Exhibit 2(h)
Xxxxx & Steers Worldwide Realty Income Fund, Inc.
[ ] Common Shares
Par Value $0.001 Per Share
UNDERWRITING AGREEMENT
March [ ], 2005
UNDERWRITING AGREEMENT
March [ ], 2005
UBS Securities LLC
[other co-managers]
as Representatives
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Xxxxx & Steers Worldwide Realty Income Fund, Inc., a Maryland corporation
(the "Fund"), proposes to issue and sell to the underwriters named in Schedule A
annexed hereto (the "Underwriters") an aggregate of [ ] shares of
common stock (the "Firm Shares"), par value $0.001 per share (the "Common
Shares"), of the Fund. In addition, solely for the purpose of covering
over-allotments, the Fund proposes to grant to the Underwriters the option to
purchase from the Fund up to an additional [ ] Common Shares (the
"Additional Shares"). The Firm Shares and the Additional Shares are hereinafter
collectively sometimes referred to as the "Shares." The Shares are described in
the Prospectus, which is defined below.
The Fund has filed, in accordance with the provisions of the Securities Act
of 1933, as amended, and the rules and regulations thereunder (collectively
called the "Securities Act"), and with the provisions of the Investment Company
Act of 1940, as amended, and the rules and regulations thereunder (collectively
called the "Investment Company Act"), with the Securities and Exchange
Commission (the "Commission") a registration statement on Form N-2 (File Nos.
333-116581 and 811-21595), including a prospectus and a statement of additional
information, relating to the Shares. The Fund has furnished to the
Representatives, for use by the Underwriters and by dealers, copies of one or
more preliminary prospectuses (including a preliminary statement of additional
information) (each thereof, including such preliminary statement of additional
information, being herein called a "Preliminary Prospectus") relating to the
Shares. Except where the context otherwise requires, the registration statement,
as amended when it becomes effective (the "Effective Date"), including all
documents filed as a part thereof or incorporated by reference therein, and
including any information contained in a prospectus subsequently filed with the
Commission pursuant to Rule 497 under the Securities Act and deemed to be part
of the registration statement at the time of effectiveness pursuant to Rule 430A
under the Securities Act is herein called the "Registration Statement," and the
prospectus (including the statement of additional information), in the form
filed by the Fund with the Commission pursuant to Rule 497 under the Securities
Act or, if no such filing is required, the form of final prospectus (including
the form of final statement of additional information) included in the
Registration Statement at the time it became effective, is herein called the
"Prospectus." In addition, the Fund has filed a Notification of Registration on
Form N-8A (the "Notification") pursuant to Section 8 of the Investment Company
Act. UBS Securities LLC ("UBS Securities" or the "Managing Representative") will
act as managing representative for the Underwriters.
Xxxxx & Steers Capital Management, Inc., a New York corporation ("Xxxxx &
Steers" or the "Investment Manager") will act as the Fund's investment manager
pursuant to an Investment Management Agreement by and between the Fund and the
Investment Manager, dated as of March [ ], 2005 (the "Investment Management
Agreement"). Xxxxxxxx Rovers S.A. (the
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"Subadvisor" and together with the Investment Manager, the "Advisers") will act
as the Fund's Subadvisor pursuant to a Sub-advisory Agreement between the
Investment Manager and the Subadvisor, dated as of March [ ], 2005 (the
"Sub-advisory Agreement"). State Street Bank & Trust Company will act as the
custodian (the "Custodian") of the Fund's cash and portfolio assets pursuant to
a Custodian Agreement, dated as of March 9, 2001 and effective with respect to
the Fund as of [ ], 2005 (the "Custodian Agreement"). The Bank of New
York will act as the Fund's transfer agent, dividend disbursing agent and
registrar (the "Transfer Agent") pursuant to a Transfer Agency Services
Agreement, dated as of [ ], 2005 (the "Transfer Agency Agreement").
The Investment Manager will act as the administrator of the Fund pursuant to an
Administration Agreement, dated as of [ ], 2005 (the "Administration
Agreement"). State Street Bank and Trust Company will act as the
sub-administrator of the Fund pursuant to a Sub-Administration Agreement, dated
as of [ ], 2005 (the "Sub-Administration Agreement"). The Investment
Manager and UBS Securities LLC have entered into a Shareholder Servicing
Agreement dated March [ ], 2005 (the "Shareholder Servicing Agreement"). The
Investment Manager has also entered into an Additional Compensation Agreement
with [ ], dated [ ], 2005 (the "Additional Compensation Agreement").
In addition, the Fund has adopted a dividend reinvestment plan (the "Dividend
Reinvestment Plan") pursuant to which holders of Shares may have their dividends
automatically reinvested in additional Common Shares of the Fund if so elected.
The Fund, the Investment Manager, the Subadvisor and the Underwriters agree
as follows:
1. Sale and Purchase. Upon the basis of the warranties and
representations and subject to the terms and conditions herein set
forth, the Fund agrees to sell to the respective Underwriters and each
of the Underwriters, severally and not jointly, agrees to purchase
from the Fund the aggregate number of Firm Shares set forth opposite
the name of such Underwriter in Schedule A attached hereto in each
case at a purchase price of $19.10 per Share. The Fund is advised that
the Underwriters intend (i) to make a public offering of their
respective portions of the Firm Shares as soon after the effective
date of the Registration Statement as is advisable and (ii) initially
to offer the Firm Shares upon the terms set forth in the Prospectus.
The Underwriters may from time to time increase or decrease the public
offering price after the initial public offering to such extent as
they may determine.
In addition, the Fund hereby grants to the several Underwriters the
option to purchase, and upon the basis of the warranties and
representations and subject to the terms and conditions herein set
forth, the Underwriters shall have the right to purchase, severally
and not jointly, from the Fund, ratably in accordance with the number
of Firm Shares to be purchased by each of them, all or a portion of
the Additional Shares as may be necessary to cover over-allotments
made in connection with the offering of the Firm Shares, at the same
purchase price per Share to be paid by the Underwriters to the Fund
for the Firm Shares. This option may be exercised by the
Representatives on behalf of the several Underwriters at any time and
from time to time on or before the forty-fifth day following the date
hereof, by written notice to the Fund. Such notice shall set forth the
aggregate number of Additional Shares as to which the option is being
exercised, and the date and time when the Additional Shares are to be
delivered (such date and time being herein referred to as the
"Additional Time of Purchase"); provided, however, that the Additional
Time of Purchase shall not be
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earlier than the Time of Purchase (as defined below) nor earlier than
the second business day after the date on which the option shall have
been exercised. The number of Additional Shares to be sold to each
Underwriter shall be the number which bears the same proportion to the
aggregate number of Additional Shares being purchased as the number of
Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the total number of Firm Shares (subject,
in each case, to such adjustment as the Representatives may determine
to eliminate fractional shares).
2. Payment and Delivery. Payment of the purchase price for the Firm
Shares shall be made by the Underwriters to the Fund by Federal Funds
wire transfer, against delivery of the certificates for the Firm
Shares to the Representatives through the facilities of the Depository
Trust Company for the respective accounts of the Underwriters. Such
payment and delivery shall be made at a time mutually agreed upon by
the parties on the third business day following the date of this
Underwriting Agreement (unless another date shall be agreed to by the
Representatives and the Fund). The time at which such payment and
delivery are actually made is hereinafter sometimes called the Time of
Purchase. Certificates for the Firm Shares shall be delivered to the
Representatives in definitive form in such names and in such
denominations as the Representatives shall specify on the second
business day preceding the Time of Purchase. For the purpose of
expediting the checking of the certificates for the Firm Shares by the
Representatives, the Fund agrees to make such certificates available
to the Representatives for such purpose at least one full business day
preceding the Time of Purchase.
