Exhibit 99.(h)(i)
Exhibit(h)(i)
Madison/Claymore Covered Call Fund
(a Delaware statutory trust)
Common Shares of Beneficial Interest
(Par Value $.01 per share)
PURCHASE AGREEMENT
[ ], 2004
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
[other co-managers]
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Madison/Claymore Covered Call Fund, a Delaware statutory trust (the "Fund")
and the Fund's investment adviser, Claymore Advisors, LLC, a Delaware limited
liability company (the "Investment Adviser") and its investment manager, Madison
Asset Management, LLC, a Wisconsin limited liability company (the "Investment
Manager" and together with the Investment Adviser, the "Advisers") each confirms
its agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx"), [other co-managers] and each of the other
Underwriters named in Schedule A hereto (collectively, the "Underwriters," which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom Xxxxxxx Xxxxx, [other co-managers] are acting as
representatives (in such capacity, the "Representatives"), with respect to the
issue and sale by the Fund and the purchase by the Underwriters, acting
severally and not jointly, of the respective number of common shares of
beneficial interest, par value $.01 per share, of the Fund ("Common Shares") set
forth in said SCHEDULE A, and with respect to the grant by the Fund to the
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of [ ] additional Common
Shares for the sole purpose of covering overallotments, if any. The aforesaid [
] Common Shares (the "Initial Securities") to be purchased by the Underwriters
and all or any part of the [ ] Common Shares subject to the option described
in Section 2(b) hereof (the "Option Securities") are hereinafter called,
collectively, the "Securities."
The Fund understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Fund has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (No. 333-115386 and No.
811-21582) covering the registration of the Securities under the Securities Act
of 1933, as amended (the "1933 Act"), including the related preliminary
prospectus or prospectuses, and a notification on Form N-8A of registration of
the Fund as an investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and the rules and regulations of the Commission under
the 1933 Act and the 1940 Act (the "Rules and Regulations"). Promptly after
execution and delivery of this Agreement, the Fund will either (i) prepare
and file a prospectus in accordance with the provisions of Rule 430A ("Rule
430A") of the Rules and Regulations and paragraph (c) or (h) of Rule 497 ("Rule
497") of the Rules and Regulations or (ii) if the Fund has elected to rely upon
Rule 434 ("Rule 434") of the Rules and Regulations, prepare and file a term
sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and Rule
497. The information included in any such prospectus or in any such Term Sheet,
as the case may be, that was omitted from such registration statement at the
time it became effective but that is deemed to be part of such registration
statement at the time it became effective, if applicable, (a) pursuant to
paragraph (b) of Rule 430A is referred to as "Rule 430A Information" or (b)
pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434 Information."
Each prospectus publicly distributed before such registration statement became
effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, including in each
case any statement of additional information incorporated therein by reference,
is herein called a "preliminary prospectus." Such registration statement,
including the exhibits thereto and schedules thereto at the time it became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the Rules and Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus in the form first filed under paragraph (c) or
(h) of Rule 497 and furnished to the Underwriters for use in connection with the
offering of the Securities, including the statement of additional information
incorporated therein by reference, is herein called the "Prospectus." If Rule
434 is relied on, the term "Prospectus" shall refer to the preliminary
prospectus dated [ ], 2004 together with the Term Sheet and all references in
this Agreement to the date of the Prospectus shall mean the date of the Term
Sheet. For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the Prospectus or any Term Sheet or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) REPRESENTATIONS AND WARRANTIES BY THE FUND AND THE ADVISERS. The
Fund and the Advisers jointly and severally represent and
warrant to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each
Date of Delivery (if any) referred to in Section 2(b) hereof,
and agree with each Underwriter, as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. Each of the
Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act and no stop
order suspending the effectiveness of the Registration Statement
or any Rule 462(b) Registration Statement has been issued under
the 1933 Act, or order of suspension or revocation of
registration pursuant to Section 8(e) of the 1940 Act, and no
proceedings for any such purpose have been instituted or are
pending or, to the knowledge of the Fund or the Advisers, are
contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with
in all material respects.
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At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement, the notification of Form N-8A and any
amendments and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act, the 1940 Act and the Rules
and Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. Neither
the Prospectus nor any amendments or supplements thereto, on the respective
date of the Prospectus or any such amendment or supplement and at the
Closing Time (and, if any Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material fact
or omitted or will 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. If Rule 434 is used, the Fund will comply in all
material respects with the requirements of Rule 434 and the Prospectus
shall not be "materially different," as such term is used in Rule 434, from
the prospectus included in the Registration Statement at the time it became
effective.
Each preliminary prospectus and the prospectus filed as part of the
effective Registration Statement or as part of any amendment thereto, or
filed pursuant to Rule 497 under the 1933 Act, complied when so filed in
all material respects with the Rules and Regulations and each preliminary
prospectus and the Prospectus delivered to the Underwriters for use in
connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
If a Rule 462(b) Registration Statement is required in connection with
the offering and sale of the Securities, the Fund has complied or will
comply with the requirements of Rule 111 under the 1933 Act Regulations
relating to the payment of filing fees thereof.
The foregoing representations in this Section 1(a)(i) do not apply to
statements or omissions relating to the Underwriters made in reliance on
and in conformity with information furnished in writing to the Fund by the
Underwriters or their agents expressly for use in the Registration
Statement, the 462(b) Registration Statement, Prospectus or preliminary
prospectus (or any amendment or supplement to any of the foregoing), or
with respect to representations of the Fund, the descriptions of each of
Advisers (referred to in Section (1)(b)(iii) of this Agreement) contained
in the foregoing.
(ii) INDEPENDENT ACCOUNTANTS. As of the date of the report of the
independent accountants contained in the Registration Statement,
the accountants who certified the statement of assets and
liabilities included in the Registration Statement are
independent public accountants as required by the 1933 Act and
the Rules and Regulations.
(iii) FINANCIAL STATEMENTS. The statement of assets and liabilities
included in the Registration Statement and the Prospectus,
together with the related notes, presents fairly the financial
position of the Fund in all material respects at the date
indicated; said statement has been prepared in conformity with
generally accepted accounting principles ("GAAP").
(iv) EXPENSE SUMMARY. The information set forth in the Prospectus in
the Fee Table has been prepared in accordance with the
requirements of Form N-2 and to the extent
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estimated or projected, such estimates or projections are
reasonably believed to be attainable and reasonably based.
(v) NO MATERIAL ADVERSE CHANGE. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has
been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business
prospects of the Fund, whether or not arising in the ordinary
course of business (a "Material Adverse Effect"), (B) there have
been no transactions entered into by the Fund, other than those
in the ordinary course of business, which are material with
respect to the Fund, and (C) there has been no dividend or
distribution of any kind declared, paid or made by the Fund on
any class of its capital shares.
(vi) GOOD STANDING OF THE FUND. The Fund has been duly organized and
is validly existing as an unincorporated voluntary association
in good standing under the laws of the state of Delaware and has
power and authority to own and lease its properties and to
conduct its business as described in the Prospectus and to enter
into and perform its obligations under this Agreement; and the
Fund is duly qualified to transact business and is in good
standing in each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a
Material Adverse Effect.
(vii) NO SUBSIDIARIES. The Fund has no subsidiaries.
(viii) INVESTMENT COMPANY STATUS. The Fund is duly registered with the
Commission under the 1940 Act as a closed-end diversified
management investment company, and no order of suspension or
revocation of such registration has been issued or proceedings
therefor initiated or, to the knowledge of the Fund or each of
Advisers, threatened by the Commission.
(ix) OFFICERS AND TRUSTEES. No person is serving or acting as an
officer, trustee or investment adviser of the Fund except in
accordance with the provisions of the 1940 Act and the Rules and
Regulations and the Investment Advisers Act of 1940, as amended
(the "Advisers Act"), and the rules and regulations of the
Commission promulgated under the Advisers Act (the "Advisers Act
Rules and Regulations"). Except as disclosed in the Registration
Statement and the Prospectus (or any amendment or supplement to
either of them), no trustee of the Fund is (A) an "interested
person" (as defined in the 0000 Xxx) of the Fund or (B) an
"affiliated person" (as defined in the 0000 Xxx) of any
Underwriter. For purposes of this Section 1(a)(ix), the Fund and
each of Advisers shall be entitled to rely on representations
from such officers and trustees.
(x) CAPITALIZATION. The authorized, issued and outstanding shares of
beneficial interest of the Fund is as set forth in the
Prospectus. All issued and outstanding common shares of
beneficial interest of the Fund have been duly authorized and
validly issued and are fully paid and non-assessable (except as
described in the Registration Statement) and have been offered
and sold or exchanged by the Fund in compliance with all
applicable laws (including, without limitation, federal and
state securities laws); none of the outstanding common shares of
beneficial interest of the Fund was issued in violation of the
preemptive or other similar rights of any securityholder of the
Fund.
