EXHIBIT H
Calamos Convertible Opportunities and Income Fund
(a Delaware business trust)
[ ] Auction Market Preferred Shares ("AMPS") of Beneficial Interest
[ ] Shares [ ] AMPS, Series [ ]
[ ] Shares [ ] AMPS, Series [ ]
[ ] Shares [ ] AMPS, Series [ ]
[ ] Shares [ ] AMPS, Series [ ]
[ ] Shares [ ] AMPS, Series [ ]
Liquidation Preference $25,000 per share
PURCHASE AGREEMENT
[ ], 2002
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
North Tower
World Financial Center
New York, New York 10080
Ladies and Gentlemen:
Calamos Convertible Opportunities and Income Fund, a Delaware business
trust (the "Fund"), proposes, upon the terms and conditions set forth herein, to
issue and sell an aggregate of [ ] shares of its Auction Market Preferred Shares
of Beneficial Interest, Series [ ], [ ] shares of its Auction Market Preferred
Shares of Beneficial Interest, Series [ ], [ ] shares of its Auction Market
Preferred Shares of Beneficial Interest, Series [ ], [ ] shares of its Auction
Market Preferred Shares of Beneficial Interest, Series [ ], and [ ] shares of
its Auction Market Preferred Shares, Series [ ], each with a liquidation
preference of $25,000 per share (the "AMPS"). The AMPS will be authorized by,
and subject to the terms and conditions of, the Statement of Preferences of
Preferred Shares, dated as of [ ], 2002 (the "Statement") and the Agreement and
Declaration of Trust of the Fund, dated as of April 17, 2002 (the
"Declaration"), in the forms filed as exhibits to the Registration Statement
referred to in the second following paragraph of this Agreement, as the same may
be amended from time to time. The Fund, the Fund's investment adviser, Calamos
Asset Management, Inc., an Illinois corporation (the "Investment Adviser"), each
confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ is acting as representative (in such capacity,
the "Representative"), with respect to the issue and sale by the Fund and the
purchase by the Underwriters, acting severally and not jointly, of the
respective number of AMPS set forth in said Schedule A.
The Fund understands that the Underwriters propose to make a public
offering of the AMPS as soon as the Representative deems advisable after this
Agreement has been executed and delivered.
The Fund has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (No. 333-96997 and No.
811-21080) covering the registration of the
AMPS under the Securities Act of 1933, as amended (the "1933 Act"), including
the related preliminary prospectus or prospectuses, and a notification on Form
N-8A of registration of the Fund as an investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules and regulations
of the Commission under the 1933 Act and the 1940 Act (the "Rules and
Regulations"). Promptly after execution and delivery of this Agreement, the Fund
will either (i) prepare and file a prospectus in accordance with the provisions
of Rule 430A ("Rule 430A") of the Rules and Regulations and paragraph (c) or (h)
of Rule 497 ("Rule 497") of the Rules and Regulations or (ii) if the Fund has
elected to rely upon Rule 434 ("Rule 434") of the Rules and Regulations, prepare
and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule
434 and Rule 497. The information included in any such prospectus or in any such
Term Sheet, as the case may be, that was omitted from such registration
statement at the time it became effective but that is deemed to be part of such
registration statement at the time it became effective, if applicable, (a)
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A Information"
or (b) pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434
Information." Each prospectus used before such registration statement became
effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, including in each
case any statement of additional information incorporated therein by reference,
is herein called a "preliminary prospectus." Such registration statement,
including the exhibits thereto and schedules thereto at the time it became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the Rules and Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus in the form first furnished to the Underwriters
for use in connection with the offering of the AMPS, including the statement of
additional information incorporated therein by reference, is herein called the
"Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to the
preliminary prospectus dated [ ], 2002 together with the Term Sheet and all
references in this Agreement to the date of the Prospectus shall mean the date
of the Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all reference in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be..
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Fund and the Investment
Adviser. The Fund and the Investment Adviser jointly and severally represent and
warrant to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and agree with each Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act, or order of
suspension or revocation of registration pursuant to Section 8(e) of
the 1940 Act, and no proceedings for any such purpose have been
2
instituted or are pending or, to the knowledge of the Fund or the
Investment Adviser, are contemplated by the Commission, and any request
on the part of the Commission for additional information has been
complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time, the Registration Statement,
the Rule 462(b) Registration Statement, the notification on Form N-8A
and any amendments and supplements thereto complied and will comply in
all material respects with the requirements of the 1933 Act, the 1940
Act and the 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 not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement, Rule 462(b) Registration
Statement and any post--effective amendments thereto or the Prospectus
and any amendments or supplements thereto made in reliance upon and in
conformity with information furnished to the Fund by any Underwriter in
writing expressly for use in the Registration Statement, Rule 462(b)
Registration Statement and any post--effective amendments thereto or in
the Prospectus and any amendments or supplements thereto. Neither the
Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued and at the
Closing Time, included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434
is used, the Fund will comply with the requirements of Rule 434 and the
Prospectus shall not be "materially different", as such term is used in
Rule 434, from the prospectus included in the Registration Statement at
the time it became effective.
Each preliminary prospectus and the 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 1933 Act,
complied when so filed in all material respects with the Rules and
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted
by Regulation S-T.
If a Rule 462(b) Registration Statement is required in
connection with the offering and sale of the AMPS, the Fund has
complied or will comply with the requirements of Rule 111 under the
1933 Act Regulations relating to the payment of filing fees thereof.
(ii) Independent Accountants. The accountants who certified
the statement of assets and liabilities included in the Registration
Statement have represented to the Fund that they are independent public
accountants as required by the 1933 Act and the Rules and Regulations.
(iii) Financial Statements. The statement of assets and
liabilities included in the Registration Statement and the Prospectus,
together with the related notes, presents fairly the financial position
of the Fund at the date indicated; said statement has been prepared in
conformity with generally accepted accounting principles ("GAAP").
