Exhibit h. 1
CALAMOS CONVERTIBLE AND HIGH INCOME FUND
_____ COMMON SHARES OF BENEFICIAL INTEREST
(no par value)
UNDERWRITING AGREEMENT
New York, New York
, 2006
Citigroup Global Markets Inc.
[Other Co-Managers]
As Representatives of the several Underwriters
c/o Citigroup Global Markets Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, Calamos Convertible and High Income Fund, a
Delaware statutory trust (the "Fund") and Calamos Advisors LLC, a Delaware
limited liability company (the "Adviser"), address you as underwriters and as
the representatives (the "Representatives") of each of the several underwriters
named in Schedule I hereto (the "Underwriters"). The Fund proposes to sell to
the Underwriters _____ shares of common shares of beneficial interest, no par
value per share (the "Common Shares") of the Fund (said shares to be issued and
sold by the Fund being hereinafter called the "Underwritten Securities"). The
Fund also proposes to grant to the Underwriters an option to purchase up to
______ additional Common Shares to cover over-allotments (the "Option
Securities"; the Option Securities, together with the Underwritten Securities,
being hereinafter called the "Securities"). Certain terms used herein are
defined in Section 21 hereof.
The Fund has entered into an Investment Management Agreement with
the Adviser dated as of May 1, 2003, a Custody Agreement with The Bank of New
York dated as of March 21, 2003, a Stock Transfer Agency Agreement with The Bank
of New York dated as of May 30, 2003, a Financial Accounting Services Agreement
with the Adviser dated as of _____ and a Master Services Agreement with State
Street Bank and Trust Company dated as of _____ and such agreements are herein
referred to as the "Management Agreement," the "Custodian Agreement, " the
"Transfer Agency Agreement," the "Accounting Agreement" and the "Administration
Agreement," respectively. Collectively, the Management Agreement, the Custodian
Agreement, the Transfer Agency Agreement, the Accounting Agreement and the
Administration Agreement are herein referred to as the "Fund Agreements." In
addition, the Fund has adopted a dividend reinvestment plan (the "Dividend
Reinvestment Plan") pursuant to
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which holders of Common Shares shall have their dividends automatically
reinvested in additional Common Shares of the Fund unless they elect to receive
such dividends in cash.
1. Representations and Warranties of the Fund and the Adviser. The
Fund and the Adviser, jointly and severally, represent and warrant to, and agree
with, each Underwriter as set forth below in this Section 1.
(a) The Fund has prepared and filed with the Commission a
registration statement (file numbers 333-_____ and 811-21319) on Form N-2,
including a related preliminary prospectus (including the statement of
additional information incorporated by reference therein), for
registration under the Act and the 1940 Act of the offering and sale of
the Securities. Such Registration Statement, including any amendments
thereto filed prior to the Execution Time, has become effective. The Fund
may have filed one or more amendments thereto, including a related
preliminary prospectus (including the statement of additional information
incorporated by reference therein), each of which has previously been
furnished to you. The Fund will file with the Commission a final
prospectus (including the statement of additional information incorporated
by reference therein) in accordance with Rule 497. As filed, such final
prospectus (including the statement of additional information incorporated
by reference therein) shall contain all information required by the Act
and the 1940 Act and the rules thereunder and, except to the extent the
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time, shall contain
only such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Fund has advised
you, prior to the Execution Time, will be included or made therein.
(b) Each Preliminary Prospectus complied when filed with the
Commission in all material respects with the provisions of the Act, the
1940 Act and the Rules and Regulations, and the Preliminary Prospectus and
the Rule 430A Information, when taken together as a whole, as of the
Execution Time, do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Fund makes no representations or
warranties as to the information contained in or omitted from the
Preliminary Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Fund by or on
behalf of any Underwriter specifically for inclusion therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in Section 9(b)
hereof. The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus.
(c) On the Effective Date, the Registration Statement did, and when
the Prospectus is first filed in accordance with Rule 497 and on the
Closing Date (as defined herein) and on any date on which Option
Securities are purchased, if such date is not the Closing Date (a
"settlement date"), the Prospectus (and any supplements thereto) will, and
the 1940 Act Notification when originally filed with the Commission and
any
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amendment or supplement thereto when filed with the Commission did or
will, comply in all material respects with the applicable requirements of
the Act, the 1940 Act and the Rules and Regulations; on the Effective Date
and at the Execution Time, the Registration Statement did not and will 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 on the date of any filing
pursuant to Rule 497 and on the Closing Date and any settlement date, the
Prospectus (together with any supplements thereto) 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; provided,
however, that the Fund makes no representations or warranties as to the
information contained in or omitted from the Registration Statement, or
the Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Fund by or on
behalf of any Underwriter through the Representatives specifically for
inclusion in the Registration Statement or the Prospectus (or any
supplement thereto), it being understood and agreed that the only such
information furnished by any Underwriter consists of the information
described as such in Section 9(b) hereof.
(d) The Fund has been duly formed and is validly existing in good
standing as a statutory trust under the laws of the State of Delaware,
with full power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement, the
Preliminary Prospectus and the Prospectus (and any amendment or supplement
to any of them) and is duly registered and qualified to conduct business
and is in good standing in each jurisdiction or place where the nature of
its properties or the conduct of its business requires such registration
or qualification, except where the failure so to register or to qualify
does not have a material, adverse effect on the condition (financial or
other), business, prospects, properties, net assets or results of
operations of the Fund. The Fund has no subsidiaries.
(e) The Fund's authorized equity capitalization is as set forth in
the Preliminary Prospectus and the Prospectus; the capital stock of the
Fund conforms in all material respects to the description thereof
contained in the Preliminary Prospectus and Prospectus; all outstanding
shares of capital stock have been duly and validly authorized and issued
and are fully paid and, except as described in the Preliminary Prospectus
and Prospectus, nonassessable; the Securities have been duly and validly
authorized, and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be fully paid and, except as
described in the Preliminary Prospectus and Prospectus, nonassessable; the
Securities are duly listed, and admitted and authorized for trading,
subject to official notice of issuance and evidence of satisfactory
distribution, on the New York Stock Exchange (the "NYSE"); the
certificates for the Securities are in valid and sufficient form; the
holders of outstanding Common Shares are not entitled to preemptive or
other rights to subscribe for the Securities; and, except as set forth in
the Prospectus, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital stock
of or ownership interests in the Fund are outstanding.
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(f) The Fund's registration statement on Form 8-A under the Exchange
Act is effective.
(g) The Fund, subject to the Registration Statement having been
declared effective and the filing of the Prospectus under Rule 497, has
taken all required action under the Act, the 1940 Act and the Rules and
Regulations to make the public offering and consummate the sale of the
Securities as contemplated by this Agreement.
(h) There are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration
Statement, the Preliminary Prospectus or the Prospectus, or to be filed as
an exhibit to the Registration Statement, which are not described or filed
as required; and the statements in the Registration Statement, the
Preliminary Prospectus and Prospectus, insofar as they are descriptions of
contracts, agreements or other legal documents or refer to statements of
law or legal conclusions, are accurate and present fairly the information
required to be shown.
(i) The execution and delivery of and the performance by the Fund of
its obligations under this Agreement and the Fund Agreements have been
duly and validly authorized by the Fund and this Agreement and the Fund
Agreements have been duly executed and delivered by the Fund and
constitute the valid and legally binding agreements of the Fund,
enforceable against the Fund in accordance with their terms, except as
rights to indemnity and contribution hereunder may be limited by federal
or state securities laws and subject to the qualification that the
enforceability of the Fund's obligations hereunder and thereunder may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and by general
equitable principles.
