Exhibit h(1)
[ ] Shares
Salomon Brothers Global High Income Fund Inc.
Common Stock
UNDERWRITING AGREEMENT
July [ ], 2003
Citigroup Global Markets Inc.
As Representatives of the Several Underwriters
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The undersigned, Salomon Brothers Global High Income Fund Inc., a
Maryland corporation (the "Fund") and Salomon Brothers Asset Management Inc, a
Delaware corporation (the "Investment Manager"), address you as the 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 the
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 July 25,
2003 between the Fund and the Investment Manager (the "Investment Management
Agreement"); the Subadvisory Consulting Agreement dated as of July 25, 2003
between the Investment Adviser and Citigroup Asset Management Limited (the
"Subadviser,") from time to time referred to together with the Investment
Manager as the "Managers") (the "Subadvisory Consulting Agreement"); the Master
Custodian Agreement dated as of June 29, 2001 among certain management
investment companies and State Street Bank and Trust Company (the " Custodian
Agreement"), the Transfer Agency and Services Agreement dated as of July 25,
2003 between the Fund and PFPC Global Fund Services are hereinafter referred to
as the "Fund Agreements." The Investment Management Agreement, the Subadvisory
Consulting Agreement and the Additional Compensation Agreement dated as of July
[ ], 2003 are collectively referred to as the "Manager 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. 333-104706 and
811-21337), 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 and
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 filing of
Pre-Effective Amendment No. 1 to the Registration Statement with the Commission
on June 23, 2003 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 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
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Fund or the Investment Manager. The terms "Registration Statement," "Prospectus"
and "Prepricing Prospectus" shall also include any financial statements
incorporated by reference therein.
The Fund has furnished Citigroup Global Markets Inc., on behalf
of 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 $14.325 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 a
purchase price of $14.325 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 45/th/ day after the date of the Prospectus (or
if such 45/th/ 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 approximately the same proportion to the total
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 12 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 your 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.
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(a) Delivery to the Underwriters of and payment to the Fund for the
Firm Shares shall be made at the office of Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, Xxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or through the facilities of
the Depository Trust Company or at another mutually agreeable facility, at 9:30
A.M., New York City time, on [ ], 2003 (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 shall be made at the
aforementioned office of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP or through the
facilities of the Depository Trust Company or another mutually agreeable
facility 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) 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, through the
facilities of the Depository Trust Company or another mutually agreeable
facility against payment of the purchase price therefor in immediately available
funds to the order of the Fund.
5. AGREEMENTS OF THE FUND AND THE INVESTMENT MANAGER. The Fund and the
Investment Manager, jointly and severally, agree with the Underwriters as
follows:
(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
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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) 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 commencement 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(c) 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 you promptly and, if requested by you,
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 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,
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), assets or
results of operations of the Fund or any event which should reasonably be
expected to have a material adverse effect on the ability of the Investment
Manager to perform its obligations under this Agreement and the Investment
Management Agreement (in either case, other than as a result of changes in
market conditions generally) or of the happening
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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 hereinafter 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 the 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, one signed copy 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) Within five years from the date hereof, 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 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 the
Prepricing Prospectus contained in Pre-Effective Amendment No. 1 to the
Registration Statement so furnished by the Fund.
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(f) (i) As soon after the execution and delivery of this Agreement
as practicable 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, as promptly as practicable, 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.
(ii) 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 the 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, as promptly as
practicable, furnish to the Underwriters and dealers, without charge, a
reasonable number of copies thereof; provided, if the amendment or supplement is
required solely as a result of a misstatement in or omission from any
information provided to the Fund by the Underwriters, the Fund may deliver such
amendment or supplement at cost.
(iii) 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 in the opinion of counsel to the Underwriters it is required by law
or any national securities exchange on which the Shares are listed, will
promptly issue a press release announcing or disclosing the matters to be
covered by the proposed amendment or supplement or will otherwise appropriately
disseminate the required information.
(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 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.
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(h) No later than the last day of the 18/th/ 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 (which need not be audited) 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 three 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 stockholders or filed with the Commission or furnished to 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 pursuant to the
third paragraph of Section 12(b) hereof or by notice given by the Underwriters
terminating this Agreement pursuant to Section 12 or Section 13 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 any
material term or fulfill any material condition of this Agreement required to be
complied with or fulfilled by them, 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) Except as stated in this Agreement and in the Prepricing Prospectus
and the Prospectus, neither the Fund nor the Investment Manager have taken, nor
will they 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.
(m) 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.
(n) The Fund will comply with the undertaking set forth in paragraph 6 of
Item 33 of Part C of the Registration Statement.
(o) The Fund will use its reasonable best efforts to have the Shares
listed, subject to notice of issuance, on the NYSE concurrently with the
effectiveness of the Registration Statement and to comply with the rules and
regulations of such exchange.
(p) Except as provided in this Agreement or pursuant to any dividend
reinvestment plan of the Fund in effect on the date hereof, the Fund and the
Investment Manager will not sell, contract to sell or otherwise dispose of, any
Common Shares, as
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defined below, 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 Citigroup Global Markets Inc.
(q) The Fund will comply with all applicable securities and other
applicable laws, rules and regulations, including, without limitation, the
Xxxxxxxx-Xxxxx Act of 2002, and will use its best efforts to cause the Fund's
trustees and officers, in their capacities as such, to comply with such laws,
rules and regulations, including, without limitation, the provisions of the
Xxxxxxxx-Xxxxx Act of 2002.
