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1,200,000 Shares
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
__% Cumulative Preferred Stock
Liquidation Preference $25 Per Share
UNDERWRITING AGREEMENT
May __, 1997
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
GABELLI & COMPANY, INC.
As Representatives of the Several Underwriters
c/o ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
The Gabelli Global Multimedia Trust Inc., a Maryland
corporation (the "Fund"), proposes, upon the terms and conditions set forth
herein, to issue and sell an aggregate of 1,200,000 shares (the "Shares") of
its __% cumulative preferred stock, liquidation preference $25 per share, $.001
par value per share (the "Cumulative Preferred Stock"), to the several
Underwriters named in Schedule I hereto. The Cumulative Preferred Stock will
be authorized by, and subject to the terms and conditions of, the Articles
Supplementary to be adopted in connection with the issuance of the Cumulative
Preferred Stock (the "Articles Supplementary").
The Fund and its investment adviser, Gabelli Funds, Inc., a
New York corporation (the "Adviser"), wish to confirm as follows their
agreement with you (the "Representatives") and the other several Underwriters
on whose behalf you are acting, in connection with the several purchases of the
Shares by the Underwriters.
The Fund has entered into an investment advisory agreement
dated October 3, 1994 with the Adviser, a custodian agreement dated October 3,
1994 with State Street Bank and Trust Company, a Massachusetts corporation, and
a registrar, transfer agency and service agreement dated October 3, 1994 with
State Street Bank and Trust Company. Such agreements are hereinafter referred
to as the "Investment Advisory Agreement", the "Custodian Agreement" and the
"Transfer Agency Agreement", respectively. Collectively, the Investment
Advisory Agreement, the Custodian Agreement and the Transfer Agency Agreement
are hereinafter referred to as the "Fund Agreements". This Underwriting
Agreement is hereinafter referred to as the "Agreement".
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1. Registration Statement and Prospectus. The Fund has
prepared in conformity with the provisions of the Securities Act of 1933, as
amended (the "1933 Act"), the Investment Company Act of 1940, as amended (the
"1940 Act") and the rules and regulations of the Securities and Exchange
Commission (the "Commission") promulgated under the 1933 Act (the "1933 Act
Rules and Regulations") and the 1940 Act (the "1940 Act Rules and Regulations"
and, together with the 1933 Act Rules and Regulations, the "Rules and
Regulations") a registration statement on Form N-2 (File Nos. 333-25487 and
811-8476) under the 1933 Act and the 1940 Act (the "registration statement"),
including a prospectus relating to the Shares, and has filed the registration
statement and prospectus in accordance with the 1933 Act and 1940 Act. The
Fund also has filed a notification of registration of the Fund as an investment
company under the 1940 Act on Form N-8A (the "1940 Act Notification"). The
term "Registration Statement" as used in this Agreement means the registration
statement (including all financial schedules and exhibits), as amended at the
time it becomes effective under the 1933 Act or, if the registration statement
became effective under the 1933 Act prior to the execution of this Agreement,
as amended or supplemented at the time it became effective, prior to the
execution of this Agreement. If it is contemplated, at the time this Agreement
is executed, that a post-effective amendment to the registration statement will
be filed under the 1933 Act and must be declared effective before the offering
of the Shares may commence, the term "Registration Statement" as used in this
Agreement means the registration statement as amended by said post-effective
amendment. If the Fund has filed an abbreviated registration statement to
register an additional amount of Shares pursuant to Rule 462(b) under the 1933
Act (the "Rule 462 Registration Statement"), then any reference herein to the
term "Registration Statement" shall include such Rule 462 Registrations
Statement. The term "Prospectus" as used in this Agreement means the
prospectus and statement of additional information in the forms included in the
Registration Statement or, if the prospectus and statement of additional
information included in the Registration Statement omit information in reliance
on Rule 430A under the 1933 Act Rules and Regulations and such information is
included in a prospectus and statement of additional information filed with the
Commission pursuant to Rule 497(h) under the 1933 Act, the term "Prospectus" as
used in this Agreement means the prospectus and statement of additional
information in the forms included in the Registration Statement as supplemented
by the addition of the information contained in the prospectus filed with the
Commission pursuant to Rule 497(h). The term "Prepricing Prospectus" as used
in this Agreement means the prospectus and statement of additional information
subject to completion in the forms included in the registration statement at
the time of filing of amendment No. 1 to the registration statement with the
Commission on May 23, 1997 and as such prospectus and statement of additional
information shall have been amended from time to time prior to the date of the
Prospectus, together with any other prospectus and statement of
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additional information relating to the Fund other than the Prospectus, approved
in writing by or directly or indirectly prepared by the Fund or the Adviser; it
being understood that the definition of Prepricing Prospectus above shall not
include any Prepricing Prospectus prepared by any Underwriter unless approved
in writing by the Fund or Adviser. The terms "Registration Statement",
"Prospectus" and "Prepricing Prospectus" shall also include any financial
statements incorporated by reference therein.
The Fund has furnished the Representatives with copies of such
registration statement, each amendment to such registration statement filed
with the Commission and each Prepricing Prospectus.
2. Agreements to Sell and Purchase. The Fund hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Underwriter and, upon the basis of the representations, warranties and
agreements of the Fund and the Adviser herein contained and subject to all the
terms and conditions set forth herein, each Underwriter agrees, severally and
not jointly, to purchase from the Fund, at a purchase price of $_______ per
Share, the number of Shares set forth opposite the name of such Underwriter in
Schedule I hereto (or such number of Shares increased as set forth in Section
11 hereof).
3. Terms of Public Offering. The Fund and the Adviser have
been advised by you that the Underwriters propose to make a public offering of
their respective portions of the Shares as soon after the Registration
Statement and this Agreement have become effective as in your judgment is
advisable and initially to offer the Shares upon the terms set forth in the
Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to
the Underwriters of and payment for the Shares shall be made at the office of
▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, at 10:00 A.M., New
York City time, on May __, 1997 (the "Closing Date"). The place of closing for
the Shares and the Closing Date may be varied by agreement between you and the
Fund.
Certificates for the Shares shall be registered in such names
and in such denominations as you shall request prior to 9:30 A.M., New York
City time, on the second business day preceding the Closing Date. Such
certificates shall be made available to you in New York City for inspection and
packaging not later than 9:30 A.M., New York City time, on the business day
next preceding the Closing Date. The certificates evidencing the Shares shall
be delivered to you on the Closing Date against payment of the purchase price
therefor in immediately available funds.
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5. Agreements of the Fund and the Adviser. The Fund and the
Adviser, jointly and severally, agree with the several Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective under the 1933 Act before the offering of the
Shares may commence, the Fund will endeavor to cause the Registration Statement
or such post-effective amendment to become effective under the 1933 Act as soon
as possible and will advise you promptly and, if requested by you, will confirm
such advice in writing when the Registration Statement or such post-effective
amendment has become effective.
(b) The Fund will advise you promptly and, if requested by
you, will confirm such advice in writing: (i) of any request made by the
Commission for amendment of or a supplement to the Registration Statement, any
Prepricing Prospectus or the Prospectus (or any amendment or supplement to any
of the foregoing) or for additional information, (ii) of the issuance by the
Commission, the National Association of Securities Dealers, Inc. (the "NASD"),
any state securities commission, any national securities exchange, any
arbitrator, any court or any other governmental, regulatory, self-regulatory or
administrative agency or any official of any order suspending the effectiveness
of the Registration Statement, prohibiting or suspending the use of the
Prospectus, any Prepricing Prospectus or any sales material (as hereinafter
defined), of any notice pursuant to Section 8(e) of the 1940 Act, of the
suspension of qualification of the Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for any such purposes, (iii)
of receipt by the Fund, the Adviser, any affiliate of the Fund or the Adviser
or any representative or attorney of the Fund or the Adviser of any other
material communication from the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court or any
other governmental, regulatory, self-regulatory or administrative agency or any
official relating to the Fund (if such communication relating to the Fund is
received by such person within three years after the date of this Agreement),
the Registration Statement, the 1940 Act Notification, the Prospectus, any
Prepricing Prospectus, any sales material (as hereinafter defined) (or any
amendment or supplement to any of the foregoing), this Agreement or any of the
Fund Agreements and (iv) within the period of time referred to in paragraph (f)
below, of any material adverse change in the condition (financial or other),
business, prospects, properties, net assets or results of operations of the
Fund or the Adviser or of the happening of any event which makes any statement
of a material fact made in the Registration Statement, the Prospectus or any
sales material (as herein defined) (or any amendment or supplement to any of
the foregoing) untrue or which requires the making of any additions to or
changes in the Registration Statement, the Prospectus, any
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Prepricing Prospectus or any sales materials (as herein defined) (or any
amendment or supplement to any of the foregoing) in order to state a material
fact required by the 1933 Act, the 1940 Act or the Rules and Regulations to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading or of the
necessity to amend or supplement the Registration Statement, the Prospectus,
any Prepricing Prospectus or any sales material (as herein defined) (or any
amendment or supplement to any of the foregoing) to comply with the 1933 Act,
the 1940 Act, the Rules and Regulations or any other law or order of any court
or regulatory body. If at any time the Commission, the NASD, any state
securities commission, any national securities exchange, any arbitrator, any
court or any other governmental, regulatory, self-regulatory or administrative
agency or any official shall issue any order suspending the effectiveness of
the Registration Statement, prohibiting or suspending the use of the Prospectus
or any sales material (as hereinafter defined) (or any amendment or supplement
to any of the foregoing) or suspending the qualification of the Shares for
offering or sale in any jurisdiction, the Fund will make every reasonable
effort to obtain the withdrawal of such order at the earliest possible time.
