Fund as contemplated by the Investment Management Agreement, the
Registration Statement and the Prospectus.
(c) The Investment Manager has full power and authority to enter into
each of this Underwriting Agreement, the Shareholder Servicing
Agreement, the Additional Compensation Agreement, the Investment
Management Agreement and the Investment Advisory Agreement
(collectively, this Underwriting Agreement, the Shareholder
Servicing Agreement, the Additional Compensation Agreement, the
Investment Management Agreement and the Investment Advisory
Agreement being referred to as the "Investment Manager Agreements")
and to carry out all the terms and provisions hereof and thereof to
be carried out by it; and each Investment Manager Agreement has been
duly and validly authorized, executed and delivered by the
Investment Manager; none of the Investment Manager Agreements
violate in any material respect any of the applicable provisions of
the Investment Company Act or the Advisers Act; and assuming due
authorization, execution and delivery by the other parties thereto,
each Investment Manager Agreement constitutes a legal, valid and
binding obligation of the Investment Manager, enforceable in
accordance with its terms, (i) subject, as to enforcement, to
applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general equitable principles
(regardless of whether enforcement is sought in a proceeding in
equity or at law) and (ii) except as rights to indemnity thereunder
may be limited by federal or state securities laws.
(d) Neither (i) the execution and delivery by the Investment Manager of
any Investment Manager Agreement nor (ii) the consummation by the
Investment Manager of the transactions contemplated by, or the
performance of its obligations under any Investment Manager
Agreement conflicts or will conflict with, or results or will result
in a breach of, the charter or by-laws of the Investment Manager or
any agreement or instrument to which the Investment Manager is a
party or by which the Investment Manager is bound, or any law, rule
or regulation, or order of any court, governmental instrumentality,
securities exchange or association or arbitrator, whether foreign or
domestic, applicable to the Investment Manager except in each case
for such conflicts or breaches which do not, either alone or in the
aggregate, have a material adverse effect on the Investment
Manager's ability to perform its obligations under the Investment
Manager Agreements.
(e) No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association,
whether foreign or domestic, is required to be obtained by the
Investment Manager on or prior to the Closing Date for the
consummation of the transactions contemplated in, or the performance
by the Investment Manager of its obligations under, any Investment
Manager Agreement, as the case may be, except such as (i) have been
obtained under the federal securities laws,
9
and (ii) may be required by the American Stock Exchange or under
state securities or "blue sky" laws, in connection with the purchase
and distribution of the Shares by the Underwriters pursuant to this
Underwriting Agreement.
(f) The description of the Investment Manager and its business, and the
statements attributed to the Investment Manager, in the Registration
Statement and the Prospectus comply with the requirements of the Act
and the Investment Company Act and do 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 not misleading (and, solely with respect to the
Prospectus, in the light of the circumstances under which they were
made).
(g) There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending or, to
the knowledge of the Investment Manager, threatened against or
affecting the Investment Manager of a nature required to be
disclosed in the Registration Statement or Prospectus.
(h) Except for stabilization activities conducted by the Managing
Representative and except for tender offers, Share repurchases and
the issuance or purchase of Shares pursuant to the Dividend
Reinvestment Plan effected following the date on which the
distribution of the Shares is completed in accordance with the
policies of the Fund as set forth in the Prospectus, the Investment
Manager has not taken and will not take, directly or indirectly, any
action designed, or which might reasonably be expected to cause or
result in, or which will constitute, stabilization or manipulation
of the price of the Common Shares in violation of applicable federal
securities laws.
(i) The Fund and the Investment Manager will not make any promotional
materials intended for use only by qualified broker-dealers and
registered representatives thereof available by means of an Internet
web site or similar electronic means.
(j) The Investment Adviser has been duly formed, is validly existing as
a limited liability company under the laws of Delaware with full
power and authority to perform its obligations under the Investment
Advisory Agreement, and the Investment Adviser is duly licensed and
qualified to do business and in good standing in each jurisdiction
in which it is required to be so qualified in order to perform its
obligations under the Investment Advisory Agreement, except to the
extent that failure to be so qualified or be in good standing would
not have a material adverse affect on the Investment Adviser's
ability to perform its obligations under the Investment Advisory
Agreement; and the Investment Adviser owns,
10
possesses or has obtained and currently maintains all governmental
licenses, permits, consents, orders, approvals and other
authorizations, whether foreign or domestic, necessary in order to
perform its obligations under the Investment Advisory Agreement.
(k) The Investment Adviser is (i) duly registered as an investment
adviser under the Advisers Act and (ii) not prohibited by the
Advisers Act or the Investment Company Act from acting as the
investment adviser for the Fund as contemplated by the Investment
Advisory Agreement, the Registration Statement and the Prospectus.
(l) The Investment Adviser has full power and authority to enter into
the Investment Advisory Agreement and to carry out all the terms and
provisions thereof to be carried out by it; and the Investment
Advisory Agreement has been duly and validly authorized, executed
and delivered by the Investment Adviser; the Investment Advisory
Agreement does not violate in any material respect any of the
applicable provisions of the Investment Company Act or the Advisers
Act; and assuming due authorization, execution and delivery by the
other parties thereto, the Investment Advisory Agreement constitutes
a legal, valid and binding obligation of the Investment Adviser,
enforceable in accordance with its terms, (i) subject, as to
enforcement, to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general equitable
principles (regardless of whether enforcement is sought in a
proceeding in equity or at law) and (ii) except as rights to
indemnity thereunder may be limited by federal or state securities
laws.
(m) Neither (i) the execution and delivery by the Investment Adviser of
the Investment Advisory Agreement nor (ii) the consummation by the
Investment Adviser of the transactions contemplated by, or the
performance of its obligations under the Investment Advisory
Agreement conflicts or will conflict with, or results or will result
in a breach of, the organizational or operational documents of the
Investment Adviser or any agreement or instrument to which the
Investment Adviser is a party or by which the Investment Adviser is
bound, or any law, rule or regulation, or order of any court,
governmental instrumentality, securities exchange or association or
arbitrator, whether foreign or domestic, applicable to the
Investment Adviser except in each case for such conflicts or
breaches which do not, either alone or in the aggregate, have a
material adverse effect on the Investment Adviser's ability to
perform its obligations under the Investment Advisory Agreement.
(n) No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association,
whether foreign or domestic, is required to be obtained by the
Investment Adviser on or prior to the Closing Date for the
consummation of the transactions contemplated in, or the performance
by the Investment Adviser of its obligations under,
11
the Investment Advisory Agreement except such as (i) have been
obtained under the federal securities laws, and (ii) may be required
by the American Stock Exchange or under state securities or "blue
sky" laws, in connection with the purchase and distribution of the
Shares by the Underwriters pursuant to this Underwriting Agreement.
(o) The description of the Investment Adviser and its business, and the
statements attributed to the Investment Adviser, in the Registration
Statement and the Prospectus comply with the requirements of the Act
and the Investment Company Act and do 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 not misleading (and, solely with respect to the
Prospectus, in the light of the circumstances under which they were
made).
(p) There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending or, to
the knowledge of the Investment Manager after due and appropriate
inquiry, threatened against or affecting the Investment Adviser of a
nature required to be disclosed in the Registration Statement or
Prospectus.