6. REPRESENTATIONS AND WARRANTIES OF THE FUND AND THE INVESTMENT MANAGER.
(a) The Fund and the Investment Manager, jointly and severally, represent
and warrant to the Underwriters that:
(i) Each Prepricing Prospectus included as part of Pre-Effective
Amendment No. 1 to the Registration Statement or as part of any amendment or
supplement thereto complied when so filed with the Commission in all material
respects with the applicable provisions of the 1933 Act, the 1940 Act and the
Rules and Regulations, except that this representation and warranty does not
apply to statements in or omissions from a Prepricing 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. The Commission has not issued any order preventing or
suspending the use of any Prepricing Prospectus.
(ii) 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 the 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.
(iii) All the outstanding shares of common stock of the Fund, par
value $0.001 per share (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
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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 in all material respects 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 in all material respects to the description thereof in the Registration
Statement and the Prospectus (and any amendment or supplement to either of
them). The authorized capital stock of the Fund consists of 100,000,000 Common
Shares, of which 6,995.453 shares are outstanding.
(iv) 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), 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.
(v) 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.
(vi) 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 or default does not have a Material Adverse
Effect.
(vii) 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 (1) 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
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other governmental body, agency or official having jurisdiction over the Fund
(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 (2) 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 material 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.
(viii) 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) 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.
(ix) 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 of the Fund on the basis
stated or incorporated by reference in the Registration Statement and the
Prospectus 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.
(x) The Fund, subject to the Registration Statement having been
declared effective and the filing of the Prospectus under Rule 497 under the
1933 Act 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.
(xi) 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
11
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 considerations 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, liquidation, receivership, conservatorship, 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) and fair dealing.
(xii) Except as disclosed in or contemplated by 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, 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.
(xiii) The Fund has not distributed and, prior to the later to
occur of (1) the Closing Date and (2) 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, the Prospectus or other materials permitted by the 1933
Act, the 1940 Act or the Rules and Regulations.
(xiv) (1) 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;
(2) 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
(3) 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 (1), (2) or (3) to be
accurate would not, individually or in the aggregate,
have a Material Adverse Effect.
12
(xv) The Fund maintains a system of internal accounting controls
sufficient to provide reasonable assurances that:
(1) 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");
(2) 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;
(3) access to assets is permitted only in accordance with
management's general or specific authorization; and
(4) the recorded account for assets is compared with existing
assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(xvi) 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 such funds is of a
character required to be disclosed in the Prospectus and that is not so
disclosed.
(xvii) The Fund has not, and has not been required to, file any tax
returns.
(xviii) No holder of any security of the Fund has any right to
require registration of Common Shares or any other security of the Fund because
of the filing of the registration statement or consummation of the transactions
contemplated by this Agreement.
(xix) Except for the Additional Shares, Common Shares to be issued
pursuant to the Fund's dividend reinvestment plan and as otherwise 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.
(xx) The conduct by the Fund of its business (as described in the
Prospectus) does not require the Fund to be the owner, possessor or licensee of
any patents, patent licenses, trademarks, service marks or trade names
(collectively, "Intellectual Property") which it does not own, possess or
license, except where the
13
failure to own, possess or license such Intellectual Property should not
reasonably be expected to have a Material Adverse Effect.
(xxi) 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, at the time of filing,
and at the time of filing of any amendment or supplement thereto, conformed in
all material respects with all applicable provisions of the 1940 Act and the
1940 Act 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).
(xxii) 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.
(xxiii) 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 when filed 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.
(xxiv) All advertising, sales literature or other promotional
material (including "prospectus wrappers") intended for public distribution and
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, when read
together with the Prospectus, 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 the light of the
circumstances under which they were made, not misleading. No advertising, sales
literature or other promotional material (including "broker kits," "road show
slides" and "road show scripts") not intended for public distribution and
authorized in writing by or
14
prepared by the Fund or the Investment Manager for use in connection with the
offering and sale of the Shares was or is, when read together with the
Prospectus, materially false or misleading.
(xxv) Each of this Agreement and each Fund Agreement 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.
(xxvi) 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.
(xxvii) 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.
(xxviii) 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. The form of the certificate for the Shares
conforms to the requirements of the NYSE.
7. REPRESENTATIONS AND WARRANTIES OF THE INVESTMENT MANAGER. The Investment
Manager represents and warrants to the Underwriters as follows:
(a)
(i) The Investment Manager is a corporation duly incorporated and
validly existing in good standing under the laws of the State of Delaware, 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 to qualify does not have a material adverse effect on the
condition (financial or other), 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 Manager Agreements.
(ii) 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 Manager Agreements for the Fund
as contemplated by the Prospectus (or any amendment or supplement thereto).
There does not exist any proceeding which should reasonably be expected to have
a material adverse effect on the registration of the Investment Manager with the
Commission.
15
(iii) 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 should reasonably be expected to have a material
adverse effect on the condition (financial or other), 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 Manager Agreements.
(iv) Neither the execution, delivery or performance of this
Agreement or the Manager Agreements by the Investment Manager, nor the
consummation by the Investment Manager of the transactions contemplated hereby
or thereby:
(A) 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 having jurisdiction over the
Investment Manager or conflicts or will conflict with or constitutes or will
constitute a material breach of or a default under the articles of
incorporation, bylaws, or other organizational documents, of the Investment
Manager; or
(B) 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 judgment, injunction, order or decree applicable to
the Investment Manager 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 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,
except in any case under clause (A) or (B) as should not reasonably be expected
to have a material adverse effect on the ability of the Investment Manger to
perform its obligations under the Manager Agreements. The Investment Manager is
not subject to any order of any court or of any arbitrator, governmental
authority or administrative agency.
