EXHIBIT 99.H
Travelers Corporate Loan Fund Inc.
__________ Shares/*/
Common Stock
UNDERWRITING AGREEMENT
----------------------
New York, New York
September __, 1998
Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representative of the several Underwriters
listed in Schedule I hereto
Ladies and Gentlemen:
Travelers Corporate Loan Fund Inc., a Maryland corporation (the
"Fund"), Mutual Management Corp. (the "Investment Adviser") and Travelers Asset
Management International Corp. (the "Sub-Investment Adviser") each confirms its
agreement with you with respect to the sale by the Fund to the underwriters
named in Schedule I hereto (the "Underwriters"), for whom you (the
"Representative") are acting as representative, of __________ shares of Common
Stock, par value $.001 per share, of the Fund ("Common Stock") (said shares to
be issued and sold by the Fund being hereinafter called the "Underwritten
Securities"). The Fund also proposes to grant to the Underwriters, upon the
terms and subject to the conditions set forth in Section 2(b) hereof, an option
to purchase up to __________ additional shares of Common Stock (the "Option
Securities" and together with the Underwritten Securities, the "Securities").
1. Representations and Warranties. (a) Each of the Fund, the
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Investment Adviser and the Sub-Investment Adviser, jointly and severally,
represents and warrants to, and agrees with, each Underwriter as set forth below
in this Section 1. Certain terms used in this Section 1 are defined in Section
(iii) hereof.
(i) The Fund meets the requirements for use of Form N-2 under
the Securities Act of 1933 (the "Act") and the Investment Company Act of
1940 (the "Investment Company Act") and the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") under each of the Act and the Investment Company Act; the
Fund has filed with the Commission a registration statement (file number
333-_____) on such Form, including
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/*/ Plus an option to purchase from Travelers Corporate Loan Fund Inc. up to
__________ additional shares to cover over-allotments
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a related preliminary prospectus and a notification of registration on
Form N-8A under the Investment Company Act (file number 811-_____). The
Fund may have filed one or more amendments thereto, including the
related preliminary prospectus, each of which has previously been
furnished to you. The Fund will next file with the Commission one of the
following: (A) prior to effectiveness of such registration statement, a
further amendment to such registration statement, including the form of
final prospectus or (B) after effectiveness of such registration
statement, a final prospectus in accordance with Rule 497(b) or Rules
430A and 497(h), as the case may be. In the case of clause (B), the Fund
has included in such registration statement, as amended at the Effective
Date, all information (other than Rule 430A Information) required by the
Act and the Investment Company Act and the Rules and Regulations to be
included in the Prospectus with respect to the Securities and the
offering thereof. As filed, such amendment and form of final prospectus,
or such final prospectus, shall contain all Rule 430A Information,
together with all other such required information, with respect to the
Securities and the offering thereof and, except to the extent the
Representative shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes
(beyond that contained in the latest Preliminary Prospectus) as the Fund
has advised you, prior to-the Execution Time, will be included or made
therein.
(ii) On the Effective Date, the Registration Statement and the
notification of registration on Form N-8A did or will, and when the
Prospectus is first filed in accordance with Rule 497(b) or (h), as the
case may be, and if subsequently filed pursuant to Rule 497(d), and on
the Closing Date, the Prospectus (and any supplements thereto) will,
comply in all material respects with the applicable requirements of the
Act and the Investment Company Act and the Rules and Regulations; on the
Effective Date, the Registration Statement and the notification of
registration on Form N-8A did not or will not contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements
therein not misleading; and, on the Effective Date, the Prospectus, if
not filed pursuant to Rule 497(b) or (h), as the case may be, did not or
will not, and on the date of any filing pursuant to Rule 497(b) or (h),
as the case may be, and on the date of any filing pursuant to Rule
497(d), and on the Closing Date, the Prospectus (together with any
supplement thereto) will not, include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Fund makes no
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representations or warranties as to the information contained in or
omitted from the Registration State ment, the Prospectus (or any
supplement thereto) or the notification of registration on Form N-8A, in
reliance upon and in conformity with (A) information furnished in
writing to the Fund by or on behalf of any Underwriter through the
Representative specifically for inclusion in the Registration Statement,
the Prospectus (or any supplement thereto) or the notification on
Form N-8A or (B) information relating to the Investment Adviser or the
Sub-Investment Adviser and furnished to the Fund by
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the Investment Adviser or the Sub-Investment Adviser specifically for
inclusion in the Registration Statement, the Prospectus (or any
supplement thereto) or the notification of registration on Form N-8A.
(iii) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "Effective Date" shall mean each
date that the Registration Statement and any post-effective amendment or
amendments thereto became or become effective. "Execution Time" shall
mean the date and time that this Agreement is executed and delivered by
the parties hereto. "Preliminary Prospectus" shall mean any preliminary
prospectus referred to in Section 1(i) above and any preliminary
prospectus included in the Registration Statement at the Effective Date
that omits Rule 430A Information. "Prospectus" shall mean the prospectus
relating to the Securities that is first filed pursuant to Rule 497(b)
or (h), as the case may be, after the Execution Time, or as subsequently
filed pursuant to Rule 497(d) under the Act or, if no filing pursuant to
Rule 497 is required, shall mean the form of final prospectus relating
to the Securities included in the Registration Statement at the
Effective Date. "Registration Statement" shall mean the registration
statement referred to in Section 1(i) above, including incorporated
documents, exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time, in the form
in which it shall become effective) and, in the event any post-effective
amendment thereto becomes effective prior to the Closing Date (as
hereinafter defined), shall also mean such registration statement as so
amended and such term shall include any Rule 430A Information deemed to
be included therein at the Effective Date as provided by Rule 430A.
"Rule 430A" and "Rule 497" refer to such rules under the Act. "Rule 430A
Information" means information with respect to the Securities and the
offering thereof permitted to be omitted from the Registration Statement
when it becomes effective pursuant to Rule 430A.
(iv) The Fund has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Maryland, with full corporate power and authority to own its property
and conduct its business as described in the Prospectus, and is duly
qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or conducts
material business; the Fund has no subsidiaries; and the Fund holds all
licenses, certificates and permits from all governmental authorities
necessary for the conduct of its business as described in the Prospectus
(other than the order of the Commission declaring the Registration
Statement effective under the Act and similar orders under the
securities or blue sky laws of the various states of the United States).
