SunAmerica Focused Alpha Large-Cap Fund, Inc. (a Maryland corporation) Shares of Common Stock ($.001 Par Value) FORM OF PURCHASE AGREEMENT
Exhibit 2(h)(1)
SunAmerica Focused Alpha Large-Cap Fund, Inc.
(a Maryland corporation)
(a Maryland corporation)
Shares of Common Stock
($.001 Par Value)
($.001 Par Value)
FORM OF PURCHASE AGREEMENT
December 22, 2005
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
AIG Financial Advisors, Inc.
Advantage Capital Corporation
Advest, Inc.
Xxxxxx X. Xxxxx & Co. Incorporated
H&R Block Financial Advisors, Inc.
Xxxxxx, Xxxxx Xxxxx, Incorporated
FSC Securities Corporation
J.J.B. Xxxxxxxx, X.X. Xxxxx, Inc.
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Xxxxxxxxxxx & Co. Inc.
RBC Capital Markets Corporation
Royal Alliance Associates, Inc.
Xxxxxx, Xxxxxxxx & Company, Incorporated
Xxxxx Fargo Securities, LLC
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
AIG Financial Advisors, Inc.
Advantage Capital Corporation
Advest, Inc.
Xxxxxx X. Xxxxx & Co. Incorporated
H&R Block Financial Advisors, Inc.
Xxxxxx, Xxxxx Xxxxx, Incorporated
FSC Securities Corporation
J.J.B. Xxxxxxxx, X.X. Xxxxx, Inc.
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Xxxxxxxxxxx & Co. Inc.
RBC Capital Markets Corporation
Royal Alliance Associates, Inc.
Xxxxxx, Xxxxxxxx & Company, Incorporated
Xxxxx Fargo Securities, LLC
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
SunAmerica Focused Alpha Large-Cap Fund, Inc., a Maryland corporation (the “Fund”), the Fund’s
administrator and investment adviser, AIG SunAmerica Asset Management Corp., Delaware corporation
(“SAAMCo” or the “Investment Adviser”), the Fund’s subadviser, Xxxxxxx Capital Management, LLC, a
Delaware limited liability company (“Xxxxxxx”) and the Fund’s subadviser, Xxxxxxx Xxxxx Investment
Managers L.P., doing business as Mercury Advisors, a Delaware limited partnership (“Mercury” and,
together with Xxxxxxx, the “Subadvisers” and each a “Subadviser” and, together with SAAMCo and
Xxxxxxx, the “Investment Advisers”), confirm their agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (“Xxxxxxx Xxxxx”), AIG Financial Advisors, Inc.,
Advantage Capital Corporation, Advest, Inc., Xxxxxx X. Xxxxx & Co. Incorporated, H&R Block
Financial Advisors, Inc., Xxxxxx, Xxxxx Xxxxx, Incorporated, FSC Securities Corporation, J.J.B.
Xxxxxxxx, X.X. Xxxxx, Inc., Xxxxxx Xxxxxxxxxx Xxxxx LLC, Xxxxxxxxxxx & Co. Inc., RBC Capital
Markets Corporation, Royal Alliance Associates, Inc., Xxxxxx, Xxxxxxxx & Company, Incorporated and
Xxxxx Fargo Securities, LLC 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, AIG Financial Advisors, Inc.,
Advantage Capital
Corporation, Advest, Inc., Xxxxxx X. Xxxxx & Co. Incorporated, H&R Block Financial Advisors,
Inc., Xxxxxx, Xxxxx Xxxxx, Incorporated, FSC Securities Corporation, J.J.B. Xxxxxxxx, X.X. Xxxxx,
Inc., Xxxxxx Xxxxxxxxxx Xxxxx LLC, Xxxxxxxxxxx & Co. Inc., RBC Capital Markets Corporation, Royal
Alliance Associates, Inc., Xxxxxx, Xxxxxxxx & Company, Incorporated and Xxxxx Fargo Securities, LLC
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 shares of common stock, $.001 par value, of the Fund (“Common Stock”) 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 shares of Common Stock to cover overallotments, if any. The aforesaid [
] shares of Common Stock (the “Initial Securities”) to be purchased by the Underwriters and all or
any part of the [ ] shares of Common Stock 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. 333-128229 and No. 811-21805) 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 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. The
information included in any such prospectus 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 pursuant to paragraph (b) of Rule 430A is referred to as “Rule 430A
Information.” Each prospectus used before such registration statement became effective, and any
prospectus that omitted the Rule 430A 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 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 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.” For purposes of this Agreement, all references to
the Registration Statement, any preliminary prospectus or the Prospectus 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.
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SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Fund and the Investment Advisers. The Fund and the
Investment Advisers jointly and severally represent and warrant to each Underwriter as of the date
hereof, the Applicable Time referred to in Section 1(a)(i) hereof, and 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
each Investment Adviser, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
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 on 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, at the time the Prospectus
or any such amendment or supplement was issued 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.
As of the Applicable Time (as defined below), the Rule 482 Statement (as defined below)
issued at or prior to the Applicable Time, if any, the Statutory Prospectus (as defined
below) as of the Applicable Time and the information included on Schedule C hereto, all
considered together (collectively, the “General Disclosure Package”), did not include any
untrue statement of a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made,
not misleading.
As used in this subsection and elsewhere in this Agreement:
“Applicable Time” means [ ]:00 [a/p].m. (Eastern time) on [INSERT DATE] or such other
time as agreed by the Fund and Xxxxxxx Xxxxx.
“Rule 482 Statement” means a document that contains the number of securities issued,
the offering price and any other items dependent upon the offering price and/or certain
other information, prepared in accordance with the provisions of Rule 482 of the 1933 Act.
“Statutory Prospectus” as of any time means the prospectus relating to the Securities
that is included in the Registration Statement immediately prior to that time, including any
document incorporated by reference therein.
The documents incorporated or deemed to be incorporated by reference in the
Registration Statement and the Prospectus, when they became effective or at the time they
were or hereafter are filed with the Commission, complied and will comply in all material
respects with
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the requirements of the 1934 Act and the 1934 Act Regulations, and, when read together
with the other information in the Prospectus, (a) at the time the Registration Statement
became effective, (b) at the time the Prospectus was issued and (c) at the Closing Time, 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.
