▇▇▇▇▇ & Steers REIT and Utility Income Fund, Inc.
(a Maryland corporation)
[ ] Common Shares
(Par Value $.001 Per Share)
FORM OF PURCHASE AGREEMENT
January [ ], 2004
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
Wachovia Capital Markets, LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇ Fargo Securities, LLC
Advest, Inc.
BB&T Capital Markets, a division of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇▇, Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Co.
Deutsche Bank Securities Inc.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Incorporated
J.J.B. ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC
▇▇▇▇▇▇▇▇ Investments Inc., a KeyCorp Company
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc.
Quick & ▇▇▇▇▇▇, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc.
Sterne, Agee & ▇▇▇▇▇, Inc.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated
SunTrust Capital Markets, Inc.
TD Waterhouse Investor Services, Inc.
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇ & Steers REIT and Utility Income Fund, Inc., a Maryland
corporation (the "Fund"), and the Fund's investment manager, ▇▇▇▇▇ & Steers
Capital Management, Inc., a New York corporation (the "Investment Manager"),
each confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.,
Wachovia Capital Markets, LLC, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated, RBC ▇▇▇▇
▇▇▇▇▇▇▇▇ Inc., U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇
Inc., ▇▇▇▇▇ Fargo Securities, LLC, Advest, Inc., BB&T Capital Markets, a
division of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇▇, Inc., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Co., Deutsche Bank Securities Inc., ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Incorporated, J.J.B. ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC,
▇▇▇▇▇▇▇▇ Investments Inc., a KeyCorp Company, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc.,
Quick & ▇▇▇▇▇▇, Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc., Sterne, Agee & ▇▇▇▇▇, Inc.,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated, SunTrust Capital Markets, Inc., and TD
Waterhouse Investor Services, Inc. and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters," which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc., Wachovia Capital
Markets, LLC, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated, RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., U.S.
Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc., ▇▇▇▇▇ Fargo Securities, LLC, Advest, Inc., BB&T
Capital Markets, a division of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇▇, Inc., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Incorporated, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Co., Deutsche Bank Securities Inc., ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, Incorporated, J.J.B. ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ LLC, ▇▇▇▇▇▇▇▇ Investments Inc., a KeyCorp Company, ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
Company, Inc., Quick & ▇▇▇▇▇▇, Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc., Sterne, Agee &
▇▇▇▇▇, Inc., ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated, SunTrust Capital Markets,
Inc., and TD Waterhouse Investor Services, Inc. are acting as representatives
(in such capacity, the "Representatives"), with respect to the issue and sale by
the Fund and the purchase by the Underwriters, acting severally and not jointly,
of the respective number of common shares, par value $.001 per share, of the
Fund ("Common Shares") set forth in said Schedule A, 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 Common Shares to cover over-allotments, if any. The aforesaid [ ]
Common Shares (the "Initial Securities") to be purchased by the Underwriters and
all or any part of the [ ] Common Shares subject to the option described in
Section 2(b) hereof (the "Option Securities") are hereinafter called,
collectively, the "Securities."
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 filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (No. 333-109441 and No.
811-21437) covering the registration of the Securities under the Securities Act
of 1933, as amended (the "1933 Act"), including the related preliminary
prospectus or prospectuses, and a notification on Form N-8A of registration of
the Fund as an investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and the rules and regulations of the Commission under
the 1933 Act and the 1940 Act (the "Rules and Regulations"). Promptly after
execution and delivery of this Agreement, the Fund will either (i) prepare and
file a prospectus in accordance with the provisions of Rule 430A ("Rule 430A")
of the Rules and Regulations and paragraph (c) or (h) of Rule 497 ("Rule 497")
of the Rules and Regulations or (ii) if the Fund has elected to rely upon Rule
434 ("Rule 434") of the Rules and Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 497. The
information included in any such prospectus or in any such Term Sheet, as the
case may be, that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement at
the time it became effective, if applicable, (a) pursuant to paragraph (b) of
Rule 430A is referred to as "Rule 430A Information" or (b) pursuant to paragraph
(d) of Rule 434 is referred to as "Rule 434 Information." Each prospectus used
before such registration statement became effective, and any prospectus that
omitted, as applicable, the Rule 430A Information or the Rule 434 Information,
that was used after such effectiveness and prior to the execution and delivery
of this Agreement, including in each case any statement of additional
information incorporated therein by reference, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto and
schedules thereto at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the Rules and Regulations is herein referred to as the
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"Rule 462(b) Registration Statement," and after such filing the term
"Registration Statement" shall include the Rule 462(b) Registration Statement.
The final prospectus in the form first furnished to the Underwriters for use in
connection with the offering of the Securities, including the statement of
additional information incorporated therein by reference, is herein called the
"Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to the
preliminary prospectus dated [ ] together with the Term Sheet and all
references in this Agreement to the date of the Prospectus shall mean the date
of the Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Fund and the Investment
Manager. The Fund and the Investment Manager jointly and severally represent and
warrant to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof, and agree with each Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act, or order of
suspension or revocation of registration pursuant to Section 8(e) of
the 1940 Act, and no proceedings for any such purpose have been
instituted or are pending or, to the knowledge of the Fund or the
Investment Manager, are contemplated by the Commission, and any request
on the part of the Commission for additional information has been
complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statement,
the Rule 462(b) Registration Statement, the notification of Form N-8A
and any amendments and supplements thereto complied and will comply in
all material respects with the requirements of the 1933 Act, the 1940
Act and the Rules and Regulations and did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any such amendment
or supplement was issued and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), 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 (except that this representation and warranty does not
apply to statements in or omissions from the Registration Statement or
the Prospectus made in reliance upon and in conformity with information
relating to the Underwriters furnished to the Fund by or on behalf of
the Underwriters expressly for use therein). If Rule 434 is used, the
Fund will comply with the requirements of Rule 434 and the Prospectus
shall not be "materially different," as such term is used in Rule 434,
from the prospectus included in the Registration Statement at the time
it became effective.
3
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 497 under the 1933 Act,
complied when so filed in all material respects with the Rules and
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted
by Regulation S-T.