Payment of the purchase price for the Additional Shares shall be made
at the Additional Time of Purchase in the same manner and at the same
office as the payment for the Firm Shares. Certificates for the
Additional Shares shall be delivered to the Representatives in
definitive form in such names and in such denominations as the
Representatives shall specify no later than the second business day
preceding the Additional Time of Purchase. For the purpose of
expediting the checking of the certificates for the Additional Shares
by the Representatives, the Fund agrees to make such certificates
available to the Representatives for such purpose at least one full
business day preceding the Additional Time of Purchase. The Time of
Purchase and the Additional Time of Purchase are sometimes referred to
herein as the Closing Dates.
3. Representations and Warranties of the Fund and the Investment Manager.
Each of the Fund and the Investment Manager jointly and severally
represents and warrants to each Underwriter as follows:
(a) On (i) the Effective Date and the date on which the Prospectus is
first filed with the Commission pursuant to Rule 497(b), (h) or
(j) under the Securities Act, as the case may be, (ii) the date
on which any post-effective amendment to the Registration
Statement (except any post-effective amendment which is filed
with the Commission after the later of (x) one year from the date
of this Underwriting Agreement or (y) the date on which the
distribution of the Shares is completed) became or becomes
effective or any amendment or supplement to the Prospectus was or
is filed with the Commission and (iii) the Closing Dates, the
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Registration Statement, the Prospectus and any such amendment or
supplement thereto and the Notification complied or will comply
in all material respects with the requirements of the Securities
Act and the Investment Company Act, as the case may be. On the
Effective Date and on the date that any post-effective amendment
to the Registration Statement (except any post-effective
amendment which is filed with the Commission after the later of
(x) one year from the date of this Underwriting Agreement or (y)
the date on which the distribution of the Shares is completed)
became or becomes effective, neither the Registration Statement
nor any such amendment did or will contain any untrue statement
of a material fact or omit to state a material fact required to
be stated in it or necessary to make the statements in it not
misleading. Except as permitted under Rule 430A under the
Securities Act (and other applicable rules under Regulation C
under the Securities Act), the Preliminary Prospectus dated
February [ ], 2005 did not, as of such date, contain any untrue
statement of a material fact or omit to state a material fact
required to be stated in it or necessary to make the statements
in it, in light of the circumstances under which they were made,
not misleading. At the Effective Date and, if applicable, the
date the Prospectus or any amendment or supplement to the
Prospectus was or is filed with the Commission and at the Closing
Dates, the Prospectus did not or will not, as the case may be,
contain any untrue statement of a material fact or omit to state
a material fact required to be stated in it or necessary to make
the statements in it, in light of the circumstances under which
they were made, not misleading. The foregoing representations in
this Section 3(a) do not apply to statements or omissions
relating to the Underwriters made in reliance on and in
conformity with information furnished in writing to the Fund by
the Underwriters expressly for use in the Registration Statement,
the Prospectus, or any amendments or supplements thereto, as
described in Section 9(f) hereof.
(b) The Fund has been duly formed, is a validly existing corporation
under the laws of the State of Maryland, with full power and
authority to conduct all the activities conducted by it, to own
or lease all assets owned or leased by it and to conduct its
business as described in the Registration Statement and
Prospectus, and the Fund is duly licensed and qualified to do
business and in good standing in each jurisdiction in which its
ownership or leasing of property or its conducting of business
requires such qualification, except where the failure to be so
qualified or be in good standing would not have a material
adverse effect on the Fund, and the Fund owns, possesses or has
obtained and currently maintains all governmental licenses,
permits, consents, orders, approvals and other authorizations,
whether foreign or domestic, necessary to carry on its business
as contemplated in the Prospectus. The Fund has no subsidiaries.
(c) The capitalization of the Fund is as set forth in the
Registration Statement and the Prospectus. The Common Shares
conform in all material respects to the description of them in
the Prospectus. All the outstanding Common Shares have been duly
authorized and are validly
5
issued, fully paid and nonassessable. The Shares to be issued and
delivered to and paid for by the Underwriters in accordance with
this Underwriting Agreement against payment therefor as provided
by this Underwriting Agreement have been duly authorized and when
issued and delivered to the Underwriters will have been validly
issued and will be fully paid and nonassessable. No person is
entitled to any preemptive or other similar rights with respect
to the Shares.
(d) The Fund is duly registered with the Commission under the
Investment Company Act as a non-diversified, closed-end
management investment company, and, subject to the filing of any
final amendment to the Registration Statement (a "Final
Amendment"), if not already filed, all action under the
Securities Act and the Investment Company Act, as the case may
be, necessary to make the public offering and consummate the sale
of the Shares as provided in this Underwriting Agreement has or
will have been taken by the Fund.
(e) The Fund has full power and authority to enter into each of this
Underwriting Agreement, the Investment Management Agreement, the
Sub-Advisory Agreement, the Custodian Agreement, the Transfer
Agency Agreement, the Administration Agreement, the
Sub-Administration Agreement and the Dividend Reinvestment Plan
(collectively, the "Fund Agreements") and to perform all of the
terms and provisions hereof and thereof to be carried out by it
and (i) each Fund Agreement has been duly authorized, executed
and delivered by or on behalf of the Fund, (ii) each Fund
Agreement does not violate any of the applicable provisions of
the Investment Company Act or the Investment Advisers Act of
1940, as amended, and the rules and regulations thereunder
(collectively called the "Advisers Act"), as the case may be, and
(iii) assuming due authorization, execution and delivery by the
other parties thereto, each Fund Agreement constitutes the legal,
valid and binding obligation of the Fund enforceable in
accordance with its terms, (A) subject, as to enforcement, to
applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general equitable principles
(regardless of whether enforcement is sought in a proceeding in
equity or at law) and (B) except as rights to indemnity
thereunder may be limited by federal or state securities laws.
(f) None of (i) the execution and delivery by the Fund of the Fund
Agreements, (ii) the issue and sale by the Fund of the Shares as
contemplated by this Underwriting Agreement and (iii) the
performance by the Fund of its obligations under any of the Fund
Agreements or consummation by the Fund of the other transactions
contemplated by the Fund Agreements conflicts with or will
conflict with, or results or will result in a breach of or a
default under, the Articles of Incorporation or the By-laws of
the Fund or any agreement or instrument to which the Fund is a
party or by which the Fund or its property is bound or affected,
or any law, rule or regulation, or order of any court,
governmental instrumentality, securities exchange or association
or arbitrator, whether foreign or domestic, applicable to the
Fund, other than state securities or "blue sky" laws applicable
in connection with the purchase and
6
distribution of the Shares by the Underwriters pursuant to this
Underwriting Agreement.
(g) No person has any right to the registration of any securities of
the Fund because of the filing of the registration statement.
