__ SHARES
XXXXXX XXXXXXX EMERGING MARKETS
DOMESTIC DEBT FUND, INC.
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
UNDERWRITING AGREEMENT
__, 2007
__, 2007
Xxxxxx Xxxxxxx & Co. Incorporated,
as representative of the several
Underwriters named in Schedule I hereto
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxx Xxxxxxx Emerging Markets Domestic Debt Fund, Inc., a corporation
organized under the laws of the State of Maryland (the "FUND"), is a newly
organized, non-diversified closed-end management investment company registered
under the Investment Company Act of 1940, as amended (the "INVESTMENT COMPANY
ACT"). The Fund proposes to issue and sell to the several Underwriters named in
Schedule I hereto (the "UNDERWRITERS") __ shares of its common stock (par value
$0.01 per share) (the "FIRM SHARES"). The Fund also proposes to issue and sell
to the several Underwriters not more than an additional __ shares of its common
stock (par value $0.01 per share) (the "ADDITIONAL SHARES") if and to the extent
that you, as manager of the offering, shall have determined to exercise, on
behalf of the Underwriters, the right to purchase such shares of common stock
granted to the Underwriters in Section 3 hereof. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the "SHARES." The
shares of common stock (par value $0.01 per share) of the Fund to be outstanding
after giving effect to the sales contemplated hereby are hereinafter referred to
as the "COMMON SHARES."
Xxxxxx Xxxxxxx Investment Management Inc. ("MSIM") acts as the Fund's
investment adviser (in such capacity, the "INVESTMENT ADVISER") pursuant to an
Investment Advisory Agreement between the Investment Adviser and the Fund (the
"INVESTMENT ADVISORY AGREEMENT").
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 (which includes the information required in the
"statement of additional information" contemplated by Part B of Form N-2),
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 (the "SECURITIES ACT"), is hereinafter
referred to as the
"REGISTRATION STATEMENT"; the prospectus in the form first used to confirm sales
of Shares is hereinafter referred to as the "PROSPECTUS." 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. The Investment
Company Act and the Securities Act are hereinafter referred to collectively as
the "ACTS," and the rules and regulations of the Commission under the Acts are
hereinafter referred to collectively as the "RULES AND REGULATIONS," and the
Securities Exchange Act of 1934, as amended, is hereinafter referred to as the
"EXCHANGE ACT" and the rules and regulations thereunder are hereinafter referred
to as the "EXCHANGE ACT RULES AND REGULATIONS."
For purposes of this Agreement, "OMITTING PROSPECTUS" means any
advertisement used with the written consent of the Fund in the public offering
of the Shares pursuant to Rule 482 under the Rules and Regulations, and "TIME OF
SALE PROSPECTUS" means the preliminary prospectus, dated __, 2007, and each
Omitting Prospectus, if any, identified on Schedule II hereto. As used herein,
the terms "Registration Statement," "preliminary prospectus," "Time of Sale
Prospectus" and "Prospectus" shall include the documents, if any, incorporated
by reference therein.
1. Representations and Warranties of the Fund and the Investment Adviser.
The Fund and the Investment Adviser, jointly and severally, represent and
warrant to and agree with each of the Underwriters that:
(a) The Fund meets the requirements for the use of Form N-2 under the
Acts. 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 Investment 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 the applicable Rules and Regulations thereunder,
(iii) the Time of Sale Prospectus does not, and at the time of each sale of
the Shares in connection with the offering when the Prospectus is not yet
available to prospective purchasers, and at the Closing Date (as defined in
Section 5), the Time of Sale Prospectus, as
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then 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 and (iv) the Prospectus does not contain
and, as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or
omissions in the Registration Statement, the Time of Sale Prospectus 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 a
corporation in good standing under the laws of the State of Maryland, has
the power and authority to own its property and to conduct its business as
described in the Time of Sale Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property 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 Investment Adviser, threatened by the Commission. No person is
serving or acting as an officer or director 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 (the "ADVISERS
ACT"). Except as otherwise disclosed in the Registration Statement, the
Time of Sale Prospectus and the Prospectus, no director of the Fund is an
"interested person" of the Fund or an "affiliated person" of any
Underwriter (each, as defined in the Investment Company Act).
