of registration on Form N-8A complies as to form in all
material aspects with the requirements of the 1940 Act and the 1940 Act
Rules and Regulations;
(ix) The statements made in the Registration Statement and the
Prospectus (and any amendment or supplement thereto through the delivery of
this opinion) under the caption "Tax Matters" have been reviewed by us and,
to the extent they describe or summarize federal income tax laws, present a
fair and accurate description or summary thereof;
(x) The statements made in the Registration Statement and the
Prospectus (and any amendment or supplement thereto through the delivery of
this opinion) under the caption "The Management of the Fund," "Description
of Preferred Shares" and "Certain Provisions in the Articles of
Incorporation" have been reviewed by us and, to the extent they describe or
summarize contracts, agreements or other legal documents or legal matters,
present a fair and accurate description or summary thereof;
23
(xi) To our knowledge, (A) other than as described or
contemplated in the Prospectus (or any amendment or supplement thereto
through the delivery of this opinion), there are no actions, suits or other
legal or governmental proceedings pending or expressly threatened against
the Fund (through the delivery of this opinion) which may reasonably be
expected to result in a Material Adverse Effect or to materially and
adversely affect the properties or assets of the Fund, the consummation by
the Fund of the transactions contemplated in the Underwriting Agreement or
the performance by the Fund of its obligations thereunder and (B) 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 any amendment or supplement thereto through the delivery of
this opinion) or to be filed as an exhibit to the Registration Statement
that are not described or filed as required, as the case may be;
(xii) The Fund Agreements do not violate in any material respect
any applicable provision of the 1933 Act, the 1940 Act, the Advisers Act,
the Rules and Regulations and the Advisers Act Rules and Regulations;
(xiii) Neither the offer, sale or delivery of the Preferred
Shares, the execution, delivery or performance by the Fund of its
obligations under the Underwriting Agreement or the Fund Agreements,
compliance by the Fund with the provisions thereof, consummation by the
Fund of the transactions contemplated thereby nor the adoption of the
Fund's Dividend Reinvestment Plan (i) violates the charter or bylaws of the
Fund; (ii) violates any material agreement, indenture, lease or other
instrument to which the Fund is a party or by which it or any of its
properties is bound that is an exhibit to the Registration Statement or
that is known to us except for violations that would not have a Material
Adverse Effect; (iii) to our knowledge, will result in the creation or
imposition of any material lien, charge or encumbrance upon any property or
assets of the Fund; (iv) to our knowledge, will result in any violation of
the Covered Laws or any existing material judgment, injunction, order or
decree known to us specifically naming the Fund or any of its properties,
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, may be against public policy as expressed in
the 1933 Act and therefore unenforceable; or (v) to our knowledge, requires
the Fund to obtain any consent, approval, authorization or order of or file
any registration with the Commission, the NASD, any national securities
exchange, any arbitrator, any court or any other governmental body, agency
or regulatory, self-regulatory or administrative agency or any official of
the State of Maryland (except as have been made or obtained or such as may
be required under state securities or Blue Sky laws governing the purchase
and distribution of the Preferred Shares); and
24
(xiv) Assuming due authorization, execution and delivery by the
other parties thereto and that the performance of the Fund Agreements by
such other parties will not violate law, agreements to which such other
parties or their properties are subject or orders applicable to such other
parties, the Fund Agreements constitute the valid, legal and binding
agreements of the Fund, enforceable against the Fund in accordance with
their terms, except as such enforceability may be limited by the effect of
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium
and other laws relating to or affecting creditors' rights and remedies
generally and by general equitable principles, whether enforcement is
considered in a proceeding in equity or at law, and except as rights to
indemnity thereunder may be limited by federal or state securities laws.
Such counsel shall also state that such counsel is not opining as to
factual matters, and the character of determinations involved in the
registration process is such that, other than as expressly set forth in
numbered paragraphs (iii), (ix) and (x) above, such counsel is not passing
upon and does not assume any responsibility for the accuracy, completeness
or fairness of the information included in the Registration Statement and
the Prospectus or in any amendment or supplement thereto. Other than as
expressly set forth in numbered paragraphs (iii), (ix) and (x) above, such
counsel shall also state that it assumes the correctness and completeness
of the information included therein, and such counsel has made no
independent investigation or verification of that information. However,
such counsel shall state that it has participated in the preparation of the
Registration Statement and the Prospectus and in discussions with certain
officers and directors of the Fund, certain officers and employees of the
Advisers and your representatives, and that such counsel has reviewed
certain Fund records and documents. Such counsel shall state that, based on
that participation and review, it can advise you that nothing has come to
its attention that causes it to believe that the Registration Statement,
including any Rule 462(b) Registration Statement and any Rule 430A
Information, at the time it became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
or that the Prospectus or any amendment or supplement thereto, at the time
that the Prospectus was issued or at the Closing Date, included an untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Such counsel shall state that
such paragraph does not address, and such counsel need not express any
opinion with respect to, the financial statements and related notes and
schedules, and other financial, accounting, and statistical information,
included in, incorporated by reference in, or omitted from the Registration
Statement, the Prospectus, or any amendment or supplement to either of
them. Such counsel also need not express any opinion with respect to any
matter relating to compliance with financial covenants or financial
requirements.