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.
(ii) Independent Registered Public Accounting Firm. The accountants who
certified the statement of assets and liabilities included in the Registration Statement are
from an independent registered public accounting firm 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, the General Disclosure Package and the Prospectus, together
with the related notes, presents fairly the financial position of the Fund 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
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, the General Disclosure Package 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 a corporation in good standing under the laws of the State of Maryland
and has 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
this Agreement; and the Fund 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,
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.
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(viii) Investment Company Status. The Fund is duly registered with the
Commission under the 1940 Act as a closed-end, non-diversified management investment
company, and no order of suspension or revocation of such registration has been issued or
proceedings therefor initiated or threatened by the Commission.
(ix) Officers and Directors. No person is serving or acting as an officer,
director 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 director 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.
(x) Capitalization. The authorized, issued and outstanding shares of common
stock of the Fund is as set forth in the Prospectus. All issued and outstanding shares of
common stock 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 shares of common
stock of the Fund was issued in violation of the preemptive or other similar rights of any
securityholder of the Fund.
(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). The Common Stock 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; 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
articles of incorporation 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, the Administration Agreement, the Custodian Agreement, the
Transfer Agency and Service Agreement and other applicable material agreements referred to
in the Registration Statement (as used herein, the “Investment Advisory Agreement,” the
“Administration Agreement,” the “Custodian Agreement” and the “Transfer Agency Agreement,”
respectively) 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 corporate action 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
5
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 of the
provisions of the articles of incorporation 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. 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 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 might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and adversely affect the
properties or assets of the Fund or 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, could not
reasonably be expected to result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no 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 or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the interest of the Fund
therein, and which infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would result in
a Material Adverse Effect.
(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 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
6
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; 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 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 any Investment Adviser 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 NASD, 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 Stock, will not distribute any offering material in connection with the
offering and sale of the Common Stock other than the Registration Statement, a preliminary
prospectus, the Prospectus, the Statutory Prospectus, the Rule 482 Statement 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 Investment Advisory
Agreement, the Administration 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 with all
applicable provisions of the 1940 Act. Assuming due authorization, execution and delivery
by the other parties thereto, each
7
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 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 Investment Adviser. The Investment Adviser
represents and warrants to each Underwriter, and in the case of paragraph (iii) also represents 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 Investment Adviser. The Investment Adviser has been
duly organized and is validly existing and in good standing as a corporation under the laws
of the State of Delaware, with full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus and 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 where the failure so to
qualify or to be in good standing would not result in a material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or business
prospects of the Investment Adviser, whether or not arising in the ordinary course of
business (an “Investment Adviser Material Adverse Effect”).
(ii) Investment Adviser Status. The Investment 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 Investment Advisory Agreement for the Fund as contemplated by
the Prospectus.
(iii) Description of the Investment Adviser. The description of the Investment
Adviser in the Registration Statement and the Prospectus (and any amendment or supplement to
either of them) complied and complies 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 is true and correct 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. The Investment Adviser has the financial resources
available to it necessary for the performance of its services and obligations as
contemplated in the Prospectus, the General Disclosure Package, this Agreement and under the
Investment Advisory Agreement, each of the Subadvisory Agreements between the Investment
Adviser and the Subadvisers (the “Subadvisory Agreements”) and the Additional Compensation
Agreement between the Investment Adviser and Xxxxxxx Xxxxx dated December [ ], 2005 (the
“Additional Compensation Agreement”).
(v) Authorization of Agreements; Absence of Defaults and Conflicts. This
Agreement, the Investment Advisory Agreement, the Subadvisory Agreements and the Additional
Compensation Agreement have each been duly authorized, executed and delivered by the
8
Investment Adviser, and, assuming due authorization, execution and delivery by the
other parties thereto, the Investment Advisory Agreement, the Subadvisory Agreements and the
Additional Compensation Agreement constitute valid and binding obligations of the Investment
Adviser, each 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); and neither the execution and
delivery of this Agreement, the Investment Advisory Agreement, the Subadvisory Agreements or
the Additional Compensation Agreement nor the performance by the Investment 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 the Investment Adviser
is a party or by which it is bound, (except for such conflicts, breaches or defaults that
would not result in a Investment Adviser Material Adverse Effect), the articles of
incorporation or other organizational document of the Investment Adviser, or to the
Investment Adviser’s knowledge, 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
Investment Adviser or its properties or operations; and no consent, approval, authorization
or order of any court or governmental authority or agency is required for the consummation
by the Investment Adviser of the transactions contemplated by this Agreement, the Investment
Advisory Agreement, the Subadvisory Agreements or the Additional Compensation 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 the Investment Adviser to perform its
obligations under this Agreement, the Investment Advisory Agreement, the Subadvisory
Agreements or the Additional Compensation Agreement.
(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 the Investment Adviser, threatened against or
affecting the Investment Adviser or any parent or subsidiary of the Investment Adviser or
any partners, directors, officers or employees of the foregoing, whether or not arising in
the ordinary course of business, which might 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 Investment Adviser, materially and adversely affect the
properties or assets of the Investment Adviser or materially impair or adversely affect the
ability of the Investment Adviser to function as an investment adviser or perform its
obligations under the Investment Advisory Agreement, the Subadvisory Agreements or the
Additional Compensation Agreement, 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. The Investment 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
adverse effect on the ability of the Investment Adviser to function as an investment adviser
or perform its obligations under the Investment Advisory Agreement, the Subadvisory
Agreements or the Additional Compensation Agreement.
9
(c) Representations and Warranties by Xxxxxxx. Xxxxxxx represents and warrants to each
Underwriter, and in the case of paragraph (iii) also represents 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 Xxxxxxx. Xxxxxxx 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, with full limited liability company power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus and is duly
qualified as a foreign limited liability company to transact business and is in good
standing in each other jurisdiction in which such qualification is required, except where
the failure so to qualify or to be in good standing would not result in a material adverse
change in the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of Xxxxxxx, whether or not arising in the ordinary course of business (a
“ Xxxxxxx Material Adverse Effect”).
