Exhibit h(4)
Taxable Auction Rate Preferred Stock
Real Estate Income Fund Inc.
2,600 Shares, Series M Taxable Auction Rate Preferred Stock
Liquidation Preference $25,000 Per Share
UNDERWRITING AGREEMENT
, 2002
Xxxxxxx Xxxxx Xxxxxx Inc.
As Representative of the Several Underwriters
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The undersigned, Real Estate Income Fund Inc., a Maryland corporation (the
"Fund"), Citi Fund Management Inc., a Delaware corporation (the "Investment
Manager") and AEW Management and Advisors, L.P., a Delaware limited partnership
(the "Sub-Adviser" which together with the Investment Manager are hereinafter
collectively referred to as the "Advisers"), address you as an underwriter and
as the representative ("Representative") of each of the other persons, firms and
corporations, if any, listed in Schedule I hereto (the "Underwriters"), it being
understood that, if the Representative is the only Underwriter, the term
"Underwriters" as used in this Agreement refers solely to the Representative.
The Fund proposes to issue and sell an aggregate of 2,600 shares of its Series M
Taxable Auction Rate Preferred Stock, liquidation preference of $25,000 per
share ("Shares"). The Shares will be authorized by, and subject to the terms and
conditions of, the Articles Supplementary of the Fund (the "Articles
Supplementary"), in the form filed as an exhibit to the Registration Statement
referred to in Section 1 of this Agreement. The Fund and the Advisers wish to
confirm as follows their agreements with you and the other Underwriters, if any,
in connection with the purchase of the Shares by the Underwriters.
Collectively, the Investment Management Agreement dated as of July 25,
2002 between the Fund and the Investment Manager (the "Investment Management
Agreement"); the Sub-Investment Advisory Agreement dated as of July 25, 2002
among the Fund, the Investment Manager and the Sub-Adviser (the "Sub-Advisory
Agreement" which together with the Investment Management Agreement are
hereinafter collectively referred to as the "Advisory Agreements"); the Master
Custodian Agreement dated as of June 29, 2001 between certain management
investment companies and State Street Bank and Trust Company; the Additional
Fund Agreement dated as of July 12, 2002 between the Fund and State Street Bank
and Trust Company; the Auction Agency Agreement to be dated as of September 30,
2002, between the Fund and Deutsche Bank Trust Company Americas (the "Auction
Agent"); and the Broker-Dealer Agreement to be dated as of September, 30, 2002
between the Fund, Xxxxxxx Xxxxx Xxxxxx Inc. and the Auction Agent are
hereinafter referred to as the "Fund Agreements." This Underwriting Agreement is
hereinafter referred to as the "Agreement."
1. REGISTRATION STATEMENT AND PROSPECTUS. The Fund has prepared and filed with
the Securities and Exchange Commission (the "Commission") in conformity with the
provisions of the Securities Act of 1933, as amended (the "1933 Act"), the
Investment Company Act of 1940, as amended (the "1940 Act"), and the published
rules and regulations of the Commission promulgated under the 1933 Act (the
"1933 Act Rules and Regulations") and the 1940 Act (the "1940 Act Rules and
Regulations" and, together with the 1933 Act Rules and Regulations, the "Rules
and Regulations") a registration statement on Form N-2 (File Nos. 333-97975 and
811-21098), under the 1933 Act and the 1940 Act (the "registration statement"),
including a prospectus relating to the Shares. The Fund also has filed a
notification of registration of the Fund as an investment company under the 1940
Act on Form N-8A (the "1940 Act Notification"). The term "Registration
Statement" as used in this Agreement means the registration statement (including
all financial schedules and exhibits), as amended at the time it becomes
effective under the 1933 Act or, if the registration statement became effective
under the 1933 Act prior to the execution of this Agreement, as amended or
supplemented at the time it became effective prior to the execution of this
Agreement, and includes any information deemed to be included by Rule 430A under
the 1933 Act Rules and Regulations. If it is contemplated, at the time this
Agreement is executed, that a post-effective amendment to the registration
statement will be filed under the 1933 Act and must be declared effective before
the offering of the Shares may commence, the term "Registration Statement" as
used in this Agreement means the registration statement as amended by said
post-effective amendment. If the Fund has filed an abbreviated registration
statement to register an additional amount of Shares pursuant to Rule 462(b)
under the 1933 Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall include such Rule 462
Registration Statement. The term "Prospectus" as used in this Agreement means
the prospectus and statement of additional information in the forms included in
the Registration Statement or, if the prospectus and statement of additional
information included in the Registration Statement omit information in reliance
on Rule 430A under the 1933 Act Rules and Regulations and such information is
included in a prospectus and statement of additional information filed with the
Commission pursuant to Rule 497(h) under the 1933 Act Rules and Regulations, the
term "Prospectus" as used in this Agreement means the prospectus and statement
of additional information in the forms included in the Registration Statement as
supplemented by the addition of the information contained in the prospectus and
the statement of additional information filed with the Commission pursuant to
Rule 497(h). The term "Prepricing Prospectus" as used in this Agreement means
the prospectus and statement of additional information subject to completion in
the forms included
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in the registration statement at the time of the initial filing of the
registration statement with the Commission on August 12, 2002 and as such
prospectus and statement of additional information shall have been amended from
time to time prior to the date of the Prospectus, together with any other
prospectus and statement of additional information relating to the Fund other
than the Prospectus approved in writing by or directly or indirectly prepared by
the Fund or the Advisers; it being understood that the definition of Prepricing
Prospectus above shall not include any Prepricing Prospectus prepared by the
Underwriters unless approved in writing by the Fund or the Advisers. The terms
"Registration Statement," "Prospectus" and "Prepricing Prospectus" shall also
include any financial statements incorporated by reference therein.
The Fund has furnished the Representative with copies of such registration
statement, each amendment to such registration statement filed with the
Commission and each Prepricing Prospectus, and the Representative has provided
the same to the other Underwriters.
2. AGREEMENTS TO SELL AND PURCHASE. The Fund hereby agrees, subject to all the
terms and conditions set forth herein, to issue and to sell to each Underwriter
and, upon the basis of the representations, warranties and agreements of the
Fund, the Investment Manager and the Sub-Adviser herein contained and subject to
all the terms and conditions set forth herein, each Underwriter agrees,
severally and not jointly, to purchase from the Fund, at a purchase price of $
per Share, the number of shares of Series M Shares set forth opposite the name
of such Underwriter in Schedule I hereto.
3. TERMS OF PUBLIC OFFERING. The Fund and the Advisers have been advised by you
that the Underwriters propose to make a public offering of the Shares as soon
after the Registration Statement and this Agreement have become effective as in
your judgment is advisable and initially to offer the Shares upon the terms set
forth in the Prospectus.
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR.
(a) Delivery to the Underwriters of and payment to the Fund for the Shares
shall be made at the office of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Four
Times Square, New York, New York 10036, or through the facilities of the
Depository Trust Company or at another mutually agreeable facility, at 9:30
A.M., New York City time, on September 30, 2002 (the "Closing Date"). The place
of closing for the Shares and the Closing Date may be varied by agreement
between you and the Fund. A certificate for the Series M Shares shall be
registered in such name as the Underwriters shall request prior to 9:30 A.M.,
New York City time, on
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the second business day preceding the Closing Date. The certificate evidencing
the Shares shall be delivered as directed by the Underwriters on the Closing
Date through the facilities of the Depository Trust Company or another mutually
agreeable facility against payment of the purchase price therefor in immediately
available funds to the order of the Fund.
5. AGREEMENTS OF THE FUND AND THE ADVISERS. The Fund and the Investment Manager,
jointly and severally, and the Sub-Adviser, severally but not jointly, with
respect to paragraphs (b), (f)(ii), (j), (k), (l), (m) and (p) of this Section
5, agree with the Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is necessary
for the Registration Statement or a post-effective amendment thereto to be
declared effective under the 1933 Act before the offering of the Shares may
commence, the Fund will use its best efforts to cause the Registration Statement
or such post-effective amendment to become effective under the 1933 Act as soon
as possible. If the Registration Statement has become effective and the
Prospectus contained therein omits certain information at the time of
effectiveness pursuant to Rule 430A of the 1933 Act Rules and Regulations, the
Fund will file a prospectus including such information pursuant to Rule 497(h)
of the 1933 Act Rules and Regulations, as promptly as practicable, but no later
than the second business day following the earlier of the date of the
determination of the offering price of the Shares or the date the Prospectus is
first used after the effective date of the Registration Statement. If the
Registration Statement has become effective and the Prospectus contained therein
does not so omit such information, the Fund will file a Prospectus pursuant to
Rule 497(c) or (j) of the 1933 Act Rules and Regulations as promptly as
practicable, but no later than the fifth business day following the date of the
later of the effective date of the Registration Statement or the commencement of
the public offering of the Shares after the effective date of the Registration
Statement. The Fund will advise the Underwriters promptly and, if requested by
the Underwriters, will confirm such advice in writing (i) when the Registration
Statement or such post-effective amendment has become effective, and (ii) when
the Prospectus has been timely filed pursuant to Rule 497(c) or Rule 497(h) of
the 1933 Act Rules and Regulations or the certification permitted pursuant to
Rule 497(j) of the 1933 Act Rules and Regulations has been timely filed,
whichever is applicable.
(b) For a period of three years from the date hereof, unless otherwise
provided herein, the Fund will advise you promptly and, if requested by you,
will confirm such advice in writing:
(i) of any request made by the Commission for amendment of or a
supplement to the Registration Statement, any Prepricing Prospectus or the
Prospectus (or any amendment or supplement to any of the foregoing) or for
additional information,
(ii) of the issuance by the Commission, the National Association of
Securities Dealers, Inc. (the "NASD"), any state securities
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commission, any national securities exchange, any arbitrator, any court or any
other governmental, regulatory, self-regulatory or administrative agency or any
official of any order suspending the effectiveness of the Registration
Statement, prohibiting or suspending the use of the Prospectus or any Prepricing
Prospectus, or any advertising, sales literature or other promotional material
(including "prospectus wrappers") intended for public distribution and
authorized in writing or prepared by the Fund or the Advisers for use in
connection with the offering and sale of the Shares (collectively, "sales
material"), of any notice pursuant to Section 8(e) of the 1940 Act, of the
suspension of qualification of the Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for any such purposes,
(iii) of receipt by the Fund, the Advisers, any affiliate of the Fund or
the Advisers or any representative or attorney of the Fund or the Advisers of
any other material communication from the Commission, the NASD, any state
securities commission, any national securities exchange, any arbitrator, any
court or any other governmental, regulatory, self-regulatory or administrative
agency or any official relating to the Fund, the Registration Statement, the
1940 Act Notification, the Prospectus, any Prepricing Prospectus, any sales
material (or any amendment or supplement to any of the foregoing) or this
Agreement or any of the Fund Agreements and
(iv) within the period of time referred to in paragraph (f) below, of any
material adverse change in the condition (financial or other), assets or results
of operations of the Fund or any event which should reasonably be expected to
have a material adverse effect on the ability of either Adviser to perform its
respective obligations under this Agreement and the Advisory Agreements to which
it is a party (in either case, other than as a result of changes in market
conditions generally or the market for real estate securities generally) or of
the happening of any other event which makes any statement of a material fact
made in the Registration Statement or the Prospectus, or any Prepricing
Prospectus or any sales material (or any amendment or supplement to any of the
foregoing) untrue or which requires the making of any additions to or changes in
the Registration Statement or the Prospectus, or any Prepricing Prospectus or
any sales material (or any amendment or supplement to any of the foregoing) in
order to state a material fact required by the 1933 Act, the 1940 Act or the
Rules and Regulations to be stated therein or necessary in order to make the
statements therein (in the case of the Prospectus, in the light of the
circumstances under which they were made), not misleading or of the necessity to
amend or supplement the Registration Statement, the Prospectus, or any
Prepricing Prospectus or any sales material (or any amendment or supplement to
any of the foregoing) to comply with the 1933 Act, the 1940 Act, the Rules and
Regulations or any other law or order of any court or regulatory body. If at any
time the Commission, the NASD, any state securities commission, any national
securities exchange, any arbitrator, any court or any other governmental,
regulatory, self-regulatory or administrative agency or any official shall issue
any order suspending the effectiveness of the Registration Statement,
prohibiting or suspending the use of the Prospectus or any sales material (or
any amendment or supplement to any of the foregoing) or suspending the
qualification
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of the Shares for offering or sale in any jurisdiction, the Fund will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible time.
