Exhibit H(1)
[ ] Shares
Real Estate Income Fund Inc.
Common Stock
UNDERWRITING AGREEMENT
July 25, 2002
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
Xxxxx Fargo Securities, LLC
Advest, Inc.
H&R Block Financial Advisors, Inc.
McDonald Investments Inc., a KeyCorp Company
Wedbush Xxxxxx Securities, Inc.
As Representatives of the Several Underwriters
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The undersigned, Real Estate Income Fund Inc., a Maryland corporation (the
"Fund"), Citi Fund Management Inc., a Delaware corporation (the "Investment
Manager") and AEW Management and Advisors, L.P., a Delaware limited partnership
(the "Sub-Adviser," which together with the Investment Manager are hereinafter
collectively referred to as the "Advisers"), address you as Underwriters and as
the representatives ("Representatives") of each of the other persons, firms and
corporations, if any, listed in Schedule I hereto (the "Underwriters"). The Fund
proposes to issue and sell an aggregate of [ ] shares of its common stock at
$0.001 par value per share to the several Underwriters (the "Firm Shares"). The
Fund also proposes to sell upon the terms and conditions contained in Section 2
hereof, up to [ ] additional common shares (the "Additional Shares" which
together with the Firm Shares are hereinafter collectively referred to as the
"Shares"). The Fund and the Advisers 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, 2002
between the Fund and the Investment Manager (the "Investment Management
Agreement"); the Sub-Investment Advisory Agreement dated as of July 25, 2002
among the Fund, the Investment Manager and the Sub-Adviser (the "Sub-Advisory
Agreement" which together with the Investment Management Agreement are
hereinafter collectively referred to as the "Advisory
Agreements"); the Master Custodian Agreement dated as of June 29, 2001 between
the Fund and State Street Bank and Trust Company (the "Master Custodian
Agreement"), the Additional Fund Agreement dated as of July [ ], 2002 between
the Fund and State Street Bank and Trust Company (the "Additional Fund
Agreement" and, together with the Master Custodian Agreement, the "Custodian
Agreement") and the Transfer Agency Agreement dated as of [ ] between the Fund
and American Stock Transfer & Trust Company are hereinafter referred to as the
"Fund Agreements." This Underwriting Agreement is hereinafter referred to as the
"Agreement."
1. REGISTRATION STATEMENT AND PROSPECTUS. The Fund has prepared and filed
with the Securities and Exchange Commission (the "Commission") in conformity
with the provisions of the Securities Act of 1933, as amended (the "1933 Act"),
the Investment Company Act of 1940, as amended (the "1940 Act"), and the
published rules and regulations of the Commission promulgated under the 1933 Act
(the "1933 Act Rules and Regulations") and the 1940 Act (the "1940 Act Rules and
Regulations" and, together with the 1933 Act Rules and Regulations, the "Rules
and Regulations") a registration statement on Form N-2 (File Nos. 333-88458 and
811-21098), 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 20, 2002 and as such prospectus and statement of additional information
shall have been amended from time to
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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 Advisers; it being understood that the definition of Prepricing
Prospectus above shall not include any Prepricing Prospectus prepared by the
Underwriters unless approved in writing by the Fund or the Advisers. The terms
"Registration Statement," "Prospectus" and "Prepricing Prospectus" shall also
include any financial statements incorporated by reference therein.
The Fund has furnished Xxxxxxx Xxxxx Barney 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, the Investment Manager and the Sub-Adviser 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, the Investment Manager
and the Sub-Adviser 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 45th day after the date of
the Prospectus (or if such 45th day shall be a Saturday or a Sunday or a
holiday, on the next business day thereafter when the New York Stock Exchange
(the "NYSE") is open for trading), up to an aggregate of [ ] Additional Shares.
Additional Shares may be purchased solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. Upon
any exercise of the over-allotment option, upon the basis of the
representations, warranties and agreements of the Fund, the Investment Manager
and the Sub-Adviser 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 Advisers 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 July 31, 2002 (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 ADVISERS. The Fund and the Advisers,
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
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practicable, but no later than the second business day following the earlier of
the date of the determination of the offering price of the Shares or the date
the Prospectus is first used after the effective date of the Registration
Statement. If the Registration Statement has become effective and the Prospectus
contained therein does not so omit such information, the Fund will file a
Prospectus pursuant to Rule 497(c) 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 Advisers, any affiliate of the Fund or
the Advisers or any representative or attorney of the Fund or the Advisers 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 either Adviser to perform its
respective obligations under this Agreement and the Advisory Agreements to which
it is a party (in either case, other than as a result of changes in market
conditions generally or the market for real estate securities generally) or of
the happening of any other event which makes any statement of a material fact
made in the Registration Statement or the Prospectus, or any Prepricing
Prospectus or any sales material (as herein defined) (or any amendment or
supplement to any of the foregoing) untrue or which requires the making of any
additions to or changes in the Registration Statement or the Prospectus, or any
Prepricing Prospectus or any sales material (as herein defined) (or any
amendment or supplement to any of the foregoing) in order to state a material
fact required by the 1933 Act, the 1940 Act or
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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.
