Exhibit 99(h)(1)
4,199,170 Shares of Common Stock
Issuable Upon Exercise of Rights
to Subscribe for such Shares
DEALER MANAGER AGREEMENT
New York, New York
November [__] , 2005
UBS Securities LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Each of The Greater China Fund, Inc., a Maryland corporation (the
"Fund"), and Baring Asset Management (Asia) Limited (the "Investment Manager"),
hereby confirms the agreement with and appointment of UBS Securities LLC to act
as dealer manager (the "Dealer Manager") in connection with the issuance by the
Fund to the holders of record (the "Holders") at the close of business on the
record date set forth in the Prospectus (as defined herein) (the "Record Date")
transferable rights entitling such Holders to subscribe for up to 4,199,170
shares (each a "Share" and, collectively, the "Shares") of common stock, par
value $0.001 per share (the "Common Shares"), of the Fund (the "Offer").
Pursuant to the terms of the Offer, the Fund is issuing each Holder one
transferable right (each a "Right" and, collectively, the "Rights") for each
Common Share held by such Holder on the Record Date. Such Rights entitle holders
to acquire during the subscription period set forth in the Prospectus (the
"Subscription Period"), at the price set forth in such Prospectus (the
"Subscription Price"), one Share for each three Rights exercised (except that
any Holder who is issued fewer than three Rights will be able to subscribe for
one full Share pursuant to the primary subscription), on the terms and
conditions set forth in such Prospectus. No fractional shares will be issued.
Any Holder who fully exercises all Rights initially issued to such Holder (other
than those Rights that cannot be exercised because they represent the right to
acquire less than one Share) will be entitled to subscribe for, subject to
allocation, additional Shares (the
"Over- Subscription Privilege") on the terms and conditions set forth in the
Prospectus. The Rights are transferable and are expected to be listed on the New
York Stock Exchange, Inc. under the symbol "GCH.RT".
The Fund has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (Nos. 333-112505 and
811-6674), including a preliminary prospectus and preliminary statement of
additional information under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations of the Commission under the
Investment Company Act and the Securities Act (the "Rules and Regulations"), and
has filed such amendments to such registration statement on Form N-2, if any,
including any amended preliminary prospectuses and preliminary statements of
additional information as may have been required to the date hereof. If the
registration statement has not become effective, a further amendment to such
registration statement, including forms of a final prospectus and final
statement of additional information necessary to permit such registration
statement to become effective will promptly be filed by the Fund with the
Commission. If the registration statement has become effective and any
prospectus or statement of additional information contained therein omits
certain information at the time of effectiveness pursuant to Rule 430A of the
Rules and Regulations, a final prospectus and final statement of additional
information containing such omitted information will promptly be filed by the
Fund with the Commission in accordance with Rule 497(h) of the Rules and
Regulations. The term "Registration Statement" means the registration statement,
as amended, at the time it becomes or became effective, including financial
statements and all exhibits and all documents, if any, incorporated therein by
reference, and any information deemed to be included by Rule 430A. The term
"Prospectus" means the final prospectus and final statement of additional
information in the forms filed with the Commission pursuant to Rule 497(c), (e),
(h) or (j) of the Rules and Regulations, as the case may be, as from time to
time amended or supplemented pursuant to the Securities Act.
The Prospectus and letters to owners of Common Shares of the Fund,
subscription certificates and other forms used to exercise rights, brochures,
wrappers, any letters from the Fund to securities dealers, commercial banks and
other nominees and any newspaper announcements, press releases and other
offering materials and information that the Fund may use, approve, prepare or
authorize for use in connection with the Offer, are collectively referred to
hereinafter as the "Offering Materials".
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1. Representations and Warranties.
a. The Fund represents and warrants to, and agrees with, the Dealer
Manager as of the date hereof, as of the date of the commencement of
the Offer (such later date being hereinafter referred to as the
"Representation Date") and as of the Expiration Date (as defined
below) that:
i. The Fund meets the requirements for use of Form N-2 under the
Securities Act and the Investment Company Act and the Rules
and Regulations. At the time the Registration Statement
becomes effective, the Registration Statement will contain all
statements required to be stated therein in accordance with
and will comply in all material respects with the requirements
of the Securities Act, the Investment Company Act and the
Rules and Regulations and will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading. From the time the
Registration Statement becomes effective through the
expiration date of the Offer set forth in the Prospectus (the
"Expiration Date"), the Prospectus and the other Offering
Materials then authorized by the Fund for use will not contain
an untrue statement of a material fact or omit to state a
material fact required to be stated therein or 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 representations and warranties in
this subsection shall not apply to statements in or omissions
from the Registration Statement, Prospectus or Offering
Materials made in reliance upon and in conformity with
information furnished to the Fund in writing by the Dealer
Manager expressly for use in the Registration Statement,
Prospectus or Offering Materials.
ii. The Fund is registered with the Commission under the
Investment Company Act as a closed-end, non-diversified
management investment company, and no order of suspension or
revocation of such registration has been issued or proceedings
therefor initiated or threatened by the Commission.
iii. To the knowledge of the Fund after due inquiry, based on
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written representations made by ▇▇▇▇▇ & Young LLP ("▇▇▇▇▇ &
▇▇▇▇▇"), ▇▇▇▇▇ & ▇▇▇▇▇, the accountants who certified the
financial statements of the Fund set forth or incorporated by
reference in the Registration Statement and the Prospectus,
are independent public accountants as required by the
Securities Act and the Rules and Regulations.
iv. The financial statements of the Fund set forth or incorporated
by reference in the Registration Statement and the Prospectus
present fairly in all material respects the financial
condition of the Fund as of the dates or for the periods
indicated in conformity with generally accepted accounting
principles applied on a consistent basis; and the information
set forth in the Prospectus under the headings "Expense
Information" and "Financial Highlights" presents fairly in all
material respects the information stated therein.
v. The Fund has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of
Maryland, has full power and authority (corporate and other)
to conduct its business as described in the Registration
Statement and the Prospectus and is duly qualified to do
business in each jurisdiction, whether foreign or domestic, in
which it owns or leases real property or in which the conduct
of its business requires such qualification, except where the
failure to be so qualified would not result in a material
adverse effect upon the business, properties, financial
position or results of operations of the Fund. The Fund has no
subsidiaries.
vi. The Fund has an authorized capitalization as set forth in the
Prospectus; the outstanding Common Shares have been duly
authorized and are validly issued, fully paid and
non-assessable and conform in all material respects to the
description thereof in the Prospectus under the heading
"Description of Common Stock"; the Rights have been duly
authorized by all requisite action on the part of the Fund for
issuance pursuant to the Offer; the Shares have been duly
authorized by all requisite action on the part of the Fund for
issuance and sale pursuant to the terms of the Offer and, when
issued and delivered by the Fund pursuant to the terms of the
Offer against payment of the consideration set forth in the
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Prospectus, will be validly issued, fully paid and
non-assessable; the Shares and the Rights conform in all
material respects to all statements relating thereto contained
in the Registration Statement, Prospectus and Offering
Materials; and the issuance of each of the Rights and the
Shares is not subject to any preemptive rights.
vii. Except as set forth in the Prospectus, subsequent to the
respective dates as of which information is given in the
Registration Statement and the Prospectus, (A) there has been
no material adverse change in the condition (financial or
other) or business of the Fund, not arising in the ordinary
course of business, (B) there have been no transactions
entered into by the Fund that are material to the Fund other
than those in the ordinary course of business and (C) there
has been no dividend or distribution paid or declared in
respect of the Fund's capital stock.
viii. Except as set forth in the Prospectus, there is no pending or,
to the knowledge of the Fund, threatened action, suit or
proceeding affecting the Fund or to which the Fund is a party
before or by any court or governmental agency or body, whether
foreign or domestic, which might result in any material
adverse change in the condition (financial or other) or
business of the Fund, or which might materially and adversely
affect the properties or assets of the Fund (taken as a
whole).
ix. There are no franchises, contracts or documents of the Fund
that are required to be described in or filed as exhibits to
the Registration Statement by the Securities Act or the
Investment Company Act or by the Rules and Regulations that
have not been so described in or filed or incorporated by
reference therein as permitted by the Securities Act,
Investment Company Act or the Rules and Regulations.
x. Each of this agreement (the "Agreement"), the Addendum to the
Transfer Agency Services Agreement (the "Subscription Agency
Agreement"), dated as of November [__], 2005, between the Fund
and PFPC Inc. (the "Subscription Agent"), the Investment
Management Agreement (the "Management Agreement"), dated as of
June 30, 2005, between the Fund
5
and the Investment Manager, the Information Agent Agreement
(the "Information Agent Agreement"), dated as of November
[__], 2005, between the Fund and The ▇▇▇▇▇▇ Group, Inc.
(the "Information Agent"), the Administration Agreement
(the "Administration Agreement"), dated as of July 14,
1992, between the Fund and UBS Global Asset Management (US)
Inc. (formerly ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Asset Management Inc.),
the Custodian Agreement (the "Custodian Agreement"), dated
as of August 23, 2005, between the Fund and The Bank of New
York and the Paying and Transfer Agency Agreement (the
"Transfer Agency Agreement"), dated as of July 15, 1992,
between the Fund and PFPC Inc. (formerly Provident National
Bank) (collectively, all the foregoing are the "Fund
Agreements") has been duly authorized, executed and
delivered by the Fund; each of the Fund Agreements is,
assuming due authorization, execution and delivery by the
other parties thereto, a legal, valid, binding and
enforceable obligation of the Fund, except as enforcement
of rights to indemnity and contribution under this
Agreement may be limited by Federal or state securities
laws or principles of public policy and subject, as to
enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general applicability
relating to or affecting creditors' rights and to general
principles of equity (regardless of whether enforceability
is considered in a proceeding in equity or at law). The
issuance of the Rights, the issuance and sale of the Shares
and the performance of the Fund Agreements and the
consummation of the transactions contemplated therein or in
the Registration Statement will not result in a conflict
with or in a material breach or violation of any of the
material terms and provisions of, constitute a default
under, or result in the creation or imposition of any
material lien, charge or encumbrance upon any properties or
assets of the Fund pursuant to any material agreement,
indenture, mortgage, lease or other instrument to which the
Fund is a party or by which it may be bound or to which any
of the property or assets of the Fund is subject, nor will
such action result in any violation of the Fund's charter
or by-laws, or, to the best knowledge of the Fund, any
order, law, rule or regulation of any court or governmental
agency or body, whether foreign or domestic, having
jurisdiction over the Fund or any
6
of its properties, except, in each case, for such violations,
defaults, conflicts or breaches that would not have,
individually or in the aggregate, a material adverse effect on
the Fund; no consent, approval, authorization, notification or
order of, or filing with, any court or governmental agency or
body, whether foreign or domestic, is required for the
consummation by the Fund of the transactions contemplated by
the Fund Agreements or the Registration Statement, except such
as have been obtained, or if the registration statement filed
with respect to the Shares is not effective under the
Securities Act as of the time of execution hereof, such as may
be required (and shall be obtained as provided in this
Agreement) under the Investment Company Act, the Securities
Act, the rules of the New York Stock Exchange and state
securities laws.
xi. Each of the Fund Agreements complies in all material respects
with those provisions of the Investment Company Act applicable
to the Fund Agreements.
xii. The Common Shares have been duly listed on the New York Stock
Exchange and, prior to their issuance, the Shares and the
Rights will have been authorized by the Fund and approved by
the New York Stock Exchange for listing, subject to official
notice of issuance, on the New York Stock Exchange.