If a Rule 462(b) Registration Statement is required in
connection with the offering and sale of the Securities, the Fund has
complied or will comply with the requirements of Rule 111 under the
1933 Act Regulations relating to the payment of filing fees thereof.
(ii) Independent Accountants. The accountants who certified
the statement of assets and liabilities included in the Registration
Statement have represented to the Fund that they are independent public
accountants as required by the 1933 Act and the Rules and Regulations.
(iii) Financial Statements. The statement of assets and
liabilities included in the Registration Statement and the Prospectus,
together with the related notes, presents fairly the financial position
of the Fund at the date indicated; said statement has been prepared in
conformity with generally accepted accounting principles ("GAAP").
(iv) No Material Adverse Change. Since the respective dates as
of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects (other than as a
result of a change in the financial markets generally) of the Fund,
whether or not arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions entered into by
the Fund, other than those in the ordinary course of business, which
are material with respect to the Fund, and (C) there has been no
dividend or distribution of any kind declared, paid or made by the Fund
on any class of its capital stock.
(v) Good Standing of the Fund. The Fund has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Maryland and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under this Agreement; and the Fund is duly qualified as
a foreign corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(vi) No Subsidiaries. The Fund has no subsidiaries.
(vii) Investment Company Status. The Fund is duly registered
with the Commission under the 1940 Act as a closed-end, non-diversified
management investment company, and to the Fund's knowledge no order of
suspension or revocation of such registration has been issued or
proceedings therefor initiated or threatened by the Commission.
(viii) Officers and Directors. No person is serving or acting
as an officer, director or investment manager of the Fund except in
accordance with the provisions of the 1940 Act and the Rules and
Regulations and the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and the rules and regulations of the Commission
promulgated under the Advisers Act (the "Advisers Act Rules and
Regulations"). Except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement to either of them), no
director of the Fund is an
4
"interested person" (as defined in the ▇▇▇▇ ▇▇▇) of the Fund or an
"affiliated person" (as defined in the ▇▇▇▇ ▇▇▇) of any Underwriter
listed in Schedule A hereto.
(ix) Capitalization. The authorized, issued and outstanding
common shares of the Fund is as set forth in the Prospectus as of the
date thereof under the caption "Description of Shares." All issued and
outstanding common shares of the Fund have been duly authorized and
validly issued and are fully paid and non-assessable and have been
offered and sold or exchanged by the Fund in compliance with all
applicable laws (including, without limitation, federal and state
securities laws); none of the outstanding common shares of the Fund was
issued in violation of the preemptive or other similar rights of any
securityholder of the Fund.
(x) Authorization and Description of Securities. The
Securities to be purchased by the Underwriters from the Fund have been
duly authorized for issuance and sale to the Underwriters pursuant to
this Agreement and, when issued and delivered by the Fund pursuant to
this Agreement against payment of the consideration set forth herein,
will be validly issued and fully paid and non-assessable. The Common
Shares conform to all statements relating thereto contained in the
Prospectus and such description conforms to the rights set forth in the
instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder; and the
issuance of the Securities is not subject to the preemptive or other
similar rights of any securityholder of the Fund.
(xi) Absence of Defaults and Conflicts. The Fund is not in
violation of its articles of incorporation or by-laws, or in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or
instrument to which it is a party or by which it may be bound, or to
which any of the property or assets of the Fund is subject
(collectively, "Agreements and Instruments") except for such violations
or defaults that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement, the Investment
Management Agreement, the Administration Agreement, the
Sub-Administration Agreement, the Custodian Agreement and the Transfer
Agent and Service Agreement referred to in the Registration Statement
(as used herein, the "Management Agreement," the "Administration
Agreement," the "Sub-Administration Agreement," the "Custodian
Agreement" and the "Transfer Agency Agreement," respectively) and the
consummation of the transactions contemplated herein and in the
Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities
as described in the Prospectus under the caption "Use of Proceeds") and
compliance by the Fund with its obligations hereunder have been duly
authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Fund pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the articles of
incorporation or by-laws of the Fund or any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Fund or any of its assets, properties or
operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or
a portion of such indebtedness by the Fund.
5
(xii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Fund or the Investment Manager, threatened,
against or affecting the Fund, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect
the properties or assets of the Fund or the consummation of the
transactions contemplated in this Agreement or the performance by the
Fund of its obligations hereunder. The aggregate of all pending legal
or governmental proceedings to which the Fund is a party or of which
any of its property or assets is the subject which are not described in
the Registration Statement, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result
in a Material Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits thereto by the
1933 Act, the 1940 Act or by the Rules and Regulations which have not
been so described and filed as required.
(xiv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Fund of its
obligations hereunder, in connection with the offering, issuance or
sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as have been
already obtained or as may be required under the 1933 Act, the 1940
Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"),
or under the rules of the National Association of Securities Dealers,
Inc ("NASD") or state securities laws.
(xv) Possession of Licenses and Permits. The Fund possesses
such permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies
necessary to operate its properties and to conduct the business as
contemplated in the Prospectus; the Fund is in compliance with the
terms and conditions of all such Governmental Licenses, except where
the failure so to comply would not, singly or in the aggregate, have a
Material Adverse Effect; all of the Governmental Licenses are valid and
in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to
be in full force and effect would not have a Material Adverse Effect;
and the Fund has not received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xvi) Advertisements. Any advertising, sales literature or
other promotional material (including "prospectus wrappers," "broker
kits," "road show slides" and "road show scripts" and "electronic road
show presentations") authorized in writing by or prepared by the Fund
or the Investment Manager used in connection with the public offering
of the Securities (collectively, "sales material") does not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. Moreover, all sales material complied and will
comply in all material respects with the applicable requirements of the
1933 Act, the 1940 Act, the Rules and Regulations and the rules and
interpretations of the NASD.
(xvii) Subchapter M. The Fund intends to direct the investment
of the proceeds of the offering described in the Registration Statement
in such a manner as to comply with the requirements of Subchapter M of
the Internal Revenue Code of 1986, as amended ("Subchapter
6
M of the Code" and the "Code," respectively), and intends to qualify as
a regulated investment company under Subchapter M of the Code.
(xviii) Distribution of Offering Materials. The Fund has not
distributed and, prior to the later to occur of (A) the Closing Time
and (B) completion of the distribution of the Shares, will not
distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, a preliminary
prospectus, the Prospectus or the sales materials.
