________Shares
DLJ HIGH YIELD BOND FUND
COMMON STOCK
PAR VALUE $.001 PER SHARE
UNDERWRITING AGREEMENT
July 27, 1998
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
Advest, Inc.
Fac/Equities
▇▇▇▇▇▇▇▇▇▇ & Co. Inc.
First of Michigan Corporation
Gruntal & Co., L.L.C.
Interstate/▇▇▇▇▇▇▇ ▇▇▇▇
Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
▇▇▇▇▇ Brothers & Co. Ltd.
Sutro & Co. Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Incorporated
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
DLJ High Yield Bond Fund, a Delaware business trust (the "Fund"), is a
newly formed, non-diversified, closed-end management investment company
registered under the Investment Company Act of 1940, as amended. The Fund
proposes to issue and sell to the several Underwriters named in Schedule I
hereto (the "Underwriters")_____ shares of beneficial interest, par value $.001
per share (the "Firm Shares"). The Fund also proposes to issue and sell from
time to time to the several Underwriters not more than an additional _________
shares of beneficial interest, par value $.001 per share (the "Additional
Shares"), if requested by the Underwriters as provided in Section 2 hereof. The
Firm Shares and the Additional Shares are hereinafter collectively referred to
as the "Shares". The Common Shares of beneficial interest, $.001 par value per
share, of the Fund to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "Common Shares".
SECTION 1. Registration Statement and Prospectus. The Fund has prepared
and filed with the Securities and Exchange Commission (the "Commission") a
notification on Form N-8A (the "Notification") of registration of the Fund as an
investment company and a registration statement on Form N-2,
2
including a prospectus, relating to the Shares. The registration statement, as
amended at the time it became effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act of 1933, as amended, is
hereinafter referred to as the "Registration Statement"; and the prospectus in
the form first used to confirm sales of Shares is hereinafter referred to as the
"Prospectus". If the Fund has filed or is required pursuant to the terms hereof
to file a registration statement pursuant to Rule 462(b) under the Securities
Act of 1933, as amended, registering additional shares of Common Shares (a "Rule
462(b) Registration Statement"), then, unless otherwise specified, any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462(b) Registration Statement. The Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder are collectively referred to
as the "Securities Act"; the Investment Company Act of 1940, as amended, and the
rules and regulations of the Commission thereunder are collectively referred to
as the "Investment Company Act"; and the Securities Act and the Investment
Company Act are collectively referred to as the "Acts".
SECTION 2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Fund agrees to issue and sell, and each Underwriter
agrees, severally and not jointly, to purchase from the Fund at a price per
Share of $10.00 (the "Purchase Price") the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Fund further agrees to
issue and sell the Additional Shares and the Underwriters shall have the right
to purchase, severally and not jointly, up to _______ Additional Shares from the
Fund at the Purchase Price. Additional Shares may be purchased solely for the
purpose of covering over-allotments made in connection with the offering of the
Firm Shares. The Underwriters may exercise their right to purchase Additional
Shares in whole or in part from time to time by giving written notice thereof to
the Fund within __ days after the date of this Agreement. You shall give any
such notice on behalf of the Underwriters and such notice shall specify the
aggregate number of Additional Shares to be purchased pursuant to such exercise
and the date for payment and delivery thereof, which date shall be a business
day (i) no earlier than two business days after such notice has been given (and,
in any event, no earlier than the Closing Date (as hereinafter defined)) and
(ii) no later than ten business days after such notice has been given. If any
Additional Shares are to be purchased, each Underwriter, severally and not
jointly, agrees to purchase from the Fund the number of Additional Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) which bears the same
3
proportion to the total number of Additional Shares to be purchased from the
Fund as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I bears to the total number of Firm Shares.
For each of the Shares sold to the several Underwriters pursuant to
this Agreement [(other than Shares purchased by certain employees of DLJ
Investment Management Corp. (the "Investment Manager") or its affiliates from an
Underwriter).] The Investment Manger (not the Fund) agrees to pay or cause to be
paid to ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation for its own account
and the account of each Underwriter a fee equal to an amount computed by
multiplying (A) $___, by (B) the sum of the number of Shares purchased by
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation and each such Underwriter on
the Closing Date and any Option Closing Date (as defined below in Section 4).
The Fund hereby agrees not to (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Shares or any
securities convertible into or exercisable or exchangeable for Common Shares or
(ii) enter into any swap or other arrangement that transfers all or a portion of
the economic consequences associated with the ownership of any Common Shares
(regardless of whether any of the transactions described in clause (i) or (ii)
is to be settled by the delivery of Common Shares, or such other securities, in
cash or otherwise), except to the Underwriters pursuant to this Agreement or as
described in the Prospectus, including the Fund's Automatic Divided Reinvestment
Plan (the "Plan"), for a period of 180 days after the date of the Underwriting
Agreement without the prior written consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation.
SECTION 3. Terms of Public Offering. The Fund and the Investment
Manager are advised by you that the Underwriters propose (i) to make a public
offering of their respective portions of the Shares as soon after the execution
and delivery of this Agreement as in your judgment is advisable and (ii)
initially to offer the Shares upon the terms set forth in the Prospectus.
SECTION 4. Delivery and Payment. The Shares shall be represented by
definitive certificates and shall be issued in such authorized denominations and
registered in such names as ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
shall request not later than two business days prior to the Closing Date or the
applicable Option Closing Date (as defined below), as the case may be. The Fund
shall deliver the Shares, with any transfer taxes thereon duly paid by the Fund,
to ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation through the facilities of
The Depository Trust Company ("DTC"), for the respective accounts of the several
Underwriters, against payment to the Fund of the Purchase Price therefor by wire
4
transfer of Federal or other funds immediately available in New York City. The
certificates representing the Shares shall be made available for inspection not
later than 9:30 A.M., New York City time, on the business day prior to the
Closing Date or the applicable Option Closing Date, as the case may be, at the
office of DTC or its designated custodian (the "Designated Office"). The time
and date of delivery and payment for the Firm Shares shall be 9:00 A.M., New
York City time, on July 30, 1998 or such other time on the same or such other
date as ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation and the Fund shall
agree in writing. The time and date of delivery and payment for the Firm Shares
are hereinafter referred to as the "Closing Date". The time and date of delivery
and payment for any Additional Shares to be purchased by the Underwriters shall
be 9:00 A.M., New York City time, on the date specified in the applicable
exercise notice given by you pursuant to Section 2 or such other time on the
same or such other date as ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
and the Fund shall agree in writing. The time and date of delivery and payment
for any Additional Shares are hereinafter referred to as an "Option Closing
Date".
