CONFORMED COPY
40,000,000 Shares
DLJ HIGH YIELD BOND FUND
COMMON STOCK
PAR VALUE $.001 PER SHARE
UNDERWRITING AGREEMENT
July 27, 1998
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
Advest, Inc.
Fac/Equities
Xxxxxxxxxx & Co. Inc.
First of Michigan Corporation
Gruntal & Co., L.L.C.
Interstate/Xxxxxxx Xxxx
Corporation
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
Xxxxxxxx, Lemon & Co. Incorporated
Sands Brothers & Co. Ltd.
Sutro & Co. Incorporated
Xxxxxx Xxxxxxx Incorporated
c/oDonaldson, Lufkin & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
DLJ High Yield Bond Fund, a Delaware business trust (the "Fund"), is a
newly formed, non-diversified, closed-end management investment company
registered under the Investment Company Act of 1940, as amended. The Fund
proposes to issue and sell to the several Underwriters named in Schedule I
hereto (the "Underwriters") 40,000,000 common shares of beneficial interest, par
value $.001 per share (the "Firm Shares"). The Fund also proposes to issue and
sell from time to time to the several Underwriters not more than an additional
6,000,000 common shares of beneficial interest, par value $.001 per share (the
"Additional Shares"), if requested by the Underwriters as provided in Section 2
hereof. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "Shares". The common shares of beneficial interest, $.001 par
value per share, of the Fund to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "Common Shares".
SECTION 1. Registration Statement and Prospectus. The Fund has
prepared and filed with the Securities and Exchange Commission (the
"Commission") a notification on Form N-8A (the "Notification") of registration
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of the Fund as an investment company and a registration statement on Form N-2,
including a prospectus, relating to the Shares. The registration statement, as
amended at the time it became effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act of 1933, as amended, is
hereinafter referred to as the "Registration Statement"; and the prospectus in
the form first used to confirm sales of Shares is hereinafter referred to as the
"Prospectus". If the Fund has filed or is required pursuant to the terms hereof
to file a registration statement pursuant to Rule 462(b) under the Securities
Act of 1933, as amended, registering additional shares of Common Shares (a "Rule
462(b) Registration Statement"), then, unless otherwise specified, any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462(b) Registration Statement. The Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder are collectively referred to
as the "Securities Act"; the Investment Company Act of 1940, as amended, and the
rules and regulations of the Commission thereunder are collectively referred to
as the "Investment Company Act"; and the Securities Act and the Investment
Company Act are collectively referred to as the "Acts".
SECTION 2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Fund agrees to issue and sell, and each Underwriter
agrees, severally and not jointly, to purchase from the Fund at a price per
Share of $10.00 (the "Purchase Price") the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Fund further agrees to
issue and sell the Additional Shares and the Underwriters shall have the right
to purchase, severally and not jointly, up to 6,000,000 Additional Shares from
the Fund at the Purchase Price. Additional Shares may be purchased solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. The Underwriters may exercise their right to purchase
Additional Shares in whole or in part from time to time by giving written notice
thereof to the Fund within 60 days after the date of this Agreement. You shall
give any such notice on behalf of the Underwriters and such notice shall specify
the aggregate number of Additional Shares to be purchased pursuant to such
exercise and the date for payment and delivery thereof, which date shall be a
business day (i) no earlier than two business days after such notice has been
given (and, in any event, no earlier than the Closing Date (as hereinafter
defined)) and (ii) no later than ten business days after such notice has been
given. If any Additional Shares are to be purchased, each Underwriter, severally
and not jointly, agrees to purchase from the Fund the number of Additional
Shares (subject to such adjustments to
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eliminate fractional shares as you may determine) which bears the same
proportion to the total number of Additional Shares to be purchased from the
Fund as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I bears to the total number of Firm Shares.
For each of the Shares sold to the several Underwriters pursuant to this
Agreement, the Investment Manger (not the Fund) agrees to pay or cause to be
paid to Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation for its own account
and the account of each Underwriter a fee equal to an amount computed by
multiplying (A) $0.50, by (B) the sum of the number of Shares purchased by
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and each such Underwriter on
the Closing Date and any Option Closing Date (as defined below in Section 4).
The Fund hereby agrees not to (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Shares or any
securities convertible into or exercisable or exchangeable for Common Shares or
(ii) enter into any swap or other arrangement that transfers all or a portion of
the economic consequences associated with the ownership of any Common Shares
(regardless of whether any of the transactions described in clause (i) or (ii)
is to be settled by the delivery of Common Shares, or such other securities, in
cash or otherwise), except to the Underwriters pursuant to this Agreement or as
described in the Prospectus, including the Fund's Automatic Divided Reinvestment
Plan (the "Plan"), for a period of 180 days after the date of the Underwriting
Agreement without the prior written consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation.
SECTION 3. Terms of Public Offering. The Fund and the Investment Manager
are advised by you that the Underwriters propose (i) to make a public offering
of their respective portions of the Shares as soon after the execution and
delivery of this Agreement as in your judgment is advisable and (ii) initially
to offer the Shares upon the terms set forth in the Prospectus.
SECTION 4. Delivery and Payment. The Shares shall be represented by
definitive certificates and shall be issued in such authorized denominations and
registered in such names as Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
shall request not later than two business days prior to the Closing Date or the
applicable Option Closing Date (as defined below), as the case may be. The Fund
shall deliver the Shares, with any transfer taxes thereon duly paid by the Fund,
to Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation through the facilities of
The Depository Trust Company ("DTC"), for the respective accounts of the several
Underwriters, against payment to the Fund of the Purchase Price therefor by wire
transfer of Federal or other funds immediately available in New York City. The
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certificates representing the Shares shall be made available for inspection not
later than 9:30 A.M., New York City time, on the business day prior to the
Closing Date or the applicable Option Closing Date, as the case may be, at the
office of DTC or its designated custodian (the "Designated Office"). The time
and date of delivery and payment for the Firm Shares shall be 9:00 A.M., New
York City time, on July 31, 1998 or such other time on the same or such other
date as Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and the Fund shall
agree in writing. The time and date of delivery and payment for the Firm Shares
are hereinafter referred to as the "Closing Date". The time and date of delivery
and payment for any Additional Shares to be purchased by the Underwriters shall
be 9:00 A.M., New York City time, on the date specified in the applicable
exercise notice given by you pursuant to Section 2 or such other time on the
same or such other date as Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
and the Fund shall agree in writing. The time and date of delivery and payment
for any Additional Shares are hereinafter referred to as an "Option Closing
Date".
Payment of the Underwriters' fee described in the third paragraph of
Section 2 hereof shall be made or caused to be made by the Investment Manager to
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation for its own account and the
account of each Underwriter in Federal or other funds immediately available in
New York City on the Closing Date and any Option Closing Date.
