_____________ Shares
Xxxxx & Steers Advantage Income Realty Fund, Inc.
Common Stock
UNDERWRITING AGREEMENT
May [24], 2001
Xxxxxxx Xxxxx Barney Inc.
Prudential Securities Incorporated
UBS Warburg LLC
First Union Securities, Inc.
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
Xxxxxxx Xxxxx & Associates, Inc.
As Representatives of the Several Underwriters
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The undersigned, Xxxxx & Steers Advantage Income Realty Fund, Inc., a
Maryland corporation (the "Fund") and Xxxxx & Steers Capital Management, Inc., a
New York corporation (the "Investment Manager") address you as Underwriters and
as the representatives ("Representatives") of each of the other persons, firms
and corporations, if any, listed in Schedule I hereto (the "Underwriters"). The
Fund proposes to issue and sell an aggregate of [______] shares of its common
stock at $0.001 par value per share to the several Underwriters (the "Firm
Shares"). The Fund also proposes to sell upon the terms and conditions contained
in Section 2 hereof, up to [_______] additional common shares (the "Additional
Shares" which together with the Firm Shares are hereinafter collectively
referred to as the "Shares"). The Fund and Investment Manager wish to confirm as
follows their agreements with you and the other several Underwriters, in
connection with the several purchases of the Shares by the Underwriters.
Collectively, the Investment Management Agreement dated as of May
[____], 2001 between the Fund and the Investment Manager (the "Advisory
Agreement"); the Administration Agreement dated as of May [____], 2001 between
the Fund and the Investment Manager (the "Administration Agreement"); the
Sub-Administration Agreement dated May [_______], 2001 between the Fund and
State Street Bank and Trust Company ("the Sub-Administration Agreement"); the
Custodian Agreement dated as of [_____], 2001 between the Fund and State Street
Bank and Trust Company (the "Custodian Agreement") and the Transfer, Dividend
Disbursing Agent and Registrar Agreement dated as of [_______], 2001 between the
Fund and Equiserve Trust Company NA. are hereinafter referred to as the "Fund
Agreements." This Underwriting Agreement is hereinafter referred to as the
"Agreement."
1. REGISTRATION STATEMENT AND PROSPECTUS. The Fund has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
conformity with the provisions of the Securities Act of 1933, as amended (the
"1933 Act"), the Investment Company Act of 1940, as amended (the "1940 Act"),
and the published rules and regulations of the Commission promulgated under the
1933 Act (the "1933 Act Rules and Regulations") and the 1940 Act (the "1940 Act
Rules and Regulations" and, together with the 1933 Act Rules and Regulations,
the "Rules and Regulations") a registration statement on Form N-2 (File Nos.
333-39900 and 811-0993), under the 1933 Act and the 1940 Act (the "Registration
Statement"), including a prospectus relating to the Shares. The Fund also has
filed a notification of registration of the Fund as an investment company under
the 1940 Act on Form N-8A (the "1940 Act Notification"). The term "Registration
Statement" as used in this Agreement means the registration statement
(including all financial schedules and exhibits), as amended at the time it
becomes effective under the 1933 Act or, if the registration statement became
effective under the 1933 Act prior to the execution of this Agreement, as
amended or supplemented at the time it became effective prior to the execution
of this Agreement, and includes any information deemed to be included by Rule
430A under the 1933 Act Rules and Regulations. If it is contemplated, at the
time this Agreement is executed, that a post-effective amendment to the
registration statement will be filed under the 1933 Act and must be declared
effective before the offering of the Shares may commence, the term "Registration
Statement" as used in this Agreement means the registration statement as amended
by said post-effective amendment. If the Fund has filed an abbreviated
Registration Statement to register an additional amount of Shares pursuant to
Rule 462(b) under the 1933 Act (the "Rule 462 Registration Statement"), then any
reference herein to the term "Registration Statement" shall include such Rule
462 Registration Statement. The term "Prospectus" as used in this Agreement
means the prospectus and statement of additional information in the forms
included in the Registration Statement or, if the prospectus and statement of
additional information included in the Registration Statement omit information
in reliance on Rule 430A under the 1933 Act Rules and Regulations and such
information is included in a prospectus and statement of additional information
filed with the Commission pursuant to Rule 497(h) under the 1933 Act Rules and
Regulations, the term "Prospectus" as used in this Agreement means the
prospectus and statement of additional information in the forms included in the
registration statement as supplemented by the addition of the information
contained in the prospectus (including the statement of additional information)
filed with the Commission pursuant to Rule 497(h). The term "Prepricing
Prospectus" as used in this Agreement means the prospectus and statement of
additional information subject to completion in the forms included in the
Registration Statement at the time of the initial filing of the registration
statement with the Commission and as such prospectus and statement of additional
information shall have been amended from time to time prior to the date of the
Prospectus, together with any
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other prospectus and statement of additional information relating to the Fund
other than the Prospectus approved in writing by or directly or indirectly
prepared by the Fund or the Investment Manager; it being understood that the
definition of Prepricing Prospectus above shall not include any Prepricing
Prospectus prepared by the Underwriters unless approved in writing by the Fund
or Investment Manager. The terms "Registration Statement," "Prospectus" and
"Prepricing Prospectus" shall also include any financial statements incorporated
by reference therein.
The Fund has furnished the Representatives with copies of such
registration statement, each amendment to such registration statement filed with
the Commission and each Prepricing Prospectus, and the Representatives have
provided the same to the other Underwriters.
2. AGREEMENTS TO SELL AND PURCHASE. The Fund hereby agrees, subject to
all the terms and conditions set forth herein, to issue and to sell to each
Underwriter and, upon the basis of the representations, warranties and
agreements of the Fund and the Investment Manager herein contained and subject
to all the terms and conditions set forth herein, each Underwriter agrees,
severally and not jointly, to purchase from the Fund, at a purchase price of
$[________] per Share, the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule I hereto.
The Fund also agrees, subject to all the terms and conditions set forth
herein, to issue and to sell to the Underwriters and, upon the basis of the
representations, warranties and agreements of the Fund and the Investment
Manager herein contained and subject to all the terms and conditions set forth
herein, the Underwriters shall have the right to purchase from the Fund, at the
purchase price per share, pursuant to an option (the "over-allotment option")
which may be exercised at any time and from time to time prior to 9:00 A.M., New
York City time, on the 45th day after the date of the Prospectus (or if such
45th day shall be a Saturday or a Sunday or a holiday, on the next business day
thereafter when the New York Stock Exchange (the "NYSE") is open for trading),
up to an aggregate of [ _______________ ] Additional Shares. Additional Shares
may be purchased solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. Upon any exercise of the
over-allotment option, upon the basis of the representations, warranties and
agreements of the Fund and the Investment Manager herein contained and subject
to all of the other terms and conditions set forth herein, each Underwriter
agrees, severally and not jointly, to purchase from the Fund the number of
Additional Shares (subject to such adjustments as you may determine to avoid
fractional shares) which bears the same proportion to the number of Additional
Shares to be purchased by the Underwriters as the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I (or such number of
Firm Shares increased as set forth in Section 11 hereof) bears to the aggregate
number of Firm Shares.
3. TERMS OF PUBLIC OFFERING. The Fund and the Investment Manager have
been advised by you that the Underwriters propose to make a public offering of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in the
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Underwriters' judgment is advisable and initially to offer the Shares upon the
terms set forth in the Prospectus.
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR.
(a) Delivery to the Underwriters of and payment to the Fund
for the Firm Shares and compensation of the Underwriters with respect thereto
shall be made at the office of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Xxxx
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at another mutually agreeable
facility, at 9:30 A.M., New York City time, on May _____, 2001 (the "Closing
Date"). The place of closing for the Firm Shares and the Closing Date may be
varied by agreement between you and the Fund;
(b) Delivery to the Underwriters of, and payment to the Fund
for, any Additional Shares to be purchased by the Underwriters and compensation
of the Underwriters with respect thereto shall be made at the aforementioned
office of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP at such time on such date (an
"Option Closing Date"), which may be the same as the Closing Date, but shall in
no event be earlier than the Closing Date nor earlier than two nor later than
three business days after the giving of the notice hereinafter referred to, as
shall be specified in a written notice from you on behalf of the Underwriters to
the Fund of the Underwriters' determination to purchase a number, specified in
said notice, of Additional Shares. The place of closing for any Additional
Shares and the Option Closing Date for such Additional Shares may be varied by
agreement between you and the Fund;
(c) Simultaneous with delivery to the Underwriters of, and
payment by the Underwriters for, the Firm Shares or any Additional Shares, as
the case may be, the Investment Manager will pay to Xxxxxxx Xxxxx Barney Inc.
all or a portion of the structuring fee in the amounts specified to be so paid
in Section 5(r) herein by wire transfer to the order of Xxxxxxx Xxxxx Xxxxxx
Inc.; and
(d) Certificates for the Firm Shares and for any Additional
Shares shall be registered in such names and in such denominations as you shall
request prior to 1:00 P.M., New York City time, (i) in respect of the Firm
Shares, on the second business day preceding the Closing Date and (ii) in
respect of Additional Shares, on the day of the giving of the written notice in
respect of such Additional Shares. Such certificates will be made available to
you in New York City for inspection and packaging not later than 9:00 A.M., New
York City time, on the business day next preceding the Closing Date or any
Option Closing Date, as the case may be. The certificates evidencing the Firm
Shares and any Additional Shares to be purchased hereunder shall be delivered to
you on the Closing Date or the Option Closing Date, as the case may be, against
payment of the purchase price therefor in immediately available funds.