Payment of the Underwriters' fee described in the third paragraph of
Section 2 hereof shall be made or caused to be made by the Investment Manager to
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation for its own account and the
account of each Underwriter in Federal or other funds immediately available in
New York City on the Closing Date and any Option Closing Date.
The documents to be delivered on the Closing Date or any Option Closing
Date on behalf of the parties hereto pursuant to Section 10 of this Agreement
shall be delivered at the offices of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and the Shares shall be delivered at the
Designated Office, all on the Closing Date or such Option Closing Date, as the
case may be.
SECTION 5. Agreements of the Fund. The Fund agrees with you:
(a) To advise you promptly and, if requested by you, to
confirm such advice in writing, (i) of any request by the Commission
for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information, (ii) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction,
or the initiation of any proceeding for such purposes, (iii) when any
amendment to the Registration Statement becomes effective, (iv) if the
Fund is required to file a Rule 462(b) Registration Statement after the
effectiveness of this Agreement, when the Rule 462(b) Registration
Statement has become effective and (v) of the happening of any event
during the period referred to in Section 5(e) below
5
which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires any additions to
or changes in the Registration Statement or the Prospectus in order to
make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, the Fund will use its best efforts to
obtain the withdrawal or lifting of such order at the earliest possible
time.
(b) To notify you immediately, and confirm such notice in
writing, (i) of the institution of any proceedings pursuant to Section
8(e) of the Investment Company Act and (ii) of the happening of any
event during the period described in Section 5(f) below which in the
judgment of the Fund makes any statement in the Notification, the
Registration Statement or the Prospectus untrue in any material respect
or which requires the making of any change in or addition to the
Notification, the Registration Statement or the Prospectus in order to
make the statements therein not misleading in any material respect. If
at any time the Commission shall issue any order suspending the
effectiveness of the Registration Statement or an order pursuant to
Section 8(e) of the Investment Company Act, the Fund will make every
reasonable effort to obtain the withdrawal of such order at the
earliest possible moment.
(c) To furnish to you a signed copy of each of the
Notification and the Registration Statement as first filed with the
Commission and of each amendment to it, including all exhibits, and to
furnish to you and each Underwriter designated by you such number of
conformed copies of the Notification and the Registration Statement as
so filed and of each amendment to it, without exhibits, as you may
reasonably request.
(d) To prepare the Prospectus, the form and substance of which
shall be reasonably satisfactory to you, and to file the Prospectus in
such form with the Commission within the applicable period specified in
the relevant subsection of Rule 497(b) under the Securities Act; during
the period specified in Section 5(e) below, not to file any further
amendment to the Registration Statement and not to make any amendment
or supplement to the Prospectus of which you shall not previously have
been advised or to which you shall reasonably object after being so
advised; and, during such period, to prepare and file with the
Commission, promptly upon your reasonable request, any amendment to the
Registration Statement or amendment or supplement to the Prospectus
which may be necessary or advisable in connection with the distribution
of the Shares by you, and to use its best efforts to cause any such
amendment to the Registration Statement to become promptly effective.
6
(e) Prior to 10:00 A.M., New York City time, on the first
business day after the date of this Agreement and from time to time
thereafter for such period as in the opinion of counsel for the
Underwriters a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, to furnish in New
York City to each Underwriter and any dealer as many copies of the
Prospectus (and of any amendment or supplement to the Prospectus) as
such Underwriter or dealer may reasonably request.
(f) If during the period specified in Section 5(e), any event
shall occur or condition shall exist as a result of which, in the
opinion of counsel for the Underwriters, it becomes necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare and file with the
Commission an appropriate amendment or supplement to the Prospectus so
that the statements in the Prospectus, as so amended or supplemented,
will not in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with applicable law,
and to furnish to each Underwriter and to any dealer as many copies
thereof as such Underwriter or dealer may reasonably request.
(g) To use its best efforts to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code").
(h) Prior to any public offering of the Shares, to cooperate
with you and counsel for the Underwriters in connection with the
registration or qualification of the Shares for offer and sale by the
several Underwriters and by dealers under the state securities or Blue
Sky laws of such jurisdictions as you may request, to continue such
registration or qualification in effect so long as required for
distribution of the Shares and to file such consents to service of
process or other documents as may be necessary in order to effect such
registration or qualification; provided, however, that the Fund shall
not be required in connection therewith to qualify as a foreign entity
in any jurisdiction in which it is not now so qualified or to take any
action that would subject it to general consent to service of process
or taxation other than as to matters and transactions relating to the
Prospectus, the Registration Statement, any preliminary
7
prospectus or the offering or sale of the Shares, in any jurisdiction
in which it is not now so subject.
(i) To mail and make generally available to its stockholders
as soon as practicable an earnings statement covering the twelve-month
period ending September 30, 1999 that shall satisfy the provisions of
Section 11(a) of the Securities Act, and to advise you in writing when
such statement has been so made available.
(j) During the period of three years after the date of this
Agreement, to furnish to you as soon as available copies of all reports
or other communications furnished to the record holders of Common
Shares or furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Fund is
listed and such other publicly available information concerning the
Fund as you may reasonably request.