(v) The Investment Manager has full power and authority to enter
into this Agreement and the Manager Agreements; the execution and delivery of,
and the performance by the Investment Manager of its obligations under, this
Agreement and the Manager Agreements have been duly and validly authorized by
the Investment Manager; and this Agreement and the Manager Agreements have been
duly executed and delivered by the Investment Manager and, assuming due
authorization, execution and delivery by the other parties thereto, constitute
the valid and legally binding agreements of the Investment Manager, enforceable
against the Investment Manager in accordance with their terms, except as
enforcement of rights to indemnity and contribution hereunder may
16
be limited by considerations of public policy and subject to the qualification
that the enforceability of the Investment Manager's obligations hereunder and
thereunder may be limited by bankruptcy, insolvency, liquidation, receivership,
conservatorship, 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) and fair dealing.
(vi) 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 Manager Agreements.
(vii) 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 do 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 the light of the
circumstances under which they were made) not misleading.
(viii) 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),
there has not occurred any event that should reasonably be expected to have a
material adverse effect on the ability of the Investment Manager to perform its
obligations under this Agreement and the Manager Agreements.
(ix) The Investment Manager has such permits, licenses, franchises
and authorizations of governmental or regulatory authorities ("Investment
Manager 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) except to the extent that the failure to so have should not
reasonably be expected to have a material adverse effect on the ability of the
Investment Manager to perform its obligation under the Manager Agreements;
(x) the Investment Manager has fulfilled and performed all its
material obligations with respect to such Investment Manager 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 Investment Manager Permit,
except where the revocation, termination or impairment of the Investment
Manager's rights under such Investment Manager Permits should not reasonably be
expected to have a material adverse effect on the ability of the Investment
Manager to perform its obligations under the Manager Agreements.
17
(xi) 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.
(xii) 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.
(xiii) This Agreement and the Manager Agreements 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.
(b)
(i) The Subadviser is a duly formed limited company and is validly
existing in good standing under the laws of the United Kingdom, with full power
and authority 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 to qualify does not have a material adverse effect on
the condition (financial or other), assets or results of operations of the
Subadviser or on the ability of the Subadviser to perform its obligations under
the Subadvisory Consulting Agreement.
(ii) The Subadviser 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 Subadvisory Consulting Agreement for the
Fund as contemplated by the Prospectus (or any amendment or supplement thereto).
There does not exist any proceeding which should reasonably be expected to have
a material adverse affect on the registration of the Subadviser with the
Commission.
(iii) There are no legal or governmental proceedings pending or, to
the knowledge of the Subadviser, threatened against the Subadviser, or to which
the Subadviser 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 should reasonably be expected to have
a material adverse effect on the condition (financial or other), assets or
results of operations of the Subadviser or on the
18
ability of the Subadviser to perform its obligations under the Subadvisory
Consulting Agreement.
(iv) Neither the execution, delivery or performance of the
Subadvisory Consulting Agreement by the Subadviser, nor the consummation by the
Subadviser of the transactions contemplated thereby:
(A) requires the Subadviser 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 having jurisdiction over the Subadviser or
conflicts or will conflict with or constitutes or will constitute a material
breach of or a default under the organizational documents of the Subadviser; or
(B) conflicts or will conflict with or constitutes or will
constitute a breach of or a default under, any material agreement to which the
Subadviser is a party or by which it may be bound, or violates or will violate
any statute, law, regulation or judgment, injunction, order or decree applicable
to the Subadviser,
except in any case under clause (A) or (B) as should not reasonably be expected
to have a material adverse effect on the ability of the Subadviser to perform
its obligations under the Subadvisory Consulting Agreement. The Subadviser is
not subject to any order of any court or of any arbitrator, governmental
authority or administrative agency.
(v) The Subadviser has full power and authority to enter into
the Subadvisory Consulting Agreement; the execution and delivery of, and the
performance by the Subadviser of its obligations under, the Subadvisory
Consulting Agreement are duly and validly authorized; and the Subadvisory
Consulting Agreement has been duly executed and delivered by the Subadviser
and, assuming due authorization, execution and delivery by the other parties
thereto, constitute the valid and legally binding agreements of the Subadviser,
enforceable against the Subadviser in accordance with their terms, except as
enforcement of rights to indemnity and contribution hereunder may be limited by
considerations of public policy and subject to the qualification that the
enforceability of the Subadviser's obligations hereunder and thereunder may be
limited by bankruptcy, insolvency, liquidation, receivership, conservatorship,
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) and fair
dealing.
(vi) The Subadviser 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 the
Subadvisory Consulting Agreement.
19
(vii) The description of the Subadviser 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 do 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 the light of the
circumstances under which they were made) not misleading.
(viii) 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),
there has not occurred any event that should reasonably be expected to have a
material adverse effect on the ability of the Subadviser to perform its
obligations under the Subadvisory Consulting Agreement.
(ix) The Subadviser has currently in effect such permits, licenses,
franchises and authorizations of governmental or regulatory authorities
("Subadviser 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) except to the extent that the failure to so have should not
reasonably be expected to have a material adverse effect on the ability of the
Subadviser to perform its obligations under the Subadvisory Consulting
Agreement;
(x) Except as stated in this Agreement and in the Prospectus (and
in any amendment or supplement thereto), the Subadviser 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 Subadviser is not aware of any such action taken or to be
taken by any affiliates of the Subadviser.
(xi) The Subadviser will not make available any promotional
materials regarding the Fund intended for use only by qualified broker-dealers
and registered representatives.
(xii) This Subadvisory Consulting Agreement 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.
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,
20
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 (in the case of the Prospectus, in the 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 there from 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)(i) 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 or the
Investment Manager, and the Fund or the Investment Manager shall assume the
defense thereof, including the employment of counsel and payment of all
reasonable 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).
21
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 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, severally and not jointly, to indemnify
and hold harmless the Fund and the Investment Manager, their directors, their
partners, 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 of their
partners, 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 or the Investment Manager, their directors,
their partners, 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
22
jointly for this purpose as one person) and the Underwriters on the other from
the offering of the Shares, or
(ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Fund 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 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 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
23
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such 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, their
directors, partners 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, their directors, partners 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 or 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 your reasonable satisfaction.