5. AGREEMENTS OF THE FUND AND THE INVESTMENT MANAGER. The Fund and the
Investment Manager, jointly and severally, agree with the Underwriters as
follows:
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(a) If, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective under the 1933 Act before the offering of the
Firm Shares may commence, the Fund will use its best efforts to cause the
Registration Statement or such post-effective amendment to become effective
under the 1933 Act as soon as possible. If the Registration Statement has become
effective and the Prospectus contained therein omits certain information at the
time of effectiveness pursuant to Rule 430A of the 1933 Act Rules and
Regulations, the Fund will file a prospectus including such information pursuant
to Rule 497(h) of the 1933 Act Rules and Regulations, 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 Shares or the date
the Prospectus is first used after the effective date of the Registration
Statement. 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(c), (e) or (j) of the 1933 Act Rules and
Regulations as promptly as practicable, but no later than the fifth business day
following the date of the later of the effective date of the Registration
Statement or the com mencement of the public offering of the Shares after the
effective date of the Registration Statement. The Fund will advise the
Underwriters promptly and, if requested by the Underwriters, will confirm such
advice in writing (i) when the Registration Statement or such post-effective
amendment has become effective, and (ii) when the Prospectus has been timely
filed pursuant to Rule 497(e) or Rule 497(h) of the 1933 Act Rules and
Regulations or the certification permitted pursuant to Rule 497(j) of the 1933
Act Rules and Regulations has been timely filed, whichever is applicable.
(b) For a period of three years from the date hereof, unless
otherwise provided herein, the Fund will advise the Underwriters promptly and,
if requested by the Underwriters, will confirm such advice in writing:
(i) of any request made by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectus (or any amendment or supplement to any of the
foregoing) or for additional information,
(ii) of the issuance by the Commission, the National
Association of Securities Dealers, Inc. (the "NASD"), any state securities
commission, any national securities exchange, any arbitrator, any court or any
other governmental, regulatory, self-regulatory or administrative agency or any
official of any order suspending the effectiveness of the Registration
Statement, prohibiting or suspending the use of the Prospectus or any Prepricing
Prospectus, or any sales material (as hereinafter defined), of any notice
pursuant to Section 8(e) of the 1940 Act, of the suspension of qualification of
the Shares for offering or sale in any jurisdiction, or the initiation of any
proceeding for any such purposes,
(iii) of receipt by the Fund, the Investment
Manager, any affiliate of the Fund or the Investment Manager or any
representative or attorney of the Fund or the Investment
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Manager of any other material communication from the Commission, the NASD, any
state securities commission, any national securities exchange, any arbitrator,
any court or any other governmental, regulatory, self-regulatory or
administrative agency or any official relating to the Fund (if such
communication relating to the Fund is received by such person within three years
after the date of this Agreement), the Registration Statement, the 1940 Act
Notification, the Prospectus, any Prepricing Prospectus, any sales material (as
herein defined) (or any amendment or supplement to any of the foregoing) or this
Agreement or any of the Fund Agreements and
(iv) within the period of time referred to in
paragraph (f) below, of any material adverse change in the condition (financial
or other), business, business prospects, properties, net assets or results of
operations of the Fund or the Investment Manager or of the happening of any
other event which makes any statement of a material fact made in the
Registration Statement or the Prospectus, or any Prepricing Prospectus or any
sales material (as herein defined) (or any amendment or supplement to any of the
foregoing) untrue or which requires the making of any additions to or changes in
the Registration Statement or the Prospectus, or any Prepricing Prospectus or
any sales material (as herein defined) (or any amendment or supplement to any of
the foregoing) in order to state a material fact required by the 1933 Act, the
1940 Act or the Rules and Regulations to be stated therein or necessary in order
to make the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made), not misleading or of the necessity to
amend or supplement the Registration Statement, the Prospectus, or any
Prepricing Prospectus or any sales material (as herein defined) (or any
amendment or supplement to any of the foregoing) to comply with the 1933 Act,
the 1940 Act, the Rules and Regulations or any other law or order of any court
or regulatory body. If at any time the Commission, the NASD, any state
securities commission, any national securities exchange, any arbitrator, any
court or any other governmental, regulatory, self-regulatory or administrative
agency or any official shall issue any order suspending the effectiveness of the
Registration Statement, prohibiting or suspending the use of the Prospectus or
any sales material (as herein defined) (or any amendment or supplement to any of
the foregoing) or suspending the qualification of the Shares for offering or
sale in any jurisdiction, the Fund will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.
(c) The Fund will furnish to you, without charge, three signed
copies of the Registration Statement and the 1940 Act Notification as originally
filed with the Commission and of each amendment thereto, including financial
statements and all exhibits thereto, and will also furnish to you, without
charge, such number of conformed copies of the Registration Statement as
originally filed and of each amendment thereto, but without exhibits, as you may
reasonably request.
(d) The Fund will not (i) file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus,
any Prepricing Prospectus, or any sales material (as herein defined), of which
you shall not previously have been advised or to which you shall reasonably
object after being so advised or (ii) so long as, in the opinion of counsel for
the Underwriters, a Prospectus is required by the 1933 Act to be delivered in
connection with
6
sales by the Underwriters or any dealer, file any information, documents or
reports pursuant to the Securities Exchange Act of 1934, as amended (the "1934
Act"), without delivering a copy of such information, documents or reports to
you prior to or concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the
Fund has delivered to you, without charge, in such quantities as you have
requested, copies of each form of the Prepricing Prospectus. The Fund consents
to the use, in accordance with the provisions of the 1933 Act and with the state
securities or blue sky laws of the jurisdictions in which the Shares are offered
by the Underwriters and by dealers, prior to the date of the Prospectus, of each
Prepricing Prospectus so furnished by the Fund.
(f) As soon after the execution and delivery of this Agreement
as possible and thereafter from time to time for such period as in the opinion
of counsel for the Underwriters a prospectus is required by the 1933 Act to be
delivered in connection with sales of Shares by the Underwriters or any dealer,
the Fund will expeditiously deliver to the Underwriters and each dealer, without
charge, as many copies of the Prospectus (and of any amendment or supplement
thereto) as the Underwriters may reasonably request. The Fund consents to the
use of the Prospectus (and of any amendment or supplement thereto) in accordance
with the provisions of the 1933 Act and with the state securities or blue sky
laws of the jurisdictions in which the Shares are offered by the Underwriters
and by all dealers to whom Shares may be sold, both in connection with the
offering and sale of the Shares and for such period of time thereafter as the
Prospectus is required by the 1933 Act to be delivered in connection with sales
by the Underwriters or any dealer. If during such period of time any event
shall occur that in the judgment of the Fund or in the opinion of counsel for
the Underwriters is required to be set forth in the Registration Statement or
the Prospectus (as then amended or supplemented) or should be set forth therein
in order to make the statements therein (in the case of the Prospectus, in light
of the circumstances under which they were made) not misleading, or if it is
necessary to supplement or amend the Registration Statement or the Prospectus to
comply with the 1933 Act, the 1940 Act, the Rules and Regulations or any other
federal law, rule or regulation, or any state securities or blue sky disclosure
laws, rules or regulations, the Fund will forthwith prepare and, subject to the
provisions of paragraph (d) above, promptly file with the Commission an
appropriate supplement or amendment thereto, and will expeditiously furnish to
the Underwriters and dealers, without charge, a reasonable number of copies
thereof. In the event that the Fund and the Underwriters agree that the
Registration Statement or the Prospectus should be amended or supplemented, the
Fund, if requested by you, will promptly issue a press release announcing or
disclosing the matters to be covered by the proposed amendment or supplement.
(g) The Fund will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities or blue sky laws of such jurisdictions as you may designate and will
file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided that
in no event shall the Fund be obligated to qualify to do business in any
jurisdiction where it is not now so
7
qualified or to take any action which would subject it to service of process in
suits, other than those arising out of the offering or sale of the Shares, in
any jurisdiction where it is not now so subject.
(h) 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 of the Registration Statement falls, the Fund will make generally
available to its security holders an earnings statement satisfying the
provisions of Section 11(a) of the 1933 Act and Rule 158 of the 1933 Act Rules
and Regulations.
(i) During the period of five years after the date of this
Agreement, the Fund will furnish to you (i) as soon as available, a copy of each
report of the Fund mailed to stock holders or filed with the Commission or
furnished to the New York Stock Exchange (the "NYSE") other than reports on Form
N-SAR, and (ii) from time to time such other information concerning the Fund as
you as Representatives of the Underwriters may reasonably request.
(j) If this Agreement shall terminate or shall be terminated
after execution pursuant to any provisions hereof (otherwise than by notice
given by the Underwriters terminating this Agreement pursuant to Section 12
hereof) or if this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Fund or the Investment Manager to
comply with the terms or fulfill any of the conditions of this Agreement, the
Fund and the Investment Manager, jointly and severally, agree to reimburse the
Underwriters for all out-of-pocket expenses (including reasonable fees and
expenses of counsel for the Underwriters) incurred by the Underwriters in
connection herewith.
(k) The Fund will apply the net proceeds from the sale of the
Shares in accordance with the description set forth in the Prospectus and in
such a manner as to comply with the investment objectives, policies and
restrictions of the Fund as described in the Prospectus.