(k) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Fund's counsel and the Fund's
accountants in connection with the registration and delivery of the
Shares under the Acts and the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and all other fees and expenses in
connection with the preparation, printing, filing and distribution of
the Notification and the Registration Statement (including financial
statements and exhibits), any preliminary prospectus, the Prospectus
and all amendments and supplements to any of the foregoing, including
the mailing and delivering of copies thereof to the Underwriters and
dealers in the quantities specified herein, (ii) all costs and expenses
related to the transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) all costs
of printing or producing this Agreement, the Fund Agreements (as
defined in Section 7) and any other agreements or documents in
connection with the offering, purchase, sale or delivery of the Shares,
(iv) all expenses in connection with the registration or qualification
of the Shares for offer and sale under the securities or Blue Sky laws
of the several states and all costs of printing or producing any
Preliminary and Supplemental Blue Sky Memoranda in connection therewith
(including the filing fees and fees and disbursements of counsel for
the Underwriters in connection with such registration or qualification
and memoranda relating thereto), (v) the filing fees and disbursements
of counsel for the Underwriters in connection with the review and
clearance of the offering of the Shares by the National
8
Association of Securities Dealers, Inc., (vi) all fees and expenses in
connection with the registration of the Shares under the Exchange Act
and all costs and expenses incident to the listing of the Shares on the
New York Stock Exchange (the "NYSE"), (vii) the cost of printing
certificates representing the Shares, (viii) the costs and charges of
any transfer agent, registrar and/or depositary, and (ix) all other
costs and expenses incident to the performance of the obligations of
the Fund hereunder for which provision is not otherwise made in this
Section 5(k).
(l) To use its best efforts to list, subject to official
notice of issuance, the Shares on the NYSE and to maintain the listing
of the Shares on the NYSE for a period of three years after the date of
this Agreement.
(m) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by
the Fund prior to the Closing Date or any Option Closing Date, as the
case may be, and to satisfy all conditions precedent to the delivery of
the Shares.
(n) If the Registration Statement at the time of the
effectiveness of this Agreement does not cover all of the Shares, to
file a Rule 462(b) Registration Statement with the Commission
registering the Shares not so covered in compliance with Rule 462(b) by
10:00 P.M., New York City time, on the date of this Agreement and to
pay to the Commission the filing fee for such Rule 462(b) Registration
Statement at the time of the filing thereof or to give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under
the Securities Act.
Section 6. Agreements of the Investment Manager. The Investment Manager
agrees with you and the Fund:
(a) To use reasonable efforts to cause the Fund to comply with
each of its covenants and agreements contained in Section 5 hereof.
(b) In the event the transactions contemplated hereunder are
not consummated, to pay all amounts which the Fund is obligated to pay
under Section 5(k).
SECTION 7. Representations and Warranties of the Fund. The Fund and the
Investment Manager, jointly and severally, represent and warrant to each
Underwriter that:
(a) The Registration Statement has become effective (other
than any Rule 462(b) Registration Statement to be filed by the Fund
after the
9
effectiveness of this Agreement); any Rule 462(b) Registration
Statement filed after the effectiveness of this Agreement will become
effective no later than 10:00 P.M., New York City time, on the date of
this Agreement; and no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such
purpose are pending before or threatened by the Commission.
(b) (i) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Fund after the effectiveness
of this Agreement), when it became effective, did not contain and, as
amended, if applicable, will not contain any 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,
(ii) the Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Fund after the effectiveness
of this Agreement) and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with
the Acts and the Exchange Act, (iii) if the Fund is required to file a
Rule 462(b) Registration Statement after the effectiveness of this
Agreement, such Rule 462(b) Registration Statement and any amendments
thereto, when they become effective (A) will not contain any 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 and (B) will comply in all material respects with the Acts
and the Exchange Act and (iv) the Prospectus does not contain and, as
amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the representations
and warranties set forth in this paragraph do not apply to statements
or omissions in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the Fund in
writing by such Underwriter through you expressly for use therein.
(c) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 497 under the Securities Act,
complied when so filed in all material respects with the Acts, and did
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or
omissions in any preliminary prospectus based upon
10
information relating to any Underwriter furnished to the Fund in
writing by such Underwriter through you expressly for use therein.
(d) The Fund has been duly formed, is validly existing as a
business trust in good standing under the laws of the State of Delaware
and has the power and authority to carry on its business as described
in the Prospectus and is duly qualified to do business and in good
standing in each jurisdiction in which the nature of its business
requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the business,
prospects, financial condition or results of operations of the Fund.
(e) The Fund is registered with the Commission as a
non-diversified, closed-end management investment company under the
Investment Company Act and no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated or, to
the knowledge of the Fund or the Investment Manager, threatened by the
Commission. No person is serving or acting as an officer or director
of, or investment adviser to, the Fund except in accordance with the
provisions of the Investment Company Act and the Investment Advisers
Act of 1940, as amended, and the rules and regulations of the
Commission thereunder (such act and rules being collectively referred
to as the "Advisers Act").
(f) Each of this Agreement, the Investment Management
Agreement between the Investment Manager and the Fund (the "Management
Agreement"), the Administration Agreement between First Data Investor
Services Group, Inc.(the "Administrator") and the Fund (the
"Administration Agreement"), the Custodian and Transfer and Dividend
Disbursing Agent Agreement among Citibank N.A. (the "Custodian"), First
Data Investor Services Group, Inc. (the "Transfer and Dividend
Disbursing Agent") and the Fund (the "Custody, Transfer and Dividend
Disbursing Agreement") (this Agreement, the Management Agreement, the
Administration Agreement and the Custody, Transfer and Dividend
Disbursing Agreement are referred to herein, collectively, as the "Fund
Agreements"), respectively, has been duly authorized, executed and
delivered by the Fund. Each Fund Agreement, other than this Agreement,
assuming due authorization, execution and delivery by the other parties
thereto, and the Plan constitutes the legal, valid and binding
obligation of the Fund, enforceable against the Fund in accordance with
its terms except as such enforceability may be limited by applicable
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting creditors' rights generally and by general
principles of
11
equity, regardless of whether considered in a proceeding in equity or
at law.
(g) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
granted or issued by the Fund relating to or entitling any person to
purchase or otherwise to acquire any shares of the capital stock of the
Fund, except as otherwise disclosed in the Registration Statement.
(h) All the outstanding shares of capital stock of the Fund
have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights; and
the Shares have been duly authorized and, when issued and delivered to
the Underwriters against payment therefor as provided by this
Agreement, will be validly issued, fully paid and non-assessable, and
the issuance of such Shares will not be subject to any preemptive or
similar rights.
(i) The authorized capital stock of the Fund conforms in all
material respects to the description thereof contained in the
Prospectus, and the Agreement and Declaration of Trust dated as of
April 24, 1998 (the "Declaration of Trust") and by-laws of the Fund,
the Fund Agreements and the Plan conform in all material respects to
the descriptions thereof contained in the Prospectus.