(xix) Accounting Controls. The Fund maintains a system of
internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with
management's general or specific authorization and with the applicable
requirements of the 1940 Act, the Rules and Regulations and the Code;
(B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets and to maintain
compliance with the books and records requirements under the 1940 Act
and the Rules and Regulations; (C) access to assets is permitted only
in accordance with the management's general or specific authorization;
and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xx) Absence of Undisclosed Payments. To the Fund's knowledge,
neither the Fund nor any employee or agent of the Fund has made any
payment of funds of the Fund or received or retained any funds, which
payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
(xxi) Material Agreements. This Agreement, the Management
Agreement, the Administration Agreement, the Sub-Administration
Agreement, the Custodian Agreement and the Transfer Agency Agreement
have each been duly authorized by all requisite action on the part of
the Fund, executed and delivered by the Fund, as of the dates noted
therein and each complies with all applicable provisions of the 1940
Act. Assuming due authorization, execution and delivery by the other
parties thereto with respect to the Management Agreement, the
Sub-Administration Agreement, the Custodian Agreement and the Transfer
Agency Agreement, each of the Management Agreement, the Administration
Agreement, the Sub-Administration Agreement, the Custodian Agreement
and the Transfer Agency Agreement constitutes a valid and binding
agreement of the Fund, enforceable in accordance with its terms, except
as affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law).
(xxii) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Fund under the 1933 Act.
(xxiii) NYSE Listing. The Securities have been duly authorized
for listing, upon notice of issuance, on the New York Stock Exchange
("NYSE") and the Fund's registration statement on Form 8-A under the
1934 Act has become effective.
(b) Representations and Warranties by the Investment Manager. The
Investment Manager represents and warrants to each Underwriter as of the date
hereof, as of the Closing Time referred to in Section 2(c) hereof, and as of
each Date of Delivery (if any) referred to in Section 2(b) hereof as follows:
(i) Good Standing of the Investment Manager. The Investment
Manager has been duly organized and is validly existing and in good
standing as a corporation under the laws of the State of New York with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus
and is duly qualified as a
7
foreign corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is required except
where the failure so to register or to qualify does not have a material
adverse effect on the condition (financial or other), business,
business prospects, properties, net assets or results of operations of
the Investment Manager or on the ability of the Investment Manager to
perform its obligations under this Agreement and the Management
Agreement.
(ii) Investment Manager Status. The Investment Manager is duly
registered and in good standing with the Commission as an investment
manager under the Advisers Act, and is not prohibited by the Advisers
Act or the 1940 Act, or the rules and regulations under such acts, from
acting under the Management Agreement or Administration Agreement for
the Fund as contemplated by the Prospectus.
(iii) Description of Investment Manager. The description of
the Investment Manager in the Registration Statement and the Prospectus
(and any amendment or supplement to either of them) complied and comply
in all material respects with the provisions of the 1933 Act, the 1940
Act, the Advisers Act, the Rules and Regulations and the Advisers Act
Rules and Regulations and is true and correct and does not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(iv) Capitalization. The Investment Manager has the financial
resources available to it necessary for the performance of its services
and obligations as contemplated in the Prospectus, this Agreement and
under the Management Agreement and Administration Agreement to which it
is a party.
(v) Authorization of Agreements; Absence of Defaults and
Conflicts. This Agreement, the Management Agreement, the Administration
Agreement and the Additional Compensation Agreement have each been duly
authorized, executed and delivered by the Investment Manager, and the
Management Agreement and the Administration Agreement each constitute a
valid and binding obligation of the Investment Manager, enforceable in
accordance with its terms, except as affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in
equity or at law); and neither the execution and delivery of this
Agreement, the Management Agreement or the Administration Agreement nor
the performance by the Investment Manager of its obligations hereunder
or thereunder will conflict with, or result in a breach of any of the
terms and provisions of, or constitute, with or without the giving of
notice or lapse of time or both, a default under, any agreement or
instrument to which the Investment Manager is a party or by which it is
bound, the certificate of incorporation, the by-laws or other
organizational documents of the Investment Manager, or to the
Investment Manager's knowledge, by any law, order, decree, rule or
regulation applicable to it of any jurisdiction, court, federal or
state regulatory body, administrative agency or other governmental
body, stock exchange or securities association having jurisdiction over
the Investment Manager or its properties or operations; and no consent,
approval, authorization or order of any court or governmental authority
or agency is required for the consummation by the Investment Manager of
the transactions contemplated by this Agreement, the Management
Agreement or the Administration Agreement, except as have been obtained
or may be required under the 1933 Act, the 1940 Act, the 1934 Act or
state securities laws.
(vi) No Material Adverse Change. Since the respective dates as
of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, there has not occurred
any event which should reasonably be expected to have a material
adverse effect
8
on the ability of the Investment Manager to perform its obligations
under this Agreement and the Management Agreement and Administration
Agreement to which it is a party.
(vii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Investment Manager, threatened against or
affecting the Investment Manager or any "affiliated person" of the
Investment Manager (as such term is defined in the ▇▇▇▇ ▇▇▇) or any
partners, directors, officers or employees of the foregoing, whether or
not arising in the ordinary course of business, which might reasonably
be expected to result in any material adverse change in the condition,
financial or otherwise, or earnings, business affairs or business
prospects of the Investment Manager, materially and adversely affect
the properties or assets of the Investment Manager or materially impair
or adversely affect the ability of the Investment Manager to function
as an investment manager or perform its obligations under the
Management Agreement or the Administration Agreement, or which is
required to be disclosed in the Registration Statement and the
Prospectus.
(viii) Absence of Violation or Default. The Investment Manager
is not in violation of its certificate of incorporation, by-laws or
other organizational documents or in default under any agreement,
indenture or instrument except for such violations or defaults that
would not result in a material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Investment Manager or the Fund.