(l) The Fund will timely file the requisite copies of the
Prospectus with the Commission pursuant to Rule 497(c) or Rule 497(h) of the
1933 Act Rules and Regulations, whichever is applicable or, if applicable, will
timely file the certification permitted by Rule 497(j) of the 1933 Act Rules and
Regulations and will advise you as Representatives of the Underwriters of the
time and manner of such filing.
(m) Except as stated in this Agreement and in the Prepricing
Prospectus and the Prospectus, neither the Fund nor the Investment Manager has
taken, nor will it take, directly or indirectly, any action designed to or that
might reasonably be expected to cause or result in stabilization or manipulation
of the price of any securities issued by the Fund to facilitate the sale or
resale of the Shares.
8
(n) The Fund and the Investment Manager will use commercially
reasonable efforts to perform all of the agreements required of them and
discharge all conditions to closing as set forth in this Agreement.
(o) The Fund will comply with the undertaking set forth in
paragraph 6 of Item 33 of Part C of the Registration Statement.
(p) The Fund will use its best efforts to have the Shares
listed, subject to notice of issuance, on the New York Stock Exchange
concurrently with the effectiveness of the Registration Statement and to comply
with the rules and regulations of such exchange.
(q) Except as provided in this Agreement or pursuant to any
dividend reinvestment plan of the Fund in effect on the date hereof, the Fund
will not sell, contract to sell or otherwise dispose of, any Common Shares as
herein defined or any securities convertible into or exercisable or exchangeable
for Common Shares or grant any options or warrants to purchase Common Shares,
for a period of 180 days after the date of the Prospectus, without the prior
written consent of Xxxxxxx Xxxxx Xxxxxx Inc.
(r) The Investment Manager will pay Xxxxxxx Xxxxx Barney Inc.
a structuring fee in the aggregate amount of $1,000,000 (one million). The
Investment Manager will pay Xxxxxxx Xxxxx Xxxxxx Inc. the amount of $500,000
(five hundred thousand) simultaneous with the delivery of the Firm Shares, and
(i) If the aggregate price to the public for the
Firm Shares exceeds $250,000,000 (two hundred and fifty million) then the
Investment Manager will pay the remainder of the structuring fee simultaneous
with the delivery of the Firm Shares on the Closing Date;
(ii) If the aggregate price to the public for all
Shares exceeds $250,000,000 (two hundred and fifty million) on any Option
Closing Date then the Investment Manager will pay Xxxxxxx Xxxxx Barney Inc. the
remainder of the structuring fee, if any, simultaneous with the delivery of
Additional Shares on such Option Closing Date;
(iii) On the first anniversary of the Closing the
Investment Manager will pay Xxxxxxx Xxxxx Xxxxxx the remainder of the
structuring fee, if any.
6. REPRESENTATIONS AND WARRANTIES OF THE FUND AND THE INVESTMENT
MANAGER. The Fund and the Investment Manager, jointly and severally, represent
and warrant to the Underwriters that:
(a) Each Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 497 of the 1933 Act Rules and
Regulations, complied when so filed in all material respects with
9
the applicable provisions of the 1933 Act, the 1940 Act and the Rules and
Regulations. The Commission has not issued any order preventing or suspending
the use of any Prepricing Prospectus.
(b) The Registration Statement in the form in which it became
or becomes effective and also in such form as it may be when any post-effective
amendment thereto shall become effective and the Prospectus and any supplement
or amendment thereto when filed with the Commission under Rule 497 of the 1933
Act Rules and Regulations and the 1940 Act Notification when originally filed
with the Commission and any amendment or supplement thereto when filed with the
Commission, complied or will comply in all material respects with the provisions
of the 1933 Act, the 1940 Act and the Rules and Regulations and did not or will
not at any such times contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading, except that this representation and
warranty does not apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information relating to the Underwriters furnished to the Fund in writing by or
on behalf of the Underwriters expressly for use therein.
(c) All the outstanding shares of common stock of the Fund
(the "Common Shares") have been duly authorized and validly issued by the Fund,
are fully paid and nonassessable and are free of any preemptive or similar
rights; the Shares have been duly authorized and, when issued and delivered to
the Underwriters against payment therefor in accordance with the terms hereof,
will be validly issued by the Fund, fully paid and nonassessable and free of any
preemptive or similar rights and will conform to the description thereof in the
Registration Statement and the Prospectus (and any amendment or supplement to
either of them); and the capitalization of the Fund conforms to the description
thereof in the Registration Statement and the Prospectus (and any amendment or
supplement to either of them).
(d) The Fund is a corporation duly incorporated and validly
existing under the laws of the State of Maryland with full corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus (and any amendment
or supplement to either of them), and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction or place where
the nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or
qualify does not have a material adverse effect on the condition (financial or
other), business, business prospects (other than as a result of a change in the
financial markets generally), properties, net assets or results of operations of
the Fund, whether or not arising in the ordinary course of business (a "Material
Adverse Effect"); and the Fund has no subsidiaries.
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(e) There are no legal or governmental proceedings pending or,
to the knowledge of the Fund, threatened, against the Fund, or to which the Fund
or any of its properties is subject, that are required to be described in the
Registration Statement or the Prospectus (and any amendment or supplement to
either of them) but are not described as required, and there are no agreements,
contracts, indentures, leases or other instruments that are required to be
described in the Registration Statement or the Prospectus (and any amendment or
supplement to either of them) or to be filed as an exhibit to the Registration
Statement that are not described or filed as required by the 1933 Act, the 1940
Act or the Rules and Regulations.
(f) The Fund is not in violation of its Charter (the
"Charter") or Bylaws (the "Bylaws"), or other organizational documents or of any
law, ordinance, administrative or governmental rule or regulation applicable to
the Fund or of any decree of the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court or
governmental agency, body or official having jurisdiction over the Fund, or in
default in any respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any material agreement, indenture, lease or other instrument
to which the Fund is a party or by which it or any of its properties may be
bound, except where such violation does not have a Material Adverse Effect.
(g) Neither the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement or any of the Fund
Agreements by the Fund, nor the consummation by the Fund of the transactions
contemplated hereby or thereby (i) requires any consent, approval, authorization
or other order of or registration or filing with, the Commission, the NASD, any
state securities commission, any national securities exchange, any arbitrator,
any court, regulatory body, administrative agency or other governmental body,
agency or official (except such as may have been obtained or made prior to the
date hereof and such as may be required for compliance with the state securities
or blue sky laws of various jurisdictions which have been or will be effected in
accordance with this Agreement, and except for compliance with the filing
requirements of the NASD Division of Corporate Finance) or conflicts or will
conflict with or constitutes or will constitute a breach of, or a default under,
the Charter, the Bylaws or other organizational documents of the Fund or (B)
conflicts or will conflict with or constitutes or will constitute a material
breach of, or a default under, any material agreement, indenture, lease or other
instrument to which the Fund is a party or by which it or any of its properties
may be bound, or violates or will violate any statute, law, regulation or
judgment, injunction, order or decree applicable to the Fund or any of its
properties, or will result in the creation or imposition of any material lien,
charge or encumbrance upon any property or assets of the Fund pursuant to the
terms of any agreement or instrument to which it is a party or by which it may
be bound or to which any of its property or assets is subject. The Fund is not
subject to any order of any court or of any arbitrator, governmental authority
or administrative agency.
(h) The accountants, PricewaterhouseCoopers LLP, who have
certified or shall certify the audited financial statements included or
incorporated by reference in the Registration Statement and the Prospectus (or
any amendment or supplement to either of them)
11
have represented to the Fund that they are independent public accountants as
required by the 1933 Act, the 1940 Act and the Rules and Regulations.
(i) The financial statements, together with related schedules
and notes, included or incorporated by reference in the Registration Statement
and the Prospectus (and any amendment or supplement to either of them), present
fairly in all material respects the financial position on the basis stated or
incorporated by reference in the Registration Statement at the respective dates
or for the respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein; and the other financial and statistical information
and data included in the Registration Statement and the Prospectus (and any
amendment or supplement to either of them) in all material respects are
accurately presented and prepared on a basis consistent with such financial
statements and the books and records of the Fund.
(j) The Fund, subject to the Registration Statement having
been declared effective and the filing of the Prospectus under Rule 497 under
the Rules and Regulations, has taken all required action under the 1933 Act, the
1940 Act and the Rules and Regulations to make the public offering and
consummate the sale of the Shares as contemplated by this Agreement.
(k) The execution and delivery of, and the performance by the
Fund of its obligations under, this Agreement and the Fund Agreements have been
duly and validly authorized by the Fund, and this Agreement and the Fund
Agreements have been duly executed and delivered by the Fund and, assuming due
authorization, execution and delivery by the other parties thereto, constitute
the valid and legally binding agreements of the Fund, enforceable against the
Fund in accordance with their terms, except as enforcement of rights to
indemnity and contribution hereunder and thereunder may be limited by principles
of public policy and subject to the qualification that the enforceability of the
Fund's obligations hereunder and thereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally and by general
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(l) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement to either of them),
the Fund has not entered into any transaction, incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Fund, and there has not
been any change in the capital stock, or material increase in the short-term
debt or long-term debt, of the Fund, or any material adverse change, or any
development involving or which may reasonably be expected to involve a Material
Adverse Effect.
12
(m) The Fund has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of the
Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, the
Prepricing Prospectus included in Pre-effective Amendment No.[ ] to the
registration statement, the Prospectus and the advertisements/sales literature
filed with the NASD on [ ].
