Exhibit (2)(h)(iii)
▇▇▇▇▇▇▇ RREEF Real Estate Fund, Inc.
Auction Preferred Stock
Par Value $0.01 per Share
UNDERWRITING AGREEMENT
January 9, 2004
UNDERWRITING AGREEMENT
January 9, 2004
UBS SECURITIES LLC
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
c/o UBS Securities LLC
as Managing Representative
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇▇ RREEF Real Estate Fund, Inc., a Maryland corporation (the "Fund"),
proposes to issue and sell to the underwriters named in Schedule A annexed
hereto (the "Underwriters") an aggregate of 800 additional preferred shares of
the Fund, par value $0.01 per share, designated Series A Auction Preferred
Shares of the Fund, and 800 additional preferred shares of the Fund, par value
$0.01 per share, designated Series B Auction Preferred Shares of the Fund, each
with a liquidation preference of $25,000 per share (the "New Preferred Shares").
The New Preferred Shares are described in the Prospectus which is referred to
below.
The Fund has filed, in accordance with the provisions of the Securities Act
of 1933, as amended, and the rules and regulations thereunder (collectively
called the "Act"), and with the provisions of the Investment Company Act of
1940, as amended, and the rules and regulations thereunder (collectively called
the "Investment Company Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (File Nos. 333-110101 and
811-21172), including a prospectus and a statement of additional information,
relating to the New Preferred Shares. The Fund has furnished to you, for use by
the Underwriters and by dealers, copies of one or more preliminary prospectuses
(including a preliminary statement of additional information) (each thereof,
including such preliminary statement of additional information, being herein
called a "Preliminary Prospectus") relating to the New Preferred Shares. Except
where the context otherwise requires, the registration statement, as amended
when it becomes effective (the "Effective Date"), including all documents filed
as a part thereof or incorporated by reference therein, and including any
information contained in a prospectus subsequently filed with the Commission
pursuant to Rule 497 under the Act and deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the Act is
herein called the Registration Statement, and the prospectus (including the
statement of additional information), in the form filed by the Fund with the
Commission pursuant to Rule 497 under the Act or, if no such filing is required,
the form of final prospectus (including the form of final statement of
additional information) included in the Registration Statement at the time it
became
effective, is herein called the Prospectus. In addition, the Fund has filed a
Notification of Registration on Form N-8A (the "Notification") pursuant to
Section 8 of the Investment Company Act.
Deutsche Asset Management, Inc. (the "Investment Manager") will act as the
Fund's investment manager pursuant to an Investment Management Agreement by and
between the Fund and the Investment Manager, dated as of October 28, 2002 (the
"Investment Management Agreement"). RREEF America L.L.C. will act as the Fund's
investment advisor (the "Investment Adviser") pursuant to an Investment Advisory
Agreement by and between the Investment Manager and the Investment Adviser (the
"Investment Adviser"), dated as of October 28, 2002 (the "Investment Advisory
Agreement"). ▇▇▇▇▇▇▇ Fund Accounting Services Corporation, an affiliate of the
Investment Manager (the "Accounting Agent"), will act as the Fund's accounting
agent pursuant to a Fund Accounting Services Agreement by and between the Fund
and the Accounting Agent dated as of October 28, 2002 (the "Accounting Services
Agreement"). Deutsche Bank Trust Company Americas, an affiliate of the
Investment Manager, will act as the custodian (the "Custodian") of the Fund's
cash and portfolio assets pursuant to a Custody Agreement, dated as of October
28, 2002 (the "Custody Agreement"). ▇▇▇▇▇▇▇ Service Company will act as the
Fund's transfer agent and dividend disbursing agent with respect to the common
shares of the Fund (the "Transfer Agent") pursuant to a transfer agency
agreement, dated as of October 28, 2002 (the "Transfer Agency Agreement").
Deutsche Bank Trust Company Americas will act as the Fund's auction agent (the
"Auction Agent") for the New Preferred Shares pursuant to an Auction Agency
Agreement by and between the Fund and the Auction Agent, dated as of January 15,
2003 (the "Auction Agency Agreement"). The Fund has entered into a Letter
Agreement, dated as of January 15, 2003, with the Depository Trust Company (the
"DTC Agreement"). The Investment Manager and UBS Securities LLC (the "Managing
Representative") have entered into a Shareholder Servicing Agreement dated
October 28, 2002 (the "Shareholder Servicing Agreement").
The Fund, the Investment Manager, the Investment Adviser and the
Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the warranties and representations and
subject to the terms and conditions herein set forth, the Fund agrees to
sell to the respective Underwriters and each of the Underwriters, severally
and not jointly, agrees to purchase from the Fund the aggregate number of
New Preferred Shares set forth opposite the name of such Underwriter in
Schedule A attached hereto in each case at a purchase price of $24,750 per
New Preferred Share. The Fund is advised that the Underwriters intend (i)
to make a public offering of their respective portions of the New Preferred
Shares as soon after the effective date of the Registration Statement as is
advisable and (ii) initially to offer the New Preferred Shares upon the
terms set forth in the Prospectus. The Underwriters may from time to time
increase or decrease the public offering price after the initial public
offering to such extent as they may determine.
2
2. Payment and Delivery. Payment of the purchase price for the New Preferred
Shares shall be made by the Underwriters to the Fund by Federal Funds wire
transfer, against delivery of the certificates for the New Preferred Shares
to you through the facilities of the Depository Trust Company ("DTC") for
the respective accounts of the Underwriters. Such payment and delivery
shall be made at 10:00 A.M., New York City time on the third business day
following the date of this Underwriting Agreement (unless another date or
time shall be agreed to by you and the Fund). The time at which such
payment and delivery are actually made is hereinafter sometimes called the
"Time of Purchase" or the "Closing Date."
A certificate in definitive form representing the New Preferred Shares
registered in the name of Cede & Co., as nominee for DTC, shall be
delivered by or on behalf of the Fund to DTC for the account of the
Underwriters. For the purpose of expediting the checking of the
certificates for the New Preferred Shares by you, the Fund agrees to make
such certificates available to you for such purpose at least one full
business day preceding the Time of Purchase.
3. Representations and Warranties of the Fund and the Investment Manager. Each
of the Fund and the Investment Manager jointly and severally represents and
warrants to each Underwriter as follows:
(a) On (A) the Effective Date and the date on which the Prospectus is
first filed with the Commission pursuant to Rule 497(b), (h) or (j)
under the Act, as the case may be, (B) the date on which any
post-effective amendment to the Registration Statement (except any
post-effective amendment which is filed with the Commission after the
later of (x) one year from the date of this Underwriting Agreement or
(y) the date on which the distribution of the New Preferred Shares is
completed) became or becomes effective or any amendment or supplement
to the Prospectus was or is filed with the Commission and (C) the
Closing Dates, the Registration Statement, the Prospectus and any such
amendment or supplement thereto and the Notification complied or will
comply in all material respects with the requirements of the Act and
the Investment Company Act, as the case may be. On the Effective Date
and on the date that any post-effective amendment to the Registration
Statement (except any post-effective amendment which is filed with the
Commission after the later of (x) one year from the date of this
Underwriting Agreement or (y) the date on which the distribution of
the New Preferred Shares is completed) became or becomes effective,
neither the Registration Statement nor any such amendment did or will
contain any untrue statement of a material fact or omit to state a
material fact required to be stated in it or necessary to make the
statements in it not misleading. At the Effective Date and, if
applicable, the date the Prospectus or any amendment or supplement to
the Prospectus was or is filed with the Commission and at the Closing
Dates, the Prospectus did not or will not, as the case may be, contain
any untrue statement of a material fact or omit to state a material
fact required to be stated in it or necessary to make the
3
statements in it, in light of the circumstances under which they were
made, not misleading. The foregoing representations in this Section
3(a) do not apply to statements or omissions relating to the
Underwriters made in reliance on and in conformity with information
furnished in writing to the Fund by you expressly for use in the
Registration Statement, the Prospectus, or any amendments or
supplements thereto, as described in Section 9(f) hereof.
(b) The Fund has been duly organized, is validly existing as a corporation
in good standing under the laws of the State of Maryland, with full
power and authority to conduct all the activities conducted by it, to
own or lease all assets owned or leased by it and to conduct its
business as described in the Registration Statement and Prospectus,
and the Fund is duly licensed and qualified to do business and in good
standing in each jurisdiction in which its ownership or leasing of
property or its conducting of business requires such qualification,
except where the failure to be so qualified or be in good standing
would not have a material adverse effect on the Fund, and the Fund
owns, possesses or has obtained and currently maintains all
governmental licenses, permits, consents, orders, approvals and other
authorizations, whether foreign or domestic, necessary to carry on its
business as contemplated in the Prospectus, except where the failure
to obtain such licenses, grants, consents, orders, approvals and other
authorizations, either alone or in the aggregate, would not have a
material adverse effect on the Fund. The Fund has no subsidiaries.
(c) The capitalization of the Fund is as set forth in the Registration
Statement and the Prospectus. The outstanding common shares of the
Fund, par value $0.01 per share (the "Common Shares"), the outstanding
preferred shares of the Fund, par value $0.01 per share (the
"Preferred Shares"), and the New Preferred Shares conform in all
material respects to the description of them in the Prospectus. All
the outstanding Common Shares and Preferred Shares have been duly
authorized and are validly issued, fully paid and nonassessable
(except as described in the Registration Statement). The New Preferred
Shares to be issued and delivered to and paid for by the Underwriters
in accordance with this Underwriting Agreement against payment
therefor as provided by this Underwriting Agreement have been duly
authorized and when issued and delivered to the Underwriters will have
been validly issued and will be fully paid and nonassessable (except
as described in the Registration Statement). No person is entitled to
any preemptive or other similar rights with respect to the New
Preferred Shares.
