<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 20, 1994
SECURITIES ACT FILE NO. 33-54525
INVESTMENT COMPANY ACT FILE NO. 811-7197
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-2
(CHECK APPROPRIATE BOX OR BOXES)
/X/REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
/X/PRE-EFFECTIVE AMENDMENT NO. 2
/ /POST-EFFECTIVE AMENDMENT NO.
AND/OR
/X/REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
/X/AMENDMENT NO. 2
LEHMAN BROTHERS LATIN AMERICA GROWTH FUND, INC.
(Exact Name of Registrant as Specified in Charter)
3 WORLD FINANCIAL CENTER
NEW YORK, NEW YORK 10285
(Address of Principal Executive Offices (Number, Street, City, State, Zip Code))
(212) 526-0600
(Registrant's Telephone Number, including Area Code)
CLINTON KENDRICK
LEHMAN BROTHERS LATIN AMERICA GROWTH FUND, INC.
3 WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10285
Name and address (Number, Street, City, State, Zip Code) of Agent for Service
with copies to:
<TABLE>
<S> <C>
GARY S. SCHPERO, ESQ. BURTON M. LEIBERT, ESQ.
SIMPSON THACHER & BARTLETT WILLKIE FARR & GALLAGHER
425 LEXINGTON AVENUE 153 EAST 53RD STREET
NEW YORK, NEW YORK 10017-3954 NEW YORK, NEW YORK 10022
(212) 455-2000 (212) 821-8000
</TABLE>
------------------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable
after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis in reliance on Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with a
dividend reinvestment plan, check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES AMOUNT BEING OFFERING PRICE OFFERING REGISTRATION
BEING REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE(3)
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Common Stock,
par value
$.001............ 8,050,000 $15.00 $120,750,000 $42,638*
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
</TABLE>
* Previously paid.
(1) Includes 1,050,000 shares of Common Stock issuable upon exercise of the
over-allotment options granted to the U.S. Underwriters and the
International Managers. The amount of shares of Common Stock being
registered includes any shares initially offered or sold outside the United
States that are thereafter sold or resold in the United States. Offers and
sales of shares outside the United States are not covered in this
Registration Statement.
(2) Estimated solely for purpose of calculating the registration fee.
(3) Includes $1,000 registration fee under the Investment Company Act of 1940.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
LEHMAN BROTHERS LATIN AMERICA GROWTH FUND, INC.
CROSS-REFERENCE SHEET
PARTS A AND B OF PROSPECTUS*
<TABLE>
<CAPTION>
ITEMS IN PARTS A AND B OF FORM N-2 LOCATION IN PROSPECTUS
- --------------------------------------------------- -------------------------------------------------
<S> <C>
Item 1. Outside Front Cover...................... Cover of Prospectus
Item 2. Inside Front and Outside Back Cover
Page............................................. Inside Front and Outside Back Cover of Prospectus
Item 3. Fee Table and Synopsis................... Prospectus Summary; Summary of Expenses;
Management of the Fund
Item 4. Financial Highlights..................... Not Applicable
Item 5. Plan of Distribution..................... Cover of Prospectus; Management of the Fund;
Underwriting
Item 6. Selling Shareholders..................... Not Applicable
Item 7. Use of Proceeds.......................... Use of Proceeds; Investment Objective and
Policies; Additional Investment Practices
Item 8. General Description of the Registrant.... Cover of Prospectus; Prospectus Summary; The
Fund; Investment Objective and Policies;
Additional Investment Practices; Investment
Restrictions; Risk Factors and Special
Considerations
Item 9. Management............................... Management of the Fund; Custodian, Transfer
Agent, Dividend Paying Agent and Registrar;
Common Stock
Item 10. Capital Stock, Long-Term Debt, and Other
Securities.............................. Common Stock; Dividends and Distributions;
Dividend Reinvestment Plan; Taxation
Item 11. Defaults and Arrears on Senior
Securities....................................... Not Applicable
Item 12. Legal Proceedings........................ Not Applicable
Item 13. Table of Contents of the Statement of
Additional Information.................. Not Applicable
Item 14. Cover Page............................... Not Applicable
Item 15. Table of Contents........................ Not Applicable
Item 16. General Information and History.......... Not Applicable
Item 17. Investment Objective and Policies........ Investment Objective and Policies; Additional
Investment Practices; Investment Restrictions;
Portfolio Transactions
Item 18. Management............................... Management of the Fund; Custodian, Transfer
Agent, Dividend Paying Agent and Registrar
Item 19. Control Persons and Principal Holders of
Securities.............................. Common Stock
Item 20. Investment Advisory and Other Services... Management of the Fund
Item 21. Brokerage Allocation and Other
Practices........................................ Portfolio Transactions
Item 22. Tax Status............................... Dividends and Distributions; Dividend
Reinvestment Plan; Taxation
Item 23. Financial Statements..................... Experts; Report of Independent Auditors;
Statement of Assets and Liabilities
</TABLE>
- ---------------
* All information required to be set forth in Part B: Statement of Additional
Information has been included in Part A: The Prospectus. All Items required to
be set forth in Part C are set forth in Part C.
<PAGE> 3
EXPLANATORY NOTE
This Amendment to the Registration Statement is being filed for the purpose
of including exhibits not previously filed. The Prospectus for Lehman Brothers
Latin America Growth Fund, Inc., which was included in Pre-Effective Amendment
No. 1 to the Registration Statement, filed on September 2, 1994 ("Pre-Effective
Amendment No. 1") is incorporated by reference to Pre-Effective Amendment No. 1
and is not affected by this filing.
<PAGE> 4
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(1) Financial Statements
Parts A & B Lehman Brothers Latin America Growth Fund, Inc.
(i) Statement of Assets and Liabilities.
(ii) Report of Independent Auditors.
Part C None.
(2) Exhibits
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- -------- ---------------------------------------------------------------------------------
<S> <C>
(a) Charter.*
(b) By-Laws.*
(c) Not applicable.
(d) Form of specimen certificate representing shares of Common Stock par value $.001
per share.***
(e) Form of Dividend Reinvestment and Cash Purchase Plan.
(f) Not applicable.
(g)(A) Form of Advisory Agreement between the Fund and Lehman Brothers Global Asset
Management Limited.
(g)(B) Form of U.S. Administration Agreement between the Fund and The Shareholder
Services Group, Inc.
(h)(A) Form of U.S. Underwriting Agreement.
(h)(B) U.S. Master Agreement Among U.S. Underwriters.
(h)(C) U.S. Master Selected Dealer Agreement.
(h)(D) Form of Supplemental Agreement Among U.S. Underwriters.
(h)(E) Form of International Underwriting Agreement.
(h)(F) Form of Agreement Among International Managers.
(h)(G) Form of International Selling Agreement.
(h)(H) Form of Japanese Subscription Agreement.
(h)(I) Form of Japanese Underwriting Agreement.
(h)(J) Form of Agreement Between U.S. Underwriters, International Managers and Japanese
Managers.
(i) Not applicable.
(j) Form of Custodian Contract between the Fund and Boston Safe Deposit and Trust
Company.
(k)(A) Form of Registrar, Transfer Agency and Service Agreement between the Fund and The
Shareholder Services Group, Inc.
(k)(B) Form of Agreement for Shareholder Services in Japan.
(k)(C) Form of Agreement for Dividend Paying Services in Japan.
(k)(D) Form of Agreement for Commissions for Shareholder and Dividend Paying Services in
Japan.
(l)(A) Opinion and consent of Simpson Thacher & Bartlett.**
(l)(B) Opinion and consent of Piper & Marbury.**
(m) Not applicable.
(n)(A) Consent of Ernst & Young LLP, independent auditors.**
(n)(B) Consent of Bruchou, Fernandez, Madero & Lombardi.**
(n)(C) Consent of Machado, Meyer, Sendacz e Opice.**
(n)(D) Consent of Carey y Cia.**
(n)(E) Consent of Gomez Pinzon & Asociados.**
(n)(F) Consent of Ritch, Heather y Mueller, S.C.**
(n)(G) Consent of Rodrigo, Elias & Medrano.**
</TABLE>
II-1
<PAGE> 5
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- -------- ---------------------------------------------------------------------------------
<S> <C>
(n)(H) Consent of Rodner, Martinez & Asociados.**
(o) Not applicable.
(p) Form of Share Purchase Agreement between the Fund and Lehman Brothers Global
Asset Management Limited.
(q) Not applicable.
(r) Not applicable.
(s) Powers of attorney.*
</TABLE>
- ---------------
* Previously filed
** To be filed by amendment.
*** Reference is made to Registrant's Charter and By-Laws.
ITEM 25. MARKETING ARRANGEMENTS
See Section of the U.S. Underwriting Agreement to be filed as Exhibit
(h)(A) to this Registration Statement.
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses expected to be
incurred in connection with the Offerings described in this Registration
Statement:
<TABLE>
<S> <C>
Registration fees.......................................................... $42,638
Blue Sky qualification fees (including fees of counsel).................... *
Stock exchange listing fees................................................ *
Printing (other than stock certificates)................................... *
Engraving and printing stock certificates.................................. *
Accounting fees and expenses............................................... *
Legal fees and expenses.................................................... *
Underwriters' expense allowance............................................ *
NASD fees.................................................................. *
Miscellaneous.............................................................. *
-------
Total............................................................ $ *
=======
</TABLE>
- ---------------
* To be completed by amendment.
ITEM 27. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
ITEM 28. NUMBER OF HOLDERS OF SECURITIES
As of the effective date of this Registration Statement:
<TABLE>
<CAPTION>
(2)
NUMBER OF
(1) RECORD
TITLE OF CLASS HOLDERS
-------------------------------------------------------------------------- ---------
<S> <C>
Common Stock, par value $.001.............................................
</TABLE>
ITEM 29. INDEMNIFICATION
Section 2-418 of the General Corporation Law of the State of Maryland, the
state in which Lehman Brothers Latin America Growth Fund, Inc. (the "Fund") was
organized, empowers a corporation, subject to certain limitations, to indemnify
its directors, officers, employees and agents against expenses (including
attorneys' fees, judgments, penalties, fines and settlements) actually and
reasonably incurred by them in connection with any suit or proceeding to which
they are a party so long as they acted in good faith or without active and
deliberate dishonesty, or they received no actual improper personal benefit in
money, property or
II-2
<PAGE> 6
services, or, with respect to any criminal proceeding, so long as they had no
reasonable cause to believe their conduct to have been unlawful.
Article VII of the Fund's Charter filed as Exhibit (a) provides that the
Fund shall indemnify its currently acting and former directors and officers to
the fullest extent permitted by the Maryland General Corporation Law. The Fund's
Board of Directors may make further provision for indemnification of directors,
officers, employees and agents to the fullest extent permitted by Maryland law.
The Charter provides, however, that the Fund's directors and officers shall not
be indemnified against liability arising from willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
their office.
Article VI of the Fund's By-Laws filed as Exhibit (b) indemnifies current
or former directors and officers of the Fund to the full extent permissible
under the Maryland General Corporation Law, the Securities Act of 1933, as
amended ("the 1933 Act") and the Investment Company Act of 1940, as amended
("the Investment Company Act"). Employees and agents who are not officers or
directors of the Fund may be indemnified in the same manner, and to such further
extent as may be provided by action of the Board of Directors or by contract. In
addition, the Fund may purchase insurance on behalf of any director, officer,
employee or agent of the Fund with respect to certain liabilities.
Section 4 of the Advisory Agreement filed as Exhibit g(A) provides that the
Fund shall indemnify Lehman Brothers Global Asset Management Limited (the
"Investment Adviser") from any and all losses, claims, damages, liabilities or
expenses not resulting from willful misfeasance, bad faith or gross negligence
on its part in the performance of its duties or from reckless disregard by it of
its obligations and duties under the Advisory Agreement.
Under Section 8 of the U.S. Underwriting Agreement filed as Exhibit h(A),
the Fund will indemnify the U.S. Underwriters, and the U.S. Underwriters will
indemnify the Fund with such indemnities also extending to the directors,
certain of the officers, and controlling persons of the aforementioned
indemnified parties, against certain liabilities in connection with the
offering, including liabilities under the 1933 Act.
Under Section 8 of the International Underwriting Agreement filed as
Exhibit h(E), the Fund and the Investment Adviser will indemnify the
International Managers, and the International Managers will indemnify the Fund
and the Investment Adviser with such indemnities also extending to directors,
certain of the officers, and controlling persons of the aforementioned
indemnified parties, against certain liabilities in connection with the
offering.
Under Articles 4 and 6 of the Japanese Subscription Agreement filed as
Exhibit h(H), the Fund and the Investment Adviser will indemnify the Japanese
Underwriters, and the Japanese Underwriters will indemnify the Fund and the
Investment Adviser against certain liabilities in connection with the offering.
In so far as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers and controlling persons of the Fund,
pursuant to the foregoing provisions or otherwise, the Fund has been advised
that in the opinion of the Securities and Exchange Commission ( the
"Commission") such indemnification is against public policy as expressed in the
1933 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Fund of
expenses incurred or paid by a director, officer or controlling person of the
Fund in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the Fund will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 7
ITEM 30. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
Information as to the directors and officers of the Investment Adviser are
included in its Form ADV filed with the Commission (Commission File No.
801-21068) and is incorporated herein by reference thereto.
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS
Certain accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act and the Rules promulgated thereunder
are maintained by the Investment Adviser at Two Broadgate, London EC2M 7HA,
England. Records relating to the duties of the Registrant's custodian are
maintained by Boston Safe Deposit and Trust Company, 31 St. James Avenue,
Boston, Massachusetts and records relating to the duties of the Registrant's
transfer agent are maintained by The Shareholder Services Group, Inc., 31 St.
James Avenue, Boston, Massachusetts.
ITEM 32. MANAGEMENT SERVICES
Not applicable.
ITEM 33. UNDERTAKINGS
(1) Registrant undertakes to suspend the offering of the shares covered
hereby until it amends its prospectus contained herein if (1) subsequent to the
effective date of this Registration Statement, its net asset value per share
declines more than 10% from its net asset value per share as of the effective
date of this Registration Statement, or (2) its net asset value increases to an
amount greater than its net proceeds as stated in the prospectus contained
herein.
(2) Registrant hereby undertakes:
a. That, for purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant under Rule 497(h) under the Act shall
be deemed to be part of this Registration Statement as of the time it was
declared effective.
b. That, for the purpose of determining any liability under the Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, and State of New York, on
the 19th day of October, 1994.
LEHMAN BROTHERS LATIN AMERICA GROWTH
FUND, INC.
(Registrant)
By: /s/ Andrew Gordon
------------------------------------
Andrew Gordon
Treasurer and Secretary
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------- ----------------------------------- ------------------
<S> <C> <C>
Chairman of the Board and President
- ----------------------------------- (Principal Executive Officer)
Clinton Kendrick
/s/ Andrew Gordon Director, Treasurer and Secretary October 19, 1994
- ----------------------------------- (Principal Financial and Accounting
Andrew Gordon Officer)
* Director October 19, 1994
- -----------------------------------
Philip H. Didriksen, Jr.
* Director October 19, 1994
- -----------------------------------
Rodman L. Drake
* Director October 19, 1994
- -----------------------------------
Kathleen C. Holmes McClave
/s/ Andrew Gordon
*By: ------------------------------
Andrew Gordon
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
- -------- ----
<S> <C> <C>
(e) Form of Dividend Reinvestment and Cash Purchase Plan.
(g)(A) Form of Advisory Agreement between the Fund and Lehman Brothers Global Asset
Management Limited.
(g)(B) Form of U.S. Administration Agreement between the Fund and the Shareholder
Services Group, Inc.
(h)(A) Form of U.S. Underwriting Agreement.
(h)(B) U.S. Master Agreement Among U.S. Underwriters.
(h)(C) U.S. Master Selected Dealer Agreement.
(h)(D) Form of Supplemental Agreement Among U.S. Underwriters.
(h)(E) Form of International Underwriting Agreement.
(h)(F) Form of Agreement Among International Managers.
(h)(G) Form of International Selling Agreement.
(h)(H) Form of Japanese Subscription Agreement.
(h)(I) Form of Japanese Underwriting Agreement.
(h)(J) Form of Agreement Between U.S. Underwriters, International Managers and
Japanese Managers.
(j) Form of Custodian Contract between the Fund and Boston Safe Deposit & Trust
Company.
(k)(A) Form of Registrar, Transfer Agency and Service Agreement between the Fund
and the Shareholder Services Group, Inc.
(k)(B) Form of Agreement for Shareholder Services in Japan.
(k)(C) Form of Agreement for Dividend Paying Services in Japan.
(k)(D) Form of Agreement for Commissions for Shareholder and Dividend Paying
Services in Japan.
(p) Form of Share Purchase Agreement between the Fund and Lehman Brothers Global
Asset Management Limited.
</TABLE>
<PAGE> 1
EXHIBIT (e)
LEHMAN BROTHERS LATIN AMERICA GROWTH FUND, INC.
TERMS AND CONDITIONS OF
DIVIDEND REINVESTMENT PLAN
1. Each holder of shares (a "Shareholder") of common stock in
Lehman Brothers Latin America Growth Fund, Inc. (the "Fund") will automatically
be a participant ("Participant") in the Dividend Reinvestment Plan (the
"Plan"), unless any such Shareholder specifically elects to receive all
dividends and capital gains in cash paid by check mailed directly to the
Shareholder. A Shareholder whose shares are registered in the name of a
broker-dealer or other nominee (the "Nominee") will be a Participant if (a)
such a service is provided by the Nominee and (b) the Nominee makes an election
on behalf of the Shareholder to participate in the Plan. Lehman Brothers Inc.
intends to make such an election on behalf of Shareholders whose shares are
registered in its name, as Nominee, unless a Shareholder specifically instructs
his or her broker to pay dividends and capital gains in cash. The Shareholder
Services Group, Inc. (the "Agent") will act as agent for Participants and will
open an account under the Plan for each Participant in the same name as such
Participant's common stock is registered on the books and records of the
transfer agent for the common stock.
2. Whenever the Fund declares a capital gains distribution or an
income dividend payable in shares of common stock or cash, Participants will
receive such distribution or dividend in the manner described in paragraph 3
below as determined on the date such distribution or dividend becomes payable.
3. Whenever the market price of the Fund's common stock is equal
to or exceeds the net asset value per share at the time shares of common stock
are valued for the purpose of determining the number of shares equivalent to
the cash dividend or capital gains distribution, Participants will be issued
shares of common stock valued at the greater of (i) the net asset value per
share most recently determined or (ii) 95% of the then current market price.
Participants will receive any such distribution or dividend entirely in shares
of common stock, and the Agent shall automatically receive such shares of
common stock, including fractions, for all Participants' accounts. If the net
value per share of the common stock at the time of valuation exceeds the market
price of the common stock, or if the Fund should declare a dividend or capital
gains distribution payable only in cash, the Agent, as purchasing agent for the
Participants, will buy shares of common stock in the open market, on the New
York Stock Exchange (the "Exchange") or elsewhere, for each Participant's
account. If, following the commencement of such purchases and before the Agent
has completed its purchases, the market price exceeds the net asset value per
share, the average per share purchase price paid by the Agent may exceed the
net asset value of the common stock, resulting in the acquisition of fewer
shares of common stock than if the dividend or capital gains distribution had
been paid in common stock issued by the Fund at net asset value per share.
Additionally, if the market price exceeds the net asset value of shares before
the Agent has completed its purchases, the Agent is permitted to cease
purchasing shares and the Fund may issue the remaining shares at a price equal
to the greater of (a) net asset value or (b) 95% of the then current market
price. In a case where the Agent has terminated open market purchases and the
Fund has issued the remaining shares, the number of shares received by the
Participant in respect of the cash dividend or distribution will be based on
the weighted average of prices paid for shares purchased in the open market and
the price at which the Fund issues remaining shares.
<PAGE> 2
The Agent will apply all cash received as a dividend or
capital gains distribution to purchase shares of common stock on the open
market as soon as practicable after the payment date of such dividend or
capital gains distribution, but in no event later than 30 days after such date,
except where necessary to comply with applicable provisions of the Federal
securities laws.
4. For all purposes of the Plan: (a) the market price of
the Fund's common stock on a particular date shall be the last sale price on
the Exchange at the close of the previous trading day or, if there is no sale
on the Exchange on the date, then the mean between the closing bid and asked
quotations for such common stock on the Exchange on such date and (b) net asset
value per share of common stock on a particular date shall be as determined by
or on behalf of the Fund.
5. The open market purchases provided for above may be
made on any securities exchange where the shares of common stock of the Fund
are traded, in the over-the-counter market or in negotiated transactions and
may be on such terms as to price, delivery and otherwise as the Agent shall
determine. Funds held by the Agent invested will not bear interest, and it is
understood that, in any event, the purchasing agent shall have no liability in
connection with any inability to purchase shares of common stock within 30 days
after the initial date of such purchase as herein provided, or with the timing
of any purchases effected. The Agent shall have no responsibility as to the
value of the shares of common stock of the Fund acquired for any Participant's
account.
6. The Agent will hold shares of common stock acquired
pursuant to the Plan in noncertificated form in the Participant's name. The
Agent will forward to each Participant any proxy solicitation material and will
vote any shares of common stock so held for each Participant only in accordance
with the proxy returned by any such Participant to the Fund. Upon any
Participant's written request, the Agent will deliver to her or him, without
charge, a certificate or certificates for the full shares of common stock.
7. The Agent will confirm to each Participant
acquisitions made for her or his account as soon as practicable but not later
than 60 days after the date thereof. Although a Participant may from time to
time have an undivided fractional interest (computed to three decimal places)
in a share of common stock of the Fund, no certificates for fractional shares
will be issued. However, dividends and distributions on fractional shares of
common stock will be credited to Participants' accounts. In the event of
termination of a Participant account under the Plan, the Agent will adjust for
any such undivided fractional interest in cash at the market value of the
shares of common stock at the time of termination.
8. Any stock dividends or split shares distributed by
the Fund on shares of common stock held by the Agent for any Participant will
be credited to such Participant's account. In the event that the Fund makes
available to Participants rights to purchase additional shares of common stock
or other securities, the Agent will sell such rights and apply the proceeds of
the sale to the purchase of additional shares of common stock of the Fund for
the account of Participants.
9. The Agent's service for handling capital gains
distributions or income dividends will be paid by the Fund. Participants will
be charged a pro rata share of brokerage commissions on all open market
purchases.
<PAGE> 3
10. Any Participant may withdraw shares from such
Participant's account or terminate such Participant's account under the Plan by
notifying the Agent in writing. Such withdrawal or termination will be
effective immediately if notice is received by the Agent not less than 10 days
prior to any dividend or distribution record date; otherwise such withdrawal or
termination will be effective, with respect to any subsequent dividend or
distribution, on the first trading day after the dividends paid for such record
date have been credited to the Participant's account. The Plan may be
terminated by the Agent or the Fund upon notice in writing mailed to each
Participant at least 30 days prior to any record date for the payment of any
dividend or distribution by the Fund. Upon any withdrawal or termination, the
Agent will cause to be delivered to each Participant a certificate or
certificate for the appropriate number of full shares and a cash adjustment for
any fractional share (valued at the market value of the shares at the time of
withdrawal or termination); provided, however, that any Participant may elect
by notice to the Agent in writing in advance of such termination to have the
Agent sell part or all of the shares in question and remit the proceeds to such
Participant, net of any brokerage commissions. A $5.00 fee will be charged by
the Agent upon any cash withdrawal or termination, and the Agent is authorized
to sell a sufficient number of the Participant's shares to cover such fee and
any brokerage commission on such sale.
11. These terms and conditions may be amended or
supplemented by the Agent or the Fund at any time or times but, except when
necessary or appropriate to comply with applicable law or the rules or policies
of the Securities and Exchange Commission or any other regulatory authority,
only by mailing to each Participant appropriate written notice at least 30 days
prior to the effective date thereof. The amendment or supplement shall be
deemed to be deemed to be accepted by each Participant unless, with respect to
any such Participant, prior to the effective date thereof, the Agent receives
written notice of the termination of that Participant's account under the Plan.
Any such amendment may include an appointment by the Agent in its place and
stead of a successor Agent under these terms and conditions, with full power
and authority to perform all or any of the acts to be performed by the Agent
under these terms and conditions. Upon any such appointment of an Agent for
the purpose of receiving dividends and distributions, the Fund will be
authorized to pay to such successor Agent, for Participants' accounts, all
dividends and distributions payable on the shares of common stock held in each
Participant's name or under the Plan for retention or application by such
successor Agent as provided in these terms and conditions.
12. The Agent shall at all times act in good faith and
agree to use its best efforts within reasonable limits to ensure the accuracy
of all services performed under this agreement and to comply with applicable
law, but assumes no responsibility and shall not be liable for loss or damage
due to errors unless such error is caused by its or its employees' negligence,
bad faith or willful misconduct.
13. The Participant shall have no right to draw checks or
drafts against such Participant's account or to give instructions to the Agent
in respect of any shares or cash held therein except as expressly provided
herein.
14. The Participant agrees to notify the Agent promptly
in writing of any change of address. Notices to the Participant may be given
by the Agent by letter addressed to the Participant as shown on the records of
the Agent.
<PAGE> 4
15. This Agreement and the account established hereunder
for the Participant shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts and the Rules and Regulations of the
Securities and Exchange Commission, as they may be changed or amended from time
to time.
Dated: _____________________, 1994
<PAGE> 1
EXHIBIT (g)(A)
LEHMAN BROTHERS LATIN AMERICA GROWTH FUND, INC.
FORM OF INVESTMENT ADVISORY AGREEMENT
__________, 1994
Lehman Brothers Global Asset Management Limited
Two Broadgate, 7th Floor
London EC2M 7HA, U.K.
Ladies and Gentlemen:
Lehman Brothers Latin America Growth Fund, Inc. (the "Fund"),
a corporation organized under the laws of the State of Maryland, confirms its
agreement with Lehman Brothers Global Asset Management Limited (the "Advisor")
regarding investment advisory services to be provided by the Advisor to Fund.
The Advisor agrees to provide services upon the following terms and conditions:
1. Investment Description; Appointment.
The Fund will employ its capital by investing and reinvesting
in investments of the kind and in accordance with the limitations specified in
the Fund's Articles of Amendment and Restatement dated August 1, 1994, as
amended from time to time (the "Articles of Amendment and Restatement"), in the
prospectus (the "Prospectus") describing the Fund filed with the Securities and
Exchange Commission as part of the Fund's Registration Statement on Form N-2,
as amended from time to time, and in the manner and to the extent as may from
time to time be approved by the Board of Directors of the Fund. Copies of the
Prospectus and the Articles of Amendment and Restatement have been or will be
submitted to the Advisor. The Fund desires to employ and appoints the Advisor
to act as the Fund's investment adviser. The Advisor accepts the appointment
and agrees to furnish the services for the compensation set forth below.
2. Services as Investment Advisor.
Subject to the supervision and direction of the Board of
Directors of the Fund, the Advisor has general responsibility for the
investment advisory services provided to the Fund and will exercise this
responsibility in accordance with the Articles of Amendment and Restatement,
the Investment Company Act of 1940 and the Investment Advisers Act of 1940, as
the same may from time to time be amended, and with the Fund's investment
objective and policies as stated in the Prospectus relating to the Fund as from
time to time in effect. In connection therewith, the Advisor will, among other
things, (a) manage the Fund's portfolio in accordance with the Fund's
investment objective, policies and restrictions as stated in the Prospectus;
(b) make investment decisions for the Fund; (c) place orders to purchase and
sell securities on behalf of the Fund; (d) employ professional portfolio
managers and securities analysts who provide research services to
<PAGE> 2
the Fund; (e) participate in the formulation of the Fund's investment policies;
(f) analyze economic trends affecting the Fund; and (g) monitor the brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Act of 1934) that are provided to the Fund and may be considered
in selecting brokers or dealers to execute particular transactions. In
providing those services, the Advisor will conduct a continual program of
investment, evaluation and, if appropriate, sale and reinvestment of the
Fund's assets. In addition, the Advisor will furnish the Fund with whatever
statistical information the Fund may reasonably request with respect to
the instruments that the Fund may hold or contemplate purchasing.
3. Information Provided to the Fund.
The Advisor will keep the Fund informed of developments
materially affecting the Fund, and will, on its own initiative, furnish the
Fund from time to time with whatever information the Advisor believes is
appropriate for this purpose.
4. Standard of Care.
The Advisor will exercise its best judgment in rendering the
services described in paragraph 2 of this Agreement. The Advisor will not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with the matters to which this Agreement relates, except
that nothing in this Agreement may be deemed to protect or purport to protect
the Advisor against any liability to the Fund or to shareholders of the Fund to
which the Advisor would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence on its part in the performance of its duties or
by reason of the Advisor's reckless disregard of its obligations and duties
under this Agreement ("disabling conduct"). The Fund will indemnify the
Advisor against, and hold it harmless from, any and all losses, claims,
damages, liabilities or expenses (including reasonable counsel fees and
expenses), including any amounts paid in satisfaction of judgments, in
compromise or as fines or penalties, not resulting from disabling conduct by
the Advisor. Indemnification shall be made only following: (i) a final
decision on the merits by a court or other body before whom the proceeding was
brought that the Advisor was not liable by reason of disabling conduct, or (ii)
in the absence of such a decision, a reasonable determination, based upon a
review of the facts, that the Advisor was not liable by reason of disabling
conduct by (a) the vote of a majority of a quorum of directors of the Fund who
are neither "interested persons" of the Fund nor parties to the proceeding
("disinterested non-party directors"), or (b) an independent legal counsel in a
written opinion. The Advisor shall be entitled to advances from the Fund for
payment of the reasonable expenses incurred by it in connection with the matter
as to which it is seeking indemnification in the manner and to the fullest
extent permissible under law. Prior to any such advance, the Advisor shall
provide to the Fund a written affirmation of its good faith belief that the
standard of conduct necessary for indemnification by the Fund has been met and
a written undertaking to repay any such advance if it should ultimately be
determined that the standard of conduct has not been met. In addition, at
least one of the following additional conditions shall be met: (a) the Advisor
shall provide a security in form and amount acceptable to the Fund for its
undertaking; (b) the Fund is insured against losses arising by reason of the
advance; or (c) a majority of a quorum of disinterested non-party directors, or
independent legal counsel, in a written opinion, shall have determined, based
on
<PAGE> 3
a review of facts readily available to the Fund at the time the advance is
proposed to be made, that there is reason to believe that the Advisor will
ultimately be found to be entitled to indemnification.
5. Compensation.
In consideration of the services rendered pursuant to this
Agreement, the Fund will pay the Advisor on the first business day of each
month a fee for the previous month at the annual rate of 1.25% of the value of
the Fund's average daily net assets. The fee for the period from the date the
Fund commences its investment operations to the end of the month during which
the Fund commences its investment operations will be prorated according to the
proportion that the period bears to the full monthly period. Upon any
termination of this Agreement before the end of a month, the fee for such part
of that month will be prorated according to the proportion that the period
bears to the full monthly period and will be payable upon the date of
termination of this Agreement. For the purpose of determining fees payable to
the Advisor, the value of the Fund's net assets will be computed at the times
and in the manner specified in the Prospectus.
6. Expenses.
The Advisor will bear all expenses in connection with the
performance of its services under this Agreement. The Fund will be responsible
for all of the Fund's other expenses and liabilities, including but not limited
to: costs incurred in connection with the Fund's organization; investment
advisory and administration fees; fees for necessary professional and brokerage
services; fees for any pricing service; the costs of regulatory compliance; the
costs associated with maintaining the Fund's legal existence; and the costs of
corresponding with shareholders of the Fund.
7. Services to Other Companies or Accounts.
(a) The Fund understands that the Advisor now acts, will
continue to act and may act in the future as investment adviser to fiduciary
and other managed accounts, and may act in the future as investment adviser to
other investment companies, and the Fund has no objection to the Advisor so
acting, provided that whenever the Fund and one or more fiduciary and other
managed accounts or other investment companies advised by the Advisor have
available funds for investment, investments suitable and appropriate for each
will be allocated in accordance with a formula believed by the Advisor to be
equitable to each. The Fund recognizes that in some cases this procedure may
adversely affect the price paid or received by the Fund or the size of the
position obtained or disposed of by the Fund.
(b) The Fund understands that the persons employed by the
Advisor to assist in the performance of the Advisor's duties under this
Agreement will not devote their full time to such service and nothing contained
in this Agreement will be deemed to limit or restrict the right of the Advisor
or any affiliate of the Advisor to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature.
<PAGE> 4
8. Term of Agreement.
(a) This Agreement will become effective as of the date the
Fund commences its investment operations and will continue for an initial
two-year term and will continue thereafter so long as the continuance is
specifically approved at least annually by (i) the Board of Directors of the
Fund or (ii) a vote of a "majority" (as defined in the Investment Company Act
of 1940, as amended (the "1940 Act")) of the Fund's outstanding voting
securities, provided that in either event the continuance is also approved by a
majority of the Directors who are not "interested persons" (as defined in the
1940 Act) of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on the approval.
(b) This Agreement is terminable, without penalty, on 60
days' written notice, by the Board of Directors of the Fund or by vote of
holders of a majority of the Fund's outstanding voting securities, or upon 60
days' written notice, by the Advisor.
(c) This Agreement will terminate automatically in the event
of its "assignment" (as defined in the 1940 Act).
9. Representation by the Fund.
The Company represents that a copy of the Articles of
Incorporation are on file with the Secretary of the State of Maryland.
10. Limitation of Liability.
The execution and delivery of this Agreement have been
authorized by the Board of Directors of the Fund.
11. Governing Law.
This agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.
12. Other.
Upon expiration or earlier termination of this Agreement, the
Fund shall, if reference to "Lehman" is made in the corporate name of the Fund
and if the Advisor requests in writing, as promptly as practicable change its
corporate name and the name of the Fund so as to eliminate all reference to
"Lehman", and thereafter the Fund shall cease transacting business in any
corporate name using the word "Lehman" or containing any other reference to the
Advisor or "Lehman." The foregoing rights of the Advisor and the obligations
of the Fund shall not deprive the Advisor, or any affiliate thereof which has
"Lehman" in its name, of, but shall be in addition to, any other rights or
remedies to which the Advisor and any such affiliate may be entitled in law or
equity by reason of any breach of this Agreement by the Fund, and the failure
and omission of the Advisor to request a change of the Fund's name or a
cessation of the use of the name of
<PAGE> 5
"Lehman" as described in this paragraph 10 shall not under any circumstances
be deemed a waiver of the right to require such change or cessation at any
time thereafter for the same or any subsequent breach.
If the foregoing is in accordance with your understanding,
kindly indicate your acceptance of this Agreement by signing and returning the
enclosed copy of this Agreement.
Very truly yours,
LEHMAN BROTHERS LATIN AMERICA
GROWTH FUND, INC.
By:____________________________
Name:
Title:
Accepted:
LEHMAN BROTHERS GLOBAL
ASSET MANAGEMENT LIMITED
By:____________________________
Name:
Title:
<PAGE> 1
EXHIBIT (g)(B)
LEHMAN BROTHERS LATIN AMERICA GROWTH FUND, INC.
ADMINISTRATION AGREEMENT
______________, 1994
The Shareholder Services Group, Inc.
One Exchange Place
Boston, Massachusetts 02109
Ladies and Gentlemen:
Lehman Brothers Latin America Growth Fund, Inc. (the "Fund"), a
corporation organized under the laws of the State of Maryland, confirms its
agreement with The Shareholder Services Group, Inc. ("TSSG") regarding
administration services to be provided by TSSG to the Fund. TSSG agrees to
provide services upon the following terms and conditions:
1. Appointment.
The Fund desires to employ and hereby appoints TSSG to act as
the administrator of the Fund. TSSG accepts this appointment and agrees to
furnish the services for the compensation set forth below.
2. Services.
(a) As administrator, and subject to the supervision of the
Fund's Board of Directors, TSSG will assist in supervising all aspects of the
operations of the Fund, other than those functions which are to be performed by
the other service providers to the Fund. TSSG's responsibilities include:
(i) Providing the supervision of the operation of
an automated data processing system to process purchase and
redemption orders;
(ii) Providing information concerning the Fund to
its shareholders of record; distributing regular written
communications to their record shareholders such as dividend
letters, listings of the Fund's portfolio securities; and
handling shareholder inquiries;
<PAGE> 2
(iii) Supervising the services of employees
("shareholder representatives") whose principal responsibility
and function shall be to preserve and strengthen the Fund's
relationships with its shareholders;
(b) TSSG will prepare reports to the Fund's shareholders
and prepare tax returns and reports to and filings with the Securities and
Exchange Commission.
(c) TSSG will compute the respective net asset value per
share of the Fund on each business day.