(c) The Fund will furnish to you, without charge, three
signed copies of the registration statement and the 1940 Act Notification as
originally filed with the Commission and of each amendment thereto, including
financial statements and all exhibits thereto, and will also furnish to you,
without charge, such number of conformed copies of the registration statement
as originally filed and of each amendment thereto, but without exhibits, as you
may request.
(d) The Fund will not (i) (A) file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus,
or any sales material (as hereinafter defined) of which you shall not
previously have been advised or to which you shall object after being so
advised or (ii) so long as, in the opinion of counsel for the Underwriters, a
Prospectus is required by the 1933 Act to be delivered in connection with sales
by any Underwriter or dealer, file any information, documents or reports
pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"),
without delivering a copy of such information, documents or reports to you, as
Representatives of the Underwriters, prior to or concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement,
the Fund has delivered to you, without charge, in such quantities as you have
requested, copies of each form of the Prepricing Prospectus. The Fund consents
to the use, in accordance with the provisions of the 1933 Act and with the
state securities or blue sky laws of the jurisdictions in which the Shares are
offered by the several Underwriters and by dealers,
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prior to the date of the Prospectus, of each Prepricing Prospectus so furnished
by the Fund.
(f) As soon after the execution and delivery of this
Agreement as possible and thereafter from time to time for such period as in
the opinion of counsel for the Underwriters a prospectus is required by the
1933 Act to be delivered in connection with sales by any Underwriter or dealer,
the Fund will expeditiously deliver to each Underwriter and each dealer,
without charge, as many copies of the Prospectus (and of any amendment or
supplement thereto) as you may request. The Fund consents to the use of the
Prospectus (and of any amendment or supplement thereto) in accordance with the
provisions of the 1933 Act and with the state securities or blue sky laws of
the jurisdictions in which the Shares are offered by the several Underwriters
and by all dealers to whom Shares may be sold, both in connection with the
offering and sale of the Shares and for such period of time thereafter as the
Prospectus is required by the 1933 Act to be delivered in connection with sales
by any Underwriter or dealer. If during such period of time any event shall
occur that in the judgment of the Fund or in the opinion of counsel for the
Underwriters is required to be set forth in the Registration Statement or the
Prospectus (as then amended or supplemented) or should be set forth therein in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary to supplement or
amend the Registration Statement or the Prospectus to comply with the 1933 Act,
the 1940 Act, the Rules and Regulations or any other federal law, rule or
regulation, or any state securities or blue sky disclosure laws, rules or
regulations, the Fund will forthwith prepare and, subject to the provisions of
paragraph (d) above, promptly file with the Commission an appropriate
supplement or amendment thereto, and will expeditiously furnish to the
Underwriters and dealers, without charge, a reasonable number of copies
thereof. In the event that the Fund and you, as Representatives of the several
Underwriters, agree that the Registration Statement or the Prospectus should be
amended or supplemented, the Fund, if requested by you, will promptly issue a
press release announcing or disclosing the matters to be covered by the
proposed amendment or supplement.
(g) The Fund will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
state securities or blue sky laws of such jurisdictions as you may designate
and will file such consents to service of process or other documents necessary
or appropriate in order to effect such registration or qualification; provided,
that in no event shall the Fund be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to service of process in suits, other than those arising out
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of the offering or sale of the Shares, in any jurisdiction where it is not now
so subject.
(h) The Fund will make generally available to its security
holders an earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as
practicable after the end of such period, which earnings statement shall
satisfy the provisions of Section 11(a) of the Act and Rule 158 of the 1933 Act
Rules and Regulations.
(i) During the period of five years hereafter, the Fund will
furnish to you (i) as soon as available, a copy of each report of the Fund
mailed to stockholders or filed with the Commission or furnished to the New
York Stock Exchange (the "NYSE") other than reports on Form N-SAR, and (ii)
from time to time such other information concerning the Fund as you may
request.
(j) If this Agreement shall terminate or shall be terminated
after execution pursuant to any provisions hereof (otherwise than pursuant to
the second paragraph of Section 11 hereof or by notice given by you terminating
this Agreement pursuant to Section 11 or Section 12 hereof) or if this
Agreement shall be terminated by the Underwriters because of any failure or
refusal on the part of the Fund or the Adviser to comply with the terms or
fulfill any of the conditions of this Agreement required to be complied with or
fulfilled by them, the Fund or, in the case of a failure or refusal by the
Adviser, the Adviser, agrees to reimburse the Representatives for all
out-of-pocket expenses (including fees and expenses of (i) counsel for the
Underwriters and (ii) Financial Products Group, Inc.) incurred by you in
connection herewith.
(k) The Fund will apply the net proceeds from the sale of the
Shares substantially in accordance with the description set forth in the
Prospectus and in such a manner as to comply with the investment objectives,
policies and restrictions of the Fund as described in the Prospectus.
(l) The Fund will timely file the requisite copies of the
Prospectus with the Commission pursuant to Rule 497(c) or Rule 497(h) of the
1933 Act Rules and Regulations, whichever is applicable or, if applicable, will
timely file the certification permitted by Rule 497(j) of the 1933 Act Rules
and Regulations and will advise you of the time and manner of such filing.
(m) Except as provided in this Agreement, the Fund will not
sell, contract to sell, or otherwise dispose of any senior securities of the
Fund, or grant any options or warrants to purchase senior securities of the
Fund, for a period of 180 days after the date of the Prospectus, without the
prior written consent of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
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(n) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, neither the Fund nor the Adviser has taken, nor will
it take, directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation of
the price of any securities issued by the Fund to facilitate the sale or resale
of the Shares; it being understood that the Underwriters include certain
affiliates of the Adviser and that stabilization or other activity by the
Representatives on behalf of the Underwriters shall not be deemed to be
violative of this representation.
(o) The Fund will use its best efforts to have the Shares
listed, subject to notice of issuance, on the NYSE.
(p) The Fund will use its best efforts to cause the
Cumulative Preferred Stock, prior to the Closing Date, to be assigned a rating
of 'aaa' by ▇▇▇▇▇'▇ Investor Services, Inc. (the "Rating Agency").
(q) The Fund and the Adviser will use their best efforts to
perform all of the agreements required of them and discharge all conditions to
closing as set forth in this Agreement.
6. Representations and Warranties of the Fund and the
Adviser. The Fund and the Adviser, jointly and severally, represent and
warrant to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 497 of the 1933 Act Rules and
Regulations, complied when so filed in all material respects with the
provisions of the 1933 Act, the 1940 Act and the Rules and Regulations. The
Commission has not issued any order preventing or suspending the use of any
Prepricing Prospectus.
(b) The registration statement in the form in which it became
or becomes effective and also in such form as it may be when any post-effective
amendment thereto shall become effective and the Prospectus and any supplement
or amendment thereto when filed with the Commission under Rule 497 of the 1933
Act Rules and Regulations and the 1940 Act Notification when originally filed
with the Commission and any amendment or supplement thereto when filed with the
Commission, complied or will comply in all material respects with the
provisions of the 1933 Act, the 1940 Act and the Rules and Regulations and did
not or will not at any such times contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, except that this
representation and warranty does not apply to statements in or omissions from
the registration statement or the Prospectus made in reliance upon and in
conformity with information relating to any Underwriter furnished to the Fund
in
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writing by or on behalf of any Underwriter through you expressly for use
therein.