(v) The Fund has an authorized equity capitalization as set
forth in the Prospectus; the capital stock of the Fund conforms to the
description thereof contained in the Prospectus; there are no shares of
Common Stock owned of record [except _______ shares of Common Stock
owned of record by the Investment Adviser or an affiliate]; the
outstanding shares of Common Stock of the Fund have been duly and
validly authorized and issued and are fully paid and nonassessable; the
Securities have
4
been duly and validly authorized and, when issued and delivered to and
paid for by the Underwriters pursuant to this Agreement, will be validly
issued, fully paid and nonassessable; the Securities have been duly
authorized for listing, subject to official notice of issuance, on the
New York Stock Exchange; the certificates representing the Securities
are in valid and sufficient form; and no holder of outstanding shares of
capital stock of the Fund is entitled to preemptive or other rights to
subscribe for the Securities.
(vi) There in not pending or, to the best knowledge of the Fund,
threatened, any action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Fund of a character required to be disclosed in the Registration
Statement by the Act, the Investment Company Act or the Rules and
Regulations which is not disclosed in the Prospectus, and there is no
franchise, contract, agreement or document of a character required to be
described in the Registration Statement or Prospectus by the Act, the
Investment Company Act or the Rules and Regulations, or to be filed as
an exhibit, which is not described or filed as required.
(vii) Except as stated or contemplated in the Prospectus,
subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, (A) the Fund has not
incurred any liabilities or obligations, direct or contingent, or
entered into any transactions, not in the ordinary course of business,
that are material to the Fund and (B) the Fund has not incurred any
indebtedness for borrowed money.
(viii) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by the
Fund of the transactions contemplated herein, except such as may be
required under the Act, the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the Investment Company Act, the Rules and
Regulations, the rules and regulations of the Commission under the
Exchange Act or state securities or blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
Underwriters.
(ix) The Investment Advisory Agreement (the "Advisory
Agreement") and the Administration Agreement (the "Administration
Agreement") to be dated as of the Effective Date, between the Fund and
the Investment Adviser, the Custodian Agreement (the "Custodian
Agreement") to be dated as of the Effective Date, between the Fund and
PNC Bank, N.A. (the "Custodian") and the Transfer Agency and Services
Agreement (the "Transfer Agency Agreement") to be dated as of the
Effective Date, between the Fund and First Data Investor Services Group,
Inc., (this Agreement, the Advisory Agreement, the Custodian Agreement,
and the Transfer Agency Agreement, collectively, the "Company
Agreements") have been duly authorized, executed and delivered by the
Fund; the Advisory Agreement, the Custodian Agreement and the Transfer
Agency Agreement comply as to form with all applicable provisions of the
Act and each constitutes a legal, valid and binding instrument
enforceable against the Fund in accordance with its terms (subject, as
to enforcement
5
of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from time
to time in effect).
(x) The Fund is registered with the Commission under the
Investment Company Act as a closed-end diversified management investment
company and all required action has been taken under the Act and the
Investment Company Act to make the public offering and consummate the
sale of the Securities under this Agreement, and the provisions of the
Fund's articles of incorporation and by-laws do not violate the
Investment Company Act or the Rules and Regulations of the Commission
thereunder.
(xi) The Fund is not in violation of its articles of
incorporation or by-laws or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Fund or of any decree
of 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
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 material agreement, indenture, lease or other instrument to which
the Fund is a party or by which it or any of its properties may be
bound.
(xii) Neither (A) the issuance and sale of the Securities, (B)
the performance by the Fund of the Fund Agreements, nor (C) the
consummation of the transactions contemplated herein or in the
Prospectus will conflict with, or result in a breach of or violation of
any of the terms and provisions of, or constitute a default under, any
statute, any agreement or instrument to which the Fund is a party or by
which it is bound or to which any of the property of the Fund is
subject, the Fund's articles of incorporation or by-laws, or any order,
rule or regulation of any court or governmental agency, authority or
body having jurisdiction over the Fund or any of its properties.
(xiii) Since the date as of which information is given in the
Registration Statement and the Prospectus (and any amendment or
supplement to either of them), except as otherwise stated therein, (A)
there has been no material, adverse change in the condition (financial
or other), business, properties, net assets or results of operations of
the Fund or business prospects of the Fund, whether or not arising in
the ordinary course of business and (B) there has been no dividend or
distribution of any kind declared, paid or made by the Fund on any class
of its capital stock.
(xiv) The accountants, KPMG Peat Marwick LLP who have certified
or shall certify the financial statements included in the Registration
Statement and the Prospectus (and any amendment or supplement to either
of them), are an independent public accounting firm as required by the
Act, the Investment Company Act and the Rules and Regulations.
6
(xv) The Statement of Assets and Liabilities, together with
related notes, included in the Registration Statement or the Prospectus
(or any amendment or supplement to either of them) presents fairly the
financial position of the Fund on the basis stated in the Registration
Statement at the respective dates or for the respective periods to which
they apply; such financial 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.
(xvi) The Fund has not distributed and, prior to the later to
occur of (A) the Closing Date and (B) completion of the distribution of
the Securities, will not distribute to the public any offering material
in connection with the offering and sale of the Securities other than
the Registration Statement, the prospectus included in [Pre-Effective
Amendment No. 1] to the Registration Statement, the Prospectus and the
sales literature filed with the NASD on __________, 1998 (the "NASD
Sales Literature").
(xvii) The Fund believes that it maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with the investment policies and
restrictions of the Fund and the applicable requirements of the
Investment Company Act, the Investment Company Act Rules and Regulations
and the Internal Revenue Code of 1986, as amended; (B) 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 material compliance with the books and
records requirements under the Investment Company Act and the Investment
Company Act Rules and Regulations; and (C) the internal books and
records of the Fund accurately reflect the Fund's actual assets in all
material respects.
(xviii) Except as stated in this Agreement and in the Prospectus
(and any amendment or supplement thereto), the Fund has not taken and
will not take, directly or indirectly, any action designed to or which
might reasonably be expected to cause or result in or which will
constitute stabilization or manipulation of the price of shares of
Common Stock and the Fund is not aware of any such action taken or to be
taken by any affiliates of the Fund.
(xix) The NASD Sales Literature complied and comply in all
material respects with the applicable requirements of the Act, the Act
Rules and Regulations and the rules and interpretations of the NASD, and
neither the NASD Sales Literature nor any other advertising, sales
literature or other promotional material (including "prospectus
wrappers," "broker kits, "road show slides" and "road show scripts")
authorized by or prepared by or on behalf of the Fund or the Investment
Adviser or the Sub-Investment Adviser for use in connection with the
offering and sale of the Securities 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 circumstance under which they were made, not
misleading.