(j) The Fund is duly registered under the 1940 Act as a closed-end,
diversified management investment company and the 1940 Act Notification
has been duly filed with the Commission. The Fund has not received any
notice from the Commission pursuant to Section 8(e) of the 1940 Act with
respect to the 1940 Act Notification or the Registration Statement.
(k) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein or in the Fund Agreements, except such as
have been made or obtained under the Act, the 1940 Act and the rules and
regulations of the National Association of Securities Dealers, Inc. (the
"NASD") and the NYSE, and such as may be required under the blue sky laws
of any jurisdiction in connection with the purchase and distribution of
the Securities by the Underwriters in the manner contemplated herein and
in the Preliminary Prospectus and Prospectus.
(l) Neither the issuance and sale of the Securities, the execution,
delivery or performance of this Agreement or any of the Fund Agreements by
the Fund, nor the consummation by the Fund of the transactions
contemplated hereby or thereby (i) conflicts or will conflict with or
constitutes or will constitute a breach of the declaration of trust or
by-laws of the Fund, (ii) conflicts or will conflict with or constitutes
or will
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constitute a breach of or a default under, any material agreement,
indenture, lease or other instrument to which the Fund is a party or by
which it or any of its properties may be bound or (iii) violates or will
violate any material statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Fund or any of its
properties or will result in the creation or imposition of any material
lien, charge or encumbrance upon any property or assets of the Fund
pursuant to the terms of any agreement or instrument to which it is a
party or by which it may be bound or to which any of the property or
assets of the Fund is subject.
(m) No holders of securities of the Fund have rights to the
registration of such securities under the Registration Statement.
(n) The financial statements, together with related schedules and
notes, included or incorporated by reference in the Preliminary
Prospectus, the Prospectus and the Registration Statement present fairly
in all material respects the financial condition and results of operations
of the Fund as of the dates and for the periods indicated, comply as to
form with the applicable accounting requirements of the Act and the 1940
Act and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein).
(o) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Fund or its property is pending or, to the knowledge of the Fund,
threatened that (i) could reasonably be expected to have a material
adverse effect on the performance of this Agreement or the consummation of
any of the transactions contemplated hereby or (ii) could reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Fund,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Preliminary
Prospectus and Prospectus (exclusive of any supplement thereto).
(p) The Fund is not (i) in violation of its declaration of trust or
by-laws, (ii) in breach or default in any material respect in the
performance of the terms of any material indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which it is a
party or bound or to which its property is subject or (iii) in violation
of any material law, ordinance, administrative or governmental rule or
regulation applicable to the Fund, including, without limitation, the
applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and
regulations promulgated in connection therewith, or of any material decree
of the Commission, the NASD, any state securities commission, any national
securities exchange, any arbitrator, any court or any other governmental,
regulatory, self-regulatory or administrative agency or any official
having jurisdiction over the Fund.
(q) Since the date as of which information is given in the
Preliminary Prospectus and Prospectus, except as otherwise stated therein,
(i) there has been no material, adverse change in the condition (financial
or other), business, properties, net assets or results of operations of
the Fund or business prospects (other than as a result of a change in the
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financial markets generally) of the Fund, whether or not arising in the
ordinary course of business, (ii) there have been no transactions entered
into by the Fund which are material to the Fund other than those in the
ordinary course of its business as described in the Prospectus and (iii)
there has been no dividend or distribution of any kind declared, paid or
made by the Fund on any class of its Common Shares.
(r) Deloitte & Touche LLP, who have audited the statement of assets
and liabilities, including the schedule of investments, and the related
statement of operations, the statements of changes in net assets and the
financial highlights included or incorporated by reference in the
Registration Statement, the Preliminary Prospectus and the Prospectus, are
independent public accountants with respect to the Fund within the meaning
of the Act, the 1940 Act and the Rules and Regulations.
(s) The Fund has not distributed and, prior to the later to occur of
(i) the Closing Date and (ii) completion of the distribution of the
Securities, will not distribute any offering material in connection with
the offering and sale of the Securities other than the Registration
Statement, the Preliminary Prospectus, the Prospectus or other materials
permitted by the Act, the 1940 Act or the Rules and Regulations.
(t) All advertising, sales literature or other promotional material
(including "prospectus wrappers", "broker kits", "road show slides" and
"road show scripts"), whether in printed or electronic form, authorized in
writing by or prepared by the Fund or the Adviser for use in connection
with the offering and sale of the Securities (collectively, "sales
material") complied and comply in all material respects with the
applicable requirements of the Act, the Act Rules and Regulations and the
rules and interpretations of the NASD and if required to be filed with the
NASD under the NASD's conduct rules were provided to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, for filing. No sales material
contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(u) The Fund's directors and officers/errors and omissions insurance
policy and its fidelity bond required by Rule 17g-1 of the 1940 Act Rules
and Regulations are in full force and effect; the Fund is in compliance
with the terms of such policy and fidelity bond in all material respects;
and there are no claims by the Fund under any such policy or fidelity bond
as to which any insurance company is denying liability or defending under
a reservation of rights clause; the Fund has not been refused any
insurance coverage sought or applied for; and the Fund has no reason to
believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not have a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the Fund,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Preliminary
Prospectus and Prospectus (exclusive of any supplement thereto).
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(v) The Fund has such licenses, permits, and authorizations of
governmental or regulatory authorities ("permits") as are necessary to own
its property and to conduct its business in the manner described in the
Preliminary Prospectus and Prospectus, except where the failure to hold
any such permit does not have a material, adverse effect on the condition
(financial or other), business, prospects, properties, net assets or
results of operations of the Fund; the Fund has fulfilled and performed
all its material obligations with respect to such permits and no event has
occurred which allows or, after notice or lapse of time, would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the Fund under any such permit, subject in
each case to such qualification as may be set forth in the Preliminary
Prospectus and Prospectus; and, except as described in the Preliminary
Prospectus and Prospectus, none of such permits contains any restriction
that is materially burdensome to the Fund.
(w) The Fund maintains and will maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization and with the investment objectives, policies and
restrictions of the Fund and the applicable requirements of the 1940 Act,
the 1940 Act Rules and Regulations and the Internal Revenue Code of 1986,
as amended (the "Code"); (ii) 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 1940 Act and the 1940 Act Rules
and Regulations; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
The Fund's internal controls over financial reporting are effective and
the Fund is not aware of any material weakness in its internal control
over financial reporting.
(x) The Fund maintains "disclosure controls and procedures" (as such
term is defined in Rule 30a-3 under the 1940 Act); such disclosure
controls and procedures are effective.
(y) Except as stated in this Agreement, the Preliminary Prospectus
and the Prospectus, the Fund has not taken, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Fund to
facilitate the sale or resale of the Securities, and the Fund is not aware
of any such action taken or to be taken by any affiliates of the Fund.
(z) This Agreement and each of the Fund Agreements complies in all
material respects with all applicable provisions of the 1940 Act, the 1940
Act Rules and Regulations, the Advisers Act and the Advisers Act Rules and
Regulations.
(aa) The Fund intends to direct the investment of the proceeds of
the offering of the Securities in such a manner as to comply with the
requirements of Subchapter M of the Code.
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(bb) The conduct by the Fund of its business (as described in the
Preliminary Prospectus and 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,
except where the failure to own, possess or license any such patent,
patent license, trademark, service ▇▇▇▇ or trade name does not have a
material, adverse effect on the condition (financial or other), business,
prospects, properties, net assets or results of operations of the Fund.
