SELIGMAN PREMIUM TECHNOLOGY GROWTH FUND, INC. __________ Shares of Common Stock $20.00 per Share UNDERWRITING AGREEMENT
Exhibit 99.H.1
▇▇▇▇▇▇▇▇ PREMIUM TECHNOLOGY GROWTH FUND, INC.
__________ Shares of Common Stock
$20.00 per Share
$20.00 per Share
Dated: _______, 2009
Table of Contents
| Page | ||||||
| SECTION 1. | Representations and Warranties
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2 | ||||
| SECTION 2. | Sale and Delivery to Underwriters; Closing
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13 | ||||
| SECTION 3. | Covenants of the Fund and the Manager
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15 | ||||
| SECTION 4. | Payment of Expenses
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17 | ||||
| SECTION 5. | Conditions of Underwriters’ Obligations
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18 | ||||
| SECTION 6. | Indemnification
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22 | ||||
| SECTION 7. | Contribution
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24 | ||||
| SECTION 8. | Representations, Warranties and Agreements to Survive Delivery
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26 | ||||
| SECTION 9. | Termination of Agreement
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26 | ||||
| SECTION 10. | Default by One or More of the Underwriters
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27 | ||||
| SECTION 11. | Notices
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27 | ||||
| SECTION 12. | Parties
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27 | ||||
| SECTION 13. | Governing Law
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28 | ||||
| SECTION 14. | Effect of Headings
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28 | ||||
| SECTION 15. | Definitions
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28 | ||||
| SECTION 16. | Absence of Fiduciary Relationship
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30 | ||||
| EXHIBITS |
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| Exhibit A — Initial Securities to be Sold | ||||||
| Exhibit B — Form of Opinion of Fund Counsel | ||||||
| Exhibit C — Form of Opinion of Manager Counsel | ||||||
| Exhibit D — Price-Related Information | ||||||
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▇▇▇▇▇▇▇▇ PREMIUM TECHNOLOGY GROWTH FUND, INC.
________ Shares of Common Stock
, 2009
▇▇▇▇▇ Fargo Securities, LLC
[REPRESENTATIVES]
[REPRESENTATIVES]
As Representatives of the several Underwriters
listed on Exhibit A hereto
listed on Exhibit A hereto
c/o Wells Fargo Securities, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇▇▇ Premium Technology Growth Fund, Inc. (the “Fund”) and RiverSource
Investments, LLC (the “Manager”) confirm their respective agreements with ▇▇▇▇▇ Fargo
Securities, LLC (“▇▇▇▇▇ Fargo”) and each of the other Underwriters named in Exhibit A
hereto (collectively, the “Underwriters,” which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom ▇▇▇▇▇ Fargo, [REPRESENTATIVES]
are acting as representatives (in such capacity, the “Representatives”), with respect to
the issue and sale by the Fund of a total of
shares of common stock, $0.01 par value per
share (the “Initial Securities”), and the purchase by the Underwriters, acting severally
and not jointly, of the respective numbers of Initial Securities set forth in said Exhibit A
hereto, and with respect to the grant by the Fund to the Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase
all or any part of additional shares of common stock, par value $0.01 per share (the “Option Securities”) to
cover over-allotments, if any. The Initial Securities to be purchased by the Underwriters and all
or any part of the Option Securities are hereinafter called, collectively, the
“Securities.” Certain terms used in this Agreement are defined in Section 15 hereof.
The Fund understands that the Underwriters propose to make a public offering of the Securities
as soon as the Representatives deem advisable after this Agreement has been executed and delivered.
The Fund has entered into (i) an Investment Management Agreement with the Manager dated as of
, 2009, (ii) a Custodian Agreement with JPMorgan Chase Bank, N.A. dated as of
, ▇▇▇▇, (▇▇▇) a Transfer Agency Agreement with American Stock Transfer & Trust Company
dated as of , 2009 and (iv) an Administrative Services Agreement with Ameriprise Financial,
Inc. dated as of , 2009 and such agreements are herein referred to as the “Investment
Advisory Agreement,” the “Custodian Agreement”, the “Transfer Agency Agreement”
and the “Administration Agreement,” respectively. Collectively, the Investment Advisory
Agreement, the Custodian Agreement, the Transfer Agency Agreement
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and the Administration Agreement are herein referred to as the “Fund Agreements.” The Manager
has entered into a Structuring Fee Agreement with ▇▇▇▇▇ Fargo dated as of , 2009, a
Structuring Fee Agreement with dated as of [Date], 2009 and a
Structuring Fee Agreement with dated as of [Date], 2009, and such
agreements are herein referred to as the “Structuring Fee Agreements.” In addition, the
Fund has adopted a dividend reinvestment plan pursuant to which holders of shares of common stock
shall have their dividends automatically reinvested in additional shares of common stock of the
Fund unless they elect to receive such dividends in cash, and such plan is herein referred to as
the “Dividend Reinvestment Plan.”
The Fund has prepared and filed with the Commission a registration statement (file numbers
333-161752 and 811-22328) on Form N-2, including a related preliminary prospectus (including the
statement of additional information incorporated by reference therein), for registration under the
Act and the 1940 Act of the offering and sale of the Securities. The Fund may have filed one or
more amendments thereto, including a related preliminary prospectus (including the statement of
additional information incorporated by reference therein), each of which has previously been
furnished to you.
The Fund will next file with the Commission one of the following: either (1) prior to the
effective date of the registration statement, a further amendment to the registration statement
(including the form of final prospectus (including the statement of additional information
incorporated by reference therein)) or (2) after the effective date of the registration statement,
a final prospectus (including the statement of additional information incorporated by reference
therein) in accordance with Rules 430A and 497. In the case of clause (2), the Fund has included or
incorporated by reference in the Registration Statement, as amended at the effective date, all
information (other than Rule 430A Information) required by the 1933 Act and the 1940 Act and the
Rules and Regulations to be included in the registration statement and the Prospectus. As filed,
such amendment and form of final prospectus (including the statement of additional information
incorporated by reference therein), or such final prospectus (including the statement of additional
information incorporated by reference therein), shall contain all Rule 430A Information, together
with all other such required information, and, except to the extent the Representatives shall agree
in writing to a modification, shall be in all substantive respects in the form furnished to you
prior to the Applicable Time or, to the extent not completed at the Applicable Time, shall contain
only such specific additional information and other changes (beyond that contained in the latest
preliminary prospectus) as the Fund has advised you, prior to the Applicable Time, will be included
or made therein.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Fund and the Manager. The Fund, and the Manager,
jointly and severally, represent and warrant to each Underwriter as of the date hereof, as of the
Applicable Time, as of the Closing Date referred to in Section 2(c) hereof, and as of each Option
Closing Date (if any) referred to in Section 2(b) hereof, and agree with each Underwriter, as
follows:
(1) Compliance with Registration Requirements. The Securities have been duly
registered under the 1933 Act and the 1940 Act pursuant to the Registration
2
Statement. Each of the Initial Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act and the 1940 Act, and no stop order
suspending the effectiveness of the Initial Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act or the 1940 Act, and no
proceedings for that purpose have been instituted or are pending or, to the knowledge of the
Fund or the Manager, are contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with. The Preliminary Prospectus
and the Prospectus complied when filed with the Commission in all material respects with the
requirements of the 1933 Act, the 1940 Act and the Rules and Regulations. The Preliminary
Prospectus and the Prospectus and any amendments or supplements thereto delivered to the
Underwriters for use in connection with the offering of the Securities each was identical to
the electronically transmitted copy thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
At the respective times the Initial Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became or become effective
and at the Closing Date (and, if any Option Securities are purchased, at the applicable
Option Closing Date), the Initial Registration Statement, any Rule 462(b) Registration
Statement will, and the 1940 Act Notification when originally filed with the Commission and
any amendments and supplements thereto did or will, comply in all material respects with the
requirements of the 1933 Act, the 1940 Act and the Rules and Regulations and did not and
will not contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not misleading.