(h) No consent, approval, authorization or order of any court or
governmental agency or body or securities exchange or
association, whether foreign or domestic, is required by the Fund
for the consummation by the Fund of the transactions to be
performed by the Fund or the performance by the Fund of all of
its obligations hereunder, except such as (i) have been obtained
under the Securities Act, the Investment Company Act, or the
Advisers Act, and (ii) may be required by the New York Stock
Exchange or under state securities or "blue sky" laws, in
connection with the purchase and distribution of the Shares by
the Underwriters pursuant to this Underwriting Agreement.
(i) The Shares are duly authorized for listing, subject to official
notice of issuance, on the New York Stock Exchange and the Fund's
Registration Statement on Form 8-A, under the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder
(collectively called the "Exchange Act"), has become effective.
(j) PricewaterhouseCoopers LLP, whose report appears in the
Prospectus, is an independent registered public accounting firm
as required by the Securities Act and the Investment Company Act.
(k) The statement of assets and liabilities included in the
Registration Statement and the Prospectus presents fairly in all
material respects, in accordance with generally accepted
accounting principles in the United States applied on a
consistent basis, the financial position of the Fund as of the
date indicated.
(l) The Fund 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; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with existing assets through an asset reconciliation
procedure or otherwise at reasonable intervals and appropriate
action is taken with respect to any differences.
(m) Since the date as of which information is given in the
Registration Statement and the Prospectus, except as otherwise
stated therein, (i) there has been no material adverse change in
the condition, financial or otherwise, business affairs or
business of the Fund, whether or not arising in the ordinary
course of business, (ii) there have been no transactions entered
into by the Fund other than those in the ordinary
7
course of its business and (iii) there has been no dividend or
distribution of any kind declared, paid or made on any class of
its capital shares.
(n) There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending,
or, to the knowledge of the Fund, threatened against or affecting
the Fund, which is of a character required to be described in the
Registration Statement or the Prospectus; and there are no
contracts, franchises or other documents that are of a character
required to be described in, or that are required to be filed as
exhibits to, the Registration Statement that have not been
described or filed as required. There is no action, suit or
proceeding before or by any court, commission, regulatory body,
administrative agency or other governmental agency or body,
foreign or domestic, now pending, or, to the knowledge of the
Fund, threatened against or affecting the Fund, which other than
those that, if determined adversely to the Fund, would have a
material adverse effect.
(o) Except for stabilization transactions conducted by the
Underwriters, and except for tender offers, Share repurchases and
the issuance or purchase of Shares pursuant to the Fund's
Dividend Reinvestment Plan effected following the date on which
the distribution of the Shares is completed in accordance with
the policies of the Fund as set forth in the Prospectus, the Fund
has not taken and will not take, directly or indirectly, any
action designed or which might be reasonably expected to cause or
result in, or which will constitute, stabilization or
manipulation of the price of the Common Shares in violation of
applicable federal securities laws.
(p) The Fund intends to direct the investment of the proceeds of the
offering of the Shares in such a manner as to comply with the
requirements of Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code").
(q) No advertising, sales literature or other promotional materials
(excluding road show slides or road show tapes) were authorized
or prepared by or on behalf of the Fund, the Investment Manager,
the Subadvisor or any representative thereof for use in
connection with the public offering or sale of the Shares other
than the definitive client brochure and the advisor brochure,
which were filed with the NASD on February 11, 2005, one dealer
postcard, which was filed with the NASD on February 11, 2005 and
a mock-up of the website made available on a password-protected
Internet web site maintained by the Investment Manager, which was
filed with the NASD on February [ ], 2005 (collectively, the
"sales materials"); the sales materials and any road show slides
or road show tapes complied and comply in all material respects
with the applicable requirements of the Securities Act and the
rules and interpretations of the NASD; and no broker kits, road
show slides, road show tapes or sales materials authorized or
prepared by the Fund or authorized in writing or prepared on
behalf of the Fund by the Investment Manager or the Subadvisor or
their counsel for use in connection with the public offering of
the Shares contains an untrue
8
statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading.
In addition, any certificate signed by any officer of the Fund and
delivered to the Underwriters or counsel for the Underwriters in connection
with the offering of the Share shall be deemed to be a representation and
warranty by the Fund as to matters covered thereby, to each Underwriter.
4. Representations and Warranties of the Investment Manager and the
Subadvisor. Each of the Investment Manager and the Subadvisor
represents to each Underwriter as follows:
(a) Such Adviser has been duly formed, is validly existing as a
corporation under the laws of the State of New York, in the case
of the Investment Manager, or as a limited liability company
under the laws of Belgium, in the case of the Subadvisor, with
full power and authority to conduct all of the activities
conducted by it, to own or lease all of the assets owned or
leased by it and to conduct its business as described in the
Registration Statement and Prospectus, and such Adviser is duly
licensed and qualified to do business and in good standing in
each jurisdiction in which it is required to be so qualified,
except to the extent that failure to be so qualified or be in
good standing would not have a material adverse affect on such
Adviser's ability to perform its obligations under this
Agreement, the Investment Management Agreement and the
Sub-Advisory Agreement to which it is a party; and such Adviser
owns, possesses or has obtained and currently maintains all
governmental licenses, permits, consents, orders, approvals and
other authorizations, whether foreign or domestic, necessary to
carry on its business as contemplated in the Registration
Statement and the Prospectus.
(b) Such Adviser is (i) duly registered as an investment adviser
under the Advisers Act and (ii) not prohibited by the Advisers
Act or the Investment Company Act from acting as the investment
adviser for the Fund as contemplated by the Investment Management
Agreement, the Sub-Advisory Agreement, the Registration Statement
and the Prospectus.
(c) Such Adviser has full power and authority to enter into each of
this Underwriting Agreement, the Investment Management Agreement,
the Sub-Advisory Agreement, the Administration Agreement, the
Sub-Administration Agreement, the Shareholder Servicing Agreement
and the Additional Compensation Agreement, to which such Adviser
is a party (collectively, the "Adviser Agreements"), and to carry
out all the terms and provisions hereof and thereof to be carried
out by it; and each Adviser Agreement has been duly and validly
authorized, executed and delivered by such Adviser; none of the
Adviser Agreements violate any of the applicable provisions of
the Investment Company Act or the Advisers Act; and assuming due
authorization, execution and delivery by the other parties
thereto, each Adviser Agreement constitutes a legal, valid and
binding obligation of such Adviser, enforceable in accordance
with its terms, (i) subject, as to enforcement, to applicable
bankruptcy,
9
insolvency and similar laws affecting creditors' rights generally
and to general equitable principles (regardless of whether
enforcement is sought in a proceeding in equity or at law) and
(ii) except as rights to indemnity thereunder may be limited by
federal or state securities laws.
(d) Neither (i) the execution and delivery by such Adviser of any
Adviser Agreement nor (ii) the consummation by such Adviser of
the transactions contemplated by, or the performance of its
obligations under any Adviser Agreement conflicts or will
conflict with, or results or will result in a breach of the
Articles of Incorporation or By-Laws of such Adviser or any
agreement or instrument to which such Adviser is a party or by
which such Adviser is bound, or any law, rule or regulation, or
order of any court, governmental instrumentality, securities
exchange or association or arbitrator, whether foreign or
domestic, applicable to such Adviser.