(d) TSSG shall be responsible for the maintenance of the
registration or qualification of the shares of the Fund for sale under state
securities laws. Payment of share registration fees and any fees for
qualifying or continuing the qualification of the Fund as a dealer or broker
shall be made by the Fund.
(e) TSSG shall provide the services of certain persons who
may be elected as directors or appointed as officers of the Fund by the Board
of Directors.
3. Compensation.
In consideration of services rendered pursuant to this
Agreement, the Fund will pay TSSG on the first business day of each month a fee
for the previous month at the annual rate of .10% of the value of the Fund's
average daily net assets; provided, however, that in no event will the amount
of the annual fee to be paid to TSSG be less than $100,000. The fee for the
period from the date the Fund commences its investment operations to the end of
the month during which the Fund commences its investment operations will be
prorated according to the proportion that the period bears to the full monthly
period. Upon any termination of this Agreement with respect to the Fund before
the end of any month, the fee for such part of the month will be prorated
according to the proportion that the period bears to the full monthly period
and will be payable upon the date of termination of this Agreement with respect
to the Fund. For the purpose of determining fees payable to TSSG, the value of
the Fund's net assets will be computed at the times and in the manner specified
in the prospectus describing the Fund filed with the Securities and Exchange
Commission. In addition, the Fund will pay to TSSG a fee in the amount of
$10,000 for services provided by TSSG in connection with the organization of
the Fund.
4. Expenses.
TSSG will bear all expenses in connection with the performance
of its services under this Agreement. The Fund will bear certain other expenses
to be incurred in its operation, including, but not limited to: costs incurred
in connection with the Fund's organization; investment advisory and
administration fees for necessary professional and brokerage services; fees for
any pricing service; the costs of regulatory compliance; and the costs
associated with maintaining the Fund's legal existence; and the costs of
corresponding with shareholders of the Fund.
<PAGE> 3
5. Reduction of Fee.
If in any fiscal year of the Fund, the aggregate expenses of the
Fund (including fees pursuant to this Agreement and the Fund's investment
advisory agreement, but excluding interest, taxes, brokerage fees, and, if
permitted by the relevant state securities commissions, extraordinary expenses
or other expenses) exceed the expense limitations of any state having
jurisdiction over the Fund, TSSG will reduce its fee to the Fund for that
excess expense, to the extent required by state law in the same proportion as
its administration fee bears to the Fund's aggregate fees for investment advice
and administration. A fee reduction pursuant to this paragraph 5, if any, will
be estimated, reconciled and paid on a monthly basis.
6. Standard of Care.
TSSG will exercise its best judgment in rendering the services
listed in paragraph 2 above. TSSG will not be liable for any error of judgment
or mistake of law or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates, except that nothing in this Agreement
may be deemed to protect or purport to protect TSSG against liability to the
Fund or to shareholders of the Fund to which TSSG would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of TSSG reckless disregard of its
obligations and duties under this Agreement.
7. Term of Agreement.
(a) This Agreement will become effective with respect to the
Fund as of the date the Fund commences its investment operations and will
continue in effect until terminated in accordance with paragraph 7(b).
(b) This Agreement is terminable with respect to the Fund,
without penalty, on 60 days' written notice, by the Board of Directors of the
Fund or by vote of holders of a majority of the Fund's outstanding voting
securities, or upon 90 days' written notice, by TSSG.
8. Service to Other Companies or Accounts.
(a) The Fund understands that TSSG now acts, will continue to
act and may act in the future as investment adviser to fiduciary and other
managed accounts, and as investment adviser, sub-investment adviser and/or
administrator to other investment companies, and the Fund has no objection to
TSSG so acting, provided that whenever the Fund and one or more fiduciary and
other managed accounts or other investment companies advised by TSSG have
available funds for investment, investments suitable and appropriate for each
will be allocated in accordance with a formula believed by TSSG to be equitable
to each company.
(b) The Fund understands that the persons employed by TSSG to
assist in the performance of TSSG's duties under this Agreement will not devote
their full time to such service and nothing contained in this Agreement will be
deemed to limit or restrict the right of TSSG or
<PAGE> 4
any affiliate of TSSG to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
9. Representation by the Fund.
The Fund represents that a copy of the Articles of Amendment and
Restatement is on file with the Secretary of the State of Maryland.
10. Governing Law.
This Agreement shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
If the foregoing is in accordance with your understanding,
kindly indicate your acceptance of this Agreement by signing and returning to
us the enclosed copy of this Agreement.
Very truly yours,
LEHMAN BROTHERS LATIN AMERICA GROWTH FUND, INC.
By:___________________________________
Name:
Title: President
Accepted:
THE SHAREHOLDER SERVICES GROUP, INC.
By:___________________________________
Name:
Title:
<PAGE> 1
DRAFT
EXHIBIT (h)(A)
7,000,000 SHARES
LEHMAN BROTHERS LATIN AMERICA GROWTH FUND, INC.
COMMON STOCK
FORM OF U.S. UNDERWRITING AGREEMENT
_____ __, 1994
LEHMAN BROTHERS INC.
THE NIKKO SECURITIES CO. INTERNATIONAL, INC.
ADVEST, INC.
DAIN BOSWORTH INCORPORATED
FAHNESTOCK & CO. INC.
FIRST OF MICHIGAN CORPORATION
PRINCIPAL FINANCIAL SECURITIES, INC.
RAUSCHER PIERCE REFSNES, INC.,
As Representatives of the several
U.S. Underwriters named in Schedule 1,
c/o LEHMAN BROTHERS INC.
3 World Financial Center
New York, New York 10285
Dear Sirs:
Lehman Brothers Latin America Growth Fund, Inc., a Maryland
corporation (the "Company"), proposes to sell _________ shares (the "Firm
Stock") of the Company's Common Stock, par value $.001 per share (the "Common
Stock"). In addition, the Company proposes to grant to the U.S. Underwriters
named in Schedule 1 hereto (the "U.S. Underwriters") an option to purchase up
to an additional _____ shares of the Common Stock on the terms and for the
purposes set forth in Section 2 (the "Option Stock"). The Firm Stock and the
Option Stock, if purchased, are hereinafter collectively called the "U.S.
Stock." Lehman Brothers Global Asset Management Limited will be the Company's
investment adviser (the "Adviser"). This is to confirm the agreement
concerning the purchase of the U.S. Stock from the Company by the U.S.
Underwriters.
It is understood by all parties that the Company and the Adviser are
concurrently entering into an agreement dated the date hereof (the
"International Underwriting Agreement") providing for the sale by the Company
of _____ shares of Common Stock (including the over-allotment option
thereunder) (the "International Stock") through arrangements with certain
underwriters outside the United States (the "International Managers"), for whom
Lehman Brothers International (Europe) and Nikko Europe Plc are acting as lead
managers. The Company and
<PAGE> 2
the Adviser have also entered into a Subscription Agreement dated ____________,
1994 (the "Japanese Subscription Agreement") with The Nikko Securities Co.,
Ltd. and Lehman Brothers Japan Inc. (the "Japanese Managers" and, together with
the several underwriters named in Schedule 1 to the Japanese Underwriting
Agreement, the "Japanese Underwriters") relating to the concurrent offering and
sale of up to _________ shares of Common Stock in Japan (the "Japanese Stock").
The U.S. Stock, the International Stock and the Japanese Stock are hereinafter
collectively referred to as the "Stock." The U.S. Underwriters, the
International Managers and the Japanese Underwriters are hereinafter
collectively referred to as the "Underwriters." To provide for the
coordination of their activities, the U.S. Underwriters, the International
Managers and the Japanese Underwriters have entered into an Agreement Between
U.S. Underwriters, International Managers and Japanese Underwriters (the
"Agreement Between U.S. Underwriters, International Managers and Japanese
Underwriters") which permits the International Managers and the U.S.
Underwriters, among other things, to sell shares of Stock to each other for
purposes of resale.
Three forms of offering documents are to be used in connection with
the offering and sale of shares of Common Stock contemplated by the foregoing,
one relating to the Stock, one relating to the International Stock and one
relating to the Japanese Stock. References herein to any prospectus whether in
preliminary or final form, and whether as amended or supplemented, shall
include the U.S. version thereof, as well as the international offering
circular (the "International Offering Circular"), and any preliminary
international offering circular, as the case may be, and the forms of
prospectus referenced in the Japanese Subscription Agreement.
1. Representations, Warranties and Agreements of the Company and the
Adviser. (a) The Company and the Adviser each, severally and not jointly,
represents, warrants and agrees that:
(i) A registration statement on Form N-2, and amendments
thereto, with respect to the U.S. Stock have (A) been prepared by the
Company in conformity with the requirements of the U.S. Securities Act
of 1933, as amended (the "Securities Act"), and the rules and
regulations (the "Rule and Regulations") of the U.S. Securities and
Exchange Commission (the "Commission") thereunder and the U.S.
Investment Company Act of 1940, as amended (the "Investment Company
Act," and together with the Securities Act, the "Acts"), and the rules
and regulations of the Commission thereunder; (B) been filed with the
Commission under the Acts and (C) become effective under the Acts.
Copies of such registration statement and the amendments thereto have
been delivered by the Company to you as the representatives (the
"Representatives") of the U.S. Underwriters. A notification of
registration on Form N-8A (the "Notification") has been filed by the
Company with the Commission under the Investment Company Act. As used
in this Agreement, "Effective Time" means the date and the time as of
which such registration statement or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission;
"Effective Date" means the date of the
2
<PAGE> 3
Effective Time; "Preliminary Prospectus" means each prospectus included
in such registration statement, or amendments thereof, before it became
effective under the Acts and any prospectus filed with the Commission
by the Company with the consent of the Representatives pursuant to Rule
497(a) of the Rules and Regulations; "Registration Statement" means
such registration statement, as amended at the Effective Time,
including all information contained in the final prospectus filed with
the Commission pursuant to Rule 497 of the Rules and Regulations in
accordance with Section 5 hereof and deemed to be a part of the
Registration Statement pursuant to paragraph (b) of Rule 430A of the
Rules and Regulations; and "Prospectus" means such final prospectus, as
first filed with the Commission pursuant to Rule 497 of the Rules and
Regulations. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus and the Company has
not received any notice from the Commission pursuant to Section 8(e) of
the Investment Company Act with respect to the Notification or the
Registration Statement.
(ii) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement
or the Prospectus will, when they become effective or are filed with
the Commission, as the case may be, conform in all respects to the
requirements of the Acts and the rules and regulations thereunder and
do not and will not, as of the applicable effective date (as to the
Registration Statement and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) 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 (as to the
Registration Statement and any amendment or supplement thereto) or
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading
(as to the Prospectus and any amendment or supplement thereto); and the
Notification complies in all material respects with the requirements of
the Investment Company Act and the rules and regulations of the
Commission thereunder and does not contain or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company or the
Adviser through the Representatives by or on behalf of any U.S.
Underwriter specifically for inclusion therein.
(iii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Maryland, is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such
qualification, except where the failure to so qualify would not have a
materially adverse
3
<PAGE> 4
effect upon the Company, and has all power and authority necessary to
own or hold its properties and to conduct its business as described in
the Prospectus and to issue and sell the Stock as contemplated by this
Agreement, the International Underwriting Agreement and the Japanese
Subscription Agreement; and the Company has no subsidiaries.
(iv) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the description thereof
contained in the Prospectus.
(v) The unissued shares of the Stock to be issued and sold
by the Company to the Underwriters hereunder and under the
International Underwriting Agreement and the Japanese Subscription
Agreement have been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein and therein, will
be duly and validly issued, fully paid and non-assessable with no
personal liability attaching to the ownership thereof. None of the
shares of the Stock when delivered will be subject to any lien, claim,
encumbrance, preemptive rights or any other claim of any third party.
(vi) The execution, delivery and performance of this
Agreement and the International Underwriting Agreement, the Japanese
Subscription Agreement, the Investment Advisory Agreement (the
"Advisory Agreement") between the Company and the Adviser, the
Administration Agreement (the "Administration Agreement") between the
Company and The Shareholders Services Group, Inc. ("TSSG"), the Custody
Agreement (the "Custody Agreement") between the Company and Boston Safe
Deposit and Trust Company and the Transfer Agency Agreement (the
"Transfer Agency Agreement") between the Company and TSSG, by the
Company and the consummation of the transactions contemplated hereby
and thereby and the issuance and delivery of the Stock will not
conflict with or result in a breach or violation by the Company of any
of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company is a party or by which the Company
is bound or to which any of the property or assets of the Company is
subject, nor will such actions result in any violation of the
provisions of the charter or by-laws of the Company or a violation by
the Company of any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties or assets; the International
Underwriting Agreement, the Japanese Subscription Agreement, the
Advisory Agreement, the Administration Agreement, the Custody Agreement
and the Transfer Agency Agreement, have each been duly authorized,
executed and delivered by the Company; this Agreement, the
International Underwriting Agreement, the Advisory Agreement, the
Administration Agreement, the Custody Agreement and the Transfer Agency
Agreement each constitutes the valid and binding obligation of the
Company, enforceable in accordance with its terms, except to the extent
that enforceability may be limited by
4
<PAGE> 5
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equity principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith
and fair dealing; and except for the registration of the U.S. Stock
under the Acts and such consents, approvals, authorizations,
registrations or qualifications as may have been obtained or as may be
required under the Securities and Exchange Act of 1934 (the "Exchange
Act"), the bylaws and rules of the National Association of Securities
Dealers, Inc. (the "NASD"), the New York Stock Exchange, Inc. (the
"NYSE"), the Ministry of Finance of Japan (the "MOF") and the Osaka
Securities Exchange (the "OSE") and applicable state or foreign
securities laws in connection with the purchase and distribution of the
Stock by the Underwriters, no consent, approval, authorization or order
of, or filing or registration with, any such court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement, the International Underwriting Agreement, the
Japanese Subscription Agreement, the Advisory Agreement, the
Administration Agreement, the Custody Agreement or the Transfer Agency
Agreement by the Company and the consummation of the transactions
contemplated hereby and thereby.
(vii) Since the date as of which information is given in the
Registration Statement and the Prospectus, and except as described in
or contemplated therein, (A) there has not been any change in the
capital stock of the Company or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity, results of operations or prospects of the
Company, and (B) there have been no transactions entered into by the
Company which are material to the Company other than those in the
ordinary course of business.
(viii) The statement of assets and liabilities (including the
related notes thereto) filed as part of the Registration Statement or
included in the Prospectus presents fairly the financial condition of
the Company, at the date indicated, and has been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis.
(ix) Ernst & Young LLP, whose report appears in the
Prospectus and who have delivered the initial letter referred to in
Section 7(g) hereof, are independent public accountants as required by
the Acts and the rules and regulations thereunder.
(x) There are no legal or governmental proceedings pending
to which the Company is a party or of which any property or assets of
the Company is the subject which, if determined adversely to the
Company, could have a material adverse effect on the financial
position, stockholders' equity, results of operations, business or
prospects of the Company or which are required to be disclosed in the
Registration Statement and
5
<PAGE> 6
the Prospectus; and to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(xi) There are no material contracts or other documents which
are required to be described in the Prospectus or filed as exhibits to
the Registration Statement by the Acts or by the rules and regulations
thereunder which have not been described in the Prospectus or filed as
exhibits to the Registration Statement or incorporated therein by
reference as permitted by such rules and regulations.
(xii) The Company is not (A) in violation of its charter or
by-laws, (B) in default in any material respect, and no event has
occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term,
covenant or condition contained in any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
it is a party or by which it is bound or to which any of its properties
or assets is subject or (C) in violation in any material respect of any
law, ordinance, governmental rule, regulation, judgment or court decree
to which it or its property or assets may be subject nor has it failed
to obtain any material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of its
property or to the conduct of the business as described in the
Prospectus, except such licenses, permits, certificates, franchises or
other governmental authorizations or permits which if not obtained
would not have a material adverse effect on the Company or its business
as described in the Prospectus.
(xiii) Neither the Company, nor any director, officer, agent,
employee or other person associated with or acting on behalf of the
Company, has used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political
activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(xiv) The advertising and sales literature approved in writing
by the Company and used in connection with the public offering and sale
of the U.S. Stock pursuant to Rule 482 under the Rules and Regulations
(an "Omitting Prospectus") and filed by the U.S. Underwriters with the
NASD for review in accordance with Rule 497(i) under the Rules and
Regulations complies in all material respects with the requirements of
Rule 482 under the Securities Act and 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 not
misleading.
(xv) The Company is registered with the Commission under the
Investment Company Act as a closed-end, diversified management
investment company. The
6
<PAGE> 7
Company is, and at all times through the completion of the transactions
contemplated hereby will be, in compliance in all material respects
with the terms and provisions of the Acts. No person is serving or
acting as an officer, director or investment adviser of the Company
except in accordance with the provisions of the Investment Company Act
and the U.S. Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and the rules and regulations of the Commission under
such acts.
(xvi) The Stock is duly authorized for listing, subject to
official notice of issuance, on the NYSE.
(b) The Adviser further represents, warrants and agrees that:
(i) The Adviser has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of
England, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such
qualification (except where the failure to so qualify would not have a
material adverse effect on the Adviser), and has all corporate power
and authority necessary to own or hold its properties and to conduct
its business as described in the Prospectus.
(ii) The Adviser is duly registered with the Commission under
the Advisers Act as an investment adviser, and there does not exist any
proceeding or any facts or circumstances the existence of which could
lead to any proceeding which could adversely affect the registration or
good standing of the Adviser with the Commission. The Adviser is not
prohibited by the Advisers Act or the Investment Company Act, or the
rules and regulations under such acts, from acting for the Company
under the Advisory Agreement as contemplated by the Prospectus.
(iii) The description of the Adviser in the Prospectus is true
and correct in all material respects 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 to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(iv) This Agreement, the International Underwriting
Agreement, the Japanese Subscription Agreement and the Advisory
Agreement have each been duly authorized, executed and delivered by the
Adviser, and the Advisory Agreement constitutes the valid and binding
obligation of the Adviser enforceable in accordance with its terms,
except to the extent that enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally,
general equity principles (whether considered in a proceeding in equity
or at law) and an implied covenant of good faith and fair dealing. No
consent, approval, authorization or order of any court or governmental
agency or body is required
7
<PAGE> 8
for the execution, delivery and performance of this Agreement, the
International Underwriting Agreement, the Japanese Subscription
Agreement or the Advisory Agreement by the Adviser or the consummation
by the Adviser of the transactions contemplated hereby or thereby,
except such as have been obtained and such as may be required under the
Acts, the Exchange Act, the Advisers Act, the bylaws and rules of the
NASD, the NYSE, the MOF and the OSE, or applicable state securities
laws in connection with the purchase and distribution of the Stock by
the Underwriters. The execution, delivery and performance of this
Agreement, the International Underwriting Agreement, the Japanese
Subscription Agreement and the Advisory Agreement by the Adviser and
the consummation by the Adviser of the transactions contemplated hereby
and thereby will not conflict with, result in the creation or
imposition of any lien, charge or encumbrance upon the assets of the
Adviser pursuant to the terms of, result in a breach or violation by
the Adviser of any of the terms or provisions of, or constitute a
default by the Adviser under, any material indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
the Adviser is a party or to which it or its property is subject, nor
will such actions result in a violation of the provisions of the
corporate charter or by-laws of the Adviser, or any statute (including
the Acts) or any judgment, decree, order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Adviser or any of its property.
(v) Except as described in the Registration Statement and
the Prospectus, there is no litigation or proceeding pending or, to the
knowledge of the Adviser, threatened against the Adviser which might
result in any material adverse change in the financial condition,
results of operations, business or prospects of the Adviser or which is
required to be disclosed in the Registration Statement and the
Prospectus.
(vi) The Adviser has the financial resources available to it
necessary for the performance of its services and obligations as
contemplated in the Prospectus.
(vii) The Adviser is not in violation of its corporate charter
or by-laws or in default in any material respect under any material
agreement, indenture or instrument.
2. Purchase of the U.S. Stock by the U.S. Underwriters. On the basis
of the representations and warranties contained in, and subject to the terms
and conditions of, this Agreement, the Company agrees to sell _______ shares of
the Firm Stock to the several U.S. Underwriters and each of the U.S.
Underwriters, severally and not jointly, agrees to purchase the number of
shares of the Firm Stock set opposite that U.S. Underwriter's name in Schedule
1 hereto. The respective purchase obligations of the U.S. Underwriters with
respect to the Firm Stock shall be rounded among the U.S. Underwriters to avoid
fractional shares, as the Representatives may determine.
8
<PAGE> 9
In addition, the Company grants to the U.S. Underwriters an option to
purchase up to _______ shares of Option Stock. Such option is granted solely
for the purpose of covering over-allotments in the sale of Firm Stock and is
exercisable as provided in Section 4 hereof. Shares of Option Stock shall be
purchased severally for the account of the U.S. Underwriters in proportion to
the number of shares of Firm Stock set opposite the name of such U.S.
Underwriters in Schedule 1 hereto. The respective purchase obligations of each
U.S. Underwriter with respect to the Option Stock shall be adjusted by the
Representatives so that no U.S. Underwriter shall be obligated to purchase
Option Stock other than in 100 share amounts. The price of both the Firm Stock
and any Option Stock shall be $_____ per share.
The Company shall not be obligated to deliver any of the U.S. Stock to
be delivered on the First Delivery Date or any Option Delivery Date (as
hereinafter defined) as the case may be, except upon payment for all the Stock
to be purchased on such Delivery Date as provided herein, in the International
Underwriting Agreement and in the Japanese Subscription Agreement.
3. Offering of Stock by the U.S. Underwriters. Upon authorization by
the Representatives of the release of the Firm Stock, the several U.S.
Underwriters propose to offer the Firm Stock for sale upon the terms and
conditions set forth in the Prospectus. Each U.S. Underwriter agrees that,
except to the extent permitted by the Agreement Between U.S. Underwriters,
International Managers and Japanese Underwriters, it will not offer or sell any
of the U.S. Stock outside of the United States.
4. Delivery of and Payment for the U.S. Stock. Delivery of and
payment for the Firm Stock shall be made at the office of Willkie Farr &
Gallagher, One Citicorp Center, 153 East 53rd Street, New York, New York 10022,
at 10:00 A.M., New York City time, on the fifth full business day following the
date of this Agreement or at such other date or place as shall be determined by
agreement between the Representatives and the Company. This date and time are
sometimes referred to as the "First Delivery Date." On the First Delivery
Date, the Company shall deliver or cause to be delivered certificates
representing the Firm Stock to the Representatives for the account of each U.S.
Underwriter against payment to or upon the order of the Company of the purchase
price by certified or official bank check or checks payable in New York
Clearing House (next-day) funds. Time shall be of the essence, and delivery at
the time and place specified pursuant to this Agreement is a further condition
of the obligation of each U.S. Underwriter hereunder. Upon delivery, the Firm
Stock shall be registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the First Delivery Date. For the purpose of expediting the checking
and packaging of the certificates for the Firm Stock, the Company shall make
the certificates representing the Firm Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the First Delivery Date.
9
<PAGE> 10
At any time on or before the forty-fifth day after the date of this
Agreement the option granted in Section 2 may be exercised, in whole or in part
at any time and from time to time, by written notice being given to the Company
by the Representatives. Such notice shall set forth the aggregate number of
shares of Option Stock as to which the option is being exercised, the names in
which the shares of Option Stock are to be registered, the denominations in
which the shares of Option Stock are to be issued and the date and time, as
determined by the Representatives, when the shares of Option Stock are to be
delivered; provided, however, that this date and time shall not be earlier than
the First Delivery Date nor earlier than the second business day after the date
on which the option shall have been exercised nor later than the fifth business
day after the date on which the option shall have been exercised. The dates
and times the shares of Option Stock are delivered are sometimes referred to as
an "Option Delivery Date" and the First Delivery Date and each Option Delivery
Date are sometimes each referred to as a "Delivery Date."
Deliveries of and payments for the Option Stock shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on any
Option Delivery Date. On any Option Delivery Date, the Company shall deliver
or cause to be delivered the certificates representing the Option Stock being
purchased at such time to the Representatives for the account of each U.S.
Underwriter against payment to or upon the order of the Company of the purchase
price by certified or official bank check or checks payable in New York
Clearing House (next-day) funds. Time shall be of the essence, and delivery at
the time and place specified pursuant to this Agreement is a further condition
of the obligation of each U.S. Underwriter hereunder. Upon delivery, any
Option Stock shall be registered in such names and in such denominations as the
Representatives shall request in the aforesaid written notice. For the purpose
of expediting the checking and packaging of the certificates for any Option
Stock, the Company shall make the certificates representing the Option Stock
available for inspection by the Representatives in New York, New York, not
later than 2:00 P.M., New York City time, on the business day prior to the
Option Delivery Date.
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to, and within
the time period specified in, Rule 497 under the Securities Act not
later than Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Securities Act; to make no further amendment or any
supplement to the Registration Statement or to the Prospectus except
as permitted herein; to advise the Representatives, promptly after it
receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has
10
<PAGE> 11
been filed and to furnish the Representatives with copies thereof; to
advise the Representatives, promptly after it receives notice thereof,
of the happening of any event which makes untrue any statement of a
material fact made in the Registration Statement, the Prospectus or
any Omitting Prospectus, or which requires the making of a change in
the Registration Statement, the Prospectus or any Omitting Prospectus
in order to make any material statement therein not misleading; to
advise the Representatives, promptly after it receives notice thereof,
of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the receipt by the Company of a notice from or order of
the Commission pursuant to Section 8(e) of the Investment Company Act,
of the suspension of the qualification of the U.S. Stock for offering
or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, of any action by the NYSE rejecting,
suspending or terminating the application for the listing of, or the
listing of, the U.S. Stock, or of any request by the Commission for
the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or suspending
any such qualification, or an order pursuant to Section 8(e) of the
Investment Company Act, to use promptly its best efforts to obtain its
withdrawal at the earliest possible time;
(b) To furnish promptly to each of the Representatives and to
counsel for the U.S. Underwriters a signed copy of the Notification
and the Registration Statement as originally filed with the
Commission, and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of
the following documents as the Representatives shall reasonably
request: (i) conformed copies of the Registration Statement and
Notification as originally filed with the Commission and each
amendment thereto (in each case excluding exhibits other than this
Agreement) (ii) each Preliminary Prospectus, the Prospectus and any
amended or supplemented Prospectus and, if the delivery of a
prospectus is required at any time prior to the expiration of nine
months after the Effective Time in connection with the offering or
sale of the Stock and if at such time any events shall have occurred
as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such same period to amend or supplement
the Prospectus in order to comply with the Acts, to notify the
Representatives and, upon their request, to prepare and furnish
without charge to each U.S. Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended or supplemented Prospectus which will
correct such statement or omission or effect such compliance, and in
case any
11
<PAGE> 12
U.S. Underwriter is required to deliver a prospectus in connection
with sales of any of the Stock at any time nine months or more after
the Effective Time, upon the request of the Representatives but at the
expense of such U.S. Underwriter, to prepare and deliver to such U.S.
Underwriter as many copies as the Representatives may from time to
time reasonably request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Securities Act;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Acts or requested by the
Commission;
(e) Prior to filing with the Commission, until the
termination of the distribution of the U.S. Stock, any (i) amendment
to the Registration Statement or supplement to the Prospectus or (ii)
any Prospectus pursuant to Rule 497 of the Rules and Regulations, to
furnish a copy thereof to the Representatives and counsel for the U.S.
Underwriters and obtain the consent of the Representatives to the
filing;
(f) As soon as practicable after the Effective Date to make
generally available to the Company's security holders and to deliver
to the Representatives an earnings statement of the Company (which
need not be audited) complying with Section 11(a) of the Securities
Act and the Rules and Regulations (including, at the option of the
Company, Rule 158);
(g) For a period of five years following the Effective Date,
to furnish to the Representatives copies of all materials furnished by
the Company to its shareholders and all public reports and all reports
and financial statements furnished by the Company to the principal
national securities exchange upon which the Common Stock may be listed
pursuant to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of
the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the U.S. Stock for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the U.S. Stock; provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any
jurisdiction; and
(i) For a period of 180 days from the date of the Prospectus,
not to offer for sale, sell or otherwise dispose of (or enter into any
transaction which is designed to, or could be expected to, result in
the disposition by any person of), directly or indirectly,
12
<PAGE> 13
any shares of Common Stock (other than the Stock and any shares of
Common Stock issued to shareholders pursuant to the Company's Dividend
Reinvestment and Cash Purchase Plan), or sell or grant options, rights
or warrants with respect to any shares of Common Stock.
6. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable
in that connection; (b) the costs incident to the preparation, printing and
filing under the Acts of the Registration Statement and the Notification and
any amendments and exhibits thereto; (c) the costs of distributing the
Registration Statement as originally filed and each amendment thereto and any
post-effective amendments thereof (including, in each case, exhibits), any
Preliminary Prospectus, the Prospectus, any Omitting Prospectus and any
amendment or supplement to the Prospectus, all as provided in this Agreement;
(d) the costs of reproducing and distributing this Agreement, the Agreement
Between U.S. Underwriters, International Managers and Japanese Underwriters
and the Supplemental Agreement Among U.S. Underwriters; (e) the costs of
distributing the terms of agreement relating to the organization of the
domestic underwriting syndicate and selling group to the members thereof by
mail, telex or other means of communication; (f) the filing fees incident to
securing any required review by the NASD of the terms of sale of the Stock; (g)
the costs of listing the Stock on the NYSE, Inc.; (h) the fees and expenses of
qualifying the U.S. Stock under the securities laws of the several
jurisdictions as provided in Section 5(h) and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the U.S. Underwriters); (i) to the Underwriters $_____________ as
reimbursement of certain costs and expenses of the Underwriters (including fees
and disbursements of counsel) in connection with the offering and distribution
of the Stock, and (j) all other costs and expenses incident to the performance
of the obligations of the Company under this Agreement; provided that, except
as provided in this Section 6 and in Section 11, the U.S. Underwriters shall
pay their own costs and expenses, including the costs and expenses of their
counsel, any transfer taxes on the U.S. Stock which they may sell and the
expenses of advertising any offering of the U.S. Stock made by the U.S.
Underwriters. In the event the transactions contemplated hereunder are not
consummated, the Adviser will pay all of the costs and expenses set forth in
this Paragraph which the Company would have paid if such transactions were
consummated. The Adviser shall be solely responsible for, and shall pay all
costs and expenses of, preparing, printing and distributing all advertising and
sales literature, including any Omitting Prospectus, furnished by it to the
Underwriters and to investment dealers in connection with the public offering
of the Shares, and in connection therewith complying with the Rules of Fair
Practice of the NASD and applicable federal and state securities laws and
regulations.
7. Conditions of U.S. Underwriters' Obligations. The respective
obligations of the U.S. Underwriters hereunder are subject to the accuracy,
when made and on each Delivery Date, of the representations and warranties of
the Company and the Adviser contained herein, to the
13
<PAGE> 14
performance by the Company of its obligations hereunder, and to each of the
following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 5(a) hereof; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof or order or proceeding for an order pursuant to Section 8(e)
of the Investment Company Act shall have been issued and no proceeding
for such a purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus
or otherwise shall have been complied with.
(b) No U.S. Underwriter, International Manager or Japanese
Underwriter shall have discovered and disclosed to the Company on or
prior to such Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of Willkie Farr & Gallagher,
counsel for the U.S. Underwriters, is material or omits to state a
fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to made the statements
therein not misleading.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement,
the International Underwriting Agreement, the Japanese Subscription
Agreement, the Advisory Agreement, the Administration Agreement, the
Custody Agreement and the Transfer Agency Agreement, the Stock, the
Registration Statement, the Prospectus and any Omitting Prospectus,
and all other legal matters relating to this Agreement, the
International Underwriting Agreement and the Japanese Subscription
Agreement and the transactions contemplated hereby and thereby, shall
be satisfactory in all respects to counsel for the U.S. Underwriters,
and the Company shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass
upon such matters.
(d) Simpson Thacher & Bartlett shall have furnished to the
Representatives a written opinion, as counsel to the Company,
addressed to the U.S. Underwriters and dated such Delivery Date, in
form and substance satisfactory to the Representatives, to the effect
that:
(i) The Company is duly qualified to do business and
is in good standing as a foreign corporation in each
jurisdiction in which its ownership or lease of property or
the conduct of its business requires such qualification (other
than those jurisdictions in which the failure to so qualify
would not have a material adverse effect on the Company), and
has all power and authority necessary to own or hold its
properties and to conduct its business as described in the
Prospectus; and the Company has no subsidiaries;
14
<PAGE> 15
(ii) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company (including the shares of Stock
being delivered on such Delivery Date) have been duly and
validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof
contained in the Prospectus;
(iii) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Stock pursuant to the
Company's charter or by-laws or any agreement or other
instrument known to such counsel;
(iv) To such counsel's knowledge after reasonable
investigation, there is no legal or governmental proceeding
before any court or before or by any public body or board
pending or threatened against the Company which is required to
be disclosed in the Prospectus which is not disclosed therein;
(v) The Registration Statement is effective under
the Acts, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 497 of the Rules and
Regulations specified in such opinion within the time period
required by Rule 497 and, to such counsel's knowledge after
reasonable investigation, no stop order suspending the
effectiveness of the Registration Statement or order pursuant
to Section 8(e) of the Investment Company Act has been issued
and no proceeding for that purpose is pending or threatened by
the Commission;
(vi) The statements contained in the Prospectus under
the captions "Management of the Fund," "Dividends and
Distributions; Dividend Reinvestment Plan," "Taxation,"
"Common Stock" and the information contained in Item 29 of
Part C of the Registration Statement, insofar as such
statements constitute a summary of legal matters, documents
referred to therein or matters of law, are fair and accurate
summaries of the material provisions thereof in all material
respects;
(vii) The statements made in the Prospectus under the
caption "Common Stock" insofar as they purport to summarize
the provisions of documents or agreements specifically
referred to therein fairly present the information called for
with respect thereto by Form N-2;
(viii) To such counsel's knowledge after reasonable
investigation, there are no contracts or other documents which
are required to be described in the Prospectus or filed as
exhibits to the Registration Statement by the Acts or by the
rules and regulations thereunder which have not been described
or filed as exhibits to the Registration Statement;
15
<PAGE> 16
(ix) Assuming that each of this Agreement, the
International Underwriting Agreement, the Japanese
Subscription Agreement, the Advisory Agreement, the
Administration Agreement, the Custody Agreement and the
Transfer Agency Agreement has been duly authorized, each of
such agreements has been duly executed and delivered by the
Company in accordance with the laws of the State of New York;
assuming that each of this Agreement, the International
Underwriting Agreement, the Japanese Subscription Agreement,
the Advisory Agreement, the Administration Agreement, the
Custody Agreement and the Transfer Agency Agreement has been
duly authorized by the Company and assuming due authorization,
execution and delivery of each of such agreements by the other
parties thereto, each of such agreements complies in all
material respects with all applicable provisions of the
Investment Company Act and the Advisers Act; and each of the
Advisory Agreement, the Administration Agreement, the Custody
Agreement and the Transfer Agency Agreement constitutes the
valid and binding obligation of the Company enforceable
against the Company in accordance with its terms;
(x) The Company is registered with the Commission
under the Investment Company Act as a closed-end, diversified
management investment company; all required action has been
taken by the Company under the Acts and the Exchange Act to
make the public offering and consummate the sale of the Stock
pursuant to this Agreement, the International Underwriting
Agreement and the Japanese Subscription Agreement; the
provisions of the corporate charter and by-laws of the Company
and the investment policies and restrictions described in the
Prospectus under the captions "Investment Objective and
Policies" and "Investment Restrictions" comply in all material
respects with the requirements of the Investment Company Act;
and
(xi) The execution and delivery of this Agreement,
the International Underwriting Agreement, the Advisory
Agreement, the Administration Agreement, the Custody Agreement
and the Transfer Agency Agreement, and the consummation of the
transactions contemplated hereby and thereby will not result
in any violation of the provisions of the charter or by-laws
of the Company nor, to such counsel's knowledge after
reasonable investigation, will such actions conflict with or
result in the creation or imposition of any material lien,
charge or encumbrance upon any assets of the Company, or
result in a material breach or violation of any of the terms
or provisions of, or constitute a material default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the
Company is a party or by which the Company is bound or to
which any of the property or assets of the Company is subject,
or result in any violation of the provisions of any statute or
any order, rule or regulation of any court or governmental
agency or body having
16
<PAGE> 17
jurisdiction over the Company or any of its properties or
assets; and, except for the registration of the U.S. Stock
under the Acts and such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Exchange Act and applicable state or foreign securities laws
in connection with the purchase and distribution of the U.S.
Stock by the U.S. Underwriters, all of which have been
obtained, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental
agency or body is required for the execution, delivery and
performance of this Agreement, the International Underwriting
Agreement, the Advisory Agreement, the Administration
Agreement, the Custody Agreement and the Transfer Agency
Agreement by the Company and the consummation of the
transactions contemplated hereby and thereby.