24
(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), assets, or results of
operations of the Fund or the Investment Manager not contemplated by the
Prospectus (or any amendment or supplement thereto), 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 the Subadviser or any officer, partner or director of the Fund the Investment
Manager which makes any statement 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 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 the 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
the Underwriters' opinion, materially adversely affect the market for the
Shares.
(c) (i) You shall have received on the Closing Date an opinion of
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the Fund, dated the Closing Date and
addressed to you as Representatives of the several Underwriters, substantially
to the effect set forth in Exhibit A hereto. Insofar as the opinions contained
therein relate to or are dependent upon matters governed by Maryland law,
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP will be permitted to rely on the opinion of Xxxxx
Xxxxxxx LLP.
(ii) You shall have received on the Closing Date an opinion of Xxxxx
Xxxxxxx LLP, special Maryland counsel for the Fund, dated the Closing Date and
addressed to you as Representatives of the several Underwriters, substantially
to the effect set forth in Exhibit B hereto.
(iii) You shall have received on the Closing Date an opinion of Xxxxxx
X. Xxxxxxx, Counsel for Citigroup Asset Management Inc., counsel to the
Investment Manager and the Subadviser, dated the Closing Date and addressed to
you as Representatives of the several Underwriters, substantially to the effect
set forth in Exhibit C hereto.
(d) 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 you as Representatives of the several
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
Xxxxx Xxxxxxx LLP to the extent those opinions relate to or are dependent upon
matters governed by the laws of the State of Maryland.
25
(e) 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.
(f) (i) All the representations and warranties of the Fund and the
Investment Manager in this Agreement that are qualified by a materiality
standard are true and correct, and all the representations and warranties of the
Fund and the Investment Manager contained in this Agreement that are not so
qualified 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 from each
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 you), to the
effect set forth in Section 9(h), as the case may be, hereof;
(ii) 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 (other than as a result of
changes in market conditions generally or the market for fixed income securities
generally) in the condition (financial or other), assets or results of
operations of the Fund or the Investment Manager or the Subadviser;
(iii) no order suspending the effectiveness of the Registration
Statement or prohibiting or suspending the use of the Prospectus (or any
amendment or supplement thereto), any Prepricing Prospectus, any sales material
or the sale of any of the Shares or having a material adverse effect on the
Fund, the Investment Manager or the Subadviser 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, the Subadviser or, with respect
to the transactions contemplated by 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, the Subadviser or the
Underwriters or in the reasonable view of counsel to the Underwriters, shall be
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 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 reasonable satisfaction of the
Underwriters;
(iv) the Fund, the Investment Manager and the Subadviser shall not
have sustained any material loss or interference with their respective
businesses 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;
26
(v) 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);
(vi) 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 or contemplated by the
Registration Statement or the Prospectus (or any amendment or supplement to
either of them); and
(vii) to the knowledge of the Investment Manager, no order having any
material adverse effect on the ability of the Investment Manager to fulfill its
obligations under this Agreement or the Manager Agreements, or on the ability of
the Subadviser to fulfill its obligations under the Subadvisory Consulting
Agreement, has been issued and no proceedings for any such purpose are pending
before or reasonably believed to be threatened by the Commission or any
regulatory body, whether foreign or domestic.
(g) None of the Fund, the Investment Manager or the Subadviser 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.
(h) 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 (or such other officers as are acceptable to
you) certifying that:
(i) the signers have carefully examined the Registration Statement,
the Prospectus (and any amendments or supplements to either of them) and this
Agreement;
(ii) all the representations and warranties of the Fund (with respect
to the certificate from such Fund officers) and the representations and
warranties of the Investment Manager (with respect to the certificate from such
officers of the Investment Manager) in the Agreement that are qualified by a
materiality standard are true and correct, and all the representations and
warranties of the Fund (with respect to the certificate from such Fund officers)
and the representations and warranties of the Investment Manager (with respect
to the certificate from such officers of the Investment Manager) in the
Agreement that are not so qualified shall be true and correct in all material
respects, 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), except as otherwise stated in the Prospectus (or any amendment or
supplement thereto), there has not been any material adverse change (other than
as a result of changes in market conditions generally or the market for fixed
income securities generally) in the condition (financial or other), assets or
results of operations of the Fund (with respect to the certificate from such
Fund officers) or the Investment Manager or the Subadviser (with respect to the
certificate from such officers of the Investment Manager);
27
(iv) to the knowledge of such officers after reasonable
investigation, no order suspending the effectiveness of the Registration
Statement or prohibiting or suspending the use of the Prospectus (or any
amendment or supplement thereto), any Prepricing Prospectus, any sales material
or the sale of any of the Shares or having a Material Adverse Effect on the Fund
(with respect to the certificate from such Fund officers) or the Investment
Manager or the Subadviser (with respect to the certificate from such officers of
the Investment Manager) has been issued and no proceedings for any such purpose
or for the purpose of commencing an enforcement action against the Fund or the
Subadviser (with respect to the certificate from such Fund officers) or the
Investment Manager or the Subadviser (with respect to the certificate from such
officers of the Investment Manager) 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 and 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) have been complied with to the
reasonable satisfaction of the Underwriters;
(v) each of the Fund (with respect to the certificate from such
Fund officers) and the Investment Manager (with respect to the certificate from
such officers of the Investment Manager) has performed and complied in all
material respects 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 either of the Managers (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;
(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 or contemplated 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 or contemplated by the Registration Statement or the
Prospectus (or any amendment or supplement thereto); and
(viii) with respect to the certificate from such officers of the
Investment Manager, to the knowledge of such officers, no order having any
material adverse effect on the ability of (A) the Investment Manager to fulfill
its obligations under this Agreement or the Manager Agreements, or (B) the
Subadviser to fulfill its obligation under the Subadvisory Consulting Agreement,
has been issued and no proceedings for any such purpose are pending before or
reasonably believed to be threatened by the Commission or any regulatory body,
whether foreign or domestic.