(iv) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with
the requirements of the 1933 Act and the Rules and Regulations and,
when read together with the other information in the Prospectus, at the
time the Registration Statement became effective, at the time the
Prospectus was issued and at the Closing Time, did not and will not
contain an untrue
3
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.
(v) No Material Adverse Change. Since the respective dates as
of which information with respect to the Fund is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein and except for changes in the net asset value of the Fund
arising out of normal investment operations, (A) there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Fund,
whether or not arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions entered into by
the Fund, other than those in the ordinary course of business, which
are material with respect to the Fund, and (C) there has been no
dividend or distribution of any kind declared, paid or made by the Fund
on any class of its capital stock.
(vi) Good Standing of the Fund. The Fund has been duly
established and is validly existing as a business trust in good
standing under the laws of the State of Delaware and has business trust
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into
and perform its obligations under this Agreement; and the Fund is duly
qualified as a foreign business trust to transact business and is in
good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect.
(vii) No Subsidiaries. The Fund has no subsidiaries.
(viii) Investment Company Status. The Fund is duly registered
with the Commission under the 1940 Act as a closed-end diversified
management investment company and, to the knowledge of the Fund and the
Investment Adviser, no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated or
threatened by the Commission.
(ix) Officers and Trustees. To the knowledge of the Fund and
the Investment Adviser, no person is serving or acting as an officer,
trustee or investment adviser of the Fund except in accordance with the
provisions of the 1940 Act and the 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"). Except as
disclosed in the Registration Statement and the Prospectus (or any
amendment or supplement to either of them), to the knowledge of the
Fund and the Investment Adviser, no trustee 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
listed in Schedule A hereto.
(x) Capitalization. The authorized, issued and outstanding
common shares of beneficial interest of the Fund is as set forth in the
Prospectus as of the date thereof under the caption "Description of
Common Shares." All issued and outstanding common shares of beneficial
interest of the Fund have been duly authorized and validly issued and
are fully paid and non-assessable and have been offered and sold or
exchanged by the Fund in compliance with all applicable laws
(including, without limitation, federal and state securities laws);
none of the outstanding common shares of beneficial interest of the
Fund was issued in violation of the preemptive or other similar rights
of any securityholder of the Fund.
(xi) Authorization and Description of AMPS. The AMPS to be purchased by
the Underwriters from the Fund have been duly authorized for issuance
and sale to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Fund pursuant to this Agreement against
payment of the consideration set forth herein, will be validly issued
and fully
4
paid and non-assessable. The AMPS conform in all material respects to
all statements relating thereto contained in the Prospectus and such
description conforms in all material respects to the rights set forth
in the instruments defining the same; no holder of the AMPS will be
subject to personal liability solely by reason of being such a holder;
and the issuance of the AMPS is not subject to the preemptive or other
similar rights of any securityholder of the Fund.
(xii) Absence of Defaults and Conflicts. The Fund is not in
violation of its declaration of trust or by-laws, or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other 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 Fund is subject
(collectively, "Agreements and Instruments") except for such violations
or defaults that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement, the Investment
Management Agreement, the Administration Agreement, the Custody
Agreement, the Stock Transfer Agency Agreement and the Auction Agency
Agreement referred to in the Registration Statement (as used herein,
the "Management Agreement," the "Administration Agreement," the
"Custody Agreement," and the "Stock Transfer Agency Agreement" and the
"Auction Agency Agreement" respectively) and the consummation of the
transactions contemplated herein and in the Registration Statement
(including the issuance and sale of the AMPS and the use of the
proceeds from the sale of the AMPS as described in the Prospectus under
the caption "Use of Proceeds") and performance by the Fund of its
obligations hereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, violate or constitute a
breach of, or default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Fund pursuant to, the Agreements and
Instruments (except for such violations, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions
of the declaration of trust or by-laws of the Fund or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Fund or any of its assets, properties or
operations (except for such violations that would not result in a
Material Adverse Effect). As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Fund.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Fund or the Investment Adviser, threatened,
against or affecting the Fund, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect
the properties or assets of the Fund or the consummation of the
transactions contemplated in this Agreement or the performance by the
Fund of its obligations hereunder. The aggregate of all pending legal
or governmental proceedings to which the Fund is a party or of which
any of its property or assets is the subject which are not described in
the Registration Statement, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result
in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits thereto by
5
the 1933 Act, the 1940 Act or by the Rules and Regulations which have
not been so described and filed as required.
(xv) Possession of Intellectual Property. The Fund or the
Investment Adviser owns or possesses, or can acquire on reasonable
terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by the Fund, and neither the Fund
nor the Investment Adviser has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Fund therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Fund of its
obligations hereunder, in connection with the offering, issuance or
sale of the AMPS hereunder or the consummation of the transactions
contemplated by this Agreement, except such as have been already
obtained or as may be required under the 1933 Act, the 1940 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), or state
securities laws.
(xvii) Possession of Licenses and Permits. The Fund possesses
such material permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to operate its properties and to conduct the business
as contemplated in the Prospectus; the Fund is not in violation of the
terms and conditions of any such Governmental Licenses, except where
such violation would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and the Fund
has not received any notice of proceedings relating to the revocation
or modification of any such Governmental Licenses which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xviii) Advertisements. Any 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 Investment Adviser used in
connection with the public offering of the AMPS (collectively, "Sales
Material") does 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. Moreover, all Sales Material
complied and will 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 National Association of
Securities Dealers, Inc. ("NASD").
(xix) Subchapter M. The Fund intends to direct the investment
of the proceeds of the offering described in the Registration Statement
in such a manner as to comply with the requirements of Subchapter M of
the Internal Revenue Code of 1986, as amended ("Subchapter M of the
Code" and the "Code," respectively), and intends to qualify as a
regulated investment company under Subchapter M of the Code.
6
(xx) Distribution of Offering Materials. The Fund has not
distributed and, prior to the later to occur of (A) the Closing Time
and (B) completion of the distribution of the AMPS, will not distribute
any offering material in connection with the offering and sale of the
AMPS other than the Registration Statement, a preliminary prospectus,
the Prospectus or other materials, if any, permitted by the 1933 Act or
the 1940 Act or the Rules and Regulations.