(f) 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
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which the Shares are offered by the Underwriters and by all dealers to whom
Shares may be sold, both in connection with the offering and sale of the Shares
and for such period of time thereafter as the Prospectus is required by the 1933
Act to be delivered in connection with sales by the Underwriters or any dealer.
If during such period of time any event shall occur that in the judgment of the
Fund or in the opinion of counsel for the Underwriters is required to be set
forth in the Registration Statement or the Prospectus (as then amended or
supplemented) or should be set forth therein in order to make the statements
therein (in the case of the Prospectus, in 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. 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.
(h) No later than the last day of the 18th full calendar month following
the calendar quarter in which the effective date of the Registration Statement
falls, the Fund will make generally available to its security holders an
earnings statement (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
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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, the Investment Manager or the Sub-Adviser 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 Advisers, 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 Advisers 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 Advisers 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
Advisers will not sell, contract to sell or otherwise dispose of, any Common
Shares, as 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 Xxxxxxx Xxxxx Xxxxxx Inc.
6. REPRESENTATIONS AND WARRANTIES OF THE FUND AND THE ADVISERS. The Fund
and the Advisers, jointly and severally, represent and warrant to the
Underwriters that:
(a) 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
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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.
(b) The Registration Statement in the form in which it became or becomes
effective and also in such form as it may be when any post-effective amendment
thereto shall become effective and the Prospectus and any supplement or
amendment thereto when filed with the Commission under Rule 497 of the 1933 Act
Rules and Regulations and the 1940 Act Notification when originally filed with
the Commission and any amendment or supplement thereto when filed with the
Commission, complied or will comply in all material respects with the provisions
of the 1933 Act, the 1940 Act and the Rules and Regulations and did not or will
not at any such times contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in 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.
(c) 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 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).
(d) The Fund is a corporation duly incorporated and validly existing under the
laws of the State of Maryland with full corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or supplement to
either of them), and is duly registered and qualified to conduct its business
and is in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does not have
a material adverse effect on the condition (financial or other), 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.
(e) There are no legal or governmental proceedings pending or, to the
knowledge of the Fund, threatened, against the Fund, or to which the Fund or any
of its properties is subject, that are required to be described in the
Registration Statement or the Prospectus (and any amendment or supplement to
either of them) but are not described as required, and there are no agreements,
contracts, indentures, leases or other instruments that are required to be
described in the Registration Statement or the Prospectus (and any amendment or
9
supplement to either of them) or to be filed as an exhibit to the Registration
Statement that are not described or filed as required by the 1933 Act, the 1940
Act or the Rules and Regulations.
(f) The Fund is not in violation of its Charter (the "Charter") or Bylaws
(the "Bylaws"), or other organizational documents or of any law, ordinance,
administrative or governmental rule or regulation applicable to the Fund or of
any decree of the Commission, the NASD, any state securities commission, any
national securities exchange, any arbitrator, any court or governmental agency,
body or official having jurisdiction over the Fund, or in default in any respect
in the performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any material
agreement, indenture, lease or other instrument to which the Fund is a party or
by which it or any of its properties may be bound, except where such violation
or default does not have a Material Adverse Effect.
(g) Neither the issuance and sale of the Shares, the execution, delivery or
performance of this Agreement or any of the Fund Agreements by the Fund, nor the
consummation by the Fund of the transactions contemplated hereby or thereby (i)
requires any consent, approval, authorization or other order of, or registration
or filing with, the Commission, the NASD, any state securities commission, any
national securities exchange, any arbitrator, any court, regulatory body,
administrative agency or other governmental body, agency or official 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
(ii) 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.
(h) The accountants, KPMG 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 and the Rules and Regulations.
(i) The financial statements, together with related schedules and notes,
included or incorporated by reference in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them), present fairly
in all material respects the financial position 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
10
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.
(j) 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.
(k) The execution and delivery of, and the performance by the Fund of its
obligations under, this Agreement and the Fund Agreements have been duly and
validly authorized by the Fund, and this Agreement and the Fund Agreements have
been duly executed and delivered by the Fund and, assuming due authorization,
execution and delivery by the other parties thereto, constitute the valid and
legally binding agreements of the Fund, enforceable against the Fund in
accordance with their terms, except as enforcement of rights to indemnity and
contribution hereunder and thereunder may be limited by 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.
(l) 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.
(m) The Fund has not distributed and, prior to the later to occur of (i)
the Closing Date and (ii) completion of the distribution of the Shares, will not
distribute any offering material in connection with the offering and sale of the
Shares other than the Registration Statement, the Prepricing Prospectus, the
Prospectus or other materials permitted by the 1933 Act, the 1940 Act or the
Rules and Regulations.