(c) Officer's Certificates. Any certificate signed by any officer of
the Fund or the Investment Manager delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Fund or the Investment 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 the price per share set forth in Schedule B, the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter, plus
any additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Fund hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional [ ] Common Shares in the aggregate
at the price per share set forth in Schedule B, less an amount per share equal
to any dividends or distributions declared by the Fund and payable on the
Initial Securities but not payable on the Option Securities. The option hereby
granted will expire 45 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Securities upon notice by the Representatives to the Fund setting forth
the number of Option Securities as to which the several Underwriters are then
exercising the option and the time and date of payment and delivery for such
Option Securities. Any such time and date of delivery (a "Date of Delivery")
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 Time, as hereinafter defined. If the option is exercised as to all
or any portion of the Option Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Securities then being purchased which the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter bears to the total
number of
9
Initial Securities, subject in each case to such adjustments as ▇▇▇▇▇▇▇ ▇▇▇▇▇ in
its discretion shall make to eliminate any sales or purchases of a fractional
number of Option Securities.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities 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
10:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30
P.M. (Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representatives and the Fund (such time and date of payment and delivery being
herein called "Closing Time").
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 Date of Delivery as specified in the notice from the
Representatives to the Fund.
Payment shall be made to the Fund by wire transfer of immediately
available funds to a bank account designated by the Fund, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(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 Time or the relevant Date of Delivery,
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 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants.
(a) The Fund and the Investment Manager, jointly and severally,
covenant with each Underwriter as follows:
(i) Compliance with Securities Regulations and Commission
Requests. The Fund, subject to Section 3(a)(ii), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify
the 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, and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Fund will promptly effect the
filings necessary
10
pursuant to Rule 497 and will take such steps as it deems necessary to
ascertain promptly whether the form of prospectus transmitted for
filing under Rule 497 was received for filing by the Commission and, in
the event that it was not, it will promptly file such prospectus. The
Fund will make every reasonable effort to prevent the issuance of any
stop order, or order of suspension or revocation of registration
pursuant to Section 8(e) of the 1940 Act, and, if any such stop order
or order of suspension or revocation of registration is issued, to
obtain the lifting thereof at the earliest possible moment.
(ii) 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)), any Term Sheet or any amendment, supplement or revision
to either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, will furnish the
Representatives with copies of any such documents a reasonable amount
of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representatives or
counsel for the Underwriters shall reasonably object.
(iii) 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 or incorporated by reference therein) and
signed copies of all consents and certificates of experts, and will
also deliver to the Representatives, without charge, a conformed copy
of the Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(iv) Delivery of Prospectuses. The Fund has delivered to each
Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the Fund
hereby consents to the use of such copies for purposes permitted by the
1933 Act prior to the date of the Prospectus. The Fund will furnish to
each Underwriter, without charge, during the period when the Prospectus
is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments
or supplements thereto furnished to the Underwriters will be identical
to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(v) Continued Compliance with Securities Laws. If at any time
when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, 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 statements of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the opinion of such counsel, at any such
time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or
the Rules and Regulations, the Fund will promptly prepare and file with
the Commission, subject to Section 3(a)(ii), such amendment or
supplement as may be necessary to correct such statement or omission or
to make the Registration Statement or the Prospectus comply with such
requirements, and the Fund will furnish to the Underwriters such number
of copies of such amendment or supplement as the Underwriters may
reasonably request.
11
(vi) Blue Sky Qualifications. The Fund will use its best
efforts, in cooperation with the Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions of the United States as the
Representatives may designate and to maintain such qualifications in
effect for a period of not less than one year from the later of the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Fund shall not be
obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Fund will file such statements
and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect for a period of not less than one
year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(vii) 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 securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(viii) Use of Proceeds. The Fund will use the net proceeds
received by it from the sale of the Securities in the manner specified
in the Prospectus under "Use of Proceeds."
(ix) Listing. The Fund will use commercially reasonable
efforts to effect the listing of the Securities on the NYSE, subject to
notice of issuance, concurrently with the effectiveness of the
Registration Statement.
(x) Restriction on Sale of Securities. During a period of 180
days from the date of the Prospectus, the Fund will not, without the
prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (A) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of Common
Shares or any securities convertible into or exercisable or
exchangeable for Common Shares or file any registration statement under
the 1933 Act with respect to any of the foregoing or (B) enter into any
swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of
ownership of the Common Shares, whether any such swap or transaction
described in clause (A) or (B) above is to be settled by delivery of
Common Shares or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (1) the Securities to be sold
hereunder or (2) Common Shares issued pursuant to any dividend
reinvestment plan.
(xi) Reporting Requirements. The Fund, during the period when
the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1940 Act and the 1934 Act within the time
periods required by the 1940 Act and the Rules and Regulations and the
1934 Act and the rules and regulations of the Commission thereunder,
respectively.
(xii) Subchapter M. The Fund will use its best efforts to
comply with the requirements of Subchapter M of the Code to qualify as
a regulated investment company under the Code.
(xiii) No Manipulation of Market for Securities. The Fund will
not (a) take, directly or indirectly, any action designed to cause or
to result in, or that might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Fund
to facilitate the sale or resale of the Securities, and (b) until the
Closing Date, or the Date of Delivery, if any, (i) sell, bid for or
purchase the Securities or pay any person any compensation for
soliciting
12
purchases of the Securities or (ii) pay or agree to pay to any person
any compensation for soliciting another to purchase any other
securities of the Fund .
(xiv) Rule 462(b) Registration Statement. If the Fund elects
to rely upon Rule 462(b), the Fund shall file a Rule 462(b)
Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Fund shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to
Rule 111(b) under the 1933 Act.
SECTION 4. Payment of Expenses.
