Dreman/Claymore Dividend & Income Fund
(a Delaware statutory trust)
Common Shares of Beneficial Interest
(Par Value $.01 per share)
FORM OF PURCHASE AGREEMENT
[ ], 2004
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
Claymore Securities, Inc.
[other co-managers]
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Dreman/Claymore Dividend & Income Fund, a Delaware statutory trust (the
"Fund") and the Fund's investment adviser, Claymore Advisors, LLC, a Delaware
limited liability company (the "Investment Adviser") and its investment manager,
Dreman Value Management LLC, a Delaware limited liability company (the
"Investment Manager" and together with the Investment Adviser, the "Advisers")
each confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), Claymore Securities, Inc. and
[other co-managers] 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
▇▇▇▇▇▇▇ ▇▇▇▇▇, Claymore Securities, Inc. and [other co-managers] 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 of
beneficial interest, par value $.01 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 for the sole purpose of covering overallotments, 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. 333-109918 and No.
811-21455) 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 publicly distributed before such registration
statement became effective, and any prospectus that omitted, as applicable, the
Rule 430A Information or the Rule 434 Information, that was used after such
effectiveness and prior to the execution and delivery of this Agreement,
including in each case any statement of additional information incorporated
therein by reference, is herein called a "preliminary prospectus." Such
registration statement, including the exhibits thereto and schedules thereto at
the time it became effective and including the Rule 430A Information and the
Rule 434 Information, as applicable, is herein called the "Registration
Statement." Any registration statement filed pursuant to Rule 462(b) of the
Rules and Regulations is herein referred to as the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The final prospectus in the form
first filed under paragraph (c) or (h) of Rule 497 and 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 [ ], 2003
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 ADVISERS. The
Fund and the Advisers 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
Advisers, are contemplated by the Commission, and any request on the
part of the Commission for additional information has been complied
with in all material respects.
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
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(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, on
the respective date of the Prospectus or any such amendment or
supplement 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. If Rule 434 is used, the Fund will comply in all material
respects with the requirements of Rule 434 and the Prospectus shall
not be "materially different," as such term is used in Rule 434, from
the prospectus included in the Registration Statement at the time it
became effective.
Each preliminary prospectus and the prospectus filed as part
of the effective Registration Statement 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.
The foregoing representations in this Section 1(a)(i) do not
apply to statements or omissions relating to the Underwriters made in
reliance on and in conformity with information furnished in writing to
the Fund by the Underwriters or their agents expressly for use in the
Registration Statement, the 462(b) Registration Statement, Prospectus
or preliminary prospectus (or any amendment or supplement to any of the
foregoing), or with respect to representations of the Fund, the
descriptions of each of Advisers (referred to in Section (1)(b)(iii) of
this Agreement) contained in the foregoing.
(ii) INDEPENDENT ACCOUNTANTS. As of the date of the report of
the independent accountants contained in the Registration Statement,
the accountants who certified the statement of assets and liabilities
included in the Registration Statement 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 in all material respects at the date indicated; said
statement has been prepared in conformity with generally accepted
accounting principles ("GAAP").
(iv) EXPENSE SUMMARY. The information set forth in the
Prospectus in the Fee Table has been prepared in accordance with the
requirements of Form N-2 and to the extent estimated or projected, such
estimates or projections are reasonably believed to be attainable and
reasonably based.
(v) 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 of the Fund,
whether or not arising in the ordinary
3
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 shares.
(vi) GOOD STANDING OF THE FUND. The Fund has been duly
organized and is validly existing as an unincorporated voluntary
association in good standing under the laws of the state of Delaware
and has power and authority to own and lease 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 to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect.
(vii) NO SUBSIDIARIES. The Fund has no subsidiaries.
(viii) INVESTMENT COMPANY STATUS. The Fund is duly registered
with the Commission under the 1940 Act as a closed-end non-diversified
management investment company, and no order of suspension or revocation
of such registration has been issued or proceedings therefor initiated
or, to the knowledge of the Fund or each of Advisers, threatened by the
Commission.