(d) The Fund is duly registered with the Commission under the Investment
Company Act as a non-diversified, closed-end management investment
company, and, subject to the filing of a final amendment to the
Registration Statement (the "Final Amendment"), if not already filed,
all action under the Act and the Investment Company Act, as the case
may
4
be, necessary to make the public offering and consummate the sale of
the New Preferred Shares as provided in this Underwriting Agreement
has or will have been taken by the Fund.
(e) The Fund has, or at the relevant time had, full power and authority to
enter into each of this Underwriting Agreement, the Investment
Management Agreement, the Fund Accounting Services Agreement, the
Custody Agreement, the Transfer Agency Agreement, the Auction Agency
Agreement and the DTC Agreement (collectively, the "Fund Agreements")
and to perform all of the terms and provisions hereof and thereof to
be carried out by it and (i) each Fund Agreement has been duly and
validly authorized, executed and delivered by or on behalf of the
Fund, (ii) each Fund Agreement does not violate in any material
respect any of the applicable provisions of the Investment Company Act
or the Investment Advisers Act of 1940, as amended, and the rules and
regulations thereunder (collectively called the "Advisers Act"), as
the case may be, and (iii) assuming due authorization, execution and
delivery by the other parties thereto, each Fund Agreement constitutes
the legal, valid and binding obligation of the Fund enforceable in
accordance with its terms, (A) subject, as to enforcement, to
applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general equitable principles
(regardless of whether enforcement is sought in a proceeding in equity
or at law) and (B) except as rights to indemnity thereunder may be
limited by federal or state securities laws.
(f) None of (i) the execution and delivery by the Fund of the Fund
Agreements, (ii) the issuance and sale by the Fund of the New
Preferred Shares as contemplated by this Underwriting Agreement and
(iii) the performance by the Fund of its obligations under any of the
Fund Agreements or consummation by the Fund of the other transactions
contemplated by the Fund Agreements conflicts with or will conflict
with, or results or will result in a breach of, the Articles of
Incorporation or the By-laws of the Fund, the Articles Supplementary
of the Fund adopted in connection with the issuance of the New
Preferred Shares (the "Articles Supplementary") or any agreement or
instrument to which the Fund is a party or by which the Fund is bound,
or any law, rule or regulation, or order of any court, governmental
instrumentality, securities exchange or association or arbitrator,
whether foreign or domestic, applicable to the Fund, other than state
securities or "blue sky" laws applicable in connection with the
purchase and distribution of the New Preferred Shares by the
Underwriters pursuant to this Underwriting Agreement.
(g) The Fund is not currently in breach of, or in default under, any
written agreement or instrument to which it is a party or by which it
or its property is bound or affected, except for such breaches or
defaults that do not, either alone or in the aggregate, have a
material adverse effect on the Fund.
5
(h) No person has any right to the registration of any securities of the
Fund because of the filing of the registration statement.
(i) No consent, approval, authorization or order of any court or
governmental agency or body or securities exchange or association,
whether foreign or domestic, is required by the Fund for the
consummation by the Fund of the transactions to be performed by the
Fund or the performance by the Fund of all the terms and provisions to
be performed by or on behalf of it in each case as contemplated in the
Fund Agreements, except such as (i) have been obtained under the
federal securities laws, and (ii) may be required by the American
Stock Exchange or under state securities or "blue sky" laws, in
connection with the purchase and distribution of the New Preferred
Shares by the Underwriters pursuant to this Underwriting Agreement.
(j) To the best of our knowledge, PricewaterhouseCoopers LLP, whose report
appears in the Prospectus, are independent public accountants with
respect to the Fund as required by the Act and the Investment Company
Act.
(k) The statement of assets and liabilities included in the Registration
Statement and the Prospectus presents fairly in all material respects,
in accordance with generally accepted accounting principles in the
United States applied on a consistent basis, the financial position of
the Fund as of the date indicated.
(l) The Fund will maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets through an
asset reconciliation procedure or otherwise at reasonable intervals
and appropriate action is taken with respect to any differences.
(m) Since the date as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (i)
there has been no material adverse change in the condition, financial
or otherwise, business affairs or business of the Fund, whether or not
arising in the ordinary course of business, (ii) there have been no
transactions entered into by the Fund other than those in the ordinary
course of its business and (iii) there has been no dividend or
distribution of any kind declared, paid or made on any class of its
capital shares other than in the ordinary course of business.
6
(n) There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending, or, to
the knowledge of the Fund, threatened against or affecting the Fund,
which (i) might result in any material adverse change in the
condition, financial or otherwise, business affairs or business
prospects of the Fund or might materially adversely affect the
properties or assets of the Fund or (ii) is of a character required to
be described in the Registration Statement or the Prospectus; and
there are no contracts, franchises or other documents that are of a
character required to be described in, or that are required to be
filed as exhibits to, the Registration Statement that have not been
described or filed as required.
(o) The Fund intends to direct the investment of the proceeds of the
offering of the New Preferred Shares in such a manner as to comply
with the requirements of Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code").
(p) The Common Shares are listed on the American Stock Exchange.
(q) The New Preferred Shares have been, or prior to the Closing Date will
be, assigned ratings of "Aaa" by ▇▇▇▇▇'▇ Investors Service, Inc.
("▇▇▇▇▇'▇") and "AAA" by Fitch Ratings ("Fitch").
(r) The issuance of the New Preferred Shares shall not impair the ratings
assigned by ▇▇▇▇▇'▇ and Fitch to the outstanding Preferred Shares of
the Fund.
(s) No advertising, sales literature or other promotional materials
(excluding road show slides or road show tapes) were authorized or
prepared by or on behalf of the Fund or the Investment Manager or any
representative thereof for use in connection with the public offering
or sale of the New Preferred Shares (collectively referred to as the
"sales materials").
4. Representations and Warranties of the Investment Manager. The Investment
Manager represents to each Underwriter as follows:
(a) The Investment Manager has been duly formed, is validly existing as a
corporation under the laws of Delaware with full power and authority
to perform its obligations under the Investment Manager Agreements (as
defined below), and the Investment Manager is duly licensed and
qualified to do business and in good standing in each jurisdiction in
which it is required to be so qualified in order to perform its
obligations under the Investment Manager Agreements, except to the
extent that failure to be so qualified or be in good standing would
not have a material adverse effect on the Investment Manager's ability
to perform its obligations under the Investment Manager Agreements;
and the Investment Manager owns,
7
possesses or has obtained and currently maintains all governmental
licenses, permits, consents, orders, approvals and other
authorizations, whether foreign or domestic, necessary in order to
perform its obligations under the Investment Manager Agreements.
(b) The Investment Manager is (i) duly registered as an investment adviser
under the Advisers Act and (ii) not prohibited by the Advisers Act or
the Investment Company Act from acting as the investment manager for
the Fund as contemplated by the Investment Management Agreement, the
Registration Statement and the Prospectus.
(c) The Investment Manager has, or at the relevant time had, full power
and authority to enter into each of this Underwriting Agreement, the
Shareholder Servicing Agreement, the Investment Management Agreement
and the Investment Advisory Agreement (collectively, this Underwriting
Agreement, the Shareholder Servicing Agreement, the Investment
Management Agreement and the Investment Advisory Agreement being
referred to as the "Investment Manager Agreements") and to carry out
all the terms and provisions hereof and thereof to be carried out by
it; and each Investment Manager Agreement has been duly and validly
authorized, executed and delivered by the Investment Manager; none of
the Investment Manager Agreements violate in any material respect any
of the applicable provisions of the Investment Company Act or the
Advisers Act; and assuming due authorization, execution and delivery
by the other parties thereto, each Investment Manager Agreement
constitutes a legal, valid and binding obligation of the Investment
Manager, enforceable in accordance with its terms, (i) subject, as to
enforcement, to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general equitable
principles (regardless of whether enforcement is sought in a
proceeding in equity or at law) and (ii) except as rights to indemnity
thereunder may be limited by federal or state securities laws.
(d) Neither (i) the execution and delivery by the Investment Manager of
any Investment Manager Agreement nor (ii) the consummation by the
Investment Manager of the transactions contemplated by, or the
performance of its obligations under any Investment Manager Agreement
conflicts or will conflict with, or results or will result in a breach
of, the charter or by-laws of the Investment Manager or any agreement
or instrument to which the Investment Manager is a party or by which
the Investment Manager is bound, or any law, rule or regulation, or
order of any court, governmental instrumentality, securities exchange
or association or arbitrator, whether foreign or domestic, applicable
to the Investment Manager except in each case for such conflicts or
breaches which do not, either alone or in the aggregate, have a
material adverse effect on the Investment Manager's ability to perform
its obligations under the Investment Manager Agreements.
8
(e) No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association,
whether foreign or domestic, is required to be obtained by the
Investment Manager on or prior to the Closing Date for the
consummation of the transactions contemplated in, or the performance
by the Investment Manager of its obligations under, any Investment
Manager Agreement, as the case may be, except such as (i) have been
obtained under the federal securities laws, and (ii) may be required
by the American Stock Exchange or under state securities or "blue sky"
laws, in connection with the purchase and distribution of the New
Preferred Shares by the Underwriters pursuant to this Underwriting
Agreement.
(f) The description of the Investment Manager and its business, and the
statements attributed to the Investment Manager, in the Registration
Statement and the Prospectus comply with the requirements of the Act
and the Investment Company Act and do 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, solely with respect to the Prospectus, in the
light of the circumstances under which they were made).