(c) All the outstanding shares of Common Stock of the Fund
have been duly authorized and validly issued, are fully paid and nonassessable
and are free of any preemptive or similar rights; the Shares have been duly
authorized and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms hereof, will be validly issued, fully
paid and nonassessable and free of any preemptive or similar rights and will
conform to the description thereof in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them); and the capital
stock of the Fund conforms to the description thereof in the Registration
Statement and the Prospectus (and any amendment or supplement to either of
them).
(d) The Fund is a corporation duly organized and validly
existing in good standing under the laws of the State of Maryland with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them), and is duly
registered and qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure so to register or qualify does not have a material adverse effect on
the condition (financial or other), business, prospects, properties, net assets
or results of operations of the Fund; and the Fund has no subsidiaries.
(e) There are no legal or governmental proceedings pending
or, to the knowledge of the Fund, threatened, against the Fund, or to which the
Fund or any of its properties is subject, that are required to be described in
the Registration Statement or the Prospectus (and any amendment or supplement
to either of them) but are not described as required, and there are no
agreements, contracts, indentures, leases or other instruments that are
required to be described in the Registration Statement or the Prospectus (and
any amendment or supplement to either of them) or to be filed as an exhibit to
the Registration Statement that are not described or filed as required by the
1933 Act, the 1940 Act or the Rules and Regulations.
(f) The Fund is not in violation of its articles of
incorporation or by-laws, or other organizational documents, or of any law,
ordinance, administrative or governmental rule or regulation applicable to the
Fund or of any decree of the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court or
governmental agency, body or official having jurisdiction over the Fund, or in
default in any material respect in the performance of any obligation, agreement
or condition contained
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in any bond, debenture, note or any other evidence of indebtedness or in any
material agreement, indenture, lease or other instrument to which the Fund is a
party or by which it or any of its properties may be bound.
(g) Neither the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement or any of the Fund
Agreements by the Fund, nor the consummation by the Fund of the transactions
contemplated hereby or thereby (A) requires any consent, approval,
authorization or other order of or registration or filing with, the Commission,
the NASD, any state securities commission, any national securities exchange,
any arbitrator, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may have been obtained
prior to the date hereof and such as may be required for compliance with the
state securities or blue sky laws of various jurisdictions which have been or
will be effected in accordance with this Agreement) or conflicts or will
conflict with or constitutes or will constitute a breach of, or a default
under, the articles of incorporation, including the Articles Supplementary, or
by-laws, or other organizational documents, of the Fund or (B) conflicts or
will conflict with or constitutes or will constitute a breach of, or a default
under, any agreement, indenture, lease or other instrument to which the Fund is
a party or by which it or any of its properties may be bound, or violates or
will violate any statute, law, regulation or filing or judgment, injunction,
order or decree applicable to the Fund or any of its properties, or will result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Fund pursuant to the terms of any agreement or
instrument to which it is a party or by which it may be bound or to which any
of its property or assets is subject. The Fund is not subject to any order of
any court or of any arbitrator, governmental authority or administrative
agency.
(h) The accountants, Price Waterhouse LLP, who have certified
or shall certify the financial statements included in the Registration
Statement and the Prospectus (or any amendment or supplement to either of them)
are independent public accountants as required by the 1933 Act, the 1940 Act
and the Rules and Regulations.
(i) The financial statements, together with related schedules
and notes, included or incorporated by reference in the Registration Statement
and the Prospectus (and any amendment or supplement to either of them), present
fairly the financial position, results of operations and changes in financial
position of the Fund on the basis stated or incorporated by reference in the
Registration Statement at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data included
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in the Registration Statement and the Prospectus (and any amendment or
supplement to either of them) are accurately presented and prepared on a basis
consistent with such financial statements and the books and records of the
Fund.
(j) The execution and delivery of, and the performance by the
Fund of its obligations under, this Agreement and the Fund Agreements have been
duly and validly authorized by the Fund, and this Agreement and the Fund
Agreements have been duly executed and delivered by the Fund and constitute the
valid and legally binding agreements of the Fund, enforceable against the Fund
in accordance with their terms, except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws.
(k) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), subsequent to
the respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement to either of
them), the Fund has not incurred any liability or obligation, direct or
contingent, or entered into any transaction, not in the ordinary course of
business, that is material to the Fund, and there has not been any change in
the capital stock, or material increase in the short-term debt or long-term
debt, of the Fund, or any material adverse change, or any development involving
or which may reasonably be expected to involve, a prospective material adverse
change, in the condition (financial or other), business, prospects, properties,
net assets or results of operations of the Fund, whether or not arising in the
ordinary course of business, it being understood that a change of up to 15% of
the aggregate market value of the Fund's assets shall not cause this
representation to be untrue.
(l) The Fund has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of the
Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, the
Prepricing Prospectus, the Prospectus or other materials, if any, permitted by
the 1933 Act, the 1940 Act or the Rules and Regulations.
(m) The Fund has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own its properties and to conduct its business in the manner
described in the Prospectus (and any amendment or supplement thereto), subject
to such qualifications as may be set forth in the Prospectus; the Fund has
fulfilled and performed all its material obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in any other
material impairment of the rights of the Fund under any such permit, subject in
each case to such qualification as may be set forth in the Prospectus (and any
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amendment or supplement thereto); and, except as described in the Prospectus
(and any amendment or supplement thereto), none of such permits contains any
restriction that is materially burdensome to the Fund.
(n) The Fund maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization and
with the applicable requirements of the 1940 Act, the 1940 Act Rules and
Regulations and the Internal Revenue Code of 1986, as amended (the "Code");
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets and to maintain compliance with the books
and records requirements under the 1940 Act and the 1940 Act Rules and
Regulations; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(o) To the Fund's knowledge, neither the Fund nor any
employee or agent of the Fund has made any payment of funds of the Fund or
received or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
(p) The Fund has filed all tax returns required to be filed,
which returns are complete and correct, and the Fund is not in default in the
payment of any taxes which were payable pursuant to said returns or any
assessments with respect thereto.
(q) No holder of any security of the Fund has any right to
require registration of shares of common stock, Cumulative Preferred Stock or
any other security of the Fund because of the filing of the registration
statement or consummation of the transactions contemplated by this Agreement.
(r) The Fund, subject to the registration statement having
been declared effective and the filing of the Prospectus under Rule 497 under
the Rules and Regulations, has taken all required action under the 1933 Act,
the 1940 Act and the Rules and Regulations to make the public offering and
consummate the sale of the Shares as contemplated by this Agreement.
(s) The conduct by the Fund of its business (as described
in the Prospectus) does not require it to be the owner, possessor or licensee
of any patents, patent licenses, trademarks, service marks or trade names which
it does not own, possess or license.
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(t) The Fund is registered under the 1940 Act as a closed-end
non-diversified management investment company and the 1940 Act Notification has
been duly filed with the Commission and, at the time of filing thereof and any
amendment or supplement thereto, conformed in all material respects with all
applicable provisions of the 1940 Act and the Rules and Regulations. The Fund
is, and at all times through the completion of the transactions contemplated
hereby, will be, in compliance in all material respects with the terms and
conditions of the 1933 Act and the 1940 Act. No person is serving or acting as
an officer, director or investment adviser of the Fund except in accordance
with the provisions of the 1940 Act and the 1940 Act Rules and Regulations and
the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and the
rules and regulations of the Commission promulgated under the Advisers Act (the
"Advisers Act Rules and Regulations").
(u) Except as stated in this Agreement and in the Prospectus
(and any amendment or supplement thereto), the Fund has not taken, nor will it
take, directly or indirectly, any action designed to or which might reasonably
be expected to cause or result in stabilization or manipulation of the price of
any securities issued by the Fund to facilitate the sale or resale of the
Shares, and the Fund is not aware of any such action taken or to be taken by
any affiliates of the Fund.
(v) The Fund has filed in a timely manner each document or
report required to be filed by it pursuant to the 1934 Act and the rules and
regulations of Commission promulgated thereunder (the "1934 Act Rules and
Regulations"); each such document or report at the time it was filed conformed
to the requirements of the 1934 Act and the 1934 Act Rules and Regulations; and
none of such documents or reports contained an untrue statement of any material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(w) All advertising, sales literature or other promotional
material (including "prospectus wrappers," "broker kits," "road show slides"
and "road show scripts") authorized in writing by or prepared by the Fund or
the Adviser for use in connection with the offering and sale of the Shares
(collectively, "sales material") complied and comply in all material respects
with the applicable requirements of the 1933 Act, the 1940 Act, the Rules and
Regulations and the rules and interpretations of the NASD and no such sales
material contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(x) Each of the Fund Agreements and the Fund's and the
Adviser's obligations under this Agreement and each of the Fund Agreements
comply in all material respects with all applicable
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provisions of the 1940 Act, the 1940 Act Rules and Regulations, the Advisers
Act the Advisers Act Rules and Regulations.