(q) Except for stabilization activities conducted by the Managing
Representative and except for tender offers, Share repurchases and
the issuance or purchase of Shares pursuant to the Dividend
Reinvestment Plan effected following the date on which the
distribution of the Shares is completed in accordance with the
policies of the Fund as set forth in the Prospectus, the Investment
Adviser has not taken and will not take, directly or indirectly, any
action designed, or which might reasonably be expected to cause or
result in, or which will constitute, stabilization or manipulation
of the price of the Common Shares in violation of applicable federal
securities laws.
(r) The Investment Adviser will not make any promotional materials
intended for use only by qualified broker-dealers and registered
representatives thereof available by means of an Internet web site
or similar electronic means.
5. AGREEMENTS OF THE PARTIES.
(a) If the registration statement relating to the Shares has not yet
become effective, the Fund will promptly file the Final Amendment,
if not previously filed, with the Commission, and will use its best
efforts to cause such registration statement to become effective
and, as soon as the Fund is advised, will advise the Managing
Representative when the Registration Statement or any amendment
thereto has become effective. If the Registration Statement has
become effective and the Prospectus
12
contained therein omits certain information at the time of
effectiveness pursuant to Rule 430A under the Act, the Fund will
file a 430A Prospectus pursuant to Rule 497(h) under the Act as
promptly as practicable, but no later than the second business day
following the earlier of the date of the determination of the
offering price of the Shares or the date the Prospectus is first
used after the Effective Date. If the Registration Statement has
become effective and the Prospectus contained therein does not so
omit such information, the Fund will file a Prospectus pursuant to
Rule 497(b) or (j) under the Act as promptly as practicable, but no
later than the fifth business day following the date of the later of
the Effective Date or the commencement of the public offering of the
Shares after the Effective Date. In either case, the Fund will
provide you satisfactory evidence of the filing. The Fund will not
file with the Commission any Prospectus or any other amendment
(except any post-effective amendment which is filed with the
Commission after the later of (x) one year from the date of this
Underwriting Agreement or (y) the date on which distribution of the
Shares is completed) or supplement to the Registration Statement or
the Prospectus unless a copy has first been submitted to the
Managing Representative a reasonable time before its filing and the
Managing Representative has not objected to it in writing within a
reasonable time after receiving the copy.
(b) For the period of three years from the date hereof, the Fund will
advise the Managing Representative promptly (1) of the issuance by
the Commission of any order in respect of the Fund or the Investment
Manager or which relates to the offering of the Shares, (2) of the
initiation or threatening of any proceedings for, or receipt by the
Fund of any notice with respect to, the suspension of the
qualification of the Shares for sale in any jurisdiction or the
issuance of any order by the Commission suspending the effectiveness
of the Registration Statement, (3) of receipt by the Fund, or any
representative or attorney of the Fund, of any other communication
from the Commission relating in any material way to the Fund, the
Registration Statement, the Notification, any Preliminary
Prospectus, the Prospectus or to the transactions contemplated by
this Underwriting Agreement and (4) the issuance by any court,
regulatory body, administrative agency or other governmental agency
or body, whether foreign or domestic, of any order, ruling or
decree, or the threat to initiate any proceedings with respect
thereto, regarding the offering of the Shares by the Fund. The Fund
will make every reasonable effort to prevent the issuance of any
order suspending the effectiveness of the Registration Statement
and, if any such order is issued, to obtain its lifting as soon as
possible.
(c) If not delivered prior to the date of this Underwriting Agreement,
the Fund will deliver to the Managing Representative, without
charge, a signed copy of the registration statement and the
Notification and of any amendments (except any post-effective
amendment which is filed with the
13
Commission after the later of (x) one year from the date of this
Underwriting Agreement or (y) the date on which the distribution of
the Shares is completed) to either the Registration Statement or the
Notification (including all exhibits filed with any such document)
and as many conformed copies of the registration statement and any
amendments thereto (except any post-effective amendment which is
filed with the Commission after the later of (x) one year from the
date of this Underwriting Agreement or (y) the date on which the
distribution of the Shares is completed) (excluding exhibits) as the
Managing Representative may reasonably request.
(d) During such period as a prospectus is required by law to be
delivered by an underwriter or a dealer, the Fund will deliver,
without charge, to you, the Underwriters and any dealers, at such
office or offices as you may designate, as many copies of the
Prospectus as you may reasonably request, and, if any event occurs
during such period as a result of which it is necessary to amend or
supplement the Prospectus, in order to make the statements therein,
in light of the circumstances existing when such Prospectus is
delivered to a purchaser of Shares, not misleading in any material
respect, or if during such period it is necessary to amend or
supplement the Prospectus to comply with the Act or the Investment
Company Act, the Fund promptly will prepare, submit to the Managing
Representative, file with the Commission and deliver, without
charge, to the Underwriters and to dealers (whose names and
addresses the Managing Representative will furnish to the Fund) to
whom Shares may have been sold by the Underwriters, and to other
dealers on request, amendments or supplements to the Prospectus so
that the statements in such Prospectus, as so amended or
supplemented, will not, in light of the circumstances existing when
such Prospectus is delivered to a purchaser, be misleading in any
material respect and will comply with the Act and the Investment
Company Act. Delivery by the Underwriters of any such amendments or
supplements to the Prospectus will not constitute a waiver of any of
the conditions in Section 6 hereof.
(e) The Fund will make generally available to holders of the Fund's
securities, as soon as practicable but in no event later than the
last day of the 18th full calendar month following the calendar
quarter in which the Effective Date falls, an earnings statement, if
applicable, satisfying the provisions of Section 11(a) of the Act
and, at the option of the Fund, Rule 158 under the Act.
(f) The Fund will take such actions as the Managing Representative
reasonably requests in order to qualify the Shares for offer and
sale under the securities or "blue sky" laws of such jurisdictions
as the Managing Representative reasonably designates; provided that
the Fund shall not be required in connection therewith or as a
condition thereof to qualify as a
14
foreign corporation or to execute a general consent to service of
process in any jurisdiction.
(g) If the transactions contemplated by this Underwriting Agreement are
consummated, the Fund shall pay all costs and expenses incident to
the performance of the obligations of the Fund under this
Underwriting Agreement (to the extent such expenses do not, in the
aggregate, exceed $0.03 per Share), including but not limited to
costs and expenses of or relating to (1) the preparation, printing
and filing of the registration statement and exhibits to it, each
Preliminary Prospectus, the Prospectus and all amendments and
supplements thereto, (2) the issuance of the Shares and the
preparation and delivery of certificates for the Shares, (3) the
registration or qualification of the Shares for offer and sale under
the securities or "blue sky" laws of the jurisdictions referred to
in the foregoing paragraph, including the fees and disbursements of
counsel for the Underwriters in that connection, and the preparation
and printing of any preliminary and supplemental "blue sky"
memoranda, (4) the furnishing (including costs of design,
production, shipping and mailing) to the Underwriters and dealers of
copies of each Preliminary Prospectus relating to the Shares, the
definitive client brochure that is part of the sales materials, the
Prospectus, and all amendments or supplements to the Prospectus, and
of the other documents required by this Section to be so furnished,
(5) the filing requirements of the NASD, in connection with its
review of the financing, including filing fees and the fees,
disbursements and other charges of counsel for the Underwriters in
that connection, (6) all transfer taxes, if any, with respect to the
sale and delivery of the Shares to the Underwriters, (7) the listing
of the Shares on the American Stock Exchange, and (8) the transfer
agent for the Shares. To the extent the foregoing costs and expenses
incident to the performance of the obligations of the Fund under
this Underwriting Agreement exceed, in the aggregate, $0.03 per
Share, the Investment Manager or an affiliate will pay all such
excess costs and expenses.