(c) The Fund will furnish to you, without charge, one signed copy of the
registration statement as originally filed with the Commission and of each
amendment thereto, including financial statements and all exhibits thereto, and
will also furnish to you, without charge, such number of conformed copies of the
registration statement as originally filed and of each amendment thereto, but
without exhibits, as you may reasonably request.
(d) Within five years from the date hereof, the Fund will not (i) file any
amendment to the registration statement or make any amendment or supplement to
the Prospectus, any Prepricing Prospectus, or any sales material, of which you
shall not previously have been advised or to which you shall reasonably object
after being so advised or (ii) so long as, in the opinion of counsel for the
Underwriters, a Prospectus is required by the 1933 Act to be delivered in
connection with sales by the Underwriters or any dealer, file any information,
documents or reports pursuant to the Securities Exchange Act of 1934, as amended
(the "1934 Act"), without delivering a copy of such information, documents or
reports to you prior to or concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the Fund has
delivered to you, without charge, in such quantities as you have requested,
copies of each form of the Prepricing Prospectus. The Fund consents to the use,
in accordance with the provisions of the 1933 Act and with the state securities
or blue sky laws of the jurisdictions in which the Shares are offered by the
Underwriters and by dealers, prior to the date of the Prospectus, of each
Prepricing Prospectus so furnished by the Fund.
(f) (i) As soon after the execution and delivery of this Agreement as
practicable and thereafter from time to time for such period as in the opinion
of counsel for the Underwriters a prospectus is required by the 1933 Act to be
delivered in connection with sales of Shares by the Underwriters or any dealer,
the Fund will, as promptly as practicable, deliver to the Underwriters and each
dealer, without charge, as many copies of the Prospectus (and of any amendment
or supplement thereto) as the Underwriters may reasonably request. The Fund
consents to the use of the Prospectus (and of any amendment or supplement
thereto) in accordance with the provisions of the 1933 Act and with the state
securities or blue sky laws of the jurisdictions in which the Shares are offered
by the Underwriters and by all dealers to whom Shares may be sold, both in
connection with the offering and sale of the Shares and for such period of time
thereafter as the Prospectus is required by the 1933 Act to be delivered in
connection with sales by the Underwriters or any dealer.
(ii) If during such period of time any event shall occur that in the
judgment of the Fund or in the opinion of counsel for the Underwriters is
required to be set forth in the Registration Statement or the Prospectus (as
then amended or
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supplemented) or should be set forth therein in order to make the statements
therein (in the case of the Prospectus, in the light of the circumstances under
which they were made) not misleading, or if it is necessary to supplement or
amend the Registration Statement or the Prospectus to comply with the 1933 Act,
the 1940 Act, the Rules and Regulations or any other federal law, rule or
regulation, or any state securities or blue sky disclosure laws, rules or
regulations, the Fund will forthwith prepare and, subject to the provisions of
paragraph (d) above, promptly file with the Commission an appropriate supplement
or amendment thereto, and will, as promptly as practicable, furnish to the
Underwriters and dealers, without charge, a reasonable number of copies thereof;
provided, if the amendment or supplement is required solely as a result of a
misstatement in or omission from any information provided to the Fund by the
Underwriters, the Fund may deliver such amendment or supplement at cost.
(iii) In the event that the Fund and the Underwriters agree that the
Registration Statement or the Prospectus should be amended or supplemented, the
Fund will promptly issue a press release announcing or disclosing the matters to
be covered by the proposed amendment or supplement.
(g) The Fund will cooperate with you and with counsel for the Underwriters in
connection with the registration or qualification of the Shares for offering and
sale by the several Underwriters and by dealers under the securities or blue sky
laws of such jurisdictions as you may designate and will file such consents to
service of process or other documents necessary or appropriate in order to
effect such registration or qualification; provided that in no event shall the
Fund be obligated to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action which would subject it to service of
process in suits, other than those arising out of the offering or sale of the
Shares, in any jurisdiction where it is not now so subject.
(h) No later than the last day of the 18th full calendar month following the
calendar quarter in which the effective date of the Registration Statement
falls, the Fund will make generally available to its security holders an
earnings statement (which need not be audited) satisfying the provisions of
Section 11(a) of the 1933 Act and Rule 158 of the 1933 Act Rules and
Regulations.
(i) During the period of three years after the date of this Agreement, the
Fund will furnish to you (i) as soon as available, a copy of each report of the
Fund mailed to stockholders or filed with the Commission or furnished to the New
York Stock Exchange (the "NYSE") other than reports on Form N-SAR, and (ii) from
time to time such other information concerning the Fund as the Underwriters may
reasonably request.
(j) If this Agreement shall terminate or shall be terminated after execution
pursuant to any provisions hereof (otherwise than pursuant to the third
paragraph of Section 12(b) hereof or by notice given by the Underwriters
terminating this Agreement pursuant to Section 12 or Section 13 hereof) or if
this
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Agreement shall be terminated by the Underwriters because of any failure or
refusal on the part of the Fund, the Investment Manager or the Sub-Adviser to
comply with any material term or fulfill any material condition of this
Agreement required to be complied with or fulfilled by them, the Fund agrees to
reimburse the Underwriters for all out-of-pocket expenses (including reasonable
fees and expenses of counsel for the Underwriters) incurred by the Underwriters
in connection herewith.
(k) The Fund will apply the net proceeds from the sale of the Shares in
accordance with the description set forth in the Prospectus and in such a manner
as to comply with the investment objectives, policies and restrictions of the
Fund as described in the Prospectus.
(l) Except as stated in this Agreement and in the Prepricing Prospectus and
the Prospectus, neither the Fund nor the Advisers have taken, nor will they
take, directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of any
securities issued by the Fund to facilitate the sale or resale of the Shares.
(m) The Fund and the Advisers will use commercially reasonable efforts to
perform all of the agreements required of them and discharge all conditions to
closing as set forth in this Agreement.
(n) The Fund will comply with the undertaking set forth in paragraph 6 of
Item 33 of Part C of the Registration Statement.
(o) The Fund will use its best efforts to cause the Shares, prior to the
Closing Date, to be assigned a rating of `Aaa' by Xxxxx'x Investors Service,
Inc. ("Moody's") and `AAA' by Fitch Ratings ("Fitch" and, together with Moody's,
the "Rating Agencies").
(p) Except as provided in this Agreement, so long as the Shares remain
outstanding, the Fund and the Advisers will not sell, contract to sell or
otherwise dispose of, any senior securities (as defined in 1940 Act) (other than
senior securities sold in an underwritten offering lead-managed by Xxxxxxx Xxxxx
Xxxxxx Inc.) of the Fund, or grant any options or warrants to purchase senior
securities of the Fund, for a period of 120 days after the date of the
Prospectus, without the prior written consent of Xxxxxxx Xxxxx Xxxxxx Inc.
6. REPRESENTATIONS AND WARRANTIES OF THE FUND AND THE ADVISERS.
(a) The Fund and the Investment Manager, jointly and severally, represent and
warrant to the Underwriters that:
(i) Each Prepricing Prospectus included as part of the registration
statement as originally filed or as part of any amendment or supplement thereto,
or filed pursuant to Rule 497 of the 1933 Act Rules and
8
Regulations, complied when so filed with the Commission in all material respects
with the applicable provisions of the 1933 Act, the 1940 Act and the Rules and
Regulations, except that this representation and warranty does not apply to
statements in or omissions from a Prepricing Prospectus made in reliance upon
and in conformity with information relating to the Representative furnished to
the Fund in writing by or on behalf of the Representative expressly for use
therein. The Commission has not issued any order preventing or suspending the
use of any Prepricing Prospectus.
(ii) The Registration Statement in the form in which it became or becomes
effective and also in such form as it may be when any post-effective amendment
thereto shall become effective and the Prospectus and any supplement or
amendment thereto when filed with the Commission under Rule 497 of the 1933 Act
Rules and Regulations and the 1940 Act Notification when originally filed with
the Commission and any amendment or supplement thereto when filed with the
Commission, complied or will comply in all material respects with the provisions
of the 1933 Act, the 1940 Act and the Rules and Regulations and did not or will
not at any such times contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in the light of the
circumstances under which they were made) not misleading, except that this
representation and warranty does not apply to statements in or omissions from
the Registration Statement or the Prospectus made in reliance upon and in
conformity with information relating to the Underwriters furnished to the Fund
in writing by or on behalf of the Underwriters expressly for use therein.
(iii) All the outstanding shares of common stock of the Fund, par value
$0.001 per share (the "Common Shares"), have been duly authorized and validly
issued by the Fund, are fully paid and nonassessable and are free of any
preemptive or similar rights; the Shares have been duly authorized and, when
issued and delivered to the Underwriters against payment therefor in accordance
with the terms hereof, will be validly issued by the Fund, fully paid and
nonassessable and free of any preemptive or similar rights and will conform in
all material respects to the description thereof in the Registration Statement
and the Prospectus (and any amendment or supplement to either of them); and the
capitalization of the Fund conforms in all material respects to the description
thereof in the Registration Statement and the Prospectus (and any amendment or
supplement to either of them).
(iv) The Fund is a corporation duly incorporated and validly existing
under the laws of the State of Maryland with full corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus (and any amendment or
supplement to either of them), and is duly registered and qualified to conduct
its business and is in good standing in each jurisdiction or place where the
nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or
qualify does not have a material adverse
9
effect on the condition (financial or other), business, prospects, assets or
results of operations of the Fund, whether or not arising in the ordinary course
of business (a "Material Adverse Effect"); and the Fund has no subsidiaries.
(v) There are no legal or governmental proceedings pending or, to the
knowledge of the Fund, threatened, against the Fund, or to which the Fund or any
of its properties is subject, that are required to be described in the
Registration Statement or the Prospectus (and any amendment or supplement to
either of them) but are not described as required, and there are no agreements,
contracts, indentures, leases or other instruments that are required to be
described in the Registration Statement or the Prospectus (and any amendment or
supplement to either of them) or to be filed as an exhibit to the Registration
Statement that are not described or filed as required by the 1933 Act, the 1940
Act or the Rules and Regulations.
(vi) The Fund is not in violation of its Amended and Restated Articles of
Incorporation (the "Charter"), Articles Supplementary or Bylaws (the "Bylaws"),
or other organizational documents or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Fund or of any decree of the
Commission, the NASD, any state securities commission, any national securities
exchange, any arbitrator, any court or governmental agency, body or official
having jurisdiction over the Fund, or in default in any respect in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any material
agreement, indenture, lease or other instrument to which the Fund is a party or
by which it or any of its properties may be bound, except where such violation
or default does not have a Material Adverse Effect.
(vii) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement or any of the Fund Agreements by the
Fund, nor the consummation by the Fund of the transactions contemplated hereby
or thereby (1) requires any consent, approval, authorization or other order of,
or registration or filing with, the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except such as may have been obtained or made prior to the date hereof
and such as may be required for compliance with the state securities or blue sky
laws of various jurisdictions and the filing and acceptance for record of the
Articles Supplementary with the State Department of Assessments and Taxation of
the State of Maryland which have been or will be effected in accordance with
this Agreement) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the Charter, the Bylaws or other
organizational documents of the Fund or (2) conflicts or will conflict with or
constitutes or will constitute a material breach of, or a default under, any
material agreement, indenture, lease or other instrument to which the Fund is a
party or by which it or any of its properties may be bound, or violates or will
violate any material statute, law, regulation or judgment, injunction, order or
decree applicable to the Fund or any of its properties, or will result in the
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creation or imposition of any material lien, charge or encumbrance upon any
property or assets of the Fund pursuant to the terms of any agreement or
instrument to which it is a party or by which it may be bound or to which any of
its property or assets is subject. The Fund is not subject to any order of any
court or of any arbitrator, governmental authority or administrative agency.
