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EXHIBIT (h(1))
[ ] SHARES
XXX XXXXXX AMERICAN CAPITAL SENIOR INCOME TRUST
COMMON SHARES OF BENEFICIAL INTEREST
PAR VALUE $.01 PER SHARE
UNDERWRITING AGREEMENT
____ __, 1998
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June __, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
X.X. Xxxxxxx & Sons Inc.
Advest, Inc.
Xxxxxx X. Xxxxx & Co. Incorporated
Xxxx Xxxxxxxx Xxxxxxx
Xxxxxxxxxx & Co. Inc.
First of Michigan Corporation
Gruntal & Co. Inc.
Interstate/Xxxxxxx Xxxx Corporation
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
XxXxxxxx & Company Securities, Inc.
Xxxxxxx Xxxxx & Associates, Inc.
c/x Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
XXX XXXXXX AMERICAN CAPITAL SENIOR INCOME TRUST, a Massachusetts
business trust (the "FUND"), is a newly organized, non-diversified, closed-end
management investment company registered under the Investment Company Act of
1940, as amended. The Fund proposes to issue and sell to the several
Underwriters named in Schedule I hereto (the "UNDERWRITERS") [ ] shares of its
common shares of beneficial interest, $.01 par value per share (the "FIRM
SHARES"). The Fund also proposes to issue and sell to the several Underwriters
not more than [ ] additional common shares of beneficial interest, $.01 par
value per share (the "ADDITIONAL SHARES"), if and to the extent that you, as
Manager(s) of the offering, shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such Additional Shares granted to the
Underwriters in Section 3 hereof. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "SHARES." The Common Shares of
beneficial interest, $.01 par value per share, of the Fund to be outstanding
after giving effect to the sales contemplated hereby are hereinafter referred to
as the "COMMON SHARES."
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The Fund has filed with the Securities and Exchange Commission (the
"COMMISSION") a notification on Form N-8A (the "NOTIFICATION") of registration
of the Fund as an investment company and a registration statement on Form N-2,
including a prospectus, relating to the Shares. The registration statement as
amended at the time it becomes effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act of 1933, as amended, is
hereinafter referred to as the "REGISTRATION STATEMENT." The Prospectus in the
form first used to confirm sales of Shares, together with the Statement of
Additional Information incorporated therein by reference, are hereinafter
referred to as the "PROSPECTUS." The Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder are collectively referred to
as the "SECURITIES ACT"; the Investment Company Act of 1940, as amended, and the
rules and regulations of the Commission thereunder are collectively referred to
as the "INVESTMENT COMPANY ACT"; and the Securities Act and the Investment
Company Act are collectively referred to as the "ACTS."
If the Fund has filed an abbreviated registration statement to register
additional Common Shares pursuant to Rule 462(b) under the Securities Act (the
"RULE 462 REGISTRATION STATEMENT"), then any reference herein to the term
"REGISTRATION STATEMENT" shall be deemed to include such Rule 462 Registration
Statement.
1. Representations and Warranties Relating to the Fund. The Fund and
Xxx Xxxxxx American Capital Investment Advisory Corp. (the "ADVISER"), jointly
and severally, represent and warrant to and agree with each of the Underwriters
that:
(a) The Registration Statement has become effective, no stop order
suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or, to
the knowledge of the Fund or the Adviser, threatened by the Commission.
(b) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Acts and (iii) the
Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances
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under which they were made, not misleading, except that the
representations and warranties set forth in this Section 1(b) do not
apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished
to the Fund in writing by such Underwriter through you expressly for
use therein.
(c) The Fund has been duly organized, is validly existing as an
unincorporated business trust in good standing under the laws of the
Commonwealth of Massachusetts, has the power and authority to conduct
its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would
not have a material adverse effect on the Fund. The Fund has no
subsidiaries.
(d) The Fund is registered with the Commission as a non-diversified,
closed-end management investment company under the Investment Company
Act and no order of suspension or revocation of such registration has
been issued or proceedings therefor initiated or, to the knowledge of
the Fund or the Adviser, threatened by the Commission. No person is
serving or acting as an officer or trustee of, or investment adviser
to, the Fund except in accordance with the provisions of the Investment
Company Act and the Investment Advisers Act of 1940, as amended, and
the rules and regulations of the Commission thereunder (such act and
rules being collectively referred to as the "ADVISERS ACT").
(e) Each of this Agreement, the Investment Advisory Agreement
between the Adviser and the Fund (the "ADVISORY AGREEMENT"), the
Administration Agreement between Xxx Xxxxxx American Capital, Inc. (the
"ADMINISTRATOR") and the Fund (the "ADMINISTRATION AGREEMENT"), the
Legal Services Agreement between the Administrator and the Fund (the
"LEGAL SERVICES AGREEMENT"), the Custody Agreement between State Street
Bank and Trust Company (the "CUSTODIAN") and the Fund (the "CUSTODIAN
AGREEMENT") and the Transfer Agency Agreement between Boston Equiserve
L.P. (the "TRANSFER AGENT") and the Fund (the "TRANSFER AGENCY AND
SERVICE AGREEMENT") (this Agreement, the Advisory Agreement, the
Administration Agreement, the Legal Services Agreement, the Custodian
Agreement and the Transfer Agency and Service Agreement are referred to
herein, collectively, as the "FUNDAMENTAL AGREEMENTS") has been duly
authorized, executed and delivered by the Fund. Each Fundamental
Agreement, other than this Agreement, assuming due authorization,
execution and delivery by the other parties thereto, constitutes the
legal, valid and binding obligation of
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the Fund, enforceable against the Fund in accordance with its terms
except as such enforceability may be limited by applicable bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws
affecting creditors' rights generally and by general principles of
equity, regardless of whether considered in a proceeding in equity or
at law.
