Exhibit (h.1)
LCM Internet Growth Fund, Inc.
4,000,000 Shares*
of Common Stock
UNDERWRITING AGREEMENT
October __, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇. SECURITIES, LLC
As Representative of the several Underwriters
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
LCM Internet Growth Fund, Inc., a Maryland
corporation (the "Company"), and LCM Capital
Management, Inc., an Illinois corporation and the
Company's investment manager (the "Manager"), hereby
confirm their agreement with the several underwriters
named in Schedule 1 hereto (the "Underwriters"), for
whom you have been duly authorized to act as
representative (in such capacity, the
"Representative"), as set forth below. If you are the
only Underwriter, all references herein to the
Representative shall be deemed to be to the
Underwriter.
1. Securities. Subject to the terms and conditions
herein contained, the Company proposes to issue and
sell to the several Underwriters an aggregate of
4,000,000 (the "Firm Securities") shares of common
stock in the Company, par value, $.01 per share (the
"Shares"). The Company also proposes to issue and sell
to the several Underwriters not more than 600,000
additional Shares if requested by the Representative as
provided in Section 3 of this Agreement. Any and all
Shares to be purchased by the Underwriters pursuant to
such option are referred to herein as the "Option
Securities", and the Firm Securities and any Option
Securities are collectively referred to herein as the
"Securities".
2. Representations and Warranties of the Company and
the Manager.
(a) The Company and the Manager jointly and severally
represent and warrant to, and agree with, each of the
several Underwriters that:
(i) A registration statement on Form N-2 (File Nos.
333-74407 and 811-9261) with respect to the Securities,
including a prospectus subject to completion, has been
filed by the Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act"), and one or more
amendments to such
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* Plus an option to purchase from LCM Internet Growh Fund, Inc. up to
600,000 additional shares to cover over-allotments.
registration statement may have been so filed.
A notification of registration on Form N-8A
(the "Notification of Registration") has also been
filed with the Commission pursuant to Section 8(a) of
the Investment Company Act of 1940, as amended (the
"Investment Company Act"). After the execution of this
Agreement, the Company will file with the Commission
either (A) if such registration statement, as it may
have been amended, has been declared by the Commission
to be effective under the Act, a prospectus in the form
most recently included in an amendment to such
registration statement (or, if no such amendment shall
have been filed, in such registration statement), with
such changes or insertions as are required by Rule 430A
under the Act or permitted by Rule 497(h) under the Act
and as have been provided to and approved by the
Representative prior to the execution of this
Agreement, or (B) if such registration statement, as it
may have been amended, has not been declared by the
Commission to be effective under the Act, an amendment
to such registration statement, including a form of
prospectus, a copy of which amendment has been
furnished to and approved by the Representative prior
to the execution of this Agreement. As used in this
Agreement, the term "Registration Statement" means such
registration statement, as amended at the time when it
was or is declared effective, including all financial
schedules and exhibits thereto and including any
information omitted therefrom pursuant to Rule 430A
under the Act and included in the Prospectus (as
hereinafter defined); the term "Preliminary Prospectus"
means each prospectus subject to completion filed with
such registration statement or any amendment thereto
(including the prospectus subject to completion, if
any, included in the Registration Statement or any
amendment thereto at the time it was or is declared
effective); and the term "Prospectus" means the
prospectus first filed with the Commission pursuant to
Rule 497(b) or (h), as the case may be, under the Act
or, if applicable, as subsequently filed pursuant to
Rule 497(d) under the Act.
(ii) The Commission has not issued any order preventing
or suspending the use of any Preliminary Prospectus.
When any Preliminary Prospectus was filed with the
Commission it (A) contained all statements required to
be stated therein in accordance with, and complied in
all material respects with the requirements of, the
Act, the Investment Company Act and the respective
rules and regulations of the Commission thereunder and
(B) did not include any untrue statement of a material
fact or omit to state any material fact necessary in
order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading. When the Registration Statement or any
amendment thereto was or is declared effective, it (A)
contained or will contain all statements required to be
stated therein in accordance with, and complied or will
comply in all material respects with the requirements
of, the Act, the Investment Company Act and the
respective rules and regulations of the Commission
thereunder and (B) did not or will not include any
untrue statement of a material fact or omit to state
any material fact necessary to make the statements
therein not misleading. When the Prospectus or any
amendment or supplement thereto is filed with the
Commission pursuant to Rule 497(b) or (h) under the
Act, as the case may be, and, if applicable, when
subsequently filed with the Commission pursuant to Rule
497(d) under the Act (or, if the Prospectus or such
amendment or supplement is not required to be so filed,
when the Registration Statement or the amendment
thereto containing such amendment or supplement to the
Prospectus was or is declared effective), and on the
Firm Closing Date and any Option Closing Date (both as
hereinafter defined), the Prospectus, as amended or
supplemented at any such time, (A) contained or will
contain all statements
required to be stated therein in
accordance with, and complied or will comply in all
material respects with the requirements of, the Act,
the Investment Company Act and the respective rules and
regulations of the Commission thereunder and (B) did
not or will not include any untrue statement of a
material fact or omit to state any material fact
necessary in order to make the statements therein, in
the light of the circumstances under which they were
made, not misleading. The foregoing provisions of this
paragraph (ii) do not apply to statements or omissions
made in any Preliminary Prospectus, the Registration
Statement or any amendment thereto or the Prospectus or
any amendment or supplement thereto in reliance upon
and in conformity with written information furnished to
the Company by any Underwriter through the
Representative specifically for use therein.
(iii) When the Notification of Registration was
filed with the Commission, it (A) contained all
statements required to be stated therein in accordance
with, and complied in all material respects with the
requirements of, the Investment Company Act and the
rules and regulations of the Commission thereunder and
(B) did not include any untrue statement of a material
fact or omit to state a material fact necessary to make
the statements therein not misleading.
(iv) The Company has been duly organized and is validly
existing as a corporation in good standing under the
laws of the State of Maryland and is duly qualified to
transact business and is in good standing under the
laws of all other jurisdictions where the ownership or
leasing of its properties or the conduct of its
business requires such qualification, except where the
failure to be so qualified does not amount to a
material liability or disability to the Company; and
the Company holds all licenses, certificates and
permits from all governmental authorities necessary for
the conduct of its business as described in the
Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus) (other than, if
the Registration Statement is not effective under the
Act, the order of the Commission declaring the
Registration Statement effective under the Act and
similar orders as may be required under state
securities or blue sky laws). The Company has no
subsidiaries.
(v) The Company has full power (corporate and other)
(A) to own or lease its properties and conduct its
business as described in the Registration Statement and
the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus; (B)
to enter into this Agreement, the Investment Advisory
Agreement, dated as of October 15, 1999 (the "Advisory
Agreement"), between the Company and the Manager, the
Custodian Contract dated as of October 15, 1999, (the
"Custody Agreement"), between the Company and Firstar
Bank Milwaukee, N.A., the Transfer Agency Agreement,
dated as of October 15, 1999 (the "Transfer Agency
Agreement"), between the Company and Firstar Bank
Milwaukee, N.A., the Fund Administration Servicing
Agreement, dated as of October 15, 1999, (the "Fund
Administration Agreement"), between the Company and
Firstar Mutual Fund Services, LLC ("FMFS"), the
Fulfillment Servicing Agreement, dated as of October
15, 1999 (the "Fulfillment Agreement"), between the
Company and FMFS and the Fund Accounting Servicing
Agreement, dated as of October 15, 1999 (the "Fund
Accounting Agreement"), between the Company and FMFS;
(C) to adopt the distribution reinvestment plan (the
"Distribution Reinvestment Plan") described in the
Prospectus, or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus;
and (D) to carry out all the terms and provisions hereof and of
any of the foregoing agreements and plans to be carried
out by it.
(vi) The Company is duly registered with the Commission
pursuant to Section 8 of the Investment Company Act as
a non-diversified, closed-end management investment
company; and the Company's articles of incorporation
and by-laws comply in all material respects with the
Investment Company Act and the rules and regulations of
the Commission thereunder.