xiii. The Fund owns or possesses or has obtained all material
governmental licenses, permits, consents, orders or approvals
and other authorizations, whether foreign or domestic,
necessary to lease or own, as the case may be, and to operate
its properties and to carry on its business as contemplated in
the Prospectus, except for such licenses, permits, consents,
orders or approvals and other authorizations which the failure
to obtain would not have, individually or in the aggregate, a
material adverse effect on the Fund.
xiv. The Fund (A) has not taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of
the Fund to facilitate the issuance of the Rights or the sale
or
7
resale of the Rights and the Shares, (B) has not since the
filing of the Registration Statement sold, bid for or
purchased, or paid anyone any compensation for soliciting
purchases of, Common Shares (except for the solicitation of
exercises of the Rights pursuant to this Agreement) and (C)
will not, until the later of the expiration of the Rights or
the completion of the distribution (within the meaning of the
anti-manipulation rules under the Securities Exchange Act of
1934, as amended (the "Exchange Act") of the Shares, sell, bid
for or purchase, pay or agree to pay to any person any
compensation for soliciting another to purchase any other
securities of the Fund (except for the solicitation of
exercises of the Rights pursuant to this Agreement); PROVIDED
THAT any action in connection with the Fund's dividend
reinvestment plan will not be deemed to be within the terms of
this Section 1.a.xiv.
xv. The Fund intends to direct the investment of the proceeds of
the offering described in the Registration Statement and the
Prospectus in such a manner as to comply with the requirements
of Subchapter M of the Internal Revenue Code of 1986, as
amended ("Subchapter M of the Code"), and is qualified and
intends to continue to qualify as a regulated investment
company under Subchapter M of the Code.
b. The Investment Manager represents and warrants to, and agrees with,
the Dealer Manager as of the date hereof, as of the Representation
Date and as of the Expiration Date that:
i. The Investment Manager has been duly incorporated and is
validly existing as a corporation under the laws of Hong Kong
with full power and authority to own its properties and
conduct its business as described in the Prospectus, and is
duly qualified to do business in each jurisdiction, whether
foreign or domestic, in which it owns or leases real property
or in which the conduct of its business requires such
qualification, except where the failure to be so qualified
does not involve a material adverse effect on the Investment
Manager.
ii. The Investment Manager is duly registered as an investment
adviser under the Investment Advisers Act of 1940, as amended
8
(the "Advisers Act"), and is not prohibited by the Advisers
Act or the Investment Company Act, or the rules and
regulations under such Acts, from acting under the Management
Agreement for the Fund as contemplated by the Prospectus.
iii. Each of this Agreement and the Management Agreement has been
duly authorized, executed and delivered by the Investment
Manager; the Management Agreement is, assuming due
authorization, execution and delivery by the other parties
thereto, a legal, valid, binding and enforceable obligation of
the Investment Manager, except as enforcement of rights to
indemnity and contribution under this Agreement may be limited
by federal or state securities laws or principles of public
policy and subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other similar laws
of general applicability relating to or affecting creditors'
rights and to general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity
or at law), and the performance by the Investment Manager of
its obligations under this Agreement and the Management
Agreement and the consummation of the transactions therein
contemplated to be consummated by the Investment Manager will
not conflict with or result in a breach or violation of any of
the terms and provisions of, or constitute a default under,
any statute, any material agreement or instrument to which the
Investment Manager is a party or by which it is bound or to
which any of its property is subject, the Investment Manager's
charter and by-laws, or any order, rule or regulation of any
court or governmental agency or body, stock exchange or
securities association, whether foreign or domestic, having
jurisdiction over the Investment Manager or any of its
properties or operations, except, in each case, for such
conflicts, breaches or violations that would not have,
individually or in the aggregate a material adverse effect on
the Investment Manager.
iv. Except as set forth in the Prospectus, there is no pending or,
to the knowledge of Investment Manager, threatened action,
suit or proceeding to which the Investment Manager is a party
before or by any court or governmental agency or body,
9
whether foreign or domestic, which is likely to have a
material adverse effect upon the Investment Manager or upon
the ability of the Investment Manager to perform its
obligations under the Management Agreement with the Fund.
v. No consent, approval, authorization, notification or order of,
or filing with, or the issuance of any license or permit by,
any court or governmental agency or body is required for the
consummation by the Investment Manager of the transactions
contemplated by this Agreement or the Management Agreement
except such as have been obtained.
vi. The Investment Manager (A) has not taken, directly or
indirectly, any action designed to cause or to result in, or
that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of
any security of the Fund to facilitate the issuance of the
Rights or the sale or resale of the Rights and the Shares, (B)
has not since the filing of the Registration Statement sold,
bid for or purchased, or paid anyone any compensation for
soliciting purchases of Common Shares (except for the
solicitation of exercises of the Rights pursuant to this
Agreement) and (C) will not, until the later of the expiration
of the Rights or the completion of the distribution (within
the meaning of the anti-manipulation rules under the Exchange
Act) of the Shares, sell, bid for or purchase, pay or agree to
pay any person any compensation for soliciting another to
purchase any other securities of the Fund (except for the
solicitation of exercises of the Rights pursuant to this
Agreement); PROVIDED THAT any action in connection with the
Fund's dividend reinvestment plan will not be deemed to be
within the terms of this Section ▇.▇.▇▇.
vii. Except as set forth in the Prospectus, to the knowledge of the
Investment Manager, there is no pending or threatened action,
suit or proceeding affecting the Fund or to which the Fund is
a party before or by any foreign court or governmental agency
or body which might result in any material adverse change in
the condition (financial or other) or business of the Fund, or
which might materially and adversely affect the properties or
assets of the Fund (taken as a whole).
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viii. The issuance of the Rights, the issuance and sale of the
Shares and the consummation of the transactions contemplated
in the Registration Statement will not, to the best knowledge
of the Investment Manager, (1) result in any violation of any
foreign order, law, rule or regulation of any court or
governmental agency or body having jurisdiction over the Fund
or any of its properties, except, in each case, for such
violations, defaults, conflicts or breaches that would not
have, individually or in the aggregate, a material adverse
effect on the Fund or (2) require the consent, approval,
authorization, notification or order of, or filing with, any
foreign court or governmental agency or body for the
consummation by the Fund of the transactions contemplated by
the Registration Statement, except such as have been obtained.
ix. To the best knowledge of the Investment Manager, the Fund owns
or possesses or has obtained all material foreign governmental
licenses, permits, consents, orders or approvals and other
authorizations necessary to lease or own, as the case may be,
and to operate its properties and to carry on its business as
contemplated in the Prospectus, except for such licenses,
permits, consents, orders or approvals and other
authorizations which the failure to obtain would not have,
individually or in the aggregate, a material adverse effect on
the Fund.
x. The Investment Manager intends to direct the investment of the
proceeds of the offering described in the Registration
Statement and the Prospectus in such a manner as to cause the
Fund to comply with the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended ("Subchapter M of
the Code").
xi. At the time the Registration Statement becomes effective, the
Registration Statement will not contain any untrue statement
of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading. From the time the Registration
Statement becomes effective through the expiration date of the
Offer set forth in the Prospectus (the "Expiration Date"), the
Prospectus
11
will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
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 representations and
warranties in this subsection shall not apply to statements in
or omissions from the Registration Statement or Prospectus (i)
other than those relating to (1) the sections in the
Prospectus under the headings "The Offer," "Use of Proceeds,"
Investment Objective and Policies," Risk Factors and Special
Considerations" and "Management of the Fund," (2) to the
sections of the final statement of additional information
portion of the Prospectus under the headings "General
Information and History," "Investment Objective and Policies,"
"Investment Restrictions," "Management of the Fund,"
"Investment Advisory and Other Services," "Portfolio Manager"
and "Brokerage Allocation and Other Practices" and (3) the
cover page of the Prospectus and under the heading "Prospectus
Summary" that are derived from the foregoing (collectively,
the "Investment Manager Information"); or (ii) made in
reliance upon and in conformity with information furnished to
the Fund in writing by the Dealer Manager expressly for use in
the Registration Statement, Prospectus or Offering Materials.
c. Any certificate required by this Agreement that is signed by any
officer of the Fund on behalf of the Fund or the Investment Manager on
behalf of the Investment Manager and delivered to the Dealer Manager
or counsel for the Dealer Manager shall be deemed a representation and
warranty by the Fund or the Investment Manager, as the case may be, to
the Dealer Manager, as to the matters covered thereby.
2. AGREEMENT TO ACT AS DEALER MANAGER.
a. On the basis of the representations and warranties contained herein,
and subject to the terms and conditions of the Offer:
i. The Fund hereby appoints the Dealer Manager to solicit the
exercise of Rights and authorizes the Dealer Manager to sell
Shares purchased by the Dealer Manager from the Fund
12
though the exercise of Rights as described herein; the Fund
hereby authorizes the Dealer Manager to form and manage a
group of selling broker-dealers (each a "Selling Group Member"
and collectively the "Selling Group") that enter into a
Selling Group Agreement with the Dealer Manager in the form
attached hereto as Exhibit A to solicit the exercise of Rights
and to sell Shares purchased by the Selling Group Member from
the Dealer Manager as described herein; and the Fund hereby
authorizes other soliciting broker-dealers (each a "Soliciting
Dealer" and collectively the "Soliciting Dealers") that enter
into a Soliciting Dealer Agreement with the Dealer Manager in
the form attached hereto as Exhibit B to solicit the exercise
of Rights. The Dealer Manager hereby agrees to solicit the
exercise of Rights in accordance with the Securities Act, the
Investment Company Act and the Exchange Act, and customary
practice subject to the terms and conditions of this
Agreement, the procedures described in the Registration
Statement, the Prospectus and, where applicable, the terms and
conditions of such Selling Group Agreement or Soliciting
Dealer Agreement; and the Dealer Manager hereby agrees to form
and manage the Selling Group to solicit the exercise of Rights
and to sell Shares to the Selling Group purchased by the
Dealer Manager from the Fund through the exercise of Rights as
described herein in accordance with the Securities Act, the
Investment Company Act and the Exchange Act, and its customary
practice subject to the terms and conditions of this
Agreement, the procedures described in the Registration
Statement, the Prospectus and, where applicable, the terms and
conditions of the Selling Group Agreement.
ii. The Fund hereby authorizes the Dealer Manager to buy and
exercise Rights, including unexercised Rights delivered to the
Subscription Agent for resale and Rights of foreign record
date shareholders (as described under "The Offer--Foreign
Restrictions" in the Prospectus) held by the Subscription
Agent for which no instructions are received, on the terms and
conditions set forth in such Prospectus, and to sell Shares to
the public or to Selling Group Members at the offering price
set by the Dealer Manager from time to time. Sales of Shares
by the Dealer Manager or Selling Group Members shall not be at
a price higher than the offering price set by the Dealer
13
Manager from time to time.
b. To the extent permitted by applicable law, the Fund agrees to furnish,
or cause to be furnished, to the Dealer Manager, lists, or copies of
those lists, showing the names and addresses of, and number of Common
Shares held by, Holders as of the Record Date, and the Dealer Manager
agrees to use such information only in connection with the Offer, and
not to furnish the information to any other person except for
securities brokers and dealers that have been requested by the Dealer
Manager to solicit exercises of Rights.
c. The Dealer Manager agrees to provide to the Fund, in addition to the
services described in paragraph 2.a., financial advisory and marketing
services in connection with the Offer. No advisory fee, other than the
fees provided for in Section 3 of this Agreement and the reimbursement
of the Dealer Manager's out-of-pocket expenses as described in Section
5 of this Agreement, will be payable by the Fund, or any other party
hereto, to the Dealer Manager in connection with the financial
advisory and marketing services provided by the Dealer Manager
pursuant to this Section 2.c.
d. The Fund and the Dealer Manager agree that the Dealer Manager is an
independent contractor with respect to the solicitation of the
exercise of Rights and the Over-Subscription Privilege and the
performance of financial advisory and marketing services for the Fund
contemplated by this Agreement.
e. In rendering the services contemplated by this Agreement, the Dealer
Manager agrees not to use any written solicitation material other than
the Offering Materials (as supplemented or amended, if applicable) and
not to make any written representations concerning the Fund to any
holders or prospective holders of Shares or Rights other than those
contained in the Offering Materials or otherwise previously authorized
in writing by the Fund.
f. In rendering the services contemplated by this Agreement, the Dealer
Manager will not be subject to any liability to the Fund or the
Investment Manager or any of their affiliates, for any act or omission
on the part of any soliciting broker or dealer (except with respect to
the Dealer Manager acting in such capacity) or any other person, and
the Dealer Manager will not be liable for acts or omissions in
14
performing its obligations under this Agreement, except for any
losses, claims, damages, liabilities and expenses that are finally
judicially determined to have resulted primarily from the bad faith,
willful misconduct or gross negligence of the Dealer Manager or by
reason of the reckless disregard of the obligations and duties of the
Dealer Manager under this Agreement.