(viii) The accountants, KPMG LLP, who have certified or shall certify the
audited financial statements included or incorporated by reference in the
Registration Statement and the Prospectus (or any amendment or supplement to
either of them) have represented to the Fund that they are independent public
accountants as required by the 1933 Act, the 1940 Act and the Rules and
Regulations.
(ix) The financial statements, together with related schedules and notes,
included or incorporated by reference in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them), present fairly
in all material respects the financial position, results of operations and
changes in financial position of the Fund on the basis stated or incorporated by
reference in the Registration Statement and the Prospectus at the respective
dates or for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and statistical
information and data included in the Registration Statement and the Prospectus
(and any amendment or supplement to either of them) in all material respects are
accurately presented.
(x) The Fund, subject to the Registration Statement having been declared
effective and the filing of the Prospectus under Rule 497 under the 1933 Act
Rules and Regulations, has taken all required action under the 1933 Act, the
1940 Act and the Rules and Regulations to make the public offering and
consummate the sale of the Shares as contemplated by this Agreement.
(xi) The execution and delivery of, and the performance by the Fund of
its obligations under, this Agreement and the Fund Agreements have been duly and
validly authorized by the Fund, and this Agreement and the Fund Agreements have
been duly executed and delivered by the Fund and, assuming due authorization,
execution and delivery by the other parties thereto, constitute the valid and
legally binding agreements of the Fund, enforceable against the Fund in
accordance with their terms, except as enforcement of rights to indemnity and
contribution hereunder and thereunder may be limited by considerations of public
policy or federal or state securities laws and subject to the qualification that
the enforceability of the Fund's obligations hereunder and thereunder may be
limited by bankruptcy, fraudulent conveyance, insolvency, liquidation,
receivership, conservatorship, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and by general equitable
principles (regardless of whether enforcement is sought in a proceeding in
equity or at law) and fair dealing.
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(xii) Except as disclosed in or contemplated by the Registration
Statement and the Prospectus (or any amendment or supplement to either of them),
subsequent to the respective dates as of which such information is given in the
Registration Statement and the Prospectus (or any amendment or supplement to
either of them), the Fund has not entered into any transaction, not in the
ordinary course of business, incurred any liability or obligation, direct or
contingent, that is material to the Fund, and there has not been any change in
the capital stock, or material increase in the short-term debt or long-term
debt, of the Fund, or any material adverse change, or any development involving
or which may reasonably be expected to involve a Material Adverse Effect.
(xiii) The Fund has not distributed and, prior to the later to occur of
(1) the Closing Date and (2) completion of the distribution of the Shares, will
not distribute any offering material in connection with the offering and sale of
the Shares other than the Registration Statement, the Prepricing Prospectus, the
Prospectus or other materials, if any, permitted by the 1933 Act, the 1940 Act
or the Rules and Regulations.
(xiv) (1) The Fund has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("Permits") as are
necessary to own its properties and to conduct its business in the manner
described in the Prospectus (and any amendment or supplement thereto), subject
to such qualifications as may be set forth in the Prospectus;
(2) the Fund has fulfilled and performed all its material
obligations with respect to such Permits and no event has occurred which allows,
or after notice or lapse of time would allow, revocation or termination thereof
or results in any other material impairment of the rights of the Fund under any
such Permit, subject in each case to such qualification as may be set forth in
the Prospectus (and any amendment or supplement thereto); and
(3) except as described in the Prospectus (and any amendment or
supplement thereto), none of such Permits contains any restriction that is
materially burdensome to the Fund, except where the failure of (1), (2) or (3)
to be accurate would not, individually or in the aggregate, have a Material
Adverse Effect.
(xv) The Fund maintains a system of internal accounting controls
sufficient to provide reasonable assurances that:
(1) transactions in portfolio securities are executed in accordance
with management's general or specific authorization and with the applicable
requirements of the 1940 Act, the 1940 Act Rules and Regulations and the
Internal Revenue Code of 1986, as amended (the "Code");
(2) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted
12
accounting principles and to maintain accountability for assets and to maintain
compliance with the books and records requirements under the 1940 Act and the
1940 Act Rules and Regulations;
(3) access to assets is permitted only in accordance with
management's general or specific authorization; and
(4) the recorded account for assets is compared with existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences.
(xvi) To the Fund's knowledge, neither the Fund nor any employee or agent
of the Fund has made any payment of funds of the Fund or received or retained
any funds, which payment, receipt or retention of such funds is of a character
required to be disclosed in the Prospectus and that is not so disclosed.
(xvii) The Fund has filed all tax returns required to be filed, which
returns are complete and correct in all material respects, and the Fund is not
in material default in the payment of any taxes which were payable pursuant to
said returns or any assessments with respect thereto.
(xviii) No holder of any security of the Fund has any right to require
registration of Common Shares or any other security of the Fund because of the
filing of the registration statement or consummation of the transactions
contemplated by this Agreement.
(xix) Except as described in the Prospectus, there are no outstanding
options, warrants or other rights calling for the issuance of, and the Fund has
no agreement to issue, any shares of capital stock of the Fund or any security
convertible into or exchangeable or exercisable for shares of capital stock of
the Fund.
(xx) The conduct by the Fund of its business (as described in the
Prospectus) does not require the Fund to be the owner, possessor or licensee of
any patents, patent licenses, trademarks, service marks or trade names
(collectively, "Intellectual Property") which it does not own, possess or
license, except where the failure to own, possess or license such Intellectual
Property should not reasonably be expected to have a Material Adverse Effect.
(xxi) The Fund is duly registered under the 1940 Act as a closed-end,
non-diversified management investment company and the 1940 Act Notification has
been duly filed with the Commission and, at the time of filing, and at the time
of filing of any amendment or supplement thereto, conformed in all material
respects with all applicable provisions of the 1940 Act and the 1940 Act Rules
and Regulations. The Fund is, and at all times through the completion of the
transactions contemplated hereby, will be, in compliance in all material
respects with the terms and conditions of the 1933 Act and the 1940 Act. No
person is serving or acting as an officer, director or investment adviser of the
Fund except in
13
accordance with the provisions of the 1940 Act and the 1940 Act Rules and
Regulations and the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), and the rules and regulations of the Commission promulgated under the
Advisers Act (the "Advisers Act Rules and Regulations"). The Fund has not
received any notice from the Commission pursuant to Section 8(e) of the 1940 Act
with respect to the 1940 Act Notification or the Registration Statement (or any
amendment or supplement to either of them).
(xxii) Except as stated in this Agreement and in the Prospectus (and any
amendment or supplement thereto), the Fund has not taken, nor will it take,
directly or indirectly, any action designed to or which might reasonably be
expected to cause or result in stabilization or manipulation of the price of any
securities issued by the Fund to facilitate the sale or resale of the Shares,
and the Fund is not aware of any such action taken or to be taken by any
affiliates of the Fund.
(xxiii) The Fund has filed in a timely manner each document or report
required to be filed by it pursuant to the 1934 Act and the rules and
regulations of the Commission promulgated thereunder (the "1934 Act Rules and
Regulations"); each such document or report at the time it was filed conformed
to the requirements of the 1934 Act and the 1934 Act Rules and Regulations; and
none of such documents or reports when filed contained an untrue statement of
any material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(xxiv) Neither the Fund nor the Advisers have prepared or issued, to the
public or otherwise, any advertising, sales literature or other promotional
material (including "prospectus wrappers", "broker kits," "road show slides" and
"road show scripts") for use in connection with the offering and sale of the
Shares.
(xxv) Each of this Agreement and each Fund Agreement complies in all
material respects with all applicable provisions of the 1940 Act, the 1940 Act
Rules and Regulations, the Advisers Act and the Advisers Act Rules and
Regulations.
(xxvi) As required by Subchapter M of the Code, the Fund is in compliance
with the requirements to qualify as a regulated investment company under the
Code. The Fund intends to direct the investment of the proceeds of the offering
in such a manner as to comply with the requirements of Subchapter M of the Code.
(xxvii) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), no director of
the Fund is an "interested person" (as defined in the 1940 Act) of the Fund or
an "affiliated person" (as defined in the 1940 Act) of any Underwriter listed in
Schedule I hereto.
14
(b) The Sub-Adviser represents and warrants to the Underwriters that:
(i) To the best knowledge of the Sub-Adviser, the Registration Statement
in the form in which it became or becomes effective and also in such form as it
may be when any post-effective amendment thereto shall become effective and the
Prospectus and any supplement or amendment thereto when filed with the
Commission under Rule 497 of the 1933 Act Rules and Regulations and the 1940 Act
Notification when originally filed with the Commission and any amendment or
supplement thereto when filed with the Commission, complied or will comply in
all material respects with the provisions of the 1933 Act, the 1940 Act and the
Rules and Regulations and did not or will not at any such times contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein (in the case of
the Prospectus, in the light of the circumstances under which they were made)
not misleading, except that this representation and warranty does not apply to
statements in or omissions from the Registration Statement or the Prospectus
made in reliance upon and in conformity with information relating to the
Underwriters furnished to the Fund in writing by or on behalf of the
Underwriters expressly for use therein.
(ii) To the best knowledge of the Sub-Adviser, there are no legal or
governmental proceedings pending or threatened, against the Fund, or to which
the Fund or any of its properties is subject, that are required to be described
in the Registration Statement or the Prospectus (and any amendment or supplement
to either of them) but are not described as required, and there are no
agreements, contracts, indentures, leases or other instruments that are required
to be described in the Registration Statement or the Prospectus (and any
amendment or supplement to either of them) or to be filed as an exhibit to the
Registration Statement that are not described or filed as required by the 1933
Act, the 1940 Act or the Rules and Regulations.
(iii) To the best knowledge of the Sub-Adviser, the Fund is not in
violation of its Charter, Articles Supplementary or Bylaws, or other
organizational documents or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Fund or of any decree of the
Commission, the NASD, any state securities commission, any national securities
exchange, any arbitrator, any court or governmental agency, body or official
having jurisdiction over the Fund, or in default in any respect in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any material
agreement, indenture, lease or other instrument to which the Fund is a party or
by which it or any of its properties may be bound, except where such violation
or default does not have a Material Adverse Effect.
(iv) To the best knowledge of the Sub-Adviser, the Fund, subject to the
Registration Statement having been declared effective and the filing of the
Prospectus under Rule 497 under the 1933 Act Rules and Regulations, has taken
all required action under the 1933 Act, the 1940 Act and the Rules and
Regulations
15
to make the public offering and consummate the sale of the Shares as
contemplated by this Agreement.
(v) To the best knowledge of the Sub-Adviser, except as disclosed in or
contemplated by the Registration Statement and the Prospectus (or any amendment
or supplement to either of them), subsequent to the respective dates as of which
such information is given in the Registration Statement and the Prospectus (or
any amendment or supplement to either of them), the Fund has not entered into
any transaction, incurred any liability or obligation, direct or contingent,
that is material to the Fund, and there has not been any change in the capital
stock, or material increase in the short-term debt or long-term debt, of the
Fund, or any material adverse change, or any development involving or which may
reasonably be expected to involve a Material Adverse Effect.
(vi) To the best knowledge of the Sub-Adviser, the Fund has not
distributed and, prior to the later to occur of (1) the Closing Date and (2)
completion of the distribution of the Shares, will not distribute any offering
material in connection with the offering and sale of the Shares other than the
Registration Statement, the Prepricing Prospectus, the Prospectus or other
materials, if any, permitted by the 1933 Act, the 1940 Act or the Rules and
Regulations.
(vii) To the best knowledge of the Sub-Adviser, the Fund maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that:
(1) transactions in portfolio securities are executed in
accordance with management's general or specific authorization and with the
applicable requirements of the 1940 Act, the 1940 Act Rules and Regulations and
the Code;
(2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets and to maintain compliance
with the books and records requirements under the 1940 Act and the 1940 Act
Rules and Regulations;
(3) access to assets is permitted only in accordance with
management's general or specific authorization; and
(4) the recorded account for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to
any differences.