(f) None of (i) the execution and delivery by the Fund of, and the
performance by the Fund of its obligations under, each Fundamental
Agreement or the adoption by the Fund of the Dividend Reinvestment Plan
(the "PLAN"), or (ii) the issue and sale by the Fund of the Shares as
contemplated by this Agreement contravenes or will contravene any
provision of law applicable to the Fund or the declaration of trust or
by-laws of the Fund or any agreement or other instrument binding upon
the Fund that is material to the Fund, or any judgment, order or decree
of any governmental body, agency or court having jurisdiction over the
Fund which contravention would have a material adverse effect on the
Fund or its ability to perform its obligations under any such
Agreement. No consent, approval, authorization, order or permit of, or
qualification with, any governmental body or agency, self-regulatory
organization or court or other tribunal is required for the performance
by the Fund of its obligations under the Fundamental Agreements or the
Plan, except such as have been obtained or as may be required by the
Acts, the Securities Exchange Act of 1934 (such act and the rules and
regulations of the Commission thereunder being collectively referred to
as the "EXCHANGE ACT") or the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Shares.
(g) The authorized shares of beneficial interest of the Fund conform
in all material respects to the description thereof contained in the
Prospectus, and the declaration of trust and by-laws of the Fund, the
Fundamental Agreements and the Plan conform in all material respects to
the descriptions thereof contained in the Prospectus (except that no
representation or warranty is made as to this Agreement).
(h) The declaration of trust or by-laws of the Fund, the Fundamental
Agreements and the Plan comply with all applicable provisions of the
Acts, and all approvals of such documents required under the Investment
Company Act by the Fund's shareholders and Board of Trustees have been
obtained and are in full force and effect.
(i) The Fundamental Agreements (other than this Agreement) and the
Plan are in full force and effect and neither the Fund nor, to the
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Fund's knowledge, any other party to any such agreement is in default
thereunder and, to the knowledge of the Fund and the Adviser, no event
has occurred which with the passage of time or the giving of notice or
both would constitute a default thereunder. The Fund is not currently
in breach of, or in material default under, any other written agreement
or instrument to which it or its property is bound or affected.
(j) The common shares of beneficial interest, par value $.01 per
share, of the Fund outstanding prior to the issuance of the Shares have
been duly authorized and are validly issued, fully paid and
non-assessable and the form of certificates used to evidence such
common shares is in due and proper form and complies with all
provisions of applicable law.
(k) The Shares have been duly authorized and, when issued, paid for
and delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of the
Shares will not be subject to any pre-emptive or similar rights except
as disclosed in the Prospectus. No person has rights to the
registration of any securities because of the filing of the
Registration Statement.
(l) The Shares and any common shares of beneficial interest, par
value $.01 per share, of the Fund outstanding prior to the issuance of
the Shares have been approved for listing on the New York Stock
Exchange, Inc. (the "NEW YORK STOCK EXCHANGE"), subject to official
notice of issuance. The Fund's Registration Statement on Form 8-A under
the Exchange Act is effective.
(m) The Fund intends to direct the investment of the proceeds of the
offering described in the Prospectus in such a manner as to comply with
the requirements of Subchapter M of the Internal Revenue Code of 1986,
as amended (the "CODE"), and the Fund is eligible to qualify as a
regulated investment company under Subchapter M of the Code.
(n) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, of the Fund, or in the investment
objectives, investment policies, liabilities, business, prospects or
operations of the Fund from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement) and there have been no transactions entered into by the Fund
which are material to the Fund other than those in the ordinary course
of its business or as described in the Prospectus.
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(o) There are no legal or governmental proceedings pending or, to
the knowledge of the Fund and the Adviser, threatened to which the Fund
is a party or is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(p) The Fund has all necessary consents, authorizations, approvals,
orders (including exemptive orders), certificates and permits of and
from, and has made all declarations and filings with, all governmental
authorities, self-regulatory organizations and courts and other
tribunals to own and use its assets and to conduct its business in the
manner described in the Prospectus, except to the extent that the
failure to obtain or file the foregoing would not have a material
adverse effect on the Fund.
(q) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 497 under the Securities Act, complied when so
filed in all material respects with the Acts.
(r) The statement of assets and liabilities included in the
Registration Statement and the Prospectus presents fairly the financial
position of the Fund as at the date indicated and said statement has
been prepared in conformity with generally accepted accounting
principles. KPMG Peat Marwick LLP, whose report appears in the
Prospectus, are independent public accountants with respect to the Fund
as required by the Acts.
(s) There are no material restrictions, limitations or regulations
with respect to the ability of the Fund to invest its assets as
described in the Prospectus, other than as described therein.
(t) Any advertisement used with the written consent of the Fund in
the public offering of the Shares pursuant to Rule 482 under the
Securities Act (an "OMITTING PROSPECTUS") complies in all material
respects with the requirements of Rule 482, and does not contain an
untrue statement of a material fact.
2. Representations and Warranties Relating to the Adviser. The Adviser
represents and warrants to and agrees with each of the Underwriters that:
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(a) The Adviser has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware,
has the corporate power and authority to conduct its business as
described in the Prospectus and is duly qualified to transact business
and is in good standing in each jurisdiction in which the conduct of
its business requires such qualification, except to the extent that
failure to be so qualified or be in good standing would not have a
material adverse effect on the Adviser.
(b) (i) The description of the Adviser in the Registration
Statement, when it became effective, did not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
the description of the Adviser in the Prospectus does not contain and,
as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(c) The Adviser is duly registered as an investment adviser under
the Advisers Act, and is not prohibited by the Advisers Act or the
Investment Company Act from acting under the Advisory Agreement as an
investment adviser to the Fund as contemplated by the Prospectus, and
no order of suspension or revocation of such registration has been
issued or proceedings therefor initiated or, to the knowledge of the
Adviser, threatened by the Commission.