3. DEALER MANAGER FEES. In full payment for the financial advisory, marketing
and soliciting services rendered and to be rendered hereunder by the Dealer
Manager, the Fund agrees to pay the Dealer Manager a fee (the "Dealer
Manager Fee") equal to 3.75% of the aggregate Subscription Price for the
Shares issued pursuant to the exercise of Rights and the Over-Subscription
Privilege. In full payment for the soliciting efforts to be rendered, the
Dealer Manager agrees to reallow selling fees (the "Selling Fees") to
Selling Group Members equal to 2.50% of the Subscription Price per Share
for each Share issued pursuant to either (a) the exercise of Rights and the
Over-Subscription Privilege where such Selling Group Member is so
designated on the subscription form or (b) the purchase for resale from the
Dealer Manager in accordance with the Selling Group Agreement. In full
payment for the soliciting efforts to be rendered, the Dealer Manager
agrees to reallow soliciting fees (the "Soliciting Fees") to Soliciting
Dealers equal to 0.50% of the Subscription Price per Share for each Share
issued pursuant to the exercise of Rights and the Over-Subscription
Privilege where such Soliciting Dealer is so designated on the subscription
form, subject to a maximum fee based on the number of Common Shares held by
such Soliciting Dealer through The Depository Trust Company ("DTC") on the
Record Date. The Dealer Manager agrees to pay the Selling Fees or
Solicitation Fees, as the case may be, to the broker-dealer designated on
the applicable portion of the form used by the Holder to exercise Rights
and the Over-Subscription Privilege, and if no broker-dealer is so
designated or a broker-dealer is otherwise not entitled to receive
compensation pursuant to the terms of the Selling Group Agreement or
Soliciting Dealer Agreement, then the Dealer Manager shall retain such
Selling Fee or Solicitation Fee for Shares issued pursuant to the exercise
of Rights and the Over-Subscription Privilege. Payment to the Dealer
Manager by the Fund will be in the form of a wire transfer of same day
funds to an account or accounts identified by the Dealer Manager. Such
payment will be made on each date on which the Fund issues Shares after the
Expiration Date. Payment to a Selling Group Member or Soliciting Dealer
will be made by the Dealer Manager directly to such Selling Group Member or
Soliciting Dealer by check to an address identified by such broker-dealer.
Such payments shall be made on or before the tenth business day following
the day the Fund
15
issues Shares after the Expiration Date.
4. OTHER AGREEMENTS.
a. The Fund covenants with the Dealer Manager as follows:
i. The Fund will use its best efforts to cause the Registration
Statement to become effective and maintain its effectiveness
under the Securities Act pursuant to the requirements of the
Securities Act.
ii. The Fund will notify, and confirm the notice in writing to,
the Dealer Manager immediately (A) of the effectiveness of the
Registration Statement and any amendment thereto (including
any post-effective amendment), (B) of the receipt of any
additional comments from the Commission, (C) of any request by
the Commission for any further amendment to the Registration
Statement or any amendment or supplement to the Prospectus or
for additional information and (D) of the issuance by the
Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any
proceedings for that purpose. The Fund will make every
reasonable effort to prevent the issuance of any stop order
described in subsection (D) hereunder and, if any such stop
order is issued, to obtain the lifting thereof at the earliest
possible moment.
iii. The Fund will give the Dealer Manager notice of its intention
to file any amendment to the Registration Statement (including
any post-effective amendment) or any amendment or supplement
to the Prospectus (including any revised prospectus which the
Fund proposes for use by the Dealer Manager in connection with
the Offer, which differs from the prospectus on file at the
Commission at the time the Registration Statement becomes
effective, whether or not such revised prospectus is required
to be filed pursuant to Rule 497(c), (e) or (h) of the Rules
and Regulations), whether pursuant to the Investment Company
Act, the Securities Act, or otherwise, and will furnish the
Dealer Manager with copies of any such amendment or supplement
a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will give due
16
consideration to not filing or to revising any such proposed
amendment or supplement to which the Dealer Manager or counsel
for the Dealer Manager shall reasonably and timely object.
iv. The Fund will, without charge, deliver to the Dealer Manager,
as soon as practicable, the number of copies (one of which is
manually executed) of the Registration Statement as originally
filed and of each amendment thereto as it may reasonably
request, in each case with the exhibits filed therewith.
v. The Fund will, without charge, furnish to the Dealer Manager,
from time to time during the period when the Prospectus is
required to be delivered under the Securities Act, such number
of copies of the Prospectus (as amended or supplemented) as
the Dealer Manager may reasonably request for the purposes
contemplated by the Securities Act or the Rules and
Regulations.
vi. If any event shall occur during the term of the Offer (as
extended) or any later period when the Prospectus is required
to be delivered under the Securities Act, as a result of which
it is necessary or appropriate to amend or supplement the
Registration Statement or the Prospectus in order to make the
Prospectus not misleading in any material respect in the light
of the circumstances existing at the time it is delivered to a
Holder, the Fund will forthwith amend or supplement the
Prospectus by preparing for filing with the Commission (and
furnishing to the Dealer Manager a reasonable number of copies
of) an amendment or amendments of the Registration Statement
or an amendment or amendments of or a supplement or
supplements to the Prospectus (in a manner consistent with
paragraph 4.a.iii. above), at the Fund's expense, which will
amend or supplement the Registration Statement or the
Prospectus so that the Prospectus will not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances
existing at the time the Prospectus is delivered to a Holder,
not misleading; PROVIDED that if the amendment or supplement
is required as a result of a misstatement in or arising from
the
17
information contained in and in conformity with the
information furnished in writing by or on behalf of the Dealer
Manager expressly for use in the Prospectus, the Fund may
deliver such amendment or supplement to the Dealer Manager at
a reasonable charge to the Dealer Manager not to exceed the
actual cost thereof to the Fund.
vii. The Fund will endeavor, in cooperation with the Dealer Manager
and its counsel, to confirm that the Rights and the Shares are
not required to be qualified for offering and sale under the
applicable securities laws of such states and other
jurisdictions of the United States as the Dealer Manager may
designate.
viii. The Fund will make generally available to its security holders
as soon as practicable, but no later than 60 days after the
end of the Fund's fiscal semi-annual or fiscal year-end period
covered thereby, an earnings statement (which need not be
audited) (in form complying with the provisions of Rule 158 of
the Rules and Regulations of the Securities Act) covering a
twelve-month period beginning not later than the first day of
the Fund's fiscal semi-annual period next following the
"effective" date (as defined in said Rule 158) of the
Registration Statement.
ix. For a period of 180 days from the date of this Agreement, the
Fund will not, without the prior consent of the Dealer
Manager, offer or sell, or enter into any agreement to sell,
any equity or equity related securities of the Fund or
securities convertible into such securities, other than the
Rights and the Shares and the Common Shares issued in
reinvestment of dividends or distributions.
x. The Fund will use the net proceeds from the Offer as set forth
under "Use of Proceeds" in the Prospectus.
xi. The Fund will use its best efforts to cause the Rights and the
Shares to be duly authorized for listing by the New York Stock
Exchange, subject to official notice of issuance, prior to the
time the Rights are issued.
xii. The Fund will use its best efforts to maintain its
qualification
18
as a regulated investment company under Subchapter M of the
Code.
xiii. The Fund will apply the net proceeds from the Offer in such a
manner as to continue to comply with the requirements of the
Prospectus and the Investment Company Act.
xiv. The Fund will advise or cause the Subscription Agent (A) to
advise the Dealer Manager and, only where specifically noted,
each Selling Group Member who specifically requests, from day
to day during the period of, and promptly after the
termination of, the Offer, as to the names and addresses (to
the extent permitted by applicable law) of all Holders
exercising Rights, the total number of Rights exercised by
each Holder (to the extent permitted by applicable law) during
the immediately preceding day, indicating the total number of
Rights verified to be in proper form for exercise, rejected
for exercise and being processed and, for the Dealer Manager
and each Selling Group Member, the number of Rights exercised
on subscription certificates indicating the Dealer Manager or
such Selling Group Member, as the case may be, as the
broker-dealer with respect to such exercise, and as to such
other information as the Dealer Manager may reasonably
request; and will notify the Dealer Manager and each Selling
Group Member, not later than 5:00 P.M., New York City time, on
the first business day following the Expiration Date, of the
total number of Rights exercised and Shares related thereto,
the total number of Rights verified to be in proper form for
exercise, rejected for exercise and being processed and, for
the Dealer Manager and each Selling Group Member, the number
of Rights exercised on subscription certificates indicating
the Dealer Manager or such Selling Group Member, as the case
may be, as the broker-dealer with respect to such exercise,
and as to such other information as the Dealer Manager may
reasonably request; (B) to sell any Rights received for resale
from Holders exclusively to or through the Dealer Manager,
which may, at its election, purchase such Rights as principal
or act as agent for the resale thereof; and (C) to issue
Shares upon the Dealer Manager's exercise of Rights no later
than the close of business on the business day following the
day that full payment for such Shares has been received by the
19
Subscription Agent.
b. Neither the Fund nor the Investment Manager will take, directly or
indirectly, any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Fund
to facilitate the issuance of the Rights or the sale or resale of the
Rights or the Shares; PROVIDED that any action in connection with the
Fund's dividend reinvestment plan will not be deemed to be within the
meaning of this Section 4.b.
5. PAYMENT OF EXPENSES.
a. The Fund will pay all expenses incident to the performance of its
obligations under this Agreement, including, but not limited to,
expenses relating to (i) the printing and filing of the Registration
Statement as originally filed and of each amendment thereto, (ii) the
preparation, issuance and delivery of the certificates for the Shares
and subscription certificates relating to the Rights, (iii) the fees
and disbursements of the Fund's counsel (including the fees and
disbursements of local counsel) and accountants, (iv) the printing or
other production and delivery to the Dealer Manager of copies of the
Registration Statement as originally filed and of each amendment
thereto and of the Prospectus and any amendments or supplements
thereto, (v) the fees and expenses incurred with respect to filing
with the National Association of Securities Dealers, Inc., (vi) the
fees and expenses incurred in connection with the listing of the
Shares on the New York Stock Exchange, (vii) the printing or other
production, mailing and delivery expenses incurred in connection with
Offering Materials and (viii) the fees and expenses incurred with
respect to the Subscription Agent and the Information Agent. The Fund
agrees to pay the foregoing expenses whether or not the transactions
contemplated under this Agreement are consummated.
b. In addition to any fees that may be payable to the Dealer Manager
under this Agreement, the Fund agrees to reimburse the Dealer Manager
upon request made from time to time for its reasonable expenses
incurred in connection with its activities under this Agreement,
including the reasonable fees and disbursements of its legal counsel
(excluding Blue Sky filing fees which are paid directly by the Fund),
20
in an amount up to $[100,000].
c. Except as otherwise provided herein, if the transactions contemplated
by this Agreement are not consummated, each party shall bear its own
costs and expenses, except that (i) if this Agreement is terminated by
the Dealer Manager in accordance with the provisions of Section 6 or
Section 9.a.i., 9.a.ii. or 9.a.iii., the Fund agrees to reimburse the
Dealer Manager for all of its reasonable out-of-pocket expenses
incurred in connection with its performance hereunder, including the
reasonable fees and disbursements of counsel for the Dealer Manager
and (ii) in the event the transactions contemplated hereunder are not
consummated for reasons other than as described in the previous
sentence, the Fund agrees to pay all of the costs and expenses set
forth in paragraph 5.b.
