EXHIBIT (h)(1)
_______________Shares
DEBT STRATEGIES FUND III, INC.
(a Maryland corporation)
Common Stock
(Par Value $0.10 Per Share)
PURCHASE AGREEMENT
________________, 1998
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
Xxxxxxx Xxxxx World Headquarters
World Financial Center
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs and Mesdames:
Debt Strategies Fund III, Inc., a Maryland corporation (the "Fund"), and
Fund Asset Management, L.P., a Delaware limited partnership (the "Adviser"),
each confirms its agreement with Xxxxxxx Xxxxx & Co., Inc., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated (the "Underwriter"), with respect to the
sale by the Fund and the purchase by the Underwriter of ___________ shares of
common stock, par value $.10 per share, of the Fund (the "Common Stock"), and,
with respect to the grant by the Fund to the Underwriter of the option described
in Section 2 hereof to purchase all or any part of ___________ additional shares
of Common Stock to cover over-allotments. The aforesaid ____________ shares
(the "Initial Shares"), together with all or any part of the ____________
additional shares of Common Stock subject to the option described in Section 2
hereof (the "Option Shares"), hereinafter are referred to collectively as the
"Shares".
Prior to the purchase and public offering of the Shares by the Underwriter,
the Fund and the Underwriter shall enter into an agreement substantially in the
form of Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement may
take the form of an exchange of any standard form of written telecommunication
between the Fund and the Underwriter and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the Shares
will be governed by this Agreement, as supplemented by the Pricing Agreement.
From and after the date of the execution and delivery of the Pricing Agreement,
this Agreement shall be deemed to incorporate the Pricing Agreement.
The Fund has filed with the Securities and Exchange Commission (the
"Commission") a notification on Form N-8A of registration of the Fund as an
investment company under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and a registration statement on Form N-2 (No. 333-
________) and a related preliminary prospectus for the registration of the
Shares under the Securities Act of 1933, as amended (the "1933 Act"), the
Investment Company Act, and the rules and regulations of the Commission under
the 1933 Act and the Investment Company Act (together, the "Rules and
Regulations"), and has filed such amendments to such registration statement on
Form N-2, if any, and such amended preliminary prospectuses as may have been
required to the date hereof. The Fund will prepare and file such additional
amendments thereto and such amended prospectuses as hereafter may be required.
Such registration statement (as amended at the time it becomes effective, if
applicable) and the prospectus constituting a part thereof (including in each
case the information, if any, deemed to be a part thereof pursuant to Rule
430A(b) or Rule 434 of the Rules and Regulations), as from time to time amended
or supplemented pursuant to the 1933 Act, are referred to hereinafter as the
"Registration Statement" and the "Prospectus", respectively; except that if any
revised prospectus shall be provided to the Underwriter by the Fund for use in
connection with the offering of the Shares which differs from the Prospectus on
file at the Commission at the time the Registration Statement becomes effective
(whether such revised prospectus is required to be filed by the Fund pursuant to
Rule 497(c) or Rule 497(h) of the Rules and Regulations), the term "Prospectus"
shall refer to each such revised prospectus from and after the time it is first
provided to the Underwriter for such use. If the Fund elects to rely on Rule
434 under the Rules and Regulations, all references to the Prospectus shall be
deemed to include, without limitation, the form of prospectus and the term
sheet, taken together, provided to the Underwriter by the Fund in reliance on
Rule 434 under the 1933 Act (the "Rule 434 Prospectus"). If the Fund files a
registration statement to register a portion of the Shares and relies on Rule
462(b) for such registration statement to become effective upon filing with the
Commission (the "Rule 462 Registration Statement"), then any reference to
"Registration Statement" herein shall be deemed to include both the registration
statement referred to above (No. 333-____________) and the Rule 462 Registration
Statement, as each such registration statement may be amended pursuant to the
1933 Act.
The Fund understands that the Underwriter proposes to make a public
offering of the Shares as soon as the Underwriter deems advisable after the
Registration Statement becomes effective and the Pricing Agreement has been
executed and delivered.
SECTION 1. Representations and Warranties.
(a) The Fund and the Adviser each severally represents and warrants to the
Underwriter as of the date hereof and as of the date of the Pricing
Agreement (such later date hereinafter being referred to as the
"Representation Date") as follows:
(i) At the time the Registration Statement becomes effective and at
the Representation Date, the Registration Statement will comply in all
material respects with the requirements of the 1933 Act, the
Investment Company Act and the Rules and Regulations and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. At the time the Registration
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Statement becomes effective, at the Representation Date and at Closing
Time referred to in Section 2, the Prospectus (unless the term
"Prospectus" refers to a prospectus which has been provided to the
Underwriter by the Fund for use in connection with the offering of the
Shares which differs from the Prospectus on file with the Commission
at the time the Registration Statement becomes effective, in which
case at the time such prospectus first is provided to the Underwriter
for such use) will not contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the representations
and warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or the Prospectus made in
reliance upon and in conformity with information furnished to the Fund
in writing by the Underwriter expressly for use in the Registration
Statement or in the Prospectus.
(ii) The accountants who certified the statement of assets,
liabilities and capital included in the Registration Statement are
independent public accountants as required by the 1933 Act and the
Rules and Regulations.