(e) Each of this Agreement, the Investment Advisory Agreement, the
Administration Agreement between MSIM, as administrator (in such capacity,
the "ADMINISTRATOR"), and the Fund (the "ADMINISTRATION AGREEMENT"), the
Custody Agreement between JPMorgan Chase Bank, N.A. (the "CUSTODIAN") and
the Fund (the "CUSTODY AGREEMENT") and the Transfer Agency and Service
Agreement
3
among Computershare Shareholder Services, Inc. and Computershare Trust
Company, N.A. (together, the "TRANSFER AGENT") and the Fund (the "TRANSFER
AGENCY AGREEMENT") has been duly authorized, executed and delivered by the
Fund; and each of this Agreement, the Investment Advisory Agreement, the
Administration Agreement, the Custody Agreement and the Transfer Agency
Agreement (collectively, the "FUNDAMENTAL AGREEMENTS") complies with all
applicable provisions of the Acts, the Advisers Act and the applicable
Rules and Regulations. The Fund has adopted a Dividend Reinvestment Plan
(the "PLAN"). Each Fundamental Agreement, other than this Agreement, and
the Plan is a valid and binding agreement of the Fund, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights generally and equitable principles of general
applicability.
(f) None of (1) 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 Plan, or (2) the issue and
sale by the Fund of the Shares as contemplated by this Agreement
contravenes or will contravene (x) any provision of applicable law or the
charter and bylaws of the Fund or any agreement or other instrument binding
upon the Fund that is material to the Fund, or (y) any judgment, order or
decree of any governmental body, agency or court having jurisdiction over
the Fund, whether foreign or domestic, except, with respect to this clause
(y), any such foreign judgment, order or decree the contravention of which
would neither have (i) a material adverse effect on the Fund or the
Investment Adviser or (ii) an adverse effect on the consummation of the
transactions contemplated by this Agreement or on any Underwriter; provided
that no representation or warranty is made with respect to compliance with
the laws of any jurisdiction outside of the United States in connection
with any offer or sale of the Shares in such jurisdiction by any
Underwriter. No consent, approval, authorization, order or permit of, or
qualification with, any governmental body or agency, self-regulatory
organization or court or other tribunal, whether foreign or domestic, is
required for the performance by the Fund of its obligations under the
Fundamental Agreements or the Plan, except such as have been obtained as
required by the Acts, the Advisers Act, the Exchange Act, or the applicable
Rules and Regulations or the Exchange Act Rules and Regulations, or by the
securities or Blue Sky laws of the various states and foreign jurisdictions
in connection with the offer and sale of the Shares or such as which the
failure to obtain would neither have (i) a material adverse effect on the
Fund or the Investment Adviser or (ii) an adverse effect on the
consummation of the transactions contemplated by this Agreement or on any
Underwriter.
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(g) The authorized capital stock of the Fund conforms in all material
respects to the description thereof contained in each of the Time of Sale
Prospectus and the Prospectus, and the charter and bylaws of the Fund, the
Fundamental Agreements and the Plan conform in all material respects to the
descriptions thereof contained in each of the Time of Sale Prospectus and
the Prospectus.
(h) The charter and bylaws of the Fund, the Fundamental Agreements and
the Plan comply with all applicable provisions of the Acts and the
applicable Rules and Regulations, and all approvals of such documents
required under the Investment Company Act by the Fund's stockholders and
Board of Directors 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
knowledge of the Fund or the Investment Adviser, any other party to any
such agreement is in default thereunder, and no event has occurred which
with the passage of time or the giving of notice or both would constitute a
default thereunder. The Fund is not currently in breach of, or in default
under, any other written agreement or instrument to which it or its
property is bound or affected.
(j) The Common Shares outstanding prior to the issuance of the Shares
have been duly authorized and are validly issued, fully paid and
non-assessable.
(k) The Shares have been duly authorized and, when issued 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 preemptive or similar rights.
(l) The Shares and any Common Shares outstanding prior to the issuance
of the Shares have been approved for listing on 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) Each Omitting Prospectus (i) complies in all material respects
with the requirements of Rule 482, (ii) does not contain an untrue
statement of a material fact and (iii) complied and will comply in all
material respects with the Acts, the Rules and Regulations and the rules
and regulations of the National Association of Securities Dealers, Inc.
(the "NASD"). Each such Omitting Prospectus has been duly filed with the
NASD and either (x) the NASD has issued no objections with respect
5
thereto or (y) all comments received from the NASD with respect thereto
have been duly incorporated into such Omitting Prospectus. Except for the
Omitting Prospectuses, if any, identified on Schedule II hereto, the Fund
has not prepared, used or referred to and will not, without your prior
written consent, prepare, use or refer to any Omitting Prospectuses.
(n) The Fund intends to direct the investment of the proceeds of the
offering described in the Time of Sale Prospectus and 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.
(o) 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 earnings, business or
operations of the Fund from that set forth in the Time of Sale Prospectus,
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 Time of Sale Prospectus.