In rendering such opinion, such counsel may (i) state that its
opinions set forth in paragraph (ix) above are subject to the effects
of 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); (ii) state that its opinion is limited to
matters governed by the Federal laws of the United States of America,
the laws of the State of New York and that such counsel is not
admitted in the State of Maryland; (iii) rely (to the extent such
counsel deems proper and specifies in its opinion), as to matters
involving the application of the laws of the State of Maryland upon
the opinion of Piper & Marbury, provided that Piper & Marbury
furnishes a copy of its opinion to the Representatives. Such counsel
may further state that with respect to the disclosure set forth in the
Prospectus in Appendix A: Securities Markets and Economic Data:
Selected Latin American Countries, that the scope of such counsel's
investigation was less than that applied to other sections of the
Prospectus and Registration Statement and was limited to review of the
documents referred to or cited therein.
Lastly, such counsel shall also state that on the basis of
their examination of the Registration Statement and the Prospectus,
their investigation made in connection with the preparation of the
Registration Statement and the Prospectus, and their participation in
conferences with representatives of the Company, the Adviser, the
Company's accountants, the Representatives and counsel to the U.S.
Underwriters at which the contents of the Registration Statement and
the Prospectus and related matters were discussed, they are of the
opinion that the Registration Statement, as of its effective date, and
the Prospectus, as of its date, complied (other than the financial
statements or other financial, economic or statistical data contained
therein, as to which they need not express an opinion), as to form in
all material respects with the requirements of the Acts and the
applicable rules and regulations thereunder, and they have no reason
to believe that the Registration Statement, as of its effective date
(other than the financial statements
17
<PAGE> 18
or other financial, economic or statistical data contained therein, as
to which they need not express an opinion) contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus (other than the
financial statements or other financial, economic or statistical data
contained therein, as to which they need not express an opinion)
contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Such counsel shall also have furnished to the Representatives a
written statement addressed to the U.S. Underwriters and dated such
Delivery Date, in form and substance satisfactory to the
Representatives, to the effect that such counsel has acted as counsel
to the Company in connection with the issuance and sale by the Company
of the U.S. Stock and the preparation of the Registration Statement.
The foregoing opinion and statement may be qualified by a statement to
the effect that such counsel has not independently verified and does
not assume any responsibility for the accuracy, completeness or
fairness of the statements made or included in the Registration
Statement or the Prospectus, except for the statements made in the
Prospectus under the captions described in paragraphs (vi) and (vii)
above insofar as such statements relate to the Stock and concern legal
matters.
(e) Piper & Marbury shall have furnished to the
Representatives a written opinion, as special Maryland counsel to the
Company, addressed to the U.S. Underwriters and dated such Delivery
Date, in form and substance satisfactory to the Representatives, to
the effect that:
(i) The Company has been duly incorporated and is
validly existing and in good standing as a corporation under
the laws of the State of Maryland and has all corporate power
and authority necessary to own its properties and conduct the
business in which it is engaged as described in the Prospectus
and to issue and sell the Stock as contemplated in this
Agreement, the International Underwriting Agreement and the
Japanese Subscription Agreement;
(ii) All of the authorized shares of capital stock of
the Company, including the Stock, have been duly authorized
and, upon payment for the Stock pursuant to the terms of this
Agreement, the International Underwriting Agreement and the
Japanese Subscription Agreement, all of the issued and
outstanding shares of capital stock of the Company, including
the Stock, will be, validly issued and outstanding, fully paid
and nonassessable, with no personal liability attaching to the
ownership thereof; and the form of certificate used to
evidence the shares of Stock is in due and proper form and
complies with all provisions of Maryland law;
18
<PAGE> 19
(iii) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Stock pursuant to the
Company's corporate charter or by-laws or any agreement or
other outstanding instrument known to such counsel;
(iv) The shares of Stock conform in all material
respects to the statements concerning them contained in the
Prospectus, and the authorized and outstanding shares of
capital stock of the Company are as set forth in the
Prospectus;
(v) Such counsel does not know of any litigation or
any proceeding pending or threatened against the Company
before any Maryland court or Maryland governmental agency,
authority or body or any Maryland arbitrator which could
affect the subject matter of this Agreement, the International
Underwriting Agreement or the Japanese Subscription Agreement;
(vi) To the best of such counsel's knowledge, the
Company is not in violation of its corporate charter or
by-laws; and
(vii) Each of this Agreement, the International
Underwriting Agreement, the Japanese Subscription Agreement,
the Advisory Agreement, the Administration Agreement, the
Administration Agreement, the Custody Agreement and the
Transfer Agency Agreement has been duly authorized, executed
and delivered by the Company; the execution, delivery and
performance of this Agreement, the International Underwriting
Agreement, the Advisory Agreement, the Administration
Agreement, the Custody Agreement and the Transfer Agency
Agreement by the Company will not result in a violation of the
corporate charter or by-laws of the Company or any order, rule
or regulation of general application to the Company of any
Maryland court or governmental agency having jurisdiction over
the Company or its property; and no consent, authorization or
order of any Maryland court or governmental agency is required
under Maryland corporate law for the execution, delivery and
performance of this Agreement, the International Underwriting
Agreement, the Advisory Agreement, the Administration
Agreement, the Administration Agreement, the Custody Agreement
or the Transfer Agency Agreement by the Company.
(f) ________________ shall have furnished to the
Representatives a written opinion, as counsel to the Adviser,
addressed to the U.S. Underwriters and dated such Delivery Date, in
form and substance satisfactory to the Representatives, to the effect
that:
(i) The Adviser has been duly incorporated and is
validly existing and in good standing as a corporation under
the laws of England, is duly qualified to
19
<PAGE> 20
do business and is in good standing as a foreign corporation
in all jurisdictions in which its ownership of property or the
conduct of its business requires such qualification (except
where the failure to do so would not have a material adverse
effect on the Adviser), and has all and authority necessary to
own its properties and conduct the business in which it is
engaged as described in the Prospectus;
(ii) This Agreement, the International Underwriting
Agreement and the Advisory Agreement have been duly
authorized, executed and delivered by the Adviser; assuming
due execution by the other parties thereto, the Advisory
Agreement constitutes the valid and binding obligation of the
Adviser enforceable in accordance with its terms, except to
the extent that enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors'
rights, generally, general equity principles (whether
considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing; the execution,
delivery and performance of this Agreement, the International
Underwriting Agreement and the Advisory Agreement by the
Adviser will not conflict with, or result in the creation or
imposition of any material lien, charge or encumbrance upon
any of the assets of the Adviser pursuant to the terms of, or
constitute a default by the Adviser under, any material
agreement, indenture or instrument known to such counsel, or
result in a violation of the corporate charter or by-laws of
the Adviser or any statute (including the Acts), any rule or
regulation of, or to the knowledge of such counsel any order
of, any court or governmental agency having jurisdiction over
the Adviser or its property; and no consent, authorization or
order of, or filing or registration with, any court or
governmental agency is required for the execution, delivery
and performance of this Agreement, the International
Underwriting Agreement or the Advisory Agreement by the
Adviser, except such as has been obtained under the Acts, the
Advisers Act or the Exchange Act or as may be required by
state securities laws;
(iii) The Adviser is duly registered with the
Commission under the Advisers Act as an investment adviser and
is not prohibited by the Advisers Act or the Investment
Company Act, or the rules and regulations under such acts,
from acting under the Advisory Agreement;
(iv) Such counsel does not know of any litigation or
any proceeding pending or threatened against the Adviser which
could affect the subject matter of this Agreement, the
International Underwriting Agreement, the Japanese
Subscription Agreement or the Advisory Agreement or the
registration of the Adviser with the Commission, or which is
required to be disclosed in the Prospectus which is not
disclosed and correctly summarized therein; and
20
<PAGE> 21
(v) To the best of such counsel's knowledge the
Adviser is not in violation of its corporate charter or
by-laws, or in default in any material respect under any
material agreement, indenture or instrument.
Such opinion shall also contain a statement that in the course of
their representation of the Adviser in connection with the offering by
the Company of its Stock, such counsel participated in meetings and
telephone conversations with certain directors and officers of the
Adviser, and that although they are not passing upon, and do not
assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement, the
Notification or Prospectus, and while such counsel has not made any
independent check or verification thereof, on the basis of the
foregoing, no facts came to their attention that led them to believe
that the Section of the Prospectus captioned "Management of the
Fund--Investment Adviser" insofar as it relates to or describes the
Adviser, at such Delivery Date, contains an untrue statement of a
material fact 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.
In giving such opinion, ________________ may rely on the
opinion of ____________ as to matters of __________ law, provided that
______________ furnish a copy thereof to the Representatives and state
such opinion is satisfactory in form and scope and that the
Underwriters are entitled to rely thereon.
(g) With respect to the letter of Ernst & Young LLP delivered
to the Representatives concurrently with the execution of this
Agreement, the Company shall have furnished to the Representatives a
letter (the "bring-down letter") of such accountants, addressed to the
U.S. Underwriters and dated such Delivery Date (i) confirming that
they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date of the
bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not
more than five days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set
forth in the initial letter.
(h) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board,
its President or a Vice President and its Treasurer or an Assistant
Treasurer stating that:
21
<PAGE> 22
(i) The representations, warranties and agreements
of the Company in Section 1 are true and correct as of such
Delivery Date; the Company has complied with all its
agreements contained herein; and the conditions set forth in
Sections 7(a) have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of
the Effective Date, the Registration Statement, and Prospectus
did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading and on such Delivery Date, the Prospectus and any
Omitting Prospectus did not include any untrue statement of a
material fact and did not omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading, and (B) since the Effective
Date no event has occurred which should have been set forth in
a supplement or amendment to the Registration Statement or the
Prospectus which has not been so set forth in such a
supplement or amendment.
(i) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i)
trading in securities generally on the NYSE, in the over-the-counter
market, or on the principal stock exchange in any of Argentina,
Brazil, Chile, Colombia, Mexico, Peru or Venezuela (the "Principal
Countries"), or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended
or minimum prices shall have been established on any such exchange or
such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a
banking moratorium shall have been declared by Federal or state
authorities or by comparable authorities in any of the Principal
Countries, (iii) the United States or any of the Principal Countries
shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or any of the
Principal Countries or there shall have been a declaration of a
national emergency or war by the United States or any of the Principal
Countries or (iv) there shall have occurred such a material adverse
change in general economic, political or financial conditions in the
United States or any of the Principal Countries (or the effect of
international conditions on the financial markets in the United States
or in any of the Principal Countries shall be such) as to make it, in
the judgment of a majority in interest of the several U.S.
Underwriters, impracticable or inadvisable to proceed with the public
offering or delivery of the U.S. Stock being delivered on such
Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(j) The New York Stock Exchange, Inc. shall have approved the
Stock for listing, subject only to official notice of issuance.
22
<PAGE> 23
(k) The closing under the International Underwriting
Agreement and the Japanese Subscription Agreement shall have occurred
concurrently with or prior to the closing hereunder on the First
Delivery Date.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to
counsel for the U.S. Underwriters.
8. Indemnification and Contribution. (a) The Company and the
Adviser, jointly and severally, shall indemnify and hold harmless each U.S.
Underwriter and each person, if any, who controls any U.S. Underwriter within
the meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of U.S. Stock), to which that U.S. Underwriter or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or in any amendment or supplement
thereto or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (ii) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Prospectus or any
Omitting Prospectus or in any amendment or supplement thereto or the omission
or alleged omission to state therein a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and shall reimburse each U.S. Underwriter and each such
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that U.S. Underwriter or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company and the Adviser shall not be liable in any
such case to the extent that any such loss, claim, damage, liability or action
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any of such documents in reliance upon
and in conformity with written information furnished to the Company or the
Adviser through the Representatives by or on behalf of any U.S. Underwriter
specifically for inclusion therein; provided further, that as to any
Preliminary Prospectus this indemnity agreement shall not inure to the benefit
of any U.S. Underwriter or any person controlling that U.S. Underwriter on
account of any loss, claim, damage, liability or action arising from the sale
of U.S. Stock to any person by that U.S. Underwriter if that U.S. Underwriter
failed to send or give a copy of the Prospectus, as the same may be amended or
supplemented, to that person within the time required by the Securities Act,
and the untrue statement or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact in such Preliminary
Prospectus was corrected in the Prospectus, unless such failure resulted from
non-compliance by the Company with Section 5(c); provided further, that the
Adviser shall be liable to any party indemnified by it under this Section 8(a)
only to the extent that the Company fails to indemnify and hold
23
<PAGE> 24
harmless such indemnified party pursuant to this Section 8(a). The foregoing
indemnity agreement is in addition to any liability which the Company and
Adviser may otherwise have to any U.S. Underwriter or to any controlling person
of that U.S. Underwriter.
(b) Each U.S. Underwriter, severally and not jointly, shall indemnify
and hold harmless the Company, the Adviser, each of their respective directors,
each of the Company's officers who signed the Registration Statement and each
person, if any, who controls the Company or the Adviser within the meaning of
the Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Company, the
Adviser or any such director, officer or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement
or alleged untrue statement of a material fact contained in any the
Registration Statement or in any amendment or supplement thereto or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Prospectus or any Omitting
Prospectus or in any amendment or supplement thereto or the omission or alleged
omission to state therein a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, but in each case only to the extent that the untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company or the Adviser through the Representatives by or on behalf of that U.S.
Underwriter specifically for inclusion therein, and shall reimburse the
Company, the Adviser and any such director, officer or controlling person for
any legal or other expenses reasonably incurred by the Company, the Adviser or
any such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any U.S. Underwriter
may otherwise have to the Company, the Adviser or any such director, officer or
controlling person.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 8. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
24
<PAGE> 25
party. After notice from the indemnifying party to the indemnified party of
its election to assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this Section 8 for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Representatives shall have the right
to employ counsel to represent jointly the Representatives and those other U.S.
Underwriters and their respective controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the U.S. Underwriters against the Company or the Adviser, under this Section
8 if, in the reasonable judgment of the Representatives, it is advisable for
the Representatives and those U.S. Underwriters and controlling persons to be
jointly represented by separate counsel, and in that event the fees and
expenses of such separate counsel shall be paid by the Company; provided
further, that the Company and the Adviser shall have the right to employ
counsel to represent jointly the Company and the Adviser and their respective
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Company and the Adviser against
the U.S. Underwriters, under this Section 8 if, in the reasonable judgment of
the Company and the Adviser, it is advisable for the Company and the Adviser
and those controlling persons to be jointly represented by separate counsel,
and in that event the fees and expenses of such separate counsel shall be paid
by the Company.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or 8(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Adviser on the one hand and the U.S.
Underwriters on the other from the offering of the U.S. Stock or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Adviser on the one hand and the U.S. Underwriters on the other with respect
to the statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
the Adviser on the one hand and the U.S. Underwriters on the other with respect
to such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the U.S. Stock purchased under this Agreement
(before deducting expenses) received by the Company, on the one hand, and the
total underwriting discounts and commissions received by the U.S. Underwriters
with respect to the shares of the U.S. Stock purchased under this Agreement, on
the other hand, bear to the total gross proceeds from the offering of the
shares of the U.S. Stock under this Agreement, in each case as set forth in the
table on the cover page of the Prospectus. As between the Company and the
Adviser (and solely for the purpose of allocating between such
25
<PAGE> 26
parties the total amount to be contributed by them), the relative benefits
received by the Company, on the one hand, and the Adviser, on the other hand,
shall be deemed to be in the same proportion that the total net proceeds from
the U.S. Offering, the International Offering and the Japanese Offering (before
deducting expenses) received by the Company bears to the present value of the
future revenue stream to be generated by the advisory fees paid by the Company
to the Adviser pursuant to the Advisory Agreement. The relative fault shall be
determined by reference to whether the 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 Company, the Adviser or the U.S. Underwriters,
the intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company,
the Adviser and the U.S. Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) were to be determined
by pro rata allocation (even if the U.S. Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section
8(d) shall be deemed to include, for purposes of this Section 8(d), any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no U.S. Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the U.S. Stock underwritten by it and distributed to the public was offered to
the public exceeds the amount of any damages which such U.S. Underwriter has
otherwise paid or become liable to pay by reason of any 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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The U.S. Underwriters'
obligations to contribute as provided in this Section 8(d) are several in
proportion to their respective underwriting obligations and not joint.
(e) The U.S. Underwriters severally confirm that the statements with
respect to the public offering of the U.S. Stock set forth on the cover page
of, and under the caption "Underwriting" in, the Prospectus are correct, and
the Company and the Adviser acknowledge that such statements constitute the
only information furnished in writing to the Company or the Adviser by or on
behalf of the U.S. Underwriters specifically for inclusion in the Registration
Statement and the Prospectus.
9. Defaulting U.S. Underwriters. If, on either Delivery Date, any
U.S. Underwriter defaults in the performance of its obligations under this
Agreement, the remaining non-defaulting U.S. Underwriters shall be obligated to
purchase the U.S. Stock which the defaulting U.S. Underwriter agreed but failed
to purchase on such Delivery Date in the respective proportions which the
number of shares of the Firm Stock set opposite the name of each remaining
non-defaulting U.S. Underwriter in Schedule 1 hereto bears to the total number
of shares of the Firm
26
<PAGE> 27
Stock set opposite the names of all the remaining non-defaulting U.S.
Underwriters in Schedule 1 hereto; provided, however, that the remaining
non-defaulting U.S. Underwriters shall not be obligated to purchase any of the
U.S. Stock on such Delivery Date if the total number of shares of the U.S.
Stock which the defaulting U.S. Underwriter or U.S. Underwriters agreed but
failed to purchase on such date exceeds 9.09% of the total number of shares of
the U.S. Stock to be purchased on such Delivery Date, and any remaining
non-defaulting U.S. Underwriter shall not be obligated to purchase more than
110% of the number of shares of the U.S. Stock which it agreed to purchase on
such Delivery Date pursuant to the terms of Section 2. If the foregoing
maximums are exceeded, the remaining non-defaulting U.S. Underwriters, or those
other underwriters satisfactory to the Representatives who so agree, shall have
the right, but shall not be obligated, to purchase, in such proportion as may
be agreed upon among them, all the U.S. Stock to be purchased on such Delivery
Date. If the remaining U.S. Underwriters or other underwriters satisfactory to
the Representatives do not elect to purchase the shares which the defaulting
U.S. Underwriter or U.S. Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to any Option Delivery Date,
the obligation of the U.S. Underwriters to purchase, and of the Company to
sell, the Option Stock) shall terminate without liability on the part of any
non-defaulting U.S. Underwriter or the Company, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in
Sections 6 and 11. As used in this Agreement, the term "U.S. Underwriter"
includes, for all purposes of this Agreement unless the context requires
otherwise, any party not listed in Schedule 1 hereto who, pursuant to this
Section 9, purchases Firm Stock which a defaulting U.S. Underwriter agreed but
failed to purchase.
Nothing contained herein shall relieve a defaulting U.S. Underwriter
of any liability it may have to the Company for damages caused by its default.
If other underwriters are obligated or agree to purchase the U.S. Stock of a
defaulting or withdrawing U.S. Underwriter, either the Representatives or the
Company may postpone the First Delivery Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Company
or counsel for the U.S. Underwriters may be necessary in the Registration
Statement, the Prospectus or in any other document or arrangement.
10. Termination. The obligations of the U.S. Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Section 7(i) shall have occurred or if the
U.S. Underwriters shall decline to purchase the U.S. Stock for any reason
permitted under this Agreement.
11. Reimbursement of U.S. Underwriters' Expenses. If (a) the Company
shall fail to tender the Stock for delivery to the U.S. Underwriters for any
reason permitted under this Agreement or (b) the U.S. Underwriters shall
decline to purchase the Stock for any reason permitted under this Agreement
(including the termination of this Agreement pursuant to Section 10), the
Company and the Adviser shall reimburse the U.S. Underwriters for the
reasonable fees
27
<PAGE> 28
and expenses of their counsel and for such other reasonable out-of-pocket
expenses as shall have been incurred by them in connection with this Agreement
and the proposed purchase of the Stock, and upon demand the Company and the
Adviser shall pay the full amount thereof to the Representatives. If this
Agreement is terminated pursuant to Section 9 by reason of the default of one
or more U.S. Underwriters, neither the Company nor the Adviser shall be
obligated to reimburse any U.S. Underwriter on account of those expenses.
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the U.S. Underwriters, shall be delivered or sent
by mail, telex or facsimile transmission to Lehman Brothers Inc., 3
World Financial Center, New York, New York 10285, Attention:
Syndicate Department (Fax: 212-528-8822);
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set
forth in the Registration Statement, Attention: President (Fax:
_________);
(c) if to the Adviser, shall be delivered or sent by mail,
telex or facsimile transmission to Lehman Brothers Global Asset
Management Limited, Two Broadgate, London EC2M 7HA, England,
Attention: President (Fax: _________);
provided, however, that any notice to an U.S. Underwriter pursuant to Section
8(c) shall be delivered or sent by mail, telex or facsimile transmission to
such U.S. Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by
the Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement
given or made on behalf of the U.S. Underwriters by Lehman Brothers Inc. on
behalf of the Representatives.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the U.S. Underwriters, the
Company, the Adviser and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Company and the Adviser contained in this Agreement shall also be deemed to
be for the benefit of the person or persons, if any, who control any U.S.
Underwriter within the meaning of Section 15 of the Securities Act and (B) the
indemnity agreement of the U.S. Underwriters contained in Section 8(b) of this
Agreement shall be deemed to be for the benefit of directors of the Company,
officers of the Company or the Adviser who have signed the Registration
Statement and any person controlling the Company within the meaning of Section
15 of the Securities Act. Nothing in this Agreement is intended or shall be
construed to give any person,
28
<PAGE> 29
other than the persons referred to in this Section 13, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
14. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Adviser and the U.S. Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
U.S. Stock and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person controlling any
of them.
15. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the NYSE
is open for trading and (b) "subsidiary" has the meaning set forth in Rule 405
of the Rules and Regulations.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF NEW YORK.
17. Consent to Jurisdiction. EACH OF THE PARTIES HERETO CONSENTS TO
THE JURISDICTION OF AND VENUE IN FEDERAL AND STATE COURTS LOCATED IN THE
BOROUGH OF MANHATTAN, CITY AND STATE OF NEW YORK, OVER ANY SUIT, ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT. EACH OF THE PARTIES HEREBY
IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY SUCH COURT AND
HEREBY FURTHER WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
18. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
19. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
29
<PAGE> 30
If the foregoing correctly sets forth the agreement among the Company,
the Adviser and the U.S. Underwriters, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
LEHMAN BROTHERS LATIN AMERICA
GROWTH FUND, INC.
By: __________________________
Title:
LEHMAN BROTHERS GLOBAL ASSET
MANAGEMENT LIMITED
By: __________________________
Title:
30
<PAGE> 31
Accepted:
LEHMAN BROTHERS INC.
THE NIKKO SECURITIES CO. INTERNATIONAL, INC.
ADVEST, INC.
DAIN BOSWORTH INCORPORATED
FAHNESTOCK & CO. INC.
FIRST OF MICHIGAN CORPORATION
PRINCIPAL FINANCIAL SECURITIES, INC.
RAUSCHER PIERCE REFSNES, INC.,
For themselves and as Representatives
of the several Underwriters named in
Schedule 1 hereto
By: LEHMAN BROTHERS INC.
By: ______________________________
Authorized Representative
31
<PAGE> 32
SCHEDULE 1
<TABLE>
<CAPTION>
Number of
U.S. Underwriters Shares
----------------- ---------
<S> <C>
LEHMAN BROTHERS INC
THE NIKKO SECURITIES CO. INTERNATIONAL, INC.
ADVEST, INC.
DAIN BOSWORTH INCORPORATED
FAHNESTOCK & CO. INC.
FIRST OF MICHIGAN CORPORATION
PRINCIPAL FINANCIAL SECURITIES, INC.
RAUSCHER PIERCE REFSNES, INC.,
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
=========
</TABLE>
1
<PAGE> 1
EXHIBIT (h)(B)
SHEARSON LEHMAN BROTHERS INC.
AGREEMENT AMONG UNDERWRITERS
BASIC PROVISIONS FOR OFFERINGS OF SECURITIES
May 15, 1985
These basic provisions (the "Basic Provisions") set forth the general terms
and conditions pursuant to which the several Underwriters will agree among
themselves with reference to proposed purchases severally of Securities (the
"Securities) referred to in an underwriting agreement (the "Underwriting
Agreement") to be executed by the issuer of such Securities (the "Company") and
the selling securityholders, if any (the "Selling Securityholders").
1. UNDERWRITING ARRANGEMENTS. (a) From time to time, in connection with
public offerings of the Securities by Underwriters to be represented by Shearson
Lehman Brothers Inc., either alone or with one or more other firms (the
"Representatives"), the Representatives may invite one or more Underwriters to
become a member of an underwriting syndicate on the terms and conditions set
forth herein, which shall be deemed to include the terms and conditions set
forth in (i) any letter, wire, telex or other written communication or telephone
call (confirmed immediately in writing) to prospective Underwriters in
connection with an invitation to become a member of an underwriting syndicate
(the "Invitation Telex") and (ii) any letter, wire, telex or other written
communication or telephone call (confirmed immediately in writing) to
Underwriters in connection with the terms of any particular public offering of
Securities (the "Terms Telex"), provided that the terms and conditions set forth
herein and therein shall be applicable only to public offerings with respect to
which Shearson Lehman Brothers Inc. has expressly informed Underwriters that
such terms and conditions shall be applicable. Under certain circumstances the
Invitation Telex and the Terms Telex may be combined in a single communication,
in which case any reference herein to either the Invitation Telex or the Terms
Telex shall refer to such single communication. Any Invitation Telex, the Terms
Telex and these Basic Provisions are together referred to herein as this
"Agreement".
(b) The Terms Telex specifies, with respect to the Underwriter to whom such
Terms Telex is addressed. (i) the amount of the Securities to be purchased by
such Underwriter, the purchase price to be paid by such Underwriter for the
Securities, (ii) the public offering price of the Securities or, if the initial
public offering price is to be determined by a formula based on market prices,
the terms of the formula, (iii) the interest rate, if any, (iv) the selling
concession, if any, to be allowed to Selected Dealers (as defined in Section
5(c) hereof), (v) the amount of any reallowance to other dealers, (vi) the
Representatives' compensation for managing the offering, (vii) certain
information with respect to the Trustee, if any, and (viii) other matters,
including whether the Underwriting Agreement provides the Underwriters with an
option to purchase additional Securities (the "Option Securities") to cover
over-allotments and whether the Underwriters are authorized to solicit
institutional investors to purchase Securities pursuant to Delayed Delivery
Contracts, certain terms thereof and the Underwriters' compensation therefor.
(c) By its acceptance by telegram, telex, Graphic Scanning or telephone
call (confirmed immediately in writing) of the Invitation Telex or the Terms
Telex, as the case may be, in accordance with the terms thereof and its
acceptance of an allotment of Securities as set forth in the Terms Telex, each
Underwriter agrees that it will purchase, on the terms and conditions set forth
in the Underwriting Agreement, in the Invitation Telex, if any, in the Terms
Telex, in the Prospectus referred to below and herein, the amount of such
Securities set forth in the Underwriting Agreement to be purchased by it.
(d) If acceptance of an Invitation Telex has been received, the Terms Telex
may state that an Underwriter will be deemed to have accepted an allotment of
Securities unless the Syndicate Department of Shearson Lehman Brothers Inc.
receives a telegram, telex or Graphic Scanning prior to the
<PAGE> 2
time specified in the Terms Telex giving notice of such Underwriter's rejection
of its allotment of Securities. Notwithstanding the foregoing, in certain
instances the Representatives may notify the Underwriters that no affirmative
acceptance to either any Invitation Telex or the Terms Telex may be required.
In such case, an Underwriter will be deemed to have accepted an allotment of
Securities unless the Syndicate Department of Shearson Lehman Brothers Inc.
receives a telegram, telex or Graphic Scanning prior to the time specified in
the Terms Telex giving notice of such Underwriter's rejection of its allotment
of Securities.
2. REGISTRATION STATEMENT AND PROSPECTUS. As used in this Agreement, the
term "Registration Statement" means the registration statement, as amended,
filed with respect to the Securities under the Securities Act of 1933 (the
"Act"), and the terms "Preliminary Prospectus" and "Prospectus" mean any
preliminary prospectus and the prospectus (including any basic prospectus and
prospectus supplement and any documents incorporated by reference) authorized
for use in connection with the offering of the Securities. A conformed copy of
the Registration Statement (excluding exhibits other than the Underwriting
Agreement, any indenture covering the Securities, any computation of the ratio
of earnings to fixed charges, and any computation of per share earnings) and
such number of copies of each Prospectus (and any documents incorporated by
reference in any Prospectus) as may be requested by any Underwriter will be
delivered to it. Each Underwriter hereby consents to being named in any
Prospectus as an underwriter of the amount of Securities specified in the Terms
Telex addressed to such Underwriter.
3. AUTHORITY OF THE REPRESENTATIVES. (a) Each Underwriter authorizes the
Representatives, on such Underwriter's behalf, to negotiate in their discretion
the terms of, and to execute and deliver, the Underwriting Agreement. Each
Underwriter also authorizes the Representatives to exercise, in their
discretion, all authority and discretion vested in the Underwriters or in the
Representatives by the Underwriting Agreement and to take all such action as the
Representatives may believe desirable in order to carry out the Underwriting
Agreement and this Agreement.
(b) Each Underwriter authorizes the Representatives to take such action as,
in their discretion, may be necessary or desirable to effect the sale and
distribution of the Securities, including the right to determine and advise the
Company and Selling Securityholders, if any, of the terms of any proposed
offering, the selling concession to Selected Dealers and the reallowance, if
any, to other dealers. Each Underwriter also authorizes the Representatives to
determine all matters relating to the public advertisement of the offering of
the Securities.
(c) Any action to be taken by the Representatives under this Agreement may
be taken by Shearson Lehman Brothers Inc.
4. AUTHORITY OF THE REPRESENTATIVES AS TO WITHDRAWING OR DEFAULTING
UNDERWRITER. (a) Until the termination of this Agreement, the Representatives
are authorized to arrange for or agree to the purchase by other persons, who may
include the Representatives and any of the other Underwriters, of any Securities
not taken up by any withdrawing or defaulting Underwriter. In the event that
such arrangements or agreements are made, the respective amounts of the
Securities to be purchased by the other Underwriters and by such other persons,
if any, shall be taken as the basis for all rights and obligations under this
Agreement; but this shall not in any way affect the liability of any defaulting
Underwriter to the other Underwriters (including the Representatives) for
damages resulting from such default, nor shall such default in any way relieve
any other Underwriter of any of its obligations hereunder or under the
Underwriting Agreement, except as herein or therein provided.
(b) In the event of default by one or more Underwriters in respect of its
obligations under this Agreement, including the obligations to take up and pay
for any Securities or Stabilized Securities (as defined in Section 9(a) hereof)
purchased by the Representatives for their respective accounts pursuant to
Section 9 thereof, or to deliver any Securities sold or over-allotted by the
Representatives for their account pursuant to such Section, and to the extent
that arrangements shall not have been made by the
2
<PAGE> 3
Representatives for any person to assume the obligations of such defaulting
Underwriter, each non-defaulting Underwriter shall assume its proportionate
share of the obligations of each defaulting Underwriter without relieving any
such defaulting Underwriter of its liability therefor.
5. OFFERING OF THE SECURITIES. (a) The Representatives will notify each
Underwriter when the initial public offering of the Securities (subject to
reservation by the Representatives as herein provided) is to be made. The
Representatives are authorized, in their discretion, after the initial public
offering, to change the public offering price, the selling concession to
Selected Dealers and the reallowance to other dealers. The offering price at
any time in effect is hereinafter referred to as the "public offering price".
Each Underwriter agrees to make, at the initial public offering price, a
public offering of the Securities purchased by it and not reserved by the
Representatives for sale to retail purchasers and dealers.
(b) Each Underwriter agrees that all arrangements for the solicitation of
offers to purchase the Securities under Delayed Delivery Contracts, if such
contracts are authorized pursuant to the Underwriting Agreement, will be made
only through the Representatives, and each Underwriter authorizes the
Representatives to act on its behalf in making such arrangements for the
accounts of all Underwriters or of less than all Underwriters and in such
proportions as the Representatives may determine, in their discretion. Any fee
payable to the Representatives for the accounts of the Underwriters under the
Underwriting Agreement with respect to arranging sales of Securities pursuant to
Delayed Delivery Contracts shall be credited to the accounts of the
Underwriters.
(c) Each Underwriter authorizes the Representatives to reserve and offer
for sale such of the Securities to be purchased by such Underwriter pursuant to
the Underwriting Agreement or for its account under any of the provisions of
this Agreement as the Representatives shall determine (i) to retail purchasers
and (ii) to dealers to be selected by the Representatives (the "Selected
Dealers") (A) who are members of the National Association of Securities Dealers,
Inc. (the "NASD") and who will agree to comply with the requirements of Section
24 of Article III of the Rules of Fair Practice of the NASD or (B) who are
foreign dealers not eligible for membership in the NASD and who will agree (I)
not to make any sales of the Securities in, or to nationals or residents of, the
United States, its territories or its possessions and (II) in making any sales
of the Securities to comply, as though such foreign dealers were members of the
NASD, with (x) the interpretation of the Board of Governors of the NASD entitled
"Free-Riding and Withholding", (y) the requirements of Sections 8, 24 and 36 of
Article III of the Rules of Fair Practice of the NASD and (z) to the extent
applicable to such foreign dealers, the requirements of Section 25 of such
Article III. The sales referred to in clause (i) shall be made at the public
offering price, and the sales referred to in clause (ii) shall be made at the
public offering price less the selling concession to Selected Dealers. The
Representatives may arrange for any Underwriter, including the Representatives,
to become one of such Selected Dealers, and each Underwriter agrees that it will
not offer any of the Securities for sale at a price below the public offering
price or allow any concession therefrom except as herein otherwise provided.
Sales made by the Representatives for the account of each Underwriter to
Selected Dealers will be as nearly as practicable in the ratio which the amount
of the Securities so reserved for the account of such Underwriter bears to the
aggregate amount of the Securities so reserved for the account of all
Underwriters.
(d) Any such public offering may be made by the Representatives pursuant to
the terms and conditions of selling agreements or otherwise, as the
Representatives determine. Each Underwriter authorizes the Representatives to
determine the form and manner of any selling agreements or other communications
with Selected Dealers and, in the event there shall be any such selling
agreements, each Underwriter agrees to be governed by the terms and conditions
of such agreements.
(e) The Representatives, as such, may make purchases and sales of the
Securities from or to any Underwriter or Selected Dealer at the public offering
price less all or any part of the selling concession to Selected Dealers
specified in the Terms Telex. With the Representatives' consent, any Underwriter
may make purchases or sales of the Securities from or to any Underwriter or
Selected Dealer at the public offering price less all or any part of such
selling concession to Selected Dealers.
3
<PAGE> 4
(f) The Representatives will notify each Underwriter promptly upon the
release of the public offering of the Securities as to the amount of the
Securities reserved for sale to retail purchasers and Selected Dealers, and the
amount of the Securities not so reserved. Any of the Securities not so reserved
may be sold by each Underwriter for its own account. Each Underwriter agrees,
upon the Representatives' request, at any time or times prior to the termination
of this Agreement with respect to the Securities, to report to the
Representatives as to the amount of the Securities not so reserved which then
remain unsold by it and the Representatives may, in their discretion, add to the
Securities reserved for sale to retail purchasers and Selected Dealers any such
unsold Securities.
(g) If all the Securities so reserved are not promptly sold by the
Representatives, any Underwriter may from time to time, with the
Representatives' consent, obtain a release of all or any Securities of such
Underwriter then remaining unsold, and Securities so released shall thereafter
be deemed not to have been reserved. Securities of any Underwriters so reserved
which remain unsold or if sold have not been paid for at any time prior to the
termination of this Agreement with respect to the Securities may, in the
Representatives' discretion or upon the request of such Underwriter, be
delivered to such Underwriter for carrying purposes only, but such Securities
shall remain subject to disposition by the Representatives, in their discretion,
until this Agreement is terminated. If the aggregate amount of the Securities so
reserved upon termination of this Agreement does not exceed 20% of the total
amount of the Securities, the Representatives may, in their discretion, sell for
the accounts of the several Underwriters all or any Securities so reserved, at
such prices, on such terms and in such manner as the Representatives may
determine.
