EXHIBIT 99(H)
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Draft of 9/15/95
THE KOREAN INVESTMENT FUND, INC.
1,987,637 Shares of Common Stock Issuable Upon Exercise
of Non-Transferable Rights to Subscribe for
Such Shares of Common Stock
DEALER MANAGER AGREEMENT
New York, New York
September 19, 1995
PaineWebber Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The Korean Investment Fund, Inc., a Maryland corporation (the
"Company"), Alliance Capital Management L.P. ("Alliance") and Orion Asset
Management Co., Ltd. ("Orion") each confirms its agreement with and appointment
of PaineWebber Incorporated to act as dealer manager (the "Dealer Manager") in
connection with the issuance by the Company to the holders of record at the
close of business on September 25, 1995 or such other date as is established as
the record date for such purpose (the "Holders"), of the shares of common stock,
par value $.01 per share, of the Company (the "Common Stock"), of non-
transferable rights entitling such Holders to subscribe for an aggregate of
1,987,637 shares (each a "Share" and, collectively, the "Shares") of Common
Stock (the "Offer"). Pursuant to the over-subscription privilege in connection
with the Offer, the Company may, at the discretion of the Board of Directors,
increase the number of Shares subject to subscription by up to 25%. Pursuant to
the terms of the Offer, the Company is issuing each Holder one nontransferable
right (each a "Right" and, collectively, the "Rights") for each whole share of
Common Stock held by such Holder on the record date set forth in the Prospectus
(as defined herein) (the "Record Date"). The Rights entitle Holders to acquire
during the subscription period set forth in the Prospectus (as defined herein)
(the "Subscription Period"), at the price set forth in the Prospectus (the
"Subscription Price"), one Share for each three Rights exercised on the terms
and conditions set forth in such Prospectus. No fractional Shares will be
issued.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (No. 33-61849) and a related
preliminary prospectus and statement of additional information for the
registration of the Shares under the Securities Act of 1933, as amended (the
"Act"), and the rules and regulations of the Commission thereunder (the "1933
Act Rules and Regulations"), and has filed such amendments to such registration
statement on Form N-2, if any, and such amended preliminary prospectuses and
statements of additional information as may have been required to the date
hereof. The Company will prepare and file such additional amendments thereto
and such amended prospectuses and statements of additional information as may
hereafter be required. The registration statement (as amended, if applicable)
and the prospectus and statement of additional information constituting a part
thereof, as from time to time amended or supplemented pursuant to the Act, are
herein referred to as the "Registration Statement" and such prospectus and
statement of additional information are collectively referred to herein as the
"Prospectus", except that if any revised prospectus or statement of additional
information shall be provided to the Dealer Manager by the Company for use in
connection with the Offer which differs from the Prospectus on file at the
Commission at the time the Registration Statement becomes effective (whether
such revised prospectus or statement of additional information is required to be
filed by the Company pursuant to Rule 497(b) or Rule 497(h) of the 1933 Act
Rules and Regulations), the term "Prospectus" shall refer to each such revised
prospectus and statement of additional information from and after the time it is
first provided to the Dealer Manager for such use. Any letters to beneficial
owners of the shares of Common Stock of the Company, forms used to exercise
rights, any letters from the Company to securities dealers, commercial banks and
other nominees and any newspaper announcements, press releases and other
offering materials and information that the Company may use, approve, prepare or
authorize in writing for use in connection with the Offer, are collectively
referred to hereinafter as the "Offering Materials".
1. Representations and Warranties.
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(a) The Company represents and warrants to, and agrees with, the
Dealer Manager as of the date hereof and as of the date of the commencement of
the Offer (such later date being hereinafter referred to as the "Representation
Date") that:
(i) The Company meets the requirements for use of Form N-2 under the
Act, the 1933 Act Rules and Regulations, the Investment Company Act of
1940, as amended (the "Investment Company Act"), and the rules and
regulations of the Commission under the Investment Company Act, (the
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"Investment Company Act Rules and Regulations"). At the time the
Registration Statement becomes effective, the Registration Statement will
contain all statements required to be stated therein in accordance with and
will comply in all material respects with the requirements of the Act, the
Investment Company Act, the 1933 Act Rules and Regulations and the
Investment Company Act Rules and Regulations (the 1933 Act Rules and
Regulations and the Investment Company Act Rules and Regulations will
together hereinafter be referred to as the "Rules and Regulations") and
will not include any 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. From the time the Registration
Statement becomes effective through the expiration date of the Offer set
forth in the Prospectus (the "Expiration Date"), the Prospectus (unless the
term "Prospectus" refers to a prospectus which has been provided to the
Dealer Manager by the Company for use in connection with the Offer which
differs from the Prospectus on file with the Commission at the time the
Registration Statement becomes effective, in which case at the time such
prospectus is first provided to the Dealer Manager for such use) and the
Offering Materials then authorized by the Company for use will not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
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however, that the representations and warranties in this subsection shall
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not apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by the Dealer Manager expressly for use
in the Registration Statement or Prospectus.
(ii) The Company is registered with the Commission under the
Investment Company Act as a closed-end, diversified, management investment
company, and no order of suspension or revocation of such registration has
been issued or proceedings therefor initiated or threatened by the
Commission.
(iii) Price Waterhouse LLP, the accountants who certified the
financial statements of the Company set forth or incorporated by reference
in the Registration Statement and the Prospectus, are independent public
accountants as required by the Act and the 1933 Act Rules and Regulations.
(iv) The financial statements of the Company set forth or
incorporated by reference in the Registration Statement
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and the Prospectus fairly present in all material respects the financial
condition of the Company as of the dates indicated in conformity with
generally accepted accounting principles; and the information set forth in
the Prospectus under the headings "Expense Information" and "Financial
Highlights" each presents fairly in all material respects the information
stated therein.
(v) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Maryland, has
full power and authority (corporate and other) to conduct its business as
described in the Registration Statement and the Prospectus and is duly
qualified to do business in each jurisdiction in which it owns or leases
real property or in which the conduct of its business requires such
qualification, except where the failure to be so qualified would not result
in a material adverse effect upon the business, properties, financial
position or results of operations of the Company. The Company has no
subsidiaries.
(vi) The Company's authorized capitalization is as set forth in the
Prospectus; the outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable and
conform in all material respects to the description thereof in the
Prospectus under the heading "Description of Common Stock"; the Rights have
been duly authorized by all requisite action on the part of the Company for
issuance pursuant to the Offer; the Shares have been or, with respect to
the Shares to be issued pursuant to the over-subscription privilege, will
be duly authorized by all requisite action on the part of the Company for
issuance and sale pursuant to the terms of the Offer and, when issued and
delivered by the Company pursuant to the terms of the Offer against payment
of the consideration set forth in the Prospectus will be validly issued and
fully paid and non-assessable; the Shares and the Rights conform in all
material respects to all statements relating thereto contained in the
Registration Statement and the Prospectus; and the issuance of each of the
Rights and the Shares is not subject to any preemptive rights.
(vii) Except as set forth in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, (A) the Company has not incurred any
liabilities or obligations, direct or contingent, or entered into any
transactions, other than in the ordinary course of business, that are
material to the Company, (B) there has not been any material change in the
capital stock of the Company, or any
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material adverse change, or to the Company's knowledge any development
involving a prospective material adverse change, in the condition
(financial or otherwise), business, prospects, net worth or results of
operations of the Company, (C) there has been no dividend or distribution
paid or declared in respect of the Company's capital stock and (D) the
Company has no outstanding long-term debt.
(viii) Except as set forth in the Prospectus, there is not pending
or, to the knowledge of the Company, threatened, any action, suit or
proceeding affecting the Company or to which the Company is a party before
or by any court or governmental agency or body, which might result in any
material adverse change in the condition (financial or otherwise),
business, prospects, net worth or results of operations of the Company, or
which might materially and adversely affect the properties or assets
thereof.
(ix) There are no contracts or documents of the Company that are
required to be filed as exhibits to the Registration Statement by the Act
or the Investment Company Act or by the Rules and Regulations that have not
been so filed or incorporated by reference therein as permitted by the
Rules and Regulations.
(x) This Agreement, the Subscription Rights Agency Agreement (the
"Subscription Agency Agreement") dated as of September , 1995 between
the Company and State Street Bank and Trust Company (the "Subscription
Agent"), the Investment Management and Administration Agreement between the
Company and Alliance (the "Investment Management and Administration
Agreement"), the Investment Management Agreement between the Company and
Orion (the "Management Agreement"), the Custodian Agreement between the
Fund and Brown Brothers Xxxxxxxx & Co. and the Registrar, Transfer Agency
and Service Agreement (the "Transfer Agency Agreement") between the Company
and State Street Bank and Trust Company (collectively, all the foregoing
are the "Company Agreements") have been duly authorized, executed and
delivered by the Company; the Company Agreements are, assuming due
authorization, execution and delivery by the other parties thereto, legal,
valid, binding and enforceable obligations of the Company subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and
other laws of general applicability relating to or affecting creditors'
rights and to general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law) and
except as enforcement of rights to indemnity and contribution hereunder may
be limited by Federal or state securities laws or principles of
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public policy, and the performance of the Company's obligations under the
Company Agreements and the consummation of the transactions contemplated
therein or in the Registration Statement will not result in a material
breach or violation of any of the terms and provisions of, constitute a
default under, or result in the creation or imposition of any lien, charge
or encumbrance upon any properties or assets of the Company pursuant to any
material agreement, indenture, mortgage, lease or other instrument to which
the Company is a party or by which it may be bound or to which any of the
property or assets of the Company is subject, nor will such action result
in any violation of the Company's charter or by-laws, or any order, law,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; no consent,
approval, authorization, notification or order of, or filing with, any
court or governmental agency or body is required for the consummation by
the Company of the transactions contemplated by the Company Agreements or
the Registration Statement, except such as have been obtained, or if the
registration statement filed with respect to the Shares is not effective
under the Act as of the time of execution hereof, such as may be required
(and shall be obtained as provided in this Agreement) under the Investment
Company Act, the Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and state securities laws.