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(xi) AUTHORIZATION AND DESCRIPTION OF SECURITIES. The Securities to
be purchased by the Underwriters from the Fund have been duly
authorized for issuance and sale to the Underwriters pursuant to
this Agreement and, when issued and delivered by the Fund
pursuant to this Agreement against payment of the consideration
set forth herein, will be validly issued and fully paid and
non-assessable (except as described in the Registration
Statement). In all material respects, the Common Shares conform
to all statements relating thereto contained in the Prospectus
and such description conforms to the rights set forth in the
instruments defining the same, to the extent such rights are set
forth; no holder of the Securities will be subject to personal
liability by reason of being such a holder (except as described
in the Registration Statement); and the issuance of the
Securities is not subject to the preemptive or other similar
rights of any securityholder of the Fund.
(xii) ABSENCE OF DEFAULTS AND CONFLICTS. The Fund is not in violation
of its agreement and declaration of trust or by-laws, each as
amended from time to time, or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other 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
(collectively, "Agreements and Instruments") except for such
violations or defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance of
this Agreement, the Investment Advisory Agreement dated as of
[ ], 2004 between the Fund and the Investment Adviser (the
"Management Agreement"), the Sub-Advisory Agreement dated as of
[ ], 2004 among the Fund, the Investment Adviser and the
Investment Manager (the "Sub-Advisory Agreement"), the Custodian
Contract dated as of [ ], 2004 between the Fund and The Bank
of New York (the "Custodian Agreement") and the Registrar,
Transfer Agency and Service Agreement dated as of [ ], 2004
between the Fund and The Bank of New York (the "Transfer Agency
Agreement") and the consummation of the transactions
contemplated herein and in the Registration Statement (including
the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the
Prospectus under the caption "Use of Proceeds") and compliance
by the Fund with its obligations hereunder have been duly
authorized by all necessary action under the Delaware Statutory
Trust Act (the "Delaware Act") and do not and will not, whether
with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property
or assets of the Fund pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action result in any
violation (except for such violations that will not result in a
Material Adverse Effect) of the provisions of the agreement and
declaration of trust or by-laws of the Fund, each as amended
from time to time, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Fund or any of its assets, properties or
operations, other than State securities or "blue sky" laws
applicable in connection with the purchase and distribution of
the Securities by the Underwriters pursuant to this Agreement.
As used herein, a "Repayment Event" means any event or condition
which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting
5
on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness
by the Fund.
(xiii) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Fund, threatened, against or
affecting the Fund, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or
which would (if determined in a manner adverse to the Fund)
reasonably be expected to result in a Material Adverse Effect
(including the consummation of the transactions contemplated in
this Agreement or the performance by the Fund of its obligations
hereunder). The aggregate of all pending legal or governmental
proceedings to which the Fund is a party or of which any of its
property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation
incidental to the business, would not (if determined in a manner
adverse to the Fund) reasonably be expected to result in a
Material Adverse Effect.
(xiv) ACCURACY OF EXHIBITS. There are no material contracts or
documents which are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits thereto
by the 1933 Act, the 1940 Act or by the Rules and Regulations
which have not been so described and filed as required.
(xv) POSSESSION OF INTELLECTUAL PROPERTY. The Fund owns or possesses,
or can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual
property (collectively, "Intellectual Property") necessary to
carry on the business now operated by the Fund, and the Fund has
not received any notice or is not otherwise aware of any
infringement of or conflict with asserted rights of others with
respect to any Intellectual Property.
(xvi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority
or agency is necessary or required for the performance by the
Fund of its obligations hereunder, in connection with the
offering, issuance or sale of the Securities hereunder or the
consummation of the transactions contemplated by this Agreement,
except as referred to in the Prospectus or the Registration
Statement and such as have been already obtained or as may be
required under the 1933 Act, the 1940 Act, the Securities
Exchange Act of 1934, as amended (the "1934 Act"), the rules of
the New York Stock Exchange (the "NYSE") or state securities
laws.
(xvii) POSSESSION OF LICENSES AND PERMITS. The Fund possesses such
permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies
or bodies necessary to operate its properties and to conduct the
business as contemplated in the Prospectus, except where the
absence of such possession would not result in a Material
Adverse Effect; the Fund is in compliance with the terms and
conditions of all such Governmental Licenses, except where the
failure so to comply would not, singly or in the aggregate, have
a Material Adverse Effect; all of the Governmental Licenses are
valid and in full force and effect, except when the invalidity
of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not
have a Material Adverse Effect; and the Fund has not received
any notice of proceedings relating to the revocation or
modification of any
6
such Governmental Licenses which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect.
(xviii) ADVERTISEMENTS. Any advertising, sales literature or other
promotional material (including "prospectus wrappers," "broker
kits," "road show slides" and "road show scripts") authorized in
writing by or prepared by the Fund or the Advisers and used in
connection with the public offering of the Securities
(collectively, "sales material") does not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they
were made, not misleading. All sales material complied and will
comply in all material respects with the applicable requirements
of the 1933 Act, the 1940 Act and the Rules and Regulations and
the rules and interpretations of the National Association of
Securities Dealers, Inc. ("NASD").
(xix) SUBCHAPTER M. The Fund intends to direct the investment of the
proceeds of the offering described in the Registration Statement
in such a manner as to comply with the requirements of
Subchapter M of the Internal Revenue Code of 1986, as amended
("Subchapter M of the Code" and the "Code," respectively), and
intends to qualify as a regulated investment company under
Subchapter M of the Code.
(xx) DISTRIBUTION OF OFFERING MATERIALS. The Fund has not distributed
and, prior to the later to occur of (A) the Closing Time and (B)
completion of the distribution of the Common Shares, will not
distribute any offering material in connection with the offering
and sale of the Common Shares other than the Registration
Statement, a preliminary prospectus, the Prospectus or the sales
materials.
(xxi) ACCOUNTING CONTROLS. The Fund maintains a system of internal
accounting controls sufficient to provide reasonable assurances
that (A) transactions are executed in accordance with
management's general or specific authorization and with the
applicable requirements of the 1940 Act, the Rules and
Regulations and the Code; (B) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets and to maintain compliance
with the books and records requirements under the 1940 Act and
the Rules and Regulations; (C) access to assets is permitted
only in accordance with the management's general or specific
authorization; and (D) the recorded accountability for assets is
compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxii) ABSENCE OF UNDISCLOSED PAYMENTS. To the Fund's knowledge,
neither the Fund nor any employee or agent of the Fund has made
any payment of funds of the Fund or received or retained any
funds, which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus.
(xxiii) MATERIAL AGREEMENTS. This Agreement, the Management Agreement,
the Sub-Advisory Agreement, the Custodian Agreement and the
Transfer Agency Agreement have each been duly authorized by all
requisite action on the part of the Fund, executed and delivered
by the Fund, as of the dates noted therein and each complies in
all material respects with all applicable provisions of the 1940
Act. Assuming due authorization, execution and delivery by the
other parties thereto, each such Agreement constitutes a valid
and binding agreement of the Fund, enforceable in accordance
with its terms, except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws, whether statutory or
7
decisional, relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good
faith and fair dealing and except as rights to indemnification
or contribution thereunder may be limited by federal or state
laws.
(xxiv) REGISTRATION RIGHTS. There are no persons with registration
rights or other similar rights to have any securities of the
Fund registered pursuant to the Registration Statement or
otherwise registered by the Fund under the 1933 Act.
(xxv) NYSE LISTING. The Securities have been duly authorized for
listing, upon notice of issuance, on the NYSE and the Fund's
registration statement on Form 8-A under the 1934 Act has become
effective.
(b) REPRESENTATIONS AND WARRANTIES BY THE ADVISERS. Each of the
Advisers represents and warrants to each Underwriter, and in the
case of paragraph (iii) also represent to the Fund, as of the
date hereof, as of the Closing Time referred to in Section 2(c)
hereof, and as of each Date of Delivery (if any) referred to in
Section 2(b) hereof as follows:
(i) GOOD STANDING OF THE ADVISERS. Such Adviser has been duly
organized and is validly existing and in good standing as a
limited liability company under the laws of the state of
Delaware, in case of the Investment Adviser and Wisconsin, in
case of the Investment Manager, with full power and authority to
own, lease and operate its properties and to conduct its
business as described in the Prospectus and each is duly
qualified as a foreign corporation to transact business and is
in good standing in each other jurisdiction in which such
qualification is required, except to the extent that failure to
be so qualified and in good standing would not have a material
adverse effect on the Adviser's ability to perform its
obligations under the Management Agreement (in the case of the
Investment Adviser) or the Sub-Advisory Agreement (in the case
of the Investment Manager).
(ii) INVESTMENT ADVISER STATUS. Such Adviser is duly registered and
in good standing with the Commission as an investment adviser
under the Advisers Act, and is not prohibited by the Advisers
Act or the 1940 Act, or the rules and regulations under such
acts, from acting under the Management Agreement and the
Sub-Advisory Agreement for the Fund as contemplated by the
Prospectus.