(ix) OFFICERS AND TRUSTEES. No person is serving or acting as
an officer, trustee or investment adviser of the Fund except in
accordance with the provisions of the 1940 Act and the Rules and
Regulations and the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and the rules and regulations of the Commission
promulgated under the Advisers Act (the "Advisers Act Rules and
Regulations"). Except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement to either of them), no
trustee of the Fund is (A) an "interested person" (as defined in the
▇▇▇▇ ▇▇▇) of the Fund or (B) an "affiliated person" (as defined in the
▇▇▇▇ ▇▇▇) of any Underwriter. For purposes of this Section 1(a)(ix),
the Fund and each of Advisers shall be entitled to rely on
representations from such officers and trustees.
(x) CAPITALIZATION. The authorized, issued and outstanding
shares of beneficial interest of the Fund is as set forth in the
Prospectus. All issued and outstanding common shares of beneficial
interest of the Fund have been duly authorized and validly issued and
are fully paid and non-assessable (except as described in the
Registration Statement) and have been offered and sold or exchanged by
the Fund in compliance with all applicable laws (including, without
limitation, federal and state securities laws); none of the outstanding
common shares of beneficial interest of the Fund was issued in
violation of the preemptive or other similar rights of any
securityholder of the Fund.
(xi) AUTHORIZATION AND DESCRIPTION OF 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 (except as
described in the Registration Statement). In all material respects, 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, to the extent such rights are set
forth; no holder of the Securities will be subject to personal
liability by reason of being such a holder (except as described in the
Registration Statement); and the issuance of the Securities is not
subject to the preemptive or other similar rights of any securityholder
of the Fund.
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(xii) ABSENCE OF DEFAULTS AND CONFLICTS. The Fund is not in
violation of its agreement and declaration of trust or by-laws, each as
amended from time to time, 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 Advisory Agreement dated
as of January __, 2004 between the Fund and the Investment Adviser (the
"Management Agreement"), the Sub-Advisory Agreement dated as of January
___, 2004 among the Fund, the Investment Adviser and the Investment
Manager (the "Sub-Advisory Agreement"), the Custodian Contract dated as
of January __, 2004 between the Fund and The Bank of New York (the
"Custodian Agreement") and the Registrar, Transfer Agency and Service
Agreement dated as of January __, 2004 between the Fund and The Bank of
New York (the "Transfer Agency Agreement") 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
action under the Delaware Statutory Trust Act (the "Delaware Act") 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 (except for such
violations that will not result in a Material Adverse Effect) of the
provisions of the agreement and declaration of trust or by-laws of the
Fund, each as amended from time to time, 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, other than State securities or "blue sky" laws applicable
in connection with the purchase and distribution of the Securities by
the Underwriters pursuant to this Agreement. As used herein, a
"Repayment Event" means any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Fund.
(xiii) ABSENCE OF PROCEEDINGS. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Fund, threatened, against or affecting the Fund,
which is required to be disclosed in the Registration Statement (other
than as disclosed therein), or which would (if determined in a manner
adverse to the Fund) reasonably be expected to result in a Material
Adverse Effect (including 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, would not (if determined in a manner
adverse to the Fund) reasonably be expected to result in a Material
Adverse Effect.
(xiv) ACCURACY OF EXHIBITS. There are no material 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.
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(xv) POSSESSION OF INTELLECTUAL PROPERTY. The Fund owns or
possesses, or can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service
marks, trade names or other intellectual property (collectively,
"Intellectual Property") necessary to carry on the business now
operated by the Fund, and the Fund has not received any notice or is
not otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property.
(xvi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Fund of its
obligations hereunder, in connection with the offering, issuance or
sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except as referred to in
the Prospectus or the Registration Statement and 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"),
the rules of the New York Stock Exchange (the "NYSE") or state
securities laws.
(xvii) 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, except where the absence of such
possession would not result in a Material Adverse Effect; 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.
(xviii) ADVERTISEMENTS. Any advertising, sales literature or
other promotional material (including "prospectus wrappers," "broker
kits," "road show slides" and "road show scripts") authorized in
writing by or prepared by the Fund or the Advisers and 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, in light of the circumstances
in which they were made, not misleading. All sales material complied
and will comply in all material respects with the applicable
requirements of the 1933 Act, the 1940 Act and the Rules and
Regulations and the rules and interpretations of the National
Association of Securities Dealers, Inc. ("NASD").