The documents to be delivered on the Closing Date or any Option Closing
Date on behalf of the parties hereto pursuant to Section 10 of this Agreement
shall be delivered at the offices of Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and the Shares shall be delivered at the
Designated Office, all on the Closing Date or such Option Closing Date, as the
case may be.
SECTION 5. Agreements of the Fund.
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to
the Registration Statement or amendments or supplements to the Prospectus
or for additional information, (ii) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of the suspension of qualification of the Shares for offering or sale
in any jurisdiction, or the initiation of any proceeding for such
purposes, (iii) when any amendment to the Registration Statement becomes
effective, (iv) if the Fund is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, when the Rule 462(b)
Registration Statement has become effective and (v) of the happening of
any event during the period referred to in Section 5(e) below which makes
any statement of a material fact made in the Registration
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Statement or the Prospectus untrue or which requires any additions to or
changes in the Registration Statement or the Prospectus in order to make
the statements therein not misleading. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, the Fund will use its best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time.
(b) To notify you immediately, and confirm such notice in writing,
(i) of the institution of any proceedings pursuant to Section 8(e) of the
Investment Company Act and (ii) of the happening of any event during the
period described in Section 5(f) below which in the judgment of the Fund
makes any statement in the Notification, the Registration Statement or the
Prospectus untrue in any material respect or which requires the making of
any change in or addition to the Notification, the Registration Statement
or the Prospectus in order to make the statements therein not misleading
in any material respect. If at any time the Commission shall issue any
order suspending the effectiveness of the Registration Statement or an
order pursuant to Section 8(e) of the Investment Company Act, the Fund
will make every reasonable effort to obtain the withdrawal of such order
at the earliest possible moment.
(c) To furnish to you a signed copy of each of the Notification and
the Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and to furnish to you and each
Underwriter designated by you such number of conformed copies of the
Notification and the Registration Statement as so filed and of each
amendment to it, without exhibits, as you may reasonably request.
(d) To prepare the Prospectus, the form and substance of which shall
be reasonably satisfactory to you, and to file the Prospectus in such form
with the Commission within the applicable period specified in the relevant
subsection of Rule 497(b) under the Securities Act; during the period
specified in Section 5(e) below, not to file any further amendment to the
Registration Statement and not to make any amendment or supplement to the
Prospectus of which you shall not previously have been advised or to which
you shall reasonably object after being so advised; and, during such
period, to prepare and file with the Commission, promptly upon your
reasonable request, any amendment to the Registration Statement or
amendment or supplement to the Prospectus which may be necessary or
advisable in connection with the distribution of the Shares by you, and to
use its best efforts to cause any such amendment to the Registration
Statement to become promptly effective.
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(e) Prior to 10:00 A.M., New York City time, on the first business
day after the date of this Agreement and from time to time thereafter for
such period as in the opinion of counsel for the Underwriters a prospectus
is required by law to be delivered in connection with sales by an
Underwriter or a dealer, to furnish in New York City to each Underwriter
and any dealer as many copies of the Prospectus (and of any amendment or
supplement to the Prospectus) as such Underwriter or dealer may reasonably
request.
(f) If during the period specified in Section 5(e), any event shall
occur or condition shall exist as a result of which, in the opinion of
counsel for the Underwriters, it becomes necessary to amend or supplement
the Prospectus in order to make the statements therein, in the light of
the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable
law, forthwith to prepare and file with the Commission an appropriate
amendment or supplement to the Prospectus so that the statements in the
Prospectus, as so amended or supplemented, will not in the light of the
circumstances when it is so delivered, be misleading, or so that the
Prospectus will comply with applicable law, and to furnish to each
Underwriter and to any dealer as many copies thereof as such Underwriter
or dealer may reasonably request.
(g) To use its best efforts to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code").
(h) Prior to any public offering of the Shares, to cooperate with
you and counsel for the Underwriters in connection with the registration
or qualification of the Shares for offer and sale by the several
Underwriters and by dealers under the state securities or Blue Sky laws of
such jurisdictions as you may request, to continue such registration or
qualification in effect so long as required for distribution of the Shares
and to file such consents to service of process or other documents as may
be necessary in order to effect such registration or qualification;
provided, however, that the Fund shall not be required in connection
therewith to qualify as a foreign entity in any jurisdiction in which it
is not now so qualified or to take any action that would subject it to
general consent to service of process or taxation other than as to matters
and transactions relating to the Prospectus, the Registration Statement,
any preliminary prospectus or the offering or sale of the Shares, in any
jurisdiction in which it is not now so subject.
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(i) To mail and make generally available to its stockholders as soon
as practicable an earnings statement covering the twelve-month period
ending September 30, 1999 that shall satisfy the provisions of Section
11(a) of the Securities Act, and to advise you in writing when such
statement has been so made available.
(j) During the period of three years after the date of this
Agreement, to furnish to you as soon as available copies of all reports or
other communications furnished to the record holders of Common Shares or
furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Fund is listed and such
other publicly available information concerning the Fund as you may
reasonably request.
(k) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of its obligations under
this Agreement, including: (i) the fees, disbursements and expenses of the
Fund's counsel and the Fund's accountants in connection with the
registration and delivery of the Shares under the Acts and the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and all other fees
and expenses in connection with the preparation, printing, filing and
distribution of the Notification and the Registration Statement (including
financial statements and exhibits), any preliminary prospectus, the
Prospectus and all amendments and supplements to any of the foregoing,
including the mailing and delivering of copies thereof to the Underwriters
and dealers in the quantities specified herein, (ii) all costs and
expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, (iii)
all costs of printing or producing this Agreement, the Fund Agreements (as
defined in Section 7) and any other agreements or documents in connection
with the offering, purchase, sale or delivery of the Shares, (iv) all
expenses in connection with the registration or qualification of the
Shares for offer and sale under the securities or Blue Sky laws of the
several states and all costs of printing or producing any Preliminary and
Supplemental Blue Sky Memoranda in connection therewith (including the
filing fees and fees and disbursements of counsel for the Underwriters in
connection with such registration or qualification and memoranda relating
thereto), (v) the filing fees and disbursements of counsel for the
Underwriters in connection with the review and clearance of the offering
of the Shares by the National Association of Securities Dealers, Inc.,
(vi) all fees and expenses in connection with the registration of the
Shares under the Exchange Act and
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all costs and expenses incident to the listing of the Shares on the New
York Stock Exchange (the "NYSE"), (vii) the cost of printing certificates
representing the Shares, (viii) the costs and charges of any transfer
agent, registrar and/or depositary, and (ix) all other costs and expenses
incident to the performance of the obligations of the Fund hereunder for
which provision is not otherwise made in this Section 5(k).
(l) To use its best efforts to list, subject to official notice of
issuance, the Shares on the NYSE and to maintain the listing of the Shares
on the NYSE for a period of three years after the date of this Agreement.