28
(i) You shall have received certificates addressed to you, as
Representatives of the several Underwriters, dated the date hereof and the
Closing Date, executed by an officer of the Subadviser certifying that:
(i) The Subadviser is a duly formed limited company and is validly
existing in good standing under the laws of the United Kingdom, with full power
and authority 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
e ach 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 to qualify does not have a material adverse effect on
the condition (financial or other), assets or results of operations of the
Subadviser or on the ability of the Subadviser to perform its obligations under
the Subadvisory Consulting Agreement.
(ii) The Subadviser 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 Subadvisory Consulting Agreement for the
Fund as contemplated by the Prospectus (or any amendment or supplement thereto).
There does not exist any proceeding which should reasonably be expected to have
a material adverse affect on the registration of the Subadviser with the
Commission.
(iii) There are no legal or governmental proceedings pending or, to
the knowledge of the Subadviser, threatened against the Subadviser, or to which
the Subadviser 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 should reasonably be expected to have
a material adverse effect on the condition (financial or other), assets or
results of operations of the Subadviser or on the ability of the Subadviser to
perform its obligations under the Subadvisory Consulting Agreement.
(iv) Neither the execution, delivery or performance of the
Subadvisory Consulting Agreement by the Subadviser, nor the consummation by the
Subadviser of the transactions contemplated hereby or thereby:
(1) requires the Subadviser 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 having jurisdiction over the Subadviser or
29
conflicts or will conflict with or constitutes or will constitute a material
breach of or a default under the organizational documents of the Subadviser; or
(2) conflicts or will conflict with or constitutes or will
constitute a breach of or a default under, any material agreement to which the
Subadviser is a party or by which it may be bound, or violates or will violate
any statute, law, regulation or judgment, injunction, order or decree applicable
to the Subadviser,
(v) except in any case under clause (A) or (B) as should not
reasonably be expected to have a material adverse effect on the ability of the
Subadviser to perform its obligations under the Subadvisory Consulting
Agreement. The Subadviser is not subject to any order of any court or of any
arbitrator, governmental authority or administrative agency.
(vi) The Subadviser has full power and authority to enter into the
Subadvisory Consulting Agreement; the execution and delivery of, and the
performance by the Subadviser of its obligations under, the Subadvisory
Consulting Agreement are duly and validly authorized; and the Subadvisory
Consulting Agreement have been duly executed and delivered by the Subadviser
and, assuming due authorization, execution and delivery by the other parties
thereto, constitute the valid and legally binding agreements of the Subadviser,
enforceable against the Subadviser in accordance with their terms, except as
enforcement of rights to indemnity and contribution hereunder may be limited by
considerations of public policy and subject to the qualification that the
enforceability of the Subadviser's obligations hereunder and thereunder may be
limited by bankruptcy, insolvency, liquidation, receivership, conservatorship,
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) and fair
dealing.
(vii) The Subadviser 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 the
Subadvisory Consulting Agreement.
(viii) The description of the Subadviser 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 do 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 the light of the
circumstances under which they were made) not misleading.
(ix) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), subsequent to the
respective
30
dates as of which such information is given in the Registration Statement and
the Prospectus (or any amendment or supplement to either of them), there has not
occurred any event that should reasonably be expected to have a material adverse
effect on the ability of the Subadviser to perform its obligations under the
Subadvisory Consulting Agreement.
(x) The Subadviser has currently in effect such permits, licenses,
franchises and authorizations of governmental or regulatory authorities
("Subadviser 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) except to the extent that the failure to so have should not
reasonably be expected to have a material adverse effect on the ability of the
Subadviser to perform its obligations under the Subadvisory Consulting
Agreement;
(xi) Except as stated in the Prospectus (and in any amendment or
supplement thereto), the Subadviser 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
Subadviser is not aware of any such action taken or to be taken by any
affiliates of the Subadviser.
(xii) The Subadviser will not make available any promotional
materials regarding the Fund intended for use only by qualified broker-dealers
and registered representatives.
(xiii) This Subadvisory Consulting Agreement 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.
31
(j) The Fund, the Investment Manager and the Subadviser shall have
furnished or caused to be furnished to you such further certificates and
documents as you shall have reasonably requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
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(e), 9(h), 9(i) and this paragraph shall be dated the
Option Closing Date in question and the opinions called for by paragraphs 9(c),
9(d), and 9(e) 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 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 (to the extent that such costs and expenses do not, in the aggregate,
exceed $0.03 per Share): (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, not to exceed $3,000.00; (f) the transportation and other
expenses incurred by or on behalf of Fund representatives in connection with
presentations to prospective purchasers of the Shares;
32
(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 reasonable 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, which fees and
expenses of counsel will not exceed $9,500.00; and (i) the registration of the
shares under the 1934 Act and the listing of the Shares on the NYSE. The
Investment Manager has agreed to pay (x) all of the Fund's organizational costs
and (y) offering costs of the Fund (other than sales load) that exceed $0.03 per
Share.
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 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
33
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 shall have been suspended by the Commission on
the NYSE or securities generally on the NYSE shall have been suspended or
limited or minimum prices shall have been established on the NYSE, (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, declaration by the United States of a national
emergency or war, or other international or domestic calamity, crisis or change
in political, financial or economic conditions, occurs, the effect of which on
the financial markets is such as to make it, in your sole judgment,
impracticable or inadvisable to commence or continue the offering or delivery of
the Shares as contemplated by the Prospectus (exclusive of any supplement
thereto) or to enforce contracts for the resale of the Shares by the
Underwriters.