6. CONDITIONS OF THE DEALER MANAGER'S OBLIGATIONS. The obligations of the
Dealer Manager hereunder are subject to the accuracy of the respective
representations and warranties of the Fund and the Investment Manager
contained herein, to the performance by the Fund and the Investment Manager
of their respective obligations hereunder, and to the following further
conditions:
a. The Registration Statement shall have become effective not later than
5:30 P.M., New York City time, on the Record Date, or at such later
time and date as may be approved by the Dealer Manager; the Prospectus
and any amendment or supplement thereto shall have been filed with the
Commission in the manner and within the time period required by Rule
497(c), (e), (h) or (j), as the case may be, under the Securities Act;
no stop order suspending the effectiveness of the Registration
Statement or any amendment thereto shall have been issued, and no
proceedings for that purpose shall have been instituted or threatened
or, to the knowledge of the Fund, the Investment Manager or the Dealer
Manager, shall be contemplated by the Commission; and the Fund shall
have complied with any request of the Commission for additional
information (to be included in the Registration Statement, the
Prospectus or otherwise).
b. On the Representation Date and the Expiration Date, the Dealer Manager
shall have received:
i. The opinions, dated the Representation Date and the Expiration
21
Date, of White & Case LLP, counsel for the Fund, in form and
substance reasonably satisfactory to counsel for the Dealer
Manager to the effect that:
(1) The Fund has been duly incorporated and is validly
existing as a corporation in good standing under the
laws of the State of Maryland, has full power and
authority (corporate and other) to conduct its business
as described in the Registration Statement and
Prospectus, and is duly qualified to do business as a
foreign corporation in each jurisdiction wherein it
owns or leases real property or in which the conduct of
its business requires such qualification, except where
the failure to be so qualified would not result in a
material adverse effect upon the business, properties,
financial position or results of operations of the
Fund.
(2) The Fund's authorized capitalization is as set forth in
the Prospectus; the outstanding shares of Common Stock
have been duly authorized and are validly issued, fully
paid and non-assessable and conform in all material
respects to the description thereof in the Prospectus
under the heading "Description of Common Stock"; the
Rights have been duly authorized by all requisite
corporate action on the part of Fund for issuance
pursuant to the Offer; the Shares have been duly
authorized by all requisite corporate action on the
part of the Fund for issuance and sale pursuant to the
terms of the Offer and, when issued and delivered by
the Fund pursuant to the terms of the Offer against
payment of the consideration set forth in the
Prospectus, will be validly issued, fully paid and
non-assessable; the Shares and the Rights conform in
all material respects to all statements relating
thereto contained in the Registration Statement, the
Prospectus and the Offering Materials; and the issuance
of each of the Rights and the Shares is not subject to
any preemptive rights. The outstanding Common Stock has
been duly listed on the New York Stock Exchange and the
Shares have been duly approved for listing, subject to
official notice of issuance, on the New York Stock
Exchange.
22
(3) Except as set forth in the Prospectus, to the best
knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court
or governmental agency, authority or body or any
arbitrator involving the Fund of a character required
to be disclosed in the Registration Statement or the
Prospectus, and there are no franchises, contracts or
other documents of a character required to be described
in the Registration Statement or the Prospectus, or to
be filed as an exhibit or incorporated by reference
which are not described or filed or incorporated by
reference as required.
(4) The statements in Part A of the Prospectus under the
heading "Taxation" and the statements in the Statement
of Additional Information under the heading
"Taxation--United States Federal Income Taxes" insofar
as such statements describe or summarize United States
tax laws, treaties, doctrines or practices, fairly
summarize the matters therein described.
(5) Each of this Agreement, the Subscription Agency
Agreement, the Management Agreement, the Custodian
Agreement, the Administration Agreement, the
Information Agent Agreement, and the Transfer Agency
Agreement has been duly authorized, executed and
delivered by the Fund, complies with all applicable
provisions of the Investment Company Act and, assuming
due authorization, execution and delivery by the other
parties thereto, constitutes a legal, valid, binding
and enforceable obligation of the Fund, except as to
enforcement of rights to indemnity under this agreement
may be limited by Federal or state securities laws or
principles of public policy and subject to the
qualification that the enforceability of the Fund's
obligations thereunder may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws
of general applicability relating to or affecting
creditors' rights, and to general principles of equity
(regardless of whether enforceability is considered in
a proceeding in equity or at law).
23
(6) No consent, approval, authorization, notification or
order of, or any filing with, any court or governmental
agency or body is required under the laws of New York
or Federal law or, to the best of such counsel's
knowledge, the laws of any other jurisdiction in the
United States for the consummation by the Fund of the
transactions contemplated by the Fund Agreements,
except (A) such as have been obtained under the
Securities Act, the Exchange Act and the Investment
Company Act and (B) such as may be required under the
blue sky laws of any jurisdiction in connection with
the transactions contemplated hereby.
(7) Neither the issuance of the Rights, nor the issuance
and sale of the Shares by the Fund, nor the performance
and consummation by the Fund of any other of the
transactions contemplated in the Fund Agreements or the
Registration Statement will conflict with, result in a
breach or violation of, or constitute a default under
the charter or by-laws of the Fund or, to the knowledge
of such counsel after due inquiry, the material terms
of any material agreement, indenture, mortgage, lease
or other instrument to which the Fund is a party or by
which it may be bound or to which any of the properties
or assets of the Fund is subject, or any order, of
which such counsel has knowledge after due inquiry,
law, rule or regulation of any court or governmental
agency or body having jurisdiction over the Fund of the
state of New York or the United States, except, in each
case, for such violations, defaults, conflicts or
breaches that would not have, individually or in the
aggregate, a material adverse effect on the Fund.
(8) The Fund is registered with the Commission under the
Investment Company Act as a closed-end, non-diversified
management investment company, all required action has
been taken under the Securities Act and the Investment
Company Act to make the public offering and consummate
the issuance of the Rights and the issuance and sale of
the Shares by the Fund
24
upon exercise of the Rights, and the provisions of the
Fund's charter and by-laws comply as to form in all
material respects with the requirements of the
Investment Company Act.
(9) The Registration Statement has become effective under
the Securities Act; any required filing of the
Prospectus or any supplement thereto pursuant to Rule
497(c), (e), (h) or (j) required to be made prior to
the date hereof has been made in the manner and within
the time period required by Rule 497(c), (e), (h) or
(j), as the case may be; to the knowledge of such
counsel after reasonable inquiry, no stop order
suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for that
purpose have been instituted or threatened by the
Commission; and the Registration Statement, as it may
be amended, and the Prospectus, as it may be amended or
supplemented, (other than the financial statements,
schedules, the notes thereto and the schedules and
other financial, economic and statistical data
contained or incorporated by reference therein or
omitted therefrom, as to which such counsel need
express no opinion) as of their respective effective or
issue dates appeared on their face to comply as to form
in all material respects to the requirements of the
Securities Act and the Investment Company Act and the
Rules and Regulations.
(10) The Management Agreement has been duly executed and
delivered by the Investment Manager.
In rendering such opinion, such counsel may rely, as to
matters of law of any jurisdiction other than the Federal law
of the United States and the laws of the State of New York, on
the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for
the Dealer Manager and, as to matters of fact, to the extent
they deem proper, on certificates of responsible officers of
the Fund, the Investment Manager and public officials.
25
Such counsel shall also have stated that, while they have not
themselves checked the accuracy and completeness of or
otherwise verified, and are not passing upon and assume no
responsibility for the accuracy, completeness or fairness of,
the statements contained in the Registration Statement or the
Prospectus, except to the limited extent stated in paragraphs
(2) and (4) above, in the course of their review and
discussion of the contents of the Registration Statement and
Prospectus with certain officers and employees of the Fund,
the Investment Manager and the Fund's independent accountants,
nothing has come to their attention which caused them to
believe that the Registration Statement, as of its effective
date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated
therein or necessary to make the statements contained therein
not misleading or that the Prospectus, as of its date and on
the Representation Date or the Expiration Date, as the case
may be, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading (except that such counsel need not express any
statement or belief with respect to the financial statements,
schedules or other financial or statistical data included or
incorporated by reference in the Registration Statement or
Prospectus).
ii. The favorable opinions, dated the Representation Date and the
Expiration Date, of DLA ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ LLP, special
counsel to the Fund, in form and substance satisfactory to
counsel for the Dealer Manager, to the effect that:
(1) The Company is a corporation duly incorporated and
existing under and by virtue of the laws of the State of
Maryland and is in good standing with the SDAT. The Company
has the corporate power to conduct its business as described
in the Charter, which includes the business of an investment
company under the Investment Company Act of 1940, as amended.
(2) The Company has authority under the Charter to issue
the number of shares of Common Stock as set forth in the
26
Prospectus under the heading "Description of our Common
Stock". As of the date hereof, so far as is known to us there
are ______________ shares of Common Stock (the "Outstanding
Shares") issued and outstanding. The Outstanding Shares have
been duly authorized and are validly issued, fully paid and
nonassessable and conform in all material respects to the
description thereof in the Prospectus under the heading
"Description of Common Stock". The Rights have been duly
authorized, and when issued and delivered pursuant to terms of
the Resolutions and in the manner contemplated by the
Prospectus, will be validly issued. The Shares have been duly
authorized, and when issued and delivered upon the exercise of
Rights in the manner contemplated by the Prospectus and in
accordance with the Resolutions, will be validly issued, fully
paid and nonassessable. The Shares and the Rights conform in
all material respects to all statements relating thereto
contained in the Registration Statement and the Prospectus.
The issuance of each of the Rights and the Shares does not
give rise to any preemptive or similar right arising under the
Charter, the By-Laws or the Maryland General Corporation Law.
(3) No consent, approval, authorization, notification, or
order of, or any filing with, any court or government agency
or body is required under the laws of the State of Maryland
for the consummation by the Company of the transactions
contemplated by the Company Agreements.
(4) Neither the issuance of the Rights, nor the issuance
and sale of the Shares by the Company, nor the performance and
consummation by the Company of any other of the transactions
contemplated in the Fund Agreements or the Registration
Statement will breach, violate the Charter or By-Laws or, so
far as is known to us, any writ, order, or decree of any court
or governmental agency or body of the State of Maryland.
In rendering such opinion, such counsel may rely as to matters
of fact, to the extent they deem proper, on certificates of
responsible officers of the Fund and public officials.
27
iii. The opinions, dated the Representation Date and the Expiration
Date, of Ropes & Gray LLP, counsel for the Investment Manager,
in form and substance satisfactory to counsel for the Dealer
Manager to the effect that:
(1) The Investment Manager is duly registered as an
investment adviser under the Advisers Act and is not
prohibited by the Advisers Act or the Investment
Company Act, or the rules and regulations under such
Acts, from acting as an investment manager for the Fund
as contemplated in the Prospectus and the Management
Agreement.