(iii) The statement of assets, liabilities and capital included in
the Registration Statement presents fairly the financial position of
the Fund as at the date indicated and said statement has been prepared
in conformity with generally accepted accounting principles.
(iv) Since the respective dates as of which information is given in
the Registration Statement and in the Prospectus, except as otherwise
stated therein, (A) there has been no material adverse change in the
condition, financial or otherwise, of the Fund, or in the earnings,
business affairs or business prospects of the Fund, whether or not
arising in the ordinary course of business, (B) there have been no
transactions entered into by the Fund which are material to the Fund
other than those in the ordinary course of business and (C) there has
been no dividend or distribution of any kind declared, paid or made by
the Fund on any class of its capital stock.
(v) The Fund has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Maryland
with corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement; the Fund is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required; and the Fund has no
subsidiaries.
(vi) The Fund is registered with the Commission under the Investment
Company Act as a closed-end, diversified, management investment
company, and
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no order of suspension or revocation of such registration
has been issued or proceedings therefor initiated or threatened by the
Commission.
(vii) The authorized, issued and outstanding capital stock of the
Fund is as set forth in the Prospectus under the caption "Description
of Capital Stock"; the Shares have been duly authorized for issuance
and sale to the Underwriter pursuant to this Agreement and, when
issued and delivered by the Fund pursuant to this Agreement against
payment of the consideration set forth in the Pricing Agreement, will
be validly issued and fully paid and nonassessable; the Shares conform
in all material respects to all statements relating thereto contained
in the Registration Statement; and the issuance of the Shares to be
purchased by the Underwriter is not subject to preemptive rights.
(viii) The Fund is not in violation of its articles of incorporation,
as amended (the "Charter"), or its by-laws, as amended (the "By-
Laws"), or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any material
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or its properties may
be bound; and the execution and delivery of this Agreement, the
Pricing Agreement and the Investment Advisory Agreement and the
Custody Agreement referred to in the Registration Statement (as used
herein, the "Advisory Agreement" and the "Custody Agreement",
respectively) and the consummation of the transactions contemplated
herein and therein have been duly authorized by all necessary
corporate action and will not conflict with or constitute a breach of,
or a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Fund
pursuant to any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Fund is a
party or by which it may be bound or to which any of the property or
assets of the Fund is subject, nor will such action result in any
violation of the provisions of the Charter or the By-Laws of the Fund,
or, to the best knowledge of the Fund and the Adviser, any law,
administrative regulation or administrative or court decree; and no
consent, approval, authorization or order of any court or governmental
authority or agency is required for the consummation by the Fund of
the transactions contemplated by this Agreement, the Pricing
Agreement, the Advisory Agreement and the Custody Agreement, except
such as has been obtained under the Investment Company Act or as may
be required under the 1933 Act or state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriter.
(ix) The Fund owns or possesses or has obtained all material
governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to lease or own, as the case may be, and to
operate its properties and to carry on its businesses as contemplated
in the Prospectus and the Fund has not received
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any notice of proceedings relating to the revocation or modification
of any such licenses, permits, covenants, orders, approvals or
authorizations.
(x) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Fund, threatened against or affecting, the Fund,
which might result in any material adverse change in the condition,
financial or otherwise, business affairs or business prospects of the
Fund, or might materially and adversely affect the properties or
assets of the Fund; and there are no material contracts or documents
of the Fund which are required to be filed as exhibits to the
Registration Statement by the 1933 Act, the Investment Company Act or
the Rules and Regulations which have not been so filed.
(xi) There are no contracts or documents which are required to be
described in the Registration Statement or the Prospectus or to be
filed as exhibits thereto which have not been so described and filed
as required.
(xii) The Fund owns or possesses, or can acquire on reasonable terms,
adequate trademarks, service marks and trade names necessary to
conduct its business as described in the Registration Statement, and
the Fund has not received any notice of infringement of or conflict
with asserted rights of others with respect to any trademarks, service
marks or trade names which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would materially
adversely affect the conduct of the business, operations, financial
condition or income of the Fund.
(b) The Adviser represents and warrants to the Underwriter as of the date
hereof and as of the Representation Date as follows:
(i) The Adviser has been duly organized as a limited partnership
under the laws of the State of Delaware, with power and authority to
conduct its business as described in the Prospectus.
(ii) The Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Investment Advisers
Act"), and is not prohibited by the Investment Advisers Act or the
Investment Company Act, or the rules and regulations under such acts,
from acting under the Advisory Agreement for the Fund as contemplated
by the Prospectus.
(iii) This Agreement has been duly authorized, executed and delivered
by the Adviser; the Advisory Agreement has been duly authorized,
executed and delivered by the Adviser and constitutes a valid and
binding obligation of the Adviser, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization or other laws relating to or affecting creditors'
rights and to general equitable principles; and neither the execution
and
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delivery of this Agreement or the Advisory Agreement, nor the
performance by the Adviser of its obligations hereunder or thereunder
will conflict with, or result in a breach of any of the terms and
provisions of, or constitute, with or without the giving of notice or
the lapse of time or both, a default under, any agreement or
instrument to which the Adviser is a party or by which it is bound, or
any law, order, rule or regulation applicable to it of any
jurisdiction, court, Federal or state regulatory body, administrative
agency or other governmental body, stock exchange or securities
association having jurisdiction over the Adviser or its respective
properties or operations.