(g) There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending or, to
the knowledge of the Investment Manager, threatened against or
affecting the Investment Manager of a nature required to be disclosed
in the Registration Statement or Prospectus.
(h) The Fund and the Investment Manager will not make any promotional
materials intended for use only by qualified broker-dealers and
registered representatives thereof available by means of an Internet
web site or similar electronic means.
(i) The Investment Adviser has been duly formed, is validly existing as a
limited liability company under the laws of Delaware with full power
and authority to perform its obligations under the Investment Advisory
Agreement, and the Investment Adviser is duly licensed and qualified
to do business and in good standing in each jurisdiction in which it
is required to be so qualified in order to perform its obligations
under the Investment Advisory Agreement, except to the extent that
failure to be so qualified or be in good standing would not have a
material adverse effect on the Investment Adviser's ability to perform
its obligations under the Investment Advisory Agreement; and the
Investment Adviser owns, possesses or has obtained and currently
maintains all governmental licenses, permits, consents, orders,
approvals and other authorizations, whether foreign or domestic,
necessary in order to perform its obligations under the Investment
Advisory Agreement.
9
(j) The Investment Adviser is (i) duly registered as an investment adviser
under the Advisers Act and (ii) not prohibited by the Advisers Act or
the Investment Company Act from acting as the investment adviser for
the Fund as contemplated by the Investment Advisory Agreement, the
Registration Statement and the Prospectus.
(k) The Investment Adviser has, or at the relevant time had, full power
and authority to enter into the Investment Advisory Agreement and to
carry out all the terms and provisions thereof to be carried out by
it; and the Investment Advisory Agreement has been duly and validly
authorized, executed and delivered by the Investment Adviser; the
Investment Advisory Agreement does not violate in any material respect
any of the applicable provisions of the Investment Company Act or the
Advisers Act; and assuming due authorization, execution and delivery
by the other parties thereto, the Investment Advisory Agreement
constitutes a legal, valid and binding obligation of the Investment
Adviser, enforceable in accordance with its terms, (i) subject, as to
enforcement, to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general equitable
principles (regardless of whether enforcement is sought in a
proceeding in equity or at law) and (ii) except as rights to indemnity
thereunder may be limited by federal or state securities laws.
(l) Neither (i) the execution and delivery by the Investment Adviser of
the Investment Advisory Agreement nor (ii) the consummation by the
Investment Adviser of the transactions contemplated by, or the
performance of its obligations under the Investment Advisory Agreement
conflicts or will conflict with, or results or will result in a breach
of, the organizational or operational documents of the Investment
Adviser or any agreement or instrument to which the Investment Adviser
is a party or by which the Investment Adviser is bound, or any law,
rule or regulation, or order of any court, governmental
instrumentality, securities exchange or association or arbitrator,
whether foreign or domestic, applicable to the Investment Adviser
except in each case for such conflicts or breaches which do not,
either alone or in the aggregate, have a material adverse effect on
the Investment Adviser's ability to perform its obligations under the
Investment Advisory Agreement.
(m) No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association,
whether foreign or domestic, is required to be obtained by the
Investment Adviser on or prior to the Closing Date for the
consummation of the transactions contemplated in, or the performance
by the Investment Adviser of its obligations under, the Investment
Advisory Agreement except such as (i) have been obtained under the
federal securities laws, and (ii) may be required by the American
Stock Exchange or under state securities or "blue sky" laws, in
connection
10
with the purchase and distribution of the New Preferred Shares by the
Underwriters pursuant to this Underwriting Agreement.
(n) The description of the Investment Adviser and its business, and the
statements attributed to the Investment Adviser, in the Registration
Statement and the Prospectus comply with the requirements of the Act
and the Investment Company Act and do 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, solely with respect to the Prospectus, in the
light of the circumstances under which they were made).
(o) There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending or, to
the knowledge of the Investment Manager after due and appropriate
inquiry, threatened against or affecting the Investment Adviser of a
nature required to be disclosed in the Registration Statement or
Prospectus.
(p) The Investment Adviser will not make any promotional materials
intended for use only by qualified broker-dealers and registered
representatives thereof available by means of an Internet web site or
similar electronic means.
5. Agreements of the Parties.
(a) If the registration statement relating to the New Preferred Shares has
not yet become effective, the Fund will promptly file the Final
Amendment, if not previously filed, with the Commission, and will use
its best efforts to cause such registration statement to become
effective and, as soon as the Fund is advised, will advise the
Managing Representative when the Registration Statement or any
amendment thereto has become effective. If the Registration Statement
has become effective and the Prospectus contained therein omits
certain information at the time of effectiveness pursuant to Rule 430A
under the Act, the Fund will file a 430A Prospectus pursuant to Rule
497(h) under the Act as promptly as practicable, but no later than the
second business day following the earlier of the date of the
determination of the offering price of the New Preferred Shares or the
date the Prospectus is first used after the Effective Date. If the
Registration Statement has become effective and the Prospectus
contained therein does not so omit such information, the Fund will
file a Prospectus pursuant to Rule 497(b) or (j) under the Act as
promptly as practicable, but no later than the fifth business day
following the date of the later of the Effective Date or the
commencement of the public offering of the New Preferred Shares after
the Effective Date. In either case, the Fund will provide you
satisfactory evidence of the filing. The Fund will not file with the
Commission any Prospectus or any other amendment (except any
post-
11
effective amendment which is filed with the Commission after the later
of (x) one year from the date of this Underwriting Agreement or (y)
the date on which distribution of the New Preferred Shares is
completed) or supplement to the Registration Statement or the
Prospectus unless a copy has first been submitted to the Managing
Representative a reasonable time before its filing and the Managing
Representative has not objected to it in writing within a reasonable
time after receiving the copy.
(b) For the period of three years from the date hereof, the Fund will
advise the Managing Representative promptly (1) of the issuance by the
Commission of any order in respect of the Fund or the Investment
Manager or which relates to the offering of the New Preferred Shares,
(2) of the initiation or threatening of any proceedings for, or
receipt by the Fund of any notice with respect to, the suspension of
the qualification of the New Preferred Shares for sale in any
jurisdiction or the issuance of any order by the Commission suspending
the effectiveness of the Registration Statement, (3) of receipt by the
Fund, or any representative or attorney of the Fund, of any other
communication from the Commission relating in any material way to the
Fund, the Registration Statement, the Notification, any Preliminary
Prospectus, the Prospectus or to the transactions contemplated by this
Underwriting Agreement and (4) the issuance by any court, regulatory
body, administrative agency or other governmental agency or body,
whether foreign or domestic, of any order, ruling or decree, or the
threat to initiate any proceedings with respect thereto, regarding the
offering of the New Preferred Shares by the Fund. The Fund will make
every reasonable effort to prevent the issuance of any order
suspending the effectiveness of the Registration Statement and, if any
such order is issued, to obtain its lifting as soon as possible.
(c) If not delivered prior to the date of this Underwriting Agreement, the
Fund will deliver to the Managing Representative, without charge, a
signed copy of the registration statement and the Notification and of
any amendments (except any post-effective amendment which is filed
with the Commission after the later of (x) one year from the date of
this Underwriting Agreement or (y) the date on which the distribution
of the New Preferred Shares is completed) to either the Registration
Statement or the Notification (including all exhibits filed with any
such document) and as many conformed copies of the registration
statement and any amendments thereto (except any post-effective
amendment which is filed with the Commission after the later of (x)
one year from the date of this Underwriting Agreement or (y) the date
on which the distribution of the New Preferred Shares is completed)
(excluding exhibits) as the Managing Representative may reasonably
request.
(d) During such period as a prospectus is required by law to be delivered
by an underwriter or a dealer, the Fund will deliver, without charge,
to you, the Underwriters and any dealers, at such office or offices as
you may
12
designate, as many copies of the Prospectus as you may reasonably
request, and, if any event occurs during such period as a result of
which it is necessary to amend or supplement the Prospectus, in order
to make the statements therein, in light of the circumstances existing
when such Prospectus is delivered to a purchaser of New Preferred
Shares, not misleading in any material respect, or if during such
period it is necessary to amend or supplement the Prospectus to comply
with the Act or the Investment Company Act, the Fund promptly will
prepare, submit to the Managing Representative, file with the
Commission and deliver, without charge, to the Underwriters and to
dealers (whose names and addresses the Managing Representative will
furnish to the Fund) to whom New Preferred Shares may have been sold
by the Underwriters, and to other dealers on request, amendments or
supplements to the Prospectus so that the statements in such
Prospectus, as so amended or supplemented, will not, in light of the
circumstances existing when such Prospectus is delivered to a
purchaser, be misleading in any material respect and will comply with
the Act and the Investment Company Act. Delivery by the Underwriters
of any such amendments or supplements to the Prospectus will not
constitute a waiver of any of the conditions in Section 6 hereof.
(e) The Fund will make generally available to holders of the Fund's
securities, as soon as practicable but in no event later than the last
day of the 18th full calendar month following the calendar quarter in
which the Effective Date falls, an earnings statement, if applicable,
satisfying the provisions of Section 11(a) of the Act and, at the
option of the Fund, Rule 158 under the Act.
(f) The Fund will take such actions as the Managing Representative
reasonably requests in order to qualify the New Preferred Shares for
offer and sale under the securities or "blue sky" laws of such
jurisdictions as the Managing Representative reasonably designates;
provided that the Fund shall not be required in connection therewith
or as a condition thereof to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction.