7
(xx) No holder of any security of the Fund has any right to require
registration of shares of Common 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.
(b) The Investment Adviser represents and warrants to, and agrees
with, each Underwriter that:
(i) The Investment Adviser is duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of [Delaware], with full corporate power and authority to own its
property and conduct its business as described in the Prospectus, and is
duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or conducts
material business.
(ii) The Investment Adviser is duly registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the
"Advisers Act") and is not prohibited by the Advisers Act or the
Investment Company Act, or the rules and regulations under such Acts,
from acting as investment adviser for the Fund under the Advisory
Agreement and as contemplated by the Prospectus.
(iii) This Agreement, the Advisory Agreement and the Sub-
Investment Advisory Agreement (the "Sub-Advisory Agreement") to be dated
as of the Effective Date, between the Investment Adviser and the Sub-
Investment Adviser (collectively, the "Investment Adviser Agreements"),
have been duly authorized, executed and delivered by the Investment
Adviser; each of the Advisory Agreement and Sub-Advisory Agreement
complies as to form with all applicable provisions of the Act and the
Investment Company Act and constitutes a legal, valid and binding
instrument enforceable against the Investment Adviser in accordance with
its terms (subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect).
(iv) Neither (A) the operations and activities of the Investment
Adviser as contemplated in the Prospectus, (B) the performance by the
Investment Adviser of the Investment Adviser Agreements, nor (C) the
consummation of the transactions contem plated herein or in the
Prospectus will conflict with, or result in a breach of or violation of
any of the terms and provisions of, or constitute a default under, any
statute, any agreement or instrument to which the Investment Adviser is
a party or by which it is bound or to which any of the property of the
Investment Adviser is subject, the Investment Adviser's certificate of
incorporation or by-laws, or any order, rule or regulation of any court
or governmental agency, authority or body having jurisdiction over the
Investment Adviser or any of its properties; and no consent, approval,
authorization or order of, or filing with, any court or governmental
agency, authority or body is required for the consummation of the
transactions contemplated by the
8
Investment Adviser Agreements in connection with the issuance or sale of
the Securities by the Fund, except such as may be required under the
Act, the Exchange Act, the Investment Company Act or state securities
laws or blue sky laws.
(v) On the Effective Date, the Registration Statement did not or
will not contain any untrue statement of a material fact relating to the
description of the Investment Adviser or the Investment Adviser
Agreements or omit to state a material fact relating to the description
of the Investment Adviser or the Investment Adviser Agreements required
to be stated therein or necessary to make the statements therein not
misleading; and on the Effective Date, the Prospectus, if not filed
pursuant to Rule 497(b) or (h), as the case may be, did not or will not,
and on the date of any filing pursuant to Rule 497(b) or (h), as the
case may be, and on the date of any filing pursuant to Rule 497(d), and
on the Closing Date, the Prospectus (together with any supplements
thereto) will not, include any untrue statement of a material fact
relating to the description of the Investment Adviser or the Investment
Adviser Agreements or omit to state a material fact relating to the
description of the Investment Adviser or the Investment Adviser
Agreements necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(vi) There has not been any material change in the management of
the Investment Adviser or any material adverse change in the condition
(financial or other) of the Investment Adviser since the date of the
Prospectus (or, if the Prospectus is not in existence, the Preliminary
Prospectus).
(vii) There is not pending, or to the best knowledge of the
Investment Adviser, threatened, any action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency,
authority or body or any arbitration involving the Investment Adviser
(A) relating to any of the transactions contemplated by the Investment
Adviser Agreements or (B) which might, in the reasonable judgment of the
Investment Adviser, individually or in the aggregate, result in any
material adverse change in the condition (financial or other), business,
prospectus or net worth of the Investment Adviser, or might materially
and adversely affect the properties or assets thereof.
(viii) Except as stated in this Agreement and in the Prospectus
(and in any amendment or supplement thereto), the Investment Adviser has
not taken and will not take, directly or indirectly, any action designed
to or which might reasonably be expected to cause or result in or which
will constitute, stabilization or manipulation of the price of shares of
Common Stock and the Investment Adviser is not aware of any such action
taken or to be taken by any affiliates of the Investment Adviser.
(c) The Sub-Investment Adviser represents and warrants to, and agrees
with, each Underwriter that:
(i) The Sub-Investment Adviser is duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of [Delaware],
9
with full corporate power and authority to own its property and conduct
its business as described in the Prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing under the laws
of each jurisdiction which requires such qualification wherein it owns
or leases material properties or conducts material business.
(ii) The Sub-Investment Adviser is duly registered as an
investment adviser under the Investment Advisers Act of 1940, as amended
(the "Advisers Act") and is not prohibited by the Advisers Act or the
Investment Company Act, or the rules and regulations under such Acts,
from acting as investment sub-adviser for the Fund under the Sub-
Advisory Agreement and as contemplated by the Prospectus.
(iii) This Agreement and the Sub-Advisory Agreement
(collectively, the "Sub-Investment Adviser Agreements"), have been duly
authorized, executed and delivered by the Sub-Investment Adviser; the
Sub-Advisory Agreement complies as to form with all applicable
provisions of the Act and the Investment Company Act and constitutes a
legal, valid and binding instrument enforceable against the Sub-
Investment Adviser in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect).
(iv) Neither (A) the operations and activities of the Sub-
Investment Adviser as contemplated in the Prospectus, (B) the
performance by the Sub-Investment Adviser of the Sub-Investment Adviser
Agreements, nor (C) the consummation of the transactions contemplated
herein or in the Prospectus will conflict with, or result in a breach of
or violation of any of the terms and provisions of, or constitute a
default under, any statute, any agreement or instrument to which the
Sub-Investment Adviser is a party or by which it is bound or to which
any of the property of the Sub-Investment Adviser is subject, the Sub-
Investment Adviser's certificate of incorporation or by-laws, or any
order, rule or regulation of any court or governmental agency, authority
or body having jurisdiction over the Sub-Investment Adviser or any of
its properties; and no consent, approval, authorization or order of, or
filing with, any court or governmental agency, authority or body is
required for the consummation of the transactions contemplated by the
Sub-Investment Adviser Agreements in connection with the issuance or
sale of the Securities by the Fund, except such as may be required under
the Act, the Exchange Act, the Investment Company Act or state
securities laws or blue sky laws.