(vii) The Company has authorized, issued and
outstanding capitalization as set forth in the
Prospectus or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus. All of the
issued Shares have been duly authorized and validly
issued and are fully paid and nonassessable. The Firm
Securities and the Option Securities have been duly
authorized and at the Firm Closing Date or the related
Option Closing Date (as the case may be), after payment
therefor in accordance herewith, will be validly
issued, fully paid and nonassessable. The Securities
have been duly authorized for listing, subject to
official notice of issuance, on the American Stock
Exchange, and the Company's Registration Statement on
Form 8-A under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), will be filed and become
effective at the same time the Company's Registration
Statement on Form N-2 is declared effective. No
holders of outstanding shares of beneficial interest of
the Company are entitled as such to any preemptive or
other rights to subscribe for any of the Securities,
and no holder of securities of the Company has any
right which has not been fully exercised or waived to
require the Company to register the offer or sale of
any securities owned by such holder under the Act in
the public offering contemplated by this Agreement.
(viii) The Shares conform to the description thereof
contained in the Prospectus or, if the Prospectus is
not in existence, the most recent Preliminary
Prospectus.
(ix) Except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent
Preliminary Prospectus), there are no outstanding (A)
securities or obligations of the Company convertible
into or exchangeable for any capital stock of the
Company, (B) warrants, rights or options to subscribe
for or purchase from the Company any such capital stock
or any such convertible or exchangeable securities or
obligations, or obligations of the Company to issue any
shares of capital stock, any such convertible or
exchangeable securities or obligations, or any such
warrants, rights or options.
(x) The Statement of Assets and Liabilities of the
Company included in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus) fairly presents
the financial position of the Company as of the date
therein specified. Such Statement of Assets and
Liabilities has been prepared in accordance with
generally accepted accounting principles.
(xi) PricewaterhouseCoopers, LLP, who have certified
certain financial statements of the Company and
delivered their report with respect to the Statement of
Assets and Liabilities of the Company included in the
Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), are independent public
accountants as required by the Act, the Investment
Company Act and the respective rules and regulations
thereunder.
(xii) The execution and delivery of this Agreement,
the Advisory Agreement, the Custody Agreement, the
Transfer Agency Agreement, the Fund Administration
Agreement, the Fulfillment Agreement and the Fund
Accounting Agreement have been duly authorized by the
Company; this Agreement, the Advisory Agreement, the
Custody Agreement, the Transfer Agency Agreement, the
Fund Administration Agreement, the Fulfillment
Agreement and the Fund Accounting Agreement have been
duly executed and delivered by the Company; and
assuming due authorization, execution and delivery by
the other parties thereto, this Agreement, the Advisory
Agreement, the Custody Agreement, the Transfer Agency
Agreement, the Fund Administration Agreement, the
Fulfillment Agreement and the Fund Accounting Agreement
are the legal, valid, binding and enforceable
instruments of the Company and all such agreements and
the Distribution Reinvestment Plan comply in all
material respects with the requirements of the
Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and the Investment Company Act and the
respective rules and regulations of the Commission
thereunder; and the Distribution Reinvestment Plan has
been duly adopted by the Company.
(xiii) No legal or governmental proceedings are
pending to which the Company is a party or to which the
property of the Company is subject that are required to
be described in the Registration Statement or the
Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus), and are not
described therein and, to the knowledge of the Company
and the Manager, no such proceedings have been
threatened against the Company or with respect to any
of its properties; and no contract or other document is
required to be described in the Registration Statement
or the Prospectus or to be filed as an exhibit to the
Registration Statement that is not described therein
(or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) or filed as required by
the Act, the Investment Company Act or the respective
rules and regulations of the Commission thereunder.
(xiv) The issuance, offering and sale of the
Securities to the Underwriters by the Company pursuant
to this Agreement, the compliance by the Company with
the other provisions of this Agreement, the Advisory
Agreement, the Custody Agreement, the Transfer Agency
Agreement, the Fund Administration Agreement, the
Fulfillment Agreement and the Fund Accounting Agreement
and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval,
authorization, registration or qualification of or with
any governmental authority, stock exchange or
securities association except such as have been
obtained, such as may be required under state
securities or blue sky laws or the rules of the
National Association of Securities Dealers, Inc. (the
"NASD Rules") and, if the registration statement filed
with respect to the Securities (as amended) is not
effective under the Act as of the time of execution
hereof, such as may be required (and shall be obtained
as provided in this Agreement) under the Act or the
Investment Company Act, or (B) conflict with or result
in a breach or violation of any of the terms and
provisions of, or constitute a default under, any
agreement or instrument to which the Company is a party or
by which the Company or any of its properties are
bound, or the articles of incorporation or by-laws of
the Company or any statute or any judgment, decree,
order, rule or regulation of any court or other
governmental authority or any arbitrator applicable to
the Company.
(xv) Subsequent to the date of the audited Statement of
Assets and Liabilities included in the Prospectus (or,
if the Prospectus is not in existence, the most recent
Preliminary Prospectus), the Company has not incurred
any material liabilities or obligations, direct or
contingent, or entered into any material transactions
not in the ordinary course of business, and there has
not been any material adverse change, or any
development involving a prospective material adverse
change (including without limitation a change in
management or control of the Company), in the condition
(financial or otherwise), business prospects, financial
position or net worth of the Company, except in each
case as described in or contemplated by the Prospectus
(or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
(xvi) The Company has not distributed and, prior to
the later of the expiration of the option period
described in Section 3(b) hereof and the completion of
the distribution of the Securities, will not distribute
any offering material in connection with the offering
and sale of the Securities other than the Registration
Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or
supplement thereto, or other materials, if any,
permitted by the Act.
(xvii) Neither the Company nor the Manager has
directly or indirectly (except as the Company or the
Manager may be deemed to have acted through the
Representative as a result of the affiliation between
the parties), (A) taken any action designed to cause or
to result in, or that constituted or which might
reasonably be expected to constitute, the stabilization
or manipulation of the price of any security of the
Company to facilitate the sale or resale of the
Securities or (B) since the filing of the Registration
Statement (X) sold, bid for, purchased, or paid anyone
any compensation for soliciting purchases of, the
Securities or (Y) paid or agreed to pay to any person
any compensation for soliciting another to purchase any
other securities of the Company.
(xviii) Each certificate signed by any officer of the
Company in his or her capacity as such and delivered to
the Representative or counsel for the Underwriters
shall be deemed to be a representation and warranty by
the Company to each Underwriter as to the matters
covered thereby.
(xix) The Company maintains, either directly or
through arrangements with its service providers, 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 investment policies
and restrictions of the Company and the applicable
requirements of the Investment Company Act, the rules
and regulations thereunder and the Internal Revenue
Code of 1986, as amended; (B) transactions are recorded
as necessary to permit preparation of financial
statements in conformity with generally accepted
accounting principles, to calculate net asset value, to
maintain accountability for assets and to maintain
material compliance with the books and records
requirements under the Investment Company Act and the
rules and regulations thereunder; (C) access to assets
is permitted only in accordance with management's
general or specific authorization; and (D) the recorded
account for assets is compared with existing assets at
reasonable intervals and appropriate action is taken
with respect to any differences.
(xx) The conduct by the Company of its business (as
described in the Prospectus or, if the Prospectus is
not in existence, the most recent Preliminary
Prospectus) does not require it to be the owner,
possessor or licensee of any patents, patent licenses,
trademarks, service marks or trade names which it does
not own, possess or license.
(b) The Manager represents and warrants to, and agrees
with each of the Underwriters that:
(i) The Manager has been duly incorporated and is
validly existing as a corporation in good standing
under the laws of the State of Illinois and is duly
qualified to transact business as a foreign corporation
and is in good standing under the laws of all other
jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such
qualification, except where the failure to be so
qualified does not amount to a material liability or
disability to the Manager.
(ii) The Manager has full power (corporate and other)
to own or lease its properties and conduct its business
as described in the Registration Statement and the
Prospectus or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus; and the Manager
has full power (corporate and other) to enter into this
Agreement and the Advisory Agreement and to carry out
all the terms and provisions hereof and thereof to be
carried out by it.