Neither the Prospectus nor any amendments or supplements thereto, as of its date, at the
Closing Date (and, if any Option Securities are purchased, at the applicable Option Closing
Date), and at any time when a prospectus is required by applicable law to be delivered in
connection with sales of Securities, included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading. The Preliminary Prospectus and the information included on Exhibit D hereto,
all considered together (collectively, the “General Disclosure Package”) did not or
will not contain any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the Fund makes
no representations or warranties as to the information contained in or omitted from the
Preliminary Prospectus or the Prospectus in reliance upon and in conformity with information
furnished in writing to the Fund by or on behalf of any Underwriter specifically for
inclusion therein, it being understood and agreed that the only such information furnished
by any Underwriter consists of the information described as such in Section 6(b) hereof.
The Fund’s registration statement on Form 8-A under the 1934 Act is effective.
(2) Independent Accountants. ___who certified and audited the financial
statements and supporting schedules included in the Registration Statement, the
3
Preliminary Prospectus and the Prospectus are independent public accountants as
required by the 1933 Act, the 1940 Act and the Rules and Regulations.
(3) Financial Statements. The financial statements of the Fund included in the
Registration Statement, the Preliminary Prospectus and the Prospectus, together with the
related schedules (if any) and notes, present fairly the financial position of the Fund at
the dates indicated and the results of operations and cash flows of the Fund for the periods
specified; and all such financial statements have been prepared in conformity with GAAP
applied on a consistent basis throughout the periods involved and comply with all applicable
accounting requirements under the 1933 Act, the 1940 Act and the Rules and Regulations. The
supporting schedules, if any, included in the Registration Statement present fairly, in
accordance with GAAP, the information required to be stated therein, and the other financial
and statistical information and data included in the Registration Statement, the Preliminary
Prospectus and the Prospectus are accurately derived from such financial statements and the
books and records of the Fund.
(4) No Material Adverse Change in Business. Since the respective dates as of
which information is given in the Preliminary Prospectus and the Prospectus, except as
otherwise stated therein, (A) there has been no Fund Material Adverse Effect, (B) there have
been no transactions entered into by the Fund which are material with respect to the Fund
other than those in the ordinary course of its business as described in the Preliminary
Prospectus and the Prospectus and (C) there has been no dividend or distribution of any kind
declared, paid or made by the Fund on any class of its Common Stock.
(5) Good Standing of the Fund. The Fund has been duly organized and is validly
existing in good standing as a corporation under the laws of the State of Maryland and has
power and authority to own, lease and operate its properties and to conduct its business as
described in the Registration Statement, the Preliminary Prospectus and the Prospectus and
to enter into and perform its obligations under this Agreement and the Fund Agreements; and
the Fund is duly qualified to transact business and is in good standing under the laws of
each jurisdiction which requires qualification.
(6) No Subsidiaries. The Fund has no subsidiaries.
(7) Investment Company Status. The Fund is duly registered under the 1940 Act
as a closed-end, non-diversified management investment company under the 1940 Act, the Rules
and Regulations, and the 1940 Act Notification has become effective. The Fund has not
received any notice from the Commission pursuant to Section 8(e) of the 1940 Act with
respect to the 1940 Act Notification or the Registration Statement.
(8) Officers and Directors. No person is serving or acting as an officer,
trustee or investment adviser of the Fund except in accordance with the provisions of the
1940 Act and the Rules and Regulations and the Advisers Act. Except as disclosed in the
Registration Statement, the Preliminary Prospectus and the Prospectus, no trustee of the
Fund is (A) an “interested person” (as defined in the ▇▇▇▇ ▇▇▇) of the Fund or (B) an
“affiliated person” (as defined in the ▇▇▇▇ ▇▇▇) of any Underwriter. For purposes of this
4
Section 1(a)(8), the Fund and the Manager shall be entitled to rely on representations
from such officers and directors.
(9) Capitalization. The authorized, issued and outstanding shares of common
stock of the Fund are as set forth in the Preliminary Prospectus and in the Prospectus. All
issued and outstanding shares of common stock of the Fund have been duly authorized and
validly issued and are fully paid and non-assessable and have been offered and sold or
exchanged by the Fund in compliance with all applicable laws (including, without limitation,
federal and state securities laws); none of the outstanding shares of common stock of the
Fund was issued in violation of the preemptive or other similar rights of any securityholder
of the Fund; the Securities have been duly and validly authorized and, when issued and
delivered to and paid for by the Underwriters pursuant to this Agreement, will be fully paid
and nonassessable; the certificates for the Securities are in valid and sufficient form.
(10) Power and Authority. The Fund has full power and authority to enter into
this Agreement and the Fund Agreements; the execution and delivery of, and the performance
by the Fund of its obligations under this Agreement and the Fund Agreements have been duly
and validly authorized by the Fund; and this Agreement and the Fund Agreements have been
duly executed and delivered by the Fund and constitute the valid and legally binding
agreements of the Fund, enforceable against the Fund in accordance with their terms, except
as rights to indemnity and contribution 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, insolvency, reorganization, moratorium,
fraudulent conveyance and other laws relating to or affecting creditors’ rights generally
and by general equitable principles.
(11) Approval of Management Agreement. The Fund’s Board of Directors and the
Fund’s sole shareholder have approved the Management Agreement in accordance with Section
15(c) of the 1940 Act.
(12) Agreements’ Compliance with Law. This Agreement and each of the Fund
Agreements comply in all material respects with all applicable provisions of the 1940 Act,
the 1940 Act Rules and Regulations, the Advisers Act and the Advisers Act Rules and
Regulations.
(13) Absence of Defaults and Conflicts. The Fund is not (i) in violation of
its Articles of Incorporation or bylaws, (ii) in breach or default in the performance of the
terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to which it is a
party or bound or to which its property is subject or (iii) in violation of any law,
ordinance, administrative or governmental rule or regulation applicable to the Fund or of
any decree of the Commission, FINRA, any state securities commission, any foreign securities
commission, any national securities exchange, any arbitrator, any court or any other
governmental, regulatory, self-regulatory or administrative agency or any official having
jurisdiction over the Fund.
5
(14) Absence of Proceedings. There is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Fund, threatened, against or affecting the
Fund which is required to be disclosed in the Preliminary Prospectus and Prospectus (other
than as disclosed therein), or that could reasonably be expected to result in a Material
Adverse Effect, or that could reasonably be expected to materially and adversely affect the
properties or assets of the Fund or the consummation of the transactions contemplated in
this Agreement or the performance by the Fund of its obligations under this Agreement or the
Fund Agreements; the aggregate of all pending legal or governmental proceedings to which the
Fund is a party or of which any of its property or assets is the subject which are not
described in the Preliminary Prospectus or the Prospectus or to be filed as an exhibit to
the Registration Statement that are not described or filed as required by the 1933 Act, the
1940 Act or the Rules and Regulations, including ordinary routine litigation incidental to
the business, could not reasonably be expected to result in a Fund Material Adverse Effect.
(15) Accuracy of Descriptions and Exhibits. The statements set forth under the
headings “Description of Common Shares,” “Anti-Takeover Provisions and Other Provisions of
the Maryland General Corporation Law and the Fund’s Charter and Bylaws” and “Tax Matters” in
the Preliminary Prospectus and the Prospectus and “Certain Provisions in the Articles of
Incorporation” and “Tax Matters” in the Statement of Additional Information, insofar as such
statements purport to summarize certain provisions of the 1940 Act, the Maryland General
Corporation Law, the Fund’s Articles of Incorporation, U.S. federal income tax law and
regulations or legal conclusions with respect thereto, fairly and accurately summarize such
provisions in all material respects; all descriptions in the Registration Statement, the
Preliminary Prospectus and the Prospectus of any Fund documents are accurate in all material
respects; and there are no franchises, contracts, indentures, mortgages, deeds of trust,
loan or credit agreements, bonds, notes, debentures, evidences of indebtedness, leases or
other instruments or agreements required to be described or referred to in the Registration
Statement, the Preliminary Prospectus or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required by the 1933 Act, the 1940
Act or the Rules and Regulations which have not been so described and filed as required.
(16) Absence of Further Requirements. (A) No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, and (B) no authorization, approval,
vote or other consent of any other person or entity, is necessary or required for the
performance by the Fund of its obligations under this Agreement or the Fund Agreements, for
the offering, issuance, sale or delivery of the Securities hereunder, or for the
consummation of any of the other transactions contemplated by this Agreement or the Fund
Agreements, in each case on the terms contemplated by the Registration Statement, the
Preliminary Prospectus and the Prospectus, except such as have been already obtained and
under the 1933 Act, the 1940 Act, the Rules and Regulations, the rules and regulations of
FINRA and the NYSE and such as may be required under state securities laws.