(j) The Declaration of Trust and by-laws of the Fund, the Fund
Agreements and the Plan comply with all applicable provisions of the
Acts, and all approvals of such documents required under the Investment
Company Act by the Fund's shareholders and trustees have been obtained
and are in full force and effect.
(k) The Fund is not in violation of the Declaration of Trust
or by-laws or in default in the performance of any obligation,
agreement, covenant or condition contained in any agreement or
instrument that is material to the Fund to which it is a party or by
which it or its property is bound.
(l) The Fund intends to direct the investment of the proceeds
of the offering described in the Prospectus in such a manner as to
comply with the requirements of Subchapter M of the Code, and the Fund
is eligible to qualify as a regulated investment company under
Subchapter M of the Code.
12
(m) The execution, delivery and performance by the Fund of
each Fund Agreement, the compliance by the Fund with all the provisions
thereof and the consummation of the transactions contemplated thereby
will not (i) require any consent, approval, authorization or other
order of, or qualification with, any court or governmental body or
agency (except such as may be required under the securities or Blue Sky
laws of the various states), (ii) conflict with or constitute a breach
of any of the terms or provisions of, or a default under, the
Declaration of Trust or by-laws of the Fund or any agreement or
instrument that is material to the Fund to which it is a party or by
which it or its property is bound, (iii) violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree of
any court or any governmental body or agency having jurisdiction over
it or its property or (iv) result in the suspension, termination or
revocation of any Authorization (as defined below) of the Fund or any
other impairment of the rights of the holder of any such Authorization.
(n) There are no legal or governmental proceedings pending or
threatened to which the Fund is or could be a party or to which any of
its property is or could be subject that are required to be described
in the Registration Statement or the Prospectus and are not so
described; nor are there any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not so described or filed as required.
(o) The Fund has such consents, orders (including exemptive
orders), certificates, authorizations and other approvals (each, an
"Authorization") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, as are necessary to
own and use its assets and to conduct its business in the manner
described in the Prospectus, except where the failure to have any such
Authorization or to make any such filing or notice would not, singly or
in the aggregate, have a material adverse effect on the business,
prospects, financial condition or results of operations of the Fund.
Each such Authorization is valid and in full force and effect and the
Fund is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies
having jurisdiction with respect thereto; and no event has occurred
(including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse of
time or both, would allow, revocation, suspension or termination of any
such Authorization or results or, after notice or lapse of time or
both, would
13
result in any other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions that are
burdensome to the Fund; except where such failure to be valid and in
full force and effect or to be in compliance, the occurrence of any
such event or the presence of any such restriction would not, singly or
in the aggregate, have a material adverse effect on the business,
prospects, financial condition or results of operations of the Fund.
(p) ▇▇▇▇▇ & Young LLP are independent public accountants with
respect to the Fund as required by the Acts.
(q) The statement of assets and liabilities included in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto), presents fairly the financial position of the Fund
as of the date indicated and such statement has been prepared in
accordance with generally accepted accounting principles.
(r) Since the respective dates as of which information is
given in the Prospectus other than as set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there has not occurred any material
adverse change or any development involving a prospective material
adverse change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Fund from that set
forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) and (ii) there have
been no transactions entered into by the Fund which are material to the
Fund other than those in the ordinary course of its business or as
described in the Prospectus.
(s) The Fund Agreements (other than this Agreement) and the
Plan are in full force and effect and neither the Fund nor, to the
Fund's knowledge, any other party to any such agreement is in default
thereunder and, to the knowledge of the Fund and the Investment
Manager, no event has occurred which with the passage of time or the
giving of notice or both would constitute a default thereunder. The
Fund is not currently in breach of, or in default under, any other
written agreement or instrument to which it or its property is bound or
affected.
(t) The Shares and any shares of Common Shares outstanding
prior to the issuance of the Shares have been approved for listing on
the NYSE, subject to official notice of issuance.
14
(u) There are no material restrictions, limitations or
regulations with respect to the ability of the Fund to invest its
assets as described in the Prospectus, other than as described therein.
(v) Any advertisement used with the written consent of the
Fund in the public offering of the Shares pursuant to Rule 482 under
the Securities Act (an "Omitting Prospectus") complies with the
requirements of Rule 482, and does not contain an untrue statement of a
material fact.
SECTION 8. Representations and Warranties Relating to the Investment
Manager. The Investment Manager represents and warrants to each Underwriter
that:
(a) The Investment Manager has been duly incorporated, is
validly existing as a [corporation] in good standing under the laws of
the State of [Delaware], has the corporate power and authority to carry
on its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the nature of its business requires such qualification, except where
failure to be so qualified would not have a material adverse effect on
the Investment Manager.
(b) The Investment Manager is duly registered as an investment
adviser under the Advisers Act, and is not prohibited by the Investment
Advisers Act of 1940 or the Investment Company Act from acting under
the Management Agreement as an investment adviser to the Fund as
contemplated by the Prospectus, and no order of suspension or
revocation of such registration has been issued or proceedings therefor
initiated or, to the knowledge of the Investment Manager, threatened by
the Commission.
(c) Each of this Agreement and the Management Agreement has
been duly authorized, executed and delivered by the Investment Manager
and complies with all applicable provisions of the Investment Company
Act and the Investment Advisers Act. The Management Agreement, assuming
due authorization, execution and delivery by the other parties thereto,
constitutes the legal, valid and binding obligation of the Investment
Manager, enforceable against the Investment Manager in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting creditors' rights generally and by general
principles of
15
equity, regardless of whether considered in a proceeding in equity or
at law.
(d) The execution and delivery by the Investment Manager of,
and the performance by the Investment Manager of its obligations under,
this Agreement and the Management Agreement do not and will not
contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Investment Manager or any agreement or
other instrument binding upon the Investment Manager that is material
to the Investment Manager, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the
Investment Manager. No consent, approval, authorization, or other order
of or qualification with, any court or governmental body or agency,
self-regulatory agency or other tribunal is required for the
performance by the Investment Manager of its obligations under this
Agreement or the Management Agreement except such as have been obtained
and as may be required by the Acts, the Exchange Act or the securities
or Blue Sky laws of the various states in connection with the offer and
sale of the Shares.