(m) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Fund prior
to the Closing Date or any Option Closing Date, as the case may be, and to
satisfy all conditions precedent to the delivery of the Shares.
(n) If the Registration Statement at the time of the effectiveness
of this Agreement does not cover all of the Shares, to file a Rule 462(b)
Registration Statement with the Commission registering the Shares not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time,
on the date of this Agreement and to pay to the Commission the filing fee
for such Rule 462(b) Registration Statement at the time of the filing
thereof or to give irrevocable instructions for the payment of such fee
pursuant to Rule 111(b) under the Securities Act.
SECTION 6. Agreements of the Investment Manager. The Investment
Manager agrees with you and the Fund:
(a) To use reasonable efforts to cause the Fund to comply with each
of its covenants and agreements contained in Section 5 hereof.
(b) In the event the transactions contemplated hereunder are not
consummated, to pay all amounts which the Fund is obligated to pay under
Section 5(k).
SECTION 7. Representations and Warranties of the Fund. The Fund and the
Investment Manager, jointly and severally, represent and warrant to each
Underwriter that:
(a) The Registration Statement has become effective (other than any
Rule 462(b) Registration Statement to be filed by the Fund after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement
filed after the effectiveness of this Agreement will become effective no
9
later than 10:00 P.M., New York City time, on the date of this Agreement;
and no stop order suspending the effectiveness of the Registration
Statement is in effect, and no proceedings for such purpose are pending
before or threatened by the Commission.
(b) (i) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Fund after the effectiveness of
this Agreement), when it became effective, did not contain and, as
amended, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii)
the Registration Statement (other than any Rule 462(b) Registration
Statement to be filed by the Fund after the effectiveness of this
Agreement) and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Acts and the
Exchange Act, (iii) if the Fund is required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, such
Rule 462(b) Registration Statement and any amendments thereto, when they
become effective (A) will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (B) will
comply in all material respects with the Acts and the Exchange Act and
(iv) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph
do not apply to statements or omissions in the Registration Statement or
the Prospectus based upon information relating to any Underwriter
furnished to the Fund in writing by such Underwriter through you expressly
for use therein.
(c) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 497 under the Securities Act, complied when so
filed in all material respects with the Acts, and did 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 light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph do not apply to statements or omissions in any preliminary
prospectus based upon information relating to any Underwriter furnished to
the Fund in writing by such Underwriter through you expressly for use
therein.
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(d) The Fund has been duly formed, is validly existing as a business
trust in good standing under the laws of the State of Delaware and has the
power and authority to carry on its business as described in the
Prospectus and is duly qualified to do business and in good standing in
each jurisdiction in which the nature of its business requires such
qualification, except where the failure to be so qualified would not have
a material adverse effect on the business, prospects, financial condition
or results of operations of the Fund.
(e) The Fund is registered with the Commission as a non-diversified,
closed-end management investment company under the Investment Company Act
and no order of suspension or revocation of such registration has been
issued or proceedings therefor initiated or, to the knowledge of the Fund
or the Investment Manager, threatened by the Commission. No person is
serving or acting as an officer or trustee of, or investment adviser to,
the Fund except in accordance with the provisions of the Investment
Company Act and the Investment Advisers Act of 1940, as amended, and the
rules and regulations of the Commission thereunder (such act and rules
being collectively referred to as the "Advisers Act").
(f) Each of this Agreement, the Investment Management Agreement
between the Investment Manager and the Fund (the "Management Agreement"),
the Services Agreement between First Data Investor Services Group,
Inc.(the "Administrator") and the Fund (the "Administration Agreement"),
the Global Custodial Services Agreement between Citibank N.A. (the
"Custodian") and the Fund (the "Custodian Agreement"), the Transfer Agency
and Services Agreement between First Data Investor Services Group, Inc.
(the "Transfer and Dividend Disbursing Agent") and the Fund (the "Transfer
Agency Agreement") (this Agreement, the Management Agreement, the
Administration Agreement, the Custodian Agreement and the Transfer Agency
Agreement are referred to herein, collectively, as the "Fund Agreements"),
respectively, has been duly authorized, executed and delivered by the
Fund. Each Fund Agreement, other than this Agreement, assuming due
authorization, execution and delivery by the other parties thereto, and
the Plan constitutes the legal, valid and binding obligation of the Fund,
enforceable against the Fund in accordance with its terms except as such
enforceability may be limited by applicable bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
creditors' rights generally and by general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
11
(g) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
granted or issued by the Fund relating to or entitling any person to
purchase or otherwise to acquire any shares of the capital stock of the
Fund, except as otherwise disclosed in the Registration Statement.
(h) All the outstanding shares of capital stock of the Fund have
been duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights; and the Shares have
been duly authorized and, when issued and delivered to the Underwriters
against payment therefor as provided by this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares
will not be subject to any preemptive or similar rights.
(i) The authorized capital stock of the Fund conforms in all
material respects to the description thereof contained in the Prospectus,
and the Agreement and Declaration of Trust dated as of April 24, 1998 (the
"Declaration of Trust") and by-laws of the Fund, the Fund Agreements and
the Plan conform in all material respects to the descriptions thereof
contained in the Prospectus.
(j) The Declaration of Trust and by-laws of the Fund, the Fund
Agreements and the Plan comply with all applicable provisions of the Acts,
and all approvals of such documents required under the Investment Company
Act by the Fund's shareholders and trustees have been obtained and are in
full force and effect.
(k) The Fund is not in violation of the Declaration of Trust or
by-laws or in default in the performance of any obligation, agreement,
covenant or condition contained in any agreement or instrument that is
material to the Fund to which it is a party or by which it or its property
is bound.
(l) The Fund intends to direct the investment of the proceeds of the
offering described in the Prospectus in such a manner as to comply with
the requirements of Subchapter M of the Code, and the Fund is qualifies as
a regulated investment company under Subchapter M of the Code.
(m) The execution, delivery and performance by the Fund of each Fund
Agreement, the compliance by the Fund with all the provisions thereof and
the consummation of the transactions contemplated thereby will not (i)
require any consent, approval, authorization or other order of,
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or qualification with, any court or governmental body or agency (except
such as may be required under the securities or Blue Sky laws of the
various states), (ii) conflict with or constitute a breach of any of the
terms or provisions of, or a default under, the Declaration of Trust or
by-laws of the Fund or any agreement or instrument that is material to the
Fund to which it is a party or by which it or its property is bound, (iii)
violate or conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental body or agency
having jurisdiction over it or its property or (iv) result in the
suspension, termination or revocation of any Authorization (as defined
below) of the Fund or any other impairment of the rights of the holder of
any such Authorization.