(xi) Each of the Company Agreements complies in all material respects
with all applicable provisions of the Investment Company Act.
(xii) The Common Stock has been duly listed on the New York Stock
Exchange and prior to their issuance the Shares will have been approved for
listing, subject to official notice of issuance.
(xiii) The Company owns or possesses or has obtained all material
governmental licenses, permits, consents, orders or approvals and other
authorizations necessary to lease or own, as the case may be, and to
operate its properties and to carry on its business as contemplated in the
Prospectus, including registration as a foreign investor in Korea able to
invest directly in securities of Korean issuers to the extent permitted
under Korean laws and regulations as of the date of the Prospectus.
(xiv) The Company (A) has not taken, directly or indirectly, any
action designed to cause or to result in, or that has constituted or which
might reasonably be expected
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to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the issuance of the Rights or the
sale or resale of the Shares, (B) has not since the filing of the
Registration Statement sold, bid for or purchased, or paid anyone any
compensation for soliciting purchases of, shares of Common Stock of the
Company and (C) will not, until the later of the expiration of the Rights
or the completion of the distribution (within the meaning of Rule 10b-6
under the Exchange Act) of the Shares, sell, bid for or purchase, pay or
agree to pay to any person any compensation for soliciting another to
purchase any other securities of the Company (except for the solicitation
of the exercises of Rights pursuant to this Agreement); provided that any
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action in connection with the Company's dividend reinvestment plan will not
be deemed to be within the terms of this Section 1(a)(xiv).
(xv) The Company intends to direct the investment of the proceeds of
the Offer described in the Registration Statement and the Prospectus 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
is qualified and intends to continue to qualify as a regulated investment
company under Subchapter M of the Code.
(xvi) The Prospectus and the Offering Materials complied and comply
with the requirements of the Act, the Investment Company Act and the Rules
and Regulations.
(xvii) There are no material restrictions, limitations or regulations
with respect to the ability of the Company to invest its assets as
described in the Prospectus other than as described therein.
(b) Alliance represents and warrants to, and agrees with, the Dealer
Manager as of the date hereof and as of the Representation Date that:
(i) It has been duly organized and is validly existing as a limited
partnership under the laws of the State of Delaware, with partnership power
and authority to own its properties and conduct its business as described
in the Prospectus, and is duly licensed or qualified as a foreign entity
and in good standing to do business in each other jurisdiction in which its
ownership of property or the conduct of its business requires such
qualification or license, except where the failure to be so qualified would
not have a material adverse effect on Alliance.
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(ii) It is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), and is
not prohibited by the Advisers Act or the Investment Company Act, or the
rules and regulations under such Acts, from acting under the Investment
Management and Administration Agreement for the Company as contemplated by
the Prospectus.
(iii) Each of this Agreement and the Investment Management and
Administration Agreement has been duly authorized, executed and delivered
by Alliance; the Investment Management and Administration Agreement is,
assuming due authorization, execution and delivery by the other parties
thereto, a legal, valid, binding and enforceable obligation of Alliance,
subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium and other laws of general applicability relating to or affecting
creditors' rights, and to general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law),
and the performance by Alliance of its obligations under such agreements
and the consummation of the transactions therein contemplated to be
consummated by Alliance will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any statute,
any material agreement or instrument to which Alliance is a party or and by
which it is bound or to which any of the property of Alliance is subject,
the Agreement of Limited Partnership of Alliance, or any order, rule or
regulation of any court or governmental agency or body, stock exchange or
securities association having jurisdiction over Alliance or any of its
properties or operations.
(iv) Except as set forth in the Prospectus, there is not pending or,
to the knowledge of Alliance, threatened, any action, suit or proceeding to
which Alliance is a party before or by any court or governmental agency or
body, which is likely to have a material adverse effect upon the Company or
upon the ability of Alliance to perform its obligations under the
Investment Management and Administration Agreement.
(v) Alliance (i) has not taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the issuance of the
Rights or the sale or resale of the Shares, (ii) has not since the filing
of the Registration Statement sold, bid for or purchased, or paid anyone
any compensation
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for soliciting purchases of, shares of Common Stock of the Company and
(iii) will not, until the later of the expiration of the Rights or the
completion of the distribution (within the meaning of Rule 10b-6 under the
Exchange Act) of the Shares, sell, bid for or purchase, pay or agree to pay
any person any compensation for soliciting another to purchase any other
securities of the Company (except for the solicitation of exercises of
Rights pursuant to this Agreement); provided that any action in connection
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with the Company's dividend reinvestment plan will not be deemed to be
within the terms of this Section 1(b)(v).
(vi) Alliance owns, possesses or has obtained and currently maintains
all material governmental licenses, permits, consents, orders, approvals
and other authorizations ("Authorizations") as are necessary for Alliance
to carry on its business as set forth in and contemplated by the Prospectus
except where the failure to obtain such Authorizations would not have a
material adverse effect on the ability of Alliance to perform its
obligations under the Investment Management and Administration Agreement.
(vii) The description of Alliance and its businesses in the
Registration Statement and the Prospectus complies with the requirements of
the Act, the Investment Company Act and the Rules and Regulations and does
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading in light of the circumstances under
which they were made.
(viii) There are no material restrictions, limitations or regulations
with respect to the ability of the Company to invest its assets as
described in the Prospectus other than as may be described therein.
(c) Xxxxx represents and warrants to, and agrees with, the Dealer
Manager as of the date hereof and as of the Representation Date that:
(i) It has been duly organized and is validly existing as a
corporation under the laws of the Cayman Islands, with corporate power and
authority to conduct its business as described in the Prospectus, and is
duly qualified to do business as a foreign corporation and in good standing
in each other jurisdiction in which it owns or leases real property or in
which the conduct of its business requires such qualification, except where
the failure to be so qualified does not involve a material adverse risk to
its
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business, properties, financial position or results of operations.
(ii) It is duly registered as an investment adviser under the
Advisers Act, and is not prohibited by the Advisers Act or the Investment
Company Act, or the rules and regulations under such Acts, from acting
under the Management Agreement for the Company as contemplated by the
Prospectus.
(iii) Each of this Agreement and the Management Agreement have been
duly authorized, executed and delivered by Orion; the Management Agreement
is, assuming due authorization, execution and delivery by the other parties
thereto, a legal, valid, binding and enforceable obligation of Orion,
subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium and other laws of general applicability relating to or affecting
creditors' rights, and to general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law),
and the performance by Orion of its obligations under such agreements and
the consummation of the transactions therein contemplated to be consummated
by Orion will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any material
agreement or instrument to which Orion is a party or and by which it is
bound or to which any of the property of Orion is subject, Orion's
corporate charter, or any order, rule or regulation of any court or
governmental agency or body, stock exchange or securities association
having jurisdiction over Orion or any of its properties or operations.
(iv) Except as set forth in the Prospectus, there is not pending or,
to the knowledge of Orion, threatened, any action, suit or proceeding to
which Orion is a party before or by any court or governmental agency or
body, which is likely to have a material adverse effect upon the Company or
upon the ability of Orion to perform its obligations under the Management
Agreement.
(v) Orion (i) has not taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the issuance of the
Rights or the sale or resale of the Shares, (ii) has not since the filing
of the Registration Statement sold, bid for or purchased, or paid anyone
any compensation for soliciting purchases of, shares of Common Stock of the
Company and
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(iii) will not, until the later of the expiration of the Rights or the
completion of the distribution (within the meaning of Rule 10b-6 under the
Exchange Act) of the Shares, sell, bid for or purchase, pay or agree to pay
any person any compensation for soliciting another to purchase any other
securities of the Company (except for the solicitation of exercises of
Rights pursuant to this Agreement); provided that any action in connection
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with the Company's dividend reinvestment and cash purchase plan will not be
deemed to be within the terms of this Section l(c)(v).
(vi) Orion owns, possesses or has obtained and currently maintains
all material Authorizations as are necessary for Orion to carry on its
business as contemplated in the Prospectus except where the failure to
obtain such Authorizations would not have a material adverse effect on the
ability of Orion to perform its obligations under the Management Agreement.
(vii) The description of Orion and its businesses in the Registration
Statement and the Prospectus complies with the requirements of the Act, the
Investment Company Act and the Rules and Regulations and does not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading in light of the circumstances under which they were
made.
(viii) There are no material restrictions, limitations or regulations
with respect to the ability of the Company to invest its assets as
described in the Prospectus other than as may be described therein.
(d) Any certificate required by this Agreement that is signed by any
officer of the Company, Alliance Capital Management Corporation, the General
Partner of Alliance (the "General Partner"), or Orion and delivered to the
Dealer Manager or counsel for the Dealer Manager shall be deemed a
representation and warranty by the Company, Alliance or Orion, as the case may
be, to the Dealer Manager, as to the matters covered thereby.
2. Agreement to Act as Dealer Manager.
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(a) On the basis of the representations and warranties contained
herein, and subject to the terms and conditions of the Offer:
(i) The Company hereby appoints the Dealer Manager and other
soliciting dealers entering into a Soliciting Dealer Agreement, in the form
attached hereto as Exhibit A, with
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the Dealer Manager (the "Soliciting Dealers"), to solicit, in accordance
with the Act, the Investment Company Act and the Exchange Act, and their
customary practice, the exercise of the Rights, subject to the terms and
conditions of this Agreement, the procedures described in the Registration
Statement and, where applicable, the terms and conditions of such
Soliciting Dealer Agreement; and
(ii) The Company agrees to furnish, or cause to be furnished, to the
Dealer Manager lists, or copies of those lists, showing the names and
addresses of, and number of shares of Common Stock held by, Holders as of
the Record Date, and the Dealer Manager agrees to use such information only
in connection with the Offer, and not to furnish the information to any
other person except for securities brokers and dealers that have been
requested by the Dealer Manager to solicit exercises of Rights.
