Exhibit h.1
AEW Real Estate Income Fund
(a Massachusetts business trust)
[ ] Common Shares of Beneficial Interest
(Par Value $.00001 Per Share)
FORM OF PURCHASE AGREEMENT
November [ ], 2002
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Prudential Securities Incorporated
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
RBC Xxxx Xxxxxxxx Inc.
Advest, Inc.
Xxxxxx, Xxxxx Xxxxx, Incorporated
J.J.B. Xxxxxxxx, X.X. Xxxxx, Inc.
XxXxxxxx Investments Inc., a KeyCorp Company
Quick & Xxxxxx, Inc.
TD Waterhouse Investor Services, Inc.
Wedbush Xxxxxx Securities
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
AEW Real Estate Income Fund, a Massachusetts business trust (the "Fund"),
and the Fund's investment adviser, AEW Management and Advisors, L.P., a Delaware
limited partnership (the "Adviser"), each confirms its agreement with Xxxxxxx
Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (together,
"Xxxxxxx Xxxxx") and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Xxxxxxx
Xxxxx and Prudential Securities Incorporated, Xxxx Xxxxx Xxxx Xxxxxx,
Incorporated, RBC Xxxx Xxxxxxxx Inc., Advest, Inc., Xxxxxx, Xxxxx Xxxxx,
Incorporated, J.J.B. Xxxxxxxx, X.X. Xxxxx, Inc., McDonald Investments Inc., a
KeyCorp Company, Quick & Xxxxxx, Inc., TD Waterhouse Investor Services, Inc. and
Wedbush Xxxxxx Securities are acting as representatives (in such capacity, the
"Representatives"), with respect to the issue and sale by the Fund and the
purchase by the Underwriters, acting severally and not jointly, of the
respective number of common shares of beneficial interest, par value $.00001 per
share, of the Fund ("Common Shares") set forth in said Schedule A, and with
respect to the grant by the Fund to the Underwriters, acting severally and not
jointly, of the option described in
Section 2(b) hereof to purchase all or any part of [ ] additional Common
Shares for the sole purpose of covering over-allotments, if any. The aforesaid
[ ] Common Shares (the "Initial Securities") to be purchased by the
Underwriters and all or any part of the [ ] Common Shares subject to the
option described in Section 2(b) hereof (the "Option Securities") are
hereinafter called, collectively, the "Securities."
The Fund understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Fund has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (No. 333-100018 and No.
811-21206) covering the registration of the Securities under the Securities Act
of 1933, as amended (the "1933 Act"), including the related preliminary
prospectus or prospectuses, and a notification on Form N-8A of registration of
the Fund as an investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and the rules and regulations of the Commission under
the 1933 Act and the 1940 Act (the "Rules and Regulations"). Promptly after
execution and delivery of this Agreement, the Fund will, to the extent it has
not already done so, either (i) prepare and file a prospectus in accordance with
the provisions of Rule 430A ("Rule 430A") of the Rules and Regulations and
paragraph (c) or (h) of Rule 497 ("Rule 497") of the Rules and Regulations or
(ii) if the Fund has elected to rely upon Rule 434 ("Rule 434") of the Rules and
Regulations, prepare and file a term sheet (a "Term Sheet") in accordance with
the provisions of Rule 434 and Rule 497. The information included in any such
prospectus or in any such Term Sheet, as the case may be, that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective, if
applicable, (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each prospectus used before such registration statement
became effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, including in each
case any statement of additional information incorporated therein by reference,
is herein called a "preliminary prospectus." Such registration statement,
including the exhibits thereto and schedules thereto at the time it became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the Rules and Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus in the form first furnished to the Underwriters
for use in connection with the offering of the Securities, including the
statement of additional information incorporated therein by reference, is herein
called the "Prospectus." If Rule 434 is relied on, the term "Prospectus" shall
refer to the preliminary prospectus dated October 28, 2002 together with the
Term Sheet and all references in this Agreement to the date of the Prospectus
shall mean the date of the Term Sheet. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
Prospectus or any Term Sheet or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Fund and the Adviser. The Fund
and the Adviser jointly and severally represent and warrant to each Underwriter
as of the date hereof, as of the Closing
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Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if
any) referred to in Section 2(b) hereof, and agree with each Underwriter, as
follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act, or order of
suspension or revocation of registration pursuant to Section 8(e) of
the 1940 Act, and no proceedings for any such purpose have been
instituted or are pending or, to the knowledge of the Fund or the
Adviser, are contemplated by the Commission, and any request on the
part of the Commission for additional information has been complied
with in all material respects.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments
(except any post-effective amendments filed with the Commission after
the later of (x) one year from the date of this Agreement or (y) the
date on which the distributions of the Securities is completed)
thereto became effective and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement, the notification of
Form N-8A and any amendments and supplements thereto complied and will
comply in all material respects with the requirements of the 1933 Act,
the 1940 Act and the Rules and Regulations and did not and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. Neither the Prospectus nor any
amendments or supplements thereto, at the time the Prospectus or any
such amendment or supplement was issued and at the Closing Time (and,
if any Option Securities are purchased, at the Date of Delivery),
included or will include an untrue statement of a material fact or
omitted or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. If Rule 434 is used, the Fund
will comply with the requirements of Rule 434 and the Prospectus shall
not be "materially different", as such term is used in Rule 434, from
the prospectus included in the Registration Statement at the time it
became effective.
Each preliminary prospectus delivered to the Underwriters for use
in connection with this offering and the prospectus included in the
effective Registration Statement or as part of any amendment thereto,
or filed pursuant to Rule 497 under the 1933 Act, complied when so
filed in all material respects with the Rules and Regulations and each
such preliminary prospectus and the Prospectus delivered to the
Underwriters for use in connection with this offering was identical to
the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
If a Rule 462(b) Registration Statement is required in connection
with the offering and sale of the Securities, the Fund has complied or
will comply with the requirements of Rule 111 under the 1933 Act
Regulations relating to the payment of filing fees thereof.
The foregoing representations in this Section 1(a)(i) do not
apply to statements or omissions relating to the Underwriters made in
reliance on and in conformity with information furnished in writing to
the Fund by the Underwriters or their agents expressly for use in the
Registration Statement, the 462(b) Registration Statement, Prospectus
or preliminary prospectus (or any amendment or supplement to any of
the foregoing), or, with respect to the representations of the Fund
contained in this Section 1(a)(i), the description of the Adviser
(referred to in Section (1)(b)(iii) of this Agreement) contained in
the foregoing.
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(ii) Independent Accountants. To the knowledge of the Fund,
based on representations from PricewaterhouseCoopers LLP, as of the
date of the report of the independent accountants contained in the
Registration Statement, the accountants who certified the statement of
assets and liabilities included in the Registration Statement are
independent public accountants as required by the 1933 Act and the
Rules and Regulations.