(e) No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or
association, whether foreign or domestic, is required for the
consummation of the transactions contemplated in, or the
performance by such Adviser of its obligations under, any Adviser
Agreement, as the case may be, except such as (i) have been
obtained under the Securities Act, the Investment Company Act, or
the Advisers Act, and (ii) may be required by the New York Stock
Exchange or under state securities or "blue sky" laws, in
connection with the purchase and distribution of the Shares by
the Underwriters pursuant to this Underwriting Agreement.
(f) The description of such Adviser and its business and the
statements attributable to such Adviser in the Registration
Statement and the Prospectus comply with the requirements of the
Securities Act and the Investment Company Act and do not contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order
to make the statements therein not misleading.
(g) Except as disclosed, there is no action, suit or proceeding
before or by any court, commission, regulatory body,
administrative agency or other governmental agency or body,
foreign or domestic, now pending or, to the knowledge of such
Adviser, threatened against or affecting such Adviser of a nature
required to be disclosed in the Registration Statement or
Prospectus or that might reasonably be expected to result in any
material adverse change in the condition, financial or otherwise,
business affairs or business prospects of such Adviser or the
ability of such Adviser to fulfill its respective obligations
under any Adviser Agreement.
(h) Except for stabilization activities conducted by the Underwriters
and except for tender offers, Share repurchases and the issuance
or purchase of Shares pursuant to the Fund's Dividend
Reinvestment Plan effected following the date on which the
distribution of the Shares is completed in accordance with the
policies of the Fund as set forth in the Prospectus,
10
such Adviser has not taken and will not take, directly or
indirectly, any action designed, or which might reasonably be
expected to cause or result in, or which will constitute,
stabilization or manipulation of the price of the Common Shares
in violation of applicable federal securities laws.
In the event that the Fund or such Adviser makes available any
promotional materials (other than the sales materials) intended
for use only by qualified broker-dealers and registered
representatives thereof by means of an Internet web site or
similar electronic means, such Adviser will install and maintain
pre-qualification and password-protection or similar procedures
which will effectively prohibit access to such promotional
materials by persons other than qualified broker-dealers and
registered representatives thereof.
In addition, any certificate signed by any officer of the Investment
Manager or the Subadvisor and delivered to the Underwriters or counsel
for the Underwriters in connection with the offering of the Shares
shall be deemed to be a representation and warranty by the Investment
Manager or the Subadvisor, as applicable, as to matters covered
thereby, to each Underwriter.
5. Agreements of the Parties.
(a) If the registration statement relating to the Shares has not yet
become effective, the Fund will promptly file a Final Amendment,
if not previously filed, with the Commission, and will use its
best efforts to cause such registration statement to become
effective and, as soon as the Fund is advised, will advise the
Managing Representative when the Registration Statement or any
amendment thereto has become effective. If the Registration
Statement has become effective and the Prospectus contained
therein omits certain information at the time of effectiveness
pursuant to Rule 430A under the Securities Act, the Fund will
file a 430A Prospectus pursuant to Rule 497(h) under the
Securities Act 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 Shares or the date the
Prospectus is first used after the Effective Date. 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(b) or a certification
pursuant to Rule 497(j) under the Securities Act as promptly as
practicable, but no later than the fifth business day following
the date of the later of the Effective Date or the commencement
of the public offering of the Shares after the Effective Date. In
either case, the Fund will provide the Managing Representative
satisfactory evidence of the filing. The Fund will not file with
the Commission any Prospectus or any other amendment (except any
post-effective amendment which is filed with the Commission after
the later of (x) one year from the date of this Underwriting
Agreement or (y) the date on which distribution of the Shares is
completed) or supplement to the Registration Statement or the
Prospectus unless a copy has first been submitted to the Managing
Representative a reasonable time before its filing and the
Managing
11
Representative has not objected to it in writing within a
reasonable time after receiving the copy.
(b) For the period of one year from the date hereof, the Fund will
advise the Managing Representative promptly (i) of the issuance
by the Commission of any order in respect of the Fund, the
Investment Manager or the Subadvisor, which relates to the Fund,
or which relates to any material arrangements or proposed
material arrangements involving the Fund, the Investment Manager
or the Subadvisor, (ii) of the initiation or threatening of any
proceedings for, or receipt by the Fund of any notice with
respect to, any suspension of the qualification of the Shares for
sale in any jurisdiction or the issuance of any order by the
Commission suspending the effectiveness of the Registration
Statement, (iii) of receipt by the Fund, or any representative or
attorney of the Fund, of any other communication from the
Commission relating in any material way to the Fund, the
Registration Statement, the Notification, any Preliminary
Prospectus, the Prospectus or to the transactions contemplated by
this Underwriting Agreement and (iv) the issuance by any court,
regulatory body, administrative agency or other governmental
agency or body, whether foreign or domestic, of any order, ruling
or decree, or the threat to initiate any proceedings with respect
thereto, regarding the Fund, which relates in any material way to
the Fund or any material arrangements or proposed material
arrangements involving the Fund. The Fund will make every
reasonable effort to prevent the issuance of any order suspending
the effectiveness of the Registration Statement and, if any such
order is issued, to obtain its lifting as soon as possible.
(c) If not delivered prior to the date of this Underwriting
Agreement, the Fund will deliver to the Managing Representative,
without charge, a signed copy of the Registration Statement and
the Notification and of any amendments (except any post-effective
amendment which is filed with the Commission after the later of
(x) one year from the date of this Underwriting Agreement or (y)
the date on which the distribution of the Shares is completed) to
either the Registration Statement or the Notification (including
all exhibits filed with any such document) and as many conformed
copies of the Registration Statement and any amendments thereto
(except any post-effective amendment which is filed with the
Commission after the later of (x) one year from the date of this
Underwriting Agreement or (y) the date on which the distribution
of the Shares is completed) (excluding exhibits) as the Managing
Representative may reasonably request.
(d) During such period as a prospectus is required by law to be
delivered by an underwriter or a dealer, the Fund will deliver,
without charge, to the Representatives, the Underwriters and any
dealers, at such office or offices as the Representatives may
designate, as many copies of the Prospectus as the
Representatives may reasonably request, and, if any event occurs
during such period as a result of which it is necessary to amend
or supplement the Prospectus, in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading in any material respect, or if during such
period it is
12
necessary to amend or supplement the Prospectus to comply with
the Securities Act or the Investment Company Act, the Fund
promptly will prepare, submit to the Managing Representative,
file with the Commission and deliver, without charge, to the
Underwriters and to dealers (whose names and addresses the
Managing Representative will furnish to the Fund) to whom Shares
may have been sold by the Underwriters, and to other dealers on
request, amendments or supplements to the Prospectus so that the
statements in such Prospectus, as so amended or supplemented,
will not, in light of the circumstances under which they were
made, be misleading in any material respect and will comply with
the Securities Act and the Investment Company Act. Delivery by
the Underwriters of any such amendments or supplements to the
Prospectus will not constitute a waiver of any of the conditions
in Section 6 hereof.
(e) The Fund will make generally available to holders of the Fund's
securities, as soon as practicable but in no event later than the
last day of the 18th full calendar month following the calendar
quarter in which the Effective Date falls, an earnings statement,
if applicable, satisfying the provisions of the last paragraph of
Section 11(a) of the Securities Act and, at the option of the
Fund, Rule 158 under the Securities Act.