(n) (i) The Fund has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own its properties and to conduct its business in the manner
described in the Prospectus (and any amendment or supplement thereto), subject
to such qualifications as may be set forth in the Prospectus;
(ii) the Fund has fulfilled and performed all its
material obligations with respect to such permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the rights of
the Fund under any such permit, subject in each case to such qualification as
may be set forth in the Prospectus (and any amendment or supplement thereto);
and
(iii) except as described in the Prospectus (and any
amendment or supplement thereto), none of such permits contains any restriction
that is materially burdensome to the Fund, except where the failure of (i), (ii)
or (iii) to be accurate would not, individually or in the aggregate, have a
Material Adverse Effect.
(o) The Fund maintains a system of internal accounting
controls sufficient to provide reasonable assurances that:
(i) transactions in portfolio securities are
executed in accordance with management's general or specific authorization and
with the applicable requirements of the 1940 Act, the 1940 Act Rules and
Regulations and the Internal Revenue Code of 1986, as amended (the "Code");
(ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets and to maintain
compliance with the books and records requirements under the 1940 Act and the
1940 Act Rules and Regulations;
(iii) access to assets is permitted only in
accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
13
(p) To the Fund's knowledge, neither the Fund nor any employee
or agent of the Fund has made any payment of funds of the Fund or received or
retained any funds, which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus and that is not so
disclosed.
(q) The Fund has filed all tax returns required to be filed,
which returns are complete and correct in all material respects, and the Fund is
not in material default in the payment of any taxes which were payable pursuant
to said returns or any assessments with respect thereto.
(r) No holder of any security of the Fund has any right to
require registration of common shares of capital stock or any other security of
the Fund because of the filing of the registration statement or consummation of
the transactions contemplated by this Agreement.
(s) Except as described in the Prospectus, there are no
outstanding options, warrants or other rights calling for the issuance of, and
the Fund has no agreement to issue, any shares of capital stock of the Fund or
any security convertible into or exchangeable or exercisable for shares of
capital stock of the Fund.
(t) The conduct by the Fund of its business does not require
the Fund to be the owner, possessor or licensee of any patents, patent licenses,
trademarks, service marks or trade names which it does not own, possess or
license.
(u) The Fund is duly registered under the 1940 Act as a
closed-end, non-diversified management investment company and the 1940 Act
Notification has been duly filed with the Commission and conforms in all
material respects with all applicable provisions of the 1940 Act and the Rules
and Regulations. The Fund is, and at all times through the completion of the
transactions contemplated hereby, will be, in compliance in all material
respects with the terms and conditions of the 1933 Act and the 1940 Act. No
person is serving or acting as an officer, director or investment adviser of the
Fund except in accordance with the provisions of the 1940 Act and the 1940 Act
Rules and Regulations and the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and the rules and regulations of the Commission promulgated
under the Advisers Act (the "Advisers Act Rules and Regulations"). The Fund has
not received any notice from the Commission pursuant to Section 8(e) of the 1940
Act with respect to the 1940 Act Notification or the Registration Statement (or
any amendment or supplement to either of them).
(v) Except as stated in this Agreement and in the Prospectus
(and any amendment or supplement thereto), the Fund has not taken, nor will it
take, directly or indirectly, any action designed to or which might reasonably
be expected to cause or result in stabilization or manipulation of the price of
any securities issued by the Fund to facilitate the sale or resale of the
Shares, and the Fund is not aware of any such action taken or to be taken by any
affiliates of the Fund.
14
(w) The Fund has filed in a timely manner each document or
report required to be filed by it pursuant to the 1934 Act and the rules and
regulations of the Commission promulgated thereunder (the "1934 Act Rules and
Regulations"); each such document or report at the time it was filed conformed
to the requirements of the 1934 Act and the 1934 Act Rules and Regulations; and
none of such documents or reports contained an untrue statement of any material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(x) All advertising, sales literature or other promotional
material (including "prospectus wrappers," "broker kits," "road show slides" and
"road show scripts") authorized in writing by or prepared by the Fund or the
Investment Manager for use in connection with the offering and sale of the
Shares (collectively, "sales material") complied and comply in all material
respects with the applicable requirements of the 1933 Act, the 1940 Act, the
Rules and Regulations and the rules and interpretations of the NASD and no such
sales material contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(y) This Agreement and each of the Fund Agreements complies in
all material respects with all applicable provisions of the 1940 Act, the 1940
Act Rules and Regulations, the Advisers Act and the Advisers Act Rules and
Regulations.
(z) As required by Subchapter M of the Code, the Fund is in
compliance with the requirements to qualify as a regulated investment company
under the Code; the Fund intends to direct the investment of the proceeds of the
offering in such a manner as to comply with the requirements of Subchapter M of
the Code.
(aa) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), no director of
the Fund is an "interested person" (as defined in the 0000 Xxx) of the Fund or
an "affiliated person" (as defined in the 0000 Xxx) of any Underwriter listed in
Schedule I hereto.
(bb) The Shares have been duly approved for listing upon
notice of issuance on the NYSE and the Fund's Registration Statement on Form
8-A, under the 1934 Act has become effective.
7. REPRESENTATIONS AND WARRANTIES OF THE INVESTMENT MANAGER. The
Investment Manager represents and warrants to the Underwriters as follows:
(a) The Investment Manager is a corporation duly incorporated
and validly existing in good standing under the laws of the State of New York,
with full corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the
15
Registration Statement and the Prospectus (and any amendment or supplement to
either of them), and is duly registered and qualified to conduct its business
and is in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or to qualify does not
have a material adverse effect on the condition (financial or other), business,
business prospects (other than as a result of a change in the financial markets
generally), properties, net assets or results of operations of the Investment
Manager or on the ability of the Investment Manager to perform its obligations
under this Agreement and the Advisory Agreement.
(b) The Investment Manager is duly registered with the
Commission as an investment adviser under the Advisers Act and is not prohibited
by the Advisers Act, the Advisers Act Rules and Regulations, the 1940 Act or the
1940 Act Rules and Regulations from acting under the Advisory Agreement for the
Fund as contemplated by the Prospectus (or any amendment or supplement thereto).
There does not exist any proceeding or any facts or circumstances the existence
of which could lead to any proceeding which might adversely affect the
registration of the Investment Manager with the Commission.
(c) There are no legal or governmental proceedings pending or,
to the knowledge of the Investment Manager, threatened against the Investment
Manager, or to which the Investment Manager or any of its properties is subject,
that are required to be described in the Registration Statement or the
Prospectus (or any amendment or supplement to either of them) but are not
described as required or that may reasonably be expected to involve a
prospective material adverse change in the condition (financial or other),
business, business prospects, properties, net assets or results of operations of
the Investment Manager or on the ability of the Investment Manager to perform
its obligations under this Agreement and the Advisory Agreement.
(d) Neither the execution, delivery or performance of this
Agreement or the Advisory Agreement by the Investment Manager, nor the
consummation by the Investment Manager of the transactions contemplated hereby
or thereby
(i) requires the Investment Manager to obtain any
consent, approval, authorization or other order of or registration or filing
with, the Commission, the NASD, any state securities commission, any national
securities exchange, any arbitrator, any court, regulatory body, administrative
agency or other governmental body, agency or official or conflicts or will
conflict with or constitutes or will constitute a material breach of or a
default under the Charter, By-laws, or other organizational documents, of the
Investment Manager or
(ii) conflicts or will conflict with or constitutes
or will constitute a breach of or a default under, any material agreement,
indenture, lease or other instrument to which the Investment Manager is a party
or by which it or any of its properties may be bound, or violates or will
violate any statute, law, regulation or filing or judgment, injunction, order or
decree applicable to the Investment Manager or any of its properties or will
result in the creation
16
or imposition of any material lien, charge or encumbrance upon any property or
assets of the Investment Manager pursuant to the terms of any agreement or
instrument to which it is a party or by which it may be bound or to which any of
the property or assets of the Investment Manager is subject. The Investment
Manager is not subject to any order of any court or of any arbitrator,
governmental authority or administrative agency.
(e) The Investment Manager has full power and authority to
enter into this Agreement and the Advisory Agreement, the execution and delivery
of, and the performance by the Investment Manager of its obligations under, this
Agreement and the Advisory Agreement have been duly and validly authorized by
the Investment Manager and this Agreement and the Advisory Agreement have been
duly executed and delivered by the Investment Manager and constitute the valid
and legally binding agreements of the Investment Manager, enforceable against
the Investment Manager in accordance with their terms, except as rights to
indemnity and contribution hereunder may be limited by federal or state
securities laws and subject to the qualification that the enforceability of the
Investment Manager's obligations hereunder and thereunder may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and by general equitable principles.
(f) The Investment Manager has the financial resources
available to it necessary for the performance of its services and obligations as
contemplated in the Prospectus (or any amendment or supplement thereto) and
under this Agreement and the Advisory Agreement.
(g) The description of the Investment Manager in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) complied and comply in all material respects with the provisions of the
1933 Act, the 1940 Act, the Advisers Act, the Rules and Regulations and the
Advisers Act Rules and Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading.