(y) The Shares have been, or prior to the Closing Date will
be, assigned a rating of 'aaa' by the Rating Agency.
(z) At all times since its inception, as required by
Subchapter M of the Code, the Fund has complied with the requirements to
qualify as a regulated investment company under the Code.
(ab) Except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement to either of them), no director
of the Fund is an "interested person" (as defined in the 1940 Act) of the Fund
or an "affiliated person" (as defined in the 1940 Act) of any Underwriter.
7. Representations and Warranties of the Adviser. The
Adviser represents and warrants to each Underwriter as follows:
(a) The Adviser is a corporation duly organized and validly
existing in good standing under the laws of the State of New York, with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them), and is duly
registered and qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure so to register or to qualify does not have a material adverse effect on
the condition (financial or other), business, prospects, properties, net assets
or results of operations of the Adviser and its subsidiaries, taken as a whole,
or on the ability of the Adviser to perform its obligations under this
Agreement and the Investment Advisory Agreement.
(b) The Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the Advisers
Act, the Advisers Act Rules and Regulations, the 1940 Act or the 1940 Act Rules
and Regulations from acting under the Investment Advisory Agreement for the
Fund as contemplated by the Prospectus (or any amendment or supplement
thereto). There does not exist any proceeding or any facts or circumstances
the existence of which could lead to any proceeding which might adversely
affect the registration of the Adviser with the Commission.
(c) There are no legal or governmental proceedings pending
or, to the knowledge of the Adviser, threatened against the Adviser, or to
which the Adviser or any of its properties is subject, that are required to be
described in the Registration Statement or the Prospectus (or any amendment or
supplement to either of them) but are not described as required or that may
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reasonably be expected to involve a prospective material adverse change, in the
condition (financial or other), business, prospects, properties, net assets or
results of operations of the Adviser and its subsidiaries, taken as a whole, or
on the ability of the Adviser to perform its obligations under this Agreement
and the Investment Advisory Agreement.
(d) Neither the execution, delivery or performance of this
Agreement or the Investment Advisory Agreement by the Adviser, nor the
consummation by the Adviser of the transactions contemplated hereby or thereby
(A) requires the Adviser to obtain any consent, approval, authorization or
other order of or registration or filing with, the Commission, the NASD, any
state securities commission, any national securities exchange, any arbitrator,
any court, regulatory body, administrative agency or other governmental body,
agency or official or conflicts or will conflict with or constitutes or will
constitute a breach of or a default under, the certificate of incorporation or
by-laws, or other organizational documents, of the Adviser or (B) conflicts or
will conflict with or constitutes or will constitute a breach of or a default
under, any agreement, indenture, lease or other instrument to which the Adviser
is a party or by which it or any of its properties may be bound, or violates or
will violate any statute, law, regulation or filing or judgment, injunction,
order or decree applicable to the Adviser or any of its properties or will
result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Adviser pursuant to the terms of any agreement or
instrument to which it is a party or by which it may be bound or to which any
of the property or assets of the Adviser is subject. The Adviser is not
subject to any order of any court or of any arbitrator, governmental authority
or administrative agency.
(e) The execution and delivery of, and the performance by the
Adviser of its obligations under, this Agreement and the Investment Advisory
Agreement have been duly and validly authorized by the Adviser, and this
Agreement and the Investment Advisory Agreement have been duly executed and
delivered by the Adviser and each constitutes the valid and legally binding
agreement of the Adviser, enforceable against the Adviser in accordance with
its terms except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws.
(f) The Adviser has the financial resources available to it
necessary for the performance of its services and obligations as contemplated
in the Prospectus (or any amendment or supplement thereto) and under this
Agreement and the Investment Advisory Agreement.
(g) The description of the Adviser in the Registration
Statement and the Prospectus (and any amendment or supplement thereto) complied
and comply in all material respects with the provisions the 1933 Act, the 1940
Act, the Advisers Act, the
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Rules and Regulations and the Advisers Act Rules and Regulations and did not
and will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(h) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), subsequent to
the respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement to either of
them), the Adviser has not incurred any liability or obligation, direct or
contingent, or entered into any transaction, not in the ordinary course of
business, that is material to the Adviser and its subsidiaries, taken as a
whole, and that is required to be disclosed in the Registration Statement or in
the Prospectus and there has not been any material adverse change, or any
development involving or which may reasonably be expected to involve, a
prospective material adverse change, in the condition (financial or other),
business, prospects, properties, net assets or results of operations of the
Adviser and its subsidiaries, taken as a whole, whether or not arising in the
ordinary course of business, or which, in each case, could have a material
adverse effect on the ability of the Adviser to perform its obligations under
this Agreement and the Investment Advisory Agreement.
(i) The Adviser has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own its properties and to conduct its business in the manner
described in the Prospectus (and any amendment thereto); the Adviser has
fulfilled and performed all its material obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in any other
material impairment of the rights of the Adviser under any such permit; and,
except as described in the Prospectus (and any amendment or supplement
thereto), none of such permits contains any restriction that is materially
burdensome to the Adviser.
(j) Except as stated in this Agreement and in the Prospectus
(and in any amendment or supplement thereto), the Adviser has not taken, nor
will it take, directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in, stabilization or manipulation of
the price of any securities issued by the Fund to facilitate the sale or resale
of the Shares, and the Adviser is not aware of any such action taken or to be
taken by any affiliates of the Adviser; it being understood that the
Underwriters include certain affiliates of the Adviser and that stabilization
or other activity by the Representatives on behalf of the Underwriters shall
not be deemed to be violative of this representation.
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(k) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ is the validly appointed Chairman,
President, Chief Executive Officer and Director of the Adviser and the
portfolio manager of the Fund; ▇▇. ▇▇▇▇▇▇▇ has not given notice nor made known
an intention to give notice of termination of his employment and the Adviser
knows of no reason why ▇▇. ▇▇▇▇▇▇▇ should be unable to serve as portfolio
manager to the Fund.
8. Indemnification and Contribution. (a) The Fund and the
Adviser, jointly and severally, agree to indemnify and hold harmless each of
you and each other Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act from and against any and all losses, claims, damages, liabilities
and expenses, joint and several (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue statement
of a material fact contained in any Prepricing Prospectus or in the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or expenses arise out of or are based upon any
untrue statement or omission or alleged untrue statement or omission which has
been made therein or omitted therefrom in reliance upon and in conformity with
the information relating to such Underwriter furnished in writing to the Fund
by or on behalf of any Underwriter through you expressly for use in connection
therewith; provided, however, that the indemnification contained in this
paragraph (a) with respect to any Prepricing Prospectus shall not inure to the
benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter) on account of any such loss, claim, damage, liability or expense
arising from the sale of the Shares by such Underwriter to any person if a copy
of the Prospectus shall not have been delivered or sent to such person within
the time required by the 1933 Act and the 1933 Act Rules and Regulations, and
the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such Prepricing Prospectus was
corrected in the Prospectus, provided that the Fund has delivered the
Prospectus to the several Underwriters in requisite quantity on a timely basis
to permit such delivery or sending. The foregoing indemnity agreement shall be
in addition to any liability which the Fund or the Adviser may otherwise have.