(h) If the transactions contemplated by this Underwriting Agreement are
not consummated, except as otherwise provided herein, no party will
be under any liability to any other party, except that (i) if this
Underwriting Agreement is terminated by (A) the Fund or the
Investment Manager pursuant to any of the provisions hereof
(otherwise than pursuant to Section 8 hereof) or (B) by you or the
Underwriters because of any inability, failure or refusal on the
part of the Fund or the Investment Manager to comply with any
material terms of this Agreement or because any of the conditions in
Section 6 are not satisfied, the Investment Manager or an affiliate
and the Fund, jointly and severally, will reimburse the Underwriters
for all out-of-pocket expenses (including the reasonable fees,
disbursements and other charges of their counsel) reasonably
incurred by them in connection with the proposed purchase and sale
of the Shares and (ii) no Underwriter who has failed or refused to
purchase the
15
▇▇▇▇▇▇ agreed to be purchased by it under this Underwriting
Agreement, in breach of its obligations pursuant to this
Underwriting Agreement, will be relieved of liability to the Fund
and the Investment Manager and the other Underwriters for damages
occasioned by its default.
(i) Without the prior written consent of the Managing Representative,
the Fund will not offer, sell or register with the Commission, or
announce an offering of, any equity securities of the Fund, within
180 days after the Effective Date, except for the Shares as
described in the Prospectus and any issuances of Common Shares
pursuant to the Dividend Reinvestment Plan and except in connection
with any offering of preferred shares of beneficial interest as
contemplated by the Prospectus.
(j) The Fund will use its best efforts to list the Shares on the
American Stock Exchange and comply with the rules and regulations of
such exchange.
(k) The Fund will direct the investment of the net proceeds of the
offering of the Shares in such a manner as to comply with the
investment objective and policies of the Fund as described in the
Prospectus.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase the Shares are subject to the accuracy on the
date of this Underwriting Agreement, and on each of the Closing Dates, of
the representations of the Fund and the Investment Manager in this
Underwriting Agreement, to the accuracy and completeness of all statements
made by the Fund, the Investment Manager or any of their respective
officers in any certificate delivered to the Managing Representative or
its counsel pursuant to this Underwriting Agreement, to performance by the
Fund and the Investment Manager of their respective obligations under this
Underwriting Agreement and to each of the following additional conditions:
(a) The registration statement must have become effective by 5:30 p.m.,
New York City time, on the date of this Underwriting Agreement or
such later date and time as the Managing Representative consents to
in writing. The Prospectus must have been filed in accordance with
Rule 497(b), (h) or (j), as the case may be, under the Act.
(b) No order suspending the effectiveness of the Registration Statement
may be in effect and no proceedings for such purpose may be pending
before or, to the knowledge of counsel to the Underwriters,
threatened by the Commission, and any requests for additional
information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) must be
complied with or waived to the reasonable satisfaction of the
Managing Representative.
(c) Since the dates as of which information is given in the Registration
Statement and the Prospectus, (i) there must not have been any
material
16
change in the number of outstanding Common Shares or liabilities of
the Fund except as set forth in or contemplated by the Prospectus
(provided that a change in the Fund's net asset value, liabilities
or portfolio securities in the exercise of its normal investment
operations shall not be deemed to be a material adverse change);
(ii) there must not have been any material adverse change in the
general affairs, prospects, management, business, financial
condition or results of operations of the Fund or the Investment
Manager, whether or not arising from transactions in the ordinary
course of business as set forth in or contemplated by the Prospectus
(provided that a change in the Fund's net asset value, liabilities
or portfolio securities in the exercise of its normal investment
operations shall not be deemed to be a material adverse change);
(iii) the Fund must not have sustained any material interference
with its business from any court or from legislative or other
governmental action, order or decree, whether foreign or domestic,
or from any other occurrence not described in the Registration
Statement and Prospectus; and (iv) there must not have occurred any
event that makes untrue or incorrect in any material respect any
statement or information contained in the Registration Statement or
Prospectus or that is not reflected in the Registration Statement or
Prospectus but should be reflected therein in order to make the
statements or information therein (in the case of the Prospectus, in
light of the circumstances in which they were made) not misleading
in any material respect; if, in the judgment of the Managing
Representative, any such development referred to in clause (i),
(ii), (iii) or (iv) of this paragraph (c) makes it impracticable or
inadvisable to consummate the sale and delivery of the Shares
pursuant to this Underwriting Agreement by the Underwriters, at the
initial public offering price of the Shares.
(d) The Managing Representative must have received on each Closing Date
a certificate, dated such date, of the President or a Vice-President
and the chief financial or accounting officer of each of the Fund
and the Investment Manager certifying that (i) the signers have
carefully examined the Registration Statement, the Prospectus, and
this Underwriting Agreement, (ii) the representations of the Fund
(with respect to the certificates from such Fund officers) and the
representations of the Investment Manager (with respect to the
certificates from such officers of the Investment Manager) in this
Underwriting Agreement are accurate on and as of the date of the
certificate, (iii) there has not been any material adverse change in
the general affairs, prospects, management, business, financial
condition or results of operations of the Fund (with respect to the
certificates from such Fund officers) or the Investment Manager
(with respect to the certificates from such officers of the
Investment Manager), which change would materially and adversely
affect the ability of the Fund or the Investment Manager, as the
case may be, to fulfill its obligations under this Underwriting
Agreement or the Investment Management Agreement, whether or not
arising from transactions in the ordinary course of business, (iv)
with respect to the Fund only, to the
17
knowledge of such officers after reasonable investigation, no order
suspending the effectiveness of the Registration Statement or
prohibiting the sale of any of the Shares has been issued and no
proceedings for any such purpose are pending before or threatened by
the Commission or any other regulatory body, whether foreign or
domestic, (v) to the knowledge of the officers of the Investment
Manager, after reasonable investigation, no order having a material
adverse effect on the ability of the Investment Manager to fulfill
its obligations under this Underwriting Agreement or the Investment
Management Agreement, as the case may be, has been issued and no
proceedings for any such purpose are pending before or threatened by
the Commission or any other regulatory body, whether foreign or
domestic, and (vi) each of the Fund (with respect to the
certificates from such Fund officers) and the Investment Manager
(with respect to the certificates from such officers of the
Investment Manager) has performed all of its respective agreements
that this Underwriting Agreement requires it to perform by such
Closing Date (to the extent not waived in writing by the Managing
Representative).
(e) You must receive on each Closing Date the opinions dated such
Closing Date substantially in the form of Schedules B, C and D to
this Underwriting Agreement from the counsel identified in each such
Schedules.
(f) You must receive on each Closing Date from Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP and its affiliated entities an opinion dated such
Closing Date with respect to the Fund, the Shares, the Registration
Statement and the Prospectus, this Underwriting Agreement and the
form and sufficiency of all proceedings taken in connection with the
sale and delivery of the Shares. Such opinion and proceedings shall
fulfill the requirements of this Section 6(f) only if such opinion
and proceedings are satisfactory in all respects to the Managing
Representative. The Fund and the Investment Manager must have
furnished to such counsel such documents as counsel may reasonably
request for the purpose of enabling them to render such opinion.
