[ ] Shares
THE GABELLI EQUITY TRUST INC.
Series C Auction Rate Cumulative Preferred Stock
Liquidation Preference $25,000 Per Share
UNDERWRITING AGREEMENT
[June __], 2002
XXXXXXX XXXXX XXXXXX INC.
GABELLI & COMPANY, INC.
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Ladies and Gentleman:
The Gabelli Equity Trust Inc., a Maryland corporation (the
"Fund"), proposes, upon the terms and conditions set forth herein, to issue
and sell an aggregate of [ ] shares (the "Shares") of its Series C Auction
Rate Cumulative Preferred Stock, liquidation preference $25,000 per share,
$.001 par value per share (the "Series C Preferred"), to the several
Underwriters named in Schedule I hereto (the "Underwriters"). The Shares will
be authorized by, and subject to the terms and conditions of, the Articles
Supplementary to be adopted in connection with the issuance of the Shares
(the "Articles Supplementary").
The Fund and its investment adviser, Gabelli Funds, LLC, a New
York limited liability company (the "Adviser"), wish to confirm as follows
their agreement with you in connection with the several purchases of the
Shares by the Underwriters.
The Fund has entered into an investment advisory agreement with
the Adviser, a custodian agreement with Boston Safe Deposit and Trust
Company, a registrar, transfer agency and dividend reinvestment plan with
Equiserve Trust Company, and an auction agency agreement with The Bank of New
York. Such agreements are hereinafter referred to as the "Investment Advisory
Agreement", the "Custodian Agreement", the "Transfer Agency Agreement" and
the "Auction Agency Agreement", respectively. Collectively, the Investment
Advisory Agreement, the Custodian Agreement, the Transfer Agency Agreement
and the Auction Agency Agreement 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
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 rules and regulations of the Securities and Exchange Commission
(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. 333-86554 and
811-4700) under the 1933 Act and the 1940 Act (the "registration statement"),
including a prospectus relating to the Shares, and has filed the registration
statement and prospectus in accordance with the 1933 Act and the 1940 Act.
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. 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 omits 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 form included in
the Registration Statement as supplemented by the addition of the information
contained in the prospectus 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 form included in the registration statement at the time of filing of
amendment No. [ ] to the registration statement with the Commission on [June
, 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 Adviser; it being
understood that the definition of Prepricing Prospectus above shall not
include any Prepricing Prospectus prepared by any Underwriter unless approved
in writing by the Fund or Adviser. The terms "Registration Statement",
"Prospectus" and "Prepricing Prospectus" shall also include any financial
statements incorporated by reference therein.
The Fund has furnished you with copies of such Registration
Statement, each amendment to such Registration Statement filed with the
Commission and each Prepricing Prospectus.
2. AGREEMENTS TO SELL AND PURCHASE. The Fund hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell
to each Underwriter and, upon the basis of the representations, warranties
and agreements of the Fund and the 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 set forth opposite the name of such
Underwriter in Schedule I hereto.
3. TERMS OF PUBLIC OFFERING. The Fund and the Adviser have been
advised by you that the Underwriters propose to make a public offering of
their respective portions 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. Delivery to the
Underwriters of and payment for the Shares shall be made at the office of
Xxxxxxx Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at
[____] A.M., New York City time, on [ , 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.
Certificates for the Shares shall be registered in such names and
in such denominations as you shall request prior to 9:30 A.M., New York City
time, on the second business day preceding the Closing Date. Such
certificates shall be made available to you in New York City for inspection
and packaging not later than 9:30 A.M., New York City time, on the business
day next preceding the Closing Date. The certificates evidencing the Shares
shall be delivered to you on the Closing Date against payment of the purchase
price therefor in immediately available funds.
5. AGREEMENTS OF THE FUND AND THE ADVISER. The Fund and the
Adviser, jointly and severally, agree with the several 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 endeavor to cause the Registration
Statement or such post-effective amendment to become effective under the 1933
Act as soon as possible and will advise you promptly and, if requested by
you, will confirm such advice in writing when the Registration Statement or
such post-effective amendment has become effective.
(b) 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 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, any Prepricing Prospectus or any sales
material (as hereinafter defined), 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 or contemplated initiation of
any proceeding for any such purposes, (iii) of receipt by the Fund, the
Adviser, any affiliate of the Fund or the Adviser or any representative or
attorney of the Fund or the Adviser 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 (if such communication relating to the Fund is received by such
person within three years after the date of this Agreement), the Registration
Statement, the 1940 Act Notification, the Prospectus, any Prepricing
Prospectus, any sales material (as hereinafter defined) (or any amendment or
supplement to any of the foregoing), 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),
business, prospects, properties, net assets or results of operations of the
Fund or the Adviser or of the happening of any event which makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any Prepricing Prospectus or any sales material (as hereinafter
defined) (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, the Prospectus, any Prepricing Prospectus or any sales materials
(as herein defined) (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 light of the circumstances under which they were
made, not misleading or of the necessity to amend or supplement the
Registration Statement, the Prospectus, any Prepricing Prospectus or any
sales material (as herein defined) (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 (as hereinafter defined) (or any amendment or
supplement to any of the foregoing) or suspending the qualification 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, three signed
copies of the registration statement and the 1940 Act Notification 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 additional copies of the registration
statement and of each amendment thereto, but without exhibits, as you may
request.
(d) 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 (as hereinafter defined) of which
you shall not previously have been advised or to which you shall 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 any Underwriter or 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 the 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 several Underwriters and by dealers, prior to the date of
the Prospectus, of each Prepricing Prospectus so furnished by the Fund.