In rendering such opinion, such counsel may limit such opinion to
matters involving the application of the laws of the State of Maryland, the
State of New York and the United States and may rely upon an opinion or
opinions, each dated the Closing Date, of other counsel retained by the
Fund as to laws of any jurisdiction other than the United States and the
State of Maryland, provided that (X) each such local counsel is acceptable
25
to the Representative, (Y) such reliance is expressly authorized by each
opinion so relied upon and a copy of each such opinion is delivered to the
Representative and is, in form and substance satisfactory to them and their
counsel and (Z) counsel shall state in their view that they believe that
they and the Underwriters are justified in relying thereon.
(c) You shall have received on the Closing Date an opinion of Xxxxxxx
Xxxx & Xxxxxxxxx, counsel for the Investment Adviser, dated the Closing
Date and addressed to you, as Representative of the several Underwriters,
to the effect that:
(i) The Investment Adviser is a corporation validly existing in
good standing under the laws of the State of New York with full
corporate 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 thereto) and is
duly registered and qualified to conduct its business and is in good
standing in each state set forth on Annex A to such opinion, such
states being those in which the Investment Adviser has represented
lists all states in which 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),
business, properties, net assets or results of operations of the
Investment Adviser (such counsel being entitled to rely in respect of
the opinion in this clause upon certificates of government officials
in the relevant jurisdictions regarding the Investment Adviser's due
registration, qualification and good standing, and in respect of
matters of fact upon certificates of the Investment Adviser);
(ii) The Investment Adviser is duly registered with the
Commission under the Advisers Act as an investment adviser and is not
prohibited by the Advisers Act, the 1940 Act or the Rules and
Regulations under such acts from acting as the investment adviser for
the Fund under the Management Agreement and the Administration
Agreement as contemplated by the Prospectus (and any amendment or
supplement thereto);
(iii) The Investment Adviser has corporate power and authority to
enter into this Agreement, the Management Agreement, the
Administration Agreement and the Sub-Advisory Agreement; this
Agreement, the Management Agreement, the Administration Agreement and
the Sub-Advisory Agreement have been duly authorized, executed and
delivered by the Investment Adviser; and (assuming the due
authorization, execution and delivery by each of the other parties
thereto) each of the Management Agreement, the Administration
Agreement and the Sub-Advisory Agreement is a valid, legal and binding
agreement of the Investment Adviser, enforceable against the
Investment Adviser in accordance with its terms, as rights to
indemnity and contribution thereunder may be limited by public policy
or federal or state securities laws and subject to the qualification
that the enforceability of the Investment Adviser's obligations
thereunder may be limited by bankruptcy, fraudulent conveyance,
26
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing (except that
counsel may state that it expresses no opinion as to the
reasonableness or fairness of compensation payable under the
Management Agreement or the Sub-Advisory Agreement).;
(iv) Each of the Management Agreement and the Sub-Advisory
Agreement complies in all material respects with all applicable
provisions of the Advisers Act, the 1940 Act and the Advisers Act
Rules and Regulations and the 1940 Act Rules and Regulations (except
that counsel may state that it expresses no opinion as to the
reasonableness or fairness of compensation payable under the
Management Agreement and the Sub-Advisory Agreement);
(v) Neither (A) the execution and delivery by the Investment
Adviser of this Agreement, the Management Agreement, the
Administration Agreement or the Sub-Advisory Agreement nor (B) the
consummation by the Investment Adviser of the transactions
contemplated hereunder or thereunder constitutes or will constitute a
breach of or a default under (i) the Certificate of Incorporation or
By-Laws of the Investment Adviser or (ii) any material agreement,
indenture, lease or other instrument set forth on Schedule A thereto
furnished to such counsel by the Investment Adviser and which the
Investment Adviser has represented lists all agreements and
instruments to which the Investment Adviser is a party or by which the
Investment Adviser is bound or to which any of the property or assets
of the Investment Adviser is subject that are material to the business
or operations of the Investment Adviser or (iii) result in any
violation of any applicable United States federal or New York law,
rule, regulation (other than state securities or "blue sky" laws, as
to which such counsel need express no opinion, and other than United
States federal securities laws as to which such counsel need express
no opinion, except as otherwise specifically set forth therein) or
order of any New York or United States federal court, governmental
instrumentality, securities exchange or association or arbitrator, in
each case known to such counsel after reasonable inquiry (provided