(f) If the transactions contemplated by this Underwriting Agreement
are consummated, the Fund shall pay all costs and expenses
incident to the performance of the obligations of the Fund under
this Underwriting Agreement (to the extent such expenses do not,
in the aggregate, exceed $0.04 per Share), including but not
limited to costs and expenses of or relating to (i) the
preparation, printing and filing of the Registration Statement
and exhibits to it, each Preliminary Prospectus, the Prospectus
and all amendments and supplements thereto, (ii) the issuance of
the Shares and the preparation and delivery of certificates for
the Shares, (iii) the registration or qualification of the Shares
for offer and sale under the securities or "blue sky" laws of the
jurisdictions referred to in the foregoing paragraph, including
the fees and disbursements of counsel for the Underwriters in
that connection, and the preparation and printing of any
preliminary and supplemental "blue sky" memoranda, (iv) the
furnishing (including costs of design, production, shipping and
mailing) to the Underwriters and dealers of copies of each
Preliminary Prospectus relating to the Shares, the sales
materials, the Prospectus, and all amendments or supplements to
the Prospectus, and of the other documents required by this
Section to be so furnished, (v) the filing requirements of the
NASD, in connection with its review of the financing, including
filing fees, and the fees, disbursements and other charges of
counsel for the Underwriters in that connection, (vi) all
transfer taxes, if any, with respect to the sale and delivery of
the Shares to the Underwriters, (vii) the listing of the Shares
on the New York Stock Exchange and (viii) the transfer agent for
the Shares. To the extent the foregoing costs and expenses
incident to the performance of the obligations of the Fund under
this Underwriting Agreement exceed, in the aggregate, $0.04 per
Share, the Investment Manager will pay all such excess costs and
expenses. The Fund, the Investment Manager and the
13
Subadvisor may otherwise agree among themselves as to the payment
of the foregoing expenses, whether or not the transactions
contemplated by this Underwriting Agreement are consummated,
provided, however, that in no event shall the Underwriters be
obligated to pay any of the foregoing expenses. The Investment
Manager has agreed to pay all organizational expenses and
offering costs (other than sales load) of the Fund that exceed
$0.04 per Share.
(g) If the transactions contemplated by this Underwriting Agreement
are not consummated, except as otherwise provided herein, no
party will be under any liability to any other party, except that
(i) if this Underwriting Agreement is terminated by (x) the Fund,
the Investment Manager or the Subadvisor pursuant to any of the
provisions hereof or (y) by the Representatives or the
Underwriters because of any inability, failure or refusal on the
part of the Fund, the Investment Manager or the Subadvisor to
comply with any material terms or because any of the conditions
in Section 6 are not satisfied, the Investment Manager or the
Subadvisor or such Adviser's affiliates and the Fund, jointly and
severally, will reimburse the Underwriters for all out-of-pocket
expenses (including the reasonable fees, disbursements and other
charges of their counsel) reasonably incurred by them in
connection with the proposed purchase and sale of the Shares and
(ii) no Underwriter who has failed or refused to purchase the
Shares agreed to be purchased by it under this Underwriting
Agreement, in breach of its obligations pursuant to this
Underwriting Agreement, will be relieved of liability to the
Fund, the Investment Manager, the Subadvisor and the other
Underwriters for damages occasioned by its default.
(h) Without the prior written consent of the Managing Representative,
the Fund will not offer, sell or register with the Commission, or
announce an offering of, any equity securities of the Fund,
within 180 days after the Effective Date, except for the Shares
as described in the Prospectus and any issuances of Common Shares
pursuant to the Dividend Reinvestment Plan and except in
connection with any offering of preferred shares of beneficial
interest as contemplated by the Prospectus.
(i) The Fund will use its best efforts to list the Shares on the New
York Stock Exchange prior to the date the Shares are issued and
comply with the rules and regulations of such exchange.
(j) The Fund will direct the investment of the net proceeds of the
offering of the Shares in such a manner as to comply with the
investment objectives and policies of the Fund as described in
the Prospectus.
6. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters to purchase the Shares are subject to the accuracy on the
date of
14
this Underwriting Agreement, and on each of the Closing Dates, of the
representations of the Fund and the Investment Manager and the
Subadvisor in this Underwriting Agreement, to the accuracy and
completeness of all material statements made by the Fund, the
Investment Manager or the Subadvisor or any of their respective
officers in any certificate delivered to the Managing Representative
or its counsel pursuant to this Underwriting Agreement, to performance
by the Fund, the Investment Manager and the Subadvisor of their
respective obligations under this Underwriting Agreement and to each
of the following additional conditions:
(a) The Registration Statement must have become effective by 5:30
p.m., New York City time, on the date of this Underwriting
Agreement or such later date and time as the Managing
Representative consents to in writing. The Prospectus must have
been filed in accordance with Rule 497(b) or (h) or a certificate
must have been filed in accordance with Rule 497(j), as the case
may be, under the Securities Act.
(b) No order suspending the effectiveness of the Registration
Statement may be in effect and no proceedings for such purpose
may be pending before or, to the knowledge of counsel to the
Underwriters, threatened by the Commission, and any requests for
additional information on the part of the Commission (to be
included in the Registration Statement or the Prospectus or
otherwise) must be complied with or waived to the reasonable
satisfaction of the Managing Representative.
(c) Since the dates as of which information is given in the
Registration Statement and the Prospectus, (i) there must not
have been any material change in the Common Shares or liabilities
of the Fund except as set forth in or contemplated by the
Prospectus; (ii) there must not have been any material adverse
change in the general affairs, prospects, management, business,
financial condition or results of operations of the Fund, the
Investment Manager or the Subadvisor whether or not arising from
transactions in the ordinary course of business as set forth in
or contemplated by the Prospectus which in the judgment of the
Managing Representative would materially adversely affect the
market for the Shares; (iii) the Fund 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,
whether foreign or domestic, or from any other occurrence not
described in the Registration Statement and Prospectus; and (iv)
there must not have occurred any event that makes untrue or
incorrect in any material respect any statement or information
contained in the Registration Statement or Prospectus or that is
not reflected in the Registration Statement or Prospectus but
should be reflected therein in order to make the statements or
information therein (in the case of the Prospectus, in light of
the circumstances in which they were made) not misleading in any
material respect; if, in the judgment of the Managing
Representative, any such development referred to in clause (i),
(ii), (iii), or (iv) of this paragraph (c) makes it impracticable
or inadvisable to consummate the sale and delivery of the Shares
pursuant to this Underwriting Agreement by the Underwriters, at
the initial public offering price of the Shares.
15
(d) The Managing Representative must have received on each Closing
Date a certificate, dated such date, of the President or a
Vice-President and the chief financial or accounting officer of
each of the Fund, the Investment Manager and the Subadvisor
certifying (in their capacity as such officers and, with respect
to clauses (ii), (iii) and (vi) below, on behalf of the Fund and
such Adviser, as the case may be) that (i) the signers have
carefully examined the Registration Statement, the Prospectus,
and this Underwriting Agreement, (ii) the representations of the
Fund (with respect to the certificates from such Fund officers),
the representations of the Investment Manager (with respect to
the certificates from such officers of the Investment Manager)
and the representations of the Subadvisor (with respect to the
certificates from such officers of the Subadvisor) in this
Underwriting Agreement are accurate on and as of the date of the
certificate, (iii) there has not been any material adverse change
in the general affairs, prospects, management, business,
financial condition or results of operations of the Fund (with
respect to the certificates from such Fund officers), the
Investment Manager (with respect to the certificates from such
officers of the Investment Manager) or the Subadvisor (with
respect to the certificates from such officers of the
Subadvisor), which change would materially and adversely affect
the ability of the Fund, the Investment Manager or the
Subadvisor, as the case may be, to fulfill its obligations under
this Underwriting Agreement, the Investment Management Agreement
(with respect to the certificates from such officers of the
Investment Manager) or the Sub-Advisory Agreement, whether or not
arising from transactions in the ordinary course of business,
(iv) with respect to the Fund only, to the knowledge of such
officers after reasonable investigation, no order suspending the
effectiveness of the Registration Statement, prohibiting the sale
of any of the Shares or otherwise having a material adverse
effect on the Fund has been issued and no proceedings for any
such purpose are pending before or threatened by the Commission
or any other regulatory body, whether foreign or domestic, (v) to
the knowledge of the officers of each of the Investment Manager
and the Subadvisor, after reasonable investigation, no order
having a material adverse effect on the ability of such Adviser
to fulfill its obligations under this Underwriting Agreement, the
Shareholder Servicing Agreement, the Additional Compensation
Agreement, the Investment Management Agreement or the
Sub-Advisory Agreement (with respect to the certificates from
such officers of the Investment Manager) and this Underwriting
Agreement or the Sub-Advisory Agreement (with respect to the
certificates from such officers of the Subadvisor), as the case
may be, has been issued and no proceedings for any such purpose
are pending before or threatened by the Commission or any other
regulatory body, whether foreign or domestic, and (vi) each of
the Fund (with respect to the certificates from such Fund
officers), the Investment Manager (with respect to the
certificates from such officers of the Investment Manager) and
the Subadvisor (with respect to the certificates from such
officers of the Subadvisor) has performed all of its respective
agreements that this Underwriting Agreement requires it to
perform by such Closing Date (to the extent not waived in writing
by the Managing Representative).
16
(e) The Managing Representative must have received on each Closing
Date the opinions dated such Closing Date substantially in the
form of Schedules B, C and D to this Underwriting Agreement from
the counsel identified in each such Schedules.
(f) The Managing Representative must have received on each Closing
Date from Xxxxxxxx Chance US LLP an opinion dated such Closing
Date with respect to the Fund, the Shares, the Registration
Statement and the Prospectus, this Underwriting Agreement and the
form and sufficiency of all proceedings taken in connection with
the sale and delivery of the Shares. Such opinion and proceedings
shall fulfill the requirements of this Section 6(f) only if such
opinion and proceedings are satisfactory in all respects to the
Managing Representative. The Fund, the Investment Manager and the
Subadvisor must have furnished to such counsel such documents as
counsel may reasonably request for the purpose of enabling them
to render such opinion.
(g) The Managing Representative must have received on the date this
Underwriting Agreement is signed and delivered by you a signed
letter, dated such date, substantially in the form of Schedule E
to this Underwriting Agreement from the independent registered
public accounting firm designated in such Schedule. The Managing
Representative also must have received on each Closing Date a
signed letter from such independent registered public accounting
firm, dated as of such Closing Date, confirming on the basis of a
review in accordance with the procedures set forth in their
earlier letter that nothing has come to their attention during
the period from a date not more than five business days before
the date of this Underwriting Agreement, specified in the letter,
to a date not more than five business days before such Closing
Date, that would require any change in their letter referred to
in the foregoing sentence.
(h) The Managing Representative must have received at the Time of
Purchase, the Shareholder Servicing Agreement, dated as of the
Time of Purchase, as executed by the Investment Manager. In
addition, [_] must have received at the Time of Purchase, the
Additional Compensation Agreement, dated as of the Time of
Purchase, as executed by the Investment Manager.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Underwriting Agreement will comply only if they are
in form and scope reasonably satisfactory to counsel for the
Underwriters, provided that any such documents, forms of which are
annexed hereto, shall be deemed satisfactory to such counsel if
substantially in such form.
7. Termination. This Underwriting Agreement may be terminated by the
Managing Representative by notifying the Fund at any time:
(a) before the later of the effectiveness of the Registration
Statement and the time when any of the Shares are first generally
offered pursuant to this
17
Underwriting Agreement by the Managing Representative to dealers
by letter or telegram;
(b) at or before any Closing Date if, in the sole judgment of the
Managing Representative, payment for and delivery of any Shares
is rendered impracticable or inadvisable because (i) trading in
the equity securities of the Fund is suspended by the Commission
or by the principal exchange that lists the Shares, (ii) trading
in securities generally on the New York Stock Exchange or the
Nasdaq Stock Market shall have been suspended or limited or
minimum or maximum prices shall have been generally established
on such exchange or over-the-counter market, (iii) additional
material governmental restrictions, not in force on the date of
this Underwriting Agreement, have been imposed upon trading in
securities or trading has been suspended on any U.S. securities
exchange, (iv) a general banking moratorium has been established
by U.S. federal or New York authorities or (v) any material
adverse change in the financial or securities markets in the
United States or in political, financial or economic conditions
in the United States or any outbreak or material escalation of
hostilities or declaration by the United States of a national
emergency or war or other calamity, terrorist activity or crisis
shall have occurred the effect of any of which is such as to make
it, in the sole judgment of the Managing Representative,
impracticable or inadvisable to market the Shares on the terms
and in the manner contemplated by the Prospectus; or
(c) at or before any Closing Date, if any of the conditions specified
in Section 6 have not been fulfilled when and as required by this
Underwriting Agreement.
8. Substitution of Underwriters. If one or more of the Underwriters fails
(other than for a reason sufficient to justify the termination of this
Underwriting Agreement) to purchase on any Closing Date the Shares
agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Managing Representative may find one or more
substitute underwriters to purchase such Shares or make such other
arrangements as the Managing Representative deems advisable, or one or
more of the remaining Underwriters may agree to purchase such Shares
in such proportions as may be approved by the Managing Representative,
in each case upon the terms set forth in this Underwriting Agreement.
If no such arrangements have been made within 24 hours after such
Closing Date, and
(a) the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date does not exceed 10% of the
Shares that the Underwriters are obligated to purchase on such
Closing Date, each of the nondefaulting Underwriters will be
obligated, severally and not jointly, to purchase such Shares on
the terms set forth in this Underwriting Agreement in proportion
to their respective obligations under this Underwriting
Agreement, or
(b) the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date exceeds 10% of the Shares to be
purchased by all the
18
Underwriters on such Closing Date, the Fund will be entitled to
an additional period of 24 hours within which to find one or more
substitute underwriters reasonably satisfactory to the Managing
Representative to purchase such Shares on the terms set forth in
this Underwriting Agreement.
Upon the occurrence of the circumstances described in the foregoing
paragraph (b), either the Managing Representative or the Fund will
have the right to postpone the applicable Closing Date for not more
than five business days in order that necessary changes and
arrangements (including any necessary amendments or supplements to the
Registration Statement or the Prospectus) may be effected by the
Managing Representative and the Fund. If the number of Shares to be
purchased on such Closing Date by such defaulting Underwriter or
Underwriters exceeds 10% of the Shares that the Underwriters are
obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Fund makes arrangements pursuant to
this Section within the period stated for the purchase of the Shares
that the defaulting Underwriters agreed to purchase, this Underwriting
Agreement will terminate without liability on the part of any
nondefaulting Underwriter, the Fund, the Investment Manager or the
Subadvisor, except as provided in Sections 5(g) and 9 hereof. Any
action taken under this Section will not affect the liability of any
defaulting Underwriter to the Fund, the Investment Manager or the
Subadvisor or to any nondefaulting Underwriters arising out of such
default. A substitute underwriter will become an Underwriter for all
purposes of this Underwriting Agreement.