(h) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement to either of them),
the Investment Manager has not incurred any liability or obligation, direct or
contingent, or entered into any transaction, not in the ordinary course of
business, that is material to the Investment Manager or the Fund and that is
required to be disclosed in the Registration Statement or the Prospectus and
there has not been any material adverse change, or any development involving or
which may reasonably be expected to involve, a prospective material adverse
change, in the condition (financial or other), business, business prospects,
properties, net assets or results of operations of the Investment Manager,
whether or not arising in the ordinary course of business, or which, in each
case, could have a material
17
adverse effect on the ability of the Investment Manager to perform its
obligations under this Agreement and the Advisory Agreement.
(i) (i) The Investment Manager has such permits, licenses,
franchises and authorizations of governmental or regulatory authorities
("permits") as are necessary to own its properties and to conduct its business
in the manner described in the Prospectus (and any amendment or supplement
thereto);
(ii) the Investment Manager has fulfilled and
performed all its material obligations with respect to such permits and no event
has occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material impairment of
the rights of the Investment Manager under any such permit.
(j) Except as stated in this Agreement and in the Prospectus
(and in any amendment or supplement thereto), the Investment Manager has not
taken, nor will it take, directly or indirectly, any action designed to or which
might reasonably be expected to cause or result in, stabilization or
manipulation of the price of any securities issued by the Fund to facilitate the
sale or resale of the Shares, and the Investment Manager is not aware of any
such action taken or to be taken by any affiliates of the Investment Manager.
(k) In the event that the Fund or the Investment Manager makes
available any promotional materials regarding the Fund intended for use only by
qualified broker-dealers and registered representatives thereof by means of an
Internet web site or similar electronic means, the Investment Manager will
install and maintain pre-qualification and password-protection or similar
procedures which are reasonably designed to effectively prohibit access to such
promotional materials by persons other than qualified broker-dealers and
registered representatives thereof.
(l) This Agreement and the Advisory Agreement comply in all
material respects with all applicable provisions of the 1940 Act, the 1940 Act
Rules and Regulations, the Advisers Act and the Advisers Act Rules and
Regulations.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Fund and the Investment Manager, jointly and
severally, agree to indemnify and hold harmless each of you and each of the
Underwriters and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act from and
against any and all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation), joint or several, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any sales material, Prepricing Prospectus or in the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein
18
(in the case of the Prospectus, in light of the circumstances under which they
were made) not misleading, except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has been made therein or
omitted therefrom in reliance upon and in conformity with the information
furnished in writing to the Fund by or on behalf of any Underwriter through you
expressly for use in connection therewith; provided, however, that the
indemnification contained in this paragraph (a) with respect to any Prepricing
Prospectus shall not inure to the benefit of any Underwriter (or to the benefit
of any person controlling such Underwriter) on account of any such loss, claim,
damage, liability or expense arising from the sale of the Shares by such
Underwriter to any person if a copy of the Prospectus shall not have been
delivered or sent by the Underwriters as required to such person within the time
required by the 1933 Act and the 1933 Act Rules and Regulations, and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such Prepricing Prospectus was corrected in such
Prospectus, provided that the Fund has delivered such Prospectus to the several
Underwriters in requisite quantity on a timely basis to permit such delivery or
sending. The foregoing indemnity agreement shall be in addition to any liability
which the Fund or the Investment Manager may otherwise have.
(b) If any action, suit or proceeding shall be brought against
any Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Fund or the Investment Manager, such
Underwriter or such controlling person shall promptly notify the Fund and the
Investment Manager, and the Fund or the Investment Manager shall assume the
defense thereof, including the employment of counsel and payment of all fees and
expenses. Such Underwriter or any such controlling person shall have the right
to employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or such controlling person unless
(i) the Fund or the Investment Manager has agreed in writing to pay such fees
and expenses, (ii) the Fund and the Investment Manager have failed to assume the
defense and employ counsel, or (iii) the named parties to any such action, suit
or proceeding (including any impleaded parties) include both such Underwriter or
such controlling person and the Fund or the Investment Manager and such
Underwriter or such controlling person shall have been advised by its counsel
that representation of such indemnified party and the Fund or the Investment
Manager by the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has
been proposed) due to actual or potential differing interests between them (in
which case the Fund and the Investment Manager shall not have the right to
assume the defense of such action, suit or proceeding on behalf of such
Underwriter or such controlling person).
It is understood, however, that the Fund and the Investment
Manager shall, in connection with any one such action, suit or proceeding or
separate but substantially similar or related actions, suits or proceedings in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Underwriters and
19
controlling persons not having actual or potential differing interests with you
or among themselves, which firm shall be designated in writing by the
Underwriters, and that all such fees and expenses shall be reimbursed as they
are incurred. The Fund and the Investment Manager shall not be liable for any
settlement of any such action, suit or proceeding effected without their written
consent, but if settled with such written consent, or if there be a final
judgment for the plaintiff in any such action, suit or proceeding, the Fund and
the Investment Manager agree to indemnify and hold harmless any Underwriter, to
the extent provided in the preceding paragraph, and any such controlling person
from and against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
(c) Each Underwriter agrees to indemnify and hold harmless the
Fund and the Investment Manager, directors, any officers who sign the
Registration Statement, and any person who controls the Fund or the Investment
Manager within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act, to the same extent as the foregoing indemnity from the Fund and the
Investment Manager to each Underwriter, but only with respect to information
relating to such Underwriter furnished in writing by or on behalf of such
Underwriter expressly for use in the Registration Statement, the Prospectus or
any Prepricing Prospectus, or any amendment or supplement thereto. If any
action, suit or proceeding shall be brought against the Fund or the Investment
Manager, any of their directors, any such officer, or any such controlling
person based on the Registration Statement, the Prospectus or any Prepricing
Prospectus, or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Underwriter pursuant to this paragraph (c),
such Underwriter shall have the rights and duties given to the Fund and the
Investment Manager by paragraph (b) above (except that if the Fund or the
Investment Manager shall have assumed the defense thereof such Underwriter shall
not be required to do so, but may employ separate counsel therein and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at such Underwriter's expense), and the Fund and the Investment
Manager, their directors, any such officer, and any such controlling person
shall have the rights and duties given to the Underwriters by paragraph (b)
above. The foregoing indemnity agreement shall be in addition to any liability
which the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses
(i) in such proportion as is appropriate to reflect
the relative benefits received by the Fund and the Investment Manager on the one
hand (treated jointly for this purpose as one person) and the Underwriters on
the other hand from the offering of the Shares, or
20
(ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Fund and the Investment Manager on the one hand
(treated jointly for this purpose as one person) and the Underwriters on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Fund and the Investment
Manager on the one hand (treated jointly for this purpose as one person) and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Fund bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Fund and the Investment Manager on the one
hand (treated jointly for this purpose as one person) and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Fund and the Investment Manager on the one hand (treated jointly for this
purpose as one person) or by the Underwriters on the other hand and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(e) The Fund, the Investment Manager and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 8 were determined by a pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in paragraph (d) above. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages, liabilities and expenses referred to in
paragraph (d) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating any claim or defending any such action,
suit or proceeding. Notwithstanding the provisions of this Section 8, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price of the Shares underwritten by it and distributed to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 8 are several in proportion to the respective numbers of Shares set
forth opposite their names in Schedule I hereto (or such numbers of Shares
increased as set forth in Section 11 hereof) and not joint.
(f) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity could
21
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 8 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Fund and the Investment Manager set forth
in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Fund, the Investment Manager,
directors or officers, or any person controlling the Fund or the Investment
Manager, (ii) acceptance of any Shares and payment therefor hereunder, and (iii)
any termination of this Agreement.
A successor to any Underwriter or any person controlling any
Underwriter, or to the Fund, the Investment Manager, directors or officers, or
any person controlling the Fund or the Investment Manager, shall be entitled to
the benefits of the indemnity, contribution, and reimbursement agreements
contained in this Section 8.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase the Shares hereunder are subject to the accuracy of
and compliance with the representations, warranties and agreements of and by the
Fund and the Investment Manager contained herein on and as of the date hereof,
the date on which the Registration Statement becomes or became effective, the
date of the Prospectus (and of any amendment or supplement thereto), the Closing
Date and, with respect to any Additional Shares, any Option Closing Date; to the
accuracy and completeness of all statements made by the Fund, the Investment
Manager or any of their officers in any certificate delivered to the
Representatives or their counsel pursuant to this Agreement; and to the
following conditions:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may commence,
the Registration Statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by the
Underwriters, and all filings, if any, required by Rules 497 and 430A under the
1933 Act and the 1933 Act Rules and Regulations shall have been timely made; no
stop order suspending the effectiveness of the Registration Statement or order
pursuant to Section 8(e) of the 1940 Act shall have been issued and no
proceeding for those purposes shall have been instituted or, to the knowledge of
the Fund, the Investment Manager or any Underwriter, threatened by the
Commission, and any request of the Commission for additional information (to be
included in the Registration Statement or the prospectus or otherwise) shall
have been complied with to the Underwriters' reasonable satisfaction.
22
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change or any development involving a
prospective change in or affecting the condition (financial or other), business,
business prospects, properties, net assets, or results of operations of the Fund
or the Investment Manager not contemplated by the Prospectus, which in the
Underwriters' opinion would materially adversely affect the market for the
Shares, or (ii) any event or development relating to or involving the Fund or
the Investment Manager or any officer or director of the Fund or the Investment
Manager which makes any statement made in the Prospectus untrue or which, in the
opinion of the Fund and its counsel or the Underwriters and their counsel,
requires the making of any addition to or change in the Prospectus in order to
state a material fact required by the 1933 Act, the 1940 Act or the Rules and
Regulations or any other law to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, if amending or supplementing the Prospectus to reflect
such event or development would, in the Underwriters' opinion, materially
adversely affect the market for the Shares.