(ii) Xxxxxxx’x Status. Xxxxxxx 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 Subadvisory Agreement to which it is a party for the Fund as contemplated by the
Prospectus.
(iii) Description of Xxxxxxx. The description of Xxxxxxx in the Registration
Statement and the Prospectus (and any amendment or supplement to either of them) complied
and complies 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 is
true and correct 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. Xxxxxxx 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 Subadvisory Agreement to which it is a party.
(v) Authorization of Agreements; Absence of Defaults and Conflicts. This
Agreement and the Subadvisory Agreement to which Xxxxxxx is a party have each been duly
authorized, executed and delivered by Xxxxxxx, and, assuming due authorization, execution
and delivery by the other parties thereto, this Agreement and the Subadvisory Agreement to
which Xxxxxxx is a party constitute valid and binding obligations of Xxxxxxx, each
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); and neither the execution and delivery of this
Agreement or the Subadvisory Agreement to which Xxxxxxx is a party nor the performance by
Xxxxxxx 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 Xxxxxxx is a
party or by which it is bound, (except for such conflicts, breaches or defaults that would
not result in a Xxxxxxx Material Adverse Effect), the limited liability company agreement or
other organizational document of Xxxxxxx, or to Xxxxxxx’x knowledge, 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 Xxxxxxx or its properties or operations; and no
consent, approval, authorization or order of any court or governmental authority or agency
is required for the consummation by Xxxxxxx of the transactions contemplated by this
Agreement
10
or the Subadvisory Agreement to which it is a party, 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 Xxxxxxx to perform its obligations under this
Agreement and the Subadvisory 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 Xxxxxxx, threatened against or affecting
Xxxxxxx or any parent or subsidiary of Xxxxxxx or any partners, directors, officers or
employees of the foregoing, whether or not arising in the ordinary course of business, which
might reasonably be expected to result in any material adverse change in the condition,
financial or otherwise, or earnings, business affairs or business prospects of Xxxxxxx,
materially and adversely affect the properties or assets of Xxxxxxx or materially impair or
adversely affect the ability of Xxxxxxx to function as an investment adviser or perform its
obligations under the Subadvisory 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. Xxxxxxx 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 adverse effect on
the ability of Xxxxxxx to function as an investment adviser or perform its obligations under
the Subadvisory Agreement to which it is a party.
(d) Representations and Warranties by Mercury. Mercury represents and warrants to each
Underwriter, and in the case of paragraph (iii) also represents 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 Mercury. Mercury has been duly organized and is validly
existing and in good standing as a limited partnership under the laws of the State of
Delaware, with full partnership power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and 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 where the failure so to qualify or to be in
good standing would not result in a material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of Mercury, whether or
not arising in the ordinary course of business (a “Mercury Material Adverse Effect”).
(ii) Mercury’s Status. Mercury 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 Subadvisory Agreement to which it is a party for the Fund as contemplated by the
Prospectus.
(iii) Description of Mercury. The description of Mercury in the Registration
Statement and the Prospectus (and any amendment or supplement to either of them) complied
and complies 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 is
true and correct and does not contain any untrue statement of a material fact or omit to
state any material
11
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. Mercury 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 Subadvisory Agreement to which it is a party.
(v) Authorization of Agreements; Absence of Defaults and Conflicts. This
Agreement and the Subadvisory Agreement to which Mercury is a party have each been duly
authorized, executed and delivered by Mercury, and, assuming due authorization, execution
and delivery by the other parties thereto, this Agreement and the Subadvisory Agreement to
which Mercury is a party constitute valid and binding obligations of Mercury, each
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); and neither the execution and delivery of this
Agreement or the Subadvisory Agreement to which Mercury is a party nor the performance by
Mercury 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 Mercury is a
party or by which it is bound, (except for such conflicts, breaches or defaults that would
not result in a Mercury Material Adverse Effect), the articles of incorporation or other
organizational document of Mercury, or to Mercury’s knowledge, 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 Mercury or its properties or operations; and no consent, approval,
authorization or order of any court or governmental authority or agency is required for the
consummation by Mercury of the transactions contemplated by this Agreement or the
Subadvisory Agreement to which it is a party, 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 Mercury to perform its obligations under this
Agreement and the Subadvisory 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 Mercury, threatened against or affecting
Mercury or any parent or subsidiary of Mercury or any partners, directors, officers or
employees of the foregoing, whether or not arising in the ordinary course of business, which
might reasonably be expected to result in any material adverse change in the condition,
financial or otherwise, or earnings, business affairs or business prospects of Mercury,
materially and adversely affect the properties or assets of Mercury or materially impair or
adversely affect the ability of Mercury to function as an investment adviser or perform its
obligations under the Subadvisory 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. Mercury 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 adverse effect on
the ability of Mercury
12
to function as an investment adviser or perform its obligations under the Subadvisory
Agreement to which it is a party.
(e) Officer’s Certificates. Any certificate signed by any officer of (i) the Fund or the
Investment Advisers and delivered to the Representatives or to counsel for the Underwriters shall
be deemed a representation and warranty by the Fund or the Investment Advisers, (ii) the Investment
Adviser and delivered to the Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by the Investment Adviser delivering such certificate and (iii) any
certificate signed by any officer of each of the Subadvisers and delivered to the Representatives
or to counsel for the Underwriters shall be deemed a representation and warranty by such Subadviser
delivering such certificate, as the case may be, to each Underwriter as to the matters covered
thereby; provided that the Fund and the Investment Adviser acknowledge that the provisions of the
Purchase Agreement (other than Sections 1(c) and 1(d)) concern matters that ordinarily would not be
within the knowledge or control of the Subadvisers to the Fund, and that such matters are instead
within the exclusive knowledge and control of the Fund itself and of the Investment Adviser, and
therefore, any certificate signed by any officer of the Subadviser may be qualified subject to such
officer’s knowledge.