(iii) Financial Statements. The statement of assets and
liabilities included in the Registration Statement and the Prospectus,
together with the related notes, presents fairly the financial
position of the Fund in all material respects at the date indicated;
said statement has been prepared in conformity with generally accepted
accounting principles ("GAAP").
(iv) Expense Summary. The information set forth in the
Prospectus in the fee table, contained in the section of the
Prospectus entitled "Summary of Fund Expenses," has been prepared in
accordance with the requirements of Form N-2 and to the extent
estimated or projected, such estimates or projections are reasonably
believed to be attainable and reasonably based.
(v) No Material Adverse Change. Since the respective dates as
of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or
in the earnings, business affairs or business prospects of the Fund,
whether or not arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions entered into by
the Fund, other than those in the ordinary course of business, which
are material with respect to the Fund, and (C) there has been no
dividend or distribution of any kind declared, paid or made by the
Fund on any class of its shares.
(vi) Good Standing of the Fund. The Fund has been duly
organized and is validly existing as an unincorporated voluntary
association in good standing under the laws of the Commonwealth of
Massachusetts and has power and authority to own and lease its
properties and to conduct its business as described in the Prospectus
and to enter into and perform its obligations under this Agreement;
and the Fund is duly qualified to transact business and is in good
standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect.
(vii) No Subsidiaries. The Fund has no subsidiaries.
(viii) Investment Company Status. The Fund is duly registered
with the Commission under the 1940 Act as a closed-end non-diversified
management investment company, and no order of suspension or
revocation of such registration has been issued or proceedings
therefor initiated or, to the knowledge of the Fund or the Adviser,
threatened by the Commission.
(ix) Officers and Trustees. No person is serving or acting as
an officer, trustee or investment adviser of the Fund except in
accordance with the provisions of the 1940 Act and the Rules and
Regulations and the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and the rules and regulations of the Commission
promulgated under the Advisers Act (the "Advisers Act Rules and
Regulations"). Except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement to either of them), no
trustee of the Fund is (A) an "interested person" (as defined in the
0000 Xxx) of the Fund or (B) an "affiliated person" (as defined in the
0000 Xxx) of any Underwriter. For purposes of this Section 1(a)(ix),
the Fund and the Adviser shall be entitled to rely on representations
from such officers and trustees.
(x) Capitalization. The authorized, issued and outstanding
shares of beneficial interest of the Fund is as set forth in the
Prospectus. All issued and outstanding common shares
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of beneficial interest of the Fund have been duly authorized and
validly issued and are fully paid and non-assessable (except as
described in the Registration Statement), and have been offered and
sold or exchanged by the Fund in compliance with all applicable laws
(including, without limitation, federal and state securities laws);
none of the outstanding common shares of beneficial interest of the
Fund was issued in violation of the preemptive or other similar rights
of any securityholder of the Fund.
(xi) Authorization and Description of Securities. The
Securities to be purchased by the Underwriters from the Fund have been
duly authorized for issuance and sale to the Underwriters pursuant to
this Agreement and, when issued and delivered by the Fund pursuant to
this Agreement against payment of the consideration set forth herein,
will be validly issued and fully paid and non-assessable (except as
described in the Registration Statement). The Common Shares conform in
all material respects to all statements relating thereto contained in
the Prospectus and such description conforms in all material respects
to the rights set forth in the instruments defining the same (to the
extent such rights are set forth); no holder of the Securities will be
subject to personal liability by reason of being such a holder (except
as described in the Registration Statement); and the issuance of the
Securities is not subject to the preemptive or other similar rights of
any securityholder of the Fund (other than the right of the Adviser to
purchase securities as set forth in Section 2 hereof).
(xii) Absence of Defaults and Conflicts. The Fund is not in
violation of its agreement and declaration of trust or by-laws, each
as amended from time to time, or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to
which it is a party or by which it may be bound, or to which any of
the property or assets of the Fund is subject (collectively,
"Agreements and Instruments") except for such violations or defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement, the Investment Management
Agreement, the Administrative Services Agreement, the Custodian
Agreement and the Transfer Agency and Service Agreement referred to in
the Registration Statement (as used herein, the "Investment Management
Agreement," the "Administrative Services Agreement," the "Custodian
Agreement" and the "Transfer Agency and Service Agreement,"
respectively) and the consummation of the transactions contemplated
herein and in the Registration Statement (including the issuance and
sale of the Securities and the use of the proceeds from the sale of
the Securities as described in the Prospectus under the caption "Use
of Proceeds") and compliance by the Fund with its obligations
hereunder have been duly authorized by all necessary corporate action
and do not and will not, whether with or without the giving of notice
or passage of time or both, conflict with or constitute a breach of,
or default or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Fund pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the
provisions of the agreement and declaration of trust or by-laws of the
Fund, each as amended from time to time, or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Fund or any of its assets, properties or
operations, other than State securities or "blue sky" laws applicable
in connection with the purchase and distribution of the Securities by
the Underwriters pursuant to this Agreement and except for violations
that would not result in a Material Adverse Effect. As used herein, a
"Repayment Event" means any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to
5
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Fund.
(xiii) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Fund or the Adviser, threatened, against or affecting the Fund, which
is required to be disclosed in the Registration Statement (other than as
disclosed therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets of the Fund or the
consummation of the transactions contemplated in this Agreement or the
performance by the Fund of its obligations hereunder. The aggregate of all
pending legal or governmental proceedings to which the Fund is a party or
of which any of its property or assets is the subject which are not
described in the Registration Statement, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no material contracts or
documents which are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits thereto by the 1933 Act, the
1940 Act or by the Rules and Regulations which have not been so described
and filed as required.
(xv) Possession of Intellectual Property. Either the Adviser or the
Fund owns or possesses, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by the Fund, and the Fund has not received any notice or is
not otherwise aware of any infringement of or conflict with asserted rights
of others with respect to any Intellectual Property, or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Fund or the Adviser therein, and
which infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Fund of its obligations
hereunder, in connection with the offering, issuance or sale of the
Securities hereunder or the consummation of the transactions contemplated
by this Agreement, except such as have been already obtained or as may be
required under the 1933 Act, the 1940 Act, the Securities Exchange Act of
1934, as amended (the "1934 Act"), the rules of the American Stock Exchange
("AMEX"), or state securities laws.
(xvii) Possession of Licenses and Permits. The Fund possesses such
permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to operate
its properties and to conduct the business as contemplated in the
Prospectus, except where the absence of such possession would not result in
a Material Adverse Effect; the Fund is in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so
to comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect would
not have a Material Adverse Effect; and the Fund has not received any
notice of proceedings relating to the revocation or modification of any
such Governmental Licenses which,
6
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xviii) Advertisements. Any advertising, sales literature or other
promotional material (including "prospectus wrappers", "broker kits," "road
show slides" and "road show scripts") authorized in writing by or prepared
by the Fund or the Adviser used in connection with the public offering of
the Securities (collectively, "sales material") does not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading. Moreover, all
sales material complied and will comply in all material respects with the
applicable requirements of the 1933 Act, the 1940 Act, the Rules and
Regulations and the rules and interpretations of the National Association
of Securities Dealers, Inc. ("NASD").