(c) The Underwriters shall have received on the Closing Date
an opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Fund, dated the
Closing Date and addressed to you, in form and substance reasonably satisfactory
to you, as Representatives of the several Underwriters, and to the effect that:
(i) The Fund (A) is a corporation duly incorporated
and validly existing under the laws of the State of Maryland with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus (and any
amendment or supplement to either of them), and (B) is duly registered and
qualified to conduct its business and is in good standing in each jurisdiction
in which such qualification is required, except where the failure to be so
qualified or in good standing would not have a Material Adverse Effect on the
Fund;
(ii) The Fund has no subsidiaries;
(iii) The authorized and outstanding capital stock
of the Fund is as set forth under the caption "Capitalization" in the
Prospectus; and the authorized capital stock of the Fund conforms in all
material respects as to legal matters to the description thereof contained in
the Prospectus under the caption "Description of Common Stock" which conforms in
all legal material respects as to legal matters to the terms thereof contained
in the Fund's Charter.
(iv) All shares of capital stock of the Fund
outstanding prior to the issuance of the Shares have been duly authorized and
validly issued by the Fund, and are fully paid and nonassessable;
(v) The Shares have been duly authorized and, when
issued and delivered to the Underwriters against payment therefor in accordance
with the terms hereof, will
23
be validly issued by the Fund, fully paid and nonassessable and free of any
preemptive, or to the knowledge of such counsel after reasonable inquiry,
similar rights that entitle or will entitle any person to acquire any Shares
upon the issuance thereof by the Fund, and will conform to the description
thereof contained in the Prospectus under the caption "Description of Preferred
Shares";
(vi) The form of the certificate for the Shares is
in due and proper form and conforms to the requirements of all applicable law
and the NYSE.
(vii) The Registration Statement and all
post-effective amendments, if any, have become effective under the 1933 Act and
the 1933 Act Rules and Regulations and, to the best knowledge of such counsel
after reasonable inquiry, no stop order suspending the effectiveness of the
Registration Statement or order pursuant to Section 8(e) of the 1940 Act has
been issued and no proceedings for that purpose are pending before or
contemplated by the Commission; and any required filing of the Prospectus
pursuant to Rule 497 of the 1933 Act Rules and Regulations has been made in
accordance with Rule 497;
(viii) The Fund has corporate power and authority to
enter into this Agreement and each of the Fund Agreements and to issue, sell and
deliver the Shares to the Underwriters as provided herein, and this Agreement
and each of the Fund Agreements have been duly authorized, executed and
delivered by the Fund and each is a valid, legal and binding agreement of the
Fund, enforceable against the Fund in accordance with its terms, except as
enforcement of rights to indemnity and contribution hereunder or thereunder may
be limited by Federal or state securities laws or principles of public policy
and subject to the qualification that the enforceability of the Fund's
obligations hereunder or thereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and by general equitable principles
(regardless of whether enforcement is sought in a proceeding in equity or at
law);
(ix) (A) The Fund is not in violation of the
Charter, the By-laws, or other organizational documents, and (B) based upon a
certificate executed by officers of the Fund delivered to us, is not in default
in the performance of any material obligation, agreement or condition contained
in any bond, debenture, note or other evidence of indebtedness, except as may be
disclosed in the Prospectus;
(x) Neither the offer, sale or delivery of the
Shares, the execution, delivery or performance of this Agreement or the Fund
Agreements, compliance by the Fund with the provisions hereof or thereof,
consummation by the Fund of the transactions contemplated hereby or thereby nor
the adoption of the Fund's dividend reinvestment plan conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the Charter or Bylaws or any material agreement, indenture, lease or other
instrument to which the Fund is a party or by which it or any of its properties
is bound that is an exhibit to the Registration Statement or other instrument to
which any of its properties is bound or will result
24
in the creation or imposition of any material lien, charge or encumbrance upon
any property or assets of the Fund, nor will any such action result in any
violation of any existing material law, regulation, ruling (assuming compliance
with all applicable state securities and blue sky laws), judgment, injunction,
order or decree known to such counsel after reasonable inquiry, applicable to
the Fund or any of its properties;
(xi) No consent, approval, authorization or other
order of, or registration or filing with, the Commission, the NASD, any national
securities exchange, or, to counsel's knowledge, any state securities
commission, any arbitrator, any court, regulatory body, administrative agency or
other governmental body, agency, or official is required on the part of the Fund
(except such as may have been obtained prior to the date hereof and such as may
be required for compliance with the state securities or blue sky laws of various
jurisdictions) for the valid issuance and sale of the Shares to the Underwriters
as contemplated by this Agreement, the execution, delivery and performance by
the Fund of this Agreement and the Fund Agreements or the consummation of the
transactions contemplated hereby and thereby;
(xii) The Registration Statement, the Prospectus and
any supplements or amendments thereto (except for the financial statements and
the notes thereto and the schedules and other financial and statistical data
included therein, as to which such counsel need not express any opinion) comply
as to form in all material respects with the requirements of the 1933 Act, the
1940 Act; and the Rules and Regulations;
(xiii) To the knowledge of such counsel after
reasonable inquiry, (A) other than as described or contemplated in the
Registration Statement or Prospectus (or any amendment or supplement thereto),
there are no legal or governmental proceedings pending or threatened against the
Fund, or to which the Fund or any of its properties is subject, which are
required to be described in the Registration Statement or Prospectus (or any
amendment or supplement to either of them) and (B) there are no agreements,
contracts, indentures, leases or other instruments that are required to be
described in the Registration Statement or the Prospectus (or any amendment or
supplement thereto) or to be filed as an exhibit to the Registration Statement
that are not described or filed as required, as the case may be;
(xiv) The statements in the Registration Statement
and Prospectus, insofar as they (A) are descriptions of contracts, agreements or
other legal documents, or (B) refer to statements of law or legal conclusions,
are accurate and present fairly the information required to be shown;
(xv) Each of the Fund Agreements complies in all
material respects with all applicable provisions of the 1933 Act, the 1940 Act,
the Advisers Act, the Rules and Regulations and the Advisers Act Rules and
Regulations;
25
(xvi) The Fund is duly registered with the
Commission under the 1940 Act and the 1940 Act Rules and Regulations as a
closed-end, diversified management investment company and, to such counsel's
knowledge after reasonable inquiry, no order of suspension or revocation of such
registration under the 1940 Act and the 1940 Act Rules and Regulations has been
issued or proceedings therefor initiated or threatened by the Commission; the
provisions of the Charter and Bylaws comply as to form in all material respects
with the applicable provisions of the 1940 Act and the 1940 Act Rules and
Regulations, the provisions of the Charter and the Bylaws and the investment
policies and restrictions described in the Registration Statement and the
Prospectus under the captions ["Investment Objective and Policies"], ["Principal
Risks of the Fund and Special Considerations"], and ["Investment Restrictions"]
(in the Prospectus and the statement of additional information) comply in all
material respects with the requirements of the 1940 Act, and all action has been
taken by the Fund as is required of the Fund by the 1933 Act and the 1940 Act
and the Rules and Regulations in connection with the issuance and sale of the
Shares to make the public offering and consummate the sale of the Shares as
contemplated by this Agreement;
(xvii) Except as described in the Prospectus, there
are no outstanding options, warrants or other rights calling for the issuance
of, and such counsel does not know of any commitment, plan or arrangement to
issue (other than in connection with the reinvestment of dividends) any shares
of capital stock of the Fund or any security convertible into or exchangeable or
exercisable for shares of capital stock of the Fund;
(xviii) Except as described in the Prospectus, such
counsel does not know of any holder of any security of the Fund or any other
person who has the right, contractual or otherwise, to cause the Fund to sell or
otherwise issue to them, or to permit them to underwrite the sale of, the Shares
or the right to have any securities of the Fund included in the Registration
Statement or the right, as a result of the filing of the Registration Statement,
to require registration under the 1933 Act of any securities of the Fund;
(xix) 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;
(xx) Although counsel has not undertaken, except as
otherwise indicated in their opinion, to determine independently and does not
assume any responsibility for, the accuracy or completeness of the statements in
the Registration Statement, such counsel has participated in the preparation of
the Registration Statement and Prospectus, including review and discussion of
the contents thereof and nothing has come to the attention of such counsel that
has caused it to believe that the Registration Statement, at the time the
Registration Statement became effective or the Prospectus, as of its date and as
of the Closing Date, as the case may be, or the Option Closing Date contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein (in the case of
a prospectus, in light of the circumstances under which they were made) not
misleading or that any amendment or supplement to the Prospectus, as of the
Closing Date or
26
the Option Closing Date, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no view with
respect to the financial statements and the notes thereto and the schedules and
other financial and statistical data including in the Registration Statement or
the Prospectus).
Insofar as the opinions expressed above relate to or are dependent upon
matters governed by Maryland law, Simpson, Thacher & Xxxxxxxx will be permitted
to rely on the opinion of Xxxxxxx, Baetjer and Xxxxxx, LLP.