(v) On the Effective Date, the Registration Statement did not or
will not contain any untrue statement of a material fact relating to the
description of the Sub-Investment Adviser or the Sub-Investment Adviser
Agreements or omit to state a material fact relating to the description
of the Sub-Investment Adviser or the Sub-Investment Adviser Agreements
required to be stated therein or necessary to make the statements
therein not misleading; and on the Effective Date, the Prospectus, if
not filed pursuant to Rule 497(b) or (h), as the case may be, did not or
will not, and on the date of any filing pursuant to Rule 497(b) or (h),
as the case may be, and on the
10
date of any filing pursuant to Rule 497(d), and on the Closing Date, the
Prospectus (together with any supplements thereto) will not, include any
untrue statement of a material fact relating to the description of the
Sub-Investment Adviser or the Sub-Investment Adviser Agreements or omit
to state a material fact relating to the description of the Sub-
Investment Adviser or the Sub-Investment Adviser Agreements necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(vi) There has not been any material change in the management of
the Sub-Investment Adviser or any material adverse change in the
condition (financial or other) of the Sub-Investment Adviser since the
date of the Prospectus (or, if the Prospectus is not in existence, the
Preliminary Prospectus).
(vii) There is not pending, or to the best knowledge of the Sub-
Investment Adviser, threatened, any action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency,
authority or body or any arbitration involving the Sub-Investment
Adviser (A) relating to any of the transactions contemplated by the Sub-
Investment Adviser Agreements or (B) which might, in the reasonable
judgment of the Sub-Investment Adviser, individually or in the
aggregate, result in any material adverse change in the condition
(financial or other), business, prospectus or net worth of the Sub-
Investment Adviser, or might materially and adversely affect the
properties or assets thereof.
(viii) Except as stated in this Agreement and in the Prospectus
(and in any amendment or supplement thereto), the Sub-Investment Adviser
has not taken and will not take, directly or indirectly, any action
designed to or which might reasonably be expected to cause or result in
or which will constitute, stabilization or manipulation of the price of
shares of Common Stock and the Sub-Investment Adviser is not aware of
any such action taken or to be taken by any affiliates of the Sub-
Investment Adviser.
2. Purchase and Sale. (a) Subject to the terms and condition and in
-----------------
reliance upon the representations and warranties herein set forth, the Fund
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Fund, at a purchase price of $_____ per share,
the amount of the Underwritten Securities set forth opposite such Underwriter's
name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Fund hereby grants an
option to the sev eral Underwriters to purchase, severally and not jointly, up
to __________ shares of Option Securities at the same purchase price per share
as the Underwriters shall pay for the Underwritten Securities. Said option may
be exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or from
time to time in part at any time on or before the 45th day after the date of the
Prospectus upon written or telegraphic notice by the Representative to the Fund
setting forth the number of shares of the Option Securities as to which the
several Underwriters are exercising the option and the settlement date.
Delivery of certificates for the shares of Option
11
Securities, and payment therefor, shall be made as provided in Section 3 hereof.
The number of shares of the Option Securities to be purchased by each
Underwriter shall be the same percentage of the total number of shares of the
Option Securities to be purchased by the several Underwriters as such
Underwriter is purchasing of the Underwritten Securities, subject to such
adjustments as you in your absolute discretion shall make to eliminate any
fractional shares.
3. Delivery and Payment. Delivery of and payment for the
--------------------
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third business
day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
__________, 1998, or such later date (not later than __________, 1998) as the
Representative shall designate, which date and time may be postponed by
agreement between the Representative and the Fund or as provided in Section 9
hereof (such date and time of delivery and payment for the Securities being
herein called the "Closing Date"). Delivery of the Securities shall be made to
the Representative for the respective accounts of the several Underwriters
against payment by the several Underwriters through the Representative of the
purchase price therefor in immediately available funds. Delivery of the
Underwritten Securities and the Option Securities shall be made at such location
as the Representative shall reasonably designate at least one business day in
advance of the Closing Date and payment for such Securities shall be made at the
office of Xxxxxxx Xxxxxxx & Xxxxxxxx in New York, New York. Certificates for
the Securities shall be registered in such names and in such denominations as
the Representative may request not less than three full business days in advance
of the Closing Date.
The Fund agrees to have the Securities available for inspection,
checking and packaging by the Representative in New York, New York, not later
than 1:00 PM on the business day prior to the Closing Date.
If the option provided for in Section 2(b) hereof is exercised after
the third business day prior to the Closing Date, the Fund will deliver (at the
expense of the Fund) to the Representative, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, xx the date specified by the Representative (which shall in no event
be earlier than three business days nor later than ten business days after
exercise of said option), certificates for the Option Securities in such names
and denominations as the Representative shall have requested against payment of
the purchase price therefor in immediately available funds. If settlement for
the Option Securities occurs after the Closing Date, the Fund will deliver to
the Representative on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
------------------------
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements. The Fund agrees with the several Underwriters that:
----------
12
(a) The Fund will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment thereof, to
become effective. Prior to the termination of the offering of the Securities,
the Fund will not file any amendment of the Registration Statement or supplement
(whether pursuant to the Act, the Investment Company Act, or otherwise) to the
Prospectus unless the Fund has furnished you a copy for your review prior to
filing and will not file any such proposed amendment or supplement to which you
reasonably object. Subject to the foregoing sentence, if the Registration
Statement has become or becomes effective pursuant to Rule 430A, or filing of
the Prospectus is otherwise required under Rule 497, the Fund will cause the
Prospectus, properly completed, and any supplement thereto to be filed with the
Commission pursuant to the applicable paragraph of Rule 497 within the time
period prescribed and will provide evidence satisfactory to the Representative
of such timely filing. The Fund will promptly advise the Representative (i)
when the Registration Statement, if not effective at the Execution Time, and any
amendment thereto, shall have become effective, (ii) when the Prospectus, and
any supplement thereto, shall have been filed (if required) with the Commission
pursuant to Rule 497, (iii) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have been filed or
become effective, (iv) of any request by the Commission for any amendment of the
Registration Statement or supplement to the Prospectus or for any additional
information, (v) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement under the Act or the issuance of
any notice or order under Section 8(e) of the Investment Company Act or the
institution or threatening of any proceeding for either such purpose and (vi) of
the receipt by the Fund of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The Fund will use
its best efforts to prevent the issuance of any such stop order and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend the Registration Statement
or supplement the Prospectus to comply with the Act, the Investment Company Act
or the Rules and Regulations, the Fund promptly will prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this Section 5,
an amendment or supplement which will correct such statement or omission or
effect such compliance.