(xix) Subchapter M. The Fund intends to direct the investment of the
proceeds of the offering described in the Registration Statement in such a
manner as to comply with the requirements of Subchapter M of the Internal
Revenue Code of 1986, as amended ("Subchapter M of the Code" and the
"Code," respectively), and intends to qualify as a regulated investment
company under Subchapter M of the Code.
(xx) Material Agreements. This Agreement, the Investment Management
Agreement, the Administrative Services Agreement, the Custodian Agreement
and the Transfer Agency and Service Agreement have each been duly
authorized by all requisite action on the part of the Fund and executed and
delivered by the Fund, as of the dates noted therein, and each complies
with all applicable provisions of the 1940 Act in all material respects.
Assuming due authorization, execution and delivery by the other parties
thereto with respect to the Investment Management Agreement, the
Administrative Services Agreement, the Custodian Agreement and the Transfer
Agency and Service Agreement, each of the Investment Management Agreement,
the Administrative Services Agreement, the Custodian Agreement and the
Transfer Agency and Service Agreement constitutes a valid and binding
agreement of the Fund, enforceable in accordance with its terms, except as
affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and
fair dealing and except as rights to indemnity or contribution thereunder
may be limited by federal or state laws.
(xxi) Registration Rights. There are no persons with registration
rights or other similar rights to have any securities of the Fund
registered pursuant to the Registration Statement or otherwise registered
by the Fund under the 1933 Act.
(xxii) AMEX Listing. The Securities have been duly authorized for
listing, upon notice of issuance, on the American Stock Exchange ("AMEX")
and the Fund's registration statement on Form 8-A under the 1934 Act has
become effective.
(b) Representations and Warranties by the Adviser. The Adviser represents
and warrants to each Underwriter, and in the case of paragraph (iii) below also
represents to the Fund, as of the date hereof, as of the Closing Time referred
to in Section 2(c) hereof, and as of each Date of Delivery (if any) referred to
in Section 2(b) hereof as follows:
(i) Good Standing of the Adviser. The Adviser has been duly
organized and is validly existing and in good standing as a limited
partnership under the laws of the State of Delaware with full power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required,
7
except to the extent that failure to be so qualified and in good standing
would not have a material adverse effect on the Adviser's ability to
provide services to the Fund.
(ii) Investment Adviser Status. The Adviser is duly registered with
the Commission as an investment adviser under the Advisers Act, the
Commission has not issued to the Adviser notice of any hearing or other
proceeding to consider suspension or revocation of such registration, and
the Adviser is not prohibited by the Advisers Act or the 1940 Act, or the
rules and regulations under such acts, from acting under the Investment
Management Agreement for the Fund as contemplated by the Prospectus.
(iii) Description of Adviser. The description of the Adviser in the
Registration Statement and the Prospectus (and any amendment or supplement
to either of them) complied and comply in all material respects with the
provisions of the 1933 Act, the 1940 Act, the Advisers Act, the Rules and
Regulations and the Advisers Act Rules and Regulations and is true and
correct and does not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(iv) Capitalization. The Adviser has the financial resources
available to it necessary for the performance of its services and
obligations as contemplated in the Prospectus, this Agreement and under the
Investment Management Agreement.
(v) Authorization of Agreements; Absence of Defaults and Conflicts.
This Agreement, the Investment Management Agreement and the Additional
Compensation Agreement have each been duly authorized, executed and
delivered by the Adviser, and, assuming due authorization, execution and
delivery by the other parties thereto, the Investment Management Agreement
and the Additional Compensation Agreement each constitutes a valid and
binding obligation of the Adviser, enforceable in accordance with its
terms, except as affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing and except as rights to indemnity or
contribution thereunder may be limited by federal or state laws; and
neither the execution and delivery of this Agreement, the Investment
Management Agreement or the Additional Compensation Agreement nor the
performance by the Adviser of its obligations hereunder or thereunder will
conflict with, or result in a breach of any of the terms and provisions of,
or constitute, with or without the giving of notice or lapse of time or
both, a default under, any agreement or instrument to which the Adviser is
a party or by which it is bound, the limited partnership agreement or other
organizational documents of the Adviser, or to the Adviser's knowledge, any
law, order, decree, rule or regulation applicable to it of any
jurisdiction, court, federal or state regulatory body, administrative
agency or other governmental body, stock exchange or securities association
having jurisdiction over the Adviser or its properties or operations,
except where such breach would not have a material adverse effect on the
Adviser's ability to perform the services contemplated by such Agreement;
and no consent, approval, authorization or order of any court or
governmental authority or agency is required for the consummation by the
Adviser of the transactions contemplated by this Agreement, the Investment
Management Agreement and the Additional Compensation Agreement, except as
have been obtained or may be required under the 1933 Act, the 1940 Act, the
1934 Act, the rules and regulations of AMEX, or state securities laws.
(vi) No Material Adverse Change. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, there has not occurred any
event which should reasonably be expected to have a material adverse effect
8
on the ability of the Adviser to perform its respective obligations under
this Agreement and the Investment Management Agreement.
(vii) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Adviser, threatened against or affecting the Adviser or any person
controlling, or controlled by, the Adviser or any partners, directors,
officers or employees of the foregoing, whether or not arising in the
ordinary course of business, which might reasonably be expected to result
in any material adverse change in the condition, financial or otherwise, or
earnings, business affairs or business prospects of the Adviser, materially
and adversely affect the properties or assets of the Adviser or materially
impair or adversely affect the ability of the Adviser to function as an
investment adviser or perform its obligations under the Investment
Management Agreement, or which is required to be disclosed in the
Registration Statement and the Prospectus and has not been so disclosed.
(viii) Absence of Violation or Default. The Adviser is not in
violation of its limited partnership agreement or other organizational
documents or in default under any agreement, indenture or instrument, where
such violation or default would reasonably be expected to have a material
adverse effect on the ability of the Adviser to function as an investment
adviser or perform its obligations under the Investment Management
Agreement.
