Exhibit h
THE MALLARD FUND, INC.
UNDERWRITING AGREEMENT
August 4, 0000
Xxxxxx Xxxxxx Distributors, Inc.
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Gentlemen:
The Mallard Fund, Inc. ("Company"), a Maryland corporation, proposes to
issue and sell though you ("Underwriter") up to 2,000,000 shares of the
Company's $0.001 par value common stock ("Shares"). The offering of the shares
is further described in the Registration Statement filed on Form N-2 with the
United States Securities and Exchange Commission ("Commission").
SECTION 1
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REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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In order to induce the Underwriter to enter into this Agreement, the Company
represents and warrants to and agrees with the Underwriter as follows:
1.01 REGISTRATION STATEMENT AND PROSPECTUS. A registration statement on
Form N-2 (File No. 333-26791) (the "Registration Statement") with respect to the
Shares, including as part thereof a Preliminary Prospectus, copies of which have
heretofore been delivered by the Company to the Underwriter, has been prepared
by the Company in conformity with the requirements of the Securities Act of
1933, as amended (the "1933 Act"), and the Investment Company Act of 1940, as
amended (the "1940 Act", and together with the 1933 Act, the "Acts") and the
rules and regulations ("Rules and Regulations") of the Commission thereunder,
and said Registration Statement has been filed with the Commission under the
1933 Act and 1940 Act; one or more amendments to said Registration Statement,
copies of which have heretofore been delivered to the Underwriter, has or have
heretofore been filed; and the Company may file on or prior to the effective
date additional amendments to said Registration Statement, including the final
Prospectus.
As used in this Agreement, the term "Registration Statement" refers to and
means said Registration Statement on Form N-2 and all amendments thereto,
including the Prospectus, all exhibits and financial statements, as of the time
said Registration Statement becomes effective; the term "Prospectus" refers to
and means the Prospectus included in the Registration Statement when it becomes
effective; and the term "Preliminary Prospectus" refers to and means any
prospectus included in said Registration Statement before it becomes effective.
The terms "effective date" and "effective" refer to the date the Commission
declares the Registration Statement effective pursuant to Section 8 of the 1933
Act.
1.02 ACCURACY OF REGISTRATION STATEMENT AND PROSPECTUS. The Commission has
not issued any order preventing or suspending the use of any Preliminary
Prospectus with respect to the offering of Shares for sale, and each Preliminary
Prospectus has conformed in all material respects with the requirements of the
Acts and the applicable Rules and Regulations of the Commission thereunder and,
to the best of the Company's knowledge, has not included at the time of filing
any untrue statement of a material fact necessary to make the statements therein
not misleading. When the Registration Statement becomes effective and until the
completion of the offering, the Registration Statement and the Prospectus and
any further amendments or supplements thereto will contain all statements which
are required to be stated therein in accordance with the Acts and Rules and
Regulations for the purposes of the proposed public offering of the Shares, and
all statements of material fact contained in the Registration Statement and
Prospectus will be true and correct, and neither the Registration Statement nor
the Prospectus will include 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; provided, however, the Company does not make
any representations or warranties as to information contained in or omitted from
the Registration Statement or the Prospectus in reliance upon written
information furnished on behalf of the Underwriter specifically for use therein.
1.03 FINANCIAL STATEMENTS. The financial statements of the Company together
with related notes as set forth in the Registration Statement and Prospectus
will present fairly the financial position of the Company. Such financial
statements have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the period concerned except as
otherwise stated therein.
1.04 INDEPENDENT PUBLIC ACCOUNTANT. Coopers & Xxxxxxx L.L.P., which has
certified or shall certify certain of the financial statements filed or to be
filed with the Commission as part of the Registration Statement and Prospectus,
is an independent certified public accountant within the meaning of the Acts and
the Rules and Regulations.
1.05 NO MATERIAL ADVERSE CHANGE. Except as may be reflected in or
contemplated by the Registration Statement or the Prospectus, subsequent to the
dates as of which information is given in the Registration Statement and
Prospectus, and prior to the completion of the offering (i) there shall not be
any material adverse change in the condition, financial or otherwise, of the
Company or in its business taken as a whole; (ii) there shall not have been any
material transaction entered into by the Company other than transactions in the
ordinary course of the Company's business; (iii) the Company shall not have
incurred any material obligations, contingent or otherwise, which are not
disclosed in the Prospectus; (iv) there shall not have been nor will there be
any change in the capital stock or long-term debt (except current payments) of
the Company; and (v) the Company has not and will not have paid or declared any
dividends or other distributions on its common stock.
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1.06 NO DEFAULTS. The Company is not in any default which has not been
waived in the performance of any obligation, agreement or condition contained in
any debenture, note or any other evidence of indebtedness or any material
indenture or loan agreement of the Company. The execution and delivery of this
Agreement, the Fund Administration and Accounting Services Agreement, the
Investment Consulting Agreement and the Custodian Agreement described in the
Registration Statement, the consummation of the transactions herein
contemplated, and the Company's compliance with the terms of such agreements
will not conflict with or result in a breach of any of the terms, conditions or
provisions of, or constitute a default under, the articles of incorporation, as
amended, or bylaws of the Company, any note, indenture, mortgage, deed of trust,
or any other material agreement or instrument to which the Company is a party or
by which the Company or any of its property is bound, or any existing law,
order, rule, regulation, writ, injunction, or decree of any government,
governmental instrumentality, agency or body except such as may be required
under the Acts or blue sky or securities laws of any state or jurisdiction or
except such as has been therefore obtained.
1.07 INCORPORATION AND STANDING OF THE COMPANY. The Company is and at the
completion of the offering will be duly incorporated and validly existing in
good standing as a corporation under the laws of the State of Maryland with
authorized and outstanding capital stock as set forth in the Registration
Statement and the Prospectus, and with full power and authority (corporate and
other) to own its property and conduct its business, present and proposed, as
described in the Registration Statement and Prospectus. The Company has full
power and authority to enter into this Agreement, and the Company is duly
qualified and in good standing as a foreign corporation in each jurisdiction in
which it owns or leases real property or transacts business requiring such
qualification, except where failure so to register or to qualify does not have a
material, adverse effect on the condition (financial or otherwise), business,
properties, net assets or results of operation of the Company. The Company has
no subsidiaries.