(f) As soon after the execution and delivery of this Agreement as
possible 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 by any Underwriter or dealer, the Fund
will expeditiously deliver to each Underwriter and each dealer, without
charge, as many copies of the Prospectus (and of any amendments or
supplements thereto) as you may 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 several
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 law to be delivered in
connection with sales by any Underwriter or dealer. 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 supplemented) or
should be set forth therein in order to make the statements therein, 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 expeditiously furnish to the Underwriters and dealers,
without charge, a reasonable number of copies thereof. In the event that the
Fund and you agree that the Registration Statement or the Prospectus is to be
amended or supplemented, the Fund, if requested by you, will promptly issue a
press release announcing or disclosing the matters to be covered by the
proposed amendment or supplement.
(g) The Fund and the Adviser will cooperate with you and with
counsel for the Underwriters in connection with the registration or
qualification, if necessary, 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, if any, necessary or appropriate in
order to effect such registration or qualification.
(h) The Fund will make generally available to its security
holders an earnings statement, which need not be audited, covering a
twelve-month period ending not later than 15 months after the effective date
of the Registration Statement, as soon as practicable after the end of such
period, which earnings statement shall satisfy 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 five years hereafter, 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 you may
request.
(j) If this Agreement shall terminate or shall be terminated
after execution pursuant to any provisions hereof (otherwise than pursuant to
the second paragraph of Section 11 hereof or by notice given by you
terminating this Agreement pursuant to Section 11 or Section 12 hereof) or if
this Agreement shall be terminated by the Underwriters because of any failure
or refusal on the part of the Fund or the Adviser to comply with the terms or
fulfill any of the conditions of this Agreement required to be complied with
or fulfilled by them, the Fund or, in the case of a failure or refusal by the
Fund, the Adviser, agrees to reimburse you for all out-of-pocket expenses
(including fees and expenses of counsel for the Underwriters) incurred by you
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) The Fund will timely file the requisite copies of the
Prospectus with the Commission pursuant to Rule 497(c) or Rule 497(h) of the
1933 Act Rules and Regulations, whichever is applicable or, if applicable,
will timely file the certification permitted by Rule 497(j) of the 1933 Act
Rules and Regulations and will advise you of the time and manner of such
filing.
(m) Except as provided in this Agreement and except to the extent
any hedging activities disclosed in the Prospectus may be considered senior
securities, the Fund will not sell, contract to sell, or otherwise dispose of
any senior securities of the Fund, or grant any options or warrants to
purchase senior securities of the Fund, for a period of 180 days after the
date of the Prospectus, without the prior written consent of Xxxxxxx Xxxxx
Xxxxxx Inc.
(n) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, neither the Fund nor the Adviser has taken, nor
will it 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; it being understood that the Underwriters include
certain affiliates of the Adviser and that stabilization or other activity by
you on behalf of the Underwriters shall not be deemed to be violative of this
representation.
(o) The Fund will use its best efforts to cause the Series C
Preferred, prior to the Closing Date, to be assigned a rating of Aaa by
Xxxxx'x Investors Service, Inc. ("Moody's") and AAA by Standard and Poor's
Rating Services ("S&P", and together with Xxxxx'x, the "Rating Agencies").
(p) The Fund and the Adviser will use their best efforts to
perform all of the agreements required of them and discharge all conditions
to closing as set forth in this Agreement.
(q) The Fund will furnish to you, on the date on which delivery
is made to the Rating Agencies, the Accountant's Confirmation (as defined in
the Articles Supplementary) corresponding to the Series C Preferred Basic
Maintenance Report (as defined in the Articles Supplementary) for the first
Valuation Date (as defined in the Articles Supplementary) following the
Closing Date.
6. REPRESENTATIONS AND WARRANTIES OF THE FUND AND THE ADVISER.
The Fund and the Adviser, jointly and severally, represent and warrant to
each Underwriter that:
(a) 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
Regulations, complied when so filed in all material respects with the
provisions of the 1933 Act, the 1940 Act and the Rules and Regulations. The
Commission has not issued any order preventing or suspending the use of any
Prepricing Prospectus.
(b) 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 amendment
or supplement 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 not misleading, except that this
representation and warranty does not apply to statements in or omissions from
the Registration Statement or the Prospectus (or any amendment or supplement
thereto) made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Fund in writing by or on behalf of any
Underwriter through you expressly for use therein.
(c) All the outstanding shares of capital stock of the Fund have
been duly authorized and validly issued, 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, fully
paid and nonassessable and free of any preemptive or similar rights and will
conform to the description thereof in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them). The capital
stock of the Fund conforms to the description thereof in the Registration
Statement and the Prospectus (and any amendment or supplement to either of
them).
(d) The Fund is a corporation duly organized and validly existing
in good standing 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 effect on
the condition (financial or other), business, prospects, properties, net
assets or results of operations of the Fund. The Fund has no subsidiaries.
(e) 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.
(f) The Fund is not in violation of its articles of incorporation
or by-laws, 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 material 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 contract required to be included as an exhibit to the
Registration Statement (each, a "Material Fund Agreement").
(g) 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 (A) 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 prior to the date
hereof and such as may be required for compliance with the state securities
or blue sky laws of various jurisdictions 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 articles
of incorporation, including the Articles Supplementary, or by-laws, or other
organizational documents, of the Fund or (B) 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 Fund 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 filing or judgment, injunction, order
or decree applicable to the Fund 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 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.
(h) The accountants, PriceWaterhouseCoopers LLP, who have audited
and certified or shall audit and certify the financial statements included or
incorporated by reference in the Registration Statement and the Prospectus
(or any amendment or supplement to either of them) are independent public
accountants as required by the 1933 Act, the 1940 Act and the Rules and
Regulations.
(i) 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 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) are
accurately presented and prepared on a basis consistent with such financial
statements and the books and records of the Fund.
(j) 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 constitute
the valid and legally binding agreements of the Fund, enforceable against the
Fund in accordance with their terms, except as rights to indemnity and
contribution hereunder and thereunder may be limited by federal or state
securities laws.