(cc) The Fund has filed all tax returns required to be filed and the
Fund is not in material default in the payment of any taxes which were
shown as payable on said returns or any assessments with respect thereto;
and, as required by Subchapter M of the Code, the Fund is currently in
compliance with the requirements to qualify as a regulated investment
company under the Code.
(dd) The statements made in the Preliminary Prospectus and
Prospectus under the captions "U.S. Federal Income Tax Matters," insofar
as they constitute matters of law or legal conclusions, constitute
accurate statements of any such matters of law or legal conclusions.
(ee) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and delivery
of this Agreement or the issuance by the Fund or sale by the Fund of the
Securities.
Any certificate signed by any officer of the Fund and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Fund, as to matters covered thereby, to each Underwriter.
2. Representations and Warranties of the Adviser. The Adviser
represents and warrants to each Underwriter as follows:
(a) The Adviser has been duly formed and is validly existing in good
standing as a limited liability company under the laws of the State of
Delaware, with full power and authority to own, lease and operate its
properties and to conduct its business as described in the Preliminary
Prospectus and Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the failure
to so qualify would not have a material, adverse effect on the condition
(financial or other), business, prospects, properties, net assets or
results of operations of the Adviser.
(b) The Adviser is duly registered as an investment adviser under
the Advisers Act and is not prohibited by the Advisers Act, the 1940 Act,
the Advisers Act Rules and Regulations or the 1940 Act Rules and
Regulations from acting under the Management Agreement or the Accounting
Agreement as contemplated by the Preliminary Prospectus and Prospectus.
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(c) The Adviser has full power and authority to enter into this
Agreement, the Management Agreement and the Accounting Agreement; the
execution and delivery of, and the performance by the Adviser of its
obligations under, this Agreement, the Management Agreement and the
Accounting Agreement have been duly and validly authorized by the Adviser;
and this Agreement, the Management Agreement and the Accounting Agreement
have been duly executed and delivered by the Adviser and constitute the
valid and legally binding agreements of the Adviser, enforceable against
the Adviser in accordance with their terms, except as rights to indemnity
and contribution hereunder may be limited by federal or state securities
laws and subject to the qualification that the enforceability of the
Adviser's obligations hereunder and thereunder may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights generally and by general equitable
principles.
(d) The Adviser has the financial resources available to it
necessary for the performance of its services and obligations as
contemplated in the Preliminary Prospectus and Prospectus and under this
Agreement, the Management Agreement and the Accounting Agreement.
(e) The description of the Adviser and its business, and the
statements attributable to the Adviser, in the Preliminary Prospectus and
Prospectus complied and comply in all material respects with the
provisions of the Act, the 1940 Act, the Advisers Act, the Rules and
Regulations and the Advisers Act Rules and Regulations and did not and
will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(f) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Adviser or its property is pending or, to the best knowledge of the
Adviser, threatened that (i) is required to be described in the
Preliminary Prospectus and Prospectus that is not so described as
required, (ii) could reasonably be expected to have a material adverse
effect on the ability of the Adviser to fulfill its obligations hereunder
or under the Management Agreement or the Accounting Agreement or (iii)
could reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Adviser, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in the
Preliminary Prospectus and Prospectus (exclusive of any supplement
thereto).
(g) Since the date as of which information is given in the
Preliminary Prospectus and Prospectus, except as otherwise stated therein,
(i) there has been no material, adverse change in the condition (financial
or other), business, properties, net assets or results of operations or
business prospects of the Adviser, whether or not arising from the
ordinary course of business and (ii) there have been no transactions
entered into by the Adviser which are material to the Adviser other than
those in the ordinary course of its business as described in the
Preliminary Prospectus and Prospectus.
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(h) The Adviser has such licenses, permits and authorizations of
governmental or regulatory authorities ("permits") as are necessary to own
its property and to conduct its business in the manner described in the
Preliminary Prospectus and Prospectus, except where the failure to hold
any such permit does not have a material, adverse effect on the condition
(financial or other), business, prospects, properties, net assets or
results of operations of the Adviser or on the ability of the Adviser to
perform its obligations under this Agreement, the Management Agreement and
the Accounting Agreement; the Adviser has fulfilled and performed all its
material obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the Adviser under any such permit.
(i) This Agreement, the Management Agreement and the Accounting
Agreement comply in all material respects with all applicable provisions
of the 1940 Act, the 1940 Act Rules and Regulations, the Advisers Act and
the Advisers Act Rules and Regulations.
(j) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein or in the Management Agreement or the
Accounting Agreement, except such as have been made or obtained under the
Act, the 1940 Act and the rules and regulations of the NASD and the NYSE
and such as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated herein and in the Preliminary
Prospectus and Prospectus.
(k) Neither the execution, delivery or performance of this
Agreement, the Management Agreement or the Accounting Agreement, nor the
consummation by the Fund or the Adviser of the transactions contemplated
hereby or thereby (i) conflicts or will conflict with or constitutes or
will constitute a breach of the certificate of formation or limited
liability company agreement of the Adviser, (ii) conflicts or will
conflict with or constitutes or will constitute a breach of or a default
under, any material agreement, indenture, lease or other instrument to
which the Adviser is a party or by which it or any of its properties may
be bound or (iii) violates or will violate any material statute, law,
regulation or filing or judgment, injunction, order or decree applicable
to the Adviser or any of its properties or will result in the creation or
imposition of any material lien, charge or encumbrance upon any property
or assets of the Adviser pursuant to the terms of any agreement or
instrument to which the Adviser is a party or by which the Adviser may be
bound or to which any of the property or assets of the Adviser is subject.
(l) Except as stated in this Agreement and in the Preliminary
Prospectus and Prospectus, the Adviser has not taken nor will it take,
directly or indirectly, any action designed to or which should reasonably
be expected to cause or result in or which will constitute, stabilization
or manipulation of the price of any security of the Fund in violation of
federal securities laws and the Adviser is not aware of any such action
taken or to be taken by any affiliates of the Adviser.
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(m) In the event that the Fund or the Adviser makes available any
promotional materials intended for use only by qualified broker-dealers
and registered representatives thereof by means of an Internet web site or
similar electronic means, the Adviser will install and maintain
pre-qualification and password-protection or similar procedures which are
reasonably designed to effectively prohibit access to such promotional
materials by persons other than qualified broker-dealers and registered
representatives thereof.
Any certificate signed by any officer of the Adviser and delivered
to the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Adviser, as to matters covered thereby, to each Underwriter.
3. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Fund
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Fund, at a purchase price of $_____ per share,
the amount of the Underwritten Securities set forth opposite such Underwriter's
name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Fund hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
_______ Option Securities at the same purchase price per share as the
Underwriters shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in part
at any time on or before the 45th day after the date of the Prospectus upon
written or telegraphic notice by the Representatives to the Fund setting forth
the number of shares of the Option Securities as to which the several
Underwriters are exercising the option and the settlement date. The number of
Option Securities to be purchased by each Underwriter shall be the same
percentage of the total number of shares of the Option Securities to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
4. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 3(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
_________, 2006 or at such time on such later date not more than three Business
Days after the foregoing date as the Representatives shall designate, which date
and time may be postponed by agreement between the Representatives and the Fund
or as provided in Section 10 hereof (such date and time of delivery and payment
for the Securities being herein called the "Closing Date"). Delivery of the
Securities shall be made to the Representatives for the respective accounts of
the several Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the Fund
by wire transfer payable in same-day funds to an account specified by the Fund.