(iii) DESCRIPTION OF THE ADVISERS. The description of such Adviser in
the Registration Statement and the Prospectus (and any amendment
or supplement to either of them) complied and comply in all
material respects with the provisions of the 1933 Act, the 1940
Act, the Advisers Act, the Rules and Regulations and the
Advisers Act Rules and Regulations and does 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, in light of the
circumstances under which they were made, not misleading.
(iv) CAPITALIZATION. Such Adviser (whether alone or together with its
affiliates) has the financial resources available to it
necessary for the performance of its services and obligations as
contemplated in the Prospectus, this Agreement and under the
Management Agreement and the Sub-Advisory Agreement to which it
is a party.
(v) AUTHORIZATION OF AGREEMENTS; ABSENCE OF DEFAULTS AND CONFLICTS.
Each of this Agreement, the Management Agreement and the
Sub-Advisory Agreement to which such Adviser is a party has each
been duly authorized, executed and delivered by
8
such Adviser, and, assuming due authorization, execution and
delivery by the other parties thereto, such Agreements to which
such Adviser is a party constitute valid and binding obligations
of the Adviser, enforceable in accordance with their respective
terms, except as affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws,
whether statutory or decisional, relating to or affecting
creditors' rights generally and general equitable principles
(whether considered in a proceeding in equity or at law) and
except as rights to indemnification and contribution thereunder
may be limited by federal and state law; and neither the
execution and delivery of any of this Agreement, the Management
Agreement or the Sub-Advisory Agreement to which such Adviser is
a party nor the performance by such Adviser of its obligations
hereunder or thereunder will conflict with, or result in a
breach of any of the terms and provisions of, or constitute,
with or without the giving of notice or lapse of time or both, a
default under, any agreement or instrument to which such Adviser
is a party or by which it is bound, the organizational documents
of the Adviser, or to the Adviser's knowledge, by any law,
order, decree, rule or regulation applicable to it of any
jurisdiction, court, federal or state regulatory body,
administrative agency or other governmental body, stock exchange
or securities association having jurisdiction over the Adviser
or its properties or operations, except where such breach or
default would not have a material adverse effect on such
Adviser's ability to perform the services contemplated by this
Agreement, the Management Agreement or the Sub-Advisory
Agreement; and no consent, approval, authorization or order of
any court or governmental authority or agency is required for
the consummation by the Adviser of the transactions contemplated
by this Agreement, the Management Agreement, or the Sub-Advisory
Agreement except as have been obtained or may be required under
the 1933 Act, the 1940 Act, the 1934 Act, NYSE or state
securities laws.
(vi) NO MATERIAL ADVERSE CHANGE. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, there has not
occurred any event which would reasonably be expected to have a
material adverse effect on the ability of such Adviser to
perform its obligations under any of this Agreement, the
Management Agreement and the Sub-Advisory Agreement to which it
is a party.
(vii) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of such Adviser, threatened against or
affecting the Adviser or any parent or subsidiary of the Adviser
or any partners, directors, officers or employees of the
foregoing, whether or not arising in the ordinary course of
business, which would reasonably be expected to result in any
material adverse change in the condition, financial or
otherwise, or earnings, business affairs or business prospects
of the Adviser, to materially and adversely affect the
properties or assets of the Adviser or to materially impair or
adversely affect the ability of the Adviser to function as an
investment adviser or perform its obligations under the
Management Agreement or the Sub-Advisory Agreement to which it
is a party, or which is required to be disclosed in the
Registration Statement and the Prospectus (and has not been so
disclosed).
(viii) ABSENCE OF VIOLATION OR DEFAULT. Such Adviser is not in
violation of its organizational documents or in default under
any agreement, indenture or instrument, where such violation or
default would reasonably be expected to have a material
9
adverse effect on the ability of such Adviser to perform its
obligations under either of the Management Agreement or the
Sub-Advisory Agreement to which it is a party.
(c) OFFICER'S CERTIFICATES. Any certificate signed by any officer of
the Fund or any Adviser delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation
and warranty by the Fund or the Advisers, as the case may be, to
each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) INITIAL SECURITIES. On the basis of the representations and
warranties herein contained and subject to the terms and
conditions herein set forth, the Fund agrees to sell to each
Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from the Fund, at
the price per share set forth in SCHEDULE B, the number of
Initial Securities set forth in SCHEDULE A opposite the name of
such Underwriter, plus any additional number of Initial
Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(b) OPTION SECURITIES. In addition, on the basis of the
representations and warranties herein contained and subject to
the terms and conditions herein set forth, the Fund hereby
grants an option to the Underwriters, severally and not jointly,
to purchase up to an additional [ ] Common Shares in the
aggregate at the price per share set forth in SCHEDULE B, less
an amount per share equal to any dividends or distributions
declared by the Fund and payable on the Initial Securities but
not payable on the Option Securities. The option hereby granted
will expire 45 days after the date hereof and may be exercised
in whole or in part from time to time only for the purpose of
covering overallotments which may be made in connection with the
offering and distribution of the Initial Securities upon written
notice by the Representatives to the Fund setting forth the
number of Option Securities as to which the several Underwriters
are then exercising the option and the time and date of payment
and delivery for such Option Securities. Any such time and date
of delivery (a "Date of Delivery") shall be determined by the
Representatives, but shall not be earlier than the third day
after the date on which the option is being exercised nor later
than seven full business days after the exercise of said option,
nor in any event prior to the Closing Time, as hereinafter
defined. If the option is exercised as to all or any portion of
the Option Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the
total number of Option Securities then being purchased which the
number of Initial Securities set forth in SCHEDULE A opposite
the name of such Underwriter bears to the total number of
Initial Securities, subject in each case to such adjustments as
Xxxxxxx Xxxxx in its discretion shall make to eliminate any
sales or purchases of a fractional number of Option Securities
plus any additional number of Option Securities which such
Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof.
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the
offices of Xxxxxxxx Chance US LLP, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, or at such other place as shall be agreed upon
by the Representatives and the Fund, at 10:00 A.M. (Eastern
time) on the third (fourth, if the pricing occurs after 4:30
P.M. (Eastern time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions
of Section 10), or such other time not later than ten business
days after such date as shall be agreed upon by the
Representatives and the Fund (such time and date of payment and
delivery being herein called "Closing Time").
10
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Fund, on each Date of Delivery as specified in the notice from the
Representatives to the Fund.
Payment shall be made to the Fund by wire transfer of immediately available
funds to a bank account designated by the Fund, against delivery to the
Representatives for the respective accounts of the Underwriters of certificates
for the Securities to be purchased by them. It is understood that each
Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Xxxxxxx Xxxxx, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such
denominations and registered in such names as the
Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of
Delivery, as the case may be. The certificates for the Initial
Securities and the Option Securities, if any, will be made
available for examination and packaging by the Representatives
in the City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant
Date of Delivery, as the case may be.
SECTION 3. Covenants.
(a) The Fund and the Advisers, jointly and severally, covenant with
each Underwriter as follows:
(i) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS.
For a period of one year from the date hereof, the Fund, subject
to Section 3(a)(ii), will comply with the requirements of Rule
430A or Rule 434, as applicable, and will notify the
Representatives immediately, and confirm the notice in writing,
(i) when any post-effective amendment to the Registration
Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii)
of the receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or
for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending
the use of any preliminary prospectus, or of the suspension of
the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or, to the knowledge of the
Fund, threatening of any proceedings for any of such purposes.
The Fund will promptly effect the filings necessary pursuant to
Rule 497 and will take such steps as it deems necessary to
ascertain promptly whether the form of prospectus transmitted
for filing under Rule 497 was received for filing by the
Commission and, in the event that it was not, it will promptly
file such prospectus. The Fund will make every reasonable effort
to prevent the issuance of any stop order, or order of
suspension or revocation of registration pursuant to Section
8(e) of the 1940 Act, and, if any such stop order or order of
suspension or revocation of registration is issued, to obtain
the lifting thereof at the earliest possible moment.
11
(ii) FILING OF AMENDMENTS. For a period of one year from the date
hereof, the Fund will give the Representatives notice of its
intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it
became effective or to the Prospectus, will furnish the
Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case
may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall reasonably
object.
(iii) DELIVERY OF REGISTRATION STATEMENTS. The Fund has furnished or
will deliver to the Representatives, without charge, a signed
copy of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and a signed copy of all
consents and certificates of experts, and will also deliver to
the Representatives, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The
copies of the Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T. No copy of a post-effective amendment shall be
required to be delivered after one year from the date hereof.
(iv) DELIVERY OF PROSPECTUSES. The Fund has delivered to each
Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the
Fund hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Fund will furnish to each
Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act, such
number of copies of the Prospectus (as amended or supplemented)
as such Underwriter may reasonably request. The Prospectus and
any amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
(v) CONTINUED COMPLIANCE WITH SECURITIES LAWS. If at any time when
the Prospectus (as amended or supplemented) is required by the
1933 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a
result of which it is necessary, in the reasonable opinion of
counsel for the Underwriters or for the Fund, to amend the
Registration Statement or amend or supplement the Prospectus in
order that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in the light
of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the reasonable
opinion of such counsel, at any such time to amend the
Registration Statement or amend or supplement the Prospectus in
order to comply with the requirements of the 1933 Act or the
Rules and Regulations, the Fund will promptly prepare and file
with the Commission, subject to Section 3(a)(ii), such amendment
or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectus
comply with such requirements, and the Fund will furnish to the
Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request; provided
that, if the supplement or amendment is required exclusively as
a result of a misstatement in or omission from
12
the information provided to the Fund in writing by the
Underwriters expressly for use in the Prospectus, the Fund may
deliver such supplement or amendment to the Underwriters and
dealers at a reasonable charge not to exceed the actual cost
thereof to the Fund.