(e) There are no legal or governmental proceedings pending or
threatened, to which the Investment Manager is or could be a party or
is or could be subject that are required to be described in the
Registration Statement or the Prospectus and are not so described.
(f) The Investment Manager has such Authorizations of, and has
made all filings with and notices to, all governmental or regulatory
authorities and self-regulatory organizations and all courts and other
tribunals, as are necessary to own and use its assets and to conduct
its business in the manner described in the Prospectus, except where
the failure to have any such Authorization or to make any such filing
or notice would not, singly or in the aggregate, have a material
adverse effect on the business, prospects, financial condition or
results of operations of the Investment Manager. Each such
Authorization is valid and in full force and effect and the Investment
Manager is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies
having jurisdiction with respect thereto; and no event has occurred
(including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse of
time or both, would allow, revocation, suspension or termination of any
such Authorization or results or, after notice or lapse of time or
both, would result in any other impairment of the rights of the holder
of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Investment Manager; except
where such failure
16
to be valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such restriction
would not, singly or in the aggregate, have a material adverse effect
on the business, prospects, financial condition or results of
operations of the Investment Manager.
(g) The Management Agreement is in full force and effect and
neither the Investment Manager nor, to the Investment Manager's
knowledge, the Fund is in default thereunder and, to the knowledge of
the Investment Manager, no event has occurred which with the passage of
time or the giving of notice or both would constitute a default under
such document.
(h) All information furnished by the Investment Manager for
use in the Registration Statement and Prospectus, including, without
limitation, the description of the Investment Manager, does not, and on
the Closing Date will not, contain any untrue statement of a material
fact or omit to state any material fact necessary to make such
information not misleading.
(i) Since the respective dates as of which information is
given in the Prospectus other than as set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), there has not occurred any material adverse
change or any development involving a prospective material adverse
change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Investment Manager from that
set forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement).
SECTION 9. Indemnification. (a) Each of the Fund and the Investment
Manager, jointly and severally, agree to indemnify and hold harmless each
Underwriter, its directors, its officers and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages, liabilities and judgments (including, without limitation, any legal or
other expenses incurred in connection with investigating or defending any
matter, including any action, that could give rise to any such losses, claims,
damages, liabilities or judgments) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or
any amendment thereto), the Prospectus (or any amendment or supplement thereto),
any Omitting Prospectus or any preliminary prospectus, or caused by any omission
or alleged omission to state therein a material fact required to be stated
17
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or judgments are caused by
any such untrue statement or omission or alleged untrue statement or omission
based upon information relating to any Underwriter furnished in writing to the
Fund by such Underwriter through you expressly for use therein; provided that
the foregoing indemnity agreement with respect to any Omitting Prospectus or
preliminary prospectus shall not inure to the benefit of any Underwriter who
failed to deliver the Prospectus, as then amended or supplemented (so long as
the Prospectus and any such amendment or supplement was provided by the Fund to
the several Underwriters in the requisite quantity and on a timely basis to
permit proper delivery on or prior to the Closing Date) to the person asserting
any losses, claims, damages, liabilities or judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in such
Omitting Prospectus or preliminary prospectus, or caused by 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, if such material
misstatement or omission or alleged material misstatement or omission was cured
in the Prospectus, as so amended or supplemented, and such Prospectus was
required by law to be delivered at or prior to the written confirmation of sale
to such person; provided further, that the Investment Manager will be required
to indemnify and hold harmless any indemnified party pursuant to this paragraph
only to the extent that the Fund fails to indemnify and hold harmless such
indemnified party pursuant to this paragraph.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Fund and the Investment Manager, their respective trustees
or directors, and each officer of the Fund who signs the Registration Statement
and each person, if any, who controls the Fund or the Investment Manager within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, to the same extent as the foregoing indemnity from the Fund and the
Investment Manager to such Underwriter but only with reference to information
relating to such Underwriter furnished in writing to the Fund by such
Underwriter through you expressly for use in the Registration Statement (or any
amendment thereto), the Prospectus (or any amendment or supplement thereto), any
Omitting Prospectus or any preliminary prospectus.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 9(a) or 9(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought
18
pursuant to both Sections 9(a) and 9(b), the Underwriter shall not be required
to assume the defense of such action pursuant to this Section 9(c), but may
employ separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
such Underwriter). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons of Underwriters,
such firm shall be designated in writing by ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation. In the case of any such separate firm for the Fund, and
such trustees, officers and control persons of the Fund, such firm shall be
designated in writing by the Fund. In the case of any such separate firm for the
Investment Manager, and such directors and control persons of the Investment
Manager, such firm shall be designated in writing by the Investment Manager. The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with its written consent or
(ii) effected without its written consent if the settlement is entered into more
than twenty business days after the indemnifying party shall have received a
request from the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such
19
settlement, compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability on claims that are or could have been the
subject matter of such action and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
indemnified party.
(d) To the extent the indemnification provided for in this Section 9
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
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 and judgments (i) in such
proportion as is appropriate to reflect the benefits received by the Fund and
the Investment Manager on the one hand and the Underwriters on the other hand
from the offering of the Shares or (ii) if the allocation provided by clause
9(d)(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Fund and the Investment Manager on the
one hand and the Underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Fund or the Investment
Manager shall be deemed to equal the aggregate public offering price of the
Shares. The benefits received by the Underwriters shall be deemed to equal the
product of [$.__] times the aggregate number of Shares purchased by the
Underwriters hereunder. The relative fault of the parties 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 or the Investment Manager on the one
hand or 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. The Investment Manager agrees to pay or cause to be paid
any amounts that are payable by the Fund pursuant to this paragraph to the
extent that the Fund fails to make all contributions required to be made by the
Fund pursuant to this paragraph.
The Fund, the Investment Manager and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 9(d)
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth
20
above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered 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
Securities 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 9(d) are several in proportion to the
respective number of Shares purchased by each of the Underwriters hereunder and
not joint.
(e) The indemnity and contribution provisions contained in this
Section 9 and the representations and warranties of the Fund and the Investment
Manager contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter, its officers or directors
or any person controlling any Underwriter, the Investment Manager, its officers
or directors or any person controlling the Investment Manager or the Fund, its
trustees or directors or any person controlling the Fund and (iii) acceptance of
and payment for any of the Shares.