(n) (i) The Fund has such permits, licenses, franchises and authorizations
of governmental or regulatory authorities ("Permits") as are necessary to own
its properties and to conduct its business in the manner described in the
Prospectus (and any amendment or supplement thereto), subject to such
qualifications as may be set forth in the Prospectus;
(ii) the Fund has fulfilled and performed all its material obligations with
respect to such Permits and no event has occurred which allows, or after notice
or lapse of time would allow, revocation or termination thereof or results in
any other material impairment
11
of the rights of the Fund under any such Permit, subject in each case to such
qualification as may be set forth in the Prospectus (and any amendment or
supplement thereto); and
(iii) except as described in the Prospectus (and any amendment or
supplement thereto), none of such Permits contains any restriction that is
materially burdensome to the Fund, except where the failure of (i), (ii) or
(iii) to be accurate would not, individually or in the aggregate, have a
Material Adverse Effect.
(o) The Fund maintains a system of internal accounting controls sufficient
to provide reasonable assurances that:
(i) transactions in portfolio securities are executed in accordance with
management's general or specific authorization and with the applicable
requirements of the 1940 Act, the 1940 Act Rules and Regulations and the
Internal Revenue Code of 1986, as amended (the "Code");
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles
and to maintain accountability for assets and to maintain compliance with the
books and records requirements under the 1940 Act and the 1940 Act Rules and
Regulations;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and
(iv) the recorded account for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(p) To the Fund's knowledge, neither the Fund nor any employee or agent of
the Fund has made any payment of funds of the Fund or received or retained any
funds, which payment, receipt or retention of such funds is of a character
required to be disclosed in the Prospectus and that is not so disclosed.
(q) The Fund has not, and has not been required to, file any tax returns.
(r) 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.
(s) 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.
(t) 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
12
own, possess or license, except where the failure to own, possess or license
such Intellectual Property should not reasonably be expected to have a Material
Adverse Effect
(u) The Fund is duly registered under the 1940 Act as a closed-end,
non-diversified management investment company and the 1940 Act Notification has
been duly filed with the Commission and, 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).
(v) Except as stated in this Agreement and in the Prospectus (and any
amendment or supplement thereto), the Fund has not taken, nor will it take,
directly or indirectly, any action designed to or which might reasonably be
expected to cause or result in stabilization or manipulation of the price of any
securities issued by the Fund to facilitate the sale or resale of the Shares,
and the Fund is not aware of any such action taken or to be taken by any
affiliates of the Fund.
(w) The Fund has filed in a timely manner each document or report required
to be filed by it pursuant to the 1934 Act and the rules and regulations of the
Commission promulgated thereunder (the "1934 Act Rules and Regulations"); each
such document or report at the time it was filed conformed to the requirements
of the 1934 Act and the 1934 Act Rules and Regulations; and none of such
documents or reports 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.
(x) 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 Advisers 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 prepared by the Fund or the Advisers 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.
13
(y) 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.
(z) The Fund intends to direct the investment of the proceeds of the
offering in such a manner as to comply with the requirements of Subchapter M of
the Code.
(aa) Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement to either of them), no director of the Fund is
an "interested person" (as defined in the 0000 Xxx) of the Fund or an
"affiliated person" (as defined in the 0000 Xxx) of any Underwriter listed in
Schedule I hereto.
(bb) The Shares have been duly approved for listing upon notice of issuance
on the NYSE and the Fund's Registration Statement on Form 8-A under the 1934 Act
has become effective. 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) 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 Advisory Agreements.
(b) The Investment Manager is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the Advisers
Act, the Advisers Act Rules and Regulations, the 1940 Act or the 1940 Act Rules
and Regulations from acting under the Advisory 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.
(c) There are no legal or governmental proceedings pending or, to the
knowledge of the Investment Manager, threatened against the Investment Manager,
or to which the Investment Manager or any of its properties is subject, that are
required to be described in the Registration Statement or the Prospectus (or any
amendment or supplement to either of them) but are not described as required or
that 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 Advisory Agreements.
(d) Neither the execution, delivery or performance of this Agreement or the
Advisory Agreements by the Investment Manager, nor the consummation by the
Investment Manager of the transactions contemplated hereby or thereby.
(i) requires the Investment Manager to obtain any consent, approval,
authorization or other order of, or registration or filing with, the Commission,
the NASD, any state securities commission, any national securities exchange, any
arbitrator, any court, regulatory body, administrative agency or other
governmental body, agency or official 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
(ii) conflicts or will conflict with or constitutes or will constitute a
breach of or a default under, any material agreement, indenture, lease or other
instrument to which the Investment Manager is a party or by which it or any of
its properties may be bound, or violates or will violate any statute, law,
regulation or 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 (i) or (ii) as should not reasonably be expected
to have a material adverse effect on the ability of the Investment Manger to
perform its obligations under this Agreement and the Advisory Agreements. The
Investment Manager is not subject to any order of any court or of any
arbitrator, governmental authority or administrative agency.
(e) The Investment Manager has full power and authority to enter into this
Agreement and the Advisory Agreements; the execution and delivery of, and the
performance by the Investment Manager of its obligations under, this Agreement
and the Advisory Agreements have been duly and validly authorized by the
Investment Manager; and this Agreement and the Advisory 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 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.