Delivery of the Underwritten Securities and the Option Securities shall be made
through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
12
If the option provided for in Section 3(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Fund will deliver the
Option Securities (at the expense of the Fund) to the Representatives, at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Fund by wire transfer payable in
same-day funds to an account specified by the Fund. If settlement for the Option
Securities occurs after the Closing Date, the Fund will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 7 hereof.
5. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
6. Agreements of the Fund and the Adviser. The Fund and the Adviser,
jointly and severally, agree with the several Underwriters that:
(a) Prior to the termination of the offering of the Securities, the
Fund will not file any amendment of the Registration Statement or
supplement to the Prospectus or any Rule 462(b) Registration Statement
unless the Fund has furnished you a copy for your review prior to filing
and will not file any such proposed amendment or supplement to which you
reasonably object. The Fund will cause the Prospectus, properly completed,
and any supplement thereto to be filed in a form approved by the
Representatives with the Commission pursuant to the applicable paragraph
of Rule 497 within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The Fund will
promptly advise the Representatives (i) when the Prospectus, and any
supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 497 or when any Rule 462(b) Registration
Statement shall have been filed with the Commission, (ii) when, prior to
termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (iii) of
any request by the Commission or its staff for any amendment of the
Registration Statement, or any Rule 462(b) Registration Statement, or for
any supplement to the Prospectus or for any additional information, (iv)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any notice objecting to
its use or the institution or threatening of any proceeding for that
purpose and (v) of the receipt by the Fund of any notification with
respect to the suspension of the qualification of the Securities for sale
in any jurisdiction or the institution or threatening of any proceeding
for such purpose. The Fund will use its best efforts to prevent the
issuance of any such stop order or the occurrence of any such suspension
or objection to the use of the Registration Statement and, upon such
issuance, occurrence or notice of objection, to obtain as soon as possible
the withdrawal of such stop order or relief from such occurrence or
objection, including, if necessary, by filing an amendment to the
Registration Statement or a new registration statement and using its best
efforts to have such amendment or new registration statement declared
effective as soon as practicable.
13
(b) If, at any time prior to the filing of the Prospectus pursuant
to Rule 497, any event occurs as a result of which the Preliminary
Prospectus would 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 at such time not
misleading, the Fund will (i) notify promptly the Representatives so that
any use of the Preliminary Prospectus may cease until it is amended or
supplemented; (ii) amend or supplement the Preliminary Prospectus to
correct such statement or omission; and (iii) supply any amendment or
supplement to you in such quantities as you may reasonably request.
(c) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act , any event occurs as a result of
which, in the judgment of the Fund or in the reasonable opinion of counsel
for the Underwriters, the Prospectus as then supplemented would 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 at such time not misleading, or if it shall be
necessary to amend the Registration Statement or supplement the Prospectus
to comply with the Act, the 1940 Act and the Rules and Regulations, the
Fund promptly will (i) notify the Representatives of any such event; (ii)
prepare and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 6, an amendment or supplement which will
correct such statement or omission or effect such compliance; and (iii)
supply any supplemented Prospectus to you in such quantities as you may
reasonably request.
(d) As soon as practicable, the Fund will make generally available
to its security holders and to the Representatives an earnings statement
or statements of the Fund which will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act.
(e) The Fund will furnish to the Representatives and counsel for the
Underwriters signed copies of the Registration Statement (including
exhibits thereto) and to each other Underwriter a copy of the Registration
Statement (without exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as many
copies of each Preliminary Prospectus and the Prospectus and any
supplement thereto as the Representatives may reasonably request.
(f) The Fund will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the
Securities for offering and sale by the several Underwriters and by
dealers with the NASD and under the securities or Blue Sky laws of such
jurisdictions as you may designate and will file such consents to service
of process or other documents necessary or appropriate in order to effect
such registration or qualification; provided that in no event shall the
Fund be obligated to qualify to do business in any jurisdiction where it
is not now so qualified or to take any action that would subject it to
service of process in suits, other than those arising out of the offering
or sale of the Securities, in any jurisdiction where it is not now so
subject.
(g) The Fund will not, without the prior written consent of
Citigroup Global Markets Inc., offer, sell, contract to sell, pledge, or
otherwise dispose of, (or enter into any transaction which is designed to,
or might reasonably be expected to, result in the
14
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Fund or any
affiliate of the Fund or any person in privity with the Fund or any
affiliate of the Fund) directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act, any other Common Shares or any
securities convertible into, or exercisable, or exchangeable for, Common
Shares; or publicly announce an intention to effect any such transaction,
for a period of 180 days after the date of the Underwriting Agreement,
provided, however, that the Fund may issue and sell Common Shares pursuant
to any dividend reinvestment plan of the Fund in effect at the Execution
Time.
(h) Except as stated in this Agreement, the Preliminary Prospectus
and the Prospectus, neither the Fund nor the Adviser will take, directly
or indirectly, any action designed to or that would constitute or that
might reasonably be expected to cause or result in, under the Exchange Act
or otherwise, stabilization or manipulation of the price of any security
of the Fund to facilitate the sale or resale of the Securities.
(i) The Fund agrees to pay the costs and expenses relating to the
following matters: (i) the preparation, printing or reproduction and
filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), each Preliminary Prospectus,
the Prospectus and the 1940 Act Notification and each amendment or
supplement to any of them; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting
and packaging) of such copies of the Registration Statement, each
Preliminary Prospectus, the Prospectus, any sales material and all
amendments or supplements to any of them, as may, in each case, be
reasonably requested for use in connection with the offering and sale of
the Securities; (iii) the preparation, printing, authentication, issuance
and delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the
Securities; (iv) the printing (or reproduction) and delivery of this
Agreement, any blue sky memorandum, dealer agreements and all other
agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Securities; (v) the registration of
the Securities under the Exchange Act and the listing of the Securities on
the NYSE; (vi) any registration or qualification of the Securities for
offer and sale under the securities or blue sky laws of the several states
(including filing fees and the reasonable fees and expenses of counsel for
the Underwriters relating to such registration and qualification); (vii)
any filings required to be made with the NASD (including filing fees and
the reasonable fees and expenses of counsel for the Underwriters relating
to such filings); (viii) the transportation and other expenses incurred by
or on behalf of Fund representatives in connection with presentations to
prospective purchasers of the Securities; (ix) the fees and expenses of
the Fund's accountants and the fees and expenses of counsel (including
local and special counsel) for the Fund; (x) all other costs and expenses
incident to the performance by the Fund of its obligations hereunder; and
[(xi) an amount equal to $.005 per Common Share for each Common Share sold
pursuant to this Agreement, payable no later than 45 days from the date of
this Agreement to the Underwriters in partial reimbursement of their
expenses in connection with the offering.]
15
(j) The Fund will direct the investment of the net proceeds of the
offering of the Securities in such a manner as to comply with the
investment objectives, policies and restrictions of the Fund as described
in the Preliminary Prospectus and Prospectus.
(k) The Fund will comply with the requirements of Subchapter M of
the Code to qualify as a regulated investment company under the Code.
(l) The Fund and the Adviser will use their reasonable best efforts
to perform all of the agreements required of them by this Agreement and
discharge all conditions of theirs to closing as set forth in this
Agreement.
7. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Fund and the Adviser contained
herein as of the Execution Time, the Closing Date and any settlement date
pursuant to Section 4 hereof, to the accuracy of the statements of the Fund and
the Adviser made in any certificates pursuant to the provisions hereof, to the
performance by the Fund or the Adviser of its obligations hereunder and to the
following additional conditions:
(a) The Prospectus, and any supplement thereto, have been filed in
the manner and within the time period required by Rule 497; and no stop
order suspending the effectiveness of the Registration Statement or any
notice objecting to its use or order pursuant to Section 8(e) of the 1940
Act shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) You shall have received on the Closing Date an opinion of
Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz, special counsel for the Fund, dated the
Closing Date and addressed to the Representatives, in substantially the
form attached as Exhibit A, which opinion may rely as to matters of
Delaware law on the opinion of Morris, Nichols, Arsht & ▇▇▇▇▇▇▇, special
Delaware counsel for the Fund, dated the Closing Date and addressed to the
Representatives, in substantially the form attached as Exhibit B. The
opinion of Morris, Nichols, Arsht & ▇▇▇▇▇▇▇ shall state that ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, may rely on such
opinion as to matters of Delaware law for the purposes of rendering its
opinion referenced in Section 7(d).
(c) You shall have received on the Closing Date an opinion of
Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz, special counsel for the Adviser, dated
the Closing Date and addressed to the Representatives, in substantially
the form attached as Exhibit C.
(d) The Representatives shall have received from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with respect
to the issuance and sale of the Securities, the Registration Statement,
the Preliminary Prospectus and Prospectus (together with any supplement
thereto) and other related matters as the Representatives may reasonably
require, and the Fund and the Adviser shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters.
16
(e) Each of the Fund and the Adviser shall have furnished to the
Representatives a certificate, signed by the president, any managing
director or any vice president and of the controller, treasurer or
assistant treasurer of each of the Fund and the Adviser, dated the Closing
Date, to the effect that the signers of such certificates have carefully
examined the Registration Statement, the Preliminary Prospectus and
Prospectus, any amendments or supplements thereto and this Agreement and
that:
(i) The representations and warranties of the Fund or the
Adviser, as the case may be, in this Agreement are true and correct
on and as of the Closing Date with the same effect as if made on the
Closing Date and the Fund or the Adviser, as the case may be, have
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing
Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement or any notice objecting to its use has been
issued and no proceedings for that purpose have been instituted or,
to the Fund's or the Adviser's knowledge, as the case may be,
threatened; and
(iii) Since the date of the most recent financial statements
included or incorporated by reference in the Prospectus (exclusive
of any supplement thereto) (with respect to the Fund), and since the
date of the Prospectus (exclusive of any supplement thereto) (with
respect to the Adviser), there has been no material adverse effect
on the condition (financial or otherwise), prospects, earnings,
business or properties of the Fund or the Adviser, as the case may
be, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the
Preliminary Prospectus and Prospectus (exclusive of any supplement
thereto).
(f) The Fund shall have requested and caused Deloitte & Touche LLP
to have furnished to the Representatives, at the Execution Time and at the
Closing Date, letters, dated respectively as of the Execution Time and as
of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within
the meaning of the Act and the 1940 Act and the Rules and Regulations and
that they have performed a review of the unaudited interim financial
information of the Fund for the -month period ended and as at
and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included in the Registration
Statement, Preliminary Prospectus and the Prospectus and reported on
by them comply as to form in all material respects with the
applicable accounting requirements of the Act, the 1940 Act and the
Rules and Regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Fund; their limited
review, in accordance with standards established under Statement on
Auditing Standards No. 100, of the unaudited interim financial
information for the -month period
17
ended and as at ; carrying out certain specified
procedures (but not an examination in accordance with generally
accepted auditing standards) which would not necessarily reveal
matters of significance with respect to the comments set forth in
such letter; a reading of the minutes of the meetings of the
shareholders, trustees and committees of the Board of the Fund; and
inquiries of certain officials of the Fund who have responsibility
for financial and accounting matters of the Fund as to transactions
and events subsequent to October 31, 2005, nothing came to their
attention which caused them to believe that:
(1) any unaudited financial statements included in the Registration
Statement, Preliminary Prospectus and the Prospectus do not comply as to
form in all material respects with applicable accounting requirements of
the Act, the 1940 Act and with the Rules and Regulations adopted by the
Commission with respect to registration statements on Form N-2; and said
unaudited financial statements are not in conformity with generally
accepted accounting principles applied on a basis substantially consistent
with that of the audited financial statements included in the Registration
Statement, Preliminary Prospectus and the Prospectus;
(2) with respect to the period subsequent to , there were
any changes, at a specified date not more than five days prior to the date
of the letter, in the long-term liabilities, capital stock or net assets
of the Fund or decreases in the shareholders' equity of the as compared
with the amounts shown on the _____ consolidated balance sheet included in
the Registration Statement, Preliminary Prospectus and the Prospectus,
except in all instances for changes or decreases set forth in such letter,
in which case the letter shall be accompanied by an explanation by the
Fund as to the significance thereof unless said explanation is not deemed
necessary by the Representatives;
(3) the information included in the Registration Statement,
Preliminary Prospectus and Prospectus in response to Item 4 (Financial
Highlights) and Item 24 (Financial Statements) of Form N-2 is not in
conformity with the applicable disclosure requirements of Form N-2; and
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Fund) set forth in the
Registration Statement, Preliminary Prospectus and the Prospectus,
including the information set forth under the captions " " and " "
in the Prospectus, agrees with the accounting records of the Fund,
excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (f) include any supplement
thereto at the date of the letter.
18
(g) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified
in the letter or letters referred to in paragraph (f) of this Section 7 or
(ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Fund and the Adviser, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Preliminary Prospectus and Prospectus (exclusive of
any supplement thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the Representatives,
so material and adverse as to make it impractical or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by
the Registration Statement (exclusive of any amendment thereof), the
Preliminary Prospectus and the Prospectus (exclusive of any supplement
thereto).
(h) The Securities shall have been listed and admitted and
authorized for trading on the NYSE, and satisfactory evidence of such
actions shall have been provided to the Representatives.
(i) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Fund's outstanding preferred shares
by any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act) or any notice given of any
intended or potential decrease in any such rating or of a possible change
in any such rating that does not indicate the direction of the possible
change.
(j) Prior to the Closing Date, the Fund and the Adviser shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 7 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Representatives and counsel
for the Underwriters, this Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Fund in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 7 shall be
delivered at the office of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the
Underwriters, at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, on the Closing
Date.
8. Reimbursement of Underwriters' Expenses. 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 of any termination pursuant to Section 11 hereof or because of any
refusal, inability or failure on the part of the Fund or the Adviser to perform
any agreement herein or comply with any provision hereof other than by
19
reason of a default by any of the Underwriters, the Adviser will reimburse the
Underwriters severally through Citigroup Global Markets Inc. on demand for all
reasonable out-of-pocket expenses (including reasonable fees and disbursements
of counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities.