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 [ ] shares
of Common Stock 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 second 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, 00 Xxxx 00xx 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
13
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”).
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 Investment Advisers, jointly and severally, covenant with each
Underwriter as follows:
(i) Compliance with Securities Regulations and Commission Requests. The Fund,
subject to Section 3(a)(ii), will comply with the requirements of Rule 430A 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
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.
14
(ii) Filing of Amendments. 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 and counsel for the Underwriters, without charge, signed
copies of the Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein) and signed copies
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.
(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 or the 1934 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 a
prospectus 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 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 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. If, at
any time following issuance of a Rule 482 Statement when a prospectus 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 opinion of counsel for
the Underwriters or for the Fund, to amend or supplement such Rule 482 Statement in order
that the Rule 482 Statement will not materially conflict with the information contained in
the Registration Statement relating to the Securities or will not include any untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances prevailing at that subsequent time not
misleading, or if it shall be necessary, in the opinion of such counsel,
15
at any such time to amend or supplement the Rule 482 Statement in order to comply with
the requirements of the 1933 Act or the Rules and Regulations, the Fund will promptly notify
Xxxxxxx Xxxxx and will promptly amend or supplement, at its own expense, such Rule 482
Statement to eliminate or correct such conflict.
(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
corporation 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 any shares of Common Stock
or any securities convertible into or exercisable or exchangeable for Common Stock 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 Stock,
whether any such swap or transaction described in clause (A) or (B) above is to be settled
by delivery of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (1) the Securities to be sold hereunder or (2) any shares of
Common Stock 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 or the 1934 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.
(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
16
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.
(b) The Investment Adviser covenants with each Underwriter that for a period of 180 days from
the date of the Prospectus, the Investment Adviser will not, without your prior written, act as
investment adviser to any other closed end registered investment company having an investment
objective, policies and restrictions substantially similar to those of the Fund.
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 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 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, the
independent registered public accounting firm and other advisors, (v) the qualification of the
Securities 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 the Blue Sky survey and any
supplement thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, Rule 482 Statement, if any, Prospectus and any amendments or supplements
thereto, and any costs associated with electronic delivery of any of the forgoing by the
Underwriters to investors (vii) the preparation, printing and delivery to the Underwriters of
copies of the 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 as partial
reimbursement of expenses incurred in connection with the offering. The amount paid by the Fund as
this partial reimbursement to the Underwriters will not exceed .03335% of the total price to the
public of the common stock sold in this offering. The Investment Adviser has agreed to pay the
Fund’s offering and organizational costs (other than sales load) that exceed $.04 per common share.
(b) Termination of Agreement. If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 5 or Section 9 hereof, the Fund and the Investment
Advisers, jointly and severally, agree that they shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
17
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 Investment Adviser contained in Section 1 hereof
or in certificates of any officer of the Fund or the Investment Adviser delivered pursuant to the
provisions hereof, to the performance by the Fund and the Investment Adviser 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)).
(b) Opinions of Counsel for Fund and the Investment Advisers. At Closing Time, the
Representatives shall have received the favorable opinions, dated as of Closing Time, of Dechert
LLP, counsel for the Fund, SAAMCo’s General Counsel, counsel for the Investment Adviser, Xxxxxxx’x
General Counsel, counsel for Xxxxxxx and Mercury’s General Counsel, counsel for Mercury, together
with signed or reproduced copies of such letter for each of the other Underwriters substantially to
the effect set forth in Exhibit A, Exhibit B, Exhibit C and Exhibit
D hereto or in such other forms and substance reasonably satisfactory to counsel to the
Underwriters.
(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 with respect to the matters set forth in clauses (i), (ii), (vi), (vii) (solely as to
preemptive or other similar rights arising by operation of law or under the charter or by-laws of
the Fund), (viii) through (x), inclusive, (xii), (xiv) (solely as to the information in the
Prospectus under “Description of Shares”) and the last paragraph of Exhibit A 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 or the General
Disclosure Package, 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 Investment Adviser, 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), (b), (c) and (d) 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 Investment 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, (iv) with respect to each of the Investment Advisers only, there
18
has been no material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of such Investment Adviser, whether or not arising
in the ordinary course of business and (v) 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 are contemplated by the Commission.
The Fund and the Investment Adviser acknowledge that the provisions of the Purchase Agreement
(other than Sections 1(c) and 1(d)) concern matters that ordinarily would not be within the
knowledge or control of the Subadvisers to the Fund, and that such matters are instead within the
exclusive knowledge and control of the Fund itself and of the Investment Adviser. Therefore, any
certificate signed by any officer of a Subadviser may be qualified subject to such officer’s
knowledge.
(e) Independent Registered Public Accounting Firm’s Comfort Letter. At the time of the
execution of this Agreement, the Representatives shall have received from PricewaterhouseCoopers
LLP a letter dated such date, in form and substance satisfactory to the Representatives and
PricewaterhouseCoopers LLP, together with signed or reproduced copies of such letter for each of
the other Underwriters containing statements and information of the type ordinarily included in
independent registered public accounting firms’ “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
PricewaterhouseCoopers LLP 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) Execution of Additional Compensation Agreement. At Closing Time, Xxxxxxx Xxxxx shall have
received the Additional Compensation Agreement, dated as of the Closing Date, as executed by the
Investment Adviser.
(j) 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 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 the
Investment 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. The Fund and the Investment Adviser acknowledge that the
provisions of the Purchase Agreement (other than Sections 1(c) and 1(d)) concern matters
that ordinarily would not be within the knowledge or control of the Subadvisers to the Fund,
and that such matters are instead within the exclusive knowledge and control of the Fund
itself and of the Investment Adviser. Therefore, any certificate signed by any officer of
the Subadviser may be qualified subject to such officer’s knowledge.
19
(ii) Opinions of Counsel for the Fund and the Investment Advisers. The
favorable opinions of counsel for the Fund and the Investment Advisers, in form and
substance 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 PricewaterhouseCoopers LLP, in
form and substance satisfactory to the Representatives and PricewaterhouseCoopers LLP, 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.