(vi) BLUE SKY QUALIFICATIONS. The Fund will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such
states and other jurisdictions of the United States as the
Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration
Statement and any Rule 462(b) Registration Statement; provided,
however, that the Fund shall not be obligated to file any
general consent to service of process or to qualify as a foreign
entity or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not
otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Fund will file such
statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration
Statement.
(vii) RULE 158. The Fund will make generally available to its
securityholders as soon as practicable an earnings statement, if
applicable, for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933
Act.
(viii) USE OF PROCEEDS. The Fund will use the net proceeds received by
it from the sale of the Securities substantially in the manner
specified in the Prospectus under "Use of Proceeds."
(ix) LISTING. The Fund will use its reasonable best efforts to cause
the Securities to be duly authorized for listing by the NYSE,
prior to the date the Securities are issued.
(x) RESTRICTION ON SALE OF SECURITIES. During a period of 180 days
from the date of the Prospectus, the Fund will not, without the
prior written consent of Xxxxxxx Xxxxx, (A) directly or
indirectly, offer, pledge, sell, contract to sell, sell any
option, rights or warrant to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase
or otherwise transfer or dispose of Common Shares or any
securities convertible into or exercisable or exchangeable for
Common Shares or file any registration statement under the 1933
Act with respect to any of the foregoing or (B) enter into any
swap or any other agreement or any transaction that transfers,
in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Shares, whether any such
swap or transaction described in clause (A) or (B) above is to
be settled by delivery of Common Shares or such other
securities, in cash or otherwise. The foregoing sentence shall
not apply to (1) the Securities to be sold hereunder or (2)
Common Shares issued or, for avoidance of doubt, purchased in
the open market pursuant to any dividend reinvestment plan.
(xi) REPORTING REQUIREMENTS. The Fund, during the period when the
Prospectus is required to be delivered under the 1933 Act, will
file all documents required to be filed with the Commission
pursuant to the 1940 Act and the 1934 Act within the time
periods required by the 1940 Act and the Rules and Regulations
and the 1934 Act and the rules and regulations of the Commission
thereunder, respectively.
13
(xii) SUBCHAPTER M. The Fund will use its best efforts to comply with
the requirements of Subchapter M of the Code to qualify as a
regulated investment company under the Code.
(xiii) NO MANIPULATION OF MARKET FOR SECURITIES. The Fund will not (a)
take, directly or indirectly, any action designed to cause or to
result in, or that might reasonably be expected to constitute,
the stabilization or manipulation of the price of any security
of the Fund to facilitate the sale or resale of the Securities
in violation of federal or state securities laws, and (b) except
for share repurchases permitted in accordance with applicable
laws and purchases of Securities in the open market pursuant to
the Fund's dividend reinvestment plan, until the Closing Date,
or the Date of Delivery, if any, (i) sell, bid for or purchase
the Securities or pay any person any compensation for soliciting
purchases of the Securities or (ii) pay or agree to pay to any
person any compensation for soliciting another to purchase any
other securities of the Fund.
(xiv) RULE 462(b) REGISTRATION STATEMENT. If the Fund elects to rely
upon Rule 462(b), the Fund shall file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) by
10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Fund shall at the time of filing either pay
to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the 1933 Act.
SECTION 4. Payment of Expenses.
(a) EXPENSES. The Fund will pay all expenses incident to the
performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the
reasonable costs of the preparation, printing and delivery to
the Underwriters of this Agreement, any Agreement among
Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or
delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates, if any, for the Securities to the
Underwriters, including any stock or other transfer taxes and
any stamp or other duties payable upon the sale, issuance or
delivery of the Securities to the Underwriters, (iv) the fees
and disbursements of the Fund's counsel, accountants and other
advisers, (v) the qualification of the Securities, if required,
under securities laws in accordance with the provisions of
Section 3(a)(vi) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the
preparation of any requisite Blue Sky survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of
copies of each preliminary prospectus, Prospectus and any
amendments or supplements thereto, (vii) the preparation,
printing and delivery to the Underwriters of copies of any
requisite Blue Sky Survey and any supplement thereto, (viii) the
fees and expenses of any transfer agent or registrar for the
Securities, (ix) the filing fees incident to, and the reasonable
fees and disbursements of counsel to the Underwriters in
connection with, the review by the NASD of the terms of the sale
of the Securities, (x) the fees and expenses incurred in
connection with the listing of the Securities on the NYSE and
(xi) the printing of any sales material. Also, the Fund shall
pay the Underwriters $.00667 per Common Share purchased by the
Underwriters pursuant to this Agreement as partial reimbursement
of expenses incurred in connection with the offering; provided,
however, that such partial reimbursement payable by the Fund
shall not exceed 0.03335% of the aggregate price to the public
(as set forth in the
14
Prospectus) of the Initial Securities and any Option Securities
that may be sold to the Underwriters pursuant to Section 2(b) of
this Agreement (as used herein, the "Aggregate Offering Price").
The Investment Adviser has agreed to pay (1) all organizational
expenses and (2) offering costs (other than sales load) of the
Fund that exceed $.04 per Common Share purchased by the
Underwriters pursuant to this Agreement (the "Offering Cost
Limitation"). The Fund shall pay to Claymore Securities, Inc.,
in connection with its distribution assistance in connection
with the sale of the Common Shares, an amount equal to the
lesser of (y) 0.10% of the Aggregate Offering Price and (z) the
positive amount by which the Offering Cost Limitation exceeds
the actual offering costs of the Fund or, if the actual offering
costs of the Fund are equal to or greater than the Offering Cost
Limitation, zero.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5
or Section 9(a) hereof, the Fund and each of Advisers, jointly
and severally, agree that they shall reimburse the Underwriters
for all of their out-of-pocket expenses incurred, including the
reasonable fees and disbursements of counsel for the
Underwriters.
SECTION 5. Conditions of Underwriters' Obligations.
The obligations of the several Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Fund and the Advisers
contained in Section 1 hereof or in certificates of any officer of the Fund or
any Adviser delivered pursuant to the provisions hereof, to the performance by
the Fund and the Advisers of their respective covenants and other obligations
hereunder, and to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, has
become effective or will have become effective by 5:30 p.m., New
York City time on the date hereof, and at Closing Time no stop
order suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act, no notice or order
pursuant to Section 8(e) of the 1940 Act shall have been issued,
and no proceedings with respect to either shall have been
initiated or, to the knowledge of counsel to the Underwriters
and counsel to the Fund, threatened by the Commission, and any
request on the part of the Commission for additional information
shall have been complied with or waived to the reasonable
satisfaction of counsel to the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with
the Commission in accordance with Rule 497 (or a post-effective
amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule
430A or a certificate must have been filed in accordance with
Rule 497(j)) or, if the Fund has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in
accordance with Rule 497.
(b) OPINION OF COUNSEL FOR FUND AND THE ADVISERS. At Closing Time,
the Representatives shall have received the favorable opinions,
dated as of Closing Time, of Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, counsel for the Fund, of Xxxxxxxx Xxxxxxx, general
counsel of the Investment Adviser, and of [ ], counsel for
the Investment Manager, together with signed or reproduced
copies of such letter for each of the other Underwriters
substantially to the effect set forth in EXHIBIT A and EXHIBIT B
hereto or in such other forms and substance reasonably
satisfactory to counsel to the Underwriters.
15
(c) OPINION OF COUNSEL FOR UNDERWRITERS. At Closing Time, the
Representatives shall have received the favorable opinion, dated
as of Closing Time, of Xxxxxxxx Chance US LLP, counsel for the
Underwriters, together with signed or reproduced copies of such
letter for each of the other Underwriters to the effect set
forth in EXHIBIT C hereto. In giving such opinion such counsel
may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and
the federal law of the United States, upon the opinions of
counsel satisfactory to the Representatives. Such counsel may
also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Fund and certificates of public
officials.
(d) OFFICERS' CERTIFICATES. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of
which information is given in the Prospectus, any material
adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the
Fund, whether or not arising in the ordinary course of business,
and the Representatives shall have received a certificate of a
duly authorized officer of the Fund and of the chief financial
or chief accounting officer of the Fund and of the President or
a Vice President or Managing Director of each of the Advisers,
dated as of Closing Time, to the effect that (i) there has been
no such material adverse change, (ii) the representations and
warranties in Sections 1(a) and (b) hereof, as applicable, are
true and correct with the same force and effect as though
expressly made at and as of Closing Time, (iii) each of the Fund
and the Advisers, respectively, has complied with all agreements
and satisfied all conditions on its part to be performed or
satisfied pursuant to this Agreement at or prior to Closing
Time, and (iv) with respect to the Fund only, no stop order
suspending the effectiveness of the Registration Statement, or
order of suspension or revocation of registration pursuant to
Section 8(e) of the 1940 Act, has been issued and no proceedings
for any such purpose have been instituted or are pending or, to
the knowledge of such officer, are contemplated by the
Commission.