9. Indemnification and Contribution. (a) The Fund and the Adviser,
jointly and severally, agree to indemnify and hold harmless each Underwriter,
the directors, officers, employees and agents of each Underwriter and each
person who controls any Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement for the registration of the Securities as originally filed or in any
amendment thereof (and including any post-effective amendment, any Rule 462(b)
Registration Statement and any Rule 430A Information deemed to be included or
incorporated therein), or in any Preliminary Prospectus, the Prospectus, any
sales material or in any amendment thereof or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Fund and Adviser will not 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 such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Fund or Adviser by
or on behalf of any Underwriter through the Representatives specifically for
inclusion therein. This indemnity agreement will be in addition to any liability
which the Fund and Adviser may otherwise have. The parties acknowledge that any
indemnification of the Underwriter by the Fund shall be subject to the
requirements and limitations of Section 17(i) of the ▇▇▇▇ ▇▇▇.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless each of the Fund and the Adviser, each of their directors,
trustees, each officer who signs the Registration Statement, and each person who
controls the Fund or the Adviser within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Fund and
the Adviser to each Underwriter, but only with reference to written information
relating to such Underwriter furnished to the Fund or the Adviser by or on
behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. The Fund and the Adviser acknowledge that the statements set
forth in the last paragraph of the cover page regarding delivery of the
Securities and, under the heading "Underwriting", (i) the list of Underwriters
and their respective participation in the sale of the Securities, (ii) the
sentences related to concessions and reallowances, (iii) the paragraphs related
to stabilization, syndicate covering transactions and penalty bids and (iv) the
paragraph related to prospectuses in electronic format in any Preliminary
Prospectus and the Prospectus constitute the only information furnished in
writing
20
by or on behalf of the several Underwriters for inclusion in any Preliminary
Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 9 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 9, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a), (b)
or (c) of this Section 9 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Fund, the Adviser and the Underwriters
severally agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which the Fund,
the Adviser and one or more of the Underwriters may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Fund and the Adviser on the one hand (treated jointly for this purpose as one
person) and by the Underwriters on the other from the offering of the
Securities; provided, however, that in no case shall any Underwriter (except as
may be provided in any agreement among underwriters relating to the offering of
the Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to
21
the Securities purchased by such Underwriter hereunder. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the Fund, the Adviser and the Underwriters severally shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Fund and the Adviser on the one hand (treated jointly
for this purpose as one person) and of the Underwriters on the other in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Fund and the Adviser (treated jointly for this purpose as one person) shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses) received by it, and benefits received by the Underwriters shall be
deemed to be equal to the total underwriting discounts and commissions, in each
case as set forth on the cover page of the Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by the Fund and the
Adviser on the one hand (treated jointly for this purpose as one person) or the
Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Fund, the Adviser and the Underwriters agree
that it would not be just and equitable if contribution were determined by pro
rata allocation or any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this paragraph (d), 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. For purposes
of this Section 9, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Fund or the Adviser within the
meaning of either the Act or the Exchange Act, each officer of the Fund and the
Adviser who shall have signed the Registration Statement and each director of
the Fund and the Adviser shall have the same rights to contribution as the Fund
and the Adviser, subject in each case to the applicable terms and conditions of
this paragraph (d).
10. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter, the
Fund or the Adviser. In the event of a default by any Underwriter as set forth
in this Section 10, the Closing Date shall be postponed for such period, not
exceeding five Business Days, as the Representatives shall determine in order
that the required changes in the Registration Statement and the Prospectus or in
any other documents or
22
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Fund and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
11. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, without liability on the part of
the Underwriters to the Fund or the Adviser, by notice given to the Fund or the
Adviser prior to delivery of and payment for the Securities, if at any time
prior to such time (i) trading in the Fund's Common Shares shall have been
suspended by the Commission or the NYSE or trading in securities generally on
the NYSE shall have been suspended or limited or minimum prices shall have been
established on the NYSE, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iii) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war, or other calamity or crisis the effect of
which on financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Preliminary Prospectus or the
Prospectus (exclusive of any supplement thereto).
12. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Fund and the Adviser or their officers and of the Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or the Fund or the
Adviser or any of the officers, trustees, directors, employees, agents or
controlling persons referred to in Section 9 hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 8 and 9 hereof
shall survive the termination or cancellation of this Agreement.
13. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (fax
no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel, Citigroup Global
Markets Inc., at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention:
General Counsel; or, if sent to the Fund or the Adviser, will be mailed,
delivered or telefaxed to: ▇/▇ ▇▇▇▇▇▇▇ Advisors LLC at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, (fax no.: (630)
▇▇▇-▇▇▇▇).
14. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, trustees, directors, employees, agents and controlling persons
referred to in Section 9 hereof, and no other person will have any right or
obligation hereunder.
15. No fiduciary duty. Each of the Fund and Adviser hereby
acknowledges that (a) the purchase and sale of the Securities pursuant to this
Agreement is an arm's-length commercial transaction between the Fund and
Adviser, on the one hand, and the Underwriters and any affiliate through which
it may be acting, on the other, (b) the Underwriters are acting as principal and
not as an agent or fiduciary of the Fund and Adviser and (c) the Fund's and
Adviser's engagement of the Underwriters in connection with the offering and the
process leading up to the offering is as independent contractors and not in any
other capacity.
23
Furthermore, each of the Fund and Adviser agrees that it is solely responsible
for making its own judgments in connection with the offering (irrespective of
whether any of the Underwriters has advised or is currently advising the Fund or
Adviser on related or other matters). Each of the Fund and Adviser agrees that
it will not claim that the Underwriters have rendered advisory services of any
nature or respect, or owe an agency, fiduciary or similar duty to the Fund or
Adviser, in connection with such transaction or the process leading thereto.
16. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Fund, the Adviser and the
Underwriters, or any of them, with respect to the subject matter hereof.
17. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
18. Waiver of Jury Trial. Each of the Fund and the Adviser hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby.
19. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
20. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
21. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"1940 Act" shall mean the Investment Company Act of 1940, as
amended.
"1940 Act Rules and Regulations" shall mean the rules and
regulations of the Commission under the 1940 Act.
"1940 Act Notification" shall mean a notification of registration of
the Fund as an investment company under the 1940 Act on Form N-8A, as the
1940 Act Notification may be amended from time to time.
"Act" shall mean the Securities Act of 1933, as amended.
"Act Rules and Regulations" shall mean the rules and regulations of
the Commission under the Act.
"Advisers Act" shall mean the Investment Advisers Act of 1940, as
amended.
"Advisers Act Rules and Regulations" shall mean the rules and
regulations of the Commission under the Advisers Act.
24
"Business Day" shall mean any day other than a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust companies
are authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean the preliminary prospectus
(including the statement of additional information incorporated by
reference therein) dated ____, 2006 and any preliminary prospectus
(including the statement of additional information incorporated by
reference therein) included in the Registration Statement at the Effective
Date that omits Rule 430A Information.
"Prospectus" shall mean the prospectus (including the statement of
additional information incorporated by reference therein) relating to the
Securities that is first filed pursuant to Rule 497 after the Execution
Time.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements and any prospectus supplement relating to the Securities that
is filed with the Commission pursuant to Rule 497 and deemed part of such
registration statement pursuant to Rule 430A, as amended at the Execution
Time and, in the event any post-effective amendment thereto or any Rule
462(b) Registration Statement becomes effective prior to the Closing Date,
shall also mean such registration statement as so amended or such Rule
462(b) Registration Statement, as the case may be. Such term shall include
any Rule 430A Information deemed to be included therein at the Effective
Date as provided by Rule 430A.
"Rule 430A" and "Rule 462" refer to such rules under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred to
in Section 1(a) hereof.
"Rule 497" refers to Rule 497(c) or 497(h) under the Act, as
applicable.
25
"Rules and Regulations" shall mean, collectively, the Act Rules and
Regulations and the 1940 Act Rules and Regulations.
26
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Fund, the Adviser and the several Underwriters.
Very truly yours,
CALAMOS CONVERTIBLE AND HIGH
INCOME FUND
By:
-----------------------
Name:
Title:
CALAMOS ADVISORS LLC
By:
-----------------------
Name:
Title:
27
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Citigroup Global Markets Inc.
By:
------------------------------
Name:
Title:
For itself and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
SCHEDULE I
NUMBER OF UNDERWRITTEN
SECURITIES TO BE
UNDERWRITERS PURCHASED
------------ ---------
Citigroup Global Markets Inc.
2
NUMBER OF UNDERWRITTEN
SECURITIES TO BE
UNDERWRITERS PURCHASED
------------ ---------
Total.....................................