(d) You shall have received on the Closing Date an opinion of
[Simpson, Thacher & Xxxxxxxx], counsel for the Manager, dated the Closing Date
and addressed to you as Representatives of the several Underwriters, in form and
substance satisfactory to you and to the effect that:
(i) The Manager is a corporation duly incorporated
and validly existing in good standing under the laws of the State of New York
with full corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them), and is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
to so register or qualify does not have a material adverse effect on the
condition (financial or other), business, business prospects, properties, net
assets or results of operations of the Manager and its subsidiaries, taken as a
whole, or on the ability of the Manager to perform its obligations under this
Agreement and the Advisory Agreement;
(ii) The Manager is duly registered with the
Commission as an investment adviser under the Advisers Act and is not prohibited
by the Advisers Act, the Advisers Act Rules and Regulations, the 1940 Act or the
1940 Act Rules and Regulations from acting under the Advisory Agreement for the
Fund as contemplated by the Prospectus (or any amendment or supplement thereto);
and, to such counsel's knowledge after reasonable inquiry, no order of
suspension or revocation of such registration under the Advisers Act and the
Advisers Act Rules and Regulations has been issued or proceedings therefor
initiated or threatened by the Commission;
(iii) The Manager has full corporate power and
authority to enter into this Agreement and the Advisory Agreement, and this
Agreement and the Advisory Agreement have been duly authorized, executed and
delivered by the Manager and each is a valid, legal and binding agreement of the
Manager, enforceable against the Manager in accordance with its terms except as
enforcement of rights to indemnity and contribution hereunder or thereunder may
be limited by Federal or state securities laws or principles of public policy
and subject to the qualification that the enforceability of the Manager's
obligations hereunder or thereunder may be
27
limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors' rights generally
and by general equitable principles;
(iv) Neither the execution, delivery or performance
of this Agreement or the Advisory Agreement by the Manager, compliance by the
Manager with the provisions hereof or thereof nor consummation by the Manager of
the transactions contemplated hereby and the Advisory Agreement conflicts or
will conflict with, or constitutes or will constitute a breach of or default
under, the Charter, By-laws, or other organizational documents, of the Manager
or any agreement, indenture, lease or other instrument to which the Manager is a
party or by which it or any of its properties is bound that is known to such
counsel after reasonable inquiry of the Manager, or will result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Manager, nor will any such action result in any violation of any existing
law, regulation, ruling, judgment, injunction, order or decree known to such
counsel after reasonable inquiry, applicable to the Manager or any of its
properties;
(v) No consent, approval, authorization or other
order of, or registration or filing with, the Commission, the NASD, any national
securities exchange, any state securities commission, any arbitrator, any court,
regulatory body, administrative agency or other governmental body, agency, or
official is required on the part of the Manager (except such as have been
obtained prior to the date hereof) for the execution, delivery and performance
by it of this Agreement and the Fund Agreements to which it is a party or the
consummation by it of the transactions contemplated hereby and thereby;
(vi) To the knowledge of such counsel after
reasonable inquiry, there are no legal or governmental proceedings pending or
threatened against the Manager or to which the Manager or any of its properties
is subject, which are required to be described in the Registration Statement or
the Prospectus (or any amendment or supplement to either of them) but are not
described as required or which may reasonably be expected to involve a
prospective material adverse change on the ability of the Manager to perform its
obligations under this Agreement and the Advisory Agreement;
(vii) The obligations of the Manager under this
Agreement and the Advisory Agreement comply in all material respects with all
applicable provisions of the 1940 Act, the 1940 Act Rules and Regulations, the
Advisers Act and the Advisers Act Rules and Regulations;
(viii) The description of the Manager and its
business in the Prospectus (and any amendment or supplement thereto) complies in
all material respects with all requirements of the 1933 Act, the 1940 Act and
the Rules and Regulations;
(ix) The Manager has full power and authority and
all necessary governmental authorizations, approvals, orders, licenses,
certificates, franchises and permits of and from all governmental regulatory
officials and bodies (except where the failure so to have
28
any such authorizations, approvals, orders, licenses, certificates, franchises
or permits, individually or in the aggregate, would not have a material adverse
effect on the business, properties, operations or financial condition of the
Manager and its subsidiaries, taken as a whole), to own its properties and to
conduct business as now being conducted, as described in the Prospectus, and to
perform its obligations under the Advisory Agreement; and
(x) Although counsel has not undertaken, except as
otherwise indicated in its opinion, to determine independently and does not
assume any responsibility for, the accuracy or completeness of the statements in
the Registration Statement, such counsel has participated in the preparation of
the Registration Statement and the Prospectus, including review and discussion
of the contents thereof and nothing has come to its attention that has caused it
to believe that the Registration Statement at the time it became effective or
the Prospectus, as of its date and as of the Closing Date or the Option Closing
Date, as the case may be, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statement therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading or that any amendment
or supplement to the Prospectus, as of the Closing Date or the Option Closing
Date, contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no opinion with respect to the financial
statements and the notes thereto and the schedules and other financial and
statistical data included in the Registration Statement or the Prospectus).
(e) You shall have received on the Closing Date an opinion of
Skadden, Arps, Slate, Xxxxxxx and Xxxx LLP, counsel for the Underwriters, dated
the Closing Date and addressed to the Underwriters, with respect to such matters
as the Underwriters may reasonably request and the Fund, and the Investment
Manager and their respective counsels shall have furnished to such counsel such
documents as they may reasonably request for the purpose of enabling them to
pass upon such matters. It is agreed that Skadden, Arps, Slate, Xxxxxxx and Xxxx
LLP may rely on the opinions of Xxxxxxx, Baetjer and Xxxxxx, LLP to the extent
those opinions relate to or are dependent upon matters governed by the laws of
the State of Maryland.
(f) You shall have received letters addressed to you, as
Representatives of the several Underwriters, dated the date hereof and the
Closing Date, from PricewaterhouseCoopers LLP, independent certified public
accountants, substantially in the forms heretofore approved by you.
(g) (i) No order suspending the effectiveness of the
Registration Statement or prohibiting or suspending the use of the Prospectus
(or any amendment or supplement thereto) or any Prepricing Prospectus or any
sales material shall have been issued and no proceedings for such purpose or for
the purpose of commencing an enforcement action against the Fund, the Investment
Manager or, with respect to the transactions contemplated by
29
the Prospectus (or any amendment or supplement thereto) and this Agreement, the
Underwriters, may be pending before or, to the knowledge of the Fund, the
Investment Manager or the Underwriters or in the reasonable view of counsel to
the Underwriters, shall be threatened or contemplated by the Commission or any
court or other regulatory or self-regulatory body having jurisdiction at or
prior to the Closing Date and that any request for additional information on the
part of the Commission or such court or other body (to be included in the
Registration Statement, the Prospectus or otherwise) be complied with to the
satisfaction of the Underwriters;
(ii) there shall not have been any change in the
capital stock of the Fund nor any material increase in the short-term or
long-term debt of the Fund from that set forth or contemplated in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto);
(iii) there shall not have been, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus (or any amendment or supplement thereto), except as may
otherwise be stated in the Registration Statement and Prospectus (or any
amendment or supplement thereto), any material adverse change in the condition
(financial or other), business, business prospects, properties, net assets or
results of operations of the Fund or the Investment Manager;
(iv) the Fund shall not have any liabilities or
obligations, direct or contingent (whether or not in the ordinary course of
business), that are material to the Fund, other than those reflected in the
Registration Statement or the Prospectus (or any amendment or supplement to
either of them); and
(v) all the representations and warranties of the
Fund and the Investment Manager contained in this Agreement shall be true and
correct in all material respects on and as of the date hereof and on and as of
the Closing Date as if made on and as of the Closing Date, and the Underwriters
shall have received a certificate of the Fund and the Investment Manager, dated
the Closing Date and signed by the chief executive officer and the chief
financial officer of each of the Fund and the Investment Manager (or such other
officers as are acceptable to the Underwriters), to the effect set forth in
Section 9(h) and in Section 9(i) hereof.
(h) That neither the Fund nor the Investment Manager shall
have failed at or prior to the Closing Date to have performed or complied in all
material respects with any of its agreements herein contained and required to be
performed or complied with by it hereunder at or prior to the Closing Date.
(i) That you shall have received on the Closing Date a
certificate, dated such date, of the chief executive officer and the chief
financial officer of each of the Fund and the Investment Manager certifying
that:
30
(i) the signers have carefully examined the
Registration Statement, the Prospectus (and any amendments or supplements to
either of them) and this Agreement;
(ii) the representations and warranties 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 the Agreement are true and correct
on and as of the date of the certificate as if made on such date;
(iii) since the date of the Prospectus (and any
amendment or supplement thereto) there has not been any material adverse change
in the condition (financial or other), business, prospects (other than as a
result of a change in the financial markets generally), properties, net assets
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);
(iv) 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 Shares or having a
material adverse effect on 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) has been issued and no proceedings for
any such purpose are pending before or threatened by the Commission or any court
or other regulatory body, the NASD, any state securities commission, any
national securities exchange, any arbitrator, any court or any other
governmental, regulatory, self-regulatory or administrative agency or any
official;
(v) each of the Fund (with respect to certificates
from such Fund officers) and the Investment Manager (with respect to
certificates from such officers of the Investment Manager) has performed and
complied with all agreements that this Agreement require it to perform by such
Closing Date;
(vi) neither the Fund (with respect to the
certificate from such officers of the Fund) nor the Investment Manager (with
respect to the certificate from such officers of the Investment Manager) has
sustained any material loss or interference with its business from any court or
from legislative or other governmental action, order or decree or from any other
occurrence not described in the Registration Statement and the Prospectus and
any amendment or supplement to either of them; and
(vii) with respect to the certificate from such
officers of the Fund, there has not been any change in the capital stock of the
Fund nor any material increase in the debt of the Fund from that set forth in
the Prospectus (and any amendment or supplement thereto) and the Fund has not
sustained any material liabilities or obligations, direct or contingent, other
than those reflected in the Prospectus (and any amendment or supplement
thereto).