(xxi) Accounting Controls. The Fund maintains a system of
internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with
management's general or specific authorization and with the applicable
requirements of the 1940 Act, the Rules and Regulations and the Code;
(B) 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 Rules and Regulations; (C) access to assets is permitted only
in accordance with the management's general or specific authorization;
and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxii) Absence of Undisclosed Payments. To the Fund's
knowledge, neither the Fund nor any employee or agent of the Fund has
made any payment of funds of the Fund or received or retained any
funds, which payment, receipt or retention of funds is of a character
required to be disclosed in the Prospectus.
(xxiii) Material Agreements. This Agreement, the Management
Agreement, the Administration Agreement, the Custody Agreement, the
Stock Transfer Agency Agreement and the Auction Agency Agreement have
each been duly authorized by all requisite action on the part of the
Fund, executed and delivered by the Fund, as of the dates noted therein
and each does not violate any applicable provisions of the 1940 Act.
Assuming due authorization, execution and delivery by the other parties
thereto with respect to the Administration Agreement, the Custody
Agreement and the Stock Transfer Agency Agreement, each of the
Management Agreement, the Administration Agreement, the Custody
Agreement and the Stock Transfer Agency Agreement constitutes a valid
and binding agreement of the Fund, enforceable in accordance with its
terms, except as affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing.
(xxiv) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Fund under the 1933 Act.
(xxv) Ratings. The AMPS have been, or prior to the Closing
Date will be, assigned a rating of 'aaa' by ▇▇▇▇▇'▇ Investors Service,
Inc. ("Moody's") and "AAA" by Standard & Poor's Rating Services
("S&P").
(b) Representations and Warranties by the Investment Adviser. The
Investment Adviser represents and warrants to each Underwriter as of the date
hereof, as of the Closing Time referred to in Section 2(c) hereof as follows:
(i) Good Standing of the Investment Adviser. The Investment
Adviser has been duly established and is validly existing and in good
standing as a corporation under the laws of the State of Illinois with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus
and is duly qualified as a
7
foreign corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is required.
(ii) Investment Adviser Status. The Investment Adviser is
registered with the Commission as an investment adviser under the
Advisers Act, and is not prohibited by the Advisers Act or the 1940
Act, or the rules and regulations under such acts, from acting under
the Management Agreement or Administration Agreement for the Fund as
contemplated by the Prospectus.
(iii) Description of Investment Adviser. The description of
the Investment Adviser in the Registration Statement and the Prospectus
(and any amendment or supplement to either of them) did not violate and
does not violate in any material respect the provisions of the 1933
Act, the 1940 Act, the Rules and Regulations, the Advisers Act and the
Advisers Act Rules and Regulations and is true and correct and does not
contain any untrue statement of a material fact or omit to state any
material fact required 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.
(iv) Capitalization. The Investment Adviser has the financial
resources available to it necessary for the performance of its services
and obligations as contemplated in the Prospectus, this Agreement and
under the Management Agreement and Administration Agreement.
(v) Authorization of Agreements; Absence of Defaults and
Conflicts. This Agreement, the Management Agreement and the
Administration Agreement have each been duly authorized, executed and
delivered by the Investment Adviser, and the Management Agreement and
the Administration Agreement each constitute a valid and binding
obligation of the Investment Adviser, enforceable in accordance with
its terms, except as affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law);
and neither the execution and delivery of this Agreement, the
Management Agreement or the Administration Agreement nor the
performance by the Investment Adviser of its obligations hereunder or
thereunder will violate, or result in a breach of any of the terms and
provisions of, or constitute, with or without the giving of notice or
lapse of time or both, a default under, any agreement or instrument to
which the Investment Adviser is a party or by which it is bound and
which are material to the conduct of the Investment Adviser's services
under each of the Management Agreement and the Administration
Agreement, the certificate of incorporation, the by-laws or other
organizational documents of the Investment Adviser, or to the
Investment Adviser's knowledge, by any law, order, decree, rule or
regulation applicable to it of any jurisdiction, court, federal or
state regulatory body, administrative agency or other governmental
body, stock exchange or securities association having jurisdiction over
the Investment Adviser or its properties or operations; and no consent,
approval, authorization or order of any court or governmental authority
or agency is required for the consummation by the Investment Adviser of
the transactions contemplated by this Agreement, the Management
Agreement or the Administration Agreement, except as have been obtained
or may be required under the 1933 Act, the 1940 Act, the 1934 Act or
state securities laws.
(vi) No Material Adverse Change. Since the respective dates as
of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, there has not occurred
any event which should reasonably be expected to have a Material
Adverse Effect on the ability of the Investment Adviser to perform its
obligations under this Agreement and the Management Agreement and
Administration Agreement.
(vii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or
8
foreign, now pending, or, to the knowledge of the Investment Adviser,
threatened against or affecting the Investment Adviser or any
"affiliated person" of the Investment Adviser (as such term is defined
in the 1940 Act) or any partners, directors, officers or employees of
the foregoing, whether or not arising in the ordinary course of
business, which should reasonably be expected to result in any material
adverse change in the condition, financial or otherwise, or earnings,
business affairs or business prospects of the Investment Adviser
whether or not arising in the ordinary course of business, materially
and adversely affect the properties or assets of the Investment Adviser
or materially impair or adversely affect the ability of the Investment
Adviser to function as an investment adviser or perform its obligations
under the Management Agreement or the Administration Agreement, or
which is required to be disclosed in the Registration Statement and the
Prospectus.
(viii) Absence of Violation or Default. The Investment Adviser
is not in violation of its certificate of incorporation, by-laws or
other organizational documents or in default under any agreement,
indenture or instrument, except for such violations or defaults that
would not result in a Material Adverse Effect on the Investment Adviser
or the Fund.