(xix) SUBCHAPTER M. The Fund intends to direct the investment
of the proceeds of the offering described in the Registration Statement
in such a manner as to comply with the requirements of Subchapter M of
the Internal Revenue Code of 1986, as amended ("Subchapter M of the
Code" and the "Code," respectively), and intends to qualify as a
regulated investment company under Subchapter M of the Code.
(xx) DISTRIBUTION OF OFFERING MATERIALS. The Fund has not
distributed and, prior to the later to occur of (A) the Closing Time
and (B) completion of the distribution of the Common Shares, will not
distribute any offering material in connection with the offering and
sale of the Common Shares other than the Registration Statement, a
preliminary prospectus, the Prospectus or the sales materials.
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(xxi) ACCOUNTING CONTROLS. The Fund maintains a system of
internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with
management's general or specific authorization and with the applicable
requirements of the 1940 Act, the Rules and Regulations and the Code;
(B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets and to maintain
compliance with the books and records requirements under the 1940 Act
and the Rules and Regulations; (C) access to assets is permitted only
in accordance with the management's general or specific authorization;
and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxii) ABSENCE OF UNDISCLOSED PAYMENTS. To the Fund's
knowledge, neither the Fund nor any employee or agent of the Fund has
made any payment of funds of the Fund or received or retained any
funds, which payment, receipt or retention of funds is of a character
required to be disclosed in the Prospectus.
(xxiii) MATERIAL AGREEMENTS. This Agreement, the Management
Agreement, the Sub-Advisory 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 in all material
respects with all applicable provisions of the 1940 Act. Assuming due
authorization, execution and delivery by the other parties thereto,
each such 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, whether statutory or decisional,
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing and except as rights
to indemnification or contribution thereunder may be limited by federal
or state laws.
(xxiv) REGISTRATION RIGHTS. There are no persons with
registration rights or other similar rights to have any securities of
the Fund registered pursuant to the Registration Statement or otherwise
registered by the Fund under the 1933 Act.
(xxv) NYSE LISTING. The Securities have been duly authorized
for listing, upon notice of issuance, on the NYSE and the Fund's
registration statement on Form 8-A under the 1934 Act has become
effective.
(b) REPRESENTATIONS AND WARRANTIES BY THE ADVISERS. Each of the
Advisers represents and warrants to each Underwriter, and in the case of
paragraph (iii) also represent to the Fund, 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 ADVISERS. Such Adviser has been duly
organized and is validly existing and in good standing as a limited
liability company under the laws of the state of Delaware, with full
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and each 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, except to the extent that failure to be so qualified and in
good standing would not have a material adverse effect on the Adviser's
ability to perform its obligations under the Management Agreement (in
the case of the Investment Adviser) or the Sub-Advisory Agreement (in
the case of the Investment Manager).
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(ii) INVESTMENT ADVISER STATUS. Such Adviser is duly
registered and in good standing with the Commission as an investment
adviser under the Advisers Act, and is not prohibited by the Advisers
Act or the 1940 Act, or the rules and regulations under such acts, from
acting under the Management Agreement and the Sub-Advisory Agreement
for the Fund as contemplated by the Prospectus.
(iii) DESCRIPTION OF THE ADVISERS. The description of such
Adviser 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 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. Such Adviser (whether alone or together
with its affiliates) 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 the Sub-Advisory Agreement to which it is a party.