(h) The Representatives may, in their discretion, charge the account of any
Underwriter with an amount equal to the selling concession to Selected Dealers
(plus any broker's commissions and transfer taxes) with respect to Securities
purchased by such Underwriter, or purchased for their account, and not sold to
retail purchasers or Selected Dealers for their account by the Representatives,
which, prior to the termination of this Agreement, the Representatives may
purchase or contract to purchase, in the open market or otherwise, pursuant to
this Agreement, for the account of any Underwriter, or which may be delivered
against contracts made prior to the termination of this Agreement; or in lieu
thereof require such Underwriter to repurchase on demand at the total cost
thereof (including commissions and taxes) any of such Securities so purchased or
contracted to be purchased. Securities delivered on such repurchases need not be
the identical Securities originally purchased. In lieu of so charging the
account of any Underwriter or delivering such Securities to any Underwriter
obligated to repurchase the same as aforesaid, the Representatives may, in their
discretion, sell the same for the account of such Underwriter, publicly or
privately, without notice, at such prices and upon such terms and to such
persons, including any of the several Underwriters, as the Representatives may
determine, charging to the Underwriters so obligated the amount of any loss and
expense or crediting to such Underwriter the amount of any profit less any
expense resulting from such sale.
6. COMPENSATION TO REPRESENTATIVES. As compensation for the
Representatives' services, each Underwriter agrees to pay the Representatives a
management fee as specified in the Terms Telex (without reduction for any
Securities to be delivered pursuant to any Delayed Delivery Contracts). Such
compensation shall be treated as an expense of each Underwriter and shall be
charged to its account on the books of the Representatives.
7. PAYMENT AND DELIVERY. (a) At or before 9:00 A.M., New York City time,
on the date on which the Underwriters are required to purchase Securities, each
Underwriter agrees to deliver to the Representatives at the office of Shearson
Lehman Brothers Inc., One Western Union International Plaza (Cashiers'
Department--17th Floor), New York, N.Y. 10004, or such other address as the
Underwriter may be notified by the Representatives, a certified or official bank
check payable in New York Clearing House funds or, if specified in the Terms
Telex, immediately available funds to the order of Shearson Lehman Brothers Inc.
for an amount equal to the initial public offering price less the selling
concession to Selected Dealers for the Securities to be purchased by such
Underwriter pursuant to the
4
<PAGE> 5
Underwriting Agreement. The Representatives may, however, advance funds
(to the extent permitted by law) in respect of Securities which have been sold
or reserved for sale to retail purchasers or Selected Dealers for the account
of any Underwriter. Each Underwriter authorizes the Representatives to make
payment to the Company and the Selling Securityholders, if any, for the
Securities to be purchased by such Underwriter against delivery to the
Representatives of certificates for such Securities for the account of such
Underwriter. Unless notified at least three full business days prior to the
date of delivery to make other arrangements, the Representatives may, in their
discretion, advise the Company and the Selling Securityholders to prepare each
Underwriter's certificates for the Securities to be purchased by it in the name
of such Underwriter (or in such other name as the Representatives shall
designate, but such other name shall be for administrative convenience only and
shall not affect such Underwriter's title to such Securities or the several
nature of the obligations of the Underwriters hereunder) in such denominations
as the Representatives may determine. The Representatives will give each
Underwriter notice of the date of delivery.
(b) Each Underwriter authorizes the Representatives to hold and deliver
against payment the Securities purchased by such Underwriter or for its account
which have been sold or reserved for sale to retail purchasers or Selected
Dealers, and agrees to endorse such Securities in blank or to deliver to the
Representatives upon their request appropriate powers executed in blank. The
Representatives will remit promptly to each Underwriter an amount equivalent to
the purchase price paid by such Underwriter, and not advanced or borrowed by the
Representatives for securities sold for such Underwriter's account to retail
purchasers or Selected Dealers and for which payment has been received. The
Representatives agree that Securities not sold or reserved by them as aforesaid
will be available for delivery to each Underwriter at the office of Shearson
Lehman Brothers Inc., One Western Union International Plaza (Cashiers'
Department--17th Floor), New York, N.Y. 10004, or such other address as the
Underwriter may be notified by the Representatives, as soon as practicable after
such Securities have been delivered to the Representatives.
(c) If an Underwriter is a member of, or clears through a member of, The
Depository Trust Company ("DTC"), the Representatives may, in their discretion,
deliver such Underwriter's Securities through the facilities of DTC.
8. AUTHORITY TO BORROW. The Representatives are hereby authorized (to the
extent permitted by law) to arrange such loans for the account of one or more of
the Underwriters, severally and not jointly, to execute and deliver any notes or
other instruments in connection therewith, and to pledge as security therefor
all or any part of the Securities as the Representatives may deem necessary or
advisable to carry out the purchase, carrying and distribution of the
Securities, and to advance their own funds, in their individual capacities,
charging current interest rates. Any lending bank is hereby authorized to rely
upon instructions of the Representatives in all matters relating to any such
loan. The Representatives may deliver to any Underwriter for carrying purposes
such Securities, or any part thereof, which Securities will be redelivered to
the Representatives on demand.
9. OVER-ALLOTMENTS AND STABILIZATION. (a) The Representatives may, for the
account of each Underwriter, until the termination of this Agreement of earlier
surrender of this authorization, (i) over-allot in arranging for sales of the
Securities to retail purchasers and Selected Dealers, and purchase Securities at
such prices as the Representatives may determine for the purpose of covering
such over-allotments, and (ii) for the purpose of stabilizing the market in the
Securities, make purchases and sales of Securities or other securities of the
Company which the Representatives may designate for purchase or sale in
stabilizing transactions ("Stabilized Securities"), for long or short account,
on a when-issued basis or otherwise, at such prices, in such amounts and in such
manner as the Representatives may determine; provided that at no time shall the
net dollar commitment of any Underwriter either for long or short account, under
this Section 9, exceed (except as otherwise provided in Section 4(b) hereof) 15%
of the amount of the Securities (and the Option Securities, if any) which such
Underwriter is obligated to purchase pursuant to the Underwriting Agreement.
Such purchases, sales and over-
5
<PAGE> 6
allotments shall be made for the accounts of the several Underwriters as
nearly as practicable in proportion to the respective underwriting obligations
of such Underwriters. Each Underwriter agrees to take up at cost on demand any
Securities or Stabilized Securities so purchased for their account and to
deliver on demand any thereof so sold or any Securities so over-allotted for
their account.
(b) The Representatives may sell for the account of any Underwriter any
Securities or Stabilized Securities purchased pursuant to the provisions of this
Section 9 upon such terms as the Representatives may deem advisable and any
Underwriter, including the Representatives, may participate as a purchaser in
connection with any such sales. The Representatives shall have full
discretionary power to pay such commissions in connection with such purchases
and sales as they may deem proper and to charge the respective accounts of the
Underwriters commissions on purchases and sales effected by them.
(c) If stabilizing transactions are effected pursuant to the authorizations
contained in this Section 9. the Representatives shall effect such transactions
in accordance with the rules of the Securities and Exchange Commission (the
"Commission") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and each Underwriter agrees to furnish the Representatives with
the notification required by Rule 17a-2(d) promulgated by the Commission under
the Exchange Act. The Representatives will notify each Underwriter if they
effect any such transactions.
10. OPEN MARKET TRANSACTIONS. Each Underwriter agrees that, except as
herein otherwise provided, until the termination of this Agreement or until
notified by the Representatives prior thereto that such Underwriter is released
from this restriction, it will not buy, sell, deal or trade in the Securities or
Stabilized Securities or, if options to purchase Securities or common stock into
which Securities may be convertible ("Common Stock") are traded on any
securities exchange, buy any right or option to purchase Securities or Common
Stock for their own account or for the accounts of customers except on
unsolicited brokerage orders therefor received and executed in the ordinary
course of their brokerage business. Each Underwriter further agrees that it will
not lend any shares of Common Stock, either before or after the purchase of the
Securities, to any customer, Underwriter, Selected Dealer or to any other
securities broker or dealer. Each Underwriter represents that it has not
participated, since the date on which it was invited by the Representatives to
participate in the offering of Securities, in any transactions prohibited by the
foregoing provisions of this Section 10 and that it has at all times complied
with the provisions of Rule 10b-6 under the Exchange Act applicable to the
offering of the Securities.
11. ALLOCATION OF EXPENSES. Each Underwriter authorizes the
Representatives to charge against such Underwriter's account any and all
expenses incurred by the Representatives, as such, in connection with the
purchase, carrying, offering, sale and distribution of the Securities for the
account of such Underwriter. All expenses of a general nature paid by the
Representatives in connection with the purchase and sale of the Securities shall
be borne by the Underwriters in proportion to the amount of the Securities which
each Underwriter is obligated to purchase pursuant to the Underwriting
Agreement, except that any transfer taxes payable by reason of sales by the
Underwriters shall be charged to the accounts of the respective Underwriters
only to the extent that sales of Securities or Stabilized Securities are made
for such Underwriter's account. In the event of the default of any Underwriter
in carrying out its obligations under this Agreement, the expenses chargeable to
such Underwriter pursuant to this Agreement and not paid by it, as well as any
additional losses or expenses arising from such default, may be charged against
the other Underwriters not so defaulting in proportion to the respective amounts
of Securities which such other Underwriters are obligated to purchase pursuant
to the Underwriting Agreement, without, however, relieving such Underwriter from
its liability therefor. The Representatives' ascertainment of all expenses and
the apportionment thereof shall be conclusive.
12. TERMINATION. This Agreement will terminate at the close of business on
the fifth full day after the date of the Terms Telex unless prior thereto the
Underwriting Agreement shall have been executed and delivered and shall have
become effective, in which event: (a) if there shall be an offering to
6
<PAGE> 7
Selected Dealers pursuant to the terms of selling agreements, this Agreement
will terminate at the close of business on the fifteenth day after
the termination of the selling agreements, or at such earlier date, not
earlier than the termination of the selling agreements, as the Representatives
may determine, but may be extended for a further period not exceeding thirty
days with the consent of the Underwriters (including the Representatives) who
have agreed to purchase in the aggregate 50% or more of the total amount of
the Securities; or (b) if there shall be no such offering to Selected Dealers,
this Agreement will terminate at the close of business on the thirtieth day
after payment by the Underwriters for the Securities, or at such earlier date
as the Representatives may determine. Notwithstanding any settlement of
accounts under this Agreement, each Underwriter agrees to pay its proportionate
share (based on its final total obligation to purchase Securities pursuant to
the Underwriting Agreement) of the amount of any claim, demand or liability
which may be asserted against and discharged by the Underwriters, or any of
them, based on the claim that the Underwriters constitute an association,
unincorporated business or other entity, and also to pay a like proportionate
share of any transfer taxes which may be assessed after such settlement and of
the expenses incurred by the Underwriters, or any of them, and approved by the
Representatives, in contesting any such claim, demand, liability or tax.
13. POSITION OF REPRESENTATIVES. (a) Except as otherwise specifically
provided in this Agreement, the Representatives shall have full authority to
take such action as they may deem necessary or advisable in respect of all
matters pertaining to the Underwriting Agreement and this Agreement in
connection with the purchase, carrying, offering, sale, distribution and
advertising of the Securities, but they shall not be under any liability
whatsoever to any of the Underwriters except such as may be incurred under the
Act and except for want of good faith and for the obligations expressly assumed
by them in this Agreement. No obligations not expressly assumed by the
Representatives in this Agreement shall be implied hereby or inferred from this
Agreement. Authority with respect to matters to be determined by the
Representatives or by the Representatives, the Company and the Selling
Securityholders, if any, pursuant to the terms of the Underwriting Agreement
shall survive the termination of this Agreement. Nothing herein contained shall
constitute the several Underwriters an association, or partners with the
Representatives or with each other, or, except as in this Agreement expressly
provided, render any Underwriter liable for the obligation of any other
Underwriter, and the rights, obligations and liabilities of each of the
Underwriters are several, in accordance with their respective obligations, and
not joint. If the Underwriters, among themselves or with the Selected Dealers,
are deemed to constitute a partnership for Federal income tax purposes, it is
the intent of each Underwriter to be excluded from the application of
Subchapter K, Chapter I, Subtitle A, of the Internal Revenue Code of 1954, as
amended. Each Underwriter elects to be so excluded and agrees not to take any
position inconsistent with such election. Each Underwriter authorizes the
Representatives, in their discretion, to execute and file on behalf of the
Underwriters such evidence of election as may be required by the Internal
Revenue Service.
(b) The Representatives shall be under no duty to account for any interest
on funds of any of the Underwriters at any time in their hands, and such funds
may be held by the Representatives unsegregated from their general funds.
14. INDEMNIFICATION AND FUTURE CLAIMS. (a) Each Underwriter agrees to
indemnify and hold harmless each other Underwriter, and each person, if any, who
controls any such other Underwriter within the meaning of Section 15 of the Act,
to the extent and upon the terms that such Underwriter will agree to indemnify,
hold harmless and reimburse the Company and the Selling Securityholders, if any,
as set forth in the Underwriting Agreement.
(b) In the event that at any time any claim or claims shall be asserted
against the Representatives, as such, or shall otherwise involve the
Underwriters generally, or relate to any Preliminary Prospectus, any Prospectus,
the Registration Statement, the public offering of the Securities, or any of the
transactions contemplated by this Agreement, each Underwriter authorizes the
Representatives to make such investigation, to retain such counsel and to take
such other action as the Representatives
7
<PAGE> 8
shall deem necessary or desirable under the circumstances, including settlement
of any such claim or claims if such course of action shall be recommended by
counsel retained by them. Each Underwriter agrees to pay to the
Representatives, on request, such Underwriter's proportionate share (based on
their final total obligations to purchase Securities pursuant to the
Underwriting Agreement) of all expenses incurred by the Representatives
(including, but not limited to, the fees and disbursements of counsel retained
by them) in investigating and defending against such claim or claims, and their
proportionate share of any liability incurred by the Representatives in respect
of such claim or claims, whether such liability shall be the result of a
judgment against the Representatives or as a result of any such settlement. A
claim against or liability incurred by a person who controls an Underwriter
within the meaning of Section 15 of the Act shall be deemed to have been made
against or incurred by such Underwriter.
(c) The foregoing indemnity agreement shall survive the termination of this
Agreement, and shall remain in full force and effect regardless of any
investigation made by or on behalf of such other Underwriter or controlling
person.
15. TITLE TO SECURITIES. The Securities and Stabilized Securities
purchased by or for the account of each Underwriter pursuant to this Agreement
or the Underwriting Agreement shall remain the property of such Underwriter
until sold, and no title to any such Securities or Stabilized Securities shall
in any event pass to the Representatives, as such, by virtue of any of the
provisions of this Agreement.
16. BLUE SKY MATTERS. It is understood that the Representatives assume no
obligation or responsibility with respect to the right of any Underwriter or
other person to sell the Securities in any jurisdiction, notwithstanding any
information which the Representatives may furnish as to the jurisdictions under
the securities laws of which it is believed the Securities may be sold.
17. NASD MEMBERSHIP. The Representatives represent that they are members
in good standing of the NASD and each Underwriter represents that it is neither
(a) a member in good standing of the NASD or (b) a foreign dealer not eligible
for membership in the NASD, in which event such Underwriter agrees that it will
not sell any of the Securities in, or to nationals or residents of, the United
States, its territories or its possessions, except as required by the Sections
5(c), 5(e), 5(f) and 9 hereof, and that in making any sales of the Securities it
will comply, as though it were a member of the NASD, with (i) the interpretation
of the Board of Governors of the NASD entitled "Free-Riding and Withholding,"
(ii) the requirements of Sections 8, 24 and 36 of Article III of the Rules of
Fair Practice of the NASD and (iii) to the extent applicable to it, the
requirements of Section 25 of such Article III.
18. UNDERWRITERS' QUESTIONNAIRE. Each Underwriter represents and warrants
to the Representatives, the Company and the Selling Securityholders, if any,
that the statements made in the Underwriters' Questionnaire attached as Schedule
A are (except as otherwise disclosed in writing to the Representatives) true,
correct and complete as of the date of the Terms Telex.
19. CERTAIN AGREEMENTS OF THE UNDERWRITERS. Each Underwriter agrees that:
(a) Such Underwriter will notify the Representatives immediately if
any of the representations of such Underwriter contained in this Agreement
cease to be accurate;
(b) If, immediately prior to the filing of the Registration Statement,
the Company was not subject to the requirements of Section 13(a) or 15(d)
of the Exchange Act, such Underwriter (i) will not sell any Securities to
any account over which it exercises discretionary authority and (ii)
confirms that (A) it is familiar with Release No. 4968 under the Act and
Rule 15c2-8 under the Exchange Act relating to the distribution of
prospectuses for securities of an issuer which is not subject to the
reporting requirements of Section 13(a) or 15(d) of the Exchange Act. (B)
copies of each Preliminary Prospectus have been or will be distributed to
all persons to whom it expects to mail confirmations of sales. (C) such
distribution will be made not less than 48 hours prior to the time that is
expected such confirmations will be mailed. (D) such distribution will be
either made
8
<PAGE> 9
by air mail if the confirmations are to be sent by air mail, or
by such other means of delivery as shall assure that such Preliminary
Prospectuses will be received not less than 48 hours prior to the time
confirmations are received and (E) such Underwriter will otherwise comply
with said Release; and
(c) Such Underwriter will (i) delivery Preliminary Prospectuses.
Prospectuses and other reports required to be delivered under the Act, the
Exchange Act and the rules and regulations under such Acts, including
without limitation Rule 15c2-8 under the Exchange Act, (ii) keep an
accurate record of the names and addresses of all persons to whom it
delivers copies of the Registration Statement, any amendment thereto or any
Preliminary Prospectus or any document incorporated therein by reference,
(iii) upon the request of the Representatives, furnish promptly to the
persons who received copies of the foregoing documents, any subsequent
amendment, revised Preliminary Prospectus, Prospectus, document
incorporated by reference or any memorandum furnished to the undersigned
outlining changes in the Registration Statement or any Preliminary
Prospectus and (iv) deliver a copy of each Prospectus to each person who
purchases any of the Securities from it.
20. NOTICES. Any notice from the Representatives to any Underwriter shall
be deemed to have been duly given if mailed, telephoned (and confirmed in
writing) or telegraphed to such Underwriter at the address set forth in the
Terms Telex to such Underwriter. Any notice from any Underwriter to the
Representatives shall be deemed to have been duly given if mailed, telephoned
(and confirmed in writing) or telegraphed to Shearson Lehman Brothers Inc., 55
Water Street, New York, N.Y. 10041. Attention: Syndicate Department (or to such
other address as the Underwriter may be notified by the Representatives).
21. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of New York, without giving effect to the choice of law
or conflicts of laws principles thereof.
9
<PAGE> 10
SCHEDULE A
UNDERWRITERS' QUESTIONNAIRE
In connection with each offering of Securities to which this Agreement
relates, except as disclosed to the Representatives in writing, each Underwriter
advises the Representatives as follows and authorizes the Representatives to use
the information furnished in response to this Underwriters' Questionnaire in the
Registration Statement relating to the Securities:
(a) Neither such Underwriter nor any of its directors, officers or
partners, individually or as a part of a "group" (as that terms is used in
Section 13(d)(3) of the Exchange Act), (i) has a "material" relationship
(as defined in Rule 405 under the Act) with the Company or any Selling
Securityholder or (ii) is a director, officer or holder (of record or
beneficially) of 5% or more of any class of voting securities of the
Company or any Selling Securityholder;
(b) With reference to the Interpretation of the Board of Governors of
the NASD with respect to the Review of Corporate Financing, neither such
Underwriter nor any of its "related persons" (as defined by the NASD) (i)
has purchased or otherwise acquired from the Company any warrants, options
or other securities of the Company within 18 months prior to the date that
the Registration Statement was initially filed or subsequent to that date,
and there are no existing arrangements for any such purchase or (ii) has
had any dealings with the Company (except those with respect to the
Underwriting Agreement) or any "affiliate" of the Company (as defined in
Rule 405 under the Act) as to which documents or other information are
required to be furnished to the NASD pursuant to such Interpretation;
(c) Other than as may be stated in the Registration Statement, any
Prospectus, this Agreement, the Underwriting Agreement or any selling
agreements, such Underwriter does not know of any discounts or commissions,
including any cash, securities, contract or other consideration to be
received by any dealer in connection with the sale of the Securities, or of
any intention to over-allot the Securities or to stabilize the price of any
security to facilitate the offering of the Securities;
(d) If the Securities are to be issued pursuant to a trust indenture,
such Underwriter is not in control of, controlled by, or under common
control with the Trustee, any other trustee under a trust indenture
relating to securities of the Company and qualified under the Trust
Indenture Act of 1939 (an "Other Trustee") or any of their respective
affiliates, and none of said companies or affiliates, or any of their
respective directors or executive officers, is a director, officer,
partner, employee, appointee or representative of such Underwriter;
(e) If the Securities are to be issued pursuant to a trust indenture,
such Underwriter and its directors, executive officers and partners, taken
as a group, did not, on the date of the Trustee's Statement of Eligibility
and Qualification on Form T-1, own beneficially more than 1% of the
outstanding voting securities of the Trustee, the Trustee's parent, any
Other Trustee or the parent of any Other Trustee;
(f) If the Registration Statement is on Form S-1, such Underwriter has
not prepared or had prepared for it within the past 12 months any
engineering, management or similar report or memorandum relating to the
broad aspects of the business, operations or products of the Company,
except for reports solely comprised of recommendations to buy, sell or hold
the Company's securities, unless such recommendations have changed within
the past six months;
(g) If the Registration Statement is on either Form S-2 or Form S-3,
such Underwriter has not prepared any report or memorandum for external use
by it or by the Company in connection with the proposed offering of the
Securities;
(h) Such Underwriter's proposed commitment to purchase Securities will
not result in a violation by it of the financial responsibility
requirements of Rule 15c3-1 under the Exchange Act;
(i) Such Underwriter is familiar with the rules, regulations and
releases of the Commission dealing with the dissemination of information
prior to and during registration and has not distributed nor will it
distribute any written information outside of its organization relating to
the Company or its securities other than in accordance with such rules,
regulations and releases; and
(j) If the company is a "public utility", such Underwriter is not a
"holding company" or a "subsidiary company" or an "affiliate" of a "holding
company" or of a "public utility," each as defined in the Public Utility
Holding Company Act of 1935.
<PAGE> 1
EXHIBIT (h)(C)
SHEARSON LEHMAN BROTHERS INC.
MASTER DEALERS AGREEMENT
BASIC PROVISIONS FOR OFFERINGS OF SECURITIES
November 5, 1985
These basic provisions (the "Basic Provisions") set forth the general terms
and conditions pursuant to which, in connection with a proposed underwritten
public offering of securities (the "Securities"), a portion of the Securities
will be offered to certain selected dealers (the "Selected Dealers").
1. SELLING GROUP ARRANGEMENTS. (a) From time to time, in connection with
certain public offerings of the Securities by underwriters (the "Underwriters")
to be represented by Shearson Lehman Brothers Inc., either alone or with one or
more other firms (the "Representatives"), the Representatives may offer one or
more Selected Dealers the right to purchase as principal a portion of the
Securities being distributed in the offering (the "Offering") on the terms and
conditions set forth herein, which shall be deemed to include the terms and
conditions set forth in any letter, wire, telex or other written communication
or telephone call (confirmed immediately in writing) sent or made to prospective
Selected Dealers in connection with the terms of any particular public offering
of Securities (the "Terms Telex"), provided that the terms and conditions set
forth herein and therein shall be applicable only to public offerings with
respect to which Shearson Lehman Brothers Inc. has expressly informed Selected
Dealers that such terms and conditions shall be applicable. The Terms Telex and
these Basic Provisions are together referred to herein as this "Agreement".
(b) The Terms Telex specifies, with respect to the Selected Dealer to whom
such Terms Telex is addressed, (i) the amount of the Securities to be allotted
to such Selected Dealer, (ii) the purchase price to be paid by such Selected
Dealer for the Securities, (iii) the public offering price of the Securities,
or, if the initial public offering price is to be determined by a formula based
on market prices, the terms of the formula, (iv) the interest rate, if any, (v)
the selling concession, if any, to be allowed to Selected Dealers, (vi) the
amount of any reallowance to other dealers and (vii) other matters, including
whether the Underwriters have the option to purchase additional Securities to
cover over-allotments and whether the Underwriters are authorized to solicit
institutional investors to purchase Securities pursuant to Delayed Delivery
Contracts, certain terms thereof and the compensation therefor.
(c) By its acceptance of this Agreement by telegram, telex, Graphic
Scanning or telephone call (confirmed immediately in writing) in accordance with
the terms hereof and its acceptance of an allotment of Securities as set forth
in the Terms Telex, each Selected Dealer agrees that it will purchase, on the
terms and conditions set forth in the Terms Telex, herein and in the Prospectus
referred to below, the amount of such Securities allotted to it. Acceptance of
any reserved Securities received after the time specified therefor in the Terms
Telex and any application for additional Securities will be subject to rejection
in whole or in part. Subscription books may be closed by the Representatives at
any time in the Representatives' discretion without notice and the right is
reserved to reject any subscription in whole or in part, but notification of
allotments against and rejections of subscriptions will be made as promptly as
practicable.
2. REGISTRATION STATEMENT AND PROSPECTUS. (a) As used in this Agreement,
the term "Registration Statement" means the registration statement, as amended,
filed with respect to the Securities under the Securities Act of 1933 (the
"Act"), and the terms "Preliminary Prospectus" and "Prospectus" mean any
preliminary prospectus and the prospectus (including any basic prospectus and
prospectus supplement and any documents incorporated by reference) authorized
for use in connection with the offering of the Securities. Such number of copies
of each Prospectus (and any documents incorporated by reference in any
Prospectus) as may reasonably be requested by any Selected Dealer will be
delivered to it.
<PAGE> 2
(b) The Underwriters named in the Prospectus have severally agreed, subject
to the terms and conditions of the Underwriting Agreement referred to therein,
to purchase from the issuer (the "Company") or the seller of the Securities
named in the Prospectus, the securities described in the Prospectus. The
Securities are more particularly described in the Prospectus.
3. ROLE OF REPRESENTATIVES. The Representatives are acting as
representatives of each of the Underwriters in all matters connected with the
offering of the Securities and with the Underwriters' purchases of the
Securities. Any action to be taken by the Representatives under this Agreement
may be taken by Shearson Lehman Brothers Inc.
4. OFFERING OF THE SECURITIES. (a) The Representatives have advised each
Selected Dealer of the release by the Representatives of the Securities for
public offering and of the public offering price. Upon receipt of such advice,
any of the Securities thereafter purchased by such Selected Dealer pursuant to
this Agreement are to be offered by such Selected Dealer to the public at the
public offering price, subject to the terms of this Agreement. Except as
otherwise provided herein, the Securities shall not be offered or sold by any
Selected Dealer below the public offering price before the termination of this
Agreement, except that a concession from the public offering price of not in
excess of the amount set forth in the Prospectus may be allowed either to
dealers who are members in good standing of the NASD or to foreign dealers not
eligible for membership in the NASD and who, in each case, will agree as
provided in Paragraph 12 of these Basic Provisions.
(b) The Representatives as such, and, with the Representatives' consent,
any Underwriter may buy Securities from, or sell Securities to, any of the
Selected Dealers or any of the Underwriters, and any Selected Dealer may buy
Securities from, or sell Securities to, any other Selected Dealer or any
Underwriter at the public offering price less all or any part of the concession
to Selected Dealers.
(c) Each Selected Dealer agrees to pay the Representatives on demand for
the accounts of the several Underwriters an amount equal to the Selected Dealer
concession as to any Securities purchased by such Selected Dealer pursuant to
this Agreement, which, prior to the termination of this Agreement, the
Representatives may purchase or contract to purchase for the account of any
Underwriter or which may be delivered against purchase contracts made prior to
the termination of this Agreement and, in addition, the Representatives may
charge such Selected Dealer with any broker's commission and transfer tax paid
in connection with such purchase or contract to purchase. Securities delivered
on such repurchases need not be the identical Securities originally purchased.
(d) No expenses shall be charged to Selected Dealers. A single transfer tax
upon the sale of the Securities by the respective Underwriters to a Selected
Dealer will be paid when such Securities are delivered to such Selected Dealer.
However, each Selected Dealer shall pay any transfer tax on sales of Securities
by it and each Selected Dealer shall pay its proportionate share of any transfer
tax or other tax (other than the single transfer tax described above) in the
event that any such tax shall from time to time be assessed against it and other
Selected Dealers as a group or otherwise.
5. PAYMENT AND DELIVERY. (a) Securities purchased by any Selected Dealer
pursuant to this Agreement shall be paid for at the cost price to such Selected
Dealer on the delivery date specified in the Terms Telex, on one day's notice,
by certified or official bank check payable in New York Clearing House funds or,
if specified in the Terms Telex, immediately available funds to the other of
Shearson Lehman Brothers Inc., at the office of Shearson Lehman Brothers Inc.,
388 Greenwich Street (Cashier's Window, Main Level), New York, N.Y. 10013, or
such other address as the Selected Dealer may be notified by the
Representatives, against delivery of such Securities.
(b) If payment is made for Securities purchased by a Selected Dealer at the
public offering price, the concession to which such Selected Dealer may be
entitled will by paid to such Selected Dealer upon termination of this
Agreement, as it applies to such Securities.
2
<PAGE> 3
(c) If a Selected Dealer is a member of, or clears through a member of, The
Depository Trust Company ("DTC"), the Representatives may, in their discretion,
deliver such Selected Dealers Securities through the facilities of DTC.
(d) The offering of the Securities is made subject to the conditions
referred to on the cover of the Prospectus and to the terms and conditions set
forth in this Agreement and may be made on the basis of the reservations of the
Securities or an allotment against subscriptions, and is not yet joint but
several.
6. DELIVERY OF PROSPECTUSES. (a) The Underwriters have been advised by the
Company that the Registration Statement in respect of the Securities has become
effective. Each Selected Dealer, in selling Securities purchased pursuant to
this Agreement, agrees (which agreement shall also be for the benefit of the
Company and any selling securityholder) that such Selected Dealer will comply
with the applicable requirements of the Act and of the Securities Exchange Act
of 1934, as amended (the "Exchange act"), and applicable rules and regulations
issued under the Act and the Exchange Act.
(b) With respect to Rule 15c2-8 of the Exchange Act, each Selected Dealer
confirms that it has itself delivered and will itself deliver copies of all
Preliminary Prospectuses and Prospectuses required under the provisions thereof.
(c) Each Selected Dealer confirms that in purchasing the Securities, it has
relied upon no statements whatsoever, written or oral, other than the statements
in the Prospectus, as delivered to such Selected Dealer by the Representatives.
7. OVER-ALLOTMENTS AND STABILIZATION. Each of the Underwriters has
authorized the Representatives to (i) over-allot in arranging for sales of the
Securities to the Selected Dealers, and purchase the Securities at such prices
as the Representatives may determine for the purpose of covering such
over-allotments and (ii) for the purpose of stabilizing the market in the
Securities, make purchases and sales of the Securities or other securities of
the Company which the Representatives may designate for purchase or sale in
stabilizing transactions ("Stabilized Securities"), for long or short account.
8. OPEN MARKET TRANSACTIONS. Each Selected Dealer agrees that, except as
herein otherwise provided, until the termination of this Agreement or until
notified by the Representatives prior thereto that such Selected Dealer is
released from this restriction, it will not buy, sell, deal or trade in the
Securities, securities convertible into common stock of the Company ("Common
Stock") or Stabilized Securities or, if options to purchase Securities or Common
Stock into which Securities may be convertible are traded on any securities
exchange, buy any right or option to purchase Securities or Common Stock for its
own account or for the accounts of customers except on unsolicited brokerage
orders therefor received and executed in the ordinary course of its brokerage
business. Each Selected Dealer further agrees that it will not lend any shares
of Common Stock, either before or after the purchase of the Securities, to any
customer. Underwriter, Selected Dealer or to any other securities broker or
dealer. Each Selected Dealer represents that it has not participated, since the
date on which it was invited by the Representatives to participate in the
Offering, in any transactions prohibited by the foregoing provisions of this
Paragraph 8 and that it has at all times complied with the provisions of Rule
10b-6 under the Exchange Act applicable to the offering of the Securities.
9. ROLE OF SELECTED DEALER; RELATIONSHIP WITH UNDERWRITERS. (a) No person
is authorized to give any information or to make any representations, other than
those contained in any Prospectus in connection with the offering or sale of the
Securities. Each Selected Dealer is to act as principal in purchasing Securities
and is not authorized to act as agent for the Company or any selling
securityholder or any of the Underwriters in offering the Securities to the
public or otherwise.
(b) Nothing contained in this Agreement shall constitute the Selected
Dealers partners with any of the Underwriters or with one another. If the
Selected Dealers, among themselves or with the Underwriters, are deemed to
constitute a partnership for Federal income tax purposes, it is the intent of
each Selected Dealer to be excluded from the application of Subchapter K,
Chapter I, Subtitle A of the
3
<PAGE> 4
Internal Revenue Code of 1954, as amended, and each Selected Dealer elects to
be so excluded and agrees not to take any position inconsistent with that
election. Each Selected Dealer authorizes the Representatives, in their
discretion, to execute and file on behalf of such Selected Dealer any
evidence of that election which may be required by the Internal Revenue Service.
(c) The Representatives, as such, shall have full authority to take such
action as they may deem advisable in respect of all matters pertaining to the
Offering or arising under this Agreement. Neither the Representatives, as such,
nor any of the Underwriters shall be under any liability to any Selected
Dealer, except such as may be incurred under the Act and except for lack of
good faith and for obligations assumed by the Representatives in this
Agreement. No obligation on the Representatives' part shall be implied or
inferred herefrom.
10. BLUE SKY MATTERS. Upon application to the Representatives, any
Selected Dealer will be informed as to the States in which the Representatives
have been advised by counsel the Securities have been qualified for sale or are
exempt under the respective securities or blue sky laws of such States, but the
Representatives have not assumed and will not assume any obligation or
responsibility as to the right of any Selected Dealer to sell any of the
Securities in any such State.
11. REPORTS OF SELECTED DEALER. Each Selected Dealer agrees, upon the
Representatives' request, at any time or times prior to the termination of this
Agreement, to report to the Representatives as to the amount of the Securities
purchased by such Selected Dealer pursuant to the provisions of this Agreement
which then remain unsold.
12. NASD MEMBERSHIP. Each Selected Dealer represents that it is a member
in good standing of the National Association of Securities Dealers, Inc. (the
"NASD") or a foreign dealer not eligible for membership in the NASD. If such
Selected Dealer is a member of the NASD, it agrees to comply with the
requirements of Section 24 of Article III of the Rules of Fair Practice of the
NASD, and it agrees not to grant any concessions, discounts or other allowances
which are not permitted by that section. If such Selected Dealer is a foreign
dealer not eligible for membership in the NASD, it agrees that it will not make
any sales of the Securities in, or to nationals or residents of, the United
States, its territories or its possessions, and that in making any sales of the
Securities it will comply, as though it is a member of the NASD, with (a) the
interpretation of the Board of Governors of the NASD entitled "Free-Riding and
Withholding," (b) the requirements of Sections 8, 24 and 36 of Article III of
the Rules of Fair Practice of the NASD and (c) to the extent applicable to it,
the requirements of Section 25 of such Article III.
13. TERMINATION AND AMENDMENT. (a) All Selected Dealers will be governed
by the conditions set forth in this Agreement until this Agreement is
terminated. This Agreement will terminate at the close of business on the
fifteenth day after the date of the initial public offering of the Securities,
but, in the Representatives' discretion, may be extended by the Representatives
for a further period not exceeding fifteen days and, in the Representatives'
discretion, whether or not extended, may be terminated at any earlier time.
Notwithstanding the termination of this Agreement, each Selected Dealer shall
remain liable to the extent provided by law for its proportionate amount of any
claim, demand or liability which may be asserted against it alone, or against it
together with other dealers purchasing Securities upon the terms of this
Agreement, or against the Representatives, based upon the claim that the
Selected Dealers, or any of them, constitute an association, an unincorporated
business or other separate entity.
(b) This Agreement may be amended by the Representatives upon written
notice to Selected Dealers, and any such amendment shall be effective with
respect to any Offering to which this Agreement applies on the date of such
amendment.
(c) This Agreement may be terminated by either party hereto upon five
business days' written notice to the other party; provided that with respect to
any Offering for which a Terms Telex was sent and accepted prior to such notice,
this Agreement as it applies to such Offering shall remain in full force
4
<PAGE> 5
and effect and shall terminate with respect to such Offering in accordance with
subparagraph (a) of this Paragraph 13.
14. NOTICES. Any notice from the Representatives to any Selected Dealer
shall be deemed to have been duly given if mailed, telephone (and confirmed in
writing) or telegraphed to such Selected Dealer at the address set forth in the
Terms Telex sent to such Selected Dealer. Any notice from any Selected Dealer to
the Representatives shall be deemed to have been duly given if mailed,
telephoned (and confirmed in writing) or telegraphed to Shearson Lehman Brothers
Inc. at American Express Tower, World Financial Center, New York, New York
10013, Attention Syndicate Department (or to such other address as the Selected
Dealer may be notified by the Representatives).