(g) The Fund will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Fund's counsel and accountants in
connection with the registration of the New Preferred Shares and all
other expenses in connection with the preparation, printing and filing
of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the
cost of printing or reproducing this Underwriting Agreement and any
other documents in connection with the offering, purchase, sale and
delivery of the New Preferred Shares (including advertising expenses
of the Underwriters, if any); (iii) the cost of preparing share
certificates; (iv) the expenses (including, but not limited to,
travel, hotels and other accommodations)
13
incurred by the Fund's directors, officers, employees and other
personnel in connection with meetings held with registered brokers in
connection with the offering of the New Preferred Shares, the
preparing to market and the marketing of the New Preferred Shares; (v)
any fees charged by securities rating services for rating the New
Preferred Shares; (vi) the fees and expenses of the DTC and its
nominee, the Custodian and the Auction Agent; and (vii) all other
costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for.
(h) If the transactions contemplated by this Underwriting Agreement are
not consummated, except as otherwise provided herein, no party will be
under any liability to any other party, except that (i) if this
Underwriting Agreement is terminated by (A) the Fund or the Investment
Manager pursuant to any of the provisions hereof (otherwise than
pursuant to Section 8 hereof) or (B) by you or the Underwriters
because of any inability, failure or refusal on the part of the Fund
or the Investment Manager to comply with any material terms of this
Agreement or because any of the conditions in Section 6 are not
satisfied, the Investment Manager or an affiliate and the Fund,
jointly and severally, will reimburse the Underwriters for all
out-of-pocket expenses (including the reasonable fees, disbursements
and other charges of their counsel) reasonably incurred by them in
connection with the proposed purchase and sale of the New Preferred
Shares and (ii) no Underwriter who has failed or refused to purchase
the New Preferred Shares agreed to be purchased by it under this
Underwriting Agreement, in breach of its obligations pursuant to this
Underwriting Agreement, will be relieved of liability to the Fund and
the Investment Manager and the other Underwriters for damages
occasioned by its default.
(i) Without the prior written consent of the Managing Representative, the
Fund will not offer, sell or register with the Commission, or announce
an offering of, any equity securities of the Fund, within 180 days
after the Effective Date, except for the New Preferred Shares as
described in the Prospectus and any issuances of Common Shares
pursuant to the dividend reinvestment plan established by the Fund.
(j) The Fund will direct the investment of the net proceeds of the
offering of the New Preferred Shares in such a manner as to comply
with the investment objective and policies of the Fund as described in
the Prospectus.
6. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters to purchase the New Preferred Shares are subject to the
accuracy on the date of this Underwriting Agreement, and on each of the
Closing Dates, of the representations of the Fund and the Investment
Manager in this Underwriting Agreement, to the accuracy and completeness of
all statements made by the Fund,
14
the Investment Manager or any of their respective officers in any
certificate delivered to the Managing Representative or its counsel
pursuant to this Underwriting Agreement, to performance by the Fund and the
Investment Manager of their respective obligations under this Underwriting
Agreement and to each of the following additional conditions:
(a) The registration statement must have become effective by 5:30 p.m.,
New York City time, on the date of this Underwriting Agreement or such
later date and time as the Managing Representative consents to in
writing. The Prospectus must have been filed in accordance with Rule
497(b), (h) or (j), as the case may be, under the Act.
(b) No order suspending the effectiveness of the Registration Statement
may be in effect and no proceedings for such purpose may be pending
before or, to the knowledge of counsel to the Underwriters, threatened
by the Commission, and any requests for additional information on the
part of the Commission (to be included in the Registration Statement
or the Prospectus or otherwise) must be complied with or waived to the
reasonable satisfaction of the Managing Representative.
(c) Since the dates as of which information is given in the Registration
Statement and the Prospectus, (i) there must not have been any
material change in the number of outstanding Common Shares,
outstanding Preferred Shares, New Preferred Shares or liabilities of
the Fund except as set forth in or contemplated by the Prospectus
(provided that a change in the Fund's net asset value, liabilities or
portfolio securities in the exercise of its normal investment
operations shall not be deemed to be a material adverse change); (ii)
there must not have been any material adverse change in the general
affairs, prospects, management, business, financial condition or
results of operations of the Fund or the Investment Manager, whether
or not arising from transactions in the ordinary course of business as
set forth in or contemplated by the Prospectus (provided that a change
in the Fund's net asset value, liabilities or portfolio securities in
the exercise of its normal investment operations shall not be deemed
to be a material adverse change); (iii) the Fund must not have
sustained any material interference with its business from any court
or from legislative or other governmental action, order or decree,
whether foreign or domestic, or from any other occurrence not
described in the Registration Statement and Prospectus; and (iv) there
must not have occurred any event that makes untrue or incorrect in any
material respect any statement or information contained in the
Registration Statement or Prospectus or that is not reflected in the
Registration Statement or Prospectus but should be reflected therein
in order to make the statements or information therein (in the case of
the Prospectus, in light of the circumstances in which they were made)
not misleading in any material respect; if, in the judgment of the
Managing Representative, any such development referred to in clause
(i), (ii), (iii) or (iv) of this paragraph (c) makes it impracticable
or
15
inadvisable to consummate the sale and delivery of the New Preferred
Shares pursuant to this Underwriting Agreement by the Underwriters, at
the initial public offering price of the New Preferred Shares.
(d) The Managing Representative must have received on the Closing Date a
certificate, dated such date, of the President or a Vice-President and
the chief financial or accounting officer of each of the Fund and the
Investment Manager certifying that (i) the signers have carefully
examined the Registration Statement, the Prospectus, and this
Underwriting Agreement, (ii) the representations of the Fund (with
respect to the certificates from such Fund officers) and the
representations of the Investment Manager (with respect to the
certificates from such officers of the Investment Manager) in this
Underwriting Agreement are accurate on and as of the date of the
certificate, (iii) there has not been any material adverse change in
the general affairs, prospects, management, business, financial
condition or results of operations of the Fund (with respect to the
certificates from such Fund officers) or the Investment Manager (with
respect to the certificates from such officers of the Investment
Manager), which change would materially and adversely affect the
ability of the Fund or the Investment Manager, as the case may be, to
fulfill its obligations under this Underwriting Agreement or the
Investment Management Agreement, whether or not arising from
transactions in the ordinary course of business, (iv) with respect to
the Fund only, to the knowledge of such officers after reasonable
investigation, no order suspending the effectiveness of the
Registration Statement or prohibiting the sale of any of the New
Preferred Shares has been issued and no proceedings for any such
purpose are pending before or threatened by the Commission or any
other regulatory body, whether foreign or domestic, (v) to the
knowledge of the officers of the Investment Manager, after reasonable
investigation, no order having a material adverse effect on the
ability of the Investment Manager to fulfill its obligations under
this Underwriting Agreement or the Investment Management Agreement, as
the case may be, has been issued and no proceedings for any such
purpose are pending before or threatened by the Commission or any
other regulatory body, whether foreign or domestic, and (vi) each of
the Fund (with respect to the certificates from such Fund officers)
and the Investment Manager (with respect to the certificates from such
officers of the Investment Manager) has performed all of its
respective agreements that this Underwriting Agreement requires it to
perform by the Closing Date (to the extent not waived in writing by
the Managing Representative).
(e) You must receive on the Closing Date the opinions dated such Closing
Date substantially in the form of Schedules B, C and D to this
Underwriting Agreement from the counsel identified in each such
Schedules.
16
(f) You must receive on the Closing Date from Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP an opinion dated such Closing Date with respect to
the Fund, the New Preferred Shares, the Registration Statement and the
Prospectus, this Underwriting Agreement and the form and sufficiency
of all proceedings taken in connection with the sale and delivery of
the New Preferred Shares. Such opinion and proceedings shall fulfill
the requirements of this Section 6(f) only if such opinion and
proceedings are satisfactory in all respects to the Managing
Representative. The Fund and the Investment Manager must have
furnished to such counsel such documents as counsel may reasonably
request for the purpose of enabling them to render such opinion.
(g) The Managing Representative must receive on the date this Underwriting
Agreement is signed and delivered by you a signed letter, dated such
date, substantially in the form of Schedule E to this Underwriting
Agreement from the firm of accountants designated in such Schedule.
The Managing Representative also must receive on the Closing Date a
signed letter from such accountants, dated as of such Closing Date,
confirming on the basis of a review in accordance with the procedures
set forth in their earlier letter that nothing has come to their
attention during the period from a date not more than five business
days before the date of this Underwriting Agreement, specified in the
letter, to a date not more than five business days before such Closing
Date, that would require any change in their letter referred to in the
foregoing sentence.
(h) The New Preferred Shares shall have been accorded ratings of "Aaa" by
▇▇▇▇▇'▇ and "AAA" by Fitch and letters to such effect, dated on or
before the Closing Date, shall have been delivered to the Managing
Representative.
(i) The issuance of the New Preferred Shares shall not impair the ratings
assigned by ▇▇▇▇▇'▇ and Fitch to the outstanding Preferred Shares, and
letters to such effect, dated on or before the Closing Date, shall
have been delivered to the Managing Representative.
(j) As of the Closing Date, and assuming the receipt of the net proceeds
from the sale of the New Preferred Shares, the 1940 Act Preferred
Shares Asset Coverage and the Preferred Shares Basic Maintenance
Amount (each as defined in the Prospectus) each will be met.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Underwriting Agreement will comply only if they are in
form and scope reasonably satisfactory to counsel for the Underwriters,
provided that any such documents, forms of which are annexed hereto, shall
be deemed satisfactory to such counsel if substantially in such form.