(v) AUTHORIZATION OF AGREEMENTS; ABSENCE OF DEFAULTS AND
CONFLICTS. Each of this Agreement, the Management Agreement and the
Sub-Advisory Agreement to which such Adviser is a party has each been
duly authorized, executed and delivered by such Adviser, and, assuming
due authorization, execution and delivery by the other parties thereto,
such Agreements to which such Adviser is a party constitute valid and
binding obligations of the Adviser, enforceable in accordance with
their respective terms, except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws, whether statutory or decisional, relating to or affecting
creditors' rights generally and general equitable principles (whether
considered in a proceeding in equity or at law) and except as rights to
indemnification and contribution thereunder may be limited by federal
and state law; and neither the execution and delivery of any of this
Agreement, the Management Agreement or the Sub-Advisory Agreement to
which such Adviser is a party nor the performance by such Adviser 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 such Adviser is a party or
by which it is bound, the organizational documents of the Adviser, or
to the Adviser's knowledge, by any law, order, decree, rule or
regulation applicable to it of any jurisdiction, court, federal or
state regulatory body, administrative agency or other governmental
body, stock exchange or securities association having jurisdiction over
the Adviser or its properties or operations, except where such breach
or default would not have a material adverse effect on such Adviser's
ability to perform the services contemplated by this Agreement, the
Management Agreement or the Sub-Advisory Agreement; and no consent,
approval, authorization or order of any court or governmental authority
or agency is required for the consummation by the Adviser of the
transactions contemplated by this Agreement, the Management Agreement,
or the Sub-Advisory Agreement except as have been obtained or may be
required under the 1933 Act, the 1940 Act, the 1934 Act, NYSE 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 would reasonably be expected to have a material adverse
effect on the ability of such Adviser to perform its obligations under
any of this Agreement, the Management Agreement and the Sub-Advisory
Agreement to which it is a party.
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(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 such Adviser, threatened against or affecting the
Adviser or any parent or subsidiary of the Adviser or any partners,
directors, officers or employees of the foregoing, whether or not
arising in the ordinary course of business, which would 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 Adviser, to materially and adversely affect the
properties or assets of the Adviser or to materially impair or
adversely affect the ability of the Adviser to function as an
investment adviser or perform its obligations under the Management
Agreement or the Sub-Advisory Agreement to which it is a party, or
which is required to be disclosed in the Registration Statement and the
Prospectus (and has not been so disclosed).
(viii) ABSENCE OF VIOLATION OR DEFAULT. Such Adviser is not
in violation of its organizational documents or in default under any
agreement, indenture or instrument, where such violation or default
would reasonably be expected to have a material adverse effect on the
ability of such Adviser to perform its obligations under either of the
Management Agreement or the Sub-Advisory Agreement to which it is a
party.
(c) OFFICER'S CERTIFICATES. Any certificate signed by any officer of
the Fund or any Adviser delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Fund or the
Advisers, 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 overallotments which may be made in connection with the offering and
distribution of the Initial Securities upon written 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 earlier than the third day after the date on which the option
is being exercised nor 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 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
plus any additional number of Option Securities
9
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof.
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
▇▇▇▇▇▇▇▇ Chance US 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 Advisers, jointly and severally, covenant with
each Underwriter as follows:
(i) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION
REQUESTS. For a period of one year from the date hereof, 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, to the knowledge of the
Fund, threatening of any proceedings for any of such purposes. The Fund
will promptly effect the filings necessary pursuant to
10
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. For a period of one year from the
date hereof, 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, without charge, a
signed copy of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and a signed copy 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. No copy of a post-effective amendment shall be
required to be delivered after one year from the date hereof.
(iv) DELIVERY OF PROSPECTUSES. The Fund has delivered to each
Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the Fund
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Fund will furnish to each Underwriter, without charge,
during the period when the Prospectus is required to be delivered under
the 1933 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 the Prospectus (as amended or supplemented) 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 reasonable opinion of counsel for the Underwriters
or for the Fund, to amend the Registration Statement or amend or
supplement the Prospectus in order that the Prospectus will not include
any untrue statements of a material fact or omit to state a material
fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered
to a purchaser, or if it shall be necessary, in the reasonable opinion
of such counsel, at any such time to amend the Registration Statement
or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the Rules and Regulations, the Fund
will promptly prepare and file with the Commission, subject to Section
3(a)(ii), such amendment or supplement as may be necessary to correct
such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Fund will furnish to
the Underwriters such number of copies of such amendment or
11
supplement as the Underwriters may reasonably request; provided that,
if the supplement or amendment is required exclusively as a result of a
misstatement in or omission from the information provided to the Fund
in writing by the Underwriters expressly for use in the Prospectus, the
Fund may deliver such supplement or amendment to the Underwriters and
dealers at a reasonable charge not to exceed the actual cost thereof to
the Fund.