(iv) The Adviser has the financial resources available to it necessary
for the performance of its services and obligations as contemplated in
the Prospectus.
(v) Any advertisement approved by the Adviser for use in the public
offering of the Shares pursuant to Rule 482 under the Rules and
Regulations (an "Omitting Prospectus") complies with the requirements
of such Rule 482.
(c) Any certificate signed by any officer of the Fund or the Adviser and
delivered to the Underwriter or to counsel to the Fund and the Underwriter shall
be deemed a representation and warranty by the Fund or the Adviser, as the case
may be, to the Underwriter, as to the matters covered thereby.
SECTION 2. Sale and Delivery to the Underwriter; Closing.
(a) On the basis of the representations and warranties herein contained, and
subject to the terms and conditions herein set forth, the Fund agrees to sell
the Initial Shares to the Underwriter and the Underwriter agrees to purchase the
Initial Shares from the Fund, at the price per share set forth in the Pricing
Agreement.
(i) If the Fund has elected not to rely upon Rule 430A under the Rules
and Regulations, the initial public offering prices and the purchase
price per share to be paid by the Underwriter for the Shares have been
determined and set forth in the Pricing Agreement, dated the date
hereof, and an amendment to the Registration Statement and the
Prospectus will be filed before the Registration Statement becomes
effective.
(ii) If the Fund has elected to rely upon Rule 430A under the Rules
and Regulations, the purchase price per share to be paid by the
Underwriter for the Shares shall be an amount equal to the applicable
initial public offering price, less an amount per share to be
determined by agreement between the Underwriter and the Fund. The
initial public offering price per share shall be a fixed price based
upon the number of Shares purchased in a single transaction to be
determined by agreement between the Underwriter and the Fund. The
initial public offering price and the purchase price, when so
determined, shall be set forth in the Pricing Agreement. In the event
that such prices have not been agreed upon and the Pricing Agreement
has not been executed and delivered by all parties thereto by the
close of business on the fourth business day following the date of
this
6
Agreement, this Agreement shall terminate forthwith, without
liability of any party to any other party, except as provided in
Section 4, unless otherwise agreed to by the Fund, the Adviser and the
Underwriter.
In addition, on the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, the Fund
hereby grants an option to the Underwriter to purchase all or any part of the
Option Shares at the price per share set forth above. The option hereby granted
will expire 45 days after the date hereof (or, if the Fund has elected to rely
upon Rule 430A under the Rules and Regulations, 45 days after the execution of
the Pricing Agreement) and may be exercised only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Shares upon notice by the Underwriter to the Fund
setting forth the number of Option Shares as to which the Underwriter is then
exercising the option and the time, date and place of payment and delivery for
such Option Shares. Any such time and date of delivery (a "Date of Delivery")
shall be determined by the Underwriter but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to
Closing Time, as hereinafter defined, unless otherwise agreed upon by the
Underwriter and the Fund.
(b) Payment of the purchase price for, and delivery of certificates for, the
Initial Shares shall be made at the office of Xxxxx & Xxxx LLP, Xxx Xxxxx Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, or at such other place as shall be agreed
upon by the Underwriter and the Fund, at 9:00 A.M. on the third business day
following the date the Registration Statement becomes effective or, if the Fund
has elected to rely upon Rule 430A under the Rules and Regulations, the third
business day after execution of the Pricing Agreement (or, if pricing takes
place after 4:30 P.M. on either the date the Registration Statement becomes
effective or the date of execution of the Pricing Agreement, as applicable, the
fourth business day after such applicable date), or such other time not later
than ten business days after such date as shall be agreed upon by the
Underwriter and the Fund (such time and date of payment and delivery herein
being referred to as "Closing Time"). In addition, in the event that any or all
of the Option Shares are purchased by the Underwriter, payment of the purchase
price for, and delivery of certificates for, such Option Shares shall be made at
the above-mentioned office of Xxxxx & Wood LLP, or at such other place as shall
be agreed upon mutually by the Fund and the Underwriter, on each Date of
Delivery as specified in the notice from the Underwriter to the Fund. Payment
shall be made to the Fund by a Federal Funds check or checks or similar same-day
funds payable to the order of the Fund, against delivery to the Underwriter of
certificates for the Shares to be purchased by it. Certificates for the Initial
Shares and Option Shares shall be in such denominations and registered in such
names as the Underwriter may request in writing at least two business days
before Closing Time or the Date of Delivery, as the case may be. The
certificates for the Initial Shares and the Option Shares will be made available
by the Fund for examination by the Underwriter not later than 10:00 A.M. on the
last business day prior to Closing Time or the Date of Delivery, as the case may
be.
SECTION 3. Covenants of the Fund. The Fund covenants with the
Underwriter as follows:
(a) The Fund will use its best efforts (i) to cause the Registration
Statement to become effective under the 1933 Act, and will advise the
Underwriter promptly as to the
7
time at which the Registration Statement and any amendments thereto (including
any post-effective amendment) becomes so effective and (ii) if required, to
cause the issuance of any orders exempting the Fund from any provisions of the
Investment Company Act, and the Fund will advise the Underwriter promptly as
to the time at which any such orders are granted.