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," the names of the underwriters and numbers
of Shares listed opposite such names following the first paragraph, the first,
third, fourth and last sentence of the third paragraph, the first sentence of
the eleventh paragraph, the twelth paragraph, the seventeeth paragraph and the
eighteenth paragraph constitute the only information furnished by or on behalf
of the Underwriters through you or your counsel as such information is referred
to herein, expressly for use in the Prospectus.
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:
34
(a) if to the Fund, at the office of the Fund at:
Salomon Brothers Global High Income Fund Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx Xxxxx
(b) if to the Investment Manager, at the office of the Investment
Manager at:
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
(c) or if to you as Representatives of the Underwriters, to:
Citigroup Global Markets 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, their directors, partners 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 at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
35
Please confirm that the foregoing correctly sets forth the agreement among the
Fund, the Investment Manager and the several Underwriters.
Very truly yours,
SALOMON BROTHERS GLOBAL HIGH
INCOME FUND INC.
By: ____________________________
Name:
Title:
SALOMON BROTHERS ASSET
MANAGEMENT INC.
By: ____________________________
Name:
Title:
Confirmed as of the date first above
mentioned on behalf of themselves and
the other several Underwriters named
in Schedule I hereto.
CITIGROUP GLOBAL MARKETS INC.
As Representatives of the Several Underwriters
By: CITIGROUP GLOBAL MARKETS INC.
By: ___________________________
Name:
Title:
36
SCHEDULE I
Salomon Brothers Global High Income Fund Inc.
Underwriter Number of Shares
----------- ----------------
Citigroup Global Markets Inc.................................
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated .....................................
Wachovia Capital Markets, LLC................................
Advest, Inc..................................................
Xxxxxx, Xxxxx Xxxxx, Incorporated............................
Xxxxxx Xxxxxxxxxx Xxxxx LLC..................................
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated.........................
McDonald Investments Inc., a KeyCorp Company.................
RBC Xxxx Xxxxxxxx Inc........................................
Xxxxxx, Xxxxxxxx & Company, Incorporated.....................
Wedbush Xxxxxx Securities Inc................................
S-1
EXHIBIT A
FORM OF OPINION OF
FUND COUNSEL
(i) The Fund (A) has been duly incorporated and is
validly existing and in good standing as a corporation under the laws of
the State of Maryland and has full corporate power and authority to conduct
its business as described in the 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 in the State of New York
(which is the only jurisdiction identified by management of the Fund to
such counsel in which the Fund owns or leases property or operates or
conducts its business);
(ii) The statements made in the Prospectus under the
caption "Description of Shares," insofar as they purport to constitute
summaries of the terms of the Fund's common stock, constitute accurate
summaries of the terms of such common stock in all material respects;
(iii) All outstanding shares of capital stock of the Fund
have been duly authorized and validly issued by the Fund, and are fully
paid and nonassessable;
(iv) The Shares have been duly authorized and, when
issued and delivered to the Underwriters against payment therefor in
accordance with this Agreement, will be validly issued by the Fund, fully
paid and nonassessable. There are no preemptive rights under federal or New
York law or under the Maryland General Corporation Law to subscribe for or
purchase shares of the Fund's capital stock. There are no preemptive or
other rights to subscribe for or to purchase, nor any restriction upon the
issuance, voting or transfer of, any shares of the Fund's capital stock
pursuant to the Fund's Charter, Bylaws or any agreement or other instrument
filed or incorporated by reference as an exhibit to the Registration
Statement;
(v) The Shares have been authorized for listing, subject
to notice of issuance, on the NYSE; and the form of certificate for the
Shares conforms to the requirements of the Maryland General Corporate Law
and the NYSE:
(vi) The Registration Statement and all post-effective
amendments, if any, have become effective under the 1933 Act and the 1933
Act Rules and Regulations, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or order
pursuant to Section 8(e) of the 1940 Act are pending before or threatened
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;
A-1
(vii) (A) This Agreement and each of the Fund Agreements
have been duly authorized, executed and delivered by the Fund and (B) each
of the Fund Agreements, assuming that the Fund Agreements are the valid and
legally binding obligations of the other parties thereto, is a valid and
legally binding agreement of the Fund, enforceable against the Fund in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and by
general equitable principles (whether considered in a proceeding in equity
or at law) and an implied covenant of good faith and fair dealing, except
as the enforceability thereof may be limited by considerations of public
policy;
(viii) The issuance and sale of the Shares by the Fund and
the compliance by the Fund with the provisions of this Agreement and the
Fund Agreements will not breach or result in a default under any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
filed or incorporated by reference as an exhibit to the Registration
Statement, nor will such action violate the Fund's Charter or Bylaws or any
federal or New York statute or any rule or regulation thereunder or the
Maryland General Corporation Law or any rule or regulation thereunder or
order known to us issued pursuant to any federal or New York statute or the
Maryland General Corporation Law by any court or governmental agency or
body having jurisdiction over the Fund or any of its properties;
(ix) No consent, approval, authorization, order,
registration or qualification of or with any federal or New York
governmental agency or body or any Maryland governmental agency or body
acting pursuant to the Maryland General Corporation Law or, to such
counsel's knowledge, any federal or New York court or any Maryland court
acting pursuant to the Maryland General Corporation Law is required for the
issue and sale of the Shares by the Fund and the compliance by the Fund
with all of the provisions of this Agreement and the Fund Agreements,
except for the registration of the Shares under the 1933 Act and the 1940
Act pursuant to the Registration Statement and under the 1934 Act pursuant
to the Fund's Registration Statement on Form 8-A, both of which have been
filed and have become effective, and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters;
(x) To the knowledge of such counsel, (A) other than as
described or contemplated in the Registration Statement or Prospectus (and
any amendment or supplement to either of them), 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 (and 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
A-2
(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, as the case may be;