(f) The Investment Manager has the financial resources available to it
necessary for the performance of its services and obligations as contemplated in
the Prospectus (or any amendment or supplement thereto) and under this Agreement
and the Advisory Agreements.
14
(g) The description of the Investment Manager in the Registration Statement
and the Prospectus (and any amendment or supplement thereto) complied and comply
in all material respects with the provisions of the 1933 Act, the 1940 Act, the
Advisers Act, the Rules and Regulations and the Advisers Act Rules and
Regulations and 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.
(h) Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement to either of them), subsequent to the respective
dates as of which such information is given in the Registration Statement and
the Prospectus (or any amendment or supplement to either of them), 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 Advisory Agreements.
(i) (i) The Investment Manager has such 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
Advisory Agreements;
(ii) the Investment Manager has fulfilled and performed all its material
obligations with respect to such Permits and no event has occurred which allows,
or after notice or lapse of time would allow, revocation or termination thereof
or results in any other material impairment of the rights of the Investment
Manager under any such Permit, except where the revocation, termination or
impairment of the Investment Manager's rights under such Permits should not
reasonably be expected to have a material adverse effect on the ability of the
Investment Manger to perform its obligations under the Advisory Agreements.
(j) Except as stated in this Agreement and in the Prospectus (and in any
amendment or supplement thereto), the Investment Manager has not taken, nor will
it take, directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in, stabilization or manipulation of
the price of any securities issued by the Fund to facilitate the sale or resale
of the Shares, and the Investment Manager is not aware of any such action taken
or to be taken by any affiliates of the Investment Manager.
(k) In the event that the Fund or the Investment Manager makes available
any promotional materials regarding the Fund intended for use only by qualified
broker-dealers and registered representatives thereof by means of an Internet
web site or similar electronic means, the Investment Manager will install and
maintain pre-qualification and password-protection or similar procedures which
are reasonably designed to effectively prohibit access to such promotional
materials by persons other than qualified broker-dealers and registered
representatives thereof.
(l) This Agreement and the Advisory 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.
15
8. REPRESENTATIONS AND WARRANTIES OF THE SUB-ADVISER. The Sub-Adviser
represents and warrants to the Underwriters as follows:
(a) The Sub-Adviser is a duly formed limited partnership and is validly
existing in good standing under the laws of the State of Delaware, with full
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 Sub-Adviser or on the ability of
the Sub-Adviser to perform its obligations under this Agreement and the
Sub-Advisory Agreement.
(b) The Sub-Adviser 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 Sub-Advisory 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 Sub-Adviser with the
Commission.
(c) There are no legal or governmental proceedings pending or, to the
knowledge of the Sub-Adviser, threatened against the Sub-Adviser, or to which
the Sub-Adviser or any of its properties are 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 Sub-Adviser or on
the ability of the Sub-Adviser to perform its obligations under this Agreement
and the Sub-Advisory Agreement.
(d) Neither the execution, delivery or performance of this Agreement or the
Sub-Advisory Agreement by the Sub-Adviser, nor the consummation by the
Sub-Adviser of the transactions contemplated hereby or thereby.
(i) requires the Sub-Adviser 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 Sub-Adviser or conflicts or will
conflict with or constitutes or will constitute a material breach of or a
default under the certificate of limited partnership or limited partnership
agreement or other organizational documents of the Sub-Adviser; or
(ii) conflicts or will conflict with or constitutes or will constitute a
breach of or a default under, any material agreement, indenture, lease or other
instrument to which the Sub-Adviser 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
Sub-Adviser 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 Sub-Adviser pursuant to
16
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 Sub-Adviser is
subject,
except in any case under clause (i) or (ii) as should not reasonably be expected
to have a material adverse effect on the ability of the Sub-Adviser to perform
its obligations under this Agreement and the Sub-Advisory Agreement. The
Sub-Adviser is not subject to any order of any court or of any arbitrator,
governmental authority or administrative agency.
(e) The Sub-Adviser has full power and authority to enter into this
Agreement and the Sub-Advisory Agreement; the execution and delivery of, and the
performance by the Sub-Adviser of its obligations under, this Agreement and the
Sub-Advisory Agreement have been duly and validly authorized by the Sub-Adviser;
and this Agreement and the Sub-Advisory Agreement have been duly executed and
delivered by the Sub-Adviser and, assuming due authorization, execution and
delivery by the other parties thereto, constitute the valid and legally binding
agreements of the Sub-Adviser, enforceable against the Sub-Adviser 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 Sub-Adviser'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.
(f) The Sub-Adviser 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 Sub-Advisory Agreement.
(g) The description of the Sub-Adviser 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.
(h) Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement to either of them), subsequent to the respective
dates as of which such information is given in the Registration Statement and
the Prospectus (or any amendment or supplement to either of them), there has not
occurred any event that should reasonably be expected to have a material adverse
effect on the ability of the Sub-Adviser to perform its obligations under this
Agreement and the Sub-Advisory Agreement.