EXHIBIT A
Opinions of Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz, P.C. Regarding the Fund
1. The Fund has been duly formed and is validly existing in good standing
as a statutory trust under the Delaware Act. The Fund has the statutory trust
power and authority to own property and conduct its business as described in the
Preliminary Prospectus and Prospectus;
2. Under the Delaware Act and the Declaration, the execution and delivery
of the Underwriting Agreement and each of the Fund Agreements by the Fund, and
the performance by the Fund of its obligations thereunder, have been duly
authorized by all requisite statutory trust action on the part of the Fund; the
Underwriting Agreement and each of the Fund Agreements have been duly executed
and delivered by the Fund; each of the Fund Agreements constitute the valid and
binding agreement of the Fund enforceable against the Fund in accordance with
its terms; and the Underwriting Agreement and each of the Fund Agreements comply
in all material respects with all applicable provisions of the 1940 Act and the
1940 Act Rules and Regulations and the Advisers Act and the Advisers Act Rules
and Regulations;
3. The currently outstanding shares of beneficial interest of the Fund
have been duly authorized for issuance by the Fund, are validly issued and,
subject to the qualifications below, fully paid and non-assessable beneficial
interests in the Fund. The holders of such shares will be, subject to the terms
of the Declaration, entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware; provided, however, that we
express no opinion with respect to the liability of any holder of such shares
who is, was or may become a named Trustee of the Fund;
4. The Shares have been duly authorized for issuance by the Fund and, when
issued and delivered against payment therefor in accordance with the terms,
conditions, requirements and procedures set forth in the Underwriting Agreement,
will be validly issued and, subject to the qualifications below, fully paid and
non-assessable beneficial interests in the Fund. The holders of Shares will be,
subject to the terms of the Declaration, entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware; provided,
however, that we express no opinion with respect to the liability of any holder
of Shares who is, was or may become a named Trustee of the Fund;
5. Under the Declaration and the Delaware Act, the issuance of the Shares
is not subject to preemptive rights, and no holders of securities of the Fund
have rights to the registration of such securities under the Registration
Statement;
6. The form of certificate evidencing the Shares complies in all material
respects with all applicable requirements of the Delaware Act and the NYSE;
7. The execution and delivery by the Fund of the Underwriting Agreement
and the Fund Agreements, the consummation by the Fund of the transactions
contemplated by the Underwriting Agreement and the Fund Agreements, the
performance by the Fund of its
A-1
obligations thereunder and the issuance and sale by the Fund of the Shares will
not violate (i) the Certificate of Trust or the Declaration of Trust or (ii) any
applicable Delaware law or administrative regulation;
8. None of the issuance and sale of the Shares by the Fund pursuant to the
Underwriting Agreement, the execution and delivery of the Underwriting Agreement
or any of the Fund Agreements by the Fund, or the performance by the Fund of its
agreements under the Underwriting Agreement or any of the Fund Agreements (A)
requires any consent, approval, authorization or other order of or registration
or filing with, the Commission, the National Association of Securities Dealers,
Inc., or any national securities exchange, or governmental body or agency of the
United States of America, or State of Illinois or State of Delaware or, based
solely on a review of our litigation docket and based solely on the Docket
Search (as that term is defined in the opinion of Morris, Nichols, Arsht &
▇▇▇▇▇▇▇), an order of any court or arbitrator of the United States of America or
State of Illinois or any Delaware Court (as that term is defined in the opinion
of Morris, Nichols, Arsht & ▇▇▇▇▇▇▇) (except (1) the absence of which, either
individually or in the aggregate, would not have a material adverse effect on
the Fund or the offering of the Shares as contemplated in the Underwriting
Agreement; (2) such as may have been obtained prior to the date hereof; and (3)
such as may be required for compliance with state securities or blue sky laws of
various jurisdictions) or (B) violates or will violate or constitutes or will
constitute a breach of any of the provisions of the Organizational Documents of
the Fund or (C) violates or will violate or constitutes or will constitute a
breach of, or a default under, any material agreement, indenture, lease or other
instrument known to us to which the Fund is party or by which it or any of its
properties may be bound, or violates any existing material United States of
America or State of Illinois statute, law or regulation (assuming compliance
with all applicable state securities and blue sky laws, and except that, in the
published opinion of the Commission, the indemnification provisions in the
Underwriting Agreement and the Fund Agreements, insofar as they relate to
indemnification for liabilities arising under the 1933 Act, are against public
policy as expressed in the 1933 Act and therefore unenforceable), or violates
any judgment, injunction, order or decree known to us to be applicable to the
Fund or any of its properties, or will result in the creation or imposition of
any material lien, charge or encumbrance upon any property or assets of the Fund
pursuant to the terms of any agreement or instrument known to us to which the
Fund is a party or by which any of its property or assets is bound. To the best
of our knowledge, based solely on a review of our litigation docket, the Fund is
not subject to any order of any court or of any arbitrator, governmental
authority or administrative agency of the United States of America or the State
of Illinois;
9. Based solely on the Docket Search (as that term is defined in the
opinion of Morris, Nichols, Arsht & ▇▇▇▇▇▇▇), there is not any Delaware court
action, suit or proceeding pending against the Fund;
10. The Registration Statement is effective under the 1933 Act and was
filed under the 1940 Act; any required filing of the Prospectus pursuant to Rule
497 of the 1933 Act Rules and Regulations has been made within the time periods
required by Rule 497; no stop-order suspending the effectiveness of the
Registration Statement or order pursuant to Section 8(e) of the 1940 Act has
been issued and to the best of our knowledge, no proceeding for any such purpose
has been instituted or is pending or threatened in writing by the Commission;
A-2
11. The Fund is registered under the 1940 Act as a closed-end diversified
management investment company;
12. The description of the authorized shares of beneficial interest of the
Fund under the caption "Description of Shares" in the Preliminary Prospectus and
Prospectus conforms in all material respects as to legal matters to the terms
thereof contained in the Fund's Declaration of Trust and Statement of
Preferences of Preferred Shares;
13. The statements made in the Preliminary Prospectus and Prospectus under
the captions "U.S. Federal Income Tax Matters," insofar as they constitute
matters of law or legal conclusions, have been reviewed by us and constitute
accurate statements of any such matters of law or legal conclusions;
14. The Registration Statement, the Preliminary Prospectus and the
Prospectus and each amendment or supplement to the Registration Statement,
Preliminary Prospectus and the Prospectus as of their respective issue dates
(except the financial statements and other financial data contained therein, as
to which we express no opinion) comply as to form in all material respects with
the requirements of the 1933 Act, the 1940 Act and the Rules and Regulations;
15. To the best of our knowledge, there are no legal or governmental
proceedings pending or threatened in writing against the Fund, or to which the
Fund or any of its properties is subject, that are required to be described in
the Registration Statement, the Preliminary Prospectus or the Prospectus, but
are not described therein as required;
16. To the best of our knowledge, there are no material agreements,
contracts, indentures, leases or other instruments that are required to be
described in the Registration Statement, the Preliminary Prospectus or the
Prospectus, or to be filed as an exhibit to the Registration Statement that are
not described or filed as required by the 1933 Act, the 1940 Act or the Rules
and Regulations; and
17. The Shares are duly authorized for listing, subject to official notice
of issuance, on the NYSE and the Fund's registration statement on Form 8-A under
the 1934 Act is effective.