(c) Officer's Certificates. Any certificate signed by any officer of the
Fund or the Adviser delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Fund or the
Adviser, as the case may be, to each Underwriter as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Fund agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Fund, at the
price per share set forth in Schedule B, the number of Initial Securities set
forth in Schedule A opposite the name of such Underwriter, plus any additional
number of Initial Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Fund hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional [ ] Common Shares in the
aggregate at the price per share set forth in Schedule B, less an amount per
share equal to any dividends or distributions declared by the Fund and payable
on the Initial Securities but not payable on the Option Securities. The option
hereby granted will expire 45 days after the date hereof and may be exercised in
whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Representatives to the
Fund setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by the Representatives, but shall not be
earlier than the third day after the date on which the option is being exercised
nor later than seven full business days after the exercise of said option, nor
in any event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option Securities then being purchased which the number of
Initial Securities set forth in Schedule A opposite the name of such Underwriter
bears to the total number of Initial Securities, subject in each case to such
adjustments as Xxxxxxx Xxxxx in its discretion shall make to eliminate any sales
or
9
purchases of a fractional number of Option Securities, plus any additional
number of Option Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
The Fund also agrees, subject to all the terms and conditions set forth
herein, to sell to the Adviser, and, upon the basis of the representations,
warranties and agreements of the Fund herein contained and subject to all the
terms and conditions set forth herein, the Adviser shall have the right to
purchase from the Fund, at the same purchase price per share as the Underwriters
shall pay for the Option Securities, up to an aggregate of [___] Securities (the
"AEW Securities").
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Xxxxxxxx Chance US LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such
other place as shall be agreed upon by the Representatives and the Fund, at
10:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30
P.M. (Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representatives and the Fund (such time and date of payment and delivery being
herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Fund, on each Date of Delivery as specified in the notice from the
Representatives to the Fund.
Payment shall be made to the Fund by wire transfer of immediately available
funds to a bank account designated by the Fund, against delivery to the
Representatives for the respective accounts of the Underwriters of certificates
for the Securities to be purchased by them. It is understood that each
Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Xxxxxxx Xxxxx, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
The place and time of closing for the AEW Securities shall be as agreed
upon the Adviser, the Fund and Xxxxxxx Xxxxx except that the date of such
closing for the AEW Securities shall in no event be earlier than the relevant
Date of Delivery.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in the City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants.
(a) The Fund and the Adviser, jointly and severally, covenant with each
Underwriter as follows:
(i) Compliance with Securities Regulations and Commission Requests.
With respect to the offering of the Securities, the Fund, subject to
Section 3(a)(ii), will comply with the
10
requirements of Rule 430A or Rule 434, as applicable, and will notify the
Representatives immediately, and confirm the notice in writing, (i) when
any post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended Prospectus
shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or, to the
knowledge of the Fund or the Adviser, threatening of any proceedings for
any of such purposes. The Fund will promptly effect the filings necessary
pursuant to Rule 497 and will take such steps as it deems necessary to
ascertain promptly whether the form of prospectus transmitted for filing
under Rule 497 was received for filing by the Commission and, in the event
that it was not, it will promptly file such prospectus. The Fund will make
every reasonable effort to prevent the issuance of any stop order, or order
of suspension or revocation of registration pursuant to Section 8(e) of the
1940 Act, and, if any such stop order or order of suspension or revocation
of fregistration is issued, to obtain the lifting thereof at the earliest
possible moment.
(ii) Filing of Amendments. With respect to the offering of the
Securities, the Fund will give the Representatives notice of its intention
to file or prepare any amendment to the Registration Statement (including
any filing under Rule 462(b)), any Term Sheet or any amendment, supplement
or revision to either the prospectus included in the Registration Statement
at the time it became effective or to the Prospectus, will furnish the
Representatives with copies of any such documents a reasonable amount of
time prior to such proposed filing or use, as the case may be, and will not
file or use any such document to which the Representatives or counsel for
the Underwriters shall reasonably object.
(iii) Delivery of Registration Statements. The Fund has furnished or
will deliver to the Representatives, without charge, a signed copy of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein)
and a signed copy of all consents and certificates of experts, and will
also deliver to the Representatives, without charge, a conformed copy of
the Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The copies of the
Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T. No copy of a post-effective amendment shall be
required to be delivered after one year from the date hereof.
(iv) Delivery of Prospectuses. The Fund has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Fund hereby consents to
the use of such copies for purposes permitted by the 1933 Act. The Fund
will furnish to each Underwriter, without charge, during the period when
the Prospectus is required to be delivered by an underwriter or a dealer
under the 1933 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The Prospectus
and any amendments or supplements thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(v) Continued Compliance with Securities Laws. If at any time when
a prospectus is required by the 1933 Act to be delivered in connection with
sales of the Securities, any event shall occur or condition shall exist as
a result of which it is necessary, in the reasonable opinion
11
of counsel for the Underwriters or for the Fund, to amend the Registration
Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
reasonable opinion of such counsel, at any such time to amend the
Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the Rules and Regulations,
the Fund will promptly prepare and file with the Commission, subject to
Section 3(a)(ii), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or
the Prospectus comply with such requirements, and the Fund will furnish to
the Underwriters such number of copies of such amendment or supplement as
the Underwriters may reasonably request.
(vi) Blue Sky Qualifications. The Fund will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Representatives may designate (if
qualification is required under applicable law) and to maintain such
qualifications in effect for a period of not less than one year from the
later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the Fund shall not
be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject. In each jurisdiction in which the Securities have
been so qualified, the Fund will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the effective date of
the Registration Statement and any Rule 462(b) Registration Statement.
(vii) Rule 158. The Fund will make generally available to its
securityholders as soon as practicable an earnings statement, if
applicable, for the purposes of, and to provide the benefits contemplated
by the last paragraph of Section 11(a) of the 1933 Act.
(viii) Use of Proceeds. The Fund will use the net proceeds received by
it from the sale of the Securities substantially in the manner specified in
the Prospectus under "Use of Proceeds".
(ix) Listing. The Fund will use its reasonable best efforts to cause
the listing of the Securities to be duly authorized for listing by the
AMEX, subject to notice of issuance, prior to the date the Securities are
issued.
(x) Restriction on Sale of Securities. During a period of 180 days
from the date of the Prospectus, the Fund will not, without the prior
written consent of Xxxxxxx Xxxxx, (A) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of Common Shares or any
securities convertible into or exercisable or exchangeable for Common
Shares or file any registration statement under the 1933 Act with respect
to any of the foregoing or (B) enter into any swap or any other agreement
or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Shares,
whether any such swap or transaction described in clause (A) or (B) above
is to be settled by delivery of Common Shares or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (1) the
Securities to be sold hereunder (including the AEW Securities) or (2)
Common Shares issued or distributed (whether issued by the Fund or
purchased on the open market) pursuant to any dividend reinvestment plan.
(xi) Reporting Requirements. The Fund, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file all
documents required to be filed with the
12
Commission pursuant to the 1940 Act and the 1934 Act within the time
periods required by the 1940 Act and the Rules and Regulations and the 1934
Act and the rules and regulations of the Commission thereunder,
respectively.
(xii) Subchapter M. The Fund will use its best efforts to comply with
the requirements of Subchapter M of the Code to qualify as a regulated
investment company under the Code.