(d) Each of this Agreement and the Advisory Agreement has been duly
authorized, executed and delivered by the Adviser and complies in all
material respects with all applicable provisions of the Acts. The
Advisory Agreement, assuming due authorization, execution and delivery
by the other parties thereto, constitutes the legal, valid and binding
obligation of the Adviser, enforceable against the Adviser in
accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium
or similar laws affecting creditors' rights generally and by general
principles of equity, regardless of whether considered in a proceeding
in equity or at law.
(e) The execution and delivery by the Adviser of, and the
performance by the Adviser of its obligations under, this Agreement and
the Advisory Agreement do not and will not contravene any provision of
law applicable to the Adviser or the certificate of incorporation or
by-laws
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of the Adviser or any agreement or other instrument binding upon the
Adviser that is material to the Adviser, or any judgment, order or
decree of any governmental body, agency or court having jurisdiction
over the Adviser which contravention would have a material adverse
effect on the Adviser or its ability to perform its obligations under
any such Agreement. No consent, approval, authorization, order or
permit of, or qualification with, any governmental body or agency,
self-regulatory agency or court or other tribunal is required for the
performance by the Adviser of its obligations under this Agreement or
the Advisory Agreement except such as have been obtained or as may be
required by the Acts, the Exchange Act or the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Shares.
(f) There are no legal or governmental proceedings pending or, to
the knowledge of the Adviser, threatened to which the Adviser is a
party or is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described.
(g) The Adviser has all necessary consents, authorizations,
approvals, orders (including exemptive orders), certificates and
permits of and from, and has made all declarations and filings with,
all governmental authorities, self-regulatory organizations and courts
and other tribunals to own and use its assets and to conduct its
business in the manner described in the Prospectus, except to the
extent that the failure to obtain or file the foregoing would not have
a material adverse effect on the Adviser.
(h) The Adviser has the financial resources available to it
necessary for the performance of its services and obligations as
contemplated in the Prospectus.
(i) The Advisory Agreement is in full force and effect and neither
the Adviser nor, to the Adviser's knowledge, the Fund is in default
thereunder and, to the knowledge of the Adviser, no event has occurred
which with the passage of time or the giving of notice or both would
constitute a default under such document.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the business or operations of
the Adviser from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement).
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3. Agreements to Sell and Purchase. The Fund hereby agrees to sell to
the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the Fund
the respective number of Firm Shares set forth in Schedule I hereto opposite its
name at the price of $10.00 per Share (the "PURCHASE PRICE").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Fund further agrees to
sell to the Underwriters the Additional Shares, and the Underwriters shall have
the right to purchase from time to time in the aggregate, severally and not
jointly, up to the total number of Additional Shares at the Purchase Price. If
the Underwriters elect to exercise this right to purchase Additional Shares,
Xxxxxx Xxxxxxx & Co. Incorporated, on behalf of the Underwriters, shall so
notify the Fund in writing not later than 45 days after the date of this
Agreement, which notice shall specify the number of Additional Shares to be
purchased by the Underwriters and the date on which such shares are to be
purchased. Such date may be the same as the Closing Date (as defined below) but
not earlier than the Closing Date nor later than ten business days after the
date of such notice. Additional Shares may be purchased as provided in Section 5
hereof solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. If any Additional Shares are to be
purchased, each Underwriter agrees, severally and not jointly, to purchase the
number of Additional Shares (subject to such adjustments to eliminate fractional
shares as you may determine) that bears the same proportion to the total number
of Additional Shares to be purchased as the number of Firm Shares set forth in
Schedule I hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
The Fund hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 180 days after the date of the Prospectus, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend or otherwise transfer or dispose of, directly or indirectly, any
of its Common Shares or any securities convertible into or exercisable or
exchangeable for such Common Shares or (ii) enter into any swap or other
agreement that transfers to another, in whole or in part, any of the economic
consequences of ownership of its Common Shares, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Shares or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (A) the Shares or (B) any Common Shares of the Fund issued
pursuant to the Plan.
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4. Terms of Public Offering. The Fund and the Adviser are 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. The Fund and
the Adviser are further advised by you (i) that the Shares are to be offered to
the public initially at a price of $10.00 per share (the "PUBLIC OFFERING
PRICE"), and (ii) that the Underwriters may pay a fee to certain dealers
selected by you not in excess of $0.30 a share.
5. Payment and Delivery. Payment for the Firm Shares shall be made to
the Fund in Federal or other funds immediately available in New York City
against delivery of such Firm Shares for the respective accounts of the
Underwriters at 10:00 A.M., New York City time, on ______ __, 1998, or at such
other time on the same or such other date, in any event not later than ______
__, 1998, as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares shall be made to the Fund in Federal
or other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the Underwriters at 10:00 A.M.,
New York City time, on the date specified in the notice described in Section 3
or at such other time on the same or on such other date, in any event not later
than ______ __, 1998, as shall be designated in writing by you. Such notice
shall be provided at least two business days prior to such Option Closing Date.
The time and date of any such payment are hereinafter referred to as an "OPTION
CLOSING DATE."
The Firm Shares and Additional Shares to be purchased by each
Underwriter hereunder shall be represented by one or more definitive global
certificates in book-entry form which shall be deposited by or on behalf of the
Fund with The Depository Trust Company ("DTC") or its custodian. The Fund shall
deliver the Firm Shares and Additional Shares to you on the Closing Date or an
Option Closing Date, as the case may be, for the account of each Underwriter,
against payment by or on behalf of such Underwriter of the purchase price
therefor by wire transfer to the account specified by the Fund in Federal (same
day) funds, by causing DTC to credit the Firm Shares and Additional Shares to
the account of Xxxxxx Xxxxxxx & Co. Incorporated at DTC. The Fund shall cause
the certificates representing the Firm Shares and Additional Shares to be made
available to you for checking at least twenty-four hours prior to the Closing
Date or such Option Closing Date, as the case may be, at the office of DTC or
its designated custodian.