6
(17) Non-Contravention. Neither the execution, delivery or performance of this
Agreement, the Fund Agreements nor the consummation by the Fund of the transactions herein
or therein contemplated (i) conflicts or will conflict with or constitutes or will
constitute a breach of the Articles of Incorporation or bylaws of the Fund, (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 Fund is a party or by which it
or any of its properties may be bound or (iii) 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 the Fund is a party or by which the Fund may be bound or to which any
of the property or assets of the Fund is subject.
(18) Possession of Licenses and Permits. 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 Preliminary
Prospectus and the Prospectus; the Fund has fulfilled and performed all its material
obligations with respect to such Permits and no event has occurred which allows or, after
notice or lapse of time, would allow, revocation or termination thereof or results in any
other material impairment of the rights of the Fund under any such Permit, subject in each
case to such qualification as may be set forth in the Preliminary Prospectus and the
Prospectus; and, except as described in the Preliminary Prospectus and the Prospectus, none
of such Permits contains any restriction that is materially burdensome to the Fund.
(19) Distribution of Offering Material. 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 Securities, will not distribute any offering material in connection with the offering
and sale of the Securities other than the Registration Statement, the Preliminary
Prospectus, the Prospectus, the Sales Material (as defined below) or other materials
permitted by the Act, the 1940 Act or the Rules and Regulations.
(20) Absence of Registration Rights. There are no persons with registration
rights or other similar rights to have any securities (debt or equity) (A) registered
pursuant to the Registration Statement or included in the offering contemplated by this
Agreement or (B) otherwise registered by the Fund under the 1933 Act or the 1940 Act. There
are no persons with tag-along rights or other similar rights to have any securities (debt or
equity) included in the offering contemplated by this Agreement or sold in connection with
the sale of Securities by the Fund pursuant to this Agreement.
(21) NYSE. The Securities are duly listed and admitted and authorized for
trading, subject to official notice of issuance and evidence of satisfactory distribution,
on the NYSE.
(22) FINRA Matters. All of the information provided to the Underwriters or to
counsel for the Underwriters by the Fund, its officers and Directors in connection with
letters, filings or other supplemental information provided to FINRA pursuant to FINRA’s
conduct rules is true, complete and correct.
7
(23) Tax Returns. The Fund has filed all tax returns that are required to be
filed and has paid all taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is due and payable,
except for any such tax, assessment, fine or penalty that is currently being contested in
good faith by appropriate actions and except for such taxes, assessments, fines or penalties
the nonpayment of which would not, individually or in the aggregate, have a Fund Material
Adverse Effect.
(24) Subchapter M. The Fund is currently in compliance 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 and intends to direct the
investment of the net proceeds of the offering of the Securities in such a manner as to
comply with the requirements of Subchapter M of the Code.
(25) Insurance. The Fund is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent and
customary in the businesses in which it is engaged and which the Fund deems adequate; all
policies of insurance insuring the Fund or its business, assets, employees, officers and
directors, including the Fund’s directors and officers/errors and omissions insurance policy
and its fidelity bond required by Rule 17g-1 of the 1940 Act Rules and Regulations are in
full force and effect; the Fund is in compliance with the terms of such policy and fidelity
bond in all material respects; and there are no claims by the Fund under any such policy or
fidelity bond as to which any insurance company is denying liability or defending under a
reservation of rights clause; the Fund has not been refused any insurance coverage sought or
applied for; and the Fund has no reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a cost that would not
have a Fund Material Adverse Effect, except as set forth in or contemplated in the
Preliminary Prospectus and Prospectus (exclusive of any supplement thereto).
(26) Accounting Controls and Disclosure Controls. The Fund maintains a system
of internal accounting controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management’s general or specific authorizations
and with the investment objectives, policies and restrictions of the Fund and the applicable
requirements of the 1940 Act, the 1940 Act Rules and Regulations and the Code; (B)
transactions are recorded as necessary to permit preparation of financial statements in
conformity with GAAP, to calculate net asset value, to maintain accountability for assets
and to maintain material compliance with the books and records requirements under the 1940
Act and the 1940 Act Rules and Regulations; (C) access to assets is permitted only in
accordance with management’s general or specific authorization; and (D) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The Fund employs “internal
control over financial reporting” (as such term is defined in Rule 30a-3 under the ▇▇▇▇ ▇▇▇)
and such internal control over financial reporting is and shall be effective as required by
the 1940 Act and the 1940 Act Rules and Regulations. The Fund is not aware of any material
weakness in its internal control
8
over financial reporting. The Fund employs “disclosure controls and procedures” (as
such term is defined in Rule 30a-3 under the 1940 Act); such disclosure controls and
procedures are effective.
(27) Compliance with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. There is and has been no failure
on the part of the Fund or any of the Fund’s directors or officers, in their capacities as
such, to comply with any provision of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the rules and regulations
promulgated in connection therewith, including Sections 302 and 906 related to
certifications.
(28) Fund Compliance with Policies and Procedures. The Fund has adopted and
implemented written policies and procedures reasonably designed to prevent violation of the
Federal Securities Laws (as that term is defined in Rule 38a-1 under the ▇▇▇▇ ▇▇▇) by the
Fund, including policies and procedures that provide oversight of compliance for each
investment adviser, administrator and transfer agent of the Fund.
(29) Absence of Manipulation. The Fund has not taken and will not take,
directly or indirectly, any action designed to or that would constitute or that might
reasonably be expected to cause or result in the stabilization or manipulation of the price
of any security to facilitate the sale or resale of the Securities, and the Fund is not
aware of any such action taken or to be taken by any affiliates of the Fund, other than such
actions as taken by the Underwriters that are affiliates of the Fund, so long as such
actions are in compliance with all applicable law.
(30) Statistical, Demographic or Market-Related Data. Any statistical,
demographic or market-related data included in the Registration Statement, the Preliminary
Prospectus or the Prospectus is based on or derived from sources that the Fund believes to
be reliable and accurate and all such data included in the Registration Statement, the
Preliminary Prospectus or the Prospectus accurately reflects the materials upon which it is
based or from which it was derived.
(31) Advertisements. All advertising, sales literature or other promotional
material (including “prospectus wrappers”, “broker kits”, “road show slides” and “road show
scripts”), whether in printed or electronic form, authorized in writing by or prepared by or
at the direction of the Fund or the Manager for use in connection with the offering and sale
of the Securities (collectively, “Sales Material”) complied and comply in all material
respects with the applicable requirements of the 1933 Act, the 1940 Act, the Rules and
Regulations and the rules and interpretations of FINRA and if required to be filed with
FINRA under FINRA’s conduct rules were provided to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel
for the Underwriters, for filing. No Sales Material contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were
made, not misleading.
(32) Foreign Corrupt Practices Act. Neither the Fund nor, to the knowledge of
the Fund, any director, officer, agent, employee, affiliate or other person acting on behalf
of the Fund is aware of or has taken any action, directly or indirectly, that has resulted
or
9
would result in a violation by such persons of the Foreign Corrupt Practices Act of
1977, as amended, and the rules and regulations thereunder (collectively, the “FCPA”),
including, without limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to pay or
authorization of the payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any “foreign official” (as such term is
defined in the FCPA) or any foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA, and the Fund and, to the knowledge
of the Fund, its other affiliates have conducted their businesses in compliance with the
FCPA and have instituted and maintain policies and procedures designed to ensure, and which
are reasonably expected to continue to ensure, continued compliance therewith.
(33) Money Laundering Laws. The operations of the Fund are and have been
conducted at all times in compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the
money laundering statutes of all applicable jurisdictions, the rules and regulations
thereunder and any related or similar applicable rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, “Money Laundering Laws”)
and no action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Fund with respect to the Money Laundering Laws is
pending or, to the knowledge of the Fund, threatened.
(34) OFAC. Neither the Fund nor, to the knowledge of the Fund, any director,
officer, agent, employee, affiliate or person acting on behalf of the Fund is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department (“OFAC”); and the Fund will not directly or indirectly use any of
the proceeds received by the Fund from the sale of Securities contemplated by this
Agreement, or lend, contribute or otherwise make available any such proceeds to any
subsidiary, joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions administered by OFAC.