(xiii) No Manipulation of Market for Securities. The Fund will not (a)
take, directly or indirectly, any action designed to cause or to result in,
or that might reasonably be expected to constitute, the stabilization (as
defined in Regulation M under the 0000 Xxx) or manipulation of the price of
any security of the Fund to facilitate the sale or resale of the Securities
in violation of federal or state securities laws, and (b) except for share
repurchases permitted in accordance with applicable laws and purchases of
Securities in connection with the Fund's dividend reinvestment plan, until
the Closing Date, or the Date of Delivery, if any, (i) sell, bid for or
purchase the Securities or pay any person any compensation for soliciting
purchases of the Securities or (ii) pay or agree to pay to any person any
compensation for soliciting another to purchase any other securities of the
Fund.
(xiv) Rule 462(b) Registration Statement. If the Fund elects to rely
upon Rule 462(b), the Fund shall file a Rule 462(b) Registration Statement
with the Commission in compliance with Rule 462(b) by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement, and the Fund shall at
the time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the 1933 Act.
(xv) NASD Correspondence. The Fund will provide to the
Representatives copies of any correspondence with the NASD regarding any
sales material filed with the NASD with respect to the offering.
(b) The Adviser covenants with each Underwriter that for a period of 90
days from the date of the Prospectus, the Adviser will not, without your prior
written consent which consent shall not be unreasonably withheld, act as
investment adviser to any other closed end registered investment company having
an investment objective, policies and restrictions substantially similar to
those of the Fund.
SECTION 4. Payment of Expenses.
(a) Expenses. The Fund will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation,
printing and filing of the Registration Statement (including financial
statements and exhibits) as originally filed and of each amendment thereto,
(ii) the reasonable costs of the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such
other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities
to the Underwriters, including any stock or other transfer taxes and any
stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters, (iv) the fees and disbursements of the
Fund's counsel, accountants and other advisors, (v) the qualification of
the Securities under securities laws in accordance with the provisions of
Section 3(a)(vi) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and
in connection with the preparation of the Blue Sky Survey (if applicable)
and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, Prospectus and any
amendments or supplements thereto, (vii) the preparation, printing and
delivery to the Underwriters of copies of the Blue Sky Survey and any
supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the Securities, (ix) the filing fees incident to, and the
13
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the NASD of the terms of the sale of the Securities, (x) the
fees and expenses incurred in connection with the listing of the Securities on
the AMEX and (xi) the printing of any sales material. Also, the Fund shall pay
to Xxxxxxx Xxxxx, on behalf of the Underwriters, $.005 per common share of the
securities purchased pursuant to this agreement as partial reimbursement of
expenses incurred in connection with the offering. The Adviser has agreed to pay
organizational expenses and offering costs (other than sales load) of the Fund
that exceed $.03 per Common Share measured for these purposes as expenses and
costs incurred prior to November [29], 2002.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section 9(a)
hereof, the Fund and the Adviser, jointly and severally, agree that they shall
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations.
The obligations of the several Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Fund and the Adviser
contained in Section 1 hereof or in certificates of any officer of the Fund or
the Adviser delivered pursuant to the provisions hereof, to the performance by
the Fund and the Adviser of their respective covenants and other obligations
hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective or will
have become effective by 5:30 p.m., NYC time, on the date hereof, and at Closing
Time no stop order suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act, no notice or order pursuant to
Section 8(e) of the 1940 Act shall have been issued, and no proceedings with
respect to either shall have been initiated or, to the knowledge of counsel to
the Underwriter and counsel in the Fund, threatened by the Commission, and any
request on the part of the Commission for additional information shall have been
complied with or waived to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing the Rule 430A Information shall have been
filed with the Commission in accordance with Rule 497 (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A or a certificate must
have been filed in accordance with Rule 497(j)) or, if the Fund has elected to
rely upon Rule 434, a Term Sheet shall have been filed with the Commission in
accordance with Rule 497.
(b) Opinion of Counsel for Fund and the Adviser. At Closing Time, the
Representatives shall have received the favorable opinions, dated as of Closing
Time, of Ropes & Xxxx, counsel for the Fund, and Xxxxx X. Xxxxxxxx, Esq.,
counsel for the Adviser, together with signed or reproduced copies of such
letters for each of the other Underwriters substantially, with respect to the
matters set forth in Exhibit A hereto or in such other forms and substance
reasonably satisfactory to the Underwriters. Such counsel may state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Fund and
certificates of public officials.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxxxx Chance US LLP, counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters
with respect to the matters set forth in [clauses (A) (i), (ii), (vi), (vii)
(solely as to preemptive or other similar rights arising by operation of law or
under the charter or by-laws of the Fund), (viii) through (x), inclusive, (xii),
(xiv) (solely as to the information in the Prospectus under "Description of
Shares") and the last paragraph] of Exhibit A hereto. In giving such opinion
such counsel may rely, as to all matters governed by the laws of jurisdictions
other than the law of the State of New York and the federal law of the United
States, upon the opinions of counsel satisfactory to the Representatives. Such
counsel may
14
also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Fund and certificates of public officials.
(d) Officers' Certificates. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Fund, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of a duly authorized officer
of the Fund and of the chief financial or chief accounting officer of the Fund
and of the President or a Vice President or Managing Director of the Adviser,
dated as of Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Sections 1(a) and (b)
hereof, as applicable, are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (iii) each of the Fund and the
Adviser, respectively, has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied pursuant to this Agreement
at or prior to Closing Time, and (iv) with respect to the Fund only, no stop
order suspending the effectiveness of the Registration Statement, or order of
suspension or revocation of registration pursuant to Section 8(e) of the 1940
Act with respect to the Fund has been issued and no proceedings for any such
purpose have been instituted or, to their knowledge, are pending or are
contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from PricewaterhouseCoopers
LLP a letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representatives shall
have received from PricewaterhouseCoopers LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall have been
approved for listing on the AMEX, subject only to official notice of issuance.
(h) Execution of Additional Compensation Agreement. At Closing Time,
Xxxxxxx Xxxxx shall have received the Additional Compensation Agreement, dated
the date of the Closing Time, as executed by the Adviser.
(i) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(j) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Fund contained herein and the statements in any certificates furnished by
the Fund hereunder shall be true and correct as of each Date of Delivery and, at
the relevant Date of Delivery, the Representatives shall have received:
(i) Officers' Certificates. Certificates, dated such Date of
Delivery, of a duly authorized officer of the Fund and of the chief
financial or chief accounting officer of the Fund and of the President or a
Vice President or Managing Director of the Adviser confirming that the
information contained in the certificate delivered by each of them at the
Closing Time pursuant to Section 5(d) hereof remains true and correct as of
such Date of Delivery.
15
(ii) Opinions of Counsel for the Fund and the Adviser. The favorable
opinion of Ropes & Xxxx, counsel for the Fund, and Xxxxx X. Xxxxxxxx, Esq.,
counsel for the Adviser, in form and substance reasonably satisfactory to
counsel for the Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(b) hereof.