that, such inquiry shall not include any obligation on the part of
such counsel to conduct, or cause to be conducted, any review of the
files or indices of any court, governmental instrumentality,
securities exchange or association or arbitrator), except, in the case
of each of clauses (ii) and (iii), for such conflicts or breaches
which do not, either individually or in the aggregate, have an Adviser
Material Adverse Effect on the Investment Adviser or a material
adverse effect on the Investment Adviser's ability to perform its
obligations under this Agreement or the Fund Agreements to which it is
a party;
(vi) To the best knowledge of such counsel after reasonable
inquiry (provided that, such inquiry shall not include any obligation
on the part of such counsel to conduct, or cause to be conducted, any
review of the files or indices of any court, governmental
27
instrumentality, securities exchange or association or arbitrator),
other than as described or contemplated in the Prospectus (and any
amendment or supplement thereto), there are no actions, suits or other
legal or governmental proceedings pending or threatened against the
Investment Adviser or to which the Investment Adviser or any of its
property is subject which are required to be described in the
Registration Statement or Prospectus (or any amendment or supplement
thereto); and
(vii) No material consent, approval, authorization or order of any
New York or United States federal court, regulatory body,
administrative or other governmental body, agency or official is
required on the part of the Investment Adviser for the performance of
this Agreement, the Management Agreement, the Administration Agreement
or the Sub-Advisory Agreement by the Investment Adviser or for the
consummation by the Investment Adviser of the transactions
contemplated hereby or thereby , except such as (i) have been obtained
under the United States federal securities laws and (ii) may be
required under state securities or "blue sky" laws, in each case, as
to which such counsel need express no opinion, in connection with the
purchase and distribution of the Preferred Shares by the Underwriters
pursuant to this Agreement.
Such counsel shall also state that such counsel are not opining as to
factual matters, and the character of determinations involved in the
registration process is such that such counsel are not passing upon and do
not assume any responsibility for the accuracy, completeness or fairness of
the information included in the Registration Statement and the Prospectus
or in any amendment or supplement thereto. Such counsel shall also state
that such counsel assumes the correctness and completeness of the
information included therein, and such counsel has made no independent
investigation or verification of that information. However, such counsel
shall state that they have participated in the preparation of the
Registration Statement and the Prospectus and in discussions with certain
officers and directors of the Fund, certain officers and employees of the
Investment Adviser and your representatives, and such counsel have reviewed
certain records and documents of the Advisers. Based on that participation
and review, such counsel shall state that they can advise you that nothing
has come to their attention that causes them to believe that the
description of the Investment Adviser and its business, and the statements
directly attributable to the Investment Adviser, set forth in the
Registration Statement, including any Rule 462(b) Registration Statement
and any Rule 430A Information, at the time it became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or that the description of the Investment Adviser and its
business, and the statements directly attributable to the Investment
Adviser, set forth in the Prospectus or any amendment or supplement
thereto, at the time that the Prospectus was issued or at the Closing Date,
included an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. Such
counsel shall state that such paragraph does not address, and such counsel
28
need not express any opinion with respect to, the financial statements and
related notes and schedules, and other financial, accounting and
statistical information (including information with respect to assets under
management), included in, or incorporated by reference in, or omitted from
the Registration Statement, the Prospectus, or any amendment or supplement
to either of them. Such counsel also need not express any opinion with
respect to any matter relating to compliance with financial covenants or
financial requirements.
In rendering such opinion, counsel may limit such opinion to matters
involving the application of the laws of the State of New York and the laws
of the United States and may rely upon an opinion or opinions, each dated
the Closing Date, of other counsel retained by the Investment Adviser as to
laws of any jurisdiction other than the United States and the State of New
York, provided that (X) each such local counsel is acceptable to the
Representative, (Y) such reliance is expressly authorized by each opinion
so relied upon and a copy of each such opinion is delivered to the
Representative and is, in form and substance, satisfactory to them and
their counsel and (Z) counsel shall state in their view that they believe
that they and the Underwriters are justified in relying thereon.