(b) Representations and Warranties by the Manager. The Manager represents and warrants to
each Underwriter as of the date hereof, as of the Applicable Time, as of the Closing Date and as of
each Option Closing Date (if any), and agrees with each Underwriter, as follows:
(1) Investment Manager Status. The Manager is duly registered 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 Investment Advisory Agreement, the Administrative Agreement or the Structuring Fee
Agreements as contemplated by the Preliminary Prospectus and the Prospectus.
(2) Capitalization. The Manager has the financial resources available to it
necessary for the performance of its services and obligations as contemplated in the
Preliminary Prospectus and the Prospectus and under this Agreement and the Advisory
Agreement, the Administration Agreement and the Structuring Fee Agreements.
10
(3) No Material Adverse Change in Business. Since the respective dates as of
which information is given in the Preliminary Prospectus and the Prospectus, except as
otherwise stated therein, (A) there has been no Manager Material Adverse Effect and (B)
there have been no transactions entered into by the Manager which are material with respect
to the Manager other than those in the ordinary course of its business as described in the
Preliminary Prospectus and the Prospectus.
(4) Good Standing. The Manager has been duly formed and is validly existing in
good standing as a limited liability company under the laws of the State of Minnesota and
has power and authority to own, lease and operate its properties and to conduct its business
as described in the Registration Statement, the Preliminary Prospectus and the Prospectus
and to enter into and perform its obligations under this Agreement, the Fund Agreements and
the Structuring Fee Agreements; and the Manager is duly qualified to transact business and
is in good standing under the laws of each jurisdiction which requires qualification.
(5) Power and Authority. The Manager has full power and authority to enter
into this Agreement, the Investment Advisory Agreement, the Administration Agreement and the
Structuring Fee Agreements; the execution and delivery of, and the performance by the
Manager of its obligations under this Agreement, the Investment Advisory Agreement and the
Structuring Fee Agreements have been duly and validly authorized by the Manager; and this
Agreement, the Advisory Agreement and the Structuring Fee Agreements have been duly executed
and delivered by the Manager and constitute the valid and legally binding agreements of the
Manager, enforceable against the Manager in accordance with their terms, except as rights to
indemnity and contribution may be limited by federal or state securities laws and subject to
the qualification that the enforceability of the Manager’s obligations hereunder and
thereunder may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other laws relating to or affecting creditors’ rights generally and by
general equitable principles.
(6) Description of the Manager. The description of the Manager and its
business and the statements attributable to the Manager in the Preliminary Prospectus and
Prospectus complied and comply in all material respects with the provisions of the 1933 Act,
the 1940 Act, the Advisers Act, the 1940 Act Rules and Regulations and the Advisers Act
Rules and Regulations and did not and will not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(7) Non-Contravention. Neither the execution, delivery or performance of this
Agreement, the Investment Advisory Agreement or the Structuring Fee Agreements nor the
consummation by the Fund or the Manager of the transactions herein or therein contemplated
(i) conflicts or will conflict with or constitutes or will constitute a breach of the
Organizational Documents of the Manager, (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 Manager is a party or by which it or any of its properties may be
bound or (iii) violates or will violate any statute, law, regulation or
11
filing or judgment, injunction, order or decree applicable to the Manager 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 Manager pursuant to the terms of any agreement or
instrument to which the Manager is a party or by which the Manager may be bound or to which
any of the property or assets of the Manager is subject.
(8) Agreements’ Compliance with Laws. This Agreement, the Investment Advisory
Agreement and the Structuring Fee Agreements comply in all material respects with all
applicable provisions of the 1940 Act, the 1940 Act Rules and Regulations, the Advisers Act,
and the Advisers Act Rules and Regulations.
(9) Absence of Proceedings. There is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Manager, threatened, against or affecting
the Manager which is required to be disclosed in the Preliminary Prospectus and Prospectus
(other than as disclosed therein), or that could reasonably be expected to result in a
Manager Material Adverse Effect, or that could reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of the transactions
contemplated in this Agreement or the performance by the Manager of its obligations under
this Agreement, the Investment Advisory Agreement or the Structuring Fee Agreements; the
aggregate of all pending legal or governmental proceedings to which the Manager is a party
or of which any of its property or assets is the subject which are not described in the
Preliminary Prospectus or the Prospectus, including ordinary routine litigation incidental
to the business, could not reasonably be expected to result in a Manager Material Adverse
Effect.
(10) Absence of Further Requirements. (A) No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, and (B) no authorization, approval,
vote or other consent of any other person or entity, is necessary or required for the
performance by the Manager of its obligations under this Agreement, the Investment Advisory
Agreement or the Structuring Fee Agreements, except such as have been already obtained under
the 1933 Act, the 1940 Act, the Rules and Regulations, the rules and regulations of the NASD
and the NYSE and such as may be required under state securities laws.
(11) Possession of Permits. The Manager has Permits as are necessary to own
its property and to conduct its business in the manner described in the Preliminary
Prospectus and the Prospectus; the Manager has fulfilled and performed all its material
obligations with respect to such Permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or results in any
other material impairment of the rights of the Manager under any such Permits.
(12) Manager Compliance with Policies and Procedures. The Manager has adopted
and implemented written policies and procedures under Rule 206(4)-7 of the Advisers Act
reasonably designed to prevent violation of the Advisers Act and the Advisers Act Rules by
the Manager and its supervised persons.
12
(13) Absence of Manipulation. The Manager has not taken and will not take,
directly or indirectly, any action designed to or that would constitute or that might
reasonably be expected to cause or result in the stabilization or manipulation of the price
of any security to facilitate the sale or resale of the Securities, and the Manager is not
aware of any such action taken or to be taken by any affiliates of the Manager, other than
such actions as taken by the Underwriters that are affiliates of the Manager, so long as
such actions are in compliance with all applicable law.
(14) Promotional Materials. In the event that the Fund or the Manager makes
available any promotional materials related to the Securities or the transactions
contemplated hereby intended for use only by registered broker-dealers and registered
representatives thereof by means of an Internet web site or similar electronic means, the
Manager will install and maintain, or will cause to be installed and maintained,
pre-qualification and password-protection or similar procedures which are reasonably
designed to effectively prohibit access to such promotional materials by persons other than
registered broker-dealers and registered representatives thereof.
(15) Internal Controls. The Manager maintains a system of internal controls
sufficient to provide reasonable assurance that (i) transactions effectuated by it under the
Investment Advisory Agreement are executed in accordance with its management’s general or
specific authorization; and (ii) access to the Fund’s assets is permitted only in accordance
with management’s general or specific authorization.
(16) Money Laundering Laws. The operations of the Manager and its subsidiaries
are and have been conducted at all times in compliance with applicable Money Laundering Laws
and no action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Manager or any of its subsidiaries with respect to
the Money Laundering Laws is pending or, to the knowledge of the Manager, threatened.
(c) Certificates. Any certificate signed by any officer of the Fund or the Manager and
delivered to the Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by the Fund or the Manager, as the case may be, to each Underwriter as
to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Fund agrees to sell to each
Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to
purchase from the Fund, at a purchase price of $ per share, the amount of the Initial
Securities set forth opposite such Underwriter’s name in Exhibit A hereto. The Fund is advised
that the Underwriters intend to (i) make a public offering of their respective portions of the
Securities as soon after the Applicable Time as is advisable and (ii) initially to offer the
Securities upon the terms set forth in the Preliminary Prospectus and the Prospectus.
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(b) Option Securities. Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Fund hereby grants an option to the several
Underwriters to purchase, severally and not jointly, up to ___Option Securities at the same
purchase price per share as the Underwriters shall pay for the Initial Securities. Said option may
be exercised only to cover over-allotments in the sale of the Initial Securities by the
Underwriters. Said option may be exercised in whole or in part at any time and from time to time
on or before the 45th day after the date of the Prospectus upon written or telegraphic notice by
the Representatives to the Fund setting forth the number of shares of the Option Securities as to
which the several Underwriters are exercising the option and the settlement date. The number of
Option Securities to be purchased by each Underwriter shall be the same percentage of the total
number of shares of the Option Securities to be purchased by the several Underwriters as such
Underwriter is purchasing of the Initial Securities, subject to such adjustments as you in your
absolute discretion shall make to eliminate any fractional shares. Any such time and date of
delivery (an “Option Closing Date”) shall be determined by the Representatives, but shall
not be later than seven full business days after the exercise of said option, nor in any event
prior to the Closing Date, as hereinafter defined.