(c) Officer's Certificates. Any certificate signed by any officer of
the Fund or the Investment Adviser delivered to the Representative or to counsel
for the Underwriters shall be deemed a representation and warranty by the Fund
or the Investment Adviser, as the case may be, to each Underwriter as to the
matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) AMPS. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Fund
agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Fund, at the
price per share set forth in Schedule B, the number of AMPS set forth in
Schedule A opposite the name of such Underwriter, plus any additional number of
AMPS which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof.
(b) Commission. The Fund agrees to pay to the Underwriters a commission
set forth in Schedule B as compensation to the Underwriters for their
commitments under this Agreement.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the AMPS shall be made at the offices of ▇▇▇▇▇▇▇▇ Chance
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, New York, New York 10166, or through the facilities of the
Depository Trust Company ("DTC") or at such other place as shall be agreed upon
by the Representative and the Fund, at 10:00 A.M. (Eastern time) on the business
day after the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such date
as shall be agreed upon by the Representative and the Fund (such time and date
of payment and delivery being herein called "Closing Time").
Payment shall be made to the Fund by wire transfer of immediately
available funds to a bank account designated by the Fund, against delivery to
the Representative for the respective accounts of the Underwriters of
certificates for the AMPS to be purchased by them. It is understood that each
Underwriter has authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for the AMPS
which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the AMPS to be purchased by any Underwriter
whose funds have not been received by the Closing Time but such payment shall
not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the AMPS shall be in
such denominations and registered in such names as the Representative may
request in writing at least one full business day before the Closing Time. The
certificates for the AMPS will be made available for examination and packaging
9
by the Representative in the City of New York not later than 10:00 A.M. (Eastern
time) on the business day prior to the Closing Time.
SECTION 3. Covenants.
(a) The Fund and the Investment Adviser, jointly and severally,
covenant with each Underwriter as follows:
(i) Compliance with Securities Regulations and Commission
Requests. The Fund, subject to Section 3(a)(ii), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify
the Representative immediately, and confirm the notice in writing, (i)
when any post-effective amendment to the Registration Statement shall
become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the AMPS for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings
for any of such purposes. The Fund will promptly effect the filings
necessary pursuant to Rule 497 and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 497 was received for filing by the
Commission and, in the event that it was not, it will promptly file
such prospectus. The Fund will make reasonable efforts to prevent the
issuance of any stop order, or order of suspension or revocation of
registration pursuant to Section 8(e) of the 1940 Act, and, if any such
stop order or order of suspension or revocation of registration is
issued, to obtain the lifting thereof at the earliest possible moment.
If at any time the Commission shall issue any order suspending the
effectiveness of the Registration Statement, prohibiting or suspending
the use of the Prospectus or any sales material (or any amendment or
supplement to any of the foregoing) or suspending the qualification of
the AMPS for offering or sale in any jurisdiction, the Fund and the
Advisers will use their reasonable best efforts to obtain the
withdrawal of such order at the earliest possible time. If at any time
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 (or any amendment or supplement to any of the foregoing)
or suspending the qualification of the AMPS for offering or sale in any
jurisdiction, the Advisers will use their reasonable best efforts to
obtain the withdrawal of such order at the earliest possible time.
(ii) Filing of Amendments. The Fund will give the
Representative notice of its intention to file or prepare any amendment
to the Registration Statement (including any filing under Rule 462(b)),
any Term Sheet or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, will furnish the Representative with
copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use
any such document to which the Representative or counsel for the
Underwriters shall reasonably object.
(iii) Delivery of Registration Statements. The Fund has
furnished or will deliver to the Representative and counsel for the
Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein) and
signed copies of all consents and certificates of experts, and will
also deliver to the Representative, without charge, a conformed copy of
the
10
Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(iv) Delivery of Prospectuses. The Fund has delivered to each
Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the Fund
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Fund will furnish to each Underwriter, without charge,
during the period when in the opinion of counsel for the Underwriters
the Prospectus is required to be delivered under the 1933 Act in
connection with sales by any Underwriter or dealer or the 1934 Act,
such number of copies of the Prospectus (as amended or supplemented) as
such Underwriter may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with
the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(v) Continued Compliance with Securities Laws. If at any time
when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the AMPS, any event shall occur or condition
shall exist as a result of which it is necessary, in the reasonable
opinion of counsel for the Underwriters or for the Fund, to amend the
Registration Statement or amend or supplement the Prospectus in order
that the Prospectus will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the reasonable opinion of such counsel, at
any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the Rules and Regulations, the Fund will promptly
prepare and file with the Commission, subject to Section 3(a)(ii), such
amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus
comply with such requirements, and the Fund will furnish to the
Underwriters such number of copies of such amendment or supplement as
the Underwriters may reasonably request.
(vi) Blue Sky Qualifications. The Fund will use its best
efforts, in cooperation with the Underwriters, to qualify the AMPS for
offering and sale under the applicable securities laws of such states
and other jurisdictions of the United States as the Representative may
designate and to maintain such qualifications in effect for a period of
not less than one year from the later of the effective date of the
Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the Fund shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the AMPS have been so qualified,
the Fund will file such statements and reports as may be required by
the laws of such jurisdiction to continue such qualification in effect
for a period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(vii) Filing Reports. The Fund will timely file such reports
pursuant to the 1940 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(viii) Use of Proceeds. The Fund will use the net proceeds
received by it from the sale of the AMPS in the manner specified in the
Prospectus under "Use of Proceeds".
11
(ix) Reporting Requirements. The Fund, during the period when
the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1940 Act and the 1934 Act within the time
periods required by the 1940 Act and the Rules and Regulations and the
1934 Act and the rules and regulations of the Commission thereunder,
respectively.
(x) Subchapter M. The Fund will direct the investment of the
proceeds of the offering described in the Registration Statement and in
the Prospectus in such a manner as to comply with the requirements of
Subchapter M of the Code, and will use its best efforts to maintain its
qualification as a regulated investment company under Subchapter M of
the Code.