(2) The Investment Manager is duly qualified as a foreign
corporation and is in good standing in each United
States jurisdiction in which the performance of its
obligations under the Management Agreement requires
such qualification except where the failure to be so
qualified does not involve a material adverse effect on
the Investment Manager.
(3) This Agreement and the Management Agreement comply with
all applicable provisions of the Advisers Act, the
Investment Company Act and the rules and regulations
under such Acts, and is, assuming due authorization,
execution and delivery by the other parties thereto, a
legal, valid, binding and enforceable obligation of the
Investment Manager, subject as to enforcement to
bankruptcy, insolvency, reorganization, moratorium and
other laws of general applicability relating to or
affecting creditors' rights, and to general principles
of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
(4) Neither the performance by the Investment Manager of
its obligations under this Agreement or the Management
Agreement nor the consummation of the transactions
contemplated therein nor the fulfillment of the terms
thereof will conflict with, or result in a breach or
violation of, or constitute a default or, to the
28
knowledge of such counsel, the terms of any material
agreement or instrument to which the Investment Manager
is a party or by which it is bound or to which any of
its properties are subject, or any order of which such
counsel has knowledge after due inquiry, or other law,
rule or regulation applicable to the Investment Manager
of any U.S. federal or New York court, governmental
agency or body, stock exchange or securities
association having jurisdiction over the Investment
Manager or its properties or operations except for such
conflicts, breaches or defaults which would not have a
material adverse effect on the Investment Manager.
(5) The description of the Investment Manager and its
businesses in the Prospectus complies in all material
respects with the requirements of the Securities Act,
the Investment Company Act and the Rules and
Regulations.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction
other than the State of New York or the United States, to the
extent such counsel deems proper and specified in such
opinion, upon the opinion of other counsel of good standing
whom such counsel believes to be reliable and who are
satisfactory to counsel for the Dealer Manager, and (B) as to
matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Investment Manager
and public officials.
iv. The favorable opinions, dated the Representation Date and the
Expiration Date, of White & Case LLP, Hong Kong counsel for
the Fund and the Investment Manager, in form and substance
satisfactory to counsel for the Dealer Manager, to the effect
that:
(1) The Investment Manager has been duly incorporated and
is validly existing as a corporation under the laws of
Hong Kong, with full power and authority to conduct its
business as described in the Prospectus;
29
(2) The Investment Manager has been issued with the license
necessary for it to carry on the regulated activity of
advising on securities (Type 4 regulated activity as
defined in the Securities and Futures Ordinance) in
Hong Kong in respect of securities of "China companies"
(as referred to in the Prospectus) listed and traded in
Hong Kong as contemplated in the Prospectus and the
Management Agreement;
(3) The Management Agreement has been duly authorized by
the Investment Manager. This Agreement has been duly
executed and delivered by the Investment Manager. Each
of the Management Agreement and this Agreement and
complies with all applicable provisions of the laws of
Hong Kong;
(4) Neither the execution or delivery or performance by the
Investment Manager of its obligations under this
Agreement or the performance by the Investment Manager
of its obligations under the Management Agreement will
conflict with, or result in a breach or violation of,
the memorandum and articles of association of the
Investment Manager or any order of which such counsel
has knowledge after due inquiry, or other Hong Kong
law, rule or regulation applicable to the Investment
Manager of any Hong Kong court, governmental agency or
body of Hong Kong, the Stock Exchange of Hong Kong
Limited or the Securities and Futures Commission of
Hong Kong, except for such conflicts, breaches or
defaults which would not have a material adverse effect
on the Investment Manager;
(5) The Fund does not require any governmental licenses,
permits, consents, orders, approvals or other
authorizations under the laws of Hong Kong to enable
the Fund to continue to invest in securities of China
companies as contemplated in the Prospectus. Neither
the execution or delivery by the Fund nor the
performance by the Fund of any of its obligations under
this Agreement or the Management Agreement will
contravene or constitute
30
a default under any provision contained in any Hong
Kong law, rule or regulation of any Hong Kong
governmental or regulatory authority or any order of
any Hong Kong court by which the Fund is bound or
affected;
(6) The issuance by the Fund of the Rights and the
subsequent issuance of the Shares pursuant to this
Agreement will not contravene any provisions contained
in any Hong Kong law or any rule, regulation or order
of any Hong Kong governmental authority, provided that
subscription certificates are not mailed to
shareholders with addresses in Hong Kong, and the
Rights to which those subscription certificates relate
are otherwise held and dealt with as contemplated by
the Prospectus as regards shareholders whose addresses
are outside the United States;
(7) No consent, approval, authorization or order of any
court or governmental body of Hong Kong is required in
order for the Fund to perform its obligations referred
to or contemplated by this Agreement;
(8) The statements in the Statement of Additional
Information to the Prospectus and the Registration
Statement as set out under the captions "Certain
Information Concerning China, Hong Kong and
Taiwan--Hong Kong" and "Taxation--Hong Kong Taxes" to
the extent that they describe Hong Kong ordinances and
regulations are accurate in all material respects; and
(9) No profits tax is required to be paid by the Dealer
Manager or any of the Soliciting Dealers pursuant to
the Inland Revenue Ordinance (Cap. 112 of the laws of
Hong Kong) on profits derived from transactions
contemplated by this Agreement, provided they do not
carry on any business, trade or profession in Hong Kong
on their own behalf or through an agent.
31
In rendering such opinion, such counsel may rely as to matters
of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Investment Manager
and public officials.
v. The favorable opinions, dated the Representation Date and the
Expiration Date, of King & Wood, Chinese counsel for the Fund
and the Investment Manager, in form and substance satisfactory
to counsel for the Dealer Manager, to the effect that:
(1) The statements in the Statement of Additional
Information under the heading "Taxation--China Taxes"
in the Registration Statement and Prospectus, insofar
as such statements describe or summarize China tax
laws, treaties, doctrines or practices, fairly
summarize the matters therein described.
c. The Dealer Manager shall have received from Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Dealer Manager, such opinion or
opinions, dated the Representation Date and the Expiration Date, with
respect to the Offer, the Registration Statement, the Prospectus and
other related matters as the Dealer Manager may reasonably require,
and the Fund shall have furnished to such counsel such documents as
they reasonably request for the purpose of enabling them to pass upon
such matters.
d. The Fund shall have furnished to the Dealer Manager a certificate of
the Fund, signed by the President, the Treasurer, the Assistant
Treasurer, the Secretary, the Assistant Secretary or a Vice President
of the Fund, dated the Representation Date and the Expiration Date, to
the effect that the signer of such certificate has examined the
Registration Statement, the Prospectus, any supplement to the
Prospectus and this Agreement and that, to the best of the signer's
knowledge:
i. the representations and warranties of the Fund in this
Agreement are true and correct in all material respects on and
as of the Representation Date or the Expiration Date, as the
case may be (except that references to the Registration
Statement or Prospectus shall be to such documents as they may
have been amended or supplemented at the date of such
certificate), with
32
the same effect as if made on the Representation Date or the
Expiration Date, as the case may be, and the Fund has complied
with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the
Representation Date or the Expiration Date, as the case may
be;
ii. no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or, to the Fund's knowledge, threatened;
and
iii. since the date of the most recent balance sheet included or
incorporated by reference in the Prospectus, there has been no
material adverse change in the condition (financial or other),
business, prospects, net worth or results of operations of the
Fund (excluding fluctuations in the Fund's net asset value,
market price per share of the Common Shares and discount or
premium of such market price per share to net asset value per
share due to investment activities in the ordinary course of
operations), except as set forth in or contemplated in the
Prospectus (as amended or supplemented at the date of such
certificate).
e. The Investment Manager shall have furnished to the Dealer Manager
certificates of the Investment Manager, signed by the President,
Treasurer, Secretary or Vice President or any other senior officer of
comparable authority, dated the Representation Date and the Expiration
Date, to the effect that the signer of such certificate has read the
Registration Statement, the Prospectus, any supplement to the
Prospectus and this Agreement and, to the best knowledge of such
signer, the representations and warranties of the Investment Manager
in this Agreement are true and correct in all material respects on and
as of the Representation Date or the Expiration Date, as the case may
be, with the same effect as if made on the Representation Date or the
Expiration Date, as the case may be (except that references to the
Registration Statement or Prospectus shall be to such documents as
they may have been amended or supplemented at the date of such
certificate).
▇. ▇▇▇▇▇ & ▇▇▇▇▇ shall have furnished to the Dealer Manager letters,
33
dated the Representation Date and the Expiration Date, in form and
substance satisfactory to the Dealer Manager stating in effect that:
i. they are independent accountants with respect to the Fund
within the meaning of the Securities Act and the applicable
Rules and Regulations;
ii. in their opinion, the audited financial statements examined by
them and included or incorporated by reference in the
Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act and the Investment Company Act and the
respective Rules and Regulations with respect to registration
statements on Form N-2;
iii. they have performed specified procedures, not constituting an
audit in accordance with generally accepted auditing
standards, including a reading of the latest available
unaudited financial information of the Fund, a reading of the
minute books of the Fund, and inquiries of officials of the
Fund responsible for financial and accounting matters and on
the basis of such inquiries and procedures nothing came to
their attention that caused them to believe that at a
specified date not more than five business days prior to the
Representation Date or the Expiration Date, as the case may
be, there was any change in the Common Shares, any decrease in
net assets or any increase in long-term debt of the Fund as
compared with amounts shown in the most recent statement of
assets and liabilities included or incorporated by reference
in the Registration Statement, except as the Registration
Statement discloses has occurred or may occur, or they shall
state any specific changes, increases or decreases; and
iv. in addition to the procedures referred to in clause iii.
above, they have compared certain dollar amounts (or
percentages as derived from such dollar amounts) and other
financial information regarding the operations of the Fund
appearing in the Registration Statement, which have previously
been specified by the Dealer Manager and which shall be
specified in such letter, and have found such items to be in
agreement with, the accounting and financial records of the
Fund.
34
g. Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, there shall not have
been (i) any change specified in the letter or letters referred to in
paragraph 6.f., or (ii) any change, or any development involving a
prospective change, in or affecting the business or properties of the
Fund, the effect of which, in any case referred to in clause (i) or
(ii) above, is, in the judgment of the Dealer Manager, so material and
adverse as to make it impractical or inadvisable to proceed with the
Offer as contemplated by the Registration Statement and the
Prospectus.
h. Prior to the Representation Date, the Fund shall have furnished to the
Dealer Manager such further information, certificates and documents as
the Dealer Manager may reasonably request.
i. If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this
Agreement or waived by the Dealer Manager, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects satisfactory in form and substance to
the Dealer Manager and its counsel, this Agreement and all obligations
of the Dealer Manager hereunder may be canceled at, or at any time
prior to, the Expiration Date by the Dealer Manager. Notice of such
cancellation shall be given to the Fund promptly in writing or by
telephone confirmed in writing.