(b) If any action, suit or proceeding shall be brought
against any Underwriter or any person controlling any Underwriter in respect of
which indemnity may be sought against the Fund or the Adviser, such Underwriter
or such controlling person shall promptly notify the Fund or the Adviser, and
the Fund or the Adviser shall assume the defense thereof, including the
employment of counsel and payment of all fees and expenses. Such Underwriter
or any such controlling person shall have the right
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to employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or such controlling person unless
(i) the Fund or the Adviser has agreed in writing to pay such fees and
expenses, (ii) the Fund and the Adviser have failed to assume the defense and
employ counsel, or (iii) the named parties to any such action, suit or
proceeding (including any impleaded parties) include both such Underwriter or
such controlling person and the Fund or the Adviser and such Underwriter or
such controlling person shall have been advised by its counsel that
representation of such indemnified party and the Fund or the Adviser by the
same counsel would be inappropriate under applicable standards of professional
conduct (whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them (in which
case the Fund and the Adviser shall not have the right to assume the defense of
such action, suit or proceeding on behalf of such Underwriter or such
controlling person). It is understood, however, that the Fund and the Adviser
shall, in connection with any one such action, suit or proceeding or separate
but substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such
Underwriters and controlling persons not having actual or potential differing
interests with you or among themselves, which firm shall be designated in
writing by ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., and that all such fees and expenses shall be
reimbursed as they are incurred. The Fund and the Adviser shall not be liable
for any settlement of any such action, suit or proceeding effected without its
written consent, but if settled with such written consent, or if there be a
final judgment for the plaintiff in any such action, suit or proceeding, the
Fund and the Adviser agree to indemnify and hold harmless any Underwriter, to
the extent provided in the preceding paragraph, and any such controlling person
from and against any loss, claim, damage, liability or expense by reason of
such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Fund and the Adviser, their directors, any
officers who sign the Registration Statement, and any person who controls the
Fund or the Adviser within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act, to the same extent as the foregoing indemnity from the Fund
and the Adviser to each Underwriter, but only with respect to information
relating to such Underwriter furnished in writing by or on behalf of such
Underwriter through you expressly for use in the Registration Statement, the
Prospectus or any Prepricing Prospectus, or any amendment or supplement
thereto. If any action, suit or proceeding shall be brought against the Fund
or the Adviser, any of their directors, any such officer, or any such
controlling person based on the Registration Statement, the Prospectus or any
Prepricing Prospectus, or any amendment or
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supplement thereto, and in respect of which indemnity may be sought against any
Underwriter pursuant to this paragraph (c), such Underwriter shall have the
rights and duties given to the Fund and the Adviser by paragraph (b) above
(except that if the Fund or the Adviser shall have assumed the defense thereof
such Underwriter shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the fees and
expenses of such counsel shall be at such Underwriter's expense), and the Fund
and the Adviser, their directors, any such officer, and any such controlling
person shall have the rights and duties given to the Underwriters by paragraph
(b) above. The foregoing indemnity agreement shall be in addition to any
liability which the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Fund and the Adviser on the one hand (treated jointly for this purpose as
one person) and the Underwriters on the other hand from the offering of the
Shares, or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the Fund and the Adviser on the one hand (treated jointly for this purpose
as one person) and the Underwriters on the other in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Fund and the Adviser on
the one hand (treated jointly for this purpose as one person) and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by
the Fund bear to the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault of the Fund and the Adviser on the one hand
(treated jointly for this purpose as one person) and the Underwriters on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Fund and the Adviser on the one hand (treated jointly for this purpose as
one person) or by the Underwriters on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
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(e) The Fund, the Adviser and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 8 were
determined by a pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in paragraph (d)
above. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in paragraph (d)
above shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 8, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price of the Shares underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this Section 8 are several in proportion to the respective numbers of Shares
set forth opposite their names in Schedule I hereto (or such numbers of Shares
increased as set forth in Section 11 hereof) and not joint.
(f) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 8 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Fund and the Adviser set forth in this
Agreement shall remain operative and in full force and effect, regardless of
(i) any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Fund, the Adviser, their directors or
officers, or any person controlling the Fund or the Adviser, (ii) acceptance of
any Shares and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to any Underwriter or any person controlling any
Underwriter, or to the Fund, the Adviser, their directors or officers, or any
person
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controlling the Fund or the Adviser, shall be entitled to the benefits of the
indemnity, contribution, and reimbursement agreements contained in this Section
8.
9. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Shares hereunder are subject to
the following conditions:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for the registration statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may
commence, the registration statement or such post-effective amendment shall
have become effective not later than 5:30 P.M., New York City time, on the date
hereof, or at such later date and time as shall be consented to in writing by
you, and all filings, if any, required by Rules 497 and 430A under the 1933 Act
and the 1933 Act Rules and Regulations shall have been timely made; no stop
order suspending the effectiveness of the Registration Statement or order
pursuant to Section 8(e) of the 1940 Act shall have been issued and no
proceeding for those purposes shall have been instituted or, to the knowledge
of the Fund, the Adviser or any Underwriter, threatened by the Commission, and
any request of the Commission for additional information (to be included in the
registration statement or the prospectus or otherwise) shall have been complied
with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change (other than a change of up to 15% of the
aggregate market value of the Fund's assets) or any development involving a
prospective change, in or affecting the condition (financial or other),
business, prospects, properties, net assets, or results of operations of the
Fund or the Adviser and its subsidiaries, taken as a whole, not contemplated by
the Prospectus, which in your opinion, as Representatives of the several
Underwriters, would materially, adversely affect the market for the Shares, or
(ii) any event or development relating to or involving the Fund or the Adviser
or any officer or director of the Fund or the Adviser which makes any statement
made in the Prospectus untrue or which, in the opinion of the Fund and its
counsel or the Underwriters and their counsel, requires the making of any
addition to or change in the Prospectus in order to state a material fact
required by the 1933 Act, the 1940 Act or the Rules and Regulations or any
other law to be stated therein or necessary in order to make the statements
therein not misleading, if amending or supplementing the Prospectus to reflect
such event or development would, in your opinion, as Representatives of the
several Underwriters, materially adversely affect the market for the Shares.
(c) The Fund shall have furnished to you, a report showing
compliance with the asset coverage requirements of the 1940 Act, a Certificate
of Basic Maintenance Amount (as defined in the Prospectus) and a letter from
Price Waterhouse LLP
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regarding certain matters set forth in such report and certificate and
confirming that, after giving effect to the offering of Cumulative Preferred
Stock, the Fund will be in compliance with the asset coverage requirements of
the 1940 Act and the Rating Agency, each dated the Closing Date and in form and
substance satisfactory to you.
(d) You shall have received on the Closing Date, an opinion
of ▇▇▇▇▇▇▇, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Fund, dated the
Closing Date and addressed to you, as Representatives of the several
Underwriters, to the effect that:
(i) The Fund is duly registered and qualified
to conduct its business and is in good standing in the State of New York (which
is the only jurisdiction identified by management of the Fund to such counsel
in which the Fund owns property, has operations or conducts business);
(ii) The authorized and outstanding capital
stock of the Fund is as set forth under the caption "Capitalization" in the
Prospectus; and the authorized capital stock of the Fund (including the
Cumulative Preferred Stock) conforms in all material respects as to legal
matters to the description thereof contained in the Prospectus under the
captions "Description of Capital Stock and Other Securities" and "Description
of Cumulative Preferred Stock";
(iii) The Registration Statement and all
post-effective amendments, if any, have become effective under the 1933 Act
and, to the best knowledge of such counsel after reasonable inquiry, no stop
order suspending the effectiveness of the Registration Statement or order
pursuant to Section 8(e) of the 1940 Act has been issued and no proceedings for
that purpose are pending before or contemplated by the Commission; and any
required filing of the Prospectus pursuant to Rule 497 has been made in
accordance with Rule 497;
(iv) Each of this Agreement and the Fund
Agreements has been duly executed and delivered and is a valid, legal and
binding agreement of the Fund, enforceable against the Fund in accordance with
its terms, except to the extent that (A) enforcement hereof and thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, or (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity) and (B)
enforcement of rights to indemnity and contribution hereunder and thereunder
may be limited by Federal or state securities laws or principles of public
policy;
(v) The Fund is not in violation of any
contract included as an exhibit to the Registration Statement (each, a
"Material Fund Agreement");
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(vi) Neither the offer, sale or delivery of the