(xi) No Manipulation of Market for AMPS. The Fund will not (a)
take, directly or indirectly, any action designed to cause or to result
in, or that might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Fund
to facilitate the sale or resale of the AMPS, and (b) until the Closing
Date (i) sell, bid for or purchase the AMPS or pay any person any
compensation for soliciting purchases of the AMPS or (ii) pay or agree
to pay to any person any compensation for soliciting another to
purchase any other securities of the Fund .
(xii) Rule 462(b) Registration Statement. If the Fund elects
to rely upon Rule 462(b), the Fund shall file a Rule 462(b)
Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Fund shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to
Rule 111(b) under the 1933 Act.
(xiii) Accountant's Certificate. The Fund will furnish to the
Underwriters, on the date on which delivery is made to the Rating
Agencies, the report and the confirmation of the Independent Accountant
(as defined in the Statement) required to be delivered pursuant to
Section 12(g) of Part I of the Statement.
(b) Except as provided in this Agreement, the Fund will not sell,
contract to sell or otherwise dispose of any of its preferred shares of
beneficial interest of the same series as the AMPS or any securities convertible
into or exercisable or exchangeable for its preferred shares of beneficial
interest of the same series as the AMPS, or grant any options or warrants to
purchase its preferred shares of beneficial interest of the same series as the
AMPS, for a period of 180 days after the date of the Prospectus, without the
prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 4. Payment of Expenses.
(a) Expenses. The Fund will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the AMPS, (iii) the preparation, issuance and delivery of the certificates
for the AMPS to the Underwriters, including any stock or other transfer taxes
and any stamp or other duties payable upon the sale, issuance or delivery of the
AMPS to the Underwriters, (iv) the fees and disbursements of the Fund's counsel,
accountants and other advisors, (v) the qualification of the AMPS under
securities laws in accordance with the provisions of Section 3(a)(vi) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus,
Prospectus and any amendments or
12
supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii)
the fees and expenses of any transfer agent or registrar for the AMPS, (ix) the
filing fees incident to, and the reasonable fees and disbursements of counsel to
the Underwriters in connection with, the review by the NASD of the terms of the
sale of the AMPS, (x) the fees and expenses incurred in connection with the
rating of the AMPS and (xi) the printing of any Sales Material.
(b) Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or Section 9(a)(i)
or (iii) hereof, the Fund and the Investment Adviser, jointly and severally,
agree that they shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
SECTION 5. Conditions of Underwriters' Obligations.
The obligations of the several Underwriters hereunder are subject to
the accuracy of the representations and warranties of the Fund and the
Investment Adviser contained in Section 1 hereof or in certificates of any
officer of the Fund or the Investment Adviser delivered pursuant to the
provisions hereof, to the performance by the Fund and the Investment Adviser of
their respective covenants and other obligations hereunder, and to the following
further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, shall have become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act, no notice or
order pursuant to Section 8(e) of the 1940 Act shall have been issued, and no
proceedings with respect to either shall have been initiated or to the knowledge
of the Fund or Investment Adviser threatened by the Commission, and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the Underwriters. A
prospectus containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 497 (or a post-effective amendment providing
such information shall have been filed and declared effective in accordance with
the requirements of Rule 430A) or, if the Fund has elected to rely upon Rule
434, a Term Sheet shall have been filed with the Commission in accordance with
Rule 497.
(b) Opinion of Counsel for Fund and the Investment Adviser. At Closing
Time, the Representative shall have received the favorable opinions, dated as of
Closing Time, of ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the Fund
and counsel for the Investment Adviser, in form and substance satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of such
letters for each of the other Underwriters substantially to the effect set forth
in Exhibit A hereto. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the State of
Illinois and the federal law of the United States, upon the opinions of counsel
satisfactory to the Representative. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Fund and certificates of public
officials.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representative shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇▇▇ Chance ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters with respect to the matters set forth in paragraphs (A) (1), (2),
(4), (5) (solely as to preemptive or other similar rights arising by operation
of law or under the declaration of trust or by-laws of the Fund), (6), (7), (8),
(10), (12) (solely as to the information in the Prospectus under "Description of
AMPS") and the last paragraph of Exhibit A hereto. In giving such opinion such
counsel may rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York and the federal law of the United States,
upon the opinions of counsel satisfactory to the Representative. Such
13
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Fund and certificates of public officials.
(d) Officers' Certificates. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Fund, whether or not arising in the ordinary course of business, and the
Representative shall have received a certificate of a duly authorized officer of
the Fund and of the chief financial or chief accounting officer of the Fund and
of the President or a Vice President or Managing Director of the Investment
Adviser, dated as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in Sections
1(a) and (b) hereof are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (iii) each of the Fund and the
Investment Adviser, respectively, has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement, or order of suspension or revocation of registration pursuant to
Section 8(e) of the 1940 Act, has been issued and no proceedings for any such
purpose have been instituted or are pending or to the knowledge of the Fund or
Investment Adviser are contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representative shall have received from ▇▇▇▇▇ & Young LLP a
letter dated such date, in form and substance satisfactory to the
Representative, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representative
shall have received from Ernst & Young LLP a letter, dated as of Closing Time,
to the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.
(g) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(h) Rating. The Fund shall have delivered and you shall have received
evidence satisfactory to you that the AMPS are rated 'aaa' by ▇▇▇▇▇'▇ and 'AAA'
by S&P as of the Closing Date, and there shall not have been given any notice of
any intended or potential downgrading, or of any review for a potential
downgrading, in the rating accorded to the AMPS or any other securities issued
by the Fund, by ▇▇▇▇▇'▇ or by S&P.
(i) Asset Coverage. As of the Closing Date and assuming the receipt of
the net proceeds from the sale of the AMPS, the 1940 Act Preferred Shares Asset
Coverage and the Preferred Shares Basic Maintenance Amount (each as defined in
Amendment No. 1) each will be met.
(j) Additional Documents. At Closing Time, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the issuance
and sale of the AMPS as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Fund and
the Investment Adviser in connection with the organization and registration of
the Fund under the 1940 Act and the issuance and sale of the AMPS as herein
contemplated shall be satisfactory in form and substance to the Representative
and counsel for the Underwriters.