7. INDEMNITY AND CONTRIBUTION.
a. Each of the Fund and the Investment Manager, jointly and severally,
agrees to indemnify, defend and hold harmless the Dealer Manager, its
partners, directors and officers, and any person who controls the
Dealer Manager within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act from and against any loss, damage,
expense, liability or claim (including the reasonable cost of
investigation) which the Dealer Manager or any such person may incur
under the Securities Act, the Exchange Act, the Investment Company
Act, the Advisers Act, the common law or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (the term "Registration
Statement for purposes of this Section 7 being deemed
35
to include the Registration Statement as amended by any post-effective
amendment thereof by the Fund) or in a Prospectus (the term Prospectus
for the purpose of this Section 7 being deemed to include any
preliminary prospectus, the Prospectus and the Prospectus as amended
or supplemented by the Fund), or arises out of or is based upon any
omission or alleged omission to state a material fact required to be
stated in either such Registration Statement or Prospectus or
necessary to make the statements made therein not misleading (in the
case of the Prospectus, in light of the circumstances under which such
statements are made), except insofar as any such loss, damage,
expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in
and in conformity with information furnished in writing by or on
behalf of the Dealer Manager to the Fund or the Investment Manager
expressly for use with reference to the Dealer Manager in such
Registration Statement or such Prospectus or arises out of or is based
upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such
information not misleading, and provided, however that, solely with
respect to the foregoing agreement of the Investment Manager, such
agreement shall relate only to the Investment Manager Information.
If any action, suit or proceeding (together, a "Proceeding") is
brought against the Dealer Manager or any such person in respect of
which indemnity may be sought against the Fund or the Investment
Manager pursuant to the foregoing paragraph, the Dealer Manager or
such person shall promptly notify the Fund or the Investment Manager,
as the case may be, in writing of the institution of such Proceeding
and the Fund or the Investment Manager shall assume the defense of
such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and
expenses; provided, however, that the omission to so notify the Fund
or the Investment Manager shall not relieve the Fund or the Investment
Manager from any liability which the Fund or the Investment Manager
may have to the Dealer Manager or any such person or otherwise. The
Dealer Manager or such person shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Dealer Manager or of such
person unless the employment of such counsel
36
shall have been authorized in writing by the Fund or the Investment
Manager, as the case may be, in connection with the defense of such
Proceeding or the Fund or the Investment Manager shall not have,
within a reasonable period of time in light of the circumstances,
employed counsel to have charge of the defense of such Proceeding or
such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different
from, additional to or in conflict with those available to the Fund or
the Investment Manager (in which case the Fund or the Investment
Manager shall not have the right to direct the defense of such
Proceeding on behalf of the indemnified party or parties but the Fund
and the Investment Manager may employ counsel and participate in the
defense thereof, but the fees and expenses of such counsel shall be at
the expense of the Fund and the Investment Manager, respectively), in
any of which events such fees and expenses shall be borne by the Fund
or the Investment Manager and paid as incurred (it being understood,
however, that the Fund or the Investment Manager shall not be liable
for the expenses of more than one separate counsel (in addition to any
local counsel) in any one Proceeding or series of related Proceedings
in the same jurisdiction representing the indemnified parties who are
parties to such Proceeding). Neither the Fund nor the Investment
Manager shall be liable for any settlement of any Proceeding effected
without its written consent but if settled with the written consent of
the Fund or the Investment Manager, the Fund or the Investment
Manager, as the case may be, agrees to indemnify and hold harmless the
Dealer Manager and any such person from and against any loss or
liability by reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable
for any settlement of any Proceeding effected without its written
consent if (i) such settlement is entered into more than 60 business
days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of
37
which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such Proceeding and does not include an admission of fault,
culpability or a failure to act, by or on behalf of such indemnified
party.
b. The Dealer Manager agrees to indemnify, defend and hold harmless the
Fund and the Investment Manager, each of their shareholders, partners,
managers, members, directors and officers, and any person who controls
the Fund or the Investment Manager within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against
any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, the
Fund or the Investment Manager or any such person may incur under the
Securities Act, the Exchange Act, the Investment Company Act, the
Advisers Act, the common law or otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information furnished in writing
by or on behalf of the Dealer Manager to the Fund or the Investment
Manager expressly for use with reference to the Dealer Manager in the
Registration Statement (or in the Registration Statement as amended by
any post-effective amendment thereof by the Fund) or in a Prospectus,
or arises out of or is based upon any omission or alleged omission to
state a material fact in connection with such information required to
be stated in such Registration Statement or such Prospectus or
necessary to make such information not misleading.
If any Proceeding is brought against the Fund, the Investment Manager
or any such person in respect of which indemnity may be sought against
the Dealer Manager pursuant to the foregoing paragraph, the Fund, the
Investment Manager or such person shall promptly notify the Dealer
Manager in writing of the institution of such Proceeding and the
Dealer Manager shall assume the defense of such Proceeding, including
the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; PROVIDED, HOWEVER, that
the omission to so notify the Dealer
38
Manager shall not relieve the Dealer Manager from any liability which
the Dealer Manager may have to the Fund, the Investment Manager or any
such person or otherwise. The Fund, the Investment Manager or such
person shall have the right to employ its own counsel in any such
case, but the fees and expenses of such counsel shall be at the
expense of the Fund, the Investment Manager or such person, as the
case may be, unless the employment of such counsel shall have been
authorized in writing by the Dealer Manager in connection with the
defense of such Proceeding or the Dealer Manager shall not have,
within a reasonable period of time in light of the circumstances,
employed counsel to have charge of the defense of such Proceeding or
such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different
from, additional to or in conflict with those available to the Dealer
Manager (in which case the Dealer Manager shall not have the right to
direct the defense of such Proceeding on behalf of the indemnified
party or parties, but the Dealer Manager may employ counsel and
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of the Dealer Manager), in any of
which events such fees and expenses shall be borne by the Dealer
Manager and paid as incurred (it being understood, however, that the
Dealer Manager shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such
Proceeding). The Dealer Manager shall not be liable for any settlement
of any such Proceeding effected without the written consent of the
Dealer Manager but if settled with the written consent of the Dealer
Manager, the Dealer Manager agrees to indemnify and hold harmless the
Fund, the Investment Manager and any such person from and against any
loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for
fees and expenses of counsel as contemplated by the second sentence of
this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its
written consent if (i) such settlement is entered into more than 60
business days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified
39
party shall have given the indemnifying party at least 30 days' prior
notice of its intention to settle. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened Proceeding in respect of which
any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
Proceeding.
c. If the indemnification provided for in this Section 7 is unavailable
to an indemnified party under subsections (a) and (b) of this Section
7 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
damages, expenses, liabilities or claims (i) in such proportion as is
appropriate to reflect the relative benefits received by the Fund and
the Investment Manager on the one hand and the Dealer Manager on the
other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault
of the Fund and the Investment Manager on the one hand and of the
Dealer Manager on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses,
liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Fund or the
Investment Manager on the one hand and the Dealer Manager on the other
shall be deemed to be in the same respective proportions as the total
proceeds from the offering (net of the Dealer Manager Fee but before
deducting expenses) received by the Fund and the total underwriting
discounts and commissions received by the Dealer Manager, bear to the
aggregate public offering price of the Shares. The relative fault of
the Fund and the Investment Manager on the one hand and of the Dealer
Manager on the other shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission relates to information
supplied by the Fund or the Investment Manager or by the Dealer
Manager and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
40
omission. The amount paid or payable by a party as a result of the
losses, damages, expenses, liabilities and claims referred to in this
subsection shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any Proceeding.
d. The Fund and the Investment Manager and the Dealer Manager agree that
it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation or by any other
method of allocation that does not take account of the equitable
considerations referred to in subsection (c) above. Notwithstanding
the provisions of this Section 7, the Dealer Manager shall not be
required to contribute any amount in excess of the fees received by
it. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
e. Notwithstanding any other provisions in this Section 7, no party shall
be entitled to indemnification or contribution under this Dealer
Manager Agreement against any loss, claim, liability, expense or
damage arising by reason of such person's willful misfeasance, or
gross negligence in the performance of its duties hereunder.
f. The indemnity and contribution agreements contained in this Section 7
and the covenants, warranties and representations of the Fund
contained in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of the Dealer
Manager, its partners, directors or officers or any person (including
each partner, officer or director of such person) who controls the
Dealer Manager within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, or by or on behalf of the Fund or
the Investment Manager, its directors or officers or any person
(including each partner, officer of director of such person) who
controls the Fund or the Investment Manager within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act,
and shall survive any termination of this Agreement or the issuance
and delivery of the Shares. The Fund or the Investment Manager and the
Dealer Manager agree promptly to notify each other of the commencement
of any Proceeding against it and, in the case of the Fund or the
Investment Manager, against any of the Fund's or the
41
Investment Manager's officers or directors or any person (including
each partner, officer or director of such person) who controls the
Fund or the Investment Manager within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act in connection with
the issuance of the Shares, or in connection with the Registration
Statement or Prospectus.
g. The Fund and the Investment Manager acknowledge that the statements
under the caption "Distribution Arrangements" in the Prospectus
constitute the only information furnished in writing to the Fund by
the Dealer Manager expressly for use in such document, and the Dealer
Manager confirms that such statements are correct in all material
respects.
8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. The
respective agreements, representations, warranties, indemnities and other
statements of the Fund or its officers, of the Investment Manager and of
the Dealer Manager set forth in or made pursuant to this Agreement shall
survive the Expiration Date and will remain in full force and effect,
regardless of any investigation made by or on behalf of Dealer Manager or
the Fund or any of the officers, directors or controlling persons referred
to in Section 7 hereof, and will survive delivery of and payment for the
Shares pursuant to the Offer. The provisions of Sections 5 and 7 hereof
shall survive the termination or cancellation of this Agreement.
9. TERMINATION OF AGREEMENT.
a. This Agreement shall be subject to termination in the absolute
discretion of the Dealer Manager, by notice given to the Fund prior to
the expiration of the Offer, if prior to such time (i) financial,
political, economic, currency, banking or social conditions in the
United States shall have undergone any material change the effect of
which on the financial markets makes it, in the Dealer Manager's
judgment, impracticable or inadvisable to proceed with the Offer, (ii)
there has occurred any outbreak or material escalation of hostilities
or other calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in the Dealer
Manager's judgment, impracticable or inadvisable to proceed with the
Offer, (iii) trading in the Common Shares or in the Rights shall have
been suspended by the Commission or the New York Stock Exchange, (iv)
trading in securities generally on the New York Stock Exchange shall
have been suspended
42
or limited or (v) a banking moratorium shall have been declared either
by Federal or New York State authorities.
b. If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party
except as provided in Section 5.
10. NOTICES. All communications hereunder will be in writing and effective only
on receipt, and, if sent to the Dealer Manager, will be mailed, delivered
or telegraphed and confirmed to UBS Securities LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attn: Syndicate Department and, if to the Fund
or the Investment Manager, shall be sufficient in all respects if delivered
or sent to the Fund or the Investment Manager to UBS Global Asset
Management (US) Inc., ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇.▇▇▇▇▇▇.
11. SUCCESSORS. This Agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors and will inure to the
benefit of the officers and directors and controlling persons referred to
in Section 7 hereof, and no other person will have any right or obligation
hereunder.
12. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York without reference to the
choice-of-law principles thereof.
13. SUBMISSION TO JURISDICTION. Except as set forth below, no claim arising out
of or in any way relating to this Agreement (a "Claim") may be commenced,
prosecuted or continued in any court other than the courts of the State of
New York located in the City and County of New York or in the United States
District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and each of the
Fund and the Investment Manager consents to the jurisdiction of such courts
and personal service with respect thereto. Each of the Fund and the
Investment Manager hereby consents to personal jurisdiction, service and
venue in any such court in which any Claim is brought by any third party
against the Dealer Manager or any indemnified party. Each of the Dealer
Manager, the Fund (on its behalf and, to the extent permitted by applicable
law, on behalf of its stockholders and affiliates) and the Investment
Manager (on its behalf and, to the extent permitted by applicable law, on
behalf of its stockholders and affiliates) waives all right to trial by
jury in any action, proceeding or counterclaim (whether based upon
contract, tort or otherwise) in any way
43
arising out of or relating to this Agreement. Each of the Fund, the
Investment Manager and the Dealer Manager agrees that a final judgment in
any such action, proceeding or counterclaim brought in any such court shall
be conclusive and binding upon the Fund, the Investment Manager or the
Dealer Manager, as the case may be, and may be enforced in any other courts
in the jurisdiction of which the Fund, the Investment Manager or the Dealer
Manger is or may be subject, by suit upon such judgment.
14. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
44
If the foregoing is in accordance with your understanding of our
agreement, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Fund, the
Investment Manager and the Dealer Manager.
Very truly yours,
The Greater China Fund, Inc.
By:
--------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Baring Asset Management (Asia) Limited
By:
-------------------------------------
Name:
----------------------------------
Title:
---------------------------------
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
UBS Securities LLC
By:
----------------------------------
Name:
-------------------------------
Title:
------------------------------
By:
----------------------------------
Name:
-------------------------------
Title:
------------------------------
Exhibit A
THE GREATER CHINA FUND, INC.
4,199,170 Shares of Common Stock
Issuable Upon Exercise of Transferable Rights
to Subscribe for Such Shares
SELLING GROUP AGREEMENT
New York, New York
November [__], 2005
UBS Securities LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
We understand that The Greater China Fund, Inc., a Maryland
corporation (the "Fund"), proposes to issue to holders of record (the "Holders")
at the close of business on the record date set forth in the Prospectus (as
defined herein) (the "Record Date") transferable rights entitling such Holders
to subscribe for up to 4,199,170 shares (each a "Share" and, collectively, the
"Shares") of the Fund's shares of common stock, par value $0.01 per share (the
"Common Shares"), of the Fund (the "Offer"). Pursuant to the terms of the Offer,
the Fund is issuing each Holder one transferable right (each a "Right" and,
collectively, the "Rights") for each Common Share held by such Holder on the
Record Date. Such Rights entitle holders to acquire during the subscription
period set forth in the Prospectus (the "Subscription Period"), at the price set
forth in such Prospectus (the "Subscription Price"), one Share for each three
Rights (except that any Holder who is issued fewer than three Rights will be
able to subscribe for one full Share pursuant to the primary subscription), on
the terms and conditions set forth in such Prospectus. No fractional shares will
be issued. Any Holder who fully exercises all Rights initially issued to such
Holder (other than those Rights that cannot be exercised because they represent
the right to acquire less than one Share) will be entitled to subscribe for,
subject to allocation, additional Shares (the "Over-Subscription Privilege") on
the terms and conditions set forth in such Prospectus. The Rights are
transferable and are expected to be listed on the New York Stock Exchange.
The Greater China Fund, Inc.
Selling Group Agreement Page 2
Rights Offer Expiring December [__], 2005, unless extended
We further understand that the Fund has appointed UBS Securities LLC
to act as the dealer manager (the "Dealer Manager") in connection with the Offer
and has authorized the Dealer Manager to form and manage a group of
broker-dealers (each a "Selling Group Member" and collectively the "Selling
Group") to solicit the exercise of Rights and to sell Shares purchased by the
Dealer Manager from the Fund through the exercise of Rights.
We hereby express our interest in participating in the Offer as a
Selling Group Member.
We hereby agree with you as follows:
1. We have received and reviewed the Fund's prospectus dated November
[__], 2005 (the "Prospectus") relating to the Offer and we understand
that additional copies of the Prospectus (or of the Prospectus as it
may be subsequently supplemented or amended, if applicable) and any
other solicitation materials authorized by the Fund relating to the
Offer ("Offering Materials") will be supplied to us in reasonable
quantities upon our request therefor to you. We agree that we will not
use any solicitation material other than the Prospectus (as
supplemented or amended, if applicable) and such Offering Materials
and we agree not to make any written representations concerning the
Fund to any holders or prospective holders of Shares or Rights other
than those contained in the Offering Materials or otherwise previously
authorized in writing by the Fund or otherwise permitted by applicable
law.
2. From time to time during the period (the "Subscription Period")
commencing on November [__], 2005 and ending at 5:00 p.m., New York
City time, on the Expiration Date (the term "Expiration Date" means
December [__], 2005, unless and until the Fund shall, in its sole
discretion, have extended the period for which the Offer is open, in
which event the term "Expiration Date" with respect to the Offer will
mean the latest time and date on which the Offer, as so extended by
the Fund, will expire), we may solicit the exercise of Rights in
connection with
The Greater China Fund, Inc.
Selling Group Agreement Page 3
Rights Offer Expiring December [__], 2005
the Offer. We will be entitled to receive fees in the amounts and at
the times described in Section 4 of this Agreement with respect to
Shares purchased pursuant to the exercise of Rights and with respect
to which PFPC Inc. (the "Subscription Agent") has received, no later
than 5:00 p.m., New York City time, on the Expiration Date, either (i)
a properly completed and executed Subscription Certificate identifying
us as the broker-dealer having been instrumental in the exercise of
such Rights, and full payment for such Shares or (ii) a Notice of
Guaranteed Delivery guaranteeing to the Subscription Agent by the
close of business of the third business day after the Expiration Date
of a properly completed and duly executed Subscription Certificate,
similarly identifying us, and full payment for such Shares. We
understand that we will not be paid these fees with respect to Shares
purchased pursuant to an exercise of Rights for our own account or for
the account of any of our affiliates. We also understand and agree
that we are not entitled to receive any fees in connection with the
solicitation of the exercise of Rights other than pursuant to the
terms of this Agreement and, in particular, that we will not be
entitled to receive any fees under the Fund's Soliciting Dealer
Agreement. We agree to solicit the exercise of Rights in accordance
with the Securities Act of 1933, as amended (the "Securities Act"),
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the Investment Company Act of 1940, as amended, and the rules and
regulations under each such Act, any applicable securities laws of any
state or jurisdiction where such solicitations may be lawfully made,
the applicable rules and regulations of any self-regulatory
organization or registered national securities exchange and customary
practice and subject to the terms of the Subscription Agent Agreement
between the Fund and the Subscription Agent and the procedures
described in the Fund's registration statement on Form N-2 (File Nos.
333-112505 and 811-6674), as amended (the "Registration Statement").
3. From time to time during the Subscription Period, we may indicate
interest in purchasing Shares from the Dealer Manager. We understand
that from time to time the Dealer Manager intends to offer Shares
obtained or to be obtained by the Dealer Manager through the exercise
of Rights to Selling Group Members who have so indicated interest at
The Greater China Fund, Inc.
Selling Group Agreement Page 4
Rights Offer Expiring December [__], 2005
prices which shall be determined by the Dealer Manager (the "Offering
Price"). We agree that with respect to any such Shares purchased by us
from the Dealer Manager the sale of such Shares to us shall be
irrevocable and we will offer them to the public at the Offering Price
at which we purchase them from the Dealer Manager. Shares not sold by
us at such Offering Price may be offered by us after the next
succeeding Offering Price is set at the latest Offering Price set by
the Dealer Manager. The Dealer Manager agrees that, if requested by
any Selling Group Member, and subject to applicable law, the Dealer
Manager will set a new Offering Price prior to 4:00 p.m., New York
City time, on any business day. We agree to advise the Dealer Manager
from time to time upon request, prior to the termination of this
Agreement, of the number of Shares remaining unsold which were
purchased by us from the Dealer Manager and, on the Dealer Manager's
request, we will resell to the Dealer Manager any of such Shares
remaining unsold at the purchase price thereof if in the Dealer
Manager's opinion such Shares are needed to make delivery against
sales made to other Selling Group Members. Any shares purchased
hereunder from the Dealer Manager shall be subject to regular way
settlement through the facilities of the Depository Trust Company.
4. We understand that you will remit to us on or before the tenth
business day following the day the Fund issues Shares after the
Expiration Date, following receipt by you from the Fund of the Dealer
Manager Fee, a selling fee equal to 2.50% of the Subscription Price
per Share for (A) each Share issued pursuant to the exercise of Rights
or the Over-Subscription Privilege pursuant to each Subscription
Certificate upon which we are designated, as certified to you by the
Subscription Agent, as a result of our solicitation efforts in
accordance with Section 2 and (B) each Share sold by the Dealer
Manager to us in accordance with Section 3 less any Shares resold to
the Dealer Manager in accordance with Section 3. Your only obligation
with respect to payment of the foregoing selling fee to us is to remit
to us amounts owing to us and actually received by you from the Fund.
Except as aforesaid, you shall be under no liability to make any
payments to us pursuant to this Agreement.
The Greater China Fund, Inc.
Selling Group Agreement Page 5
Rights Offer Expiring December [__], 2005
5. We agree that you, as Dealer Manager, have full authority to take such
action as may seem advisable to you in respect of all matters
pertaining to the Offer. You are authorized to approve on our behalf
any amendments or supplements to the Registration Statement or the
Prospectus.
6. We represent that we are a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD") and, in making
sales of Shares, agree to comply with all applicable rules of the
NASD, including, without limitation, NASD Conduct Rule 2740 and either
(i) the NASD's Interpretation with Respect to Free-Riding and
Withholding, as set forth in IM 2110-1 of the NASD's Conduct Rules or
(ii) NASD Conduct Rule 2790. We understand that no action has been
taken by you or the Fund to permit the solicitation of the exercise of
Rights or the sale of Shares in any jurisdiction (other than the
United States) where action would be required for such purpose. We
agree that we will not, without your approval in advance, buy, sell,
deal or trade in, on a when-issued basis or otherwise, the Rights or
the Shares or any other option to acquire or sell Shares for our own
account or for the accounts of customers, except as provided in
Sections 2 and 3 hereof and except that we may buy or sell Rights or
Shares in brokerage transactions on unsolicited orders which have not
resulted from activities on our part in connection with the
solicitation of the exercise of Rights and which are executed by us in
the ordinary course of our brokerage business. We will keep an
accurate record of the names and addresses of all persons to whom we
give copies of the Registration Statement, the Prospectus, any
preliminary prospectus (or any amendment or supplement thereto) or any
Offering Materials and, when furnished with any subsequent amendment
to the Registration Statement and any subsequent prospectus, we will,
upon your request, promptly forward copies thereof to such persons.
7. Nothing contained in this Agreement will constitute the Selling Group
Members partners with the Dealer Manager or with one another or create
any association between those parties, or will render the Dealer
Manager or the Fund liable for the obligations of any Selling Group
Member. The Dealer Manager will be under no liability to make any
payment to any Selling Group Member other than as provided in
The Greater China Fund, Inc.
Selling Group Agreement Page 6
Rights Offer Expiring December [__], 2005
Section 4 of this Agreement, and will be subject to no other
liabilities to any Selling Group Member, and no obligations of any
sort will be implied. We agree to indemnify and hold harmless you and
each other Selling Group Member and each person, if any, who controls
you and any such Selling Group Member within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act,
against loss or liability caused by any breach by us of the terms of
this Agreement.
8. We agree to pay any transfer taxes which may be assessed and paid on
account of any sales or transfers for our account.
9. All communications to you relating to the Offer will be addressed to:
UBS Securities LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attn: Syndicate Department.
10. This Agreement will be governed by the internal laws of the State of
New York.
The Greater China Fund, Inc.
Selling Group Agreement Page 7
Rights Offer Expiring December [__], 2005
A signed copy of this Selling Group Agreement will be promptly returned to
the Selling Group Member at the address set forth below.
Very truly yours,
UBS Securities LLC
By:
-----------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
PLEASE COMPLETE THE INFORMATION BELOW
Printed Firm Name Address
Contact at Selling Group Member
Authorized Signature Area Code and Telephone
Number
Name and Title Facsimile Number
Dated:
------------------------------
The Greater China Fund, Inc.