(iii) The Manager is duly registered with the
Commission as an investment adviser under the Advisers
Act; and the Manager is not prohibited by any provision
of the Advisers Act or the Investment Company Act, or
the respective rules and regulations of the Commission
thereunder, from performing its obligations under the
Advisory Agreement.
(iv) The execution and delivery of this Agreement and
the Advisory Agreement have been duly authorized by the
Manager; this Agreement and the Advisory Agreement have
been duly executed and delivered by the Manager; and,
assuming due authorization, execution and delivery by
the Company, the Advisory Agreement is the legal,
valid, binding and enforceable instrument of the
Manager and complies in all material respects with the
Advisers Act and the Investment Company Act and the
respective rules and regulations of the Commission
thereunder.
(v) The compliance by the Manager with the provisions
of this Agreement and the Advisory Agreement and the
consummation of the other transactions herein
contemplated do not (A) require the consent, approval,
authorization, registration or qualification of or with
any governmental authority, stock exchange or
securities association except such as have been
obtained, such as may be required under state
securities or blue sky laws or the NASD Rules and, if
the registration statement filed with respect to the
Securities
(as amended) is not effective under the Act
as of the time of execution hereof, such as may be
required (and shall be obtained as provided in this
Agreement) under the Act or the Investment Company Act,
(B) result in a material breach or violation of any of
the terms and provisions of, or constitute a material
default under, any agreement or instrument to which the
Manager is a party or by which the Manager or any of
its properties are bound, or (C) conflict with the
charter documents or by-laws of the Manager or any
statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority
or any arbitrator, stock exchange or securities
association applicable to the Manager.
(vi) The description of the Manager and its business
contained in the Prospectus (or, if the Prospectus is
not yet in existence, the most recent Preliminary
Prospectus) complies in all material respects with the
requirements of the Act, the Investment Company Act and
the respective rules and regulations of the Commission
thereunder and does not include any untrue statement of
a material fact or omit to state any material fact
necessary to make the statements therein, in the light
of the circumstances under which they were made, not
misleading.
(vii) Subsequent to the date of the Prospectus (or,
if the Prospectus is not in existence, the most recent
Preliminary Prospectus), there has not been any
material adverse change, or any development involving a
prospective material adverse change (including without
limitation a change in management or control of the
Manager), in the condition (financial or otherwise),
business prospects, net worth or results of operations
of the Manager or in the ability of the Manager to
fulfill its respective obligations under this Agreement
or the Advisory Agreement.
(viii) No legal or governmental proceedings are
pending to which the Manager is a party or to which the
property of the Manager is subject that are required to
be described in the Registration Statement or the
Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus), and are not
described therein and, to the knowledge of the Manager,
no such proceedings have been threatened against the
Manager or with respect to any of its properties.
(ix) Neither the Company nor the Manager has, directly
or indirectly (except as the Company or the Manager may
be deemed to have acted through the Representative as a
result of the affiliation between the parties), (A)
taken any action designed to cause or to result in, or
that constituted or which might reasonably be expected
to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the
sale or resale of the Securities or (B) since the
filing of the Registration Statement (X) sold, bid for,
purchased, or paid anyone any compensation for
soliciting purchases of, the Securities or (Y) paid or
agreed to pay to any person any compensation for
soliciting another to purchase any other securities of
the Company.
(x) The Manager has the financial resources available
to it necessary for the performance of its services and
obligations as contemplated in the Registration
Statement and the Prospectus.
3. Purchase, Sale and Delivery of the Securities.
(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject
to the terms and conditions herein set forth, the
Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters, severally
and not jointly, agrees to purchase from the Company,
at a purchase price of $9.45 per share, the number of
Firm Securities set forth opposite the name of such
Underwriter in Schedule 1 hereto. One or more
certificates in definitive form for the Firm Securities
that the several Underwriters have agreed to purchase
hereunder, and in such denomination or denominations
and registered in such name or names as the
Representative requests upon notice to the Company at
least 48 hours prior to the Firm Closing Date, shall be
delivered by or on behalf of the Company to the
Representative for the respective accounts of the
Underwriters, against payment by or on behalf of the
Underwriters of the purchase price therefor by wire
transfer of immediately available funds to an account
designated by the Company at least 48 hours prior to
the Firm Closing Date. Such delivery of and payment
for the Firm Securities shall be made at the offices of
▇▇▇▇▇▇▇ & ▇▇▇▇, S.C., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ at 9:30 A.M., Milwaukee time, on
October __, 1999, or at such other place, time or date
as the Representative and the Company may agree upon or
as the Representative may determine pursuant to Section
9 hereof, such time and date of delivery against
payment being herein referred to as the "Firm Closing
Date". The Company will make such certificate or
certificates for the Firm Securities available for
checking and packaging by the Representative at the
offices in Milwaukee, Wisconsin of the Company's
transfer agent or at the offices in Chicago, Illinois
of LaSalle St. Securities, LLC at least 24 hours prior
to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm
Securities as contemplated by the Prospectus, the
Company hereby grants to the several Underwriters an
option to purchase, severally and not jointly, the
Option Securities. The purchase price to be paid for
any Option Securities shall be the same price per share
as the price per share for the Firm Securities set
forth above in paragraph (a) of this Section 3, plus,
if the purchase and sale of any Option Securities takes
place after the Firm Closing Date and after the Firm
Securities are trading "ex- dividend", an amount equal
to the dividends payable on such Option Securities. The
option granted hereby may be exercised as to all or any
part of the Option Securities within thirty days after
the date of the Prospectus (or, if such 30th day shall
be a Saturday or Sunday or holiday, on the next
business day thereafter when the American Stock
Exchange is open for trading). The Underwriters shall
not be under any obligation to purchase any of the
Option Securities prior to the exercise of such option.
The Representative may exercise the option granted
hereby by giving notice in writing or by telephone
(confirmed in writing) to the Company setting forth the
aggregate number of Option Securities as to which the
several Underwriters are then exercising the option and
the date and time for delivery of and payment for such
Option Securities. Any such date of delivery shall be
determined by the Representative but shall not be
earlier than two business days or later than seven
business days after such exercise of the option and, in
any event, shall not be earlier than the Firm Closing
Date. The time and date set forth in such notice, or
such other time on such other date as the
Representative and the Company may agree upon or as the
Representative may determine pursuant to Section 9
hereof, is herein called the "Option Closing Date" with
respect to such Option Securities. Upon exercise of the
option as provided herein, the Company shall become
obligated to sell to each of the several Underwriters,
and, subject to the terms and conditions herein set
forth, each of the Underwriters (severally and not
jointly) shall become obligated to
purchase from the Company, the same percentage of the total
number of the Option Securities as to which the several
Underwriters are then exercising the option as such Underwriter
is obligated to purchase of the aggregate number of Firm
Securities, as adjusted by the Representative in such
manner as it deems advisable to avoid fractional
shares. If the option is exercised as to all or any
portion of the Option Securities, one or more
certificates in definitive form for such Option
Securities, and payment therefor, shall be delivered on
the Option Closing Date in the manner, and upon the
terms and conditions, set forth in paragraph (a) of
this Section 3, except that reference therein to the
Firm Securities and the Firm Closing Date shall be
deemed, for purposes of this paragraph (b), to refer to
such Option Securities and Option Closing Date,
respectively.
(c) It is understood that any of you may (but shall
not be obligated to) make payment on behalf of any
Underwriter or Underwriters for any of the Securities
to be purchased by such Underwriter or Underwriters. No
such payment shall relieve such Underwriter or
Underwriters from any of its or their obligations
hereunder.
4. Offering by the Underwriters. Upon your
authorization of the release of the Firm Securities,
the several Underwriters propose to offer the Firm
Securities for sale to the public upon the terms set
forth in the Prospectus.