(c) Payment. Payment of the purchase price for the Initial Securities, and delivery of the
related closing certificates therefor, shall be made at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be agreed upon
by the Representatives and the Fund, at 9:00 A.M. (Eastern time) on ___, 2009 (unless
postponed in accordance with the provisions of Section 10), or such other time not later than ten
business days after such date as shall be agreed upon by the Representatives and the Fund (such
time and date of payment and delivery being herein called “Closing Date”).
In addition, in the event that any or all of the Option Securities are purchased by the
Underwriters, payment of the purchase price for, and delivery of certificates for, such Option
Securities shall be made at the above-mentioned offices, or at such other place as shall be agreed
upon by the Representatives and the Fund, on each Option Closing Date as specified in the notice
from the Representatives to the Fund.
Delivery of the Securities shall be made to the Representatives for the respective accounts of
the several Underwriters against payment by the several Underwriters through the Representatives of
the purchase price thereof to or upon the order of the Fund by Federal Funds wire transfer payable
in same-day funds to an account specified by the Fund. Delivery of the Initial Securities and the
Option Securities shall be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct. ▇▇▇▇▇ Fargo, individually and not as Representative of
the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the
Initial Securities or the Option Securities, if any, to be purchased by any Underwriter whose funds
have not been received by the Closing Date or the relevant Option Closing Date, as the case may be,
but such payment shall not relieve such Underwriter from its obligations hereunder.
14
(d) Denominations; Registration. Certificates for the Initial Securities and the Option
Securities, if any, shall be in such denominations and registered in such names as the
Representatives may request in writing at least one full business day before the Closing Date or
the relevant Option Closing Date, as the case may be. The certificates for the Initial Securities
and the Option Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than noon (Eastern time) on the business day
prior to the Closing Date or the relevant Option Closing Date, as the case may be.
SECTION 3. Covenants of the Fund and the Manager. The Fund and the Manager, jointly
and severally, covenant with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The Fund, subject
to Section 3(a)(ii), will comply with the requirements of Rule 430A and will notify the
Representatives immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt of any
comments from the Commission, (iii) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the Prospectus or for
additional information, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of any order preventing or suspending the
use of any preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or threatening of
any proceedings for any of such purposes, or of any examination pursuant to Section 8(e) of
the 1940 Act concerning the Registration Statement and (v) if the Fund becomes the subject
of a proceeding under Section 8A of the 1933 Act in connection with the offering of the
Securities. The Fund will use its best efforts in connection with the offering of the
Securities to prevent the issuance of any stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the withdrawal thereof.
(b) Filing of Amendments. The Fund will give the Representatives notice of its
intention to file or prepare any amendment to the Registration Statement (including any
filing under Rule 462(b)) or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or to the Prospectus,
whether pursuant to the 1933 Act or otherwise, or will furnish the Representatives with
copies of any such documents within a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall object.
(c) Delivery of Registration Statements. The Fund has furnished or will deliver to the
Representatives and counsel for the Underwriters, without charge, signed copies of the
Registration Statement as originally filed and of each amendment thereto (including exhibits
filed therewith) and signed copies of all consents and certificates of experts. The copies
of the Registration Statement and each amendment thereto furnished to the Underwriters will
be identical to the electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
15
(d) Delivery of Prospectuses. The Fund has delivered to each Underwriter, without
charge, as many copies of each preliminary prospectus prepared prior to the date of this
Agreement as such Underwriter reasonably requested, and the Fund hereby consents to the use
of such copies for purposes permitted by the 1933 Act. The Fund will furnish to each
Underwriter, without charge, such number of copies of the documents constituting the General
Disclosure Package prepared on or after the date of this Agreement and the Prospectus (and
any amendments or supplements thereto) as such Underwriter may reasonably request. The
Preliminary Prospectus and the Prospectus and any amendments or supplements thereto
furnished to the Underwriters is or will be, as the case may be, identical to the
electronically transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Fund will comply with the 1933 Act,
the 1940 Act and the Rules and Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement and in the Prospectus. If
at any time when a prospectus is required by the 1933 Act to be delivered in connection with
sales of the Securities (including, without limitation, pursuant to Rule 172), any event
shall occur or condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or for the Fund, to amend the Registration Statement or amend
or supplement the Prospectus in order that the Prospectus will not include any untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances existing at the time it
is delivered to a purchaser, or if it shall be necessary, in the opinion of such counsel, at
any such time to amend the Registration Statement or amend or supplement the Prospectus in
order to comply with the requirements of the 1933 Act, the 1940 Act or the Rules and
Regulations, the Fund will promptly prepare and file with the Commission, subject to Section
3(b) hereof, such amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectus comply with such
requirements, and the Fund will furnish to the Underwriters such number of copies of such
amendment or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Fund will use its best efforts, in cooperation with
the Underwriters, to qualify, if necessary, the Securities for offering and sale under the
applicable securities laws of states of the United States, the District of Columbia, Guam,
Puerto Rico and the U.S. Virgin Islands as the Representatives may designate and to maintain
such qualifications in effect for a period of not less than one year from the date of this
Agreement; provided, however, that the Fund shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not otherwise so
subject.
(g) Rule 158. The Fund will timely file such reports pursuant to the 1934 Act as are
necessary in order to make generally available to its security holders as soon as
practicable an earnings statement for the purposes of, and to provide to the Underwriters
the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
16
(h) Use of Proceeds. The Fund will use the net proceeds received by it from the sale
of the Securities in the manner specified in the Prospectus under “Use of Proceeds.”
(i) Reporting Requirements. The Fund, during the period when the Prospectus is
required to be delivered under the 1933 Act, the 1940 Act or the Rules and Regulations, will
file all documents required to be filed with the Commission pursuant to the 1933 Act, the
1940 Act or the Rules and Regulations within the time periods required by the 1934 Act, the
1940 Act or the Rules and Regulations.
(j) Subchapter M. The Fund will comply with the requirements of Subchapter M of the
Code to qualify as a regulated investment company under the Code.
(k) Absence of Manipulation. The Fund and the Manager have not taken and will not
take, directly or indirectly, any action designed to or that would constitute or that might
reasonably be expected to cause or result in the stabilization or manipulation of the price
of any security to facilitate the sale or resale of the Securities, and the Fund and the
Advisers are not aware of any such action taken or to be taken by any affiliates of the Fund
or the Advisers, other than such actions as taken by the Underwriters that are affiliates of
the Fund or the Advisers, so long as such actions are in compliance with all applicable law.
(l) Restriction on Sale of Securities. The Fund will not, without the prior written
consent of ▇▇▇▇▇ Fargo, offer, sell, contract to sell, pledge, or otherwise dispose of, or
enter into any transaction which is designed to, or might reasonably be expected to, result
in the disposition (whether by actual disposition or effective economic disposition due to
cash settlement or otherwise) by the Fund or any affiliate of the Fund or any person in
privity with the Fund, directly or indirectly, including the filing (or participation in the
filing) of a registration statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Exchange Act, any other Securities or any securities
convertible into, or exercisable, or exchangeable for, Securities; or publicly announce an
intention to effect any such transaction for a period of 180 days following the Execution
Time, provided, however, that the Fund may issue and sell Securities
pursuant to any dividend reinvestment plan of the Fund in effect at the Execution Time.
SECTION 4. Payment of Expenses.
(a) Expenses. The Fund will pay all expenses incident to the performance of its obligations
under this Agreement, including (i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the word processing, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the preparation, issuance
and delivery of the certificates for the Securities to the Underwriters, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of
the Securities to the Underwriters, (iv) the fees and
17
disbursements of the counsel, accountants and other advisors to the Fund, (v) the
qualification of the Securities under securities laws in accordance with the provisions of Section
3(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey
and any supplements thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, the documents constituting the General Disclosure Package, the Prospectus
and the 1940 Act Notification, any sales material and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the Blue Sky Survey and any
supplements thereto, (viii) the fees and expenses of the custodian and the transfer agent and
registrar for the Securities, (ix) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review by FINRA of the terms
of the sale of the Securities, (x) the transportation and other expenses incurred in connection
with presentations to prospective purchasers of the Securities, (xi) the fees and expenses incurred
in connection with the listing of the Securities on the NYSE, (xii) all other costs and expenses
incident to the performance by the Fund of its obligations hereunder. To the extent that the
foregoing costs and expenses incidental to the performance of the obligations of the Fund under
this Agreement (other than sales load) exceed $0.04 per share, the Manager will pay all such costs
and expenses.