(b) The Fund will notify the Underwriter immediately, and will confirm the
notice in writing, (i) of the effectiveness of the Registration Statement and
any amendments thereto (including any post-effective amendment), (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose, and (v) of the issuance by the Commission of an order of suspension
or revocation of the notification on Form N-8A of registration of the Fund as
an investment company under the Investment Company Act or the initiation of
any proceeding for that purpose. The Fund will make every reasonable effort to
prevent the issuance of any stop order described in subsection (vi) hereunder
or any order of suspension or revocation described in subsection (vii)
hereunder and, if any such stop order or order of suspension or revocation is
issued, to obtain the lifting thereof at the earliest possible moment. If the
Fund elects to rely on Rule 434 under the Rules and Regulations, the Fund will
prepare a term sheet that complies with the requirements of Rule 434 under the
Rules and Regulations and the Fund will provide the Underwriter with copies of
the form of Rule 434 Prospectus, in such number as the Underwriter may
reasonably request by the close of business in New York on the business day
immediately succeeding the date of the Pricing Agreement.
(c) The Fund will give the Underwriter notice of its intention to file any
amendment to the Registration Statement (including any post-effective
amendment) or any amendment or supplement to the Prospectus (including any
revised prospectus which the Fund proposes for use by the Underwriter in
connection with the offering of the Shares, which differs from the prospectus
on file at the Commission at the time the Registration Statement becomes
effective, whether such revised prospectus is required to be filed pursuant
to Rule 497(c) or Rule 497(h) of the Rules and Regulations or any term sheet
prepared in reliance on Rule 434 of the Rules and Regulations), whether
pursuant to the Investment Company Act, the 1933 Act, or otherwise, and will
furnish the Underwriter with copies of any such amendment or supplement a
reasonable amount of time prior to such proposed filing or use, as the case
may be, and will not file any such amendment or supplement to which the
Underwriter reasonably shall object.
(d) The Fund will deliver to the Underwriter, as soon as practicable, two
signed copies of the notification of registration and registration statement
as originally filed and of each amendment thereto, in each case with two sets
of the exhibits filed therewith, and also will deliver to the Underwriter a
conformed copy of the registration statement as originally filed and of each
amendment thereto (but without exhibits to the registration statement or any
such amendment) for the Underwriter.
8
(e) The Fund will furnish to the Underwriter, from time to time during the
period when the Prospectus is required to be delivered under the 1933 Act,
such number of copies of the Prospectus (as amended or supplemented) as the
Underwriter reasonably may request for the purposes contemplated by the 1933
Act, or the Rules and Regulations.
(f) If any event shall occur as a result of which it is necessary, in the
opinion of counsel to the Fund and the Underwriter, to amend or supplement the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, the Fund
forthwith will amend or supplement the Prospectus by preparing and furnishing
to the Underwriter a reasonable number of copies of an amendment or amendments
of or a supplement or supplements to, the Prospectus (in form and substance
satisfactory to counsel to the Fund and the Underwriter), so that, as so
amended or supplemented, the Prospectus will not contain an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances existing at the time
the Prospectus is delivered to a purchaser, not misleading.
(g) The Fund will endeavor, in cooperation with the Underwriter, to qualify
the Shares for offering and sale under the applicable securities laws of such
states and other jurisdictions of the United States as the Underwriter may
designate, and will maintain such qualifications in effect for a period of not
less than one year after the date hereof. The Fund will file such statements
and reports as may be required by the laws of each jurisdiction in which the
Shares have been qualified as above provided.
(h) The Fund will make generally available to its security holders as soon as
practicable, but no later than 60 days after the close of the period covered
thereby, an earnings statement (in form complying with the provisions of Rule
158 of the Rules and Regulations) covering a twelve-month period beginning not
later than the first day of the Fund's fiscal quarter next following the
"effective" date (as defined in said Rule 158) of the Registration Statement.
(i) Between the date of this Agreement and the termination of any trading
restrictions or Closing Time, whichever is later, the Fund will not, without
your prior consent, offer or sell, or enter into any agreement to sell, any
equity or equity related securities of the Fund other than the Shares and
shares of Common Stock issued in reinvestment of dividends or distributions.
(j) If, at the time that the Registration Statement becomes effective, any
information shall have been omitted therefrom in reliance upon Rule 430A of
the Rules and Regulations, then immediately following the execution of the
Pricing Agreement, the Fund will prepare, and file or transmit for filing with
the Commission in accordance with such Rule 430A and Rule 497(h) of the Rules
and Regulations, copies of the amended Prospectus, or, if required by such
Rule 430A, a post-effective amendment to the Registration Statement (including
an amended Prospectus), containing all information so omitted.
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(k) The Fund will use its best efforts to effect the listing of the Shares on
the New York Stock Exchange so that trading on such Exchange will begin no
later than two weeks from the date of the Prospectus.