(k) Except as disclosed in the Registration Statement and the
Prospectus (and 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 (and any amendment or supplement to
either of them), the Fund has not incurred any liability or obligation,
direct or contingent, or entered into any transaction, not in the ordinary
course of business, 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
prospective material adverse change, in the condition (financial or other),
business, prospects, properties, net assets or results of operations of the
Fund, whether or not arising in the ordinary course of business, it being
understood that a change of up to 15% of the aggregate market value of the
Fund's assets shall not cause this representation to be untrue.
(l) The Fund has not distributed and, prior to the later to occur
of (i) the Closing Date and (ii) 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.
(m) 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; 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, 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.
(n) The Fund maintains and will maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization and with the investment policies and restrictions of the Fund
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");
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles, to calculate net asset value, 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; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(o) To the Fund's knowledge, except as disclosed in the
Prospectus, neither the Fund nor any employee or agent of the Fund has made
any payment of funds of the Fund or received or retained any funds, which
payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
(p) The Fund has filed all tax returns required to be filed,
which returns are complete and correct, 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.
(q) No holder of any security of the Fund has any right to
require registration of any shares of capital stock or any other security of
the Fund because of the filing of the Registration Statement or consummation
of the transactions contemplated by this Agreement.
(r) The Fund, subject to the Registration Statement having been
declared effective and the filing of the Prospectus under Rule 497 under the
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.
(s) The conduct by the Fund of its business (as described in the
Prospectus) does not require it to be the owner, possessor or licensee of any
patents, patent licenses, trademarks, service marks or trade names which it
does not own, possess or license.
(t) 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 thereof and any amendment or supplement thereto, conformed in all
material respects with all applicable provisions of the 1940 Act and the
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 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").
(u) 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.
(v) 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 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 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.
(w) All advertising, sales literature or other promotional
material (including "prospectus wrappers," "broker kits," "road show slides"
and "road show scripts"), whether in printed or electronic form, authorized
in writing by or prepared by the Fund or the Adviser for use in connection
with the offering and sale of the Shares (collectively, "sales material")
complied and comply in all material respects with the applicable requirements
of the 1933 Act, the 1940 Act, the Rules and Regulations and the rules and
interpretations of the NASD and no such sales material contained or contains
an untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(x) Each of the Fund Agreements and the Fund's and the Adviser's
obligations under this Agreement and each of the Fund Agreements comply in
all material respects with all applicable provisions of the 1940 Act, the
1940 Act Rules and Regulations, the Advisers Act the Advisers Act Rules and
Regulations.
(y) At all times since its inception, as required by Subchapter M
of the Code, the Fund has complied with the requirements to qualify as a
regulated investment company under the Code.
(z) 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.
7. REPRESENTATIONS AND WARRANTIES OF THE ADVISER. The Adviser
represents and warrants to each Underwriter as follows:
(a) The Adviser is a limited liability company duly organized and
validly existing in good standing under the laws of the State of New York,
with full limited liability company power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or supplement to
either of them), 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 to qualify does not
have a material adverse effect on the condition (financial or other),
business, prospects, properties, net assets or results of operations of the
Adviser and its subsidiaries, taken as a whole, or on the ability of the
Adviser to perform its obligations under this Agreement and the Investment
Advisory Agreement.
(b) The 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 Investment Advisory
Agreement for the Fund as contemplated by the Prospectus (or any amendment or
supplement thereto). There does not exist any proceeding or any facts or
circumstances the existence of which could lead to any proceeding which might
adversely affect the registration of the Adviser with the Commission.
(c) There are no legal or governmental proceedings pending or, to
the knowledge of the Adviser, threatened against the Adviser, or to which the
Adviser 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
may reasonably be expected to involve a prospective material adverse change,
in the condition (financial or other), business, prospects, properties, net
assets or results of operations of the Adviser and its subsidiaries, taken as
a whole, or on the ability of the Adviser to perform its obligations under
this Agreement and the Investment Advisory Agreement.
(d) Neither the execution, delivery or performance of this
Agreement or the Investment Advisory Agreement by the Adviser, nor the
consummation by the Adviser of the transactions contemplated hereby or
thereby (A) requires the 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 or
conflicts or will conflict with or constitutes or will constitute a breach of
or a default under the certificate of incorporation or by-laws, or other
organizational documents of the Adviser or (B) 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 Adviser 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 filing or judgment, injunction,
order or decree applicable to the 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 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 Adviser is subject. The Adviser is not
subject to any order of any court or of any arbitrator, governmental
authority or administrative agency except for (a) an Order of the Securities
and Exchange Commission, dated August 17, 1988 and (b) an Order of the
Federal Communications Commission, dated August 21, 1992.
(e) The execution and delivery of, and the performance by the
Adviser of its obligations under, this Agreement and the Investment Advisory
Agreement have been duly and validly authorized by the Adviser, and this
Agreement and the Investment Advisory Agreement have been duly executed and
delivered by the Adviser and each constitutes the valid and legally binding
agreement of the Adviser, enforceable against the Adviser in accordance with
its terms except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws.
(f) The 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 Investment Advisory Agreement.
(g) The description of the Adviser in the Registration Statement
and the Prospectus (and any amendment or supplement thereto) complied and
comply in all material respects with the provisions the 1933 Act, the 1940
Act, the Advisers Act, the Rules and Regulations and the Advisers Act Rules
and Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in 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), the Adviser has not incurred any liability or obligation,
direct or contingent, or entered into any transaction, not in the ordinary
course of business, that is material to the Adviser and its subsidiaries,
taken as a whole, and that is required to be disclosed in the Registration
Statement or in the Prospectus and there has not been any material adverse
change, or any development involving or which may reasonably be expected to
involve, a prospective material adverse change, in the condition (financial
or other), business, prospects, properties, net assets or results of
operations of the Adviser and its subsidiaries, taken as a whole, whether or
not arising in the ordinary course of business, or which, in each case, could
have a material adverse effect on the ability of the Adviser to perform its
obligations under this Agreement and the Investment Advisory Agreement.