5. Covenants of the Company. The Company covenants
and agrees with each of the Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of
execution of this Agreement, and any amendments thereto
to become effective as promptly as possible. If
required, the Company will file the Prospectus and any
amendment or supplement thereto with the Commission in
the manner and within the time period required by Rule
497(b), (d) or (h), as the case may be, under the Act.
During any time when a prospectus relating to the
Securities is required to be delivered under the Act,
the Company (A) will comply with all requirements
imposed upon it by the Act, the Investment Company Act
and the respective rules and regulations of the
Commission thereunder to the extent necessary to permit
the continuance of sales of or dealings in the
Securities in accordance with the provisions hereof and
of the Prospectus, as then amended or supplemented, and
(B) will not file with the Commission the prospectus or
the amendment referred to in the third sentence of
Section 2(a)(i) hereof, any amendment or supplement to
such prospectus or any amendment to the Registration
Statement of which the Representative shall not
previously have been advised and furnished with a copy
for a reasonable period of time prior to the proposed
filing and as to which filing the Representative shall
not have given its consent. The Company will prepare
and file with the Commission, in accordance with the
rules and regulations of the Commission, promptly upon
request by the Representative or counsel for the
Underwriters, any amendments to the Registration
Statement or amendments or supplements to the
Prospectus that may be necessary or advisable in
connection with the distribution of the Securities by
the several Underwriters, and will use its best efforts
to cause any such amendment to the Registration
Statement to be declared effective by the Commission as
promptly as possible. The Company will advise the
Representative, promptly after receiving notice
thereof, of the time when the Registration Statement or
any amendment thereto has been filed or declared
effective or the Prospectus or any amendment or
supplement thereto has been filed and will provide
evidence satisfactory to the Representative of each
such filing or effectiveness.
(b) The Company will advise the Representative,
promptly after receiving notice or obtaining knowledge
thereof, of (A) the issuance by the Commission of any
stop order suspending the effectiveness of the
Registration Statement or any amendment thereto or any
order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, (B) the suspension of
the qualification of the Securities for offering or
sale in any jurisdiction, (C) the institution,
threatening or contemplation of any proceeding for any
such purpose or (D) any request made by the Commission
for amending the Registration Statement, for amending
or supplementing the Prospectus or for additional
information. The Company will use its best efforts to
prevent the issuance of any such stop order and, if any
such stop order is issued, to obtain the withdrawal
thereof as promptly as possible.
(c) The Company will assist Underwriter's counsel in
such counsel's effort to qualify the Securities for
offering and sale under the securities or blue sky laws
of such jurisdictions as the Representative may
designate; provided that in connection therewith the
Company shall not be required to qualify as a foreign
corporation or to execute a general consent to service
of process in any jurisdiction.
(d) If, at any time prior to the later of (A) the
final date when a prospectus relating to the Securities
is required to be delivered under the Act or (B) the
Option Closing Date, any event occurs as a result of
which the Prospectus, as then amended or supplemented,
would include an untrue statement of a material fact or
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, or if for any other reason it is necessary
at any time to amend or supplement the Prospectus to
comply with the Act, the Investment Company Act or the
respective rules or regulations of the Commission
thereunder, the Company will promptly notify the
Representative thereof and, subject to Section 5(a)
hereof, will prepare and file with the Commission, at
the Company's expense, an amendment to the Registration
Statement or an amendment or supplement to the
Prospectus that corrects such statement or omission or
effects such compliance.
(e) The Company will, without charge and upon request,
provide (A) to the Representative and to counsel for
the Underwriters (X) a signed copy of the Notification
of Registration and (Y) a signed copy of the
registration statement originally filed with respect to
the Securities and each amendment thereto (in each case
including exhibits thereto), a conformed copy of the
registration statement originally filed with respect to
the Securities and each amendment thereto (in each case
including exhibits thereto), certified by the Secretary
or an Assistant Secretary of the Company to be true and
complete copies thereof as filed with the Commission by
electronic transmission, (B) to each other Underwriter,
a conformed copy of such Notification of Registration
and such registration statement and each amendment
thereto (in each case without exhibits thereto) and (C)
so long as a prospectus relating to the Securities is
required to be delivered under the Act, as many copies
of each Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto as the Representative
may reasonably request.
(f) The Company, as soon as practicable but in no
event later than 60 days after the period covered
thereby, will make generally available to its security
holders and to the
Representative a consolidated earnings statement of the Company
that satisfies the provisions of Section 11(a) of the Act and
Rule 158 thereunder.
(g) The Company will apply the net proceeds from the
sale of the Securities as set forth under "Use of
Proceeds" in the Prospectus.
(h) The Company will use its best efforts to list,
subject to notice of issuance, the Securities to be
sold by it on the American Stock Exchange
simultaneously with the effectiveness of the
Registration Statement.
(i) During a period of five years from the effective
date of the Registration Statement, the Company will
furnish to the Representative copies of all reports and
other communications (financial or other) furnished by
the Company to its shareholders and, as soon as
available, copies of any reports or financial
statements furnished or filed by the Company to or with
the Commission or any national securities exchange on
which any class of securities of the Company may be
listed.
(j) The Company and the Manager will not, directly or
indirectly (except as the Company or the Manager may be
deemed to have acted through the Representative as a
result of the affiliation between the parties), (A)
take any action designed to cause or to result in, or
that has constituted or which might reasonably be
expected to constitute, the stabilization or
manipulation of the price of any security of the
Company to facilitate the sale or resale of the
Securities or (B) (X) sell, bid for, purchase, or pay
anyone any compensation for soliciting purchases of,
the Securities or (Y) pay or agree to pay to any person
any compensation for soliciting another to purchase any
other securities of the Company.
(k) If at any time during the 25-day period after the
Registration Statement becomes effective or the period
prior to the Option Closing Date, any rumor,
publication or event relating to or affecting the
Company shall occur as a result of which in your
opinion the market price of the Common Stock has been
or is likely to be materially affected (regardless of
whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the
Company will, after written notice from you advising
the Company to the effect set forth above, forthwith
prepare, consult with you concerning the substance of,
and disseminate a press release or other public
statement, reasonably satisfactory to you, responding
to or commenting on such rumor, publication or event.
6. Expenses.
(a) The Manager agrees to pay all costs and expenses
incident to the performance of the Company's
obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or
this Agreement is terminated pursuant to Section 11
hereof, including all costs and expenses incident to
(i) the printing or other production of documents with
respect to the transactions, including any costs of
printing the registration statement originally filed
with respect to the Securities and any amendment
thereto, the Notification of Registration, any
Preliminary Prospectus (including without limitation,
the expenses of printing the mailing folder for the
Preliminary Prospectus and the expenses of attaching
the mailing folder to each Preliminary Prospectus and
of packaging each Preliminary Prospectus for
distribution) and the Prospectus and
any amendment or supplement thereto, this Agreement, the Advisory
Agreement, the Custody Agreement, the Transfer Agency
Agreement, the Fund Administration Agreement, the
Fulfillment Agreement and the Fund Accounting Agreement
and any blue sky memoranda, (ii) all arrangements
relating to the delivery to the Underwriters of copies
of the foregoing documents, (iii) the fees and
disbursements of the counsel, the accountants and any
other experts or advisors retained by the Company or
the Manager, (iv) the preparation, issuance and
delivery to the Underwriters of any certificates
evidencing the Securities, including transfer agent's
and registrar's fees, (v) the qualification of the
Securities under state securities and blue sky laws,
including filing fees and fees and disbursements of
counsel for the Underwriters relating thereto, (vi) the
filing fees of the Commission and the National
Association of Securities Dealers, Inc. relating to the
Securities, (vii) any listing fees of the Securities on
the American Stock Exchange, (viii) any meetings with
prospective investors in the Securities (other than as
shall have been specifically approved by the
Representative to be paid for by the Underwriters) and
(ix) advertising relating to the offering of the
Securities (other than as shall have been specifically
approved by the Representative to be paid for by the
Underwriters). If the sale of the Securities provided
for herein is not consummated because any condition to
the obligations of the Underwriters set forth in
Section 7 hereof is not satisfied, because this
Agreement is terminated pursuant to Section 11 hereof
or because of any failure, refusal or inability on the
part of the Company or the Manager to perform all
obligations and satisfy all conditions on its
respective part to be performed or satisfied hereunder
other than by reason of a default by any of the
Underwriters, the Manager agrees to reimburse the
Underwriters severally upon demand for all out-of-
pocket expenses (including counsel fees and
disbursements) that shall have been incurred by them in
connection with the proposed purchase and sale of the
Securities. Neither the Company nor the Manager shall
in any event be liable to any of the Underwriters for
the loss of anticipated profits from the transactions
covered by this Agreement.