17
7. Termination. This Underwriting Agreement may be terminated by the Managing
Representative by notifying the Fund at any time:
(a) before the later of the effectiveness of the Registration Statement
and the time when any of the New Preferred Shares are first generally
offered pursuant to this Underwriting Agreement by the Managing
Representative to dealers by letter or telegram;
(b) at or before the Closing Date if, in the sole judgment of the Managing
Representative, payment for and delivery of any New Preferred Shares
is rendered impracticable or inadvisable because (i) trading in the
equity securities of the Fund is suspended by the Commission or by the
principal exchange that lists the Common Shares, (ii) trading in
securities generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq Stock Market shall have been suspended or
limited or minimum or maximum prices shall have been generally
established on such exchange or over-the-counter market, (iii)
additional material governmental restrictions, not in force on the
date of this Underwriting Agreement, have been imposed upon trading in
securities or trading has been suspended on any U.S. securities
exchange, (iv) a general banking moratorium has been established by
U.S. federal or New York authorities or (v) any material adverse
change in the financial or securities markets in the United States or
in political, financial or economic conditions in the United States or
any outbreak or material escalation of hostilities or declaration by
the United States of a national emergency or war or other calamity or
crisis shall have occurred the effect of any of which is such as to
make it, in the sole judgment of the Managing Representative,
impracticable or inadvisable to market the New Preferred Shares on the
terms and in the manner contemplated by the Prospectus; or
(c) at or before the Closing Date, if any of the conditions specified in
Section 6 have not been fulfilled when and as required by this
Underwriting Agreement.
8. Substitution of Underwriters. If one or more of the Underwriters fails
(other than for a reason sufficient to justify the termination of this
Underwriting Agreement) to purchase on the Closing Date the New Preferred
Shares agreed to be purchased on the Closing Date by such Underwriter or
Underwriters, the Managing Representative may find one or more substitute
underwriters to purchase such New Preferred Shares or make such other
arrangements as the Managing Representative deems advisable, or one or more
of the remaining Underwriters may agree to purchase such New Preferred
Shares in such proportions as may be approved by the Managing
Representative, in each case upon the terms set forth in this Underwriting
Agreement. If no such arrangements have been made within 36 hours after the
Closing Date, and
18
(a) the number of New Preferred Shares to be purchased by the defaulting
Underwriters on the Closing Date does not exceed 10% of the New
Preferred Shares that the Underwriters are obligated to purchase on
the Closing Date, each of the nondefaulting Underwriters will be
obligated to purchase such New Preferred Shares on the terms set forth
in this Underwriting Agreement in proportion to their respective
obligations under this Underwriting Agreement, or
(b) the number of New Preferred Shares to be purchased by the defaulting
Underwriters on the Closing Date exceeds 10% of the New Preferred
Shares to be purchased by all the Underwriters on the Closing Date,
the Fund will be entitled to an additional period of 24 hours within which
to find one or more substitute underwriters reasonably satisfactory to the
Managing Representative to purchase such New Preferred Shares on the terms
set forth in this Underwriting Agreement.
In any such case, either the Managing Representative or the Fund will
have the right to postpone the Closing Date for not more than five business
days in order that necessary changes and arrangements (including any
necessary amendments or supplements to the Registration Statement or the
Prospectus) may be effected by the Managing Representative and the Fund. If
the number of New Preferred Shares to be purchased on the Closing Date by
such defaulting Underwriter or Underwriters exceeds 10% of the New
Preferred Shares that the Underwriters are obligated to purchase on the
Closing Date, and none of the nondefaulting Underwriters or the Fund makes
arrangements pursuant to this Section within the period stated for the
purchase of the New Preferred Shares that the defaulting Underwriters
agreed to purchase, this Underwriting Agreement will terminate without
liability on the part of any nondefaulting Underwriter, the Fund or the
Investment Manager, except as provided in Sections 5(h) and 9 hereof. This
Section will not affect the liability of any defaulting Underwriter to the
Fund or the nondefaulting Underwriters arising out of such default. A
substitute underwriter will become a Underwriter for all purposes of this
Underwriting Agreement.
9. Indemnity and Contribution.
(a) Each of the Fund, the Investment Manager and the Investment Adviser,
jointly and severally, agrees to indemnify, defend and hold harmless
each Underwriter, its partners, directors and officers, and any person
who controls any Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, and the successors and assigns
of all of the foregoing persons from and against any loss, damage,
expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter or
any such person may incur under the Act, the Exchange Act, the
Investment Company Act, the Advisers Act, the common law or otherwise,
insofar as such loss, damage,
19
expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Fund) or in a
Prospectus (the term "Prospectus" for the purpose of this Section 9
being deemed to include any Preliminary Prospectus, any sales
materials prepared or authorized by the Fund, the Prospectus and the
Prospectus as amended or supplemented by the Fund), or arises out of
or is based upon any omission or alleged omission to state a material
fact required to be stated in either such Registration Statement or
Prospectus or necessary to make the statements made therein not
misleading, except insofar as any such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in and in
conformity with information furnished in writing by or on behalf of
any Underwriter through you to the Fund or the Investment Manager
expressly for use with reference to such Underwriter in such
Registration Statement or such Prospectus or arises out of or is based
upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such
information not misleading, provided, however, that the indemnity
agreement contained in this subsection (a) with respect to any
Preliminary Prospectus or amended Preliminary Prospectus shall not
inure to the benefit of any Underwriter (or to the benefit of any
person controlling such Underwriter) from whom the person asserting
any such loss, damage, expense, liability or claim purchased the New
Preferred Shares which is the subject thereof if the Prospectus
corrected any such alleged untrue statement or omission and if such
Underwriter failed to send or give a copy of the Prospectus to such
person at or prior to the written confirmation of the sale of such New
Preferred Shares to such person, unless the failure is the result of
noncompliance by the Fund with Section 5(d) hereof.
If any action, suit or proceeding (together, a "Proceeding") is
brought against an Underwriter or any such person in respect of which
indemnity may be sought against the Fund, the Investment Manager or
the Investment Adviser pursuant to the foregoing paragraph, such
Underwriter or such person shall promptly notify the Fund, the
Investment Manager or the Investment Adviser, as the case may be, in
writing of the institution of such Proceeding and the Fund, the
Investment Manager or the Investment Adviser shall assume the defense
of such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and
expenses; provided, however, that the omission to so notify the Fund,
the Investment Manager or the Investment Adviser shall not relieve the
Fund, the Investment Manager or the Investment Adviser from any
liability which the Fund, the Investment Manager or the Investment
Adviser may have to any Underwriter or any such person or otherwise
and, unless and only to the extent that, such
20
omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. Such Underwriter or such person shall have
the right to employ its or their own counsel in any such case, but the
fees and expenses of such counsel shall be at the expense of such
Underwriter or of such person unless the employment of such counsel
shall have been authorized in writing by the Fund, the Investment
Manager or the Investment Adviser, as the case may be, in connection
with the defense of such Proceeding or the Fund, the Investment
Manager or the Investment Adviser shall not have, within a reasonable
period of time in light of the circumstances, employed counsel to have
charge of the defense of such Proceeding or such indemnified party or
parties shall have reasonably concluded that there may be defenses
available to it or them which are different from, additional to or in
conflict with those available to the Fund, the Investment Manager or
the Investment Adviser (in which case the Fund, the Investment Manager
or the Investment Adviser, as the case may be, shall not have the
right to direct the defense of such Proceeding on behalf of the
indemnified party or parties), in any of which events such fees and
expenses shall be borne by the Fund, the Investment Manager or the
Investment Adviser, as the case may be, and paid as incurred (it being
understood, however, that the Fund, the Investment Manager or the
Investment Adviser shall not be liable for the expenses of more than
one separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such
Proceeding). None of the Fund, the Investment Manager or the
Investment Adviser shall be liable for any settlement of any
Proceeding effected without its written consent but if settled with
the written consent of the Fund, the Investment Manager or the
Investment Adviser, as the case may be, the Fund, the Investment
Manager or the Investment Adviser, as the case may be, agrees to
indemnify and hold harmless any Underwriter and any such person from
and against any loss or liability by reason of such settlement.
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 sentence of this paragraph, then 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 60 business days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall not
have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior notice
of its intention to settle. 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
21
settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such
Proceeding and does not include an admission of fault, culpability or
a failure to act, by or on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Fund, the Investment Manager and the Investment Adviser,
any of their partners, directors and officers, and any person who
controls the Fund, the Investment Manager or the Investment Adviser
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing
persons from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or
severally, the Fund, the Investment Manager or the Investment Adviser
or any such person may incur under the Act, the Exchange Act, the
Investment Company Act, the Advisers Act, the common law or otherwise,
insofar as such loss, damage, expense, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in and in conformity with information
furnished in writing by or on behalf of such Underwriter through you
to the Fund, the Investment Manager or the Investment Adviser
expressly for use with reference to such Underwriter in the
Registration Statement (or in the Registration Statement as amended by
any post-effective amendment thereof by the Fund) or in a Prospectus,
or arises out of or is based upon any omission or alleged omission to
state a material fact in connection with such information required to
be stated in such Registration Statement or such Prospectus or
necessary to make such information not misleading.