Shares, the execution, delivery or performance of this Agreement and the Fund
Agreements by the Fund, compliance by the Fund with the provisions hereof or
thereof nor consummation by the Fund of the transactions contemplated hereby or
thereby conflicts or will conflict with or constitutes or will constitute a
breach of, or a default under, any Material Fund Agreement, or will result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Fund under any Material Fund Agreement, nor will any such
action result in any violation of (a) any provision of the New York Business
Corporation Law and those laws, rules and regulations of the State of New York
and the United States of America that, in the experience of such counsel, are
normally applicable to entities such as the Fund and transactions of the type
contemplated by this Agreement, but without having made any special
investigation concerning any other laws, rules or regulations (collectively,
"Applicable Fund Laws"); provided, that the term "Applicable Fund Laws" does
not include (1) the rules and regulations of the NASD, (2) any federal or state
securities or blue sky laws, (3) any antifraud laws or (4) any law, rule or
regulation that may have become applicable to the Fund as a result of the
Underwriters' involvement with the transactions contemplated hereby or because
of any facts specifically pertaining to the Underwriters, or (b) any judgment,
order or decree of any New York or federal executive, legislative, judicial,
administrative or regulatory body under Applicable Fund Laws and the NYSE
(each, a "Governmental Fund Authority") identified in an officer's certificate;
(vii) No consent, approval, license,
authorization, order or validation of, or filing, recording or registration
with, any Governmental Fund Authority pursuant to Applicable Fund Laws (each, a
"Governmental Fund Approval") is required for the valid issuance and sale of
the Shares to the Underwriters or the execution, delivery and performance by
the Fund of this Agreement and the Fund Agreements or the consummation of the
transactions contemplated hereby and thereby except such Governmental Fund
Approvals as have been obtained;
(viii) The 1940 Act Notification, the Registration
Statement, the Prospectus and the Fund's Registration Statement on Form 8-A
under the 1934 Act and any supplements or amendments thereto (except for the
financial statements and the notes thereto and the schedules and other
financial and statistical data included therein, as to which such counsel need
not express any opinion) comply as to form in all material respects with the
requirements of the 1933 Act, the 1940 Act, the Rules and Regulations, the 1934
Act and the rules and regulations promulgated thereunder;
(ix) To the actual knowledge of such counsel
after reasonable inquiry, other than as described or contemplated in the
Registration Statement or Prospectus (or any supplement
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thereto), (A) there are no legal or governmental proceedings in the State of
New York or, to the actual knowledge of such counsel, any other state, pending
or threatened against the Fund, or to which the Fund or any of its properties
is subject, which are required to be described in the Registration Statement or
Prospectus (or any amendment or supplement to either of them) and (B) there are
no agreements, contracts, indentures, leases or other instruments that are
required to be described in the Registration Statement or the Prospectus (or
any amendment or supplement to either of them) or to be filed as an exhibit to
the Registration Statement that are not described or filed as required, as the
case may be;
(x) The statements in the Registration
Statement, Prospectus and statement of additional information under the caption
"Taxation", insofar as they refer to statements of law or legal conclusions,
are accurate and present fairly the information required to be shown;
(xi) The Fund's registration statement on Form
8-A under the 1934 Act is effective;
(xii) Each of the Fund Agreements and the Fund's
and the Adviser's obligations under each of this Agreement and the Fund
Agreements comply as to form in all material respects with all applicable
provisions of the 1933 Act, the 1940 Act, the Advisers Act, the Rules and
Regulations and the Advisers Act Rules and Regulations;
(xiii) The Fund is duly registered with the
Commission under the 1940 Act as a closed-end non-diversified management
investment company; and the provisions of the Fund's articles of incorporation,
including the Articles Supplementary, and by-laws, and the investment policies
and restrictions described in the Registration Statement and the Prospectus
under the captions "The Fund", "Investment Objectives and Policies", " Special
Investment Methods", "Risk Factors and Special Considerations" and "Investment
Restrictions" (in the Prospectus and the statement of additional information)
comply in all material respects with the requirements of the 1940 Act, and all
action has been taken by the Fund as is required of the Fund by the 1933 Act
and the 1940 Act and the Rules and Regulations in connection with the issuance
and sale of the Shares to make the public offering and consummate the sale of
the Shares as contemplated by this Agreement;
(xiv) The Fund has full corporate power and
authority, and all necessary governmental authorizations, approvals, orders,
licenses, certificates, franchises and permits of and from all governmental
regulatory officials and bodies required under Applicable Fund Law (except
where the failure so to have any such authorizations, approvals, orders,
licenses, certificates, franchises or permits, individually or in the
aggregate, would not have a material adverse effect on the business,
properties, operations or financial condition of the Fund), to own its
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25
properties and to conduct business as now being conducted, as described in the
Prospectus;
(xv) Except as described in the Prospectus,
there is no holder of any security of the Fund or any other person who has the
right, contractual or otherwise pursuant to any Material Fund Agreement, to
cause the Fund to sell or otherwise issue to them, or to permit them to
underwrite the sale of, the Shares or the right to have any securities of the
Fund included in the registration statement or the right, as a result of the
filing of the registration statement, to require registration under the 1933
Act of any securities of the Fund;
(xvi) If the Fund operates as described in the
Prospectus, the Fund will qualify as a regulated investment company under the
Code; and
(xvii) Such counsel shall also state that they
have participated in conferences with officers and employees of the Fund,
representatives of the independent accountants for the Fund, Maryland counsel
to the Fund, the Underwriters and counsel for the Underwriters at which the
contents of the Registration Statement and the Prospectus and related matters
were discussed and, although they are not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus except to the limited
extent otherwise covered by paragraphs (ii), (ix), (x) and (xiii), and have
made no independent check or verification thereof, on the basis of the
foregoing, no facts have come to their attention that would have led them to
believe that the Registration Statement or any amendment or supplement thereto,
at the time it became effective, contained an untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements contained therein not misleading or that the
Prospectus or any amendment or supplement thereto, as of its issue date and as
of the Closing Date, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact required to be stated therein
or necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading, except that they
express no belief with respect to the financial statements, schedules and other
financial information and statistical data included therein or excluded
therefrom or the exhibits to the Registration Statement.
(e) You shall have received on the Closing Date, an opinion
of ▇▇▇▇▇ & Stockbridge, Maryland counsel for the Fund, dated the Closing Date
and addressed to you, as Representatives of the several Underwriters, to the
effect that:
(i) The Fund is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Maryland with full corporate power to own, lease and operate
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26
its properties and to conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement to either of
them);
(ii) The authorized capital stock of the Fund is
as set forth under the caption "Capitalization" in the Prospectus; and the
authorized capital stock of the Fund conforms in all material respects as to
legal matters to the description thereof contained in the Prospectus under the
caption "Description of Capital Stock and Other Securities";
(iii) The Shares have been duly authorized and,
when issued and delivered to the Underwriters against payment therefor in
accordance with the terms hereof, will be validly issued, fully paid and
nonassessable. The issuance of the Shares will not be subject to preemptive or
other similar rights entitling any person to purchase or acquire any of the
Shares upon the issuance thereof by the Fund which arise by operation of the
laws of the State of Maryland or under the articles of incorporation or by-laws
of the Fund;
(iv) The Shares conform in all material respects
to the description thereof contained in the Prospectus under the caption
"Description of Cumulative Preferred Stock";
(v) The form of certificates for the Shares
conforms to the requirements of the Maryland General Corporation Law;
(vi) The Fund has the requisite corporate power
and authority to enter into and execute and deliver this Agreement and to
issue, sell and deliver the Shares to the Underwriters as provided for herein;
(vii) This Agreement has been duly authorized by
the Fund. Neither the offer, sale or delivery of the Shares, the execution,
delivery or performance of this Agreement by the Fund, compliance by the Fund
with the provisions hereof nor consummation by the Fund of the transactions
contemplated hereby conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the articles of incorporation,
including the Articles Supplementary, or by-laws of the Fund;
(viii) The Fund has full corporate power and, to
the knowledge of such counsel, all governmental authorizations, approvals,
orders, licenses, certificates, franchises and permits necessary or required
under the laws of the State of Maryland for the Fund to own its properties and
to conduct its business as it now is being conducted as described in the
Prospectus (except in cases where the failure so to have any such
authorizations, approvals, orders, licenses, certificates, franchises or
permits, individually or in the aggregate, would not have a material adverse
effect on the business, properties, operations or financial conditions of the
Fund); and
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27
(ix) No consent, approval, authorization or
other order of, or registration or filing with, any securities commission,
court, regulatory body, administrative agency or other governmental body,
agency, or official of the State of Maryland is required on the part of the
Fund for the valid issuance and sale of the Shares to the Underwriters as
contemplated by this Agreement, the execution and delivery by the Fund of this
Agreement and the performance by the Fund of its obligations hereunder or the
consummation of the transactions contemplated hereby by the Fund, except those
as may be required under the securities or blue sky laws of the State of
Maryland; it being understood that such counsel do not express any opinion as
to any such consent, approval, authorization or other order of, or registration
or filing, which may be required as a result of the involvement of any other
parties to this Agreement.