(b) If the Underwriters purchase the Firm Securities,
the Company will pay a non-accountable expense
allowance equal to $400,000 to the Representative for
out-of-pocket expenses incurred in connection with the
offering (including, but not limited to, advertising
relating to the offering of the Securities and travel
expenses and the fees and disbursements of counsel for
the Underwriters). The Company will pay such amount by
permitting the Underwriters to deduct such amount from
the proceeds payable to the Company on the Firm Closing
Date pursuant to Section 3(a) hereof.
7. Conditions of the Underwriters' Obligations. The
obligations of the several Underwriters to purchase and
pay for the Firm Securities shall be subject, in the
Representative's sole discretion, to the accuracy of
the representations and warranties of the Company and
the Manager contained herein as of the date hereof and
as of the Firm Closing Date, as if made on and as of
the Firm Closing Date, to the accuracy of the
statements of the Company's and the Manager's officers
made pursuant to the provisions hereof, to the
performance by the Company and the Manager of its
covenants and agreements hereunder and to the following
additional conditions:
(a) If the Registration Statement or any amendment
thereto filed prior to the Firm Closing Date has not
been declared effective as of the time of execution
hereof, the Registration Statement or such amendment
shall have been declared effective not later than 10
A.M., Milwaukee time, on the date on which the
amendment to the registration statement originally
filed with respect to the Securities or to the
Registration Statement, as the case may be, containing
information
regarding the initial public offering price
of the Securities has been filed with the Commission,
or such later time and date as shall have been
consented to by the Representative; the Prospectus and
any amendment or supplement thereto shall have been
filed with the Commission in the manner and within the
time period required by Rule 497(b), (d) or (h), as the
case may be, under the Act; no stop order suspending
the effectiveness of the Registration Statement or any
amendment thereto shall have been issued, and no
proceedings for that purpose shall have been instituted
or threatened or, to the knowledge of the Company or
the Representative, shall be contemplated by the
Commission; and the Company shall have complied with
any request of the Commission for additional
information (to be included in the Registration
Statement or the Prospectus or otherwise).
(b) The Representative shall have received an opinion,
dated the Firm Closing Date, of ▇▇▇▇▇▇▇ & ▇▇▇▇, S.C.,
counsel for the Company, substantially to the effect
that:
(i) the Company has been duly organized and is validly
existing as a corporation in good standing under the
laws of the State of Maryland;
(ii) the Company has corporate power to own or lease
its properties and conduct its business as described in
the Registration Statement and the Prospectus, and the
Company has corporate power to enter into this
Agreement, the Advisory Agreement, the Custody
Agreement, the Transfer Agency Agreement, the Fund
Administration Agreement, the Fulfillment Agreement and
the Fund Accounting Agreement and to carry out all the
terms and provisions hereof and thereof to be carried
out by it;
(iii) the Company is duly registered with the
Commission pursuant to Section 8 of the Investment
Company Act as a non-diversified, closed-end management
investment company; and the Company's articles of
incorporation and by-laws comply in all material
respects with the Investment Company Act and the rules
and regulations of the Commission thereunder;
(iv) the Company has an authorized, issued and
outstanding capitalization as set forth in the
Prospectus; all of the issued Shares have been duly
authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all
applicable federal securities laws and were not issued
in violation of or subject to any preemptive rights or
other rights to subscribe for or purchase securities;
the Firm Securities have been duly authorized by all
necessary corporate action of the Company and, when
issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be
validly issued, fully paid and nonassessable; no
holders of outstanding Shares are entitled as such to
any preemptive or other rights to subscribe for any of
the Securities; and no holders of securities of the
Company are entitled to have such securities registered
under the Registration Statement;
(v) the execution and delivery of this Agreement have
been duly authorized by all necessary corporate action
of the Company, and this Agreement has been duly
executed and delivered by the Company and assuming due
authorization, execution and delivery by the other
parties hereto, this Agreement is a legal, valid,
binding and enforceable instrument of the Company;
(vi) the execution and delivery of each of the Advisory
Agreement, the Custody Agreement, the Transfer Agency
Agreement, the Fund Administration Agreement, the
Fulfillment Agreement and the Fund Accounting Agreement
have been duly authorized by all necessary corporate
action of the Company and the Advisory Agreement, the
Custody Agreement, the Transfer Agency Agreement, the
Fund Administration Agreement, the Fulfillment
Agreement and the Fund Accounting Agreement and the
Distribution Reinvestment Plan comply in all material
respects with all applicable provisions of the
Investment Company Act and the Advisers Act, and,
assuming due authorization, execution and delivery by
the other parties thereto, the Advisory Agreement, the
Custody Agreement, the Transfer Agency Agreement, the
Fund Administration Agreement, the Fulfillment
Agreement and the Fund Accounting Agreement are the
legal, valid, binding, and enforceable instruments of
the Company and comply in all material respects with
the requirements of the Advisers Act and the Investment
Company Act and the respective rules and regulations of
the Commission thereunder;
(vii) To the knowledge of such counsel, (A) no
legal or governmental proceedings are pending to which
the Company is a party or to which the property of the
Company is subject that are required to be described in
the Registration Statement or the Prospectus and are
not described therein, and, to the knowledge of such
counsel, no such proceedings have been threatened
against the Company or with respect to any of its
properties and (B) no contract or other document is
required to be described in the Registration Statement
or the Prospectus or to be filed as an exhibit to the
Registration Statement that is not described therein or
filed as required;
(viii) the issuance, offering and sale of the
Securities to the Underwriters by the Company pursuant
to this Agreement, the compliance by the Company with
the other provisions of this Agreement, the Advisory
Agreement, the Custody Agreement, the Transfer Agency
Agreement, the Fund Administration Agreement, the
Fulfillment Agreement and the Fund Accounting Agreement
and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval,
authorization, registration or qualification of or with
any governmental authority, except such as have been
obtained and such as may be required under state
securities or blue sky laws, or (B) conflict with or
result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any
agreement known to such counsel, to which the Company
is a party or by which the Company or any of its
properties are bound, or the articles of incorporation
or by-laws of the Company, or any statute or any
judgment, decree, order, rule or regulation of any
court or other governmental authority or any arbitrator
known to such counsel and applicable to the Company;
(ix) the Registration Statement is effective under the
Act; the filing of the Prospectus pursuant to Rule
497(b), (d) or (h), as the case may be, has been made
in the manner and within the time period required by
Rule 497(b), (d) or (h), as the case may be; and, to
the knowledge of such counsel after reasonable inquiry,
no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has
been issued, and no proceedings for that purpose have
been instituted or threatened or, to the knowledge of
such counsel, are contemplated by the Commission;
(x) the Registration Statement originally filed with
respect to the Securities and each amendment thereto
and the Prospectus (in each case, other than the
financial statements and other financial information
contained therein, as to which such counsel need
express no opinion) comply as to form in all material
respects with the applicable requirements of the Act,
the Investment Company Act and the respective rules and
regulations of the Commission thereunder;
(xi) To the knowledge of such counsel, the Company is
not currently in breach of, or in default under, any
written agreement or instrument to which the Company is
a party or by which it or its property is bound or
affected; and
(xii) The Company's Registration Statement on Form
8-A under the Exchange Act is effective.
In rendering any such opinion, such counsel may rely,
as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible officers of the
Company, the Manager and public officials.
References to the Registration Statement and the
Prospectus in this paragraph (b) shall include any
amendment or supplement thereto at the date of such
opinion.