(b) The Dealer Manager agrees to provide to the Company, in addition
to the services described in paragraph (a) of this Section 2, financial advisory
and marketing services in connection with the Offer. No advisory fee, other
than the fees provided for in Section 3 of this Agreement and the reimbursement
of the Dealer Manager's out-of-pocket expenses as described in Section 5 of this
Agreement, will be payable by the Company to the Dealer Manager in connection
with the financial advisory and marketing services provided by the Dealer
Manager pursuant to this Section 2(b).
(c) The Company and the Dealer Manager agree that the Dealer Manager
is an independent contractor with respect to the solicitation of the exercise of
Rights and the performance of financial advisory and marketing services to the
Company contemplated by this Agreement.
(d) In rendering the services contemplated by this Agreement, the
Dealer Manager will not be subject to any liability to the Company, Alliance or
Orion or any of their affiliates, for any act or omission on the part of any
securities broker or dealer (except with respect to the Dealer Manager acting in
such capacity) or any other person and the Dealer Manager will not be liable for
acts or omissions in performing its obligations under this Agreement, except for
any losses, claims, damages, liabilities and expenses that are finally
judicially determined to have resulted primarily from the bad faith, willful
misconduct or gross negligence of the Dealer Manager or by reason of the
reckless disregard of the obligations and duties of the Dealer Manager under
this Agreement.
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3. Dealer Manager and Solicitation Fees. In full payment for the
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financial advisory and marketing services rendered and to be rendered hereunder
by the Dealer Manager, the Company agrees to pay the Dealer Manager a fee (the
"Dealer Manager Fee"), equal to 1.25% of the aggregate Subscription Price per
Share for each Share issued pursuant to the exercise of Rights and the over-
subscription privilege. The Company also agrees to pay Soliciting Dealers and
the Dealer Manager, in full payment for their soliciting efforts, fees (the
"Soliciting Fees") equal to 2.50% of the Subscription Price per Share for each
Share issued pursuant to the exercise of Rights and the over-subscription
privilege. The Company agrees to pay the Soliciting Fees to the broker-dealer
designated on the applicable portion of the form used by the Holder to exercise
Rights, and if no broker-dealer is so designated or a broker-dealer is otherwise
not entitled to receive compensation pursuant to the terms of the Soliciting
Dealer Agreement, then to pay the Dealer Manager the Soliciting Fee for such
exercise of Rights. Payment to the Dealer Manager by the Company will be in the
form of a wire transfer of same day funds to an account or accounts identified
by the Dealer Manager. Such payment will be made on each date on which the
Company issues Shares acquired during the Primary Subscription or pursuant to
the Over-Subscription Privilege. Payment to a Soliciting Dealer will be made by
the Company directly to such Soliciting Dealer by certified or official bank
check payable to the order of such Soliciting Dealer to an address identified by
such Soliciting Dealer in the Soliciting Dealer Agreement or otherwise. Such
payments shall be made as soon as practicable immediately following the receipt
of payment by the Subscription Agent for Shares acquired during Primary
Subscription or pursuant to the Over-Subscription Privilege. The Company shall
be under no liability for any payment of Soliciting Fees made to any Soliciting
Dealer which payment is made in accordance with instructions received from the
Dealer Manager.
4. Covenants of the Company, Alliance and Orion.
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(a) The Company covenants with the Dealer Manager as follows:
(i) The Company will use its best efforts to cause the Registration
Statement to become effective under the Act, and will advise the Dealer
Manager promptly as to the time at which the Registration Statement and any
amendments thereto (including any post-effective amendment) becomes so
effective.
(ii) The Company will notify the Dealer Manager immediately, and
confirm the notice in writing, (A) of the effectiveness of the Registration
Statement and any
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amendment thereto (including any post-effective amendment), (B) of the
receipt of any comments from the Commission, (C) 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, (D) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose, (E) of the suspension of the qualification of the Shares or the
Rights for offering or sale in any jurisdiction. The Company will make
every reasonable effort to prevent the issuance of any stop order described
in subsection (D) hereunder and, if any such stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
(iii) The Company will give the Dealer Manager notice of its
intention to file any amendment to the Registration Statement (including
any post-effective amendment) or any amendment or supplement to the
Prospectus (including any revised prospectus which the Company proposes for
use by the Dealer Manager in connection with the Offer, which differs from
the prospectus on file at the Commission at the time the Registration
Statement becomes effective, whether such revised prospectus is required to
be filed pursuant to Rule 497(b) or Rule 497(h) of the 1933 Act Rules and
Regulations), whether pursuant to the Investment Company Act, the Act, or
otherwise, and will furnish the Dealer Manager with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such amendment or
supplement to which the Dealer Manager or counsel for the Dealer Manager
shall reasonably object.
(iv) The Company will, without charge, deliver to the Dealer Manager,
as soon as practicable, the number of copies (one of which is manually
executed) of the Registration Statement as originally filed and of each
amendment thereto as it may reasonably request, in each case with the
exhibits filed therewith.
(v) The Company will, without charge, furnish to the Dealer Manager,
from time to time during the period when the Prospectus is required to be
delivered under the Act, such number of copies of the Prospectus (as
amended or supplemented) as the Dealer Manager may reasonably request for
the purposes contemplated by the Act or the 1933 Act Rules and Regulations.
(vi) If any event shall occur as a result of which it is necessary,
in the reasonable opinion of counsel for the
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Dealer Manager, to amend or supplement the Registration Statement or the
Prospectus in order to make the Prospectus not misleading in the light of
the circumstances existing at the time it is delivered to a Holder, the
Company will forthwith amend or supplement the Prospectus by preparing and
filing with the Commission (and furnishing to the Dealer Manager a
reasonable number of copies of) an amendment or amendments of the
Registration Statement or an amendment or amendments of or a supplement or
supplements to, the Prospectus (in form and substance satisfactory to
counsel for the Dealer Manager), at the Company's expense, which will amend
or supplement the Registration Statement or the Prospectus so that the
Prospectus will not contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances existing at the time the Prospectus is
delivered to a Holder, not misleading.
(vii) The Company will endeavor, in cooperation with the Dealer
Manager and its counsel, to assist such counsel to qualify the Rights and
the Shares for offering and sale under the applicable securities laws of
such states and other jurisdictions of the United States as the Dealer
Manager may designate and maintain such qualifications in effect for the
duration of the Offer; provided, however, that the Company will 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 now so qualified. The Company will file such statements
and reports as may be required by the laws of each jurisdiction in which
the Rights and the Shares have been qualified as above provided.
(viii) The Company will make generally available to its security
holders as soon as practicable, but no later than 60 days after the close
of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 of the Rules and Regulations) covering a
twelve-month period beginning not later than the first day of the Company's
second fiscal quarter following the "effective" date (as defined in said
Rule 158) of the Registration Statement.
(ix) For a period of 180 days from the date of this Agreement, the
Company will not, without the prior consent of the Dealer Manager, offer or
sell, or enter into any agreement to sell, any equity or equity related
securities of the Company or securities convertible into such securities,
other than the Shares and the Common Stock issued in reinvestment of
dividends or distributions.
15
(x) The Company will apply the net proceeds from the Offer as set
forth under "Use of Proceeds" in the Prospectus.
(xi) The Company will use its best efforts to cause the Shares to be
duly authorized for listing by the New York Stock Exchange prior to the
time the Shares are issued.
(xii) The Company will use its best efforts to maintain its
qualification as a regulated investment company under Subchapter M of the
Code.
(xiii) The Company will advise or cause the Subscription Agent to
advise the Dealer Manager and each Soliciting Dealer from day to day during
the period of, and promptly after the termination of, the Offer, as to the
names and addresses of all Holders exercising Rights, the total number of
Rights exercised by each Holder during the immediately preceding day,
indicating the total number of Rights verified to be in proper form for
exercise, rejected for exercise and being processed and, for the Dealer
Manager and each Soliciting Dealer, the number of Rights exercised on
exercise forms indicating the Dealer Manager or such Soliciting Dealer, as
the case may be, as the broker-dealer with respect to such exercise, and as
to such other information as the Dealer Manager may reasonably request; and
will notify the Dealer Manager and each Soliciting Dealer, not later than
5:00 P.M., New York City time, on the first business day following the
Expiration Date, of the total number of Rights exercised and Shares related
thereto, the total number of Rights verified to be in proper form for
exercise, rejected for exercise and being processed and, for the Dealer
Manager and each Soliciting Dealer, the number of Rights exercised on
exercise forms indicating the Dealer Manager or such Soliciting Dealer, as
the case may be, as the broker-dealer with respect to such exercise, and as
to such other information as the Dealer Manager may reasonably request.
(b) The Company, Alliance and Orion will not take, directly or
indirectly, any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute the
stabilization or manipulation of the price of any security of the Company to
facilitate the issuance of the Rights or the sale or resale of the Shares;
provided that any action in connection with the Company's dividend reinvestment
-------- ----
plan will not be deemed to be within the meaning of this Section 4(b).