(xi) The statements made in the Registration Statement and
the Prospectus insofar as they purport to constitute summaries of the terms
of the Maryland General Corporation Law or any federal statutes, rules and
regulations thereunder or contracts and other documents, constitute
accurate summaries of the terms of such statutes, rules and regulations or
contracts and other documents in all material respects;
(xii) The statements made in the Registration Statement and
the Prospectus under the caption "Tax Matters" insofar as they purport to
constitute summaries of matters of United States federal tax law and
regulations or legal conclusions with respect thereto, constitute accurate
summaries of the matters described therein in all material respects;
(xiii) Each of the Fund Agreements complies as to form in
all material respects with all applicable provisions of the 1933 Act, 1940
Act, the Advisers Act, the Rules and Regulations and the Advisers Act Rules
and Regulations;
(xiv) The Fund is duly registered with e provisions of the
Fund's Charter and By-Laws and the investment policies and restrictions
described in the Registration Statement and the Prospectus under the
captions "The Fund's Investments," "Risks," "Investment Objectives" and
"Investment Policies and Techniques" comply in all material respects with
the requirements of the 1940 Act and the applicable 1940 Act Rules and
Regulations;
(xv) 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 or to
otherwise register such securities for sale;
(xvi) The Fund has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the State
of Maryland with full corporate power and authority to conduct its business
as described in the Registration Statement and the Prospectus;
(xvii) The Fund has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the State
of Maryland with full corporate power and authority to conduct its business
as described in the Registration Statement and the Prospectus;
A-3
Insofar as the opinions expressed herein relate to or are dependent
upon matters governed by the laws of the State of Maryland, such counsel has
relied upon the opinion of Xxxxx Xxxxxxx LLP.
Such counsel has not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement or
the Prospectus and takes no responsibility therefor, except as and to the extent
set forth in paragraphs (ii), (xi) and (xii) above. In the course of the
preparation by the Fund of the Registration Statement and the Prospectus, such
counsel participated in conferences with certain officers and employees of the
Fund, the Investment Manager and the Sub-Adviser, with representatives of
PricewaterhouseCoopers LLP and with counsel to the Investment Manager and the
Sub-Adviser. Based upon such counsel's examination of the Registration Statement
and the Prospectus, such counsel's investigations made in connection with the
preparation of the Registration Statement and the Prospectus and such counsel's
participation in the conferences referred to above, (i) such counsel is of the
opinion that the Registration Statement, as of its effective date, and the
Prospectus, as of its date, complied as to form in all material respects with
the requirements of the 1933 Act and the 1940 Act and the applicable rules and
regulations of the Commission thereunder, except that in each case such counsel
expresses no opinion with respect to the financial statements or other financial
or statistical data contained or incorporated by reference in the Registration
Statement or the Prospectus, and (ii) such counsel has no reason to believe that
the Registration Statement, at the time the Registration Statement became
effective, contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary in order to make
the statements therein not misleading or that the Prospectus contains any untrue
statement of a material of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that in each
case such counsel expresses no belief with respect to the financial statements
or other financial or statistical data contained or incorporated by reference in
the Registration Statement or the Prospectus.
A-4
EXHIBIT B
FORM OF OPINION OF
XXXXX XXXXXXX LLP
(i) The Fund has been duly incorporated and is validly existing and
in good standing as a corporation under the laws of the State of Maryland with
full corporate power and authority to conduct its business as described in the
Registration Statement and the Prospectus;
(ii) The statements made in the Prospectus under the caption
"Description of Shares," insofar as they purport to constitute summaries of the
terms of the Fund's common stock, constitute accurate summaries of the terms of
such common stock under the Fund's Charter and Bylaws and under the Maryland
General Corporation Law in all material respects;
(iii) All outstanding shares of capital stock of the Fund have been
duly authorized and validly issued by the Fund, and are fully paid and
nonassessable;
(iv) The Shares have been duly authorized and, when issued and
delivered to the Underwriters against payment therefore in accordance with the
terms of this Agreement, will be validly issued by the Fund, fully paid and
nonassessable and free of any preemptive right arising under Maryland General
Corporation Law that entitle or will entitle any person to acquire the Shares
upon issuance thereof by the Fund. There are no preemptive or other rights to
subscribe for or to purchase, nor any restrictions upon the issuance, voting or
transfer of, any shares, of the Fund's capital stock pursuant to the Fund's
Charter or Bylaws;
(v) The form of the certificate evidencing the Shares is in due and
proper form and complies in all material respects with the requirements of the
Maryland General Corporation Law;
(vi) This Agreement and each of the Fund Agreements have been duly
authorized by all necessary corporate action on the part of the Fund and
assuming it has been executed and delivered by the [title of officers], has been
duly executed and delivered by the Fund;
(vii) The issuance and sale of the Shares by the Fund and the
execution, delivery and performance of the Agreement and the Fund Agreements by
the Fund, and the consummation of the transaction contemplated thereby, will not
violate the Charter or Bylaws of the Fund, or the Maryland General Corporation
Law, or any rule or regulation thereunder, or any order known to us issued
pursuant to the Maryland General Corporation Law by any Maryland court or
Maryland government agency or Maryland body having jurisdiction over the Fund,
or any of its properties;
B-1
(viii) No consent, approval, authorization, order, registration,
filing or qualification of or with any Maryland governmental agency or body
acting pursuant to the Maryland General Corporation Law or, to such counsel's
knowledge, any Maryland court acting pursuant to the Maryland General
Corporation Law, is required for the issuance and sale of the Shares by the Fund
and the execution, delivery and performance of the Agreement and the Fund
Agreements, or the consummation of the transactions contemplated thereby by the
Fund; and
(ix) The statements made in the Prospectus under the caption
"Description of Shares" insofar as they purport to constitute summaries of the
terms of the Maryland General Corporation Law or any rules and regulations
thereunder, constitute accurate summaries of the terms of such statutes, rules
and regulations in all material respects.