(c) The Representative shall have received an opinion,
dated the Firm Closing Date, of ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Genelly, a Partnership of Professional Corporations,
counsel of the Manager, to the effect that:
(i) the Manager is duly incorporated and validly
existing as a corporation in good standing under the
laws of the State of Illinois and is duly qualified to
transact business as a foreign corporation and is in
good standing under the laws of all other jurisdictions
where the ownership or leasing of its properties or the
conduct of its business requires such qualification,
except where the failure to be so qualified does not
amount to a material liability or disability to the
Manager;
(ii) the Manager has corporate power to own or lease
its properties and conduct its business as described in
the Registration Statement and the Prospectus, and the
Manager has corporate power to enter into this
Agreement and the Advisory Agreement and to carry out
all the terms and provisions hereof and thereof to be
carried out by it;
(iii) the Manager is duly registered with the
Commission as an investment adviser under the Advisers
Act; and the Manager is not prohibited by any provision
of the Advisers Act or the Investment Company Act, or
the respective rules and regulations of the Commission
thereunder, from performing its obligations under the
Advisory Agreement;
(iv) the execution and delivery of this Agreement and
the Advisory Agreement have been duly authorized by all
necessary corporate action of the Manager; this
Agreement and the Advisory Agreement have been duly
executed and delivered by the Manager; and,
assuming due authorization, execution and delivery by the
Company, the Advisory Agreement is the legal, valid,
binding and enforceable instrument of the Manager and
complies in all material respects with the Advisers Act
and the Investment Company Act and the respective rules
and regulations of the Commission thereunder;
(v) the compliance by the Manager with the provisions
of this Agreement and the Advisory Agreement and the
consummation of the other transactions herein
contemplated do not (i) require the consent, approval,
authorization, registration or qualification of or with
any governmental authority, except such as have been
obtained, (ii) result in a material breach or violation
of any of the terms and provisions of, or constitute a
material default under, any indenture, mortgage, deed
of trust, lease or other agreement or instrument to
which the Manager is a party or by which the Manager or
any of its properties are bound, or (iii) conflict with
the charter documents or by-laws of the Manager or any
statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority
or any arbitrator, stock exchange or securities
association known to such counsel and applicable to the
Manager;
(vi) the description of the Manager and its business
contained in the Prospectus complies in all material
respects with the requirements of the Act and the
Investment Company Act and the respective rules and
regulations of the Commission thereunder and, to the
best knowledge of such counsel after due inquiry, does
not include an untrue statement of a material fact or
omit to state any material fact necessary to make the
statements therein, in the light of the circumstances
under which they were made, not misleading; and
(vii) no legal or governmental proceedings are
pending to which the Manager is a party or to which the
property of the Manager is subject that are required to
be described in the Registration Statement or the
Prospectus and are not described therein and, to the
best knowledge of such counsel, no such proceedings
have been threatened against the Manager or with
respect to any of its properties.
In rendering any such opinion, such counsel may
rely, as to matters of fact, to the extent such counsel
deems proper, on certificates of responsible officers
of the Manager and public officials.
References to the Registration Statement and the
Prospectus in this paragraph (c) shall include any
amendment or supplement thereto at the date of such
opinion.
(d) The Representative shall have received an opinion,
dated the Firm Closing Date, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
Ltd., counsel for the Underwriters, with respect to the
issuance and sale of the Firm Securities, the
Registration Statement and the Prospectus, and such
other related matters as the Representative may
reasonably require, and the Company shall have
furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to
pass upon such matters.
(e) The Representative shall have received from
PricewaterhouseCoopers LLP a letter or letters dated,
respectively, the date hereof and the Firm Closing
Date, in form and substance satisfactory to the
Representative, to the effect that:
(i) they are independent accountants with respect to
the Company within the meaning of the Act, the
Investment Company Act and the respective rules and
regulations thereunder;
(ii) in their opinion, the Statement of Assets and
Liabilities examined by them and included in the
Registration Statement and the Prospectus complies in
form in all material respects with the applicable
accounting requirements of the Act, the Investment
Company Act and the respective rules and regulations of
the Commission thereunder;
(iii) on the basis of carrying out certain
specified procedures (which do not constitute an
examination made in accordance with generally accepted
auditing standards) that would not necessarily reveal
matters of significance with respect to the comments
set forth in this paragraph (iii), a reading of the
minute books of the shareholders, the board of
directors and any committees thereof of the Company,
and inquiries of certain officials of the Company who
have responsibility for financial and accounting
matters, nothing came to their attention that caused
them to believe that at a specific date not more than
five business days prior to the date of such letter,
there were any changes in the shares of beneficial
interest or long-term debt of the Company or any
decreases in stockholders' equity of the Company, in
each case compared with amounts shown on the Statement
of Assets and Liabilities included in the Registration
Statement and the Prospectus; and
(iv) they have recalculated certain data of a
statistical or financial nature identified by the
Representative and appearing in the Prospectus,
including without limitation, under the caption "Fees
and Expenses" and agree with the Company's calculation
of such data as set forth in the Prospectus.
In the event that the letters referred to above set
forth any such changes or decreases, it shall be a
further condition to the obligations of the
Underwriters that (A) such letters shall be accompanied
by a written explanation of the Company as to the
significance thereof, unless the Representative deems
such explanation unnecessary, and (B) such changes or
decreases do not, in the sole judgment of the
Representative, make it impractical or inadvisable to
proceed with the purchase and delivery of the
Securities as contemplated by the Registration
Statement, as amended as of the date hereof.
References to the Registration Statement and the
Prospectus in this paragraph (d) with respect to either
letter referred to above shall include any amendment or
supplement thereto at the date of such letter.
(f) The Representative shall have received a
certificate, dated the Firm Closing Date, of the
principal executive officer and the principal financial
or accounting officer of the Company to the effect
that:
(i) the representations and warranties of the Company
in this Agreement are true and correct as if made on
and as of the Firm Closing Date; the Registration
Statement, as amended as of the Firm Closing Date, does
not include any untrue statement of a material fact or
omit to state any material fact necessary to make the
statements therein not
misleading, and the Prospectus,
as amended or supplemented as of the Firm Closing Date,
does not include any untrue statement of a material
fact or omit to state any material fact necessary in
order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading; and the Company has performed all covenants
and agreements and satisfied all conditions on its part
to be performed or satisfied at or prior to the Firm
Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has
been issued, and no proceedings for that purpose have
been instituted or threatened or, to the best of the
Company's knowledge, are contemplated by the
Commission; and
(iii) subsequent to the respective dates as of
which information is given in the Registration
Statement and the Prospectus, the Company has not
sustained any material loss or interference with its
business or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or
governmental proceeding, and there has not been any
material adverse change, or any development involving a
prospective material adverse change, in the condition
(financial or otherwise), management, business
prospects, net worth or results of operations of the
Company, except in each case as described in or
contemplated by the Prospectus (exclusive of any
amendment or supplement thereto).
(g) The Representative shall have received a
certificate, dated the Firm Closing Date, of the
principal executive officer and the principal financial
or accounting officer of the Manager to the effect
that:
(i) the representations and warranties of the Manager
in this Agreement are true and correct as if made on
and as of the Firm Closing Date; the description of the
Manager and its business contained in the Prospectus,
as amended or supplemented as of the Firm Closing Date,
does not include any untrue statement of a material
fact or omit to state any material fact necessary in
order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading; and
(ii) subsequent to the respective dates as of which
information is given in the Registration Statement and
the Prospectus, the Manager has not sustained any
material loss or interference with its business or
properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental
proceeding, and there has not been any material adverse
change, or any development involving a prospective
material adverse change, in the condition (financial or
otherwise), business prospects, net worth or results of
operations of the Manager, except in each case as
described in or contemplated by the Prospectus
(exclusive of any amendment or supplement thereto).
(h) On or before the Firm Closing Date, the
Representative and counsel for the Underwriters shall
have received such further certificates, documents or
other information as they may have reasonably requested
from the Company.