(n) There are no legal or governmental proceedings pending or
threatened to which the Fund is or could be a party or to which any of its
property is or could be subject that are required to be described in the
Registration Statement or the Prospectus and are not so described; nor are
there any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus
or to be filed as exhibits to the Registration Statement that are not so
described or filed as required.
(o) The Fund has such consents, orders (including exemptive orders),
certificates, authorizations and other approvals (each, an
"Authorization") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations
and all courts and other tribunals, as are necessary to own and use its
assets and to conduct its business in the manner described in the
Prospectus, except where the failure to have any such Authorization or to
make any such filing or notice would not, singly or in the aggregate, have
a material adverse effect on the business, prospects, financial condition
or results of operations of the Fund. Each such Authorization is valid and
in full force and effect and the Fund is in compliance with all the terms
and conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect thereto;
and no event has occurred (including, without limitation, the receipt of
any notice from any authority or governing body) which allows or, after
notice or lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or results or, after notice or lapse
of time or both, would result in any other impairment of the rights of the
holder of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Fund; except where such failure to
be valid and in full force and effect or to be in compliance, the
occurrence of any such event
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or the presence of any such restriction would not, singly or in the
aggregate, have a material adverse effect on the business, prospects,
financial condition or results of operations of the Fund.
(p) Xxxxx & Young LLP are independent public accountants with
respect to the Fund as required by the Acts.
(q) The statement of assets and liabilities included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), presents fairly the financial position of the Fund as of the
date indicated and such statement has been prepared in accordance with
generally accepted accounting principles.
(r) Since the respective dates as of which information is given in
the Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), (i) there has not occurred any material adverse change or any
development involving a prospective material adverse change in the
condition, financial or otherwise, or the earnings, business, management
or operations of the Fund from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement) and (ii) there have been no transactions entered into by the
Fund which are material to the Fund other than those in the ordinary
course of its business or as described in the Prospectus.
(s) The Fund Agreements (other than this Agreement) and the Plan are
in full force and effect and neither the Fund nor, to the Fund's
knowledge, any other party to any such agreement is in default thereunder
and, to the knowledge of the Fund and the Investment Manager, no event has
occurred which with the passage of time or the giving of notice or both
would constitute a default thereunder. The Fund is not currently in breach
of, or in default under, any other written agreement or instrument to
which it or its property is bound or affected.
(t) The Shares and any shares of Common Shares outstanding prior to
the issuance of the Shares have been approved for listing on the NYSE,
subject to official notice of issuance.
(u) There are no material restrictions, limitations or regulations
with respect to the ability of the Fund to invest its assets as described
in the Prospectus, other than as described therein.
14
(v) Any advertisement used with the written consent of the Fund in
the public offering of the Shares (an "Omitting Prospectus") does not
contain an untrue statement of a material fact.
SECTION 8. Representations and Warranties Relating to the Investment
Manager. The Investment Manager represents and warrants to each Underwriter
that:
(a) The Investment Manager has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State of
Delaware, has the corporate power and authority to carry on its business
as described in the Prospectus and is duly qualified to transact business
and is in good standing in each jurisdiction in which the nature of its
business requires such qualification, except where failure to be so
qualified would not have a material adverse effect on the Investment
Manager.
(b) The Investment Manager is duly registered as an investment
adviser under the Advisers Act, and is not prohibited by the Investment
Advisers Act of 1940 or the Investment Company Act from acting under the
Management Agreement as an investment adviser to the Fund as contemplated
by the Prospectus, and no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated or, to the
knowledge of the Investment Manager, threatened by the Commission.
(c) Each of this Agreement and the Management Agreement has been
duly authorized, executed and delivered by the Investment Manager and
complies with all applicable provisions of the Investment Company Act and
the Investment Advisers Act. The Management Agreement, assuming due
authorization, execution and delivery by the other parties thereto,
constitutes the legal, valid and binding obligation of the Investment
Manager, enforceable against the Investment Manager in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or similar laws
affecting creditors' rights generally and by general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
(d) The execution and delivery by the Investment Manager of, and the
performance by the Investment Manager of its obligations under, this
Agreement and the Management Agreement do not and will not contravene any
provision of applicable law or the certificate of
15
incorporation or by-laws of the Investment Manager or any agreement or
other instrument binding upon the Investment Manager that is material to
the Investment Manager, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Investment
Manager. No consent, approval, authorization, or other order of or
qualification with, any court or governmental body or agency,
self-regulatory agency or other tribunal is required for the performance
by the Investment Manager of its obligations under this Agreement or the
Management Agreement except such as have been obtained and as may be
required by the Acts, the Exchange Act or the securities or Blue Sky laws
of the various states in connection with the offer and sale of the Shares.
(e) There are no legal or governmental proceedings pending or
threatened, to which the Investment Manager is or could be a party or is
or could be subject that are required to be described in the Registration
Statement or the Prospectus and are not so described.
(f) The Investment Manager has such Authorizations of, and has made
all filings with and notices to, all governmental or regulatory
authorities and self-regulatory organizations and all courts and other
tribunals, as are necessary to own and use its assets and to conduct its
business in the manner described in the Prospectus, except where the
failure to have any such Authorization or to make any such filing or
notice would not, singly or in the aggregate, have a material adverse
effect on the business, prospects, financial condition or results of
operations of the Investment Manager. Each such Authorization is valid and
in full force and effect and the Investment Manager is in compliance with
all the terms and conditions thereof and with the rules and regulations of
the authorities and governing bodies having jurisdiction with respect
thereto; and no event has occurred (including, without limitation, the
receipt of any notice from any authority or governing body) which allows
or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after
notice or lapse of time or both, would result in any other impairment of
the rights of the holder of any such Authorization; and such
Authorizations contain no restrictions that are burdensome to the
Investment Manager; except where such failure to be valid and in full
force and effect or to be in compliance, the occurrence of any such event
or the presence of any such restriction would not, singly or in the
aggregate, have a material adverse effect on the business, prospects,
financial condition or results of operations of the Investment Manager.
16
(g) The Management Agreement is in full force and effect and neither
the Investment Manager nor, to the Investment Manager's knowledge, the
Fund is in default thereunder and, to the knowledge of the Investment
Manager, no event has occurred which with the passage of time or the
giving of notice or both would constitute a default under such document.
(h) All information furnished by the Investment Manager for use in
the Registration Statement and Prospectus, including, without limitation,
the description of the Investment Manager, does not, and on the Closing
Date will not, contain any untrue statement of a material fact or omit to
state any material fact necessary to make such information not misleading.
(i) Since the respective dates as of which information is given in
the Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), there has not occurred any material adverse change or any
development involving a prospective material adverse change in the
condition, financial or otherwise, or the earnings, business, management
or operations of the Investment Manager from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto subsequent
to the date of this Agreement).