(a) Expenses. The Fund will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the 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
disbursements of the Fund's counsel, accountants and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(a)(vi) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, Prospectus and any amendments or supplements thereto,
(vii) the preparation, printing and delivery to the Underwriters of copies of
the Blue Sky Survey and any supplement thereto, (viii) the fees and expenses of
any transfer agent or registrar for the Securities, (ix) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
Underwriters (up to $10,000) in connection with, the review by the NASD of the
terms of the sale of the Securities, (x) the fees and expenses incurred in
connection with the listing of the Securities on the NYSE and (xi) the printing
of any sales material. Also, the Fund shall pay to ▇▇▇▇▇▇▇ ▇▇▇▇▇, on behalf of
the Underwriters, $.00667 per share of the securities purchased pursuant to this
agreement as partial reimbursement of expenses incurred in connection with the
offering. The Investment Manager has agreed to pay organizational expenses and
offering costs (other than sales load, but including the partial reimbursement
of expenses described in the preceding sentence) of the Fund that exceed $.04
per Common Share.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section 9(a)
hereof, the Fund and the Investment 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 several Underwriters hereunder are subject to
the accuracy of the representations and warranties of the Fund and the
Investment Manager contained in Section 1 hereof or in certificates of any
officer of the Fund or the Investment Manager delivered pursuant to the
provisions hereof, to the performance by the Fund and the Investment Manager of
their respective covenants and other obligations hereunder, and to the following
further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act, no notice or
13
order pursuant to Section 8(e) of the 1940 Act shall have been issued, and no
proceedings with respect to either shall have been initiated or threatened by
the Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel to the Underwriters. A prospectus containing the Rule 430A Information
shall have been filed with the Commission in accordance with Rule 497 (or a
post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A) or, if the
Fund has elected to rely upon Rule 434, a Term Sheet shall have been filed with
the Commission in accordance with Rule 497.
(b) Opinion of Counsel for Fund and the Investment Manager. At Closing
Time, the Representatives shall have received the favorable opinions, dated as
of Closing Time, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Fund and of
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., internal counsel for the Investment Manager, in form
and substance satisfactory to counsel for the Underwriters, together with signed
or reproduced copies of such letters for each of the other Underwriters
substantially to the effect set forth in Exhibit A hereto and to such further
effect as counsel to the Underwriters may reasonably request. Insofar as the
opinions expressed above relate to or are dependent upon matters governed by
Maryland law, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP will be permitted to rely on the
opinion of ▇▇▇▇▇▇▇ LLP.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇▇▇ Chance US LLP, counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters
with respect to the matters set forth in clauses (A) (1), (4), (5) (solely as to
the information in the second clause thereof), (6), (7), (11) and the second
paragraph after (A)(15) of the form of opinion of counsel for the Fund in
Exhibit A hereto. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the State of
New York and the federal law of the United States, upon the opinions of counsel
satisfactory to the Representatives. Such counsel may also state that, insofar
as such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Fund and certificates of
public officials.
(d) Officers' Certificates. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Fund, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of a duly authorized officer
of the Fund and of the chief financial or chief accounting officer of the Fund
and of the President or a Vice President or Managing Director of the Investment
Manager, dated as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in Sections
1(a) and (b) hereof are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (iii) each of the Fund and the
Investment Manager, respectively, has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) to the knowledge of such officers, no stop order suspending the
effectiveness of the Registration Statement, or order of suspension or
revocation of registration pursuant to Section 8(e) of the 1940 Act, has been
issued and no proceedings for any such purpose have been instituted or are
pending or are contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from PricewaterhouseCoopers
LLP a letter dated such date, 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 to the
effect that:
(i) They are independent certified public accountants with
respect to the Fund within the meaning of the 1933 Act and 1940 Act,
and the applicable rules and regulations thereunder adopted by the
Commission;
14
(ii) In their opinion, the financial statements of the Fund
audited by them and included in the Registration Statement comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act and 1940 Act and the related rules and
regulations adopted by the Commission;
(iii) on the basis of procedures (but not an audit in
accordance with generally accepted auditing standards) consisting of:
a. Reading the minutes of meetings of the Board of
Directors of the Fund as set forth in the minute books through
a specified date not more than three business days prior to
the date of delivery of such letter; and
b. Making inquiries of certain officials of the Fund
who have responsibility for financial and accounting matters
regarding changes in the capital stock, net assets or
long-term liabilities of the Fund as compared with the amounts
shown in the latest balance sheet included in the Registration
Statement or for the period from the date of the latest income
statement included in the Registration Statement to a
specified date not more than three business days prior to the
delivery of such letter,
there has been no change in the capital stock, net assets or long-term
liabilities of the Fund except as disclosed in the comfort letter.
(f) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from PricewaterhouseCoopers LLP a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the NYSE, subject only to official notice of
issuance.
(h) No Objection. The NASD has not raised any objection with respect to
the fairness and reasonableness of the underwriting terms and arrangements.
(i) Execution of Additional Compensation Agreement. At Closing Time,
▇▇▇▇▇▇▇ ▇▇▇▇▇ shall have received the Additional Compensation Agreement, dated
as of the Closing Date, as executed by the Investment Manager.
(j) 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, the representations and warranties
of the Fund contained herein and the statements in any certificates furnished by
the Fund hereunder shall be true and correct as of each Date of Delivery and, at
the relevant Date of Delivery, the Representatives shall have received:
(i) Officers' Certificates. Certificates, dated such Date of
Delivery, of a duly authorized officer of the Fund and of the chief
financial or chief accounting officer of the Fund and of the President
or a Vice President or Managing Director of the Investment Manager
confirming that the information contained in the certificate delivered
by each of them at the Closing Time pursuant to Section 5(d) hereof
remains true and correct as of such Date of Delivery.
(ii) Opinions of Counsel for the Fund and the Investment
Manager. The favorable opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP,
counsel for the Fund and of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., internal counsel
for the Investment Manager, in form and substance satisfactory to
counsel
15
for the Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(b)
hereof.
(iii) Opinion of Counsel for the Underwriters. The favorable
opinion of ▇▇▇▇▇▇▇▇ Chance US LLP, counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from
PricewaterhouseCoopers LLP, in form and substance satisfactory to the
Representatives and dated such Date of Delivery, substantially in the
same form and substance as the letter furnished to the Representatives
pursuant to Section 5(f) 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 Date of Delivery.
(k) Additional Documents. At Closing Time and at each Date of Delivery,
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, herein contained; and all proceedings
taken by the Fund and the Investment Manager in connection with the organization
and registration of the Fund under the 1940 Act and the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and substance to
the Representatives and counsel for the Underwriters.