(k) 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 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 Investment 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
satisfactory in form and substance to the Representatives and counsel for the Underwriters.
(l) 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.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Fund and the Investment 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 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 any
Rule 482 Statement, 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;
20
(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 the Investment Advisers; and
(iii) against any and all expense whatsoever, as incurred (including the 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 (i) 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 an Investment Adviser by any Underwriter through Xxxxxxx Xxxxx expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A Information or any
preliminary prospectus or the Prospectus (or any amendment or supplement thereto), (ii) 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, and (iii) nothing in this indemnity agreement shall be
construed to require or permit indemnification by the Fund or Investment Advisers for any liability
for any Underwriter, whether or not there is an adjudication of liability, where such
indemnification would be in contravention of Section 17(i) of the 1940 Act or 1940 Act Release No.
11330.
(b) Indemnification of the Fund, Investment Advisers, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Fund and the Investment Advisers,
their respective directors and shareholders, each of the Fund’s officers who signed the
Registration Statement, and each person, if any, who controls the Fund or one of the Investment
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, any Rule 482 Statement, 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 one of the Investment Advisers by such
Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430A Information, or such preliminary prospectus or the Prospectus (or
any amendment or supplement thereto).
(c) Indemnification for Sales Materials. In addition to the foregoing indemnification, the
Fund and the Investment 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 as defined in Section 1(a)(xviii).
21
(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 Investment Adviser. 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.
(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 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 Investment 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 Investment 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 Investment 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
22
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.
The relative fault of the Fund and the Investment 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 one of the Investment 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 Investment 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 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.
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 director and shareholder of the Fund and each director
of one of the Investment Advisers, respectively, each officer of the Fund who signed the
Registration Statement, and each person, if any, who controls the Fund or the Investment Adviser,
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 Investment Adviser, 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 one of the Investment 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 Investment 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
(exclusive of any supplement thereto) or the General Disclosure Package, any material adverse
change in the condition,
23
financial or otherwise, or in the earnings, business affairs or business prospects of the Fund
or one of the Investment Advisers, 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 Stock 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 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.
24
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 the Investment 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
the Investment Adviser shall be directed, as appropriate, to the office of AIG SunAmerica Asset
Management Corp., Harborside Financial Center, 0000 Xxxxx 0, Xxxxxx Xxxx, Xxx Xxxxxx 00000,
Attention: Xxxxxxx X. Xxxxxxxx; notices to Marsico shall be directed to it at 0000 00xx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X.X. Xxxxxx; and notices to Mercury shall be
directed to it at 000 Xxxxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Attention: [ ].
SECTION 13. Parties.
This Agreement shall each inure to the benefit of and be binding upon the Underwriters, the
Fund, the Investment Advisers and their 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 Investment Advisers and their respective
successors and the controlling persons and officers, directors, 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 Investment Advisers and their respective partners and
successors, and said controlling persons and officers, 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. No Fiduciary Relationship.
The Fund acknowledges and agrees that (i) the purchase and sale of the Securities pursuant to
this Agreement, including the determination of the public offering price of the Securities and any
related discounts and commissions, is an arm’s-length commercial transaction between the Fund on
the one hand, and the several Underwriters, on the other hand, (ii) in connection with the offering
contemplated hereby and the process leading to such transaction each Underwriter is and has been
acting solely as a principal and is not the agent or fiduciary of the Fund, or its stockholders,
creditors, employees or any other party, (iii) no Underwriter has assumed or will assume an
advisory or fiduciary responsibility in favor of the Fund with respect to the offering contemplated
hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is
currently advising the Fund on other matters) and no Underwriter has any obligation to the Fund
with respect to the offering contemplated hereby except the obligations expressly set forth in this
Agreement, (iv) the Underwriters and their respective affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Fund, and
25
(v) the Underwriters have not provided any legal, accounting, regulatory or tax advice with
respect to the offering contemplated hereby and the Fund has consulted its own legal, accounting,
regulatory and tax advisors to the extent it deemed appropriate.
SECTION 15. 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 16. Effect of Headings.
The Article and Section headings herein are for convenience only and shall not affect the
construction hereof.
[signatures on following page]
26
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 the Investment Advisers in
accordance with its terms.
Very truly yours, | |||||
SUNAMERICA FOCUSED ALPHA LARGE-CAP FUND, INC. | |||||
By: | |||||
Name: | |||||
Title: | |||||
AIG SUNAMERICA ASSET MANAGEMENT CORP. | |||||
By: | |||||
Name: | |||||
Title: | |||||
XXXXXXX CAPITAL MANAGEMENT, LLC | |||||
By: | |||||
Name: | |||||
Title: | |||||
MERCURY ADVISORS | |||||
By: | |||||
Name: | |||||
Title: |
CONFIRMED AND ACCEPTED,
as of the date first above written:
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
AIG FINANCIAL ADVISORS, INC.
ADVANTAGE CAPITAL CORPORATION ADVEST, INC.
ADVANTAGE CAPITAL CORPORATION ADVEST, INC.
27
XXXXXX X. XXXXX & CO. INCORPORATED
H&R BLOCK FINANCIAL ADVISORS, INC.
XXXXXX, XXXXX XXXXX, INCORPORATED
FSC SECURITIES CORPORATION
J.J.B. XXXXXXXX, X.X. XXXXX, INC.
XXXXXX XXXXXXXXXX XXXXX LLC
XXXXXXXXXXX & CO. INC.
RBC CAPITAL MARKETS CORPORATION
ROYAL ALLIANCE ASSOCIATES, INC.
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
XXXXX FARGO SECURITIES, LLC
H&R BLOCK FINANCIAL ADVISORS, INC.
XXXXXX, XXXXX XXXXX, INCORPORATED
FSC SECURITIES CORPORATION
J.J.B. XXXXXXXX, X.X. XXXXX, INC.
XXXXXX XXXXXXXXXX XXXXX LLC
XXXXXXXXXXX & CO. INC.
RBC CAPITAL MARKETS CORPORATION
ROYAL ALLIANCE ASSOCIATES, INC.