1.08 LEGALITY OF OUTSTANDING SHARES. The outstanding common stock of the
Company has been duly and validly authorized, issued and is fully paid and
nonassessable and will conform to all statements with regard thereto contained
in the Registration Statement and the Prospectus. No sales of securities have
been made by the Company in violation of the registration provisions of the 1933
Act.
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1.09 LEGALITY OF SHARES. The Shares have been duly and validly authorized
and, when issued and delivered against payment therefor, will be validly issued,
fully paid and nonassessable. The Shares, upon issuance, will not be subject to
the preemptive rights of any shareholders of the Company. The Shares will
conform to all statements with regard thereto in the Registration Statement and
the Prospectus.
1.10 PRIOR SALES. No securities of the Company have been sold except as set
out in the Registration Statement.
1.11 LITIGATION. Except as set forth in the Registration Statement and
Prospectus, there is and at the completion of the offering there will be no
action, suit or proceeding before any court or governmental agency, authority or
body pending or to the knowledge of the Company threatened which might result in
judgments against the Company not adequately covered by insurance or which
collectively might result in any material adverse change in the condition
(financial or otherwise), the business or the prospects of the Company, or would
materially affect the properties or assets of the Company.
1.12 FINDER. The Company knows of no outstanding claims for services in the
nature of a finder's fee or origination fee with respect to the sale of the
Shares hereunder resulting from its acts for which the Underwriter may be
responsible.
1.13 REGISTRATION UNDER THE 1940 ACT. The Company is duly registered with
the Commission under the 1940 Act as a closed-end, non-diversified, management
investment company (as those terms are defined in the 0000 Xxx) and in all
material respects complies with and has complied with the terms and provisions
of the Acts and the Rules and Regulations of the Commission thereunder, and with
all investment company regulatory requirements of applicable state securities or
Blue Sky laws. The statements contained in Form N-8A, filed by the Company with
the Commission, as amended to the date hereof, are appropriately responsive in
all respects to the requirements of said form and of such Rules and Regulations
of the Commission, and the statements contained therein were accurate as of the
date made.
1.14 EXHIBITS. There are no contracts or other documents which are required
to be filed as exhibits to the Registration Statement by the 1933 Act or by the
Rules and Regulations which have not been so filed and each contract to which
the Company is a party and to which reference is made in the Prospectus has been
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duly and validly executed, is in full force and effect in all material respects
in accordance with their respective terms, and none of such contracts have been
assigned by the Company. The Company knows of no present situation or condition
or fact which would prevent compliance with the terms of such contracts, as
amended to date. Except for amendments or modifications of such contracts in the
ordinary course of business, the Company has no current intention of exercising
any right which it may have to cancel any of its obligations under any of such
contracts. The Company has no knowledge that any other party to any of such
contracts has any intention not to render full performance under such contracts.
1.15 COMPLIANCE WITH APPLICABLE SECURITIES LAWS. Any offers or sales of
securities (other than the Shares) made by the Company have been made in
material compliance with the registration and other requirements of the 1933
Act, the 1940 Act, and all applicable state securities or Blue Sky laws or
applicable exceptions therefrom.
1.16 AUTHORITY. The execution and delivery of this Agreement and the Fund
Administration and Accounting Services Agreement and Custodian Agreement
described in the Registration Statement have been duly authorized by all
necessary corporate action by the Company and are each valid, binding and
legally enforceable obligations of the Company.
SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITER
The Underwriter represents and warrants to and agrees with the Company
that:
2.01 REGISTRATION AS BROKER-DEALER AND MEMBER OF NASD. The Underwriter is
registered as a broker-dealer with the Commission under the Securities Exchange
act of 1934 ("1934 Act"), and is registered as a broker-dealer in all states in
which it conducts business and is a member in good standing with the National
Association of Securities Dealers, Inc.
2.02 NO PENDING PROCEEDINGS. There is not now pending or threatened against
the Underwriter an action or proceeding of which it has been advised, either in
any court of competent jurisdiction, before the Securities and Exchange
Commission or any state securities commission concerning its activities as a
broker or dealer, nor has the Underwriter been named as a "cause" in any such
action or proceeding.
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2.03 PERFORMANCE. The performance of this Agreement by the Underwriter is
and will not be in violation of any order, writ, decree or regulation applicable
to the Underwriter or in violation of any contract, agreement or obligation to
which the Underwriter or its controlling persons are a party.
SECTION 3
EMPLOYMENT OF THE UNDERWRITER
In reliance upon the representations and warranties and subject to the
terms and conditions of this Agreement:
3.01 UNDERWRITER'S BEST-EFFORTS AGENCY. The Company employs the Underwriter
as its exclusive agent to sell for the Company's account the Shares, on a cash
basis only, at a price equal to the net asset value of a share of common stock
of the Company on the third business day following the close of the subscription
offering period as described in subparagraph 3.03 of this Agreement. The
Underwriter agrees to use its best efforts, as agent for the Company, to sell
the shares subject to the terms and conditions set forth in this Agreement. It
is understood between the parties that there is no firm commitment by the
Underwriter to purchase any or all of the Shares.
3.02 CONDITIONS OF UNDERWRITER'S OBLIGATION. The obligation of the
Underwriter to offer the Shares is subject to (i) receipt by it of written
advice from the Commission that the Registration Statement is effective; (ii)
the Shares being qualified for offering under applicable laws in the states as
may be reasonably designated by the Underwriter; (iii) the absence of any
prohibitory action by any governmental body, agency or official; (iv) the terms
and conditions contained in this Agreement and in the Registration Statement
covering the offering to which this Agreement relates, and (v) the Company duly
executing and entering into the Fund Administration and Accounting Services
Agreement with the Underwriter's affiliate, Xxxxxx Square Management
Corporation.
3.03 TERMINATION UPON CLOSE OF SUBSCRIPTION OFFERING PERIOD. The Company
and the Underwriter agree that unless all of the Shares offered are sold within
sixty (60) days after the effective date (which may be extended for an
additional period not to exceed thirty (30) days by mutual agreement between the
Company and the Underwriter), the agency between the Company and the Underwriter
will terminate.
3.04 PROMPT DELIVERY OF FUNDS. The Underwriter will promptly transmit all
Share purchase monies to the Company in accordance with Rule 15c2-4(a) under the
0000 Xxx.
3.05 ADDITIONAL UNDERWRITERS AND DEALERS. The Underwriter shall have the
right to associate with such other Underwriters and dealers as it may determine.