(iii) Opinion of Counsel for the Underwriters. The favorable opinion
of Xxxxxxxx Chance US LLP, counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from PricewaterhouseCoopers
LLP, in form and substance satisfactory to the Representatives and dated
such Date of Delivery, substantially in the same form and substance as the
letter furnished to the Representatives pursuant to Section 5(f) hereof,
except that the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to such Date of
Delivery.
(k) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Securities as herein contemplated, or in order
to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Fund and the Adviser in connection with the organization and
registration of the Fund under the 1940 Act and the issuance and sale of the
Securities as herein contemplated shall be reasonably satisfactory in form and
substance to the Representatives and counsel for the Underwriters.
(l) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option
Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by notice to the Fund at
any time at or prior to Closing Time or such Date of Delivery, as the case may
be, and such termination shall be without liability of any party to any other
party except as provided in Section 4 and except that Sections 1, 6, 7, 8 and 13
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Fund and the Adviser, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, and any director, officer, employee
or affiliate thereof as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
16
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(e) below) any such settlement is effected with the written consent of the
Fund; and
(iii) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by Xxxxxxx Xxxxx),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Fund or the
Adviser by any Underwriter through Xxxxxxx Xxxxx expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); provided,
further, that the indemnity agreement contained in this Section 6(a) shall not
inure to the benefit of any Underwriter (or to the benefit of any person
affiliated with such Underwriter) from whom the person asserting any such loss,
liability, claim, damage and expense purchased the Securities which are the
subject thereof if the Prospectus (as amended or supplemented if the Fund shall
have furnished any amendments or supplements thereto) corrected any such alleged
untrue statement or omission and if such Prospectus was delivered to such
Underwriter in a timely manner and if such Underwriter failed to send or give a
copy of the Prospectus (as so amended or supplemented) to such person at or
prior to the written confirmation of the sale of such Securities to such person.
(b) Indemnification of Fund, Adviser, Trustees, Directors and Officers.
Each Underwriter severally agrees to indemnify and hold harmless the Fund and
the Adviser, their respective trustees, directors, shareholders and partners,
each of the Fund's officers who signed the Registration Statement, and each
person, if any, who controls the Fund or the Adviser within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the Fund
or the Adviser by such Underwriter through Xxxxxxx Xxxxx expressly for use in
the Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Indemnification for Marketing Materials. In addition to the foregoing
indemnification, the Fund and the Adviser also, jointly and severally, agree to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss, liability, claim, damage
and expense described in the indemnity contained in Section 6(a), as limited by
the provisos set forth therein, with respect to any sales material and provided
further that the Fund and the Adviser will not be liable to any Underwriter with
respect to any Prospectus to the extent that the Fund and the Adviser shall
sustain the burden of proving that any such loss, liability, claim, damage or
expense resulted from the fact that such Underwriter, in contravention of a
requirement of this Agreement or applicable law, sold Securities to a
17
person to whom such Underwriter failed to send or give, at or prior to the
Closing Time, a copy of the Prospectus, as then amended or supplemented if: (i)
the Fund or the Adviser had previously furnished copies thereof (sufficiently in
advance of the Closing Time to allow for distribution by the Closing Time) to
the Underwriter and the loss, liability, claim, damage or expense of such
Underwriter resulted from an untrue statement or omission of a material fact
contained in or omitted from the preliminary prospectus which was corrected in
the Prospects as, if applicable, amended or supplemented prior to the Closing
Time and such Prospectus was required by law to be delivered at or prior to the
written confirmation of sale to such person and (ii) such failure to give or
send such Prospectus by the Closing Time to the party or parties asserting such
loss, liability, claim, damage or expense would have constituted the sole
defense to the claim asserted by such person.
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Fund and the Adviser. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any settlement of the nature
contemplated by Section 6(a)(ii) effected without its written consent if (i)
such settlement is entered into more than 60 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 7. Contribution.
If the indemnification provided for in Section 6 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then, in lieu of indemnifying such indemnified party, each indemnifying party
shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Fund and the Adviser on the one hand and the Underwriters on the other
18
hand from the offering of the Securities pursuant to this Agreement or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Fund and the
Adviser on the one hand and of the Underwriters on the other hand in connection
with the statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations.
The relative benefits received by the Fund and the Adviser on the one hand
and the Underwriters on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Fund and the total underwriting discount received by the Underwriters
(whether from the Fund or otherwise), in each case as set forth on the cover of
the Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the Securities as
set forth on such cover.
The relative fault of the Fund and the Adviser on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Fund or the Adviser or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Fund, the Adviser and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each trustee and shareholder of the Fund and each director and partner of the
Adviser, respectively, each officer of the Fund who signed the Registration
Statement, and each person, if any, who controls the Fund or the Adviser, within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Fund and the Adviser, respectively.
The Underwriters' respective obligations to contribute pursuant to this Section
7 are several in proportion to the number of Initial Securities set forth
opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Covenants to Survive Delivery.
All representations, warranties and covenants contained in this Agreement
or in certificates of officers of the Fund or the Adviser submitted pursuant
hereto, shall remain operative and in full force and
19
effect, regardless of any investigation made by or on behalf of any Underwriter
or controlling person, or by or on behalf of the Fund or the Adviser, and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Fund, at any time at or prior to Closing Time (i) if
there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Fund or the Adviser,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Representatives, impracticable or inadvisable to market
the Securities or to enforce contracts for the sale of the Securities, or (iii)
if trading in the Common Shares of the Fund has been suspended or materially
limited by the Commission or the AMEX, or if trading generally on the New York
Stock Exchange or the AMEX or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the NASD or any other governmental
authority, or a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, or (iv) if a
banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7, 8 and 13 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the Representatives shall
have the right, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting Underwriters, or any other underwriters, with the consent
of the Fund, which consent shall not be unreasonably withheld, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Fund to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the
20
obligation of the Underwriters to purchase and the Fund to sell the relevant
Option Securities, as the case may be, either the Representatives or the Fund
shall have the right to postpone Closing Time or the relevant Date of Delivery,
as the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed to the
Representatives, Xxxxxxx Xxxxx & Co., North Tower, 4 World Financial Center, Xxx
Xxxx, Xxx Xxxx 00000, attention of Equity Capital Markets; notices to the Fund
shall be directed to AEW Real Estate Income Fund, 000 Xxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, attention of the President of the Fund with a copy to the
Secretary of the Fund; and notices to the Adviser shall be directed to AEW
Management & Advisors, LP, World Trade Center East, 0 Xxxxxxx Xxxx 00/xx/ Xxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, attention of the General Counsel of the Adviser.
SECTION 12. Parties.