(viii) The Sub-Adviser has not prepared or issued, to the public or
otherwise, any advertising, sales literature or other promotional material
(including "prospectus wrappers", "broker kits," "road show slides" and "road
show scripts") for use in connection with the offering and sale of the Shares.
16
(ix) As required by Subchapter M of the Code, the Fund is in compliance
with the requirements to qualify as a regulated investment company under the
Code. The Fund intends to direct the investment of the proceeds of the offering
in such a manner as to comply with the requirements of Subchapter M of the Code.
7. REPRESENTATIONS AND WARRANTIES OF THE INVESTMENT MANAGER. The Investment
Manager represents and warrants to the Underwriters as follows:
(a) The Investment Manager is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware, with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them), and is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
to so register or to qualify does not have a material adverse effect on the
condition (financial or other), business, prospects, assets or results of
operations of the Investment Manager or on the ability of the Investment Manager
to perform its obligations under this Agreement and the Advisory Agreements (an
"Adviser Material Adverse Effect").
(b) The Investment Manager is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the Advisers
Act, the Advisers Act Rules and Regulations, the 1940 Act or the 1940 Act Rules
and Regulations from acting under the Advisory Agreements for the Fund as
contemplated by the Prospectus (or any amendment or supplement thereto). There
does not exist any proceeding which should reasonably be expected to have a
material adverse effect on the registration of the Investment Manager with the
Commission.
(c) There are no legal or governmental proceedings pending or, to the
knowledge of the Investment Manager, threatened against the Investment Manager,
or to which the Investment Manager or any of its properties is subject, that are
required to be described in the Registration Statement or the Prospectus (or any
amendment or supplement to either of them) but are not described as required or
that should reasonably be expected to have an Adviser Material Adverse Effect.
(d) Neither the execution, delivery or performance of this Agreement or the
Advisory Agreements by the Investment Manager, nor the consummation by the
Investment Manager of the transactions contemplated hereby or thereby:
(i) requires the Investment Manager to obtain any consent, approval,
authorization or other order of, or registration or filing with, the Commission,
the NASD, any state securities commission, any national securities exchange, any
arbitrator, any court, regulatory body, administrative agency or
17
other governmental body, agency or official having jurisdiction over the
Investment Manager or conflicts or will conflict with or constitutes or will
constitute a breach of or a default under the articles of incorporation, bylaws,
or other organizational documents, of the Investment Manager; or
(ii) conflicts or will conflict with or constitutes or will constitute a
breach of or a default under, any agreement, indenture, lease or other
instrument to which the Investment Manager is a party or by which it or any of
its properties may be bound, or violates or will violate any statute, law,
regulation or judgment, injunction, order or decree applicable to the Investment
Manager or any of its properties or will result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Investment
Manager pursuant to the terms of any agreement or instrument to which it is a
party or by which it may be bound or to which any of the property or assets of
the Investment Manager is subject,
except in any case under clause (i) or (ii) as should not reasonably be expected
to have an Adviser Material Adverse Effect. The Investment Manager is not
subject to any order of any court or of any arbitrator, governmental authority
or administrative agency.
(e) The Investment Manager has full power and authority to enter into this
Agreement and the Advisory Agreements; the execution and delivery of, and the
performance by the Investment Manager of its obligations under, this Agreement
and the Advisory Agreements have been duly and validly authorized by the
Investment Manager; and this Agreement and the Advisory Agreements have been
duly executed and delivered by the Investment Manager and, assuming due
authorization, execution and delivery by the other parties thereto, constitute
the valid and legally binding agreements of the Investment Manager, enforceable
against the Investment Manager in accordance with their terms, except as
enforcement of rights to indemnity and contribution hereunder may be limited by
considerations of public policy and federal and state securities law and subject
to the qualification that the enforceability of the Investment Manager's
obligations hereunder and thereunder may be limited by bankruptcy, insolvency,
liquidation, receivership, conservatorship, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and by general
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law) and fair dealing.
(f) The Investment Manager has the financial resources available to it
necessary for the performance of its services and obligations as contemplated in
the Prospectus (or any amendment or supplement thereto) and under this Agreement
and the Advisory Agreements.
(g) The description of the Investment Manager in the Registration Statement
and the Prospectus (and any amendment or supplement thereto) complied and comply
in all material respects with the provisions of the 1933 Act, the
18
1940 Act, the Advisers Act, the Rules and Regulations and the Advisers Act Rules
and Regulations and do not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein (in the case of the Prospectus, in the light of the
circumstances under which they were made) not misleading.
(h) Except as disclosed in the Registration Statement and the Prospectus (or
any amendment or supplement to either of them), subsequent to the respective
dates as of which such information is given in the Registration Statement and
the Prospectus (or any amendment or supplement to either of them), there has not
occurred any event that should reasonably be expected to have an Adviser
Material Adverse Effect.
(i) The Investment Manager has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("Investment Manager
Permits") as are necessary to own its properties and to conduct its business in
the manner described in the Prospectus (and any amendment or supplement
thereto), except to the extent that the failure to so have should not reasonably
be expected to have an Adviser Material Adverse Effect.
(j) The Investment Manager has fulfilled and performed all its material
obligations with respect to such Investment Manager Permits and no event has
occurred which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of the rights
of the Investment Manager under any such Investment Manager Permit, except where
the revocation, termination or impairment of the Investment Manager's rights
under such Investment Manager Permits should not reasonably be expected to have
an Adviser Material Adverse Effect.
(k) Except as stated in this Agreement and in the Prospectus (and in any
amendment or supplement thereto), the Investment Manager has not taken, nor will
it take, directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in, stabilization or manipulation of
the price of any securities issued by the Fund to facilitate the sale or resale
of the Shares, and the Investment Manager is not aware of any such action taken
or to be taken by any affiliates of the Investment Manager.
(l) Neither the Fund nor the Investment Manager has made available any
promotional materials regarding the Fund intended for use only by qualified
broker-dealers and registered representatives thereof by means of an Internet
web site or similar electronic means.
(m) The Advisory Agreements and the provisions in this Agreement applicable
to the Advisers comply in all material respects with all applicable provisions
of the 1940 Act, the 1940 Act Rules and Regulations, the Advisers Act and the
Advisers Act Rules and Regulations.
19
8. REPRESENTATIONS AND WARRANTIES OF THE SUB-ADVISER. The Sub-Adviser represents
and warrants to the Underwriters as follows:
(a) The Sub-Adviser is a duly formed limited partnership and is validly
existing in good standing under the laws of the State of Delaware, with full
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus (and any
amendment or supplement to either of them), and is duly registered and qualified
to conduct its business and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure to so register or to
qualify does not have a material adverse effect on the condition (financial or
other), business, prospects, assets or results of operations of the Sub-Adviser
or on the ability of the Sub-Adviser to perform its obligations under this
Agreement and the Sub-Advisory Agreement (a "Sub-Adviser Material Adverse
Effect".)
(b) The Sub-Adviser is duly registered with the Commission as an investment
adviser under the Advisers Act and is not prohibited by the Advisers Act, the
Advisers Act Rules and Regulations, the 1940 Act or the 1940 Act Rules and
Regulations from acting under the Sub-Advisory Agreement for the Fund as
contemplated by the Prospectus (or any amendment or supplement thereto). There
does not exist any proceeding which should reasonably be expected to have a
material adverse affect on the registration of the Sub-Adviser with the
Commission.
(c) There are no legal or governmental proceedings pending or, to the
knowledge of the Sub-Adviser, threatened against the Sub-Adviser, or to which
the Sub-Adviser or any of its properties are subject, that are required to be
described in the Registration Statement or the Prospectus (or any amendment or
supplement to either of them) but are not described as required or that should
reasonably be expected to have a Sub-Adviser Material Adverse Effect.
(d) Neither the execution, delivery or performance of this Agreement or the
Sub-Advisory Agreement by the Sub-Adviser, nor the consummation by the
Sub-Adviser of the transactions contemplated hereby or thereby:
(i) requires the Sub-Adviser to obtain any consent, approval,
authorization or other order of, or registration or filing with, the Commission,
the NASD, any state securities commission, any national securities exchange, any
arbitrator, any court, regulatory body, administrative agency or other
governmental body, agency or official having jurisdiction over the Sub-Adviser
or conflicts or will conflict with or constitutes or will constitute a breach of
or a default under the certificate of limited partnership or limited partnership
agreement or other organizational documents of the Sub-Adviser; or
(ii) conflicts or will conflict with or constitutes or will constitute
a breach of or a default under, any agreement, indenture, lease or other
instrument to which the Sub-Adviser is a party or by which it or any of its
20
properties may be bound, or violates or will violate any statute, law,
regulation or judgment, injunction, order or decree applicable to the
Sub-Adviser or any of its properties or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Sub-Adviser pursuant to the terms of any agreement or instrument to which it is
a party or by which it may be bound or to which any of the property or assets of
the Sub-Adviser is subject,
except in any case under clause (i) or (ii) as should not reasonably be expected
to have a Sub-Adviser Material Adverse Effect. The Sub-Adviser is not subject to
any order of any court or of any arbitrator, governmental authority or
administrative agency.
(e) The Sub-Adviser has full power and authority to enter into this
Agreement and the Sub-Advisory Agreement; the execution and delivery of, and the
performance by the Sub-Adviser of its obligations under, this Agreement and the
Sub-Advisory Agreement have been duly and validly authorized by the Sub-Adviser;
and this Agreement and the Sub-Advisory Agreement have been duly executed and
delivered by the Sub-Adviser and, assuming due authorization, execution and
delivery by the other parties thereto, constitute the valid and legally binding
agreements of the Sub-Adviser, enforceable against the Sub-Adviser in accordance
with their terms, except as enforcement of rights to indemnity and contribution
hereunder may be limited by considerations of public policy and federal and
state securities law and subject to the qualification that the enforceability of
the Sub-Adviser's obligations hereunder and thereunder may be limited by
bankruptcy, insolvency, liquidation, receivership, conservatorship,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and by general equitable principles (regardless of
whether enforcement is sought in a proceeding in equity or at law) and fair
dealing.
(f) The Sub-Adviser has the financial resources available to it necessary
for the performance of its services and obligations as contemplated in the
Prospectus (or any amendment or supplement thereto) and under this Agreement and
the Sub-Advisory Agreement.
(g) The description of the Sub-Adviser in the Registration Statement and
the Prospectus (and any amendment or supplement thereto) complied and comply in
all material respects with the provisions of the 1933 Act, the 1940 Act, the
Advisers Act, the Rules and Regulations and the Advisers Act Rules and
Regulations and do not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in the light of the
circumstances under which they were made) not misleading.
(h) Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement to either of them), subsequent to the respective
dates as of which such information is given in the Registration Statement and
the Prospectus (or any amendment or supplement to either of them), there has not
21
occurred any event that should reasonably be expected to have a Sub-Adviser
Material Adverse Effect.
(i) The Sub-Adviser has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("Sub-Adviser Permits")
as are necessary to own its properties and to conduct its business in the manner
described in the Prospectus (and any amendment or supplement thereto), except to
the extent that the failure to so have should not reasonably be expected to have
a Sub-Adviser Material Adverse Effect.
(j) The Sub-Adviser has fulfilled and performed all its material
obligations with respect to such Sub-Adviser Permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the rights of
the Sub-Adviser under any such Sub-Adviser Permit, except where the revocation,
termination or impairment of the Sub-Adviser's rights under such Sub-Adviser
Permits should not reasonably be expected to have a Sub-Adviser Material Adverse
Effect.
(k) Except as stated in this Agreement and in the Prospectus (and in any
amendment or supplement thereto), the Sub-Adviser has not taken, nor will it
take, directly or indirectly, any action designed to or which might reasonably
be expected to cause or result in, stabilization or manipulation of the price of
any securities issued by the Fund to facilitate the sale or resale of the
Shares, and the Sub-Adviser is not aware of any such action taken or to be taken
by any affiliates of the Sub-Adviser.