(i) The Adviser 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); the
Adviser 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 Adviser under any such
permit; and, 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 Adviser.
(j) Except as stated in this Agreement and in the Prospectus (and
in any amendment or supplement thereto), the 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 Adviser is not aware of any such action taken
or to be taken by any affiliates of the Adviser; it being understood that the
Underwriters include certain affiliates of the Adviser and that stabilization
or other activity by you shall not be deemed to be violative of this
representation.
(k) Xxxxx X. Xxxxxxx is the validly appointed Chief Investment
Officer of the Adviser and the portfolio manager of the Fund; Xx. Xxxxxxx has
not given notice nor made known an intention to give notice of termination of
his employment and the Adviser knows of no reason why Xx. Xxxxxxx should be
unable to serve as portfolio manager to the Fund.
(l) In the event that the Fund or the Adviser makes available any
promotional materials intended for use only by qualified broker-dealers and
registered representatives thereof by means of a proprietary Internet web
site administered by such party or similar electronic means, the Fund or the
Adviser will install and maintain pre-qualification and password- protection
or similar procedures which are reasonably designed to restrict access to
such promotional materials by persons other than qualified broker-dealers and
representatives thereof.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Fund and the Adviser, jointly and severally, agree to
indemnify and hold harmless each of you and each other Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act 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 the
Registration Statement, the Prospectus, any Prepricing Prospectus, any sales
material (or any amendment or supplement to any of the foregoing), 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 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 therefrom in reliance upon and in conformity with the
information relating to such Underwriter 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) 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 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 the Prospectus, provided that the Fund has
delivered the Prospectus to the several Underwriters in requisite quantity on
a timely basis to permit such delivery or sending. The foregoing indemnity
agreement shall be in addition to any liability which the Fund or the 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 or the Adviser, such Underwriter or
such controlling person shall promptly notify the Fund or the Adviser, and
the Fund or the Adviser shall assume the defense thereof, including the
employment of counsel and payment of all 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 or
the Adviser has agreed in writing to pay such fees and expenses, (ii) the
Fund and the Adviser 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 or the Adviser and such Underwriter or such controlling person
shall have been advised by its counsel that representation of such
indemnified party and the Fund or the 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
Adviser 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 Adviser 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 Xxxxxxx
Xxxxx Xxxxxx Inc., and that all such fees and expenses shall be reimbursed as
they are incurred. The Fund and the Adviser shall not be liable for any
settlement of any such action, suit or proceeding effected without its
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 Adviser 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 Adviser, their directors, any
officers who sign the Registration Statement, and any person who controls the
Fund or the Adviser 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 Adviser to each Underwriter, but only with respect to
information relating to such Underwriter furnished in writing by or on behalf
of such Underwriter through you 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 or the Adviser, any of their directors, 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 Adviser by paragraph (b) above
(except that if the Fund or the 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 and the Adviser, their directors, 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 8 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 Adviser 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 Adviser 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 Adviser 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 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 Adviser 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 Adviser 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 Adviser and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 8
were determined by a pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) 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 8, 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 8 are several in proportion to the
respective numbers of Shares set forth opposite their names in Schedule I
hereto 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 8 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 8 and the representations and warranties of the Fund and the Adviser
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, the Adviser,
their directors or officers, or any person controlling the Fund or the
Adviser, (ii) acceptance of any Shares and payment therefor hereunder, and
(iii) any termination of this Agreement. A successor to any Underwriter or
any person controlling any Underwriter, or to the Fund, the Adviser, their
directors or officers, or any person controlling the Fund or the Adviser,
shall be entitled to the benefits of the indemnity, contribution, and
reimbursement agreements contained in this Section 8.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
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 you, 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 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 satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change (other than a change of up to 15% of
the aggregate market value of the Fund's assets) or any development involving
a prospective change, in or affecting the condition (financial or other),
business, prospects, properties, net assets, or results of operations of the
Fund or the Adviser and its subsidiaries, taken as a whole, not contemplated
by the Prospectus, which in your opinion would materially, adversely affect
the market for the Shares , or (ii) any event or development relating to or
involving the Fund or the Adviser or any officer or director of the Fund or
the Adviser which makes any statement made in the Prospectus 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
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 not misleading, if amending or
supplementing the Prospectus to reflect such event or development would, in
your opinion materially adversely affect the market for the Shares.
(c) The Fund shall have furnished to you a report showing
compliance with the asset coverage requirements of the 1940 Act and a Series
C Preferred Basic Maintenance Report (as defined in the Articles
Supplementary), 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 the 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.