SECTION 4. Payment of Expenses. The Fund will pay all expenses incident
to the performance of its obligations under this Agreement, including, but not
limited to, expenses relating to (i) the printing and filing of the registration
statement as originally filed and of each amendment thereto, (ii) the printing
of this Agreement and the Pricing Agreement, (iii) the preparation, issuance and
delivery of the certificates for the Shares to the Underwriter, (iv) the fees
and disbursements of the Fund's counsel and accountants, (v) the qualification
of the Shares under securities laws in accordance with the provisions of Section
3(g) of this Agreement, including filing fees and any reasonable fees or
disbursements of counsel in connection therewith and in connection with the
preparation of the Blue Sky Survey, (vi) the printing and delivery to the
Underwriter of copies of the registration statement as originally filed and of
each amendment thereto, of the preliminary prospectus, and of the Prospectus and
any amendments or supplements thereto, (vii) the printing and delivery to the
Underwriter of copies of the Blue Sky Survey, (viii) the fees and expenses
incurred with respect to the filing with the National Association of Securities
Dealers, Inc. and (ix) the fees and expenses incurred with respect to the
listing of the Shares on the New York Stock Exchange.
If this Agreement is terminated by the Underwriter in accordance with the
provisions of Section 5 or Section 9(a)(i), the Fund or the Adviser shall
reimburse the Underwriter for all of its reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of counsel to the Fund and the
Underwriter. In the event the transactions contemplated hereunder are not
consummated, the Adviser agrees to pay all of the costs and expenses set forth
in the first paragraph of this Section 4 which the Fund would have paid if such
transactions had been consummated.
SECTION 5. Conditions of Underwriter's Obligations. The obligations of
the Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Fund and the Adviser herein contained, to the performance by
the Fund and the Adviser of their respective obligations hereunder, and to the
following further conditions:
(a) The Registration Statement shall have become effective not later than
5:30 P.M., on the date of this Agreement, or at a later time and date not
later, however, than 5:30 P.M. on the first business day following the date
hereof, or at such later time and date as may be approved by the Underwriter,
and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission. If the Fund
has elected to rely upon Rule 430A of the Rules and Regulations, the price of
the Shares and any price-related information previously omitted from the
effective Registration Statement pursuant to such Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 497(h) of the Rules
and Regulations within the prescribed time period, and prior to Closing Time
the Fund shall have provided evidence satisfactory to the Underwriter of such
timely filing, or a post-effective amendment providing such information shall
have been filed promptly and declared effective in accordance with the
requirements of Rule 430A of the Rules and Regulations.
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(b) At Closing Time, the Underwriter shall have received:
(1) The favorable opinion, dated as of Closing Time, of Xxxxx & Xxxx LLP,
counsel to the Fund and the Underwriter, to the effect that:
(i) The Fund has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Maryla.
(ii) The Fund has corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement and in the Prospectus.
(iii) The Fund is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required.
(iv) The Shares have been duly authorized for issuance and sale to
the Underwriter pursuant to this Agreement and, when issued and
delivered by the Fund pursuant to this Agreement against payment of
the consideration set forth in the Pricing Agreement, will be validly
issued and fully paid and nonassessable; the issuance of the Shares
is not subject to preemptive rights; and the authorized capital stock
conforms as to legal matters in all material respects to the
description thereof in the Registration Statement under the caption
"Description of Capital Stock."
(v) This Agreement and the Pricing Agreement each has been duly
authorized, executed and delivered by the Fund and each complies with
all applicable provisions of the Investment Company Act.
(vi) The Registration Statement is effective under the 1933 Act and,
to the best of their knowledge and information, no stop order
suspending the effectiveness of the Registration Statement has been
issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission.
(vii) At the time the Registration Statement became effective and at
the Representation Date, the Registration Statement (other than the
financial statements included therein, as to which no opinion need be
rendered) complied as to form in all material respects with the
requirements of the 1933 Act and the Investment Company Act and the
Rules and Regulations. The Rule 434 Prospectus conforms to the
requirements of Rule 434 in all material respects.
(viii) To the best of their knowledge and information, there are no
legal or governmental proceedings pending or threatened against the
Fund which are required to be disclosed in the Registration
Statement, other than those disclosed therein.
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(ix) To the best of their knowledge and information, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments of the Fund required to be described or referred to
in the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed as
exhibits thereto, the descriptions thereof are correct in all
material respects, references thereto are correct, and no default
exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument so described, referred to or filed.
(x) No consent, approval, authorization or order of any court or
governmental authority or agency is required in connection with the
sale of the Shares to the Underwriter, except such as has been
obtained under the 1933 Act, the Investment Company Act or the Rules
and Regulations or such as may be required under state securities
laws; and to the best of their knowledge and information, the
execution and delivery of this Agreement, the Pricing Agreement, the
Advisory Agreement and the Custody Agreement and the consummation of
the transactions contemplated herein and therein will not conflict
with or constitute a breach of, or a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Fund pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which
the Fund is a party or by which it may be bound or to which any of
the property or assets of the Fund is subject, nor will such action
result in any violation of the provisions of the Charter or the By-
Laws of the Fund, or any law or administrative regulation, or, to the
best of their knowledge and information, administrative or court
decree.
(xi) The Advisory Agreement and the Custody Agreement have each been
duly authorized and approved by the Fund and comply as to form in all
material respects with all applicable provisions of the Investment
Company Act, and each has been duly executed by the Fund.
(xii) The Fund is registered with the Commission under the Investment
Company Act as a closed-end, diversified management investment
company, and all required action has been taken by the Fund under the
1933 Act, the Investment Company Act and the Rules and Regulations to
make the public offering and consummate the sale of the Shares
pursuant to this Agreement; the provisions of the Charter and the By-
Laws of the Fund comply as to form in all material respects with the
requirements of the Investment Company Act; and, to the best of their
knowledge and information, no order of suspension or revocation of
such registration under the Investment Company Act, pursuant to
Section 8(e) of the Investment Company Act, has been issued or
proceedings therefor initiated or threatened by the Commission.