(f) The remedies provided for in this Section 9 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
SECTION 10. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Fund and the
Investment Manager contained in this Agreement shall be true and
correct on the Closing Date with the same force and effect as if made
on and as of the Closing Date.
(b) If the Fund is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New
York City time, on the date of this Agreement; and no stop order
suspending the effectiveness of the Registration Statement shall have
been
21
issued and no proceedings for that purpose shall have been commenced or
shall be pending before or contemplated by the Commission.
(c) You shall have received on the Closing Date a certificate
dated the Closing Date, signed by ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇,
in their capacities as the President and Vice-President of the Fund,
confirming the matters set forth in Sections 7(r), 10(a) and 10(b) and
that the Fund has complied with all of the agreements and satisfied all
of the conditions herein contained and required to be complied with or
satisfied by the Fund on or prior to the Closing Date.
(d) You shall have received on the Closing Date a certificate
dated the Closing Date, signed by ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇,
in their capacities as the President and Vice-President of the
Investment Manager, confirming the matters set forth in Sections 8(j),
10(a) and 10(b) and that the Investment Manager has complied with all
of the agreements and satisfied all of the conditions herein contained
and required to be complied with or satisfied by the Investment Manager
on or prior to the Closing Date.
(e) Since the respective dates as of which information is
given in the Prospectus other than as set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there shall not have occurred any change
or any development involving a prospective change in the condition,
financial or otherwise, or the earnings, business, management or
operations of the Fund or the Investment Manager, from that set forth
in the Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) and (ii) there have been no
transactions entered into by the Fund or the Investment Manager which
are material to the Fund or the Investment Manager other than those in
the ordinary course of their business or as described in the
Prospectus, the effect of which, in any such case described in clause
(i) or (ii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Shares on the terms and
in the manner contemplated in the Prospectus.
(f) You shall have received on the Closing Date an opinion
(reasonably satisfactory to you and counsel for the Underwriters),
dated the Closing Date, of ▇▇▇▇▇▇▇, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
counsel for the Fund, to the effect that:
(i) the Fund has been duly formed, is validly
existing as a business trust in good standing under the laws
of the State of
22
Delaware and has the power and authority to carry on its
business as described in the Prospectus;
(ii) the Fund is duly qualified and is in good
standing to do business in each jurisdiction in which the
nature of its business requires such qualification, except
where the failure to be so qualified would not have a material
adverse effect on the business, prospects, financial condition
or results of operations of the Fund;
(iii) the Fund is registered with the Commission as a
non-diversified, closed-end management investment company
under the Investment Company Act and no order of suspension or
revocation of such registration has been issued or proceedings
therefor initiated or, to the best of counsel's knowledge,
threatened by the Commission;
(iv) each Fund Agreement has been duly authorized,
executed and delivered by the Fund. Each Fund Agreement, other
than this Agreement, assuming due authorization, execution and
delivery by the other parties thereto, and the Plan,
constitutes the legal, valid and binding obligation of the
Fund, enforceable against the Fund in accordance with its
terms except as such enforceability may be limited by
applicable bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting
creditors' rights generally and by general principles of
equity, regardless of whether considered in a proceeding in
equity or at law;
(v) all the outstanding capital shares of the Fund
have been duly authorized and validly issued and are fully
paid, non-assessable and not subject to any preemptive or
similar rights;
(vi) the Shares have been duly authorized and, when
issued and delivered to the Underwriters against payment
therefor as provided by this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of
such Shares will not be subject to any preemptive or similar
rights;
(vii) the authorized capital shares of the Fund
conforms as to legal matters to the description thereof
contained in the Prospectus, and the Declaration of Trust and
by-laws of the Fund, conform in all material respects to the
descriptions thereof contained in the Prospectus;
23
(viii) the Shares have been approved for listing on the
NYSE, subject to official notice of issuance;
(ix) the Fund does not require any tax r other rulings
to enable it to qualify as a regulated investment company
under Subchapter M of the Code;
(x) the Registration Statement has become effective
under the Acts, no stop order suspending its effectiveness has
been issued and no proceedings for that purpose are, to the
best of such counsel's knowledge after due inquiry, pending
before or contemplated by the Commission;
(xi) the statements under the captions "Description of
Shares" and "Taxes" in the Prospectus and Item 29 of Part C of
the Registration Statement, insofar as such statements
constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents and proceedings;
(xii) the Fund is not in violation of its Declaration
of Trust or by-laws and, to the best of such counsel's
knowledge after due inquiry, the Fund is not in default in the
performance of any obligation, agreement, covenant or
condition contained in any agreement or instrument that is
material to the Fund, to which it is a party or by which its
property is bound;
(xiii) the execution, delivery and performance by the
Fund of each Fund Agreement, the compliance by the Fund with
all the provisions hereof and the consummation of the
transactions contemplated thereby will not (A) require any
consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency
(except such as may be required under the securities or Blue
Sky laws of the various states), (B) conflict with or
constitute a breach of any of the terms or provisions of, or a
default under, the Declaration of Trust or by-laws of the Fund
or any agreement or instrument that is material to the Fund to
which it is a party or by which it or its property is bound,
(C) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over it or its
property or (D) result in the suspension, termination or
revocation
24
of any Authorization of the Fund or any other impairment of
the rights of the holder of any such Authorization;
(xiv) such counsel does not know of any legal or
governmental proceedings pending or threatened to which the
Fund is or could be a party or to which its property is or
could be subject that are required to be described in the
Registration Statement or the Prospectus and are not so
described, or of any statutes, regulations, contracts or other
documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so
described or filed as required;
(xv) the Fund has such Authorizations of, and has made
all filings with and notices to, all governmental or
regulatory authorities and self-regulatory organizations and
all courts and other tribunals as are necessary to own and use
its assets and to conduct its business, except where the
failure to have any such Authorization or to make any such
filing or notice would not, singly or in the aggregate, have a
material adverse effect on the business, prospects, financial
condition or results of operations of the Fund; each such
Authorization is valid and in full force and effect and the
Fund is in compliance with all the terms and conditions
thereof and with the rules and regulations of the authorities
and governing bodies having jurisdiction with respect thereto;
and no event has occurred (including, without limitation, the
receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would
allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or
both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations
contain no restrictions that are burdensome to the Fund; and
(xvi) (A) the Registration Statement, the Notification,
and the Prospectus and any supplement or amendment thereto
(except for the financial statements and other financial data
included therein as to which no opinion need be expressed)
comply as to form with the Acts, (B) such counsel has no
reason to believe that at the time the Registration Statement
became effective or on the date of this Agreement, the
Registration Statement and the prospectus included therein
(except for the financial statements and other financial data
as to which such counsel need not express any
25
belief) contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading and
(C) such counsel has no reason to believe that the Prospectus,
as amended or supplemented, if applicable (except for the
financial statements and other financial data, as aforesaid)
contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
The opinion of ▇▇▇▇▇▇▇, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP described in
Section 10(f) above shall be rendered to you at the request of the Fund and
shall so state therein.