(g) The Managing Representative must receive on the date this
Underwriting Agreement is signed and delivered by you a signed
letter, dated such date, substantially in the form of Schedule E to
this Underwriting Agreement from the firm of accountants designated
in such Schedule. The Managing Representative also must receive on
each Closing Date a signed letter from such accountants, dated as of
such Closing Date, confirming on the basis of a review in accordance
with the procedures set forth in their earlier letter that nothing
has come to their attention during the period from a date not more
than five business days before the date of this Underwriting
Agreement, specified in the letter, to a date not more than five
business days before such Closing Date, that would require any
change in their letter referred to in the foregoing sentence.
18
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Underwriting Agreement will comply only if they are in
form and scope reasonably satisfactory to counsel for the Underwriters,
provided that any such documents, forms of which are annexed hereto, shall
be deemed satisfactory to such counsel if substantially in such form.
7. TERMINATION. This Underwriting Agreement may be terminated by the Managing
Representative by notifying the Fund at any time:
(a) before the later of the effectiveness of the Registration Statement
and the time when any of the Shares are first generally offered
pursuant to this Underwriting Agreement by the Managing
Representative to dealers by letter or telegram;
(b) at or before any Closing Date if, in the sole judgment of the
Managing Representative, payment for and delivery of any Shares is
rendered impracticable or inadvisable because (i) trading in the
equity securities of the Fund is suspended by the Commission or by
the principal exchange that lists the Shares, (ii) trading in
securities generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq Stock Market shall have been suspended
or limited or minimum or maximum prices shall have been generally
established on such exchange or over-the-counter market, (iii)
additional material governmental restrictions, not in force on the
date of this Underwriting Agreement, have been imposed upon trading
in securities or trading has been suspended on any U.S. securities
exchange, (iv) a general banking moratorium has been established by
U.S. federal or New York authorities or (v) any material adverse
change in the financial or securities markets in the United States
or in political, financial or economic conditions in the United
States or any outbreak or material escalation of hostilities or
declaration by the United States of a national emergency or war or
other calamity or crisis shall have occurred the effect of any of
which is such as to make it, in the sole judgment of the Managing
Representative, impracticable or inadvisable to market the Shares on
the terms and in the manner contemplated by the Prospectus; or
(c) at or before any Closing Date, if any of the conditions specified in
Section 6 have not been fulfilled when and as required by this
Underwriting Agreement.
8. SUBSTITUTION OF UNDERWRITERS. If one or more of the Underwriters fails
(other than for a reason sufficient to justify the termination of this
Underwriting Agreement) to purchase on any Closing Date the Shares agreed
to be purchased on such Closing Date by such Underwriter or Underwriters,
the Managing Representative may find one or more substitute underwriters
to purchase such Shares or make such other arrangements as the Managing
Representative deems advisable, or one or more of the remaining
Underwriters may agree to purchase
19
such Shares in such proportions as may be approved by the Managing
Representative, in each case upon the terms set forth in this Underwriting
Agreement. If no such arrangements have been made within 36 hours after
such Closing Date, and
(a) the number of Shares to be purchased by the defaulting Underwriters
on such Closing Date does not exceed 10% of the Shares that the
Underwriters are obligated to purchase on such Closing Date, each of
the nondefaulting Underwriters will be obligated to purchase such
Shares on the terms set forth in this Underwriting Agreement in
proportion to their respective obligations under this Underwriting
Agreement, or
(b) the number of Shares to be purchased by the defaulting Underwriters
on such Closing Date exceeds 10% of the Shares to be purchased by
all the Underwriters on such Closing Date, the Fund will be entitled
to an additional period of 24 hours within which to find one or more
substitute underwriters reasonably satisfactory to the Managing
Representative to purchase such Shares on the terms set forth in
this Underwriting Agreement.
In any such case, either the Managing Representative or the Fund
will have the right to postpone the applicable Closing Date for not more
than five business days in order that necessary changes and arrangements
(including any necessary amendments or supplements to the Registration
Statement or the Prospectus) may be effected by the Managing
Representative and the Fund. If the number of Shares to be purchased on
such Closing Date by such defaulting Underwriter or Underwriters exceeds
10% of the Shares that the Underwriters are obligated to purchase on such
Closing Date, and none of the nondefaulting Underwriters or the Fund makes
arrangements pursuant to this Section within the period stated for the
purchase of the Shares that the defaulting Underwriters agreed to
purchase, this Underwriting Agreement will terminate without liability on
the part of any nondefaulting Underwriter, the Fund or the Investment
Manager, except as provided in Sections 5(h) and 9 hereof. This Section
will not affect the liability of any defaulting Underwriter to the Fund or
the nondefaulting Underwriters arising out of such default. A substitute
underwriter will become a Underwriter for all purposes of this
Underwriting Agreement.
9. INDEMNITY AND CONTRIBUTION.
(a) Each of the Fund, the Investment Manager and the Investment Adviser,
jointly and severally, agrees to indemnify, defend and hold harmless
each Underwriter, its partners, directors and officers, and any
person who controls any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, and the successors and
assigns of all of the foregoing persons from and against any loss,
damage, expense, liability or claim (including the reasonable cost
of investigation) which, jointly or severally, any such Underwriter
or any such person may incur
20
under the Act, the Exchange Act, the Investment Company Act, the
Advisers Act, the common law or otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Fund) or in a Prospectus (the term "Prospectus" for the purpose of
this Section 9 being deemed to include any Preliminary Prospectus,
the sales materials prepared or authorized by the Fund, the
Prospectus and the Prospectus as amended or supplemented by the
Fund), or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated in either
such Registration Statement or Prospectus or necessary to make the
statements made therein not misleading, except insofar as any such
loss, damage, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a material
fact contained in and in conformity with information furnished in
writing by or on behalf of any Underwriter through you to the Fund
or the Investment Manager expressly for use with reference to such
Underwriter in such Registration Statement or such Prospectus or
arises out of or is based upon any omission or alleged omission to
state a material fact in connection with such information required
to be stated in such Registration Statement or such Prospectus or
necessary to make such information not misleading, provided,
however, that the indemnity agreement contained in this subsection
(a) with respect to any Preliminary Prospectus or amended
Preliminary Prospectus 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, damage,
expense, liability or claim purchased the Shares which is the
subject thereof if the Prospectus corrected any such alleged untrue
statement or omission and if such Underwriter failed to send or give
a copy of the Prospectus to such person at or prior to the written
confirmation of the sale of such Shares to such person, unless the
failure is the result of noncompliance by the Fund with Section 5(d)
hereof.