12
(xiii) The information in the Prospectus under the caption "Taxes", to
the extent that it constitutes matters of law or legal conclusions,
has been reviewed by them and is correct in all material respects.
(2) The favorable opinion, dated as of Closing Time, of Xxxxxx X. Xxxxxxxx,
Esq., General Counsel to the Adviser, in form and substance satisfactory to
counsel to the Underwriter, to the effect that:
(i) The Adviser has been duly organized as a limited partnership
under the laws of the State of Delaware, with power and authority to
conduct its business as described in the Registration Statement and in
the Prospectus.
(ii) The Adviser is duly registered as an investment adviser under the
Investment Advisers Act and is not prohibited by the Investment
Advisers Act or the Investment Company Act, or the rules and
regulations under such Acts, from acting under the Advisory Agreement
for the Fund as contemplated by the Prospectus.
(iii) This Agreement and the Advisory Agreement have been duly
authorized, executed and delivered by the Adviser, and the Advisory
Agreement constitutes a valid and binding obligation of the Adviser,
enforceable in accordance with its terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization or other laws relating to or
affecting creditors' rights and to general equity principles; and, to
the best of his knowledge and information, neither the execution and
delivery of this Agreement or the Advisory Agreement nor the
performance by the Adviser of its obligations hereunder or thereunder
will conflict with, or result in a breach of, any of the terms and
provisions of, or constitute, with or without the giving of notice or
the lapse of time or both, a default under, any agreement or
instrument to which the Adviser is a party or by which the Adviser is
bound, or any law, order, rule or regulation applicable to the Adviser
of any jurisdiction, court, Federal or state regulatory body,
administrative agency or other governmental body, stock exchange or
securities association having jurisdiction over the Adviser or its
properties or operations.
(iv) To the best of his knowledge and information, the description of
the Adviser in the Registration Statement and in the Prospectus does
not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading.
(3) In giving their opinion required by subsection (b)(1) of this Section,
Xxxxx & Wood LLP additionally shall state that nothing has come to their
attention that would lead them to believe that the Registration Statement
(other than the financial statements included therein, as to which no
opinion need be
13
rendered), at the time it became effective or at the Representation Date,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (other than the
financial statements included therein, as to which no opinion need be
rendered), at the Representation Date (unless the term "Prospectus" refers
to a prospectus which has been provided to the Underwriter by the Fund for
use in connection with the offering of the Shares which differs from the
Prospectus on file at the Commission at the time the Registration Statement
becomes effective, in which case at the time it first is provided to the
Underwriter for such use) or at Closing Time, included an untrue statement
of a material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Xxxxx & Xxxx LLP may rely, as to
matters of fact, upon certificates and written statements of officers and
employees of and accountants for the Fund and the Adviser and of public
officials.
(c) At Closing Time, (i) the Registration Statement and the Prospectus
shall contain all statements which are required to be stated therein in
accordance with the 1933 Act, the Investment Company Act and the Rules and
Regulations and in all material respects shall conform to the requirements of
the 1933 Act, the Investment Company Act and the Rules and Regulations, and
neither the Registration Statement nor the Prospectus shall contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and no action, suit or proceeding at law or in equity
shall be pending or, to the knowledge of the Fund or the Adviser, threatened
against the Fund or the Adviser which would be required to be set forth in the
Prospectus other than as set forth therein, (ii) there shall not have been,
since the date as of which information is given in the Prospectus, any material
adverse change in the condition, financial or otherwise, of the Fund or in its
earnings, business affairs or business prospects, whether or not arising in the
ordinary course of business, from that set forth in the Prospectus, (iii) the
Adviser shall have the financial resources available to it necessary for the
performance of its services and obligations as contemplated in the Prospectus,
and (iv) no proceedings shall be pending or, to the knowledge of the Fund or the
Adviser, threatened against the Fund or the Adviser before or by any Federal,
state or other commission, board or administrative agency wherein an unfavorable
decision, ruling or finding would materially and adversely affect the business,
property, financial condition or income of either the Fund or the Adviser other
than as set forth in the Prospectus, and the Underwriter shall have received, at
Closing Time, a certificate of the President or the Treasurer of the Fund and of
the President or a Vice President of the Adviser dated as of Closing Time,
evidencing compliance with the appropriate provisions of this subsection (c).
(d) At Closing Time, the Underwriter shall have received certificates,
dated as of Closing Time, (i) of the President or the Treasurer of the Fund to
the effect that the representations and warranties of the Fund contained in
Section 1(a) are true and correct with the same force and effect as though
expressly made at and as of Closing Time and,
14
(ii) of the President or a Vice President of the Adviser to the effect that the
representations and warranties of the Adviser contained in Sections 1(a) and (b)
are true and correct with the same force and effect as though expressly made at
and as of Closing Time.