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of New York, without giving effect to the choice of law
or conflicts of law principles thereof.
5
<PAGE> 1
EXHIBIT h(D)
7,000,000 SHARES
LEHMAN BROTHERS LATIN AMERICA GROWTH FUND, INC.
COMMON STOCK
SUPPLEMENTAL AGREEMENT AMONG U.S. UNDERWRITERS
______________ __, 1994
To each of the U.S. Underwriters
named in Schedule I to the attached
U.S. Underwriting Agreement:
Dear Sirs:
The Lehman Brothers Latin America Growth Fund, Inc., a Maryland
corporation (the "Company"), proposes to enter into an underwriting agreement
(the "U.S. Underwriting Agreement") substantially in the form attached hereto
as Annex A, with us and other prospective underwriters (including you)
(collectively, the "U.S. Underwriters"), severally and not jointly, providing
for the several purchases by the U.S. Underwriters from the Company of
___________ shares of the Company's Common Stock (the "Firm Shares"). In
addition, the U.S. Underwriting Agreement provides that solely for the purpose
of covering over-allotments the U.S. Underwriters will have an option to
purchase from the Company up to an additional ___________ shares of the
Company's Common Stock (the "Option Shares"). The Firm Shares and the Option
Shares, if purchased, are hereinafter collectively referred to as the "Shares."
We refer to the Shearson Lehman Brothers Inc. Agreement Among
Underwriters -- Basic Provisions for Offerings of Securities dated May 15, 1985
(the "Basic Provisions") which you have agreed are applicable to any
underwritten public offering of securities in which we act as a lead
representative of the underwriters comprising the underwriting syndicate
pursuant to your acceptance of an Invitation Telex, dated __________ __, 1994.
We refer also to the Terms Telex (the Invitation Telex and the Terms Telex
collectively, the "Terms Telex") sent to you on ____________ __, 1994, relating
to the proposed public offering of the Shares. This is to supplement and
confirm the terms of the Basic Provisions, included and incorporated herein by
reference, and the Terms Telex.
<PAGE> 2
1. Agreement Between U.S. Underwriters, International Managers and
Japanese Underwriters. Concurrently with the public offering of the Shares,
the Company proposes to enter into (1) an underwriting agreement (the
"International Underwriting Agreement") with Lehman Brothers International
(Europe) and Nikko Europe Plc, as International Lead Managers (the
"International Lead Managers") for the International Managers named in Schedule
1 to the International Underwriting Agreement (the "International Managers"),
providing for the purchase by the International Managers from the Company of an
aggregate of __________ shares (plus an option to purchase up to __________
additional shares from the Company solely for the purpose of covering
over-allotments) of the Company's Common Stock (collectively, the
"International Shares"), and (2) a subscription agreement (the "Japanese
Subscription Agreement") with The Nikko Securities Co., Ltd., as Japanese Lead
Manager (the "Japanese Lead Manager") for the Japanese Managers named in
Schedule 1 to the Japanese Underwriting Agreement (the "Japanese
Underwriters"), providing for the purchase by the Japanese Managers from the
Company of an aggregate of ___________ shares of the Company's Common Stock
(the "Japanese Shares"). An agreement between the U.S. Underwriters,
International Managers and Japanese Underwriters (the "Agreement Between U.S.
Underwriters, International Managers and Japanese Underwriters") substantially
in the form attached hereto as Annex B is to be entered into between the
International Lead Managers, the Japanese Lead Manager and us, as
Representatives (the "Representatives") of the U.S. Underwriters, pursuant to
which the U.S. Underwriters may purchase from the International Managers a
portion of the International Shares to be sold pursuant to the International
Underwriting Agreement, or sell to the International Managers a portion of the
Shares to be sold pursuant to the U.S. Underwriting Agreement.
2. Registration Statement and Prospectuses. The Shares are described
in a registration statement filed with the United States Securities and
Exchange Commission (the "Commission") under the United States Securities Act
of 1933, as amended (the "Act"). It is understood that three forms of offering
documents are to be used in connection with the offering and sale of the
Shares, the International Shares and the Japanese Shares pursuant to the U.S.
Underwriting Agreement, the International Underwriting Agreement and the
Japanese Subscription Agreement: one Preliminary Prospectus and one Prospectus
relating to the Shares which are to be offered and sold to U.S. Persons (as
defined in Section 4(a) hereof) (the "U.S. Preliminary Prospectus" and the
"U.S. Prospectus," respectively), one Preliminary International Offering
Circular and one International Offering Circular relating to the International
Shares, which are to be offered and sold to International Persons (as defined
in Section 4(a) hereof) (the "International Preliminary Prospectus" and the
"International Prospectus," respectively), and a prospectus relating to the
Japanese Shares which are to be offered and sold in Japan (the "Japanese
Prospectus") as contained in a registration statement which has been filed with
the Ministry of Finance of Japan.
3. Authority of the Representatives. In addition to the terms of
Section 3 of the Basic Provisions, each U.S. Underwriter hereby authorizes us,
as its Representatives, to negotiate in our discretion the terms of, and to
execute and deliver, the Agreement Between U.S.
2
<PAGE> 3
Underwriters, International Managers and Japanese Underwriters, to determine
the purchase and sale prices for any Registered Shares purchased or sold by
each U.S. Underwriter thereunder, to determine whether to purchase or sell any
Registered Shares thereunder and, in accordance with any such determination, to
purchase or sell Registered Shares for the account of any U.S. Underwriter
thereunder and to take such other action as we believe desirable in order to
carry out the Agreement Between U.S. Underwriters, International Managers and
Japanese Underwriters and to agree to any waiver, modifications or amendment of
the terms thereof. In the event that we purchase or sell Registered Shares for
the account of any U.S. Underwriter pursuant to the Agreement Between U.S.
Underwriters, International Managers and Japanese Underwriters, we will notify
such U.S. Underwriter promptly of the number of Registered Shares purchased or
sold for its account and the prices thereof.
4. Offering of the Shares. (a) In addition to the terms of Section
5(a) of the Basic Provisions, each U.S. Underwriter agrees that, except for
transactions through us permitted by the Agreement Between U.S. Underwriters,
International Managers and Japanese Underwriters, (i) it not purchasing any
Registered Shares for the account of anyone other than a U.S. Person (as
defined below), (ii) it has not offered or sold, and, without our prior written
consent, it will not offer, sell, resell or deliver, directly or indirectly,
any Registered Shares, or distribute the U.S. Preliminary Prospectus or U.S.
Prospectus, to anyone other than a U.S. Person and (iii) any dealer (including
any of the Selected Dealers referred to below) to whom it may sell any
Registered Shares (A) will represent that it is not purchasing for the account
of anyone other than a U.S. Person and (B) will agree that it will not offer,
sell, resell or deliver, directly or indirectly, any Registered Shares, or
distribute the U.S. Preliminary Prospectus or U.S. Prospectus, to anyone other
than a U.S. Person or to any other dealer who does not so represent and agree.
As used herein, the term "United States" means the United States of America
(including the District of Columbia) and its territories, its possessions and
other areas subject to its jurisdiction and the term "U.S. Person" means any
resident or citizen of the United States, any corporation, partnership or other
entity created or organized in or under the laws of the United States or any
political subdivision thereof, or any estate or trust the income of which is
subject to United States federal income taxation regardless of the source of
its income. "Japanese Person" shall mean any national or resident of Japan,
any corporation, pension, profit-sharing or other trust or other entity
organized under the laws of Japan (other than a U.S. Person, as such term is
defined in Regulation S of the Act and other than a branch located outside of
Japan of any Japanese Person). "International Person" shall mean any person,
corporation, partnership or other entity which is not a U.S. Person or a
Japanese Person.
(b) In addition to the terms of Section 5(d) of the Basic Provisions,
we, as the Representatives, may make purchases and sales of Registered Shares
from or to any International Manager acting through the International Lead
Managers at the public offering price less all or any part of the selling
concession to Selected Dealers. With our consent and acting through us, any
U.S. Underwriter may make purchases or sales of Registered Shares from or to
any
3
<PAGE> 4
International Manager at the public offering price less all or any part of the
selling concession to Selected Dealers.
5. Sale of Reserved Securities. The calculation of 20% of the total
amount of "Securities" (as referred to in the Basic Provisions made pursuant to
the last sentence of Section 5(g) of the Basic Provisions shall be made net of
the portion of Firm Shares of all U.S. Underwriters sold pursuant to the
Agreement Between U.S. Underwriters, International Managers and Japanese
Underwriters.
6. Payment and Delivery. In addition to the terms of Section 7(a) of
the Basic Provisions, at or before 9:00 A.M., New York City time, of the first
date of delivery determined as provided in the U.S. Underwriting Agreement (the
"First Delivery Date"), each U.S. Underwriter agrees to deliver to us at the
office of Lehman Brothers Inc., 3 World Trade Center, New York, New York 10285,
a certified or official bank check payable in New York Clearing House funds to
the order of Lehman Brothers Inc. for an amount equal to the initial public
offering price less the selling concession to Selected Dealers for any
International Shares purchased for the account of such U.S. Underwriter
pursuant to the Agreement Between U.S. Underwriters, International Managers and
Japanese Underwriters at least three business days prior to the First Delivery
Date. In the case of any International Shares purchased for the account of any
U.S. Underwriter pursuant to the Agreement Between U.S. Underwriters,
International Managers and Japanese Underwriters subsequent to three business
days prior to the First Delivery Date, such U.S. Underwriter agrees to deliver
payment for such International Shares to us in the manner provided in such
Section 7(a) as promptly as practicable, but in no event later than 9:00 A.M.,
New York City time, on the fifth business day after such purchase.
7. Over-Allotments and Stabilization. The calculation of the net
dollar commitment of any U.S. Underwriter, either for long or short account,
made pursuant to Section 9 of the Basic Provisions, shall include the net
commitment for long or short account represented by Registered Shares purchased
or sold for the account of any U.S. Underwriter under the Agreement Between
U.S. Underwriters, International Managers and Japanese Underwriters.
Notwithstanding Section 9 of the Basic Provisions, at no time shall the net
dollar commitment of any U.S. Underwriter, either for long or short account,
exceed 30% of the amount of the Firm Shares (and the Option Shares, if any)
which such U.S. Underwriter is obligated to purchase pursuant to the U.S.
Underwriting Agreement.
8. Allocation of Expenses. In carrying out the provisions of Section
11 of the Basis Provisions, we shall give effect to the provisions of Section 4
of the Agreement Between U.S. Underwriters, International Managers and Japanese
Underwriters.
9. Termination. We may, by mutual agreement with the International
Lead Managers and Japanese Lead Manager, amend or terminate the Agreement
Between U.S. Underwriters, International Managers and Japanese Underwriters.
4
<PAGE> 5
10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
THE CHOICE OF LAW OR CONFLICTS OF LAW PRINCIPLES THEREOF.
If the terms as set forth meet with your approval, please confirm your
acceptance in the space provided below.
Very truly yours,
LEHMAN BROTHERS INC.
THE NIKKO SECURITIES CO. INTERNATIONAL, INC.
ADVEST, INC.
DAIN BOSWORTH INCORPORATED
FAHNESTOCK & CO. INC.
FIRST OF MICHIGAN CORPORATION
PRINCIPAL FINANCIAL SECURITIES, INC.
RAUSCHER PIERCE REFSNES, INC.
For themselves and as Representatives for each
of the several U.S. Underwriters
By: LEHMAN BROTHERS INC.
By:_______________________________________________
Authorized Representative
Confirmed the day and year
first above written:
By:_________________________________
As Attorney-in-fact for each of
the several U.S. Underwriters
named in Schedule 1 to the
attached U.S. Underwriting Agreement
5
<PAGE> 1
EXHIBIT (h)(E)
DRAFT
7,000,000 SHARES
LEHMAN BROTHERS LATIN AMERICA GROWTH FUND, INC.
COMMON STOCK
FORM OF INTERNATIONAL UNDERWRITING AGREEMENT
________________ __, 1994
LEHMAN BROTHERS INTERNATIONAL (EUROPE)
NIKKO EUROPE Plc
As Lead Managers of the Several
U.S. Underwriters named in Schedule I,
c/o LEHMAN BROTHERS INTERNATIONAL (EUROPE)
1 Broadgate
London EC2 M7HA
England
Dear Sirs:
Lehman Brothers Latin America Growth Fund, Inc., a Maryland
corporation (the "Company"), proposes to sell __________ shares (the
"International Firm Stock") of the Company's Common Stock, par value $.001 per
share (the "Common Stock"). In addition, the Company proposes to grant to the
International Managers named in Schedule 1 hereto (the "International
Managers") an option to purchase up to an additional ______ shares of the
Common Stock on the terms and for the purposes set forth in Section 2 (the
"International Option Stock"). The International Firm Stock and the
International Option Stock, if purchased, are hereinafter collectively called
the "International Stock." Lehman Brothers Global Asset Management Limited
will be the Company's investment adviser (the "Adviser"). This is to confirm
the agreement concerning the purchase of the International Stock from the
Company by the International Managers.
It is understood by all parties that the Company and the Adviser
concurrently entering into an agreement dated the date hereof (the "U.S.
Underwriting Agreement") providing for the sale by the Company of _____ shares
of Common Stock (including the over-allotment option thereunder) (the "U.S.
Stock") through arrangements with certain underwriters in the United States
(the "U.S. Underwriters"), for whom Lehman Brothers Inc., The Nikko Securities
Co. International, Inc., Advest, Inc., Dain Bosworth Incorporated, Fahnestock &
Co., Inc., First of Michigan Corporation, Principal Financial Securities, Inc.
and Rausher Pierce Refsnes, Inc.
<PAGE> 2
are acting as representatives. The Company has also entered into a
Subscription Agreement dated __________, 1994 (the "Japanese Subscription
Agreement") with The Nikko Securities Co., Ltd. and Lehman Brothers Japan Inc.
(the "Japanese Managers" and, together with the several underwriters named in
Schedule 1 to the Japanese Underwriting Agreement, the "Japanese Underwriters"
) relating to the concurrent offering and sale of up to _________ shares of
Common Stock in Japan (the "Japanese Stock"). The International Stock, the
U.S. Stock and the Japanese Stock are hereinafter collectively referred to as
the "Stock." The U.S. Underwriters, the International Managers and the
Japanese Underwriters are hereinafter collectively referred to as the
"Underwriters." To provide for the coordination of their activities, the U.S.
Underwriters, the International Managers and the Japanese Underwriters have
entered into an Agreement Between U.S. Underwriters, International Managers and
Japanese Underwriters (the "Agreement Between U.S. Underwriters, International
Managers and Japanese Underwriters") which permits the U.S. Underwriters and
the International Managers, among other things, to sell shares of Stock to each
other for purposes of resale.
Three forms of offering documents are to be used in connection with
the offering and sale of shares of Common Stock contemplated by the foregoing,
one relating to the International Stock, one relating to the U.S. Stock and one
relating to the Japanese Stock. The International Managers agree to offer the
International Stock to the public initially as set forth in the international
offering circular (the "International Offering Circular"). The Company hereby
confirms that the International Managers have been authorized to distribute or
cause to be distributed the preliminary international offering circular (the
"Preliminary International Offering Circular") dated September 2, 1994.
References herein to any offering circular or prospectus whether in preliminary
or final form, and whether as amended or supplemented, shall include the U.S.
version thereof, as well as the International Offering Circular and Preliminary
International Offering Circular, as the case may be, and the forms of
prospectus referenced in the Japanese Subscription Agreement.
1. Representations, Warranties and Agreements of the Company and the
Adviser. (a) The Company and the Adviser each, severally and not jointly,
represents, warrants and agrees that:
(i) A registration statement on Form N-2, and amendments
thereto, with respect to the Stock have (A) been prepared by the
Company in conformity with the requirements of the U.S. Securities Act
of 1933, as amended (the "Securities Act"), and the rules and
regulations (the "Rule and Regulations") of the U.S. Securities and
Exchange Commission (the "Commission") thereunder and the U.S.
Investment Company Act of 1940, as amended (the "Investment Company
Act," and together with the Securities Act, the "Acts"), and the rules
and regulations of the Commission thereunder; (B) been filed with the
Commission under the Acts and (C) become effective under the Acts.
Copies of such registration statement and the amendments thereto have
been delivered by the Company to you as the lead managers (the "Lead
Managers") of the International
2
<PAGE> 3
Managers. A notification of registration on Form N-8A (the
"Notification") has been filed by the Company with the Commission
under the Investment Company Act. As used in this Agreement,
"Effective Time" means the date and the time as of which such
registration statement or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective
Date" means the date of the Effective Time; "Preliminary Prospectus"
means each prospectus included in such registration statement, or
amendments thereof, before it became effective under the Acts and any
prospectus filed with the Commission by the Company with the consent
of the Lead Managers pursuant to Rule 497(a) of the Rules and
Regulations; "Registration Statement" means such registration
statement, as amended at the Effective Time, including all
information contained in the final prospectus filed with the
Commission pursuant to Rule 497 of the Rules and Regulations in
accordance with Section 5 hereof and deemed to be a part of the
Registration Statement pursuant to paragraph (b) of Rule 430A of the
Rules and Regulations; and "Prospectus" means such final prospectus,
as first filed with the Commission pursuant to Rule 497 of the Rules
and Regulations. The Commission has not issued any order preventing
or suspending the use of any Preliminary Prospectus and the Company
has not received any notice from the Commission pursuant to Section
8(e) of the Investment Company Act with respect to the Notification
or the Registration Statement.
(ii) The International Offering Circular does not, and any
amendment or supplement thereto will not, contain an untrue statement
of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided that no representation
or warranty is made as to information contained in or omitted from the
International Offering Circular in reliance upon and in conformity
with written information furnished to the Company or the Adviser
through the Lead Managers by or on behalf of any International Manager
specifically for inclusion therein.
(iii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Maryland, is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which its ownership
or lease of property or the conduct of its business requires such
qualification, except where the failure to so qualify would not have a
materially adverse effect upon the Company, and has all power and
authority necessary to own or hold its properties and to conduct its
business as described in the International Offering Circular and to
issue and sell the Stock as contemplated by this Agreement, the U.S.
Underwriting Agreement and the Japanese Subscription Agreement; and
the Company has no subsidiaries.
(iv) The Company has an authorized capitalization as set forth
in the International Offering Circular, and all of the issued shares
of capital stock of the Company have been
3
<PAGE> 4
duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
International Offering Circular.
(v) The unissued shares of the Stock to be issued and sold by
the Company to the Underwriters hereunder and under the U.S.
Underwriting Agreement and the Japanese Subscription Agreement have
been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein and therein, will be duly
and validly issued, fully paid and non-assessable with no personal
liability attaching to the ownership thereof. None of the shares of
the Stock when delivered will be subject to any lien, claim,
encumbrance, preemptive rights or any other claim of any third party.
(vi) The execution, delivery and performance of this Agreement
and the U.S. Underwriting Agreement, the Japanese Subscription
Agreement, the Investment Advisory Agreement (the "Advisory
Agreement") between the Company and the Adviser, the Administration
Agreement (the "Administration Agreement") between the Company and The
Shareholder Services Group, Inc. ("TSSG"), the Custody Agreement (the
"Custody Agreement") between the Company and Boston Safe Deposit and
Trust Company and the Transfer Agency Agreement (the "Transfer Agency
Agreement") between the Company and TSSG, by the Company and the
consummation of the transactions contemplated hereby and thereby and
the issuance and delivery of the Common Stock will not conflict with
or result in a breach or violation by the Company of any of the terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of the property or assets of the Company is
subject, nor will such actions result in any violation of the
provisions of the charter or by-laws of the Company or a violation by
the Company of any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties or assets; this Agreement, the U.S.
Underwriting Agreement, the Japanese Subscription Agreement, the
Advisory Agreement, the Administration Agreement, the Custody
Agreement and the Transfer Agency Agreement, have each been duly
authorized, executed and delivered by the Company; this Agreement, the
Advisory Agreement, the Administration Agreement, the Custody
Agreement and the Transfer Agency Agreement each constitutes the valid
and binding obligation of the Company, enforceable in accordance with
its terms, except to the extent that enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equity principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith
and fair dealing; and except for the registration of the Stock under
the Acts and such consents, approvals, authorizations, registrations
or qualifications as may be required under the U.S. Securities and
Exchange Act of 1934 (the "Exchange Act"), the by-laws and rules of
the National Association of Securities Dealers, Inc. (the "NASD"), the
New York Stock Exchange, Inc. (the
4
<PAGE> 5
"NYSE"), the Ministry of Finance of Japan (the "MOF") and the Osaka
Securities Exchange (the "OSE") and applicable state or other
securities laws in connection with the purchase and distribution of
the Stock by the Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery
and performance of this Agreement, the U.S. Underwriting Agreement,
the Japanese Subscription Agreement, the Advisory Agreement, the
Administration Agreement, the Custody Agreement or the Transfer
Agency Agreement by the Company and the consummation of the
transactions contemplated hereby and thereby.
(vii) Since the date as of which information is given in the
International Offering Circular, and except as described in or
contemplated therein, (A) there has not been any change in the capital
stock of the Company or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity, results of operations or prospects of the
Company, and (B) there have been no transactions entered into by the
Company which are material to the Company other than those in the
ordinary course of business.
(viii) The statement of assets and liabilities (including the
related notes thereto) included in the International Offering Circular
presents fairly the financial condition of the Company, at the date
indicated, and has been prepared in conformity with generally accepted
accounting principles applied on a consistent basis.
(ix) Ernst & Young LLP, whose report appears in the
International Offering Circular and who have delivered the initial
letter referred to in Section 7(g) hereof, are independent public
accountants as required by the Acts and the rules and regulations
thereunder.
(x) There are no legal or governmental proceedings pending to
which the Company is a party or of which any property or assets of the
Company is the subject which, if determined adversely to the Company,
could have a material adverse effect on the financial position,
stockholders' equity, results of operations, business or prospects of
the Company or which are required to be disclosed in the International
Offering Circular; and to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(xi) There are no material contracts or other documents which
are required to be described in the International Offering Circular
which have not been described therein.
(xii) The Company is not (A) in violation of its charter or
by-laws, (B) in default in any material respect, and no event has
occurred which, with notice or lapse of time
5
<PAGE> 6
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any
material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound
or to which any of its properties or assets is subject or (C) in
violation in any material respect of any law, ordinance, governmental
rule, regulation, judgment or court decree to which it or its
property or assets may be subject nor has it failed to obtain any
material license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property or
to the conduct of the business as described in the International
Offering Circular, except such licenses, permits, certificates,
franchises or other governmental authorizations or permits which if
not obtained would not have a material adverse effect on the Company
or its business as described in the International Offering Circular.
(xiii) Neither the Company, nor any director, officer, agent,
employee or other person associated with or acting on behalf of the
Company, has used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political
activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(xiv) The advertising and sales literature approved in writing
by the Company and used in connection with the public offering and
sale of the U.S. Stock pursuant to Rule 482 under the Rules and
Regulations and filed by the U.S. Underwriters with the NASD for
review in accordance with Rule 497(i) under the Rules and Regulations
complies in all material respects with the requirements of Rule 482
under the Securities Act and 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 not misleading.
(xv) The Company is registered with the Commission under the
Investment Company Act as a closed-end, diversified management
investment company. The Company is, and at all times through the
completion of the transactions contemplated hereby will be, in
compliance in all material respects with the terms and provisions of
the Acts. No person is serving or acting as an officer, director or
investment adviser of the Company except in accordance with the
provisions of the Investment Company Act and the U.S. Investment
Advisers Act of 1940, as amended (the "Advisers Act"), and the rules
and regulations of the Commission under such acts.
(xvi) The Stock is duly authorized for listing, subject to
official notice of issuance, on the NYSE.
(b) The Adviser further represents, warrants and agrees that:
6
<PAGE> 7
(i) The Adviser has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of
England, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such
qualification (except where the failure to so qualify would not have
a material adverse effect on the Adviser), and has all corporate
power and authority necessary to own or hold its properties and to
conduct its business as described in the International Offering
Circular.
(ii) The Adviser is duly registered with the Commission under
the Advisers Act as an investment adviser, and there does not exist
any proceeding or any facts or circumstances the existence of which
could lead to any proceeding which could adversely affect the
registration or good standing of the Adviser with the Commission.
The Adviser is not prohibited by the Advisers Act or the Investment
Company Act, or the rules and regulations under such acts, from acting
for the Company under the Advisory Agreement as contemplated by the
International Offering Circular.
(iii) The description of the Adviser in the International
Offering Circular is true and correct in all material respects 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 to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
(iv) This Agreement, the U.S. Underwriting Agreement, the
Japanese Subscription Agreement and the Advisory Agreement have each
been duly authorized, executed and delivered by the Adviser, and the
Advisory Agreement constitutes the valid and binding obligation of the
Adviser enforceable in accordance with its terms, except to the extent
that enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general
equity principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing. No
consent, approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement, the U.S. Underwriting Agreement, the Japanese
Subscription Agreement or the Advisory Agreement by the Adviser or the
consummation by the Adviser of the transactions contemplated hereby or
thereby, except such as have been obtained and such as may be required
under the Acts, the Exchange Act, the Advisers Act, the by-laws and
rules of the NASD, the MOF and the OSE, or applicable state securities
laws in connection with the purchase and distribution of the Stock by
the Underwriters. The execution, delivery and performance of this
Agreement, the U.S. Underwriting Agreement, the Japanese Subscription
Agreement and the Advisory Agreement by the Adviser and the
consummation by the Adviser of the transactions contemplated hereby
and thereby will not conflict with, result in the creation or
imposition of any lien, charge or encumbrance upon the assets of the
7
<PAGE> 8
Adviser pursuant to the terms of, result in a breach or violation by
the Adviser of any of the terms or provisions of, or constitute a
default by the Adviser under, any material indenture, mortgage, deed
of trust, loan agreement, lease or other agreement or instrument to
which the Adviser is a party or to which it or its property is
subject, nor will such actions result in a violation of the
provisions of the corporate charter or by-laws of the Adviser, or any
statute (including the Acts) or any judgment, decree, order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Adviser or any of its property.
(v) Except as described in the International Offering
Circular, there is no litigation or proceeding pending or, to the
knowledge of the Adviser, threatened against the Adviser which might
result in any material adverse change in the financial condition,
results of operations, business or prospects of the Adviser or which
is required to be disclosed in the International Offering Circular.
(vi) The Adviser has the financial resources available to it
necessary for the performance of its services and obligations as
contemplated in the International Offering Circular.
(vii) The Adviser is not in violation of its corporate charter
or by-laws or in default in any material respect under any material
agreement, indenture or instrument.
2. Purchase of the International Stock by the International Managers.
On the basis of the representations and warranties contained in, and subject to
the terms and conditions of, this Agreement, the Company agrees to sell _______
shares of the International Firm Stock to the several International Managers
and each of the International Managers, severally and not jointly, agrees to
purchase the number of shares of the International Firm Stock set opposite that
International Manager's name in Schedule 1 hereto. The respective purchase
obligations of the International Managers with respect to the International
Firm Stock shall be rounded among the International Managers to avoid
fractional shares, as the Lead Managers may determine.
In addition, the Company grants to the International Managers an
option to purchase up to ________ shares of International Option Stock. Such
option is granted solely for the purpose of covering over-allotments in the
sale of International Firm Stock and is exercisable as provided in Section 4
hereof. Shares of International Option Stock shall be purchased severally for
the account of the International Managers in proportion to the number of shares
of International Firm Stock set opposite the name of such International
Managers in Schedule 1 hereto. The respective purchase obligations of each
International Manager with respect to the International Option Stock shall be
adjusted by the Lead Managers so that no International Manager shall be
obligated to purchase International Option Stock other than in 100 share
amounts. The price of both the International Firm Stock and any International
Option Stock shall be $______ per share.
8
<PAGE> 9
The Company shall not be obligated to deliver any of the International
Stock to be delivered on the First Delivery Date or any Option Delivery Date
(as hereinafter defined) as the case may be, except upon payment for all the
Stock to be purchased on such Delivery Date as provided herein, in the U.S.
Underwriting Agreement and in the Japanese Subscription Agreement.
3. Offering of Stock by the International Managers. Upon
authorization by the Lead Managers of the release of the International Firm
Stock, the several International Managers propose to offer the International
Firm Stock for sale upon the terms and conditions set forth in the
International Offering Circular. Each International Manager agrees that,
except to the extent permitted by the Agreement Between U.S. Underwriters,
International Managers and Japanese Underwriters, it will not offer or sell any
of the International Stock in the United States or Japan.
4. Delivery of and Payment for the International Stock. Delivery of
and payment for the International Firm Stock shall be made at the office of
Willkie Farr & Gallagher, One Citicorp Center, 153 East 53rd Street, New York,
New York 10022, at 10:00 A.M., New York City time, on the fifth full business
day following the date of this Agreement or at such other date or place as
shall be determined by agreement between the Lead Managers and the Company.
This date and time are sometimes referred to as the "First Delivery Date." On
the First Delivery Date, the Company shall deliver or cause to be delivered
certificates representing the International Firm Stock to the Lead Managers for
the account of each International Manager against payment to or upon the order
of the Company of the purchase price by certified or official bank check or
checks payable in New York Clearing House (next-day) funds. Time shall be of
the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each International
Manager hereunder. Upon delivery, the International Firm Stock shall be
registered in such names and in such denominations as the Lead Managers shall
request in writing not less than two full business days prior to the First
Delivery Date. For the purpose of expediting the checking and packaging of the
certificates for the International Firm Stock, the Company shall make the
certificates representing the International Firm Stock available for inspection
by the Lead Managers in New York, New York, not later than 2:00 P.M., New York
City time, on the business day prior to the First Delivery Date.
At any time on or before the forty-fifth day after the date of this
Agreement the option granted in Section 2 may be exercised, in whole or in part
at any time and from time to time, by written notice being given to the Company
by the Lead Managers. Such notice shall set forth the aggregate number of
shares of International Option Stock as to which the option is being exercised,
the names in which the shares of International Option Stock are to be
registered, the denominations in which the shares of International Option Stock
are to be issued and the date and time, as determined by the Lead Managers,
when the shares of International Option Stock are to be delivered; provided,
however, that this date and time shall not be earlier than the First
9
<PAGE> 10
Delivery Date nor earlier than the second business day after the date on which
the option shall have been exercised nor later than the fifth business day
after the date on which the option shall have been exercised. The dates and
times the shares of International Option Stock are delivered are sometimes
referred to as an "Option Delivery Date" and the First Delivery Date and each
Option Delivery Date are sometimes each referred to as a "Delivery Date."
Deliveries of and payments for the International Option Stock shall be
made at the place specified in the first sentence of the first paragraph of
this Section 4 (or at such other place as shall be determined by agreement
between the Lead Managers and the Company) at 10:00 A.M., New York City time,
on any Option Delivery Date. On any Option Delivery Date, the Company shall
deliver or cause to be delivered the certificates representing the
International Option Stock being purchased at such time to the Lead Managers
for the account of each International Manager against payment to or upon the
order of the Company of the purchase price by certified or official bank check
or checks payable in New York Clearing House (next-day) funds. Time shall be
of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each International
Manager hereunder. Upon delivery, any International Option Stock shall be
registered in such names and in such denominations as the Lead Managers shall
request in the aforesaid written notice. For the purpose of expediting the
checking and packaging of the certificates for any International Option Stock,
the Company shall make the certificates representing the International Option
Stock available for inspection by the Lead Managers in New York, New York, not
later than 2:00 P.M., New York City time, on the business day prior to the
Option Delivery Date.
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the International Offering Circular in a form
approved by the Lead Managers; to make no further amendment or any
supplement to the International Offering Circular except as permitted
herein; to advise the Lead Managers promptly of the time when any
amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Lead Managers with copies
thereof; to advise the Lead Managers, promptly after it receives
notice thereof, of the happening of any event which makes untrue any
statement of a material fact made in the International Offering
Circular, or which requires the making of a change in the
International Offering Circular in order to make any material
statement therein not misleading; to advise the Lead Managers,
promptly after it receives notice thereof, of the receipt by the
Company of a notice from or order of the Commission pursuant to
Section 8(e) of the Investment Company Act, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, of any action by the New York Stock Exchange, Inc. rejecting,
suspending or terminating the application for the listing of, or the
listing of, the Stock;
10
<PAGE> 11
(b) To furnish promptly to each of the Lead Managers and to
counsel for the International Managers a signed copy of the
Notification and the Registration Statement as originally filed with
the Commission, and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith;
(c) To deliver promptly to the Lead Managers such number of the
Preliminary International Offering Circulars, the International
Offering Circulars, and any amendments or supplements thereto, as the
Lead Managers shall reasonably request;
(d) For a period of five years following the Effective Date, to
furnish to the Lead Managers copies of all materials furnished by the
Company to its shareholders and all public reports and all reports and
financial statements furnished by the Company to the principal
national securities exchange upon which the Common Stock may be listed
pursuant to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of
the Commission thereunder;
(e) Promptly from time to time to take such action as the Lead
Managers may reasonably request to qualify the Stock for offering and
sale under the securities laws of such jurisdictions as the Lead
Managers may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the Stock;
provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction; and
(f) For a period of 180 days from the date of the International
Offering Circular, not to offer for sale, sell or otherwise dispose of
(or enter into any transaction which is designed to, or could be
expected to, result in the disposition by any person of), directly or
indirectly, any shares of Common Stock (other than the Stock and any
share of Common Stock the Company issued to shareholders pursuant to
the Company's Dividend Reinvestment and Cash Purchase Plan), or sell
or grant options, rights or warrants with respect to any shares of
Common Stock.
6. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable
in that connection; (b) the costs incident to the preparation and printing of
the Preliminary International Offering Circular, the International Offering
Circular and any amendments and exhibits thereto; (c) the costs of distributing
the Preliminary International Offering Circular, the International Offering
Circular and any amendment or supplement thereto, all as provided in this
Agreement; (d) the costs of reproducing and distributing this Agreement, the
Agreement Between U.S. Underwriters, International Managers and Japanese
Underwriters and the Supplemental Agreement Among International Managers; (e)
the costs of distributing the terms of agreement relating to the organization
of the domestic underwriting syndicate and selling group to the members thereof
11
<PAGE> 12
by mail, telex or other means of communication; (f) the filing fees incident to
securing any required review by the NASD of the terms of sale of the Stock; (g)
the costs of listing the Stock on the NYSE; (h) the fees and expenses of
qualifying the Stock under the securities laws of the several jurisdictions as
provided in Section 5(e); (i) to the Underwriters $_______________ as
reimbursement of certain costs and expenses of the Underwriters (including fees
and disbursements of counsel) in connection with the offering and distribution
of the Stock; and (j) all other costs and expenses incident to the performance
of the obligations of the Company under this Agreement; provided that, except
as provided in this Section 6 and in Section 11, the International Managers
shall pay their own costs and expenses, including the costs and expenses of
their counsel, any transfer taxes on the International Stock which they may
sell and the expenses of advertising any offering of the International Stock
made by the International Managers. In the event the transactions contemplated
hereunder are not consummated, the Adviser will pay all of the costs and
expenses set forth in this Paragraph which the Company would have paid if such
transactions were consummated. The Adviser shall be solely responsible for,
and shall pay all costs and expenses of, preparing, printing and distributing
all advertising and sales literature furnished by it to the Underwriters and to
investment dealers in connection with the public offering of the Shares, and in
connection therewith complying with the Rules of Fair Practice of the NASD and
applicable federal and state securities laws and regulations.
7. Conditions of International Managers' Obligations. The respective
obligations of the International Managers hereunder are subject to the
accuracy, when made and on each Delivery Date, of the representations and
warranties of the Company and the Adviser contained herein, to the performance
by the Company of its obligations hereunder, and to each of the following
additional terms and conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement or any part thereof or order or proceeding for
an order pursuant to Section 8(e) of the Investment Company Act, shall
have been issued and no proceeding for such a purpose shall have been
initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied
with.
(b) No International Manager, U.S. Underwriter or Japanese
Underwriter shall have discovered and disclosed to the Company on or
prior to such Delivery Date that the International Offering Circular
or any amendment or supplement thereto contains an untrue statement of
a fact which, in the opinion of Willkie Farr & Gallagher, counsel for
the International Managers, is material or omits to state a fact
which, in the opinion of such counsel, is material and is required to
be stated therein or is necessary to made the statements therein not
misleading.
12
<PAGE> 13
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the U.S.