(d) You shall have received on the Closing Date, an opinion of
Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Fund, dated the
Closing Date and addressed to you, to the effect that:
(i) The Fund 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 property, has operations or conducts business);
(ii) The authorized and outstanding capital stock of the Fund
is as set forth under the caption "Capitalization" in the Prospectus;
and the authorized capital stock of the Fund (including the Series C
Preferred) conforms in all material respects as to legal matters to the
description thereof contained in the Prospectus under the captions
"Description of Capital Stock and Other Securities", "Description of
Series C Preferred" and "The Auction";
(iii) To the extent the due authorization and valid issuance
of the Shares is dependent upon the Fund having the authority to issue
such Shares under Section 8(b)(1)(C) or Section 13(a)(2) of the 1940
Act, based on our review of the Fund's proxy statements dated April 3,
1997 and April 29, 1998 and the results of the meetings of stockholders
referred to therein, the Fund has such authority;
(iv) Such counsel has been orally advised that the
Registration Statement has become effective under the 1933 Act and, to
the best knowledge of such counsel after reasonable inquiry, no stop
order suspending the effectiveness of the Registration Statement or
order pursuant to Section 8(e) of the 1940 Act has been issued and no
proceedings for that purpose are pending before or contemplated by the
Commission; and any required filing of the Prospectus pursuant to Rule
497 has been made in accordance with Rule 497;
(v) Each of this Agreement and the Fund Agreements has been
duly executed and delivered by the Fund and is a valid, legal and
binding agreement of the Fund, enforceable against the Fund in
accordance with its terms, except to the extent that (A) enforcement
hereof and thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, or (ii) general
principles of equity (regardless of whether enforceability is considered
in a proceeding at law or in equity) and (B) enforcement of rights to
indemnity and contribution hereunder and thereunder may be limited by
Federal or state securities laws or principles of public policy;
(vi) Neither the offer, sale or delivery of the Shares, the
execution, delivery or performance of this Agreement and the Fund
Agreements by the Fund, compliance by the Fund with the provisions
hereof or thereof nor consummation by the Fund of the transactions
contemplated hereby or thereby conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under any
Material Fund Agreement, or will result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Fund
under any Material Fund Agreement, nor will any such action result in
any violation of (a) any provision of the New York Business Corporation
Law and those laws, rules and regulations of the State of New York and
the United States of America that, in the experience of such counsel,
are normally applicable to entities such as the Fund and transactions of
the type contemplated by this Agreement, but without having made any
special investigation concerning any other laws, rules or regulations
(collectively, "Applicable Fund Laws"); provided, that the term
"Applicable Fund Laws" does not include (1) the rules and regulations of
the NASD, (2) any federal or state securities or blue sky laws, (3) any
antifraud laws or (4) any law, rule or regulation that may have become
applicable to the Fund as a result of the Underwriters' involvement with
the transactions contemplated hereby or because of any facts
specifically pertaining to the Underwriters, or (b) any judgment, order
or decree of any New York or federal executive, legislative, judicial,
administrative or regulatory body under Applicable Fund Laws and the
NYSE (each, a "Governmental Fund Authority") identified in an officer's
certificate;
(vii) No consent, approval, license, authorization, order or
validation of, or filing, recording or registration with, any
Governmental Fund Authority pursuant to Applicable Fund Laws (each, a
"Governmental Fund Approval") is required for the valid issuance and
sale of the Shares to the Underwriters or the execution, delivery and
performance by the Fund of this Agreement and the Fund Agreements or the
consummation of the transactions contemplated hereby and thereby except
such Governmental Fund Approvals as have been obtained;
(viii) The 1940 Act Notification, the Registration Statement and
the Prospectus and any supplements or amendments thereto (except for the
financial statements and the notes thereto and the schedules and other
financial and statistical data included therein, as to which such
counsel need not express any opinion) comply as to form in all material
respects with the requirements of the 1933 Act, the 1940 Act, the Rules
and Regulations, the 1934 Act and the rules and regulations promulgated
thereunder;
(ix) To the actual knowledge of such counsel after reasonable
inquiry, other than as described or contemplated in the Registration
Statement or Prospectus (or any supplement thereto), there are (A) no
legal or governmental proceedings in the State of New York or, to the
actual knowledge of such counsel, any other state, 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) that are not described as required and (B) 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, as the case may be;
(x) The statements in the Registration Statement, Prospectus
and statement of additional information under the caption "Taxation",
insofar as they refer to statements of law or legal conclusions, are
accurate and present fairly the information required to be shown;
(xi) Each of the Fund Agreements and the Fund's and the
Adviser's obligations under each of this Agreement and the Fund
Agreements comply as to form in all material respects with all
applicable provisions of the 1933 Act, the 1940 Act, the Advisers Act,
the Rules and Regulations and the Advisers Act Rules and Regulations;
(xii) The Fund is duly registered with the Commission under
the 1940 Act as a closed-end non-diversified management investment
company; and the provisions of the Fund's articles of incorporation,
including the Articles Supplementary, and by-laws, and the investment
policies and restrictions described in the Registration Statement and
the Prospectus under the captions "The Fund", "Investment Objectives and
Policies", "Risk Factors and Special Considerations" and "Investment
Restrictions" (in the statement of additional information) comply in all
material respects with the requirements of the 1940 Act, and all action
has been taken by the Fund as is required of the Fund by the 1933 Act
and the 1940 Act and the Rules and Regulations in connection with the
issuance and sale of the Shares to make the public offering and
consummate the sale of the Shares as contemplated by this Agreement;
(xiii) The Fund has all necessary governmental authorizations,
approvals, orders, licenses, certificates, franchises and permits of and
from all governmental regulatory officials and bodies required under
Applicable Fund Law (except where the failure so to have any such
authorizations, approvals, orders, licenses, certificates, franchises or
permits, individually or in the aggregate, would not have a material
adverse effect on the business, properties, operations or financial
condition of the Fund), to own its properties and to conduct business,
as described in the Prospectus;
(xiv) To the actual knowledge of such counsel after reasonable
inquiry, except as described in the Prospectus, there is no holder of
any security of the Fund or any other person who has the right,
contractual or otherwise pursuant to any Material Fund Agreement, to
cause the Fund to sell or otherwise issue to them, or to permit them to
underwrite the sale of, the Shares or the right to have any securities
of the Fund included in the registration statement or the right, as a
result of the filing of the registration statement, to require
registration under the 1933 Act of any securities of the Fund;
(xv) If the Fund operates as described in the Prospectus, the
Fund will qualify as a regulated investment company under the Code; and
(xvi) Such counsel shall also state that they have
participated in conferences with officers and employees of the Fund,
representatives of the independent accountants for the Fund, Maryland
counsel to the Fund, the Underwriters and counsel for the Underwriters
at which the contents of the Registration Statement and the Prospectus
and related matters were discussed and, although they are not passing
upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus except to the limited extent otherwise
covered by paragraphs (ii), (ix), (x) and (xii), and have made no
independent check or verification thereof, on the basis of the
foregoing, no facts have come to their attention that would have led
them to believe that the Registration Statement or any amendment or
supplement thereto, at the time it became effective, contained an untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
contained therein not misleading or that the Prospectus or any amendment
or supplement thereto, as of its issue date and as of the Closing Date,
contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact required to be stated therein or
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading, except that
they express no belief with respect to the financial statements,
schedules and other financial information and statistical data included
therein or excluded therefrom or the exhibits to the Registration
Statement.