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6. Conditions to the Underwriters' Obligations. The respective
obligations of the Fund and the Adviser and the several obligations of the
Underwriters are subject to the condition that the Registration Statement shall
have become effective not later than the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) There shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, of the Fund or the Adviser, or in the investment objectives,
investment policies, liabilities, business, prospects or operations of
the Fund from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement) that, in your reasonable judgment, is material and adverse
and that makes it, in your reasonable judgment, impracticable to market
the Shares on the terms and in the manner contemplated in the
Prospectus.
(b) The Underwriters shall have received on the Closing Date
separate certificates, dated the Closing Date and signed by an
executive officer of each of the Fund and the Adviser in his or her
capacity as such, to the effect that the respective representations and
warranties of the Fund and the Adviser contained in this Agreement
shall be true and correct in all material respects as of the Closing
Date and that the Fund and the Adviser have complied in all material
respects with all of the agreements and satisfied in all material
respects all of the conditions on their parts to be performed or
satisfied hereunder on or before the Closing Date. Each officer signing
and delivering such a certificate may rely upon the best of his or her
knowledge as to proceedings threatened.
(c) The Adviser and the Fund shall have each performed all of their
respective obligations to be performed hereunder on or prior to the
Closing 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, to the effect that:
(i) such counsel has been orally advised by the staff of the
Commission that the Registration Statement was declared effective
under the Securities Act on [ ], 1998 and to the best of such
counsel's knowledge, no stop order suspending the effectiveness of
the Registration Statement is in effect and no
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proceedings for such purpose are pending or threatened by the
Commission;
(ii) the Fund has been organized, has legal existence and is
in good standing as an unincorporated business trust under the laws
of the Commonwealth of Massachusetts and has the power and
authority as a business trust to carry on its business as described
in the Prospectus. The Fund is qualified to the extent required as
a foreign business trust under the laws of each jurisdiction in
which the Fund has informed such counsel in the Officer's
Certificate attached to such counsel's opinion that it owns or
leases real property or conducts material operations;
(iii) the fund is registered with the Commission as a
non-diversified, closed-end management investment company under the
Investment Company Act; and to the best of such counsel's
knowledge, no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated or
threatened by the Commission;
(iv) the execution and delivery of each Fundamental Agreement
by the Fund have been duly authorized by all requisite action on
the part of the Fund, and each Fundamental Agreement has been duly
executed and delivered by the Fund. Each Fundamental Agreement,
other than this Agreement, assuming due authorization, execution
and delivery by the other parties thereto, constitutes a valid and
binding obligation of the Fund, enforceable against the Fund in
accordance with its terms, subject to (A) applicable bankruptcy,
reorganization, receivership, insolvency, fraudulent conveyance,
moratorium or similar laws affecting creditors' rights generally,
now or hereafter in effect, whether statutory or decisional, (B)
with respect to the Advisory Agreement, termination under the
Investment Company Act and (C) general principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at law);
(v) subject to the qualifications set forth below, the
execution and delivery by the Fund of the Fundamental Agreements,
the issuance and sale of the Shares to the Underwriters pursuant to
this Agreement and compliance by the Fund with other provisions of
the Fundamental Agreements and the consummation of the other
transactions therein contemplated and the adoption of the Plan (A)
do not require, under the laws of
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the Commonwealth of Massachusetts, the State of New York, the State
of Illinois or the federal securities laws of the United States of
America, the consent, approval, authorization, registration,
qualification or order of any court or governmental agency or body
or national securities exchange or national securities association
(except such as have been obtained under the Securities Act, the
Investment Company Act, the Adviser Act and such as may be required
by the National Association of Securities Dealers, Inc. or under
state securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters), (B) do not
conflict with or result in a material breach or violation of any of
the terms and provisions of, or constitute a material default
under, any indentures, mortgages, deeds of trust, leases or other
agreements or instruments specifically identified to such counsel
in the Officer's Certificate attached to such counsel's opinion as
all of the material agreements to which the Fund is a party or by
which it or any of its property is bound, or the declaration of
trust or the by-laws of the Fund, or any of the judgments, decrees
or orders specifically identified to such counsel in the Officer's
Certificate attached to such counsel's opinion as all of the
judgments, decrees and orders applicable to the Fund of any court
or other governmental authority and (C) do not contravene any
provision of the laws of the Commonwealth of Massachusetts, the
State of New York, the State of Illinois or the federal securities
laws of the United States of America which, in such counsel's
experience, are normally applicable to transactions of the type
contemplated by the Fundamental Agreements. Such counsel need not
express any opinion as to any such consent, approval,
authorization, registration, qualification or order (i) which may
be required as a result of the involvement of the other parties to
such agreements in the transactions contemplated by such agreements
because of their legal or regulatory status or because of any other
facts specifically pertaining to them, (ii) the absence of which
does not have a material adverse effect on the Underwriters and
does not deprive the Underwriters of any material benefit under
such agreements; or (iii) which can be readily obtained without
significant delay or expense to the Underwriters, without loss to
the Underwriters of any material benefit under such agreements and
without any material adverse effect on the Underwriters during the
period such consent, approval, authorization, registration,
qualification or order was not obtained;
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(vi) the authorized shares of beneficial interest of the Fund
conform in all material respects to the description thereof
contained in the Prospectus; and the declaration of trust and
by-laws of the Fund, conform in all material respects as to legal
matters to the descriptions thereof contained in the Prospectus;
(vii) the declaration of trust and by-laws of the Fund and the
Fundamental Agreements comply in all material respects with all
applicable provisions of the Investment Company Act;
(viii) the Common Shares outstanding prior to issuance of the
Shares have been duly authorized and are validly issued, fully paid
and, subject to the statements set forth below regarding the
liability of shareholders of a Massachusetts business trust,
non-assessable and the form of temporary certificate used to
evidence the Common Shares is in due and proper form and complies
with all provisions of applicable law;
(ix) the Shares have been duly authorized and, when issued,
paid for and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and, subject to the
statements set forth below regarding the liability of shareholders
of a Massachusetts business trust, non-assessable and the issuance
of the Shares will not be subject to any preemptive rights;
(x) such counsel has been advised by the New York Stock
Exchange that the Shares have been approved for listing on the New
York Stock Exchange, subject to official notice of issuance, and
has been orally advised by the staff of the Commission that the
Fund's Registration Statement on Form 8-A under the Exchange Act is
effective;
(xi) the statements in the Prospectus under "Taxation" and
"Description of Capital Structure," insofar as such statements
constitute a summary of the law or legal conclusions, documents or
proceedings referred to therein, are accurate in all material
respects. Such statements are based on current applicable laws and
such counsel's understanding of the Fund's proposed operations as
disclosed in the Prospectus; and, to the best knowledge of such
counsel (based solely on information provided to such counsel in
the Officer's Certificate attached to such counsel's opinion),
there are no legal or governmental proceedings against the Fund
pending
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or threatened, that are required to be described in the
Registration Statement or the Prospectus and are not so described;
and
(xii) the Registration Statement (exclusive of any appendices,
annexes, schedules and exhibits thereto) as of the date of its
effectiveness, the Notification as of its date and the Prospectus
and any supplements or amendments thereto as of their respective
dates each appeared on its face to be appropriately responsive in
all material respects to the requirements of the Acts; except that
in each case such counsel does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained
therein or express any opinion as to the financial statements,
schedules and other financial or statistical data or any
appendices, exhibits, schedules or annexes included therein,
excluded therefrom or incorporated by reference therein.