(e) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of
this Agreement, the Representatives shall have received from
[ ] a letter dated such date, in form and substance
satisfactory to the Representatives, together with signed or
reproduced copies of such letter for each of the other
Underwriters containing statements and information of the type
customarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and
certain financial information contained in the Registration
Statement and the Prospectus.
(f) BRING-DOWN COMFORT LETTER. At Closing Time, the Representatives
shall have received from [ ] a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in
the letter furnished pursuant to subsection (e) of this Section,
except that the specified date referred to shall be a date not
more than three business days prior to Closing Time.
(g) APPROVAL OF LISTING. At Closing Time, the Securities shall have
been approved for listing on the NYSE, subject only to official
notice of issuance.
(h) NO OBJECTION. The NASD has confirmed that it has not raised
any objection with respect to the fairness and reasonableness of
the underwriting terms and arrangements.
(i) CONDITIONS TO PURCHASE OF OPTION SECURITIES. In the event that
the Underwriters exercise their option provided in Section 2(b)
hereof to purchase all or any portion of
16
the Option Securities, the representations and warranties of the
Fund contained herein and the statements in any certificates
furnished by the Fund hereunder shall be true and correct as of
each Date of Delivery and, at the relevant Date of Delivery, the
Representatives shall have received:
(i) OFFICERS' CERTIFICATES. Certificates, dated such Date of
Delivery, of a duly authorized officer of the Fund and of the
chief financial or chief accounting officer of the Fund and of
the President or a Vice President or Managing Director of each
of Advisers confirming that the information contained in the
certificate delivered by each of them at the Closing Time
pursuant to Section 5(d) hereof remains true and correct as of
such Date of Delivery.
(ii) OPINIONS OF COUNSEL FOR THE FUND AND ADVISERS. The favorable
opinions of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel
for the Fund, of Xxxxxxxx Xxxxxxx, general counsel of the
Investment Adviser and of [ ], counsel for the Investment
Manager, in form and substance reasonably satisfactory to
counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iii) OPINION OF COUNSEL FOR THE UNDERWRITERS. The favorable opinion
of Xxxxxxxx Chance US LLP, counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(c) hereof.
(iv) BRING-DOWN COMFORT LETTER. A letter from [ ], in form and
substance satisfactory to the Representatives and dated such
Date of Delivery, substantially in the same form and substance
as the letter furnished to the Representatives pursuant to
Section 5(f) hereof, except that the "specified date" in the
letter furnished pursuant to this paragraph shall be a date not
more than five days prior to such Date of Delivery.
(j) ADDITIONAL DOCUMENTS. At Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished
with such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the issuance and
sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Fund and the
Advisers in connection with the organization and registration of
the Fund under the 1940 Act and the issuance and sale of the
Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives and
counsel for the Underwriters.
(k) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to
the purchase of Option Securities, on a Date of Delivery which
is after the Closing Time, the obligations of the several
Underwriters to purchase the relevant Option Securities, may be
terminated by the Representatives by notice to the Fund at any
time at or prior to Closing Time or such Date of Delivery, as
the case may be, and such termination shall be without liability
of any party to any other party except as provided in Section 4
and except that Sections 1, 6, 7, 8 and 13 shall survive any
such termination and remain in full force and effect.
17
SECTION 6. Indemnification.
(a) INDEMNIFICATION OF UNDERWRITERS. The Fund and the Advisers,
jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information, if
applicable, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make
the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 6(e)
below) any such settlement is effected with the written consent
of the Fund; and
(iii) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by
Xxxxxxx Xxxxx), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
(i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Fund or the
Advisers by any Underwriter through Xxxxxxx Xxxxx expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); provided,
further, that the indemnity agreement contained in this Section 6(a) shall not
inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) from whom the person asserting any such loss,
liability, claim, damage and expense purchased the Securities which are the
subject thereof if the Prospectus (as amended or supplemented) corrected any
such alleged untrue statement or omission and if such Prospectus (as amended or
supplemented) was delivered to such Underwriter in a timely manner and if such
Underwriter failed to send or give a copy of the Prospectus (as amended or
supplemented) to such person at or prior to the written confirmation of the sale
of such Securities to such person.
(b) INDEMNIFICATION OF THE FUND, ADVISERS, TRUSTEES, DIRECTORS AND
OFFICERS. Each Underwriter severally agrees to indemnify and
hold harmless the Fund and the Advisers, their respective
trustees, directors and shareholders, each of the Fund's
18
officers who signed the Registration Statement, and each person,
if any, who controls the Fund or the Advisers within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act
against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements
or omissions, or alleged untrue statements or omissions, made in
the Registration Statement (or any amendment thereto), including
the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Fund or the
Advisers by such Underwriter through Xxxxxxx Xxxxx expressly for
use in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434
Information, or such preliminary prospectus or the Prospectus
(or any amendment or supplement thereto).
(c) INDEMNIFICATION FOR MARKETING MATERIALS. In addition to the
foregoing indemnification, the Fund and the Advisers also,
jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained
in Section 6(a), as limited by the proviso set forth therein,
with respect to any sales material (to the same extent as with
respect to any preliminary prospectus or the Prospectus).
(d) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party
shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect
of which indemnity may be sought hereunder, but failure to so
notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall
not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 6(a) above, counsel to
the indemnified parties shall be selected by Xxxxxxx Xxxxx, and,
in the case of parties indemnified pursuant to Section 6(b)
above, counsel to the indemnified parties shall be selected by
the Fund and the Advisers. An indemnifying party may participate
at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection
with any one action or separate but similar or related actions
in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment
with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii)
does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any
indemnified party.
19
(e) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any
time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for reasonable fees and
expenses of counsel, such indemnifying party agrees that it
shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) (through, if applicable, the provisions of
Section 6(b)) effected without its written consent if (i) such
settlement is entered into more than 60 days after receipt by
such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of
such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
SECTION 7. Contribution.
If the indemnification provided for in Section 6 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then, in lieu of indemnifying such indemnified party, each indemnifying party
shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Fund or the Advisers on the one hand and the Underwriters on the other hand
from the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Fund and the Advisers
on the one hand and of the Underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Fund and the Advisers on the one hand
and the Underwriters on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Fund and the total underwriting discount received by the Underwriters
(whether from the Fund or otherwise), in each case as set forth on the cover of
the Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the Securities as
set forth on such cover.
The relative fault of the Fund and the Advisers on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Fund or the Advisers or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such 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 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
20
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. No person shall be
entitled to indemnification or contribution under this Agreement against any
loss, claim, liability, expense or damage arising by reason of such person's
willful misfeasance or gross negligence in the performance of its duties
hereunder.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each trustee and shareholder of the Fund and each director of the Advisers,
respectively, each officer of the Fund who signed the Registration Statement,
and each person, if any, who controls the Fund or each of Advisers, within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as the Fund and the Advisers, respectively. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial Securities set forth opposite
their respective names in SCHEDULE A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and covenants contained in this Agreement
or in certificates of officers of the Fund or either of the Advisers submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Fund or the Advisers, and shall survive
delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) TERMINATION; GENERAL. The Representatives may terminate this
Agreement, by notice to the Fund, at any time at or prior to
Closing Time (i) if there has been, since the time of execution
of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Fund or
any Adviser, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or
international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the
judgment of the Representatives, impracticable or inadvisable to
market the Securities or to enforce contracts for the sale of
the Securities, or (iii) if trading in the Common Shares of the
Fund has been suspended or materially limited by the Commission
or the NYSE, or if trading generally on the American Stock
Exchange or the NYSE or in the Nasdaq National Market has been
suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by
order of the Commission, the NASD or any other governmental
authority, or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the
United States, or (iv) if a banking moratorium has been declared
by either Federal or New York authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any
party to any other party except as provided in Section 4
21
hereof, and provided further that Sections 1, 6, 7, 8 and 13
shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the Representatives shall
have the right, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and
not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the
Closing Time, the obligation of the Underwriters to purchase and
of the Fund to sell the Option Securities to be purchased and
sold on such Date of Delivery shall terminate without liability
on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Fund to sell the relevant Option Securities, as
the case may be, either the Representatives or the Fund shall have the right to
postpone Closing Time or the relevant Date of Delivery, as the case may be, for
a period not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements.
As used herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10.
SECTION 11. Tax Disclosure.