(b) Termination of Agreement. If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 5 or Section 9(a)(i) or (v) hereof, the Fund and the
Manager, jointly and severally, agree that they shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
SECTION 5. Conditions of Underwriters’ Obligations. The obligations of the
Underwriters to purchase the Initial Securities and the Option Securities, as the case may be,
shall be subject to the accuracy of the representations and warranties on the part of the Fund and
the Manager contained herein as of the Applicable Time, the Closing Date and any Option Closing
Date pursuant to Section 4 hereof, to the accuracy of the statements of the Fund and the Manager
made in any certificates pursuant to the provisions hereof, to the performance by the Fund and the
Manager of their respective covenants and other obligations hereunder and to the following
additional conditions:
(a) Effectiveness of Registration Statement. The Registration Statement, including any
Rule 462(b) Registration Statement, has become effective and at Closing Date (or the
applicable Option Closing Date, as the case may be) no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the 1933 Act or any
notice objecting to its use or order pursuant to Section 8(e) of the 1940 Act shall have
been issued and proceedings therefor initiated or, to the knowledge of the Fund or the
Manager, threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable satisfaction of
counsel to the Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule
18
497 or a post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A.
(b) Opinion of Counsel for Fund. At the Closing Date, the Representatives shall have
received the favorable opinion, dated as of the Closing Date, of ▇▇▇▇▇▇▇▇ Chance US LLP,
counsel for the Fund (“Fund Counsel”), in form and substance satisfactory to counsel
for the Underwriters, together with signed or reproduced copies of such letter for each of
the other Underwriters, to the effect set forth in Exhibit B hereto and to such further
effect as counsel to the Underwriters may reasonably request.
(c) Opinion of Counsel for Underwriters. At Closing Date, the Representatives shall
have received the favorable opinion, dated as of Closing Date, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, counsel for the Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters, in form and substance satisfactory to the
Representatives. Insofar as the opinion expressed above relates to or is dependent upon
matters governed by Maryland law, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP will be permitted to rely
on the opinion of .
(d) Certificate of the Fund. At the Closing Date or the applicable Option Closing
Date, as the case may be, there shall not have been, since the date hereof or since the
respective dates as of which information is given in the Prospectus or the General
Disclosure Package (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), any Fund Material Adverse Effect, and, at the Closing Date, the
Representatives shall have received a certificate of the Chairman, the President, the Chief
Executive Officer or an Executive Vice President or Senior Vice President of the Fund and of
the Chief Financial Officer or Chief Accounting Officer of the Fund, dated as of the Closing
Date, to the effect that (i) there has been no such Fund Material Adverse Effect, (ii) the
representations and warranties of the Fund in this Agreement are true and correct with the
same force and effect as though expressly made at and as of the Closing Date, (iii) the Fund
has complied with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Date under or pursuant to this Agreement, and (iv) no
stop order suspending the effectiveness of the Registration Statement or order of suspension
or revocation of registration pursuant to Section 8(e) of the 1940 Act has been issued, and
no proceedings for that purpose have been instituted or are pending or, to their knowledge,
are contemplated by the Commission.
(e) Opinion of Counsel for the Manager. At the Closing Date, the Representatives shall
have received the favorable opinion, dated as of the Closing Date, of [MANAGER’S COUNSEL],
counsel for the Manager, in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other Underwriters,
to the effect set forth in Exhibit C hereto and to such further effect as counsel to the
Underwriters may reasonably request.
(f) Certificate of the Manager. At the Closing Date or the applicable Option Closing
Date, as the case may be, there shall not have been, since the date hereof or since the
respective dates as of which information is given in the Prospectus or the General
Disclosure Package (exclusive of any amendments or supplements thereto subsequent to
19
the date of this Agreement), any Manager Material Adverse Effect, and, at the Closing
Date, the Representatives shall have received a certificate of the Chairman, the President,
the Chief Executive Officer or an Executive Vice President or Senior Vice President of the
Manager and of the Chief Financial Officer of Chief Accounting Officer of the Manager, dated
as of the Closing Date, to the effect that (i) there has been no such Manager Material
Adverse Effect, (ii) the representations and warranties of the Manager in this Agreement are
true and correct with the same force and effect as though expressly made at and as of the
Closing Date, (iii) the Manager has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Closing Date under or
pursuant to this Agreement, and (iv) no stop order suspending the effectiveness of the
Registration Statement or order of suspension or revocation of registration pursuant to
Section 8(e) of the 1940 Act has been issued and no proceedings for that purpose have been
instituted or are pending or, to their knowledge, are contemplated by the Commission.
(g) Accountant’s Comfort Letter. At the time of the execution of this Agreement, the
Representatives shall have received from [ACCOUNTANTS] a letter, dated the date of this
Agreement and in form and substance satisfactory to the Representatives, together with
signed or reproduced copies of such letter for each of the other Underwriters, containing
statements and information of the type ordinarily included in accountants’ “comfort letters”
to underwriters with respect to the financial statements and certain financial information
of the Fund contained in the Registration Statement or the Prospectus.
(h) Bring-down Comfort Letter. At the Closing Date, the Representatives shall have
received from a letter, dated as of the Closing Date and in form and substance
satisfactory to the Representatives, to the effect that they reaffirm the statements made in
the letter furnished pursuant to subsection (g) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to the Closing
Date.
(i) Fee Agreements. At the Closing Date, the Manager shall deliver to each of the
other parties to the Structuring Fee Agreements copies of the Structuring Fee Agreements,
executed by the Manager and dated the Closing Date, together with reproduced copies of such
agreements executed by the Manager for each of the other parties thereto.
(j) No Objection. Prior to the date of this Agreement, FINRA shall have confirmed that
it has no objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(k) Conditions to Purchase of Option Securities. In the event that the Underwriters
exercise their option provided in Section 2(b) hereof to purchase all or any portion of the
Option Securities on any Option Closing Date that is after the Closing Date, the obligations
of the several Underwriters to purchase the applicable Option Securities shall be subject to
the conditions specified in the introductory paragraph of this
20
Section 5 and to the further condition that, at the applicable Option Closing Date, the
Representatives shall have received:
(1) Officers’ Certificate. A certificate, dated such Option Closing
Date, to the effect set forth in, and signed by two of the officers specified in,
Section 5(d) hereof, except that the references in such certificate to the Closing
Date shall be changed to refer to such Option Closing Date.
(2) Opinion of Counsel for Fund. The favorable opinion of Fund Counsel
in form and substance satisfactory to counsel for the Underwriters, dated such
Option Closing Date, relating to the Option Securities to be purchased on such
Option Closing Date and otherwise to the same effect as the opinion required by
Section 5(b) hereof.
(3) Opinion of Counsel for Underwriters. The favorable opinion of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, dated such Option
Closing Date, relating to the Option Securities to be purchased on such Option
Closing Date and otherwise to the same effect as the opinion required by Section
5(c) hereof.
(4) Opinion of Counsel for the Manager. The favorable opinion of
, counsel for the Manager, dated such Option Closing Date, relating to the
Option Securities to be purchased on such Option Closing Date and otherwise to the
same effect as the opinion required by Section 5(e) hereof.
(5) Certificate of the Manager. A certificate, dated such Option
Closing Date, to the effect set forth in, and signed by two of the officers
specified in, Section 5(f) hereof, except that the references in such certificate to
the Closing Date shall be changed to refer to such Option Closing Date.
(6) Bring-down Comfort Letter. A letter from , in form and
substance satisfactory to the Representatives and dated such Option Closing Date,
substantially in the same form and substance as the letter furnished to the
Representatives pursuant to Section 5(h) hereof, except that the “specified date” in
the letter furnished pursuant to this paragraph shall be a date not more than five
days prior to such Option Closing Date.
(l) Additional Documents. At the Closing Date and at each Option Closing Date, counsel
for the Underwriters shall have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions, contained in
this Agreement; and all proceedings taken by the Fund and the Manager in connection with the
issuance and sale of the Securities as herein contemplated and in connection with the other
transactions contemplated by this Agreement shall be satisfactory in form and substance to
the Representatives and counsel for the Underwriters.