(f) You shall have received on the Closing Date an opinion of
▇▇▇▇▇ ▇. ▇▇▇▇▇, general counsel for the Fund, dated the Closing Date and
addressed to you, as Representatives of the several Underwriters, to the effect
that:
(i) The Fund is not in violation of its
articles of incorporation, including the Articles Supplementary, or by-laws
and, to the actual knowledge of such counsel after reasonable inquiry, is not
in default in the performance of any material obligation, agreement or
condition in any bond, debenture, note or other evidence of indebtedness,
except as may be disclosed in the Prospectus; and
(ii) To the actual knowledge of such counsel
after reasonable inquiry, the Fund is not in violation of (A) any provision of
the New York Business Corporation Law and those laws, rules and regulations of
the State of New York and the United States of America that, in the experience
of such counsel, are normally applicable to entities such as the Fund and
transactions of the type contemplated by this Agreement, but without having
made any special investigation concerning any other laws, rules or regulations;
provided, that such laws, rules and regulations do not include (1) the rules
and regulations of the NASD, (2) any federal or state securities or blue sky
laws other than the 1933 Act, the 1934 Act and the 1940 Act and the rules and
regulations thereunder, (3) any antifraud laws under the 1933 Act applicable to
the Prospectus and the Registration Statement or (4) any law, rule or
regulation that may have become applicable to the Fund as a result of the
Underwriters' involvement with the transactions contemplated by this Agreement
or because of any facts specifically pertaining to the Underwriters or (B) any
order, judgment or decree of any New York or federal executive, legislative,
judicial, administrative or regulatory body under the laws, rules and
regulations referred to in clause (A) of this paragraph and the NYSE.
(g) You shall have received on the Closing Date an opinion of
▇▇▇▇▇▇▇, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special
28
28
counsel for the Adviser, dated the Closing Date and addressed to you, as
Representatives of the several Underwriters, to the effect that:
(i) The Adviser is a corporation duly
incorporated and validly existing in good standing under the laws of the State
of New York with full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement to either of
them), and is duly registered and qualified to conduct its business and is in
good standing in each jurisdiction or place where the nature of its properties
or the conduct of its business requires such registration or qualification,
except where the failure to so register or qualify does not have a material
adverse effect on the condition (financial or other), business, prospects,
properties, net assets or results of operations of the Adviser and its
subsidiaries, taken as a whole, or on the ability of the Adviser to perform its
obligations under this Agreement and the Investment Advisory Agreement; it
being understood that the opinion with respect to good standing is based solely
upon such counsel's review of a certificate of the Secretary of State and a
telephonic confirmation;
(ii) The Adviser is duly registered with the
Commission as an investment adviser under the Advisers Act and is not
prohibited by the Advisers Act, the Advisers Act Rules and Regulations, the
1940 Act or the 1940 Act Rules and Regulations from acting under the Investment
Advisory Agreement for the Fund as contemplated by the Prospectus (or any
amendment or supplement thereto);
(iii) The Adviser has corporate power and
authority to enter into this Agreement and the Investment Advisory Agreement,
and this Agreement and the Investment Advisory Agreement have been duly
authorized, executed and delivered by the Adviser and each is a valid, legal
and binding agreement of the Adviser, enforceable against the Adviser in
accordance with its terms except to the extent that enforcement hereof and
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity (regardless
of whether enforceability is considered in a proceeding at law or in equity);
(iv) Neither the execution, delivery or
performance of this Agreement or the Investment Advisory Agreement by the
Adviser, compliance by the Adviser with the provisions hereof or thereof nor
consummation by the Adviser of the transactions contemplated hereby or thereby
conflicts or will conflict with, or constitutes or will constitute a breach of
or default under, the certificate of incorporation or by-laws, or other
organizational documents, of the Adviser or any agreement, indenture, lease or
other instrument to which the Adviser is a
29
29
party which has been identified to such counsel by the Adviser as material or
as one which could have an effect on the types of transactions contemplated by
this Agreement (each, an "Material Adviser Agreement"), or will result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Adviser under any Material Adviser Agreement, nor will any such
action result in any violation of any provision of the New York Business
Corporation Law and those laws, rules and regulations of the State of New York
and the United States of America that, in the experience of such counsel, are
normally applicable to entities such as the Adviser and transactions of the
type contemplated by this Agreement, but without having made any special
investigation concerning any other laws, rules or regulations (collectively,
"Applicable Adviser Laws"); provided, that the term "Applicable Adviser Laws"
does not include (1) the rules and regulations of the NASD, (2) any federal or
state securities or blue sky laws, (3) any antifraud laws or (4) any law, rule
or regulation that may have become applicable to the Adviser as a result of the
Underwriters' involvement with the transactions contemplated hereby or because
of any facts specifically pertaining to the Underwriters.
(v) No consent, approval, license,
authorization or validation of, or filing, recording or registration with, any
New York or federal executive, legislative, judicial, administrative or
regulatory body under Applicable Adviser Laws (each, a "Governmental Adviser
Approval") is required on the part of the Adviser for the execution, delivery
and performance by it of this Agreement and the Investment Advisory Agreement
to which it is a party or the consummation by it of the transactions
contemplated hereby and thereby except such Governmental Adviser Approvals as
have been obtained;
(vi) To the actual knowledge of such counsel
after reasonable inquiry, there are no legal or governmental proceedings
pending or threatened against the Adviser or to which the Adviser or any of its
properties is subject, which are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement to either of them)
but are not described as required or which could reasonably be expected to
adversely affect the ability of the Adviser to perform its obligations under
this Agreement or the Investment Advisory Agreement;
(vii) The obligations of the Adviser under this
Agreement and the Investment Advisory Agreement comply in all material respects
with all applicable provisions of the 1940 Act, the 1940 Act Rules and
Regulations, the Advisers Act and the Advisers Act Rules and Regulations.
(viii) The Adviser has full corporate power and
authority, and all necessary governmental authorizations, approvals, orders,
licenses, certificates, franchises and permits of and from all governmental
regulatory officials and bodies
30
30
required under Applicable Adviser Law (except where the failure so to have any
such authorizations, approvals, orders, licenses, certificates, franchises or
permits, individually or in the aggregate, would not have a material adverse
effect on the business, properties, operations or financial condition of the
Adviser and its subsidiaries), to own its properties and to conduct business as
now being conducted, as described in the Prospectus, and to perform its
obligations under the Investment Advisory Agreement; and
(ix) Such counsel shall also state that they
have participated in conferences with officers and employees of the Adviser and
the Fund, representatives of the independent accountants for the Adviser and
the Fund and the Underwriters and counsel for the Underwriters at which the
contents of the Registration Statement and the Prospectus and related matters
were discussed and, although they are not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and have made no
independent check or verification thereof, on the basis of the foregoing, no
facts have come to their attention that would have led them to believe that the
Registration Statement or any amendment or supplement thereto, at the time it
became effective, contained an untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make
the statements contained therein not misleading or that the Prospectus or any
amendment or supplement thereto, as of its issue date and as of the Closing
Date, contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact required to be stated therein or necessary to
make the statements contained therein, in light of the circumstances under
which they were made, not misleading, except that they express no belief with
respect to the financial statements, schedules and other financial information
and statistical data included therein or excluded therefrom or the exhibits to
the Registration Statement.
(h) You shall have received on the Closing Date an opinion of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, dated the Closing
Date and addressed to you, as Representatives of the several Underwriters, with
respect to such matters as the Underwriters may reasonably request.
(i) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and the
Closing Date from Price Waterhouse LLP, independent certified public
accountants, substantially in the forms heretofore approved by you.
(j) (i) No order suspending the effectiveness of the
registration statement or the Registration Statement or prohibiting or
suspending the use of the Prospectus (or any amendment or supplement thereto)
or any Prepricing Prospectus or
31
31
any sales material shall have been issued and no proceedings for such purpose
or for the purpose of commencing an enforcement action against the Fund, the
Adviser or, with respect to the transactions contemplated by the Prospectus (or
any amendment or supplement thereto) and this Agreement, any Underwriter, may
be pending before or, to the knowledge of the Fund, the Adviser or any
Underwriter or in the reasonable view of counsel to the Underwriters, shall be
threatened or contemplated by the Commission at or prior to the Closing Date
and that any request for additional information on the part of the Commission
(to be included in the Registration Statement, the Prospectus or otherwise) be
complied with to the satisfaction of the Representatives; (ii) there shall not
have been any change in the capital stock of the Fund nor any material increase
in the short-term or long-term debt of the Fund (other than in the ordinary
course of business) from that set forth or contemplated in the Registration
Statement or the Prospectus (or any amendment or Supplement thereto); (iii)
there shall not have been, subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus (or any
amendment or supplement thereto), except as may otherwise be stated in the
Registration Statement and Prospectus (or any amendment or supplement thereto),
any material adverse change in the condition (financial or other), business,
prospects, properties, net assets or results of operations of the Fund or the
Adviser; (iv) the Fund shall not have any liabilities or obligations, direct or
contingent (whether or not in the ordinary course of business), that are
material to the Fund, other than those reflected in the Registration Statement
or the Prospectus (or any amendment or supplement to either of them) and other
than liabilities for payment for securities in accordance with the Fund's
investment objective and policies; and (v) all the representations and
warranties of the Fund and the Adviser contained in this Agreement shall be
true and correct on and as of the date hereof and on and as of the Closing Date
as if made on and as of the Closing Date, and you shall have received a
certificate, dated the Closing Date and signed by the chief executive officer
and the chief financial officer of each of the Fund and the Adviser (or such
other officers as are acceptable to you), to the effect set forth in this
Section 9(j) and in Section 9(k) hereof.