Notwithstanding any other provision of this Agreement, from the
commencement of discussions with respect to the transactions contemplated
hereby, the Fund and each of Advisers (and each employee, representative or
other agent of the Fund) may disclose to any and all persons, without limitation
of any kind, the tax treatment and tax structure (as such terms are used in
Sections 6011, 6111 and 6112 of the U.S. Code and the Treasury Regulations
promulgated thereunder) of the transactions contemplated by this Agreement and
all materials of any kind (including opinions or other tax analyses) that are
provided relating to such tax treatment and tax structure.
SECTION 12. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed to the
Representatives, Xxxxxxx Xxxxx & Co., 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, attention of Equity Capital Markets; and notices to the Fund or each
of Advisers shall be directed, as appropriate, to the office of Claymore
Advisors, LLC at 000 Xxxxx Xxxx
00
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxxx Xxxxxxx or Madison Asset
Management, LLC at 000 Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxx 00000,
Attention: [ ], respectively.
SECTION 13. Parties.
This Agreement shall each inure to the benefit of and be binding upon the
Underwriters, the Fund, each of Advisers and its respective partners and
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Fund, the Advisers and their respective successors and the
controlling persons and officers, trustees, shareholders and directors referred
to in Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Fund, the Advisers and their respective partners and
successors, and said controlling persons and officers, trustees, shareholders
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
IN SAID STATE. UNLESS OTHERWISE EXPLICITLY PROVIDED, SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
23
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument,
along with all counterparts, will become a binding agreement among the
Underwriters, the Fund, and each of Advisers in accordance with its terms.
Very truly yours,
MADISON/CLAYMORE COVERED CALL
FUND
By:
------------------------------
Name:
Title:
CLAYMORE ADVISORS, LLC
By:
------------------------------
Name:
Title:
MADISON ASSET MANAGEMENT, LLC
By:
------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
[OTHER CO-MANAGERS]
By:
-------------------------------------
Authorized Signatory
For themselves and as
Representatives of the
other Underwriters named
in SCHEDULE A hereto.
24
SCHEDULE A
NUMBER OF
NAME OF UNDERWRITER INITIAL SECURITIES
------------------- ----------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
----------
TOTAL:
==========
A-1
SCHEDULE B
Madison/Claymore Covered Call Fund
Common Shares of Beneficial Interest
(Par Value $.01 per share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $15.00.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $14.325, being an amount equal to the initial
public offering price set forth above less $.675 per share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the overallotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Fund
and payable on the Initial Securities but not payable on the Option Securities.
B-1
Exhibit A
FORM OF OPINION OF FUND'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
Based upon the foregoing and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, we are of the opinion that:
1. The Trust is in good standing and has a legal existence as a statutory
trust under the Delaware Statutory Trust Act.
2. The Trust has the necessary power and authority under the Delaware
Statutory Trust Act as a statutory trust to execute, deliver and perform
all of its obligations under the
Purchase Agreement and the Transaction
Documents. The execution and delivery by the Trust of the
Purchase
Agreement and the Transaction Documents and the consummation by the Trust
of the transactions contemplated thereby have been duly authorized by all
requisite action on the part of the Trust under the Delaware Statutory
Trust Act. Each of the
Purchase Agreement nad the Transaction Documents has
been duly executed and delivered by the Trust under the Applicable Laws of
the State of Delaware.
3. Each of the Transaction Documents (other than the Investment Advisory
Agreement and the Investment Sub-Advisory Agreement) constitutes the valid
and binding obligation of the Trust enforceable against the Trust in
accordance with its terms under the Applicable Laws of the State of
New
York. Each of the Investment Advisory Agreement and the Investment
Sub-Advisory Agreement constitutes the valid and binding obligation of the
Trust enforceable against the Trust in accordance with its terms under the
Applicable Laws of the State of Delaware.
4. The execution and delivery by the Trust of the
Purchase Agreement and each
of the Transaction Documents and the performance by the Trust of its
obligations under the
Purchase Agreement and each of the Transaction
Documents, each in accordance with its terms, do not (i) conflict with the
Declaration or By-Laws of the Trust, (ii) constitute a violation of, or a
default under, any Applicable Contract or (iii) cause the creation of any
security interest or lien upon any of the property of the Trust pursuant to
any Applicable Contract. We do not express any opinion, however, as to
whether the execution, delivery or performance by the Trust of the
Purchase
Agreement or the Transaction Documents will constitute a violation of, or a
default under, any covenant, restriction or provision with respect to
financial ratios or tests or any aspect of the financial condition or
results of operations of the Trust.
5. Neither the execution, delivery or performance by the Trust of its
obligations under the
Purchase Agreement or the Transaction Documents nor
the compliance by the Trust with the terms and provisions thereof will
contravene any provision of Applicable Law or the 1940 Act or the 1940 Act
Rules and Regulations in any material respect.
6. No Governmental Approval, which has not been obtained or taken and is not
in full force and effect, is required to authorize, or is required in
connection with, the execution, delivery or performance of the
Purchase
Agreement or any of the Transaction Documents.
7. Neither the execution, delivery or performance by the Trust of its
obligations under the
Purchase Agreement or the Transaction Documents nor
compliance by the Trust with the terms and provisions thereof will
contravene any Applicable Order.
A-1
8. The Trust is registered with the Commission pursuant to Section 8 of the
1940 Act as a diversified, closed-end management investment company; and
the Declaration and By-Laws comply in all material respects with the 1940
Act and the 1940 Act Rules and Regulations.
9. The Trust has an authorized capitalization as set forth in the Prospectus
(without giving effect to the issuance and sale of the Shares to you
pursuant to the Purchase Agreement); all of the outstanding Common Shares
have been duly authorized and validly issued, and are fully paid and
non-assessable (except as provided in the last sentence of Section 3.8 of
the Declaration) representing undivided beneficial ownership interests in
the assets of the Trust; the Shares have been duly authorized by all
necessary action of the Trust under the Delaware Statutory Trust Act and,
when issued to and paid for by the Underwriters pursuant to the Purchase
Agreement, will be validly issued, fully paid and non-assessable (except as
provided in the last sentence of Section 3.8 of the Declaration)
representing undivided beneficial ownership interests in the assets of the
Trust; the form of certificate that may be used to evidence the Common
Shares complies in all material respects with the applicable requirements
of the Declaration, the By-Laws and the Delaware Statutory Trust Act, in
each case as in effect on the date hereof. In rendering the opinion set
forth in this paragraph 9, we have assumed that if a holder of Common
Shares requests a certificate representing such holder's Common Shares,
that such certificate will conform to the specimen examined by us and will
have been signed by an authorized officer of the transfer agent and
registrar for the Common Shares and registered by such transfer agent and
registrar.
10. No holders of outstanding Common Shares are entitled as such to any
preemptive or other rights to subscribe for any Shares under any Applicable
Contract, under the Declaration or By-Laws or under the Delaware Statutory
Trust Act.
11. The statements set forth under the heading "Description of the Shares" in
the Prospectus, insofar as such statements purport to summarize certain
provisions of the 1940 Act, the Delaware Statutory Trust Act, the Common
Shares or the Declaration, fairly summarize such provisions in all material
respects.
12. To our knowledge, no legal or governmental proceedings are pending to which
the Trust is a party that are required to be described in the Registration
Statement or the Prospectus and are not so described therein, and, to our
knowledge, no contract or other document of the Trust is required to be
described in the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement that is not described therein or
filed as required.
13. The Registration Statement, the Prospectus and the 1940 Act Notification
(in each case, other than the financial statements and other financial
information contained therein or incorporated therein by reference and
other than any exhibits, schedules or appendices included or incorporated
by reference therein, as to which we express no opinion) comply as to form
in all material respects with the applicable requirements of the 1933 Act,
the 1933 Act Rules and Regulations, the 1940 Act and the 1940 Act Rules and
Regulations. Except to the extent set forth in paragraph 11 above and in
our tax opinion dated even herewith, we do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in
the Registration Statement and the Prospectus.
We have been orally advised by the staff of the Commission that the
Registration Statement was declared effective on [ ], 2004, and that no stop
order suspending the effectiveness of the Registration Statement or the 1940 Act
Notification's has been issued and, to our knowledge, no proceedings for that
purpose have been instituted or are pending or threatened by the Commission.
14. We have been advised by the Trust that the Shares have been authorized for
listing on the New York Stock Exchange and that the Trust has filed with
the Commodity Futures Trading
A-2
Commission and the National Futures Association a notice of eligibility for
relief from inclusion within the definition of a commodity pool operator
pursuant to Section 4.5 of the general regulations under the Commodity
Exchange Act. The filing of the Prospectus pursuant to Rule 497(h) under
the 1933 Act Rules and Regulations has been made in the manner and within
the time period required by Rule 497(h) of the 1933 Act Rules and
Regulations.
This letter is furnished only to you and is solely for your benefit in
connection with the closing under the Purchase Agreement occurring today. Except
as noted in the next sentence, without our prior written consent, this letter
may not be used, circulated, quoted or otherwise referred to for any other
purpose or relied upon by, or assigned to, any other person for any purpose,
including any other person that acquires Shares or that seeks to assert your
rights in respect of this letter (other than your successor in interest by means
of merger, consolidation, transfer of a business or other similar transaction).