(l) The Sub-Adviser has not made available any promotional materials
regarding the Fund intended for use only by qualified broker-dealers and
registered representatives thereof by means of an Internet web site or similar
electronic means.
(m) The Sub-Advisory Agreement and the provisions in this Agreement
applicable to the Sub-Adviser comply in all material respects with all
applicable provisions of the 1940 Act, the 1940 Act Rules and Regulations, the
Advisers Act and the Advisers Act Rules and Regulations.
9. INDEMNIFICATION AND CONTRIBUTION.
(a) (i) The Fund agrees to indemnify and hold harmless you and each of the
Underwriters and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act from and
against any and all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation), joint or several, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Prepricing Prospectus or in the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein (in the case of
the Prospectus, in the light
22
of the circumstances under which they were made) not misleading, except insofar
as such losses, claims, damages, liabilities or expenses arise out of or are
based upon any untrue statement or omission or alleged untrue statement or
omission which has been made therein or omitted there from in reliance upon and
in conformity with the information furnished in writing to the Fund by or on
behalf of any Underwriter through you expressly for use in connection therewith;
provided, however, that the indemnification contained in this paragraph (a)(i)
with respect to any Prepricing Prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) on
account of any such loss, claim, damage, liability or expense arising from the
sale of the Shares by such Underwriter to any person if a copy of the Prospectus
shall not have been delivered or sent by the Underwriters as required to such
person within the time required by the 1933 Act and the 1933 Act Rules and
Regulations, and the untrue statement or alleged untrue statement or omission or
alleged omission of a material fact contained in such Prepricing Prospectus was
corrected in such Prospectus, provided that the Fund has delivered such
Prospectus to the several Underwriters in requisite quantity on a timely basis
to permit such delivery or sending; and provided further, that the Fund will not
be liable to any such indemnified party with respect to any such loss, claim,
damage, liability or expense attributable to any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
there from in reliance upon and in conformity with the information furnished to
the Fund by or on behalf of the Investment Manager or the Sub-Adviser for use in
any Prepricing Prospectus or in the Registration Statement or the Prospectus or
in any amendment or supplement thereto or any untrue statement or omission or
alleged untrue statement or omission contained in any Prepricing Prospectus or
in the Registration Statement or the Prospectus or in any amendment or
supplement thereto that concerns the Investment Manager or the Sub-Adviser or
the Investment Manager's or the Sub-Adviser's duties, activities or areas of
responsibility for the Fund or the Investment Manager's or the Sub-Adviser's
ability to perform its obligations under this Agreement, the Investment
Management Agreement and the Sub-Advisory Agreement, as applicable, except to
the extent that the Investment Manager and the Sub-Adviser have failed to
indemnify and hold harmless such indemnified party pursuant to Section 9(a)(ii)
in respect of any such loss, claim, damage, liability or expense after such
indemnified party has made a claim of the Investment Manager or the Sub-Adviser
as required below. The foregoing indemnity agreement shall be in addition to any
liability which the Fund may otherwise have.
(ii) The Investment Manager and the Sub-Adviser, jointly and severally,
agree to indemnify and hold harmless you and each of the Underwriters and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act from and against any and all losses,
claims, damages, liabilities and expenses (including reasonable costs of
investigation), joint or several, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Prepricing Prospectus or in the Registration Statement or the Prospectus or in
any amendment or supplement thereto, or arising out of or based upon any
omission or alleged
23
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of the Prospectus, in the
light of the circumstances under which they were made) not misleading, except
insofar as such losses, claims, damages, liabilities or expenses arise out of or
are based upon any untrue statement or omission or alleged untrue statement or
omission which has been made therein or omitted there from in reliance upon and
in conformity with the information furnished in writing to the Fund by or on
behalf of any Underwriter through you expressly for use in connection therewith;
provided, however, that the indemnification contained in this paragraph (a)(ii)
with respect to any Prepricing Prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) on
account of any such loss, claim, damage, liability or expense arising from the
sale of the Shares by such Underwriter to any person if a copy of the Prospectus
shall not have been delivered or sent by the Underwriters as required to such
person within the time required by the 1933 Act and the 1933 Act Rules and
Regulations, and the untrue statement or alleged untrue statement or omission or
alleged omission of a material fact contained in such Prepricing Prospectus was
corrected in such Prospectus, provided that the Fund has delivered such
Prospectus to the several Underwriters in requisite quantity on a timely basis
to permit such delivery or sending; and provided further, that, except with
respect to any such loss, claim, damage, liability or expense attributable to
any untrue statement or omission or alleged untrue statement or omission which
has been made therein or omitted there from in reliance upon and in conformity
with the information furnished to the Fund by or on behalf of the Investment
Manager or the Sub-Adviser for use in any Prepricing Prospectus or in the
Registration Statement or the Prospectus or in any amendment or supplement
thereto or any untrue statement or omission or alleged untrue statement or
omission contained in any Prepricing Prospectus or in the Registration Statement
or the Prospectus or in any amendment or supplement thereto that concerns the
Investment Manager or the Sub-Adviser or the Investment Manager's or the
Sub-Adviser's duties, activities or areas of responsibility for the Fund or the
Investment Manager's or the Sub-Adviser's ability to perform its obligations
under this Agreement, the Investment Management Agreement or the Sub-Advisory
Agreement, as applicable, (A) the Investment Manager and the Sub-Adviser will
not be liable to any such indemnified party in any such case except to the
extent that the Fund has failed to indemnify and hold harmless such indemnified
party pursuant to Section 9(a)(i) in respect of any such loss, claim, damage,
liability or expense after such indemnified party has made a claim of the Fund
as required below; and (B) the amount of the Investment Manager's and the
Sub-Adviser's liability hereunder shall be limited to the amount of the net
proceeds from the sale of the Shares and provided, further, that to the extent
the Investment Manager and the Sub-Adviser have indemnified the Underwriters or
each person, if any, who controls the Underwriters, the Fund shall contribute to
the Investment Manager and the Sub-Adviser a portion of the amount paid by the
Investment Manager and the Sub-Adviser to any such indemnified party as shall be
appropriate to reflect the relative benefits received by the Fund, the
Investment Manager and the Sub-Adviser in the offering of the Shares and the
relative fault of the Fund, the Investment Manager and the Sub-Adviser in
causing
24
the omission or misstatement which resulted in such payment. The
foregoing indemnity agreement shall be in addition to any liability which the
Investment Manager and Sub-Adviser may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Fund, the Investment Manager or the
Sub-Adviser, such Underwriter or such controlling person shall promptly notify
the Fund, the Investment Manager or the Sub-Adviser, and the Fund, the
Investment Manager or the Sub-Adviser shall assume the defense thereof,
including the employment of counsel and payment of all reasonable fees and
expenses. Such Underwriter or any such controlling person shall have the right
to employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or such controlling person unless
(i) the Fund, the Investment Manager or the Sub-Adviser has agreed in writing to
pay such fees and expenses, (ii) the Fund and the Advisers have failed to assume
the defense and employ counsel, or (iii) the named parties to any such action,
suit or proceeding (including any impleaded parties) include both such
Underwriter or such controlling person and the Fund, the Investment Manager or
the Sub-Adviser and such Underwriter or such controlling person shall have been
advised by its counsel that representation of such indemnified party and the
Fund, the Investment Manager or the Sub-Adviser by the same counsel would be
inappropriate under applicable standards of professional conduct (whether or not
such representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the Fund and the
Advisers shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such Underwriter or such controlling person).
It is understood, however, that the Fund and the Advisers shall, in
connection with any one such action, suit or proceeding or separate but
substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such
Underwriters and controlling persons not having actual or potential differing
interests with you or among themselves, which firm shall be designated in
writing by the Underwriters, and that all such fees and expenses shall be
reimbursed as they are incurred. The Fund and the Advisers shall not be liable
for any settlement of any such action, suit or proceeding effected without their
written consent, but if settled with such written consent, or if there be a
final judgment for the plaintiff in any such action, suit or proceeding, the
Fund and the Advisers agree to indemnify and hold harmless any Underwriter, to
the extent provided in the preceding paragraph, and any such controlling person
from and against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Fund and the Advisers, their directors, their partners, any
25
officers who sign the Registration Statement, and any person who controls the
Fund or the Advisers within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act, to the same extent as the foregoing indemnity from the Fund
and the Advisers to each Underwriter, but only with respect to information
relating to such Underwriter furnished in writing by or on behalf of such
Underwriter expressly for use in the Registration Statement, the Prospectus or
any Prepricing Prospectus, or any amendment or supplement thereto. If any
action, suit or proceeding shall be brought against the Fund, the Investment
Manager or the Sub-Adviser, any of their directors, any of their partners, any
such officer, or any such controlling person based on the Registration
Statement, the Prospectus or any Prepricing Prospectus, or any amendment or
supplement thereto, and in respect of which indemnity may be sought against any
Underwriter pursuant to this paragraph (c), such Underwriter shall have the
rights and duties given to the Fund and the Advisers by paragraph (b) above
(except that if the Fund, the Investment Manager or the Sub-Adviser shall have
assumed the defense thereof such Underwriter shall not be required to do so, but
may employ separate counsel therein and participate in the defense thereof, but
the fees and expenses of such counsel shall be at such Underwriter's expense),
and the Fund, the Investment Manager and the Sub-Adviser, their directors, their
partners, any such officer, and any such controlling person shall have the
rights and duties given to the Underwriters by paragraph (b) above. The
foregoing indemnity agreement shall be in addition to any liability which the
Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 9 is unavailable to
an indemnified party under paragraphs (a) or (c) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses
(i) in such proportion as is appropriate to reflect the relative
benefits received by the Fund and the Advisers on the one hand (treated jointly
for this purpose as one person) and the Underwriters on the other hand from the
offering of the Shares, or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Fund and the Advisers on the one hand (treated jointly for this purpose as
one person) and the Underwriters on the other in connection with the statements
or omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Fund and the Advisers on the
one hand (treated jointly for this purpose as one person) and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Fund bear
to the total
26
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Fund and the Advisers on the one hand (treated jointly for this
purpose as one person) and the Underwriters on the other hand 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 Fund and the Advisers on
the one hand (treated jointly for this purpose as one person) or by the
Underwriters on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(e) The Fund, the Advisers and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 9 were determined by
a pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price of the Shares underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 9 are several
in proportion to the respective numbers of Shares set forth opposite their names
in Schedule I hereto (or such numbers of Shares increased as set forth in
Section 12 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 9 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Fund and the Advisers set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Fund,
27
the Investment Manager, the Sub-Adviser, their directors, partners or officers,
or any person controlling the Fund, the Investment Manager or the Sub-Adviser,
(ii) acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement.
(h) Notwithstanding any other provision in this Section 9, no party shall
be entitled to the benefit of any provision under this Agreement which protects
or purports to protect such person against any liability to the Fund or its
security holders to which such person would otherwise be subject by reason of
such person's willful misfeasance, bad faith, or gross negligence, in the
performance of such person's duties hereunder, or by reason of such person's
reckless disregard of such person's obligations and duties hereunder, if and to
the extent such liability constitutes a violation of Section 17(i) of the 1940
Act.
A successor to any Underwriter or any person controlling such
Underwriter, or to the Fund, the Investment Manager, the Sub-Adviser, their
directors, partners or officers, or any person controlling the Fund, the
Investment Manager or the Sub-Adviser shall be entitled to the benefits of the
indemnity, contribution, and reimbursement agreements contained in this
Section 9.
10. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the Underwriters
to purchase the Shares hereunder are subject to the following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
Registration Statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by the
Underwriters, and all filings, if any, required by Rules 497 and 430A under the
1933 Act and the 1933 Act Rules and Regulations shall have been timely made; no
stop order suspending the effectiveness of the Registration Statement or order
pursuant to Section 8(e) of the 1940 Act shall have been issued and no
proceeding for those purposes shall have been instituted or, to the knowledge of
the Fund, the Investment Manager, the Sub-Adviser or any Underwriter, threatened
by the Commission, and any request of the Commission for additional information
(to be included in the Registration Statement or the Prospectus or otherwise)
shall have been complied with to your reasonable satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall not have
occurred (i) any change or any development involving a prospective change in or
affecting the condition (financial or other), assets, or results of operations
of the Fund, the Investment Manager or the Sub-Adviser not contemplated by the
Prospectus (or any amendment or supplement thereto), which in the Underwriters'
reasonable opinion would materially adversely affect the market for the Shares,
or (ii) any event or development relating to or involving the Fund, the
Investment
28
Manager or the Sub-Adviser or any officer, partner or director of the Fund, the
Investment Manager or the Sub-Adviser which makes any statement made in the
Prospectus (or any amendment or supplement thereto) untrue or which, in the
opinion of the Fund and its counsel or the Underwriters and their counsel,
requires the making of any addition to or change in the Prospectus (or any
amendment or supplement thereto) in order to state a material fact required by
the 1933 Act, the 1940 Act or the Rules and Regulations or any other law to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, if
amending or supplementing the Prospectus (or any amendment or supplement
thereto) to reflect such event or development would, in the Underwriters'
opinion, materially adversely affect the market for the Shares.
(c) You shall have received on the Closing Date an opinion of Xxxxxxx Xxxx &
Xxxxxxxxx, counsel for the Fund, dated the Closing Date and addressed to you as
the Representative of the several Underwriters, substantially to the effect set
forth in Exhibit A hereto. Insofar as the opinions contained therein relate to
or are dependent upon matters governed by Maryland law, Xxxxxxx Xxxx & Xxxxxxxxx
will be permitted to rely on the opinion of Xxxxxxx, Xxxxxxx and Xxxxxx, LLP.
(d) You shall have received on the Closing Date an opinion of Xxxxxx X.
Xxxxxxx, counsel for the Investment Manager, dated the Closing Date and
addressed to you as the Representative of the several Underwriters,
substantially to the effect set forth in Exhibit B hereto.
(e) You shall have received on the Closing Date an opinion of Xxxxx X.
Xxxxxxxx, counsel for the Sub-Adviser, dated the Closing Date and addressed to
you as the Representative of the several Underwriters, substantially to the
effect set forth in Exhibit C hereto.
(f) You shall have received on the Closing Date an opinion of Xxxxxxx, Arps,
Slate, Xxxxxxx and Xxxx LLP, counsel for the Underwriters, dated the Closing
Date and addressed to you as the Representative of the several Underwriters,
with respect to such matters as the Underwriters may reasonably request and the
Fund, the Advisers and their respective counsels shall have furnished to such
counsel such documents relating to the Fund as they may reasonably request for
the purpose of enabling them to pass upon such matters. It is agreed that
Xxxxxxx, Arps, Slate, Xxxxxxx and Xxxx LLP may rely on the opinions of Xxxxxxx,
Xxxxxxx and Xxxxxx, LLP to the extent those opinions relate to or are dependent
upon matters governed by the laws of the State of Maryland.
(g) You shall have received letters addressed to you as the Representative
of the several Underwriters, dated the date hereof and the Closing Date, from
KPMG LLP, independent certified public accountants, substantially in the forms
heretofore approved by you.
29
(h) (i) all the representations and warranties of the Fund, the Investment
Manager and the Sub-Adviser contained in this Agreement shall be true and
correct on and as of the date hereof and on and as of the Closing Date as if
made on and as of the Closing Date, and the Underwriters shall have received a
certificate from each of the Fund, the Investment Manager and the Sub-Adviser,
dated the Closing Date and signed by the chief executive officer and the chief
financial officer of each of the Fund, the Investment Manager and the
Sub-Adviser (or such other officers as are acceptable to you), to the effect set
forth in Section 10(l) hereof.
(ii) there shall not have been, subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus (or
any amendment or supplement thereto), except as may otherwise be stated in the
Registration Statement and Prospectus (or any amendment or supplement thereto),
any material adverse change (other than as a result of changes in market
conditions generally or the market for real estate securities generally) in the
condition (financial or other), assets or results of operations of the Fund or
the Advisers;
(iii) no order suspending the effectiveness of the Registration
Statement or prohibiting or suspending the use of the Prospectus (or any
amendment or supplement thereto), any Prepricing Prospectus, any sales material
or the sale of any of the Shares or having a material adverse effect on the
Fund, the Investment Manager, or the Sub Adviser shall have been issued and no
proceedings for such purpose or for the purpose of commencing an enforcement
action against the Fund, the Investment Manager, the Sub-Adviser or, with
respect to the transactions contemplated by the Prospectus (or any amendment or
supplement thereto) and this Agreement, the Underwriters, may be pending before
or, to the knowledge of the Fund, the Investment Manager, the Sub-Adviser or the
Underwriters or in the reasonable view of counsel to the Underwriters, shall be
threatened by the Commission or any court or other regulatory body, the NASD,
any state securities commission, any national securities exchange, any
arbitrator, any court or any other governmental, regulatory, self-regulatory or
administrative agency or any official at or prior to the Closing Date and that
any request for additional information on the part of the Commission or such
court or other body (to be included in the Registration Statement, the
Prospectus or otherwise) be complied with to the reasonable satisfaction of the
Underwriters;
(iv) the Fund, the Investment Manager and the Sub-Adviser shall not have
sustained any material loss or interference with their respective businesses
from any court or from legislative or other governmental action, order or decree
or from any other occurrence not described in the Registration Statement and the
Prospectus and any amendment or supplement to either of them;
(v) there shall not have been any change in the capital stock of the
Fund nor any material increase in the short-term or long-term debt of the Fund
from that set forth or contemplated in the Registration Statement or the
Prospectus (or any amendment or supplement thereto);
30
(vi) the Fund shall not have any liabilities or obligations, direct or
contingent (whether or not in the ordinary course of business), that are
material to the Fund, other than those reflected in or contemplated by the
Registration Statement or the Prospectus (or any amendment or supplement to
either of them); and
(vii) to the knowledge of the Advisers, no order having any material
adverse effect on the ability of either Adviser to fulfill its respective
obligations under this Agreement or the Advisory Agreements, has been issued and
no proceedings for any such purpose are pending before or reasonably believed to
be threatened by the Commission or any regulatory body, whether foreign or
domestic.
(i) Neither the Fund nor either of the Advisers shall have failed at or
prior to the Closing Date to have performed or complied in all material respects
with any of its agreements herein contained and required to be performed or
complied with by it hereunder at or prior to the Closing Date.
(j) The Fund shall have furnished to you a report showing compliance with
the asset coverage requirements of the 1940 Act and a Preferred Shares Basic
Maintenance Certificate (as defined in such Certificate), each dated the Closing
Date and in form and substance satisfactory to you. Each such report may use
portfolio holdings and valuations as of the close of business of any day not
more than six business days preceding the Closing Date, provided, however, that
the Fund represents in such report that its total net assets as of the Closing
Date have not declined by 5% or more from such valuation date.
(k) The Fund shall have delivered and you shall have received evidence
satisfactory to you that the Shares are rated `Aaa' by Xxxxx'x and `AAA' by
Fitch as of the Closing Date, and there shall not have been given any notice of
any intended or potential downgrading, or of any review for a potential
downgrading, in the rating accorded to the Shares by either rating agency.
(l) You shall have received on the Closing Date a certificate, dated such
date, of the chief executive officer and the chief financial officer of each of
the Fund, the Investment Manager and the Sub-Adviser (or such other officers as
are acceptable to you) certifying that:
(i) the signers have carefully examined the Registration Statement, the
Prospectus (and any amendments or supplements to either of them) and this
Agreement;
(ii) all the representations and warranties of the Fund (with respect to
the certificate from such Fund officers), the representations and warranties of
the Investment Manager (with respect to the certificate from such officers of
the Investment Manager) and the representations and warranties of the
Sub-Adviser (with respect to the certificate from such officers of the
Sub-Adviser) in
31
the Agreement shall be true and correct on and as of the date of the certificate
as if made on such date;
(iii) since the date of the Prospectus (and any amendment or supplement
thereto), except as otherwise stated in the Prospectus (or any amendment or
supplement thereto), there has not been any material adverse change (other than
as a result of changes in market conditions generally or the market for real
estate securities generally) in the condition (financial or other), assets or
results of operations of the Fund (with respect to the certificate from such
Fund officers), the Investment Manager (with respect to the certificate from
such officers of the Investment Manager) or the Sub-Adviser (with respect to the
certificate from such officers of the Sub-Adviser);
(iv) to the knowledge of such officers after reasonable investigation,
no order suspending the effectiveness of the Registration Statement or
prohibiting or suspending the use of the Prospectus (or any amendment or
supplement thereto), any Prepricing Prospectus, any sales material or the sale
of any of the Shares or having a material adverse effect on the Fund (with
respect to the certificate from such Fund officers), the Investment Manager
(with respect to the certificate from such officers of the Investment Manager)
or the Sub-Adviser (with respect to the certificate from such officers of the
Sub-Adviser) has been issued and no proceedings for any such purpose or for the
purpose of commencing an enforcement action against the Fund (with respect to
the certificate from such Fund officers), the Investment Manager (with respect
to the certificate from such officers of the Investment Manager) or the
Sub-Adviser (with respect to the certificate from such officers of the
Sub-Adviser) are pending before or threatened by the Commission or any court or
other regulatory body, the NASD, any state securities commission, any national
securities exchange, any arbitrator, any court or any other governmental,
regulatory, self-regulatory or administrative agency or any official and any
request for additional information on the part of the Commission or such court
or other body (to be included in the Registration Statement, the Prospectus or
otherwise) have been complied with to the reasonable satisfaction of the
Underwriter;
(v) each of the Fund (with respect to certificate from such Fund
officers), the Investment Manager (with respect to certificate from such
officers of the Investment Manager) and the Sub-Adviser (with respect to
certificate from such officers of the Sub-Adviser) has performed and complied in
all material respects with all agreements that this Agreement require it to
perform by such Closing Date;
(vi) none of the Fund (with respect to the certificate from such
officers of the Fund), the Investment Manager (with respect to the certificate
from such officers of the Investment Manager) or the Sub-Adviser (with respect
to the certificate from such officers of the Sub-Adviser) has sustained any
material loss or interference with its business from any court or from
legislative or other governmental action, order or decree or from any other
occurrence not described in
32
the Registration Statement and the Prospectus and any amendment or supplement to
either of them;
(vii) with respect to the certificate from such officers of the Fund,
there has not been any change in the capital stock of the Fund nor any material
increase in the debt of the Fund from that set forth or contemplated in the
Prospectus (and any amendment or supplement thereto) and the Fund has not
sustained any material liabilities or obligations, direct or contingent, other
than those reflected in or contemplated by the Registration Statement or the
Prospectus (or any amendment or supplement thereto); and
(viii) with respect to the certificate from such officers of the
Investment Manager and the Sub-Adviser, to the knowledge of such officers, no
order having any material adverse effect on the ability of the Investment
Manager (with respect to the certificate from such officers of the Investment
Manager) or the Sub-Adviser (with respect to the certificate from such officers
of the Sub-Adviser) to fulfill its obligations under this Agreement or the
Investment Management Agreement (with respect to the certificate from such
officers of the Investment Manager) or the Sub-Advisory Agreement (with respect
to the certificate from such officers of the Sub-Adviser), has been issued and
no proceedings for any such purpose are pending before or reasonably believed to
be threatened by the Commission or any regulatory body, whether foreign or
domestic.
(m) The Fund and the Advisers shall have furnished or caused to be furnished
to you such further certificates and documents as you shall have reasonably
requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and your counsel.
Any certificate or document signed by any officer of the Fund, the
Investment Manager or the Sub-Adviser and delivered to you as Representative of
the Underwriters, or to counsel for the Underwriters, shall be deemed a
representation and warranty by the Fund, the Investment Manager or the
Sub-Adviser to the Underwriters as to the statements made therein.
