[ ] Shares
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ REAL ESTATE
INCOME FUND INC.
Series A Auction Preferred Shares
UNDERWRITING AGREEMENT
----------------------
October [ ], 2003
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
[ ]
c/o ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
The undersigned, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Real Estate Income Fund Inc., a Maryland
corporation (the "Fund"), ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Management Inc., a New York
corporation (the "Adviser"), and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC, a Delaware limited
liability company (the "Sub-Adviser"), address you as Underwriters and as the
Representative (the "Representative") of each of the other persons, firms and
corporations, if any, listed in Schedule I hereto (herein collectively called
"Underwriters"). The Fund proposes to issue and sell an aggregate of [ ] shares
of Series A Auction Preferred Shares, par value $0.0001 per share, liquidation
liquidation preference $25,000 per share (the "Shares"), of the Fund to the
Underwriters.
The Fund, the Adviser and the Sub-Adviser wish to confirm as follows their
agreements with you and with any other Underwriters on whose behalf you are
acting in connection with the purchase of the Shares by the Underwriters.
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The Fund has entered into an investment management agreement with the
Adviser dated November 25, 2002 (the "Management Agreement"), an administration
agreement with the Adviser dated November 25, 2002 (the "Administration
Agreement"), a Custodian Contract with State Street Bank and Trust Company dated
November 25, 2002 (the "Custodian Contract"), a Transfer Agency Agreement with
The Bank of New York dated November 25, 2002 (the "Transfer Agency Agreement"),
an Auction Agency Agreement with the Bank of New York dated February 7, 2003
(the "Auction Agency Agreement") and a Letter Agreement with the Depository
Trust Company dated February 7, 2003 (the "DTC Agreement"). In addition, the
Fund has adopted a dividend reinvestment plan (the "Dividend Reinvestment
Plan"), pursuant to which holders of shares of common stock, par value $0.0001
per share, of the Fund (the "Common Shares") shall have their dividends
automatically reinvested in additional Common Shares unless they elect to
receive such dividends in cash. Collectively, the Management Agreement,
Administration Agreement, Custodian Contract, Transfer Agency Agreement, Auction
Agency Agreement and DTC Agreement are herein referred to as the "Fund
Agreements." The Adviser has entered into a Sub-Advisory Agreement with the
Sub-Adviser dated November 25, 2002 (the "Sub-Advisory Agreement"). Collectively
the Management Agreement, Administration Agreement, and Sub-Advisory Agreement
are herein referred to as the "Adviser Agreements." This Underwriting Agreement
is herein referred to as the "Agreement."
1. REGISTRATION STATEMENT AND PROSPECTUS. The Fund has prepared and filed
with the Securities and Exchange Commission (the "Commission") in accordance
with the provisions of the Securities Act of 1933, as amended (the "1933 Act"),
the Investment Company Act of 1940, as amended (the "1940 Act"), and the rules
and regulations of the Commission under the 1933 Act (the "1933 Act Rules and
Regulations") and the 1940 Act (the "1940 Act Rules and Regulations," and,
together with the 1933 Act Rules and Regulations, the "Rules and Regulations") a
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registration statement on Form N-2 (File No. 333-108572 under the 1933 Act) (the
"registration statement"), including a prospectus and statement of additional
information relating to the Shares, and a notification of registration of the
Fund as an investment company under the 1940 Act on Form N-8A (File No.
811-21200) (the "1940 Act Notification") and may pursuant to the Rules and
Regulations prepare and file an additional registration statement relating to a
portion of the Shares pursuant to Rule 462(b) of the 1933 Act Rules and
Regulations (a "Rule 462 registration statement"). The term "Registration
Statement" as used in this Agreement means the registration statement (including
all financial schedules and exhibits), as amended at the time it becomes
effective under the 1933 Act or, if the registration statement became effective
under the 1933 Act prior to the execution of this Agreement, as amended or
supplemented thereto, prior to the execution of this Agreement and includes any
information deemed to be included by Rule 430A under the 1933 Act Rules and
Regulations. If it is contemplated, at the time this Agreement is executed, that
a post-effective amendment to the registration statement will be filed under the
1933 Act and must be declared effective before the offering of Shares may
commence, the term "Registration Statement" as used in this Agreement means the
Registration Statement as amended by said post-effective amendment. If the Fund
has filed a Rule 462 registration statement, then the reference herein to the
term "Registration Statement" shall include such Rule 462 registration
statement. The term "Prospectus" as used in this Agreement means the prospectus
and statement of additional information in the forms included in the
Registration Statement or, if the prospectus and statement of additional
information included in the Registration Statement omit information in reliance
on Rule 430A under the 1933 Act Rules and Regulations and such information is
included in a prospectus and statement of additional information filed with the
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Commission pursuant to Rule 497(h) under the 1933 Act Rules and Regulations, the
term "Prospectus" as used in this Agreement means the prospectus and statement
of additional information in the forms included in the Registration Statement as
supplemented by the addition of the information contained in the prospectus
(including the statement of additional information) filed with the Commission
pursuant to Rule 497(h). The term "Prepricing Prospectus" as used in this
Agreement means the prospectus and statement of additional information subject
to completion in the form included in the registration statement at the time of
the initial filing of the registration statement with the Commission and as such
prospectus and statement of additional information shall have been amended from
time to time prior to the date of the Prospectus, together with any other
prospectus (including any other statement of additional information) relating to
the Fund other than the Prospectus. The terms "Registration Statement,"
"Prospectus" and "Prepricing Prospectus" shall also include any financial
statements and other information included or incorporated by reference therein.
The Fund has furnished the Representative with copies of such Registration
Statement, each amendment to such Registration Statement filed with the
Commission and each Prepricing Prospectus.
2. AGREEMENTS TO SELL AND PURCHASE. The Fund hereby agrees, subject to all
the terms and conditions set forth herein, to issue and to sell to each
Underwriter and, upon the basis of the representations, warranties and
agreements of the Fund, the Adviser and the Sub-Adviser herein contained and
subject to all of the other terms and conditions set forth herein, each
Underwriter agrees, severally and not jointly, to purchase from the Fund at a
purchase price of $24,750.00 per Share (the "Price per Share"), the number of
Shares set forth opposite the name of such Underwriter in Schedule I hereto.
3. TERMS OF PUBLIC OFFERING. The Fund and the Adviser have been advised by
you that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and initially
to offer the Shares upon the terms set forth in the Prospectus.
4. DELIVERY OF SHARES AND PAYMENTS THEREFOR.
(a) Payment of the purchase price for the Shares shall be made to the
Fund by Federal Funds wire transfer, against delivery of the certificate or
certificates, if any, (or, if no certificates, against notification of
electronic delivery) for the Shares to the Representative through the
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facilities of the Depository Trust Company ("DTC") for the respective
accounts of the Underwriters. Delivery to the Underwriters of and payment
to the Fund for the Shares and compensation of the Underwriters with
respect thereto shall be made at the offices of ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 9:00 a.m. New York City time on
October [ ], 2003 (the "Closing Date"). The place of closing for the Shares
and the Closing Date may be varied by agreement between the Fund and ▇.▇.
▇▇▇▇▇▇▇ & Sons, Inc., as the managing representative (the "Managing
Representative") of the Underwriters.
(b) The Shares shall be registered in such names and in such
denominations as the Underwriters shall request prior to 1:00 P.M., New
York City time (or such other time as the parties agree) on the first
business day preceding the Closing Date.
5. AGREEMENTS OF THE FUND, THE ADVISER AND THE SUB-ADVISER. The Fund, the
Adviser and the Sub-Adviser, jointly and severally, agree with the Underwriters
as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective under the 1933 Act before the offering of
the Shares may commence, the Fund will use its best efforts to cause the
Registration Statement or such post-effective amendment to become effective
under the 1933 Act as soon as possible. If the Registration Statement has
become effective and the Prospectus contained therein omits certain
information at the time of effectiveness pursuant to Rule 430A of the 1933
Act Rules and Regulations, the Fund will file a prospectus including such
information pursuant to Rule 497(h) of the 1933 Act Rules and Regulations,
as promptly as practicable, but no later than the second business day
following the earlier of the date of the determination of the offering
price of the Shares or the date the Prospectus is first used after the
effective date of the Registration Statement. If the Registration Statement
has become effective and the Prospectus contained therein does not so omit
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such information, the Fund will file a Prospectus or certification pursuant
to Rule 497(c) or (j), as the case may be, of the 1933 Act Rules and
Regulations as promptly as practicable, but no later than the fifth
business day following the date of the later of the effective date of the
Registration Statement or the commencement of the public offering of the
Shares after the effective date of the Registration Statement. The Fund
will advise you promptly and, if requested by you, will confirm such advice
in writing (i) when the Registration Statement or such post-effective
amendment has become effective, (ii) when the Prospectus has been timely
filed pursuant to Rule 497(c) or Rule 497(h) of the 1933 Act Rules and
Regulations or (iii) when the certification permitted pursuant to Rule
497(j) of the 1933 Act Rules and Regulations has been timely filed,
whichever is applicable.
(b) The Fund, and (in the case of (iii)(B) below with respect to
communications received by the Adviser or the Sub-Adviser) the Adviser or
the Sub-Adviser, will advise you promptly and, if requested by you, will
confirm such advice in writing: (i) of any request made by the Commission
for amendment of or a supplement to the Registration Statement, the
Prospectus or any Prepricing Prospectus (or any amendment or supplement to
any of the foregoing) or for additional information, (ii) of the issuance
by the Commission, any state securities commission, any national securities
exchange, any arbitrator, any court or any other governmental, regulatory,
self-regulatory or administrative agency or any official of any order
suspending the effectiveness of the Registration Statement, prohibiting or
suspending the use of the Prospectus or any Prepricing Prospectus, of any
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notice pursuant to Section 8(e) of the 1940 Act, of the suspension of
qualification of the Shares for offering or sale in any jurisdiction, or
the initiation or contemplated initiation of any proceeding for any such
purposes, (iii) of receipt by (A) the Fund, any affiliate of the Fund or
attorney of the Fund of any other material communication from the
Commission, or (B) the Fund, the Adviser, the Sub-Adviser, any affiliate of
the Fund, the Adviser or the Sub-Adviser or attorney of the Fund, the
Adviser or the Sub-Adviser of any other material communication from the
Commission, any state securities commission, any national securities
exchange, any arbitrator, any court or any other governmental, regulatory,
self-regulatory or administrative agency or any official relating, in the
case of either clause (A) or (B), to the Fund (if such communication
relating to the Fund is received by such person within three years after
the date of this Agreement), the Registration Statement, the Prospectus,
any Prepricing Prospectus, (or any amendment or supplement to any of the
foregoing) or this Agreement, any of the Fund Agreements or the Adviser
Agreements and (iv) within the period of time referred to in paragraph (f)
below, of any material, adverse change in the condition (financial or
other), business, business prospects, properties, net assets or results of
operations of the Fund (other than as a result of changes in market
conditions generally or the market for real estate securities generally) or
any event which has or would reasonably be expected to have a material
adverse effect on the ability of the Adviser or the Sub-Adviser to perform
their respective obligations under this Agreement, the Advisory Agreement
or the Sub-Advisory Agreement, as the case may be, or of the happening of
any event (but as to each of the Fund, the Adviser and the Sub-Adviser, an
event known to that respective entity) which makes any statement of a
material fact made in the Registration Statement, the Prospectus or any
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Prepricing Prospectus (or any amendment or supplement to any of the
foregoing) untrue or which requires the making of any additions to or
changes in the Registration Statement, the Prospectus, or any Prepricing
Prospectus (or any amendment or supplement to any of the foregoing) in
order to state a material fact required by the 1933 Act, the 1940 Act or
the Rules and Regulations to be stated therein or necessary in order to
make the statements therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading or of the
necessity to amend or supplement the Registration Statement, the
Prospectus, or any Prepricing Prospectus (or any amendment or supplement to
any of the foregoing) to comply with the 1933 Act, the 1940 Act, the Rules
and Regulations or any other law or order of any court or regulatory body.