B-2
EXHIBIT C
FORM OF OPINION OF COUNSEL TO
INVESTMENT MANAGER AND THE SUBADVISER
(x) The Investment Manager (A) has been duly incorporated and is
validly existing as a corporation under the laws of the State of Delaware with
full corporate power and authority 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 the States of New York and Connecticut (which are the
only jurisdictions in which are the Investment Manager owns or leases property
or operates or conducts its business);
(xi) The Investment Manager and the Subadviser are each duly
registered with the Commission as an investment adviser under the Advisers Act
and are 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 Manager Agreements, in the case of the Investment Manager, or, in the
case of the Subadviser, the Subadvisory Consulting Agreement for the Fund as
contemplated by the Prospectus; and to such counsel's knowledge, no order of
suspension or revocation of any such registration under the Advisers Act and the
Advisers Act Rules and Regulations has been issued and proceedings for that
purpose are pending before or threatened by the Commission;
(xii) (A) Each of this Agreement and the Manager Agreements has been
duly authorized, executed and delivered by the Investment Manager, and the
Manager Agreements, assuming that the Manager Agreements are the valid and
legally binding agreements of the other parties thereto, are valid and legally
binding agreements of the Investment Manager, enforceable against the Investment
Manager in accordance with their terms subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing; and
(B) The Sub-Advisory Agreement has been duly authorized,
executed and delivered by the Sub-Adviser, and the Sub-Advisory Agreement,
assuming that the Sub-Advisory Agreement is the valid and legally binding
agreements of the other parties thereto, is a valid and legally binding
agreement of the Sub-Adviser, enforceable against the Sub-Adviser in accordance
with its terms subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law) and an implied covenant
of good faith and fair dealing;
(xiii) (A) Neither the execution, delivery or performance of this
Agreement or the Manager Agreements by the Investment Manager or compliance by
the Investment Manager with the provisions of this Agreement or the Manager
Agreements
C-1
nor consummation by the Investment Manager of the transactions contemplated
hereby and thereby will breach or result in a default under any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Investment Manager is a party or by which its properties are bound
except where breach or default would not reasonably be expected to have a
material adverse effect on the ability of the Investment Manager to perform its
obligations under this Agreement and the Manager Agreements, nor will such
action violate the certificate of incorporation or by-laws of the Investment
Manager or any federal or New York statute or the Delaware General Corporation
Law or any rules or regulations thereunder or order known to such counsel issued
pursuant to any federal or New York statute or the Delaware General Corporation
Law or by any court or governmental agency or body having jurisdiction over the
Investment Manager or any of its properties;
(B) Neither the execution, delivery or performance of the
Sub-Advisory Agreement by the Sub-Adviser or compliance by the Sub-Adviser with
the provisions of the Sub-Advisory Agreement nor consummation by the Sub-Adviser
of the transactions contemplated thereby will breach or result in a default
under any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Sub-Adviser is a party except where breach or default
would not reasonably be expected to have a material adverse effect on the
ability of the Sub-Adviser to perform its obligations under the Sub-Advisory
Agreement, nor will such action violate any federal statute or any rules or
regulations thereunder or order known to such counsel issued pursuant to any
federal statute or by any court or governmental agency or body in the United
States having jurisdiction over the Sub-Adviser or any of its properties;
(xiv) No consent, approval, authorization, order, registration,
filing or qualification of or with any federal or New York governmental agency
or body or any Delaware governmental agency or body acting pursuant to the
Delaware General Corporation Law or, to such counsel's knowledge, any federal or
New York court or any Delaware court acting pursuant to the Delaware General
Corporation Law is required on the part of the Investment Manager for the
execution, delivery and performance by the Investment Manager of this Agreement
and the Manager Agreements, except such consents, approvals, authorizations,
orders, registrations, filings or qualifications as have been obtained or made
prior to the date hereof;
(xv) To the knowledge of such counsel, there are no legal or
governmental proceedings pending or threatened against either of the Investment
Manager or the Subadviser, or to which the Investment Manager, the Subadviser or
any of their respective properties is subject, which are required to be
described in the Registration Statement or Prospectus (and any amendment or
supplement to either of them) that are not described as required or which may
reasonably be expected to involve a prospective material adverse change in the
ability of the Investment Manager to perform its obligations under this
Agreement and the Manager Agreements or the Subadviser to perform its
obligations under the Subadvisory Consulting Agreement.
C-2
Such counsel has not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement or the
Prospectus and takes no responsibility therefor. In the course of the
preparation by the Fund of the Registration Statement and the Prospectus, such
counsel participated in conferences with certain officers and employees of the
Fund, the Investment Manager and the Sub-Adviser, with representatives of
PricewaterhouseCoopers LLP and with counsel to the Fund and the Sub-Adviser.
Based upon such counsel's examination of the Registration Statement and the
Prospectus, such counsel's investigations made in connection with the
preparation of the Registration Statement and the Prospectus and such counsel's
participation in the conferences referred to above, such counsel has no reason
to believe that the Registration Statement, at the time the Registration
Statement became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading or that the Prospectus
contains any untrue statement of material fact or omits to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except such counsel
expresses no belief with respect to the financial statements or other financial
or statistical data contained or incorporated by reference in the Registration
Statement or the Prospectus.
C-3