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SECTION 4
FEES AND EXPENSES
4.01 UNDERWRITER'S ACCOUNTABLE EXPENSE ALLOWANCE. It is understood that the
Company shall reimburse the Underwriter for each and every expense it may incur,
including administrative cost, on an accountable basis not to exceed an
aggregate total of $3,500.00. If prior to the completion of the offering, the
Company does not or cannot proceed with the offering, or the covenants or
representations set out in this Agreement are not materially correct or cannot
be materially complied with, or in the event of a material change in the
financial condition, business, prospects or obligations of the Company (of which
the Company will advise the Underwriter promptly), the Company shall promptly
reimburse the Underwriter in full for its accountable, out-of-pocket expenses,
including legal fees and disbursements, subject to the limitations of this
paragraph. The Underwriter will pay all of its fees and expenses out of the
accountable expense allowance, including, but not limited to, the following:
fees and expenses of any legal counsel whom the Underwriter may employ to
represent it in connection with or on account of the offering by the Company,
and all mailing, telephone, facsimile, travel, clerical or other office or other
administrative costs incurred or to be incurred by the Underwriter or by its
sales personnel in connection with the offering.
4.02 EXPENSES OF THE COMPANY. The Company agrees that it will directly pay
and advance the following fees and expenses:
(a) All fees and expenses of its own separate legal counsel for services
rendered or to be rendered in respect of the offering;
(b) All fees and expenses of its independent certified public accountants
incurred in respect of the offering;
(c) All costs in issuing and delivering the Shares;
(d) All costs of printing and delivering to the Underwriter and dealers
as many copies of the Registration Statement and amendments,
Preliminary Prospectuses and definitive Prospectuses as are
reasonably requested by the Underwriter;
(e) All expenses of producing and disseminating Rule 134 and/or Rule 482
notices, letters or advertisements related to the offering of the
Shares;
(f) All of the Company's mailing, telephone, facsimile, travel, clerical
and other office or other administrative costs incurred or to be
incurred in connection with the offering of the Shares;
(g) All fees and costs which may be imposed by the Commission, the NASD
and various state and local securities authorities relating to the
Company's registration or qualification of, or their review in
respect thereof, the Company's offering of the Shares;
(h) All other expenses incurred by the Company in performance of its
obligations under this Agreement.
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SECTION 5
REGISTRATION STATEMENT AND PROSPECTUS
5.01 DELIVERY OF REGISTRATION STATEMENTS. The Company shall deliver to the
Underwriter without charge two signed copies of the Registration Statement,
including all financial statements and exhibits filed therewith and any
amendments or supplements thereto, and shall deliver without charge to the
Underwriter five conformed copies of the Registration Statement and any
amendment or supplement thereto, including such financial statements and
exhibits. The signed copies of the Registration Statement so furnished to the
Underwriter will include signed copies of any and all consents and certificates
of the independent public accountant certifying to the financial statements
included in the Registration Statement and Prospectus and signed copies of any
and all consents and certificates of any other persons whose profession gives
authority to statements made by them and who are named in the Registration
Statement or Prospectus as having prepared, certified, or reviewed any part
thereof.
5.02 DELIVERY OF PRELIMINARY PROSPECTUS. The Company will deliver to the
Underwriter, without charge, prior to the effective date of the Registration
Statement as many copies of each Preliminary Prospectus filed with the
Commission bearing in red ink the statement required by the Commission's Rule
481(6)(2) as may be reasonably requested by the Underwriter. The Company
consents to the use of such documents by the Underwriter and by dealers prior to
the effective date of the Registration Statement. The Company will deliver, at
its expense, such copies of the Preliminary Prospectus as may be reasonably
necessary in order to recirculate the Preliminary Prospectus and/or to permit
compliance with the provisions of Rule 15c2-8(b) under the 0000 Xxx.
5.03 DELIVERY OF PROSPECTUS. The Company will deliver, at its expense, as
many printed copies of the Prospectus as the Underwriter may reasonably request
for the purposes contemplated by this Agreement and shall deliver said printed
copies of the Prospectus to the Underwriter as soon as practicable after the
effective date. The Company will deliver such additional copies at its expense
as may be reasonably necessary to permit dealers to comply with the requirements
of Rule 174.
5.04 FURTHER AMENDMENTS AND SUPPLEMENTS. If delivery of a Prospectus is
required under the 1933 Act at any time prior to the completion of the offering
and if at such time any event occurs or any event known to the Company relating
to or affecting the Company shall occur as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a material
fact, or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or if it is necessary at any time after the effective date of the
Registration Statement to amend or supplement the Prospectus to comply with the
1933 Act, the Company will forthwith notify the Underwriter thereof and prepare
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and file with the Commission such further amendment to the Registration
Statement or supplemental or amended Prospectus as may be required and furnish
and deliver to the Underwriter and to others whose names and addresses are
designated by the Underwriter, all at the cost of the Company, a reasonable
number of copies of the amended or supplemented Prospectus which as so amended
or supplemented will not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the Prospectus not
misleading in the light of the purchaser, and which will comply in all respects
with the 1933 Act. In case the Underwriter is required to deliver a Prospectus
in connection with sales of any of the Shares at any time after the completion
of the offering, upon the Underwriter's request the Company shall prepare and
deliver, at its expense, as many copies of an amended or supplemented Prospectus
as will enable the Underwriter to comply with the prospectus delivery
requirements of the 1933 Act.
5.05 USE OF PROSPECTUS. The Company authorizes the Underwriter in
connection with the distribution of the Shares and all dealers to whom any of
the Shares may be sold by the Underwriter to use the Prospectus as from time to
time amended or supplemented, in connection with the offering and sale of the
Shares and in accordance with the applicable provisions of the 1933 Act and
applicable state blue sky or securities laws.
SECTION 6
COVENANTS OF THE COMPANY
The Company covenants and agrees with the Underwriter that:
6.01 OBJECTION OF THE UNDERWRITER TO AMENDMENTS OR SUPPLEMENTS. After the
date hereof, the Company will not at any time, whether before or after the
effective date of the Registration Statement, file any amendment or supplement
to the Registration Statement or Prospectus unless and until a copy of such
amendment or supplement has been previously furnished to the Underwriter within
a reasonable time period prior to the proposed filing thereof, or of which the
Underwriter or counsel for the Underwriter has reasonably objected to, in
writing, on the ground that such amendment or supplement is not in compliance
with the 1933 Act or the Rules and Regulations.