(i) (i) The Sub-Adviser has such 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 Sub-Adviser to perform its obligations under the
Sub-Advisory Agreement;
17
(ii) the Sub-Adviser 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 Sub-Adviser
under any such Permit, except where the revocation, termination or impairment of
the Sub-Adviser's rights under such Permits should 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.
(j) Except as stated in this Agreement and in the Prospectus (and in any
amendment or supplement thereto), the Sub-Adviser 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 Sub-Adviser is not aware of any such action taken or to be taken
by any affiliates of the Sub-Adviser.
(k) In the event that the Sub-Adviser 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 Sub-Adviser will install and maintain
pre-qualification and password-protection or similar procedures which are
reasonably designed to effectively prohibit access to such promotional materials
by persons other than qualified broker-dealers and registered representatives
thereof.
(l) This Agreement and the Sub-Advisory Agreement comply in all material
respects with all applicable provisions of the 1940 Act, the 1940 Act Rules and
Regulations, the Advisers Act and the Advisers Act Rules and Regulations.
9. INDEMNIFICATION AND CONTRIBUTION.
(a) The Fund and the Advisers, jointly and severally, agree to indemnify
and hold harmless each of you and each of the Underwriters and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation),
joint or several, arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any sales material, Prepricing
Prospectus or in the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein (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) 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
18
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
Advisers 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, the Investment Manager or the
Sub-Adviser, such Underwriter or such controlling person shall promptly notify
the Fund, the Investment Manager or the Sub-Adviser, and the Fund, the
Investment Manager or the Sub-Adviser 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, the Investment Manager or the Sub-Adviser has agreed in writing to
pay such fees and expenses, (ii) the Fund and the Advisers 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, the Investment Manager or
the Sub-Adviser and such Underwriter or such controlling person shall have been
advised by its counsel that representation of such indemnified party and the
Fund, the Investment Manager or the Sub-Adviser 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
Advisers shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such Underwriter or such controlling person).
It is understood, however, that the Fund and the Advisers 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 Advisers 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 Advisers 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 Advisers, their directors, their partners, any
officers who sign the Registration Statement, and any person who controls the
Fund or the Advisers within the
19
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 Advisers 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, the Investment Manager or the Sub-Adviser, 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
Advisers by paragraph (b) above (except that if the Fund, the Investment Manager
or the Sub-Adviser 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, the Investment Manager
and the Sub-Adviser, 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 9 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 Advisers on the one hand (treated jointly for this
purpose as one person) and the Underwriters on the other hand from the offering
of the Shares, or
(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 Advisers 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 Advisers 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 Advisers on the one hand (treated jointly for
this purpose as one person) and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Fund and the Advisers on
the one hand (treated jointly for this purpose as one person) or by
20
the Underwriters on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(e) The Fund, the Advisers and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 9 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 9, 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 9 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 12 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could have
been a party and indemnity could 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 9 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 9 and the
representations and warranties of the Fund and the Advisers 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, the Sub-Adviser,
their directors, partners or officers, or any person controlling the Fund, the
Investment Manager or the Sub-Adviser, (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, the Sub-Adviser, their directors,
partners or officers, or any person controlling the Fund, the Investment Manager
or the Sub-Adviser shall be entitled to the benefits of the indemnity,
contribution, and reimbursement agreements contained in this Section 9.
21
10. 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 Advisers 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 Advisers or any of
their officers in any certificate delivered to the Representatives or their
counsel pursuant to this Agreement; and to the following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
Registration Statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by the
Underwriters, and all filings, if any, required by Rules 497 and 430A under the
1933 Act and the 1933 Act Rules and Regulations shall have been timely made; no
stop order suspending the effectiveness of the Registration Statement or order
pursuant to Section 8(e) of the 1940 Act shall have been issued and no
proceeding for those purposes shall have been instituted or, to the knowledge of
the Fund, the Investment Manager, the Sub-Adviser 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.
(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, the Investment Manager or the Sub-Adviser 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,
the Investment Manager or the Sub-Adviser or any officer, partner or director of
the Fund, the Investment Manager or the Sub-Adviser 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) You shall have received on the Closing Date an opinion of Xxxxxxx
Xxxxxxx & Xxxxxxxx, counsel for the Fund, dated the Closing Date and addressed
to you 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
Xxxxxxxx & Xxxxxxxx will be permitted to rely on the opinion of Xxxxx Xxxxxxx
LLP.
22
(d) You shall have received on the Closing Date an opinion of Xxxxxx X.
Xxxxxxx, counsel for the Investment Manager, dated the Closing Date and
addressed to you as Representatives of the several Underwriters, substantially
to the effect set forth in Exhibit B hereto.
(e) You shall have received on the Closing Date an opinion of Xxxxx X.
Xxxxxxxx, counsel for the Sub-Adviser, dated the Closing Date and addressed to
you as Representatives of the several Underwriters, substantially to the effect
set forth in Exhibit C hereto.