(c) As soon as practicable, the Fund will make generally available to
its security holders and to the Representative an earnings statement or
statements of the Fund and its subsidiaries which will satisfy the provisions of
Section 11(a) of the Act and Rule 158 under the Act.
(d) The Fund will furnish to the Representative and counsel for the
Underwriter, without charge, signed copies of the Registration Statement
(including exhibits thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required
13
by the Act, as many copies of each Preliminary Prospectus and the Prospectus and
any supplement thereto as the Representative may reasonably request.
(e) The Fund will arrange for the qualification of the Securities for
sale under the laws of such jurisdictions as the Representative may designate,
will maintain such qualifications in effect so long as required for the
distribution of the Securities and will pay the fee of the National Association
of Securities Dealers, Inc., in connection with its review of the offering.
(f) The Fund will not, for a period of 180 days following the date of
the Prospectus, without the prior written consent of the Representative, offer,
sell or contract to sell, register with the Commission or otherwise dispose of,
directly or indirectly, or announce the offering of, any shares of Common Stock
other than the Securities or any securities convertible into, or exchangeable
for, shares of Common Stock; provided, however, that the Fund may issue and sell
-------- -------
Common Stock pursuant to any dividend reinvestment plan of the Fund in effect at
the Execution Time.
(g) The Fund will apply the net proceeds from the sale of the
Underwritten Securities, and of the Option Securities, if any, for the purposes
set forth in the Prospectus.
(h) The Fund will use its best efforts to list, subject to notice of
issuance, the Securities to be sold by it on the New York Stock Exchange
simultaneously with the effectiveness of the Registration Statement.
6. Conditions to the Obligations of the Underwriters. The
-------------------------------------------------
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Fund, the Investment Adviser
and the Sub-Investment Adviser contained herein as of the Execution Time, the
Closing Date and any settlement date pursuant to Section 3 hereof, to the
accuracy of the statements of the Fund, the Investment Adviser and the Sub-
Investment Adviser made in any certificates pursuant to the provisions hereof,
to the performance by the Fund, the Investment Adviser and the Sub-Investment
Adviser of their respective obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representative agrees in writing to a later time,
the Registration Statement will become effective not later than (i) 6:00 PM New
York City time, on the date of determination of the public offering price, if
such determination occurred at or prior to 3:00 PM New York City time on such
date or (ii) 12:00 Noon on the business day following the day on which the
public offering price was determined, if such determination occurred after 3:00
PM New York City time on such date; if filing of the Prospectus, or any
supplement thereto, is required pursuant to Rule 497(b), (d) or (h), the
Prospectus, and any such supplement, will be filed in the manner and within the
time period required by Rule 497(b), (d) or (h), as the case may be; and no stop
order suspending the effectiveness of the Registration Statement under the Act
and no notice or order under Section 8(e) of the
14
Investment Company Act shall have been issued and no proceedings for either
purpose shall have been instituted or threatened.
(b) The Fund shall have furnished to the Representative the opinion
of Xxxxxxx Xxxx & Xxxxxxxxx, counsel for the Fund, dated the Closing Date, to
the effect that:
(i) the Fund has been duly incorporated and is validly existing
and in good standing as a corporation under the laws of the State of
Maryland and has full corporate power and authority to conduct its business
as described in the Prospectus, and is duly registered and qualified to
conduct its business and is in good standing in the State of New York;
(ii) all outstanding shares of the Fund's Common Stock have been
duly authorized, and are validly issued, fully paid and nonassessable; the
Securities have been duly authorized and, upon payment and delivery in
accordance with this Agree ment, will be validly issued, fully paid and
nonassessable;
(iii) the statements made in the Prospectus under the caption
"Description of Capital Stock - Common Stock," insofar as they purport to
constitute summaries of the terms of the Fund's Common Stock (including the
Securities), constitute accurate summaries of the terms of such Common
Stock in all material respects; the Securities have been authorized for
listing, subject to official notice of issuance and evidence of
satisfactory distribution, on the New York Stock Exchange; the form of
certificates for the Securities conforms to the requirements of the General
Corporation Law of Maryland; there are no preemptive rights under federal
or Maryland law to subscribe for or purchase shares of the Fund's capital
stock and there are no preemptive or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of, any shares of
the Fund's capital stock pursuant to the Fund's articles of incorporation
or by-laws or any agreement or other instrument filed or incorporated by
reference as an exhibit to the Registration Statement;
(iv) to the knowledge of such counsel, there is no pending or
threatened legal or governmental proceeding required to be described in the
Prospectus which is not described as required, or any contracts or
documents of a character required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration
Statement or incorporated by reference therein, which are not described and
filed or incorporated by reference as required;
(v) the statements in the Prospectus under the captions
"Management of the Fund - Investment Adviser and Sub-Investment Adviser,"
"Management of the Fund - Directors and Officers" and "Description of
Capital Stock - Common Stock," insofar as they purport to constitute
summaries of the terms of Maryland or federal statutes, rules and
regulations thereunder or contracts and other documents, constitute
accurate summaries of the terms of such statutes, rules and regulations or
contracts and other documents in all material respects;
15
(vi) the statements in the Prospectus under the captions
"Dividends and Distributions; Dividend Reinvestment Plan" and "Taxation,"
insofar as they purport to constitute summaries of matters of United States
federal tax law and regulations or legal conclusions with respect thereto,
constitute accurate summaries of the matters described therein in all
material respects;
(vii) the Registration Statement has become effective under the
Act (such counsel may, to the extent necessary, rely on oral confirmation
from the Commission to this effect in rendering such opinion); any required
filing of the Prospectus, and any supplements thereto, pursuant to Rule
497(b), (d) or (h) has been made in the manner and within the time period
required by Rule 497(b), (d) or (h) under the Act; and, to the knowledge of
such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued; and, to the knowledge of such
counsel, no proceeding for that purpose has been instituted or threatened
by the Commission;
(viii) this Agreement has been duly authorized, executed and
delivered by the Fund;
(ix) no consent, approval, authorization, order, registration or
qualification of or with any federal Maryland or New York governmental
agency or body is required for the issue and sale of the Securities by the
Fund and the compliance by the Fund with all of the provisions of this
Agreement, except for the registration under the Act, the Exchange Act and
the Investment Company Act of the Securities, and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
(x) the issue and sale of the Securities by the Fund and the
compliance by the Fund with all of the provisions of this Agreement will
not breach or result in a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument filed or
incorporated by reference as an exhibit to the Registration Statement, nor
will such action violate the articles of incorporation or by laws of the
Fund or any federal, Maryland or New York statute or any rule or regulation
that has been issued pursuant to any federal, Maryland or New York statute
or any order known to such counsel issued pursuant to any federal, Maryland
or New York statute by any court or governmental agency or body or court
having jurisdiction over the Fund or any of its properties;
(xi) the Advisory Agreement, the Sub-Advisory Agreement, the
Administration Agreement, the Custodian Agreement and the Transfer Agency
Agreement have been duly authorized, executed and delivered by the Fund,
comply as to form with all applicable provisions of the Investment Company
Act and are legal, valid, binding and enforceable obligations of the Fund,
subject, to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable
16
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing; and
(xii) the Fund is registered with the Commission under the
Investment Company Act as a closed-end diversified management investment
company, and the provisions of the articles of incorporation and by-laws of
the Fund do not violate the Investment Company Act or the Rules and
Regulations of the Commission thereunder;
In rendering such opinion, such counsel may limit such opinion to matters
involving the application of the laws of the State of New York, the State of
Maryland and the United States and may rely (A) as to matters involving the
application of laws of the State of Maryland, to the extent they deem proper and
specified in such opinion, upon the opinion of [Piper & Marbury L.L.P.] or other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Fund, the Investment Adviser, the Sub-Investment Adviser and public officials.