(l) Termination of Agreement. If any condition specified in this
Section 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 a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by notice to the Fund at
any time at or prior to Closing Time or such Date of Delivery, as the case may
be, and such termination shall be without liability of any party to any other
party except as provided in Section 4 and except that Sections 1, 6, 7, 8 and 13
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Fund and the Investment
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), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or
16
of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(e) below) any such settlement is effected
with the written consent of the Fund; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇
▇▇▇▇▇), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Fund or the
Investment Manager by any Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in
the Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); provided,
however, that the indemnification contained in this paragraph (a) with respect
to any preliminary prospectus shall not inure to the benefit of any Underwriter
(or to the benefit of any person controlling such Underwriter) on account of any
such loss, claim, damage, liability or expense arising from the sale of the
Securities by such Underwriter to any person if the Fund sustains the burden of
proof that a copy of the Prospectus has not been delivered or sent by the
Underwriters as required to such person within the time required by the 1933 Act
and the 1933 Act Rules and Regulations, and the untrue statement or alleged
untrue statement or omission or alleged omission of a material fact contained in
such preliminary prospectus was corrected in such Prospectus.
(b) Indemnification of Fund, Investment Manager, Directors and
Officers. Each Underwriter severally agrees to indemnify and hold harmless the
Fund and the Investment Manager, their respective directors, each of the Fund's
officers who signed the Registration Statement, and each person, if any, who
controls the Fund or the Investment 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, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Fund or the Investment
Manager by such Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Indemnification for Marketing Materials. In addition to the
foregoing indemnification, the Fund and the Investment Manager also, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in Section 6(a),
as limited by the proviso set forth therein, with respect to any sales material.
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
17
counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Fund and the Investment 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 fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution.
If the indemnification provided for in Section 6 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Fund and the Investment 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 Investment 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.
The relative benefits received by the Fund and the Investment 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 total underwriting discount received by the Underwriters
(whether from the Fund or otherwise), in each case as set forth on the cover of
the Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the Securities as
set forth on such cover.
The relative fault of the Fund and the Investment 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
18
to information supplied by the Fund or the Investment 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 Investment 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 shall have the same rights to contribution as such Underwriter, and
each director of the Fund and each director of the Investment Manager,
respectively, each officer of the Fund who signed the Registration Statement,
and each person, if any, who controls the Fund or the Investment Manager, within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Fund and the Investment Manager,
respectively. 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 Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Fund or the Investment 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 the Investment 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, at any time at or prior to Closing Time (i) if
there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus (exclusive
of any supplement thereto), any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Fund or the Investment Manager, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable or inadvisable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in the
19
Common Shares of the Fund has been suspended or materially limited by the
Commission or the NYSE, or if trading generally on the American Stock Exchange
or the NYSE or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the NASD or any other governmental authority, or
a material disruption has occurred in commercial banking or securities
settlement or clearance services in the United States, or (iv) if a banking
moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7, 8 and 13 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at Closing Time or a Date
of Delivery 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
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Fund to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, 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, either the Representatives or the Fund shall have the right to
postpone Closing Time or the relevant Date of Delivery, 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. Tax Disclosure.
Notwithstanding any other provision of this Agreement, from the
commencement of discussions with respect to the transactions contemplated
hereby, the Fund (and each employee, representative or other agent of the Fund)
may disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure (as such terms are used in Sections 6011, 6111 and
6112 of the U.S. Code and the Treasury Regulations promulgated thereunder) of
the transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided relating to such
tax treatment and tax structure.
20
SECTION 12. 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, c/o Merrill ▇▇▇▇▇ & Co., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of Equity Capital Markets; and notices to the Fund or
the Investment Manager shall be directed, as appropriate, to the office of ▇▇▇▇▇
& Steers Capital Management, Inc. at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
SECTION 13. Parties.
This Agreement shall each inure to the benefit of and be binding upon
the Underwriters, the Fund, the Investment Manager and their respective partners
and successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Fund, the Investment Manager and their respective successors
and the controlling persons and officers and directors referred to in Sections 6
and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters, the Fund, the
Investment Manager and their respective partners and successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED IN SAID STATE. UNLESS OTHERWISE EXPLICITLY PROVIDED, SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
21
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriters, the Fund and the Investment Manager in accordance with its
terms.
Very truly yours,
▇▇▇▇▇ & Steers REIT and Utility Income Fund, Inc.
By:
---------------------------------------------
Name:
Title:
▇▇▇▇▇ & Steers Capital Management, Inc.
By:
---------------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
[OTHER CO-MANAGERS]
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
------------------------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
22
SCHEDULE A
Number of
Name of Underwriter Initial Securities
------------------- ------------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated..................................
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. ................................
Wachovia Capital Markets, LLC.............................
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇ Fargo Securities, LLC
Advest, Inc.
BB&T Capital Markets, a division of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇▇, Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Co.
Deutsche Bank Securities Inc.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Incorporated
J.J.B. ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC
▇▇▇▇▇▇▇▇ Investments Inc., a KeyCorp Company
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc.
Quick & ▇▇▇▇▇▇, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc.
Sterne, Agee & ▇▇▇▇▇, Inc.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated
SunTrust Capital Markets, Inc.
TD Waterhouse Investor Services, Inc.
Sch A-1
Number of
Name of Underwriter Initial Securities
------------------- ------------------
Sch A-2
Number of
Name of Underwriter Initial Securities
------------------- ------------------
Total...........................................................
Sch A-3
SCHEDULE B
▇▇▇▇▇ & STEERS REIT AND UTILITY INCOME FUND, INC.
[ ] Common Shares
(Par Value $.001 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $[ ].
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $[ ], being an amount equal to the initial public
offering price set forth above less $[ ] per share; provided that the purchase
price per share for any Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an amount
per share equal to any dividends or distributions declared by the Fund and
payable on the Initial Securities but not payable on the Option Securities.