(f) 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, the Advisers 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.
(g) You shall have received letters addressed to you, as Representatives of
the several Underwriters, dated the date hereof and the Closing Date, from KPMG
LLP, independent certified public accountants, substantially in the forms
heretofore approved by you.
(h) (i) all the representations and warranties of the Fund, the Investment
Manager and the Sub-Adviser contained in this Agreement that are qualified by a
materiality standard are true and correct, and all the representations and
warranties of the Fund, the Investment Manager and the Sub-Adviser 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, the Investment Manager and the
Sub-Adviser, dated the Closing Date and signed by the chief executive officer
and the chief financial officer of each of the Fund, the Investment Manager and
the Sub-Adviser (or such other officers as are acceptable to you), to the effect
set forth in Section 10(j) 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 real estate securities generally) in the
condition (financial or other), assets or results of operations of the Fund or
the Advisers;
(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 Sub-Adviser shall have been issued and no proceedings
for such purpose or for the purpose of
23
commencing an enforcement action against the Fund, the Investment Manager, the
Sub-Adviser 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 Sub-Adviser 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 Sub-Adviser 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;
(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); and
(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).
(i) Neither the Fund nor either of the Advisers 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.
(j) 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, the Investment Manager and the Sub-Adviser (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), the representations and warranties of
the Investment Manager (with respect to the certificate from such officers of
the Investment Manager) and the representations and warranties of the
Sub-Adviser (with respect to the certificate from such officers of the
Sub-Adviser) 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), the representations and
warranties of the Investment Manager (with
24
respect to the certificate from such officers of the Investment Manager) and
the representations and warranties of the Sub-Adviser (with respect to the
certificate from such officers of the Sub-Adviser) 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 real
estate 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), the Investment Manager (with respect to the certificate from
such officers of the Investment Manager) or the Sub-Adviser (with respect to the
certificate from such officers of the Sub-Adviser);
(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), the Investment Manager (with respect to
the certificate from such officers of the Investment Manager) or the Sub-Adviser
(with respect to the certificate from such officers of the Sub-Adviser) has been
issued and no proceedings for any such purpose or for the purpose of commencing
an enforcement action against the Fund (with respect to the certificate from
such Fund officers), the Investment Manager (with respect to the certificate
from such officers of the Investment Manager) or the Sub-Adviser (with respect
to the certificate from such officers of the Sub-Adviser) 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 certificate from such Fund
officers), the Investment Manager (with respect to certificate from such
officers of the Investment Manager) and the Sub-Adviser (with respect to
certificate from such officers of the Sub-Adviser) has performed and complied in
all material respects with all agreements that this Agreement require it to
perform by such Closing Date;
(vi) none of the Fund (with respect to the certificate from such officers
of the Fund), the Investment Manager (with respect to the certificate from such
officers of the Investment Manager) or the Sub-Adviser (with respect to the
certificate from such officers of the Sub-Adviser) has sustained any material
loss or interference with its business from any court or from legislative or
other governmental action, order or decree or from any other occurrence not
described in the Registration Statement and the Prospectus and any amendment or
supplement to either of them; and
25
(vii) with respect to the certificate from such officers of the Fund, there
has not been any change in the capital stock of the Fund nor any material
increase in the debt of the Fund from that set forth in the Prospectus (and any
amendment or supplement thereto) and the Fund has not sustained any material
liabilities or obligations, direct or contingent, other than those reflected in
or contemplated by the Registration Statement or the Prospectus (or any
amendment or supplement thereto).
(k) The Fund and the Advisers 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, the
Investment Manager or the Sub-Adviser 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, the Investment Manager or the
Sub-Adviser 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 Advisers 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 10 except that, if any Option Closing Date is other than
the Closing Date, the certificates, opinions and letters referred to in
paragraphs 10(c), 10(d), 10(e), 10(f), 10(g), 10(j) and 10(k) and this paragraph
shall be dated the Option Closing Date in question and the opinions called for
by paragraphs 10(c), 10(d), 10(e), 10(f) and 10(g) 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 13 hereof if they existed on or prior to the Closing Date.
11. 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
26
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; (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.
12. 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
Advisers. In any such case which does not result in termination of this
Agreement, either you or the Fund shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and the Prospectus or any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
such default of any such Underwriter
27
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 12 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
13. 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, the Investment Manager or the Sub-Adviser by notice to
the Fund, the Investment Manager or the Sub-Adviser 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, American Stock Exchange, the Nasdaq National Market or the Nasdaq Stock
Market shall have been suspended or limited or minimum prices shall have been
established on such Exchanges, the Nasdaq National Market or the Nasdaq Stock
Market, (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, the Investment Manager
or the Sub-Adviser by telegram, telecopy or telephone but shall be subsequently
confirmed by letter.
14. 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
last sentence of the second paragraph, the third paragraph, the first sentence
of the ninth paragraph, the tenth paragraph, the eleventh paragraph, the
thirteenth paragraph and the fourteenth 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, including in Sections 6(b) and 9 hereof.