(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 entity 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 make generally available to its
securityholders as soon as practicable an earnings statement, if
applicable, 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 substantially in the
manner specified in the Prospectus under "Use of Proceeds."
(ix) LISTING. The Fund will use its reasonable best efforts
to cause the Securities to be duly authorized for listing by the NYSE,
prior to the date the Securities are issued.
(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, rights or
warrant 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 or, for avoidance of doubt,
purchased in the open market 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, 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.
12
(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 in violation of
federal or state securities laws, and (b) except for share repurchases
permitted in accordance with applicable laws and purchases of
Securities in the open market pursuant to the Fund's dividend
reinvestment plan, 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 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 reasonable costs of 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, if any, 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 advisers, (v) the qualification of the Securities, if required, 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 any requisite 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 any requisite 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 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
the Underwriters $.00667 per Common Share purchased by the Underwriters pursuant
to this Agreement as partial reimbursement of expenses incurred in connection
with the offering; provided, however, that such partial reimbursement payable by
the Fund shall not exceed 0.03335% of the aggregate price to the public (as set
forth in the Prospectus) of the Initial Securities and any Option Securities
that may be sold to the Underwriters pursuant to Section 2(b) of this Agreement
(as used herein, the "Aggregate Offering Price"). The Investment Adviser has
agreed to pay (1) all organizational expenses and (2) offering costs (other than
sales load) of the Fund that exceed $.04 per Common Share purchased by the
Underwriters pursuant to this Agreement (the "Offering Cost Limitation"). The
Fund shall pay to Claymore Securities, Inc., in connection with its distribution
assistance in connection with the sale of the Common Shares, an amount equal to
the lesser of (y) 0.10% of the Aggregate Offering Price and (z) the positive
amount by which the Offering Cost Limitation exceeds the actual offering costs
of the Fund or, if the actual offering costs of the Fund are equal to or greater
than the Offering Cost Limitation, zero.
13
(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 each of Advisers, 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 Advisers
contained in Section 1 hereof or in certificates of any officer of the Fund or
any Adviser delivered pursuant to the provisions hereof, to the performance by
the Fund and the Advisers 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 or will have become effective by 5:30 p.m., New York City time on the
date hereof, and at Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act, no notice
or order pursuant to Section 8(e) of the 1940 Act shall have been issued, and no
proceedings with respect to either shall have been initiated or, to the
knowledge of counsel to the Underwriters and counsel to the Fund, threatened by
the Commission, and any request on the part of the Commission for additional
information shall have been complied with or waived 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 a certificate must have been filed in accordance with Rule 497(j)) 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 ADVISERS. At Closing Time, the
Representatives shall have received the favorable opinions, dated as of Closing
Time, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Fund, of
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, general counsel of the Investment Adviser, and of ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ LLP, counsel for the Investment Manager, together with signed or
reproduced copies of such letter for each of the other Underwriters
substantially to the effect set forth in EXHIBIT A and EXHIBIT B hereto or in
such other forms and substance reasonably satisfactory to counsel to the
Underwriters.
(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) (i), (ii), (vi), (vii)
(solely as to preemptive or other similar rights arising by operation of law or
under the charter or by-laws of the Fund), (viii) through (x), inclusive, (xii),
(xiv) (solely as to the information in the Prospectus under "Description of
Shares") and the last paragraph of EXHIBIT A hereto]. In giving such opinion
such counsel may rely, as to all matters governed by the laws of jurisdictions
other than the law of the State of New York and the federal law of the United
States, upon the opinions of counsel satisfactory to the 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 each of
14
the Advisers, 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, as applicable, 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 Advisers, respectively, has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied pursuant to
this Agreement at or prior to Closing Time, and (iv) with respect to the Fund
only, no stop order suspending the effectiveness of the Registration Statement,
or order of suspension or revocation of registration pursuant to Section 8(e) of
the 1940 Act, has been issued and no proceedings for any such purpose have been
instituted or are pending or, to the knowledge of such officer, 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 Ernst & Young 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 of the type
customarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(f) BRING-DOWN COMFORT LETTER. At Closing Time, the Representatives
shall have received from Ernst & Young LLP a letter, dated as of Closing Time,
to the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.