Sch B-1
Exhibit A
FORM OF OPINION OF FUND'S AND INVESTMENT MANAGER'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
With respect to the Fund:
1. The Fund (A) has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the State of
Maryland with full corporate power and authority to conduct its business as
described in the Registration Statement and the Prospectus and to enter into and
perform its obligations under the Purchase Agreement, and (B) is duly registered
and qualified to conduct its business and is in good standing in the State of
New York (which is the only jurisdiction identified by management of the Fund to
us in which the Fund owns or leases property or operates or conducts its
business);
2. The statements made in the Prospectus under the caption
"Description of Shares", insofar as they purport to constitute summaries of the
terms of the Fund's common stock, constitute accurate summaries of the terms of
such common stock in all material respects;
3. All outstanding shares of capital stock of the Fund have
been duly authorized and validly issued by the Fund, and are fully paid and
nonassessable;
4. The Shares have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor in accordance with the
terms of the Purchase Agreement, will be validly issued by the Fund, fully paid
and nonassessable. There are no preemptive rights under federal or New York law
or under the Maryland General Corporation Law to subscribe for or purchase
shares of the Fund's capital stock. There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the issuance, voting or
transfer of, any shares of the Fund's capital stock pursuant to the Fund's
charter or by-laws or any agreement or other instrument filed or incorporated by
reference as an exhibit to the Registration Statement;
5. The Shares have been authorized for listing, subject to
notice of issuance, on the New York Stock Exchange (the "NYSE"); the form of the
certificate for the Shares conforms to the requirements of the Maryland General
Corporation Law and the NYSE;
6. The Registration Statement and all post-effective
amendments, if any, have become effective under the 1933 Act and the 1933 Act
Rules and Regulations and, to our knowledge, no stop order suspending the
effectiveness of the Registration Statement or order pursuant to Section 8(e) of
the 1940 Act has been issued and no proceedings for that purpose are pending
before or threatened by the Commission; and any required filing of the
Prospectus pursuant to Rule 497 of the 1933 Act Rules and Regulations has been
made in accordance with Rule 497;
7. (A) The Purchase Agreement and each of the Advisory
Agreement dated as of [ ] between the Fund and the Investment Manager (the
"Advisory Agreement"), the Administration Agreement dated as of [ ] between the
Fund and the Investment Manager (the "Administration Agreement"), the Master
Custodian Agreement dated as of March 9, 2001 and effective with respect to the
Fund as of [ ] between the Fund and State Street Bank and Trust Company (the
"Custodian Agreement"), the agreement dated as of March 12, 2001 and effective
with respect to Fund as of [ ] between the Fund and State Street Bank and Trust
Company (the "Sub-Administration Agreement"), and the Stock Transfer Agent
Services Agreement dated as of [ ] between the Fund and Equiserve
A-1
Trust Company, NA (the "Transfer Agent Agreement"; collectively with the
Advisory Agreement, Administration Agreement, Custodian Agreement and
Sub-Administration Agreement, the "Fund Agreements") have been duly authorized,
executed and delivered by the Fund and (B) the Advisory Agreement, assuming that
the Advisory Agreement is the valid and legally binding obligations of the other
parties thereto, is a valid and legally binding agreement of the Fund,
enforceable against the Fund in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and fair
dealing;
8. The issue and sale of the Shares by the Fund and the
compliance by the Fund with the provisions of the Purchase Agreement and the
Fund Agreements will not breach or result in a default under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Fund pursuant to any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument filed or incorporated by reference as
an exhibit to the Registration Statement, nor will such action violate the
charter or by-laws of the Fund or any federal or New York statute or any rule or
regulation thereunder or the Maryland General Corporation Law or any rule or
regulation thereunder or order known to us issued pursuant to any federal or New
York statute or the Maryland General Corporation Law by any court or
governmental agency or body having jurisdiction over the Fund or any of its
properties;
9. No consent, approval, authorization, order, registration,
filing or qualification of or with any federal or New York governmental agency
or body or any Maryland governmental agency or body acting pursuant to the
Maryland General Corporation Law or, to our knowledge, any federal or New York
court or any Maryland court acting pursuant to the Maryland General Corporation
Law is required for the issue and sale of the Shares by the Fund and the
compliance by the Fund with all of the provisions of the Purchase Agreement and
the Fund Agreements, except for the registration of the Shares under the 1933
Act and the 1940 Act pursuant to the Registration Statement and under the
Securities Exchange Act of 1934, as amended, pursuant to the Fund's Registration
Statement on Form 8-A, both of which have been filed and have become effective,
and such consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters;
10. To our knowledge, (A) other than as described or
contemplated in the Registration Statement or Prospectus, there are no legal or
governmental proceedings pending or threatened against the Fund, or to which the
Fund or any of its properties is subject and (B) there are no agreements,
contracts, indentures, leases or other instruments that are required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement that are not described or filed as
required, as the case may be;
11. The statements made in the Prospectus under the caption
"Management of the Fund", "Description of Shares - Common Shares" and in the
Registration Statement under Item 29 (Indemnification), insofar as they purport
to constitute summaries of the terms of the Maryland General Corporation Law or
any federal statutes, rules and regulations thereunder or contracts and other
documents, constitute accurate summaries of the terms of such statutes, rules
and regulations or contracts and other documents in all material respects;
12. The statements made in the Prospectus under the caption
"Taxation" insofar as they purport to constitute summaries of matters of United
States federal tax law and regulations or legal conclusions with respect
thereto, constitute accurate summaries of the matters described therein in all
material respects;
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13. Each of the Fund Agreements complies as to form with all
applicable provisions of the 1940 Act, the Investment Advisers Act of 1940, as
amended (the "Advisers Act") and the rules and regulations under the Advisers
Act;
14. The Fund is duly registered with the Commission under the
1940 Act and the rules and regulations under the 1940 Act (the "1940 Act Rules
and Regulations") as a closed-end, non-diversified management investment company
and, to our knowledge, no order of suspension or revocation of such registration
under the 1940 Act and the 1940 Act Rules and Regulations has been issued or
proceedings therefor initiated or threatened by the Commission; the provisions
of the charter and by-laws do not violate the provisions of the 1940 Act or the
1940 Act Rules and Regulations; and the provisions of the charter and the
by-laws and the investment policies and restrictions described in the
Registration Statement and the Prospectus under the captions "Investment
Objectives and Policies", "Principal Risks of the Fund", "Additional Risk
Considerations" and "Investment Restrictions" (in the Prospectus and the
statement of additional information incorporated by reference therein) comply in
all material respects with the requirements of the 1940 Act and the applicable
1940 Act Rules and Regulations;
15. Except as described in the Prospectus, there are no
outstanding options, warrants or other rights calling for the issuance of, and
we do not know of any commitment, plan or arrangement to issue (other than in
connection with the reinvestment of dividends) any shares of capital stock of
the Fund or any security convertible into or exchangeable or exercisable for
shares of capital stock of the Fund or to otherwise register such securities for
sale.