Xxxxxxxx Chance US LLP may rely upon paragraphs 1, 2, 9, 10 and 11 of this
letter to the extent that such paragraphs cover matters governed by the Delaware
Statutory Trust Act as though this letter had been addressed to them, but only
in connection with any opinion delivered to the Underwriters on the date hereof
required pursuant to Section 5 of the Purchase Agreement.
A-3
FORM OF RULE 10B-5 NEGATIVE ASSURANCE LETTER OF FUND'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
Subject to the foregoing, we confirm to you that, on the basis of the
information we gained in the course of performing the services referred to
above, no facts have come to our attention that have caused us to believe that
the Registration Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that the Prospectus, as of its date and as of the date hereof, 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 light of the
circumstances under which they were made, not misleading (except that in each
case we do not express any view as to the financial statements, schedules and
other financial data and financial projections included or incorporated by
reference therein or excluded therefrom or the exhibits to the Registration
Statement).
This letter is furnished only to you and is solely for your benefit in
connection with the closing under the Purchase Agreement occurring today.
Without our prior written consent, this letter may not be used, circulated,
quoted or otherwise referred to for any other purpose or relied upon by, or
assigned to, any other person for any purpose, including any other person that
acquires Common Shares or that seeks to assert your rights in respect of this
letter (other than your successor in interest by means of merger, consolidation,
transfer of a business or other similar transaction).
A-4
FORM OF OPINION WITH RESPECT TO TAX MATTERS OF FUND'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
Based upon and subject to the foregoing, although the discussion in the
Prospectus and Statement of Additional Information under the headings "Taxation"
does not purport to discuss all possible United States federal income tax
consequences relating to the taxation of the Trust and the purchase, ownership
and disposition of the common shares of the Trust, such discussion constitutes,
in all material respects, a fair summary of the law and is based on our
understanding of the proposed operations of the Trust as disclosed in the
Prospectus and Statement of Additional Information.
Except as set forth above, we express no other opinion. This opinion is
furnished only to you and is solely for your benefit in connection with the
closing under the Purchase Agreement occurring today. This opinion may not be
used, circulated, quoted or otherwise referred to for any other purpose or
relied upon by, or assigned to, any other person for any purpose, including any
other person that acquires common shares or that seeks to assert your rights in
respect of this letter (other than your successor in interest by means of
merger, consolidation, transfer of a business or other similar transaction).
This opinion is expressed as of the date hereof, and we disclaim any undertaking
to advise you of any subsequent changes in respect of the matters stated or
assumed herein or any subsequent changes in applicable law.
A-5
FORM OF OPINION OF ADVISERS'
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
Based on the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, I am of the opinion
that:
1. Based on certificates of the Secretary of State of the State of
Delaware, the Adviser is a limited liability company duly organized and validly
existing in good standing under the laws of the State of Delaware, with all
necessary limited liability 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 any amendment or supplement to
either of them). Based on a certificates of the Secretaries of the States of New
Jersey and Illinois, the Adviser is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place where the nature
of its properties or the conduct of its business requires such registration or
qualification, except where the failure to so register and qualify does not have
a material adverse effect on the ability of the Adviser to perform its
obligations under the Purchase Agreement, the Investment Advisory Agreement and
the Investment Sub-Advisory Agreement to which it is a party (the Purchase
Agreement, the Investment Advisory Agreement and the Investment Sub-Advisory
Agreement collectively referred to herein as the "Transaction Documents");
2. The Adviser is duly registered with the Commission as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), and is not prohibited by the Advisers Act, the rules and regulations of
the Commission under the Advisers Act, the 1940 Act or the rules and regulations
of the Commission under the 1940 Act from acting under the Investment Advisory
Agreement as contemplated by the Prospectus (or any amendment or supplement
thereto); and, to the best of my knowledge after reasonable inquiry, there does
not exist any proceeding which should reasonably be expected to adversely affect
the registration of the Adviser with the Commission;
3. The Adviser has corporate power and authority to enter into the
Transaction Documents to which it is a party, and the Transaction Documents to
which the Adviser is a party have been duly authorized, executed and delivered
by the Adviser and the Investment Advisory Agreement is a valid and legally
binding agreement of the Adviser, enforceable against the Adviser in accordance
with its terms except as rights to indemnity and contribution in the Transaction
Documents may be limited by federal or state securities laws or principles of
public policy and subject to the qualification that the enforceability of the
Adviser's obligations thereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws relating to
or affecting creditors' rights generally and by general equitable principles
whether enforcement is considered in a proceeding in equity or at law;
4. Neither the execution, delivery or performance of the Transaction
Documents by the Adviser, nor the consummation by the Adviser of the
transactions contemplated thereby (A) conflicts or will conflict with, or
constitutes or will constitute a breach of or default under, the certificate of
incorporation or bylaws, or other organizational documents, of the Adviser or
(B) conflicts or will conflict with, or constitutes or will constitute a
material breach of or material default under any material agreement, indenture,
lease or other instrument to which the Adviser is a party, or will result in the
creation or imposition of any material lien, charge or encumbrance upon any
material property or material assets of the Adviser, nor will any such action
result in any material violation of any law of the State of New York, the
Delaware General Corporation Law, the 1940 Act, the Advisers Act or any
regulation or judgment, injunction, order or decree applicable to the Adviser or
any of its properties;
5. No consent, approval, authorization or other order of, or
registration or filing with, the Commission, any arbitrator, any court,
regulatory body, administrative agency or other governmental
A-6
body, agency, or official of the State of New York is required on the part of
the Adviser for the execution, delivery and performance of the Transaction
Documents, or the consummation by the Adviser of the transactions contemplated
hereby and thereby;
6. To the best of my knowledge after reasonable inquiry, there is not
pending or, to the best of my knowledge, after due inquiry, threatened any
action, suit, proceeding, inquiry or investigation, to which the Adviser is a
party, or to which the property of the Adviser is subject, before or brought by
any court or governmental agency or body, domestic or foreign, which might
reasonably be expected to result in any material adverse change in the
condition, financial or otherwise, in the earnings, business affairs or business
prospects of the Adviser, materially and adversely affect the properties or
assets of the Adviser or materially impair or adversely affect the ability of
the Adviser to function as an investment adviser or perform its obligations
under the Investment Advisory Agreement, or which is required to be disclosed in
the Registration Statement or the Prospectus (or any amendment or supplemental
to either of them) but are not described as required; and
7. To the best of my knowledge, after due inquiry, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the Registration
Statement, or to be filed as exhibits thereto, other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in all respects.
In addition, I have participated in conferences with officers and
other representatives of, and counsel for, the Trust, representatives of the
independent public accountants of the Trust, counsel for the Underwriters and
the Underwriters at which the contents of the Registration Statement and the
Prospectus and related matters were discussed and, although I am not passing
upon, and do not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the
Prospectus and have made no independent check or verification thereof, on the
basis of the foregoing, no facts have come to my attention that have led me to
believe that the Registration Statement, at the time it became effective,
contained an untrue statement of a material fact concerning the Adviser or
omitted to state any material fact concerning the Adviser required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of its date and as of the date hereof, contained or contains an
untrue statement of a material fact concerning the Adviser or omitted or omits
to state a material fact concerning the Adviser necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
A-7
Exhibit B
FORM OF OPINION OF INVESTMENT MANAGER'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
Based upon the foregoing and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, we are of the opinion that:
(i) The Company has been duly organized and is validly existing as a
limited liability company in good standing under the laws of the state of
Wisconsin.
(ii) The Company has all requisite limited liability company power
and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter
into and perform its obligations under the Purchase Agreement.
(iii) The Company is duly qualified to transact business and is in
good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify would not result in a Material Adverse
Effect.
(iv) The Company is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited
by the Advisers Act, rules and regulations adopted under the
Advisers Act, the 1940 Act or rules and regulations under the
1940 Act from acting under the Sub-Advisory Agreement for the
Trust to which it is a party as contemplated by the Prospectus.
(v) The Purchase Agreement and the Sub-Advisory Agreement to which
the Company is a party have been duly authorized, executed and
delivered by the Company, and the Sub-Advisory Agreement to
which it is a party constitutes a valid and binding obligation
of the Company, enforceable in accordance with its terms, except
as affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at
law), subject to any limitation arising from a provision found
to violate the public policy underlying any law, rule or
regulation (including any federal or state securities law, rule
or regulation).
(vi) To the best of our knowledge, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which
the Company is a party, or to which the property of the Company
is subject, before or brought by any court or governmental
agency or body, domestic or foreign, which might reasonably be
expected to result in any material adverse change in the
condition, financial or otherwise, in the earnings, business
affairs or business prospects of the Company, materially and
adversely affect the properties or assets of the Company or
materially impair or adversely affect the ability of the Company
to function as an investment adviser or perform its obligations
under the Sub-Advisory Agreement to which it is a party, or
which is required to be disclosed in the Registration Statement
or the Prospectus. (For the purpose of rendering the opinion set
forth in this paragraph, we have relied solely on our actual
knowledge, and on the Officer's Certificate; we have made no
other
1
inquiries or investigations or any search of the public docket
records of any court, governmental agency or body or
administrative agency.)