Underwriting Agreement, the Japanese Subscription Agreement, the
Advisory Agreement, the Administration Agreement, the Custody
Agreement and the Transfer Agency Agreement, the Stock, the
International Offering Circular, and all other legal matters relating
to this Agreement, the U.S. Underwriting Agreement and the Japanese
Subscription Agreement and the transactions contemplated hereby and
thereby, shall be satisfactory in all respects to counsel for the
International Managers, and the Company shall have furnished to such
counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(d) Simpson Thacher & Bartlett shall have furnished to the Lead
Managers a written opinion, as counsel to the Company, addressed to
the International Managers and dated such Delivery Date, in form and
substance satisfactory to the Lead Managers, to the effect that:
(i) The Company is duly qualified to do business and is
in good standing as a foreign corporation in each jurisdiction in
which its ownership or lease of property or the conduct of its
business requires such qualification (other than those
jurisdictions in which the failure to so qualify would not have a
material adverse effect on the Company), and has all power and
authority necessary to own or hold its properties and to conduct
its business as described in the International Offering Circular;
and the Company has no subsidiaries;
(ii) The Company has an authorized capitalization as set
forth in the International Offering Circular, and all of the
issued shares of capital stock of the Company (including the
shares of Stock being delivered on such Delivery Date) have been
duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in
the International Offering Circular;
(iii) There are no preemptive or other rights to subscribe
for or to purchase, nor any restriction upon the voting or
transfer of, any shares of the Stock pursuant to the Company's
charter or by-laws or any agreement or other instrument known to
such counsel;
(iv) To such counsel's knowledge after reasonable
investigation, there is no legal or governmental proceeding before
any court or before or by any public body or board pending or
threatened against the Company which is required to be disclosed
in the International Offering Circular which is not disclosed
therein;
13
<PAGE> 14
(v) The statements contained in the International
Offering Circular under the caption "Management of the Fund,"
"Dividends and Distributions; Dividend Reinvestment Plan,"
"Taxation" and "Common Stock," insofar as such statements
constitute a summary of legal matters, documents referred
to therein or matters of law, are fair and accurate summaries of
the material provisions thereof in all material respects;
(vi) Assuming that each of this Agreement, the U.S.
Underwriting Agreement, the Japanese Subscription Agreement, the
Advisory Agreement, the Administration Agreement, the Custody
Agreement and the Transfer Agency Agreement has been duly
authorized, each of such agreements has been duly executed and
delivered by the Company in accordance with the laws of the State
of New York; assuming that each of this Agreement, the U.S.
Underwriting Agreement, the Japanese Subscription Agreement, the
Advisory Agreement, the Administration Agreement, the Custody
Agreement and the Transfer Agency Agreement has been duly
authorized by the Company and assuming due authorization,
execution and delivery of each of such agreements by the other
parties thereto, each of such agreements complies in all material
respects with all applicable provisions of the Investment Company
Act and the Advisers Act; and each of the Advisory Agreement, the
Administration Agreement and the Transfer Agency Agreement
constitutes the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms;
(vii) The Company is registered with the Commission under
the Investment Company Act as a closed-end, diversified management
investment company; all required action has been taken by the
Company under the Acts and the Exchange Act to make the public
offering and consummate the sale of the Stock pursuant to this
Agreement and the U.S. Underwriting Agreement; the provisions of
the corporate charter and by-laws of the Company comply as to form
in all material respects with the requirements of the Investment
Company Act; the provisions of the corporate charter and by- laws
of the Company and the investment policies and restrictions
described in the International Offering Circular under the
captions "Investment Objective and Policies" and "Investment
Restrictions" comply in all material respects with the
requirements of the Investment Company Act; and
(viii) The execution and delivery of this Agreement, the
U.S. Underwriting Agreement, the Advisory Agreement, the
Administration Agreement, the Custody Agreement and the Transfer
Agency Agreement, and the consummation of the transactions
contemplated hereby and thereby will not result in any violation
of the provisions of the charter or by- laws of the Company, nor,
to such counsel's knowledge after reasonable investigation, will
such actions conflict with or result
14
<PAGE> 15
in the creation or imposition of any material lien, charge or
encumbrance upon any assets of the Company, or result in a
material breach or violation of any of the terms or provisions of,
or constitute a material default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument
known to such counsel to which the Company is a party or by which
the Company is bound or to which any of the property or assets of
the Company is subject or result in any violation of the
provisions of any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties or assets; and, except for the
registration of the U.S. Stock under the Acts and such consents,
approvals, authorizations, registrations or qualifications as may
be required under the Exchange Act and applicable state or foreign
securities laws in connection with the purchase and distribution
of the U.S. Stock by the U.S. Underwriters, all of which have been
obtained, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency
or body is required for the execution, delivery and performance of
this Agreement, the U.S. Underwriting Agreement, the Advisory
Agreement, the Administration Agreement, the Custody Agreement and
the Transfer Agency Agreement by the Company and the consummation
of the transactions contemplated hereby and thereby.
In rendering such opinion, such counsel may (i) state that its
opinions set forth in paragraph (vi) above are subject to the effects
of 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); (ii) state that its opinion is limited to
matters governed by the Federal laws of the United States of America,
the laws of the State of New York and that such counsel is not
admitted in the State of Maryland; (iii) rely (to the extent such
counsel deems proper and specifies in its opinion), as to matters
involving the application of the laws of the State of Maryland upon
the opinion of Piper & Marbury, provided that Piper & Marbury
furnishes a copy of its opinion to the Lead Managers. Such counsel
may further state that with respect to the disclosure set forth in the
International Offering Circular in Appendix A: Securities Markets and
Economic Data: Selected Latin American Countries, that the scope of
such counsel's investigation was less than that applied to other
sections of the International Offering Circular and was limited to
review of the documents referred to or cited therein.
Lastly, such counsel shall also state that on the basis of their
examination of the International Offering Circular, their
investigation made in connection with the preparation of the
International Offering Circular, and their participation in
conferences with representatives of the Company, the Adviser, the
Company's accountants, the Lead Managers and counsel to the
International Managers at which the contents of the
15
<PAGE> 16
International Offering Circular and related matters were discussed,
they have no reason to believe that the International Offering
Circular (other than the financial statements or other financial,
economic or statistical data contained therein, as to which they need
not express an opinion) contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they
were made, not misleading. Such counsel shall also have furnished to
the Lead Managers a written statement addressed to the International
Managers and dated such Delivery Date, in form and substance
satisfactory to the Lead Managers, to the effect that (x) such
counsel has acted as counsel to the Company in connection with the
issuance and sale by the Company of the International Stock and the
preparation of the International Offering Circular. The foregoing
opinion and statement may be qualified by a statement to the effect
that such counsel has not independently verified and does not assume
any responsibility for the accuracy, completeness or fairness of the
statements made or contained in the International Offering Circular,
except for the statements made in the International Offering Circular
under the captions described in paragraphs (v) and (vi) above insofar
as such statements relate to the Stock and concern legal matters.
(e) Piper & Marbury shall have furnished to the Lead Managers a
written opinion, as special Maryland counsel to the Company, addressed
to the International Managers and dated such Delivery Date, in form
and substance satisfactory to the Lead Managers, to the effect that:
(i) The Company has been duly incorporated and is
validly existing and in good standing as a corporation under the
laws of the State of Maryland and has all corporate power and
authority necessary to own its properties and conduct the business
in which it is engaged as described in the International Offering
Circular and to issue and sell the Stock as contemplated in this
Agreement, the U.S. Underwriting Agreement and the Japanese
Subscription Agreement;
(ii) All of the authorized shares of capital stock of the
Company, including the Stock, have been duly authorized and, upon
payment for the Stock pursuant to the terms of this Agreement, the
U.S. Underwriting Agreement and the Japanese Subscription
Agreement, all of the issued and outstanding shares of capital
stock of the Company, including the Stock, will be, validly issued
and outstanding, fully paid and nonassessable, with no personal
liability attaching to the ownership thereof; and the form of
certificate used to evidence the shares of Stock is in due and
proper form and complies with all provisions of Maryland law;
(iii) There are no preemptive or other rights to subscribe
for or to purchase, nor any restriction upon the voting or
transfer of, any shares of the
16
<PAGE> 17
Stock pursuant to the Company's corporate charter or by-laws or
any agreement or other outstanding instrument known to such
counsel;
(iv) The shares of Stock conform in all material respects
to the statements concerning them contained in the International
Offering Circular, and the authorized and outstanding shares of
capital stock of the Company are as set
forth in the International Offering Circular;
(v) Such counsel does not know of any litigation or any
proceeding pending or threatened against the Company before any
Maryland court or Maryland governmental agency, authority or body
or any Maryland arbitrator which could affect the subject matter
of this Agreement, the U.S. Underwriting Agreement or the Japanese
Subscription Agreement;
(vi) To the best of such counsel's knowledge, the Company
is not in violation of its corporate charter or by-laws; and
(vii) Each of this Agreement, the U.S. Underwriting
Agreement, the Japanese Subscription Agreement, the Advisory
Agreement, the Administration Agreement, the Administration
Agreement, the Custody Agreement and the Transfer Agency Agreement
has been duly authorized, executed and delivered by the Company;
the execution, delivery and performance of this Agreement, the
U.S. Underwriting Agreement, the Advisory Agreement, the
Administration Agreement, the Custody Agreement and the Transfer
Agency Agreement by the Company will not result in a violation of
the corporate charter or by-laws of the Company or any order, rule
or regulation of general application to the Company of any
Maryland court or governmental agency having jurisdiction over the
Company or its property; and no consent, authorization or order of
any Maryland court or governmental agency is required under
Maryland corporate law for the execution, delivery and performance
of this Agreement, the U.S. Underwriting Agreement, the Advisory
Agreement, the Administration Agreement, the Administration
Agreement, the Custody Agreement or the Transfer Agency Agreement
by the Company.
(f) ________________________________ shall have furnished to the
Lead Managers a written opinion, as counsel to the Adviser, addressed
to the International Managers and dated such Delivery Date, in form
and substance satisfactory to the Lead Managers, to the effect that:
(i) The Adviser has been duly incorporated and is
validly existing and in good standing as a corporation under the
laws of England, is duly qualified to do business and is in good
standing as a foreign corporation in all jurisdictions
17
<PAGE> 18
in which its ownership of property or the conduct of its business
requires such qualification (except where the failure to do so
would not have a material adverse effect on the Adviser), and has
all and authority necessary to own its properties and conduct the
business in which it is engaged as described in the International
Offering Circular;
(ii) This Agreement, the U.S. Underwriting Agreement and
the Advisory Agreement have been duly authorized, executed and
delivered by the Adviser; assuming due execution by the other
parties thereto, the Advisory Agreement constitutes the valid and
binding obligation of the Adviser enforceable in accordance
with its terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equity principles
(whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing; the execution,
delivery and performance of this Agreement, the U.S. Underwriting
Agreement and the Advisory Agreement by the Adviser will not
conflict with, or result in the creation or imposition of any
material lien, charge or encumbrance upon any of the assets of the
Adviser pursuant to the terms of, or constitute a default by the
Adviser under, any material agreement, indenture or instrument
known to such counsel, or result in a violation of the corporate
charter or by-laws of the Adviser or any statute (including the
Acts), any rule or regulation of, or to the knowledge of such
counsel any order of, any court or governmental agency having
jurisdiction over the Adviser or its property; and no consent,
authorization or order of, or filing or registration with, any
court or governmental agency is required for the execution,
delivery and performance of this Agreement, the U.S. Underwriting
Agreement or the Advisory Agreement by the Adviser, except such as
has been obtained under the Acts, the Advisers Act or the
Exchange Act or as may be required by state securities laws;
(iii) The Adviser is duly registered with the Commission
under the Advisers Act as an investment adviser and is not
prohibited by the Advisers Act or the Investment Company Act, or
the rules and regulations under such acts, from acting under the
Advisory Agreement;
(iv) Such counsel does not know of any litigation or any
proceeding pending or threatened against the Adviser which could
affect the subject matter of this Agreement, the U.S. Underwriting
Agreement or the Advisory Agreement or the registration or good
standing of the Adviser with the Commission, or which is required
to be disclosed in the International Offering Circular which is
not disclosed and correctly summarized therein; and
18
<PAGE> 19
(v) To the best of such counsel's knowledge the Adviser
is not in violation of its corporate charter or by- laws, or in
default under any material agreement, indenture or instrument.
Such opinion shall also contain a statement that in the course of
their representation of the Adviser in connection with the offering by
the Company of its Stock, such counsel participated in meetings and
telephone conversations with certain directors and officers of the
Adviser, and that although they are not passing upon, and do not
assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the International Offering Circular, and
while such counsel has not made any independent check or verification
thereof, on the basis of the foregoing, no facts came to their
attention that led them to believe that the Section of the
International Offering Circular captioned "Management of the
Fund--Investment Adviser" insofar as it relates to or describes the
Adviser, at such Delivery Date, contains an untrue statement of a
material fact 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.
In giving such opinion, __________________ may rely on the
opinion of _________________ as to matters of ___________ law,
provided that _____________________ furnish a copy thereof to the
Lead Managers and state such opinion is satisfactory in form and scope
and that the Underwriters are entitled to rely thereon.
(g) With respect to the letter of Ernst & Young LLP delivered to
the Lead Managers concurrently with the execution of this Agreement,
the Company shall have furnished to the Lead Managers a letter (the
"bring-down letter") of such accountants, addressed to the
International Managers and dated such Delivery Date (i) confirming
that they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date of the
bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified
financial information is given in the International Offering Circular,
as of a date not more than five days prior to the date of the
bring-down letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered by the
initial letter and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letter.
(h) The Company shall have furnished to the Lead Managers a
certificate, dated such Delivery Date, of its Chairman of the Board,
its President or a Vice President and its Treasurer or an Assistant
Treasurer stating that:
(i) The representations, warranties and agreements of
the Company in Section 1 are true and correct as of such Delivery
Date; the Company has
19
<PAGE> 20
complied with all its agreements contained herein; and the
conditions set forth in Section 7(a) have been fulfilled; and
(ii) They have carefully examined the International
Offering Circular and, in their opinion (A) as of the Effective
Date, the International Offering Circular did not include any
untrue statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading, and (B) since the Effective Date
no event has occurred which should have been set forth in a
supplement or amendment to the International Offering Circular
which has not been so set forth in such supplement or amendment.
(i) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the NYSE, in the over-the-counter market, or
on the principal stock exchange in any of Argentina, Brazil, Chile,
Colombia, Mexico, Peru or Venezuela (the "Principal Countries"), or
trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum prices
shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by Federal or state authorities or by
comparable authorities in any of the Principal Countries, (iii) the
United States or any of the Principal Countries shall have become
engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or any of the Principal
Countries or there shall have been a declaration of a national
emergency or war by the United States or any of the Principal
Countries or (iv) there shall have occurred such a material adverse
change in general economic, political or financial conditions in the
United States or in any of the Principal Countries (or the effect of
international conditions on the financial markets in the United States
or in any of the Principal Countries shall be such) as to make it, in
the judgment of a majority in interest of the several International
Managers, impracticable or inadvisable to proceed with the public
offering or delivery of the International Stock being delivered on
such Delivery Date on the terms and in the manner contemplated in the
International Offering Circular.
(j) The NYSE shall have approved the Stock for listing, subject
only to official notice of issuance.
(k) The closing under the U.S. Underwriting Agreement and the
Japanese Subscription Agreement shall have occurred concurrently with
or prior to the closing hereunder on the First Delivery Date.
20
<PAGE> 21
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to
counsel for the International Managers.
8. Indemnification and Contribution. (a) The Company and
the Adviser, jointly and severally, shall indemnify and hold
harmless each International Manager and each person, if any, who controls any
International Manager within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any action
in respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of International Stock), to
which that International Manager or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
International Offering Circular, International Offering Circular or in any
amendment or supplement thereto or the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, and
shall reimburse each International Manager and each such controlling person
promptly upon demand for any legal or other expenses reasonably incurred by
that International Manager or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company and the Adviser shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any of such documents in reliance upon and in
conformity with written information furnished to the Company or the Adviser
through the Lead Managers by or on behalf of any International Manager
specifically for inclusion therein; provided further, that as to any
Preliminary International Offering Circular this indemnity agreement shall not
inure to the benefit of any International Manager or any person controlling
that International Manager on account of any loss, claim, damage, liability or
action arising from the sale of International Stock to any person by that
International Manager if that International Manager failed to send or give a
copy of the International Offering Circular, as the same may be amended or
supplemented, to that person and the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact in such Preliminary International Offering Circular was corrected
in the International Offering Circular, unless such failure resulted from
non-compliance by the Company with Section 5(c); provided further, that the
Adviser shall be liable to any party indemnified by it under this Section 8(a)
only to the extent that the Company fails to indemnify and hold harmless such
indemnified party pursuant to this Section 8(a). The foregoing indemnity
agreement is in addition to any liability which the Company and Adviser may
otherwise have to any International Manager or to any controlling person of
that International Manager.
(b) Each International Manager, severally and not jointly, shall
indemnify and hold harmless the Company, the Adviser, each of their respective
directors, each of the Company's
21
<PAGE> 22
officers who signed the Registration Statement and each person, if any, who
controls the Company or the Adviser within the meaning of the Securities Act,
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company, the Adviser or any such
director, officer or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary International
Offering Circular, International Offering Circular or in any amendment or
supplement thereto or the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, but in each case
only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company or the Adviser through the Lead
Managers by or on behalf of that International Manager specifically for
inclusion therein, and shall reimburse the Company, the Adviser and any such
director, officer or controlling person for any legal or other expenses
reasonably incurred by the Company, the Adviser or any such director, officer
or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action
as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any International Manager may otherwise have to
the Company, the Adviser or any such director, officer or controlling person.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 8. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of
its election to assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this Section 8 for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Lead Managers shall have the right
to employ counsel to represent jointly the Lead Managers and those other
International Managers and their respective controlling persons who may be
subject to liability arising out of any claim in respect of which indemnity may
be sought by the International Managers against the Company or the Adviser,
under this Section 8 if, in the reasonable judgment of the Lead Managers, it is
22
<PAGE> 23
advisable for the Lead Managers and those International Managers and
controlling persons to be jointly represented by separate counsel, and in that
event the fees and expenses of such separate counsel shall be paid by the
Company; provided further, that the Company and the Adviser shall have the
right to employ counsel to represent jointly the Company and the Adviser and
their respective controlling persons who may be subject to liability arising
out of any claim in respect of which indemnity may be sought by the Company and
the Adviser against the International Managers, under this Section 8 if, in the
reasonable judgment of the Company and the Adviser, it is advisable for the
Company and the Adviser and those controlling persons to be jointly represented
by separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the Company.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or 8(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Adviser on the one hand and the International
Managers on the other from the offering of the International Stock or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Adviser on the one hand and the International Managers on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Adviser on the one hand and the International Managers on the
other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the International
Stock purchased under this Agreement (before deducting expenses) received by
the Company, on the one hand, and the total underwriting discounts and
commissions received by the International Managers with respect to the shares
of the International Stock purchased under this Agreement, on the other hand,
bear to the total gross proceeds from the offering of the shares of the
International Stock under this Agreement, in each case as set forth in the
table on the cover page of the International Offering Circular. As between the
Company and the Adviser (and solely for the purpose of allocating between such
parties the total amount to be contributed by them), the relative benefits
received by the Company, on the one hand, and the Adviser, on the other hand,
shall be deemed to be in the same proportion that the total net proceeds from
the International Offering, the U.S. Offering and the Japanese Offering (before
deducting expenses) received by the Company bears to the present value of the
future revenue stream to be generated by the advisory fees paid by the Company
to the Adviser pursuant to the Advisory Agreement. The relative fault shall be
determined by reference to whether the 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 Company, the Adviser or the International
Managers, the intent of
23
<PAGE> 24
the parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company, the Adviser and
the International Managers agree that it would not be just and equitable if
contributions pursuant to this Section 8(d) were to be determined by pro rata
allocation (even if the International Managers were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 8(d)
shall be deemed to include, for purposes of this Section 8(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no International Manager shall be required to
contribute any amount in excess of the amount by which the total price at which
the International Stock underwritten by it and distributed to the public was
offered to the public exceeds the amount of any damages which such
International Manager has otherwise paid or become liable to pay by reason of
any 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 Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The International
Managers' obligations to contribute as provided in this Section 8(d) are
several in proportion to their respective underwriting obligations and not
joint.
(e) The International Managers severally confirm that the statements
with respect to the public offering of the International Stock set forth on the
cover page of, and under the caption "Underwriting" in, the International
Offering Circular are correct, and the Company and the Adviser acknowledge that
such statements constitute the only information furnished in writing to the
Company or the Adviser by or on behalf of the International Managers
specifically for inclusion in the International Offering Circular.
9. Defaulting International Managers. If, on either Delivery Date,
any International Manager defaults in the performance of its obligations under
this Agreement, the remaining non-defaulting International Managers shall be
obligated to purchase the International Stock which the defaulting
International Manager agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the International Firm
Stock set opposite the name of each remaining non-defaulting International
Manager in Schedule 1 hereto bears to the total number of shares of the
International Firm Stock set opposite the names of all the remaining
non-defaulting International Managers in Schedule 1 hereto; provided, however,
that the remaining non- defaulting International Managers shall not be
obligated to purchase any of the International Stock on such Delivery Date if
the total number of shares of the International Stock which the defaulting
International Manager or International Managers agreed but failed to purchase
on such date exceeds 9.09% of the total number of shares of the International
Stock to be purchased on such Delivery Date, and any remaining non-defaulting
International Manager shall not be obligated to purchase more than 110% of the
number of shares of the International Stock which it agreed to purchase on such
Delivery Date pursuant to the terms of Section 2.
24
<PAGE> 25
If the foregoing maximums are exceeded, the remaining non-defaulting
International Managers, or those other underwriters satisfactory to the Lead
Managers who so agree, shall have the right, but shall not be obligated, to
purchase, in such proportion as may be agreed upon among them, all the
International Stock to be purchased on such Delivery Date. If the remaining
International Managers or other underwriters satisfactory to the Lead Managers
do not elect to purchase the shares which the defaulting International Manager
or International Managers agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to any Option Delivery Date, the obligation of
the International Managers to purchase, and of the Company to sell, the
International Option Stock) shall terminate without liability on the part of
any non-defaulting International Manager or the Company, except that the
Company will continue to be liable for the payment of expenses to the extent
set forth in Sections 6 and 11. As used in this Agreement, the term
"International Manager" includes, for all purposes of this Agreement unless the
context requires otherwise, any party not listed in Schedule 1 hereto who,
pursuant to this Section 9, purchases International Firm Stock which a
defaulting International Manager agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting International
Manager of any liability it may have to the Company for damages caused by its
default. If other underwriters are obligated or agree to purchase the
International Stock of a defaulting or withdrawing International Manager,
either the Lead Managers or the Company may postpone the First Delivery Date
for up to seven full business days in order to effect any changes that in the
opinion of counsel for the Company or counsel for the International Managers
may be necessary in the International Offering Circular or in any other
document or arrangement.
10. Termination. The obligations of the International Managers
hereunder may be terminated by the Lead Managers by notice given to and
received by the Company prior to delivery of and payment for the International
Firm Stock if, prior to that time, any of the events described in Section 7(i)
shall have occurred or if the International Managers shall decline to purchase
the Stock for any reason permitted under this Agreement.
11. Reimbursement of International Managers' Expenses. If (a) the
Company shall fail to tender the Stock for delivery to the International
Managers for any reason permitted under this Agreement or (b) the International
Managers shall decline to purchase the Stock for any reason permitted under
this Agreement (including the termination of this Agreement pursuant to Section
10), the Company and the Adviser shall reimburse the International Managers for
the reasonable fees and expenses of their counsel and for such other reasonable
out-of-pocket expenses as shall have been incurred by them in connection with
this Agreement and the proposed purchase of the Stock, and upon demand the
Company and the Adviser shall pay the full amount thereof to the Lead Managers.
If this Agreement is terminated pursuant to Section 9 by reason of the default
of one or more International Managers, neither the Company nor the Adviser
shall be obligated to reimburse any International Manager on account of those
expenses.
25
<PAGE> 26
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the International Managers, shall be delivered or sent
by mail, telex or facsimile transmission to Lehman Brothers
International (Europe), 1 Broadgate, London EC2 M7HA, England,
Attention: Syndicate Department (Fax: ___________);
(b) if to the Company, shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Company set forth in
the Registration Statement, Attention: President (Fax: ____________);
(c) if to the Adviser, shall be delivered or sent by mail, telex
or facsimile transmission to Lehman Brothers Global Asset Management
Limited, Two Broadgate, London EC2M 7HA, England, Attention: President
(Fax: ____________);
provided, however, that any notice to an International Manager pursuant to
Section 8(c) shall be delivered or sent by mail, telex or facsimile
transmission to such International Manager at its address set forth in its
acceptance telex to the Lead Managers, which address will be supplied to any
other party hereto by the Lead Managers upon request. Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof. The Company shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the International
Managers by Lehman Brothers Inc. on behalf of the Lead Managers.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the International Managers, the
Company, the Adviser and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Company and the Adviser contained in this Agreement shall also be deemed to
be for the benefit of the person or persons, if any, who control any
International Manager within the meaning of Section 15 of the Securities Act
and (B) the indemnity agreement of the International Managers contained in
Section 8(b) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company or the Adviser who have
signed the Registration Statement and any person controlling the Company within
the meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 13, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Adviser and the International Managers
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
International Stock and shall remain in full force and effect,
26
<PAGE> 27
regardless of any investigation made by or on behalf of any of them or any
person controlling any of them.
15. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the NYSE
is open for trading and (b) "subsidiary" has the meaning set forth in Rule 405
of the Rules and Regulations.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF NEW YORK.
17. Consent to Jurisdiction. EACH OF THE PARTIES HERETO CONSENTS TO
THE JURISDICTION OF AND VENUE IN FEDERAL AND STATE COURTS LOCATED IN THE
BOROUGH OF MANHATTAN, CITY AND STATE OF NEW YORK, OVER ANY SUIT, ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT. RIDER 29-1
18. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
19. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement among the Company,
the Adviser and the International Managers, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
LEHMAN BROTHERS LATIN AMERICA
GROWTH FUND, INC.
By:____________________________________
LEHMAN BROTHERS GLOBAL ASSET
MANAGEMENT LIMITED
By:____________________________________
27
<PAGE> 28
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
LEHMAN BROTHERS INTERNATIONAL (EUROPE)
NIKKO EUROPE Plc
For themselves and as Lead Managers for each
of the several International Managers
By: LEHMAN BROTHERS INTERNATIONAL (EUROPE)
By:____________________________________
Authorized Representative
28
<PAGE> 29
SCHEDULE 1
<TABLE>
<CAPTION>
Number of
International Managers Shares
- ---------------------- ---------
<S> <C>
LEHMAN BROTHERS INTERNATIONAL (EUROPE) . . . . . . . . . . . .
NIKKO EUROPE Plc
_________
Total . . . . . . . . . . . . . . . . . . . . . . . . . . .
=========
</TABLE>
1
<PAGE> 1
EXHIBIT (h)(F)
7,000,000 SHARES
LEHMAN BROTHERS LATIN AMERICA GROWTH FUND, INC.
COMMON STOCK
AGREEMENT AMONG INTERNATIONAL MANAGERS
____________, 1994
To each of the several International Managers
named in Schedule I to the attached
International Underwriting Agreement
Dear Sirs:
1. International Underwriting Agreement and Agreement
Between U.S. Underwriters, International Managers and Japanese Underwriters.
Lehman Brothers Latin America Growth Fund, Inc., a Maryland corporation (the
"Company"), proposes to enter into an underwriting agreement (the
"International Underwriting Agreement"), substantially in the form attached
hereto as Annex A, with us and other prospective underwriters (including you)
(the "International Managers"), severally and not jointly, providing for the
several purchases by the International Managers from the Company of _________
shares (the "International Firm Shares") of the Company's Common Shares, par
value $.001 per share (the "Common Stock"). In addition, the International
Underwriting Agreement provides that solely for the purpose of covering
over-allotments, the International Managers will have an option to purchase up
to ________ additional shares of Common Stock from the Company (the
"International Option Shares"). The International Firm Shares and the
International Option Shares, if purchased, are hereinafter collectively
referred to as the "International Shares". This is to confirm the fact that
each International Manager has agreed to purchase from the Company, in
accordance with the terms of the International Underwriting Agreement, the
number of Firm International Shares set forth opposite its name in Schedule I
to the International Underwriting Agreement.
The Company also proposes to enter into (i) an underwriting
agreement (the "U.S. Underwriting Agreement") with Lehman Brothers Inc., The
Nikko Securities Co. International, Inc., Advest Inc., Dain Bosworth
Incorporated, Fahnestock & Co. Inc., First of Michigan Corporation, Principal
Financial Securities, Inc. and Rauscher Pierce Refsnes, Inc., as
representatives (the "Representatives") of the U.S. Underwriters named in
Schedule 1 to the U.S. Underwriting Agreement (the "U.S. Underwriters"),
providing for the purchase by the U.S. Underwriters from the Company an
aggregate of _________ shares of the Common Stock (plus an option to purchase
up to _________ additional shares from the Company solely for the
<PAGE> 2
purpose of covering over-allotments) (the "U.S. Shares"); and (ii) a
subscription agreement (the "Japanese Subscription Agreement") with The Nikko
Securities Co., Ltd. and Lehman Brothers Japan Inc. (the "Japanese Managers"
and, together with the several underwriters named in Schedule 1 to the Japanese
Underwriting Agreement, the "Japanese Underwriters") providing for the purchase
by the Japanese Managers of up to _________ shares of Common Stock (the
"Japanese Shares"). The International Shares, the U.S. Shares and the Japanese
Shares are hereinafter collectively referred to as the "Shares." An agreement
between the International Managers, the U.S. Underwriters and the Japanese
Underwriters (the "Agreement Between U.S. Underwriters, International Managers
and Japanese Underwriters") substantially in the form attached hereto as Annex
B is to be entered into between the Representatives, the Japanese Underwriters
and us, as lead managers for the International Managers (the "Lead Managers"),
pursuant to which the International Managers may purchase from the U.S.
Underwriters a portion of the U.S. Shares to be sold pursuant to the U.S.
Underwriting Agreement, or sell to the U.S. Underwriters a portion of the
International Shares to be sold pursuant to the International Underwriting
Agreement.
2. International Offering Circulars; Registration
Statement and Prospectuses.
a. The Company has authorized the International
Managers to distribute or cause to be distributed a preliminary international
offering circular (the "Preliminary International Offering Circular") dated
September 2, 1994 with respect to the International Shares. The International
Shares will be offered to the public initially as set forth in an international
offering circular (the "International Offering Circular") to be prepared by the
Company.
b. The Company has filed a registration
statement filed with the United States Securities and Exchange Commission (the
"Commission") under the United States Securities Act of 1933, as amended (the
"Securities Act") with respect to the U.S. Shares. An amendment or amendments
to such registration statement may have been filed and the registration
statement and the related prospectuses may be further amended or changed, but
no such amendment or change shall release you from or affect your obligations
hereunder or under the International Underwriting Agreement. The registration
statement as finally amended and revised at the time the registration statement
becomes effective, including all information deemed to be a part thereof at
such time pursuant to Rule 424 of the rules and regulations of the Commission
under the Securities Act, is hereinafter referred to as the "Registration
Statement." The Registration Statement has not become effective.
c. A copy of the Registration Statement as filed
(exclusive of exhibits) and a copy of each amendment as filed (exclusive of
exhibits) heretofore have been or will be delivered to you, as well as such
Preliminary International Offering Circulars as you have requested, receipt of
which you hereby acknowledge, and International Offering Circulars as have been
or will be requested by you.
2
<PAGE> 3
3. Authority of the Lead Managers.
a. Each International Manager hereby authorizes
us as the Lead Managers, on such International Manager's behalf, to negotiate
in our discretion the terms of, and to execute and deliver, the International
Underwriting Agreement, including authority to agree to any variation of the
terms of the International Underwriting Agreement (except as to the price of
International Shares, or the number of International Shares set forth opposite
each International Manager's name in Schedule I thereto) which, in our
judgment, is not a material variation. Each International Manager also
authorizes us to exercise, in our discretion, all authority and discretion
vested in the International Managers or in us by the International Underwriting
Agreement and to take all such action as we may believe desirable in order to
carry out the International Underwriting Agreement and this Agreement.
b. Each International Manager authorizes us as
the Lead Managers to take such action as, in our discretion, may be necessary
or desirable to effect the sale and distribution of the International Shares,
including the right to determine and advise the Company of the terms of any
proposed offering, and selling concession to Selected Dealers (as such term is
defined in Section 5(c) hereof) and the reallowance, if any, to other dealers.
Each International Manager also authorizes us to determine all matters relating
to the public advertisement of the offering of the International Shares.
c. Each International Manager hereby authorizes
us, as Lead Managers, to negotiate in our discretion the terms of, and to
execute and deliver, the Agreement Between U.S. Underwriters, International
Managers and Japanese Underwriters, to determine the purchase and sale prices
for any Shares purchased or sold by each International Manager thereunder, to
determine whether to purchase or sell any Shares thereunder (except that,
without its consent, we shall not determine to make, or make, net purchases of
Shares thereunder for the account of any International Manager in an aggregate
amount exceeding 15% of the number of International Shares set forth opposite
the name of such International Manager in Schedule I to the International
Underwriting Agreement), and, in accordance with any such determination, to
purchase or sell Shares for the account of any International Manager thereunder
and to take such other action as we believe desirable in order to carry out the
Agreement Between U.S. Underwriters, International Managers and Japanese
Underwriters and to agree to any waiver, modification or amendment of the terms
thereof. In the event that we purchase or sell Shares for the account of any
International Manager pursuant to the Agreement Between U.S. Underwriters,
International Managers and Japanese Underwriters, we will notify such
International Manager promptly of the number of Shares purchased or sold for
its account and the prices thereof.
3
<PAGE> 4
4. Authority of the Lead Managers as to Withdrawing or
Defaulting International Manager.
a. Until the termination of this Agreement, we
are authorized to arrange for or agree to the purchase by other persons, who
may include ourselves and any of the other International Managers, of any
International Shares not taken up by any withdrawing or defaulting
International Manager. In the event that such arrangements or agreements are
made, the respective number of Shares to be purchased by the other
International Managers and by such other persons, if any, shall be taken as the
basis for all rights and obligations hereunder, but this shall not in any way
affect the liability of any defaulting International Manager to the other
International Managers (including ourselves) for damages resulting from such
default, nor shall such default in any way relieve any other International
Manager of any of its obligations hereunder or under the International
Underwriting Agreement, except as herein or therein provided.
b. In the event of default by one or more
International Managers in respect of its obligations under this Agreement or
the Agreement Between U.S. Underwriters, International Managers and Japanese
Underwriters, including, without limitation, the obligations of the
International Managers with respect to shares of Common Stock of the Company
purchased or sold by us for their respective accounts pursuant to Section 9
hereof, and to the extent that arrangements shall not have been made by us for
any person to assume the obligations of such defaulting International Manager,
each nondefaulting International Manager shall assume its proportionate share
of the obligations of each defaulting International Manager without relieving
any such defaulting International Manager of its liability therefor.
5. Offering of the International Shares.
a. We will notify you when the public offering
of the International Shares (subject to reservation by us as herein provided)
is to be made and of the public offering price. We are authorized, in our
discretion, after the initial public offering, to change such public offering
price, the selling concession to Selected Dealers and the reallowance, if any,
to other dealers. The offering price at any time in effect is hereinafter
referred to as the "public offering price." Each International Manager agrees
to make, at the public offering price, a public offering of the Shares
purchased by it and not reserved by us for sale to retail purchasers and
dealers.
b. Each International Manager agrees that,
except for transactions through us permitted by the Agreement Between U.S.
Underwriters, International Managers and Japanese Underwriters, (i) it is not
purchasing any Shares for the account of any U.S. Person or Japanese Person,
(ii) it has not offered or sold, and will not offer, sell, resell or deliver,
directly or indirectly, any of the Shares or distribute any Preliminary
International Offering Circular or International Offering Circular to any U.S.
Person or Japanese Person and (iii) any
4
<PAGE> 5
dealer to whom it may sell any of the Shares (A) will represent that it is not
purchasing for the account of any U.S. Person or Japanese Person and (B) will
agree that it will not offer, sell, resell or deliver, directly or indirectly,
any of the Shares or distribute the Preliminary Prospectus or the Prospectus or
Japanese Prospectus (each as defined in the U.S. Underwriting Agreement) to any
U.S. Person or Japanese Person or to any other dealer who does not so represent
and agree. The foregoing limitations shall not restrict (x) offers, sales,
resales, deliveries or distributions by an International Manager to or through
investment advisors who are not U.S. Persons or Japanese Persons, or other
persons exercising investment discretion who are not U.S. Persons or Japanese
Persons, who are purchasing for the account of a U.S. Person or Japanese
Person; (y) purchases by an International Manager who is also acting as a U.S.