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
XXXXX FARGO SECURITIES, LLC
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By: |
|||
Authorized Signatory |
For themselves and as
Representatives of the
other Underwriters named
in Schedule A hereto.
Representatives of the
other Underwriters named
in Schedule A hereto.
28
SCHEDULE A
Number of | ||||
Name of Underwriter | Initial Securities | |||
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated |
||||
[other underwriters] |
||||
Total |
||||
Sch A-1
SCHEDULE B
SunAmerica Focused Alpha Large-Cap Fund, Inc.
Shares of Common Stock
Shares of Common Stock
($.001 Par Value)
1. The initial public offering price per share for the Securities, determined as provided in
said Section 2, shall be $20.00.
2. The purchase price per share for the Securities to be paid by the several Underwriters
shall be $19.10, being an amount equal to the initial public offering price set forth above less
$.90 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.
Sch B-1
SCHEDULE C
Oral pricing information, if any, included as part of the General Disclosure Package:
Sch. C-1
Exhibit A
FORM OF OPINION OF FUND’S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Fund has been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Maryland.
(ii) The Fund has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and to enter into and
perform its obligations under the Purchase Agreement.
(iii) The Fund 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, 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.
(iv) To the best of our knowledge, the Fund does not have any subsidiaries.
(v) The authorized, issued and outstanding shares of common stock of the Fund are as
set forth in the Prospectus under the caption “Description of Shares” (except for subsequent
issuances, if any, pursuant to the Purchase Agreement); all issued and outstanding shares of
common stock of the Fund have been duly authorized and validly issued and are fully paid and
non-assessable 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); the
Common Stock conform as to legal matters to all statements relating thereto contained in the
Prospectus and such description conforms to the rights set forth in the instruments defining
the same; and none of the outstanding shares of common stock of the Fund was issued in
violation of the preemptive or other similar rights of any securityholder of the Fund.
(vi) The Securities to be purchased by the Underwriters from the Fund have been duly
authorized for issuance and sale to the Underwriters pursuant to the Purchase Agreement and,
when issued and delivered by the Fund pursuant to the Purchase Agreement against payment of
the consideration set forth in the Purchase Agreement, will be validly issued and fully paid
and non-assessable and no holder of the Securities is or will be subject to personal
liability by reason of being such a holder.
(vii) The issuance of the Securities is not subject to preemptive or other similar
rights of any securityholder of the Fund.
(viii) The Purchase Agreement has been duly authorized, executed and delivered by the
Fund.
(ix) The Registration Statement, including any Rule 462(b) Registration Statement, has
been declared effective under the 1933 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 the
effectiveness of the Registration Statement or any Rule 462(b) Registration Statement has
been issued under the 1933 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.
A-1
(x) The Registration Statement, including any Rule 462(b) 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 need express no opinion), and the notification on Form N-8A complied as to form in
all material respects with the requirements of the 1933 Act, the 1940 Act and the Rules and
Regulations.
(xi) The form of certificate used to evidence the Common Stock complies in all material
respects with all applicable statutory requirements, with any applicable requirements of the
articles of incorporation and by-laws of the Fund and the requirements of the NYSE.
(xii) To the best of our knowledge, there is not pending or threatened any action,
suit, proceeding, inquiry or investigation, to which the Fund is a party, or to which the
property of the Fund is subject, before or brought by any court or governmental agency or
body, domestic or foreign, which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially and adversely affect the
properties or assets of the Fund or the consummation of the transactions contemplated in the
Purchase Agreement or the performance by the Fund of its obligations thereunder.
(xiii) The information in the Prospectus under “Description of Shares” and “Taxation”
and in the Registration Statement under Item 29 (Indemnification), to the extent that it
constitutes matters of law, summaries of legal matters, the Fund’s articles of incorporation
and by-laws or legal proceedings, or legal conclusions, has been reviewed by us and is
correct in all material respects.
(xiv) Each of the Investment Advisory Agreement, the Administration Agreement, the
Custodian Agreement, the Transfer Agency Agreement, the Purchase Agreement and the
Additional Compensation Agreement comply in all material respects with all applicable
provisions of the 1940 Act, the Advisers Act, the Rules and Regulations and the Advisers Act
Rules and Regulations.
(xv) The Fund is duly registered with the Commission under the 1940 Act as a
closed-end, non-diversified management investment company; and, to the best of our
knowledge, no order of suspension or revocation of such registration has been issued or
proceedings therefor initiated or threatened by the Commission.
(xvi) To the best of our knowledge, no person is serving as an officer, director or
investment adviser of the Fund except in accordance with the 1940 Act and the Rules and
Regulations and the Investment Advisers Act and the Advisers Act Rules and Regulations.
Except as disclosed in the Registration Statement and Prospectus (or any amendment or
supplement to either of them), based solely upon our review of questionnaires submitted by
directors of the Fund, no director of the Fund is an “interested person” (as defined in the
0000 Xxx) of the Fund or an “affiliated person” (as defined in the 0000 Xxx) of an
Underwriter.
(xvii) There are no statutes or regulations that are required to be described in the
Prospectus that are not described as required.
(xviii) All descriptions in the Registration Statement of contracts and other documents
to which the Fund is a party are accurate in all material respects. 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
A-2
reference as exhibits thereto, and the descriptions thereof or references thereto are
correct in all material respects.
(xix) To the best of our knowledge, the Fund is not in violation of its articles of
incorporation or by-laws and no default by the Fund 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.
(xx) No filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency (other than under
the 1933 Act, the 1934 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), which counsel familiar with the transactions
contemplated by this Agreement would reasonably believe to be applicable to the
transactions, is necessary or required in connection with the due authorization, execution
and delivery of the Purchase Agreement or for the offering, issuance or sale of the
Securities or the consummation of the transactions contemplated by this Agreement.
(xxi) 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 (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 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 Fund
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 Fund is a party
or by which it or any of them may be bound (except for such conflicts, breaches, defaults,
liens, charges or encumbrances that would not result in a Material Adverse Effect), or to
which any of the property or assets of the Fund is subject, nor will such action result in
any violation of the provisions of the charter or by-laws of the Fund, 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 Fund or any of its properties, assets or operations.