(e) At the time of execution of this Agreement, the Underwriter shall have
received from ____________ a letter, dated such date in form and substance
satisfactory to the Underwriter, to the effect that:
(i) they are independent accountants with respect to the Fund within
the meaning of the 1933 Act and the Rules and Regulations;
(ii) in their opinion, the statement of assets, liabilities and capital
examined by them and included in the Registration Statement complies as
to form in all material respects with the applicable accounting
requirements of the 1933 Act and the Investment Company Act and the
Rules and Regulations; and
(iii) they have performed specified procedures, not constituting
an audit, including a reading of the latest available interim financial
statements of the Fund, a reading of the minute books of the Fund,
inquiries of officials of the Fund responsible for financial accounting
matters and such other inquiries and procedures as may be specified in
such letter, and on the basis of such inquiries and procedures nothing
came to their attention that caused them to believe that at the date of
the latest available statement of assets, liabilities and capital read
by such accountants, or at a subsequent specified date not more than
three days prior to the date of this Agreement, there was any change in
the capital stock or net assets of the Fund as compared with amounts
shown on the statement of assets, liabilities and capital included in
the Prospectus.
(f) At Closing Time, the Underwriter shall have received from __________ a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (e) of this
Section, except that the "specified date" referred to shall be a date not more
than three days prior to Closing Time.
(g) At Closing Time, counsel to the Underwriter shall have been furnished
with such documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the Shares as herein
contemplated and to pass upon related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Fund and
the Adviser in connection with the organization and registration of the Fund
under the Investment Company Act and the issuance and sale of the Shares as
herein and therein contemplated shall be satisfactory in form and substance to
the Underwriter.
15
(h) In the event the Underwriter exercises its option provided in Section
2 hereof to purchase all or any portion of the Option Shares, the
representations and warranties of the Fund and the Adviser contained herein
and the statements in any certificate furnished by the Fund and the Adviser
hereunder shall be true and correct as of each Date of Delivery, and the
Underwriter shall have received:
(i) Certificates, dated the Date of Delivery, of the President or the
Treasurer of the Fund and of the President or a Vice President of the
Adviser confirming that the information contained in the certificate
delivered by each of them at Closing Time pursuant to Section 5(c) or 5(d),
as the case may be, remains true as of such Date of Delivery.
(ii) The favorable opinions of Xxxxx & Wood LLP, counsel to the Fund and
the Underwriter and Xxxxxx X. Xxxxxxxx, Esq., General Counsel of the
Adviser, each in form and substance satisfactory to the Underwriter, dated
such Date of Delivery, relating to the Option Shares and otherwise to the
same effect as the opinions required by Sections 5(b)(1) and (2),
respectively.
(iii) A letter from ____________ in form and substance satisfactory to the
Underwriter and dated such Date of Delivery, substantially the same in
scope and substance as the letter furnished to the Underwriter pursuant to
Section 5(e), except that the "specified date" in the letter furnished
pursuant to this Section 5(h) shall be a date not more than three days
prior to such Date of Delivery.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Underwriter by notice to the Fund at any time at or prior to Closing Time, and
such termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8 hereof
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) The Fund and the Adviser jointly and severally agree to indemnify and
hold harmless the Underwriter and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the information deemed to be part of
the Registration Statement pursuant to Rule 430A or Rule 434 of the Rules
and Regulations, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or supplement
16
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, provided that
(subject to Section 6(d) below) any such settlement is effected with the
written consent of the indemnifying party; and
(iii) against any and all expense whatsoever (including the fees and
disbursements of counsel chosen by the Underwriter) reasonably incurred in
investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement does not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Fund by the
Underwriter expressly for use in the Registration Statement (or any amendment
thereto), including the information deemed to be part of the Registration
Statement pursuant to Rule 430A or Rule 434 of the Rules and Regulations, or any
preliminary prospectus or in the Prospectus (or any amendment or supplement
thereto).
Insofar as this indemnity agreement may permit indemnification for
liabilities under the 1933 Act of any person who is a partner of the Underwriter
or who controls the Underwriter within the meaning of Section 15 of the 1933 Act
and who, at the date of this Agreement, is a director, officer or controlling
person of the Fund, such indemnity agreement is subject to the undertaking of
the Fund in the Registration Statement.
(b) The Underwriter agrees to indemnify and hold harmless the Fund and the
Adviser, their respective directors, each of the Fund's officers who signed the
Registration Statement, and each person, if any, who controls the Fund or the
Adviser within the meaning of Section 15 of the 1933 Act, against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or in any preliminary
prospectus or in the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the Fund
by the Underwriter expressly for use in the Registration Statement (or any
amendment thereto), including the information deemed to be part of the
Registration Statement pursuant to Rule 430A or Rule 434 of the Rules and
Regulations, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) in reliance upon and in conformity with written
information furnished to the Fund by the Underwriter
17
expressly for use in the Registration Statement (or any amendment thereto) or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudicial as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for the fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6 (a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses incurred by such indemnified party, as incurred, (i) in such proportion
as is appropriate to reflect the relative benefits received by the Fund and the
Adviser on the one hand and the Underwriter on the other hand from the offering
of the Shares pursuant to this Agreement or (ii) if the allocation provided by
clause (i) 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 Adviser on the one hand
and of the Underwriter on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
18
The relative benefits received by the Fund and the Adviser on the one hand
and the Underwriter on the other hand in connection with the offering of the
Shares pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Shares pursuant
to this Agreement (before deducting expenses) received by the Fund less the
total underwriting commission received by the Underwriter, and the total
underwriting commission received by the Underwriter, in each case as set forth
on the cover of the Prospectus, or, if Rule 434 is used, the corresponding
location on the term sheet, bear to the aggregate initial public offering price
of the Shares as set forth on such cover.