(i) Prior to the commencement of the offering of the
Securities, the Securities shall have been approved for
listing on the American Stock Exchange, subject to
official notice of issuance.
All opinions, certificates, letters and documents
delivered pursuant to this Agreement will comply with
the provisions hereof only if they are reasonably
satisfactory in all material respects to the
Representative and counsel for the Underwriters. The
Company and the Manager shall furnish to the
Representative such conformed copies of such opinions,
certificates, letters and documents in such quantities
as the Representative and counsel for the Underwriters
shall reasonably request.
The respective obligations of the several Underwriters
to purchase and pay for any Option Securities shall be
subject, in their discretion, to each of the foregoing
conditions to purchase the Firm Securities, except that
all references to the Firm Securities and the Firm
Closing Date shall be deemed to refer to such Option
Securities and the Option Closing Date, respectively.
8. Indemnification and Contribution.
(a) The Company and the Manager jointly and severally
(subject to clause (i) below and to Section 17(i) of
the Investment Company Act) 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 Act or Section 20 of the Exchange Act,
against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter or such
controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out
of or are based upon:
(i) any untrue statement or alleged untrue statement
made by the Company or the Manager in Section 2 of this
Agreement; provided, however, that under this clause
(i) the Company shall be liable solely for untrue
statements or alleged untrue statements made by the
Company in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement
of any material fact contained in (A) the Registration
Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or
supplement thereto or (B) any application or other
document, including the Notification of Registration,
or any amendment or supplement thereto, executed by the
Company or based upon written information furnished by
or on behalf of the Company filed in any jurisdiction
in order to qualify the Securities under the securities
or blue sky laws thereof or filed with the Commission
or any securities association or securities exchange
(each an "Application"),
(iii) the omission or alleged omission to state in
the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or any Application a
material fact required to be stated therein or
necessary to make the statements therein not misleading
or any untrue statement or alleged untrue statement of
any material fact contained in any audio or visual
materials used in connection with the marketing of the
Securities that have been approved in writing or
provided, prepared or authorized by the Company ("Sales
Material"), including without
limitation, slides, videos, films, tape recordings, and will
reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably
incurred by such Underwriter or such controlling person
in connection with investigating, defending against or
appearing as a third-party witness in connection with
any such loss, claim, damage, liability or action;
provided, however, that neither the Company nor the
Manager will be liable in any such case to the extent
that any such loss, claim, damage or liability arises
out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made
in such registration statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto, any Application or
any Sales Materials in reliance upon and in conformity
with written information furnished to the Company by
such Underwriter through the Representative
specifically for use therein; and provided, further,
that neither the Company nor the Manager will be liable
to any Underwriter or any person controlling such
Underwriter with respect to any such untrue statement
or omission made in any Preliminary Prospectus that is
corrected in the Prospectus (or any amendment or
supplement thereto) if the person asserting any such
loss, claim, damage or liability purchased Securities
from such Underwriter but was not sent or given a copy
of the Prospectus (as amended or supplemented) at or
prior to the written confirmation of the sale of such
Securities to such person in any case where such
delivery of the Prospectus (as amended or supplemented)
is required by the Act, unless such failure to deliver
the Prospectus (as amended or supplemented) was a
result of noncompliance by the Company with any
provisions of this Agreement. This indemnity agreement
will be in addition to any liability which the Company
or the Manager may otherwise have. Neither the Company
nor the Manager will, without the prior written consent
of the Underwriter or Underwriters purchasing, in the
aggregate more than fifty percent (50%) of the
Securities, settle or compromise or consent to the
entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not
any such Underwriter or any person who controls any
such Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act is a party to
such claim, action, suit or proceeding), unless such
settlement, compromise or consent includes an
unconditional release of all of the Underwriters and
such controlling persons from all liability arising out
of such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company and the
Manager, each of the Company's directors, each of the
Company's officers who signed the Registration
Statement and each person, if any, who controls the
Company or the Manager within the meaning of Section 15
of the Act or Section 20 of the Exchange Act against
any losses, claims, damages or liabilities to which the
Company or any such director, officer or controlling
person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the
Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, any Application or any
Sales Material or (ii) the omission or the alleged
omission to state therein a material fact required to
be stated in the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, any
Application or any Sales Material or necessary to make
the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue
statement or alleged
untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the
Representative specifically for use therein; and, subject to the
limitation set forth immediately preceding this clause,
will reimburse, as incurred, any legal or other
expenses reasonably incurred by the Company or the
Manager or any such director, officer or controlling
person in connection with investigating or defending
any such loss, claim, damage, liability or any action
in respect thereof. This indemnity agreement will be in
addition to any liability which such Underwriter may
otherwise have.
(c) Promptly after receipt by an indemnified party
under this Section 8 of notice of the commencement of
any action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying
party of the commencement thereof; but the omission so
to notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified
party otherwise than under this Section 8. In case any
such action is brought against any indemnified party,
and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that
it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party;
provided, however, that if the defendants in any such
action include both the indemnified party and the
indemnifying party and the indemnified party shall have
reasonably concluded that there may be one or more
legal defenses available to it and/or other indemnified
parties which are different from or additional to those
available to the indemnifying party, the indemnifying
party shall not have the right to direct the defense of
such action on behalf of such indemnified party or
parties and such indemnified party or parties shall
have the right to select separate counsel to defend
such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to
such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party
of counsel appointed to defend such action, the
indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or
other expenses, other than reasonable costs of
investigation, subsequently incurred by such
indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have
employed separate counsel in accordance with the
proviso to the next preceding sentence (it being
understood, however, that in connection with such
action the indemnifying party shall not be liable for
the expenses of more than one separate counsel (in
addition to local counsel) in any one action or
separate but substantially similar actions in the same
jurisdiction arising out of the same general
allegations or circumstances, designated by the
Representative in the case of paragraph (a) of this
Section 8, representing the indemnified parties under
such paragraph (a) who are parties to such action or
actions) or (ii) the indemnifying party does not
promptly retain counsel satisfactory to the indemnified
party or (iii) the indemnifying party has authorized
the employment of counsel for the indemnified party at
the expense of the indemnifying party. After such
notice from the indemnifying party to such indemnified
party, the indemnifying party will not be liable for
the costs and expenses of any settlement of such action
effected by such indemnified party without the consent
of the indemnifying party.
(d) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this
Section 8 is unavailable or insufficient, for any
reason, to hold harmless an indemnified party in
respect of any losses, claims, damages or liabilities
(or actions in respect thereof), each indemnifying
party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or
payable by such indemnified party as a result of such
losses, claims,
damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate
to reflect (i) the relative benefits received by the
indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the
Securities or (ii) if the allocation provided by the
foregoing clause (i) is not permitted by applicable
law, not only such relative benefits but also the
relative fault of the indemnifying party or parties on
the one hand and the indemnified party on the other in
connection with the statements or omissions or alleged
statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect
thereof) as well as any other relevant equitable
considerations. The relative benefits received by the
Company and the Manager on the one hand (it being
understood that for such purpose, the Company and the
Manager shall be treated as one entity) and the
Underwriters on the other shall be deemed to be in the
same proportion as the total proceeds from the offering
(before deducting expenses) received by the Company
bear to the total underwriting discounts and
commissions received by the Underwriters. The relative
fault of the parties shall be determined by reference
to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to
information supplied by the Company, the Manager or the
Underwriters, the parties' relative intent, knowledge,
access to information and opportunity to correct or
prevent such statement or omission, and any other
equitable considerations appropriate in the
circumstances. The Company, the Manager and the
Underwriters agree that it would not be equitable if
the amount of such contribution were determined by pro
rata or per capita allocation (even if the Underwriters
were treated as one entity for such purpose) or by any
other method of allocation that does not take into
account the equitable considerations referred to above
in this paragraph (d). Notwithstanding any other
provision of this paragraph (d), no Underwriter shall
be obligated to make contributions hereunder that in
the aggregate exceed the total public offering price of
the Securities purchased by such Underwriter under this
Agreement, less the aggregate amount of any damages
that such Underwriter has otherwise been required to
pay in respect of the same or any substantially similar
claim, and 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 hereunder are several in proportion to their
respective underwriting obligations and not joint, and
contributions among Underwriters shall be governed by
the provisions of the LaSalle St. Securities, LLC
Master Agreement Among Underwriters. For purposes of
this paragraph (d), each person, if any, who controls
an Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act shall have the
same rights to contribution as such Underwriter, and
each director of the Company, each officer of the
Company who signed the Registration Statement and each
person, if any, who controls the Company or the Manager
within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, shall have the same rights to
contribution as the Company or the Manager, as the case
may be.