If at any time the Commission shall issue any order suspending the
effectiveness of the Registration Statement, prohibiting or suspending the
use of the Prospectus (or any amendment or supplement to any of the
foregoing) or suspending the qualification of the Shares for offering or
sale in any jurisdiction, the Fund, the Adviser and the Sub-Adviser will
use their best efforts to obtain the withdrawal of such order at the
earliest possible time. If at any time any national securities exchange,
any state securities commission, 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 amendment or supplement to any of the foregoing) or suspending the
qualification of the Shares for offering or sale in any jurisdiction, the
Fund, the Adviser and the Sub-Adviser will use their respective best
efforts to obtain the withdrawal of such order at the earliest possible
time.
(c) The Fund will furnish to you, without charge, one signed copy of
the registration statement as originally filed with the Commission and of
each amendment thereto, including financial statements and all exhibits
thereto and will also furnish to you, without charge, such number of
conformed copies of the registration statement as originally filed and of
each amendment thereto, but without exhibits, as you may reasonably
request.
(d) Within five years from the date hereof, the Fund will not (i) file
any amendment (except any post-effective amendment required by Rule 8b-16
of the 1940 Act which is filed with the Commission after the later of (x)
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one year from the date of this Agreement or (y) the date on which the
distribution of the Shares is completed) to the registration statement or
the Registration Statement or make any amendment or supplement to the
Prospectus or any Prepricing Prospectus (or any amendment or supplement to
any of the foregoing) of which you shall not previously have been advised
or (with respect to amendments filed within two years from the date hereof)
to which you shall reasonably object within two business days after being
so advised or (ii) so long as, in the opinion of counsel for the
Underwriters, a Prospectus is required to be delivered in connection with
sales of Shares by any Underwriter or dealer, file any information,
documents or reports pursuant to the 1933 Act, the 1940 Act or the
Securities Exchange Act of 1934, as amended (the "1934 Act"), without
delivering a copy of such information, documents or reports to you, as
Representative of the Underwriters, prior to or concurrently with such
filing.
(e) Prior to the execution and delivery of this Agreement, the Fund
has delivered to you, without charge, in such quantities as you have
reasonably requested, copies of each form of any Prepricing Prospectus. The
Fund consents to the use, in accordance with the provisions of the 1933 Act
and with the securities or Blue Sky laws of the jurisdictions in which the
Shares are offered by the several Underwriters and by dealers, prior to the
date of the Prospectus, of each Prepricing Prospectus so furnished by the
Fund.
(f) As soon after the execution and delivery of this Agreement as
reasonably possible and thereafter from time to time, for such period as in
the opinion of counsel for the Underwriters a prospectus is required by the
1933 Act to be delivered in connection with sales of Shares by any
Underwriter or dealer, the Fund will expeditiously deliver to each
Underwriter and each dealer, without charge, as many copies of the
Prospectus (and of any amendment or supplement thereto) as you may
reasonably request. The Fund consents to the use of the Prospectus (and of
any amendments or supplements thereto) in accordance with the provisions of
9
the 1933 Act and with the securities or Blue Sky laws of the jurisdictions
in which the Shares are offered by the several Underwriters and by all
dealers to whom Shares may be sold, both in connection with the offering or
sale of the Shares and for such period of time thereafter as the Prospectus
is required by law to be delivered in connection with sales of Shares by
any Underwriter or dealer. If during such period of time any event shall
occur that in the judgment of the Fund or in the opinion of counsel for the
Underwriters is required to be set forth in the Registration Statement or
the Prospectus (as then amended or supplemented) or should be set forth
therein in order to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading or if it is necessary to supplement or amend the Registration
Statement or the Prospectus to comply with the 1933 Act, the 1940 Act, the
Rules and Regulations or any other applicable law, rule or regulation, the
Fund will forthwith notify you of such event, prepare and, subject to the
provisions of paragraph (d) above, promptly file with the Commission an
appropriate amendment or supplement thereto and will furnish as promptly as
reasonably possible to the Underwriters and dealers, without charge, such
number of copies thereof as they may reasonably request; provided, however,
that if such amendment or supplement is required solely as a result of a
material misstatement in or material omission from the information
furnished in writing by or on behalf of an Underwriter to the Fund, the
Adviser or the Sub-Adviser expressly for use in the Registration Statement
or the Prospectus (such information, as described in Section 9(h) of this
Agreement, being referred to herein as the "Underwriter Information"), then
the Fund shall deliver such amendment or supplement at cost.
(g) The Fund will cooperate with you and with counsel for the
Underwriters in connection with any registration or qualification of the
Shares for offering and sale by the several Underwriters and by dealers as
may be required under the applicable securities or Blue Sky laws of such
jurisdictions as you may designate and will file such consents to service
of process or other documents necessary or appropriate in order to effect
10
such registration or qualification; provided, however, that the foregoing
shall not apply to the extent that the Shares are "covered securities" that
are exempt from state regulation of securities offerings pursuant to
Section 18 of the 1933 Act.
(h) As soon as practicable, but in no event later than the last day of
the 18th full calendar month following the calendar quarter in which the
effective date of the Registration Statement falls, the Fund will make
generally available to its security holders an earnings statement, which
need not be audited, which earnings statement shall satisfy the provisions
of Section 11(a) of the 1933 Act and Rule 158 of the 1933 Act Rules and
Regulations.
(i) The Fund will comply with the undertaking set forth in sub-item 6
of Item 33 of Part C of the Registration Statement.
(j) During the period of three years hereafter, the Fund will furnish
or will have furnished to you as soon as available, a copy of each report
of the Fund mailed to shareholders or filed with the Commission (other than
reports on Form N-SAR or Form N-CSR) or furnished to the New York Stock
Exchange (the "NYSE").
(k) If this Agreement shall terminate or be terminated after execution
pursuant to any provisions hereof (other than pursuant to the second
paragraph of Section 11 hereof or by notice given by you terminating this
Agreement pursuant to Section 12 hereof) or if this Agreement shall be
terminated by the Underwriters because of any inability, failure or refusal
on the part of the Fund, the Adviser or the Sub-Adviser to comply with any
material terms in this Agreement or because any of the conditions in
Section 10 of this Agreement required to be complied with or fulfilled by
them are not satisfied, then the Fund, the Adviser and the Sub-Adviser,
jointly and severally, agree to reimburse the Representative for all
out-of-pocket expenses not to exceed the amounts set forth in Section 13 of
this Agreement (including reasonable fees and expenses of counsel for the
Underwriters) incurred by you in connection herewith.
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(l) The Fund will direct the investment of the net proceeds of the
offering of the Shares (i) in accordance with the description set forth in
the Prospectus and (ii) in such a manner as to comply with the investment
objectives, policies and restrictions of the Fund as described in the
Prospectus.
(m) The Fund will file the requisite copies of the Prospectus with the
Commission in a timely fashion pursuant to Rule 497(c) or Rule 497(h) of
the 1933 Act Rules and Regulations, whichever is applicable or, if
applicable, will file in a timely fashion the certification permitted by
Rule 497(j) of the 1933 Act Rules and Regulations and will advise you of
the time and manner of such filing.
(n) Except as provided in this Agreement or pursuant to any dividend
reinvestment plan of the Fund, the Fund will not sell, contract to sell or
otherwise dispose of, any preferred stock of the Fund or any securities
convertible into or exercisable or exchangeable for preferred stock of the
Fund or grant any options or warrants to purchase preferred stock of the
Fund, for a period of 180 days after the date of the Prospectus, without
the prior written consent of the Representative.
(o) The Fund will direct the investment of the proceeds of the
offering of the Shares so as to comply with the requirements of Subchapter
M of the Internal Revenue Code of 1986, as amended (the "Code"), to qualify
as a regulated investment company under the Code.
6. REPRESENTATIONS AND WARRANTIES OF THE FUND, THE ADVISER AND THE
SUB-ADVISER. The Fund, the Adviser and the Sub-Adviser, jointly and severally,
represent and warrant to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the registration
statement as originally filed or as part of any amendment or supplement
thereto or filed pursuant to Rule 497 of the 1933 Act Rules and
Regulations, complied when so filed in all material respects with the
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provisions of the 1933 Act, the 1940 Act and the Rules and Regulations
(except that this representation and warranty does not apply to statements
in or omissions from the Prepricing Prospectus (and any amendment or
supplement thereto) made in reliance upon and in conformity with the
Underwriter Information) and the Commission has not issued any order
preventing or suspending the use of the Prepricing Prospectus.
(b) The registration statement, in the form in which it was originally
filed, in the form in which it became or becomes effective and also in such
form as it may be when any post-effective amendment thereto shall become
effective, the Prospectus and any amendment or supplement thereto when
filed with the Commission under Rule 497 of the 1933 Act Rules and
Regulations and any amendment or supplement thereto when filed with the
Commission complied or will comply in all material respects with the
provisions of the 1933 Act, the 1940 Act and the Rules and Regulations and
each of the Registration Statement and the Prospectus (or any supplement or
amendment to either of them) did not or will not at any such times contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
(in the case of the Prospectus, in light of the circumstances under which
they were made) not misleading; except that this representation and
warranty does not apply to statements in or omissions from the Registration
Statement and the Prospectus (and any amendment or supplement to either of
them) made in reliance upon and in conformity with the Underwriter
Information.
(c) All the outstanding Common Shares have been duly authorized and
validly issued, are fully paid and nonassessable and are free of any
preemptive or similar rights; the Shares have been duly authorized and,
when issued and delivered to the Underwriters against payment therefor in
accordance with the terms hereof, will be validly issued, fully paid and
nonassessable and free of any preemptive or similar rights; and the capital
stock of the Fund conforms in all material respects to the description
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thereof in the Registration Statement or the Prospectus (or any amendment
or supplement to either of them). Except for the Shares and the Common
Shares, no other shares of capital stock are issued or outstanding and the
capitalization of the Fund conforms in all material respects to the
description thereof in the Registration Statement and the Prospectus (or
any amendment or supplement to either of them).