(g) You shall have received on the Closing Date an opinion,
dated the Closing Date, of ▇▇▇▇▇▇▇, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
counsel for the Investment Manager, to the effect that:
(i) the Investment Manager has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the State of Delaware, has the
corporate power and authority to carry on its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which
the nature of its business requires such qualification, except
where failure to be so qualified would not have a material
adverse effect on the Investment Manager;
(ii) the Investment Manager is duly registered as an
investment adviser under the Advisers Act and is not
prohibited by the Advisers Act or the Investment Company Act
from acting under the Management Agreement as an investment
adviser to the Fund as contemplated by the Prospectus, and no
order of suspension or revocation of such registration has
been issued or proceedings therefor initiated or, to the
knowledge of the Investment Manager, threatened by the
Commission;
(iii) each of this Agreement and the Management
Agreement has been duly authorized, executed and delivered by
the Investment Manager and complies with all applicable
provisions of the Acts. The Management Agreement, assuming due
authorization, execution and delivery by the other parties
thereto, constitutes the legal, valid and binding obligation
of the Investment Manager, enforceable against the Investment
Manager in accord-
26
ance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws
affecting creditors' rights generally and by general
principles of equity, regardless of whether considered in a
proceeding in equity or at law;
(iv) the execution and delivery by the Investment
Manager of, and the performance by the Investment Manager of
its obligations under, this Agreement and the Management
Agreement do not and will not contravene any provision of
applicable law or the certificate of incorporation or by-laws
of the Investment Manager or any agreement or other instrument
binding upon the Investment Manager that is material to the
Investment Manager, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over
the Investment Manager. No consent, approval, authorization,
or other order of or qualification with, any court or
governmental body or agency, self-regulatory agency or other
tribunal is required for the performance by the Investment
Manager of its obligations under this Agreement or the
Management Agreement except such as have been obtained and as
may be required by the Acts, the Exchange Act or the
securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares;
(v) such counsel does not know of any legal or
governmental proceedings pending or threatened, to which the
Investment Manager is or could be a party or is or could be
subject that are required to be described in the Registration
Statement or the Prospectus and are not so described, or of
any statutes, regulations, contracts or other documents that
are required to be described in the Registration Statement or
the Prospectus or to be filed as exhibits to the Registration
Statement that are not so described or filed as required;
(vi) the Investment Manager has such Authorizations
of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, as are
necessary to own and use its assets and to conduct its
business in the manner described in the Prospectus, except
where the failure to have any such Authorization or to make
any such filing or notice would not, singly or in the
aggregate, have a material adverse effect on the
27
business, prospects, financial condition or results of
operations of the Investment Manager. Each such Authorization
is valid and in full force and effect and the Investment
Manager is in compliance with all the terms and conditions
thereof and with the rules and regulations of the authorities
and governing bodies having jurisdiction with respect thereto;
and no event has occurred (including, without limitation, the
receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would
allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or
both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations
contain no restrictions that are burdensome to the Investment
Manager; and
(vii) the description of the Investment Manager in the
Registration Statement and Prospectus does not contain any
untrue statement of a material fact or omit to state any
material fact necessary to make such the statements therein,
in light of the circumstances under which they were made, not
misleading.
(h) You shall have received on the Closing Date an opinion,
dated the Closing Date, of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
Underwriters, as to the matters referred to in Sections 10(f)(iv) (but
only as to this Agreement), 10(f)(vi), 10(f)(xi) (but only with respect
to the statements under the caption "Description of Shares" and
"Underwriting") and 10(f)(xvi).
In giving such opinions with respect to the matters
covered by Section 10(f)(xvi) ▇▇▇▇▇▇▇, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP and ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ may state that their
opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and
any amendments or supplements thereto and review and
discussion of the contents thereof, but are without
independent check or verification except as specified.
(i) You shall have received on the Closing Date a certificate
from a duly authorized officer of the Custodian and the Transfer and
Dividend Disbursing Agent, certifying that the Custody, Transfer and
Dividend Disbursing Agreement is in full force and effect and is the
legal, valid, binding and enforceable obligation of the Custodian and
the Transfer and Dividend Disbursing Agent, assuming that such
Agreement is a legal, valid, binding and enforceable obligation of the
other party thereto.
28
(j) You shall have received on the Closing Date a certificate
from a duly authorized officer of the Administrator certifying that the
Administration Agreement is in full force and effect and is the legal,
valid, binding and enforceable obligation of the Administrator,
assuming that such Agreement is a legal, valid, binding and enforceable
obligation of the other party thereto.
(k) You shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to you, from
▇▇▇▇▇ & Young LLP, independent public accountants, containing the
information and statements of the type ordinarily included in
accountants' "comfort letters" to Underwriters regarding the Fund
contained in the Registration Statement and the Prospectus.
(l) All proceedings taken by the Fund and the Investment
Manager in connection with the organization and registration of the
Fund and the Shares under the Acts shall be satisfactory in form and
substance to you and counsel for the Underwriters.
(m) No proceedings shall have been instituted or threatened by
the Commission which would adversely affect the Fund's standing as a
registered investment company under the Investment Company Act or the
standing of the Investment Manager as a registered investment adviser
under the Advisers Act.