Selling Group Agreement Page 8
Rights Offer Expiring December [__], 2005
Payment of the Selling Fee shall be mailed by check to the following address:
Exhibit B
THE GREATER CHINA FUND, INC.
Rights Offering for Shares of Common Stock
SOLICITING DEALER AGREEMENT
THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
December [__], 2005, UNLESS EXTENDED
To Securities Dealers and Brokers:
The Greater China Fund, Inc., (the "Fund") is issuing to its
shareholders of record ("Record Date Shareholders") as of the close of business
on November [__], 2005 (the "Record Date") transferable rights ("Rights") to
subscribe for an aggregate of up to 4,199,170 shares (the "Shares") of the
Fund's shares common stock, par value $0.01 per share (the "Common Shares"), of
the Fund upon the terms and subject to the conditions set forth in the Fund's
Prospectus (the "Prospectus") dated November [__], 2005 (the "Offer"). Each such
Record Date Shareholder is being issued one Right for each full Common Share
owned on the Record Date. Such Rights entitle holders to acquire during the
Subscription Period (as hereinafter defined) at the Subscription Price (as
hereinafter defined), one Share for each three Rights (except that any Record
Date Shareholder who is issued fewer than three Rights will be able to subscribe
for one full Share pursuant to the primary subscription), on the terms and
conditions set forth in such Prospectus. No fractional shares will be issued.
Any Record Date Shareholder who fully exercises all Rights initially issued to
such holder (other than those Rights that cannot be exercised because they
represent the right to acquire less than one Share) will be entitled to
subscribe for, subject to allocation, additional Shares (the "Over-Subscription
Privilege") on the terms and conditions set forth in such Prospectus. Shares
acquired pursuant to the Over-Subscription Privilege are
The Greater China Fund, Inc.
Soliciting Dealer Agreement Page 2
Rights Offer Expiring December [__], 2005
subject to allotment, as more fully described in the Prospectus. The Rights are
transferable and are expected to be listed on the New York Stock Exchange, Inc.
The Subscription Price will be as set forth in the Prospectus. The Subscription
Period will commence on November [__], 2005 and end at 5:00 p.m., New York City
time on the Expiration Date (the term "Expiration Date" means December [__],
2005, unless and until the Fund shall, in its sole discretion, have extended the
period for which the Offer is open, in which event the term "Expiration Date"
with respect to the Offer will mean the latest time and date on which the Offer,
as so extended by the Fund, will expire).
For the duration of the Offer, the Fund has authorized and the Dealer
Manager has agreed to reallow a Solicitation Fee to any qualified broker or
dealer executing a Soliciting Dealer Agreement who solicits the exercise of
Rights and the Over-Subscription Privilege in connection with the Offer and who
complies with the procedures described below (a "Soliciting Dealer"). Upon
timely delivery to PFPC, Inc., the Fund's Subscription Agent for the Offer, of
payment for Shares purchased pursuant to the exercise of Rights and the
Over-Subscription Privilege and of properly completed and executed documentation
as set forth in this Soliciting Dealer Agreement, a Soliciting Dealer will be
entitled to receive the Solicitation Fee equal to 0.50% of the Subscription
Price per Share so purchased subject to a maximum fee based on the number of
Common Shares held by such Soliciting Dealer through The Depository Trust
Company ("DTC") on the Record Date; provided, however, that no payment shall be
due with respect to the issuance of any Shares until payment therefor is
actually received. A qualified broker or dealer is a broker or dealer which is a
member of a registered national securities exchange in the United States or the
National Association of Securities Dealers, Inc. ("NASD") or any foreign broker
or dealer not eligible for membership who agrees to conform to the Rules of Fair
Practice of the NASD, including Sections 2730, 2740, 2420 and 2750 thereof, in
making solicitations in the United States to the same extent as if it were a
member thereof.
The Fund has authorized and the Dealer Manager has agreed to pay the
Solicitation Fees payable to the undersigned Soliciting Dealer and to indemnify
such Soliciting Dealer on the terms set forth in the Dealer Manager Agreement,
dated November [__], 2005, among UBS Securities LLC as the dealer manager (the
"Dealer Manager"), the Fund and others (the "Dealer Manager Agreement").
Solicitation and other activities by Soliciting Dealers may be undertaken only
in accordance with the applicable rules and regulations of the Securities and
Exchange Commission and only
The Greater China Fund, Inc.
Soliciting Dealer Agreement Page 3
Rights Offer Expiring December [__], 2005
in those states and other jurisdictions where such solicitations and other
activities may lawfully be undertaken and in accordance with the laws thereof.
Compensation will not be paid for solicitations in any state or other
jurisdiction in which the opinion of counsel to the Fund or counsel to the
Dealer Manager, such compensation may not lawfully be paid. No Soliciting Dealer
shall be paid Solicitation Fees with respect to Shares purchased pursuant to an
exercise of Rights and the Over-Subscription Privilege for its own account or
for the account of any affiliate of the Soliciting Dealer. No Soliciting Dealer
or any other person is authorized by the Fund or the Dealer Manager to give any
information or make any representations in connection with the Offer other than
those contained in the Prospectus and other authorized solicitation material
furnished by the Fund through the Dealer Manager. No Soliciting Dealer is
authorized to act as agent of the Fund or the Dealer Manager in any connection
or transaction. In addition, nothing herein contained shall constitute the
Soliciting Dealers partners with the Dealer Manager or with one another, or
agents of the Dealer Manager or of the Fund, or create any association between
such parties, or shall render the Dealer Manager or the Fund liable for the
obligations of any Soliciting Dealer. The Dealer Manager shall be under no
liability to make any payment to any Soliciting Dealer, and shall be subject to
no other liabilities to any Soliciting Dealer, and no obligations of any sort
shall be implied.
In order for a Soliciting Dealer to receive Solicitation Fees, the
Subscription Agent must have received from such Soliciting Dealer no later than
5:00 p.m., New York City time, on the Expiration Date, either (i) a properly
completed and duly executed Subscription Certificate with respect to Shares
purchased pursuant to the exercise of Rights and the Over-Subscription Privilege
and full payment for such Shares; or (ii) a Notice of Guaranteed Delivery
guaranteeing delivery to the Subscription Agent by close of business on the
third business day after the Expiration Date, of (a) full payment for such
Shares and (b) a properly completed and duly executed Subscription Certificate
with respect to Shares purchased pursuant to the exercise of Rights.
Solicitation Fees will only be paid after receipt by the Subscription Agent of a
properly completed and duly executed Soliciting Dealer Agreement and a
Subscription Certificate designating the Soliciting Dealer in the applicable
portion hereof. In the case of a Notice of Guaranteed Delivery, Solicitation
Fees will only be paid after delivery in accordance with such Notice of
Guaranteed Delivery has been effected. Solicitation Fees will be paid by the
Fund (through the Subscription Agent) to the Soliciting Dealer by check to an
address designated by the Soliciting Dealer below
The Greater China Fund, Inc.
Soliciting Dealer Agreement Page 4
Rights Offer Expiring December [__], 2005
by the tenth business day following the day the Fund issues Shares after the
Expiration Date.
All questions as to the form, validity and eligibility (including time
of receipt) of this Soliciting Dealer Agreement will be determined by the Fund,
in its sole discretion, which determination shall be final and binding. Unless
waived, any irregularities in connection with a Soliciting Dealer Agreement or
delivery thereof must be cured within such time as the Fund shall determine.
None of the Fund, the Dealer Manager, the Subscription Agent, the Information
Agent for the Offer or any other person will be under any duty to give
notification of any defects or irregularities in any Soliciting Dealer Agreement
or incur any liability for failure to give such notification.
The acceptance of Solicitation Fees from the Fund by the undersigned
Soliciting Dealer shall constitute a representation by such Soliciting Dealer to
the Fund that: (i) it has received and reviewed the Prospectus; (ii) in
soliciting purchases of Shares pursuant to the exercise of the Rights and the
Over-Subscription Privilege, it has complied with the applicable requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
applicable rules and regulations thereunder, any applicable securities laws of
any state or jurisdiction where such solicitations were made, and the applicable
rules and regulations of any self-regulatory organization or registered national
securities exchange; (iii) in soliciting purchases of Shares pursuant to the
exercise of the Rights and the Over-Subscription Privilege, it has not
published, circulated or used any soliciting materials other than the Prospectus
and any other authorized solicitation material furnished by the Fund through the
Dealer Manager and has not made any written representations concerning the Fund
to any holders or prospective holders of Shares or Rights other than those
contained in such materials or otherwise previously authorized in writing by the
Fund or otherwise permitted by applicable law; (iv) it has not purported to act
as agent of the Fund or the Dealer Manager in any connection or transaction
relating to the Offer; (v) the information contained in this Soliciting Dealer
Agreement is, to its best knowledge, true and complete; (vi) it is not
affiliated with the Fund; (vii) it will not accept Solicitation Fees paid by the
Fund pursuant to the terms hereof with respect to Shares purchased by the
Soliciting Dealer pursuant to an exercise of Rights and the Over-Subscription
Privilege for its own account; (viii) it will not remit, directly or indirectly,
any part of Solicitation Fees paid by the Fund pursuant to the terms hereof to
any beneficial owner of Shares purchased pursuant to the Offer; and (ix) it has
agreed to the amount of the Solicitation
The Greater China Fund, Inc.
Soliciting Dealer Agreement Page 5
Rights Offer Expiring December [__], 2005
Fees and the terms and conditions set forth herein with respect to receiving
such Solicitation Fees. By returning a Soliciting Dealer Agreement and accepting
Solicitation Fees, a Soliciting Dealer will be deemed to have agreed to
indemnify the Fund and the Dealer Manager against losses, claims, damages and
liabilities to which the Fund may become subject as a result of the breach of
such Soliciting Dealer's representations made herein and described above. In
making the foregoing representations, Soliciting Dealers are reminded of the
possible applicability of the anti-manipulation rules under the Exchange Act if
they have bought, sold, dealt in or traded in any Shares for their own account
since the commencement of the Offer.
Upon expiration of the Offer, no Solicitation Fees will be payable to
Soliciting Dealers with respect to ▇▇▇▇▇▇ purchased thereafter.
Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Dealer Manager Agreement or, if not defined therein, in
the Prospectus.
This Soliciting Dealer Agreement will be governed by the laws of the
State of New York.
Please execute this Soliciting Dealer Agreement below accepting the
terms and conditions hereof and confirming that you are a member firm of the
NASD or a foreign broker or dealer not eligible for membership who has conformed
to the Rules of Fair Practice of the NASD, including Sections 2730, 2740, 2420
and 2750 thereof, in making solicitations of the type being undertaken pursuant
to the Offer in the United States to the same extent as if you were a member
thereof, and certifying that you have solicited the purchase of the Shares
pursuant to exercise of the Rights, all as described above, in accordance with
the terms and conditions set forth in this Soliciting Dealer Agreement. Please
forward two executed copies of this Soliciting Dealer Agreement to: UBS
Securities LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attn: Syndicate
Department.
The Greater China Fund, Inc.
Soliciting Dealer Agreement Page 6
Rights Offer Expiring December [__], 2005
A signed copy of this Soliciting Dealer Agreement will be promptly returned
to the Soliciting Dealer at the address set forth below.
Very truly yours,
UBS Securities LLC
By:
-----------------------------------
Name:
----------------------------------
Title:
-------------------------------
PLEASE COMPLETE THE INFORMATION BELOW
Printed Firm Name Address
Contact at Soliciting Dealer
Authorized Signature Area Code and Telephone
Number
Name and Title Facsimile Number
Dated:
-------------------------------
Payment of the Solicitation Fee shall be
mailed by check to the following address:
