Exhibit h.1
NFJ Dividend, Interest & Premium Strategy Fund
_____ Common Shares
($0.00001 par value per share)
UNDERWRITING AGREEMENT
New York, New York
February __, 2005
Citigroup Global Markets Inc.
As Representatives of the several Underwriters
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned, NFJ Dividend, Interest & Premium Strategy Fund, a
Massachusetts business trust (the "Fund") and PA Fund Management LLC, a Delaware
limited liability company (the "Investment Adviser") address you as underwriters
and as the representatives (the "Representatives") of each of the several
underwriters named on Schedule I hereto (the "Underwriters"). The Fund proposes
to sell to the Underwriters _____ shares (the "Underwritten Securities") of its
common stock, par value $0.00001 per share (the "Common Shares"). The Fund also
proposes to grant to the Underwriters an option to purchase up to _____
additional Common Shares to cover over-allotments (the "Option Securities"). The
Underwritten Securities and the Option Securities are hereinafter collectively
referred to as the "Securities." Unless otherwise stated, the term "you" as used
herein means Citigroup Global Markets Inc. individually on its own behalf and on
behalf of the other Representatives. Certain terms used herein are defined in
Section 18 hereof.
The Fund and the Investment Adviser wish to confirm as follows their
agreements with you and the other several Underwriters on whose behalf you are
acting in connection with the several purchases of the Securities by the
Underwriters.
The Fund has entered into an Investment Management Agreement with the
Investment Adviser dated as of February 15, 2005, a Custodian Agreement with
Xxxxx Brothers Xxxxxxxx & Co. dated as of February 15, 2005, and a Shareholder
Transfer Agency and Service Agreement with PFPC Inc. dated as of February 15,
2005, and such agreements are herein referred to as the "Management Agreement,"
the "Custodian Agreement" and the "Transfer Agency Agreement," respectively.
Collectively, the Management Agreement, the Custodian Agreement and the Transfer
Agency Agreement are herein referred to as the "Fund
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Agreements." The Investment Adviser has entered into an investment sub-advisory
agreement with NFJ Investment Group L.P. ("NFJ"), a Delaware limited
partnership, dated as of February 15, 2005, an investment sub-advisory agreement
with Xxxxxxxx Xxxxxxxxx Capital Management LLC ("NACM"), a Delaware limited
liability company, dated as of February 15, 2005, an investment sub-advisory
agreement with PEA Capital LLC ("PEA"), a Delaware limited liability company,
dated as of February 15, 2005, (each of NFJ, NACM and PEA is a "Subadviser" and
together with the Investment Adviser, the "Advisers") an Additional Compensation
Agreements with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated dated as of February __, 2005, an additional Compensation Agreement
with UBS Securities LLC dated as of February __, 2005 and a Structuring Fee
Agreement with Citigroup Global Markets Inc. dated as of February __, 2005, and
such agreements are herein referred to as the "Sub-Advisory Agreements," the
"Additional Compensation Agreements" and the "Structuring Fee Agreement." In
addition, the Fund has adopted a dividend reinvestment plan (the "Dividend
Reinvestment Plan") pursuant to which holders of Common Shares shall have their
dividends automatically reinvested in additional Common Shares of the Fund
unless they elect to receive such dividends in cash.
1. Representations and Warranties of the Fund and the Investment
Adviser. The Fund and the Investment Adviser, jointly and severally, represent
and warrant to, and agree with, each Underwriter as set forth below in this
Section 1.
(a) The Fund has prepared and filed with the Commission a
registration statement (file numbers 333-108137 and 811-21417) on Form
N-2, including a related preliminary prospectus (including the statement
of additional information incorporated by reference therein), for
registration under the Act and the 1940 Act of the offering and sale of
the Securities. The Fund may have filed one or more amendments thereto,
including a related preliminary prospectus (including the statement of
additional information incorporated by reference therein), each of which
has previously been furnished to you. The Fund will next file with the
Commission one of the following: either (1) prior to the Effective Date
of such registration statement, a further amendment to such registration
statement (including the form of final prospectus (including the
statement of additional information incorporated by reference therein))
or (2) after the Effective Date of such registration statement, a final
prospectus (including the statement of additional information
incorporated by reference therein) in accordance with Rules 430A and
497. In the case of clause (2), the Fund has included in such
registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and
the 1940 Act and the Rules and Regulations to be included in such
registration statement and the Prospectus. As filed, such amendment and
form of final prospectus (including the statement of additional
information incorporated by reference therein), or such final prospectus
(including the statement of additional information incorporated by
reference therein), shall contain all Rule 430A Information, together
with all other such required information, and, except to the extent the
Representatives shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other
changes (beyond that contained in the latest Preliminary Prospectus) as
the Fund has advised you, prior to the Execution Time, will be included
or made therein.
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(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in accordance
with Rule 497 and on the Closing Date (as defined herein) and on any
date on which Option Securities are purchased, if such date is not the
Closing Date (a "settlement date"), the Prospectus (and any supplements
thereto) will, and the 1940 Act Notification when originally filed with
the Commission and any amendment or supplement thereto when filed with
the Commission did or will, comply in all material respects with the
applicable requirements of the Act, the 1940 Act and the Rules and
Regulations and the Registration Statement, 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, did not or will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and, on the Effective Date,
the Prospectus, if not filed pursuant to Rule 497, will not, and on the
date of any filing pursuant to Rule 497 and on the Closing Date and any
settlement date, the Prospectus (together with any supplement thereto)
will not, include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that the Fund makes no representations or
warranties as to the information contained in or omitted from the
Registration Statement, or the Prospectus (or any supplement thereto),
in reliance upon and in conformity with information furnished in writing
to the Fund by or on behalf of any Underwriter through the
Representatives specifically for inclusion in the Registration Statement
or the Prospectus (or any supplement thereto). The Commission has not
issued any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus.
(c) The Fund has been duly formed and is validly existing in
good standing as a business trust under the laws of the State of
Massachusetts, with full business power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification, except where the failure to so
register does not have a material adverse effect on the condition
(financial or otherwise), business, properties, net assets or results of
operations of the Fund. The Fund has no subsidiaries.
(d) The Fund's authorized equity capitalization is as set forth
in the Prospectus; the capital stock of the Fund conforms to the
description thereof contained in the Registration Statement and the
Prospectus; all outstanding Common Shares have been duly and validly
authorized and issued and are fully paid and nonassessable; the
Securities have been duly and validly authorized, and, when issued and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and nonassessable; the Securities are duly
listed, and admitted and authorized for trading, subject to official
notice of issuance and evidence of satisfactory distribution, on the New
York Stock Exchange (the "NYSE"); the holders of outstanding Common
Shares are not entitled to preemptive or other rights to subscribe for
the Securities; and, except as set forth in the Prospectus, no options,
warrants or other rights to purchase, agreements or other obligations to
issue, or rights to convert any obligations into or exchange any
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securities for, shares of capital stock of or ownership interests in the
Fund are outstanding.
(e) The Fund's registration statement on Form 8-A under the
Exchange Act has become effective.
(f) The Fund, subject to the Registration Statement having been
declared effective and the filing of the Prospectus under Rule 497, has
taken all required action under the Act, the 1940 Act and the Rules and
Regulations to make the public offering and consummate the sale of the
Securities as contemplated by this Agreement.
(g) There are no agreements, contracts, indentures, leases or
other instruments that are required to be described in the Registration
Statement or the Prospectus, or to be filed as an exhibit thereto, which
are not described or filed as required by the Act, the 1940 Act or the
Rules and Regulations; and the statements in the Prospectus under the
headings "Tax Matters," "Description of Shares" and "Anti-Takeover and
Other Provisions in the Declaration of Trust" accurately summarize the
matters therein described.
(h) The execution and delivery of and the performance by the
Fund of its obligations under this Agreement and the Fund Agreements
have been duly and validly authorized by the Fund and this Agreement and
the Fund Agreements have been duly executed and delivered by the Fund
and constitute the valid and legally binding agreements of the Fund,
enforceable against the Fund in accordance with their terms, except as
rights to indemnity and contribution hereunder may be limited by federal
or state securities laws and subject to the qualification that the
enforceability of the Fund's obligations hereunder and thereunder may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and by general
equitable principles.
(i) The Fund is duly registered under the 1940 Act as a
closed-end, diversified management investment company and the 1940 Act
Notification has been duly filed with the Commission. The Fund has not
received any notice from the Commission pursuant to Section 8(e) of the
1940 Act with respect to the 1940 Act Notification or the Registration
Statement.
(j) No consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection with
the transactions contemplated herein or in the Fund Agreements, except
such as have been made or obtained under the Act and the 1940 Act and
such as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated herein and in the Prospectus,
compliance with the NYSE rules and the filing requirements of the
Division of Corporate Finance of the NASD.
(k) Neither the issuance and sale of the Securities, the
execution, delivery or performance of this Agreement or any of the Fund
Agreements by the Fund, nor the
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consummation by the Fund of the transactions herein or therein
contemplated (i) conflicts or will conflict with or constitutes or will
constitute a breach of the declaration of trust or by-laws of the Fund,
(ii) conflicts or will conflict with or constitutes or will constitute a
material breach of or a material 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 (iii) violates or will
violate in any material respect 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.
(l) No holders of securities of the Fund have rights to the
registration of such securities under the Registration Statement.
(m) The financial statements, together with related schedules
and notes, included or incorporated by reference in the Prospectus and
the Registration Statement present fairly in all material respects the
financial condition, results of operations and cash flows of the Fund as
of the dates and for the periods indicated, have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as otherwise
noted therein); and the other financial information and data included in
the Registration Statement and the Prospectus are accurately derived
from such financial statements and the books and records of the Fund.
(n) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Fund or its property is pending or, to the best knowledge of the Fund,
threatened that (i) could reasonably be expected to have a material
adverse effect on the performance of this Agreement or the consummation
of any of the transactions herein contemplated or (ii) could reasonably
be expected to have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of
the Fund, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(o) The Fund owns or leases all such properties as are necessary
to the conduct of its operations as presently conducted.
(p) The Fund is not (i) in violation of its declaration of trust
or by-laws, (ii) in breach or default in the performance of the terms of
any material indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject or (iii) in violation of any material law,
ordinance, administrative or governmental rule or regulation applicable
to the Fund 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.
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(q) To the knowledge of the Fund and the Investment Adviser,
based on representations of such accountants, PricewaterhouseCoopers
LLP, who have audited the financial statements included or incorporated
by reference in the Registration Statement and the Prospectus, are
independent public accountants with respect to the Fund within the
meaning of the Act and the Act Rules and Regulations.
(r) The Fund has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of
the Securities, will not distribute any offering material in connection
with the offering and sale of the Securities other than the Registration
Statement, the Preliminary Prospectus, the Prospectus or other materials
permitted by the Act, the 1940 Act or the Rules and Regulations.
(s) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and
delivery of this Agreement or the issuance by the Fund or sale by the
Fund of the Securities.
(t) The Fund has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Fund,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto)) and has paid all taxes required
to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable,
except for any such assessment, fine or penalty that is currently being
contested in good faith or as would not have a material adverse effect
on the condition (financial or otherwise), prospects, earnings, business
or properties of the Fund, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated
in the Prospectus (exclusive of any supplement thereto).
(u) All advertising, sales literature or other promotional
material (including "prospectus wrappers", "broker kits", "road show
slides" and "road show scripts"), whether in printed or electronic form,
authorized in writing by or prepared by the Fund or the Advisers for use
in connection with the offering and sale of the Securities
(collectively, "sales material") complied and comply in all material
respects with the applicable requirements of the Act, the 1940 Act, the
Rules and Regulations and the rules and interpretations of the NASD and
if required to be filed with the NASD under the NASD's conduct rules
were provided to Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the
Underwriters, for filing. No sales material contained or contains an
untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(v) The Fund's trustees and officers/errors and omissions
insurance policy and its fidelity bond required by Rule 17g-1 of the
1940 Act Rules and Regulations are in full force and effect; the Fund is
in compliance with the terms of such policy and fidelity
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bond in all material respects; and there are no claims by the Fund under
any such policy or fidelity bond as to which any insurance company is
denying liability or defending under a reservation of rights clause; the
Fund has not been refused any insurance coverage sought or applied for;
and the Fund has no reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Fund, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement thereto).
(w) The Fund has such licenses, permits, and authorizations of
governmental or regulatory authorities ("permits") as are necessary to
own its property and to conduct its business in the manner described in
the Prospectus, except where such failure would not be reasonably
expected to have a material adverse effect on the Fund; the Fund has
fulfilled and performed all its material obligations with respect to
such permits, to the knowledge of the Fund, and no event has occurred
which allows or, after notice or lapse of time, would allow, revocation
or termination thereof or results in any other material impairment of
the rights of the Fund under any such permit, subject in each case to
such qualification as may be set forth in the Prospectus; and, except as
described in the Prospectus, none of such permits contains any
restriction that is materially burdensome to the Fund.
(x) The Fund maintains and will maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization and with the investment objectives, policies and
restrictions of the Fund and the applicable requirements of the 1940
Act, the 1940 Act Rules and Regulations and the Internal Revenue Code of
1986, as amended (the "Code"); (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles, to calculate net asset
value, to maintain accountability for assets and to maintain material
compliance with the books and records requirements under the 1940 Act
and the 1940 Act Rules and Regulations; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(y) Except for Shares repurchases or the issuance or purchase of
Shares pursuant to any dividend reinvestment plan of the Fund in effect
on the date hereof, the Fund has not taken, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Fund
to facilitate the sale or resale of the Securities, and the Fund is not
aware of any such action taken or to be taken by any affiliates of the
Fund.
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(z) This Agreement and each of the Fund Agreements complies in
all material respects with all applicable provisions of the 1940 Act,
the 1940 Act Rules and Regulations, the Advisers Act and the Advisers
Act Rules and Regulations.
(aa) Except as disclosed in the Prospectus and Registration
Statement, no trustee 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.
(bb) The Fund intends to direct the investment of the proceeds
of the offering of the Securities in such a manner as to comply with the
requirements of Subchapter M of the Code.
(cc) The conduct by the Fund of its business (as described in
the Prospectus) does not require it to be the owner, possessor or
licensee of any patents, patent licenses, trademarks, service marks or
trade names which it does not own, possess or license, except where the
failure to so own, possess or license would not have a material adverse
effect on the Fund.
(dd) Except as disclosed in the Registration Statement and the
Prospectus, the Fund (i) does not have any material lending or other
relationship with any bank or lending affiliate of Citigroup Global
Markets Holdings Inc. and (ii) does not intend to use any of the
proceeds from the sale of the Securities hereunder to repay any
outstanding debt owed to any affiliate of Citigroup Global Markets
Holdings Inc.
(ee) There is and has been no failure on the part of the Fund
and any of the Fund's trustees or officers, in their capacities as such,
to comply with any provision of the Xxxxxxxx-Xxxxx Act of 2002 and the
rules and regulations promulgated in connection therewith (the
"Xxxxxxxx-Xxxxx Act"), including Sections 302 and 906 related to
certifications.
Any certificate signed by any officer of the Fund and delivered
to the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Fund, as to matters covered therein, to each Underwriter.
2. Representations and Warranties of the Investment Adviser. The
Investment Adviser represents and warrants to each Underwriter as follows:
(a) Each of the Advisers has been duly formed and is validly
existing in good standing as a limited partnership or limited liability
company under the laws of its jurisdiction of incorporation or
formation, with full company 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 is duly qualified to do
business and is in good standing under the laws of each jurisdiction
which requires such qualification, except where the failure to so
register or to so qualify would not have a material adverse effect on
the Advisers' ability to provide services on behalf of the Fund.
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(b) Each of the Advisers is duly registered as an investment
adviser under the Advisers Act and is not prohibited by the Advisers
Act, the 1940 Act, the Advisers Act Rules and Regulations or the 1940
Act Rules and Regulations from acting under the Management Agreement for
the Fund or the Sub-Advisory Agreement to which it is a party [or the
Additional Compensation Agreement] or the Structuring Fee Agreement as
contemplated by the Prospectus.
(c) The Investment Adviser has full power and authority to enter
into this Agreement, the Management Agreement to which it is a party,
the Sub-Advisory Agreements, the Additional Compensation Agreements and
the Structuring Fee Agreement; the execution and delivery of, and the
performance by the Investment Adviser of its obligations under this
Agreement, the Management Agreement, the Sub-Advisory Agreements, and
the Additional Compensation Agreements and the Structuring Fee Agreement
have been duly and validly authorized by the Investment Adviser; and
this Agreement, the Management Agreement, the Sub-Advisory Agreements,
the Additional Compensation Agreements] and the Structuring Fee
Agreement have been duly executed and delivered by the Investment
Adviser and constitute the valid and legally binding agreements of the
Investment Adviser, enforceable against the Investment Adviser in
accordance with their terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state securities
laws and subject to the qualification that the enforceability of the
Investment Adviser's obligations hereunder and thereunder may be limited
by bankruptcy, insolvency, reorganization, moratorium and other laws
relating to or affecting creditors' rights generally and by general
equitable principles.
(d) Each of the Advisers has the financial resources available
to it necessary for the performance of its services and obligations as
contemplated in the Prospectus and under this Agreement, the Management
Agreement, the Sub-Advisory Agreement to which it is a party, the
Additional Compensation Agreements and the Structuring Fee Agreement.
(e) The description of each Adviser and its business, and the
statements attributable to such Adviser, in the Registration Statement
and the Prospectus complied and comply in all material respects with the
provisions of the Act, the 1940 Act, the Advisers Act, the Rules and
Regulations and the Advisers Act Rules and Regulations and did not and
will not contain an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(f) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving each
Adviser or its property is pending or, to the best knowledge of each
Adviser, threatened that (i) could reasonably be expected to have a
material adverse effect on the ability of each Adviser to fulfill its
obligations hereunder or under the Management Agreement, the
Sub-Advisory Agreement to which it is a party, the Additional
Compensation Agreements or the Structuring Fee Agreement or (ii) could
reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Advisers,
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whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto); and there are no agreements,
contracts, indentures, leases or other instruments relating to such
Adviser that are required to be described in the Registration Statement
or the Prospectus or to be filed as an exhibit to the Registration
Statement that are not described or filed as required by the Act, the
1940 Act or the Rules and Regulations.
(g) Each of the Advisers 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; each of the Advisers has fulfilled
and performed all its material obligations with respect to such permits
and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other
material impairment of the rights of such Adviser under any such permit
other than impairments that would not reasonably be expected to have a
material adverse effect on the Investment Adviser or the Sub-Advisers,
as applicable.
(h) This Agreement, the Management Agreement, 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.
(i) No consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection with
the transactions contemplated herein or in the Management Agreement or
the Sub-Advisory Agreements, the Additional Compensation Agreements or
the Structuring Fee Agreement, except such as have been made or obtained
under the Act and the 1940 Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Prospectus, compliance with the NYSE
rules and the filing requirements of the NASD Division of Corporate
Finance.
(j) Neither the execution, delivery or performance of this
Agreement or the Management Agreement, the Sub-Advisory Agreements to
the Additional Compensation Agreements and the Structuring Fee
Agreement, nor the consummation by the Fund or the Advisers of the
transactions herein or therein contemplated (i) conflicts or will
conflict with or constitutes or will constitute a breach of the charter,
declaration of trust or by-laws of such Adviser, (ii) conflicts or will
conflict with or constitutes or will constitute a breach of or a default
under, any material agreement, indenture, lease or other instrument to
which such Adviser is a party or by which it or any of its properties
may be bound or (iii) violates or will violate any material statute,
law, regulation or filing or judgment, injunction, order or material
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 such Adviser is a party or by which
such Adviser may be bound or to which any of the property or assets of
such Adviser is subject.
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(k) Except for Shares repurchases or the issuance or purchase of
Shares pursuant to any dividend reinvestment plan of the Fund in effect
on the date hereof, none of the Advisers has taken, directly or
indirectly, any action designed to or that would constitute or that
might reasonably be expected to cause or result in, under the Exchange
Act or otherwise, stabilization or manipulation of the price of any
security of the Fund to facilitate the sale or resale of the Securities,
and 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 an Adviser makes available any
promotional materials intended for use only by qualified broker-dealers
and registered representatives thereof by means of an Internet web site
or similar electronic means, such Adviser will install and maintain
pre-qualification and password-protection or similar procedures which
are reasonably designed to effectively prohibit access to such
promotional materials by persons other than qualified broker-dealers and
registered representatives thereof.
Any certificate signed by any officer of the Investment Adviser
and delivered to the Representatives or counsel for the Underwriters in
connection with the offering of the Securities shall be deemed a representation
and warranty by the Investment Adviser, as to matters covered therein, to each
Underwriter.
3. Purchase and Sale. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Fund agrees to sell to each Underwriter, and each Underwriter agrees, severally
and not jointly, to purchase from the Fund, at a purchase price of $_____ per
share, the amount of the Underwritten Securities set forth opposite such
Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Fund hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
_____ Option Securities at the same purchase price per share as the Underwriters
shall pay for the Underwritten Securities. Said option may be exercised only to
cover over-allotments in the sale of the Underwritten Securities by the
Underwriters. Said option may be exercised in whole or in part at any time and
from time to time on or before the 45th day after the date of the Prospectus
upon written or telegraphic notice by the Representatives to the Fund setting
forth the number of shares of the Option Securities as to which the several
Underwriters are exercising the option and the settlement date. The number of
Option Securities to be purchased by each Underwriter shall be the same
percentage of the total number of shares of the Option Securities to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
4. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 3(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
February __, 2005 or at such time on such later date not more than three
Business Days after the foregoing date as the Representatives shall designate,
which date and time may be postponed by agreement between the Representatives
and the Fund
12
or as provided in Section 10 hereof (such date and time of delivery and payment
for the Securities being herein called the "Closing Date"). Delivery of the
Securities shall be made to the Representatives for the respective accounts of
the several Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the Fund
by wire transfer payable in same-day funds to an account specified by the Fund.
Delivery of the Underwritten Securities and the Option Securities shall be made
through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
If the option provided for in Section 3(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Fund will deliver
the Option Securities (at the expense of the Fund) to the Representatives on the
date specified by the Representatives (which shall be within three Business Days
after exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the Fund
by wire transfer payable in same-day funds to an account specified by the Fund.
If settlement for the Option Securities occurs after the Closing Date, the Fund
will deliver to the Representatives on the settlement date for the Option
Securities, and the obligation of the Underwriters to purchase the Option
Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 7 hereof.
5. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
6. Agreements of the Fund and the Investment Adviser. The Fund
and the Investment Adviser, jointly and severally, agree with the several
Underwriters as follows:
(a) The Fund will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering
of the Securities, the Fund will not file any amendment of the
Registration Statement or supplement to the Prospectus or any Rule
462(b) Registration Statement unless the Fund has furnished you a copy
for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the
foregoing sentence, if the Registration Statement has become or becomes
effective pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 497, the Fund will cause the Prospectus,
properly completed, and any supplement thereto to be filed in a form
approved by the Representatives with the Commission pursuant to Rule 497
within the time period prescribed and will provide evidence satisfactory
to the Representatives of such timely filing. The Fund will promptly
advise the Representatives (1) when the Registration Statement, if not
effective at the Execution Time, shall have become effective, (2) when
the Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 497 or when any Rule
462(b) Registration Statement shall have been filed with the Commission,
(3) when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or become
effective, (4) of any request by the Commission or its staff for any
amendment of the
13
Registration Statement, or any Rule 462(b) Registration Statement, or
for any supplement to the Prospectus or for any additional information,
(5) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (6) of the receipt by
the Fund of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The Fund
will use its best efforts to prevent the issuance of any such stop order
or the suspension of any such qualification and, if issued, to obtain as
soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs as a result
of which, in the judgment of the Fund or the reasonable opinion of
counsel to the Fund, the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Act, the 1940 Act and the Rules and
Regulations, the Fund promptly will (1) notify the Representatives of
any such event, (2) prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section 6, an amendment or
supplement which will correct such statement or omission or effect such
compliance and (3) supply any supplemented Prospectus to you in such
quantities as you may reasonably request.
(c) As soon as practicable, the Fund will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Fund which will satisfy the provisions of
Section 11(a) of the Act and Rule 158 under the Act.
(d) The Fund will furnish to the Representatives and counsel for
the Underwriters signed copies of the Registration Statement (including
exhibits thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by
the Act, as many copies of each Preliminary Prospectus and the
Prospectus and any supplement thereto as the Representatives may
reasonably request.
(e) The Fund will cooperate with you and with counsel for the
Underwriter in connection with the qualification of the Securities for
sale under the laws of such jurisdictions as the Representatives may
designate and will maintain such qualifications in effect so long as
required for the distribution of the Securities; provided that in no
event shall the Fund be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that
would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject.
(f) The Fund will not, without the prior written consent of
Citigroup Global Markets Inc., offer, sell, contract to sell, pledge, or
otherwise dispose of, or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to
cash
14
settlement or otherwise) by the Fund or any affiliate of the Fund or any
person in privity with the Fund, directly or indirectly, including the
filing (or participation in the filing) of a registration statement with
the Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act, any other Common Shares or
any securities convertible into, or exercisable, or exchangeable for,
Common Shares; or publicly announce an intention to effect any such
transaction for a period of 180 days following the Execution Time,
provided, however, that the Fund may issue and sell Common Shares
pursuant to any dividend reinvestment plan of the Fund in effect at the
Execution Time.
(g) The Fund will comply with all applicable securities and
other applicable laws, rules and regulations, including, without
limitation, the Xxxxxxxx-Xxxxx Act, and will use its best efforts to
cause the Fund's trustees and officers, in their capacities as such, to
comply with such laws, rules and regulations, including, without
limitation, the provisions of the Xxxxxxxx-Xxxxx Act.
(h) Except for the issuance or purchase of Shares pursuant to
any dividend reinvestment plan of the Fund in effect on the date hereof,
the Fund and the Advisers will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Fund
to facilitate the sale or resale of the Securities.
(i) The Fund agrees to pay the costs and expenses relating to
the following matters: (i) the preparation, printing or reproduction and
filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), each Preliminary Prospectus,
the Prospectus and the 1940 Act Notification and each amendment or
supplement to any of them; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for
counting and packaging) of such copies of the Registration Statement,
each Preliminary Prospectus, the Prospectus, any sales material and all
amendments or supplements to any of them, as may, in each case, be
reasonably requested for use in connection with the offering and sale of
the Securities; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Securities, including any
stamp or transfer taxes in connection with the original issuance and
sale of the Securities; (iv) the printing (or reproduction) and delivery
of this Agreement, any blue sky memorandum, dealer agreements and all
other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Securities; (v) the registration of
the Securities under the Exchange Act and the listing of the Securities
on the NYSE; (vi) any registration or qualification of the Securities
for offer and sale under the securities or blue sky laws of the several
states (including filing fees and the reasonable fees and expenses of
counsel for the Underwriters relating to such registration and
qualification); (vii) any filings required to be made with the NASD
(including filing fees and the reasonable fees and expenses of counsel
for the Underwriters relating to such filings); (viii) the
transportation and other expenses incurred by or on behalf of Fund
representatives in connection with presentations to prospective
purchasers of the Securities; (ix) the fees and expenses of the Fund's
15
accountants and the fees and expenses of counsel (including local and
special counsel) for the Fund; (x) all other costs and expenses incident
to the performance by the Fund of its obligations hereunder; and (xi) an
amount equal to $.005 per Common Share for each Common Share sold
pursuant to this Agreement, payable no later than 45 days from the date
of this Agreement to the Underwriters in partial reimbursement of their
expenses in connection with the offering. To the extent that the
foregoing costs and expenses incidental to the performance of the
obligations under this Agreement exceed $0.05 per share, the Adviser
will pay such costs and expenses. The Fund will direct the investment of
the net proceeds of the offering of the Securities in such a manner as
to comply with the investment objectives, policies and restrictions of
the Fund as described in the Prospectus.
(j) The Fund will comply with the requirements of Subchapter M
of the Code to qualify as a regulated investment company under the Code.
(k) The Fund and the Advisers will use their reasonable best
efforts to perform all of the agreements required of them by this
Agreement and discharge all conditions of theirs to closing as set forth
in this Agreement.
7. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Fund and the Investment
Adviser contained herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 4 hereof, to the accuracy of the statements
of the Fund made in any certificates pursuant to the provisions hereof, to the
performance by the Fund or the Advisers of its obligations hereunder and to the
following additional conditions:
(a) If the Registration Statement has not become effective prior
to the Execution Time, unless the Representatives agree in writing to a
later time, the Registration Statement will become effective not later
than (i) 6:00 PM New York City time on the date of determination of the
total public offering price, if such determination occurred at or prior
to 3:00 PM New York City time on such date or (ii) 9:30 AM on the
Business Day following the day on which the total public offering price
was determined, if such determination occurred after 3:00 PM New York
City time on such date; if filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 497, the Prospectus, and any such
supplement, will be filed in the manner and within the time period
required by Rule 497; and no stop order suspending the effectiveness of
the Registration Statement or order pursuant to Section 8(e) of the 1940
Act shall have been issued and no proceedings for that purpose shall
have been instituted or threatened, and any request of the Commission
for additional information (to be included in the Registration Statement
or Prospectus or otherwise) shall have been complied with in all
material respects.
(b) The Fund shall have requested and caused Ropes & Xxxx LLP,
counsel for the Fund, to have furnished to the Representatives their
opinion, dated the Closing Date and addressed to the Representatives, to
the effect that:
16
(i) The Registration Statement and all post-effective
amendments filed with the Commission on or before the Closing
Date, if any, have been declared effective under the Securities
Act; the filing of the Prospectus, and any supplements thereto,
pursuant to Rule 497 under the Securities Act has been made in
the manner and within the time period required by Rule 497; and
based upon oral inquiries to the Commission staff on the date
hereof, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for any
such purpose is pending or threatened by the Commission;
(ii) The Fund has been duly formed and is validly
existing and in good standing as a business trust under and by
virtue of the laws of The Commonwealth of Massachusetts and has
statutory trust power and authority to own, lease or operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus. The Certificate of
Designation relating to the Fund's conduct of business in the
State of New York is on file with the Department of State of the
State of New York;
(iii) The Fund's authorized capitalization is as set
forth in the Registration Statement and the Prospectus. The Fund
has an indefinite number of authorized common shares of
beneficial interest, par value $0.00001 per share. The
authorized capitalization of the Fund conforms to the
description thereof under each section entitled "Description of
Shares" in the Prospectus. All outstanding common shares of
beneficial interest of the Fund have been duly authorized and
are validly issued, fully paid and, subject to the penultimate
paragraph of this opinion letter, non-assessable. The Shares
have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor in accordance with the
terms of the Underwriting Agreement, will be validly issued,
fully paid and subject to the penultimate paragraph of this
opinion letter, non-assessable. Except as contemplated by the
Underwriting Agreement, no person is entitled to any preemptive
or other similar rights with respect to the Shares;
(iv) The Fund was deemed to be registered under Section
8(a) of the Investment Company Act upon receipt by the
Commission of the Notification of Registration. To our
knowledge, the Commission has not issued to the Fund notice of
any hearing or other proceeding to consider suspension or
revocation of any such registration statement. All required
action has been taken by the Fund under the Securities Act, the
Investment Company Act and the rules and regulations thereunder
in connection with the issuance and sale of the Shares pursuant
to the Underwriting Agreement;
(v) The Fund has statutory trust power and authority to
enter into each of the Fund Agreements and to perform all of the
terms and provisions thereof to be carried out by it. Each Fund
Agreement has been duly and validly authorized, executed and
delivered by the Fund. Each Fund Agreement complies in all
material respects with all applicable provisions of the
Securities Act, the Investment Company Act and the Investment
Advisers Act of 1940, as amended, as the case may be, and the
rules and regulations thereunder. Assuming due
17
authorization execution and delivery by the other parties
thereto, each Fund Agreement constitutes the legal, valid and
binding obligation of the Fund enforceable against the Fund in
accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, moratorium, reorganization and other
laws of general applicability relating to or affecting
creditors' rights and to general equity principles (regardless
of whether enforceability is considered in a proceeding in
equity or at law);
(vi) The Fund has statutory trust power and authority to
enter into the Underwriting Agreement and to perform all of the
terms and provisions thereof to be carried out by it. The
Underwriting Agreement has been duly and validly authorized,
executed and delivered by the Fund;
(vii) None of (a) the execution and delivery by the Fund
of the Underwriting Agreement or any of the Fund Agreements, (b)
the issue and sale by the Fund of the Shares as contemplated by
the Underwriting Agreement and (c) the performance by the Fund
of its obligations under the Underwriting Agreement, the
Dividend Reinvestment Plan or any of the Fund Agreements or
consummation by the Fund of the other transactions contemplated
by the Underwriting Agreement or any of the Fund Agreements
conflicts or will conflict with, or results or will result in a
breach of, the Declaration of Trust or the By-laws, to our
knowledge, or any agreement or instrument to which the Fund is a
party or by which the Fund is bound, or violates or will violate
any federal or Massachusetts statute, law or regulation or any
judgment, injunction, order or decree of any federal or
Massachusetts governmental agency or body specifically naming to
Fund and that is known to us which violation would have a
material adverse effect on the condition or business of the
Fund;
(viii) No consent, approval, authorization or order of
or registration with any court or governmental agency or body or
securities exchange or securities association is required by the
Fund for the consummation by the Fund of the transactions
contemplated in the Dividend Reinvestment Plan, the Underwriting
Agreement and the Fund Agreements, except such as (a) have been
obtained under the Securities Act, the Investment Company Act or
the Exchange Act and (b) may be required by the New York Stock
Exchange or the National Association of Securities Dealers, Inc.
or under state securities or Blue Sky laws in connection with
the purchase and distribution of the Shares by the Underwriters
pursuant to the Underwriting Agreement;
(ix) To our knowledge, based upon a letter dated __,
2005, from ________, Corporate Listings and Executive Vice
President of the New York Stock Exchange authorizing the Shares
for listing on such Exchange, the Shares have been authorized
for listing on the New York Stock Exchange and will be admitted
and authorized for trading, subject to official notice of
issuance, and to our knowledge after due inquiry, including oral
inquiries of the Commission staff on ___, 2005, the Exchange Act
Registration Statement has become effective;
18
(x) To our knowledge, there are no legal or governmental
proceedings pending or 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
but are not described therein as required;
(xi) To our knowledge, there are no agreements,
contracts, indentures, leases or other instruments that are
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration
Statement which have not been so described or filed as an
exhibit or incorporated therein by reference;
(xii) Each of the sections in the Prospectus entitled
"Tax Matters," "Description of Shares" and "Anti-takeover and
Other Provisions in the Declaration of Trust" to the extent that
they state matters of United States law or legal conclusions
with respect thereto, present a fair summary of the laws and
documents described therein; and
(xiii) The Registration Statement (except for the
financial statements and schedules, the notes thereto and any
schedules and other financial data contained or incorporated by
reference therein or omitted therefrom, as to which we express
no opinion), at the effective time set forth above, and the
Prospectus (except as aforesaid), as of the date thereof,
complied as to form in all material respects with the applicable
requirements of the Securities Act and the Investment Company
Act and the rules and regulations thereunder.
Such counsel shall also state that while it has not independently
verified the accuracy, completeness or fairness of the statements made
or the information contained in the Registration Statement or the
Prospectus and, except in the respects and to the extent set forth in
paragraphs (iii), (xii) and (xiii) above, it is not passing upon and
does not assume any responsibility therefor. In the course of the
preparation by the Fund of the Registration Statement and the
Prospectus, such counsel has participated in discussions with your
representatives and employees and officers of the Fund and the Advisers
and in discussions with the Fund's independent accountants, in which the
business and the affairs of the Fund and the Advisers and the contents
of the Registration Statement and the Prospectus were discussed. There
is no assurance that all material facts as to the Fund, the Investment
Manager, the Advisers and their affairs were disclosed to such counsel
or that its familiarity with the Fund and the Advisers or any
familiarity with the Advisers is such that we would have necessarily
recognized the materiality of such facts as were disclosed to it, and we
have to a large extent relied upon statements of representatives of the
Fund and the Advisers as to the materiality of the facts disclosed to
it. Moreover, many of the determinations required to be made in
preparation of the Registration Statement and Prospectus involve matters
of a non-legal nature. Subject to the foregoing, on the basis of
information that it has gained in the course of performing the services
referred to above, no facts have come to its attention that would lead
it to believe that, as of the effective date of the Registration
Statement the Registration Statement contained any untrue statement of a
material fact or omitted or omits to state any material fact required to
be stated therein or necessary in order to make the
19
statements therein not misleading, or that as of the date of the
Prospectus and the date hereof the Prospectus contained an untrue
statement of material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (in each case,
other than the financial statements and schedules, the notes thereto and
any schedules and other financial or accounting data contained or
incorporated by reference therein or omitted therefrom, as to which we
express no opinion).
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the
Fund. However, the Fund's Declaration of Trust disclaims shareholder
liability for acts or obligations of the Fund and requires that notice
of such disclaimer be given in each agreement, obligation, and
instrument entered into or executed by the Fund or the Trustees. The
Declaration of Trust provides for indemnification out of the property of
the Fund for all loss and expense of any shareholder held personally
liable solely by reason of being or having been a shareholder of the
Fund. Thus, the risk of a shareholder's incurring financial loss on
account of being a shareholder is limited to circumstances in which the
Fund itself would be unable to meet its obligations.
(c) You shall have received on the Closing Date an opinion of
Ropes & Xxxx LLP, counsel for the Investment Adviser, dated the Closing
Date and addressed to you, as Representatives of the several
Underwriters, to the effect that:
(i) Assuming the Investment Adviser is duly registered
as an investment adviser under the Advisers Act, and is not
prohibited by the Advisers Act or the Investment Company Act,
from acting as investment adviser for the Fund as contemplated
by the Investment Management Agreement, the Registration
Statement and the Prospectus, neither the execution and delivery
of the Underwriting Agreement, the Investment Management
Agreement, each of the Sub-Advisory Agreements, by the
Investment Adviser, nor the consummation by the Investment
Adviser of the transactions contemplated thereby, nor compliance
by the Investment Adviser with any of the terms and provisions
thereof will violate the provisions of the Investment Company
Act, the Advisers Act, or the rules and regulations thereunder;
provided, however, that the foregoing does not represent an
opinion as to (a) the reasonableness of the fees to be paid to
the Adviser under the Investment Management Agreement or (b) the
compliance by the Adviser with its indemnification and
contribution obligations set forth in the Underwriting
Agreement.