If any action, suit or proceeding (together, a "Proceeding")
is brought against an Underwriter or any such person in respect of
which indemnity may be sought against the Fund, the Investment
Manager or the Investment Adviser pursuant to the foregoing
paragraph, such Underwriter or such person shall promptly notify the
Fund, the Investment Manager or the Investment Adviser, as the case
may be, in writing of the institution of such Proceeding and the
Fund, the Investment Manager or the Investment Adviser shall assume
the defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all
fees and expenses; provided, however, that the omission to so notify
the Fund, the Investment Manager or the Investment Adviser shall not
relieve the Fund, the Investment Manager or the Investment Adviser
from any liability which the Fund, the Investment
21
Manager or the Investment Adviser may have to any Underwriter or any
such person or otherwise and, unless and only to the extent that,
such omission results in the forfeiture of substantive rights or
defenses by the indemnifying party. Such Underwriter or such person
shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or of such person unless the employment
of such counsel shall have been authorized in writing by the Fund,
the Investment Manager or the Investment Adviser, as the case may
be, in connection with the defense of such Proceeding or the Fund,
the Investment Manager or the Investment Adviser shall not have,
within a reasonable period of time in light of the circumstances,
employed counsel to have charge of the defense of such Proceeding or
such indemnified party or parties shall have reasonably concluded
that there may be defenses available to it or them which are
different from, additional to or in conflict with those available to
the Fund, the Investment Manager or the Investment Adviser (in which
case the Fund, the Investment Manager or the Investment Adviser, as
the case may be, shall not have the right to direct the defense of
such Proceeding on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the
Fund, the Investment Manager or the Investment Adviser, as the case
may be, and paid as incurred (it being understood, however, that the
Fund, the Investment Manager or the Investment Adviser shall not be
liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). None of the
Fund, the Investment Manager or the Investment Adviser shall be
liable for any settlement of any Proceeding effected without its
written consent but if settled with the written consent of the Fund,
the Investment Manager or the Investment Adviser, as the case may
be, the Fund, the Investment Manager or the Investment Adviser, as
the case may be, agrees to indemnify and hold harmless any
Underwriter and any such person from and against any loss or
liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that
it shall be liable for any settlement of any Proceeding effected
without its written consent if (i) such settlement is entered into
more than 60 business days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not
have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at least
30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened Proceeding
in respect of which
22
any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such Proceeding and does not include an admission of
fault, culpability or a failure to act, by or on behalf of such
indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Fund, the Investment Manager and the Investment
Adviser, any of their partners, directors and officers, and any
person who controls the Fund, the Investment Manager or the
Investment Adviser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of
all of the foregoing persons from and against any loss, damage,
expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Fund, the Investment
Manager or the Investment Adviser or any such person may incur under
the Act, the Exchange Act, the Investment Company Act, the Advisers
Act, the common law or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information furnished in writing
by or on behalf of such Underwriter through you to the Fund, the
Investment Manager or the Investment Adviser expressly for use with
reference to such Underwriter in the Registration Statement (or in
the Registration Statement as amended by any post-effective
amendment thereof by the Fund) or in a Prospectus, or arises out of
or is based upon any omission or alleged omission to state a
material fact in connection with such information required to be
stated in such Registration Statement or such Prospectus or
necessary to make such information not misleading.
If any Proceeding is brought against the Fund, the Investment
Manager or the Investment Adviser, or any such person in respect of
which indemnity may be sought against any Underwriter pursuant to
the foregoing paragraph, the Fund, the Investment Manager or the
Investment Adviser or such person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and
such Underwriter shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided,
however, that the omission to so notify such Underwriter shall not
relieve such Underwriter from any liability which such Underwriter
may have to the Fund, the Investment Manager or the Investment
Adviser, or any such person or otherwise. The Fund, the Investment
Manager or the Investment Adviser, or such person shall have the
right to employ its own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of the Fund, the
Investment Manager or the Investment Adviser, or such person, as the
case may be, unless the employment of such counsel shall have been
23
authorized in writing by such Underwriter in connection with the
defense of such Proceeding or such Underwriter shall not have,
within a reasonable period of time in light of the circumstances,
employed counsel to have charge of the defense of such Proceeding or
such indemnified party or parties shall have reasonably concluded
that there may be defenses available to it or them which are
different from or additional to or in conflict with those available
to such Underwriter (in which case such Underwriter shall not have
the right to direct the defense of such Proceeding on behalf of the
indemnified party or parties, but such Underwriter may employ
counsel and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such
Underwriter), in any of which events such fees and expenses shall be
borne by such Underwriter and paid as incurred (it being understood,
however, that such Underwriter shall not be liable for the expenses
of more than one separate counsel (in addition to any local counsel)
in any one Proceeding or series of related Proceedings in the same
jurisdiction representing the indemnified parties who are parties to
such Proceeding). No Underwriter shall be liable for any settlement
of any such Proceeding effected without the written consent of such
Underwriter but if settled with the written consent of such
Underwriter, such Underwriter agrees to indemnify and hold harmless
the Fund, the Investment Manager or the Investment Adviser and any
such person from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement
of any Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after receipt
by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have reimbursed the indemnified party
in accordance with such request prior to the date of such settlement
and (iii) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is
or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes
an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such Proceeding
and does not include an admission of fault, culpability or a failure
to act, by or on behalf of such indemnified party.
(c) If the indemnification provided for in this Section 9 is unavailable
to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, damages, expenses, liabilities
or claims referred to therein,
24
then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses,
damages, expenses, liabilities or claims (i) in such proportion as
is appropriate to reflect the relative benefits received by the
Fund, the Investment Manager and the Investment Adviser on the one
hand and the Underwriters on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Fund, the Investment
Manager and the Investment Adviser on the one hand and of the
Underwriters on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses,
liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Fund, the
Investment Manager or the Investment Adviser on the one hand and the
Underwriters on the other shall be deemed to be in the same
respective proportions as the total proceeds from the offering (net
of underwriting discounts and commissions but before deducting
expenses) received by the Fund and the total underwriting discounts
and commissions received by the Underwriters, bear to the aggregate
public offering price of the Shares. The relative fault of the Fund,
the Investment Manager and the Investment Adviser on the one hand
and of the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged
omission relates to information supplied by the Fund, the Investment
Manager or the Investment Adviser or by the Underwriters and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
amount paid or payable by a party as a result of the losses,
damages, expenses, liabilities and claims referred to in this
subsection shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any Proceeding.
(d) The Fund, the Investment Manager and the Investment Adviser and the
Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in
subsection (c) above. Notwithstanding the provisions of this Section
9, no Underwriter shall be required to contribute any amount in
excess of the fees and commissions received by such Underwriter. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 9
are
25
several in proportion to their respective underwriting commitments
and not joint.
(e) The indemnity and contribution agreements contained in this Section
9 and the covenants, warranties and representations of the Fund and
the Investment Manager contained in this Agreement shall remain in
full force and effect regardless of any investigation made by or on
behalf of any Underwriter, its partners, directors or officers or
any person (including each partner, officer or director of such
person) who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, or by or on behalf
of the Fund, the Investment Manager or the Investment Adviser, any
of their partners, directors or officers or any person (including
each partner, officer or director of such person) who controls the
Fund, the Investment Manager or the Investment Adviser within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act,
and shall survive any termination of this Agreement or the issuance
and delivery of the Shares. The Fund, the Investment Manager or the
Investment Adviser and each Underwriter agree promptly to notify
each other of the commencement of any Proceeding against it and, in
the case of the Fund, the Investment Manager and the Investment
Adviser, against any of the Fund's, the Investment Manager's or the
Investment Adviser's officers or directors in connection with the
issuance and sale of the Shares, or in connection with the
Registration Statement or Prospectus.