6.02 COMPANY'S BEST-EFFORTS TO CAUSE REGISTRATION STATEMENT TO BECOME
EFFECTIVE. The Company will use its best efforts to cause the Registration
Statement and any post-effective amendments subsequently filed, to become
effective as promptly as reasonably practicable and will promptly advise the
Underwriter, and will confirm such advice in writing (i) when the Registration
Statement shall have become effective and when any amendment thereto shall have
become effective and when any amendment of or supplement to the Prospectus shall
be filed with the Commission; (ii) when the Commission shall make a request or
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suggestion for any amendment to the Registration Statement or the Prospectus or
for additional information and the nature and substance thereof; (iii) of the
issuance by the Commission of an order suspending the effectiveness of the
Registration Statement pursuant to Section 8 of the 1933 Act or of the
initiation of any proceedings for that purpose; (iv) of the happening of any
event which in the judgment of the Company makes any material statement in the
Registration Statement or Prospectus untrue or which requires the making of any
changes to the Registration Statement or Prospectus in order to make the
statements therein not misleading; and (v) of the refusal to qualify or the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, or of the institution of any proceedings for any of such purposes.
The Company will use every reasonable effort to prevent the issuance of any such
order preventing or suspending such use, to prevent any such refusal to qualify
or any such suspension, and to obtain as soon as possible a lifting of any such
order, the reversal of any such refusal and the termination of any such
suspension.
6.03 PREPARATION AND FILING OF AMENDMENTS AND SUPPLEMENTS. The Company will
prepare and file with the Commission, upon the request of the Underwriter, such
amendments or supplements to the Registration Statement or Prospectus, in form
satisfactory to counsel to the Company, as in the opinion of counsel to the
Underwriter and of counsel to the Company may be necessary in connection with
the offering or distribution of the Shares and will use its best efforts to
cause the same to become effective as promptly as possible.
6.04 BLUE-SKY QUALIFICATION. The Company will, as and when requested by the
Underwriter, use reasonable efforts to qualify the Shares or such part thereof
as the Company may determine for sale under the securities laws of the states
which the Company shall designate, and will comply with such laws so long as
required for the purposes of the sale and offering for sale of the Shares;
provided, however, the Company shall not be required to make a blue sky filing
in any state in which an exemption from registration is available.
6.05 FINANCIAL STATEMENTS. The Company at its own expense will prepare and
give such financial statements and other information to and as may be required
by the Commission, or the proper public bodies of the states in which the Shares
may be qualified.
6.06 REPORTS AND FINANCIAL STATEMENTS TO THE UNDERWRITER. During the period
of three years from the completion of the offering, the Company will deliver to
the Underwriter copies of all reports, other communications and financial
statements furnished to its stockholders and deliver to the Underwriter as soon
as available all reports and financial statements furnished to or filed with the
Commission and, as soon as practicable and to the extent the Company has
knowledge of any information, every press release and every material news item
and article in respect of the Company or its affairs and such additional
information concerning the business and financial condition of the Company as
the Underwriter may form time to time reasonably request.
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6.07 REPORTS TO SHAREHOLDERS. During the period of three (3) years from the
completion of the offering, the Company will as promptly as possible after each
annual fiscal period render and distribute an annual report to its shareholders
which will include audited balance sheet statements, statements of income and
changes of net assets as to which statements the Company's independent certified
public accountants shall have rendered an opinion, and for each of the first
three quarters of each fiscal year (beginning with the fiscal quarter ending
after the effective date of the Registration Statement), summary financial
information of the Company for such quarter in reasonable detail.
6.08 SECTION 11(A) FINANCIALS. The Company will make generally available to
its security holders and will deliver to the Underwriter, as soon as
practicable, but in no event later than the first day of the twentieth full
calendar month following the effective date of the Registration Statement, an
earnings statement (as to which no opinion need be rendered, but which will
satisfy the provisions of Section 11(a) of the 0000 Xxx) covering a period of at
least 12 months beginning after the effective date of the Registration
Statement.
6.09 POST-EFFECTIVE AVAILABILITY OF PROSPECTUS. Within the time during
which the Prospectus is required to be delivered under the 1933 Act, the Company
will comply, at its own expense, with all requirements imposed upon it by the
1933 Act, as now or hereafter amended, by the Rules and Regulations, as from
time to time may be in force, and by any order of the Commission, so far as
necessary to permit the continuance of sales or dealings in the Shares through
the completion of the offering.
6.10 APPLICATION OF PROCEEDS. The Company will apply the net proceeds form
the sale of the Shares substantially in the manner set forth in the Registration
Statement and Prospectus.
6.11 DELIVERY OF DOCUMENTS. Upon the completion of the offering, the
Company will deliver to the Underwriter true and correct copies of the articles
of incorporation of the Company and all amendments thereto, all such copies to
be certified by the State Department of Assessments and Taxation of the State of
Maryland; true and correct copies of the bylaws of the Company and of the and of
all meetings of the directors and shareholders of the Company held prior to the
completion of the offering which in any way relate to the subject matter of this
Agreement; and true and correct copies of all material contracts to which the
Company is a party.
6.12 COOPERATION WITH THE UNDERWRITER'S DUE DILIGENCE. At all times prior
to the completion of the offering, the Company will cooperate with the
Underwriter in such investigation as the Underwriter may make or cause to be
made of all the properties, business and operations of the Company in connection
with the sale and public offering of the Shares, and the Company will make
available to the Underwriter in connection therewith such information in its
possession or control as the Underwriter may reasonably request.
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6.13 NO SALE PERIOD. No offering, sale or other disposition of any common
stock or other equity security will be made within one year after the completion
of the offering, directly or indirectly, by the Company, otherwise than
hereunder or with the Underwriter's written consent, which shall not be
unreasonably withheld.
6.14 COMPLIANCE WITH CONDITIONS PRECEDENT. The Company will use all
reasonable efforts to comply or cause to be complied with the conditions
precedent to the several obligations of the Underwriter in Section 9 hereof.
6.15 COMPLIANCE WITH THE 1940 ACT. The Company will take all steps
necessary to ensure that at all times the Company complies with the requirements
of the 1940 Act and the Rules and Regulations thereunder.