(n) The Shares shall have been duly authorized for listing,
subject only to official notice of issuance, on the NYSE.
(o) The Fund and the Investment Manager shall not have failed
on or prior to the Closing Date to perform or comply with any of the
agreements herein contained and required to be performed or complied
with by the Fund and the Investment Manager on or prior to the Closing
Date.
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Fund and the Investment Manager, the due authorization and
issuance of such Additional Shares and other matters related to the issuance of
such Additional Shares.
29
Section 11. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Fund if any of the following has occurred:
(i) any outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic conditions or in the financial markets
of the United States or elsewhere that, in your judgment, is material and
adverse and, in your judgment, makes it impracticable to market the Shares on
the terms and in the manner contemplated in the Prospectus, (ii) the suspension
or material limitation of trading in securities or other instruments on the
NYSE, the American Stock Exchange, the Chicago Board of Options Exchange, the
Chicago Mercantile Exchange, the Chicago Board of Trade or the NASDAQ National
Market or limitation on prices for securities or other instruments on any such
exchange or the NASDAQ National Market, (iii) the enactment, publication, decree
or other promulgation of any federal or state statute, regulation, rule or order
of any court or other governmental authority which in your opinion materially
and adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Fund, (iv) the
declaration of a banking moratorium by either federal or New York State
authorities or (v) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States and that, in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it has or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Firm Shares or Additional Shares, as the
case may be, to be purchased on such date by all Underwriters, each
non-defaulting Underwriter shall be obligated severally, in the proportion which
the number of Firm Shares set forth opposite its name in Schedule I bears to the
total number of Firm Shares which all the non-defaulting Underwriters have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Shares which any Underwriter
has agreed to purchase pursuant to Section 2 hereof be increased pursuant to
this Section 11 by an
30
amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If on the Closing Date any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased by all
Underwriters and arrangements satisfactory to you and the Fund for purchase of
such Firm Shares are not made within 48 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Underwriter,
the Fund and the Investment Manager. In any such case which does not result in
termination of this Agreement, either you or the Fund shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. If, on an
Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased on such date, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation hereunder
to purchase such Additional Shares or (ii) purchase not less than the number of
Additional Shares that such non-defaulting Underwriters would have been
obligated to purchase on such date in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of any such Underwriter under this
Agreement.
Section 12. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Fund, to DLJ High
Yield Bond Fund, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; (ii) if to the
Investment Manager, to DLJ Investment Management Corp., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; and (iii) if to any Underwriter or to you, to you c/▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate Department, or in any case to such other
address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Fund, the Investment Manager and the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Shares, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter, the officers or
directors of any Underwriter, any person controlling any Underwriter, the Fund,
the officers or trustees of the Fund or any person controlling the Fund, the
Investment Manager, the officers or directors of the Investment Manager or any
person controlling the
31
Investment Manager, (ii) acceptance of the Shares and payment for them hereunder
and (iii) termination of this Agreement.
If for any reason the Shares are not delivered by or on behalf of the
Fund as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 11), the Fund agrees to reimburse the several
Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) incurred by them. The Fund also agrees to reimburse
the several Underwriters, their directors and officers and any persons
controlling any of the Underwriters for any and all fees and expenses
(including, without limitation, the fees disbursements of counsel) incurred by
them in connection with enforcing their rights hereunder (including, without
limitation, pursuant to Section 9 hereof).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Fund, the Investment
Manager, the Underwriters, the Underwriters' directors and officers, any
controlling persons referred to herein, the Fund's and the Investment Manager's
trustees or directors and the Fund's officers who sign the Registration
Statement and their respective successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" shall
not include a purchaser of any of the Shares from any of the several
Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
32
Please confirm that the foregoing correctly sets forth the agreement
between the Fund, the Investment Manager and the several Underwriters.
Very truly yours,
DLJ HIGH YIELD BOND FUND
By:
--------------------------------
Title:
DLJ INVESTMENT MANAGEMENT
CORP.
By:
--------------------------------
Title:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
ADVEST, INC.
FAC/EQUITIES
▇▇▇▇▇▇▇▇▇▇ & CO. INC.
FIRST OF MICHIGAN CORPORATION
GRUNTAL & CO., L.L.C.
INTERSTATE/▇▇▇▇▇▇▇ ▇▇▇▇
CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ INC.
▇▇▇▇▇ BROTHERS & CO. LTD.
SUTRO & CO. INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ INCORPORATED
Acting severally on behalf of themselves and the
several Underwriters named in Schedule I
hereto
By: ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By:
--------------------------------
Title:
33
SCHEDULE I
Number of Firm Shares
Underwriters to be Purchased
------------ -------------------------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation
Advest, Inc.
FAC/Equities
▇▇▇▇▇▇▇▇▇▇ & Co. Inc.
First of Michigan Corporation
Gruntal & Co., L.L.C.
Interstate/▇▇▇▇▇▇▇ ▇▇▇▇
Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
▇▇▇▇▇ Brothers & Co. Ltd.
Sutro & Co. Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Incorporated
-------------------------
Total
CROSS-REFERENCE TARGET LIST
NOTE: Due to the number of targets some target names may not appear in the
target pull-down list. (This list is for the use of the wordprocessor only, is
not a part of this document and may be discarded.)
ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME
---------------------------------- --------------- ----------- --------------- ----------- --------------- -----------
1...................reg.stmt.pros
2.............agt.sell.purch.lock
3....................term.pub.off
4.........................▇▇▇.▇▇▇
5..........................co.agt
5(e).................co.furn.pros
5(k)...................co.pay.exp
6.....................agmt.invest
7......................▇▇▇.▇▇▇.▇▇
7(r)...............no.mat.adv.chg
9...........................indem
9(a).....................co.indem
9(b)....................und.indem
9(c)......................▇▇▇.▇▇▇
9(d)................indem.unavail
9(d)(i)....................propor
9(f).........................reme
10.................cond.und.oblig
10(a).............co.rep.war.true
10(b)....................rule462b
10(e)(i)..............no.chg.cond
10(f)................▇▇▇▇.▇▇▇▇.▇▇
10(f)(xi)............fair.present
10(f)(xvi)........reg.pros.comply
11...................eff.agt.term
12...........................misc