(p) There are no legal or governmental proceedings pending or, to the
knowledge of the Fund or the Investment Adviser, threatened to which the
Fund is a party or to which any of the properties of the Fund is subject
(i) other than proceedings accurately described in all material respects in
the Time of Sale Prospectus and proceedings that would not have a material
adverse effect on the Fund, or on the power or ability of the Fund to
perform its obligations under this Agreement or to consummate the
transactions contemplated by the Time of Sale Prospectus or (ii) that are
required to be described in the Registration Statement or the Prospectus
and are not so described; and there are no 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.
(q) 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,
whether foreign or domestic, to own and use its assets and to conduct its
business in the manner described in the Time of Sale Prospectus and 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.
6
(r) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 497 under the Securities Act, complied when so filed in
all material respects with the Acts and the applicable Rules and
Regulations.
(s) The statement of assets and liabilities included in the
Registration Statement, the Time of Sale Prospectus and the Prospectus,
together with the related notes to such statement, presents fairly the
financial position of the Fund as of the date indicated, and said statement
has been prepared in conformity with generally accepted accounting
principles. Ernst & Young LLP, whose report appears in the Time of Sale
Prospectus and the Prospectus and who have certified the financial
statements and supporting schedules, if any, included in the Registration
Statement, is an independent registered public accounting firm as required
by the Acts and the applicable Rules and Regulations.
(t) There are no material restrictions, limitations or regulations
with respect to the ability of the Fund to invest its assets as described
in the Time of Sale Prospectus and the Prospectus, other than as described
therein.
(u) All advertisements authorized in writing by the Fund for use in
the offering of the Shares complied and will comply with the requirements
of the Acts, the applicable Rules and Regulations and the rules and
regulations of the NASD, and there are no such advertisements other than
(i) any Omitting Prospectuses identified in Schedule II hereto and (ii) any
advertisement that complies with Rule 135a of the Rules and Regulations.
(v) There are no contracts, agreements or understandings between the
Fund and any person granting such person the right to require the Fund to
file a registration statement under the Securities Act with respect to any
securities of the Fund or to require the Fund to include such securities
with the Shares registered pursuant to the Registration Statement.
(w) The expense summary information set forth in the Time of Sale
Prospectus and the Prospectus in the Fee Table has been prepared in
accordance with the requirements of Form N-2, and any fee projections or
estimates, if applicable, are reasonably based and comply in all material
respects with the requirements of Form N-2.
7
(x) Subsequent to the respective dates as of which information is
given in each of the Registration Statement, the Time of Sale Prospectus
and the Prospectus, (i) the Fund has not incurred any material liability or
obligation, direct or contingent, nor entered into any material
transaction; (ii) the Fund has not purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or distribution of
any kind on its capital stock (other than, in the event this representation
and warranty is made after the Closing Date, ordinary and customary
dividends declared and payable after the Closing Date); and (iii) there has
not been any material change in the capital stock, short-term debt or
long-term debt of the Fund, except in each case as described in each of the
Registration Statement, the Time of Sale Prospectus and the Prospectus,
respectively.
(y) The Fund has good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by it
which is material to the business of the Fund, in each case free and clear
of all liens, encumbrances and defects except such as are described in the
Time of Sale Prospectus or such as do not materially affect the value of
such property and do not interfere with the use made and proposed to be
made of such property by the Fund; and any real property and buildings held
under lease by the Fund are held by it under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Fund, in each case except as described in the Time of Sale
Prospectus.
(z) The Fund owns or possesses, or can acquire on reasonable terms,
all material patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names currently employed by them in
connection with the business now operated by it, and the Fund has not
received any notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse effect on the Fund.
(aa) The Fund maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
8
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences. Except as described in the
Time of Sale Prospectus, since the date of the Fund's most recent audited
financial statements included or incorporated by reference in the
Prospectus, there has been (i) no material weakness in the Fund's internal
control over financial reporting (whether or not remediated) and (ii) no
change in the Fund's internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, the
Fund's internal control over financial reporting.
(bb) Neither the Fund nor any employee nor agent of the Fund has made
any payment of funds of the Fund or received or retained any funds, which
payment, receipt or retention is of a character to be disclosed in the Time
of Sale Prospectus, the Prospectus or the Registration Statement.
2. Representations and Warranties of the Investment Adviser. The Investment
Adviser represents and warrants to and agrees with each of the Underwriters
that:
(a) The Investment Adviser has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in the Time of
Sale Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property 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 Investment Adviser. The Investment
Adviser has no subsidiaries.