This Agreement shall each inure to the benefit of and be binding upon the
Underwriters, the Fund, the Adviser and their respective partners and
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Fund, the Adviser and their respective successors and the
controlling persons and officers, trustees, shareholders, partners and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Fund, the Adviser and their respective partners and
successors, and said controlling persons and officers, trustees, shareholders,
partners and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
IN SAID STATE. UNLESS OTHERWISE EXPLICITLY PROVIDED, SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.
SECTION 14. Massachusetts Business Trust
A copy of the Amended and Restated Agreement and Declaration of Trust of
the Fund is on file with the Secretary of the Commonwealth of Massachusetts, and
notice is hereby given that this Agreement is executed on behalf of the Fund by
an officer or trustee of the Fund in his or her capacity as an officer or
trustee of the Fund and not individually and that the obligations of or arising
out of this instrument are not binding upon any of the trustees, officers or
shareholders individually but are binding only upon the assets and property of
the Fund.
SECTION 15. Effect of Headings.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
21
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument,
along with all counterparts, will become a binding agreement among the
Underwriters, the Fund and the Adviser in accordance with its terms.
Very truly yours,
AEW Real Estate Income Fund
By:_____________________________
Name:
Title:
AEW Management and Advisors, L.P.
By:_____________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
XXXX XXXXX XXXX XXXXXX, INCORPORATED
RBC XXXX XXXXXXXX INC.
ADVEST, INC.
XXXXXX, XXXXX XXXXX, INCORPORATED
J.J.B. XXXXXXXX, X.X. XXXXX, INC.
XXXXXXXX INVESTMENTS INC., A KEYCORP COMPANY
QUICK & XXXXXX, INC.
TD WATERHOUSE INVESTOR SERVICES, INC.
WEDBUSH XXXXXX SECURITIES
By: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By:__________________________________________
Authorized Signatory
For themselves and as
Representatives of the
other Underwriters named
in Schedule A hereto.
22
SCHEDULE A
Number of
Name of Underwriter Initial Securities
------------------- --------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ..............................
Prudential Securities Incorporated .................... ____________________
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated .................. ____________________
RBC Xxxx Xxxxxxxx Inc. ................................ ____________________
Advest, Inc. .......................................... ____________________
Xxxxxx, Xxxxx Xxxxx, Incorporated ..................... ____________________
J.J.B. Xxxxxxxx, X.X. Xxxxx, Inc. ..................... ____________________
McDonald Investments Inc., a KeyCorp Company .......... ____________________
Quick & Xxxxxx, Inc. .................................. ____________________
TD Waterhouse Investor Services, Inc. ................. ____________________
Wedbush Xxxxxx Securities ............................. ____________________
Total ....................................... ____________________
Sch A-1
SCHEDULE B
AEW Real Estate Income Fund
[ ] Common Shares of Beneficial Interest
(Par Value $.00001 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $15.00
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $[ ], being an amount equal to the initial
public offering price set forth above less $[ ] per share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the over-allotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Fund
and payable on the Initial Securities but not payable on the Option Securities.
Sch B-1
Exhibit A
FORM OF OPINION OF FUND'S AND ADVISER'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(A) With respect to the Fund:
(i) The Fund has been duly organized and is validly existing as a
business trust in good standing under the laws of the Commonwealth of
Massachusetts.
(ii) The Fund has business trust power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Purchase
Agreement.
(iii) The Fund is duly qualified as a foreign business trust to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect.
(iv) To the best of our knowledge, the Fund does not have any
subsidiaries.
(v) The authorized, issued and outstanding shares of beneficial
interest of the Fund is as set forth in the Prospectus under the caption
"Description of Shares--Common Shares" (except for subsequent issuances, if
any, pursuant to the Purchase Agreement); all issued and outstanding shares
of beneficial interest of the Fund have been duly authorized and validly
issued and are fully paid and non-assessable, except as provided for in the
Fund's declaration of trust, and have been offered and sold or exchanged by
the Fund in compliance with all applicable laws (including, without
limitation, federal and state securities laws); the Common Shares conform
as to legal matters to all statements relating thereto contained in the
Prospectus and such description conforms to the rights set forth in the
instruments defining the same; and none of the outstanding shares of
beneficial interest of the Fund was issued in violation of the preemptive
or other similar rights of any securityholder of the Fund.
(vi) The Securities to be purchased by the Underwriters from the
Fund have been duly authorized for issuance and sale to the Underwriters
pursuant to the Purchase Agreement and, when issued and delivered by the
Fund pursuant to the Purchase Agreement against payment of the
consideration set forth in the Purchase Agreement, will be validly issued
and fully paid and non-assessable, except as provided for in the Fund's
declaration of trust, and no holder of the Securities is or will be subject
to personal liability by reason of being such a holder.
(vii) The issuance of the Securities is not subject to preemptive or
other similar rights of any securityholder of the Fund.
(viii) The Purchase Agreement has been duly authorized, executed and
delivered by the Fund.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 497(c) or Rule 497(h)
has been made in the manner and within the time period required by Rule
497; and, to the best of our knowledge, no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act, and, to the best of our
knowledge, no order of suspension or revocation of registration
A-1
pursuant to Section 8(e) of the 1940 Act has been issued, and no proceedings for
any such purpose have been instituted or are pending or threatened by the
Commission.
(x) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434 Information,
as applicable, the Prospectus and each amendment or supplement to the
Registration Statement and Prospectus as of their respective effective or issue
dates (other than the financial statements and supporting schedules included
therein or omitted therefrom, as to which we need express no opinion), and the
notification on Form N-8A complied as to form in all material respects with the
requirements of the 1933 Act, the 1940 Act and the Rules and Regulations.
(xi) If Rule 434 has been relied upon, the Prospectus was not
"materially different," as such term is used in Rule 434, from the prospectus
included in the Registration Statement at the time it became effective.
(xii) The form of certificate used to evidence the Common Shares
complies in all material respects with all applicable statutory requirements,
with any applicable requirements of the declaration of trust and by-laws of the
Fund and the requirements of the American Stock Exchange.
(xiii) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to which the
Fund is a party, or to which the property of the Fund is subject, before or
brought by any court or governmental agency or body, domestic or foreign, which
might reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the properties
or assets of the Fund or the consummation of the transactions contemplated in
the Purchase Agreement or the performance by the Fund of its obligations
thereunder.
(xiv) The information in the Prospectus under "Description of Shares"
and "Tax Matters" and in the Registration Statement under Item 29
(Indemnification), to the extent that it constitutes matters of law, summaries
of legal matters, the Fund's declaration of trust and by-laws or legal
proceedings, or legal conclusions, has been reviewed by us and is correct in all
material respects.
(xv) Each of the Investment Management Agreement, the Administrative
Services Agreement, the Custodian Agreement, the Transfer Agency and Service
Agreement and the Purchase Agreement comply in all material respects with all
applicable provisions of the 1940 Act, Advisers Act, the Rules and Regulations
and the Advisers Act Rules and Regulations.