(d) You shall have received on the Closing Date an opinion of Xxxxxxx
Xxxx & Xxxxxxxxx, counsel for the Subadviser, dated the Closing Date and
addressed to you, as Representative of the several Underwriters, to the
effect that:
(i) The Subadviser is a limited liability company validly
existing in good standing under the laws of the State of Delaware with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto) and is duly registered and qualified to conduct
its business and is in good standing in each state set forth on Annex
A to such opinion, such states being those in which the Subadviser has
represented lists all states in which 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), business, properties, net assets or results of operations
of the Subadviser (such counsel being entitled to rely in respect of
the opinion in this clause upon certificates of government officials
in the relevant jurisdictions regarding the Subadviser's due
registration, qualification and good standing and in respect of
matters of fact upon certificates of the Subadviser;
(ii) The Subadviser is duly registered with the Commission under
the Advisers Act as an investment adviser and is not prohibited by the
Advisers Act, the 1940 Act or the rules and regulations promulgated by
the Commission under such acts from acting as the subadviser for the
Fund under the Sub-Advisory Agreement as contemplated by the
Prospectus (and any amendment or supplement thereto);
29
(iii) The Subadviser has corporate power and authority to enter
into this Agreement and the Sub-Advisory Agreement; this Agreement and
the Sub-Advisory Agreement have been duly authorized, executed and
delivered by the Subadviser; and (assuming the due authorization,
execution and delivery by each of the other parties thereto) each of
the Agreement and the Sub-Advisory Agreement is a valid, legal and
binding agreement of the Subadviser, enforceable against the
Subadviser in accordance with its terms, as rights to indemnity and
contribution thereunder may be limited by public policy or federal or
state securities laws and subject to the qualification that the
enforceability of the Subadviser's obligations thereunder may be
limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing (except that counsel
may state that it expresses no opinion as to the reasonableness or
fairness of compensation payable under the Sub-Advisory Agreement;
(iv) The Sub-Advisory Agreement complies in all material respects
with all applicable provisions of the Advisers Act, the 1940 Act and
the Advisers Act Rules and Regulations and the 1940 Act Rules and
Regulations (except that counsel may state that it expresses no
opinion as to the reasonableness or fairness of compensation payable
under the Sub-Advisory Agreement;
(v) Neither (A) the execution and delivery by the Subadviser of
this Agreement or the Sub-Advisory Agreement nor (B) the consummation
by the Subadviser of the transactions contemplated hereunder or
thereunder constitutes or will constitute a breach of or a default
under (i) the organizational documents of the Subadviser or (ii) any
material agreement, indenture, lease or other instrument set forth on
Schedule A thereto furnished to such counsel by the Subadviser and
which the Subadviser has represented lists all agreements and
instruments to which the Subadviser is a party or by which the
Subadviser is bound or to which any of the property or assets of the
Subadviser is subject that are material to the business or operations
of the Subadviser or (iii) result in any violation of any applicable
United States federal or New York law, rule, regulation (other than
state securities or "blue sky" laws, as to which such counsel need
express no opinion, and other than United States federal laws, as to
which such counsel need express no opinion, except as otherwise
specifically set forth therein) or order of any New York or United
States federal court, governmental instrumentality, securities
exchange or association or arbitrator, in each case known to such
counsel after reasonable inquiry (provided that, such inquiry shall
not include any obligation on the part of such counsel to conduct, or
cause to be conducted, any review of the files or indices of any
court, governmental instrumentality, securities exchange or
association or arbitrator), except, in the case of each of clauses
(ii) and (iii), for such conflicts or breaches which do not, either
30
individually or in the aggregate, have an Adviser Material Adverse
Effect on the Subadviser or a material adverse effect on the
Subadviser's ability to perform its obligations under this Agreement
or the Fund Agreements to which it is a party;
(vi) To the best knowledge of such counsel after reasonable
inquiry (provided that, such inquiry shall not include any obligation
on the part of such counsel to conduct, or cause to be conducted, any
review of the files or indices of any court, governmental
instrumentality, securities exchange or association or arbitrator),
other than as described or contemplated in the Prospectus (and any
amendment or supplement thereto), there are no actions, suits or other
legal or governmental proceedings pending or threatened against the
Subadviser or to which the Subadviser or any of its property is
subject that are required to be described in the Registration
Statement or Prospectus (or any amendment or supplement thereto); and
(viii) No material consent, approval, authorization or order of any
New York or United States federal court, regulatory body,
administrative or other governmental body, agency or official is
required on the part of the Subadviser for the performance of this
Agreement or the Sub-Advisory Agreement by the Subadviser or for the
consummation by the Subadviser of the transactions contemplated hereby
or thereby, except such as (i) have been obtained under the United
States federal securities laws and (ii) may be required under state
securities or "blue sky" laws, in each case, as to which such counsel
need express no opinion, in connection with the purchase and
distribution of the Preferred Shares by the Underwriters pursuant to
this Agreement.