(ii) Assuming the Subadvisers are duly registered as
investment advisers under the Advisers Act, and are not
prohibited by the Advisers Act or the Investment Company Act,
from acting as portfolio manager for the Fund as contemplated by
the Sub-Advisory Agreements, the Registration Statement and the
Prospectus, neither the execution and delivery of the
Sub-Advisory Agreements by the Adviser, nor the consummation by
the Adviser of the transactions contemplated thereby, nor
compliance by the Adviser with any of the terms and provisions
thereof will violate the provisions of the Investment
20
Company Act, the Advisers Act or the rules and regulations
thereunder; provided, however, that the foregoing does not
represent an opinion as to the reasonableness of the fees to be
paid to the Adviser under each of the Sub-Advisory Agreements.
(d) You shall have received on the Closing Date an opinion of
Xxxxxx X. Xxxxxx, Xx., Esq., internal counsel for the Investment
Adviser, dated the Closing Date and addressed to you, as Representatives
of the several Underwriters, substantially to the effect set forth in
Exhibit A hereto.
(e) You shall have received on the Closing Date an opinion of
Xxxxxxx X. Xxxx, Esq., internal counsel for NFJ, dated the Closing Date
and addressed to you, as Representatives of the several Underwriters,
substantially to the effect set forth in Exhibit B hereto.
(f) You shall have received on the Closing Date an opinion of
Xxxxxxx X. Field, Jr., Esq., internal counsel for NACM, dated the
Closing Date and addressed to you, as Representatives of the several
Underwriters, substantially to the effect set forth in Exhibit C hereto.
(g) You shall have received on the Closing Date an opinion of
Xxxxxxx X. Xxxx, Esq., internal counsel for PEA, dated the Closing Date
and addressed to you, as Representatives of the several Underwriters,
substantially to the effect set forth in Exhibit D hereto.
(h) The Representatives shall have received from Xxxxxxx Xxxxxxx
& Xxxxxxxx LLP, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with
respect to the issuance and sale of the Securities, the Registration
Statement, the Prospectus (together with any supplement thereto) and
other related matters as the Representatives may reasonably require, and
the Fund and the Advisers shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters.
(i) Each of the Fund and the Investment Adviser shall have
furnished to the Representatives a certificate, signed by the Chairman
of the Board or the President and the principal financial or accounting
officer of each of the Fund and the Investment Adviser, as the case may
be, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectus, any supplements to the Prospectus and this Agreement and
that:
(i) The representations and warranties in this agreement
of the Fund and the Investment Adviser, and the representations
and warranties made by the Investment Adviser in this Agreement
with respect to each of the Subadvisers, are true and correct on
and as of the Closing Date with the same effect as if made on
the Closing Date and the Fund and each of the Advisers have
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior
to the Closing Date;
21
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the Fund's or each of
the Adviser's knowledge, threatened; and
(iii) Since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto) (with respect to the certificate of the
Fund) and since the date of the Prospectus (with respect to the
certificate of the Advisers), there has been no material adverse
change in the condition (financial or otherwise), earnings,
business, net assets or properties of the Fund or each of the
Advisers, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement
thereto).
(j) The Fund shall have requested and caused
PricewaterhouseCoopers LLP to have furnished to the Representatives, at
the Execution Time and at the Closing Date, letters, dated respectively
as of the Execution Time and as of the Closing Date, in form and
substance heretofore approved by the Representatives.
(k) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been any material change
specified in the letter referred to in paragraph (i) of this Section 7
delivered on the Closing Date from the letter delivered at the Execution
Time or (ii) any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise),
earnings, business or properties of the Fund and each of the Advisers,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto) the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities
as contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto).
(l) The Securities shall have been listed and admitted and
authorized for trading on the NYSE, and satisfactory evidence of such
actions shall have been provided to the Representatives.
(m) Prior to the Closing Date, the Fund and the Advisers shall
have furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably
request.
If any of the conditions specified in this Section 7 shall not
have been fulfilled when and as provided in this Agreement, or if any of the
opinions and certificates mentioned above or elsewhere in this Agreement shall
not be reasonably satisfactory in form and substance to the Representatives and
counsel for the Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the
22
Representatives. Notice of such cancellation shall be given to the Fund in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 7 shall
be delivered at the office of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the
Underwriters, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, on the Closing Date.
8. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 7 hereof is not satisfied,
because of any termination pursuant to Section 11 hereof or because of any
refusal, inability or failure on the part of the Fund or the Investment Adviser
to perform any agreement herein or comply with any provision hereof other than
by reason of a default by any of the Underwriters, the Investment Adviser will
reimburse the Underwriters severally through Citigroup Global Markets Inc. on
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
9. Indemnification and Contribution. (a) The Fund and the
Investment Adviser, jointly and severally, agree to indemnify and hold harmless
each of you and each other Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls any Underwriter within
the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several (including reasonable costs of
investigation), to which they or any of them may become subject under the Act,
the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement for the Securities as originally filed or in any
amendment thereof (and including any post-effective amendment, any Rule 462(b)
Registration Statement and any Rule 430A Information deemed to be included or
incorporated therein), or in the Prospectus, any Preliminary Prospectus, any
sales material (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Fund and the Advisers will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Fund and the
Advisers by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability which the Fund and the Advisers may otherwise have.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless each of the Fund and the Investment Adviser, each of
its directors and trustees, as the case may be, each of its officers who signs
the Registration Statement, and each person who controls the Fund or the
Advisers within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Fund and the Advisers to each
Underwriter,
23
but only with reference to written information relating to such Underwriter
furnished to the Fund or the Advisers by or on behalf of such Underwriter
through the Representatives specifically for inclusion in the documents referred
to in the foregoing indemnity. This indemnity agreement will be in addition to
any liability which any Underwriter may otherwise have. The Fund and the
Advisers acknowledge that the statements regarding delivery of the Securities
set forth in the last paragraph of the cover page and under the heading
"Underwriting", (i) the list of Underwriters and their respective participation
in the sale of the Securities, (ii) the sentences related to concessions and
reallowances and (iii) the paragraph related to stabilization, syndicate
covering transactions and penalty bids in any Preliminary Prospectus and the
Prospectus constitute the only information furnished in writing by or on behalf
of the several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 9, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 9 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Fund, the Advisers and the Underwriters
severally agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively, "Losses") to which the
Fund, the Advisers and one or more of the Underwriters may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Fund and the Advisers on the one hand
24
(treated jointly for this purpose as one person) and by the Underwriters on the
other from the offering of the Securities; provided, however, that in no case
shall any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for any
amount in excess of the underwriting discount or commission applicable to the
Securities purchased by such Underwriter hereunder. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the Fund,
the Advisers and the Underwriters severally shall contribute in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of the Fund and the Advisers on the one hand (treated jointly for
this purpose as one person) and of the Underwriters on the other in connection
with the statements or omissions which resulted in such Losses as well as any
other relevant equitable considerations. Benefits received by the Fund and the
Advisers (treated jointly for this purpose as one person) shall be deemed to be
equal to the total net proceeds from the offering (before deducting expenses)
received by it, and benefits received by the Underwriters shall be deemed to be
equal to the total underwriting discounts and commissions, in each case as set
forth on the cover page of the Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Fund and the Advisers on
the one hand (treated jointly for this purpose as one person) or the
Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Fund, the Advisers and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
9 were determined by pro rata allocation or any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 9, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Fund or the Advisers within the meaning of either the Act or the Exchange
Act, each officer of the Fund and the Advisers who shall have signed the
Registration Statement and each director or trustee of the Fund and the Advisers
shall have the same rights to contribution as the Fund and the Advisers, subject
in each case to the applicable terms and conditions of this paragraph (d).