(vii) To the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases
or other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto, and the
descriptions thereof or references thereto are correct in all
material respects.
(viii) To the best of our knowledge, the Company is not in violation of
its Operating Agreement or other organizational documents and no
default by the Company exists in the due performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument that is
described or referred to in the Registration Statement or the
Prospectus or filed or incorporated by reference as an exhibit
to the Registration Statement.
(ix) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other
than under the 1933 Act, the 1940 Act and the Rules and
Regulations, which have been obtained, or as may be required
under the securities or blue sky laws of the various states, as
to which we need express no opinion) is necessary or required in
connection with the due authorization, execution and delivery of
the Purchase Agreement by the Company.
(x) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated
in the Purchase Agreement and in the Registration Statement and
compliance by the Company with its obligations under the
Purchase Agreement do not and will not, whether with or without
the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as
defined in Section 1(a)(xii) of the Purchase Agreement) under or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant
to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or
instrument, known to us, to which the Company is a party or by
which it may be bound, or to which any of the property or assets
of the Company is subject (except for such conflicts, breaches
or defaults or liens, charges or encumbrances that would not
have a Material Adverse Effect), nor will such action result in
any violation of the provisions of the charter or by-laws of the
Company, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its properties, assets
or operations.
In addition, we have participated in the preparation of the sections
entitled "Prospectus Summary--Investment Adviser and Investment Manager,"
"Investment Strategy," "Management of the Fund--The Investment Adviser,"
"Management of the Fund--The Sub-Adviser" in the Prospectus and "Management of
the Fund--Investment Advisory Agreement, "Management of the Fund--The
Sub-Advisory Agreement" and "Management of the Fund--Approval of Advisory
Agreement and Sub-Advisory Agreement" in the Statement of Additional Information
and participated in discussions with certain officers, trustees and employees of
the Company, and we have reviewed certain Company records and documents. While
we have not independently verified and are not passing upon, and do not assume
any responsibility for, the accuracy, completeness or fairness of the
information contained in the
2
Registration Statement and the Prospectus, nothing has come to our attention
that would lead us to believe that the Registration Statement (except for
financial statements, supporting schedules and other financial data included
therein or omitted therefrom, supporting schedules or other financial data, as
to which we do not express any belief), at the time such Registration Statement
became effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (except for financial
statements, supporting schedules and other financial data included therein or
omitted, supporting schedules or other financial data, as to which we do not
express any belief), at the time the Prospectus was issued, or at the Closing
Time, included or includes 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.
We have been orally advised by counsel to the Trust that: (i) the Trust has
received oral confirmation from the staff of the Commission that the
Registration Statement was declared effective on [ ], 2004, and that no stop
order suspending the Registration Statement or the 1940 Act Notification's
effectiveness has been issued and no proceedings for that purpose have been
instituted or are pending or threatened by the Commission, (ii) the Shares have
been authorized for listing on the New York Stock Exchange and (iii) the Trust
has filed with the Commodity Futures Trading Commission and the National Futures
Association a notice of eligibility for relief from inclusion within the
definition of a commodity pool operator pursuant to Section 4.5 of the general
regulations under the Commodity Exchange Act.
Members of our firm are admitted to the bar in the States of Wisconsin and
New York, and we do not express any opinion as to the laws of any jurisdiction
other than the Applicable Laws and the federal securities laws of the United
States of America to the extent specifically referred to herein. Insofar as the
opinions expressed herein relate to matters governed by laws other than those
set forth in the preceding sentence, we have assumed, without having made any
independent investigation, that such laws do not affect any of the opinions set
forth herein. The opinions expressed herein are based on laws in effect on the
date hereof, which laws are subject to change, and we do not undertake to advise
of any such change, whether prospective or retroactive in effect, or to advise
you of facts, circumstances, events or developments which hereafter may be
brought to our attention and which may alter, affect or modify the opinions
expressed herein.
3
Exhibit C
FORM OF OPINION OF UNDERWRITER'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(c)
Based on, and subject to, the foregoing, the qualifications and assumptions
set forth herein and such examination of law as we have deemed necessary, we are
of the opinion that:
(i) The Fund has been created and is in good standing and has a legal
existence as a statutory trust under the Delaware Statutory Trust Act;
(ii) All of the outstanding Shares have been duly authorized and validly
issued,, when issued and delivered to the Underwriters against payment therefor
in accordance with the terms of the Purchase Agreement, will be validly issued,
fully paid and non-assessable;
(iii) No holders of outstanding Shares are entitled as such to any
preemptive or other rights to subscribe for any Shares under any agreements or
instruments which are material to the business or financial condition of the
Fund, under certified copies of the Certificate of Trust of the Fund, as filed
with the Secretary of the State of Delaware on [ ], 2004, and the Agreement
and Declaration of Trust of the Fund (collectively, the "Declaration") or
By-Laws or under the Delaware Statutory Trust Act;
(iv) The Purchase Agreement and each of the Investment Advisory
Agreement, dated as of [ ], 2004, between the Fund and the Investment Adviser
(the "Investment Advisory Agreement"), the Investment Sub-Advisory Agreement,
dated as of [ ], 2004, between the Fund, the Investment Adviser and the
Investment Manager (the "Investment Sub-Advisory Agreement"), the Administration
Agreement between the Fund and The Bank of New York, dated as of [ ], 2004
(the "Administration Agreement"), the Transfer Agency Services Agreement, dated
as of [ ], 2004, between the Fund and The Bank of New York (the "Transfer
Agency Agreement"), and the Custodian Contract, dated as of [ ], 2004,
between the Fund and The Bank of New York (the "Custodian Agreement" and,
together with the Administration Agreement and the Transfer Agency Agreement,
the "Fund Agreements") have been duly authorized, executed and delivered by the
Fund. Assuming due authorization, execution and delivery by the other parties
thereto, the Investment Advisory Agreement, the Investment Sub-Advisory
Agreement, and each of the Fund Agreements constitute the legal, valid and
binding obligations of the Fund enforceable in accordance with their terms
(except we express no opinion as to the reasonableness or fairness of
compensation paid under such agreements), 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);
(v) The Registration Statement, has been declared effective under the
Securities Act; any required filing of the Prospectus pursuant to Rule 497(c) or
Rule 497(h) has been made in the manner and within the time period required by
Rule 497; and, to the best of our knowledge, no stop order suspending
4
the effectiveness of the Registration Statement has been issued under the
Securities Act, and, to the best of our knowledge, no order of suspension or
revocation of registration pursuant to Section 8(e) of the 1940 Act has been
issued, and no proceedings for any such purpose have been instituted or are
pending or threatened by the Commission;
(vi) The Registration Statement, the Rule 430A Information, the
Prospectus and each amendment or supplement to the Registration Statement and
Prospectus as of their respective effective or issue dates (other than the
financial statements and supporting schedules included therein or omitted
therefrom, as to which we express no opinion), and the notification on Form N-8A
complied as to form in all material respects with the requirements of the
Securities Act, the 1940 Act and the Rules and Regulations;
(vii) The statements made in the Prospectus under the caption "Description
of the Shares," insofar as such statements purport to summarize certain
provisions of the 1940 Act, the Delaware Statutory Trust Act, the Shares or the
Declaration, have been reviewed by us and are correct in all material respects.
In addition, we have participated in the preparation of the Registration
Statement and the Prospectus and participated in discussions with certain
officers, trustees and employees of the Fund, representatives of [ ], the
independent accountants who examined the financial statements of the Fund
included or incorporated by reference in the Registration Statement and the
Prospectus, and you and your representatives and we have reviewed certain Fund
records and documents. While we have not independently verified and are not
passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the information contained in the Registration
Statement and the Prospectus, except to the extent necessary to enable us to
give the opinion with respect to the Fund in paragraph (vii) above, on the basis
of such participation and review, nothing has come to our attention that would
lead us to believe that the Registration Statement (except for financial
statements, supporting schedules and other financial data included or
incorporated by reference therein or omitted therefrom, as to which we do not
express any belief), at the time such Registration Statement became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus (except for financial statements,
supporting schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we do not express any
belief), at the time the Prospectus was issued, or at the date hereof, included
or includes 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.
To the extent that any opinions stated herein relate to the Delaware
Statutory Trust Act, with your permission, we have relied upon the opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, dated the date hereof, a copy of which
has been delivered to you. Our opinion, to the extent based upon such reliance,
is limited by the qualifications, assumptions and conditions set forth in such
opinion in addition to those set forth herein.
This opinion is based upon the law as in effect and the facts known to us
on the date hereof. We have not undertaken to advise you of any subsequent
changes in the law or of any facts that hereafter may come to our attention.
This letter is given solely for your benefit and may not be relied upon by
any other person for any purpose without our prior written consent in each
instance.
5