SECTION 7
THREAT OF REGULATORY ACTION
7.01 THREAT OF REGULATORY ACTION. The Company and the Underwriter agree to
advise each other immediately and confirm in writing the receipt of any threat
of or the initiation of any steps or procedures which would impair or prevent
the right to offer the Shares or the issuance of any "suspension orders" or
other prohibitions preventing or impairing the proposed offering of the Shares.
In the case of the happening of any such event, neither the Company nor the
Underwriter will acquiesce in such steps, procedures or suspension orders if
such acquiescence would adversely affect the other party and, in such event,
each party agrees to actively defend any such actions or orders unless both
parties agree in writing to acquiesce in such actions or orders or unless
counsel for each party advises the parties that the probability of successfully
defending against such actions is remote.
SECTION 8
INDEMNIFICATION
8.01 INDEMNIFICATION BY THE COMPANY.
(a) The Company agrees to indemnify, defend and hold harmless the
Underwriter from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable legal or other
expenses) incurred by the Underwriter in connection with defending or
investigating any such claims or liabilities, whether or not
resulting in any liability to the Underwriter, which the Underwriter
may incur under the federal or state securities laws and the
regulations promulgated thereunder, a state statute or the common law
resulting from any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or in any
application or other papers filed with the various state securities
authorities (hereinafter collectively called "Blue Sky Applications")
or that shall arise out of or be based upon any omission or alleged
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omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
provided, however, that this indemnity agreement shall not apply to
any such losses, claims, damages, liabilities and expenses arising
out of or based upon any such violation based upon a statement or
omission made in reliance upon written information furnished for use
in the Registration Statement or in a Blue Sky Application by the
Underwriter.
(b) Notwithstanding any other provision of this Agreement, nothing in
this Agreement shall be deemed to protect the Underwriter against any
liability to which the Underwriter would be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance
of the Underwriter's duties, or by reason of the Underwriter's
reckless disregard of the Underwriter's obligations and duties under
the 1933 Act or this Agreement.
(c) The Underwriter agrees to give the Company an opportunity to
participate in the defense or preparation of the defense of any
action brought against the Underwriter to enforce any such claim or
liability and the Company shall have the right so to participate. The
agreement of the Company under the foregoing indemnity is expressly
conditioned upon notice of any such action having been sent by the
Underwriter to the Company, by letter or telegram (addressed as
provided in this Agreement), promptly after the receipt of written
notice of such action against the Underwriter, such notice either
being accompanied by copies of papers served or filed in connection
with such action or by a statement of the nature of the action to the
extent known to Underwriter. Failure to notify the Company as herein
provided shall not relieve it from any liability which it may have to
the Underwriter other than on account of the indemnity agreement
contained in paragraph 8.01 of this Agreement.
8.02 INDEMNIFICATION BY THE UNDERWRITER.
(a) The Underwriter likewise agrees to indemnify, defend and hold
harmless the Company against any and all losses, claims, damages,
liabilities, and expenses to which the Company may become subject,
arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement
or in any Blue Sky Application or the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, resulting
from the use of written information furnished to the Company by the
13
Underwriter for use in the preparation of the Registration Statement
or in any Blue Sky Application.
(b) The Company agrees to give the Underwriter an opportunity to
participate in the defense or preparation of the defense of any
action brought against the Company to enforce any such claim or
liability and the Underwriter shall have the right so to participate.
The Underwriter's liability under the foregoing indemnity is
expressly conditioned upon notice of any such action having been sent
by the Company to the Underwriter, by letter or telegram (addressed
as provided in this Agreement), promptly after the receipt by the
Company of written notice of such action against the Company, such
notice either being accompanied by copies of papers served or filed
in connection with such action or by a statement of the nature of the
action to the extent known to the Company. Failure to notify the
Underwriter as herein provided shall not relieve the Underwriter from
any liability which it may have to the Company other than on account
of the indemnity agreement contained in paragraph 8.02 of this
Agreement.
(c) The provisions of paragraphs 8.01 and 8.02 shall not in any way
prejudice any right or rights which the Underwriter may have against
the Company or the Company may have against the Underwriter under any
statute, including the 1933 Act, at common law or otherwise.
(d) The indemnity agreements contained in paragraph 8.01 and 8.02 shall
survive the termination of this Agreement and shall inure to the
benefit of the Company, the Underwriter, their respective successors
and their heirs, personal representatives and successors and shall be
valid irrespective of any investigation made by or on behalf of the
Underwriter or the Company.
8.03 CONTRIBUTION. If the indemnification provided in paragraphs 8.01 and
8.02 is unavailable to or insufficient to hold harmless an indemnified party
under paragraphs 8.01 and 8.02 in respect of any losses, claims, damages,
expenses or liabilities (or actions in respect thereof) referred to therein,
then each indemnifying party shall in lieu of indemnifying such indemnified
party contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, expenses or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of the Company and the Underwriter in connection with the statements or
omissions which resulted in such losses, claims, damages, expenses or
14
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault 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 Company or the Underwriter and their
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriter agree that
it would not be just and equitable if contribution pursuant to this paragraph
8.03 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 paragraph 8.03. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, expenses or liabilities (or actions in
respect thereof) referred to above in this paragraph 8.03 shall be deemed to
include any legal or other expenses to which such indemnified party would be
entitled if paragraphs 8.01 and 8.02 were applied. Notwithstanding the
provisions of this paragraph 8.03, the Underwriter shall not be required to
contribute any amount in excess of the amount by which the total price which the
Shares underwritten by it and distributed to the public exceeds the amount of
any damages which the Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission plus
the Underwriter's proportionate share of such legal or other expenses; and any
punitive or exemplary damages if the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by or statements made by the Underwriter. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11 of the
0000 Xxx) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.
SECTION 9
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE UNDERWRITER
All obligations of the Underwriter under this Agreement are subject to the
accuracy, at all times during the pendancy of the offering, of the
representations and warranties on the part of the Company herein contained, to
the fulfillment of or compliance by the Company with all covenants and
conditions hereof, and to the following additional conditions precedent:
9.01 EFFECTIVENESS OF THE REGISTRATION STATEMENT. The Registration
Statement shall have become effective on or prior to September 15, 1997, or such
later date as shall be consented to in writing by the Underwriter. On or prior
15
to the completion of the offering, no order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission or be pending. Any
request for additional information on the part of the Commission (to be included
in the Registration Statement or Prospectus or otherwise) which has not been
withdrawn shall have been complied with to the satisfaction of the Commission.