(e) You shall have received on the Closing Date, an opinion of
Xxxxx & Stockbridge P.C., Maryland counsel for the Fund, dated the Closing
Date and addressed to you, to the effect that:
(i) The Fund is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Maryland
with full corporate power 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);
(ii) The authorized capital stock of the Fund is as set forth
under the caption "Capitalization" in the Prospectus; and the authorized
capital stock of the Fund conforms in all material respects as to legal
matters to the description thereof contained in the Prospectus under the
caption "Description of Capital Stock and Other Securities";
(iii) 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, fully paid and
nonassessable. The issuance of the Shares will not be subject to
preemptive or other similar rights entitling any person to purchase or
acquire any of the Shares upon the issuance thereof by the Fund which
arise by operation of the laws of the State of Maryland or under the
articles of incorporation or by-laws of the Fund;
(iv) The Shares conform in all material respects to the
description thereof contained in the Prospectus under the caption
"Description of Series C Preferred" and "The Auction";
(v) The form of certificates for the Shares conforms to the
requirements of the Maryland General Corporation Law;
(vi) The Fund has the requisite corporate power and authority
to enter into and execute and deliver this Agreement and to issue, sell
and deliver the Shares to the Underwriters as provided for herein;
(vii) This Agreement has been duly authorized by the Fund.
Neither the offer, sale or delivery of the Shares, the execution,
delivery or performance of this Agreement by the Fund, compliance by the
Fund with the provisions hereof nor consummation by the Fund of the
transactions contemplated hereby conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the
articles of incorporation, including the Articles Supplementary, or
by-laws of the Fund;
(viii) The Fund has full corporate power and to the knowledge
of such counsel, all governmental authorizations, approvals, orders,
licenses, certificates, franchises and permits necessary or required
under the laws of the State of Maryland for the Fund to own its
properties and to conduct its business as it now is being conducted as
described in the Prospectus (except in cases where the failure so to
have any such authorizations, approvals, orders, licenses, certificates,
franchises or permits, individually or in the aggregate, would not have
a material adverse effect on the business, properties, operations or
financial conditions of the Fund); and
(ix) No consent, approval, authorization or other order of, or
registration or filing with, any securities commission, court,
regulatory body, administrative agency or other governmental body,
agency, or official of the State of Maryland is required on the part of
the Fund for the valid issuance and sale of the Shares to the
Underwriters as contemplated by this Agreement, the execution and
delivery by the Fund of this Agreement and the performance by the Fund
of its obligations hereunder or the consummation of the transactions
contemplated hereby by the Fund, except those as may be required under
the securities or blue sky laws of the State of Maryland; it being
understood that such counsel do not express any opinion as to any such
consent, approval, authorization or other order of, or registration or
filing, which may be required as a result of the involvement of any
other parties to this Agreement.
(f) You shall have received on the Closing Date an opinion of
Xxxxx X. XxXxx, general counsel for the Adviser, dated the Closing Date and
addressed to you, to the effect that:
(i) The Fund is not in violation of its articles of
incorporation, including the Articles Supplementary, or by-laws and, to
the actual knowledge of such counsel after reasonable inquiry, is not in
default in the performance of any material obligation, agreement or
condition in any bond, debenture, note or other evidence of
indebtedness, except as may be disclosed in the Prospectus;
(ii) The Fund is not in violation of any Material Fund
Agreement; and
(iii) To the actual knowledge of such counsel after reasonable
inquiry, the Fund is not in violation of (A) any provision of the New
York Business Corporation Law and those laws, rules and regulations of
the State of New York and the United States of America that, in the
experience of such counsel, are normally applicable to entities such as
the Fund and transactions of the type contemplated by this Agreement,
but without having made any special investigation concerning any other
laws, rules or regulations; provided, that such laws, rules and
regulations do not include (1) the rules and regulations of the NASD,
(2) any federal or state securities or blue sky laws other than the 1933
Act, the 1934 Act and the 1940 Act and the rules and regulations
thereunder to the extent not excluded by item (3) below, (3) any
antifraud laws under the 1933 Act or the 1934 Act as they apply to the
Prospectus and the Registration Statement or (4) any law, rule or
regulation that may have become applicable to the Fund as a result of
the Underwriters' involvement with the transactions contemplated by this
Agreement or because of any facts specifically pertaining to the
Underwriters or (B) any order, judgment or decree of any New York or
federal executive, legislative, judicial, administrative or regulatory
body under the laws, rules and regulations referred to in clause (A) of
this paragraph and the NYSE.
(g) You shall have received on the Closing Date an opinion of
Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx LLP, special counsel for the Adviser,
dated the Closing Date and addressed to you, to the effect that:
(i) The Adviser is a limited liability company duly organized
and validly existing in good standing under the laws of the State of New
York with full limited liability company power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus (and any
amendment or supplement to either of them), it being understood that the
opinion with respect to good standing is based solely upon such
counsel's review of a certificate of the Secretary of State and a
telephonic confirmation;
(ii) The 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 Investment
Advisory Agreement for the Fund as contemplated by the Prospectus (or
any amendment or supplement thereto).