16
5. Payment of Expenses.
-------------------
(a) The Company will pay all expenses incident to the performance of
its obligations under this Agreement, including, but not limited to, expenses
relating to (i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the preparation, issuance
and delivery of the certificates for the Shares and exercise forms relating to
the Rights, (iii) the fees and disbursements of the Company's counsel (including
the fees and disbursements of local counsel) and accountants, (iv) the
qualification of the Rights and the Shares under securities laws in accordance
with the provisions of Section 4(a)(vii) of this Agreement, including filing
fees and the preparation of the Blue Sky Survey by counsel to the Dealer
Manager, (v) the printing or other production and delivery to the Dealer Manager
of copies of the Registration Statement as originally filed and of each
amendment thereto and of the Prospectus and any amendments or supplements
thereto, (vi) the printing and other production and delivery of copies of the
Blue Sky Survey, (vii) the fees and expenses incurred with respect to filing
with the National Association of Securities Dealers, Inc., (viii) the fees and
expenses incurred in connection with the listing of the Shares on the New York
Stock Exchange, (ix) the printing or other production, mailing and delivery
expenses incurred in connection with the Prospectus and the Offering Materials,
and (x) the fees and expenses incurred with respect to the Subscription Agent
and the Information Agent.
(b) In addition to any fees that may be payable to the Dealer Manager
under this Agreement, the Company agrees to reimburse the Dealer Manager upon
request made from time to time for its reasonable expenses incurred in
connection with its activities under this Agreement, including the reasonable
fees and disbursements of its legal counsel (excluding Blue Sky fees and
expenses which are paid directly by the Company), in an amount up to $100,000.
(c) If this Agreement is terminated by the Dealer Manager in
accordance with the provisions of Section 6 or Section 9(a)(i), 9(a)(ii) or
9(a)(iii), the Company agrees to reimburse the Dealer Manager for all of its
reasonable out-of-pocket expenses incurred in connection with its performance
hereunder, including the reasonable fees and disbursements of counsel for the
Dealer Manager. In the event the transactions contemplated hereunder are not
consummated, the Company agrees to pay all of the costs and expenses set forth
in paragraphs (a) and (b) of this Section 5 which the Company would have paid if
such transactions had been consummated.
17
6. Conditions of Dealer Manager's Obligations. The obligations of the
------------------------------------------
Dealer Manager hereunder are subject to the accuracy of the representations and
warranties of the Company, Alliance and Orion contained herein, to the
performance by the Company, Alliance and Orion of their respective obligations
hereunder, and to the following further conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 P.M., on the Representation Date, or at such later time and date as
may be approved by the Dealer Manager; the Prospectus and any amendment or
supplement thereto shall have been filed with the Commission in the manner and
within the time period required by Rule 497(b), (d) or (h), as the case may be,
under the Act; no stop order suspending the effectiveness of the Registration
Statement or any amendment thereto shall have been issued, and no proceedings
for that purpose shall have been instituted or threatened or, to the knowledge
of the Company, Alliance, Orion or the Dealer Manager, shall be contemplated by
the Commission; and the Company shall have complied with any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise).
(b) On the Representation Date, the Dealer Manager shall have
received:
(1) The favorable opinion, dated the Representation Date, of Xxxxxx &
Xxxxxx, counsel for the Company, or, with respect to matters of Maryland
law, Xxxxxxx, Xxxxxxx and Xxxxxx LLP, Maryland counsel for the Company, in
form and substance satisfactory to counsel for the Dealer Manager, to the
effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Maryland, has full corporate power and authority to conduct its
business as described in the Registration Statement and the
Prospectus, and is duly qualified to do business as a foreign
corporation in each jurisdiction wherein it owns or leases material
properties or conducts material business, except where the failure to
be so qualified, considering all such cases in the aggregate, does not
involve a material adverse risk to the business, properties, financial
position or results of operations of the Company;
(ii) the Company's authorized capitalization is as set forth in
the Prospectus; the outstanding shares of Common Stock have been duly
authorized and validly
18
issued and are fully paid and non-assessable and conform in all
material respects to the description thereof in the Prospectus under
the heading "Description of Common Stock"; the Rights have been duly
authorized by all requisite action on the part of the Company for
issuance pursuant to the Offer; the Shares have been or, with respect
to the Shares to be issued pursuant to the over-subscription
privilege, will be, duly authorized by all requisite action on the
part of the Company for issuance and sale pursuant to the terms of the
Offer and, when issued and delivered by the Company pursuant to the
terms of the Offer against payment of the consideration set forth in
the Prospectus, will be validly issued and fully paid and non-
assessable; the Shares and the Rights conform in all material respects
to all statements relating thereto contained in the Registration
Statement and the Prospectus; and the issuance of each of the Rights
and the Shares is not subject to any preemptive rights under the
charter or bylaws of the Company or, to such counsel's knowledge,
otherwise. The outstanding Common Stock has been duly listed on the
New York Stock Exchange and the Shares have been duly authorized for
listing subject to official notice of issuance, on the New York Stock
Exchange;
(iii) to the best knowledge of such counsel, there is no pending
or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company of a character required to be disclosed in the Registration
Statement or the Prospectus which is not adequately disclosed therein,
and there is no franchise, contract or other document of a character
required to be described in the Registration Statement or the
Prospectus, or to be filed or incorporated by reference as an exhibit
which is not described or filed or incorporated by reference as
required;
(iv) the statements in the Prospectus under the heading
"Taxation", insofar as such statements describe or summarize United
States tax laws, treaties, doctrines or practices, provide an accurate
description thereof as of the date of the Prospectus;
(v) the Registration Statement has become effective under the
Act; any required filing of the Prospectus or any supplement thereto
pursuant to Rule 497(b), (d) or (h) required to be made to the date
hereof has been made in the manner and within the time
19
period required by Rule 497(b), (d) or (h), as the case may be; to the
best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued, and no
proceedings for that purpose have been instituted or threatened; and
the Registration Statement, the Prospectus and each amendment thereof
or supplement thereto (other than the financial statements and other
financial and statistical information contained therein, as to which
such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act and the
Investment Company Act and the Rules and Regulations;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution
and delivery by the other parties hereto, is a legal, valid, binding
and enforceable obligation of the Company, subject to the
qualification that the enforceability of the Company's obligations
hereunder may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights, and to general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law) subject to the qualification that the right to
indemnity and contribution thereunder may be limited by Federal or
state laws; the Subscription Agency Agreement, the Investment
Management and Administration Agreement, the Management Agreement, the
Custodian Agreement and the Transfer Agency Agreement have been duly
authorized, executed and delivered by the Company, comply in all
material respects with all applicable provisions of the Investment
Company Act and, assuming due authorization, execution and delivery by
the other parties thereto, are legal, valid, binding and enforceable
obligations of the Company, subject to the qualification that the
enforceability of the Company's obligations thereunder may be limited
by bankruptcy, insolvency, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors' rights,
and to general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law);
(vii) no consent, approval, authorization or order of any court
or governmental agency or body is required under Maryland corporate
law, the laws of New York or Federal law or, to the best of such
counsel's
20
knowledge, the laws of any other jurisdiction in the United States,
for the consummation by the Company of the transactions contemplated
in the Company Agreements, except (A) such as have been obtained under
the Act, the Exchange Act, the Investment Company Act, or from the New
York Stock Exchange, (B) such as may be required under the blue sky
laws of any jurisdiction in connection with the transactions
contemplated hereby and (C) such other approvals as have been obtained
or the failure to have obtained will not have a material adverse
effect on the Company or its ability to perform its obligations under
the Company Agreements;
(viii) neither the issuance of the Rights, nor the issuance and
sale of the Shares by the Company, nor the consummation by the Company
of any other of the transactions contemplated in the Company
Agreements or the Prospectus nor the fulfillment by the Company of the
terms of the Company Agreements will conflict with, result in a breach
of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to the charter or bylaws of the Company
or, to the knowledge of such counsel, the terms of any material
agreement, indenture, mortgage, lease or other instrument to which the
Company is a party or bound or to which any of the property or assets
of the Company is subject, or any order of which such counsel has
knowledge, law, rule or regulation applicable to the Company of any
United States court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Company
or any of its properties; and
(ix) the Company is registered with the Commission under the
Investment Company Act as a closed-end, diversified management
investment company, all required action has been taken under the Act
and the Investment Company Act to make the Offer and consummate the
issuance of the Rights and the issuance and sale of the Shares by the
Company upon exercise of the Rights, and the provisions of the
Company's charter and bylaws comply as to form in all material
respects with the requirements of the Investment Company Act.
In rendering such opinion, Xxxxxx & Xxxxxx may rely (A) as to matters involving
the application of the laws of the State of Maryland, on the opinion of Xxxxxxx,
Xxxxxxx and Xxxxxx, (B) as to matters involving the application of laws of any
jurisdiction other than the States of New York or Maryland or the United
21
States, to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be reliable and
who are satisfactory to counsel for the Dealer Manager and (C) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Company and public officials.
Such counsel shall also have stated that, while they have not
themselves checked the accuracy and completeness of or otherwise verified, and
are not passing upon and assume no responsibility for the accuracy or
completeness of, the statements contained in the Registration Statement or the
Prospectus, except to the limited extent stated in paragraphs (ii) and (iv)
above, in the course of their review and discussion of the contents of the
Registration Statement and Prospectus with certain officers and employees of the
Company and its independent accountants and others, no facts have come to their
attention which cause them to believe that the Registration Statement as of the
effective date thereof or the Prospectus, as of the effective date thereof and
as of the Representation Date, 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 contained therein not misleading, or, if there has been
any supplement to the Prospectus made by the Company, that any such supplement,
at the date of such supplement, contained an untrue statement of a material fact
or omitted to state a material fact necessary to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading (except that such counsel need express no opinion or belief as to
financial statements, schedules or other financial data included therein or
excluded therefrom).