Such counsel shall also include in such opinion a statement to the
effect that such counsel has participated in conferences with officers and other
representatives of the Fund, the independent public accountants for the Fund and
the Underwriters or their representatives at which the contents of the
Registration Statement, the Prospectus and related matters were discussed and,
although such counsel is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, and has made no
independent check or verification thereof, on the basis of the foregoing, no
facts have come to the attention of such counsel that have led such counsel to
believe either that the Registration Statement (exclusive of any appendices,
annexes, schedules and exhibits thereto), at the time such Registration
Statement became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus, as of its
date and at the date hereof, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that such counsel does not express any belief with respect to
the financial statements, schedules and other financial or statistical data
included in, omitted from or incorporated by reference in the Registration
Statement, the Prospectus, or the exhibits, annexes or appendices to the
Registration Statement.
Such counsel may include language in its opinion to the effect that
with respect to the opinions expressed in numbered paragraphs (viii) and (ix)
above such counsel notes that pursuant to certain decisions of the Supreme
Judicial Court of the Commonwealth of Massachusetts, shareholders of a
Massachusetts
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business trust may, in certain circumstances, be assessed or held personally
liable as partners for the obligations of a Massachusetts business trust.
(e) You shall have received on the Closing Date an opinion of the
office of the general counsel for the Adviser, dated the Closing Date,
to the effect that:
(i) the Adviser has been incorporated, has legal existence and
is in good standing as a corporation under the laws of the State of
Delaware and has the corporate power and authority to carry on its
business as described in the Prospectus. The Adviser is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business requires such
qualification, except to the extent that failure to be so qualified
or be in good standing would not have a material adverse effect on
the Adviser;
(ii) the Adviser is registered as an investment adviser under
the Advisers Act and is not prohibited by the Advisers Act or the
Investment Company Act from acting under the Advisory Agreement as
an investment adviser to the Fund as contemplated by the
Prospectus, and no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated or,
to the best of such counsel's knowledge, threatened by the
Commission;
(iii) the execution and delivery of each of this Agreement and
the Advisory Agreement by the Adviser have been duly authorized by
all requisite action on the part of the Adviser, and each of this
Agreement and the Advisory Agreement has been duly executed and
delivered by the Adviser. The Advisory Agreement, assuming due
authorization, execution and delivery by the Fund, constitutes a
valid and binding obligation of the Adviser, enforceable against
the Adviser in accordance with its terms, subject to (A) applicable
bankruptcy, reorganization, receivership, insolvency, fraudulent
conveyance, moratorium or similar laws affecting creditors' rights
generally, now or hereafter in effect, whether statutory or
decisional, (B) termination of the Advisory Agreement under the
Investment Company Act and (C) general principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at law);
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(iv) to such counsel's knowledge, the execution and delivery
by the Adviser of this Agreement and the Advisory Agreement and
compliance by the Adviser with the provisions thereof and the
consummation of the transactions therein contemplated (A) do not
require, under the laws of the State of Illinois or the federal
securities laws of the United States of America, the consent,
approval, authorization, registration, qualification or order of
any court or governmental agency or body or national securities
exchange or national securities association, (B) do not conflict
with or result in a material breach or violation of any of the
terms and provisions of, or constitute a material default under,
any material indenture, mortgage, deed of trust, lease or other
agreement or instrument to which the Adviser is a party or by which
it or any of its property is bound, or the certificate of
incorporation or the by-laws of the Adviser, or any judgments,
decrees or orders, known to such counsel, applicable to the
Adviser, of any court or other governmental authority and (C) do
not contravene any provision of the laws of the State of Illinois
or the federal securities laws of the United States of America
applicable to transactions of the type contemplated by this
Agreement and the Advisory Agreement. Such counsel need not express
any opinion as to any such consent, approval, authorization,
registration, qualification or order (x) which may be required as a
result of the involvement of the other parties to such agreements
in the transactions contemplated by such agreements because of
their legal or regulatory status or because of any other facts
specifically pertaining to them, (y) the absence of which does not
have a material adverse effect on the Underwriters and does not
deprive the Underwriters of any material benefit under such
agreements or (z) which can be readily obtained without significant
delay or expense to the Underwriters, without loss to the
Underwriters of any material benefit under such agreements and
without any material adverse effect on the Underwriters during the
period such consent, approval, authorization, registration,
qualification or order was not obtained;
(v) to the best knowledge of such counsel, there are no
actions, investigations or other proceedings of any nature, whether
foreign or domestic, pending, commenced or threatened, which in any
case or in the aggregate, might result in any material adverse
change in the business of the Adviser or which question the
validity of this Agreement or the Advisory Agreement or the
performance by the Adviser of such Agreements; and
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(vi) the description of the Investment Adviser in the
Prospectus does not contain any untrue statement of a material fact
or omit to state any 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.