References to the Prospectus in this Section 6(b) include any supplements
thereto at the Closing Date.
Such counsel has not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement or
the Prospectus and takes no responsibility therefor, except as and to the extent
set forth in Sections 6(b)(iii), 6(b)(v) and 6(b)(vi) above. In the course of
the preparation by the Fund of the Registration Statement and the Prospectus,
such counsel has participated in conferences with certain officers and employees
of the Fund, the Investment Adviser and the Sub-Investment Adviser, with
representatives of KPMG Peat Marwick and with counsel to the Investment Adviser
and Sub-Investment Adviser. Based upon such counsel's examination of the
Registration Statement and the Prospectus, such counsel's investigations made in
connection with the preparation of the Registration Statement and the Prospectus
and such counsel's participation in the conferences referred to above, (i) such
counsel is of the opinion that the Registration Statement, as of its effective
date, and the Prospectus, as of _______, 1998, complied as to form in all
material respects with the requirements of the Act and the Investment Company
Act and the applicable rules and regulations of the Commission thereunder,
except that in each case such counsel expresses no opinion with respect to the
financial statements or other financial or statistical data contained in the
Registration Statement or the Prospectus, and (ii) such counsel has no reason to
believe that the Registration Statement, as of its effective date, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading or that the Prospectus contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that in each case such counsel expresses no belief
with respect to the financial statements or other financial or statistical data
contained in the Registration Statement or the Prospectus.
(c) The Investment Adviser shall have furnished to the Representative
the opinion of internal counsel for the Investment Adviser reasonably acceptable
to the Representative, dated the Closing Date, to the effect that:
17
(i) the Investment Adviser is duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
[Delaware], with full corporate power and authority to own its property and
conduct its business as described in the Prospectus, and is duly qualified
to do business as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification wherein it owns
or leases material properties or conducts material business;
(ii) the Investment 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, or the rules and regulations under either, from
acting as Investment Adviser for the Fund under the Advisory Agreement and
as contemplated in the Prospectus;
(iii) this Agreement, the Advisory Agreement and the Sub-
Advisory Agreement have each been duly authorized, executed and delivered
by the Investment Adviser, and each of the Advisory Agreement and the Sub-
Advisory Agreement constitutes a legal, valid and binding instrument
enforceable against the Investment Adviser in accordance with its terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally from time to time in effect);
(iv) neither (A) the operation and activities of the Investment
Adviser as contemplated in the Prospectus, (B) the performance by the
Investment Adviser of its obligations under the Investment Adviser
Agreements, nor (C) the consummation of the transactions contemplated
herein or in the Prospectus will conflict with, or result in a breach of,
or constitute a default under the certificate of incorporation or by-laws
of the Investment Adviser or the terms of any indenture or other agreement
or instrument known to such counsel to which the Investment Adviser or any
of its affiliates is a party or by which it is bound, or any law, order or
regulation known to such counsel to be applicable to the Investment Adviser
of any court, regulatory body, administrative agency, governmental body,
stock exchange or securities association or any other authority or
arbitrator having jurisdiction over the Investment Adviser or any of its
affiliates.
Although such counsel has not undertaken, except as otherwise
indicated in their opinion, to determine independently and does not assume any
responsibility for, the accuracy or completeness of the statements in the
Registration Statement, such counsel has participated in the preparation of the
Registration Statement and the Prospectus, including review and discussion of
the contents thereof and nothing has come to the attention of such counsel that
has caused it to believe that the Registration Statement, at the time the
Registration Statement became effective or the Prospectus, as of its date and as
of the Closing Date, as the case may be, or the date of any closing of the sale
of any Option Securities, 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 any amendment or supplement
to the Prospectus, as of the Closing Date or the date of any closing
18
of the sale of any Option Securities, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that such counsel need express no opinion
with respect to the financial statements and the notes thereto and the schedules
and other financial and statistical data included in the Registration Statement
or the Prospectus).
(d) The Sub-Investment Adviser shall have furnished to the
Representative the opinion of internal counsel for the Sub-Investment Adviser
reasonably acceptable to the Representative, dated the Closing Date, to the
effect that:
(i) the Sub-Investment Adviser is duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of [Delaware], with full corporate power and authority to own its
property and conduct its business as described in the Prospectus, and is
duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or conducts
material business;
(ii) the Sub-Investment 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, or the rules and regulations
under either, from acting as Sub-Investment Adviser for the Fund under the
Sub-Advisory Agreement and as contemplated in the Prospectus;
(iii) this Agreement and the Sub-Advisory Agreement have each
been duly authorized, executed and delivered by the Sub-Investment Adviser,
and the Sub-Advisory Agreement constitutes a legal, valid and binding
instrument enforceable against the Sub-Investment Adviser in accordance
with its terms (subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium and other laws affecting
creditors' rights generally from time to time in effect);
(iv) neither (A) the operation and activities of the Sub-
Investment Adviser as contemplated in the Prospectus, (B) the performance
by the Sub-Investment Adviser of its obligations under the Sub-Investment
Adviser Agreements, nor (C) the consummation of the transactions
contemplated herein or in the Prospectus will conflict with, or result in a
breach of, or constitute a default under the certificate of incorporation
or by-laws of the Sub-Investment Adviser or the terms of any indenture or
other agreement or instrument known to such counsel to which the Sub-
Investment Adviser or any of its affiliates is a party or by which it is
bound, or any law, order or regulation known to such counsel to be
applicable to the Sub-Investment Adviser of any court, regulatory body,
administrative agency, governmental body, stock exchange or securities
association or any other authority or arbitrator having jurisdiction over
the Sub-Investment Adviser or any of its affiliates.