(f) The Fund, the Investment Manager and the Investment Adviser each
acknowledge that the statements with respect to (1) the public
offering of the Shares as set forth on the cover page of and (2) the
statements relating to stabilization, to selling concessions and
reallowances of selling concessions and with respect to
discretionary accounts under the caption "Underwriting" in the
Prospectus constitute the only information furnished in writing to
the Fund by the Representatives on behalf of the Underwriters
expressly for use in such document. The Underwriters severally
confirm that these statements are correct in all material respects
and were so furnished by or on behalf of the Underwriters severally
for use in the Prospectus.
(g) Notwithstanding any other provisions in this Section 9, no party
shall be entitled to indemnification or contribution under this
Underwriting Agreement against any loss, claim, liability, expense
or damage arising by reason of such person's willful misfeasance,
bad faith, gross negligence, or by reason of such party's reckless
disregard of its obligations and duties under this Agreement.
10. NOTICES. Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Warburg LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
Syndicate Department and,
26
if to the Fund or the Investment Manager, shall be sufficient in all
respects if delivered or sent to the Fund or the Investment Manager, as
the case may be, at the offices of the Fund or the Investment Manager at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: President and if
delivered or sent to the Investment Adviser at the offices of the
Investment Adviser at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: President.
11. GOVERNING LAW; CONSTRUCTION. This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way
relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of
New York. The Section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.
12. SUBMISSION TO JURISDICTION. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of
the State of New York located in the City and County of New York or in the
United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and
the Fund consents to the jurisdiction of such courts and personal service
with respect thereto. The Fund hereby consents to personal jurisdiction,
service and venue in any court in which any Claim arising out of or in any
way relating to this Agreement is brought by any third party against UBS
Warburg LLC or any indemnified party. Each of UBS Warburg LLC, the Fund
(on its behalf and, to the extent permitted by applicable law, on behalf
of its stockholders and affiliates) and the Investment Manager (on its
behalf and, to the extent permitted by applicable law, on behalf of its
stockholders and affiliates) waives all right to trial by jury in any
action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. Each
of the Fund, the Investment Manager and the Investment Adviser agrees that
a final judgment in any such action, proceeding or counterclaim brought in
any such court shall be conclusive and binding upon the Fund, the
Investment Manager or the Investment Adviser, as the case may be, and may
be enforced in any other courts in the jurisdiction of which the Fund, the
Investment Manager or the Investment Adviser, as the case may be, is or
may be subject, by suit upon such judgment.
13. PARTIES AT INTEREST. The Agreement herein set forth has been and is made
solely for the benefit of the Underwriters, the Fund, the Investment
Manager and the Investment Adviser and to the extent provided in Section 9
hereof the controlling persons, partners, directors and officers referred
to in such section, and their respective successors, assigns, heirs,
personal representatives and executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as
such purchaser, from any of the Underwriters) shall acquire or have any
right under or by virtue of this Agreement.
27
14. COUNTERPARTS. This Agreement may be signed by the parties in one or more
counterparts which together shall constitute one and the same agreement
among the parties.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Underwriters, the Fund, the Investment Manager or the Investment Adviser,
and any successor or assign of any substantial portion of the Fund's, the
Investment Manager's, the Investment Adviser's or any of the Underwriters'
respective businesses and/or assets.
28
If the foregoing correctly sets forth the understanding among the Fund and the
Underwriters, please so indicate in the space provided below for the purpose,
whereupon this letter and your acceptance shall constitute a binding agreement
among the Fund, the Investment Manager, the Investment Adviser and the
Underwriters, severally.
Very truly yours,
▇▇▇▇▇▇▇ RREEF REAL ESTATE
FUND, INC.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
DEUTSCHE ASSET MANAGEMENT, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
RREEF AMERICA, L.L.C.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Principal
Accepted and agreed to as of the date first above written, on behalf of
themselves and the other several Underwriters named in Schedule A
UBS WARBURG LLC
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
/s/ ▇▇▇▇ ▇. ▇▇▇▇
--------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Director
29
SCHEDULE A
Number of Shares
Name to be Purchased
---- ---------------
UBS Warburg LLC
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
Deutsche Bank Securities Inc.
Prudential Securities Incorporated
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
Wachovia Securities Inc.
▇▇▇▇▇ Fargo Securities, LLC
Total
A-1
SCHEDULE B
FORM OF OPINION OF
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ REGARDING THE FUND
i. The Registration Statement and all post-effective amendments, if any, are
effective under the Act and no stop order with respect thereto has been issued
and no proceeding for that purpose has been instituted or, to the best of our
knowledge, is threatened by the Commission. Any filing of the Prospectus or any
supplements thereto required under Rule 497 under the Act prior to the date
hereof have been made in the manner and within the time required by such rule.
ii. The Fund has been duly organized and is validly existing as a corporation in
good standing under the laws of the State of Maryland, with full corporate power
to conduct all the activities conducted by it, to own or lease all assets owned
(or to be owned) or leased (or to be leased) by it and to conduct its business,
all as described in the Registration Statement and Prospectus, and the Fund is
duly licensed and qualified to do business and in good standing in each
jurisdiction in which its ownership or leasing of property or its conducting of
business requires such qualification, except where the failure to be so
qualified or be in good standing, either alone or in the aggregate, would not
have a material adverse effect on the Fund, and the Fund owns, possesses or has
obtained and currently maintains all governmental licenses, permits, consents,
orders, approvals and other authorizations, whether foreign or domestic,
necessary to carry on its business as contemplated in the Prospectus, except
where the failure to obtain such licenses, permits, consents, orders, approvals
and other authorizations, either alone or in the aggregate, would not have a
material adverse effect on the Fund. The Fund has no subsidiaries.
iii. The number of authorized, issued and outstanding shares of Common Shares of
the Fund is as set forth in the Registration Statement and in the Prospectus
under the caption Description of Shares -- Common Shares" and in the statement
of additional information under the caption "Statements of Assets and
Liabilities as of [ ], 2002." The Common Shares of the Fund conform in all
material respects to the description of them in the Prospectus under the caption
"Description of Shares --Common Shares" in the Prospectus. All the outstanding
Common Shares have been duly authorized and are validly issued, fully paid and
nonassessable. The Shares to be issued and delivered to and paid for by the
Underwriters in accordance with the Underwriting Agreement against payment
therefor as provided by the Underwriting Agreement have been duly authorized and
when issued and delivered to the Underwriters as so provided will have been
validly issued and will be fully paid and nonassessable (except as described in
the Registration Statement). No person is entitled to any preemptive or other
similar rights with respect to the Shares under the charter or by-laws of the
Fund or the Maryland General Corporation law or, to counsel's knowledge,
otherwise.
iv. The Fund is duly registered with the Commission under the Investment Company
Act as a non-diversified, closed-end management investment company and all
action under the Act and the Investment Company Act, as the case may be,
necessary to make
B-1
the public offering and consummate the sale of the Shares as provided in the
Underwriting Agreement has or will have been taken by the Fund.