15. MISCELLANEOUS. Except as otherwise provided in Sections 5, 12 and 13
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered:
28
(a) if to the Fund, at the office of the Fund at:
Real Estate Income Fund Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: [ ]
(b) if to the Investment Manager, at the office of the Investment Manager
at:
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
(c) if to the Sub-Adviser, at the office of the Sub-Adviser at:
Two Seaport Lane
World Trade Center East
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
(d) or if to you as Representatives of the Underwriters, to:
Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
Underwriters, the Fund, the Advisers, their directors, partners and officers,
and the other controlling persons referred to in Section 9 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.
9. 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.
[END OF AGREEMENT - SIGNATURE PAGE FOLLOWS]
29
Please confirm that the foregoing correctly sets forth the agreement among
the Fund, the Investment Manager, the Sub-Adviser and the several Underwriters.
Very truly yours,
REAL ESTATE INCOME FUND INC.
By: ____________________________
Name:
Title:
CITI FUND MANAGEMENT INC.
By: ____________________________
Name:
Title:
AEW MANAGEMENT AND ADVISORS, L.P.
By: AEW Investment Group Inc.,
its General Partner
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.
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
Xxxxx Fargo Securities, LLC
Advest, Inc.
H&R Block Financial Advisors, Inc.
McDonald Investments Inc., a KeyCorp Company
Wedbush Xxxxxx Securities, Inc.
As Representatives of the Underwriters
By: XXXXXXX XXXXX XXXXXX INC.
30
By:_____________________________
Name:
Title:
SCHEDULE I
Real Estate Income Fund Inc.
Underwriter Number of Shares
----------- ----------------
Xxxxxxx Xxxxx Barney Inc. ......................... [ ]
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated .............. [ ]
Xxxxx Fargo Securities, LLC ....................... [ ]
Advest, Inc. ...................................... [ ]
H&R Block Financial Advisors, Inc. ................ [ ]
McDonald Investments Inc., a KeyCorp Company ...... [ ]
Wedbush Xxxxxx Securities, Inc. ................... [ ]
Total ............................................. [ ]
===========
31
Exhibit A
DRAFT PROVISIONS OF OPINION OF
XXXXXXX XXXXXXX & XXXXXXXX
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) filed an Application for Authority to do 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) on July __, 2002, and so far as shown by the
records of the Department of State of the State of New York, the Fund is still
authorized to do business in the State of New York;
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, Bylaws and under the Maryland General Corporation Law
in all material respects;
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;
The Shares have been duly authorized and, upon payment and delivery 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 upon issuance therof by the Fund. 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;
Such counsel has been advised by the Fund that the Shares have been authorized
for listing, subject to notice of issuance, on the NYSE; 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;
The Registration Statement and all post-effective amendments, if any, have
become effective under the 1933 Act and the 1933 Act Rules and Regulations and
the Prospectus was filed on July __, 2002 pursuant to Rule 497(h) of the 1933
Act Rules and Regulations, and, 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 has been issued and no proceedings for that purpose
have been instituted or threatened by the Commission;
32
(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 (except for the Custodian Agreement) 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, and except as the enforceability thereof may be
limited by considerations of public policy;
The issue 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;
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;
To the knowledge of such counsel, (A) other than as described or contemplated in
the Prospectus (and any amendment or supplement thereto), there are no legal or
governmental proceedings pending or threatened against the Fund, or to which the
Fund or any of its properties is subject, which are required to be described in
the Prospectus (and any amendment or supplement thereto) and (B) there are no
agreements, contracts, indentures, leases or other instruments that are required
to be described in the Prospectus (and any amendment or supplement thereto) or
to be filed as an exhibit to the Registration Statement that are not described
or filed as required, as the case may be;
The statements made in the Prospectus under the captions "Description of Shares
- Common Shares", "Investment Manager and Sub-Adviser" and "Management of the
Fund," 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
33
accurate summaries of the terms of such statutes, rules and regulations or
contracts and other documents in all material respects;
The statements made in 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;
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;
The Fund is duly registered with the Commission under the 1940 Act and the 1940
Act Rules and Regulations as a closed-end, non-diversified management investment
company and, to such counsel's knowledge, no order of suspension or revocation
of such registration under the 1940 Act and the 1940 Act Rules and Regulations
has been issued or proceedings therefor initiated or threatened by the
Commission; the provisions of the Charter and Bylaws do not violate the
provisions of the 1940 Act or the 1940 Act Rules and Regulations; and the
investment policies and restrictions described in 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;
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;
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 KPMG 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
34
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 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.
35
Exhibit B
DRAFT PROVISIONS OF OPINION OF
CITI FUND MANAGEMENT INC.