(d) The Fund has been duly formed and is validly existing in good
standing as a corporation under the laws of the State of Maryland, with
full corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement and
the Prospectus (and any amendment or supplement to either of them) and is
duly registered and qualified to conduct business and is in good standing
in each jurisdiction or place where the nature of its properties or the
conduct of its business requires such registration or qualification, except
where the failure so to register or to qualify does not or would not have a
material, adverse effect on the condition (financial or other), business,
business prospects, properties, net assets or results of operations of (a
"Material Adverse Effect") the Fund. The Fund has no subsidiaries.
(e) There are no legal or governmental proceedings pending or, to the
knowledge of the Fund, threatened, against the Fund, or to which the Fund
or any of its properties is subject, that are required to be described in
the Registration Statement or the Prospectus (and any amendment or
supplement to either of them) but are not described therein and there are
no agreements, contracts, indentures, leases or other instruments that are
required to be described in the Registration Statement or the Prospectus
(or any amendment or supplement to either of them) or to be filed as an
exhibit to the Registration Statement that are not described therein or
filed as an exhibit thereto as required by the 1933 Act, the 1940 Act or
the Rules and Regulations.
(f) The Fund is not (i) in violation of its Articles of Incorporation,
including the Articles Supplementary adopted in connection with the
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issuance of the Shares ("Articles"), by-laws or other organizational
documents, (ii) in violation of any law, ordinance, administrative or
governmental rule or regulation applicable to the Fund or of any decree of
the Commission, any state securities commission, any national securities
exchange, any arbitrator, any court or any other governmental, regulatory,
self-regulatory or administrative agency or any other agency or any body or
official having jurisdiction over the Fund or (iii) in breach or default in
the performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
agreement, indenture, lease or other instrument to which the Fund is a
party or by which it or any of its properties may be bound, except, in the
case of (ii) and (iii) above, for violations, breaches or defaults that do
not or would not have, either individually or in the aggregate, a Material
Adverse Effect on the Fund.
(g) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement or any of the Fund Agreements by
the Fund, nor the consummation by the Fund of the transactions contemplated
hereby or thereby (i) requires any consent, approval, authorization or
order of or registration or filing with the Commission, any state
securities commission, any national securities exchange, any arbitrator,
any court, regulatory body, administrative agency or other governmental
body, agency or official having jurisdiction over the Fund (except (A) such
as have been obtained or made prior to the date of this Agreement, (B) for
compliance with the securities or Blue Sky laws of various jurisdictions
which have been or will be effected in accordance with this Agreement and
(C) for compliance with the filing requirements, if any, of the NASD
Division of Corporate Finance) or conflicts or will conflict with or
constitutes or will constitute a breach of the Articles, bylaws, or other
organizational documents of the Fund or (ii) (A) conflicts or will conflict
with or constitutes or will constitute a breach of or a default under any
agreement, indenture, lease or other instrument to which the Fund is a
15
party or by which it or any of its properties may be bound or (B) violates
or will violate any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Fund or any of its properties
or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Fund pursuant to the terms
of any agreement or instrument to which it is a party or by which it may be
bound or to which any of the property or assets of the Fund is subject
except, in the case of (ii) above, for conflicts, breaches, defaults,
violations or encumbrances that do not or would not have, either
individually or in the aggregate, a Material Adverse Effect on the Fund. As
of the date hereof, the Fund is not subject to any order of any court or of
any arbitrator, governmental authority or administrative agency that has or
would have, either individually or in the aggregate, a Material Adverse
Effect on the Fund.
(h) Since the date as of which information is given in the
Registration Statement and the Prospectus (and any amendment or supplement
to either of them), except as otherwise stated therein, (i) there has been
no change, whether or not arising in the ordinary course of business, that
has or would have a Material Adverse Effect on the Fund (other than as a
result of a change in the financial markets generally); and (ii) there have
been no transactions entered into by the Fund other than those in the
ordinary course of its business or as described in the Prospectus (and any
amendment or supplement thereto).
(i) Ernst & Young LLP, who have audited the Statement of Assets and
Liabilities included in, and whose report appears in, the Registration
Statement and the Prospectus (and any amendment or supplement to either of
them), are independent public accountants with respect to the Fund as
required by the 1933 Act, the 1940 Act and the Rules and Regulations.
(j) The financial statements, together with related schedules and
notes, included or incorporated by reference in the Registration Statement
or the Prospectus (or any amendment or supplement to either of them)
16
present fairly the financial position of the Fund on the basis stated in
the Registration Statement at the respective dates or for the respective
periods to which they apply; such statements and related schedules and
notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved except as
disclosed therein; and the other financial and statistical information and
data included in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) are accurately derived from such financial
statements and the books and records of the Fund.
(k) The Fund, subject to the Registration Statement having been
declared effective and the filing of the Prospectus under Rule 497 under
the 1933 Act Rules and Regulations, has taken all action required to be
taken by it under the 1933 Act, the 1940 Act and the Rules and Regulations
to make the public offering and consummate the sale of the Shares as
contemplated by this Agreement.
(l) The execution and delivery of and the performance by the Fund of
its obligations under this Agreement and the Fund Agreements have been duly
and validly authorized by the Fund and this Agreement and each of the Fund
Agreements have been duly executed and delivered by the Fund and (assuming
due and valid authorization, execution and delivery by the other parties
hereto and thereto) this Agreement and each Fund Agreement constitutes the
valid and legally binding agreement of the Fund, enforceable against the
Fund in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws
and subject to the qualification that the enforceability of the Fund's
obligations hereunder and thereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and by general
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law).
17
(m) Except as disclosed in or contemplated by the Registration
Statement or the Prospectus (or any amendment or supplement to either of
them), subsequent to the respective dates as of which such information is
given in the Registration Statement and the Prospectus (and any amendment
or supplement to either of them), the Fund has not incurred any debt,
liability or obligation, direct or contingent, and there has not been any
change in the capital stock or capitalization of the Fund.
(n) The Fund has not distributed and, prior to the later to occur of
(i) the Closing Date and (ii) completion of the distribution of the Shares,
will not distribute to the public any offering material in connection with
the offering and sale of the Shares other than the Registration Statement,
the Prepricing Prospectus included in Pre-Effective Amendment No. 1 to the
registration statement (the "Red ▇▇▇▇▇▇▇ Preliminary Prospectus"), and the
Prospectus.
(o) (i) The Fund has such licenses, permits, and authorizations of
governmental or regulatory authorities ("permits") as are necessary to own
its property and to conduct its business in the manner described in the
Prospectus (and any amendment or supplement thereto); (ii) the Fund has
fulfilled and performed all its obligations with respect to such permits
and no event has occurred which allows or, after notice or lapse of time,
would allow, revocation or termination thereof or results in any other
impairment of the rights of the Fund under any such permit, subject in each
case to such qualification as may be set forth in the Prospectus (and any
amendment or supplement thereto); and, (iii) except as described in the
Prospectus (and any amendment or supplement thereto), none of such permits
contains any restriction that is materially burdensome to the Fund; except
where the failure to obtain or perform its obligations with respect to such
permits, or the restrictions set forth in such permits, as set forth in
clauses (i), (ii) and (iii), either individually or in the aggregate, does
or would not have a Material Adverse Effect on the Fund.
18
(p) The Fund will maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with the Board of Directors' general or specific
authorization and with the investment policies and restrictions of the Fund
and the applicable requirements of the 1940 Act, the 1940 Act Rules and
Regulations and the Code; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles, to calculate net asset value and fee
accruals, to maintain accountability for assets and to maintain compliance
with the books and records requirements under the 1940 Act and the 1940 Act
Rules and Regulations; (iii) access to assets is permitted only in
accordance with the Board of Directors' general or specific authorization;
and (iv) the recorded account for assets is compared with existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences.
(q) The conduct by the Fund of its business (as described in the
Prospectus) does not require it to be the owner, possessor, licensee of, or
otherwise require it to have the right to use, any patents, patent
licenses, trademarks, service marks or trade names (collectively,
"Intellectual Property") which it does not own, possess, license or
otherwise have the right to use, except where the failure to own, possess,
license or otherwise have the right to use such Intellectual Property,
individually or in the aggregate, does or would not have a Material Adverse
Effect on the Fund.
(r) The Fund is duly registered under the 1940 Act and the Rules and
Regulations as a closed-end, non-diversified management investment company
and the 1940 Act Notification has been duly filed with the Commission and,
at the time of filing thereof and at all times through the date hereof, the
1940 Act Notification conformed in all material respects with all
applicable provisions of the 1940 Act and the Rules and Regulations; no
order of suspension or revocation of such registration under the 1940 Act
and the Rules and Regulations has been issued or proceedings therefor
19
initiated or, to the knowledge of the Fund, threatened by the Commission.
The provisions of the Articles, and the investment policies and
restrictions described in each of the Registration Statement and the
Prospectus, comply in all material respects with the requirements of the
1940 Act and the Rules and Regulations.
(s) Each of the Fund Agreements complies in all material respects with
all applicable provisions of the 1933 Act, the 1940 Act, the Rules and
Regulations, 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").
(t) No holder of any security of the Fund has any right to require
registration of any Shares, capital stock or any other security of the Fund
because of the filing of the registration statement or consummation of the
transactions contemplated by this Agreement.
(u) The Fund, the Adviser and the Sub-Adviser intend to direct the
investment of the proceeds of the offering of the Shares in such a manner
as to comply with the requirements of Subchapter M of the Code.
(v) The Commission has not issued any order preventing or suspending
the use of any Prepricing Prospectus or the Prospectus.
(w) Except as disclosed in the Registration Statement or the
Prospectus (or any amendment or supplement to either of them), to the
Fund's knowledge, after due inquiry, no director of the Fund is an
"interested person" (as defined in the ▇▇▇▇ ▇▇▇) of the Fund or an
"affiliated person" (as defined in the ▇▇▇▇ ▇▇▇) of any Underwriter listed
in Schedule I hereto.
(x) The Common Shares are listed on the NYSE.
7. REPRESENTATIONS AND WARRANTIES OF THE ADVISER. The Adviser represents
and warrants to each Underwriter as follows:
20
(a) The Adviser is a corporation duly organized and validly existing
in good standing under the laws of the State of New York, with full
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in each of the Registration Statement
and the Prospectus (or any amendment or supplement to either of them) and
is duly registered and qualified to conduct business and is in good
standing in each jurisdiction or place where the nature of its properties
or conduct of its business requires such registration or qualification,
except where the failure so to register or to qualify does or would not
have a Material Adverse Effect on the Adviser.