Neither the Registration Statement nor the Prospectus nor any amendment thereto
shall have been filed to which counsel to the Underwriter shall have reasonably
objected in writing or have not given their consent.
9.02 ACCURACY OF THE REGISTRATION STATEMENT. The Underwriter shall not have
disclosed in writing to the Company that the Registration Statement or the
Prospectus or any amendment thereof or supplement thereto contains an untrue
statement of a fact which, in the opinion of such counsel, is material and is
required to be stated therein, or is necessary to make the statements therein
not misleading.
9.03 CASUALTY AND OTHER CALAMITY. Between the date hereof and the
completion of the offering, the Company shall not have sustained any loss on
account of calamity or any other causes of such character as materially
adversely affects its business or property, considered as an entire entity,
whether or not such loss such loss is covered by insurance.
9.04 LITIGATION AND OTHER PROCEEDINGS. Between the date hereof and the
completion of the offering, there shall be no litigation instituted or
threatened against the Company and there shall be no proceeding instituted or
threatened against the Company by or before any federal or state commission,
regulatory body or administrative agency or other governmental body, domestic or
foreign, wherein an unfavorable ruling, decision or finding would materially
adversely affect the business, operations or financial condition or income of
the Company considered as an entity.
9.05 LACK OF A MATERIAL CHANGE. Except as contemplated herein or as set
forth in the Registration Statement and Prospectus, during the period subsequent
to the date of the last audited balance sheet included in the Registration
Statement and prior to the completion of the offering, the Company (A) shall
have conducted its business in the usual and ordinary manner as the same was
being conducted on the date of the last audited balance sheet included in the
Registration Statement, and (B) except in the ordinary course of its business,
the Company shall not have incurred any liabilities or obligations (direct or
contingent) or disposed of any of its assets, or entered into any material
transaction or suffered or experienced any substantially adverse change in its
condition, financial or otherwise. At the completion of the offering, the
capital stock and surplus accounts of the Company shall be substantially the
same as at the date of the last audited balance sheet included in the
Registration Statement, without considering the proceeds from the sale of the
Shares, other than as may be set forth in the Prospectus, and except as the
surplus reflects the result of continued losses form operations.
16
9.06 REVIEW BY AND OPINION OF UNDERWRITER'S COUNSEL. The authorization of
the Shares, the Registration Statement, the Prospectus and all corporate
proceedings and other legal matters incident thereto and to this Agreement shall
be reasonably satisfactory in all respects to counsel to the Underwriter. The
Underwriter shall have received an opinion dated as of the completion of the
offering from its counsel, satisfactory to the Underwriter, relating to the
incorporation of the Company, the validity of the Shares, the Registration
Statement, the Prospectus and other related matters as Underwriter may
reasonably request, and counsel shall have received such papers and information
as they may reasonably request to enable them to pass upon such matters.
9.07 OPINION OF COUNSEL. The Company shall have furnished to the
Underwriter the opinion, dated as of the completion of the offering, addressed
to the Underwriter, from Xxxxxxxxxxx & Xxxxxxxx L.L.P., counsel to the Company,
to the effect that based upon a review by them of the Registration Statement,
Prospectus, the Company's articles of incorporation, bylaws, and relevant
corporate proceedings, an examination of such statutes as they deem necessary
and such other investigation by such counsel as they deem necessary to express
such opinion:
(i) The Company has been duly incorporated and is a validly existing
corporation in good standing with the State of Maryland, with full
corporate power and authority to own and operate its properties and
carry on its business as set forth in the Registration Statement and
Prospectus;
(ii) The Company is, to the best of counsel's knowledge, in compliance in
all material respects with all laws requiring qualification or
registration to do business as a foreign corporation in all
jurisdictions in which the Company's ownership of property or its
conduct of business requires such qualification or registration,
except where the failure so to register or to qualify does not have a
material, adverse effect on the condition (financial or otherwise),
business, properties, net assets or results of operation of the
Company;
(iii) The Company has authorized and outstanding capital stock as set forth
in the Registration Statement and Prospectus; the outstanding common
stock of the Company and the Shares conform to the statements
concerning them in the Registration Statement and Prospectus; the
outstanding common stock of the Company has been duly and validly
issued and is fully paid and nonassessable and contains no preemptive
17
rights; the Shares have been duly and validly authorized and, upon
issuance thereof in accordance with this Agreement, will be duly and
validly issued, fully paid and nonassessable, and will not be subject
to the preemptive rights of any shareholder of the Company;
(iv) The Company is duly registered with the Commission under the 1940 Act
as a closed-end, non-diversified, management investment company (as
such terms are defined in the 0000 Xxx) and, except as to matters
relating to financial statements, schedules and other financial and
statistical data, as to which such counsel need not express any
opinion, to the best of counsel's knowledge, in all respects complies
with the terms and provisions of the 1940 Act and the Rules and
Regulations thereunder; to the best of such counsel's knowledge, the
statements contained in the Form N-8A, filed by the Company with the
Commission, as amended to the date hereof, are appropriately
responsive in all respects to the requirements of said form and of
such Rules and Regulations of the Commission, and the statements
contained therein were accurate as of the date made;
(v) This Agreement, the Investment Consulting Agreement, the Custodian
Agreement and the Fund Administration and Accounting Services
Agreement have each been duly authorized, executed and delivered by
the Company and, assuming the due execution and delivery by the other
parties thereto, constitute valid and binding agreements of the
Company enforceable in accordance with their terms, except to the
extent (A) that the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights
generally, and (B) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought;
(vi) The performance of this Agreement, the Investment Consulting
Agreement, the Custodian Agreement and the Fund Administration and
Accounting Services Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with
or result in a breach or any violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company is a party or
by which the Company is bound, the Articles of Incorporation or
Bylaws of the Company, any statute or law or any order, rule or
regulation known to such counsel of any court or governmental agency
or body having jurisdiction over the Company or any of its
properties;
18
(vii) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the sale of the Shares or the consummation by the
Company of the transactions contemplated by this Agreement, the
Investment Consulting Agreement, the Custodian Agreement or the Fund
Administration and Accounting Services Agreement, except (A) such as
may be required of the Underwriter; (B) such as have been obtained
under the 1933 Act and the 1940 Act; and (C) such consents,
approvals, authorizations, orders, regulations or qualifications as
may be required under state securities or Blue Sky laws in connection
with the offering and distribution of the Shares by the Underwriter;