(e) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability from claimants on claims that are
the subject matter of such action, suit or proceeding.
(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 9 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Fund and the Advisers set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or
25
on behalf of any Underwriter or any person controlling any Underwriter, the
Fund, the Advisers or their shareholders, trustees, directors, managers, members
or officers or any person controlling the Fund or the Advisers (control to be
determined within the meaning of the Act or the Exchange Act), (ii) acceptance
of any Securities and payment therefor hereunder and (iii) any termination of
this Agreement. A successor to any Underwriter or to the Fund, the Advisers or
their shareholders, trustees, directors, managers, members 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 9.
10. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter, the
Fund or the Advisers. In the event of a default by any Underwriter as set forth
in this Section 10, the Closing Date shall be postponed for such period, not
exceeding five Business Days, as the Representatives shall determine in order
that the required changes in the Registration Statement and the Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Fund and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
11. Termination. This Agreement shall be subject to termination
in the absolute discretion of the Representatives, without liability on the part
of the Underwriters to the Fund or the Advisers, by notice given to the Fund or
the Advisers prior to delivery of and payment for the Securities, if at any time
prior to such time (a) trading in the Fund's Common Shares shall have been
suspended by the Commission or the NYSE or trading in securities generally on
the NYSE shall have been suspended or limited or minimum prices shall have been
established on the exchange, (b) a banking moratorium shall have been declared
either by Federal or New York State authorities or (c) there shall have occurred
any outbreak or escalation of hostilities, declaration by the United States of a
national emergency or war, or other calamity or crisis the effect of which on
financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Prospectus (exclusive of any
supplement thereto).
12. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
each of the Fund and the Adviser or its officers and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any
26
Underwriter or the Fund or the Adviser or any of the officers, trustees,
directors, employees, agents or controlling persons referred to in Section 9
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 8 and 9 hereof shall survive the termination or
cancellation of this Agreement.
13. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Citigroup Global
Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
General Counsel; or, if sent to the Fund or the Advisers, will be mailed,
delivered or telefaxed to PA Fund Management LLC, 0000 Xxxxxx xx xxx Xxxxxxxx,
Xxx Xxxx, XX 00000, Attention: Xxxxx X. Xxxxxxxx, President and confirmed to it
at, attention of the Legal Department.
14. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers, trustees, directors, employees, agents and controlling persons
referred to in Section 9 hereof, and no other person will have any right or
obligation hereunder.
15. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
16. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
17. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
18. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"1940 Act" shall mean the Investment Company Act of 1940, as
amended.
"1940 Act Rules and Regulations" shall mean the rules and
regulations of the Commission under the 1940 Act.
"1940 Act Notification" shall mean a notification of
registration of the Fund as an investment company under the 1940 Act on
Form N-8A, as the 1940 Act Notification may be amended from time to
time.
"Act" shall mean the Securities Act of 1933, as amended.
"Act Rules and Regulations" shall mean the rules and regulations
of the Commission under the Act.
"Advisers Act" shall mean the Investment Advisers Act of 1940,
as amended.
27
"Advisers Act Rules and Regulations" shall mean the rules and
regulations of the Commission under the Advisers Act.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Preliminary Prospectus" shall mean any preliminary prospectus
(including the statement of additional information incorporated by
reference therein) referred to in paragraph 1(a) above and any
preliminary prospectus (including the statement of additional
information incorporated by reference therein) included in the
Registration Statement at the Effective Date that omits Rule 430A
Information.
"Prospectus" shall mean the prospectus and any amendment or
supplement thereto (including the statement of additional information
incorporated by reference therein) relating to the Securities that is
first filed pursuant to Rule 497 after the Execution Time or, if no
filing pursuant to Rule 497 is required, shall mean the form of final
prospectus (including the statement of additional information
incorporated by reference therein) relating to the Securities included
in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective) and,
in the event any post-effective amendment thereto or any Rule 462(b)
Registration Statement becomes effective prior to the Closing Date,
shall also mean such registration statement as so amended or such Rule
462(b) Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
"Rule 430A" and "Rule 462" refer to such rules under the Act.
28
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(a) hereof.
"Rule 497" refers to Rule 497(c) or 497(h) under the Act, as
applicable.
"Rules and Regulations" shall mean, collectively, the Act Rules
and Regulations and the 1940 Act Rules and Regulations.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Fund, the Investment Adviser and the several Underwriters.
Very truly yours,
NFJ, DIVIDEND INTEREST & PREMIUM
STRATEGY FUND
By:
-------------------------------------
Name:
Title:
PA FUND MANAGEMENT LLC
By:
-------------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Citigroup Global Markets Inc.
By:
-----------------------------
Name:
Title:
For itself and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
SCHEDULE I
Number of Underwritten
Securities to be
Underwriters Purchased
------------ ----------------------
Citigroup Global Markets Inc.........................
--------------
Total................................ ==============
Exhibit A
Form of Opinion of Internal Counsel for the Investment Adviser
Exhibit B
Form of Opinion of Internal Counsel for NFJ
Exhibit C
Form of Opinion of Internal Counsel for NACM
Exhibit D
Form of Opinion of Internal Counsel for PEA