The relative fault of the Fund and the Adviser on the one hand and the
Underwriter on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Fund and the Adviser or by the Underwriter and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Fund, the Adviser and the Underwriter agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, the Underwriter shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which the Underwriter
has otherwise been required to pay by reason of any 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.
For purposes of this Section 7, each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as the Underwriter, and each officer or director of the
Fund and the Adviser, respectively, each director of the Fund who signed the
Registration Statement, and each person, if any, who controls the Fund and the
Adviser within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as the Fund.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
the Pricing Agreement, or contained in certificates of officers of the Fund or
of the Adviser submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any
19
investigation made by or on behalf of the Underwriter or controlling person, or
by or on behalf of the Fund or the Adviser and shall survive delivery of the
Shares to the Underwriter.
SECTION 9. Termination of Agreement.
(a) The Underwriter, may terminate this Agreement by written notice to the
Fund, at any time at or prior to Closing Time (i) if there has been, since the
time of execution of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Fund or the Adviser, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Underwriter impracticable to market
the Shares or enforce contracts for the sale of the Shares, or (iii) if trading
in the Common Stock has been suspended or materially limited by the Commission
or if trading generally on either the New York Stock Exchange or the American
Stock Exchange or in the NASDAQ National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by any of said exchanges or
by such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) if a
banking moratorium has been declared by Federal or New York authorities. As
used in this subsection (a), the term "Prospectus" means the Prospectus in the
form first used to confirm sales of the Shares.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further that Sections 1, 6, 7 and 8
shall survive such termination and remain in full force and effect.
SECTION 10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of written telecommunication. Notices to the
Underwriter shall be directed to Xxxxxxx Xxxxx & Co. Inc., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated at Xxxxxxx Xxxxx World Headquarters, World
Financial Center, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention:
[Xxxxxxx Xxxxx], Vice President; notices to the Fund or to the Adviser shall be
directed to each of them at 000 Xxxxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000, Attention: Xxxxxx Xxxxxx, President.
SECTION 11. Parties. This Agreement and the Pricing Agreement shall
inure to the benefit of and be binding upon the Underwriter, the Fund, the
Adviser and their respective successors. Nothing expressed or mentioned in this
Agreement or in the Pricing Agreement is intended or shall be construed to give
any person, firm or corporation, other than the parties hereto and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and the Pricing Agreement and
all conditions and provisions hereof are intended
20
to be for the sole and exclusive benefit of the parties hereto and thereto and
their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Shares from the Underwriter
shall be deemed to be a successor merely by reason of such purchase.
SECTION 12. Governing Law and Time. This Agreement and the Pricing
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
State. Specified times of day refer to New York City time.
21
If the foregoing is in accordance with your understanding of our Agreement,
please sign and return to us a counterpart hereof, whereupon this instrument,
along with all counterparts, will become a single binding agreement between the
Underwriter and the Fund and the Adviser in accordance with its terms.
Very truly yours,
DEBT STRATEGIES FUND III, INC.
By:
---------------------------------------
Authorized Officer
FUND ASSET MANAGEMENT, L.P.
By:
---------------------------------------
Authorized Officer
Confirmed and Accepted, as of the
date first above written:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
---------------------------------------
Authorized Officer
22
Exhibit A
________________ Shares
Debt Strategies Fund III, Inc.
(a Maryland corporation)
Common Stock
(Par Value $.10 Per Share)
PRICING AGREEMENT
-----------------
____________, 1998
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs and Mesdames:
Reference is made to the Purchase Agreement, dated _________, 1998 (the
"Purchase Agreement"), relating to the purchase by Xxxxxxx Xxxxx & Co., Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (the "Underwriter") of the above
shares of common stock, par value $.10 per share (the "Initial Shares"), of Debt
Strategies Fund III, Inc. (the "Fund") and relating to the option granted to the
Underwriter to purchase up to an additional ___________ shares of common stock,
par value $.10 per share, of the Fund to cover over-allotments in connection
with the sale of the Initial Shares (the "Option Shares"). The Initial Shares
and all or any part of the Option Shares collectively are referred to herein as
the "Shares".
Pursuant to Section 2 of the Purchase Agreement, the Fund agrees with the
Underwriter as follows:
1. The initial public offering price per share for the Shares,
determined as provided in said Section 2, and the purchase price per share
for the Shares to be paid by the Underwriter, shall be $10.00.
2. Fund Asset Management, L.P. will pay, or arrange for an affiliate
to pay, a commission to the Underwriter in the amount of $____ per share
for the Shares purchased by the Underwriter.
A-1
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Fund a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriter and the Fund in accordance with its terms.
Very truly yours,
DEBT STRATEGIES FUND III, INC.
By:
---------------------------------------
Authorized Officer
FUND ASSET MANAGEMENT, L.P.
By:
---------------------------------------
Authorized Officer
Confirmed and Accepted, as of the
date first above written:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
---------------------------------------
Authorized Officer
A-2