Such counsel shall also state that such counsel are not opining as to
factual matters, and the character of determinations involved in the
registration process is such that such counsel are not passing upon and do
not assume any responsibility for the accuracy, completeness or fairness of
the information included in the Registration Statement and the Prospectus
or in any amendment or supplement thereto. Such counsel shall also state
that such counsel assumes the correctness and completeness of the
information included therein, and such counsel has made no independent
investigation or verification of that information. However, such counsel
shall state that they have participated in the preparation of the
Registration Statement and the Prospectus and in discussions with certain
officers and directors of the Fund, certain officers and employees of the
Subadviser and your representatives, and such counsel have reviewed certain
records and documents of the Advisers. Based on that participation and
review, such counsel shall state that they can advise you that nothing has
come to their attention that causes them to believe that the description of
the Subadviser and its business, and the statements directly attributable
to the Subadviser, set forth in the Registration Statement, including any
Rule 462(b) Registration Statement and any Rule 430A Information, at the
time it became effective, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
31
description of the Subadviser and its business, and the statements directly
attributable to the Subadviser, set forth in the Prospectus or any
amendment or supplement thereto, at the time that the Prospectus was issued
or at the Closing Date, included an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. Such counsel shall state that such paragraph does not address,
and such counsel need not express any opinion with respect to, the
financial statements and related notes and schedules, and other financial,
accounting and statistical information (including information with respect
to assets under management), included in, or incorporated by reference in,
or omitted from the Registration Statement, the Prospectus, or any
amendment or supplement to either of them. Such counsel also need not
express any opinion with respect to any matter relating to compliance with
financial covenants or financial requirements.
In rendering such opinion, counsel may limit such opinion to matters
involving the application of the Delaware Limited Liability Company laws,
the State of New York and the laws of the United States and may rely upon
an opinion or opinions, each dated the Closing Date, of other counsel
retained by the Subadviser as to laws of any jurisdiction other than the
United States and the Delaware Limited Liability Company laws, provided
that (X) each such local counsel is acceptable to the Representative, (Y)
such reliance is expressly authorized by each opinion so relied upon and a
copy of each such opinion is delivered to the Representative and is, in
form and substance, satisfactory to them and their counsel and (Z) counsel
shall state in their view that they believe that they and the Underwriters
are justified in relying thereon.
(e) That you shall have received on the Closing Date, (i) an opinion
of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters, and (ii) a
letter from Cleary, Gottlieb, Xxxxx & Xxxxxxxx, special counsel for the
Underwriters, each dated the Closing Date and addressed to you, as
Representative of the several Underwriters, with respect to such matters as
the Underwriters may require and the Fund, the Advisers and their
respective counsels shall have furnished to such counsel such documents as
they may request for the purpose of enabling them to pass upon such
matters.
(f) That you shall have received letters addressed to you, as
Representative of the several Underwriters, and dated the date hereof and
the Closing Date from Ernst & Young LLP, independent certified public
accountants, substantially in the forms heretofore approved by you.
(g) (i) No order suspending the effectiveness of the Registration
Statement or prohibiting or suspending the use of the Prospectus (or any
amendment or supplement thereto) or any Prepricing Prospectus shall have
been issued and no proceedings for such purpose or for the purpose of
commencing an enforcement action against the Fund, the Advisers or, with
respect to the transactions contemplated by the Prospectus (or any
amendment or supplement thereto) and this Agreement, any Underwriter, may
be pending before or, to the knowledge of the Fund, the Advisers or any
Underwriter or in the reasonable view of counsel to the Underwriters, shall
32
be threatened or contemplated by the Commission at or prior to the Closing
Date and that any request for additional information on the part of the
Commission (to be included in the Registration Statement, the Prospectus or
otherwise) be complied with to the satisfaction of the Representative, (ii)
there shall not have been any change in the capital stock of the Fund nor
any material increase in debt of the Fund from that set forth in the
Prospectus (and any amendment or supplement thereto) and the Fund shall not
have sustained any material liabilities or obligations, direct or
contingent, other than those reflected in the Prospectus (and any amendment
or supplement thereto); (iii) since the date of the Prospectus there shall
not have been any material, adverse change in the condition (financial or
other), business, business prospects, properties, net assets or results of
operations of the Fund or the Advisers; (iv) the Fund and the Advisers must
not have sustained any material loss or interference with its business from
any court or from legislative or other governmental action, order or decree
or from any other occurrence not described in the Registration Statement
and the Prospectus (and any amendment or supplement thereto); and (v) all
of the representations and warranties of the Fund and the Advisers
contained in this Agreement shall be true and correct on and as of the date
hereof and as of the Closing Date as if made on and as of the Closing Date.