(b) 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 from acting under the Investment Advisory Agreement
as an investment adviser to the Fund as contemplated by the Time of Sale
Prospectus, and no order of suspension or revocation of such registration
has been issued or proceedings therefor initiated or, to the knowledge of
the Investment Adviser, threatened by the Commission.
(c) Each of this Agreement and the Investment Advisory Agreement has
been duly authorized, executed and delivered by the Investment Adviser; the
Marketing and Structuring Fee Agreement (the
9
"MARKETING AND STRUCTURING FEE AGREEMENT") dated the date hereof between
MSIM and Xxxxxx Xxxxxxx & Co. Incorporated has been duly authorized,
executed and delivered by MSIM; and each of this Agreement, the Investment
Advisory Agreement and the Marketing and Structuring Fee Agreement
(collectively, the "ADVISER AGREEMENTS") complies with all applicable
provisions of the Acts, the Advisers Act and the applicable Rules and
Regulations. Each of the Adviser Agreements is a valid and binding
agreement of the Investment Adviser, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights
generally and equitable principles of general applicability.
(d) The execution and delivery by the Investment Adviser of, and the
performance by the Investment Adviser of its obligations under the Adviser
Agreements will not contravene (x) any provision of applicable law or the
articles of incorporation or bylaws of the Investment Adviser or any
agreement or other instrument binding upon the Investment Adviser that is
material to the Investment Adviser, or (y) any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the
Investment Adviser, whether foreign or domestic, except, with respect to
this clause (y), any such foreign judgment, order or decree the
contravention of which would neither have (i) a material adverse effect on
the Fund or the Investment Adviser or (ii) an adverse effect on the
consummation of the transactions contemplated by this Agreement or on any
Underwriter. No consent, approval, authorization, order or permit of, or
qualification with, any governmental body or agency, self-regulatory
organization or court or other tribunal, whether foreign or domestic, is
required for the performance by the Investment Adviser of its obligations
under the Adviser Agreements, except such as have been obtained as required
by the Acts, the Advisers Act, the Exchange Act or the applicable Rules and
Regulations or the Exchange Act Rules and Regulations, or by the securities
or Blue Sky laws of the various states and foreign jurisdictions in
connection with the offer and sale of the Shares or such as which the
failure to obtain would neither have (i) a material adverse effect on the
Fund or the Investment Adviser or (ii) an adverse effect on the
consummation of the transactions contemplated by this Agreement or on any
Underwriter.
(e) There are no legal or governmental proceedings pending or, to the
knowledge of the Investment Adviser, threatened to which the Investment
Adviser is a party or to which any of the properties of the Investment
Adviser is subject (i) other than proceedings accurately described in all
material respects in the Time of Sale Prospectus and proceedings that would
not have a material adverse effect on the
10
Investment Adviser, or on the power or ability of the Investment Adviser to
perform its obligations under this Agreement or to consummate the
transactions contemplated by the Time of Sale Prospectus or (ii) that are
required to be described in the Registration Statement or the Prospectus
and are not so described; and there are no 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.
(f) The Investment 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,
whether foreign or domestic, to own and use its assets and to conduct its
business in the manner described in the Time of Sale Prospectus, except to
the extent that the failure to obtain or file the foregoing would not have
a material adverse effect on the Investment Adviser or on the Fund.
(g) The Investment Adviser has the financial resources available to it
necessary for the performance of its services and obligations as
contemplated in the Time of Sale Prospectus and by the Adviser Agreements.
(h) The Investment Advisory Agreement is in full force and effect and
neither the Fund nor the Investment Adviser is in default thereunder, and
no event has occurred which with the passage of time or the giving of
notice or both would constitute a default under such document. The Adviser
Agreements conform in all material respects to the descriptions thereof
contained in each of the Time of Sale Prospectus and the Prospectus.
(i) All information furnished by the Investment Adviser for use in the
Registration Statement, the Time of Sale Prospectus and Prospectus,
including, without limitation, the description of the Investment Adviser,
does not, and on the Closing Date will not, contain any untrue statement of
a material fact or omit to state any material fact necessary to make such
information not misleading (in case of the Time of Sale Prospectus and the
Prospectus, in the light of the circumstances under which it is
communicated).
(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 earnings, business or
operations
11
of the Investment Adviser from that set forth in the Time of Sale
Prospectus, and there have been no transactions entered into by the
Investment Adviser which are material to the Investment Adviser other than
those in the ordinary course of its business or as described in the Time of
Sale Prospectus.