(xxii) The Purchase Agreement, the Investment Advisory Agreement, the Administration
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. Assuming due authorization, execution and delivery by
the other parties thereto with respect to the Administration Agreement, the Custodian
Agreement and the Transfer Agency Agreement, each of the Investment Advisory Agreement, the
Administration Agreement, the Custodian Agreement and the Transfer Agency 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 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.
In addition, we have participated in the preparation of the Registration Statement and the
Prospectus and participated in discussions with certain officers, directors and employees of the
Fund,
A-3
representatives of PricewaterhouseCoopers LLP, the independent registered public accounting
firm who examined the statement of assets and liabilities 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 opinions with respect to the Fund in paragraphs (v), (xiv) and
(xvii), 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 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 therein or omitted
therefrom, 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. In addition, nothing has come to our
attention that would lead us to believe that the documents included in the General Disclosure
Package, other than financial statements and schedules and other financial data included or
incorporated by reference therein or omitted therefrom, as to which we need make no statement, as
of the Applicable Time, contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. With respect to statements contained in the General
Disclosure Package, any statement contained in any of the constituent documents shall be deemed to
be modified or superseded to the extent that any information contained in subsequent constituent
documents modifies or replaces such statement.
A-4
Exhibit B
FORM OF OPINION OF INVESTMENT ADVISER’S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Investment Adviser has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Investment Adviser has full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under the Purchase Agreement.
(iii) The Investment Adviser 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, 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 an Investment Adviser Material Adverse Effect.
(iv) The Investment Adviser is duly registered with the Commission as an investment
adviser under the Advisers Act and is not prohibited by the Advisers Act, the Advisers Act
Rules and Regulations, the 1940 Act or the Rules and Regulations from acting under the
Investment Advisory Agreement for the Fund as contemplated by the Prospectus.
(v) The Purchase Agreement, the Investment Advisory Agreement, the Subadvisory
Agreements and the Additional Compensation Agreement have been duly authorized, executed and
delivered by the Investment Adviser, and the Investment Advisory Agreement, the Subadvisory
Agreements and the Additional Compensation Agreement each constitute a valid and binding
obligation of the Investment Adviser, enforceable in accordance with their 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).
(vi) To the best of our knowledge, there is not pending or threatened any action, suit,
proceeding, inquiry or investigation, to which the Investment Adviser is a party, or to
which the property of the Investment 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 Investment Adviser, materially and
adversely affect the properties or assets of the Investment Adviser or materially impair or
adversely affect the ability of the Investment Adviser to function as an investment adviser
or perform its obligations under the Investment Advisory Agreement and the Additional
Compensation Agreement or which is required to be disclosed in the Registration Statement or
the Prospectus.
(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.
B-1
(viii) To the best of our knowledge, the Investment Adviser is not in violation of its
certificate of incorporation, by-laws or other organizational documents and no default by
the Investment Adviser 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.
(x) The execution, delivery and performance of the Purchase Agreement, the Investment
Advisory Agreement and the Subadvisory Agreement and the consummation of the transactions
contemplated in the Purchase Agreement, the Investment Advisory Agreement and the
Subadvisory Agreement and in the Registration Statement and compliance by the Investment
Adviser with its obligations under the Purchase Agreement, the Investment Advisory Agreement
and the Subadvisory 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 Investment Adviser 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 Investment Adviser is a party or by which it may be bound, or to which any of the
property or assets of the Investment Adviser is subject (except for such conflicts,
breaches, defaults, liens, charges or encumbrances that would not result in an Investment
Adviser Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of the Investment Adviser, 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
Investment Adviser or any of its properties, assets or operations.
In addition, we have participated in the preparation of the sections entitled “Prospectus
Summary—Investment Adviser,” “Management of the Fund—The Investment Adviser and Subadvisers,” in
the Prospectus and “Investment Advisory and Other Services—Investment Advisory Services” and
“Investment Advisory and Other Services—Investment Advisory Services—Board Approval of Subadvisory
Agreements” in the Statement of Additional Information and participated in discussions with certain
officers and employees of the Investment Adviser, and we have reviewed certain records and
documents of the Investment Adviser. 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 such sections of the Prospectus and the Statement of Additional
Information as such information relates to the Investment Adviser, nothing has come to our
attention that would lead us to believe that such sections of the Prospectus and the Statement of
Additional Information as such information relates to the Investment Adviser at the time the
Prospectus and Statement of Additional Information were issued, at the time the Registration
Statement was declared effective, 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.
In addition, nothing has come to our attention that would lead us to believe that such sections of
the Statutory Prospectus, as of the Applicable Time, contained any untrue statement of a material
fact or omitted to state any material fact necessary in order to make the statements therein, in
B-2
the light of circumstances under which they were made, not misleading. With respect to statements
contained in such sections of the Statutory Prospectus, any statement contained in any of the
constituent documents shall be deemed to be modified or superseded to the extent that any
information contained in subsequent constituent documents modifies or replaces such statement.
X-0
Xxxxxxx X
XXXX XX XXXXXXX XX XXXXXXX’S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) Xxxxxxx has been duly organized and is validly existing as a limited liability
company in good standing under the laws of the State of Delaware.
(ii) Xxxxxxx has full 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) Xxxxxxx is duly qualified as a foreign limited liability company 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 Xxxxxxx Material Adverse Effect.
(iv) Xxxxxxx is duly registered with the Commission as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act, the Advisers Act Rules and
Regulations, the 1940 Act or the Rules and Regulations from acting under the Subadvisory
Agreement to which it is a party for the Fund as contemplated by the Prospectus.
(v) The Purchase Agreement and the Subadvisory Agreement to which Xxxxxxx is a party
have been duly authorized, executed and delivered by Xxxxxxx, and the Purchase Agreement and
the Subadvisory Agreement to which Xxxxxxx is a party each constitute a valid and binding
obligation of Xxxxxxx, enforceable in accordance with their 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).