(h) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change or any development involving a prospective
change that would have a Material Adverse Effect or Adviser Material
Adverse Effect on the Fund or the Advisers, respectively, not contemplated
by the Prospectus (and any amendment or supplement thereto (and other than
as a result of changes in market conditions generally), which in your
opinion, as Representative of the several Underwriters, would materially,
adversely affect the market for the Preferred Shares or (ii) any event or
development relating to or involving the Fund, the Advisers or any officer
or director of the Fund or the Advisers which makes any statement of a
material fact made in the Prospectus (or any amendment or supplement
thereto) untrue or which, in the opinion of the Fund and its counsel or the
Underwriters and their counsel, requires the making of any addition to or
change in the Prospectus (or any amendment or supplement thereto) in order
to state a material fact required by the 1933 Act, the 1940 Act, the Rules
and Regulations or any other law to be stated therein or necessary in order
to make the statements therein (in the case of a prospectus, in light of
the circumstances under which they were made) not misleading, if amending
or supplementing the Prospectus (or any amendment or supplement thereto) to
reflect such event or development would, in your opinion, as Representative
of the several Underwriters, materially, adversely affect the market for
the Preferred Shares.
(i) That neither the Fund nor the Advisers shall have failed at or
prior to the Closing Date to have performed or complied with any of the
agreements herein contained and required to be performed or complied with
by them at or prior to the Closing Date.
(j) That you shall have received on the Closing Date a certificate,
dated such date, of the president, any managing director or any vice
president and of the controller, treasurer or assistant treasurer of each
33
of the Fund, the Investment Adviser and the Subadviser certifying that (i)
the signers have carefully examined the Registration Statement, the
Prospectus (and any amendments or supplements thereto) and this Agreement,
(ii) the representations and warranties of the Fund (with respect to the
certificates from such Fund officers) and the representations and
warranties of the Advisers (with respect to the certificates from such
officers of the Advisers) in this Agreement are true and correct on and as
of the date of the certificate as if made on such date, (iii) since the
date of the Prospectus (and any amendment or supplement thereto) there has
not been any change that would have a Material Adverse Effect on the Fund
(with respect to the certificates from such Fund officers) or an Adviser
Material Adverse Effect on the Advisers (with respect to the certificates
from such officers of the Advisers), (iv) to the knowledge of such officers
after reasonable investigation, no order suspending the effectiveness of
the Registration Statement or prohibiting the sale of any of the Preferred
Shares or having a Material Adverse Effect on the Fund (with respect to the
certificates from such Fund officers) or an Adviser Material Adverse Effect
on the Advisers (with respect to the certificates from such officers of the
Advisers) has been issued and no proceedings for any such purpose are
pending before or, to the knowledge of such officers, threatened by the
Commission or any court or other regulatory body, 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, (v) each of the Fund (with respect
to certificates from such Fund officers) and the Advisers (with respect to
certificates from such officers of the Advisers) has performed and complied
with all agreements that this Agreement requires it to perform by such
Closing Date, (vi) neither the Fund (with respect to the certificate from
such officers of the Fund) nor the Advisers (with respect to the
certificate from such officers of the Advisers) has sustained any material
loss or interference with its business from any court or from legislative
or other governmental action, order or decree or from any other occurrence
not described in the Registration Statement and the Prospectus and any
amendment or supplement thereto and (vii) with respect to the certificate
from such officers of the Fund, there has not been any change in the
capital stock of the Fund nor any material increase in the debt of the Fund
from that set forth in the Prospectus (or any amendment or supplement
thereto) and the Fund has not sustained any material liabilities or
obligations, direct or contingent, other than those reflected in the
Prospectus (or any amendment or supplement thereto).
(k) The Fund shall have furnished to you a certificate, dated the
Closing Date, of the president, any managing director, the controller,
treasurer or assistant treasurer of the Fund certifying that the 1940 Act
Preferred Shares Asset Coverage and the Preferred Shares Basic Maintenance
Amount (as defined in the Prospectus), have been met as of such date. The
certificate shall assume the receipt of the net proceeds from the sale of
the Preferred Shares.