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 numbers of Firm Shares set forth in Schedule I hereto opposite
its name at $[19.10] a 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 agrees to sell to
the Underwriters the Additional Shares, and the Underwriters shall have the
right to purchase, severally and not jointly, up to __ Additional Shares at the
Purchase Price. You may exercise this right on behalf of the Underwriters in
whole or from time to time in part by giving written notice not later than 45
days after the date of this Agreement. Any exercise 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. Each purchase date must be at least one
business day after the written notice is given and may not be earlier than the
closing date for the Firm Shares 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. On each day, if any, that Additional
Shares are to be purchased (an "OPTION CLOSING DATE"), 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 on such Option Closing Date 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, (1) 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 Common
Shares or any securities convertible into or exercisable or exchangeable for
Common Shares or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Shares, whether any such transaction described in clause (1) or (2)
above is to be settled by
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delivery of Common Shares or such other securities, in cash or otherwise or (3)
file any registration statement with the Commission relating to the offering of
any Common Shares or any securities convertible into or exercisable or
exchangeable for Common Shares. The agreements contained in this paragraph shall
not apply to the Shares to be sold hereunder or any Common Shares issued
pursuant to the Plan.
4. Terms of Public Offering. The Fund and the Investment 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 Investment Adviser are further advised by you that the Shares are to be
offered to the public initially at $[20.00] a share (the "PUBLIC OFFERING
PRICE"), and to certain dealers selected by you at a price that represents a
concession not in excess of $[0.60] a share under the Public Offering Price, and
that any Underwriter may allow, and such dealers may reallow, a concession, not
in excess of $[0.10] a share, to any Underwriter or to certain other dealers.
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 several
Underwriters at 10:00 A.M., New York City time, on __, 2007, or at such other
time on the same or such other date, not later than __, 2007, 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 several Underwriters at
10:00 A.M., New York City time, on the date specified in the corresponding
notice described in Section 3 or at such other time on the same or on such other
date, in any event not later than __, 2007, as shall be designated in writing by
you.
The Firm Shares and Additional Shares shall be registered in such names and
in such denominations as you shall request in writing not later than one full
business day prior to the Closing Date or the applicable Option Closing Date, as
the case may be. The Firm Shares and Additional Shares shall be delivered to you
on the Closing Date or an Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The respective obligations
of the Fund and the Investment Adviser and the several obligations of
13
the Underwriters hereunder are subject to the condition that the Registration
Statement shall have become effective not later than 5:30 P.M. (New York City
time) on the date hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Fund or the
Investment Adviser, from that set forth in the Time of Sale Prospectus
that, in your judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and in the manner
contemplated in the Time of Sale Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
each of the Fund and the Investment Adviser, to the effect that no stop
order suspending the effectiveness of the Registration Statement is in
effect and no proceedings for such purposes are pending before or, to the
knowledge of such officer, threatened by the Commission; that the
representations and warranties of the Fund and the Investment Adviser
contained in this Agreement are true and correct as of the Closing Date and
that each of the Fund and the Investment Adviser has complied with all of
the agreements and satisfied all of the conditions on its part 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) Each of the Investment Adviser and the Fund shall have performed
all of its respective obligations to be performed hereunder on or prior to
the Closing Date.
(d) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxxx Xxxxxx XX XXX, Xxx Xxxx counsel for the Fund, dated the
Closing Date, satisfactory to you and your counsel in form and substance,
substantially to the effect set forth in Exhibit A attached hereto. To the
extent Xxxxxxxx Chance US LLP deems proper and to the extent specified in
such opinion, such counsel may rely, as to matters involving the
application of laws of the State of Maryland, upon the opinion of Xxxxxxx
Xxxxx Xxxxxxx & Xxxxxxxxx, LLP or other counsel of good standing who are
satisfactory to you; provided that such reliance is
14
expressly authorized by the opinion so relied upon and a copy of such
opinion is delivered to you and is, in form and in substance, satisfactory
to you and your counsel.
(e) The Underwriters shall have received on the Closing Date an
opinion of an officer of MSIM, in such officer's capacity as internal
counsel for the Investment Adviser, dated the Closing Date, satisfactory to
you and your counsel in form and substance, substantially to the effect set
forth in Exhibit B attached hereto.
(f) The Underwriters shall have received on the Closing Date the
favorable opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters,
dated the Closing Date, and covering such matters as the Underwriters shall
reasonably request.
The opinions of Xxxxxxxx Chance US LLP, Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx,
LLP and MSIM's internal counsel described in Sections 6(d) and 6(e) above shall
be rendered to the Underwriters at the request of the Fund and the Investment
Adviser, as applicable, and shall so state therein.