If any Proceeding is brought against the Fund, the Investment
Manager or the Investment Adviser, or any such person in respect of
which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Fund, the Investment Manager or the
Investment Adviser or such person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; provided, however, that
the omission to so notify such Underwriter shall not relieve such
Underwriter from any liability which such Underwriter may have to the
Fund, the Investment Manager or the Investment Adviser, or any such
person or otherwise. The Fund, the Investment Manager or the
Investment Adviser, or such person shall have the right to employ its
own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Fund, the Investment Manager or
the Investment Adviser, or such person, as the case may be, unless the
employment of such counsel shall have been authorized in writing by
such Underwriter in connection with the defense of such Proceeding or
such Underwriter shall not have, within a
22
reasonable period of time in light of the circumstances, employed
counsel to have charge of the defense of such Proceeding or such
indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from
or additional to or in conflict with those available to such
Underwriter (in which case such Underwriter shall not have the right
to direct the defense of such Proceeding on behalf of the indemnified
party or parties, but such Underwriter may employ counsel and
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Underwriter), in any of which
events such fees and expenses shall be borne by such Underwriter and
paid as incurred (it being understood, however, that such Underwriter
shall not be liable for the expenses of more than one separate counsel
(in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). No
Underwriter shall be liable for any settlement of any such Proceeding
effected without the written consent of such Underwriter but if
settled with the written consent of such Underwriter, such Underwriter
agrees to indemnify and hold harmless the Fund, the Investment Manager
or the Investment Adviser and any such person from and against any
loss or liability by reason of such settlement. 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 sentence of
this paragraph, then 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 60
business days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall
have given the indemnifying party at least 30 days' prior notice of
its intention to settle. 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 and does not include an admission of fault, culpability or
a failure to act, by or on behalf of such indemnified party.
(c) If the indemnification provided for in this Section 9 is unavailable
to an indemnified party under subsections (a) and (b) of this Section
9 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such
23
indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Fund, the Investment
Manager and the Investment Adviser on the one hand and the
Underwriters on the other hand from the offering of the New Preferred
Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of the Fund, the Investment Manager and
the 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, damages, expenses, liabilities or claims, as well as any
other relevant equitable considerations. The relative benefits
received by the Fund, the Investment Manager or the Investment Adviser
on the one hand and the Underwriters on the other shall be deemed to
be in the same respective proportions as the total proceeds from the
offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Fund and the total underwriting
discounts and commissions received by the Underwriters, bear to the
aggregate public offering price of the New Preferred Shares. The
relative fault of the Fund, the Investment Manager and the Investment
Adviser on the one hand and of the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or omission
or alleged omission relates to information supplied by the Fund, the
Investment Manager or the Investment Adviser or by the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
amount paid or payable by a party as a result of the losses, damages,
expenses, liabilities and claims referred to in this subsection shall
be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(d) The Fund, the Investment Manager and the Investment Adviser and the
Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 9 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 subsection (c)
above. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of
the fees and commissions received by such Underwriter. 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. The
Underwriters' obligations to contribute pursuant to this Section 9 are
several in proportion to their respective underwriting commitments and
not joint.
24
(e) The indemnity and contribution agreements contained in this Section 9
and the covenants, warranties and representations of the Fund and the
Investment Manager contained in this Agreement shall remain in full
force and effect regardless of any investigation made by or on behalf
of any Underwriter, its partners, directors or officers or any person
(including each partner, officer or director of such person) who
controls any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, or by or on behalf of the Fund, the
Investment Manager or the Investment Adviser, any of their partners,
directors or officers or any person (including each partner, officer
or director of such person) who controls the Fund, the Investment
Manager or the Investment Adviser within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, and shall survive any
termination of this Agreement or the issuance and delivery of the New
Preferred Shares. The Fund, the Investment Manager or the Investment
Adviser and each Underwriter agree promptly to notify each other of
the commencement of any Proceeding against it and, in the case of the
Fund, the Investment Manager and the Investment Adviser, against any
of the Fund's, the Investment Manager's or the Investment Adviser's
officers or directors in connection with the issuance and sale of the
New Preferred Shares, or in connection with the Registration Statement
or Prospectus.
(f) The Fund, the Investment Manager and the Investment Adviser each
acknowledge that the statements with respect to (1) the public
offering of the New Preferred Shares as set forth on the cover page of
and (2) the statements relating to selling concessions and
reallowances of selling concessions and with respect to discretionary
accounts under the caption "Underwriting" in the Prospectus constitute
the only information furnished in writing to the Fund by the
Representatives on behalf of the Underwriters expressly for use in
such document. The Underwriters severally confirm that these
statements are correct in all material respects and were so furnished
by or on behalf of the Underwriters severally for use in the
Prospectus.
(g) Notwithstanding any other provisions in this Section 9, no party shall
be entitled to indemnification or contribution under this Underwriting
Agreement against any loss, claim, liability, expense or damage
arising by reason of such person's willful misfeasance, bad faith,
gross negligence, or by reason of such party's reckless disregard of
its obligations and duties under this Agreement.
10. Notices. Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Securities LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
Syndicate Department and, if to the Fund or the Investment Manager, shall
be sufficient in all respects if delivered or sent to the Fund or the
Investment Manager, as the case may be, at
25
the offices of the Fund or the Investment Manager at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: President and if delivered or sent to the
Investment Adviser at the offices of the Investment Adviser at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President.
11. Governing Law; Construction. This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way
relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter
of convenience of reference and are not a part of this Agreement.
12. Submission to Jurisdiction. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of
the State of New York located in the City and County of New York or in the
United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and
the Fund consents to the jurisdiction of such courts and personal service
with respect thereto. The Fund hereby consents to personal jurisdiction,
service and venue in any court in which any Claim arising out of or in any
way relating to this Agreement is brought by any third party against UBS
Securities LLC or any indemnified party. Each of UBS Securities LLC, the
Fund (on its behalf and, to the extent permitted by applicable law, on
behalf of its stockholders and affiliates) and the Investment Manager (on
its behalf and, to the extent permitted by applicable law, on behalf of its
stockholders and affiliates) waives all right to trial by jury in any
action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. Each of
the Fund, the Investment Manager and the Investment Adviser agrees that a
final judgment in any such action, proceeding or counterclaim brought in
any such court shall be conclusive and binding upon the Fund, the
Investment Manager or the Investment Adviser, as the case may be, and may
be enforced in any other courts in the jurisdiction of which the Fund, the
Investment Manager or the Investment Adviser, as the case may be, is or may
be subject, by suit upon such judgment.
13. Parties at Interest. The Agreement herein set forth has been and is made
solely for the benefit of the Underwriters, the Fund, the Investment
Manager and the Investment Adviser and to the extent provided in Section 9
hereof the controlling persons, partners, directors and officers referred
to in such section, and their respective successors, assigns, heirs,
personal representatives and executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right
under or by virtue of this Agreement.
14. Counterparts. This Agreement may be signed by the parties in one or more
counterparts which together shall constitute one and the same agreement
among the parties.
26
15. Successors and Assigns. This Agreement shall be binding upon the
Underwriters, the Fund, the Investment Manager or the Investment Adviser,
and any successor or assign of any substantial portion of the Fund's, the
Investment Manager's, the Investment Adviser's or any of the Underwriters'
respective businesses and/or assets.
27
If the foregoing correctly sets forth the understanding among the Fund and
the Underwriters, please so indicate in the space provided below for the
purpose, whereupon this letter and your acceptance shall constitute a binding
agreement among the Fund, the Investment Manager, the Investment Adviser and the
Underwriters, severally.
Very truly yours,
▇▇▇▇▇▇▇ RREEF REAL ESTATE FUND, INC.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
DEUTSCHE ASSET MANAGEMENT, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
RREEF AMERICA L.L.C.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Partner
28
Accepted and agreed to as of the
date first above written, on
behalf of themselves and
the other several Underwriters
named in Schedule A
UBS SECURITIES LLC
/s/ ▇▇▇▇ ▇. Reit
--------------------------
By: ▇▇▇▇ ▇. Reit
Title: Executive Director
/s/ ▇▇▇▇ ▇. Key
-------------------------
By: ▇▇▇▇ ▇. Key
Title: Director
29
SCHEDULE A
Number of
New Preferred Shares
Name to be Purchased
---- ---------------
UBS Securities LLC 800
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated 800
-----
Total 1,600
30
SCHEDULE B
FORM OF OPINION OF
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ REGARDING THE FUND
i. The Registration Statement and all post-effective amendments, if any,
are effective under the Act and no stop order with respect thereto has been
issued and no proceeding for that purpose has been instituted or, to the best of
our knowledge, is threatened by the Commission. Any filing of the Prospectus or
any supplements thereto required under Rule 497 under the Act prior to the date
hereof have been made in the manner and within the time required by such rule.
ii. The Fund has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Maryland, with full
corporate power to conduct all the activities conducted by it, to own or lease
all assets owned (or to be owned) or leased (or to be leased) by it and to
conduct its business, all as described in the Registration Statement and
Prospectus, and the Fund is duly licensed and qualified to do business and in
good standing in each jurisdiction in which its ownership or leasing of property
or its conducting of business requires such qualification, except where the
failure to be so qualified or be in good standing, either alone or in the
aggregate, would not have a material adverse effect on the Fund, and the Fund
owns, possesses or has obtained and currently maintains all governmental
licenses, permits, consents, orders, approvals and other authorizations, whether
foreign or domestic, necessary to carry on its business as contemplated in the
Prospectus, except where the failure to obtain such licenses, permits, consents,
orders, approvals and other authorizations, either alone or in the aggregate,
would not have a material adverse effect on the Fund. The Fund has no
subsidiaries.