SECTION 9. Indemnification. (a) Each of the Fund and the Investment
Manager, jointly and severally, agree to indemnify and hold harmless each
Underwriter, its directors, its officers and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages, liabilities and judgments (including, without
limitation, any legal or other expenses incurred in connection with
investigating or defending any matter, including any action, that could
give rise to any such losses, claims, damages, liabilities or judgments)
caused by any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment thereto),
the Prospectus (or any amendment or supplement thereto), any Omitting
Prospectus or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to any Underwriter
furnished in writing to the Fund by such Underwriter through you expressly
for use therein; provided that the foregoing indemnity agreement with
respect to any Omitting Prospectus or preliminary
17
prospectus shall not inure to the benefit of any Underwriter who failed to
deliver the Prospectus, as then amended or supplemented (so long as the
Prospectus and any such amendment or supplement was provided by the Fund
to the several Underwriters in the requisite quantity and on a timely
basis to permit proper delivery on or prior to the Closing Date) to the
person asserting any losses, claims, damages, liabilities or judgments
caused by any untrue statement or alleged untrue statement of a material
fact contained in such Omitting Prospectus or preliminary prospectus, or
caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, if such material misstatement or omission or
alleged material misstatement or omission was cured in the Prospectus, as
so amended or supplemented, and such Prospectus was required by law to be
delivered at or prior to the written confirmation of sale to such person;
provided further, that the Investment Manager will be required to
indemnify and hold harmless any indemnified party pursuant to this
paragraph only to the extent that the Fund fails to indemnify and hold
harmless such indemnified party pursuant to this paragraph.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Fund and the Investment Manager, their respective
trustees or directors, and each officer of the Fund who signs the
Registration Statement and each person, if any, who controls the Fund or
the Investment Manager within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, to the same extent as the foregoing
indemnity from the Fund and the Investment Manager to such Underwriter but
only with reference to information relating to such Underwriter furnished
in writing to the Fund by such Underwriter through you expressly for use
in the Registration Statement (or any amendment thereto), the Prospectus
(or any amendment or supplement thereto), any Omitting Prospectus or any
preliminary prospectus.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 9(a) or 9(b)
(the "indemnified party"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying
party") in writing and the indemnifying party shall assume the defense of
such action, including the employment of counsel reasonably satisfactory
to the indemnified party and the payment of all fees and expenses of such
counsel, as incurred (except that in the case of any action in respect of
which indemnity may be sought pursuant to both Sections 9(a) and 9(b), the
Underwriter shall not be required to assume the defense of such action
pursuant to this Section 9(c), but may employ separate counsel and
participate in the defense thereof, but the fees and expenses of such
counsel, except as provided below, shall be at the expense of such
Underwriter). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense
thereof, but the fees and
18
expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying
party shall have failed to assume the defense of such action or employ
counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include
both the indemnified party and the indemnifying party, and the indemnified
party shall have been advised by such counsel that there may be one or
more legal defenses available to it which are different from or additional
to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such
action on behalf of the indemnified party). In any such case, the
indemnifying party shall not, in connection with any one action or
separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred.
In the case of any such separate firm for the Underwriters and such
control persons of Underwriters, such firm shall be designated in writing
by Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. In the case of any
such separate firm for the Fund, and such trustees, officers and control
persons of the Fund, such firm shall be designated in writing by the Fund.
In the case of any such separate firm for the Investment Manager, and such
directors and control persons of the Investment Manager, such firm shall
be designated in writing by the Investment Manager. The indemnifying party
shall indemnify and hold harmless the indemnified party from and against
any and all losses, claims, damages, liabilities and judgments by reason
of any settlement of any action (i) effected with its written consent or
(ii) effected without its written consent if the settlement is entered
into more than twenty business days after the indemnifying party shall
have received a request from the indemnified party for reimbursement for
the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the indemnifying party) and, prior to the date of
such settlement, the indemnifying party shall have failed to comply with
such reimbursement request. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any
pending or threatened action in respect of which the indemnified party is
or could have been a party and indemnity or contribution may be or could
have been sought hereunder by the indemnified party, unless such
settlement, compromise or judgment (i) includes an unconditional release
of the indemnified party from all liability on claims that are or could
have been the subject matter of such action and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act,
by or on behalf of the indemnified party.
19
(d) To the extent the indemnification provided for in this Section 9
is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages, liabilities or judgments referred to therein,
then each 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 and
judgments (i) in such proportion as is appropriate to reflect the benefits
received by the Fund and the Investment Manager on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) if
the allocation provided by clause 9(d)(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 Investment Manager on the one hand and
the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The
relative benefits received by the Fund or the Investment Manager shall be
deemed to equal the aggregate public offering price of the Shares. The
benefits received by the Underwriters shall be deemed to equal the product
of $0.50 times the aggregate number of Shares purchased by the
Underwriters hereunder. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Fund or the Investment Manager on the one hand or 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. The Investment Manager agrees to pay or cause to be paid any
amounts that are payable by the Fund pursuant to this paragraph to the
extent that the Fund fails to make all contributions required to be made
by the Fund pursuant to this paragraph.
The Fund, the Investment Manager and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section
9(d) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages, liabilities or judgments referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any
action, that could have given rise to such losses, claims, damages,
liabilities or judgments. 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 at which the Shares underwritten by it
and distributed to the public were offered to the
20
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 Securities
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(d) are several in proportion to the
respective number of Shares purchased by each of the Underwriters
hereunder and not joint.
(e) The indemnity and contribution provisions contained in this
Section 9 and the representations and warranties of the Fund and the
Investment Manager contained in this Agreement shall remain operative and
in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter,
its officers or directors or any person controlling any Underwriter, the
Investment Manager, its officers or directors or any person controlling
the Investment Manager or the Fund, its trustees or directors or any
person controlling the Fund and (iii) acceptance of and payment for any of
the Shares.
(f) The remedies provided for in this Section 9 are not exclusive
and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
SECTION 10. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Fund and the
Investment Manager contained in this Agreement shall be true and correct
on the Closing Date with the same force and effect as if made on and as of
the Closing Date.
(b) If the Fund is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York
City time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c) You shall have received on the Closing Date a certificate dated
the Closing Date, signed by X. Xxxxxxx Xxxxxxx and Xxxxxx Xxxxx, in their
capacities as the President and Vice-President of the Fund,
21
confirming the matters set forth in Sections 7(r), 10(a) and 10(b) and
that the Fund has complied with all of the agreements and satisfied all of
the conditions herein contained and required to be complied with or
satisfied by the Fund on or prior to the Closing Date.
(d) You shall have received on the Closing Date a certificate dated
the Closing Date, signed by X. Xxxxxxx Xxxxxxx and Xxxxxx Xxxxx, in their
capacities as the President and Chief Operating Officer of the Investment
Manager, confirming the matters set forth in Sections 8(j), 10(a) and
10(b) and that the Investment Manager has complied with all of the
agreements and satisfied all of the conditions herein contained and
required to be complied with or satisfied by the Investment Manager on or
prior to the Closing Date.