(b) The Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the
Advisers Act, the 1940 Act, the Advisers Act Rules and Regulations or the
1940 Act Rules and Regulations from acting under the Management Agreement
for the Fund as contemplated by the Registration Statement or the
Prospectus (or any amendment or supplement to either of them). There does
not exist any proceeding which, if determined adversely with respect to the
Adviser, does or would have a material and adverse effect on the
registration of the Adviser with the Commission.
(c) There are no legal or governmental proceedings pending or, to the
knowledge of the Adviser, threatened against the Adviser that are required
to be described in the Registration Statement or the Prospectus (or any
amendment or supplement to either of them) but are not described as
required or that, if determined adversely with respect to the Adviser, does
or would have a Material Adverse Effect on the Adviser or does or would
have a material and adverse effect on the ability of the Adviser to perform
its obligations under this Agreement or any of the Adviser Agreements.
(d) Neither the execution, delivery or performance of this Agreement
or any of the Adviser Agreements, nor the consummation by the Adviser of
the transactions contemplated hereby or thereby (i) requires the Adviser to
21
obtain any consent, approval, authorization or other order of, or
registration or filing with, the Commission, any state securities
commission, any national securities exchange, any arbitrator, any court,
regulatory body, administrative agency or other governmental body, agency
or official having jurisdiction over the Adviser or conflicts or will
conflict with or constitutes or will constitute a breach of or a default
under, the certificate of incorporation or bylaws, or other organizational
documents of the Adviser or (ii) conflicts or will conflict with or
constitutes or will constitute a breach of or a default under, any
agreement, indenture, lease or other instrument to which the Adviser is a
party or by which the Adviser or any of its properties may be bound, or
violates or will violate any statute, law, regulation or judgment,
injunction, order or decree applicable to the Adviser or any of its
properties or will result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Adviser pursuant to the
terms of any agreement or instrument to which it is a party or by which it
may be bound or to which any of the property or assets of the Adviser is
subject, except in any case under clause (i) or (ii) as does or would not
have a Material Adverse Effect on the Adviser or does or would have a
material and adverse effect on the ability of the Adviser to perform its
obligations under this Agreement or any of the Adviser Agreements. The
Adviser is not subject to any order of any court or of any arbitrator,
regulatory body, administrative agency or other governmental body, agency
or official that would have a Material Adverse Effect on the Adviser or
does or would have a material and adverse effect on the ability of the
Adviser to perform its obligations under this Agreement or any of the
Adviser Agreements.
(e) The Adviser has full power and authority to enter into this
Agreement and each of the Adviser Agreements; the execution and delivery of
and the performance by the Adviser of its obligations under this Agreement
and the Adviser Agreements have been duly and validly authorized by the
Adviser; and this Agreement and each of the Adviser Agreements have been
duly executed and delivered by the Adviser and (assuming due and valid
authorization, execution and delivery by the other parties hereto and
22
thereto) this Agreement and each Adviser Agreement constitutes the valid
and legally binding agreement of the Adviser, enforceable against the
Adviser in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws
and subject to the qualification that the enforceability of the Adviser's
obligations hereunder and thereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and by general
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(f) The Adviser has the financial resources necessary for the
performance of its services and obligations as contemplated in the
Registration Statement and the Prospectus (or any amendment or supplement
to either of them) or under this Agreement or any of the Adviser
Agreements.
(g) The description of the Adviser in the Registration Statement and
the Prospectus (or any amendment or supplement to either of them) complied
and comply in all material respects with the provisions of the 1933 Act,
the 1940 Act, the Advisers Act, the Rules and Regulations and the Advisers
Act Rules and Regulations; and such description and the statements
attributable to the Adviser in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them) did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading.
(h) Since the date as of which information is given in the
Registration Statement or the Prospectus (or any amendment or supplement to
either of them), except as otherwise stated therein, there has been no
material adverse change in the condition (financial or other), business,
23
properties, net assets or results of operations or business prospects of
the Adviser, whether or not arising from the ordinary course of business
that does or would have a Material Adverse Effect on the Adviser or does or
would have a material and adverse effect on the ability of the Adviser to
perform its obligations under this Agreement or any of the Adviser
Agreements.
(i) (i) The Adviser has such permits as are necessary to own its
property and to conduct its business in the manner described in the
Prospectus (and any amendment or supplement thereto); (ii) the Adviser has
fulfilled and performed all its obligations with respect to such permits
and no event has occurred which allows or, after notice or lapse of time,
would allow, revocation or termination thereof or results in any other
impairment of the rights of the Adviser under any such permit, subject in
each case to such qualification as may be set forth in the Prospectus (and
any amendment or supplement thereto); and, (iii) except as described in the
Prospectus (and any amendment or supplement thereto), none of such permits
contains any restriction that is materially burdensome to the Adviser;
except where the failure to obtain or perform its obligations with respect
to such permits, or the restrictions set forth in such permits, as set
forth in clauses (i), (ii) and (iii), either individually or in the
aggregate, does or would have a Material Adverse Effect on the Adviser or
does or would have a material and adverse effect on the ability of the
Adviser to perform its obligations under this Agreement or any of the
Adviser Agreements.
(j) Each of the Adviser Agreements comply in all material respects
with the applicable provisions of the 1940 Act, the 1940 Act Rules and
Regulations, the Advisers Act and the Advisers Act Rules and Regulations.
8. REPRESENTATIONS AND WARRANTIES OF THE SUB-ADVISER. The Sub-Adviser
represents and warrants to each Underwriter as follows:
(a) The Sub-Adviser is a limited liability company duly formed and
validly existing in good standing under the laws of the State of Delaware,
24
with full limited liability company power and authority to own, lease and
operate its properties and to conduct its business as described in each of
the Registration Statement and the Prospectus (or any amendment or
supplement to either of them) and is duly registered and qualified to
conduct business and is in good standing in each jurisdiction or place
where the nature of its properties or conduct of its business requires such
registration or qualification, except where the failure so to register or
to qualify does or would not have a Material Adverse Effect on the
Sub-Adviser.
(b) The Sub-Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the
Advisers Act, the 1940 Act, the Advisers Act Rules and Regulations or the
1940 Act Rules and Regulations from acting under this Agreement or the
Sub-Advisory Agreement for the Fund as contemplated by the Registration
Statement or the Prospectus (or any amendment or supplement to either of
them). There does not exist any proceeding which, if determined adversely
with respect to the Sub-Adviser, does or would have a material and adverse
effect on the registration of the Sub-Adviser with the Commission.
(c) There are no legal or governmental proceedings pending or, to the
knowledge of the Sub-Adviser, threatened against the Sub-Adviser that are
required to be described in the Registration Statement or the Prospectus
(or any amendment or supplement to either of them) but are not described as
required or that, if determined adversely with respect to the Sub-Adviser,
does or would have a Material Adverse Effect on the Sub-Adviser or does or
would have a material and adverse effect on the ability of the Sub-Adviser
to perform its obligations under this Agreement or the Sub-Advisory
Agreement.
(d) Neither the execution, delivery or performance of this Agreement
or the Sub-Advisory Agreement, nor the consummation by the Sub-Adviser of
the transactions contemplated hereby or thereby (i) requires the
Sub-Adviser to obtain any consent, approval, authorization or other order
25
of, or registration or filing with, the Commission, any state securities
commission, any national securities exchange, any arbitrator, any court,
regulatory body, administrative agency or other governmental body, agency
or official having jurisdiction over the Sub-Adviser or conflicts or will
conflict with or constitutes or will constitute a breach of or a default
under, the certificate of incorporation or bylaws, or other organizational
documents of the Sub-Adviser or (ii) conflicts or will conflict with or
constitutes or will constitute a breach of or a default under, any
agreement, indenture, lease or other instrument to which the Sub-Adviser is
a party or by which the Sub-Adviser or any of its properties may be bound,
or violates or will violate any statute, law, regulation or judgment,
injunction, order or decree applicable to the Sub-Adviser or any of its
properties or will result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Sub-Adviser pursuant to
the terms of any agreement or instrument to which it is a party or by which
it may be bound or to which any of the property or assets of the
Sub-Adviser is subject, except in any case under clause (i) or (ii) as
would not have a Material Adverse Effect on the Sub-Adviser or on the
ability of the Sub-Adviser to perform its obligations under this Agreement
or the Sub-Advisory Agreement. The Sub-Adviser is not subject to any order
of any court or of any arbitrator, regulatory body, administrative agency
or other governmental body, agency or official that does or would have a
Material Adverse Effect on the Sub-Adviser or does or would have a material
and adverse effect on the ability of the Sub-Adviser to perform its
obligations under this Agreement or the Sub-Advisory Agreement.
(e) The Sub-Adviser has full power and authority to enter into this
Agreement and the Sub-Advisory Agreement; the execution and delivery of and
the performance by the Sub-Adviser of its obligations under this Agreement
and the Sub-Advisory Agreement have been duly and validly authorized by the
Sub-Adviser; and this Agreement and the Sub-Advisory Agreement have been
duly executed and delivered by the Sub-Adviser and (assuming due and valid
26
authorization, execution and delivery by the other parties hereto and
thereto) this Agreement and the Sub-Advisory Agreement constitutes the
valid and legally binding agreement of the Sub-Adviser, enforceable against
the Sub-Adviser in accordance with its terms, except as rights to indemnity
and contribution hereunder may be limited by federal or state securities
laws and subject to the qualification that the enforceability of the
Sub-Adviser's obligations hereunder and thereunder may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium
and other laws relating to or affecting creditors' rights generally and by
general equitable principles (regardless of whether enforcement is sought
in a proceeding in equity or at law).
(f) The Sub-Adviser has the financial resources necessary for the
performance of its services and obligations as contemplated in the
Registration Statement and the Prospectus (or any amendment or supplement
to either of them) or under this Agreement and the Sub-Advisory Agreement.
(g) The description of the Sub-Adviser in the Registration Statement
and the Prospectus (or any amendment or supplement to either of them)
complied and comply in all material respects with the provisions of the
1933 Act, the 1940 Act, the Advisers Act, the Rules and Regulations and the
Advisers Act Rules and Regulations; and such description and the statements
attributable to the Sub-Adviser in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them) did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading.
(h) Since the date as of which information is given in the
Registration Statement or the Prospectus (or any amendment or supplement to
either of them), except as otherwise stated therein, there has been no
27
material adverse change in the condition (financial or other), business,
properties, net assets or results of operations or business prospects of
the Sub-Adviser, whether or not arising from the ordinary course of
business that does or would have a Material Adverse Effect on the
Sub-Adviser or does or would have a material and adverse effect on the
ability of the Sub-Adviser to perform its obligations under this Agreement
or the Sub-Advisory Agreement.