21
(m) Delivery of Documents. The documents required to be delivered by this Section 5
shall be delivered at the office of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the
Underwriters, at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the Closing Date and at
each Option Closing Date.
(n) Termination of Agreement. If any condition specified in this Section 5 shall not
have been fulfilled when and as required to be fulfilled, this Agreement, or, in the case of
any condition to the purchase of Option Securities on an Option Closing Date which is after
the Closing Date, the obligations of the several Underwriters to purchase the relevant
Option Securities, may be terminated by the Representatives by notice to the Fund.
SECTION 6. Indemnification.
(a) Indemnification by the Fund and the Manager. The Fund and the Manager, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, arising out of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading, or arising out of any untrue statement or
alleged untrue statement of a material fact included in any preliminary prospectus, any
sales material (including the Sales Material), the Preliminary Prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section 6(e) below) any such
settlement is effected with the written consent of the Fund and the Manager; and
(iii) against any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel chosen by ▇▇▇▇▇ Fargo), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above,
22
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity with written
information furnished to the Fund or the Manager by any Underwriter through ▇▇▇▇▇ Fargo expressly
for use in the Registration Statement (or any amendment thereto), or in any preliminary prospectus,
any Sales Material, the Preliminary Prospectus or the Prospectus (or any amendment or supplement
thereto).
(b) Indemnification by the Underwriters. Each Underwriter severally agrees to indemnify and
hold harmless each of the Fund and the Manager, each of their directors, trustees, members, each of
their officers who signed the Registration Statement, and each person, if any, who controls the
Fund or the Manager within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
against any and all loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section 6, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), or any preliminary prospectus, any Sales Material, the Preliminary Prospectus
or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Fund or the Manager by such Underwriter through ▇▇▇▇▇ Fargo
expressly for use in the Registration Statement (or any amendment thereto) or such preliminary
prospectus, any sales material, the Preliminary Prospectus or the Prospectus (or any amendment or
supplement thereto). The Fund and the Manager acknowledge that the statements set forth in the
last paragraph of the cover page regarding the expected delivery of the Securities and, under the
heading “Underwriting”, (i) the list of Underwriters and their respective participation in the sale
of the Securities, (ii) the sentences related to concessions and reallowances and (iii) the
paragraph related to stabilization, syndicate covering transactions and penalty bids in any
Preliminary Prospectus and the Prospectus constitute the only information furnished in writing by
or on behalf of the several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
(c) Actions against Parties; Notification. Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. Counsel to the
indemnified parties shall be selected as follows: counsel to the Underwriters 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 shall be selected by ▇▇▇▇▇ Fargo; counsel to the Fund, its directors, trustees,
members, each of its officers who signed the Registration Statement and each person, if any, who
controls the Fund within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall be selected by the Fund; and counsel to the Manager and each person, if any, who controls the
Manager within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall be
selected by the Manager. An indemnifying party may participate at its own expense in the defense
of any such action; provided, however, that counsel to the indemnifying party shall not (except
with the consent of the indemnified party) also be counsel to the indemnified party. In no event
shall the indemnifying parties be liable for the fees and expenses of more than one counsel (in
addition to any local counsel) separate from their own counsel for
23
the Underwriters 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, the fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for the Fund, each of
their directors, trustees, members, each of its officers who signed the Registration Statement and
each person, if any, who controls the Fund within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, the fees and expenses of more than one counsel (in addition to any
local counsel) separate from their own counsel for the Manager, and the fees and expenses of more
than one counsel, in each case in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature
contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the date of such
settlement.
(e) Other Agreements with Respect to Indemnification and Contribution. The provisions of this
Section 6 and in Section 7 hereof shall not affect any agreements among the Fund and the Manager
with respect to indemnification of each other or contribution between themselves.
SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof is
for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of
any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying
party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate
to reflect the relative benefits received by the Fund and the Manager on the one hand and the
Underwriters on the other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Fund and the Manager on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable
considerations.
24
The relative benefits received by the Fund and the Manager on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total net proceeds from
the offering of the Securities pursuant to this Agreement (before deducting expenses) received by
the Fund and the Manager and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth on the cover of the Prospectus, bear to the aggregate
initial public offering price of the Securities as set forth on such cover.
The relative fault of the Fund and the Manager on the one hand and the Underwriters on the
other hand shall be determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Fund, by the Manager or by the Underwriters and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Fund, the Manager and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in this Section 7.
The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 7, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each trustee, officer,
employee and agent of an Underwriter shall have the same rights to contributions as such
Underwriters, and each person who controls the Fund or the Manager within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act, each officer of the Fund and the Manager and each
trustee, director or member of the Fund and the Manager shall have the same rights to contribution
as the Fund and the Manager. The Underwriters’ respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Initial Securities set forth opposite
their respective names in Exhibit A hereto and not joint.
25
SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in certificates of
officers of the Fund or signed by or on behalf of the Manager submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or controlling person, or by or on behalf of the Fund, or by or on behalf of the
Manager, and shall survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this Agreement, by notice to the
Fund or the Manager, at any time on or prior to the Closing Date (and, if any Option Securities are
to be purchased on an Option Closing Date which occurs after the Closing Date, the Representatives
may terminate the obligations of the several Underwriters to purchase such Option Securities, by
notice to the Fund, at any time on or prior to such Option Closing Date) (i) if there has been,
since the time of execution of this Agreement or since the respective dates as of which information
is given in the Prospectus or the General Disclosure Package, any Fund Material Adverse Effect or
Manager Material Adverse Effect, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable or inadvisable to market the Securities or to enforce contracts for
the sale of the Securities, or (iii) if trading in any securities of the Fund has been suspended or
materially limited by the Commission or the NYSE, or if trading generally on the NYSE or in the
Nasdaq National Market has been suspended or materially limited, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges
or by such system or by order of the Commission, FINRA or any other governmental authority, or a
material disruption has occurred in commercial banking or securities settlement or clearance
services in the United States or (iv) if a banking moratorium has been declared by either Federal
or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section 9, such termination
shall be without liability of any party to any other party except as provided in Section 4 hereof,
and provided further that Sections 1, 6, 7 and 8 hereof shall survive such termination and remain
in full force and effect.
26
SECTION 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at the Closing Date or an Option Closing Date to purchase the Securities
which it or they are obligated to purchase under this Agreement (the “Defaulted
Securities”), the Representatives shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed
upon and upon the terms herein set forth; if, however, the Representatives shall not have completed
such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the number of
Securities to be purchased on such date, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters; or
(b) if the number of Defaulted Securities exceeds 10% of the number of Securities to be
purchased on such date, this Agreement or, with respect to any Option Closing Date which
occurs after the Closing Date, the obligation of the Underwriters to purchase and of the
Fund to sell the Option Securities that were to have been purchased and sold on such Option
Closing Date, shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting Underwriter from
liability in respect of its default.
In the event of any such default which does not result in a termination of this Agreement or,
in the case of an Option Closing Date which is after the Closing Date, which does not result in a
termination of the obligation of the Underwriters to purchase and the Fund to sell the relevant
Option Securities, as the case may be, the Representatives shall have the right to postpone Closing
Date or the relevant Option Closing Date, as the case may be, for a period not exceeding seven days
in order to effect any required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term “Underwriter” includes any person substituted
for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by any standard form
of telecommunication. Notices to the Underwriters shall be directed to the Representatives at
▇▇▇▇▇ Fargo Securities, LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Equity
Syndicate; notices to the Fund and the Manager shall be directed to them at ,
Attention: President.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be binding
upon the Underwriters, the Fund and the Manager and their respective successors. Nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters, the Fund and the Manager and their respective successors
and the controlling persons and directors, officers, members and trustees referred to in Sections 6
and 7 and their heirs and legal representatives, any legal or equitable
27
right, remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended to be for the sole
and exclusive benefit of the Underwriters, the Fund and the Manager and their respective
successors, and said controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 14. Effect of Headings. The Section and Exhibit headings herein are for
convenience only and shall not affect the construction hereof.
SECTION 15. Definitions. As used in this Agreement, the following terms have the
respective meanings set forth below:
“Advisers Act” means the Investment Advisers Act of 1940, as amended.