Underwriter of U.S. Shares for the account of a U.S. Person; or (z) offers or
sales by an International Manager who is also acting as a U.S. Underwriter of
U.S. Shares to a U.S. Person. As used herein, the term "United States" shall
mean the United States of America (including the District of Columbia) and its
territories, its possessions and other areas subject to its jurisdiction, and
"U.S. Person" shall mean any resident or citizen of the United States, any
corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, or any estate
or trust the income of which is subject to United States federal income
taxation regardless of the source of its income. "Japanese Person" shall mean
any national or resident of Japan, or any corporation, pension, profit-sharing
or other trust or other entity organized under the laws of Japan (other than a
U.S. Person, as such term is defined in Regulation S of the United States
Securities Act of 1933, as amended, and other than a branch located outside of
Japan of any Japanese Person).
c. Each International Manager authorizes us to
reserve and offer for sale such of the Shares to be purchased by such
International Manager pursuant to the International Underwriting Agreement or
the Agreement Between U.S. Underwriters, International Managers and Japanese
Underwriters or for its account under any of the provisions of this Agreement
as we shall determine (i) to retail purchasers and (ii) to dealers to be
selected by us (the "Selected Dealers") (A) who are members of the United
States National Association of Securities Dealers, Inc. (the "NASD") and who
will agree to comply with the requirements of Section 24 of Article III of the
Rules of Fair Practice of the NASD or (B) who are foreign dealers not eligible
for membership in the NASD and who will agree (I) not to make any sales of
Shares in, or to nationals or residents of, the United States and (II) in
making any sales of such Shares to comply, as though such foreign dealers were
members of the NASD, with (x) the interpretation of the Board of Governors of
the NASD entitled "Free-Riding and Withholding," (y) the requirements of
Sections 8, 24 and 36 of Article III of the Rules of Fair Practice of the NASD
and (z) to the extent applicable to such foreign dealers, the requirements of
Section 25 of such Article III. The sales referred to in clause (i) shall be
made at the public offering price, and the sales referred to in clause (ii)
shall be made at the public offering price less the selling concession to
Selected Dealers. We may arrange for any International Manager, including
ourselves, to become one of such Selected Dealers, and each International
Manager agrees that it will not offer any Shares for sale at a price below the
public offering price or
5
<PAGE> 6
allow any concession therefrom except as herein otherwise provided. Sales made
by us for the account of each International Manager to Selected Dealers will be
as nearly as practicable in the ratio which the number of Shares so reserved
for the account of such International Manager bears to the aggregate number of
Shares so reserved for the account of all International Managers.
d. Any such public offering may be made by us
pursuant to the terms and conditions of an International Selling Agreement,
substantially in the form attached hereto as Annex C. If any such offering is
made pursuant to the terms and conditions of an International Selling
Agreement, each International Manager agrees to be governed by the terms and
conditions thereof.
e. We, as the Lead Managers, may make purchases
and sales of Shares from or to any International Manager or Selected Dealer at
the public offering price less all or any part of the selling concession to
Selected Dealers. With our consent, any International Manager may make
purchases or sales of Shares from or to any International Manager or Selected
Dealer at the public offering price less all or any part of the selling
concession to Selected Dealers.
f. We will notify each International Manager
promptly upon the release of the public offering of the International Shares as
to the number of Shares reserved for sale to retail purchasers and Selected
Dealers, and the number of Shares not so reserved. Any Shares not so reserved
may be sold by each International Manager for its own account. Each
International Manager agrees, upon our request, at any time or times prior to
the termination of this Agreement, to report to us as to the number of Shares
not so reserved which then remain unsold by it and we may, in our discretion,
add to the Shares reserved for sale to retail purchasers and Selected Dealers
any such unsold Shares.
g. If all Shares so reserved are not promptly
sold by us, any International Manager may from time to time, with our consent,
obtain a release of all or any Shares of such International Manager then
remaining unsold, and Shares so released shall thereafter be deemed not to have
been reserved. Shares of any International Manager so reserved which remain
unsold or if sold have not been paid for at any time prior to the termination
of this Agreement may, in our discretion or upon the request of such
International Manager, be delivered to such International Manager for carrying
purposes only, but such Shares shall remain subject to disposition by us, in
our discretion, until this Agreement is terminated. If the aggregate number of
Shares so reserved upon termination of this Agreement does not exceed 20% of
the total number of Shares purchased by the International Managers pursuant to
the International Underwriting Agreement and the Agreement Between U.S.
Underwriters, International Managers and Japanese Underwriters, net of the
portion of International Shares of all International Managers sold pursuant to
the Agreement Between U.S. Underwriters, International Managers and Japanese
Underwriters, we may, in our discretion, sell for the
6
<PAGE> 7
accounts of the several International Managers all or any Shares so reserved,
at such prices, on such terms and in such manner as we may determine.
h. We may, in our discretion, charge the account
of any International Manager with an amount equal to the selling concession to
Selected Dealers (plus any broker's commissions and transfer taxes) with
respect to Shares purchased by such International Manager, or any other shares
of Common Stock purchased for its account, and not sold to retail purchasers or
Selected Dealers for its account by us, which, prior to the termination of this
Agreement, we may purchase or contract to purchase, in the open market or
otherwise, pursuant to this Agreement, for the account of any International
Manager, or which may be delivered against contracts made prior to the
termination of this Agreement; or in lieu thereof require such International
Manager to repurchase on demand at the total cost thereof (including
commissions and taxes) any Shares or other shares of Common Stock so purchased
or contracted to be purchased. Shares or other shares of Common Stock
delivered on such repurchases need not be the identical shares originally
purchased. In lieu of so charging the account of any International Manager or
delivering such Shares or other shares of Common Stock to any International
Manager obligated to repurchase the same as aforesaid, we may, in our
discretion, sell the same for the account of such International Manager,
publicly or privately, without notice, at such prices and upon such terms and
to such persons, including any of the several International Managers, as we may
determine, charging to the International Managers so obligated the amount of
any loss and expense or crediting to such International Manager the amount of
any profit less any expense resulting from such sale.
i. Except for the registration of the Shares
under the Securities Act and the registration of Japanese Shares in Japan in
accordance with the terms of the Japanese Subscription Agreement, no action has
been taken or will be taken in any jurisdiction by any International Manager or
the Company that would permit a public offering of Shares outside the United
States or Japan in any country or jurisdiction where action for the purpose is
required. Upon application to us each International Manager will be informed
as to the jurisdictions in which we have been advised by counsel that the
Shares have been qualified for sale or are exempt under the laws of such
jurisdictions, but we have not assumed and will not assume any obligation or
responsibility as to the right of any International Manager to sell Shares in
any such jurisdiction. Each International Manager will observe all applicable
laws and regulations in any jurisdictions in which it may offer, sell, resell
or deliver Shares.
j. Each International Manager agrees that (i) it
is not carrying on investment business in the United Kingdom in contravention
of Section 3 of the Financial Services Act 1986 (the "1986 Act"), (ii) within
the United Kingdom, it will not offer or sell any Shares by means of any
document other than to persons whose ordinary business is to buy or sell shares
or debentures, whether as principal or agent (except in circumstances not
constituting an offer to the public within the meaning of the Companies Act
1985), and that it will not distribute any International Preliminary
Prospectus, the International Prospectus or any offering
7
<PAGE> 8
material relating to the Shares in or from the United Kingdom other than to
persons whose ordinary business involves the acquisition and disposal, or the
holding, of securities, whether as principal or agent (unless such
International Manager is a person permitted to do so under the securities laws
of the United Kingdom), and that it will procure from any purchaser from it of
any Shares an undertaking to comply with the provisions of this subsection (j),
(iii) it has complied and will comply with all applicable provisions of the
1986 Act with respect to anything done by it in relation to the Shares in, from
or otherwise involving the United Kingdom, and (iv) it has not issued or caused
to be issued and will not issue or cause to be issued in the United Kingdom any
investment advertisement (within the meaning of the 1986 Act) relating to the
Shares except in compliance with provisions applicable under the 1986 Act or
pursuant to any exemption thereunder and, in particular, it has not given and
will not give copies of this document or any other document received by it in
connection with the issue of the Shares to any person in the United Kingdom who
does not fall within Article 9(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1988.
6. Compensation. After delivery of payment for the
Shares to the Lead Managers in accordance with Section 7 hereof and after
payment to the Company of the purchase price for the Shares purchased for the
account of the International Managers in accordance with Paragraph 3 of the
International Underwriting Agreement, the Lead Managers shall allocate the
balance of such amounts, in proportions determined by the International
Managers as among themselves and in their sole discretion, (a) to the Lead
Managers themselves beneficially as a praecipium from the management commission
payable to each International Manager as compensation for its services, an
amount equal to $_____ per share for each International Share which such
International Manager is obligated to purchase pursuant to the International
Underwriting Agreement; (b) to each of the International Managers (including
the Lead Managers) an underwriting commission in an amount equal to $____ per
share for each International Share that such International Manager is obligated
to purchase pursuant to the International Underwriting Agreement (i) less such
International Manager's proportionate share of the expenses incurred in
connection with the offering of the Shares to the extent that it is liable for
such expenses under Section 11 hereof (excluding interest on any amount
borrowed pursuant to Section 8 hereof so far as not recovered from the relevant
International Managers), (ii) less interest on any amount borrowed pursuant to
Section 8 hereof so far as not recovered from the relevant International
Managers and (iii) plus or less (as the case may be) any profits or losses
resulting from any transactions carried out by the Lead Managers pursuant to
Section 9 hereof; and (c) to each of the International Managers (including the
Lead Managers) the balance of a management commission, in an amount equal to
$_____ per share for each International Share which such International Manager
is obligated to purchase pursuant to the International Underwriting Agreement,
which remains after payment to the Lead Managers of the praecipium determined
in accordance with clause (a) of this Section 6. Any balance thereafter
remaining shall be retained by the Lead Managers on account of the expenses
incurred by it in connection with the offering of the Shares.
8
<PAGE> 9
7. Payment and Delivery.
a. At or before 9:00 A.M., New York City time,
on any date of delivery determined as provided in the International
Underwriting Agreement (each, a "Closing Date"), each International Manager who
is a member of, or who clears through a member of, The Depository Trust Company
("DTC"), agrees to deliver to us through the facilities of DTC a certified or
official bank check payable in New York Clearing House funds in U.S. dollars to
the order of Lehman Brothers International (Europe) for an amount equal to the
initial public offering price less the selling concession to Selected Dealers
for (i) the International Shares to be purchased by such International Manager
pursuant to the International Underwriting Agreement on such Closing Date and
(ii) any U.S. Shares purchased for the account of such International Manager
pursuant to the Agreement Between U.S. Underwriters and International Managers
at least three business days prior to such Closing Date. Any International
Manager who is not a member of, or who does not clear through a member of, DTC
agrees to notify us in accordance with Section 19 hereof at least three
business days prior to such Closing Date for the purpose of making other
payment arrangements. In the case of any U.S. Shares purchased for the account
of any International Manager pursuant to the Agreement Between U.S.
Underwriters and International Managers subsequent to three business days prior
to such Closing Date, such International Manager agrees to deliver payment for
such U.S. Shares to us in the manner provided in this Section 7(a) as promptly
as practicable, but in no event later than 9:00 A.M., New York City time, on
the fifth business day after such purchase. We may, however, advance funds (to
the extent permitted by law) in respect of Shares which have been sold or
reserved for sale to retail purchasers or Selected Dealers for the account of
any International Manager on such Closing Date. Each International Manager
authorizes us to make payment to the Company, for the Shares to be purchased by
such International Manager against delivery to us of certificates for such
Shares for the account of such International Manager on such Closing Date.
Unless notified by 12:00 Noon, New York City time, on the first full business
day following the day on which the International Underwriting Agreement becomes
effective to make other arrangements, we may, in our discretion, advise the
Company to prepare each International Manager's certificates for the Shares to
be purchased by it in the name of such International Manager (or in such other
name as we shall designate, but such other name shall be for administrative
convenience only and shall not affect such International Manager's title to
such Shares or the several nature of the obligations of the International
Managers hereunder) in such denominations as we may determine. We will give
each International Manager notice of the dates of delivery.
b. Each International Manager authorizes us to
hold and deliver against payment certificates for the Shares purchased by such
International Manager or for its account which have been sold or reserved for
sale to retail purchasers or Selected Dealers and agrees to endorse the
certificates for such Shares in blank or to deliver to us upon our request
appropriate stock powers executed in blank. We will remit promptly to each
International Manager an amount equal to the purchase price paid by such
International Manager and not advanced or
9
<PAGE> 10
borrowed by us, for the Shares sold for such International Manager's account to
retail purchasers or Selected Dealers or pursuant to the Agreement Between U.S.
Underwriters and International Managers and for which payment has been
received. We agree that certificates for any Shares not sold or reserved by us
as aforesaid will be available for delivery to each International Manager
through the facilities of DTC as soon as practicable after such certificates
have been delivered to us.
c. If an International Manager is a member of,
or clears through a member of, DTC, we may, in our discretion, deliver Shares
purchased by such International Manager through the facilities of DTC.
8. Authority to Borrow. In connection with the
transactions contemplated in the International Underwriting Agreement, the
Agreement Between U.S. Underwriters, International Managers and Japanese
Underwriters and this Agreement, we are hereby authorized (to the extent
permitted by law) to arrange such loans for the account of one or more of the
International Managers, severally and not jointly, to execute and deliver any
notes or other instruments in connection therewith, and to pledge as security
therefor all or any part of the Shares or shares of Common Stock purchased
pursuant to Section 9 hereof as we may deem necessary or advisable to carry out
the purchase, carrying and distribution of the Shares, and to advance our own
funds, in our individual capacity, charging current interest rates. Any
lending bank is hereby authorized to rely upon our instructions in all matters
relating to any such loan. We may deliver to any International Manager for
carrying purposes such Shares, or any part thereof, which Shares will be
redelivered to us on demand.
9. Over-Allotments and Stabilization.
a. We may, for the account of each International
Manager, until the termination of this Agreement or earlier surrender of this
authorization: (i) over-allot in arranging for sales of the International
Shares and any U.S. Shares purchased pursuant to the Agreement Between U.S.
Underwriters and International Managers to retail purchasers and Selected
Dealers, and purchase Common Stock at such prices as we may determine for the
purpose of covering such over-allotments and (ii) for the purpose of
stabilizing the market in the Common Stock, make purchases and sales of Common
Stock, for long or short account, on a when-issued basis or otherwise, at such
prices, in such amounts and in such manner as we may determine.
b. We may, upon such terms as we may deem
advisable, cover any short position or sell any long position incurred pursuant
to the provisions of this Section 9, and any International Manager, including
ourselves, may participate as a purchaser or seller in connection with any such
transactions. We shall have full discretionary power to pay such commissions
in connection with such purchases and sales as we may deem proper and to charge
the respective accounts of the International Managers commissions on purchases
and sales
10
<PAGE> 11
effected by us. Any transactions may be closed by us for the accounts of the
International Managers at any time but in any event not later than the sixtieth
day after the allotment of the Shares or, if sooner, the thirtieth day after
the First Closing Date.
c. All purchases, sales and over-allotments made
pursuant to this Section 9 shall be made for the accounts of the International
Managers as nearly as practicable in proportion to their respective
underwriting obligations, subject to the provisions of Section 4 of the
Agreement Between U.S. Underwriters, International Managers and Japanese
Underwriters, provided that at no time shall the net dollar commitment of any
International Manager, either for long or short account, under this Section 9
exceed (except as otherwise provided in Section 4(b) hereof) 15% of the amount
of the Shares which such International Manager is obligated to purchase
pursuant to the International Underwriting Agreement and the Agreement Between
U.S. Underwriters, International Managers and Japanese Underwriters. Each
International Manager will be liable in respect of purchases, sales or
over-allotments made for its account hereunder, whether or not the proposed
issue of the Shares is consummated. The Company shall not be under any
obligation to issue and sell, as a result of the foregoing provisions, more
than the total number of Shares agreed to be issued and sold, as set forth in
the International Underwriting Agreement.
d. If stabilizing transactions are effected
pursuant to the authorization contained in this Section 9, we shall effect such
transactions in accordance with the rules of the Commission under the United
States Securities Exchange Act of 1934, as amended (the "Exchange Act") and
each International Manager agrees to furnish us with the notification required
by Rule 17-2(d) promulgated by the Commission under the Exchange Act. We will
notify each International Manager if we effect any such transactions.
10. Open Market Transactions. Each International Manager
agrees that, except as otherwise provided herein and in the Agreement Between
U.S. Underwriters, International Managers and Japanese Underwriters, until the
termination of this Agreement or until notified by us prior thereto that such
International Manager is released from this restriction, it will not buy, sell,
deal or trade in Common Stock for its own account or for the accounts of
customers except on unsolicited brokerage orders therefor received and executed
in the ordinary course of its brokerage business. Each International Manager
represents that it has not participated, since the date on which it was invited
by us to participate in the offering of the International Shares, in any
transactions prohibited by the foregoing provisions of this Section 10 and that
it has at all times complied, and will cause each dealer who has agreed to
participate or is participating in the distribution to undertake that such
dealer will comply, with the provisions of Rules 10b-6 and 10b-7 under the
Exchange Act applicable to this offering.
11. Allocation of Expenses. Each International Manager
authorizes us to charge against such International Manager's account any and
all expenses incurred by us as Lead Managers in connection with the purchase,
carrying, offering, sale and distribution of Shares for
11
<PAGE> 12
the account of such International Manager. All expenses of a general nature
paid by us in connection with the purchase and sale of Shares shall be borne by
the International Managers in proportion to the number of Shares which each
International Manager is obligated to purchase pursuant to the International
Underwriting Agreement and the Agreement Between U.S. Underwriters,
International Managers and Japanese Underwriters, except that any transfer
taxes payable by reason of sales by the International Managers shall be charged
to the accounts of the respective International Managers only to the extent
that sales of Shares are made for such International Manager's account. In the
event of the default of any International Manager in carrying out its
obligations under this Agreement, the expenses chargeable to such International
Manager pursuant to this Agreement and the Agreement Between U.S. Underwriters
and International Managers and not paid by it, as well as any additional losses
or expenses arising from such default, may be charged against the other
International Managers not so defaulting in proportion to the respective number
of Shares which such other International Managers are obligated to purchase
pursuant to the International Underwriting Agreement and the Agreement Between
U.S. Underwriters, International Managers and Japanese Underwriters, without,
however, relieving such defaulting International Manager from its liability
therefor. In carrying out the provisions of this Section 11, we shall give
effect to the provisions of Section 4 of the Agreement Between U.S.
Underwriters, International Managers and Japanese Underwriters. Our
ascertainment of all expenses and the apportionment thereof shall be
conclusive.
12. Termination.
a. This Agreement will terminate at the close of
business on the fifth business day after the date hereof unless prior thereto
the International Underwriting Agreement shall have been executed and delivered
and shall have become effective, in which event:
i) if there shall be an offering to
Selected Dealers pursuant to the terms of the International Selling Agreements,
this Agreement will terminate at the close of business on the fifteenth day
after the termination of such International Selling Agreements, or at such
earlier date, not earlier than the termination of such International Selling
Agreements, as we may determine, but may be extended for a further period not
exceeding thirty days with the consent of the International Managers (including
ourselves) who have agreed to purchase in the aggregate 50% or more of the
total number of International Shares; or
ii) if there shall be no such offering
to Selected Dealers, this Agreement will terminate at the close of business on
the thirtieth day after payment by the International Managers for the Shares to
be purchased by them pursuant to the International Underwriting Agreement and
the Agreement Between U.S. Underwriters, International Managers and Japanese
Underwriters, or at such earlier date as we may determine. Notwithstanding any
settlement of accounts under this Agreement, each International Manager agrees
to pay its proportionate share (based on its final total obligation to purchase
Shares pursuant to the International Underwriting Agreement and the Agreement
Between U.S. Underwriters,
12
<PAGE> 13
International Managers and Japanese Underwriters) of the amount of any claim,
demand or liability that may be asserted against and discharged by the
International Managers, or any of them, based on the claim that the
International Managers constitute an association, unincorporated business or
other entity, and also to pay a like proportionate share of any transfer taxes
which may be assessed after such settlement and of the expenses incurred by the
International Managers, or any of them, and approved by us, in contesting any
such claim, demand, liability or tax.
b. We may, by mutual agreement with the
Representatives, amend or terminate the Agreement Between U.S. Underwriters and
International Managers.
c. Sections 11, 12 and 14 hereof shall survive
the termination of this Agreement.
13. Position of the Lead Managers.
a. Except as otherwise specifically provided in
this Agreement, we shall have full authority to take such action as we may deem
necessary or advisable in respect of all matters pertaining to the
International Underwriting Agreement, this Agreement and the Agreement Between
U.S. Underwriters, International Managers and Japanese Underwriters in
connection with the purchase, carrying, offering, sale, distribution and
advertising of the Shares, but we shall not be under any liability whatsoever
to any of the International Managers except as such may be incurred under the
Securities Act and except for want of good faith and for the obligations
expressly assumed by us in this Agreement. No obligations not expressly
assumed by us in this Agreement shall be implied hereby or inferred from this
Agreement. Authority with respect to matters to be determined by us or by us
and the Company pursuant to the International Underwriting Agreement or the
Agreement Between U.S. Underwriters, International Managers and Japanese
Underwriters shall survive the termination of this Agreement. Nothing herein
contained shall constitute the several International Managers an association,
or partners with us or with each other, or, except as herein expressly
provided, render any International Manager liable for the obligation of any
other International Manager, and the rights, obligations and liabilities of
each of the International Managers are several, in accordance with their
respective obligations, and not joint. If the International Managers, among
themselves or with the Selected Dealers or the U.S. Underwriters or others
participating in the distribution of Shares, are deemed to constitute a
partnership for United States federal income tax purposes, it is the intent of
each International Manager to be excluded from the application of Subchapter K,
Chapter I, Subtitle A, of the United States Internal Revenue Code of 1986, as
amended. Each International Manager elects to be so excluded and agrees not to
take any position inconsistent with such election. Each International Manager
authorizes us, in our discretion, to execute and file on behalf of the
International Managers such evidence of election as may be required by the
United States Internal Revenue Service.
13
<PAGE> 14
b. We shall be under no duty to account for any
interest on funds of any of the International Managers at any time in our
hands, and such funds may be held by us unsegregated from our general funds.
14. Indemnification and Future Claims.
a. Each International Manager agrees to
indemnify and hold harmless each other International Manager, and each person,
if any, who controls any such other International Manager within the meaning of
Section 15 of the Securities Act, to the extent and upon the terms that such
International Manager will agree to indemnify, hold harmless and reimburse the
Company, as set forth in Paragraph 6(b) of the International Underwriting
Agreement.
b. In the event that at any time any claim or
claims shall be asserted against us as Lead Managers or shall otherwise involve
the International Managers generally, or relate to any Preliminary Prospectus
or Prospectus (as amended or supplemented, if so amended or supplemented), the
Registration Statement or any post-effective amendment thereof, the public
offering of the Shares, or any of the transactions contemplated by this
Agreement or the Agreement Between U.S. Underwriters, International Managers
and Japanese Underwriters, each International Manager authorizes us to make
such investigation, to retain such counsel and to take such other action as we
shall deem necessary or desirable under the circumstances, including settlement
of any such claim or claims if such course of action shall be recommended by
counsel retained by us. Each International Manager agrees to pay to us, on
request, such International Manager's proportionate share (based on its final
total obligation to purchase Shares pursuant to the International Underwriting
Agreement and the Agreement Between U.S. Underwriters, International Managers
and Japanese Underwriters) of all expenses incurred by us (including, but not
limited to, the fees and disbursements of counsel retained by us) in
investigating and defending against such claim or claims, and its proportionate
share of any liability incurred by us in respect of such claim or claims,
whether such liability shall be the result of a judgment against us or as a
result of any such settlement. A claim against or liability incurred by a
person who controls any International Manager within the meaning of Section 15
of the Securities Act shall be deemed to have been made against or incurred by
such International Manager.
c. The foregoing indemnity agreement shall
survive the termination of this Agreement, and shall remain in full force and
effect regardless of any investigation made by or on behalf of such other
International Manager or controlling person.
15. Title to Securities. The Shares and any other shares
of Common Stock purchased by or for the account of each International Manager
pursuant to this Agreement, the International Underwriting Agreement or the
Agreement Between U.S. Underwriters, International Managers and Japanese
Underwriters shall remain the property of such International
14
<PAGE> 15
Manager until sold, and no title to any such securities shall in any event pass
to us as Lead Managers by virtue of any of the provisions of this Agreement.
16. Jurisdictional Matters. It is understood that we
assume no obligation or responsibility with respect to the right of any
International Manager or other person to sell Shares in any jurisdiction,
notwithstanding any information which we may furnish as to the jurisdictions
under the laws of which it is believed Shares may be sold.
17. NASD Membership. Each International Manager
represents that it is either (a) a member in good standing of the NASD or (b) a
foreign dealer not eligible for membership in the NASD, in which event it
agrees that it will not sell any Shares in, or to nationals or residents of,
the United States, except as required by Sections 5(c), 5(e), 5(f) and 9
hereof, and that in making any sales of Shares, it will comply, as though it
were a member of the NASD, with (i) the interpretation of the Board of
Governors of the NASD entitled "Free-Riding and Withholding," (ii) the
requirements of Sections 8, 24 and 36 of Article III of the Rules of Fair
Practice of the NASD, and (iii) to the extent applicable to it, the
requirements of Section 25 of such Article III.
18. Agreement of the International Managers. Each
International Manager agrees that it will notify us if any of the
representations of such International Manager contained in this Agreement cease
to be accurate.
19. Notices. Any notice from us to any International
Manager shall be deemed to have been duly given if mailed, telephoned (and
confirmed in writing), telexed or telegraphed to such International Manager at
the address furnished by such International Manager. Any notice from
International Manager to us shall be deemed to have been duly given if mailed,
telephoned (and confirmed in writing), telexed (899621) or telegraphed to
Lehman Brothers International (Europe), 1 Broadgate, London EC2M 7HA, England,
Attention: Syndicate Department.
20. International Managers' Questionnaire. Each
International Manager represents and warrants to us and the Company that the
statements made in the International Managers' Questionnaire which it has
furnished in connection with the offering of the International Shares, as
updated pursuant to the terms of such Questionnaire, are true and correct as of
the date hereof.
21. Counterparts. This Agreement may be signed in
various counterparts which together shall constitute one and the same
instrument.
22. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, United
States, without giving effect to the choice of law or conflicts of law
principles thereof, and the parties hereto submit to the
15
<PAGE> 16
nonexclusive jurisdiction of the courts of the State of New York and the United
States District Court for the Southern District of New York.
16
<PAGE> 17
If the terms as set forth herein meet with your approval,
please confirm your acceptance in the space provided below.
Very truly yours,
LEHMAN BROTHERS INTERNATIONAL (EUROPE)
NIKKO EUROPE Plc
For themselves and as Lead Managers for
each of the several International Managers
By: Lehman Brothers International (Europe)
By: ___________________________________
Authorized Representative
Confirmed the day and year
first above written:
By: ______________________________________
Attorney-in-fact for each of the
several International Managers
named in Schedule I to the attached
International Underwriting Agreement
17
<PAGE> 1
EXHIBIT (h)(G)
LEHMAN BROTHERS INTERNATIONAL (EUROPE)
NIKKO EUROPE Plc
7,000,000 SHARES
LEHMAN BROTHERS LATIN AMERICA GROWTH FUND, INC.
COMMON STOCK
INTERNATIONAL SELLING AGREEMENT
____________ __, 1994
Dear Sirs:
The underwriters named in the enclosed prospectus (the "International
Managers") have severally agreed, subject to the terms and conditions of an
underwriting agreement (the "International Underwriting Agreement") with Lehman
Brothers Latin America Growth Fund, Inc., a Maryland corporation (the
"Company"), the purchase an aggregate of __________ shares (the "Firm Shares")
of the Company's common stock (the "Common Stock"). The International Managers
also have an option to purchase from the Company up to _________ shares of the
Company's Common Stock (the "Option Shares"). The Firm Shares and the Option
Shares, if purchased, are hereinafter collectively referred to as the "Shares."
The Shares are more particularly described in the enclosed prospectus,
additional copies of which will be supplied in reasonable quantities upon
request.
It is understood that the Company has entered into (1) an underwriting
agreement (the "U.S. Underwriting Agreement") with Lehman Brothers Inc.,
________________, as Representatives (the "Representatives") of the several
U.S. Underwriters named in Schedule I to the U.S. Underwriting Agreement (the
"U.S. Underwriters"), providing for the purchase by the U.S. Underwriters from
the Company of __________ shares of the Company's Common Stock (plus an option
to purchase up to ________ shares of the Company's Common Stock from
<PAGE> 2
the Company solely for the purpose of covering over-allotments) (collectively,
the "U.S. Shares") and (2) a subscription agreement (the "Japanese Subscription
Agreement") with (The Nikko Securities Co., Ltd.) as Japanese Lead Manager (the
"Japanese Lead Manager"), of the several Japanese Managers named in Schedule 1
to the Japanese Subscription Agreement (the "Japanese Managers" ), providing
for the purchase by the Japanese Managers from the Company of an aggregate of
__________ shares of Common Stock (collectively, the "Japanese Shares"). It is
also understood that an agreement between the International Managers, the
Japanese Managers and the U.S. Underwriters (the "Agreement Between U.S.
Underwriters, International Managers and Japanese Managers") has been entered
into between the U.S. Underwriters, the Japanese Managers and us, as
International Lead Managers (the "International Lead Managers"), for the
International Managers, pursuant to which the International Managers may
purchase from the U.S. Underwriters a portion of the U.S. Shares to be sold
pursuant to the U.S. Underwriting Agreement, or sell to the U.S. Underwriters a
portion of the Shares to be sold pursuant to the International Underwriting
Agreement. The Shares, the U.S. Shares and the Japanese Shares are hereinafter
collectively referred to as the "Registered Shares."
Certain or all of the International Managers are severally offering a
part of the Registered Shares for sale to selected dealers, among whom they are
pleased to include you (collectively, the "Selected Dealers"), (a) who are
members of the United States National Association of Securities Dealers, Inc.
(the "NASD") and who will agree to comply with the requirements of Section 24
of Article III of the Rules of Fair Practice of the NASD or (b) who are foreign
dealers not eligible for membership in the NASD and who will agree not to make
any sales of the Registered Shares in, or to nationals or residents of, the
United States (as defined below) and in making any sales of Registered Shares
to comply, as though such foreign dealers were members of the NASD, with (i)
the interpretation of the Board of Governors of the NASD entitled "Free-Riding
and Withholding," (ii) the requirements of Sections 8, 24 and 36 of Article III
of the Rules of Fair Practice of the NASD and (iii) to the extent applicable to
such foreign dealers, the requirements of Section 25 of such Article III. The
price of which Registered Shares are being offered for sale to Selected Dealers
represents a concession under the public offering price not in excess of the
amount set forth in the aforesaid prospectus. This offering is made subject to
the conditions referred to on the cover of the aforesaid prospectus and to the
terms and conditions herein set forth and may be made on the basis of the
reservation of Registered Shares or an allotment against subscriptions, and is
not joint but several.
We are acting as International Lead Managers for each of the
International Managers in all matters connected with the offering of the
Registered Shares and with the International Managers' respective purchases of
Registered Shares.
We are advising you by telex of the method and terms of the offering.
Acceptance of any reserved Registered Shares received at the office of Lehman
Brothers International (Europe), Equity Syndicate, 1 Broadgate, London EC2M
7HA, England, Attention: Syndicate Department, after the time specified
therefor in the telex and any application for additional Registered Shares
2
<PAGE> 3
will be subject to rejection in whole or in part. Subscription books may be
closed by us at any time in our discretion without notice and the right is
reserved to reject any subscription in whole or in part, but notification of
allotments against and rejections of subscriptions will be made as promptly as
practicable.
We are advising you in such telex of the release by us of the
Registered Shares for public offering and of the public offering price. Upon
receipt of such advice, any of the Registered Shares thereafter purchased by
you hereunder are to be offered by you to the public at the public offering
price, subject to the terms hereof. Except as otherwise provided herein,
Registered Shares shall not be offered or sold by you at a price below the
public offering price before the termination of this Agreement, except that a
concession (the "Reallowance Concession"), if and to the extent provided in the
following paragraph, from the public offering price may be allowed either to
dealers who are members in good standing of the NASD or foreign dealers who are
not eligible for membership in the NASD and who, in each case, will agree as
provided in the third paragraph of this Agreement.
We are the International Lead Managers and, with our consent, any
International Manager may buy Registered Shares from, or sell Registered Shares
to, any of the Selected Dealers or any of the International Managers, and any
Selected Dealer may buy Registered Shares from, or sell Registered Shares to,
any other Selected Dealer or International Manager at the public offering price
less all or any part of the concession of Selected Dealers (the "Selected
Dealer Concession"). The Selected Dealer Concession will initially be $___ per
Share. The Reallowance Concession will initially be $___ per Share. After the
initial public offering, the public offering price, the Selected Dealer
Concession and the Reallowance Concession may be changed at any time by us.
You agree to pay on demand for the accounts of the several
International Mangers an amount equal to the Selected Dealer Concession as to
any Registered Shares purchased by you hereunder, which, prior to the
termination of this Agreement, we may purchase or contract to purchase for the
account of any International Manager or which may be delivered against purchase
contracts made prior to the termination of this Agreement and, in addition, we
may charge you with any broker's commission and transfer tax paid in connection
with such purchase or contract to purchase. Certificates for Registered Shares
delivered on such repurchases need not be the identical certificates originally
purchased.
No expenses shall be charged to Selected Dealers. A single transfer
tax upon the sale of the Registered Shares by the respective International
Managers to you will be paid when such Registered Shares are delivered to you.
However, you shall pay any transfer tax on sales of Registered Shares by you
and you shall pay your proportionate share of any transfer tax or other tax
(other than the single transfer tax described above) in the event that any such
tax shall from time to time be assessed against you and other Selected Dealers
as a group or otherwise.
3
<PAGE> 4
Registered Shares purchased by you hereunder shall be paid for through
the facilities of The Depository Trust Company ("DTC") at the cost to you on or
about the applicable Delivery Date (as defined in the International
Underwriting Agreement), on one day's notice, by certified or official bank
check payable in New York Clearing House Funds to the order of Lehman Brothers
International (Europe), in U.S. dollars against delivery of certificates
representing such Registered Shares. If you are not a member of, or do not
clear through a member of, DTC, you agree to notify us in the manner provided
in this Agreement at least three business days prior to such Delivery Date for
the purpose of making other payments arrangements. If you are a member of, or
clear through a member of, DTC, we may in our discretion, deliver Registered
Shares purchased by you through the facilities of DTC.
If payment is made for Registered Shares purchased by you at the
public offering price, the Selected Dealer Concession to which you may be
entitled will be paid to you upon termination of this Agreement, as it applies
to such Registered Shares.
The International Managers have been advised by the Company that a
registration statement in respect of the Registered Shares, filed under the
United States Securities Act of 1933, as amended (the "Securities Act"), has
become effective. You, in selling Registered Shares purchased pursuant hereto,
agree (which agreement shall also be for the benefit of the Company) that you
will comply with the applicable requirements of the Securities Act and of the
United States Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and applicable rules and regulations issued under the Securities Act and the
Exchange Act. With respect to Rule 15c2-8 of the Exchange Act, you confirm
that you have yourself delivered and will yourself deliver copies of the
International Preliminary Prospectus and the International Prospectus (as such
terms are defined in the International Underwriting Agreement) required under
the provisions thereof. You confirm that in purchasing Registered Shares, you
have relied upon no statements whatsoever, written or oral, other than the
statements in the International Prospectus, as delivered to you by us.
You represent that you are not purchasing any Registered Shares for
the account of any U.S. Person or Japanese Person (each as defined below) and
you agree that, except as provided in the Agreement Between U.S. Underwriters,
International Managers and Japanese Managers, you will not offer, sell, resell
or deliver, directly or indirectly, any Registered Shares, or distribute the
Japanese Prospectus, to any U.S. Person or any Japanese Person or to any other
dealer who does not so represent and agree. You understand that the
limitations of this paragraph shall not restrict offers, sales, resales or
deliveries by an International Manager to or through investment advisors who
are not U.S. Persons or Japanese Persons, or other persons exercising
investment discretion who are not U.S. Persons or Japanese Persons, who are
purchasing for the account of U.S. Persons or Japanese Persons. As used
herein, the term "United States" shall mean the United States of America
(including the District of Columbia) and its territories, its possessions and
other areas subject to its jurisdiction, and "U.S. Person" shall mean any
resident or citizen of the United States, any corporation or other entity
created
4
<PAGE> 5
or organized in or under the laws of the United States or any estate or trust
the income of which is subject to United States federal income taxation
regardless of the source of its income. "Japanese Person" shall mean any
resident or citizen of Japan, any corporation, firm, investment fund, pension
fund, estate, trust, partnership or other entity incorporated or organized in
or under the laws of Japan or of any political subdivision thereof; provided
that the term "Japanese Person" also shall include any person that is a branch
(located in Japan) of any International Person and any person that is a branch
or subsidiary (not located in the United States) of a Japanese Person other
than a person who is a Japanese Person by reason of this proviso.