11. EXPENSES. The Fund agrees to pay the following costs and expenses and all
other costs and expenses incident to the performance by it of its obligations
hereunder: (a) the preparation, printing or reproduction, and filing with the
Commission of the registration statement (including financial statements and
exhibits thereto), each Prepricing Prospectus, the Prospectus and each amendment
or supplement to any of them (including, without limitation, the filing fees
prescribed by the 1933 Act, the 1940 Act and the Rules and Regulations); (b) the
printing (or reproduction) and delivery (including postage, air freight charges
and charges for counting and packaging) of such copies of the registration
statement, each Prepricing Prospectus, the Prospectus, any sales material and
all amendments
33
or supplements to any of them as may be reasonably requested for use in
connection with the offering and sale of the Shares; (c) the preparation,
printing, authentication, issuance and delivery of certificates for the Shares,
including any stamp taxes in connection with the original issuance and sale of
the Shares; (d) the reasonable fees, expenses and disbursements of counsel for
the Underwriters relating to blue sky matters; (e) the transportation and other
expenses incurred by or on behalf of Fund representatives in connection with
presentations to prospective purchasers of the Shares; (f) the fees and expenses
of the Fund's accountants and the fees and expenses of counsel (including local
and special counsel) for the Fund; and (g) the fees paid to the Rating Agencies.
12. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective:
(a) upon the execution and delivery hereof by the parties hereto; or
(b) if, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, when
notification of the effectiveness of the registration statement or such
post-effective amendment has been released by the Commission.
Until such time as this Agreement shall have become effective, it may be
terminated by the Fund, by notifying the Underwriters, or by you, as
Representative of the several Underwriters, by notifying the Fund.
If any one or more of the Underwriters shall fail or refuse to purchase
Shares which it or they are obligated to purchase hereunder on the Closing Date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters are obligated but fail or refuse to purchase is not more than
one-tenth of the aggregate number of Shares which the Underwriters are obligated
to purchase on the Closing Date, each non-defaulting Underwriter shall be
obligated, severally, in the proportion which the number of Shares set forth
opposite its name in Schedule I hereto bears to the aggregate number of Shares
set forth opposite the names of all non-defaulting Underwriters or in such other
proportion as you may specify, to purchase the Shares which such defaulting
Underwriter or Underwriters are obligated, but fail or refuse, to purchase, it
being understood that, if the Representative is the only Underwriter, the
Representative shall be obligated to purchase all the Shares. If any one or more
of the Underwriters shall fail or refuse to purchase Shares which it or they are
obligated to purchase on the Closing Date and the aggregate number of Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares which the Underwriters are obligated to purchase on
the Closing Date and arrangements satisfactory to you and the Fund for the
purchase of such Shares by one or more non-defaulting Underwriters or other
party or parties approved by you and the Fund are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter, the Fund or the Advisers. In any
34
such case which does not result in termination of this Agreement, either you or
the Fund shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto who, with your approval and the approval of the Fund,
purchases Shares which a defaulting Underwriter is obligated, but fails or
refuses, to purchase.
Any notice under this Section 12 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
13. TERMINATION OF AGREEMENT. This Agreement shall be subject to termination in
your absolute discretion, without liability on the part of any Underwriter to
the Fund, the Investment Manager or the Sub-Adviser by notice to the Fund, the
Investment Manager or the Sub-Adviser if prior to the Closing Date, (a) trading
in the Shares shall have been suspended by the Commission on the NYSE or
securities generally on the NYSE, American Stock Exchange, the Nasdaq National
Market or the Nasdaq Stock Market shall have been suspended or limited or
minimum prices shall have been established on such Exchanges, the Nasdaq
National Market or the Nasdaq Stock Market, (b) additional material governmental
restrictions not in force on the date of this Agreement have been imposed upon
trading in securities in general or a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or state
authorities or (c) any outbreak or material escalation of hostilities,
declaration by the United States of a national emergency or war, or other
international or domestic calamity, crisis or change in political, financial or
economic conditions, occurs, the effect of which on the financial markets is
such as to make it, in your sole judgment, impracticable or inadvisable to
commence or continue the offering or delivery of the Shares as contemplated by
the Prospectus (exclusive of any supplement thereto) or to enforce contracts for
the resale of the Shares by the Underwriters.
Notice of such termination may be given to the Fund, the Investment
Manager or the Sub-Adviser by telegram, telecopy or telephone, and shall be
subsequently confirmed by letter.
14. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth in the
last paragraph of the cover page in the Prospectus, as well as, under the
caption "Underwriting", the names of the Underwriters and the number of Shares
listed opposite such names following the first paragraph, and the last sentence
of the fourth paragraph constitute the only information furnished by or on
behalf of the Underwriters through you or your counsel as such information is
referred to herein, expressly for use in the Prospectus, including in Sections
6(b) and 9 hereof.
35
15. MISCELLANEOUS. Except as otherwise provided in Sections 5, 12 and 13 hereof,
notice given pursuant to any provision of this Agreement shall be in writing and
shall be delivered:
(a) if to the Fund, at the office of the Fund at:
Real Estate Income Fund Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: X. Xxx Xxxxxx
(b) if to the Investment Manager, at the office of the Investment
Manager at:
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
(c) if to the Sub-Adviser, at the office of the Sub-Adviser at:
Two Seaport Lane
World Trade Center East
Boston, Massachusetts 02210
Attention: Xxxxx X. Xxxxxxxx
(d) or if to you, as the Representative of the Underwriters, to:
Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
Underwriters, the Fund, the Advisers, their directors, partners and officers,
and the other controlling persons referred to in Section 9 hereof and their
respective successors and assigns, to the extent provided herein, and no other
person shall acquire or have any right under or by virtue of this Agreement.
Neither the term "successor" nor the term "successors and assigns" as used in
this Agreement shall include a purchaser from the Underwriters of any of the
Shares in his status as such purchaser.
16. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
This Agreement may be signed in various counterparts, which together
constitute one and the same instrument. If signed in counterparts, this
Agreement
36
shall not become effective unless at least one counterpart hereof shall have
been executed and delivered on behalf of each party hereto.
[Signature Page Follows]
37
Please confirm that the foregoing correctly sets forth the agreement
among the Fund, the Investment Manager, the Sub-Adviser and the several
Underwriters.
Very truly yours,
REAL ESTATE INCOME FUND INC.
By: ____________________________
Name:
Title:
CITI FUND MANAGEMENT INC.
By: ____________________________
Name:
Title:
AEW MANAGEMENT AND ADVISORS, L.P.
By: AEW Investment Group Inc.,
its General Partner
By: ___________________________
Name:
Title:
Confirmed as of the date first above mentioned on behalf of itself and the other
Several Underwriters named in Schedule I hereto:
XXXXXXX XXXXX XXXXXX INC.
As Representative of the Several Underwriters
By: Xxxxxxx Xxxxx Xxxxxx Inc.
By: ___________________________
Name:
Title:
SCHEDULE I
Real Estate Income Fund Inc.
Underwriter Number of Shares
----------- ----------------
Series M
--------
Xxxxxxx Xxxxx Xxxxxx Inc. .....................................2,600
Total 2,600
Exhibit A
PROVISIONS OF OPINION OF
Xxxxxxx Xxxx & Xxxxxxxxx
(i) The Fund (A) has been duly incorporated and is validly existing and
in good standing as a corporation under the laws of the State of Maryland with
full corporate power and authority to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or supplement to
either of them), and (B) is duly registered and qualified to conduct its
business and is in good standing in the State of New York (which is the only
jurisdiction identified by management of the Fund to such counsel in which the
Fund owns or leases property or operates or conducts its business);
(ii) The statements made in the Prospectus under the captions
"Description of Common Stock" and "Description of Preferred Shares", insofar as
they purport to constitute summaries of the terms of the Fund's capital stock,
constitute accurate summaries of the terms of such capital stock in all material
respects;
(iii) All outstanding shares of capital stock of the Fund have been duly
authorized and validly issued by the Fund, and are fully paid and nonassessable;
(iv) The Shares have been duly authorized and, when issued and delivered
to the Underwriters against payment therefor in accordance with the terms of
this Agreement, will be validly issued by the Fund, fully paid and
nonassessable. There are no preemptive rights under federal or New York law or
under the Maryland General Corporation Law to subscribe for or purchase shares
of the Fund's capital stock. There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the issuance, voting or,
except certain transfer restrictions as provided in the Articles Supplementary
with respect to the Shares, transfer of, any shares of the Fund's capital stock
pursuant to the Fund's Charter, Articles Supplementary, or Bylaws or any
agreement or other instrument filed or incorporated by reference as an exhibit
to the Registration Statement;
(v) The form of the certificate for the Shares conforms to the
requirements of the Maryland General Corporation Law;
(vi) The Registration Statement and all post-effective amendments, if
any, have become effective under the 1933 Act and the 1933 Act Rules and
Regulations and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or order pursuant to Section 8(e) of
the 1940 Act relating to the Fund has been issued and no proceedings for that
purpose are pending before or threatened by the Commission; and any required
filing of the Prospectus pursuant to Rule 497 of the 1933 Act Rules and
Regulations has been made in accordance with Rule 497;
(vii) (A) This Agreement and each of the Fund Agreements have been duly
authorized, executed and delivered by the Fund and (B) each of the Fund
Agreements, assuming that the Fund Agreements are the valid and legally binding
obligations of the other parties
A-1
thereto, is a valid and legally binding agreement of the Fund, enforceable
against the Fund in accordance with its terms (except that we express no opinion
as to the reasonableness or fairness of compensation payable under the
Investment Management Agreement or the Sub-Advisory Agreement), subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and fair
dealing;
(viii) The issuance and sale of the Shares by the Fund and the compliance
by the Fund with the provisions of this Agreement and the Fund Agreements will
not breach or result in a default under any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument filed or incorporated by
reference as an exhibit to the Registration Statement, nor will such action
violate the Charter, Articles Supplementary or Bylaws of the Fund or (assuming
compliance with state securities and Blue Sky laws) any federal or New York
statute or any rule or regulation thereunder or the Maryland General Corporation
Law or any rule or regulation thereunder or order known to us issued pursuant to
any federal or New York statute or the Maryland General Corporation Law by any
court or governmental agency or body having jurisdiction over the Fund or any of
its properties;
(ix) No consent, approval, authorization, order, registration, filing or
qualification of or with any federal or New York governmental agency or body or
any Maryland governmental agency or body acting pursuant to the Maryland General
Corporation Law or, to such counsel's knowledge, any federal or New York court
or any Maryland court acting pursuant to the Maryland General Corporation Law is
required for the issue and sale of the Shares by the Fund and the compliance by
the Fund with all of the provisions of this Agreement and the Fund Agreements,
except for such consents, approvals, authorizations, registrations, filings or
qualifications as have been made or as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Shares by
the Underwriters;
(x) To the knowledge of such counsel, (A) other than as described or
contemplated in the Registration Statement or Prospectus (or any amendment or
supplement to either of them), there are no legal or governmental proceedings
pending or threatened against the Fund, or to which the Fund or any of its
properties is subject, which are required to be described in the Registration
Statement or Prospectus (or any amendment or supplement to either of them) and
(B) there are no agreements, contracts, indentures, leases or other instruments
that are required to be described in the Registration Statement or the
Prospectus (or any amendment or supplement to either of them) or to be filed as
an exhibit to the Registration Statement that are not described or filed as
required, or incorporated by reference, as the case may be;
(xi) The statements made in the Prospectus under the captions "Management
of the Fund", "Description of Common Stock", "Description of Preferred Shares",
"The Auction", "Investment Manager and Sub-Adviser" and "Additional Information
Concerning the Auction for Preferred Shares", insofar as they purport to
constitute summaries of the terms of the Maryland General Corporation Law or any
federal statutes, rules and regulations thereunder or the Fund's Charter, Bylaws
or Articles Supplementary or any Fund Agreements, constitute accurate
A-2
summaries of the terms of such statutes, rules and regulations or the Fund's
Charter, Bylaws or Articles Supplementary or the Fund Agreements in all material
respects;
(xii) The statements made in the Prospectus under the caption "Tax
Matters", insofar as they purport to constitute summaries of matters of United
States federal tax law and regulations or legal conclusions with respect
thereto, constitute accurate summaries of the matters described therein in all
material respects;
(xiii) Each of the Fund Agreements complies as to form with all
applicable provisions of the 1933 Act, 1940 Act, the Advisers Act, the Rules and
Regulations and the Advisers Act Rules and Regulations (except that we express
no opinion as to the reasonableness or fairness of compensation payable under
the Investment Management Agreement or the Sub-Advisory Agreement);
(xiv) The Fund is duly registered with the Commission under the 1940 Act
and the 1940 Act Rules and Regulations as a closed-end, non-diversified
management investment company and, to such counsel's knowledge, no order of
suspension or revocation of such registration under the 1940 Act and the 1940
Act Rules and Regulations has been issued or proceedings therefor initiated or
threatened by the Commission; the provisions of the Charter, Articles
Supplementary and Bylaws do not violate the provisions of the 1940 Act or the
1940 Act Rules and Regulations; and the provisions of the Charter, Articles
Supplementary and the Bylaws and the investment policies and restrictions
described in the Prospectus under the captions "The Fund's Investments", "Risk
Factors" and "Investment Policies and Techniques" comply in all material
respects with the requirements of the 1940 Act and the applicable 1940 Act Rules
and Regulations thereunder; and
(xv) Except as described in the Prospectus, there are no outstanding
options, warrants or other rights calling for the issuance of, and such counsel
does not know of any commitment, plan or arrangement to issue (other than in
connection with the reinvestment of dividends) any shares of capital stock of
the Fund or any security convertible into or exchangeable or exercisable for
shares of capital stock of the Fund or to otherwise register such securities for
sale.