31
(j) The Fund and the Investment Manager shall have furnished
or caused to be furnished to you such further certificates and documents as you
shall have reasonably requested.
(k) Subsequent to the effective date of this Agreement, there
shall not have occurred
(i) any change or any development involving a
prospective change, in or affecting the condition (financial or other),
business, prospects (other than as a result of a change in the financial markets
generally), properties, net assets or results of operations of the Fund or the
Investment Manager not contemplated by the Prospectus (and any amendment or
supplement thereto), which in your opinion, as Representatives of the several
Underwriters, would materially adversely affect the market for the Shares; or
(ii) any event or development relating to or
involving the Fund, the Investment Manager or any officer or director of the
Fund or the Investment Manager which makes any statement of a material fact made
in the Prospectus (or any amendment or supplement thereto) untrue or which, in
the opinion of the Fund and its counsel or the Underwriters and their counsel,
requires the making of any addition to or change in the Prospectus (or any
amendment or supplement thereto) in order to state a material fact required by
the Act, the 1940 Act, the Rules and Regulations or any other law to be stated
therein (in the case of a prospectus, in light of the circumstances under which
they were made) not misleading, if amending or supplementing the Prospectus (or
any amendment or supplement thereto) to reflect such event or development would,
in your opinion, as Representatives of the several Underwriters, materially
adversely affect the market for the Shares.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you and your counsel.
Any certificate or document signed by any officer of the Fund or the
Investment Manager and delivered to you as Representatives of the Underwriters,
or to counsel for the Underwriters, shall be deemed a representation and
warranty by the Fund or the Investment Manager to the Underwriters as to the
statements made therein.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to (i) the accuracy of and compliance with the
representations and warranties of the Fund and the Investment Manager contained
herein on and as of the Option Closing Date as though made on any Option Closing
Date, (ii) satisfaction on and as of any Option Closing Date of the conditions
set forth in this Section 9 except that, if any Option Closing Date is other
than the Closing Date, the certificates, opinions and letters referred to in
paragraphs 9(c), 9(d), 9(f), 9(i) and 9(j) and this paragraph shall be dated the
Option Closing Date in question and the opinions called for by paragraphs [
___________ ] shall be revised to reflect the sale of Additional Shares and
(iii) the absence of circumstances on or prior to the Option Closing Date which
would
32
permit termination of this Agreement pursuant to Section 12 hereof if they
existed on or prior to the Closing Date.
10. EXPENSES. The Fund agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of its
obligations hereunder: (a) the preparation, printing or reproduction, and filing
with the Commission of the Registration Statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the Prospectus and
each amendment or supplement to any of them (including, without limitation, the
filing fees prescribed by the 1933 Act, the 1940 Act and the Rules and
Regulations); (b) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the Registration Statement, each Prepricing Prospectus, the
Prospectus, any sales material and all amendments or supplements to any of them
as may be reasonably requested for use in connection with the offering and sale
of the Shares; (c) the preparation, printing, authentication, issuance and
delivery of certificates for the Shares, including any stamp taxes in connection
with the original issuance and sale of the Shares; (d) the reproduction and
delivery of this Agreement, any dealer agreements, the preliminary blue sky
memorandum, if any, and all other agreements or documents reproduced and
delivered in connection with the offering of the Shares; (e) the reasonable
fees, expenses and disbursements of counsel for the Underwriters relating to
blue sky matters; (f) the transportation and other expenses incurred by or on
behalf of Fund representatives in connection with presentations to prospective
purchasers of the Shares; (g) the fees and expenses of the Fund's accountants
and the fees and expenses of counsel (including local and special counsel) for
the Fund; (h) the filing fees and the fees and expenses of counsel for the
Underwriters in connection with any filings required to be made with the NASD
and incurred with respect to the review of the offering of the Shares by the
NASD; (i) the registration of the shares under the 1934 Act and the listing of
the Shares on the NYSE.
11. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective:
(a) upon the execution and delivery hereof by the parties
hereto; or
(b) if, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may commence,
when notification of the effectiveness of the registration statement or such
post-effective amendment has been released by the Commission.
Until such time as this Agreement shall have become effective, it may
be terminated by the Fund, by notifying the Underwriters, or by you, as
Representatives of the several Underwriters, by notifying the Fund.
If any one or more of the Underwriters shall fail or refuse to purchase
Firm Shares which it or they are obligated to purchase hereunder on the Closing
Date, and the aggregate number of
33
Shares which such defaulting Underwriter or Underwriters are obligated but fail
or refuse to purchase is not more than one-tenth of the aggregate number of Firm
Shares which the Underwriters are obligated to purchase on the Closing Date,
each non-defaulting Underwriter shall be obligated, severally, in the proportion
which the number of Shares set forth opposite its name in Schedule I hereto
bears to the aggregate number of Shares set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters are
obligated, but fail or refuse, to purchase. If any one or more of the
Underwriters shall fail or refuse to purchase Firm Shares which it or they are
obligated to purchase on the Closing Date and the aggregate number of Firm
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Firm Shares which the Underwriters are obligated to purchase
on the Closing Date and arrangements satisfactory to you and the Fund for the
purchase of such Firm Shares by one or more non-defaulting Underwriters or other
party or parties approved by you and the Fund are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter, the Fund or the Investment Manager. In any such case
which does not result in termination of this Agreement, either you or the Fund
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto who, with your approval and the approval of the Fund,
purchases Shares which a defaulting Underwriter is obligated, but fails or
refuses, to purchase.
Any notice under this Section 11 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
12. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Fund or the Investment Manager by notice to the Fund or the
Investment Manager if prior to the Closing Date or any Option Closing Date (if
different from the Closing Date and then only as to the Additional Shares), as
the case may be, (a) trading in the Shares or securities generally on the NYSE,
American Stock Exchange, the Nasdaq National Market or the Nasdaq Stock Exchange
shall have been suspended or materially limited, (b) additional material
governmental restrictions not in force on the date of this Agreement have been
imposed upon trading in securities in general or a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or state authorities or (c) any outbreak or material escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, occurs, the effect of which is such
as to make it, in your judgment, impracticable or inadvisable to commence or
continue the offering of the Shares at the offering price to the public set
forth on the cover page of the Prospectus or to enforce contracts for the resale
of the Shares by the Underwriters.
34
Notice of such termination may be given to the Fund or the Investment
Manager by telegram, telecopy or telephone but shall be subsequently confirmed
by letter.
13. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth
in the [last sentence of the last paragraph of the cover page in the Prospectus,
as well as, under the caption "Underwriting" in the Prospectus, the names of the
underwriters and number of shares listed opposite such names in the first
paragraph, the fourth sentence in the third paragraph, the first sentences in
the seventh paragraph and the thirteenth paragraph] constitute the only
information furnished by or on behalf of the Underwriters through you as such
information is referred to in Sections 6(b) and 8 hereof.
14. MISCELLANEOUS. Except as otherwise provided in Sections 5, 11 and
12 hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered:
(a) if to the Fund or the Investment Manager, at the office of
the Fund at:
Xxxxx & Steers Advantage Income Realty Fund, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: [ ____________________ ]
(b) or if to you as Representatives of the Underwriters, to:
Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
Underwriters, the Fund, the Investment Manager, directors and officers, and the
other controlling persons referred to in Section 8 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from the Underwriters of any of the Shares in his
status as such purchaser.
15. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
This Agreement may be signed in various counterparts, which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless
35
at least one counterpart hereof shall have been executed and delivered on behalf
of each party hereto.
[END OF AGREEMENT - SIGNATURE PAGE FOLLOWS]
36
Please confirm that the foregoing correctly sets forth the agreement
among the Fund, the Investment Manager and the several Underwriters.
Very truly yours,
XXXXX & STEERS
ADVANTAGE INCOME REALTY FUND, INC.
By: ____________________________
XXXXX & STEERS
CAPITAL MANAGEMENT, INC.
By: ____________________________
Confirmed as of the date first above
mentioned on behalf of themselves
and the other several Underwriters
named in Schedule I hereto.
Xxxxxxx Xxxxx Xxxxxx Inc.
Prudential Securities Incorporated
UBS Warburg LLC
First Union Securities, Inc.
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
Xxxxxxx Xxxxx & Associates, Inc.
As Representatives of the Underwriters
By: XXXXXXX XXXXX BARNEY INC.
By:___________________________________
37
SCHEDULE I
Xxxxx & Steers Advantage Income Fund, Inc.
Underwriter Number of Shares
----------- -----------------
Xxxxxxx Xxxxx Barney, Inc............................................................. [ ]
Prudential Securities Incorporated ................................................... [ ]
UBS Warburg LLC ...................................................................... [ ]
First Union Securities, Inc. ......................................................... [ ]
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated ................................................. [ ]
Xxxxxxx Xxxxx & Associates, Inc....................................................... [ ]
[other ] .......................................................... [ ]
-------------
Total ................................................................................ [ ]
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