14
(k) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representative by notice to the Fund at any
time at or prior to Closing Time and such termination shall be without liability
of any party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7, 8 and 13 shall survive any such termination and remain in full
force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Fund and the Investment
Adviser, jointly and severally, agree to indemnify and hold harmless each
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, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(e) below) any such settlement is effected
with the written consent of the Fund; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇
▇▇▇▇▇), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Fund or the
Investment Adviser by any Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in
the Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) and
provided further that the Fund will not be liable to any Underwriter with
respect to any indemnification contained in this paragraph (a) to the extent
that the Fund shall sustain the burden of proving that any such loss, liability,
claim, damage or expense resulted from the fact that such Underwriter, in
contravention of a requirement of this Agreement or applicable law, sold AMPS to
a person to whom such Underwriter failed to send or give, at or prior to the
Closing Time a copy of the Prospectus, as then amended or supplemented if: (i)
the Fund has previously furnished copies thereof (sufficiently in advance of the
Closing Time to allow for distribution by the Closing Time) to the Underwriter
and the loss, liability, claim, damage or expense of such Underwriter resulted
from an untrue statement or omission of a material fact contained in or omitted
from the preliminary prospectus which
15
was corrected in the Prospectus as, if applicable, amended or supplemented prior
to the Closing Time and such Prospectus was required by law to be delivered at
or prior to the written confirmation of sale to such person and (ii) the failure
to give or send such Prospectus by the Closing Time to such person would have
constituted the sole basis for the claim asserted by such person against the
party or parties asserting such loss, liability, claim, damage or expense as to
which indemnification is sought pursuant to this paragraph (a).
(b) Indemnification of Fund, Investment Adviser, Trustees, Directors
and Officers. Each Underwriter severally agrees to indemnify and hold harmless
the Fund and the Investment Adviser, their respective trustees, directors, each
of the Fund's officers who signed the Registration Statement, and each person,
if any, who controls the Fund or the Investment Adviser within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the Fund
or the Investment Adviser by such Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly
for use in the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Indemnification for Marketing Materials. In addition to the
foregoing indemnification, the Fund and the Investment Adviser also, jointly and
severally, agree to indemnify and hold harmless each 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, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in Section 6(a),
as limited by the proviso set forth therein, with respect to any Sales Material
prepared by the Fund or the Investment Advisor or prepared by an Underwriter and
approved in writing by the Fund or the Investment Adviser.
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement of such
action, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, to assume the defense thereof with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to the indemnified party of its election to assume the defense thereof,
the indemnifying party shall not be liable to the indemnified party for any
legal expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation. In any such action where the
indemnifying party does not assume the defense thereof, in the case of parties
indemnified pursuant to Section 6(a) above, counsel to the indemnified parties
shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in the case of parties indemnified
pursuant to Section 6(b) above, counsel to the indemnified parties shall be
selected by the Fund and the Investment Adviser. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
16
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(f) Indemnification by the Fund. Any indemnification by the Fund shall
be subject to the requirements and limitations of Section 17(i) of the 1940 Act.
SECTION 7. Contribution.
If the indemnification provided for in Section 6 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Fund and the Investment Adviser on
the one hand and the Underwriters on the other hand from the offering of the
AMPS pursuant to this Agreement or (ii) if the allocation provided by clause (i)
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Fund and the Investment Adviser on the one hand and of
the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Fund and the Investment Adviser
on the one hand and the Underwriters on the other hand in connection with the
offering of the AMPS pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
AMPS pursuant to this Agreement (before deducting expenses) received by the Fund
and the total underwriting discount received by the Underwriters (whether from
the Fund or otherwise), in each case as set forth on the cover of the
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the AMPS as set
forth on such cover.
The relative fault of the Fund and the Investment Adviser on the one
hand and the Underwriters on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Fund or the Investment Adviser or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Fund, the Investment Adviser and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 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 above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred
17
to above in this Section 7 shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the AMPS 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 any such untrue or alleged
untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each trustee of the Fund, each director of the Investment Adviser, each officer
of the Fund who signed the Registration Statement, and each person, if any, who
controls the Fund or the Investment Adviser, within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Fund and the Investment Adviser, respectively. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of AMPS set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Fund or the Investment Adviser
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Fund or the Investment Adviser,
and shall survive delivery of the AMPS to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representative may terminate this
Agreement, by notice to the Fund, at any time at or prior to Closing Time (i) if
there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Fund or the Investment
Adviser, whether or not arising in the ordinary course of business, or (ii) if
there has occurred any material adverse change in the financial markets in the
United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Representative, impracticable or
inadvisable to market the AMPS or to enforce contracts for the sale of the AMPS,
or (iii) if trading in the common shares of beneficial interest of the Fund has
been suspended or materially limited by the Commission or the NYSE, or if
trading generally on the American Stock Exchange or the NYSE or in the Nasdaq
National Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority, or a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States, or (iv) if a banking moratorium has
been declared by either Federal or New York authorities.
18
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7, 8 and 13 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at Closing Time to
purchase the AMPS which it or they are obligated to purchase under this
Agreement (the "Defaulted AMPS"), the Representative shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted AMPS in such amounts as may be agreed upon and
upon the terms herein set forth; if, however, the Representative shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted AMPS does not exceed 10% of the number
of AMPS to be purchased on such date, each of the non-defaulting Underwriters
shall be obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted AMPS exceeds 10% of the number of AMPS
to be purchased on such date, this Agreement shall terminate without liability
on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representative or the Fund shall have the right to
postpone Closing Time for a period not exceeding seven days in order to effect
any required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed to the
Representative, c/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., North Tower, World Financial Center,
New York, New York 10080, attention of Equity Capital Markets; and notices to
the Fund or the Investment Adviser shall be directed, as appropriate, to the
office of Calamos Asset Management, Inc. at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
SECTION 12. Parties.