(i) (i) The Sub-Adviser has such permits as are necessary to own its
property and to conduct its business in the manner described in the
Prospectus (and any amendment or supplement thereto); (ii) the Sub-Adviser
has fulfilled and performed all its obligations with respect to such
permits and no event has occurred which allows or, after notice or lapse of
time, would allow, revocation or termination thereof or results in any
other impairment of the rights of the Sub-Adviser under any such permit,
subject in each case to such qualification as may be set forth in the
Prospectus (and any amendment or supplement thereto); and, (iii) except as
described in the Prospectus (and any amendment or supplement thereto), none
of such permits contains any restriction that is materially burdensome to
the Sub-Adviser; except where the failure to obtain or perform its
obligations with respect to such permits, or the restrictions set forth in
such permits, as set forth in clauses (i), (ii) and (iii), either
individually or in the aggregate, does or would have a Material Adverse
Effect on the Sub-Adviser or does or would have a material and adverse
effect on the ability of the Sub-Adviser to perform its obligations under
this Agreement or the Sub-Advisory Agreement.
(j) The Sub-Advisory Agreement complies in all material respects with
the applicable provisions of the 1940 Act, the 1940 Act Rules and
Regulations, the Advisers Act and the Advisers Act Rules and Regulations.
9. INDEMNIFICATION AND CONTRIBUTION.
(a) The Fund, the Adviser and the Sub-Adviser, jointly and severally,
agree to indemnify and hold harmless each of you and each other Underwriter
28
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against
any and all losses, claims, damages, liabilities and expenses, joint or
several (including reasonable costs of investigation), arising out of or
based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Prospectus, any
Prepricing Prospectus (or any amendment or supplement to any of the
foregoing) or arising out of or based upon any omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein (in the case of a prospectus, in light of
the circumstances under which they were made) not misleading, (except
insofar as such losses, claims, damages, liabilities or expenses arise out
of or are based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in
reliance upon and in conformity with the Underwriter Information);
provided, however, that the foregoing indemnification contained in this
paragraph (a) with respect to the Red ▇▇▇▇▇▇▇ Preliminary Prospectus (or
any amendment or supplement thereto) shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter)
on account of any such loss, claim, damage, liability or expense arising
from the sale of the Shares by such Underwriter to any person if it is
shown that a copy of any such amendment or supplement to the Red ▇▇▇▇▇▇▇
Preliminary Prospectus or of the Prospectus (which term as used in this
proviso shall not include any statement of additional information unless
specifically requested by such person) was not delivered or sent to such
person within the time required by the 1933 Act and the 1933 Act Rules and
Regulations and the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in the Red
▇▇▇▇▇▇▇ Preliminary Prospectus was corrected in the supplement or amendment
to the Red ▇▇▇▇▇▇▇ Preliminary Prospectus or in the Prospectus, provided
that the Fund has delivered such supplements or amendments or the
Prospectus to the several Underwriters in requisite quantity on a timely
29
basis to permit proper delivery or sending. The foregoing indemnity
agreement shall be in addition to any liability which the Fund, the Adviser
or the Sub-Adviser may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Fund, the Adviser or the Sub-Adviser,
such Underwriter or such controlling person shall promptly notify the Fund,
the Adviser or the Sub-Adviser and the Fund, the Adviser or the Sub-Adviser
shall assume the defense thereof, including the employment of counsel and
the payment of all fees and expenses. Such Underwriter or any such
controlling person shall have the right to employ separate counsel in any
such action, suit or proceeding and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
Underwriter or controlling person unless (i) the Fund, the Adviser or the
Sub-Adviser have agreed in writing to pay such fees and expenses, (ii) the
Fund, the Adviser or the Sub-Adviser have failed within a reasonable time
to assume the defense and employ counsel or (iii) the named parties to any
such action, suit or proceeding (including any impleaded parties) include
both such Underwriter or such controlling person and the Fund, the Adviser
or the Sub-Adviser and such Underwriter or such controlling person shall
have been advised by its counsel that representation of such indemnified
party and the Fund, the Adviser or the Sub-Adviser by the same counsel
would be inappropriate under applicable standards of professional conduct
(whether or not such representation by the same counsel has been proposed)
due to actual or potential differing interests between them (in which case
the Fund, the Adviser and the Sub-Adviser shall not have the right to
assume the defense of such action, suit or proceeding on behalf of such
Underwriter or such controlling person). It is understood, however, that
the Fund, the Adviser and the Sub-Adviser shall, in connection with any one
such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of only one separate firm of attorneys (in
30
addition to any local counsel if there is any action, suit or proceeding in
more than one jurisdiction) at any time for all such Underwriters and
controlling persons not having actual or potential differing interests with
you or among themselves, which firm shall be designated in writing by the
Representative and that, subject to the requirements of 1940 Act Release
No. 11330 and Section 17(i) of the 1940 Act, all such fees and expenses
shall be reimbursed promptly as they are incurred. The Fund, the Adviser
and the Sub-Adviser shall not be liable for any settlement of any such
action, suit or proceeding effected without the written consent of the
Fund, the Adviser or the Sub-Adviser (whether or not the fund, the Adviser
or the Sub-Adviser are actual or potential parties to such action, suit or
proceeding), but if settled with such written consent or if there be a
final judgment for the plaintiff in any such action, suit or proceeding,
the Fund, the Adviser and the Sub-Adviser agree to indemnify and hold
harmless any Underwriter, to the extent provided in the preceding paragraph
and any such controlling person from and against any loss, liability,
damage or expense by reason by such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Fund, the Adviser and the Sub-Adviser, their
directors, members or managers, any officers of the Fund who sign the
Registration Statement and any person who controls the Fund, the Adviser or
the Sub-Adviser within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act, to the same extent as the foregoing indemnity from the
Fund, the Adviser and the Sub-Adviser to each Underwriter, but only with
respect to the Underwriter Information relating to such Underwriter. If any
action, suit or proceeding shall be brought against the Fund, the Adviser
or the Sub-Adviser, any of their directors, members or managers, any such
officer or any such controlling person, based on the Registration
Statement, the Prospectus or any Prepricing Prospectus (or any amendment or
supplement thereto) and in respect of which indemnity may be sought against
any Underwriter pursuant to this paragraph (c), such Underwriter shall have
31
the rights and duties given to each of the Fund, the Adviser and the
Sub-Adviser by paragraph (b) above (except that if the Fund, the Adviser or
the Sub-Adviser shall have assumed the defense thereof such Underwriter
shall not be required to do so, but may employ separate counsel therein and
participate in the defense thereof, but the fees and expenses of such
counsel shall be at such Underwriter's expense) and the Fund, the Adviser
and the Sub-Adviser, their directors, managers or members, any such officer
and any such controlling person shall have the rights and duties given to
the Underwriters by paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability which the Underwriters may otherwise
have.
(d) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities
or expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Fund, the Adviser and the Sub-Adviser on
the one hand (treated jointly for this purpose as one person) and the
Underwriters on the other from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Fund, the Adviser and the Sub-Adviser on the one hand (treated jointly for
this purpose as one person) and of the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Fund, the
Adviser and the Sub-Adviser on the one hand (treated jointly for this
purpose as one person) and the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering
32
(before deducting expenses) received by the Fund bear to the total
underwriting discounts and commissions received by the Underwriters, in
each case, as set forth in the table on the cover page of the Prospectus.
The relative fault of the Fund, the Adviser and the Sub-Adviser on the one
hand (treated jointly for this purpose as one person) and of the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Fund, the Adviser and the Sub-Adviser on the
one hand (treated jointly for this purpose as one person) or by the
Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission.
(e) The Fund, the Adviser, the Sub-Adviser and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
Section 9 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 that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities
and expenses referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating any claim or defending any such action, suit or proceeding.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the
total price of the Shares underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇)
shall be entitled to contribution from any person who was not guilty of
33
such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 9 are several in proportion to the
respective number of Shares set forth opposite their names in Schedule I
(or such number of Shares increased as set forth in Section 11 hereof) and
not joint.
(f) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability from claimants on
claims that are the subject matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 9 shall, subject to the requirements of Release No. 11330 and
Section 17(i) of the 1940 Act, be paid by the indemnifying party to the
indemnified party as such losses, claims, damages, liabilities or expenses
are incurred. The indemnity and contribution agreements contained in this
Section 9 and the representations and warranties of each of the Fund, the
Adviser and the Sub-Adviser set forth in this Agreement shall remain
operative and in full force and effect, regardless of (i) any investigation
made by or on behalf of any Underwriter or any person controlling any
Underwriter, the Fund, the Adviser, the Sub-Adviser or their directors,
managers, members, officers or any person controlling the Fund, the Adviser
or the Sub-Adviser, (ii) acceptance of any Shares and payment therefor
hereunder and (iii) any termination of this Agreement. A successor to any
Underwriter or to the Fund, the Adviser or the Sub-Adviser or their
directors, managers, members, officers or any person controlling the Fund,
the Adviser or the Sub-Adviser shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this
Section 9.
34
(h) The Fund, the Adviser and the Sub-Adviser each acknowledge, and
the Underwriters severally confirm, that the statements in the Prospectus
with respect to (1) the "Price to Public" of the Shares as set forth on the
cover page of the Prospectus, (2) the names and corresponding share amounts
set forth in the table of Underwriters in the first paragraph under the
caption "Underwriting" in the Prospectus, (3) the dollar amount of the
selling concessions and reallowances of selling concessions in the third
paragraph under the caption "Underwriting" in the Prospectus and (4)
statements regarding the possible electronic distribution of Prospectuses
in the seventh paragraph under the caption "Underwriting" in the Prospectus
constitute the only Underwriter Information. The Underwriters severally
confirm that these statements are correct in all material respects and were
so furnished by or on behalf of the Underwriters severally for use in the
Prospectus.
(i) The indemnification provisions of this Section 9 that are
applicable to the Fund are subject to any applicable limitations and
provisions of Section 17(i) of the 1940 Act.
10. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of the
Underwriters to purchase the Shares hereunder are subject to the accuracy of and
compliance with the representations, warranties and agreements of and by each of
the Fund, the Adviser and the Sub-Adviser contained herein on and as of the date
on which the Registration Statement becomes or became effective, the date of the
Prospectus (and of any amendment or supplement thereto) and the Closing Date
(each, a "Condition Compliance Date" and collectively, the "Condition Compliance
Dates"); to the accuracy and completeness of all statements made by the Fund,
the Adviser, the Sub-Adviser or any of their respective officers in any
certificate delivered to the Representative or its counsel pursuant to this
Agreement on any Condition Compliance Date, and to the following conditions
(each of which shall be satisfied as of each of the Condition Compliance Dates):
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment
35
thereto to be declared effective before the offering of the Shares may
commence, the Registration Statement or such post-effective amendment shall
have become effective not later than 5:30 p.m., New York City time, on the
date hereof or at such later date and time as shall be consented to in
writing by you and all filings, if any, required by Rules 497 and 430A
under the 1933 Act and the 1933 Act Rules and Regulations shall have been
timely made; no order pursuant to Section 8(e) of the 1940 Act shall have
been issued and no proceeding for that purpose shall have been instituted
or, to the knowledge of the Fund, the Adviser or any Underwriter,
threatened by the Commission and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to your
satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change or any development involving a prospective
change that does or would have a Material Adverse Effect on the Fund, the
Adviser or the Sub-Adviser (in each case not contemplated by the Prospectus
and other than as a result of changes in market conditions generally),
which in your opinion, would materially adversely affect the market for the
Shares, or (ii) any event or development relating to or involving the Fund,
the Adviser or the Sub-Adviser which makes any statement made in the
Prospectus untrue or which, in the opinion of the Fund and its counsel or
the Underwriters and their counsel, requires the making of any addition to
or change in the Prospectus in order to state a material fact required by
the 1933 Act, the 1940 Act or the Rules and Regulations or any other law to
be stated therein or necessary in order to make the statements therein not
misleading, if amending or supplementing the Prospectus to reflect such
event or development would, in your opinion, materially adversely affect
the market for the Shares.
(c) That you shall have received on the Closing Date an opinion of
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Fund, dated the Closing Date
and addressed to you, as the Representative of the several Underwriters, in
substantially the form attached hereto as Exhibit A.
36
(d) That you shall have received on the Closing Date an opinion of
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel for the Adviser, dated the Closing Date
and addressed to you, as Representative of the several Underwriters, in
substantially the form attached hereto as Exhibit B.
(e) That you shall have received on the Closing Date an Opinion of
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel for the Sub-Adviser, dated the Closing
Date and addressed to you, as the Representative of the several
Underwriters, in substantially the form attached hereto as Exhibit C.
(f) That you shall have received on the Closing Date (i) an opinion of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), and (ii) a letter from
Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, each dated the Closing Date and
addressed to you, as the Representative of the several Underwriters, with
respect to such matters as you may require, and the Fund, the Adviser, the
Sub-Adviser and their respective counsel shall have furnished to such
counsel such documents as they may request for the purpose of enabling them
to pass upon such matters.
(g) That you shall have received letters addressed to you, as the
Representative of the several Underwriters and dated each of the date
hereof and the Closing Date, from Ernst & Young LLP, independent auditors,
substantially in the forms attached hereto as Exhibit D. You also must
receive on the Closing Date a signed letter from such accountants, dated as
of the Closing Date, confirming on the basis of a review in accordance with
the procedures set forth in their letter that nothing has come to their
attention during the period from a date not more than five business days
before the date of this Underwriting Agreement, specified in the letter, to
a date not more than five business days before the Closing Date, that would
require any change in their letter referred to in the foregoing sentence.
37
(h) (i) No stop order suspending the effectiveness of the Registration
Statement or prohibiting or suspending the use of the Prospectus (or any
amendment or supplement to any of the foregoing) or any Prepricing
Prospectus shall have been issued and no proceedings for such purpose or
for the purpose of commencing an enforcement action against the Fund, the
Adviser or the Sub-Adviser or, with respect to the transactions
contemplated by the Prospectus (or any amendment or supplement thereto) and
this Agreement, may be pending before or, to the knowledge of the Fund, the
Adviser, the Sub-Adviser or any Underwriter or in the reasonable view of
counsel to the Underwriters, shall be threatened or contemplated by the
Commission at or prior to the Closing Date and that any request for
additional information on the part of the Commission (to be included in the
Registration Statement, the Prospectus or otherwise) be complied with to
the satisfaction of the Representative, (ii) there shall not have been any
change in the capital stock of the Fund nor any increase in debt of the
Fund from that set forth in the Registration Statement or the Prospectus
(or any amendment or supplement to either of them) and the Fund shall not
have sustained any material liabilities or obligations, direct or
contingent, other than those reflected in or contemplated by the
Registration Statement or the Prospectus (or any amendment or supplement to
either of them), (iii) since the date of the Prospectus there shall not
have been any material, adverse change in the condition (financial or
other) business, business prospects, properties, net assets or results of
operations of the Fund, the Adviser or the Sub-Adviser, (iv) none of the
Fund, the Adviser or the Sub-Adviser shall have sustained any material loss
or interference with their businesses from any court or from legislative or
other governmental action, order or decree or from any other occurrence not
described in the Registration Statement or the Prospectus (or any amendment
or supplement to either of them), and (v) all of the representations and
warranties of each of the Fund, the Adviser or the Sub-Adviser contained in
this Agreement shall be true and correct on and as of the date hereof and
as of the respective Condition Compliance Date as if made on and as of such
Condition Compliance Date.
38
(i) That none of the Fund, the Adviser, or the Sub-Adviser shall have
failed at or prior to the respective Condition Compliance Date to have
performed or complied with any of the agreements herein contained and
required to be performed or complied with by them at or prior to the such
Condition Compliance Date.
(j) The Shares shall have been accorded a rating of "Aaa" by ▇▇▇▇▇'▇
Investors Service, Inc. and "AAA" by Fitch Ratings, and letters and/or
press releases to such effect, dated on or before the Closing Date, shall
have been delivered to the Representative.
(k) As of the Closing Date, and assuming receipt of the net proceeds
from the sale of the Shares, the 1940 Act Preferred Shares Asset Coverage
and the Preferred Shares Basic Maintenance Amount (each as defined in the
Prospectus) each will be met and a certificate to such effect, signed by an
officer of the Fund, shall have been delivered to the Representative.
(l) That you shall have received on the Closing Date a certificate,
dated such date, of each of the chief executive officer and chief financial
officer of the Fund, and of the President (or a Vice President) and
Treasurer (or an Assistant Treasurer) of each of the Adviser and the
Sub-Adviser certifying that (i) the signers have carefully examined the
Registration Statement, the Prospectus (and any amendments or supplements
to either of them) and this Agreement, (ii) the representations and
warranties of the Fund (with respect to the certificates from such Fund
39
officers), the representations and warranties of the Adviser (with respect
to the certificates from such officers of the Adviser), and the
representations and warranties of the Sub-Adviser (with respect to the
certificates from such officers of the Sub-Adviser) in this Agreement are
true and correct on and as of the date of the certificate as if made on
such date, (iii) since the date of the Prospectus (and any amendment or
supplement thereto) there has not been any change that does or would have a
Material Adverse Effect on the Fund (with respect to the certificates from
such Fund officers) or the Adviser (with respect to the certificates from
such officers of the Adviser) or the Sub-Adviser (with respect to the
certificates from such officers of the Sub-Adviser), (iv) to the knowledge
of such officers after reasonable investigation, no order suspending the
effectiveness of the Registration Statement or prohibiting the sale of any
of the Shares or having a Material Adverse Effect on the Fund (with respect
to the certificates from such Fund officers) or the Adviser (with respect
to the certificates from such officers of the Adviser) or the Sub-Adviser
(with respect to the certificates from such officers of the Sub-Adviser)
has been issued and no proceedings for any such purpose are pending before
or, to the knowledge of such officers, threatened by the Commission or any
court or other regulatory body, 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, (v) each of the Fund (with respect to certificates from such Fund
officers), the Adviser (with respect to certificates from such officers of
the Adviser) and the Sub-Adviser(with respect to the certificates from such
officers of the Sub-Adviser) has performed and complied with all agreements
that this Agreement require it to perform by such Closing Date and (vi)
with respect to the certificate from such officers of the Fund, there has
not been any change in the capital stock of the Fund nor any increase in
the debt of the Fund from that set forth in the Prospectus (or any
amendment or supplement thereto) and the Fund has not sustained any
material liabilities or obligations, direct or contingent, other than those
reflected in the Prospectus (or any amendment or supplement thereto).
(m) That the Fund, the Adviser and the Sub-Adviser shall have
furnished to you such further certificates and documents as you shall
reasonably request.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and your counsel acting in good faith.
40
Any certificate or document signed by any officer of the Fund, the
Adviser or the Sub-Adviser and delivered to you, as the Representative of the
Underwriters or to Underwriters' counsel, shall be deemed a representation and
warranty by the Fund, the Adviser or the Sub-Adviser to each Underwriter as to
the statements made therein.
11. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective: (i)
upon the execution and delivery hereof by the parties hereto; or (ii) if, at the
time this Agreement is executed and delivered, it is necessary for the
Registration Statement or a post-effective amendment thereto to be declared
effective before the offering of the Shares may commence, when the Registration
Statement or such post-effective amendment has become effective. Until such time
as this Agreement shall have become effective, it may be terminated by the Fund
by notifying you, or by you by notifying the Fund.
If any one or more of the Underwriters shall fail or refuse to purchase
Shares which it or they have agreed to purchase hereunder and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares, each non-defaulting Underwriter shall be obligated, severally, in
the proportion which the aggregate number of Shares set forth opposite its name
in Schedule I hereby bears to the aggregate number of Shares set forth opposite
the names of all non-defaulting Underwriters or in such other proportion as you
may specify in accordance with Section 7 of the ▇.▇. ▇▇▇▇▇▇▇ Master Agreement
Among Underwriters, to purchase Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase. If any Underwriter or
Underwriters shall fail or refuse to purchase Shares and the aggregate number of
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares and arrangements satisfactory to you and the Fund for
the purchase of such Shares by one or more non-defaulting Underwriters or other
party or parties approved by you and the Fund are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Fund. In any such case which does not result
in termination of this Agreement, either you or the Fund shall have the right to
41
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect to any such default of any such Underwriter under this
Agreement. The term "Underwriter" as used in this Agreement includes, for all
purposes of this Agreement, any party not listed in Schedule I hereto who, with
your approval and the approval of the Fund, purchases Shares which a defaulting
Underwriter agreed, but failed or refused, to purchase.
Any notice under this Section 11 may be made by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
12. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Fund or the Adviser by notice to the Fund or the Adviser if
at any time at or prior to the Closing Date (i) trading in any securities of the
Fund has been suspended or materially limited by the Commission or the NYSE or
such other national securities exchange upon which the Fund's securities trade
or trading in securities generally on the NYSE, American Stock Exchange, Nasdaq
National Market or the Nasdaq Stock Market shall have been suspended or limited
or minimum or maximum prices shall have been established or required by such
exchanges, the Commission, NASD or other governmental authority, (ii) additional
governmental restrictions not in force on the date of this Agreement have been
imposed upon trading in securities generally or a general moratorium on
commercial banking activities shall have been declared by Federal or any state's
authorities or (iii) there has occurred any outbreak or material escalation of
hostilities or other international or domestic calamity, crisis or change or
development in political, financial, economic, legal or regulatory conditions or
markets, the effect of which is such as to make it, in your judgment,
impracticable or inadvisable to commence or continue the offering of the Shares
at the offering price to the public set forth on the cover page of the
42
Prospectus or to enforce contracts for the resale of the Shares by the
Underwriters. Notice of such termination may be given to the Fund, the Adviser
or the Sub-Adviser by telegram, telecopy or telephone but shall be subsequently
confirmed by letter.