9. Indemnity and Contribution.
(a) Each of the Fund and the Investment Manager, jointly and
severally, agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any person
who controls any Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, and their
successors and assigns of all of the foregoing persons from and
against any loss, damage, expense, liability or claim (including
the reasonable cost of investigation) which, jointly or
severally, any such Underwriter or any such person may incur
under the Securities Act, the Exchange Act, the Investment
Company Act, the Advisers Act, the common law or otherwise,
insofar as such loss, damage, expense, liability or claim arises
out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Fund) or in a Prospectus
(the term "Prospectus" for the purpose of this Section 9 being
deemed to include any Preliminary Prospectus, the sales
materials, the Prospectus and the Prospectus as amended or
supplemented by the Fund), or arises out of or is based upon any
omission or alleged omission to state a material fact required to
be stated in either such Registration Statement or Prospectus or
necessary to make the statements made therein (with respect to
the Prospectus, in light of the circumstances under which they
were made) not misleading, except insofar as any such loss,
damage, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a
material fact
19
contained in and in conformity with information furnished in
writing by or on behalf of any Underwriter to the Fund or the
Investment Manager expressly for use with reference to any
Underwriter in such Registration Statement or such Prospectus or
arises out of or is based upon any omission or alleged omission
to state a material fact in connection with such information
required to be stated in such Registration Statement or such
Prospectus or necessary to make such information (with respect to
the Prospectus, in light of the circumstances under which they
were made) not misleading, provided, however, that the indemnity
agreement contained in this subsection (a) with respect to any
Preliminary Prospectus or amended Preliminary Prospectus shall
not inure to the benefit of any Underwriter (or to the benefit of
any person controlling such Underwriter) from whom the person
asserting any such loss, damage, expense, liability or claim
purchased the Shares which is the subject thereof if the
Prospectus corrected any such alleged untrue statement or
omission and if such Underwriter failed to send or give a copy of
the Prospectus to such person at or prior to the written
confirmation of the sale of such Shares to such person, unless
the failure is the result of noncompliance by the Fund with
Section 5(d) hereof.
If any action, suit or proceeding (together, a "Proceeding") is
brought against an Underwriter or any such person in respect of
which indemnity may be sought against the Fund or the Investment
Manager pursuant to the foregoing paragraph, such Underwriter or
such person shall promptly notify the Fund or the Investment
Manager in writing of the institution of such Proceeding and the
Fund or the Investment Manager shall assume the defense of such
Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all
reasonable fees and expenses; provided, however, that the
omission to so notify the Fund or the Investment Manager shall
not relieve the Fund or the Investment Manager from any liability
which the Fund or the Investment Manager may have to any
Underwriter or any such person or otherwise. Such Underwriter or
such person shall have the right to employ its or their own
counsel in any such case, but the reasonable fees and expenses of
such counsel shall be at the expense of such Underwriter or of
such person unless the employment of such counsel shall have been
authorized in writing by the Fund or the Investment Manager, as
the case may be, in connection with the defense of such
Proceeding or the Fund or the Investment Manager shall not have,
within a reasonable period of time in light of the circumstances,
employed counsel to have charge of the defense of such Proceeding
or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them,
which are different from, additional to or in conflict with those
available to the Fund or the Investment Manager (in which case
the Fund or the Investment Manager shall not have the right to
direct the defense of such Proceeding on behalf of the
indemnified party or parties), in any of which events such
reasonable fees and expenses shall be borne by the Fund or the
Investment Manager and paid as incurred (it being understood,
however, that the Fund or the Investment Manager shall not be
liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of
related
20
Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). Neither the Fund or
the Investment Manager shall be liable for any settlement of any
Proceeding effected without its written consent but if settled
with the written consent of the Fund, the Investment Manager or
the Subadvisor, the Fund or the Investment Manager, as the case
may be, agrees to indemnify and hold harmless any Underwriter and
any such person from and against any loss or liability by reason
of such settlement. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for
reasonable fees and expenses of counsel as contemplated by the
second sentence of this paragraph, then the indemnifying party
agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any
settlement of any pending or threatened Proceeding in respect of
which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are
the subject matter of such Proceeding and does not include an
admission of fault, culpability or a failure to act, by or on
behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Fund and the Investment Manager, and each of their
respective shareholders, partners, managers, members, trustees,
directors and officers, and any person who controls the Fund or
the Investment Manager within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, and the
successors and assigns of all of the foregoing persons from and
against any loss, damage, expense, liability or claim (including
the reasonable cost of investigation), which, jointly or
severally, the Fund or the Investment Manager or any such person
may incur under the Securities Act, the Exchange Act, the
Investment Company Act, the Advisers Act, the common law or
otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in
conformity with information furnished in writing by or on behalf
of such Underwriter to the Fund or the Investment Manager
expressly for use with reference to such Underwriter in the
Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Fund) or
in a Prospectus, or arises out of or is based upon any omission
or alleged omission to state a material fact in connection with
such information required to be stated in such Registration
Statement or such Prospectus or necessary to make such
information not misleading (with
21
respect to the Prospectus, in light of the circumstances under
which they were made).
If any Proceeding is brought against the Fund, the Investment
Manager or any such person in respect of which indemnity may be
sought against any Underwriter pursuant to the foregoing
paragraph, the Fund, the Investment Manager or such person shall
promptly notify such Underwriter in writing of the institution of
such Proceeding and such Underwriter shall assume the defense of
such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees
and expenses; provided, however, that the omission to so notify
such Underwriter shall not relieve such Underwriter from any
liability which such Underwriter may have to the Fund, the
Investment Manager or any such person or otherwise. The Fund, the
Investment Manager or such person shall have the right to employ
its own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of the Fund, the Investment
Manager or such person, as the case may be, unless the employment
of such counsel shall have been authorized in writing by such
Underwriter in connection with the defense of such Proceeding or
such Underwriter shall not have, within a reasonable period of
time in light of the circumstances, employed counsel to have
charge of the defense of such Proceeding or such indemnified
party or parties shall have reasonably concluded that there may
be defenses available to it or them, which are different from or
additional to or in conflict with those available to such
Underwriter (in which case such Underwriter shall not have the
right to direct the defense of such Proceeding on behalf of the
indemnified party or parties, but such Underwriter may employ
counsel and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such
Underwriter), in any of which events such fees and expenses shall
be borne by such Underwriter and paid as incurred (it being
understood, however, that such Underwriter shall not be liable
for the expenses of more than one separate counsel (in addition
to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). No Underwriter shall
be liable for any settlement of any such Proceeding effected
without the written consent of such Underwriter but if settled
with the written consent of such Underwriter, such Underwriter
agrees to indemnify and hold harmless the Fund, the Investment
Manager and any such person from and against any loss or
liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall
have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by the
second sentence of this paragraph, then the indemnifying party
agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the
indemnifying party at least
22
30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened
Proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder
by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all
liability on claims that are the subject matter of such
Proceeding and does not include an admission of fault,
culpability or a failure to act, by or on behalf of such
indemnified party.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b)
of this Section 9 in respect of any losses, damages, expenses,
liabilities or claims referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Fund and the
Investment Manager on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above
but also the relative fault of the Fund and the Investment
Manager on the one hand and of the Underwriters on the other in
connection with the statements or omissions, which resulted in
such losses, damages, expenses, liabilities or claims, as well as
any other relevant equitable considerations. The relative
benefits received by the Fund and the Investment Manager on the
one hand and the Underwriters on the other shall be deemed to be
in the same respective proportions as the total proceeds from the
offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Fund and the total
underwriting discounts and commissions received by the
Underwriters, bear to the aggregate public offering price of the
Shares. The relative fault of the Fund and the Investment Manager
on the one hand and of the Underwriters on the other shall be
determined by reference to, among other things, whether the
untrue statement or alleged untrue statement of a material fact
or omission or alleged omission relates to information supplied
by the Fund or the Investment Manager or by the Underwriters and
the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses,
damages, expenses, liabilities and claims referred to in this
subsection shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any Proceeding.