This Agreement shall each inure to the benefit of and be binding upon
the Underwriters, the Fund, the Investment Adviser and their respective partners
and successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Fund, the Investment Adviser and their respective successors
and the controlling persons and officers and directors referred to in Sections 6
and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters, the Fund, the
Investment Adviser and their respective partners and successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of AMPS from any Underwriter shall be deemed to be a successor by
reason merely of such purchase.
19
SECTION 13. GOVERNING LAW AND TIME.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED IN SAID STATE. UNLESS OTHERWISE EXPLICITLY PROVIDED, SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
20
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriters, the Fund and the Investment Adviser in accordance with its
terms.
Very truly yours,
Calamos Convertible Opportunities and Income Fund
By:
---------------------------------------------
Name:
Title:
Calamos Asset Management, Inc.
By:
---------------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
--------------------------------------
Authorized Signatory
For itself and as
Representative of the
other Underwriters named
in Schedule A hereto.
21
SCHEDULE A
Number of
Name of Underwriter AMPS
------------------- --------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated............................................................. [ ]
--------------
Total.............................................................................. [ ]
==============
Sch A-1
SCHEDULE B
CALAMOS CONVERTIBLE OPPORTUNITIES AND INCOME FUND
[ ] Auction Market Preferred Shares of Beneficial Interest
[ ] Shares [ ] AMPS, Series [ ]
[ ] Shares [ ] AMPS, Series [ ]
[ ] Shares [ ] AMPS, Series [ ]
[ ] Shares [ ] AMPS, Series [ ]
[ ] Shares [ ] AMPS, Series [ ]
Liquidation Preference $25,000 per share
1. The initial public offering price per share for the AMPS, determined
as provided in said Section 2, shall be $25,000.
2. The purchase price per share for the AMPS to be paid by the several
Underwriters shall be $25,000.
3. The commission to be paid to the Underwriters for their commitment
hereunder shall be $[ ] per share.
4. The initial dividend rate on the AMPS shall be [ ]% per annum for
the Series [ ], [ ]% per annum for the Series [ ], [ ]% per annum for the Series
[ ], [ ]% per annum for the Series [ ] and [ ]% per annum for the Series [ ].
Sch B-1
EXHIBIT A
FORM OF OPINION OF TRUST'S AND INVESTMENT ADVISER'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(A) With respect to the Fund:
Based upon and subject to the qualifications, assumptions and limitations set
forth herein, we are of the opinion that:
(1) The Fund has been duly formed and is validly existing as a business
trust in good standing under the laws of the State of Delaware.
(2) The Fund has business trust power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Purchase
Agreement.
(3) The authorized, issued and outstanding shares of beneficial
interest of the Fund is as set forth in the Prospectus under the caption
"Description of AMPS" (except for subsequent issuances, if any, pursuant to the
Purchase Agreement); all such issued and outstanding shares of beneficial
interest of the Fund have been duly authorized and validly issued and are fully
paid and non-assessable. The AMPS of the Fund conform in all material respects
as to legal matters to all statements relating thereto contained in the
Prospectus and such description conforms in all material respects as to legal
matters to the rights set forth in the Organizational Documents defining the
same; and none of the outstanding shares of common stock of the Fund was issued
in violation of any statutory or, to our knowledge, contractual preemptive
rights of any securityholder of the Fund.
(4) The AMPS to be purchased by the Underwriters from the Fund have
been duly authorized for issuance and sale to the Underwriters pursuant to the
Purchase Agreement and, when issued and delivered by the Fund pursuant to the
Purchase Agreement against payment of the consideration set forth in the
Purchase Agreement, will be validly issued and fully paid and non-assessable and
no holder of the AMPS is or will be subject to personal liability solely by
reason of being such a holder.
(5) The issuance of the AMPS pursuant to the Purchase Agreement is not
subject to any statutory or, to our knowledge, contractual preemptive rights of
any securityholder of the Fund.
(6) The Purchase Agreement and Fund Agreements have each been duly
authorized by all requisite business trust action on the part of the Fund, have
each been executed and delivered on behalf of the Fund, and each constitutes a
valid and binding agreement of the Fund, enforceable against the Fund in
accordance with its terms.
(7) The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the Prospectus pursuant to Rule 497 has been made in the manner and within
the time period required by Rule 497; and, to our knowledge, no stop order
suspending the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act, and, to our
knowledge, no order of suspension or revocation of registration pursuant to
Section 8(e) of the 1940 Act has been issued, and to our knowledge no
proceedings for any such purpose have been instituted or are pending or overtly
threatened in writing by the Commission.
A-1
(8) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectus and each amendment or supplement to the Registration
Statement and Prospectus as of their respective effective or issue dates (other
than the financial statements, supporting schedules and financial data included
therein or omitted therefrom and statistical information derived form such
financial statements, supporting schedules or other financial data, as to which
we express no opinion), and the notification on Form N-8A complied as to form in
all material respects with the requirements of the 1933 Act, the 1940 Act and
the Rules and Regulations.
(9) If Rule 434 has been relied upon, the Prospectus was not
"materially different," as such term is used in Rule 434, from the prospectus
included in the Registration Statement at the time it became effective.
(10) The form of certificate used to evidence the AMPS complies in all
material respects with any applicable requirements of the laws of the State of
Delaware and the Organizational Documents.
(11) To our knowledge, there is not pending or overtly threatened in
writing any action, suit, proceeding, inquiry or investigation, to which the
Fund is a party, or to which the property of the Fund is subject, before or
brought by any court or governmental agency or body, which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the properties or assets of the Fund
or the performance by the Fund of its obligations under the Purchase Agreement.
(12) The information in the Prospectus under "Description of AMPS,"
"Description of Shares" and "Tax Matters" and in the Registration Statement
under Item 29 (Indemnification), to the extent that it constitutes matters of
law, or summaries of legal matters, the Fund's Organizational Documents, matters
of law relating to legal proceedings, or legal conclusions, has been reviewed by
us and is correct in all material respects.
(13) Each of the Fund Agreements, the Purchase Agreement and the
Auction Agency Agreement comply as to form in all material respects with the
applicable provisions of the 1940 Act, Advisers Act, the Rules and Regulations
and the Advisers Act Rules and Regulations.