iii. The number of authorized shares of Common Shares of the Fund is as set
forth in the Registration Statement and the Prospectus under the caption
"Description of Common Shares." The Common Shares of the Fund conform in all
material respects to the description of them in the Prospectus under the caption
"Description of Common Shares." All the outstanding Common Shares have been duly
authorized and are validly issued, fully paid and nonassessable. The number of
authorized shares of Shares of the Fund is as set forth in the Registration
Statement and the Prospectus under the caption "Description of Preferred
Shares." The Shares of the Fund conform in all material respects to the
description of them in the Prospectus under the caption "Description of
Preferred Shares." The Shares to be issued and delivered to and paid for by the
Underwriters in accordance with the Underwriting Agreement against payment
therefor as provided by the Underwriting Agreement have been duly authorized and
when issued and delivered to the Underwriters as so provided will have been
validly issued and will be fully paid and nonassessable (except as described in
the Registration Statement). No person is entitled to any preemptive or other
similar rights with respect to the Shares under the charter or by-laws of the
Fund or the Maryland General Corporation law or, to counsel's knowledge,
otherwise.
iv. The Fund is duly registered with the Commission under the Investment
Company Act as a non-diversified, closed-end management investment company and
all action under the Act and the Investment Company Act, as the case may be,
necessary to make the public offering and consummate the sale of the Shares as
provided in the Underwriting Agreement has or will have been taken by the Fund.
v. The Fund has full corporate power to enter into each of the
Underwriting Agreement, the Investment Management Agreement, the Custody
Agreement, the Fund Accounting Services Agreement, the Transfer Agency
Agreement, the Auction Agency Agreement and the DTC Agreement (collectively, the
"Fund Agreements") and to perform all of the terms and provisions thereof to be
carried out by it and (A) each Fund Agreement has been duly and validly
authorized, executed and delivered by the Fund, (B) each Fund Agreement complies
in all material respects with all applicable provisions of the Investment
Company Act and the Advisers Act, as the case may be, and (C) assuming due
authorization, execution and delivery by the other parties thereto, each Fund
Agreement constitutes the legal, valid and binding obligation of the Fund
enforceable against the Fund in accordance with its terms, (1) subject, as to
enforcement, to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general equitable principles (regardless of
whether enforcement is sought in a proceeding in equity or at law) and (2)
except as rights to indemnity thereunder may be limited by federal or state
securities laws.
vi. None of (A) the execution and delivery by the Fund of the Fund
Agreements, (B) the issue and sale by the Fund of the Shares as contemplated by
the Underwriting Agreement and (C) the performance by the Fund of its
obligations under the Fund Agreements or consummation by the Fund of the other
transactions contemplated by the Fund Agreements conflicts with or will conflict
with, or results or will result in a breach of, the Articles of Incorporation,
the Articles Supplementary or the By-laws of the Fund or any agreement or
instrument to which the Fund is a party or by which the Fund is bound that is
filed as an exhibit to the Registration Statement, or any law, rule or
regulation which in our experience is normally applicable to transactions of the
type contemplated by the Underwriting Agreement, or order of any court,
governmental instrumentality, securities exchange or association or arbitrator,
whether foreign or domestic, specifically naming the Fund and known to counsel,
except that we express no opinion as to the securities or "blue sky" laws
applicable in connection with the purchase and distribution of the Shares by the
Underwriters pursuant to the Underwriting Agreement.
vii. No consent, approval, authorization or order of any court (to
counsel's knowledge) or governmental agency or body or securities exchange or
association, whether foreign or domestic, is required by the Fund for the
consummation by the Fund of the transactions to be performed by the Fund or the
performance by the Fund of all the terms and provisions to be performed by or on
behalf of it in each case as contemplated in the Fund Agreements, except such as
(A) have been obtained under the federal securities laws and (B) may be required
by the American Stock Exchange or under state
B-2
securities or "blue sky" laws in connection with the purchase and distribution
of the Shares by the Underwriters pursuant to the Underwriting Agreement.
viii. We do not know of any legal or governmental proceeding pending or
threatened against the Fund.
ix. The Fund does not require any tax or other rulings to enable it to
qualify as a regulated investment company under Subchapter M of the Code.
x. The section in the Prospectus entitled "Taxation" and the section in
the Statement of Additional Information entitled "Taxation " is a fair summary
of the principal United States federal income tax rules currently in effect
applicable to the Fund and to the purchase, ownership and disposition of the
Shares.
xi. The Registration Statement (except the financial statements and
schedules including the notes and schedules thereto, and other financial or
accounting data included therein or omitted therefrom, as to which we express no
view), at the time it became effective, and the Prospectus (except as
aforesaid), as of the date thereof, complied as to form in all material respects
to the requirements of the Act and the Investment Company Act.
While we have not checked the accuracy and completeness of or otherwise
verified, and are not passing upon and assume no responsibility for the accuracy
or completeness of, the statements contained in the Registration Statement or
the Prospectus, except to the limited extent set forth in paragraph (x) above,
in the course of our review of the contents of the Registration Statement and
the Prospectus with certain officers and employees of the Fund and the Fund's
independent accountants, no facts have come to our attention that cause us to
believe that the Registration Statement, at the time it became effective (but
after giving effect to any changes incorporated pursuant to Rule 430A under the
Act), contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading (except that we express no such view with respect to the
financial statements, including notes and schedules thereto, or any other
financial or accounting data included therein), or that the Prospectus, as of
the date it was filed with the Commission pursuant to Rule 497 under the Act and
as of the date hereof, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (except that we express no such view with respect to the
financial statements, including notes and schedules thereto, or any other
financial or accounting data included therein).
B-3
SCHEDULE C
FORM OF OPINION OF INTERNAL COUNSEL
REGARDING DEUTSCHE ASSET MANAGEMENT, INC.
i. Deutsche Asset Management, Inc. (the "Investment Manager") has been
duly formed and is validly existing as a corporation under the laws of its
jurisdiction of incorporation with full power and authority to own or lease all
of the assets owned or leased by it and to conduct its business as described in
the Registration Statement and Prospectus and to enter into and perform its
obligations under the Underwriting Agreement, the Shareholder Servicing
Agreement, the Investment Management Agreement and the Investment Advisory
Agreement.
ii. The Investment Manager is duly registered as an investment adviser
under the Advisers Act and is not prohibited by the Advisers Act or the
Investment Company Act from acting as investment manager for the Fund as
contemplated by the Investment Advisory Agreement, the Registration Statement
and the Prospectus.
iii. The Investment Manager has, or at the relevant time had, full power
and authority to enter into each of the Underwriting Agreement, the Investment
Management Agreement, the Investment Advisory Agreement and the Shareholder
Servicing Agreement (collectively, the "Investment Manager Agreements") and to
carry out all the terms and provisions thereof to be carried out by it, and each
such agreement has been duly and validly authorized, executed and delivered by
the Investment Manager; each Investment Manager Agreement complies in all
material respects with all provisions of the Investment Company Act and the
Advisers Act; and assuming due authorization, execution and delivery by the
other parties thereto, each Investment Manager Agreement constitutes a legal,
valid and binding obligation of the Investment Manager, enforceable against the
Investment Manager in accordance with its terms, (1) subject, as to enforcement,
to applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and to general equitable principles (regardless of whether
enforcement is sought in a proceeding in equity or at law) and (2) except as
rights to indemnity thereunder may be limited by federal or state securities
laws.
iv. Neither (A) the execution and delivery by the Investment Manager of
any Investment Manager Agreement nor (B) the consummation by the Investment
Manager of the transactions contemplated by, or the performance of its
obligations under any Investment Manager Agreement conflicts or will conflict
with, or results or will result in a breach of, the charter or by-laws of the
Investment Manager or any agreement or instrument to which the Investment
Manager is a party or by which the Investment Manager is bound, or any federal
or Delaware law, rule or regulation, or order of any court, governmental
instrumentality, securities exchange or association or arbitrator, whether
foreign or domestic, specifically naming the Investment Manager and known to
counsel, except in each case for such conflicts or breaches which do not, either
alone or in the aggregate, have a material adverse effect on the Investment
Manager's ability to perform its obligations under the Investment Manager
Agreements.
v. To my knowledge, no consent, approval, authorization or order of any
court, governmental agency or body or securities exchange or association,
whether foreign or domestic, is required for the consummation of the
transactions contemplated in, or the performance by the Investment Manager of
its obligations under, any Investment Manager Agreement, except (i) such as have
been obtained under the federal securities laws and (ii) may be required by the
American Stock Exchange or under state securities or "blue sky" laws, in
connection with the purchase and distribution of the Shares by the Underwriters
pursuant to the Underwriting Agreement.
vii. To my knowledge, there is no legal or governmental proceeding pending
or threatened against the Investment Manager that is either (i) required to be
described in the Registration Statement or Prospectus that is not already
described or (ii) which would, under Section 9 of the Investment Company Act,
make the Investment Manager ineligible to act as the Fund's investment manager.
I have not checked the accuracy and completeness of or otherwise verified,
and are not passing upon and assume no responsibility for the accuracy or
completeness of, the statements contained in the Registration Statement or the
Prospectus. No facts have come to my attention that cause me to believe that the
description of the Investment Manager and its business, and the statements
attributable to the Investment Manager, in the Registration Statement, at the
time it became effective (but after giving effect to any changes incorporated
pursuant to Rule 430A under the Act), contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading (except that I
express no such view with respect to the financial statements, including notes
and schedules thereto, or any other financial or accounting data included
therein), or that the description of the Investment Manager and its business,
and the statements attributable to the Investment Manager, in the Prospectus, as
of the date it was filed with the Commission pursuant to Rule 497 under the Act
and as of the date hereof, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (except that I express no such view with respect to
the financial statements, including notes and schedules thereto, or any other
financial or accounting data included therein).