(2) The favorable opinion, dated the Representation Date, of Xxxxxx &
Xxxxxx, counsel for Alliance, in form and substance satisfactory to counsel
for the Dealer Manager, to the effect that:
(i) Alliance has been duly organized and is validly existing as a
limited partnership under the laws of the State of Delaware, with
partnership power and authority to own its properties and conduct its
business as described in the Prospectus, and is duly licensed or
qualified as a foreign entity and in good standing to do business in
each other jurisdiction in which its ownership of property or the
conduct of its business requires such qualification or license, except
where the failure to be so qualified, considering all such cases in
the aggregate, would not have a material adverse effect on Alliance;
22
(ii) Alliance is duly registered as an investment adviser under
the Advisers Act and is not prohibited by the Advisers Act or the
Investment Company Act, or the rules and regulations under such Acts,
from acting as an investment manager and administrator for the Company
as contemplated in the Prospectus and the Investment Management and
Administration Agreement;
(iii) this Agreement and the Investment Management and
Administration Agreement have each been duly authorized, executed and
delivered by Alliance and the Investment Management and Administration
Agreement complies with all applicable provisions of the Advisers Act
and the Investment Company Act and is, assuming due authorization,
execution and delivery by the other parties thereto, a legal, valid,
binding and enforceable obligation of Alliance, subject to the
qualification that the enforceability of Alliance's obligations
thereunder may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws of general applicability relating to or
affecting creditors' rights, and to general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law);
(iv) neither the performance by Alliance of its obligations
under this Agreement or the Investment Management and Administration
Agreement nor the consummation of the transactions contemplated
therein nor the fulfillment of the terms thereof will conflict with,
or result in a breach of, or constitute a default under the Agreement
of Limited Partnership of Alliance or, to the knowledge of such
counsel, the terms of any material agreement or instrument to which
Alliance is a party or is bound or to which any of its property is
subject, which conflict, breach or default would have a material
adverse effect on the ability of Alliance to carry out its obligations
under such Agreements, or any law, order of which such counsel has
knowledge, rule or regulation applicable to Alliance of any United
States court, regulatory body, administrative agency, governmental
body, stock exchange or securities association having jurisdiction
over Alliance or its properties or operations;
(v) to the knowledge of such counsel, except as set forth in the
Prospectus, there is not pending or threatened, any action, suit or
proceeding to which Alliance is a party before or by any court or
governmental agency or body, which is likely to have a
23
material adverse effect upon the Company or upon the ability of
Alliance to perform its obligations under the Investment Management
and Administration Agreement;
(vi) to the knowledge of such counsel, Alliance owns, possesses
or has obtained and currently maintains all material Authorizations
under New York, Delaware or United States law as are necessary for
Alliance to perform its obligations under the Investment Management
and Administration Agreement as set forth in and contemplated by the
Prospectus except where the failure to obtain such Authorizations
would not have a material adverse effect on Alliance; and
(vii) the description of Alliance and its business in the
Registration Statement and the Prospectus complies with the
requirements of the Act, the Investment Company Act, and the rules and
regulations of the Commission under such Acts and, to the knowledge of
such counsel, 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 not misleading in
light of the circumstances under which they were made.
In rendering such opinion, Xxxxxx & Xxxxxx may rely (A) as to matters involving
the application of laws of any jurisdiction other than the State of New York or
the United States to the extent such counsel deems proper and specified in such
opinion, upon the opinion of other counsel of good standing whom such counsel
believes to be reliable and who are satisfactory to counsel for the Dealer
Manager, (B) as to matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of Alliance and public officials and (C) as
to the legal proceeding to which Alliance is a party referred to in Part II,
Item 1, of the Quarterly Report on Form 10-Q filed by Alliance with the
Securities and Exchange Commission pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, for the quarterly period ended June 30, 1995,
with respect to which proceeding Xxxxxx & Xxxxxx is not representing Alliance,
as the basis for such opinion, on the representation of Alliance set forth in
Section 1(b)(iv) of this Agreement as certified to pursuant to Section 6(e) of
the Agreement.
(3) The favorable opinion, dated the Representation Date, of Xxxxxx X.
Xxxxxx, Xx., Assistant General Counsel of Alliance Capital Management
Corporation, in form and substance satisfactory to counsel for the Dealer
Manager, to the effect that:
24
the Offering Materials comply as to form in all material respects with
the requirements of the Act, the Investment Company Act and the Rules
and Regulations.
(4) The favorable opinion, dated the Representation Date, of Xxxxxx,
Xxxx & Xxxxxxxx, or as to matters of Cayman Island law, Xxxxx Xxxxxxxx &
Co., counsel for Orion, in form and substance satisfactory to counsel for
the Dealer Manager, to the effect that:
(i) Orion has been duly incorporated and is validly existing as a
corporation under the laws of the Cayman Islands, with corporate power
and authority to own its properties and conduct its business as
described in the Prospectus, and is duly qualified as a foreign
corporation and in good standing to do business in each other
jurisdiction wherein it owns or leases material properties or conducts
material business, except where the failure to be so qualified,
considering all such cases in the aggregate, would not have a material
adverse effect on Orion;
(ii) Orion is duly registered as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act or the
Investment Company Act, or the rules and regulations under such Acts,
from acting as an investment manager for the Company as contemplated
in the Prospectus and the Management Agreement;
(iii) this Agreement and the Management Agreement have each been
duly authorized, executed and delivered by Orion and the Management
Agreement complies with all applicable provisions of the Advisers Act
and the Investment Company Act and is, assuming due authorization,
execution and delivery by the other parties thereto, a legal, valid,
binding and enforceable obligation of Orion, subject to the
qualification that the enforceability of Orion's obligations
thereunder may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws of general applicability relating to or
affecting creditors' rights, and to general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law), and with respect to this Agreement, subject to the
qualification that the right to indemnity and contribution thereunder
may be limited by Federal or state securities laws;
25
(iv) neither the performance by Orion of its obligations under
this Agreement or the Management Agreement nor the consummation of the
transactions contemplated therein nor the fulfillment of the terms
thereof will conflict with, or result in a breach of, or constitute a
default under Orion's corporate charter or, to the knowledge of such
counsel, the terms of any material agreement or instrument to which
Orion is a party or is bound or to which any of its property is
subject, or any law, order of which such counsel has knowledge, rule
or regulation applicable to Orion of any United States or Cayman
Islands court, regulatory body, administrative agency, governmental
body, stock exchange or securities association having jurisdiction
over Orion or its properties or operations;
(v) except as set forth in the Prospectus, there is not pending
or, to the knowledge of such counsel, threatened, any action, suit or
proceeding to which Orion is a party before or by any court or
governmental agency or body, which is likely to have a material
adverse effect upon the Company or upon the ability of Orion to
perform its contract with the Company;
(vi) Orion owns, possesses or has obtained and currently
maintains all material Authorizations as are necessary for Orion to
carry on its business as contemplated in the Prospectus except where
the failure to obtain such Authorizations would not have a material
adverse effect on Orion; and
(vii) the description of Orion and its businesses in the
Prospectus complies with the requirements of the Act, the Investment
Company Act, and the rules and regulations of the Commission under
such Acts, and, to the knowledge of such counsel, 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 not misleading in light of the circumstances under
which they were made.
In rendering such opinion, such counsel may rely as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of Orion and
public officials.
(5) The favorable opinion, dated the Representation Date, of Xxxx &
Xxx, special Korean counsel for the Company and Orion, in form and
substance satisfactory to counsel for the Dealer Manager, to the effect
that:
26
(i) the Company has obtained all material governmental licenses, permits,
consents, orders, approvals and other authorizations under the laws of
Korea or any political subdivision thereof, as is necessary for the
Company to invest its assets in Korean equity shares listed on the
Korea Stock Exchange, certain convertible bonds and public debts
issued in Korea and denominated in Won, and convertible bonds, bonds
with warrants and depositary receipts issued by Korean companies
outside of Korea as contemplated in the Prospectus, including
registration of the Company with the Securities Supervisory Board of
Korea as a foreign investor able to invest directly in equity shares
and Korean debt securities of Korean issuers; provided that if the
--------
Company acquires, sells, or transfers Korean equity shares or Korean
debt securities outside the Korea Stock Exchange as permitted under
the rules of the Securities and Exchange Commission of Korea, the
Company must immediately report to the Governor of the Securities
Supervisory Board of Korea regarding such acquisition, sale or
transfer; provided further that foreign exchange approvals and/or
-------- -------
payment authorizations will be required under the Foreign Exchange
Management Regulation of Korea (the "FEMR") for foreign exchange
transactions by the Company except for those exempted under the FEMR;
and provided further that if the Minister of Finance and Economy of
-------- -------
Korea deems that certain emergency events are likely to occur, he may
impose any necessary restriction such as requiring foreign investors,
including the Company, to obtain approval for the acquisition of
Korean equity shares or Korean debt securities or for the remittance
outside of Korea of the proceeds of sales thereof;
(ii) none of (A) the execution and delivery by the Company of
this Agreement or the Company Agreements, (B) the issue and sale by
the Company of the Shares sold by the Company as contemplated by this
Agreement, (C) the consummation by the Company of the other
transactions as contemplated by such agreements and (D) the execution
and delivery by Orion of the Dealer Manager Agreement or the
Management Agreement and the consummation by Orion of the transactions
contemplated therein, conflicts or will conflict with, or results or
will result in a breach of any Korean law or regulation or any order,
to the best of such counsel's knowledge, of any Korean court,
governmental instrumentality or arbitrator binding on the Company or
Orion, as the case may be, provided that sale or
27
distribution of the Shares in Korea or to a resident of Korea may
require compliance with Korean securities, foreign exchange control
and other related laws;
(iii) subject to the provisions in paragraph (i) and (ii) above,
no consent, approval, authorization or order of any Korean court or
governmental agency or body or Korean securities exchange or
securities association is required (A) by the Company for the
consummation of the transactions contemplated in this Agreement or the
Company Agreements or (B) by Orion for the consummation of the
transactions contemplated in the Dealer Manager Agreement or the
Management Agreement, except those that have been obtained;
(iv) all descriptions in the Prospectus of statutes or
regulations of Korea or legal or governmental proceedings under the
laws of Korea are accurate in all material respects and fairly present
the information required to be shown in all material respects;
(v) no taxes are or will be payable in or to Korea, or any
political subdivision thereof, by the Dealer Manager (except to the
extent that the Dealer Manager may do business in Korea) with respect
to this Agreement or the purchase and sale of the Shares thereunder,
provided that the Shares are not sold or distributed in Korea. The
statements set forth under the heading "Taxation--Korean Taxes" in the
Prospectus, insofar as such statements describe or summarize Korean
tax laws or treaties, provide an accurate description thereof in all
material respects as of the date of the Prospectus;
(vi) assuming that the Dealer Manager is a resident of the
United States, within the meaning of the relevant provisions of the
income tax treaty between the United States and Korea, and except to
the extent that the Dealer Manager may otherwise do business in Korea,
participation in the Offer of the Shares as contemplated in this
Agreement will not cause the Dealer Manager to be subject to taxation
in Korea, provided that the Shares are not sold or distributed in
Korea;
(vii) there are no material restrictions, limitations or
regulations under the laws of Korea with respect to the ability of the
Company to invest its
28
assets as described in the Prospectus other than as described therein;
(viii) except as set forth in the Prospectus, such counsel is
not aware of any pending action, suit or proceeding to which Orion is
a party before or by any Korean court or governmental agency or body,
which is likely to have a material adverse effect upon the Company or
upon the ability of Orion to perform its contract with the Company;
and
(ix) Orion owns, possesses or has obtained and currently
maintains all material Korean governmental licenses, permits,
consents, orders, approvals and other authorizations as are necessary
for Orion to carry on its investment management for the Company as
contemplated in the Prospectus except where the failure to obtain such
authorizations would not have a material adverse effect on Orion.