(14) The Fund is registered with the Commission under the 1940 Act as a
closed-end diversified management investment company. To our knowledge, no order
of suspension or revocation of such registration has been issued or proceedings
therefor initiated or overtly threatened in writing by the Commission.
(15) To our knowledge, no person is serving as an officer, trustee or
investment adviser of the Fund except in accordance with the 1940 Act and the
Rules and Regulations and the Investment Advisers Act and the Advisers Act Rules
and Regulations. Except as disclosed in the Registration Statement and
Prospectus (or any amendment or supplement to either of them), to our knowledge,
no trustee 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 an
Underwriter.
(16) There are no statutes or regulations that are required under the
1940 Act or 1933 Act to be described in the Prospectus that are not described as
required in all material respects.
(17) All descriptions in the Registration Statement of the Transaction
Documents, insofar as they relate to the Fund, are accurate in all material
respects.
A-2
(18) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency of the United States of America or the State of Illinois or
Delaware (other than: (i) under the 1933 Act, the 1934 Act, the 1940 Act and the
Rules and Regulations; (ii) such as have been obtained; or (iii) such as may be
required under the securities or blue sky laws of the various states, as to each
of which we express no opinion) is necessary or required in connection with the
due authorization, execution and delivery of the Purchase Agreement or for the
offering, issuance or sale of the AMPS or the performance by the Fund of its
obligations under the Purchase Agreement.
(19) The execution and delivery of, and performance by the Fund of its
obligations under the Purchase Agreement (including the issuance and sale of the
AMPS and the use of the proceeds from the sale of the AMPS as described in the
Prospectus under the caption "Use of Proceeds") do not and will not, whether
with or without the giving of notice or lapse of time or both, violate or
constitute a breach of, or default or Repayment Event under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Fund pursuant to any material contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or any other agreement or
instrument to which the Fund is a party or by which it may be bound, or to which
any of the property or assets of the Fund is subject and which, in each case,
are described or referred to in the Registration Statement or filed as exhibits
thereto, nor will such action result in any violation of the provisions of the
Organizational Documents, the Delaware Act, or any applicable material federal
or State of Illinois law, statute, rule, regulation or any judgment, order, writ
or decree, known to us, of any governmental authority or administrative agency
of the United States of America or the State of Illinois.
(B) With respect to the Investment Adviser:
Based upon and subject to the qualifications, assumptions and limitations set
forth herein, we are of the opinion that:
(1) The Adviser is validly existing as a corporation in good standing
under the laws of the State of Illinois.
(2) The Adviser has full corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Purchase
Agreement.
(3) The Adviser is 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 Rules and Regulations
from acting under the Management Agreement or the Administration Agreement as
contemplated by the Prospectus.
(4) The Purchase Agreement, the Management Agreement and the
Administration Agreement have been duly authorized by all requisite corporate
action on the part of the Adviser, have each been executed and delivered on
behalf of the Adviser and each constitutes a valid and binding obligation of the
Adviser, enforceable against the Adviser in accordance with its terms.
(5) To our knowledge, there is not pending or overtly threatened in
writing any action, suit, proceeding, inquiry or investigation, to which the
Adviser is a party, or to which the property of the Adviser is subject, before
or brought by any court or governmental agency or body, which might reasonably
be expected to result in any material adverse change on the condition, financial
or otherwise, in the earnings, business affairs or business prospects of the
Adviser, materially and adversely affect the properties or assets of the Adviser
or materially impair or adversely affect the ability of the Adviser to function
as an investment adviser or perform its obligations under the Management
Agreement or the
A-3
Administration Agreement, or which is required to be disclosed in the
Registration Statement or the Prospectus.
(6) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency of the United States of America or the State of Illinois
(other than (i) under the 1933 Act, the 1940 Act and the Rules and Regulations;
(ii) such as have been obtained; and (iii) as may be required under the
securities or blue sky laws of the various states, as to each of which we
express no opinion) is necessary or required in connection with the performance
by the Adviser of its obligations under the Purchase Agreement.
(7) The execution and delivery of the Purchase Agreement by the
Adviser, and performance by the Adviser of its obligations thereunder do not and
will not, whether with or without the giving of notice or lapse of time or both,
violate or constitute a breach of, or default or Repayment Event under or result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Adviser pursuant to any material contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
material agreement or instrument known to us and to which the Adviser is a party
or by which it may be bound, or to which any of the property or assets of the
Adviser is subject (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a Material Adverse Effect on the
Investment Adviser) nor will such action result in any violation of the
provisions of the Organizational Documents of the Adviser, or any applicable
material federal or State of Illinois law, statute, rule, regulation, or any
judgment, order, writ or decree, known to us, of any governmental authority or
administrative agency of the United States of America or the State of Illinois.
In addition, we have participated in the preparation of the Registration
Statement and the Prospectus and participated in discussions with certain
officers, trustees and employees of the Fund, representatives of the independent
accountants of the Fund who examined the statement of assets and liabilities of
the Fund included or incorporated by reference in the Registration Statement and
the Prospectus, and the Underwriters and counsel for the Underwriters and we
have reviewed certain Fund records and documents. While we have not
independently verified and are not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the information
contained in the Registration Statement and the Prospectus, except to the
limited extent necessary to enable us to give the opinions with respect to the
Fund in paragraphs 3, 12 and 17 on the basis of such participation and review,
nothing has come to our attention that would lead us to believe that the
Registration Statement (except for financial statements, supporting schedules
and other financial data included therein or omitted therefrom and for
statistical information derived from such financial statements, supporting
schedules or other financial data, as to which we do not express any belief), at
the time such Registration Statement became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus (except for financial statements, supporting schedules and
other financial data included therein or omitted therefrom and for statistical
information derived from such financial statements, supporting schedules or
other financial data, as to which we do not express any belief), at the time the
Prospectus was issued, or at the Closing Time, included or includes an untrue
statement of a material fact or omitted 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.
A-4