(f) You shall have received on the Closing Date an opinion of Xxxxx
Xxxx & Xxxxxxxx, special counsel for the Underwriters, dated the
Closing Date, to the effect that:
(i) the statements in the Prospectus under "Underwriters",
insofar as such statements constitute a summary of the law or legal
conclusion, documents or proceedings referred to therein, are
accurate in all material respects and fairly present the
information called for with respect to such legal matters, legal
conclusions, documents and proceedings and fairly summarize the
matters referred to therein; and
(ii) such counsel (A) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and
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 Securities Act and the
applicable rules and regulations of the Commission thereunder, (B)
has no reason to believe that (except for financial statements and
schedules and other financial and statistical data as to which such
counsel need not express any belief) the Registration Statement and
the prospectus included therein at the time the Registration
Statement became effective contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading and (C) has no reason to believe that (except for
financial statements and schedules and other financial and
statistical data as to which such counsel need not express any
belief) the Prospectus contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading.
With respect to Section 6(f)(ii) above, Xxxxx Xxxx & Xxxxxxxx may state
that their opinions and beliefs are based upon their participation in the
preparation of the Registration Statement and Prospectus and any amendments or
supplements
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thereto and review and discussion of the contents thereof, but are without
independent check or verification except as specified. With respect to Section
6(f) above, Xxxxx Xxxx & Xxxxxxxx may rely, to the extent such counsel deems
appropriate, upon the representations of the Fund contained herein.
(g) You shall have received on the Closing Date a certificate from a
duly authorized officer of the Custodian, certifying that the Custodian
Agreement is in full force and effect and is the legal, valid, binding
and enforceable obligation of the Custodian, assuming that such
Agreement is a legal, valid, binding and enforceable obligation of the
other party thereto.
(h) You shall have received on the Closing Date a certificate from a
duly authorized officer of the Administrator certifying that the
Administration Agreement is in full force and effect and is the legal,
valid, binding and enforceable obligation of the Administrator,
assuming that such Agreement is a legal, valid, binding and enforceable
obligation of the other party thereto.
(i) The Underwriters shall have received on the date of this
Agreement a letter dated such date, and also on the Closing Date a
letter dated the Closing Date, in each case in form and substance
satisfactory to you, from KPMG Peat Marwick LLP, independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "COMFORT LETTERS" to underwriters
with respect to the statement of assets and liabilities and certain
financial information regarding the Fund contained in the Registration
Statement and the Prospectus; provided that the letter delivered on the
Closing Date shall use a "cut-off" date not earlier than the date
hereof.
(j) The Shares shall have been duly authorized for listing on the
New York Stock Exchange, subject only to official notice of issuance
thereof.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to you on each Option Closing Date
of such updated versions of the documents, certificates and opinions set forth
above in this Section 6 as you may reasonably request with respect to the good
standing of the Fund and the Adviser, the due authorization and issuance of the
Additional Shares and other matters related to the issuance of the Additional
Shares.
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21
7. Covenants of the Fund. In further consideration of the agreements
of the Underwriters herein contained, the Fund covenants with each Underwriter
as follows:
(a) To notify you immediately, and confirm such notice in writing,
(i) of the institution of any proceedings pursuant to Section 8(e) of
the Investment Company Act and (ii) of the happening of any event
during the period described in Section 7(d) below which in the judgment
of the Fund makes any statement in the Notification, the Registration
Statement or the Prospectus untrue in any material respect or which
requires the making of any change in or addition to the Notification,
the Registration Statement or the Prospectus in order to make the
statements therein not misleading in any material respect. If at any
time the Commission shall issue any order suspending the effectiveness
of the Registration Statement or an order pursuant to Section 8(e) of
the Investment Company Act, the Fund will make every reasonable effort
to obtain the withdrawal of such order as soon as reasonably
practicable.
(b) To furnish to you, without charge, a signed copy of each of the
Notification and the Registration Statement (including exhibits
thereto) and for delivery to each other Underwriter a conformed copy of
the Notification and the Registration Statement (without exhibits
thereto) and to furnish to you in New York City, without charge, prior
to 10:00 A.M., New York City time on the business day next succeeding
the date of this Agreement and during the period described in Section
7(d) below, as many copies of the Prospectus and any supplements and
amendments thereto or to the Registration Statement as you may
reasonably request.
(c) Before amending or supplementing the Registration Statement or
the Prospectus at any time during the period described in Section 7(d)
below, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 497(b) or (h) under the Securities
Act any prospectus required to be filed pursuant to such Rule.
(d) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances
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22
when the Prospectus is delivered to a purchaser, not misleading, or if,
in the opinion of counsel for the Underwriters, it is necessary to
amend or supplement the Prospectus to comply with applicable law,
forthwith to prepare, file with the Commission and furnish, at its own
expense (or, if any statements in question concern information relating
to any Underwriter furnished to the Fund in writing by such Underwriter
through you, at the expense of the Underwriters), to the Underwriters
and to the dealers (whose names and addresses you will furnish to the
Fund) to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments
or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(e) To use its best efforts to maintain its qualification as a
regulated investment company under Subchapter M of the Code.