(iii) The Adviser has limited liability company power and
authority to enter into this Agreement and the Investment Advisory
Agreement, and this Agreement and the Investment Advisory Agreement have
been duly authorized, executed and delivered by the Adviser and each is
a valid, legal and binding agreement of the Adviser, enforceable against
the Adviser in accordance with its terms except to the extent that (A)
enforcement hereof and thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, or (ii)
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity) and (B) enforcement of
rights to indemnity and contribution hereunder and thereunder may be
limited by Federal or state securities laws or principles of public
policy;
(iv) Neither the execution, delivery or performance of this
Agreement or the Investment Advisory Agreement by the Adviser,
compliance by the Adviser with the provisions hereof or thereof nor
consummation by the Adviser of the transactions contemplated hereby or
thereby conflicts or will conflict with, or constitutes or will
constitute a breach of or default under, the certificate of
incorporation or by-laws, or other organizational documents, of the
Adviser or any contract or agreement to which the Adviser is a party
which has been identified to such counsel by the Adviser as material or
as one which could have an effect on the types of transactions
contemplated by this Agreement (each, an "Material Adviser Agreement"),
or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Adviser under any
Material Adviser Agreement, nor will any such action result in any
violation of any provision of the New York Business Corporation Law and
those laws, rules and regulations of the State of New York and the
United States of America that, in the experience of such counsel, are
normally applicable to entities such as the Adviser and transactions of
the type contemplated by this Agreement, but without having made any
special investigation concerning any other laws, rules or regulations
(collectively, "Applicable Adviser Laws"); provided, that the term
"Applicable Adviser Laws" does not include (1) the rules and regulations
of the NASD, (2) any federal or state securities or blue sky laws, (3)
any antifraud laws or (4) any law, rule or regulation that may have
become applicable to the Adviser as a result of the Underwriters'
involvement with the transactions contemplated hereby or because of any
facts specifically pertaining to the Underwriters;
(v) No consent, approval, license, authorization or validation
of, or filing, recording or registration with, any New York or federal
executive, legislative, judicial, administrative or regulatory body
under Applicable Adviser Laws (each, a "Governmental Adviser Approval")
is required on the part of the Adviser for the execution, delivery and
performance by it of this Agreement and the Investment Advisory
Agreement to which it is a party or the consummation by it of the
transactions contemplated hereby and thereby except such Governmental
Adviser Approvals as have been obtained;
(vi) To the actual knowledge of such counsel after reasonable
inquiry, there are no legal or governmental proceedings pending or
threatened against the Adviser or to which the Adviser or any of its
properties is subject, which 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 which could
reasonably be expected to adversely affect the ability of the Adviser to
perform its obligations under this Agreement or the Investment Advisory
Agreement;
(vii) The obligations of the Adviser under this Agreement and
the Investment Advisory Agreement 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;
(viii) The Adviser has full limited liability company power
and authority, and all necessary governmental authorizations, approvals,
orders, licenses, certificates, franchises and permits of and from all
governmental regulatory officials and bodies required under Applicable
Adviser Law (except where the failure so to have any such
authorizations, approvals, orders, licenses, certificates, franchises or
permits, individually or in the aggregate, would not have a material
adverse effect on the business, properties, operations or financial
condition of the Adviser and its subsidiaries), to own its properties
and to conduct its business, including specifically its business of
acting as investment adviser to registered investment companies and as
otherwise described in the Prospectus, and to perform its obligations
under the Investment Advisory Agreement;
(ix) Such counsel shall also state that such counsel has been
advised by the Adviser that it is not registered or qualified to conduct
its business as a foreign corporation in any jurisdiction and that it
believes there is no such jurisdiction where the nature of its
properties or the conduct of its business requires such registration or
qualification and where the failure to register or qualify would have a
material adverse effect on the operations of the Adviser or on the
ability of the Adviser to perform its obligations under this Agreement
or the Investment Advisory Agreement; and
(x) Such counsel shall also state that they have participated
in conferences with officers and employees of the Adviser and the Fund,
representatives of the independent accountants for the Adviser and the
Fund and the Underwriters and counsel for the Underwriters at which the
contents of the Registration Statement and the Prospectus and related
matters were discussed and, although they are not passing upon, and do
not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Registration Statement or
the Prospectus and have made no independent check or verification
thereof, on the basis of the foregoing, no facts have come to their
attention that would have led them to believe that the Registration
Statement or any amendment or supplement thereto, at the time it became
effective, contained an untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to
make the statements contained therein not misleading or that the
Prospectus or any amendment or supplement thereto, as of its issue date
and as of the Closing Date, contained or contains an untrue statement of
a material fact or omitted or omits to state a material fact required to
be stated therein or necessary to make the statements contained therein,
in light of the circumstances under which they were made, not
misleading, except that they express no belief with respect to the
financial statements, schedules and other financial information and
statistical data included therein or excluded therefrom or the exhibits
to the Registration Statement.
(h) You shall have received on the Closing Date an opinion of
Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Underwriters, dated the Closing
Date and addressed to you, with respect to such matters as you may reasonably
request.
(i) You shall have received letters addressed to you and dated
the date hereof and the Closing Date from PriceWaterhouseCoopers LLP,
independent certified public accountants, substantially in the forms
heretofore approved by you.
(j) (i) No order suspending the effectiveness of the registration
statement or the Registration Statement or prohibiting or suspending the use
of the Prospectus (or any amendment or supplement thereto) or any Prepricing
Prospectus or any sales material shall have been issued and no proceedings
for such purpose or for the purpose of commencing an enforcement action
against the Fund, the Adviser or, with respect to the transactions
contemplated by the Prospectus (or any amendment or supplement thereto) and
this Agreement, any Underwriter, may be pending before or, to the knowledge
of the Fund, the Adviser or any Underwriter or in the reasonable view of
counsel to the Underwriters, shall be threatened or contemplated by the
Commission at or prior to the Closing Date and that any request for
additional information on the part of the Commission (to be included in the
Registration Statement, the Prospectus or otherwise) be complied with to your
satisfaction; (ii) 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 (other than in the ordinary course of business) from that set forth
or contemplated in the Registration Statement or the Prospectus (or any
amendment or Supplement thereto); (iii) 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 in the
condition (financial or other), business, prospects, properties, net assets
or results of operations of the Fund or the Adviser; (iv) 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 the Registration Statement or the Prospectus (or any
amendment or supplement to either of them) and other than liabilities for
payment for securities in accordance with the Fund's investment objective and
policies; and (v) all the representations and warranties of the Fund and the
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 you shall have received a certificate, dated the Closing
Date and signed by the chief executive officer and the chief financial
officer of each of the Fund and the Adviser (or such other officers as are
acceptable to you), to the effect set forth in this Section 9(j) and in
Section 9(k) hereof.