19
Although such counsel has not undertaken, except as otherwise
indicated in their opinion, to determine independently and does not assume any
responsibility for, the accuracy or completeness of the statements in the
Registration Statement, such counsel has participated in the preparation of the
Registration Statement and the Prospectus, including review and discussion of
the contents thereof and nothing has come to the attention of such counsel that
has caused it to believe that the Registration Statement, at the time the
Registration Statement became effective or the Prospectus, as of its date and as
of the Closing Date, as the case may be, or the date of any closing of the sale
of any Option Securities, 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 any amendment or supplement
to the Prospectus, as of the Closing Date or the date of any closing of the sale
of any Option Securities, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no opinion with
respect to the financial statements and the notes thereto and the schedules and
other financial and statistical data included in the Registration Statement or
the Prospectus).
(e) The Representative shall have received from Xxxxxxx Xxxxxxx &
Xxxxxxxx, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Securities, the
Registration Statement, the Prospectus (together with any supplement thereto)
and other related matters as the Representative may reasonably require, and the
Fund shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(f) The Fund shall have furnished to the Representative a certificate
of the Fund, signed by the Chairman of the Board or the President and the
principal financial or accounting officer of the Fund, dated the Closing Date,
to the effect that the signers of such certificate have carefully examined the
Registration Statement, the Prospectus, any supplement to the Prospectus and
this Agreement and that:
(i) the representations and warranties of the Fund in this
Agreement are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing Date and the
Fund has complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement under the Act and no notice or order under Section
8(e) of the Investment Company Act has been issued and no proceedings for
either purpose have been instituted or, to the Fund's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto), there has
been no material adverse change in the condition (financial or other),
earnings, business or properties of the Fund, whether or not arising from
transactions in the ordinary course of business,
20
except as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(g) The Investment Adviser shall have furnished to the Representative
a certificate of the Investment Adviser, signed by the Chairman of the Board,
the President or any Vice President and the principal financial or accounting
officer of the Investment Adviser, dated the Closing Date, to the effect that
the signers of such certificate have carefully examined the Registration
Statement, the Prospectus, any supplement to the Prospec tus and this Agreement
and that the representations and warranties of the Investment Adviser in this
Agreement are true and correct in all material respects on and as of the Closing
Date with the same effect as if made on the Closing Date and the Investment
Adviser has complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing Date;
(h) The Sub-Investment Adviser shall have furnished to the
Representative a certificate of the Sub-Investment Adviser, signed by the
Chairman of the Board, the President or any Vice President and the principal
financial or accounting officer of the Sub-Investment Adviser, dated the Closing
Date, to the effect that the signers of such certificate have carefully examined
the Registration Statement, the Prospectus, any supplement to the Prospec tus
and this Agreement and that the representations and warranties of the Sub-
Investment Adviser in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as if made on the
Closing Date and the Sub-Investment Adviser has complied with all the agreements
and satisfied all the conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(i) At the Execution Time and at the Closing Date, KPMG Peat Marwick
LLP shall have furnished to the Representative a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form and
substance satisfactory to the Representative, confirming that they are
independent accountants within the meaning of the Act and the respective
applicable published rules and regulations thereunder and stating in effect
that:
(i) in their opinion the statement of assets and liabilities and
related notes included in the Registration Statement and the Prospectus and
reported on by them comply in form in all material respects with the
applicable accounting requirements of the Act and the Investment Company
Act and the Rules and Regulations; and
(ii) on the basis of carrying out certain specified procedures
(but not an examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of significance with
respect to the comments set forth in such letter, a reading of the minutes
of the meetings of the stockholders, directors and committees thereof of
the Fund, and inquiries of certain officials of the Fund who have
responsibility for financial and accounting matters of the Fund, nothing
came to their attention which caused them to believe that at a specified
date no more than five business days prior to the date of the letter there
was any change in the shares of Common Stock or net assets or shareholders'
equity of the Fund as compared with the
21
amounts shown on the statement of assets and liabilities included in the
Prospectus, except in all instances for changes or decreases set forth in
such letter, in which case the letter shall be accompanied by an
explanation by the Fund as to the significance thereof unless said
explanation is not deemed necessary by the Representative.
References to the Prospectus in this paragraph (g) include any supplement
thereto at the date of the letter.
(j) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (i) of this Section 6 or (ii) any change, or
any development involving a prospective change, in or affecting the business or
properties of the Fund the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the judgment of the Representative, so material and
adverse as to make it impractical or inadvisable to proceed with the offering or
the delivery of the Securities as contemplated by the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of any
supplement thereto).
(k) Prior to the Closing Date, the Fund shall have furnished to the
Representative such further information, certificates and documents as the
Representative may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representative and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representative. Notice of such
cancellation shall be given to the Fund in writing or by telephone or telegraph
confirmed in writing.