(f) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(g) To make generally available to the Fund's security holders and
to you as soon as practicable an earning statement covering the
twelve-month period ending June 30, 1999 that satisfies the provisions
of Section 11(a) of the Securities Act and the rules and regulations of
the Commission thereunder.
(h) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of its obligations under
this Agreement, including: (i) the fees, disbursements and expenses of
the Fund's counsel and the Fund's accountants in connection with the
registration and delivery of the Shares under the Securities Act and
all other fees or expenses in connection with the preparation and
filing of the Registration Statement, any preliminary prospectus, the
Prospectus, the Notification, and amendments and supplements to any of
the foregoing, including all printing costs associated therewith, and
the mailing and delivering of copies thereof to the Underwriters and
dealers, in the quantities hereinabove specified, (ii) the printing of
this Agreement, the Underwriters' Questionnaire and such other
agreements as you may reasonably request, (iii) all costs and expenses
related to the transfer and delivery of the Shares to the Underwriters,
including any transfer or other
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taxes payable thereon, (iv) furnishing such copies of the Registration
Statement, the Notification, the Prospectus and any related preliminary
prospectus, and all amendments and supplements thereto, as may be
reasonably requested for use in connection with the offering and sale
of the Shares by the Underwriters or by dealers to whom Shares may be
sold, (v) the cost of printing or producing any Blue Sky memorandum in
connection with the offer and sale of the Shares under state securities
laws and all expenses in connection with the qualification of the
Shares for offer and sale under state securities laws as provided in
Section 7(f) above, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky memorandum, (vi) all
filing fees and the reasonable fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification
of the offering of the Shares by the National Association of Securities
Dealers, Inc., (vii) the fees and expenses incurred with respect to the
listing of the Shares on the New York Stock Exchange, including the
listing fees of the New York Stock Exchange and the preparation,
printing and the filing fees with respect to the distribution of
documents relating thereto, and the registration of the Shares under
the Exchange Act, (viii) the cost of printing certificates representing
the Shares, (ix) the costs and charges of any transfer agent, registrar
or depositary, (x) the costs and expenses of the Fund relating to
investor presentations on any "road show" undertaken in connection with
the marketing of the offering of the Shares, including, without
limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of
the Fund or the Adviser, travel and lodging expenses of the
representatives and officers of the Fund and the Adviser and any such
consultants, and the cost of any aircraft chartered in connection with
the road show, and (xi) all other costs and expenses incident to the
performance of the obligations of the Fund hereunder for which
provision is not otherwise made in this Section 7; provided that the
obligation of the Fund to pay the foregoing expenses shall not exceed,
in the aggregate, an amount equal to the product of $0.02 times the
number of Shares purchased by the Underwriters hereunder.
8. Indemnity and Contribution.
(a) Each of the Fund and the Adviser, jointly and severally, agrees
to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act (a
"CONTROLLING
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PERSON") from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by any Underwriter or any such controlling person
in connection with defending or investigating any such action or claim)
caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus, any Omitting Prospectus or the
Prospectus (as amended or supplemented if the Fund shall have furnished
any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission based upon information
relating to any Underwriter or furnished to the Fund or the Adviser in
writing by any Underwriter through you expressly for use therein;
provided that the foregoing indemnity agreement with respect to any
preliminary prospectus or any Omitting Prospectus shall not inure to
the benefit of any Underwriter from whom the person asserting such
losses, claims, damages or liabilities purchased Shares or Additional
Shares, or any person controlling such Underwriter, if a copy of a
Prospectus (as then amended or supplemented if the Fund shall have
furnished any amendments or supplements thereto) was not sent or given
by or on behalf of such Underwriter to such person, if required by law
to have been delivered, at or prior to the written confirmation of the
sale of the Shares or Additional Shares to such person, and if a
Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities, unless such
failure is the result of noncompliance by the Fund with Section 7(b)
hereof; provided further, that the Adviser will be required to
indemnify and hold harmless any indemnified party pursuant to this
Section 8(a) only to the extent that the Fund fails to indemnify and
hold harmless such indemnified party pursuant to this Section 8(a).
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Fund and the Adviser, their respective directors
or trustees, and each officer of the Fund who signs the Registration
Statement and each person, if any, who controls the Fund or the Adviser
within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses,
claims, damages and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectus (as amended or supplemented if
the Fund shall have furnished any amendments or supplements thereto),
any preliminary
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prospectus, or any Omitting Prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but
only with reference to information relating to such Underwriter
furnished to the Fund or the Adviser in writing by such Underwriter
through you expressly for use in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any preliminary
prospectus.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to either of Section 8(a) or
8(b), such person (the "INDEMNIFIED PARTY") shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING
PARTY") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is under stood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (x) the fees and
expenses of more than one separate firm (in addition to any local
counsel) for all Underwriters and all persons, if any, who control
Underwriters within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, (y) the fees and expenses of
more than one separate firm (in addition to any local counsel) for the
Fund, its trustees, its officers who sign the Registration Statement
and each person, if any, who controls the Fund within the meaning of
either such Section, and (z) the fees and expenses of more than one
separate firm (in addition to any local counsel) for the Adviser, its
directors and each person, if any, who controls the Adviser within the
meaning of either such Section, and that all such fees and expenses
shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons of
Underwriters, such firm shall be designated in writing by Xxxxxx
Xxxxxxx & Co. Incorporated. In the case of any such separate firm for
the Fund,
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26
and such trustees, officers and control persons of the Fund, such firm
shall be designated in writing by the Fund. In the case of any such
separate firm for the Adviser, and such directors and control persons
of the Adviser, such firm shall be designated in writing by the
Adviser. The indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this Section 8(c),
the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than 30 days after receipt by
such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, an
indemnifying party shall not be liable for any settlement of the nature
contemplated by such sentence effected without its consent if such
indemnifying party (i) reimburses such indemnified party in accordance
with such request to the extent it considers such request to be
reasonable and (ii) provides written notice to the indemnified party
substantiating the unpaid balance as unreasonable, in each case prior
to the date of such settlement. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any
settlement of any pending or threatened 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
proceeding.