(l) The Fund shall have received from Xxxxx'x and Fitch,
respectively, and shall have delivered to Citigroup Global Markets Inc., as
Representative of the Underwriters, letters indicating that each series of
34
Preferred Shares has been rated `Aaa' by Xxxxx'x and `AAA' by Fitch, dated
on or before the Closing Date, and there shall not have been given any
notice of any intended or potential downgrading, or of any review for a
potential downgrading, in the rating accorded to the shares of each series
of the Preferred Shares by either Rating Agency.
(m) That the Fund and the Advisers shall have furnished to you such
further certificates and documents as you shall reasonably request
(including certificates of officers of the Fund and the Advisers).
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in
form and substance to you and your counsel acting in good faith.
Any certificate or document signed by any officer of the Fund or the
Advisers and delivered to you, as Representative of the Underwriters or to
Underwriters' counsel, shall be deemed a representation and warranty by the
Fund or the Advisers to each Underwriter as to the statements made therein.
10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
Registration Statement or a post-effective amendment thereto to be declared
effective before the offering of the Preferred Shares may commence, when oral
(confirmed promptly in writing) or written notification of the effectiveness of
the Registration Statement or such post-effective amendment has been released by
the Commission. Until such time as this Agreement shall have become effective,
it may be terminated by the Fund by notifying you or by you, as Representative
of the several Underwriters, by notifying the Fund.
If any one or more of the Underwriters shall fail or refuse to purchase
Preferred Shares which it or they have agreed to purchase hereunder and the
aggregate number of Preferred Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of the Preferred Shares, each non-defaulting Underwriter
shall be obligated, severally, in the proportion which the aggregate number of
Preferred Shares set forth opposite its name in Schedule I hereto bears to the
aggregate number of Preferred Shares set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as you may specify in
accordance with the Xxxxxxx Xxxxx Xxxxxx Master Agreement Among Underwriters, to
purchase Preferred Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase. If any Underwriter or Underwriters
shall fail or refuse to purchase Preferred Shares and the aggregate number of
Preferred Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Preferred Shares and arrangements
satisfactory to you and the Fund for the purchase of such Preferred Shares by
one or more non-defaulting Underwriters or other party or parties approved by
you and the Fund are not made within 36 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Underwriter
or the Fund. In any such case which does not result in termination of this
35
Agreement, either you or the Fund shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and the Prospectus or any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
such default of any such Underwriter under this Agreement. The term
"Underwriter" as used in this Agreement includes, for all purposes of this
Agreement, any party not listed in Schedule I hereto who, with your approval and
the approval of the Fund, purchases Preferred Shares which a defaulting
Underwriter agreed, but failed or refused, to purchase.
Any notice under this Section 10 may be made by telegram, facsimile or
telephone but shall be subsequently confirmed by letter.
11. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of the
Underwriters to the Fund or the Advisers, by notice given to the Fund or the
Advisers prior to delivery of and payment for the Preferred Shares, 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 AMEX or trading in securities generally on
the New York Stock Exchange or AMEX shall have been suspended or limited or
minimum prices for trading in securities generally shall have been established
on either of such Exchanges, (ii) a banking moratorium shall have been declared
by either 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 in the United States is such as to make it, in your
sole judgment, impracticable or inadvisable to proceed with the offering or
delivery of the Preferred Shares as contemplated by the Prospectus (exclusive of
any supplement thereto). Notice of such termination may be given to the Fund or
the Advisers by telegram, facsimile or telephone and shall be subsequently
confirmed by letter.