(xvi) The Fund is duly registered with the Commission under the 1940
Act as a closed-end non-diversified management investment company; and, to the
best of our knowledge, no order of suspension or revocation of such registration
has been issued or proceedings therefor initiated or threatened by the
Commission.
(xvii) To the best of our knowledge, no person is serving as an
officer, trustee or investment adviser of the Fund except in accordance with the
1940 Act and the Rules and Regulations and the Investment Advisers Act and the
Advisers Act Rules and Regulations. Except as disclosed in the Registration
Statement and Prospectus (or any amendment or supplement to either of them), to
the best of our knowledge, no trustee of the Fund is an "interested person" (as
defined in the 0000 Xxx) of the Fund or an "affiliated person" (as defined in
the 0000 Xxx) of an Underwriter.
(xviii) There are no statutes or regulations that are required to be
described in the Prospectus that are not described as required.
A-2
(xix) All descriptions in the Registration Statement of contracts
and other documents to which the Fund is a party are accurate in all
material respects. To the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits
thereto, and the descriptions thereof or references thereto are correct in
all material respects.
(xx) To the best of our knowledge, the Fund is not in violation of
its declaration of trust or by-laws and no default by the Fund exists in
the due performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument that is described
or referred to in the Registration Statement or the Prospectus or filed or
incorporated by reference as an exhibit to the Registration Statement.
(xxi) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency (other than under the 1933 Act, the 1934 Act, the 1940
Act and the Rules and Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various states, as to
which we need express no opinion) is necessary or required in connection
with the due authorization, execution and delivery of the Purchase
Agreement or for the offering, issuance or sale of the Securities or the
consummation of the transactions contemplated by this Agreement.
(xxii) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the
Purchase Agreement and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from the
sale of the Securities as described in the Prospectus under the caption
"Use of Proceeds") and compliance by the Fund with its obligations under
the Purchase Agreement do not and will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined in Section 1(a)(xii)
of the Purchase Agreement) under or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Fund
pursuant to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or instrument, known
to us, to which the Fund is a party or by which it or any of them 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 provisions of the
charter or by-laws of the Fund, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Fund or any of its properties, assets or
operations.
(xxiii) The Purchase Agreement, the Investment Management Agreement,
the Administrative Services Agreement, the Custodian Agreement and the
Transfer Agency and Service Agreement have each been duly authorized by all
requisite action on the part of the Fund, executed and delivered by the
Fund, as of the dates noted therein. Assuming due authorization, execution
and delivery by the other parties thereto with respect to the
Administrative Services Agreement, Custodian Agreement and the Transfer
Agency and Service Agreement, each of the Investment Management Agreement,
the Administrative Services Agreement, the Custodian Agreement and the
Transfer Agency and Service Agreement constitutes a valid and binding
agreement of the Fund, enforceable in accordance with its terms, except as
affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether
A-3
considered in a proceeding in equity or at law) and an implied covenant
of good faith and fair dealing.
(B) With respect to the Adviser:
(i) The Adviser has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of [ ].
(ii) The Adviser has full corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under the Purchase Agreement.
(iii) The Adviser is duly qualified as a foreign corporation
to transact business and is in good standing in each other jurisdiction
in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not result in a Material Adverse
Effect.
(iv) The Adviser is duly registered with the Commission as
an investment adviser under the Advisers Act and is not prohibited by
the Advisers Act, the Advisers Act Rules and Regulations, the 1940 Act
or the Rules and Regulations from acting under the Investment
Management Agreement for the Fund as contemplated by the Prospectus.
(v) The Purchase Agreement, the Investment Management
Agreement and the Additional Compensation Agreement have been duly
authorized, executed and delivered by the Adviser, and the Investment
Management Agreement constitutes a valid and binding obligation of the
Adviser, enforceable in accordance with its terms, except as affected
by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally and general equitable principles (whether considered
in a proceeding in equity or at law).
(vi) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to
which the Adviser is a party, or to which the property of the Adviser
is subject, before or brought by any court or governmental agency or
body, domestic or foreign, which might reasonably be expected to result
in any material adverse change in the condition, financial or
otherwise, in the earnings, business affairs or business prospects of
the Adviser, materially and adversely affect the properties or assets
of the Adviser or materially impair or adversely affect the ability of
the Adviser to function as an investment adviser or perform its
obligations under the Investment Management Agreement or which is
required to be disclosed in the Registration Statement or the
Prospectus.
(vii) To the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed or incorporated by
reference as exhibits thereto, and the descriptions thereof or
references thereto are correct in all material respects.
(viii) To the best of our knowledge, the Adviser is not in
violation of its certificate of incorporation, by-laws or other
organizational documents and no default by the Adviser exists in the
due performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument that is
described or referred to in the Registration Statement or the
Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement.
A-4
(ix) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act,
the 1940 Act and the Rules and Regulations, which have been obtained, or
as may be required under the securities or blue sky laws of the various
states, as to which we need express no opinion) is necessary or required
in connection with the due authorization, execution and delivery of the
Purchase Agreement.
(x) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the
Purchase Agreement and in the Registration Statement and compliance by the
Adviser with their obligations under the Purchase Agreement do not and
will not, whether with or without the giving of notice or lapse of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined in Section 1(a)(xii) of the Purchase Agreement) under or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Adviser pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease
or any other agreement or instrument, known to us, to which the Adviser is
a party or by which it or any of them may be bound, or to which any of the
property or assets of the Adviser is subject (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not have
a Material Adverse Effect), nor will such action result in any violation
of the provisions of the charter or by-laws of the Adviser, or any
applicable law, statute, rule, regulation, judgment, order, writ or
decree, known to us, of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Adviser or any of
its properties, assets or operations.
In addition, we have participated in the preparation of the Registration
Statement and the Prospectus and participated in discussions with certain
officers, trustees and employees of the Fund, representatives of
PricewaterhouseCoopers, LLP, the independent accountants who examined the
statement of assets and liabilities of the Fund included or incorporated by
reference in the Registration Statement and the Prospectus, and you and your
representatives and we have reviewed certain Fund records and documents. While
we have not independently verified and are not passing upon, and do not assume
any responsibility for, the accuracy, completeness or fairness of the
information contained in the Registration Statement and the Prospectus, except
to the extent necessary to enable us to give the opinions with respect to the
Fund in paragraphs (A)(v), (xiv) and (xix), on the basis of such participation
and review, nothing has come to our attention that would lead us to believe that
the Registration Statement (except for financial statements, supporting
schedules and other financial data included therein or omitted therefrom and for
statistical information derived from such financial statements, supporting
schedules or other financial data, as to which we do not express any belief), at
the time such Registration Statement became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus (except for financial statements, supporting schedules and
other financial data included therein or omitted therefrom and for statistical
information derived from such financial statements, supporting schedules or
other financial data, as to which we do not express any belief), at the time the
Prospectus was issued, or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
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