Such counsel shall also have stated that, although they 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 (as defined in this Agreement) and the Prospectus (except
as expressly set forth herein), nothing has come to their attention that would
cause them to believe that with respect to matters relating to Korea, Korean
securities regulations and other Korean law or legal conclusions as described in
the Registration Statement as of its date and the date hereof contained or
contains any untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, or the information regarding Korea, Korean
securities regulations and other Korean law or legal conclusions as described in
the Prospectus as of its date and the date hereof contained or contains any
untrue statement of a material fact or omitted or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading
(except that they need express no opinion or belief as to financial statements,
schedules and other financial information included therein or excluded therefrom
or the exhibits to the data contained in the Registration Statement).
The statement in the foregoing paragraph is to be based upon such
counsel's participation in preparing the disclosure for the Registration
Statement and the Prospectus regarding the statutes or regulations of Korea or
legal or governmental proceedings under the laws of Korea, and upon their review
and
29
discussion of the contents of the Registration Statement and the Prospectus.
(c) The Dealer Manager shall have received from Brown & Wood, counsel
for the Dealer Manager, such opinion or opinions, dated the Representation Date,
with respect to the Offer, the Registration Statement, the Prospectus and other
related matters as the Dealer Manager may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Dealer Manager a
certificate of the Company, signed by the Chairman of the Board, the President
or a Vice President of the Company, dated the Representation Date, to the effect
that the signer of such certificate has carefully examined the Registration
Statement, the Prospectus, any supplement to the Prospectus and this Agreement
and that, to the best of his knowledge:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of the
Representation Date with the same effect as if made on the Representation
Date and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to the
Representation Date; and
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened.
(e) Alliance shall have furnished to the Dealer Manager a certificate,
signed by the Chairman or other senior officer of its general partner, dated the
Representation Date, to the effect that the signer of such certificate has read
the Registration Statement, the Prospectus, any supplement to the Prospectus and
this Agreement and, to the best knowledge of such signer, (i) the
representations and warranties of Alliance in this Agreement are true and
correct in all material respects on and as of the Representation Date with the
same effect as if made on the Representation Date, (ii) Alliance has complied
with all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Representation Date and (iii) as of
the Representation Date, the Registration Statement did not include any untrue
statement of a material fact and did not omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
and on such Representation Date, the Prospectus and any Offering
30
Materials did not include any untrue statement of a material fact and did not
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and, since the date of the Prospectus, no
event has occurred which should have been set forth in a supplement to, or
amendment of, the Prospectus which has not been set forth in such a supplement
or amendment. Alliance shall have furnished to Xxxxxx & Xxxxxx a certificate,
similarly executed and dated the Representation Date, to the same effect as in
clause (i) of this paragraph, with respect to the representation in clause (C)
of Section 6(b)(2).
(f) Xxxxx shall have furnished to the Dealer Manager a certificate,
signed by the Chairman or other senior officer, dated the Representation Date,
to the effect that the signer of such certificate has read the Registration
Statement, the Prospectus, any supplement to the Prospectus and this Agreement
and, to the best knowledge of such signer, (i) the representations and
warranties of Orion in this Agreement are true and correct in all material
respects on and as of the Representation Date with the same effect as if made on
the Representation Date, (ii) Orion has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to the Representation Date and (iii) as of the Representation Date,
insofar as such information relates to the description of Orion and the services
to be provided by Xxxxx as contemplated in the Prospectus, the Registration
Statement did not include any untrue statement of a material fact and did not
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading and on such Representation Date, the
Prospectus, insofar as such information relates to the description of Orion and
the services to be provided by Xxxxx as contemplated in the Prospectus, did not
include any untrue statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and since the date of the Prospectus, insofar as such
information relates to the description of Orion and the services to be provided
by Xxxxx as contemplated in the Prospectus, no event has occurred which should
have been set forth in a supplement to, or amendment of, the Prospectus which
has not been set forth in such a supplement or amendment.
(g) Price Waterhouse LLP shall have furnished to the Dealer Manager a
letter, dated the Representation Date, in form and substance satisfactory to the
Dealer Manager, and stating in effect that:
31
(i) they are independent accountants with respect to the Company
within the meaning of the Act and the applicable Rules and Regulations;
(ii) in their opinion, the audited financial statements examined by
them and included or incorporated by reference in the Registration
Statement comply as to form in all material respects with the applicable
accounting requirements of the Act and the Investment Company Act and the
respective Rules and Regulations;
(iii) they have performed specified procedures, not constituting an
audit, including a reading of the latest available interim financial
statements of the Company, a reading of the minute books of the Company,
inquiries of officials of the Company responsible for financial or
accounting matters and such other inquiries and procedures as may be
specified in such letter, and on the basis of such inquiries and procedures
nothing came to their attention that caused them to believe that at the
date of the latest available financial statements read by such accountants,
or at a subsequent specified date not more than five days prior to the
Representation Date, there was any change in the capital stock, net assets
or absence of long-term debt of the Company as compared with amounts shown
on the audited financial statements included or incorporated by reference
in the Prospectus, except as the Prospectus discloses has occurred or may
occur or as disclosed in their letter;
(iv) in addition to the procedures referred to in clause (iii) above,
they have performed other specified procedures, not constituting an audit,
with respect to certain amounts, percentages, numerical data, financial
information and financial statements appearing in the Registration
Statement, which have previously been specified by the Dealer Manager and
which shall be specified in such letter, and have compared such items with,
and have found such items to be in agreement with, the accounting and
financial records of the Company.
(h) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall not have
been (i) any change or decrease specified in the letter or letters referred to
in paragraph (g) of this Section 6, or (ii) any change, or any development
involving a prospective change, in or affecting the business or properties of
the Company, the effect of which, in any case referred to in clause (i) or (ii)
above, is, in the reasonable judgment of the Dealer Manager, so material and
adverse as to
32
make it impractical or inadvisable to proceed with the Offer as contemplated by
the Registration Statement and the Prospectus.
(i) Prior to the Representation Date, the Company shall have furnished
to the Dealer Manager such further information, certificates and documents as
the Dealer Manager may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Dealer Manager and its counsel, this Agreement and all
obligations of the Dealer Manager hereunder may be canceled at, or at any time
prior to, the Representation Date by the Dealer Manager. Notice of such
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
7. Indemnification and Contribution.
--------------------------------
(a) Each of the Company, Alliance and Orion jointly and severally,
will indemnify and hold harmless the Dealer Manager and each person, if any, who
controls the Dealer Manager within the meaning of Section 15 of the Act against
any and all losses, claims, damages and liabilities, joint or several (including
any investigation, legal and other expenses reasonably incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claim asserted), to which they, or any of them, may become subject under the
Act, the Exchange Act, the Investment Company Act, the Advisers Act or other
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities arise out of or are based on any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus, and any amendment or supplement thereto, or the
omission or alleged omission to state in any or all such documents a material
fact required to be stated therein or necessary to make the statements in it not
misleading (in the case of the Prospectus, in light of the circumstances under
which such statements were made), provided neither the Company, Alliance nor
Orion will be liable to the extent that such loss, claim, damage or liability
arises from an untrue statement or omission or alleged untrue statement or
omission (1) made in reliance on and in conformity with information furnished in
writing to the Company by the Dealer Manager expressly for use in the document,
or (2) if a copy of the Prospectus was not sent or given to such person at or
before the written confirmation of the sale to such person in any case where
such delivery is required
33
by the Act. This indemnity agreement will be in addition to any liability that
the Company, Alliance or Orion might otherwise have.