7. Reimbursement of Underwriters' Expenses.
---------------------------------------
The Fund will pay all costs, expenses, fees and taxes incident to the
performance of its obligations under this Agreement, including, but not limited
to, expenses relating to (i) the preparation, printing and filing of the
Registration Statement as originally filed and of each amendment thereto, of the
Preliminary Prospectuses, and of the Prospectus and any amendments or
supplements thereto, (ii) the preparation of the Fund Agreements, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, including stock transfer taxes, if any, payable upon the sale,
issuance and delivery of the Securities, (iv) the fees and disbursements of the
Fund's counsel and accountants, (a) the qualification of the Securities under
securities laws in accordance with the provisions of Section 5(e) of this
Agreement, including filing fees and any fees or disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of a Blue Sky Survey, (vi) the reproduction and delivery to the Underwriters of
copies of the
22
Registration Statement as originally filed and of each amendment thereto, of the
Preliminary Prospectuses, and of the Prospectus and any amendments or
supplements thereto, (vii) the reproduction and delivery to the Underwriters of
copies of the Blue Sky Survey, (viii) the fees and expenses incurred with
respect to filings with the National Association of Securities Dealers, Inc.,
(ix) the preparation and delivery to the Underwriters of any marketing brochure
(excluding any brochures distributed to brokers) and any tombstone advertisement
placed by the Fund or placed by the Underwriters at the request of the Fund, (x)
the fees and expenses incurred with respect to the listing of the Securities on
the New York Stock Exchange and the registration thereof under the Exchange Act,
and (xi) an amount of $___________ payable on the Closing Date to the
Underwriters in partial reimbursement of their expenses in connection with the
offering.
If the sale of the Securities provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 6 hereof is not satisfied, because of any termination pursuant to
Section 10 hereof or because of any refusal, inability or failure on the part of
the Fund to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Fund will
remain liable to pay all of the costs, expenses, fees and taxes specified in the
preceding paragraph and will reimburse the Underwriters severally upon demand
for all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Fund, the Investment
--------------------------------
Adviser and the Sub-Investment Adviser jointly and severally agree to indemnify
and hold harmless each Underwriter, the directors, officers, employees and
agents of each Underwriter, and each person who controls any Underwriter within
the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the Fund,
-------- -------
the Investment Adviser and the Sub-Investment Adviser will not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Fund by or on behalf of any
Underwriter through the Representative specifically for inclusion therein. This
indemnity agreement will be in addition to any liability which the Fund or the
Investment Adviser or Sub-Investment Adviser may otherwise have.
23
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Fund and the Investment Adviser and the Sub-Investment Adviser, each of its
respective directors, each of its respective officers who signs the Registration
Statement, and each person who controls the Fund and the Investment Adviser and
the Sub-Investment Adviser within the meaning of either the Act or the Exchange
Act, to the same extent as the foregoing indemnity to each Underwriter, but only
with reference to written information relating to such Underwriter furnished to
the Fund by or on behalf of such Underwriter through the Representative
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Fund, the Investment Adviser and the
Sub-Investment Adviser acknowledge that the statements set forth in the last
paragraph of the cover page and under the heading "Underwriting" in any
Preliminary Prospectus and the Prospectus constitute the only information
furnished in writing by or on behalf of the several Underwriters for inclusion
in any Preliminary Prospectus or the Prospectus, and you, as the Representative,
confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
-------- -------
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expense of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or
24
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Fund, the Investment Adviser and the Sub-
Investment Adviser, jointly and severally, and the Underwriters agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Fund, the Investment
Adviser, the Sub-Investment Adviser and one or more of the Underwriters may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Fund, the Investment Adviser and the Sub-Investment Adviser on
the one hand and by the Underwriters on the other from the offering of the
Securities; provided, however, that in no case shall any Underwriter (except as
-------- -------
may be provided in any agreement among underwriters relating to the offering of
the Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such
Underwriter hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Fund, the Investment Adviser and the
Sub-Investment Adviser, jointly and severally, and the Underwriters shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Fund, the Investment
Adviser and the Sub-Investment Adviser on the one hand and of the Underwriters
on the other in connection with the statements or omissions which resulted in
such Losses as well as any other relevant equitable considerations. Benefits
received by the Fund, the Investment Adviser and the Sub-Investment Adviser
shall be deemed to be equal to the total net proceeds from the offering (before
deducting expenses), and benefits received by the Underwriters shall be deemed
to be equal to the total underwriting discounts and commissions, in each case as
set forth on the cover page of the Prospectus. Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Fund, the Investment Adviser, the Sub-
Investment Adviser or by the Underwriters. The Fund, the Investment Adviser,
the Sub-Investment Adviser and the Underwriters agree that it would not be just
and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
Section 8(d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Fund or the Investment Adviser or
the Sub-Investment Adviser within the meaning of either the Act or the Exchange
Act, each officer of the Fund who shall have signed the Registration Statement
and each director of the Fund shall have the same rights to contribution as the
Fund, subject in each case to the applicable terms and conditions of this
Section 8(d).
25
9. Default by an Underwriter. If any one or more Underwriters shall
-------------------------
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
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Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such non-defaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any non-defaulting Underwriter,
the Investment Adviser, the Sub-Investment Adviser or the Fund. In the event of
a default by any Underwriter as set forth in this Section 9, the Closing Date
shall be postponed for such period, not exceeding seven days, as the
Representative shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Fund, the Investment
Adviser, the Sub-Investment Adviser and any non-defaulting Underwriter for
damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in
-----------
the absolute discretion of the Representative, by notice given to the Fund prior
to delivery of and payment for the Securities, if prior to such time (i) trading
in the Fund's Common Stock shall have been suspended by the Commission or the
New York Stock Exchange or trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum prices shall have been
established on such Exchange, (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 calamity or crisis the effect of
which on financial markets is such as to make it, in the judgment of the
Representative, impracticable or inadvisable to proceed with the offering or
delivery of the securities as contemplated by the Prospectus (exclusive of any
supplement thereto).
11. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Fund or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter, the Investment Adviser,
the Sub-Investment Adviser or the Fund or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 7 and 8 hereof
shall survive the termi nation or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to the Representative, will be mailed,
delivered or telegraphed
26
and confirmed to them, care of Xxxxxxx Xxxxx Barney Inc. at 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, attention: General Counsel, Investment
Banking Division; or, if sent to the Fund, will be mailed, delivered or
telegraphed and confirmed to care of Mutual Management Corp., __________, New
York, New York _____, attention: Counsel.
13. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will 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.
15. Counterparts. This agreement may be signed in any number of
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Fund and the several Underwriters.
Very truly yours,
TRAVELERS CORPORATE LOAN FUND INC.
By:____________________________
Name:
Title:
MUTUAL MANAGEMENT CORP.
By:_______________________________
Name:
Title:
TRAVELERS ASSET MANAGEMENT INTERNATIONAL CORPORATION
By:_______________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
XXXXXXX XXXXX XXXXXX INC.
By:________________________
Managing Director
For itself and the several
Underwriters named in Schedule I
to the foregoing Agreement.
28
SCHEDULE I
Underwriters Number of Shares
------------ ----------------
Xxxxxxx Xxxxx Barney Inc.
Total ............................ __________