(vi) To the best of our knowledge, there is not pending or threatened any action, suit,
proceeding, inquiry or investigation, to which Xxxxxxx is a party, or to which the property
of Xxxxxxx 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 Xxxxxxx, materially and adversely affect the properties or assets of
Xxxxxxx or materially impair or adversely affect the ability of Xxxxxxx to function as an
investment adviser or perform its obligations under the Subadvisory Agreement to which
Xxxxxxx is a party or which is required to be disclosed in the Registration Statement or the
Prospectus.
(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, Xxxxxxx is not in violation of its certificate of
formation, by-laws or other organizational documents and no default by Xxxxxxx 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
C-1
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.
(x) The execution, delivery and performance of the Purchase Agreement and the
Subadvisory Agreement in which Xxxxxxx is a party and the consummation of the transactions
contemplated in the Purchase Agreement and the Subadvisory Agreement in which Xxxxxxx is a
party and in the Registration Statement and compliance by Xxxxxxx with its obligations under
the Purchase Agreement and the Subadvisory Agreement in which Xxxxxxx is a party and 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 Xxxxxxx 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 Xxxxxxx is a party or by which it may
be bound, or to which any of the property or assets of Xxxxxxx is subject (except for such
conflicts, breaches, defaults, liens, charges or encumbrances that would not result in a
Xxxxxxx Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of Xxxxxxx, 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 Xxxxxxx or any of
its properties, assets or operations.
In addition, we have participated in the preparation of the sections entitled “Prospectus
Summary—Investment Adviser,” “Management of the Fund—The Investment Adviser and Subadvisers,” in
the Prospectus and “Investment Advisory and Other Services—Investment Advisory Services” and
“Investment Advisory and Other Services—Investment Advisory Services—Board Approval of Subadvisory
Agreements” in the Statement of Additional Information and participated in discussions with certain
officers and employees of Xxxxxxx, and we have reviewed certain Xxxxxxx records and documents of
Xxxxxxx. 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 such
sections of the Prospectus and the Statement of Additional Information as such information relates
to Xxxxxxx, nothing has come to our attention that would lead us to believe that such sections of
the Prospectus and the Statement of Additional Information as such information relates to Xxxxxxx
at the time the Prospectus and Statement of Additional Information were issued, at the time the
Registration Statement was declared effective, 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. In addition, nothing has come to our attention that would lead us to believe that such
sections of the Statutory Prospectus, as of the Applicable Time, contained any untrue statement of
a material fact or omitted to state any material fact necessary in order to make the statements
therein, in the light of circumstances under which they were made, not misleading. With respect to
statements contained in such sections of the Statutory Prospectus, any statement contained in any
of the constituent documents shall be deemed to be modified or superseded to the extent that any
information contained in subsequent constituent documents modifies or replaces such statement.
C-2
Exhibit D
FORM OF OPINION OF MERCURY’S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) Mercury has been duly organized and is validly existing as a limited partnership in
good standing under the laws of the State of Delaware.
(ii) Mercury has full partnership 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) Mercury 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, 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 Mercury Material
Adverse Effect.
(iv) Mercury is duly registered with the Commission as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act, the Advisers Act Rules and
Regulations, the 1940 Act or the Rules and Regulations from acting under the Subadvisory
Agreement to which Mercury is a party for the Fund as contemplated by the Prospectus.
(v) The Purchase Agreement and the Subadvisory Agreement have been duly authorized,
executed and delivered by Mercury, and the Purchase Agreement and the Subadvisory Agreement
to which Mercury is a party, each constitute a valid and binding obligation of Mercury,
enforceable in accordance with their 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).
(vi) To the best of our knowledge, there is not pending or threatened any action, suit,
proceeding, inquiry or investigation, to which Mercury is a party, or to which the property
of Mercury 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 Mercury, materially and adversely affect the properties or assets of
Mercury or materially impair or adversely affect the ability of Mercury to function as an
investment adviser or perform its obligations under the Subadvisory Agreement to which
Mercury is a party, or which is required to be disclosed in the Registration Statement or
the Prospectus.
(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, Mercury is not in violation of its certificate of
incorporation, by-laws or other organizational documents and no default by Mercury 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
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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.
(x) The execution, delivery and performance of the Purchase Agreement and the
Subadvisory Agreement to which Mercury is a party and the consummation of the transactions
contemplated in the Purchase Agreement and the Subadvisory Agreement to which Mercury is a
party and in the Registration Statement and compliance by Mercury with its obligations under
the Purchase Agreement and the Subadvisory Agreement to which Mercury is a party 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 Mercury 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 Mercury is a party or by which it may be
bound, or to which any of the property or assets of Mercury is subject (except for such
conflicts, breaches, defaults, liens, charges or encumbrances that would not result in a
Mercury Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of Mercury, 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 Mercury or any of
its properties, assets or operations.
In addition, we have participated in the preparation of the sections entitled “Prospectus
Summary—Investment Adviser,” “Management of the Fund—The Investment Adviser and Subadvisers,” in
the Prospectus and “Investment Advisory and Other Services—Investment Advisory Services” and
“Investment Advisory and Other Services—Investment Advisory Services—Board Approval of Subadvisory
Agreements” in the Statement of Additional Information and participated in discussions with certain
officers and employees of Mercury, and we have reviewed certain Mercury records and documents of
Mercury. 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 such
sections of the Prospectus and the Statement of Additional Information as such information relates
to Mercury, nothing has come to our attention that would lead us to believe that such sections of
the Prospectus and the Statement of Additional Information as such information relates to Mercury
at the time the Prospectus and Statement of Additional Information were issued, at the time the
Registration Statement was declared effective, 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. In addition, nothing has come to our attention that would lead us to believe that such
sections of the Statutory Prospectus, as of the Applicable Time, contained any untrue statement of
a material fact or omitted to state any material fact necessary in order to make the statements
therein, in the light of circumstances under which they were made, not misleading. With respect to
statements contained in such sections of the Statutory Prospectus, any statement contained in any
of the constituent documents shall be deemed to be modified or superseded to the extent that any
information contained in subsequent constituent documents modifies or replaces such statement.
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