(k) That neither the Fund nor the Adviser shall have failed
at or prior to the Closing Date to have performed or complied with any of its
agreements herein contained and required to be performed or complied with by it
hereunder at or prior to the Closing Date.
(l) The Fund shall have delivered and you shall have received
evidence satisfactory to you that the shares of Cumulative Preferred Stock are
rated at least 'aaa' by the Rating Agency as of the Closing Date, and there
shall not have been given any notice of any intended or potential downgrading,
or of
32
32
any review for a potential downgrading, in the rating accorded to the shares of
Cumulative Preferred Stock by the Rating Agency.
(m) The Shares shall have been listed or approved for listing
upon notice of issuance on the NYSE.
(n) The Fund and the Adviser shall have furnished or caused
to be furnished to you such further certificates and documents as you shall
have requested.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are satisfactory
in form and substance to you and your counsel.
Any certificate or document signed by any officer of the Fund
or the Adviser and delivered to you, as Representatives of the Underwriters, or
to counsel for the Underwriters, shall be deemed a representation and warranty
by the Fund or the Adviser to each Underwriter as to the statements made
therein.
10. Expenses. The Fund agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the registration statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the 1940 Act
Notification, the Prospectus and each amendment or supplement to any of them
(including, without limitation, the filing fees prescribed by the 1933 Act, the
1940 Act and the Rules and Regulations); (ii) the printing (or reproduction)
and delivery (including postage, air freight charges and charges for counting
and packaging) of such copies of the Registration Statement, each Prepricing
Prospectus, the Prospectus, any sales material and all amendments or
supplements to any of them as may be reasonably requested for use in connection
with the offering and sale of the Shares; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares, including
any stamp taxes in connection with the original issuance and sale of the
Shares; (iv) the printing (or reproduction) and delivery of this Agreement, any
dealer agreements, the preliminary and supplemental blue sky memoranda and all
other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Shares; (v) the registration of the Shares
under the Exchange Act and the listing of the Shares on the New York Stock
Exchange; (vi) the registration or qualification of the Shares for offer and
sale under the state securities or blue sky laws of the several states as
provided in Section 5(g) hereof (including the reasonable fees, expenses and
disbursements of counsel for the Underwriters relating to the preparation,
printing or reproduction, and delivery of the preliminary and supplemental blue
sky memoranda and such registration and qualification); (vii) fees paid to the
Rating Agency; (viii) the transportation and other expenses
33
33
incurred by or on behalf of Fund representatives in connection with
presentations to prospective purchasers of the Shares; and (ix) the fees and
expenses of the Fund's accountants and the fees and expenses of counsel
(including local and special counsel) for the Fund and of the transfer agent.
Except as provided in this Section 10, the Underwriters agree
to pay their own costs and expenses of the underwriting, including the fees and
expenses of (i) their counsel and (ii) Financial Products Group, Inc.
11. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto;
or (ii) if, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, when
notification of the effectiveness of the registration statement or such
post-effective amendment has been released by the Commission. Until such time
as this Agreement shall have become effective, it may be terminated by the
Fund, by notifying you, or by you, as Representatives of the several
Underwriters, by notifying the Fund.
If any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of Shares which the Underwriters
are obligated to purchase on the Closing Date, each non-defaulting Underwriter
shall be obligated, severally, in the proportion which the number of Shares set
forth opposite its name in Schedule I hereto bears to the aggregate number of
Shares set forth opposite the names of all non-defaulting Underwriters or in
such other proportion as you may specify in accordance with Section 20 of the
Master Agreement Among Underwriters of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., to purchase the
Shares which such defaulting Underwriter or Underwriters are obligated, but
fail or refuse, to purchase. If any one or more of the Underwriters shall fail
or refuse to purchase Shares which it or they are obligated to purchase on the
Closing Date and the aggregate number of Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Shares which
the Underwriters are obligated to purchase on the Closing Date and arrangements
satisfactory to you and the Fund for the purchase of such Shares by one or more
non-defaulting Underwriters or other party or parties approved by you and the
Fund are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or
the Fund. In any such case which does not result in termination of this
Agreement, either you or the Fund shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the
34
34
Registration Statement and the Prospectus or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any such
default of any such Underwriter under this Agreement. The term "Underwriter"
as used in this Agreement includes, for all purposes of this Agreement, any
party not listed in Schedule I hereto who, with your approval and the approval
of the Fund, purchases Shares which a defaulting Underwriter is obligated, but
fails or refuses, to purchase.
Any notice under this Section 11 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed by letter.
12. Termination of Agreement. This Agreement shall be
subject to termination in your absolute discretion, without liability on the
part of any Underwriter to the Fund or the Adviser, by notice to the Fund or
the Adviser, if prior to the Closing Date (i) trading in securities generally
on the New York Stock Exchange, the American Stock Exchange or the Nasdaq
National Market shall have been suspended or materially limited, (ii) a general
moratorium on commercial banking activities in New York shall have been
declared by either federal or state authorities, or (iii) there shall have
occurred any outbreak or escalation of hostilities or other international or
domestic calamity, crisis or change in political, financial or economic
conditions, the effect of which on the financial markets of the United States
is such as to make it, in your judgment, impracticable or inadvisable to
commence or continue the offering of the Shares at the offering price to the
public set forth on the cover page of the Prospectus or to enforce contracts
for the resale of the Shares by the Underwriters. Notice of such termination
may be given to the Fund by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
13. Information Furnished by the Underwriters. The
statements set forth in the last paragraph on the cover page, the stabilization
legend on the inside cover page, and the statements in the first, third and
fifth paragraphs under the caption "Underwriting" in any Prepricing Prospectus
and in the Prospectus, constitute the only information furnished by or on
behalf of the Underwriters through you as such information is referred to in
Sections 6(b) and 8 hereof.
14. Miscellaneous. Except as otherwise provided in Sections
5, 11 and 12 hereof, notice given pursuant to any provision of this Agreement
shall be in writing and shall be delivered (i) if to the Fund or the Adviser,
at the office of the Fund at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇, ▇▇▇ ▇▇▇▇ 10580-1434,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇; or (ii) if to you, as Representatives of the
several Underwriters, care of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Adviser, Investment Banking Division.
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35
This Agreement has been and is made solely for the benefit of
the several Underwriters, the Fund, the Adviser, their directors and officers,
and the other controlling persons referred to in Section 8 hereof and their
respective successors and assigns, to the extent provided herein, and no other
person shall acquire or have any right under or by virtue of this Agreement.
Neither the term "successor" nor the term "successors and assigns" as used in
this Agreement shall include a purchaser from any Underwriter of any of the
Shares in his status as such purchaser.
15. Applicable Law; Counterparts. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York applicable to contracts made and to be performed within the State of New
York.
This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If signed in counterparts,
this Agreement shall not become effective unless at least one counterpart
hereof shall have been executed and delivered on behalf of each party hereto.
36
Please confirm that the foregoing correctly sets forth the
agreement between the Fund and the several Underwriters.
Very truly yours,
THE GABELLI GLOBAL
MULTIMEDIA TRUST INC.
By
-----------------------------
GABELLI FUNDS, INC.
By
-----------------------------
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
GABELLI & COMPANY, INC.
As Representatives of the Several Underwriters
By ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By
---------------------------
Managing Director
37
SCHEDULE I
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
Number of
Underwriter Shares
----------- ----------
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. . . . . . . . . . . . . . . . . . . . . . .
Gabelli & Company, Inc. . . . . . . . . . . . . . . . . . . .
-----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200,000
===========