(k) That neither the Fund nor the Adviser shall have failed at or
prior to the Closing Date to have performed or complied 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.
(l) The Fund shall have delivered and you shall have received
evidence satisfactory to you that the Shares are rated at least Aaa by
Xxxxx'x and AAA by S&P 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.
(m) The Fund and the Adviser shall have furnished or caused to be
furnished to you such further certificates and documents as you shall have
requested.
All such opinions, certificates, letters and other documents will
be in compliance with the provisions hereof only if they are satisfactory in
form and substance to you and your counsel.
Any certificate or document signed by any officer of the Fund or
the Adviser and delivered to you or to counsel for the Underwriters, shall be
deemed a representation and warranty by the Fund or the Adviser to each
Underwriter as to the statements made therein.
10. 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: (i) the preparation, printing or reproduction,
and filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), each Prepricing Prospectus, the
1940 Act Notification, 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); (ii) 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 or supplements to any of them as may be reasonably requested
for use in connection with the offering and sale of the Shares; (iii) 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; (iv) the printing (or reproduction) and
delivery of this Agreement, any dealer agreements, the preliminary and
supplemental blue sky memoranda and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Shares;
(v) the registration of the Shares under the Exchange Act; (vi) the
qualification of the Shares for offer and sale under the state securities or
blue sky laws of the several states (including the reasonable fees, expenses
and disbursements of counsel for the Underwriters relating to the
preparation, printing or reproduction, and delivery of the preliminary and
supplemental blue sky memoranda and such registration and qualification);
(vii) fees paid to the Rating Agencies; (viii) the transportation and other
expenses incurred by or on behalf of Fund representatives in connection with
presentations to prospective purchasers of the Shares; and (ix) 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 of the transfer agent.
Except as provided in this Section 10, the Underwriters agree to
pay their own costs and expenses of the underwriting, including the fees and
expenses of their counsel.
11. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto;
or (ii) 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 you, or by you, by notifying the
Fund.
If any one or more of the Underwriters shall fail or refuse to
purchase the Shares which it or they are obligated to purchase hereunder on
the Closing Date, and the aggregate number of the 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 such Shares set forth opposite the names of
all non-defaulting Underwriters or in such other proportion as you may
specify in accordance with Section 20 of the Master Agreement Among
Underwriters of Xxxxxxx Xxxxx Xxxxxx Inc., to purchase the Shares which such
defaulting Underwriter or Underwriters are obligated, but fail or refuse, to
purchase. If any one or more of the Underwriters shall fail or refuse to
purchase the 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 or the Fund. In any such case which does not result in a
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 11 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed by letter.
12. 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 or the Adviser, by notice to the Fund or the Adviser,
if at any time prior to the Closing Date (i) trading in any Fund's securities
shall have been suspended by the Commission or the NYSE or trading in
securities generally on the NYSE, the American Stock Exchange or the Nasdaq
National Market shall have been suspended or limited or minimum prices shall
have been established on the NYSE, (ii) a banking moratorium shall have been
declared either by Federal or New York State authorities, or (iii) there
shall have occurred any outbreak or 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, the effect of which on financial markets is such as to make it,
in your judgment, impracticable or inadvisable to commence or continue the
offering of the Shares at the offering price to the public set forth on the
cover page of the Prospectus or to enforce contracts for the resale of the
Shares by the Underwriters. Notice of such termination may be given to the
Fund by telegram, telecopy or telephone and shall be subsequently confirmed
by letter.
13. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set
forth in the last paragraph of the cover page and the statements in the
first, third and fourth paragraphs under the caption "Underwriting" in any
Prepricing Prospectus and in the Prospectus, constitute the only information
furnished by or on behalf of the Underwriters through you as such information
is referred to in Sections 6(b) and 8 hereof.
14. MISCELLANEOUS. Except as otherwise provided in Sections 5, 11
and 12 hereof, notice given pursuant to any provision of this Agreement shall
be in writing and shall be delivered (i) if to the Fund or the Adviser, at
the office of the Fund at Xxx Xxxxxxxxx Xxxxxx, Xxx, Xxx Xxxx 00000-0000,
Attention: Xxxxx X. Xxxxxx; or (ii) if to you, care of 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
several Underwriters, the Fund, the Adviser, their directors and officers,
and the other controlling persons referred to in Section 8 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 any Underwriter of
any of the Shares in his status as such purchaser.
15. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be
governed by and construed in accordance with the laws of the State of New
York applicable to contracts made and to be performed within 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 shall not become effective unless at least one counterpart
hereof shall have been executed and delivered on behalf of each party hereto.
Please confirm that the foregoing correctly sets forth the
agreement among the Fund and the Adviser and the several Underwriters.
Very truly yours,
THE GABELLI EQUITY TRUST INC.
By:_____________________________
Title:
Name:
GABELLI FUNDS, LLC
By:_____________________________
Title:
Name:
Confirmed as of the date first
above written on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.
XXXXXXX XXXXX XXXXXX INC.
GABELLI & COMPANY, INC.
By XXXXXXX XXXXX XXXXXX INC.
By: _______________________________
Title:
Name:
SCHEDULE I
THE GABELLI EQUITY TRUST INC.
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Underwriter | Number of Shares
------------------------------------------------------|-------------------------
Xxxxxxx Xxxxx Xxxxxx Inc |
------------------------------------------------------|-------------------------
Gabelli & Company, Inc. |
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