9. Default of Underwriters. If one or more
Underwriters default in their obligations to purchase
Firm Securities or Option Securities hereunder and the
aggregate number of such Securities that such
defaulting Underwriter or Underwriters agreed but
failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option
Securities to be purchased by all of the Underwriters
at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representative for the
purchase of such Securities by other persons (who may
include one or more of the non-defaulting Underwriters,
including the Representative), but if no such
arrangements are made by the Firm Closing Date or the
related Option Closing Date, as the case may be, the
other Underwriters shall be obligated severally in
proportion to their respective commitments hereunder to
purchase the Firm Securities or Option Securities that
such defaulting Underwriter or Underwriters agreed but
failed to purchase. If one or more Underwriters so
default with respect to an aggregate number of
Securities that is more than ten percent of the
aggregate number of Firm Securities or Option
Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if
arrangements satisfactory to the Representative are not
made within 36 hours after such default for the
purchase by other persons (who may include one or more
of the non-defaulting Underwriters, including the
Representative) of the Securities with respect to which
such default occurs, this Agreement will terminate
without liability on the part of any non-defaulting
Underwriter, the Company or the Manager other than as
provided in Section 10 hereof. In the event of any
default by one or more Underwriters as described in
this Section 9, the Representative shall have the right
to postpone the Firm Closing Date or the Option Closing
Date, as the case may be, established as provided in
Section 3 hereof for not more than seven business days
in order that any necessary changes may be made in the
arrangements or documents for the purchase and delivery
of the Firm Securities or Option Securities, as the
case may be. In the event of any such default, the
Company shall have the right to postpone the Firm
Closing Date or the Option Closing Date, as the case
may be, in order to enable the Company to call and hold
an in-person meeting of the directors to approve of any
substitute underwriters as required by Section 15 of
the Investment Company Act. As used in this Agreement,
the term "Underwriter" includes any person substituted
for an Underwriter under this Section 9. Nothing herein
shall relieve any defaulting Underwriter from liability
for its default.
10. Survival. The respective representations,
warranties, agreements, covenants, indemnities and
other statements of the Company, the Manager, the
officers of the Company and the Manager and the several
Underwriters set forth in this Agreement or made by or
on behalf of them pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, the
Manager, any of their officers or directors, any
Underwriter or any controlling person referred to in
Section 8 hereof and (ii) delivery of and payment for
the Securities. The respective agreements, covenants,
indemnities and other statements set forth in Sections
6 and 8 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this
Agreement.
11. Termination.
(a) This Agreement may be terminated with respect to
the Firm Securities or any Option Securities in the
sole discretion of the Representative by notice to the
Company given prior to the Firm Closing Date or the
Option Closing Date, respectively, in the event that
the Company or the Manager shall have failed, refused
or been unable to perform all obligations and satisfy
all conditions on its part to be performed or satisfied
hereunder at or prior thereto or, if at or prior to the
Firm Closing Date or such Option Closing Date,
respectively,
(i) the Company or the Manager shall have, in the sole
judgment of the Representative, sustained any material
loss or interference with its business or properties
from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from
any labor dispute or any legal or governmental
proceeding or there shall have been any material
adverse change, or any development involving a
prospective material adverse change (including without
limitation a change in management or control of the
Company or
the Manager, as the case may be), in the
condition (financial or otherwise), business prospects,
net worth or results of operations of the Company or
the Manager, except in each case as described in or
contemplated by the Prospectus (exclusive of any
amendment or supplement thereto);
(ii) trading in the Shares shall have been suspended by
the Commission or the American Stock Exchange or
trading in securities generally on the American Stock
Exchange shall have been suspended or minimum or
maximum prices shall have been established;
(iii) a banking moratorium shall have been declared
by New York or United States authorities; or
(iv) there shall have been (A) an outbreak or
escalation of hostilities between the United States and
any foreign power, (B) an outbreak or escalation of any
other insurrection or armed conflict involving the
United States or (C) any other calamity or crisis or
material adverse change in general economic, political
of financial conditions having an effect on the U. S.
financial markets that, in the sole judgment of the
Representative, makes it impractical or inadvisable to
proceed with the public offering or the delivery of the
Securities as contemplated by the Registration
Statement, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this
Section 11 shall be without liability of any party to
any other party except as provided in Section 10
hereof.
12. Information Supplied by Underwriters. The
statements set forth under the heading "Underwriting"
in any Preliminary Prospectus or the Prospectus or in
any other sections of any Preliminary Prospectus or the
Prospectus (to the extent such statements relate to the
Underwriters) constitute the only information furnished
by any Underwriter through the Representative to the
Company for the purposes of Sections 2(a)(ii) and 8
hereof. The Underwriters confirm that such statements
(to such extent) are correct.
13. Notices. All communications hereunder shall be in
writing and, if sent to any of the Underwriters, shall
be delivered or sent by mail, telex or facsimile
transmission and confirmed in writing to LaSalle St.
Securities, LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Equity Transactions Group;
if sent to the Company, shall be delivered or sent by
mail, telex or facsimile transmission and confirmed in
writing to the Company at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Will Thimes; and if
sent to the Manager, shall be mailed, delivered or
telegraphed and confirmed in writing to the Manager at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇.
14. Successors. This Agreement shall inure to the
benefit of and shall be binding upon the several
Underwriters, the Company and the Manager and their
respective successors and legal representatives, and
nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person
any legal or equitable right, remedy or claim under or
in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and
provisions hereof being intended to be and being for
the sole and exclusive benefit of such persons
and for the benefit of no other person except that (i) the
indemnities of the Company and the Manager contained in
Section 8 of this Agreement shall also be for the
benefit of any person or persons who control any
Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act and (ii) the
indemnities of the Underwriters contained in Section 8
of this Agreement shall also be for the benefit of the
directors of the Company, the officers of the Company
who have signed the Registration Statement and any
person or persons who control the Company or the
Manager within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act. No purchaser of
Securities from any Underwriter shall be deemed a
successor because of such purchase.
15. Applicable Law. The validity and interpretation
of this Agreement, and the terms and conditions set
forth herein, shall be governed by and construed in
accordance with the law of the State of Illinois,
without giving effect to any provisions relating to
conflicts of laws.
16. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute
one and the same instrument. If signed in
counterparts, the Agreement shall not become effective
unless at least one counterpart hereof shall have been
executed and delivered on behalf of each party hereto.
If the foregoing correctly sets forth our
understanding, please indicate your acceptance thereof
in the space provided below for that purpose, whereupon
this letter shall constitute an agreement binding the
Company, the Manager and each of the several
Underwriters.
Very truly yours,
LCM INTERNET GROWTH FUND, INC.
By:_____________________________
Name:
Title:
LCM CAPITAL MANAGEMENT, INC.
By:_____________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
LASALLE ST. SECURITIES, LLC
By___________________________
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: First Vice President
As Representative of the several Underwriters.
SCHEDULE 1
UNDERWRITERS
Number of Firm
Securities to be Purchased
_______________
Underwriter
LaSalle St. Securities, LLC
Southwest Securities, Inc.
Wedbush ▇▇▇▇▇▇ Securities, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Associates
▇.▇. ▇▇▇▇▇▇ & Company, LLC
EBI Securities Corp.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Company, Inc.
Paradise Valley Securities, Inc.
Advanced Equities, Inc.
Nutmeg Securities, Ltd.
L.H. Friend, Weinress, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇.▇.
Bluestone Capital Partners, L.P.
____________
Total: 4,000,000