v. The Fund has full corporate power to enter into each of the Underwriting
Agreement, the Investment Management Agreement, the Custody Agreement, the Fund
Accounting Services Agreement and the Transfer Agency Agreement (collectively,
the "Fund Agreements") and to perform all of the terms and provisions thereof to
be carried out by it and (A) each Fund Agreement has been duly and validly
authorized, executed and delivered by the Fund, (B) each Fund Agreement complies
in all material respects with all applicable provisions of the Investment
Company Act and the Advisers Act, as the case may be, and (C) assuming due
authorization, execution and delivery by the other parties thereto, each Fund
Agreement constitutes the legal, valid and binding obligation of the Fund
enforceable against the Fund in accordance with its terms, (1) subject, as to
enforcement, to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general equitable principles (regardless of
whether enforcement is sought in a proceeding in equity or at law) and (2)
except as rights to indemnity thereunder may be limited by federal or state
securities laws.
vi. None of (A) the execution and delivery by the Fund of the Fund Agreements,
(B) the issue and sale by the Fund of the Shares as contemplated by the
Underwriting Agreement and (C) the performance by the Fund of its obligations
under the Fund Agreements or consummation by the Fund of the other transactions
contemplated by the Fund Agreements conflicts with or will conflict with, or
results or will result in a breach of, the Articles of Incorporation or the
By-laws of the Fund or any agreement or instrument to which the Fund is a party
or by which the Fund is bound that is filed as an exhibit to the Registration
Statement, or any law, rule or regulation which in our experience is normally
applicable to transactions of the type contemplated by the Underwriting
Agreement, or order of any court, governmental instrumentality, securities
exchange or association or arbitrator, whether foreign or domestic, specifically
naming the Fund and known to counsel, except that we express no opinion as to
the securities or "blue sky" laws applicable in connection with the purchase and
distribution of the Shares by the Underwriters pursuant to the Underwriting
Agreement.
vii. No consent, approval, authorization or order of any court (to counsel's
knowledge) or governmental agency or body or securities exchange or association,
whether foreign or domestic, is required by the Fund for the consummation by the
Fund of the transactions to be performed by the Fund or the performance by the
Fund of all the terms and provisions to be performed by or on behalf of it in
each case as contemplated in the Fund Agreements, except such as (A) have been
obtained under the federal securities laws and (B) may be required by the
American Stock Exchange or under state securities or "blue sky" laws in
connection with the purchase and distribution of the Shares by the Underwriters
pursuant to the Underwriting Agreement.
viii. The Shares have been approved for listing on the American Stock Exchange,
subject to official notice of issuance, and the Fund's Registration Statement on
Form 8-A under the 1934 Act is effective.
B-2
ix. We do not know of any legal or governmental proceeding pending or threatened
against the Fund.
x. The Fund does not require any tax or other rulings to enable it to qualify as
a regulated investment company under Subchapter M of the Code.
xi. The section in the Prospectus entitled "Taxation" and the section in the
Statement of Additional Information entitled "Taxation" is a fair summary of the
principal United States federal income tax rules currently in effect applicable
to the Fund and to the purchase, ownership and disposition of the Shares.
xii. The Registration Statement (except the financial statements and schedules
including the notes and schedules thereto, and other financial or accounting
data included therein or omitted therefrom, as to which we express no view), at
the time it became effective, and the Prospectus (except as aforesaid), as of
the date thereof, complied as to form in all material respects to the
requirements of the Act and the Investment Company Act.
While we have not checked the accuracy and completeness of or
otherwise verified, and are not passing upon and assume no responsibility for
the accuracy or completeness of, the statements contained in the Registration
Statement or the Prospectus, except to the limited extent set forth in paragraph
(xi) above, in the course of our review of the contents of the Registration
Statement and the Prospectus with certain officers and employees of the Fund and
the Fund's independent accountants, no facts have come to our attention that
cause us to believe that the Registration Statement, at the time it became
effective (but after giving effect to any changes incorporated pursuant to Rule
430A under the Act), contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading (except that we express no such view
with respect to the financial statements, including notes and schedules thereto,
or any other financial or accounting data included therein), or that the
Prospectus, as of the date it was filed with the Commission pursuant to Rule 497
under the Act and as of the date hereof, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except that we express
no such view with respect to the financial statements, including notes and
schedules thereto, or any other financial or accounting data included therein).
B-3
SCHEDULE C
FORM OF OPINION OF INTERNAL COUNSEL
REGARDING DEUTSCHE ASSET MANAGEMENT, INC.
i. Deutsche Asset Management, Inc. (the "Investment Manager") has been duly
formed and is validly existing as a corporation under the laws of its
jurisdiction of incorporation with full power and authority to own or lease all
of the assets owned or leased by it and to conduct its business as described in
the Registration Statement and Prospectus and to enter into and perform its
obligations under the Underwriting Agreement, the Shareholder Servicing
Agreement, the Investment Management Agreement and the Investment Advisory
Agreement.
ii. The Investment Manager is duly registered as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act or the Investment Company
Act from acting as investment manager for the Fund as contemplated by the
Investment Advisory Agreement, the Registration Statement and the Prospectus.
iii. The Investment Manager has full power and authority to enter into each of
the Underwriting Agreement, the Investment Management Agreement, the Investment
Advisory Agreement and the Shareholder Servicing Agreement (collectively, the
"Investment Manager Agreements") and to carry out all the terms and provisions
thereof to be carried out by it, and each such agreement has been duly and
validly authorized, executed and delivered by the Investment Manager; each
Investment Manager Agreement complies in all material respects with all
provisions of the Investment Company Act and the Advisers Act; and assuming due
authorization, execution and delivery by the other parties thereto, each
Investment Manager Agreement constitutes a legal, valid and binding obligation
of the Investment Manager, enforceable against the Investment Manager in
accordance with its terms, (1) subject, as to enforcement, to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally
and to general equitable principles (regardless of whether enforcement is sought
in a proceeding in equity or at law) and (2) except as rights to indemnity
thereunder may be limited by federal or state securities laws.
iv. Neither (A) the execution and delivery by the Investment Manager of any
Investment Manager Agreement nor (B) the consummation by the Investment Manager
of the transactions contemplated by, or the performance of its obligations
under, any Investment Manager Agreement conflicts or will conflict with, or
results or will result in a breach of, the charter or by-laws of the Investment
Manager or any agreement or instrument to which the Investment Manager is a
party or by which the Investment Manager is bound, or any federal or Delaware
law, rule or regulation, or order of any court, governmental instrumentality,
securities exchange or association or arbitrator, whether foreign or domestic,
specifically naming the Investment Manager and known to counsel, except in each
case for such conflicts or breaches which do not, either alone or in the
aggregate, have a material adverse effect on the Investment Manager's ability to
perform its obligations under the Investment Manager Agreements.
C-1
v. To my knowledge, no consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association, whether
foreign or domestic, is required for the consummation of the transactions
contemplated in, or the performance by the Investment Manager of its obligations
under, any Investment Manager Agreement, except such as (i) have been obtained
under the federal securities laws and (ii) may be required by the American Stock
Exchange or under state securities or "blue sky" laws, in connection with the
purchase and distribution of the Shares by the Underwriters pursuant to the
Underwriting Agreement.
vi. To my knowledge, there is no legal or governmental proceeding pending or
threatened against the Investment Manager that is either (i) required to be
described in the Registration Statement or Prospectus that is not already
described or (ii) which would, under Section 9 of the Investment Company Act,
make the Investment Manager ineligible to act as the Fund's investment manager.