(e) Since the respective dates as of which information is given in
the Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), (i) there shall not have occurred any change or any
development involving a prospective change in the condition, financial or
otherwise, or the earnings, business, management or operations of the Fund
or the Investment Manager, from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date
of this Agreement) and (ii) there have been no transactions entered into
by the Fund or the Investment Manager which are material to the Fund or
the Investment Manager other than those in the ordinary course of their
business or as described in the Prospectus, the effect of which, in any
such case described in clause (i) or (ii), in your judgment, is material
and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus.
(f) You shall have received on the Closing Date an opinion
(reasonably satisfactory to you and counsel for the Underwriters), dated
the Closing Date, of Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for
the Fund, to the effect that:
(i) the Fund has been duly formed, is validly existing as a
business trust in good standing under the laws of the State of
Delaware and has the power and authority to carry on its business as
described in the Prospectus;
(ii) the Fund is duly qualified and is in good standing to do
business in each jurisdiction in which the nature of its business
requires such qualification, except where the failure to be so
22
qualified would not have a material adverse effect on the business,
prospects, financial condition or results of operations of the Fund;
(iii) the Fund is registered with the Commission as a
non-diversified, closed-end management investment company under the
Investment Company Act and no order of suspension or revocation of
such registration has been issued or proceedings therefor initiated
or, to the best of counsel's knowledge, threatened by the
Commission;
(iv) each Fund Agreement has been duly authorized, executed
and delivered by the Fund. Each Fund Agreement, other than this
Agreement, assuming due authorization, execution and delivery by the
other parties thereto, and the Plan, constitutes the legal, valid
and binding obligation of the Fund, enforceable against the Fund in
accordance with its terms except as such enforceability may be
limited by applicable bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting creditors'
rights generally and by general principles of equity, regardless of
whether considered in a proceeding in equity or at law;
(v) all the outstanding capital shares of the Fund have been
duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights;
(vi) the Shares have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor as provided
by this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be subject
to any preemptive or similar rights;
(vii) the authorized capital shares of the Fund conforms as to
legal matters to the description thereof contained in the
Prospectus, and the Declaration of Trust and by-laws of the Fund,
conform in all material respects to the descriptions thereof
contained in the Prospectus;
(viii) the Shares have been approved for listing on the NYSE,
subject to official notice of issuance;
23
(ix) the Fund does not require any tax or other rulings to
enable it to qualify as a regulated investment company under
Subchapter M of the Code;
(x) the Registration Statement has become effective under the
Acts, no stop order suspending its effectiveness has been issued and
no proceedings for that purpose are, to the best of such counsel's
knowledge after due inquiry, pending before or contemplated by the
Commission;
(xi) the statements under the captions "Description of Shares"
and "Taxes" in the Prospectus and Item 29 of Part C of the
Registration Statement, insofar as such statements constitute a
summary of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to
such legal matters, documents and proceedings;
(xii) the Fund is not in violation of its Declaration of Trust
or by-laws and, to the best of such counsel's knowledge after due
inquiry, the Fund is not in default in the performance of any
obligation, agreement, covenant or condition contained in any
agreement or instrument that is material to the Fund, to which it is
a party or by which its property is bound;
(xiii) the execution, delivery and performance by the Fund of
each Fund Agreement, the compliance by the Fund with all the
provisions hereof and the consummation of the transactions
contemplated thereby will not (A) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under
the securities or Blue Sky laws of the various states), (B) conflict
with or constitute a breach of any of the terms or provisions of, or
a default under, the Declaration of Trust or by-laws of the Fund or
any agreement or instrument that is material to the Fund to which it
is a party or by which it or its property is bound, (C) violate or
conflict with any applicable law or any rule, regulation, judgment,
order or decree of any court or any governmental body or agency
having jurisdiction over it or its property or (D) result in the
suspension, termination or revocation of any Authorization of the
Fund or any other impairment of the rights of the holder of any such
Authorization;
24
(xiv) such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Fund is or could be a
party or to which its property is or could be subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described, or of any statutes,
regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not so
described or filed as required;
(xv) the Fund has such Authorizations of, and has made all
filings with and notices to, all governmental or regulatory
authorities and self-regulatory organizations and all courts and
other tribunals as are necessary to own and use its assets and to
conduct its business, except where the failure to have any such
Authorization or to make any such filing or notice would not, singly
or in the aggregate, have a material adverse effect on the business,
prospects, financial condition or results of operations of the Fund;
each such Authorization is valid and in full force and effect and
the Fund is in compliance with all the terms and conditions thereof
and with the rules and regulations of the authorities and governing
bodies having jurisdiction with respect thereto; and no event has
occurred (including, without limitation, the receipt of any notice
from any authority or governing body) which allows or, after notice
or lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or results or, after notice or
lapse of time or both, would result in any other impairment of the
rights of the holder of any such Authorization; and such
Authorizations contain no restrictions that are burdensome to the
Fund; and
(xvi) (A) the Registration Statement, the Notification, and
the Prospectus and any supplement or amendment thereto (except for
the financial statements and other financial data included therein
as to which no opinion need be expressed) comply as to form with the
Acts, (B) such counsel has no reason to believe that at the time the
Registration Statement became effective or on the date of this
Agreement, the Registration Statement and the prospectus included
therein (except for the financial statements and other financial
data as to which such counsel need not express any belief) contained
any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and (C) such counsel
25
has no reason to believe that the Prospectus, as amended or
supplemented, if applicable (except for the financial statements and
other financial data, as aforesaid) contains any untrue statement of
a material fact or omits to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
The opinion of Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx LLP described in
Section 10(f) above shall be rendered to you at the request of the Fund and
shall so state therein.