(g) The Underwriters shall have received on the Closing Date a
certificate from a duly authorized officer of the Custodian, certifying
that the Custody Agreement is in full force and effect and is a valid and
binding agreement of the Custodian.
(h) The Underwriters 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 a
valid and binding agreement of the Administrator.
(i) The Underwriters shall have received on the Closing Date a
certificate from a duly authorized officer of the Transfer Agent certifying
that the Transfer Agency Agreement is in full force and effect and is a
valid and binding agreement of the Transfer Agent.
(j) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the Underwriters,
from Ernst & Young LLP, independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Time of Sale Prospectus, provided that the letter delivered on the
Closing Date shall use a "cut-off date" not earlier than the date hereof.
15
(k) All filings, applications and proceedings taken by the Fund and
the Investment Adviser in connection with the organization and registration
of the Fund and the Shares under the Acts and the applicable Rules and
Regulations shall be satisfactory in form and substance to you and counsel
for the Underwriters.
(l) No action, suit, proceeding, inquiry or investigation shall have
been instituted or threatened by the Commission which would adversely
affect the Fund's standing as a registered investment company under the
Investment Company Act or the standing of the Investment Adviser as a
registered investment adviser under the Advisers Act.
(m) 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 the applicable Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Fund and the Investment Adviser, the due authorization and
issuance of the Additional Shares to be sold on such Option Closing Date and
other matters related to the issuance of such Additional Shares, including
officers' certificates and opinions of Xxxxxxxx Chance US LLP, Xxxxxxx Xxxxx
Xxxxxxx & Ingersoll, LLP, MSIM's internal counsel and Xxxxx Xxxx & Xxxxxxxx to
the effect set forth above, except that such certificates and opinions shall be
dated as of the applicable Option Closing Date and statements and opinions above
contemplated to be given as of the Closing Date shall instead be made and given
as of such Option Closing Date.
7. Covenants of the Fund and the Investment Adviser. In further
consideration of the agreements of the Underwriters herein contained, the Fund
and the Investment Adviser, jointly and severally, covenant and agree with each
Underwriter as follows:
(a) To notify you as soon as practicable, 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 mentioned in Section 7(h) below which in the judgment of the
Fund makes any statement in the Notification, the Registration Statement
the Time of Sale Prospectus, any Omitting Prospectus 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, the Time of
Sale Prospectus, any Omitting Prospectus or the Prospectus in order to make
the statements therein not
16
misleading in any material respect. If at any time the Commission shall
issue any order suspending the effectiveness of the Registration Statement
or an order pursuant to Section 8(e) of the Investment Company Act, the
Fund will make every reasonable effort to obtain the withdrawal of such
order at the earliest possible moment.
(b) To furnish to you, without charge, three signed copies of each of
the Notification and the Registration Statement (including exhibits
thereto) and for delivery to each other Underwriter a conformed copy of
each 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 mentioned in Section 7(h) below, as
many copies of the Time of Sale Prospectus, 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, the
Time of Sale Prospectus or the Prospectus, 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 under the
Securities Act any prospectus required to be filed pursuant to such Rule.
(d) To furnish to you a copy of each proposed Omitting Prospectus to
be prepared by or on behalf of, used by, or referred to by the Fund and not
to use or refer to any proposed Omitting Prospectus to which you reasonably
object.
(e) If the Time of Sale Prospectus is being used to solicit offers to
buy the Shares at a time when the Prospectus is not yet available to
prospective purchasers and any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Time of Sale
Prospectus in order to make the statements therein, in the light of the
circumstances, not misleading, or if any event shall occur or condition
exist as a result of which the Time of Sale Prospectus conflicts with the
information contained in the Registration Statement then on file, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Time of Sale Prospectus to comply with applicable law,
forthwith to prepare, file with the Commission and furnish, at its own
expense, to the Underwriters and to any dealer upon request, either
amendments or supplements to the Time of Sale Prospectus so that the
statements in the Time of Sale Prospectus as so amended or supplemented
17
will not, in the light of the circumstances when delivered to a prospective
purchaser, be misleading or so that the Time of Sale Prospectus, as amended
or supplemented, will no longer conflict with the Registration Statement,
or so that the Time of Sale Prospectus, as amended or supplemented, will
comply with applicable law.
(f) The Fund will use the net proceeds received by it from the sale of
the Shares in the manner specified in the Time of Sale Prospectus.