We have participated in conferences with officers and employees of the
Fund, Adviser, representatives of the independent auditors for the Fund, special
Delaware counsel to the Fund, the Underwriters and counsel for the Underwriters
at which the contents of the Registration Statement, the Preliminary Prospectus
and the Prospectus and related matters were discussed and, although we are not
passing upon, and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement, the Preliminary Prospectus or the Prospectus, except to the limited
extent otherwise covered by paragraphs 12 and 13 hereof and have made no
independent check or verification thereof, on the basis of the foregoing, no
facts have come to our attention that would have led us to believe that (a) the
Registration Statement (except for the financial statements and other financial
and statistical data included therein, as to which we express no comment), at
the time it became effective, contained an 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, (b) the Preliminary Prospectus
and the price to the public, the number of Underwritten Securities and
A-3
the number of Option Securities to be included on the cover page of the
Prospectus, when taken together as a whole, contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements contained therein, in the light of circumstances under which they
were made, not misleading and (c) the Prospectus, as of its date and as of the
Closing Date, contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements contained therein, in the light of the circumstances under which they
were made, not misleading.
A-4
EXHIBIT B
Opinions of Morris, Nichols, Arsht & ▇▇▇▇▇▇▇ Regarding the Fund
1. The Fund has been duly formed and is validly existing in good standing
as a statutory trust under the Delaware Act. The Fund has the statutory trust
power and authority to own property and conduct its business as described in the
Preliminary Prospectus and Prospectus.
2. Under the Delaware Act and the Governing Instrument, the execution and
delivery of the Underwriting Agreement and each of the Fund Agreements by the
Fund, and the performance by the Fund of its obligations thereunder, have been
duly authorized by all requisite statutory trust action on the part of the Fund.
3. The currently outstanding shares of beneficial interest of the Fund
have been duly authorized for issuance by the Fund, are validly issued and,
subject to the qualifications below, fully paid and non-assessable beneficial
interests in the Fund. The holders of such shares will be, subject to the terms
of the Declaration, entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware; provided, however, that we
express no opinion with respect to the liability of any holder of such shares
who is, was or may become a named Trustee of the Fund;
4. The Shares have been duly authorized for issuance by the Fund and, when
issued and delivered against payment therefor in accordance with the terms,
conditions, requirements and procedures set forth in the Underwriting Agreement,
will be validly issued and, subject to the qualifications below, fully paid and
non-assessable beneficial interests in the Series. The holders of Shares will
be, subject to the terms of the Governing Instrument, entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware; provided, however, that we express no opinion with respect to the
liability of any holder of Shares who is, was or may become a named Trustee of
the Fund.
5. Under the Governing Instrument and the Delaware Act, the issuance of
the Shares is not subject to preemptive rights.
6. The form of Common Shares Certificate complies with all applicable
requirements of the Delaware Act.
7. No authorization, approval, consent or order of any governmental
authority or agency of the State of Delaware or, based solely on the Docket
Search, an order of any Delaware Court, is required to be obtained by the Fund
solely as a result of the issuance and sale of the Shares, the consummation by
the Fund of the transactions contemplated by the Underwriting
B-1
Agreement and the Fund Agreements or the performance by the Fund of its
obligations thereunder, or the adoption of the Automatic Dividend Reinvestment
Plan.
8. The execution and delivery by the Fund of the Underwriting Agreement
and the Fund Agreements, the consummation by the Fund of the transactions
contemplated by the Underwriting Agreement and the Fund Agreements, the
performance by the Fund of its obligations thereunder and the issuance and sale
by the Fund of the Shares will not violate (i) the Certificate or the Governing
Instrument or (ii) any applicable Delaware law or administrative regulation.
9. Based solely on the Docket Search, there is not in any Delaware Court
any action, suit or proceeding pending against the Fund.
With respect to the opinions expressed in paragraphs 3 and 4 above, we
note that, pursuant to Section 2 of Article VIII of the Governing Instrument,
the Trustees have the power to cause each Shareholder, or each Shareholder of
any particular Series, to pay directly, in advance or arrears, for charges of
the Fund's custodian or transfer, shareholder servicing or similar agent, an
amount fixed from time to time by the Trustees, by setting off such charges due
from such Shareholder from declared but unpaid dividends owed such Shareholder
and/or by reducing the number of Shares in the account of such Shareholder by
that number of full and/or fractional Shares which represents the outstanding
amount of such charges due from such Shareholder.
B-2
EXHIBIT C
Opinions of Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz, P.C Regarding the Adviser
1. The Adviser has been duly formed and is validly existing and in good
standing as a limited liability company under the Delaware Limited Liability
Company Act.
2. The Adviser has the limited liability company power and authority to
own, lease and operate its properties and to conduct its business as described
in the Preliminary Prospectus and Prospectus and to enter into and perform its
obligations under the Underwriting Agreement, the Management Agreement and the
Accounting Agreement.
3. The Adviser is registered with the Commission as an investment adviser
under the Advisers Act and is not prohibited by the Advisers Act, the Advisers
Act Rules and Regulations, the 1940 Act or the 1940 Act Rules and Regulations
from acting under the Management Agreement or the Accounting Agreement as
contemplated by the Preliminary Prospectus and Prospectus.
4. The Underwriting Agreement, the Management Agreement and the Accounting
Agreement have been duly authorized by all requisite limited liability company
action on the part of the Adviser, have each been duly executed and delivered on
behalf of the Adviser, and each of the Management Agreement and the Accounting
Agreement constitutes a valid and binding obligation of the Adviser, enforceable
against the Adviser in accordance with its terms.
5. To the best of our knowledge, based solely on a review of our
litigation docket, there is not pending or threatened in writing any action,
suit, proceeding, inquiry or investigation, to which the Adviser is a party, or
to which the property of the Adviser is subject, before or brought by any court
or governmental agency or body, which might reasonably be expected to (i) result
in any material adverse change in the condition, financial or otherwise,
earnings, business affairs or business prospects of the Adviser, (ii) materially
and adversely affect the properties or assets of the Adviser or (iii) materially
impair or adversely affect the ability of the Adviser to function as an
investment adviser or perform its obligations under the Management Agreement and
the Accounting Agreement, or which is required to be disclosed in the
Registration Statement, the Preliminary Prospectus or the Prospectus.
6. No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency of the United States of America or the State of Delaware solely with
respect to the Delaware Limited Liability Company Act (other than (i) under the
1933 Act, the 1940 Act and the Rules and Regulations; (ii) such as have been
obtained; and (iii) as may be required under the securities or blue sky laws of
the various states, as to each of which we express no opinion) is necessary or
required in connection with the performance by the Adviser of its obligations
under the Underwriting Agreement, the Management Agreement and the Accounting
Agreement.
C-1
7. The execution and delivery of the Underwriting Agreement, the
Management Agreement and the Accounting Agreement by the Adviser, and
performance by the Adviser of its obligations thereunder do not and will not,
whether with or without the giving of notice or lapse of time or both: (A)
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Adviser, or (B) violate or constitute a breach of, or
default under any material contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other material agreement or instrument
known to us and to which the Adviser is a party or by which it may be bound, or
to which any of the property or assets of the Adviser is subject, or (C) violate
any applicable federal or State of Illinois law, statute, rule, or regulation or
the Delaware Limited Liability Company Act, or any judgment, order, writ or
decree, known to us, of any governmental authority or administrative agency of
the United States of America or the State of Illinois or under the Delaware
Limited Liability Company Act (except in each case for such violations, breaches
or defaults or liens, charges or encumbrances that would not have a material
adverse effect on the ability of the Adviser to perform its obligations under
the Underwriting Agreement, the Management Agreement and the Accounting
Agreement) nor will such action result in any violation of the provisions of the
Organizational Documents of the Adviser.
C-2