(d) The Fund, the Investment Manager and the Underwriters agree that
it would not be just and equitable if contribution pursuant to
this Section 9 were determined by pro rata allocation (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
23
referred to in subsection (c) above. Notwithstanding the
provisions of this Section 9, no Underwriter shall be required to
contribute any amount in excess of the fees and commissions
received by such Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section
9 are several in proportion to their respective underwriting
commitments and not joint.
(e) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of
the Fund contained in this Agreement shall remain in full force
and effect regardless of any investigation made by or on behalf
of any Underwriter, its partners, directors or officers or any
person (including each partner, officer or director of such
person) who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange
Act, or by or on behalf of the Fund or the Investment Manager,
its shareholders, partners, advisers, members, trustees,
directors or officers or any person who controls the Fund or the
Investment Manager within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, and shall
survive any termination of this Agreement or the issuance and
delivery of the Shares. The Fund, the Investment Manager and each
Underwriter agree promptly to notify each other of the
commencement of any Proceeding against it and, in the case of the
Fund or the Investment Manager, against any of the Fund's or the
Investment Manager's shareholders, partners, managers, members,
trustees, directors or officers in connection with the issuance
and sale of the Shares, or in connection with the Registration
Statement or Prospectus.
(f) The Fund and the Investment Manager each acknowledge that the
statements with respect to (1) the public offering of the Shares
as set forth on the cover page of and (2) stabilization and
selling concessions and reallowances of selling concessions and
payment of fees to Underwriters that meet certain minimum sales
thresholds under the caption "Underwriting" in the Prospectus
constitute the only information furnished in writing to the Fund
by the Underwriters expressly for use in such document. The
Underwriters severally confirm that these statements are correct
in all material respects and were so furnished by or on behalf of
the Underwriters severally for use in the Prospectus.
(g) Notwithstanding any other provisions in this Section 9, no party
shall be entitled to indemnification or contribution under this
Underwriting Agreement against any loss, claim, liability,
expense or damage arising by reason of such person's willful
misfeasance, bad faith, gross negligence or reckless disregard of
its duties in the performance of its duties hereunder. The
parties hereto acknowledge that the foregoing provision shall be
applicable solely as to matters arising under Section 17(i) of
the Investment Company Act, and shall not be construed to impose
any duties or obligations upon any such parties under this
24
Agreement other than as specifically set forth herein (it being
understood that the Underwriters have no duty hereunder to the
Fund to perform any due diligence investigation).
10. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram
and, if to the Underwriters, shall be sufficient in all respects if
delivered or sent to UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX
00000-0000, Attention: Syndicate Department, if to the Fund or the
Investment Manager, shall be sufficient in all respects if delivered
or sent to the Fund or the Investment Manager, as the case may be, at
the offices of the Fund and the Investment Manager at Xxxxx & Steers
Capital Management, Inc. at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxx X. Xxxxxx, and if to the Subadvisor, at
Xxxxxxxx xx xx Xxxx 000, 0000 Xxxxxxxx, Xxxxxxx, Attention:
[ ].
11. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out
of or in any way relating to this Agreement ("Claim"), directly or
indirectly, shall be governed by, and construed in accordance with,
the laws of the State of New York. The Section headings in this
Agreement have been inserted as a matter of convenience of reference
and are not a part of this Agreement.
12. Submission to Jurisdiction. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts
of the State of New York located in the City and County of New York or
in the United States District Court for the Southern District of New
York, which courts shall have jurisdiction over the adjudication of
such matters, and the Fund and UBS Securities each consent to the
jurisdiction of such courts and personal service with respect thereto.
The Fund and UBS Securities hereby consent to personal jurisdiction,
service and venue in any court in which any Claim arising out of or in
any way relating to this Agreement is brought by any third party
against UBS Securities or any indemnified party. Each of UBS
Securities, the Fund (on its behalf and, to the extent permitted by
applicable law, on behalf of its stockholders and affiliates), the
Investment Manager (on its behalf and, to the extent permitted by
applicable law, on behalf of its stockholders and affiliates) and the
Subadvisor (on its behalf and, to the extent permitted by applicable
law, on behalf of its stockholders and affiliates), waives all right
to trial by jury in any action, proceeding or counterclaim (whether
based upon contract, tort or otherwise) in any way arising out of or
relating to this Agreement. Each of the Fund, the Investment Manager
and the Subadvisor agrees that a final judgment in any such action,
proceeding or counterclaim brought in any such court shall be
conclusive and binding upon the Fund, the Investment Manager and the
Subadvisor, as the case may be, and may be enforced in any other
courts in the jurisdiction of which the Fund, the Investment Manager
and the Subadvisor, as the case may be, is or may be subject, by suit
upon such judgment.
13. Parties at Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Fund, the
Investment Manager and the Subadvisor and to the extent provided in
Section 9 hereof the controlling persons, shareholders, partners,
members, trustees, managers, directors and officers referred to in
such section, and their respective successors, assigns, heirs,
25
personal representatives and executors and administrators. No other
person, partnership, association or corporation (including a
purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
14. Counterparts. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same
agreement among the parties.
15. Successors and Assigns. This Agreement shall be binding upon the
Underwriters, the Fund, the Investment Manager, the Subadvisor and any
successor or assign of any substantial portion of the Fund's, the
Investment Manager's, the Subadvisor's or any of the Underwriters'
respective businesses and/or assets.
26
If the foregoing correctly sets forth the understanding among the Fund, the
Investment Manager, the Subadvisor and the Underwriters, please so indicate in
the space provided below, whereupon this letter and your acceptance shall
constitute a binding agreement among the Fund, the Investment Manager, the
Subadvisor and the Underwriters, severally.
Very truly yours,
XXXXX & STEERS WORLDWIDE REALTY
INCOME FUND, INC.
By:
-------------------------------
Title:
XXXXX & STEERS CAPITAL MANAGEMENT,
INC.
By:
-------------------------------
Title:
XXXXXXXX ROVERS S.A.
By:
-------------------------------
Title:
27
Accepted and agreed to as of the date first above written, on behalf of
themselves and the other several Underwriters named in Schedule A
UBS SECURITIES LLC
--------------------------------
By:
Title:
--------------------------------
By:
Title:
28