Based on Certificates of the Secretary of State of the State of Delaware, the
Investment Manager 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). Based on
a Certificate of the Secretary of State of the State of Connecticut, the
Investment Manager is duly registered and qualified to conduct its business and
is in good standing in the State of Connecticut (which is the only jurisdiction
or place where the nature of the Investment Manager's properties or the conduct
of its business requires such registration or qualification except where the
failure to so register or qualify does not have a material adverse effect on the
condition (financial or other), assets or results of operations of the
Investment Manager or on the ability of the Investment Manager to perform its
obligations under this Agreement and the Advisory Agreements);
The Investment Manager is duly registered with the Commission as an investment
adviser under the Advisers Act and is not prohibited by the Advisers Act, the
Advisers Act Rules and Regulations, the 1940 Act or the 1940 Act Rules and
Regulations from acting under the Advisory Agreements for the Fund as
contemplated by the Prospectus; and to such counsel's knowledge, no order of
suspension or revocation of such registration under the Advisers Act and the
Advisers Act Rules and Regulations has been issued and proceedings for that
purpose are not pending before or threatened by the Commission;
Each of this Agreement and the Advisory Agreements has been duly authorized,
executed and delivered by the Investment Manager, and the Advisory Agreements,
assuming that the Advisory 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;
Neither the execution, delivery or performance of this Agreement or the Advisory
Agreements by the Investment Manager 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 such 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
Advisory Agreements, nor will such action violate the certificate of
incorporation or by-laws of the Investment Manager or any federal or Connecticut
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
Connecticut statute or the Delaware General Corporation Law or by any court or
B-1
governmental agency or body having jurisdiction over the Investment Manager or
any of its properties;
No consent, approval, authorization, order, registration, filing or
qualification of or with any federal or Connecticut 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
Connecticut 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 Advisory Agreements, except such consents, approvals, authorizations,
orders, registrations, filings or qualifications as have been obtained or made
prior to the date hereof;
To the knowledge of such counsel, there are no legal or governmental proceedings
pending or threatened against the Investment Manager, or to which the Investment
Manager 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) that are not described as required.
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 KPMG
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 concerning the Investment Manager or omitted
to state a material fact concerning the Investment Manager 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 concerning
the Investment Manager or omits to state any material fact concerning the
Investment Manager 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.
B-2
Exhibit C
DRAFT PROVISIONS OF OPINION OF
AEW MANAGEMENT AND ADVISORS, L.P.
Based on Certificates of the Secretary of State of the state of Delaware, the
Sub-Adviser has been duly formed and is validly existing as a limited
partnership under the laws of the State of Delaware with full limited
partnership 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). Based on a Certificate of the Secretary of the Commonwealth of
the Commonwealth of Massachusetts, the Sub-Adviser is duly registered and
qualified to conduct its business and is legally existing in the Commonwealth of
Massachusetts (which is the only jurisdiction or place where the nature of the
Sub-Adviser's 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 Sub-Adviser or on the ability of
the Sub-Adviser to perform its obligations under this Agreement and the
Sub-Advisory Agreement);
The Sub-Adviser 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 Sub-Advisory Agreement for the Fund as contemplated by the
Prospectus; and to such counsel's knowledge, no order of suspension or
revocation of such registration under the Advisers Act and the Advisers Act
Rules and Regulations has been issued and proceedings for that purpose are not
pending before or threatened by the Commission;
Each of this Agreement and 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;
Neither the execution, delivery or performance of this Agreement or the
Sub-Advisory Agreement by the Sub-Adviser nor consummation by the Sub-Adviser 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 Sub-Adviser is a party or by which its
properties are bound except where such 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 this Agreement and the Sub-Advisory Agreement, nor
will such action violate the certificate of limited partnership or the limited
partnership agreement of the Sub-Adviser or any federal or Massachusetts statute
or the Delaware Revised Uniform Limited Partnership Act or any rules or
regulations
thereunder or order known to such counsel issued pursuant to any
federal or Massachusetts statute or the Delaware Revised Uniform
Limited Partnership Act or by any court or governmental agency or body having
jurisdiction over the Sub-Adviser or any of its properties;
No consent, approval, authorization, order, registration, filing or
qualification of or with any federal or Massachusetts governmental agency or
body or any Delaware governmental agency or body acting pursuant to the Delaware
Revised Uniform Limited Partnership Act or, to such counsel's knowledge, any
federal or Massachusetts court or any Delaware court acting pursuant to the
Delaware Revised Uniform Limited Partnership Act is required on the part of the
Sub-Adviser for the execution, delivery and performance by the Sub-Adviser of
this Agreement and the Sub-Advisory Agreement, except such consents, approvals,
authorizations, orders, registrations, filings or qualifications as have been
obtained or made prior to the date hereof;
To the knowledge of such counsel, there are no legal or governmental proceedings
pending or threatened against the Sub-Adviser, or to which the Sub-Adviser 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) that are not described as required.
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 KPMG
LLP and with counsel to the Fund and the Investment Manager. 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 concerning the
Sub-Adviser or omitted to state a material fact concerning the Sub-Adviser
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 concerning the Sub-Adviser or omits to state any material fact
concerning the Sub-Adviser 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.
2