C-2
SCHEDULE D
FORM OF OPINION OF INTERNAL COUNSEL
REGARDING RREEF AMERICA, L.L.C.
I am internal general counsel to RREEF America L.L.C. (the "Investment
Advisor"). This opinion letter is limited solely to matters relating to the
Investment Advisor, and not its control persons or affiliates, and to its
agreement relating to investment advisory services (the "Investment Advisory
Agreement") to the ▇▇▇▇▇▇▇ RREEF Real Estate Fund, Inc. (the "Fund"). Except as
otherwise noted, capitalized terms shall have the same meaning as in the
Underwriting Agreement, dated as of the date hereof, relating to the Fund.
This opinion letter shall be governed by, and interpreted in accordance
with, the Legal Opinion Accord (the "Accord") of the ABA Section of Business Law
(1991). Consequently, it is subject to a number of qualifications, exceptions,
definitions, limitations on coverage and other limitations, all as more
particularly described in the Accord, and this opinion letter should be read in
conjunction therewith. I am a member of the bar of the State of Illinois, and
law covered by the opinions expressed herein is limited to the Federal Law of
the United States and the Law of the State of Illinois.
Subject to each of the qualifications, exceptions, definitions, limitations
set forth in this opinion letter and the Accord, it is my opinion that:
i. The Investment Advisor has been duly formed and is validly existing as
a limited liability company under the laws of its jurisdiction of
organization with full power and authority to own or lease all of the
assets owned or leased by it and to conduct its business as described
in the Registration Statement and Prospectus and to enter into and
perform its obligations under the Investment Advisory Agreement.
ii. The Investment Advisor is duly registered as an investment advisor
under the Investment Advisers Act of 1940, as amended (the "Adviser
Act"), and is not prohibited by the Advisers Act or the Investment
Company Act of 1940, as amended (the "Investment Company Act"), from
acting as investment advisor for the Fund as contemplated by the
Investment Advisory Agreement, the Registration Statement and the
Prospectus.
iii. The Investment Advisor has full power and authority to enter into the
Investment Advisory Agreement and to carry out all the terms and
provisions thereof to be carried out by it, and such agreement has
been duly and validly authorized, executed and delivered by the
Investment Advisor; the Investment Advisory Agreement complies in all
material respects with all provisions of the Investment Company Act
and the Advisers Act; and assuming due authorization, execution and
delivery by the other parties thereto, the Investment Advisory
Agreement constitutes a legal, valid and binding obligation of the
Investment Advisor, enforceable
against the Investment Advisor in accordance with its terms, subject
to the enforceability limitations stated in paragraph A of this
opinion letter.
iv. Neither (A) the execution and delivery by the Investment Advisor of
the Investment Advisory Agreement nor (B) the consummation by the
Investment Advisor of the transactions contemplated by, or the
performance of its obligations under the Investment Advisory Agreement
conflicts or will conflict with, or results or will result in a breach
of, the organizational or operational documents of the Investment
Adviser or, to my knowledge, any agreement or instrument to which the
Investment Adviser is a party or by which the Investment Adviser is
bound, or any federal law, rule or regulation, or order of any court,
governmental instrumentality, securities exchange or association or
arbitrator, whether foreign or domestic, applicable to the Investment
Adviser, except in each case for such conflicts or breaches which do
not, either alone or in the aggregate, have a material adverse effect
on the Investment Adviser's ability to perform its obligations under
the Investment Advisory Agreement.
v. To my knowledge, in connection with the purchase and distribution of
the Shares by the Underwriters pursuant to the Underwriting Agreement,
no consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association,
whether foreign or domestic, is required for the consummation of the
transactions contemplated in, or the performance by the Investment
Advisor of its obligations under, the Investment Advisory Agreement,
except such as may be required (i) under the federal securities laws,
(ii) by the American Stock Exchange, or (iii) under state securities
or "blue sky" laws.
vii. To my knowledge, there is no legal or governmental proceeding pending
or threatened against the Investment Advisor that is either (i)
required to be described in the Registration Statement or Prospectus
that is not already described or (ii) would, under Section 9 of the
Investment Company Act, make the Investment Advisor ineligible to act
as the Fund's investment advisor.
I have not checked the accuracy and completeness of or otherwise verified,
and am not passing upon and assume no responsibility for the accuracy or
completeness of, the statements contained in the Registration Statement or the
Prospectus. No facts have come to my attention that cause me to believe that the
description of the Investment Advisor and its business, and the statements
attributable to the Investment Advisor, in the Registration Statement, at the
time it became effective (but after giving effect to any changes incorporated
pursuant to Rule 430A under the Act), contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading (except that we
express no such view with respect to the financial statements, including notes
and schedules thereto, or any other financial or accounting data included
therein), or that the description of the
D-2
Investment Advisor and its business, and the statements attributable to the
Investment Advisor, in the Prospectus, as of the date it was filed with the
Commission pursuant to Rule 497 under the Act and as of the date hereof,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading
(except that we express no such view with respect to the financial statements,
including notes and schedules thereto, or any other financial or accounting data
included therein).
I have made such investigation and examined such documents, entity records,
instruments, public records and matters of law as I have deemed necessary or
advisable for the purposes of this opinion. In addition, I have assumed (i) the
genuineness of the signatures of persons signing all documents in connection
with which this opinion is rendered, (ii) the authenticity of all documents
submitted to me as originals, (iii) conformity to authenticated original
documents of all documents submitted to me as certified, conformed, photocopied
or facsimile copies, (iv) the accuracy of the representations and warranties in
documents as to factual matters, and (v) the due authorization, execution and
delivery of any agreements or documents discussed in this opinion.
The foregoing opinions are further limited and qualified as follows:
A. The opinions on enforceability are subject to limitations resulting
from the effects of (i) bankruptcy, insolvency, reorganization,
receivership, moratorium, fraudulent conveyance, arrangement and
assignment for the benefit of creditors laws and similar laws or
judicially developed doctrines; (ii) general principles of equity,
whether applied by a court of law or equity; and (iii) other generally
applicable rules of law which limit or affect the enforcement of
contracts which purport to waive obligations of good faith, fair
dealing, diligence or reasonableness, or which limit liability or
require indemnification for actions or inactions.
B. I disclaim any opinion as to (i) the validity or enforceability of any
liability limitation provisions of any documents and (ii) any
provisions relating to choice of governing law, which choice may
depend upon factual circumstances and the laws of other jurisdictions.
The opinions expressed herein are expressed as of the date first indicated
above without any undertaking to amend or supplement this opinion letter to take
into account or inform you of any changes in law or fact of which we become
aware after the date hereof.
This opinion letter may be relied upon by you only in connection with the
transactions discussed herein and may not be used or relied upon by you or any
other person for any purpose whatsoever except to the extent authorized in the
Accord, and may not be disclosed, quoted, published or otherwise circulated,
without in each instance our prior written consent.
D-3
SCHEDULE E
FORM OF ACCOUNTANT'S LETTER
[ ], 2004
The Board of Directors of
▇▇▇▇▇▇▇ RREEF Real Estate Fund, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
UBS Securities LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
as Managing Representative of the Underwriters
Ladies and Gentlemen:
We have audited the statement of assets and liabilities of ▇▇▇▇▇▇▇ RREEF
Real Estate Fund, Inc. (the "Fund") as of [ ], 2004 included in the Registration
Statement on Form N-2 filed by the Fund under the Securities Act of 1933 (the
"Act") (File No. 333-______) and under the Investment Company Act of 1940 (the
"1940 Act") (File No. 811-______); such statement and our report with respect to
such statement are included in the Registration Statement.
In connection with the Registration Statement:
1. We are independent public accountants with respect to the Fund
within the meaning of the Act and the applicable rules and regulations
thereunder.
2. In our opinion, the statement of assets and liabilities included in
the Registration Statement and audited by us complies as to form in all
respects with the applicable accounting requirements of the Act, the 1940
Act and the respective rules and regulations thereunder.
3. For purposes of this letter we have read the minutes of all
meetings of the Shareholders, the Board of Directors and all Committees of
the Board of Directors of the Fund as set forth in the minute books at the
offices of the Fund, officials of the Fund having advised us that the
minutes of all such meetings through ________ , 2004, were set forth
therein.
4. Fund officials have advised us that no financial statements as of
any date subsequent to ________, 2004, are available. We have made
inquiries of certain officials of the Fund who have responsibility for
financial and accounting matters regarding whether there was any change at
________, 2004, in the capital
shares or net assets of the Fund as compared with amounts shown in the
________, 2004, statement of assets and liabilities included in the
Registration Statement, except for changes that the Registration Statement
discloses have occurred or may occur. On the basis of our inquiries and our
reading of the minutes as described in Paragraph 3, nothing came to our
attention that caused us to believe that there were any such changes.
The foregoing procedures do not constitute an audit made in accordance with
generally accepted auditing standards. Accordingly, we make no representations
as to the sufficiency of the foregoing procedures for your purposes.
This letter is solely for the information of the addressees and to assist
the underwriters in conducting and documenting their investigation of the
affairs of the Fund in connection with the offering of the securities covered by
the Registration Statement, and is not to be used, circulated, quoted or
otherwise referred to within or without the underwriting group for any other
purpose, including but not limited to the registration, purchase or sale of
securities, nor is it to be filed with or referred to in whole or in part in the
Registration Statement or any other document, except that reference may be made
to it in the underwriting agreement or in any list of closing documents
pertaining to the offering of the securities covered by the Registration
Statement.
Very Truly Yours,
E-2