(g) You shall have received on the Closing Date an opinion, dated
the Closing Date, of Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for
the Investment Manager, to the effect that:
(i) the Investment Manager has been duly incorporated, is
validly existing as a corporation in good standing under the laws of
the State of Delaware, has the corporate power and authority to
carry on its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the nature of its business requires such
qualification, except where failure to be so qualified would not
have a material adverse effect on the Investment Manager;
(ii) the Investment Manager is duly registered as an
investment adviser under the Advisers Act and is not prohibited by
the Advisers Act or the Investment Company Act from acting under the
Management Agreement as an investment adviser to the Fund as
contemplated by the Prospectus, and no order of suspension or
revocation of such registration has been issued or proceedings
therefor initiated or, to the knowledge of the Investment Manager,
threatened by the Commission;
(iii) each of this Agreement and the Management Agreement has
been duly authorized, executed and delivered by the Investment
Manager and complies with all applicable provisions of the Acts. The
Management Agreement, assuming due authorization, execution and
delivery by the other parties thereto, constitutes the legal, valid
and binding obligation of the Investment Manager, enforceable
against the Investment Manager in accord ance with its terms, except
as such enforceability may be limited by applicable bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization,
26
moratorium or similar laws affecting creditors' rights generally and
by general principles of equity, regardless of whether considered in
a proceeding in equity or at law;
(iv) the execution and delivery by the Investment Manager of,
and the performance by the Investment Manager of its obligations
under, this Agreement and the Management Agreement do not and will
not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Investment Manager or any agreement
or other instrument binding upon the Investment Manager that is
material to the Investment Manager, or any judgment, order or decree
of any governmental body, agency or court having jurisdiction over
the Investment Manager. No consent, approval, authorization, or
other order of or qualification with, any court or governmental body
or agency, self-regulatory agency or other tribunal is required for
the performance by the Investment Manager of its obligations under
this Agreement or the Management Agreement except such as have been
obtained and as may be required by the Acts, the Exchange Act or the
securities or Blue Sky laws of the various states in connection with
the offer and sale of the Shares;
(v) such counsel does not know of any legal or governmental
proceedings pending or threatened, to which the Investment Manager
is or could be a party or is or could be subject that are required
to be described in the Registration Statement or the Prospectus and
are not so described, or of any statutes, regulations, contracts or
other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement that are not so described or filed as
required;
(vi) the Investment Manager has such Authorizations of, and
has made all filings with and notices to, all governmental or
regulatory authorities and self-regulatory organizations and all
courts and other tribunals, as are necessary to own and use its
assets and to conduct its business in the manner described in the
Prospectus, except where the failure to have any such Authorization
or to make any such filing or notice would not, singly or in the
aggregate, have a material adverse effect on the business,
prospects, financial condition or results of operations of the
Investment Manager. Each such Authorization is valid and in full
force and effect and the Investment Manager is in compliance
27
with all the terms and conditions thereof and with the rules and
regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred
(including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse
of time or both, would allow, revocation, suspension or termination
of any such Authorization or results or, after notice or lapse of
time or both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations
contain no restrictions that are burdensome to the Investment
Manager; and
(vii) the description of the Investment Manager in the
Registration Statement and Prospectus does not contain any untrue
statement of a material fact or omit to state any material fact
necessary to make such the statements therein, in light of the
circumstances under which they were made, not misleading.
(h) You shall have received on the Closing Date an opinion, dated
the Closing Date, of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters,
as to the matters referred to in Sections 10(f)(iv) (but only as to this
Agreement), 10(f)(vi), 10(f)(xi) (but only with respect to the statements
under the caption "Description of Shares" and "Taxes") and 10(f)(xvi).
In giving such opinions with respect to the matters covered by
Section 10(f)(xvi) Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx LLP and Xxxxx Xxxx
& Xxxxxxxx may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification except as specified.
(i) You shall have received on the Closing Date a certificate from a
duly authorized officer of the Custodian certifying that the Global
Custodial Services Agreement is in full force and effect and is the legal,
valid, binding and enforceable obligation of the Custodian, assuming that
such Agreement is a legal, valid, binding and enforceable obligation of
the other party thereto.
(j) You shall have received on the Closing Date a certificate from a
duly authorized officer of the Transfer and Dividend Disbursing Agent,
certifying that the Transfer Agency Agreement is in full force and effect
and is the legal, valid, binding and enforceable obligation of the
28
Transfer and Dividend Disbursing Agent, assuming that such Agreement is a
legal, valid, binding and enforceable obligation of the other party
thereto.
(k) You shall have received on the Closing Date a certificate from a
duly authorized officer of the Administrator certifying that the
Administration Agreement is in full force and effect and is the legal,
valid, binding and enforceable obligation of the Administrator, assuming
that such Agreement is a legal, valid, binding and enforceable obligation
of the other party thereto.
(l) You shall have received, on each of the date hereof and the
Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to you, from Xxxxx & Young
LLP, independent public accountants, containing the information and
statements of the type ordinarily included in accountants' "comfort
letters" to Underwriters regarding the Fund contained in the Registration
Statement and the Prospectus.
(m) All proceedings taken by the Fund and the Investment Manager in
connection with the organization and registration of the Fund and the
Shares under the Acts shall be satisfactory in form and substance to you
and counsel for the Underwriters.
(n) No proceedings shall have been instituted or threatened by the
Commission which would adversely affect the Fund's standing as a
registered investment company under the Investment Company Act or the
standing of the Investment Manager as a registered investment adviser
under the Advisers Act.
(o) The Shares shall have been duly authorized for listing, subject
only to official notice of issuance, on the NYSE.
(p) The Fund and the Investment Manager shall not have failed on or
prior to the Closing Date to perform or comply with any of the agreements
herein contained and required to be performed or complied with by the Fund
and the Investment Manager on or prior to the Closing Date.
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Fund and the Investment Manager, the due authorization and
29
issuance of such Additional Shares and other matters related to the issuance of
such Additional Shares.
SECTION 11. Effectiveness of Agreement and Termination. This
Agreement shall become effective upon the execution and delivery of this
Agreement by the parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Fund if any of the following has occurred:
(i) any outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic conditions or in the financial markets
of the United States or elsewhere that, in your judgment, is material and
adverse and, in your judgment, makes it impracticable to market the Shares on
the terms and in the manner contemplated in the Prospectus, (ii) the suspension
or material limitation of trading in securities or other instruments on the
NYSE, the American Stock Exchange, the Chicago Board of Options Exchange, the
Chicago Mercantile Exchange, the Chicago Board of Trade or the NASDAQ National
Market or limitation on prices for securities or other instruments on any such
exchange or the NASDAQ National Market, (iii) the enactment, publication, decree
or other promulgation of any federal or state statute, regulation, rule or order
of any court or other governmental authority which in your opinion materially
and adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Fund, (iv) the
declaration of a banking moratorium by either federal or New York State
authorities or (v) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States and that, in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
If on the Closing Date or on an Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase the Firm
Shares or Additional Shares, as the case may be, which it has or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Firm Shares or Additional Shares, as the
case may be, to be purchased on such date by all Underwriters, each
non-defaulting Underwriter shall be obligated severally, in the proportion which
the number of Firm Shares set forth opposite its name in Schedule I bears to the
total number of Firm Shares which all the non-defaulting Underwriters have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters
30
agreed but failed or refused to purchase on such date that in no event shall the
number of Shares which any Underwriter has agreed to purchase pursuant to
Section 2 hereof be increased pursuant to this Section 11 by an amount in excess
of one-ninth of such number of Shares without the written consent of such
Underwriter. If on the Closing Date any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares to be purchased by all Underwriters and arrangements
satisfactory to you and the Fund for purchase of such Firm Shares are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter, the Fund and the
Investment Manager. In any 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. If, on an Option Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased on such date, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
such Additional Shares or (ii) purchase not less than the number of Additional
Shares that such non-defaulting Underwriters would have been obligated to
purchase on such date in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of any such Underwriter under this Agreement.