(viii)The Company is not in violation of its Articles of Incorporation or
Bylaws, and to the best knowledge of such counsel, the Company is not
presently in violation of any material law, rule or regulation, or in
breach of, or in default in the performance of any obligation under,
any material indenture, mortgage, deed of trust, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness or
any other material agreement or instrument to which the Company is a
party or any of its properties may be bound or affected;
(ix) The Company has all requisite corporate and authority and, to the
best of such counsel's knowledge, are operating in compliance in all
material respects with all material authorizations, licenses,
permits, consents, certificates and orders of any governmental or
self-regulatory body required for the conduct of its business (the
"Licenses"); and, to the best of such counsel's knowledge, all such
Licenses are valid and in full force and effect, and the Company is
in compliance in all material respects with all laws, regulations,
orders and decrees applicable to it;
(x) To the best of such counsel's knowledge, the selection of Coopers &
Xxxxxxx L.L.P. was, and the terms of their employment are, such as to
comply with the provisions of the 1940 Act and the Rules and
Regulations of the Commission thereunder; and
(xi) The Registration Statement has become effective under the 1933 Act
and, to the best of the knowledge of such counsel, no order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated by the Commission under the 1933 Act; and except as to
matters relating to financial statements, schedules and other
financial and statistical data, as to which such counsel need not
express any opinion, the Registration Statement and Prospectus, and
each amendment and supplement thereto, comply as to form in all
19
material respects with the requirements of the 1933 Act and the Rules
and Regulations thereunder, and after a reasonable investigation such
counsel has no reason to believe that either the Registration
Statement or the prospectus, or any such amendment or supplement
thereto, contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the
circumstances under which made (except that no opinion need be
expressed as to financial statements contained in the Registration
Statement or Prospectus); and such counsel is familiar with all
contracts referred to in the Registration Statement or Prospectus and
such contracts are accurately summarized or disclosed therein in all
material respects or filed as exhibits thereto as required, and such
counsel, after a reasonable investigation, does not know of any legal
or governmental proceedings pending or threatened to which the
Company is the subject of such a character required to be disclosed
in the Registration Statement or the Prospectus which are not
disclosed and accurately described therein in all material respects.
As to routine factual matters such counsel may rely on the certificate
of an appropriate officer of the Company.
9.08 ACCOUNTANT'S LETTER. The Underwriter shall have received a letter
addressed to it and dated the date of this Agreement and the date of completion
of the offering, respectively, from Coopers & Xxxxxxx L.L.P., independent public
accountants for the Company, stating in effect that (i) with respect to the
Company they are independent public accountants with in the meaning of the 1933
Act and the applicable published Rules and Regulations thereunder; (ii) in their
opinion, the financial statements examined by them of the Company at all dates
and for all periods referred to in their opinion and included in the
Registration Statement and Prospectus, comply in all material respects with the
applicable accounting requirements of the 1933 Act and the published Rules and
Regulations thereunder with respect to registration statements on Form N-2;
(iii) on the basis of certain indicated procedures (but not an examination in
accordance with generally accepted accounting principles), including a reading
of the latest available interim unaudited financial statements of the Company,
if any, whether or not appearing in the Prospectus, inquiries of the officers of
the Company or other persons responsible for its financial and accounting
matters regarding the specific items for which representations are requested
below and a reading of the minute books of the Company, nothing has come to
their attention which would cause them to believe that (1) during the period
from the last audited balance sheet included in the Registration Statement to a
20
specified date not more than five days prior to the date of such letter (a)
there has not been any change in the capital stock or other securities of the
Company or any payment or declaration of any dividend or other distribution in
respect thereof or exchange therefor from that shown on its audited balance
sheets or in the debt of the Company form that shown in the Registration
Statement or Prospectus other than as set forth in or contemplated by the
Registration Statement or Prospectus; or (b) there have been any material
decreases in the net current assets or net assets as compared with amounts shown
in the last audited balance sheet included in the Prospectus so as to make said
financial statements misleading; or that (2) any dollar amounts, percentages or
other financial information set forth in the Registration Statement and
Prospectus are not in agreement with the Company's general ledger, financial
records or computations made by the Company therefrom.
9.09 OFFICERS' CERTIFICATE. The Company shall have furnished to the
Underwriter a certificate by the President and chief financial officer, dated on
and as of the date of the completion of the offering to the effect that:
(i) The representations and warranties of the Company in this Agreement
are true and correct at and as of the completion of the offering, and
the Company has complied with all the agreements and has satisfied
all the conditions on its part to be performed or satisfied at or
prior to the completion of the offering.
(ii) The Registration Statement has become effective and no order
suspending the effectiveness of the Registration Statement has been
issued and to the best of the knowledge of the respective signers, no
proceeding for that purpose has been initiated or is threatened by
the Commission.
(iii) The respective signers have each carefully examined the Registration
Statement and Prospectus and any amendments and supplements thereto,
and to the best of their knowledge the Registration Statement and the
Prospectus and any amendments and supplements thereto contain all
statements required to be stated therein, and all statements
contained therein are true and correct, and neither the Registration
Statement nor Prospectus nor any amendment or supplement thereto
includes any untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading and, since the effective date
of the Registration Statement, there has occurred no event required
to be set forth in an amended or a supplemented Prospectus which has
not been so set forth.
21
(iv) Except as set forth in the Registration Statement and Prospectus
since the respective dates as of which the periods for which
information is given in the Registration Statement and Prospectus and
prior to the date of such certificate, (A) there has not been any
substantially adverse change, financial or otherwise, in the affairs
or condition of the Company, and (B) the Company has not incurred any
liabilities, direct or contingent, or entered into any transactions,
otherwise than in the ordinary course of business.
(v) Subsequent to the respective dates as of which information is given
in the Registration Statement and Prospectus, no dividends or
distributions whatsoever have been declared and/or paid with respect
to the common stock of the Company.
9.10 BLUE-SKY REGISTRATION. The Shares shall be duly registered in such
states as the Company shall designate pursuant to Section 6.04 of this
Agreement, and each such registration shall be in effect and not subject to any
stop order or other proceeding at all times during the pendancy of the offering.