(d) To the extent the indemnification provided for in Section 8(a)
or 8(b) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to
therein, then each indemnifying party under such Section, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Fund and
the Adviser on the one hand and the Underwriters on the other hand from
the offering of the Shares or (ii) if
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27
the allocation provided by Section 8(d)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in Section 8(d)(i) above but
also the relative fault of the Fund and the Adviser on the one hand and
of the Underwriters on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations.
The benefits received by the Fund or the Adviser shall be deemed to
equal the aggregate public offering price of the Shares. The benefits
received by the Underwriters shall be deemed to equal the product of
$0.40 times the aggregate number of Shares purchased by the
Underwriters hereunder. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
the Fund or the Adviser on the one hand 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. The Underwriters' respective obligations to contribute
pursuant to this Section 8 are several in proportion to the respective
number of Shares they have purchased hereunder, and not joint.
(e) The Fund, the Adviser and the Underwriters agree that it would
not be just or equitable if contribution pursuant to this Section 8
were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in Section 8(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and
liabilities referred to in Section 8(d) 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 or defending any such action or claim. 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
at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 8 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
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(f) The indemnity and contribution provisions contained in this
Section 8 and the representations and warranties of the Fund and the
Adviser contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement,
(ii) any investigation made by or on behalf of any Underwriter, its
officers or directors or any person controlling any Underwriter, the
Adviser, its officers or directors or any person controlling the
Adviser or the Fund, its officers or trustees or any person controlling
the Fund and (iii) acceptance of and payment for any of the Shares.
9. Termination. This Agreement shall be subject to termination by
notice given by you to the Fund, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board of Options Exchange or, with respect
to financial products, the Chicago Mercantile Exchange or the Chicago Board of
Trade, (ii) trading of any securities of the Fund shall have been suspended on
any exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities shall have been declared by either federal or New
York State authorities or (iv) there shall have occurred any outbreak or
escalation of hostilities or any change in financial markets or any calamity or
crisis that, in your reasonable judgment, is material and adverse and (b) in the
case of any of the events specified in Sections 9(a)(i) through (iv), such event
singly or together with any other such event makes it, in your reasonable
judgment, impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
10. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the later of (x) execution and delivery hereof by the parties
hereto and (y) notification of the effectiveness of the Registration Statement
by the Commission.
If, on the Closing Date or any Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares that
it or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Shares set forth
opposite their respective names in Schedule I bears to the aggregate number of
Shares set forth opposite the names of all such non-defaulting Underwriters, or
in such other proportions as you may specify, to purchase the Shares which such
defaulting
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Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Shares that any Underwriter
has agreed to purchase pursuant to Section 3 be increased pursuant to this
Section 10 by an amount in excess of one-ninth of such number of Shares without
the written consent of such Underwriter. If, on the Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Shares and the
aggregate number of Shares with respect to which such default occurs is more
than one-tenth of the aggregate number of Shares to be purchased on such date,
and arrangements satisfactory to you and the Fund for the purchase of such
Shares are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter, the
Fund and the Adviser. In any such case 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 in
the Prospectus or in any other documents or arrangements may be effected. If, on
any Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
Additional Shares or (ii) purchase not less than the number of Additional Shares
that such non-defaulting Underwriters would have been obligated to purchase in
the absence of such default. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Fund or the Adviser
to comply with the terms or to fulfill any of the conditions of this Agreement,
or if for any reason the Fund or the Adviser shall be unable to perform its
obligations under this Agreement, the Fund or the Adviser, as the case may be,
will reimburse the Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
such Underwriters in connection with this Agreement or the offering contemplated
hereunder.
11. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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12. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
the conflicts of laws provisions thereof.
Very truly yours,
XXX XXXXXX AMERICAN CAPITAL
SENIOR INCOME TRUST
By
---------------------------------
Name:
XXX XXXXXX AMERICAN CAPITAL
INVESTMENT ADVISORY CORP.
By
---------------------------------
Name:
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Accepted as of the date hereof
XXXXXX XXXXXXX & CO.
INCORPORATED
X.X. XXXXXXX & SONS INC.
ADVEST, INC.
XXXXXX X. XXXXX & CO.
INCORPORATED
XXXX XXXXXXXX XXXXXXX
XXXXXXXXXX & CO. INC.
FIRST OF MICHIGAN CORPORATION
GRUNTAL & CO. INC.
INTERSTATE/XXXXXXX XXXX
CORPORATION
XXXXXX XXXXXXXXXX XXXXX INC.
XXXX XXXXX XXXX XXXXXX,
INCORPORATED
XXXXXXXX & COMPANY
SECURITIES, INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
Acting on behalf of themselves
and the several Underwriters
named in Schedule I hereto.
By XXXXXX XXXXXXX & CO.
INCORPORATED
By
------------------------------------------
Name:
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NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
--------------------------------------------------------------- ---------------------
Xxxxxx Xxxxxxx & Co. Incorporated.............................
X.X. Xxxxxxx & Sons Inc.......................................
Advest, Inc...................................................
Xxxxxx X. Xxxxx & Co. Incorporated............................
Xxxx Xxxxxxxx Xxxxxxx.........................................
Xxxxxxxxxx & Co. Inc..........................................
First of Michigan Corporation.................................
Gruntal & Co. Inc.............................................
Interstate/Xxxxxxx Xxxx Corporation...........................
Xxxxxx Xxxxxxxxxx Xxxxx Inc...................................
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated..........................
XxXxxxxx & Company Securities, Inc............................
Xxxxxxx Xxxxx & Associates, Inc...............................
[NAMES OF OTHER UNDERWRITERS].................................
---------------------
Total:........................................................ =====================