(b) The Dealer Manager will indemnify and hold harmless the Company,
Alliance and Orion, each person, if any, who controls the Company, Alliance or
Orion within the meaning of Section 15 of the Act, each director of the Company
and each officer of the Company who signs the Registration Statement to the same
extent as the foregoing indemnity from the Company, Alliance and Orion to the
Dealer Manager, but only insofar as losses, claims, damages or liabilities arise
out of or are based on any untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to the Dealer Manager furnished in writing to the Company by the Dealer
Manager expressly for use in the Registration Statement, the Prospectus, any
amendment or supplement thereto, or any preliminary prospectus in which the
statement or omission is made or alleged to be made. This indemnity agreement
will be in addition to any liability that the Dealer Manager might otherwise
have.
(c) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 7, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not,
except to the extent set forth below, relieve it from liability that it may have
to any indemnified party. No indemnification provided for in Section 7(a) or
(b) hereof shall be available to any party who shall fail to give notice as
provided in this Section 7(c) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
prejudiced by the failure to give such notice, but the omission so to notify
such indemnifying party of such action shall not relieve it from any liability
that it may have to any indemnified party for contribution or otherwise than on
account of the provisions in Section 7(a) or (b). If any such action is brought
against any indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in, and, to
the extent that it elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel reasonably satisfactory to the
indemnified party, and, after notice from the indemnifying party to the
indemnified party of
34
its election to assume the defense, the indemnifying party will not be liable to
the indemnified party for any legal or other expenses except as provided below
and except for the reasonable costs of investigation subsequently incurred by
the indemnified party in connection with the defense. The indemnified party
will have the right to employ its counsel in any such action, but the fees and
expenses of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded that there may be legal defenses available to it or other indemnified
parties that are different from or in addition to those available to the
indemnifying party (in which case the indemnifying party will not have the right
to direct the defense of such action on behalf of the indemnified party) or (3)
the indemnifying party has not in fact employed counsel to assume the defense of
such action within a reasonable time after receiving notice of the commencement
of the action, in each of which cases the reasonable fees and expenses of
counsel will be at the expense of the indemnifying party or parties. All such
fees and expenses will be reimbursed promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent or, in connection with any proceeding or
related proceeding in the same jurisdiction, for the fees and expenses of more
than one separate counsel for all indemnified parties except to the extent
provided herein.
(d) In no case shall the indemnification provided in this Section 7 be
available to protect any person against any liability to which any such person
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its or his obligations or duties hereunder, or
by reason of its or his reckless disregard of its or his obligations and duties
hereunder.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 7 is
applicable in accordance with its terms but for any reason is held to be
unavailable from the Company, Alliance, Orion and the Dealer Manager, the
Company, Alliance, Orion and the Dealer Manager will contribute to the total
losses, claims, damages and liabilities (including any investigation, legal and
other expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action or any claims asserted, but after deducting any
contribution received by the Company, Alliance, Orion or the Dealer Manager from
persons other than the Company, Alliance, Orion and the Dealer Manager, such as
persons who control the Company, Alliance, Orion or the Dealer Manager within
the meaning of the
35
Act, officers of the Company who signed the Registration Statement and directors
of the Company, who may also be liable for contribution) to which the Company,
Alliance, Orion or the Dealer Manager may be subject in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other hand
from the Offer of the Shares or (ii) if the allocation provided by the foregoing
clause (i) is not permitted by applicable law, not only such relative benefits
but also the relative fault of the indemnifying party or parties on the one hand
and the indemnified party on the other hand in connection with the statements or
omissions or alleged statements or omissions that resulted in the losses,
claims, damages or liabilities, joint or several (including any investigation,
legal or other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted),
for which contribution is sought. The relative benefits received by the
Company, Alliance and Orion on the one hand (treated jointly for this purpose as
one person) and the Dealer Manager on the other hand shall be deemed to be in
the same proportion as the total proceeds from the Offer (before deducting the
sales load and other expenses) received by the Company bear to the total fees
received by the Dealer Manager. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, Alliance, Orion
or the Dealer Manager, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement or
omission and any other equitable considerations appropriate in the
circumstances. Notwithstanding any other provisions of this Section 7, the
Dealer Manager will not be responsible for any amount in excess of the fees paid
by the Company pursuant to Section 3 hereof and (2) no person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, any person who
controls a party to this Agreement within the meaning of the Act will have the
same rights to contribution as that party, and each officer of the Company who
signed the Registration Statement and each director of the Company will have the
same rights to contribution as the Company, subject in each case to clause (i)
of the first sentence of this Subsection (e). Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim for contribution may be
made under this Section 7, notify such party or parties from whom contribution
may be sought, but the omission so to notify will not relieve the party or
parties from whom
36
contribution may be sought from any other obligation it or they may have
otherwise than under this Section. No party will be liable for contribution
with respect to any action or claim settled without its written consent.
(f) The Company, Alliance and Orion agree to indemnify each Soliciting
Dealer and its controlling persons to the same extent and subject to the same
conditions and to the same agreements, including with respect to contribution,
provided for in subsections (a), (b), (c), (d) and (e) of this Section 7.
(g) The Dealer Manager confirms that the statements with respect to
the Offer set forth under the caption "Distribution Arrangements" in the
Prospectus are correct, and this is the only information furnished in writing to
the Company by or on behalf of the Dealer Manager expressly for use in the
Registration Statement and the Prospectus.
8. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
The respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers, of Alliance, of Orion and of the
Dealer Manager set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of
Dealer Manager, Alliance, Orion or the Company or any of the officers, directors
or controlling persons referred to in Section 7 hereof, and will survive
delivery of and payment for the Shares pursuant to the Offer; provided, however,
-------- -------
that following delivery and payment for the Shares, the remedies against
Alliance or Orion for breach of their representations and warranties shall, in
the absence of fraudulent misrepresentation by Alliance or Orion, as the case
may be, which, in the case of Alliance, shall not include fraudulent
misrepresentation attributed to Alliance solely by virtue of and in the event of
its being a controlling person of the Company, be limited to those available
pursuant to Section 7 hereof. The provisions of Sections 5 and 7 hereof shall
survive the termination or cancellation of this Agreement.
9. Termination of Agreement. (a) This Agreement shall be subject
------------------------
to termination in the absolute discretion of the Dealer Manager, by notice given
to the Company prior to the expiration of the Offer, if prior to such time (i)
financial, political, economic, currency or banking conditions in the United
States or the Republic of Korea shall have undergone any material change the
effect of which on the financial markets makes it, in the Dealer Manager's
reasonable judgment, impracticable to proceed with the Offer, (ii) there has
occurred any outbreak or material escalation of hostilities or other calamity or
crisis the effect of which on the financial markets of the United States
37
or the Republic of Korea is such as to make it, in the Dealer Manager's
reasonable judgment, impracticable to proceed with the Offer, (iii) trading in
the shares of Common Stock shall have been suspended by the Commission or the
New York Stock Exchange, (iv) trading in securities generally on the New York
Stock Exchange or the Korea Stock Exchange shall have been suspended or limited
or minimum prices that, as of the date hereof, do not already exist, shall have
been established on such exchanges, or (v) a banking moratorium shall have been
declared either by Federal, New York State or Korean authorities.
(b) 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 5.
10. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to the Dealer Manager, will be mailed,
delivered or telegraphed and confirmed to PaineWebber Incorporated, 0000 Xxxxxx
xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000; or if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000; or if sent to Alliance, will be mailed,
delivered or telegraphed and confirmed to it at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000; or if sent to Orion, will be mailed, delivered or
telegraphed and confirmed to it at 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
11. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and will inure
to the benefit of the officers and directors and controlling persons referred to
in Section 7 hereof, and no other person will have any right or obligation
hereunder.
12. Applicable Law. This Agreement will be governed by and construed
--------------
in accordance with the laws of the State of New York without reference to choice
of law principles thereof.
13. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
38
If the foregoing is in accordance with your understanding of our
agreement, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Company,
Alliance, Orion and the Dealer Manager.
Very truly yours,
The Korean Investment Fund, Inc.
By: ____________________________
Name:
Title:
Alliance Capital Management L.P.
By Alliance Capital Management
Corporation, its general partner
By: ____________________________
Name:
Title:
Orion Asset Management Co., Ltd.
By: ____________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PaineWebber Incorporated
as Dealer Manager
By: __________________________________
Name:
Title:
39
EXHIBIT 99(A)
-------------
Draft of 9/14/95
THE KOREAN INVESTMENT FUND, INC.
Rights Offering for Shares of Common Stock
SOLICITING DEALER AGREEMENT
THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
OCTOBER 20, 1995,
UNLESS EXTENDED
To Securities Dealers and Brokers:
The Korean Investment Fund, Inc. (the "Company") is issuing to its
shareholders of record ("Record Date Shareholders") as of the close of business
on September 25, 1995 (the "Record Date") non-transferable rights ("Rights")
entitling the Record Date Shareholders to subscribe for an aggregate of
1,987,637 shares (the "Shares") of common stock, par value $.01 per share
("Common Stock"), of the Company upon the terms and subject to the conditions
set forth in the Company's Prospectus and Statement of Additional Information
(the "Prospectus") dated September 19, 1995 (the "Offer"). Pursuant to the
over-subscription privilege in connection with the Offer, the Company may, at
the discretion of the Board of Directors, increase the number of Shares subject
to subscription by up to 25%. Each such Record Date Shareholder is being issued
one Right for each whole share of Common Stock owned on the Record Date. The
Rights entitle the Record Date Shareholder, during the Subscription Period (as
hereinafter defined) to acquire at the Subscription Price (as hereinafter
defined), one Share for each three Rights held in the primary subscription. No
fractional Shares will be issued. The Subscription Price will be 95% of the
lower of (i) the average of the last reported sales price of a share of the
Fund's Common Stock on the New York Stock Exchange on the date of the expiration
of the Offer (the "Pricing Date") and on the four preceding business days and
(ii) the net asset value per share as of the close of business on the Pricing
Date. The Subscription Period will commence on September 25, 1995 and end on
the Expiration Date. (With respect to the Offer, the term "Expiration Date"
means 5:00 p.m., New York City time, on October 20, 1995, unless and until the
Company shall, in its sole discretion, have extended the period for which the
Offer is open, in which event the term "Expiration Date" with respect to the
Offer will mean the latest time and date on which the Offer, as so extended by
the Company, will expire.) Any Record Date Shareholder who fully exercises all
Rights issued to him is entitled to subscribe for Shares which were not
otherwise subscribed for by others on primary subscription (the "Over-
Subscription Privilege"). Shares acquired pursuant to the Over-Subscription
Privilege are subject to allotment, as more fully discussed in the Prospectus.