Insofar as the opinions expressed herein relate to or are
dependent upon matters governed by the laws of the State of Maryland, we have
relied upon the opinion of ▇▇▇▇▇▇▇ LLP.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement or
the Prospectus and take no responsibility therefor, except as and to the extent
set forth in paragraphs 2, 11 and 12 above. In the course of the preparation by
the Fund of the Registration Statement and the Prospectus, we participated in
conferences with certain officers and employees of the Fund and the Investment
Manager, with representatives of PricewaterhouseCoopers LLP and with counsel to
the Investment Manager. Based upon our examination of the Registration Statement
and the Prospectus, our investigations made in connection with the preparation
of the Registration Statement and the Prospectus and our participation in the
conferences referred to above, (i) we are of the opinion that the Registration
Statement, as of its effective date, the Prospectus, as of its date, and the
notification on Form N-8A, complied as to form in all material respects with the
requirements of the 1933 Act and the 1940 Act and the applicable rules and
regulations of the Commission thereunder, except that in each case we express no
opinion with respect to the financial statements or other financial data
contained or incorporated by reference in the Registration Statement or the
Prospectus, and (ii) we have no reason to believe that the Registration
Statement, at the time the Registration Statement became effective, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading or that the Prospectus contains any untrue statement of a material
fact or omits 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, except that in each case we express no belief with respect
to the financial statements or other financial data contained or incorporated by
reference in the Registration Statement or the Prospectus.
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With respect to the Investment Manager:
1. The Investment Manager (A) has been duly incorporated and
is validly existing as a corporation under the laws of the State of New York
with full corporate power and authority to conduct its business as described in
the Registration Statement and the Prospectus and (B) is duly registered and
qualified to conduct its business and is in good standing in the State of New
York (which is the only jurisdiction in which the Investment Manager owns or
leases property or operates or conducts its business).
2. The Investment Manager is duly registered with the
Commission as an investment adviser under the Investment Advisers Act of 1940,
as amended (the "Advisers Act") and is not prohibited by the Advisers Act, the
rules and regulations under the Advisers Act (the "Advisers Act Rules and
Regulations"), the 1940 Act, the rules and regulations under the 1940 Act from
acting under the Advisory Agreement dated as of [ ] between the Fund and the
Investment Manager (the "Advisory Agreement"), the Administration Agreement
between the Investment Manager and the Fund dated as of [ ] (the "Administration
Agreement") or the Additional Compensation Agreement between the Investment
Manager and ▇▇▇▇▇▇▇ ▇▇▇▇▇ dated as of [ ], for the Fund as contemplated by the
Prospectus; and to my knowledge, no order of suspension or revocation of such
registration under the Advisers Act and the Advisers Act Rules and Regulations
has been issued and no proceedings for that purpose are pending before or
threatened by the Commission;
3. Each of this Agreement, the Advisory Agreement, the
Administration Agreement and the Additional Compensation Agreement has been duly
authorized, executed and delivered by the Investment Manager and assuming that
each is the valid and legally binding agreement of the other parties thereto,
each is a valid and legally binding agreement of the Investment Manager,
enforceable against the Investment Manager in accordance with its terms subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and fair
dealing;
4. Neither the execution, delivery or performance of this
Agreement, the Advisory Agreement, the Administration Agreement or the
Additional Compensation Agreement by the Investment Manager or compliance by the
Investment Manager with the provisions of this Agreement, the Advisory Agreement
or the Administration Agreement nor consummation by the Investment Manager of
the transactions contemplated hereby and thereby will breach or result in a
default under or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Investment Manager pursuant to
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Investment Manager is a party or by which its properties
are bound except where breach or default would not reasonably be expected to
have a material adverse effect on the ability of the Investment Manager to
perform its obligations under this Agreement, the Advisory Agreement or the
Administration Agreement, nor will such action violate the charter or by-laws of
the Investment Manager or any federal or New York statute or any rules or
regulations thereunder or order known to me issued pursuant to any federal or
New York statute by any court or governmental agency or body having jurisdiction
over the Investment Manager or any of its properties;
5. No consent, approval, authorization, order, registration,
filing or qualification of or with any federal or New York governmental agency
or body or, to my knowledge, any federal or New York court is required on the
part of the Investment Manager for the execution, delivery and performance by
the Investment Manager of this Agreement, the Advisory Agreement, the
Administration Agreement
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or the Additional Compensation Agreement, except such consents, approvals,
authorizations, orders, registrations, filings or qualifications as have been
obtained or made prior to the date hereof;
6. To the best of my knowledge, no person is serving as an
officer, director or investment manager of the Fund except in accordance with
the 1940 Act and the Rules and Regulations and the Advisers Act and the Advisers
Act Rules and Regulations. Except as disclosed in the Registration Statement and
Prospectus (of any amendment or supplement to either of them), to the best of my
knowledge, no director of the Fund is an "interested person" (as defined in the
▇▇▇▇ ▇▇▇) of the Fund or an "affiliated person" (as defined in the ▇▇▇▇ ▇▇▇) of
an Underwriter listed on Schedule A to the Purchase Agreement.
7. To my knowledge, there are no legal or governmental
proceedings pending or threatened against the Investment Manager, or to which
the Investment Manager or any of its properties is subject, which are required
to be described in the Registration Statement or Prospectus that are not
described as required or which may reasonably be expected to involve a
prospective material adverse change in the ability of the Investment Manager to
perform its obligations under this Agreement, the Advisory Agreement and the
Administration Agreement.
I have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement or
the Prospectus and take no responsibility therefor. In the course of the
preparation by the Fund of the Registration Statement and the Prospectus, I
participated in conferences with certain officers and employees of the Fund and
the Investment Manager, with representatives of PricewaterhouseCoopers LLP and
with counsel to the Fund. Based upon my examination of the Registration
Statement and the Prospectus, my investigations made in connection with the
preparation of the Registration Statement and the Prospectus and my
participation in the conferences referred to above, I have no reason to believe
that the Registration Statement, at the time the Registration Statement became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading or that the Prospectus contains any untrue
statement of material fact or omits 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, except I express no belief with respect to
the financial statements or other financial data contained or incorporated by
reference in the Registration Statement or the Prospectus.
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