(g) 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 confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(i) 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 each of Advisers 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 ADVISERS. The
favorable opinions of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel
for the Fund, of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, general counsel of the Investment
Adviser and of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, counsel for the Investment
Manager, in form and substance reasonably satisfactory to 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(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 Ernst & Young
LLP, in form and substance satisfactory to the Representatives and
dated such Date of Delivery, substantially in the
15
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.
(j) 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 reasonably 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 Advisers 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 reasonably satisfactory in form and
substance to the Representatives and counsel for the Underwriters.
(k) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, 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 Advisers, jointly
and severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(e) below) any such settlement is effected
with the written consent of the Fund; and
(iii) against any and all expense whatsoever, as incurred
(including the reasonable 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;
16
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
Advisers 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,
further, that the indemnity agreement contained in this Section 6(a) shall not
inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) from whom the person asserting any such loss,
liability, claim, damage and expense purchased the Securities which are the
subject thereof if the Prospectus (as amended or supplemented) corrected any
such alleged untrue statement or omission and if such Prospectus (as amended or
supplemented) was delivered to such Underwriter in a timely manner and if such
Underwriter failed to send or give a copy of the Prospectus (as amended or
supplemented) to such person at or prior to the written confirmation of the sale
of such Securities to such person.
(b) INDEMNIFICATION OF THE FUND, ADVISERS, TRUSTEES, DIRECTORS AND
OFFICERS. Each Underwriter severally agrees to indemnify and hold harmless the
Fund and the Advisers, their respective trustees, directors and shareholders,
each of the Fund's officers who signed the Registration Statement, and each
person, if any, who controls the Fund or the Advisers 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 Advisers by such Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in
the Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, 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 Advisers 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
(to the same extent as with respect to any preliminary prospectus or the
Prospectus).
(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,
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 Advisers. 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
17
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 reasonable 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) (through, if applicable, the provisions of
Section 6(b)) effected without its written consent if (i) such settlement is
entered into more than 60 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, in lieu of indemnifying such indemnified party, 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 or the Advisers 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 Advisers 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 Advisers 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 Advisers on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Fund or the Advisers 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 Advisers 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
18
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. No person shall be
entitled to indemnification or contribution under this Agreement against any
loss, claim, liability, expense or damage arising by reason of such person's
willful misfeasance or gross negligence in the performance of its duties
hereunder.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each trustee and shareholder of the Fund and each director of the Advisers,
respectively, each officer of the Fund who signed the Registration Statement,
and each person, if any, who controls the Fund or each of Advisers, 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 Advisers, 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 covenants contained in this
Agreement or in certificates of officers of the Fund or either of the Advisers
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 Advisers, 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, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Fund or any Adviser,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Representatives, impracticable or inadvisable to market
the Securities or to enforce contracts for the sale of the Securities, or (iii)
if trading in the 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.
19
(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 of Advisers (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.
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, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, attention of Equity Capital Markets; and notices to the Fund or each
of Advisers shall be directed, as appropriate, to the office of Claymore
Advisors, LLC at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or Dreman Value
Management LLC at ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, respectively..
SECTION 13. Parties.
This Agreement shall each inure to the benefit of and be binding upon
the Underwriters, the Fund, each of Advisers and its 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 Advisers and their respective successors and the
controlling persons and officers, trustees, shareholders 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 Advisers and their respective partners and
successors, and said controlling persons and officers, trustees, shareholders
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 each of Advisers in accordance with its terms.
Very truly yours,
DREMAN/CLAYMORE DIVIDEND &
INCOME FUND
By:
-----------------------------------
Name:
Title:
CLAYMORE ADVISORS, LLC
By:
-----------------------------------
Name:
Title:
DREMAN VALUE MANAGEMENT LLC
By:
-----------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
CLAYMORE SECURITIES, INC.
[other co-managers]
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
Claymore Securities, Inc.
Total
Sch A-1
SCHEDULE B
Dreman/Claymore Dividend & Income Fund
Common Shares of Beneficial Interest
(Par Value $.01 per share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $20.00.
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 overallotment 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