(g) The Fund and the Investment Adviser will not take any action
designed to cause or result in the manipulation of the price of any
security of the Fund to facilitate the sale of Shares in violation of the
Acts or the Exchange Act, the applicable Rules and Regulations and the
Exchange Act Rules and Regulations, or the securities or Blue Sky laws of
the various states and foreign jurisdictions in connection with the offer
and sale of Shares.
(h) 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
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, 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.
(i) To use its best efforts to maintain the Fund's qualification as a
regulated investment company under Subchapter M of the Code.
(j) 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.
18
(k) To make generally available to the Fund's security holders and to
you as soon as practicable an earning statement covering a period of at
least twelve months beginning with the first fiscal quarter of the Fund
occurring after the date of this Agreement which shall satisfy the
provisions of Section 11(a) of the Securities Act and the rules and
regulations, including Rule 158, of the Commission thereunder.
(l) 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 the obligations of the Fund and the
Investment Adviser 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 Notification, the Registration Statement, any
preliminary prospectus, the Time of Sale Prospectus, the Prospectus, and
any Omitting Prospectus prepared by or on behalf of, used by, or referred
to by the Fund 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) all costs and expenses related to
the transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) 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(j) hereof, 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, (iv) 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 NASD, (v) all fees and
expenses in connection with the preparation and filing of the registration
statement on Form 8-A relating to the Common Shares and all costs and
expenses incident to listing the Shares on the New York Stock Exchange,
(vi) the cost of printing certificates representing the Shares, (vii) the
costs and charges of any transfer agent, registrar or depositary, (viii)
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
preparation or dissemination of any electronic road show, expenses
associated with production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations with
19
the prior approval of the Fund, travel and lodging expenses of the
representatives and officers of the Fund and any such consultants, and the
cost of any aircraft chartered in connection with the road show, (ix) the
document production charges and expenses associated with printing this
Agreement and (x) 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. It is understood, however, that except as
provided in this Section, Section 8 entitled "Indemnity and Contribution"
and the last paragraph of Section 10 below, the Underwriters will pay all
of their costs and expenses, including fees and disbursements of their
counsel, stock transfer taxes payable on resale of any of the Shares by
them and any advertising expenses connected with any offers they may make.
8. Indemnity and Contribution. Each of the Fund and the Investment Adviser,
jointly and severally, agrees to indemnify and hold harmless each Underwriter,
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 and each
affiliate of any Underwriter within the meaning of Rule 405 under the Securities
Act from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
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 Omitting Prospectus,
any preliminary prospectus (including any statement of additional information
incorporated therein by reference), the Time of Sale Prospectus, or the
Prospectus or any amendment or supplement 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 or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Fund in writing by such
Underwriter through you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless each of the Fund and the Investment Adviser, its directors or
trustees (as the case may be), and each officer of the Fund who signs the
Registration Statement and each person, if any, who controls the Fund or any
Investment Adviser within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Fund and the Investment Adviser to such Underwriter, but only with
reference to information relating to such Underwriter furnished to the Fund in
writing by such Underwriter through you expressly for use in the Registration
Statement, any preliminary prospectus (including any statement of additional
20
information incorporated therein by reference), the Time of Sale Prospectus, any
Omitting Prospectus or Prospectus or any amendments or supplements thereto.
(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 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 understood 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 (i) 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 any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act or who are affiliates of any
Underwriters within the meaning of Section 405 under the Securities Act, (ii)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for the Fund, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Fund within the meaning of
either such Section, and (iii) the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Investment Adviser, its
directors or trustees, as the case may be, and each person, if any, who controls
the Investment 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 and
affiliates of any Underwriters, such firm shall be designated in writing by
Xxxxxx Xxxxxxx & Co. Incorporated. In the case of any such separate firm for the
Fund, and such directors, officers and control persons of the Fund, such firm
shall be designated in writing by the Fund. In the case of any such separate
firm for the Investment Adviser, and such directors and control persons of the
Investment Adviser, such firm shall be designated in writing by MSIM. 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
21
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 paragraph, 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. 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 paragraph, 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 in such proportion as is
appropriate to reflect the relative benefits received by the Fund and the
Investment Adviser on the one hand and the Underwriters on the other hand from
the offering of the Shares or (ii) if the allocation provided by clause 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 clause 8(d)(i) above
but also the relative fault of the Fund and the Investment 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 relative benefits
received by the Fund and the Investment Adviser on the one hand and the
Underwriters on the other hand in connection with the offering of the Shares
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of the Shares (before deducting expenses) received by the Fund
and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate Public Offering Price of the Shares. The
relative fault of the Fund and the Investment Adviser on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Fund or the Investment Adviser or by the Underwriters and the
parties' relative intent, knowledge, access to information
22
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. The Investment Adviser agrees to pay any amounts that
are payable by the Fund pursuant to this paragraph to the extent that the Fund
fails to make all contributions required to be made by the Fund pursuant to this
Section 8.