12. EXPENSES. The Fund agrees to pay the following costs and expenses and
all other costs and expenses incident to the performance by the Fund of its
obligations hereunder: (i) the preparation, printing or reproduction, filing
(including, without limitation, the filing fees prescribed by the 1933 Act, the
1940 Act and the Rules and Regulations) and distribution of the Registration
Statement (including exhibits thereto), the Prospectus, each Prepricing
Prospectus and all amendments or supplements to any of them, (ii) the printing
(or reproduction) and delivery, including, but not limited to, the Underwriters
and dealers, (including postage, air freight charges and charges for counting
and packaging) of such copies of the Registration Statement, the Prospectus,
each Prepricing Prospectus and all amendments or supplements to any of them,
except as provided in Section 5 of the Agreement, as may be reasonably requested
for use in connection with the offering and sale of the Preferred Shares, (iii)
the preparation, printing, authentication, issuance and delivery of certificates
for the Preferred Shares, if any, including any stamp taxes and transfer agent
and registrar fees payable in connection with the original issuance and sale of
such Preferred Shares, (iv) the registrations or qualifications, if necessary,
of the Preferred Shares for offer and sale thereof, if any, as are required
under the securities or Blue Sky laws of the several states as provided in
Section 5(g) hereof (including the reasonable fees, expenses and disbursements
36
of counsel for the Underwriters relating to the preparation, printing or
reproduction and delivery of the preliminary and supplemental Blue Sky Memoranda
and such registration and qualification), (v) the fees and expenses of the
Fund's independent accountants, counsel for the Fund and of the transfer agent
and the auction agent, (vi) the printing (or reproduction) and delivery of this
Agreement, any dealer agreements, the preliminary and supplemental Blue Sky
Memoranda (if any) and all other company-authorized agreements or other
documents printed (or reproduced) and delivered in connection with the offering
of the Preferred Shares, (vii) the filing fees and the fees and expenses of
counsel for the Underwriters in connection with any filings required to be made
with the NASD and incurred with respect to the review of the offering of the
Preferred Shares by the NASD, which fees and expenses of counsel, together with
the fees, expenses and disbursements of counsel set forth in paragraph (iv) of
this Section 12 above, shall not exceed $5,000, exclusive of NASD and filing
fees and (viii) the fees paid to the Rating Agencies.
Notwithstanding the foregoing, in the event that the sale of the Preferred
Shares is not consummated pursuant to Section 2 hereof, the Advisers will pay
the costs and expenses of the Fund set forth above in this Section 12 (i)
through (viii), and reimbursements of Underwriter expenses in connection with
the offering shall be made in accordance with Section 5(k) hereof.
13. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth in
the last paragraph of the cover page regarding delivery of the Preferred Shares,
the names of the underwriters and numbers of Preferred Shares listed opposite
such names in the first paragraph under the caption "Underwriting" in the
Prospectus, as well as, under the same caption, the statements regarding the
selling concessions and reallowances of selling concessions in the third
paragraph, the last sentence of the third paragraph, the ninth paragraph and the
tenth paragraph constitute the only information relating to any Underwriter
furnished to the Fund in writing by or on behalf of the Underwriters through you
as such information is referred to herein, expressly for use in the Prospectus.
14. MISCELLANEOUS. Except as otherwise provided in Sections 5, 10 and 11
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (a) if to the Fund or the Advisers, c/o Neuberger
Xxxxxx, LLC, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; Attention: Xxxxx
Xxxxxxx, Esq., with a copy to Xxxxxxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxxxxxxxxx
Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000; Attention Art Delibert; or (b) if to you,
as Representative of the Underwriters, at the office of Citigroup Global Markets
Inc. at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Manager,
Investment Banking Division.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Fund, the Advisers, their directors and officers and the other
controlling persons referred to in Section 8 hereof and their respective
successors and assigns to the extent provided herein and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from any Underwriter of any of the Preferred Shares in
his status as such purchaser.
37
A copy of the Articles of Incorporation of the Fund is on file with the
Secretary of State of the State of Maryland. This Agreement has been executed on
behalf of the Fund by an executive officer of the Fund in such capacity and not
individually and the obligations of the Fund under this Agreement are not
binding upon such officer, any of the directors or the shareholders individually
but are binding only upon the assets and property of the Fund.
15. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
38
Please confirm that the foregoing correctly sets forth the agreement among
the Fund and the Advisers and the several Underwriters.
Very truly yours,
XXXXXXXXX XXXXXX INCOME OPPORTUNITY FUND INC.
By:
--------------------------------------------
Name:
Title:
XXXXXXXXX XXXXXX MANAGEMENT INC.
By:
--------------------------------------------
Name:
Title:
XXXXXXXXX XXXXXX, LLC
By:
--------------------------------------------
Name:
Title:
39
Confirmed as of the date
first above written on
behalf of themselves and
the other several Underwriters
named in Schedule I hereto.
By: CITIGROUP GLOBAL MARKETS INC.
AS REPRESENTATIVE OF THE SEVERAL UNDERWRITERS
By: CITIGROUP GLOBAL MARKETS INC.
By:
----------------------------------
Name:
Title:
40
SCHEDULE I
NUMBER OF NUMBER OF
SERIES A PREFERRED SERIES B PREFERRED
NAME OF UNDERWRITER SHARES SHARES
------------------- ------------------ ------------------
Citigroup Global Markets Inc. 1,757 1,757
Merrill, Lynch, Xxxxxx, Xxxxxx
& Xxxxx Incorporated 753 753
--------------------------------------------------------------------------------
TOTAL 2,510 2,510