13. EXPENSES. The Fund agrees to pay the following costs and expenses and
all other costs and expenses incident to the performance by the Fund of its
obligations hereunder: (a) the preparation, printing or reproduction, filing
(including, without limitation, the filing or registration fees prescribed by
the 1933 Act, the 1934 Act, the 1940 Act and the Rules and Regulations) and
distribution of the Registration Statement (including exhibits thereto), the
Prospectus, each Prepricing Prospectus and all amendments or supplements to any
of them, (b) the printing (or reproduction) and delivery to the Underwriters
(including postage, air freight charges and charges for counting and packaging)
of such copies of the Registration Statement, the Prospectus, each Prepricing
Prospectus (and all amendments or supplements to any of them, except as provided
in Section 5(f) of this Agreement) as may be reasonably requested for use in
connection with the offering and sale of the Shares, (c) the preparation,
printing, authentication, issuance and delivery of certificates (if any) for the
Shares, including any stamp taxes and transfer agent and registrar fees payable
in connection with the original issuance and sale of such Shares, (d) the
registrations or qualifications of the Shares for offer and sale thereof, if
any, as are required under the securities or Blue Sky laws of the several states
as provided in Section 5(g) hereof (including the reasonable fees, expenses and
disbursements of counsel for the Underwriters relating to the preparation,
printing or reproduction and delivery of the preliminary and supplemental Blue
Sky Memoranda and such registration and qualification), (e) the fees and
expenses of the Fund's independent accountants, counsel for the Fund and of the
transfer agent, (f) the printing (or reproduction) and delivery of this
Agreement, the preliminary and supplemental Blue Sky Memoranda (if any) and all
other company-authorized agreements or other documents printed (or reproduced)
and delivered in connection with the offering of the Shares, (g) the fees
charged by the securities rating agencies rating the Shares, (h) the fees and
expenses charged by the Depository Trust Company and its nominee and (i) the
43
fees and expenses charged by the Bank of New York, as Auction Agent with respect
to the Shares.
Notwithstanding the foregoing, in the event that the sale of the Shares is
not consummated pursuant to Section 2 hereof, the Adviser or the Sub-Adviser
will pay the costs and expenses of the Fund set forth above in this Section
13(a) through (i), and reimbursements of Underwriter expenses in connection with
the offering shall be made in accordance with Section 5(k) hereof.
14. MISCELLANEOUS. Except as otherwise provided in Sections 5, 11 and 12
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (a) if to the Fund, the Adviser or the
Sub-Adviser, c/o Neuberger ▇▇▇▇▇▇ LLC, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇; Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq., with a copy to ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention Art
Delibert (b) if to you, as Representative of the Underwriters, at the office of
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, with a copy to Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Fund, the Adviser, the Sub-Adviser, their directors, officers,
managers, members and the other controlling persons referred to in Section 9
hereof and their respective successors and assigns, to the extent provided
herein and no other person shall acquire or have any right under or by virtue of
this Agreement. Neither the term "successor" nor the term "successors and
assigns" as used in this Agreement shall include a purchaser from any
Underwriter of any of the Shares in his status as such purchaser.
15. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
44
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
45
Please confirm that the foregoing correctly sets forth the agreement among
the Fund, the Adviser, the Sub-Adviser and the several Underwriters.
Very truly yours,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ REAL ESTATE INCOME FUND INC.
By:
---------------------------------------
Title:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ MANAGEMENT INC.
By:
---------------------------------------
Title:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC
By:
---------------------------------------
Title:
Confirmed as of the date
first above written on
behalf of themselves and
the other several Under-
writers named in Schedule
I hereto.
AS REPRESENTATIVE OF THE SEVERAL UNDERWRITERS
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
By:
---------------------------------
Title:
46
SCHEDULE I
Underwriters Number of Shares
------------ ----------------
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. [ ]
Total [ ]
===== ===
47
EXHIBIT A
FORM OF ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ OPINION
1. The Fund is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Maryland and is qualified to do
business as a foreign corporation in the State of New York, which such
counsel has been advised by an officer of the Fund is the only state in
which the Fund maintains an office for the conduct of its business.
2. The Fund has the corporate power and authority to: (i) own its properties
and conduct its business as described in the Registration Statement and the
Prospectus; and (ii) execute, deliver, and perform its obligations under
the Underwriting Agreement and the Fund Agreements.
3. To such counsel's knowledge, the Fund does not have any subsidiaries.
4. The Shares, conform in all material respects as to all statements as to
legal matters relating thereto contained in the Prospectus. No person is
entitled to any preemptive or other similar rights with respect to the
Common Shares or the issuance of the Shares.
5. The number of authorized Common Shares and Shares is as set forth in the
Prospectus under the caption "The Fund." All Common Shares and Preferred
Shares that to such counsel's knowledge have been issued and are
outstanding prior to the issuance of the Shares: (i) have been duly
authorized and validly issued and are fully paid and non-assessable; and
(ii) have been offered and sold by the Fund in compliance with applicable
law.
6. The Shares have been duly authorized for issuance and sale to the
Underwriters pursuant to the Underwriting Agreement and, when issued and
delivered by the Fund pursuant to the Underwriting Agreement against
payment of the consideration set forth in the Underwriting Agreement, will
be validly issued and fully paid and non-assessable.
48
7. The Registration Statement, including any Rule 462(b) Registration
Statement, has become effective under the 1933 Act, any required filing of
the Prospectus pursuant to Rule 497(c) or Rule 497(h) has been made in the
manner and within the time period required by Rule 497, and to such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement or of any Rule 462(b) Registration Statement has
been issued, or proceedings therefor threaten under the 1933 Act.
8. The Fund is duly registered with the Commission under the 1940 Act as a
closed-end non-diversified management investment company.
9. Other than with respect to financial statements and related notes and
schedules and any other financial, accounting and statistical information
that is included or incorporated by reference in, or omitted from, the
following documents, as to which such counsel need express no opinion; the
Registration Statement, including any Rule 462(b) Registration Statement
and any Rule 430A Information, the Prospectus and any amendment or
supplement thereto through the date hereof complied as to form in all
material respects with the requirements of the 1933 Act, the 1940 Act and
the Rules and Regulations thereunder.
10. Insofar as the statements in the Prospectus under the captions "Description
of New Preferred Shares," "Description of Common Shares" and "Tax Matters"
and in the Registration Statement under Item 29 (Indemnification)
constitute summaries of legal matters, provisions of the Fund's charter or
bylaws or legal proceedings or legal conclusions referred to therein, those
statements fairly present the information called for with respect to those
legal matters, documents, proceedings or conclusions.
11. To such counsel's knowledge, there is no action, suit, proceeding, inquiry
or investigation by or before any court or governmental agency that is
pending against the Fund or to which any of its properties are subject or
49
that is threatened against the Fund, which may reasonably be expected to
result in a Material Adverse Effect or to materially and adversely affect
the properties or assets of the Fund, the consummation by the Fund of the
transactions contemplated in the Underwriting Agreement or the performance
by the Fund of its obligations thereunder.
12. The terms of the Underwriting Agreement and each of the Fund Agreements do
not violate in any material respect any applicable provision of 1940 Act,
the Rules and Regulations thereunder, the Advisers Act or the Advisers Act
Rules and Regulations.
13. Neither the execution and delivery by the Fund of, and the performance by
the Fund of its obligations under, the Underwriting Agreement or the Fund
Agreements, nor the issuance and sale of the Shares to the Underwriters and
the use by the Fund of the proceeds thereof as provided by the Underwriting
Agreement and as described in the Prospectus under the caption "Use of
Proceeds": (i) violate the Fund's charter or bylaws; (ii) violate, breach
or constitute a default or event of default under the terms of any
agreement or instrument that is filed as an exhibit to the Registration
Statement and to which the Fund is a party or by which its property may be
bound, except for violations, breaches or defaults that would not have a
Material Adverse Effect; (iii) violate the laws of the United States, the
States of Maryland and New York and The Commonwealth of Massachusetts that
are, in such counsel's experience, applicable to the transactions of the
types covered by the Underwriting Agreement and the Fund Agreements (the
"Covered Laws"); (iv) violate the terms of any order of any court,
governmental instrumentality, securities exchange or association or
arbitrator specifically naming the Fund and known to such counsel or (v) to
such counsel's knowledge, require the Fund to obtain any consent or
approval by, or make any filing with, any court, regulatory body,
administrative or other governmental body, agency or official under any
statute, rule, or regulation of the State of Maryland or of the United
States, other than consents, approvals and filings previously obtained or
made and in full force and effect.
50
14. The execution and delivery of, and performance of the Fund's obligations
under, the Underwriting Agreement and each of the Fund Agreements have been
duly authorized by all necessary action of the Fund, and the Fund has duly
executed and delivered the Underwriting Agreement and each of the Fund
Agreements.
15. Each of the Fund Agreements constitutes the legal, valid and binding
obligation of the Fund, enforceable against it in accordance with its
terms, except as the enforceability thereof may be limited by the effect of
bankruptcy, insolvency, fraudulent transfer, reorganization, receivership,
moratorium, and other, similar laws affecting the rights and remedies of
creditors generally and by general principles of equity (whether applied by
a court of law or equity), and except as rights to indemnity thereunder may
be limited by federal or state securities laws.
In addition, such counsel shall state that they are not opining as to
factual matters, and the character of determinations involved in the
registration process is such that such counsel are not passing upon and do not
assume any responsibility for the accuracy, completeness or fairness of the
information included in the Registration Statement and the Prospectus or in any
amendment or supplement thereto. Such counsel may assume the correctness and
completeness of the information included therein, and such counsel need have
made no independent investigation or verification of that information. However,
such counsel shall state that they have participated in the preparation of the
Registration Statement and the Prospectus and in discussions with certain
officers and directors of the Fund, certain officers and employees of the
Advisers and your Representative, and such counsel shall have reviewed certain
Fund records and documents relative to the Fund, the Adviser and the
Sub-Adviser. Based on that participation and review, such counsel shall advise
you that nothing has come to such counsel's attention that causes such counsel
to believe that the Registration Statement, including any Rule 462(b)
Registration Statement and any Rule 430A Information, at the time it 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
51
statements therein not misleading, or that the Prospectus or any amendment or
supplement thereto, at the time that the Prospectus was issued or at the Closing
Date, included an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. This paragraph
does not address, and such counsel need express no opinion with respect to, the
financial statements and related notes and schedules, and other financial,
accounting, and statistical information, included in, incorporated by reference
in, or omitted from the Registration Statement, the Prospectus, or any amendment
or supplement to either of them. Such counsel need also express no opinion with
respect to any matter relating to compliance with financial covenants or
financial requirements.