(e) The Fund, the Investment 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.
(f) The indemnity and contribution provisions contained in this Section 8
and the representations, warranties and other statements of the Fund and the
Investment 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, any person
controlling any Underwriter or any affiliate of any Underwriter or by or on
behalf of the Investment Adviser, its officers or directors or any person
controlling the Investment Adviser or by or on behalf of the Fund, its officers
or directors or any person controlling the Fund and (iii) acceptance of and
payment for any of the Shares.
9. Termination. Xxxxxx Xxxxxxx & Co. Incorporated may terminate this
Agreement by notice given by you to the Fund, if 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
23
of the New York Stock Exchange, the American Stock Exchange, the Nasdaq Stock
Market, the Chicago Board of Options Exchange, 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
material disruption in securities settlement, payment or clearance services in
the United States shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State authorities or
(v) there shall have occurred any outbreak or escalation of hostilities, or any
change in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and which, singly or together with any other event
specified in this clause (v), makes it, in the judgment of Xxxxxx Xxxxxxx & Co.
Incorporated, impracticable or inadvisable to proceed with the offer, sale or
delivery of the Shares on the terms and in the manner contemplated in the Time
of Sale Prospectus or the Prospectus.
10. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has 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 Firm Shares set forth
opposite their respective names in Schedule I bears to the aggregate number of
Firm 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 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 this Agreement 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 Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased on such date, and arrangements satisfactory to you and
the Fund for the purchase of such Firm Shares are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Fund. 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, in the Time of Sale Prospectus, in the Prospectus or in
any other documents or arrangements may be effected. If, on an Option Closing
Date, any Underwriter or Underwriters shall
24
fail or refuse to purchase Additional Shares and the aggregate number of
Additional Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Additional Shares to be purchased on such
Option Closing Date, the non-defaulting Underwriters shall have the option to
(i) terminate their obligation hereunder to purchase the Additional Shares to be
sold on such Option Closing Date 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 Investment
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 Investment Adviser shall be
unable to perform its obligations under this Agreement, the Fund and the
Investment Adviser, jointly and severally, 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. Entire Agreement. (a) This Agreement, together with any contemporaneous
written agreements and any prior written agreements (to the extent not
superseded by this Agreement) that relate to the offering of the Shares,
represents the entire agreement between the Fund, the Investment Adviser and the
Underwriters with respect to the preparation of any preliminary prospectus, the
Time of Sale Prospectus, the Prospectus, the conduct of the offering, and the
purchase and sale of the Shares.
(b) The Fund and the Investment Adviser acknowledge that in connection with
the offering of the Shares: (i) the Underwriters have acted at arms length, are
not agents of, and owe no fiduciary duties to, the Fund, the Investment Adviser
or any other person, (ii) the Underwriters owe the Fund and the Investment
Adviser only those duties and obligations set forth in this Agreement and prior
written agreements (to the extent not superseded by this Agreement), if any, and
(iii) the Underwriters may have interests that differ from those of the Fund and
the Investment Adviser. The Fund and the Investment Adviser waive to the full
extent permitted by applicable law any claims any of them may have against the
Underwriters arising from an alleged breach of fiduciary duty in connection with
the offering of the Shares.
25
12. 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.
13. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
15. Notices. All communications hereunder shall be in writing and effective
only upon receipt; and if to the Underwriters, shall be delivered, mailed or
sent to you in care of Xxxxxx Xxxxxxx & Co. Incorporated, 0000 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Equity Syndicate Desk, with a copy to the Legal
Department; and if to the Fund, shall be delivered, mailed or sent to 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Xxxx Xxxxxx; and
if to the Investment Adviser, shall be delivered, mailed or sent to 0000 Xxxxxx
xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Xxx Xxxx XxXxxxx.
26
Very truly yours,
XXXXXX XXXXXXX EMERGING MARKETS DOMESTIC
DEBT FUND, INC.
By:
------------------------------------
Name:
Title:
XXXXXX XXXXXXX INVESTMENT MANAGEMENT
INC.
By:
------------------------------------
Name:
Title:
Accepted as of the date hereof
XXXXXX XXXXXXX & CO.
INCORPORATED
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
---------------------------------
Name:
Title:
SCHEDULE I
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
Xxxxxx Xxxxxxx & Co. Incorporated.......................
---------------------
Total:...............................................
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