Such counsel has not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement or the
Prospectus and takes no responsibility therefor, except as and to the extent set
forth in paragraphs (ii), (xi) and (xii) above. In the course of the preparation
by the Fund of the Registration Statement and the Prospectus, such counsel
participated in conferences with certain officers and employees of the Fund and
the Advisers, with representatives of KPMG LLP and with counsel to the Advisers.
Based upon such counsel's examination of the Registration Statement and the
Prospectus, such counsel's investigations made in connection with the
preparation of the Registration Statement and the Prospectus and such counsel's
participation in the conferences referred to above, (i) such counsel is of the
opinion that the Registration Statement, as of its effective date, and the
Prospectus, as of its date, complied as to form in all material respects with
the requirements of the 1933 Act and the 1940 Act and the applicable rules and
regulations of the Commission thereunder, except that in each case such counsel
expresses no opinion with respect to the
A-3
financial statements or other financial or statistical data contained or
incorporated by reference in the Registration Statement or the Prospectus, and
(ii) such counsel has no reason to believe that the Registration Statement, at
the time the Registration Statement became effective, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading or that the Prospectus contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that in each case such counsel expresses no belief
with respect to the financial statements or other financial or statistical data
contained or incorporated by reference in the Registration Statement or the
Prospectus.
A-4
Exhibit B
DRAFT PROVISIONS OF OPINION OF
CITI FUND MANAGEMENT INC.
(i) (A) Based on Certificates of the Secretary of State of the State of
Delaware, the Investment Manager has been duly incorporated and is validly
existing as a corporation under the laws of the State of Delaware with full
corporate power and authority to conduct its business as described in the
Registration Statement and the Prospectus, and (B) the Investment Manager is
duly registered and qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure to so register or to qualify does not have an Adviser Material Adverse
Effect;
(ii) The Investment Manager is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the Advisers
Act, the Advisers Act Rules and Regulations, the 1940 Act or the 1940 Act Rules
and Regulations from acting under the Advisory Agreements for the Fund as
contemplated by the Prospectus (or any amendment or supplement thereto); and to
such counsel's knowledge, no order of suspension or revocation of such
registration under the Advisers Act and the Advisers Act Rules and Regulations
has been issued and no proceedings for that purpose are pending before or
threatened by the Commission;
(iii) Each of this Agreement and the Advisory Agreements has been duly
authorized, executed and delivered by the Investment Manager and, the Advisory
Agreements, assuming that the Advisory Agreements are the valid and legally
binding agreements of the other parties thereto, are valid and legally binding
agreements of the Investment Manager, enforceable against the Investment Manager
in accordance with their terms subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing, and except as the
enforceability thereof may be limited by considerations of public policy;
(iv) Neither the execution, delivery or performance of this Agreement or
the Advisory Agreements by the Investment Manager or compliance by the
Investment Manager with the provisions of this Agreement or the Advisory
Agreements nor consummation by the Investment Manager of the transactions
contemplated hereby and thereby will breach or result in a default under any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Investment Manager is a party or by which its properties
are bound except where such breach or default would not reasonably be expected
to have a material adverse effect on the ability of the Investment Manager to
perform its obligations under this Agreement and the Advisory Agreements, nor
will such action violate the charter or bylaws of the Investment Manager or any
federal or New York statute or the Delaware General Corporation Law or any rules
or regulations thereunder or order known to such counsel issued pursuant to any
federal or New York statute or the Delaware General Corporation Law or by any
court or
B-1
governmental agency or body having jurisdiction over the Investment Manager or
any of its properties;
(v) No consent, approval, authorization, order, registration, filing or
qualification of or with any federal or New York governmental agency or body or
any Delaware governmental agency or body acting pursuant to the Delaware General
Corporation Law or, to such counsel's knowledge, any federal or New York court
or any Delaware court acting pursuant to the Delaware General Corporation Law is
required on the part of the Investment Manager for the execution, delivery and
performance by the Investment Manager of this Agreement and the Advisory
Agreements, except such consents, approvals, authorizations, orders,
registrations, filings or qualifications as have been obtained or made prior to
the date hereof; and
(vi) To the knowledge of such counsel, there are no legal or governmental
proceedings pending or threatened against the Investment Manager, or to which
the Investment Manager or any of its properties is subject, which are required
to be described in the Registration Statement or Prospectus (or any amendment or
supplement to either of them) that are not described as required.
Such counsel has not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement or the
Prospectus and takes no responsibility therefor. In the course of the
preparation by the Fund of the Registration Statement and the Prospectus, such
counsel participated in conferences with certain officers and employees of the
Fund and the Advisers, with representatives of KPMG LLP and with counsel to the
Fund. Based upon such counsel's examination of the Registration Statement and
the Prospectus, such counsel's investigations made in connection with the
preparation of the Registration Statement and the Prospectus and such counsel's
participation in the conferences referred to above, such counsel has no reason
to believe that the Registration Statement, at the time the Registration
Statement became effective, contained an untrue statement of a material fact
concerning the Investment Manager or omitted to state a material fact concerning
the Investment Manager required to be stated therein or necessary in order to
make the statements therein not misleading or that the Prospectus contains any
untrue statement of material fact concerning the Investment Manager or omits to
state any material fact concerning the Investment Manager necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, except such counsel expresses no belief with respect
to the financial statements or other financial or statistical data contained or
incorporated by reference in the Registration Statement or the Prospectus.
B-2
Exhibit C
DRAFT PROVISIONS OF OPINION OF
AEW MANAGEMENT AND ADVISORS, L.P.
(i) (A) Based on Certificates of the Secretary of State of the State of
Delaware, the Sub-Adviser has been duly formed and is validly existing as a
limited partnership under the laws of the State of Delaware with full limited
partnership power and authority to conduct its business as described in the
Registration Statement and the Prospectus, and (B) based on a Certificate of the
Secretary of the Commonwealth of the Commonwealth of Massachusetts, the
Sub-Adviser is duly registered and qualified to conduct its business and is
legally existing in the Commonwealth of Massachusetts (which is the only
jurisdiction or place where the nature of the Sub-Adviser's properties or the
conduct of its business requires such registration or qualification, except
where the failure to so register or to qualify does not have a Sub-Adviser
Material Adverse Effect);
(ii) The Sub-Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the Advisers
Act, the Advisers Act Rules and Regulations, the 1940 Act or the 1940 Act Rules
and Regulations from acting under the Sub-Advisory Agreement as contemplated by
the Prospectus (or any amendment or supplement thereto); and to such counsel's
knowledge, no order of suspension or revocation of such registration under the
Advisers Act and the Advisers Act Rules and Regulations has been issued and no
proceedings for that purpose are pending before or threatened by the Commission;
(iii) Each of this Agreement and the Sub-Advisory Agreement has been duly
authorized, executed and delivered by the Sub-Adviser and, the Sub-Advisory
Agreement, assuming that the Sub-Advisory Agreement is the valid and legally
binding agreement of the other parties thereto, is a valid and legally binding
agreement of the Sub-Adviser, enforceable against the Sub-Adviser in accordance
with its terms subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law) and an implied covenant
of good faith and fair dealing, and except as the enforceability thereof may be
limited by considerations of public policy;
(iv) Neither the execution, delivery or performance of this Agreement or
the Sub-Advisory Agreement by the Sub-Adviser or compliance by the Sub-Adviser
with the provisions of this Agreement or the Sub-Advisory Agreement nor
consummation by the Sub-Adviser of the transactions contemplated hereby and
thereby will breach or result in a default under any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Sub-Adviser is a party or by which its properties are bound except where such
breach or default would not reasonably be expected to have a material adverse
effect on the ability of the Sub-Adviser to perform its obligations under this
Agreement and the Sub-Advisory Agreement, nor will such action violate the
certificate of limited partnership or the limited partnership agreement of the
Sub-Adviser or any federal, New York or Massachusetts statute or the Delaware
Revised Uniform Limited Partnership Act or any rules or regulations thereunder
or order known to such counsel issued pursuant to any federal, New York or
Massachusetts statute or the Delaware Revised Uniform Limited Partnership Act or
by any court or governmental agency or body having jurisdiction over the
Sub-Adviser or any of its properties; and
(v) No consent, approval, authorization, order, registration, filing or
qualification of or with any federal, New York or Massachusetts governmental
agency or body or any
C-1
Delaware governmental agency or body acting pursuant to the Delaware Revised
Uniform Limited Partnership Act or, to such counsel's knowledge, any federal,
New York or Massachusetts court or any Delaware court acting pursuant to the
Delaware Revised Uniform Limited Partnership Act is required on the part of the
Sub-Adviser for the execution, delivery and performance by the Sub-Adviser of
this Agreement and the Sub-Advisory Agreement, except such consents, approvals,
authorizations, orders, registrations, filings or qualifications as have been
obtained or made prior to the date hereof; and
(vi) To the knowledge of such counsel, there are no legal or governmental
proceedings pending or threatened against the Sub-Adviser, or to which the
Sub-Adviser or any of its properties is subject, which are required to be
described in the Registration Statement or Prospectus (or any amendment or
supplement to either of them) that are not described as required.
Such counsel has not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement or the
Prospectus and takes no responsibility therefor. In the course of the
preparation by the Fund of the Registration Statement and the Prospectus, such
counsel participated in conferences with certain officers and employees of the
Fund and the Advisers, with representatives of KPMG LLP and with counsel to the
Fund. Based upon such counsel's examination of the Registration Statement and
the Prospectus, such counsel's investigations made in connection with the
preparation of the Registration Statement and the Prospectus and such counsel's
participation in the conferences referred to above, such counsel has no reason
to believe that the Registration Statement, at the time the Registration
Statement became effective, contained an untrue statement of a material fact
concerning the Sub-Adviser or omitted to state a material fact concerning the
Sub-Adviser required to be stated therein or necessary in order to make the
statements therein not misleading or that the Prospectus contains any untrue
statement of material fact concerning the Sub-Adviser or omits to state any
material fact concerning the Sub-Adviser necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except such counsel expresses no belief with respect to
the financial statements or other financial or statistical data contained or
incorporated by reference in the Registration Statement or the Prospectus.
C-2