I have not checked the accuracy and completeness of or otherwise
verified, and are not passing upon and assume no responsibility for the accuracy
or completeness of, the statements contained in the Registration Statement or
the Prospectus. No facts have come to my attention that cause me to believe that
the description of the Investment Manager and its business, and the statements
attributable to the Investment Manager, in the Registration Statement, at the
time it became effective (but after giving effect to any changes incorporated
pursuant to Rule 430A under the Act), contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading (except that we
express no such view with respect to the financial statements, including notes
and schedules thereto, or any other financial or accounting data included
therein), or that the description of the Investment Manager and its business,
and the statements attributable to the Investment Manager, in the Prospectus, as
of the date it was filed with the Commission pursuant to Rule 497 under the Act
and as of the date hereof, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (except that we express no such view with respect to
the financial statements, including notes and schedules thereto, or any other
financial or accounting data included therein).
C-2
SCHEDULE D
FORM OF OPINION OF INTERNAL COUNSEL
REGARDING RREEF AMERICA, L.L.C.
i. RREEF America, L.L.C. (the "Investment Adviser") has been duly formed and is
validly existing as a limited liability company under the laws of its
jurisdiction of organization with full power and authority to own or lease all
of the assets owned or leased by it and to conduct its business as described in
the Registration Statement and Prospectus and to enter into and perform its
obligations under the Investment Advisory Agreement.
ii. The Investment Adviser is duly registered as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act or the Investment Company
Act from acting as investment adviser for the Fund as contemplated by the
Investment Advisory Agreement, the Registration Statement and the Prospectus.
iii. The Investment Adviser has full power and authority to enter into the
Investment Advisory Agreement and to carry out all the terms and provisions
thereof to be carried out by it, and such agreement has been duly and validly
authorized, executed and delivered by the Investment Adviser; the Investment
Advisory Agreement complies in all material respects with all provisions of the
Investment Company Act and the Advisers Act; and assuming due authorization,
execution and delivery by the other parties thereto, the Investment Advisory
Agreement constitutes a legal, valid and binding obligation of the Investment
Adviser, enforceable against the Investment Adviser in accordance with its
terms, (1) subject, as to enforcement, to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and to general equitable
principles (regardless of whether enforcement is sought in a proceeding in
equity or at law) and (2) except as rights to indemnity thereunder may be
limited by federal or state securities laws.
iv. Neither (A) the execution and delivery by the Investment Adviser of the
Investment Advisory Agreement nor (B) the consummation by the Investment Adviser
of the transactions contemplated by, or the performance of its obligations
under, the Investment Advisory Agreement conflicts or will conflict with, or
results or will result in a breach of, the organizational or operational
documents of the Investment Adviser or any agreement or instrument to which the
Investment Adviser is a party or by which the Investment Adviser is bound, or
any federal or Maryland law, rule or regulation, or order of any court,
governmental instrumentality, securities exchange or association or arbitrator,
whether foreign or domestic, specifically naming the Investment Adviser and
known to counsel, except in each case for such conflicts or breaches which do
not, either alone or in the aggregate, have a material adverse effect on the
Investment Adviser's ability to perform its obligations under the Investment
Advisory Agreement.
v. No consent, approval, authorization or order of any court, governmental
agency or body or securities exchange or association, whether foreign or
domestic, is required for the consummation of the transactions contemplated in,
or the performance by the
D-1
Investment Adviser of its obligations under, the Investment Advisory Agreement,
except such as (i) have been obtained under the federal securities laws and (ii)
may be required by the American Stock Exchange or under state securities or
"blue sky" laws, in connection with the purchase and distribution of the Shares
by the Underwriters pursuant to the Underwriting Agreement.
vi. To my knowledge, there is no legal or governmental proceeding pending or
threatened against the Investment Adviser that is either (i) required to be
described in the Registration Statement or Prospectus that is not already
described or (ii) which would, under Section 9 of the Investment Company Act,
make the Investment Adviser ineligible to act as the Fund's investment adviser.
I have not checked the accuracy and completeness of or otherwise
verified, and am not passing upon and assume no responsibility for the accuracy
or completeness of, the statements contained in the Registration Statement or
the Prospectus. No facts have come to my attention that cause me to believe that
the description of the Investment Adviser and its business, and the statements
attributable to the Investment Adviser, in the Registration Statement, at the
time it became effective (but after giving effect to any changes incorporated
pursuant to Rule 430A under the Act), contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading (except that we
express no such view with respect to the financial statements, including notes
and schedules thereto, or any other financial or accounting data included
therein), or that the description of the Investment Adviser and its business,
and the statements attributable to the Investment Adviser, in the Prospectus, as
of the date it was filed with the Commission pursuant to Rule 497 under the Act
and as of the date hereof, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (except that we express no such view with respect to
the financial statements, including notes and schedules thereto, or any other
financial or accounting data included therein).
D-2
SCHEDULE E
FORM OF ACCOUNTANT'S LETTER
[ ] , 2002
The Board of Directors of
▇▇▇▇▇▇▇ RREEF Real Estate Fund, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
UBS Warburg LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
as Managing Representative of the Underwriters
Ladies and Gentlemen:
We have audited the statement of assets and liabilities of ▇▇▇▇▇▇▇
RREEF Real Estate Fund, Inc. (the "Fund") as of [ ], 2002 included in the
Registration Statement on Form N-2 filed by the Fund under the Securities Act of
1933 (the "Act") (File No. 333-97717) and under the Investment Company Act of
1940 (the "1940 Act") (File No. 811-21172); such statement and our report with
respect to such statement are included in the Registration Statement.
In connection with the Registration Statement:
1. We are independent public accountants with respect to the Fund
within the meaning of the Act and the applicable rules and regulations
thereunder.
2. In our opinion, the statement of assets and liabilities included
in the Registration Statement and audited by us complies as to form in all
respects with the applicable accounting requirements of the Act, the 1940
Act and the respective rules and regulations thereunder.
3. For purposes of this letter we have read the minutes of all
meetings of the Shareholders, the Board of Directors and all Committees of
the Board of Directors of the Fund as set forth in the minute books at the
offices of the Fund, officials of the Fund having advised us that the
minutes of all such meetings through , 2002, were set forth
therein.
4. Fund officials have advised us that no financial statements as of
any date subsequent to , 2002, are available. We have made
inquiries of certain officials of the Fund who have responsibility for
financial and accounting matters regarding whether there was any change
at , 2002, in the capital
E-1
shares or net assets of the Fund as compared with amounts shown in the
, 2002, statement of assets and liabilities included in the
Registration Statement, except for changes that the Registration Statement
discloses have occurred or may occur. On the basis of our inquiries and
our reading of the minutes as described in Paragraph 3, nothing came to
our attention that caused us to believe that there were any such changes.
The foregoing procedures do not constitute an audit made in accordance
with generally accepted auditing standards. Accordingly, we make no
representations as to the sufficiency of the foregoing procedures for your
purposes.
This letter is solely for the information of the addressees and to assist
the underwriters in conducting and documenting their investigation of the
affairs of the Fund in connection with the offering of the securities covered by
the Registration Statement, and is not to be used, circulated, quoted or
otherwise referred to within or without the underwriting group for any other
purpose, including but not limited to the registration, purchase or sale of
securities, nor is it to be filed with or referred to in whole or in part in the
Registration Statement or any other document, except that reference may be made
to it in the underwriting agreement or in any list of closing documents
pertaining to the offering of the securities covered by the Registration
Statement.
Very Truly Yours,
E-2