9.11 APPROVAL OF UNDERWRITER'S COUNSEL. All opinions, letters, certificates
and evidence mentioned above or elsewhere in this Agreement shall be deemed to
be in compliance with the provisions hereof only if they are in form and
substance satisfactory to counsel to the Underwriter, whose approval shall not
be unreasonably withheld. The suggested form of such documents shall be provided
to counsel for the Underwriter at least one day prior to the completion of the
offering.
9.12 OFFICERS' CERTIFICATE AS A COMPANY REPRESENTATION. Any certificate
signed by an officer of the Company and delivered to the Underwriters or to
counsel for the Underwriter will be deemed a representation and warranty by the
Company to the Underwrites as to the statements made therein.
SECTION 10
TERMINATION
10.01 TERMINATION BECAUSE OF NON-COMPLIANCE. This Agreement may be
terminated by the Underwriter by notice to the Company in the event that the
Company shall have failed or been unable to comply with any of the terms,
conditions or provisions of this Agreement on the part of the Company to be
performed, complied with or fulfilled within the respective times herein
provided for, unless compliance therewith or performance or satisfaction thereof
shall have been expressly waived by the Underwriter in writing.
22
10.02 TERMINATION BECAUSE OF ADVERSE CHANGES. This Agreement may be
terminated by the Underwriter by notice to the Company if the Underwriter
believes in its sole judgment that any adverse changes have occurred in the
management of the Company, that material adverse changes have occurred in the
financial condition or obligations of the Company or if the Company shall have
sustained a loss by strike, fire, flood, accident or other calamity of such a
character as, in the sole judgment of the Underwriter, may interfere materially
with the conduct of the Company's business and operations regardless of whether
or not such loss shall have been insured.
10.03 ADDITIONAL CAUSES FOR TERMINATION. This Agreement may be terminated
by the Underwriter by notice to the Company at any time if, in the sole judgment
of the Underwriter, payment for and delivery of the Shares is rendered
impracticable or inadvisable because (i) additional material governmental
restrictions not in force and effect on the date hereof shall have been imposed
upon the trading in securities generally, or minimum or maximum prices shall
have been generally established on the New York or American Stock Exchange, or
trading in securities generally on either such Exchange shall have been
suspended, or a general moratorium shall have been established by federal or
state authorities, or (ii) a war or other national calamity shall have occurred,
or (iii) substantial and material changes in the condition of the market (either
generally or with reference to the sale of the shares to be offered hereby)
beyond normal fluctuations are such that it would be undesirable, impractical or
inadvisable, in the sole judgment of the Underwriter, to proceed with this
Agreement or with the public offering, or (iv) of any other matter materially
adversely affecting the Company.
10.04 TERMINATION BECAUSE OF THREAT OF REGULATORY ACTION OR BANKRUPTCY. In
the event any action or proceeding shall be instituted or threatened against the
Underwriter, either in any court of competent jurisdiction, before the
Commission or any state securities commission concerning its activities as a
broker or dealer that would prevent the Underwriter from acting as such, at any
time prior to the effective date hereunder, or in any court pursuant to any
federal, state, local or municipal statute, a petition in bankruptcy or
insolvency or for reorganization or for the appointment of a receiver or trustee
of the Underwriter's assets or if the Underwriter makes an assignment for the
benefit of creditors, the Company shall have the right on three days written
notice to the Underwriter to terminate this Agreement without any liability to
the Underwriter of any kind except for the payment of expenses as provided in
Section 4.01 and 4.02 herein.
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SECTION 11
NOTICES
Except as otherwise expressly provided in this Agreement:
11.01 NOTICE TO THE COMPANY. Whenever notice is required by the provisions
of this Underwriting Agreement to be given to the Company, such notice shall be
in writing addressed to the Company as follows:
Xxxxxxx X. Xxxxxxx
Secretary and Treasurer
The Mallard Fund, Inc.
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
with a copy to:
Xxxxxx X. Xxxxx, Esquire
Xxxxxxxxxxx & Xxxxxxxx L.L.P.
0000 Xxxxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
11.02 NOTICE TO THE UNDERWRITER. Whenever notice is required by the
provisions of this Agreement to be given to the Underwriter, such notice shall
be given in writing addressed to the Underwriter at the address set out at the
beginning of this Agreement, with a copy to: Xxxxxx Square Management
Corporation, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000,
Attention: Xxxx X. Xxxxx.
SECTION 12
----------
MISCELLANEOUS PROVISIONS
------------------------
12.01 SURVIVAL. The representations and warranties made in this Agreement
shall survive the termination of this Agreement and shall continue in full force
and effect regardless of any investigation made by the party relying upon any
such representation or warranty.
12.02 BENEFIT. This Agreement is made solely for the benefit of the Company
and its officers, directors and controlling persons within the meaning of
Section 15 of the 1933 Act and of the Underwriter and its officers, directors
and controlling persons within the meaning of Section 15 of the 1933 Act, and
their respective successors, heirs and personal representatives, and no other
person shall acquire or have any right under or by virtue of this Agreement. The
term "successor" as used in this Agreement shall not include any purchaser, as
such, of the Shares.
24
12.03 PARTICIPATING DEALERS. The Underwriter will provide upon the
completion of the offering a list of the names and addresses of all
participating dealers and shall provide the Company with such changes of the
address or name of such participating dealers as occur and of which the
Underwriter is notified. Further, the Underwriter shall use its best efforts to
maintain the current name and address of all participating dealers during the
terms of this Agreement.
12.04 GOVERNING LAW. The validity, interpretation and construction of this
Agreement and of each part hereof will be governed by the laws (without regard,
however, to such laws as to conflicts of law) of the State of Delaware.
12.05 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which may be deemed an original and all of which together
will constitute one and the same instrument.
If this Agreement correctly sets forth our understanding, please indicate
your acceptance in the space provided below for that purpose.
Very truly yours,
THE MALLARD FUND, INC.,
a Maryland corporation
By: /s/ Xxxxxxx X. Xxxxxxxx XX
---------------------------------
Xxxxxxx X. Xxxxxxxx XX, President
Confirmed and accepted as of
the date of this Agreement:
XXXXXX SQUARE DISTRIBUTORS, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxx, President
25