For the duration of the Offer, the Company has agreed to pay Soliciting
Fees to any qualified broker or dealer executing a Soliciting Dealer Agreement
who solicits the exercise of Rights in connection with the Offer and who
complies with the procedures described below (a "Soliciting Dealer"). Upon
timely delivery to State Street Bank and Trust Company, the Company's
Subscription Agent for the Offer, of payment for Shares purchased pursuant to
the exercise of Rights and the Over-Subscription Privilege and of properly
completed and executed documentation as set forth in this Soliciting Dealer
Agreement, a Soliciting Dealer will be entitled to receive Soliciting Fees equal
to 2.50% of the Subscription Price per Share for each Share so purchased. A
qualified broker or dealer is a broker dealer which is a member of a registered
national securities exchange in the United States or the National Association of
Securities Dealers, Inc. ("NASD") or any foreign broker or dealer not eligible
for membership who agrees to conform to the Rules of Fair Practice of the NASD,
including Sections 8, 24, 25 and 36 thereof, in making solicitations in the
United States to the same extent as if it were a member thereof.
The Company has agreed to pay the Soliciting Fees payable to the
undersigned Soliciting Dealer and to indemnify such Soliciting Dealer on the
terms set forth in the Dealer Manager Agreement, dated September 18, 1995, among
PaineWebber Incorporated, as Dealer Manager, the Company, Alliance Capital
Management L.P. and Orion Asset Management Co., Ltd., the Company's investment
managers. Solicitation and other activities by Soliciting Dealers may be
undertaken only in accordance with the applicable rules and regulations of the
Securities and Exchange Commission and only in those states and other United
States jurisdictions where such solicitations and other activities may lawfully
be undertaken and in accordance with the laws thereof. Compensation will not be
paid for solicitations in any state or other jurisdiction in which, in the
opinion of counsel to the Company or counsel to the Dealer Manager, such
compensation may not lawfully be paid. No Soliciting Dealer shall be paid
Soliciting Fees with respect to Shares purchased pursuant to an exercise of
Rights or the Over-Subscription Privilege for its own account or for the account
of any affiliate of the Soliciting Dealer, except that the Dealer Manager shall
receive the Soliciting Fees with respect to Shares purchased pursuant to an
exercise of Rights or the Over-Subscription Privilege for its own account
provided that such Shares are offered and sold by the Dealer Manager to its
clients. No Soliciting Dealer or any other person is authorized by the Company
or the Dealer Manager to give any information or make any representations in
connection with the Offer other than those
2
contained in the Prospectus and other authorized solicitation material furnished
by the Company through the Dealer Manager. No Soliciting Dealer is authorized
to act as agent of the Company or the Dealer Manager in any connection or
transaction. In addition, nothing herein contained shall constitute the
Soliciting Dealers partners with the Dealer Manager or with one another, or
agents of the Dealer Manager or of the Company, or create any association
between such parties, or shall render the Dealer Manager or the Company liable
for the obligations of any Soliciting Dealer. The Dealer Manager shall be under
no liability to make any payment to any Soliciting Dealer, and shall be subject
to no other liabilities to any Soliciting Dealer, and no obligations of any sort
shall be implied.
In order for a Soliciting Dealer to receive Soliciting Fees, the
Subscription Agent must have received from such Soliciting Dealer no later than
5:00 p.m., New York City time, on the Expiration Date, either (i) a properly
completed and duly executed Subscription Certificate with respect to Shares
purchased pursuant to the exercise of Rights and full payment for such Shares;
or (ii) a Notice of Guaranteed Delivery guaranteeing delivery to the
Subscription Agent by close of business on the third business day after the
Expiration Date, of (a) full payment for such Shares and (b) a properly
completed and duly executed Subscription Certificate with respect to Shares
purchased pursuant to the exercise of Rights. Soliciting Fees will only be paid
after receipt by the Subscription Agent of a properly completed and duly
executed Soliciting Dealer Agreement (or a facsimile thereof). In the case of a
Notice of Guaranteed Delivery, Soliciting Fees will only be paid after delivery
in accordance with such Notice of Guaranteed Delivery has been effected.
Soliciting Fees will be paid by the Company to the Soliciting Dealer by
certified or official bank check payable to the order of such Soliciting Dealer
to the address identified by such Soliciting Dealer below as soon as practicable
immediately following the receipt of payment by the Subscription Agent for
Shares acquired during the Primary Subscription or pursuant to the Over-
Subscription Privilege.
All questions as to the form, validity and eligibility (including time of
receipt) of this Soliciting Dealer Agreement will be determined by the Company,
in its sole discretion, which determination shall be final and binding. Unless
waived, any irregularities in connection with a Soliciting Dealer Agreement or
delivery thereof must be cured within such time as the Company shall determine.
None of the Company, the Dealer Manager, the Subscription Agent, the Information
Agent for the Offer (Shareholder Communications Corporation) or any other person
will be under any duty to give notification of any defects or irregularities in
any Soliciting Dealer Agreement or incur any liability for failure to give such
notification.
3
The acceptance of Soliciting Fees from the Company by the undersigned
Soliciting Dealer shall constitute a representation by such Soliciting Dealer to
the Company that: (i) it has received and reviewed the Prospectus; (ii) in
soliciting purchase of Shares pursuant to the exercise of the Rights or the
Over-Subscription Privilege, it has complied with the applicable requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
applicable rules and regulations thereunder, any applicable securities laws of
any state or jurisdiction where such solicitations may lawfully be made, and the
applicable rules and regulations of any self-regulatory organization or
registered national securities exchange; (iii) in soliciting purchases of Shares
pursuant to the exercise of the Rights or the Over-Subscription Privilege, it
has not published, circulated or used any soliciting materials other than the
Prospectus and any other authorized solicitation material furnished by the
Company through the Dealer Manager; (iv) it has not purported to act as agent of
the Company or the Dealer Manager in any connection or transaction relating to
the Offer; (v) the information contained in this Soliciting Dealer Agreement is,
to its best knowledge, true and complete; (vi) it is not affiliated with the
Company; (vii) it will not accept Soliciting Fees paid by the Company pursuant
to the terms hereof with respect to Shares purchased by the Soliciting Dealer
pursuant to an exercise of Rights or the Over-Subscription Privilege for its own
account; (viii) it will not remit, directly or indirectly, any part of
Soliciting Fees paid by the Company pursuant to the terms hereof to any
beneficial owner of Shares purchased pursuant to the Offer; and (ix) it has
agreed to the amount of the Soliciting Fees and the terms and conditions set
forth herein with respect to receiving such Soliciting Fees. By returning a
Soliciting Dealer Agreement and accepting Soliciting Fees, a Soliciting Dealer
will be deemed to have agreed to indemnify the Company and the Dealer Manager
against losses, claims, damages and liabilities to which the Company may become
subject as a result of the breach of such Soliciting Dealer's representations
made herein and described above. In making the foregoing representations,
Soliciting Dealers are reminded of the possible applicability of Rule 10b-6
under the Exchange Act if they have bought, sold, dealt in or traded in any
Shares for their own account since the commencement of the Offer.
Soliciting Fees due to eligible Soliciting Dealers will be paid as soon as
practicable immediately following the receipt of payment by the Subscription
Agent for Shares acquired during the Primary Subscription or pursuant to the
Over-Subscription Privilege. Upon expiration of the Offer, no Soliciting Fees
will be payable to Soliciting Dealers with respect to Xxxxxx purchased
thereafter.
4
Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Dealer Manager Agreement or, if not defined therein, in
the Prospectus.
This Soliciting Dealer Agreement will be governed by the laws of the State
of New York without reference to the choice of law principles thereof.
Please execute this Soliciting Dealer Agreement below accepting the terms
and conditions hereof and confirming that you are a member firm of a registered
national securities exchange or of the NASD or a foreign broker or dealer not
eligible for membership who has conformed to the Rules of Fair Practice of the
NASD, including Sections 8, 24, 25 and 36 thereof, in making solicitations of
the type being undertaken pursuant to the Offer in the United States to the same
extent as if you were a member thereof, and certifying that you have solicited
the purchase of the Shares pursuant to exercise of the Rights or the Over-
Subscription Privilege, all as described above, in accordance with the terms and
conditions set forth in this Soliciting Dealer Agreement. Please forward two
executed copies of this Soliciting Dealer Agreement to PaineWebber Incorporated,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Xxxx
(tel. number (000) 000-0000 and fax number (000) 000-0000). A signed copy of
this Soliciting Dealer Agreement will be promptly returned to the Soliciting
Dealer at the address set forth below.
Very truly yours,
PaineWebber Incorporated
By: ____________________________
Name:
Title:
5
ACCEPTED AND CONFIRMED BY
SOLICITING DEALER
____________________________ ______________________________
Printed Firm Name Address
____________________________ ______________________________
Authorized Signature Area Code and Telephone Number
____________________________
Name and Title
Dated:______________________
Payment of the Solicitation Fee
shall be mailed by check to the following:
Name of Bank or other
Recipient Institution:___________________________
Address:________________________________
Attention:______________________________
6