52
EXHIBIT B
Form of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ Adviser Opinion
i. The Adviser is validly existing as a corporation under the laws of the State
of New York with full corporate power and authority to own or lease all of the
assets owned or leased by it and to conduct its business as described in the
Registration Statement and Prospectus and to enter into and perform its
obligations under the Underwriting Agreement and the Adviser Agreements.
ii. The Adviser is duly registered as an investment adviser under the Advisers
Act and is not prohibited by the Advisers Act or the Investment Company Act from
acting as investment adviser for the Fund under the Advisory Agreement as
contemplated by the Registration Statement and the Prospectus.
iii. The Underwriting Agreement and each Adviser Agreement has been duly and
validly authorized, executed and delivered by the Adviser; each Adviser
Agreement complies in all material respects with all provisions of the
Investment Company Act and the Advisers Act; and assuming due authorization,
execution and delivery by each of the other parties thereto, each Adviser
Agreement constitutes a legal, valid and binding obligation of the Adviser,
enforceable against the Adviser in accordance with its terms, (1) subject, as to
enforcement, to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws affecting creditors' rights
generally and to general equitable principles (regardless of whether enforcement
is sought in a proceeding in equity or at law) and (2) except as rights to
indemnity thereunder may be limited by public policy or federal or state
securities laws (except that counsel may state that it expresses no opinion as
to the reasonableness or fairness of compensation payable under the Advisory
Agreement or the Sub-Advisory Agreement).
iv. Neither (A) the execution and delivery by the Adviser of the Underwriting
Agreement or of any Adviser Agreement nor (B) the consummation by the Adviser of
the transactions contemplated by, or the performance of its obligations under,
the Underwriting Agreement or any Adviser Agreement conflicts or will conflict
with, or results or will result in a breach of, (i) the charter or by-laws of
the Adviser, (ii) any agreement or instrument listed on an Annex to such opinion
(which the Adviser, in an officer's certificate accompanying such opinion or
otherwise delivered to the Underwriters on the Closing Date, shall have
identified as the only material agreements or instruments to which the Adviser
is a party or by which the Adviser is bound) or (iii) any applicable United
States federal or New York law, rule or regulation (other than state securities
53
or "blue sky" laws, as to which such counsel need express no opinion), or order
of any New York or United States federal court, governmental instrumentality,
securities exchange or association or arbitrator, (or any other orders of any
court, governmental instrumentality, securities exchange or association or
arbitrator, whether foreign or domestic, in any other jurisdiction, as set forth
on an Annex to such opinion (which the Adviser, in an officer's certificate
accompanying such opinion or otherwise delivered to the Underwriters on the
Closing Date, shall have identified as the only orders that are material to the
Adviser) in each case specifically naming the Adviser and (in the case of New
York or United States federal orders) known to such counsel, except in the case
of each of clauses (ii) and (iii) for such conflicts or breaches which do not,
either alone or in the aggregate, have a material adverse effect on the
Adviser's ability to perform its obligations under the Underwriting Agreement or
the Adviser Agreements.
v. To such counsel's knowledge, no consent, approval, authorization or order of
any New York or United States federal court, governmental agency or body or
securities exchange or association is required for the consummation of the
transactions contemplated in, or the performance by the Adviser of its
obligations under, the Underwriting Agreement or any Adviser Agreement, except
(i) such as have been obtained under the United States federal securities laws
and (ii) may be required by the New York Stock Exchange or under state
securities or "blue sky" laws, in connection with the purchase and distribution
of the Shares by the Underwriters pursuant to the Underwriting Agreement.
vi. To such counsel's knowledge, there is no legal or governmental proceeding
pending or threatened against the Adviser that is either (i) required to be
described in the Registration Statement or Prospectus that is not described
therein or (ii) which would, under Section 9 of the Investment Company Act, make
the Adviser ineligible to act as the Fund's investment adviser.
54
EXHIBIT C
Form of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ Sub-Adviser Opinion
i. The Sub-Adviser is validly existing as a limited liability company under the
laws of the State of Delaware with full power and authority to own or lease all
of the assets owned or leased by it and to conduct its business as described in
the Registration Statement and Prospectus and to enter into and perform its
obligations under the Underwriting Agreement and Sub-Advisory Agreement.
ii. The Sub-Adviser is duly registered as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act or the Investment Company
Act from acting as investment adviser for the Fund under the Sub-Advisory
Agreement as contemplated by the Registration Statement and the Prospectus.
iii. Each of the Underwriting Agreement and the Sub-Advisory Agreement has been
duly and validly authorized, executed and delivered by the Sub-Adviser; the
Sub-Advisory Agreement complies in all material respects with all provisions of
the Investment Company Act and the Advisers Act; and assuming due authorization,
execution and delivery by each of the other parties thereto, the Sub-Advisory
Agreement constitutes a legal, valid and binding obligation of the Sub-Adviser,
enforceable against the Sub-Adviser in accordance with its terms, (1) subject,
as to enforcement, to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws affecting creditors' rights
generally and to general equitable principles (regardless of whether enforcement
is sought in a proceeding in equity or at law) and (2) except as rights to
indemnity thereunder may be limited by public policy or federal or state
securities laws (except that counsel my state that it expresses no opinion as to
the reasonableness or fairness of compensation payable under the Sub-Advisory
Agreement).
iv. Neither (A) the execution and delivery by the Sub-Adviser of the
Underwriting Agreement or the Sub-Advisory Agreement nor (B) the consummation by
the Sub-Adviser of the transactions contemplated by, or the performance of its
obligations under, the Underwriting Agreement or the Sub-Advisory Agreement
conflicts or will conflict with, or results or will result in a breach of, (i)
the organizational documents of the Sub-Adviser, (ii) any agreement or
instrument listed on an Annex to such opinion (which the Sub-Adviser, in an
55
officer's certificate accompanying such opinion or otherwise delivered to the
Underwriters on the Closing Date, shall have identified as the only material
agreements or instruments to which the Adviser is a party or by which the
Sub-Adviser is bound) or (iii) any applicable United States federal or Delaware
law, rule or regulation (other than state securities or "blue sky" laws, as to
which such counsel need express no opinion), or order of any Delaware or United
States federal court, governmental instrumentality, securities exchange or
association or arbitrator, (or any other orders of any court, governmental
instrumentality, securities exchange or association or arbitrator, whether
foreign or domestic, in any other jurisdiction, as set forth on an Annex to such
opinion (which the Sub-Adviser, in an officer's certificate accompanying such
opinion or otherwise delivered to the Underwriters on the Closing Date, shall
have identified as the only orders that are material to the Sub-Adviser) in each
case specifically naming the Sub-Adviser and (in the case of Delaware or United
States federal orders) known to such counsel, except in the case of each of
clauses (ii) and (iii) for such conflicts or breaches which do not, either alone
or in the aggregate, have a material adverse effect on the Sub-Adviser's ability
to perform its obligations under the Underwriting Agreement or the Sub-Advisory
Agreement.
v. To such counsel's knowledge, no consent, approval, authorization or order of
any New York or United States federal court, governmental agency or body or
securities exchange or association is required for the consummation of the
transactions contemplated in, or the performance by the Sub-Adviser of its
obligations under, the Underwriting Agreement or the Sub-Advisory Agreement,
except (i) such as have been obtained under the United States federal securities
laws and (ii) may be required by the New York Stock Exchange or under state
securities or "blue sky" laws, in connection with the purchase and distribution
of the Shares by the Underwriters pursuant to the Underwriting Agreement.
vi. To such counsel's knowledge, there is no legal or governmental proceeding
pending or threatened against the Sub-Adviser that is either (i) required to be
described in the Registration Statement or Prospectus that is not described
therein or (ii) which would, under Section 9 of the Investment Company Act, make
the Sub-Adviser ineligible to act as the Fund's investment adviser.
56
EXHIBIT D
Form of Ernst & Young LLP Comfort Letter
October [ ], 2003
The Board of Directors of
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Real Estate Income Fund Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
as Managing Representative of the Underwriters
Ladies and Gentlemen:
We have audited the statement of assets and liabilities of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Real Estate Income Fund Inc. (the "Fund") as of [ ], 2003 (the "financial
statement") included in Pre-effective Amendment No. [ ] to the Registration
Statement on Form N-2 filed by the Fund under the Securities Act of 1933 (the "
1933 Act") (File No. 333-108572) and under the Investment Company Act of 1940
(the "1940 Act," collectively, the 1933 Act and the 1940 Act, the "Acts") (File
No. 811-21200); such statement and our report with respect to such statement are
included in the Registration Statement.
In connection with the Registration Statement:
1. We are independent auditors with respect to the Fund within
the meaning of the Acts and the applicable rules and regulations
adopted thereunder by the Securities and Exchange Commission (the
"SEC").
2. In our opinion, the financial statement audited by us and
included in the Registration Statement complies as to form in all
respects with the applicable accounting requirements of the Acts and
the related rules and regulations thereunder adopted by the SEC.
3. For purposes of this letter we have read the minutes of all
meetings of the Shareholders, the Board of Directors and all
Committees of the Board of Directors of the Fund as set forth in the
minute books at the offices of the Fund, officials of the Fund having
advised us that the minutes of all such meetings through [ ], 2003,
were set forth therein.
57
4. Fund officials have advised us that no financial statements as
of any date subsequent to [ ], 2003, are available. We have made
inquiries of certain officials of the Fund who have responsibility for
financial and accounting matters regarding whether there was any
change at [ ], 2003, in the capital shares or net assets of the Fund
as compared with amounts shown in the [ ], 2003, statement of assets
and liabilities included in the Registration Statement, except for
changes that the Registration Statement discloses have occurred or may
occur. On the basis of our inquiries and our reading of the minutes as
described in Paragraph 3, nothing came to our attention that caused us
to believe that there were any such changes.
5. In addition to the procedures referred to in clauses 3 and 4
about, we have performed other specified procedures, not constituting
an audit, with respect to certain amounts, percentages, numerical data
and financial information appearing in the Registration Statement,
which have previously been specified by the Managing Representative
and which shall be specified in this letter, and have compared such
items with, and have found such items to be in agreement with, the
accounting and financial records of the Fund.
The foregoing procedures do not constitute an audit made in accordance
with generally accepted auditing standards. Accordingly, we make no
representations as to the sufficiency of the foregoing procedures for your
purposes.
This letter is solely for the information of the addressees and to assist
the underwriters in conducting and documenting their investigation of the
affairs of the Fund in connection with the offering of the securities covered by
the Registration Statement, and is not to be used, circulated, quoted or
otherwise referred to within or without the underwriting group for any other
purpose, including but not limited to the registration, purchase or sale of
securities, nor is it to be filed with or referred to in whole or in part in the
Registration Statement or any other document, except that reference may be made
to it in the underwriting agreement or in any list of closing documents
pertaining to the offering of the securities covered by the Registration
Statement.
58