“Advisers Act Rules and Regulations” means the rules and regulations of the Commission
under the Advisers Act.
“Applicable Time” means the date and time that this Agreement is executed and
delivered by the parties hereto.
“Articles of Incorporation” means the Articles of Incorporation of ▇▇▇▇▇▇▇▇ Premium
Technology Growth Fund, Inc., dated as of August 31, 2009.
“Commission” means the Securities and Exchange Commission.
“▇▇▇▇▇” means the Commission’s Electronic Data Gathering, Analysis and Retrieval
System.
“FINRA” means the Financial Regulatory Authority.
“Fund Material Adverse Effect” means a material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business prospects of the Fund,
whether or not arising in the ordinary course of business.
“GAAP” means generally accepted accounting principles.
“Initial Registration Statement” means the Fund’s registration statement (File Nos.
333-161752 and 811-22328) on Form N-2 (including the statement of additional information
incorporated by reference therein), as amended (if applicable), at the time it became effective,
including the Rule 430A Information.
28
“Manager Material Adverse Effect” means a material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business prospects of the Manager,
whether or not arising in the ordinary course of business.
“NYSE” means the New York Stock Exchange.
“Organizational Documents” means (a) in the case of a corporation, its charter and
by-laws; (b) in the case of a limited or general partnership, its partnership certificate,
certificate of formation or similar organizational document and its partnership agreement; (c) in
the case of a limited liability company, its articles of organization, certificate of formation or
similar organizational documents and its operating agreement, limited liability company agreement,
membership agreement or other similar agreement; (d) in the case of a trust, its declaration of
trust, certificate of formation or similar organizational document and its trust agreement or other
similar agreement; and (e) in the case of any other entity, the organizational and governing
documents of such entity.
“preliminary prospectus” means any prospectus (including the statement of additional
information incorporated by reference therein) used in connection with the offering of the
Securities that was used before the Initial Registration Statement became effective, or that was
used after such effectiveness and prior to the execution and delivery of this Agreement, or that
omitted the Rule 430A Information or that was captioned “Subject to Completion”.
“Preliminary Prospectus” shall mean the preliminary prospectus (including the
statement of additional information incorporated by reference therein) dated ___, 2009 and any
preliminary prospectus (including the statement of additional information incorporated by reference
therein) included in the Registration Statement at the Applicable Time that omits Rule 430A
Information.
“Prospectus” shall mean the prospectus (including the statement of additional
information incorporated by reference therein) relating to the Securities that is first filed
pursuant to Rule 497 after the Applicable Time.
“Registration Statement” means the Initial Registration Statement; provided that, if a
Rule 462(b) Registration Statement is filed with the Commission, then the term “Registration
Statement” shall also include such Rule 462(b) Registration Statement.
“Rule 172,” “Rule 497,” “Rule 430A,” “Rule 433” and “Rule
462(b)” refer to such rules under the 1933 Act.
“Rule 430A Information” means the information included in the Prospectus that was
omitted from the Initial Registration Statement at the time it became effective but that is deemed
to be a part of the Initial Registration Statement at the time it became effective pursuant to Rule
430A.
“Rule 462(b) Registration Statement” means a registration statement filed by the Fund
pursuant to Rule 462(b) for the purpose of registering any of the Securities under the 1933 Act,
including the Rule 430A Information.
29
“Rules and Regulations” means, collectively, the 1933 Act Rules and Regulations and
the 1940 Act Rules and Regulations.
“▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act” means the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and
regulations promulgated thereunder or implementing the provisions thereof.
“1933 Act” means the Securities Act of 1933, as amended.
“1933 Act Rules and Regulations” means the rules and regulations of the Commission
under the 1933 Act.
“1934 Act” means the Securities Exchange Act of 1934, as amended.
“1934 Act Rules and Regulations” means the rules and regulations of the Commission
under the 1934 Act.
“1940 Act” means the Investment Company Act of 1940, as amended.
“1940 Act Notification” means a notification of registration of the Fund as an
investment company under the 1940 Act on Form N-8A, as the 1940 Act Notification may be amended
from time to time.
“1940 Act Rules and Regulations” means the rules and regulations of the Commission
under the 1940 Act.
All references in this Agreement to the Registration Statement, the Initial Registration
Statement, any Rule 462(b) Registration Statement, any preliminary prospectus, the Preliminary
Prospectus, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed
to include the copy filed with the Commission pursuant to ▇▇▇▇▇.
SECTION 16. Absence of Fiduciary Relationship. Each of the Fund and the Manager
acknowledges and agrees that:
(a) Each of the Underwriters is acting solely as an underwriter in connection with the public
offering of the Securities and no fiduciary, advisory or agency relationship between the Fund or
the Manager, on the one hand, and any of the Underwriters, on the other hand, has been or will be
created in respect of any of the transactions contemplated by this Agreement, irrespective of
whether or not any of the Underwriters have advised or is advising the Fund or the Manager on other
matters and none of the Underwriters has any obligation to the Fund or the Manager with respect to
the transactions contemplated by this Agreement except the obligations expressly set forth in this
Agreement;
(b) the public offering price of the Securities and the price to be paid by the Underwriters
for the Securities set forth in this Agreement were established by the Fund following discussions
and arms-length negotiations with the Representatives;
(c) it is capable of evaluating and understanding, and understands and accepts, the terms,
risks and conditions of the transactions contemplated by this Agreement;
30
(d) in connection with each transaction contemplated by this Agreement and the process leading
to such transactions, each Underwriter is and has been acting solely as principal and not as
fiduciary, advisor or agent of the Fund or the Manager or any of their respective affiliates;
(e) none of the Underwriters has provided any legal, accounting, regulatory or tax advice to
the Fund or the Manager with respect to the transactions contemplated by this Agreement and it has
consulted its own legal, accounting, regulatory and tax advisers to the extent it has deemed
appropriate;
(f) it is aware that the Underwriters and their respective affiliates are engaged in a broad
range of transactions which may involve interests that differ from those of the Fund and the
Manager, and that none of the Underwriters has any obligation to disclose such interests and
transactions to the Fund or the Manager by virtue of any fiduciary, advisory or agency
relationship; and
(g) it waives, to the fullest extent permitted by law, any claims it may have against any of
the Underwriters for breach of fiduciary duty or alleged breach of fiduciary duty and agrees that
none of the Underwriters shall have any liability (whether direct or indirect, in contract, tort or
otherwise) to it in respect of such a fiduciary duty claim or to any person asserting a fiduciary
duty claim on its behalf or on behalf of the Fund or the Manager.
[Signature Page Follows]
31
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to the Fund and the Manager a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the Underwriters, the Fund and the Manager in
accordance with its terms.
| Very truly yours, | ||||
| ▇▇▇▇▇▇▇▇ PREMIUM TECHNOLOGY GROWTH FUND, INC. |
||||
| By | ||||
| Name: Title: |
||||
| RIVERSOURCE INVESTMENTS, LLC | ||||
| By | ||||
| Name: Title: |
||||
CONFIRMED AND ACCEPTED, as of the date first above written: |
||
▇▇▇▇▇ FARGO SECURITIES, LLC [REPRESENTATIVES] |
||
By:
|
▇▇▇▇▇ FARGO SECURITIES, LLC | |
By: |
||
| Authorized Signatory | ||
For themselves and as Representatives of the Underwriters named in Exhibit A hereto.
32
EXHIBIT A
| Name of Underwriter | Number of Initial Securities | |||
▇▇▇▇▇ Fargo Securities, LLC |
||||
[other Underwriters] |
||||
Total |
||||
A-1
EXHIBIT
B
FORM OF OPINION OF FUND COUNSEL
FORM OF OPINION OF FUND COUNSEL
B-1
EXHIBIT
C
FORM OF OPINION OF MANAGER’S COUNSEL
FORM OF OPINION OF MANAGER’S COUNSEL
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SCHEDULE 1
PRICE-RELATED INFORMATION
▇▇▇▇▇▇▇▇ PREMIUM TECHNOLOGY GROWTH FUND, INC.
Public offering price: $[20.00] per share
Underwriting
discounts and commissions: $ per share
Proceeds,
before expenses to the Fund: $ per share
Shares offered: ___
Over-allotment option: ___
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