SECTION 12. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Fund, to DLJ High Yield
Bond Fund, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; (ii) if to the Investment
Manager, to DLJ Investment Management Corp., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000; and (iii) if to any Underwriter or to you, to you c/x Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Syndicate Department, or in any case to such other address as the
person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Fund, the Investment Manager and the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Shares, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter, the officers or
directors of any Underwriter, any person controlling any Underwriter, the Fund,
the officers or
31
trustees of the Fund or any person controlling the Fund, the Investment Manager,
the officers or directors of the Investment Manager or any person controlling
the Investment Manager, (ii) acceptance of the Shares and payment for them
hereunder and (iii) termination of this Agreement.
If for any reason the Shares are not delivered by or on behalf of the Fund
as provided herein (other than as a result of any termination of this Agreement
pursuant to Section 11), the Fund agrees to reimburse the several Underwriters
for all out-of-pocket expenses (including the fees and disbursements of counsel)
incurred by them. The Fund also agrees to reimburse the several Underwriters,
their directors and officers and any persons controlling any of the Underwriters
for any and all fees and expenses (including, without limitation, the fees and
disbursements of counsel) incurred by them in connection with enforcing their
rights hereunder (including, without limitation, pursuant to Section 9 hereof).
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Fund, the Investment Manager,
the Underwriters, the Underwriters' directors and officers, any controlling
persons referred to herein, the Fund's and the Investment Manager's trustees or
directors and the Fund's officers who sign the Registration Statement and their
respective successors and assigns, all as and to the extent provided in this
Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include a
purchaser of any of the Shares from any of the several Underwriters merely
because of such purchase.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
32
Please confirm that the foregoing correctly sets forth the agreement
between the Fund, the Investment Manager and the several Underwriters.
Very truly yours,
DLJ HIGH YIELD BOND FUND
/s/ Xxxxxx Xxxxx
By: ---------------------------------
Title: Vice President
DLJ INVESTMENT MANAGEMENT CORP.
/s/ Xxxxxx Xxxxx
By: ---------------------------------
Title: Chief Operating Officer
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
ADVEST, INC.
FAC/EQUITIES
XXXXXXXXXX & CO. INC.
FIRST OF MICHIGAN CORPORATION
GRUNTAL & CO., L.L.C.
INTERSTATE/XXXXXXX XXXX CORPORATION
XXXXXX XXXXXXXXXX XXXXX INC.
XXXXXXXX, LEMON & CO. INCORPORATED
SANDS BROTHERS & CO. LTD.
SUTRO & CO. INCORPORATED
XXXXXX XXXXXXX INCORPORATED
Acting severally on behalf of themselves and the
several Underwriters named in Schedule I
hereto
By: XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
/s/ Xxxxx Xxx
By: -----------------------------
Title: Managing Director
33
SCHEDULE I
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------------
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation 2,159,100
Advest, Inc. 2,159,090
FAC/Equities 2,159,090
Xxxxxxxxxx & Co. Inc. 2,159,090
First of Michigan Corporation 2,159,090
Gruntal & Co., L.L.C. 2,159,090
Interstate/Xxxxxxx Xxxx Corporation 2,150,090
Xxxxxx Xxxxxxxxxx Xxxxx Inc. 2,159,090
Xxxxxxxx, Lemon & Company Incorporated 2,159,090
Sands Brothers & Co. Ltd. 2,159,090
Sutro & Co. Incorporated 2,159,090
Xxxxxx Xxxxxxx Incorporated 2,159,090
ABN AMRO Chicago Corporation 500,000
BT Xxxx.Xxxxx Incorporated 500,000
CIBC Xxxxxxxxxxx Corp. 500,000
X.X. Xxxxxxx & Sons, Inc. 500,000
ING Baring Xxxxxx Xxxx LLC 500,000
Lazard Freres & Co. LLC 500,000
PaineWebber Incorporated 500,000
Xxxxxxxx & Co. Inc. 500,000
Xxxxx, Xxxxxxxx & Xxxx, Inc. 250,000
Xxxxxxx and X. Xxxxxxxxxxxx, Inc. 250,000
Xxxxxx X. Xxxxx & Co. Incorporated 250,000
Barington Capital Group, L.P. 250,000
Xxxxxx X. Xxxx & Company 250,000
Black & Company, Inc. 250,000
X.X. Xxxxxxxx & Co. 250,000
Xxxxxxx Securities Inc. 250,000
Charsworth Securities, Inc. 250,000
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------------
Cleary, Gull, Xxxxxxx & XxXxxxxx Inc. 250,000
Xxxxxxx, Xxxxxx & Co. 250,000
Xxxx Xxxxxxxx Xxxxxxx 250,000
Xxxxxxxx & Xxxxxxxx, Incorporated 250,000
Suntrust Equitable Securities Corporation 250,000
EVEREN Securities, Inc. 250,000
Xxxxxx, Xxxxx Xxxxx, Inc. 250,000
Fifth Third/The Ohio company 250,000
Xxxxxxxxx & Company 250,000
Josephthal & Co. Inc. 250,000
X.X. Xxxx & Associates, Inc. 250,000
Xxxxxxx Global Securities, Inc. 250,000
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated 250,000
Maxus Securities Corp. 250,000
XxXxxxx Capital Corporation 250,000
XxXxxxxx & Company Securities, Inc. 250,000
Xxxxxx Xxxxxx & Company, Inc. 250,000
Xxxxxxx & Company, Inc. 250,000
Noble Investment Co. of Palm Beach 250,000
Xxxxx Capital Markets, Inc. 250,000
Xxxxxx/Xxxxxx Incorporated 250,000
Peacock, Hislop, Xxxxxx & Given 250,000
Pennsylvania Merchant Group 250,000
Xxxxx Xxxxxxx Inc. 250,000
Xxxxx Xxxxxxxxx Incorporated 250,000
The Xxxxxxxx-Xxxxxxxx Company, LLC 250,000
Xxxxx Capital Markets 250,000
Xxxx, Xxxx & Co. 250,000
Xxxxxxx Xxxxxx Xxxxx Inc. 250,000
Xxxxx & Xxxxxxxxxxxx, Inc. 250,000
Xxxxxxxx Inc. 250,000
2
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------------
Sufel, Nicolaus & Company, Incorporated 250,000
Stone & Xxxxxxxxx 250,000
TD Securities 250,000
X.X. Xxxxxxxxx, Towbin 250,000
Xxx Xxxxxx & Company 250,000
-------
Total 40,000,000
==========
3