Each of the International Managers has authorized us (a) to over-allot
in arranging for sales of Registered Shares to the Selected Dealers, and to
purchase Registered Shares at such prices as we may determine for the purpose
of covering such over-allotments and (b) for the purpose of stabilizing the
market in the Registered Shares, to make purchases and sales of Registered
Shares or shares of Common Stock which we may designate for purpose or sale in
stabilizing transactions, for long or short account.
You agree that, except as herein otherwise provided, until the
termination of this Agreement or until notified by us prior thereto that you
are released from this restriction, you will not buy, sell, deal or trade in
the Common Stock for your own account or for the accounts of customers except
on unsolicited brokerage orders therefor received and executed in the ordinary
course of your brokerage business. You represented that you have not
participated, since the date on which you were invited by us to participate in
the offering of the Registered Shares, in any transactions prohibited by the
foregoing provisions of this paragraph and that you have at all times complied,
and will comply, with the provisions of Rules 10b-6 and 10b-7 under the
Exchange Act applicable to this offering.
You are not authorized to make any offering or sale of Registered
Shares or to circulate or distribute any written material relating to the
acquisition or disposal of Registered Shares except in accordance with the
restrictions in this Agreement. No person is authorized to give any
information or to make any representations, other than those contained in the
International Prospectus, in connection with the offering or sale of Registered
Shares. You will indemnify the Company, the International Managers and their
respective officers, directors and managing directors and each of them against
any losses, liabilities, claims, charges, expenses, actions and demands
(including but not limited to, all reasonable costs, charges and expenses paid
or incurred in disputing or defending any such claim or action) that any of
them may incur or that may be made against any of them arising out of, or in
connection with, any unauthorized action by you under the provisions of this
Agreement or the making by you of any unauthorized representation or the use by
you of any information which is not contained in the International Prospectus.
You are to act as principal in purchasing Registered Shares and are
not authorized to act as agent for the Company or any of the International
Managers in offering Registered Shares to
5
<PAGE> 6
the public or otherwise. Nothing contained herein shall constitute the
Selected Dealers partners with any of the International Managers or with one
another.
As International Lead Managers for each of the International Managers,
we shall have full authority to take such action as we deem advisable in
respect of all matters pertaining to the offering or arising under this
Agreement. Neither we, as International Lead Managers for the International
Managers, nor any of the International Managers, shall be under any liability
to you, except such as may be incurred under the Securities Act and except for
lack of good faith and for obligations assumed by us in this Agreement. No
obligation on our part shall be implied or inferred herefrom.
In connection with transactions contemplated in this Agreement, you
hereby authorize us, to the extent permitted by law, to arrange such loans for
your account, to execute and deliver any notes or other instruments in
connection therewith, and to pledge as security therefor all or any part of the
Registered Shares or shares of Common Stock as we may deem necessary or
advisable to carry out the purchase, carrying and distribution of the
Registered Shares, and to advance our own funds, in our individual capacity,
charging current interest rates.
Except for the registration of the Registered Shares under the
Securities Act and except with respect to the offering by the Japanese Managers
in Japan, no action has been taken or will be taken in any jurisdiction by the
International Managers or the Company that would permit a public offering of
Registered Shares outside the United States in any country or jurisdiction
where action for that purpose is required. Upon application to us you will be
informed as to the jurisdiction in which we have been advised by counsel that
the Registered Shares have been qualified for sale or are exempt under the
respective laws of such jurisdictions, but we have not assumed and will not
assume any obligation or responsibility as to the right of any Selected Dealer
to sell Registered Shares in any such jurisdiction. You will observe all
applicable laws and regulations in any jurisdictions in which you may offer,
sell, resell or deliver Registered Shares.
You agree that you are not carrying on investment business in the
United Kingdom in contravention of Section 3 of the Financial Services Act 1986
("1986 Act"). You also agree that (i) you have not offered or sold, and will
not offer or sell in the United Kingdom, by means of any document, any
Registered Shares other than to persons whose ordinary business it is to buy or
sell shares or debentures, whether as principal or agent, or in circumstances
which do not constitute an offer to the public within the meaning of the
Companies Act of 1985, (ii) you have complied and will comply with all
applicable provisions of the Financial Services Act 1986 with respect to
anything done by you in relation to the Registered Shares in, from or otherwise
involving the United Kingdom and (iii) you have only issued or passed on, and
will only issue or pass on, in the United Kingdom any document received by you
in connection with the issue of the Registered Shares to a person who is of a
kind described in Article 9(3) of the Financial
6
<PAGE> 7
Services 1986 (Investment Advertisements) (Exemptions) Order 1988 (as amended)
or is a person to whom the document may otherwise lawfully be issued or passed
on.
You agree, upon our request, at any time or times prior to the
termination of this Agreement, to report to us the principal amount of the
Registered Shares purchased by you pursuant to the provisions hereof which then
remain unsold.
All Selected Dealers will be governed by the conditions herein set
forth until this Agreement is terminated. This Agreement will terminate at the
close of business on the fifteenth day after the date of the initial public
offering of the Shares, but in our discretion may be extended by us for a
further period not exceeding thirty days and in our discretion, whether or not
extended, may be terminated at any earlier time. Notwithstanding the
termination of this Agreement, you shall remain liable to the extent provided
by law for your proportionate amount of any claim, demand or liability which
may be asserted against you alone, or against you together with other dealers
purchasing the Registered Shares upon the terms hereof, or against us, based
upon the claim that the Selected Dealers, or any of them, constitute an
association, an unincorporated business or other separate entity.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CHOICE OF LAW
OR CONFLICTS OF LAW PRINCIPLES THEREOF.
You hereby submit to the nonexclusive jurisdiction of the courts of
the State of New York and the United States District Court of the Southern
District of New York.
In the event that you agree to purchase Registered Shares in
accordance with the terms hereof, kindly confirm such agreement by completing
the form provided for that purpose on the enclosed duplicate hereof and
returning it to us promptly.
7
<PAGE> 8
All communications from you should be addressed to Lehman Brothers
International (Europe), 1 Broadgate, London EC2M 7HA, England, Attention:
International Syndicate Department. Any notice from us to you shall be deemed
to have been fully authorized by the International Managers and to have been
duly given if mailed, telexed or telegraphed to you at the address to which
this letter is mailed.
Very truly yours,
LEHMAN BROTHERS INTERNATIONAL (EUROPE)
NIKKO EUROPE Plc
For themselves and as International Lead Managers for
each of the several International Managers
By: LEHMAN BROTHERS INTERNATIONAL (EUROPE)
By:_________________________________________
Authorized Representative
8
<PAGE> 1
DRAFT
EXHIBIT (h)(H)
LEHMAN BROTHERS LATIN AMERICA GROWTH FUND, INC.
__ Shares of Common Stock
With Par Value of $0.01 each
FORM OF JAPANESE SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT ("this Agreement") is made and entered
into in Tokyo, Japan, as of October _, 1994, by and among Lehman Brothers Latin
America Growth Fund, Inc., a Maryland corporation (the "Issuer"), Lehman
Brothers Global Asset Management Limited, a [Delaware] corporation (the
"Investment Manager"), acting as investment adviser and manager for the
Issuer, and The Nikko Securities Co., Ltd., [Lehman Brothers Japan Inc.] and
(together, the "Managers").
WHEREAS:
(A) Pursuant to the resolutions of its Board of Directors passed on __, 1994
and __, 1994 the Issuer proposes to issue and offer in Japan __ shares (the
"Japanese Shares") of its Common Stock with par value of $0.01 per
share (the "Common Stock").
(B) The Managers propose to jointly and severally subscribe and pay for the
Japanese Shares and offer them publicly in Japan (the "Japanese
Offering") upon the terms and conditions hereinafter contained.
(C) Concurrently with the Japanese Offering, the Issuer proposes to issue
and sell up to __ shares (including the over-allotment option thereunder)
(the "U.S. Shares") of Common Stock through a group of underwriters
(the "U.S. Underwriters") pursuant to an underwriting agreement (the
"U.S. Underwriting Agreement") dated __, 1994 among the Issuer, the
Investment Manager and the U.S. Underwriters in the United States to
investors at an initial public offering price of $__ per Share (the "U.S.
Offering"). Also concurrently with the Japanese Offering, the Issuer
proposes to issue and sell up to __ shares (including the over-allotment
option thereunder) (the "International Shares") of Common Stock
through a group of underwriters (the "International Underwriters")
<PAGE> 2
pursuant to an underwriting agreement (the "International
Underwriting Agreement") dated __, 1994 among the Issuer, the
Investment Manager and the International Underwriters outside Japan
and the U.S. to investors at an initial public offering price of $__ per
share (the "International Offering"). The Japanese Shares, the U.S. Shares
and the International Shares are hereinafter collectively referred to as
the "Shares".
NOW, THEREFORE, IT IS HEREBY AGREED, as follows:
ARTICLE 1. (Issuance, Subscription and Offering of the Japanese Shares)
1. The Issuer agrees to issue the Japanese Shares and the Managers jointly
and severally agree to subscribe and pay for the entire amount of the
Japanese Shares at a price of $__ per Share (the "Issue Price") on __, 1994
(the "Payment Date") upon the terms and conditions of this Agreement.
2. Subject to the taking effect of the registration (the "Registration")
concerning the public offering of the Japanese Shares contemplated
hereunder pursuant to the Securities and Exchange Law of Japan L Law
No. 25 of 1948; the "Securities and Exchange Law"), the Japanese Shares
will be offered by the underwriters (as defined below) to the public in
Japan at the Issue Price during the period from __ through __, 1994 (or
such other period as may be agreed between the Issuer and The Nikko
Securities Co., Ltd. (the "Lead Manager") on behalf of the Managers) in
accordance with the terms of an underwriting agreement (the "Underwriting
Agreement") which has been entered into as of the date hereof by and
between the Managers and the underwriters named therein (including the
Managers in their capacity as underwriters) (the "Underwriters") and in
compliance with the selling restriction provisions set out in the
Underwriting Agreement. In particular, the Managers hereby undertake, and
confirm that the Underwriters have agreed in the Underwriting Agreement,
to observe all of the restrictions and to perform all of the obligations
set forth in the Underwriting Agreement and in the Agreement Between the
U.S. Underwriters, the International Underwriters and the Japanese
Underwriters (the "Agreement Between") dated __, 1994 between the
Underwriters, the U.S. Underwriters and the International Underwriters.
-2-
<PAGE> 3
3. Consummation of the U.S. Offering, the International Offering and the
Japanese Offering are each conditioned upon the closing of the other. For
this purpose the closing means the payment of the subscription money for
the shares of Common Stock to be issued in the relevant Offering by the
U.S. Underwriters, the International Underwriters or the Managers, as the
case may be.
4. The Issuer and the Investment Manager have not authorized any Manager,
Underwriter or any other person to make any representation or to give any
information in connection with the public offering of the Japanese Shares
other than those contained in the Registration Statement (as defined in
Article 3, paragraph 1, item (A)) or the Prospectus (as defined in Article
3, paragraph 1, item (C)).
ARTICLE 2. (Payment of the Issue Price of the Japanese Shares, Commissions
and Expenses)
1. At approximately 10:00 a.m., New York time, and in any event, no later
than 11:00 a.m., New York time, unless otherwise agreed to by the parties,
on the Payment Date, the Lead Manager on behalf of the Managers shall
pay to the order of the Issuer the net subscription moneys for the Japanese
Shares (namely the sum of $__ being the aggregate Issue Price of the
Japanese Shares less the aggregate of the amount provided for in paragraph
2 of this Article) (the "Net Subscription Moneys") against delivery of
certificates for the Japanese Shares (the "Share Certificates"). Such
payment shall be made by transfer of the said sum in same day settlement
funds in U.S. Dollars to such account at such bank in New York City as
designated by the Issuer. The delivery of the Share Certificates shall be
made in New York City to the order of the Lead Manager in such
denominations and registered in such names as shall be notified not later
than __, 1994, New York time, by the Lead Manager to the Issuer.
2. As compensation to the Managers and the Underwriters for their
commitments with respect to the Japanese Shares hereunder and under the
Underwriting Agreement and as selling concessions for the Japanese
Shares, the Managers shall be entitled to receive, in aggregate an amount
equal to $__ per Share multiplied by the number of the Shares,
namely $___ by
-3-
<PAGE> 4
way of deduction of such amount from the aggregate Issue Price of the
Japanese Shares as provided in the preceding paragraph.
3. (A) The Issuer agrees to bear, upon receipt of appropriate invoice
therefor, and pay (i) all reasonable costs and expenses incurred in
the preparation and printing of the Registration Statement and the
Prospectus, all amendments and supplements thereto, (ii) the
reasonable fees and disbursement of the independent public
accountants and legal counsels for the Issuer in connection with
the offer and issue of the Japanese Shares hereunder, (iii) the
reasonable costs and expenses in connection with the listing of the
Shares on the Osaka Securities Exchange and (iv) all other
reasonable expenses necessary for the Issuer to perform its
obligations hereunder.
(B) The Issuer will reimburse the U.S. Underwriters and the Managers
for their out-of-pocket expenses (including fees and disbursements
of legal counsels) an aggregate of $__. It is understood, however,
that except as provided in this sub-paragraph (B) the Managers will
pay all of their own expenses, securities transfer taxes, if any,
on resale of any of the Japanese Shares by them and any advertising
expenses connected with any offers they make.
ARTICLE 3. (Representations and Warranties by the Issuer and the Investment
Manager)
1. As conditions of the agreement by the Managers to subscribe and pay for
the Shares, the Issuer and the Investment Manager, jointly and severally,
represent and warrant to and agree with the Managers (for the benefit of
themselves and the Underwriters) that:
(A) The Issuer has filed with the Minister of Finance of Japan (the
"MOF") a securities registration statement in respect of the public
offering of the Japanese Shares contemplated hereunder and amendments
to such registration statement pursuant to the Securities and
Exchange Law; a further amendment to such securities registration
statement in the form heretofore delivered to the Lead Manager is
proposed to be filed by the Issuer with the MOF following the
execution of this Agreement; such securities registration statement,
as amended, will,
-4-
<PAGE> 5
at the time the Registration becomes effective, (i) conform in all
material respects to the requirements of the Securities and Exchange
Law and the cabinet orders and ministerial ordinances and other rules
and regulations of the MOF thereunder (the "Rules and Regulations")
and (ii) not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary
to make the statement therein not misleading (such securities
registration statement, as amended at the time the Registration
becomes effective, being hereinafter referred to as the "Registration
Statement"), except that the foregoing representation and warranty
shall not apply to any statement or omissions made in reliance upon
and in conformity with information furnished in writing to the Issuer
by any Manager expressly for use in the Registration Statement.
(B) The Issuer has filed with the MOF the prior notification (the "Prior
Notification") required under the Foreign Exchange and Foreign
Trade Control Law of Japan (Law No. 228 of 1949; the "Foreign
Exchange Control Law") and the cabinet orders and ministerial
ordinances thereunder in order to offer and issue the Japanese Shares
to the public in accordance with the terms of this Agreement, and the
MOF has issued a notice to the Issuer that on or after __, 1994 the
Issuer may effect the transactions covered by such notification.
(C) The Issuer has prepared a preliminary prospectus with respect
to the Shares in the Japanese language (the "Preliminary
Prospectus") and intends to prepare a final prospectus in the
Japanese language (the "Final Prospectus") (the Preliminary
Prospectus and the Final Prospectus together being hereinafter
sometimes referred to as the "Prospectus"); the Preliminary
Prospectus at the time of issue thereof conformed, and the Final
Prospectus at the time of issue thereof will conform, in all material
respects to the requirements of the Securities and Exchange Law and
the Rules and Regulations; and Preliminary Prospectus at the time of
issue thereof did not, and the Final Prospectus will not, include any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, except that the foregoing
representation and warranty shall not apply to any
-5-
<PAGE> 6
statements or omission made in reliance upon and in conformity
with information furnished in writing to the Issuer by any Manager
expressly for use therein.
(D) The Issuer has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of
Maryland, has the corporate power and authority to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business requires such qualification, except
to the extent that the failure to be so qualified or be in good
standing would not have material adverse effect on the Issuer. The
Issuer has no subsidiaries.
(E) The Issuer is registered with the Securities and Exchange
Commission of the United States (the "Commission") as a
non-diversified, closed-end management investment company under the
United States Investment Company Act of 1940, as amended and the
rules and regulations of the Commission thereunder (such act and
rules and regulations being collectively referred to as the
"Investment Company Act") and no order of suspension or revocation of
such registration has been issued or proceedings therefor initiated
or, to the knowledge of the Issuer or the Investment Manager,
threatened by the Commission. No person is serving or acting as an
officer or director of, or investment adviser to, the Issuer except
in accordance with the provisions of the Investment Company Act and
the United States Investment Advisers Act of 1940, as amended, and the
rules and regulations of the Commission thereunder (such act and
rules and regulations being collectively referred to as the "Advisers
Act").
(F) Each of this Agreement, the U.S. Underwriting Agreement,
the International Underwriting Agreement, the Advisory Agreement
between the Investment Manager and the Issuer (the "Management
Agreement"), the Administration Agreement between The Shareholder
Services Group, Inc. (the "Administrator") and the Issuer (the
"Administration Agreement"), the Custody Agreement between Boston
Safe Deposit and Trust Company (the "Custodian") and the
Issuer (the "Custody Agreement"), and the Transfer Agency Agreement
between __ (the "Transfer Agent") and the Issuer (the
-6-
<PAGE> 7
"Transfer Agency Agreement") (this Agreement, the U.S.
Underwriting Agreement, the International Underwriting Agreement, the
Management Agreement, the Administration Agreement, the Custody
Agreement, and the Transfer Agent Agreement are referred to herein,
collectively, as the "Fundamental Agreements") has been duly
authorized and has been or in the case of the U.S. Underwriting
Agreement and the International Underwriting Agreement will be duly
executed and delivered by the Issuer. Each Fundamental Agreement,
other than this Agreement, the U.S. Underwriting Agreement and the
International Underwriting Agreement, assuming due authorization,
execution and delivery by the other parties thereto constitutes the
legal, valid and binding obligation of the Issuer, enforceable
against the Issuer in accordance with its terms except as such
enforceability may be limited by applicable bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
creditor's rights generally and by general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
(G) None of (a) the execution and delivery by the Issuer of, and
the performance by the Issuer of its obligations under each
Fundamental Agreement, or (b) the issue and sale by the Issuer of the
Shares as contemplated by this Agreement, the U.S. Underwriting
Agreement and the International Underwriting Agreement, contravenes
or will contravene any provision of applicable law or the charter or
by-laws of the Issuer or any agreement or other instrument binding
upon the Issuer that is material to the Issuer, or any judgment,
order or decree of any governmental body or agency or court having
jurisdiction over the Issuer, whether foreign or domestic. No
consent, approval, authorization, order or permit of, or
qualification with, any governmental body, agency, self-regulatory
organization or court or other tribunal, whether foreign or domestic,
is required for the performance by the Issuer of its obligations
under the Fundamental Agreements, except such as have been obtained
or may be required by the United States Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder
(such act and rules and regulations being collectively referred to as
the "Securities Act"; and
-7-
<PAGE> 8
the Investment Company Act and the Securities Act being
hereinafter collectively referred to as the "Acts"), the Securities
Exchange Act of 1934 (such act and the rules and regulations of the
Commission thereunder being collectively referred to as the "Exchange
Act"), the Securities and Exchange Law or the securities or Blue Sky
laws of the various states of the United States and foreign
jurisdictions in connection with the offer and sale of the Shares by
the Underwriters, the U.S. Underwriters and the International
Underwriters.
(H) The authorized capital stock of the Issuer conforms in all
material respects to the description thereof contained in the
Prospectus, and the charter and by-laws of the Issuer and the
Fundamental Agreements conform in all material respects to the
description thereof contained in the Prospectus.
(I) The charter and by-laws of the Issuer and the Fundamental
Agreements comply with all applicable United States (including any
states of the United States) laws and regulations, and all approvals
of such documents required under the Investment Company Act by the
Issuer's shareholders and Board of Directors have been obtained and
are in full force and effect.
(J) The Fundamental Agreements (other than this Agreement, the
U.S. Underwriting Agreement and the International Underwriting
Agreement) are in full force and effect and neither the Issuer nor,
to the Issuer's knowledge, any other party to any such agreement is
in default thereunder and, to the knowledge of the Issuer and the
Investment Manager, no event has occurred which with the passage of
time or the giving of notice or both would constitute a default
thereunder. The Issuer is not currently in breach of, or in default
under, any other material written agreement or instrument to which it
or its property is bound or affected.
(K) The shares of Common Stock outstanding prior to the issuance
of the Shares have been duly authorized and are validly issued, fully
paid and non-assessable and the form of certificates used to evidence
the Common Stock is in due and proper form and complies with all
provision of applicable law.
-8-
<PAGE> 9
(L) The Shares have been duly authorized and, when issued paid
for and delivered in accordance with the terms of this Agreement,
the U.S. Underwriting Agreement and the International Underwriting
Agreement, will be validly issued, fully paid and non-assessable and
the issuance of the Shares will not be subject to any pre-emptive or
similar rights.
(M) The Shares and any shares of Common Stock outstanding prior
to the issuance of the Shares have been approved for listing on the
New York Stock Exchange, Inc. (the "New York Stock Exchange"),
subject to official notice of issuance and have been applied for
listing on the Osaka Securities Exchange.
(N) The Issuer intends to direct the investment of the proceeds
of the Japanese, U.S. and International Offerings described in the
Prospectus in such a manner as to comply with the requirements of
Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"), and the Issuer is eligible to qualify as a regulated
investment company under Subchapter M of the Code.
(O) There has not been any material adverse change, or any
development involving a material adverse change, in the condition,
financial or otherwise, of the Issuer, or in the investment
objectives, investment policies, liabilities, business, prospects or
operations of the Issuer from that set forth in the Prospectus and
there have been no transactions entered into by the Issuer which are
material to the Issuer other than those in the ordinary course of its
business or as described in the Prospectus.
(P) There are no legal or governmental proceedings pending or,
to the knowledge of the Issuer and the Investment Manager,
threatened against or affecting the Issuer that are required to be
described in the Registration Statement or the Prospectus and are not
so described or any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that are not described or filed as required.
- 9 -
<PAGE> 10
(Q) The Issuer has all necessary consents, authorizations,
approvals, orders (including exemption orders), certificates and
permits of and from, and has made all declarations and filings with,
all governmental authorities, self-regulatory organizations and
courts and other tribunals, whether foreign or domestic, to own and
use its assets and to conduct its business in the manner described in
the Prospectus, except to the extent that the failure to obtain or
file the foregoing would not have a material adverse effect on the
Issuer.
(R) There are no material restrictions, limitations or
regulations with respect to the ability of the Issuer to invest its
assets as described in the Prospectus, other than as described
therein.
2. As conditions of the agreement by the Managers to subscribe and pay
for the Shares, the Investment Manager hereby represents and warrants to
and agrees with the Managers (for the benefit of themselves and the
Underwriters) that:
(A) The Investment Manager has been duly incorporated, is
validly existing as a corporation in good standing under the laws of
the State of [Delaware], has the corporate power and authority to
conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business requires such
qualification, except to the extent that failure to be so qualified
or be in good standing would not have a material adverse effect on
the Investment Manager.
(B) The Investment Manager is duly registered as an investment
adviser under the Advisers Act, and is not prohibited by the Advisers
Act or the Investment Company Act from acting under the Management
Agreement as an investment adviser to the Issuer as contemplated by
the Prospectus, and no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated or, to
the knowledge of the Investment Manager, threatened by the
Commission.
-10-
<PAGE> 11
(C) Each of this Agreement, the U.S. Underwriting Agreement, the
International Underwriting Agreement and the Management Agreement has
been duly authorized and has been or in the case of the U.S.
Underwriting Agreement and the International Underwriting Agreement
will be duly executed and delivered by the Investment Manager and
complies with all applicable provisions of the Acts. The Management
Agreement, assuming due authorization, execution and delivery by the
other parties thereto, constitutes the legal, valid and binding
obligation of the Investment Manager, enforceable against the
Investment Manager in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
creditors' rights generally and by general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
(D) The execution and delivery by the Investment Manager of,
and the performance by the Investment Manager of its obligations
under, this Agreement, the U.S. Underwriting Agreement, the
International Underwriting Agreement and the Management Agreement do
not and will not contravene any provision of applicable law or the
certificate of incorporation or by-laws of the Investment Manager or
any agreement or other instrument binding upon the Investment Manager
that is material to the Investment Manager, or any judgment, order or
decree of any governmental body, agency or court having jurisdiction
over the Investment Manager. No consent, approval, authorization,
order or permit of, or qualification with, any governmental body or
agency, self-regulatory agency or court or other tribunal, whether
foreign or domestic is required for the performance by the Investment
Manager of its obligations under this Agreement, the U.S.
Underwriting Agreement, the International Underwriting Agreement or
the Management Agreement except such as have been obtained and as may
be required by the Acts, the Exchange Act or the securities or Blue
Sky laws of the various states and foreign jurisdictions in
connection with the offer and sale of the Shares by the Underwriters,
the U.S. Underwriters and the International Underwriters.
-11-
<PAGE> 12
(E) There are no legal or governmental proceedings pending or,
to the knowledge of the Investment Manager, threatened against or
affecting the Investment Manager that are required to be described
in the Registration Statement or the Prospectus and are not so
described.
(F) The Investment Manager has all necessary consents, authorizations,
approvals, orders (including exemption orders), certificates
and permits of and from, and has made all declarations
and filings with, all governmental authorities, self-regulatory
organizations and courts and other tribunals, whether foreign or
domestic, to own and use its assets and to conduct its business in
the manner described in the Prospectus, except to the extent that the
failure to obtain or file the foregoing would not have a material
adverse effect on the Investment Manager.
(G) The Investment Manager has the financial resources available
to it necessary for the performance of its services and obligations
as contemplated in the Prospectus.
(H) The Management Agreement is in full force and effect and
neither the Investment Manager nor, to the Investment Manager's
knowledge, the Issuer is in default thereunder and, to the knowledge
of the Investment Manager, no event has occurred which with the
passage of time or the giving of notice or both would constitute a
default under such document.
(I) All information furnished by the Investment Manager for use
in the Registration Statement and Prospectus, including, without
limitation, the description of the Investment Manager, does not, and
on the Payment Date will not, contain any untrue statement of a
material fact or omit to state any material fact necessary to make
such information not misleading.
(J) There has not been any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the business or operations
of the Investment Manager from that set forth in the Prospectus.
-12-
<PAGE> 13
ARTICLE 4. (Covenants by the Issuer)
1. The Issuer covenants and agrees with the Managers that it will:
(A) make no further amendment or any supplement to the
Registration Statement or the Prospectus without first having
furnished the Lead Manager with a copy of the proposed form thereof
and having given it a reasonable opportunity to review the same;
advise the Lead Manager promptly after the Issuer receiving notice
thereof, of the time when the Registration has become effective or
any amendment to the Registration Statement has been filed, and of
the issue by the MOF of any notice of hearing from which may result
an order requiring the filing of an amendment to the Registration
Statement (whether as originally filed or amended) or an order
suspending the effectiveness of the Registration; and in the event
that any such order shall have been issued, use every reasonable
effort to, subject to Article 7 hereof, cause to be promptly filed
such amendment to the Registration Statement or use every reasonable
effort to terminate such suspension order;
(B) furnish the Managers for use by the Underwriters with copies
of the preliminary Prospectus and the Final Prospectus in such
quantities as the Managers may from time to time reasonably request,
and if, before the earlier of the time when a period of three months
shall have elapsed after the time of the effectiveness of the
Registration or the time when delivery of a prospectus is no longer
required by Japanese law in connection with sales of any of the
Japanese Shares, any event shall have occurred as a result of which
the Final Prospectus as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading, or if for any other reason it
shall be necessary to amend or supplement the Final Prospectus in
order to comply with the Securities and Exchange Law, to notify the
Lead Manager thereof and upon its request promptly to prepare and
furnish without charge to each Underwriter and to any securities
dealer in Japan designated by the Lead Manager as many copies as the
Managers may from time to time reasonably request of a supplement to
the Final Prospectus or an
-13-
<PAGE> 14
amended prospectus which will correct such statement or
omission or effect such compliance;
(C) use its reasonable efforts to obtain the listing of the
Shares on the Osaka Securities Exchange; and
(D) comply with all the provisions, applicable to the Issuer and
shares of the Common Stock, of the Securities and Exchange Law and
the Rules and Regulations and all orders and directions of the MOF
issued thereunder and all applicable regulations and directions of
the Osaka Securities Exchange on which shares of the Common Stock is
for the time being listed (except that the Issuer shall not be
responsible for the compliance by the Managers and the Underwriters
with any applicable laws in connection with the offer or sale of the
Japanese Shares in Japan), and during the three years from the date
of this Agreement promptly furnish to the Lead Manager a copy of any
and all public documents which it may file with the relevant
authorities of the Japanese Government and (if the Common Stock is
for the time being listed on the Osaka Securities Exchange) the Osaka
Securities Exchange with respect to shares of the Common Stock and
any other publicly available documents which the Lead Manager may
reasonably request in relation to shares of the Common Stock from
time to time in writing.
2. If any material change affecting any of the said representations or
warranties contained in Article 3 of this Agreement shall come to its
knowledge at any time prior to the making of the payment by the Managers
pursuant to Article 2 hereof, the Issuer will forthwith notify the Lead
Manager of such change and take such steps as may be necessary to remedy
or publicize the same including the filing of an amendment or amendments
to the Registration Statement.
3. Each of the Issuer and the Investment Manager hereby undertakes with
the Managers (for the benefit of themselves and the Underwriters) that it
will indemnify and hold harmless the Managers and the other Underwriters
and each of them against any and all losses, claims, damages and
liabilities (including reasonable attorney's fees and expenses, and
reasonable costs of investigation) to which they or any of them may become
subject insofar as
-14-
<PAGE> 15
and to the extent that such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any
misrepresentation or alleged misrepresentation by the Issuer in the
Registration Statement, the Preliminary Prospectus or the Final Prospectus
(or any amendment or supplement to the foregoing) or any omission or
alleged omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided,
however, that neither the Issuer nor the Investment Manager shall be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon a misrepresentation or alleged
misrepresentation or omission or alleged omission made in the Registration
Statement, the Preliminary Prospectus or the Final Prospectus, or an
amendment or supplement to any of the foregoing, in reliance upon and in
conformity with information furnished to the Issuer by the Managers or any
other Underwriter or on their behalf expressly for use therein, and,
provided, further, that as to a Preliminary Prospectus that has been
superseded by the Final Prospectus or as to a Preliminary Prospectus or
Final Prospectus that shall have been amended or supplemented after its
date (a "Superseded Prospectus") the indemnity contained in this paragraph
3 shall not apply in respect of any loss, claim, damage, liability or
action arising from the sale of Japanese Shares to any person by any
Manager or any other Underwriter if such Manager or such other Underwriter
failed to send or give a copy of the Final Prospectus or such Preliminary
Prospectus or the Final Prospectus, as amended or supplemented, as the
case may be, to that person within the time required by the Securities and
Exchange Law, end the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact in
such Preliminary Prospectus or Superseded Prospectus was corrected in the
Final Prospectus or such amended or supplemented Preliminary Prospectus or
Final Prospectus, unless such failure resulted from non-compliance by the
Issuer with subparagraph (B) of this Article 4, paragraph 1. The indemnity
agreement in this paragraph 3 shall be in addition to any liability which
the Issuer or the Investment Manager may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of any of
the Manager or the other Underwriters; provided, further, that the
Investment Manager will be required to indemnify and hold harmless any
indemnified party pursuant to this paragraph only to the extent that the
Fund fails to
-15-
<PAGE> 16
indemnify and hold harmless such indemnified party pursuant to this
paragraph.
4. If any claim shall be brought or threatened against any Underwriter
in respect of which indemnity may be sought from the Issuer or the
Investment Manager pursuant to paragraph 3 of this Article, the Lead
Manager undertakes to cause such Underwriter to immediately notify the
Issuer and the Investment Manager in writing thereof and the Issuer and/or
the Investment Manager shall be entitled to assume the defence thereof;
and in such circumstances, and also in the event of any claim concerning
the offer and issue of the Japanese Shares contemplated hereunder being
brought against the Issuer or the Investment Manager or against any of the
Underwriters, the Lead Manager undertakes to cause such Underwriter to
cooperate in good faith and provide the Issuer or the Investment Manager
with such information and assistance as the Issuer may reasonably require,
subject always to the provisions contained in the said paragraph 3.
5. The indemnity contained in paragraph 3 of this Article shall not
extend to any costs, charges, expenses, losses or liabilities (i) which
may arise pursuant to any valid claim by the Issuer or the Investment
Manager in respect of any breach of this Agreement or the Underwriting
Agreement or any other arrangement made among the Underwriters in respect
of the public offering of the Japanese Shares contemplated hereunder by
the Underwriter claiming such indemnity, or (ii) which may result from the
wilful default, bad faith or negligence of such Underwriter or from the
settlement or compromise of any claim brought against such Underwriter
made or effected without the prior written consent of the Issuer or the
Investment Manager (such consent not to be unreasonably withheld in a case
where the Issuer or the Investment Manager has not, at the time such
consent is sought, assumed or agreed to assume the defense of the claim)
or to any fees and expenses of such Underwriter's own counsel in
connection with any claim against such Underwriter after the defense of
such claim has been assumed or agreed to be assumed by the Issuer under
paragraph 4 of this Article.
6. The right of any Underwriter to be indemnified pursuant to paragraph
3 of this Article is without prejudice to its obligations under this
Agreement or the Underwriting Agreement or any other agreement with the
Issuer or the
-16-
<PAGE> 17
Investment Manager and (in any such case) without prejudice to any
liability on the part of any such Underwriter for any antecedent breach of
any of the terms of this Agreement or the Underwriting Agreement or any
such other agreement with the Issuer.
7. The said representations, warranties and agreements contained in
Articles 3 and 4 hereof shall continue in full force and effect
notwithstanding the completion of the subscription and payment for and
issuance of the Japanese Shares.
ARTICLE 5. (Conditions)
The performance by the Managers of their obligations under this Agreement is
conditional upon:
(A) the Registration having become effective on or before the ____
business day after the date of this Agreement and remaining effective
on the Payment Date and no order suspending the effectiveness of the
Registration having been issued on or before Payment Date or, if
issued, such order having been terminated prior to the Payment Date;
(B) there not having occurred any change, or any development involving a
prospective change, in the condition, financial or otherwise, of the
Issuer or the Investment Manager, or in the investment objectives,
investment policies, liabilities, business, prospectus or operations
of the Issuer from that set forth in the Registration Statement, that
in the Lead Manager's reasonable judgment, is material and adverse
and that makes it, in the Lead Manager's reasonable judgment,
impracticable to market the Japanese Shares on the terms and in the
manner contemplated in the Prospectus;
(C) the Investment Manager and the Issuer having each performed
all of their respective obligations to be performed hereunder on or
prior to the Payment Date;
(D) the delivery to the Managers on or before the Payment Date of:
-17 -
<PAGE> 18
(1) a legal opinion, dated the Payment Date, of Simpson
Thacher & Bartlett, United States counsel to the Issuer,
addressed to the Managers substantially to the effect that:
(i) the Issuer has been duly incorporated, is validly
existing as a corporation in good standing under the laws
of the State of Maryland, has the corporate power and
authority to conduct its business as described in the
Prospectus and is duly qualified to transact business and
is in good standing in each jurisdiction in which the
conduct of its business requires such qualification, expect
to the extent that the failure to be so qualified or to be
in good standing would not have a material adverse effect
on the Issuer;
(ii) the Issuer is registered with the Commission as a
non-diversified, closed-end management investment company
under the Investment Company Act and, to the best of such
counsel's knowledge, no order of suspension or revocation
of such registration has been issued or proceedings
therefor initiated or threatened by the Commission;
(iii) each Fundamental Agreement has been duly authorized,
executed and delivered by the Issuer. Each
Fundamental Agreement, other than this Agreement, the U.S.
Underwriting Agreement and the International Agreement,
assuming due authorization, execution and delivery by the
other parties thereto, constitutes the legal, valid and
binding obligation of the Issuer, enforceable against the
Issuer in accordance with its terms except as such
enforceability may be limited by applicable bankruptcy,
insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting creditors' rights
generally and by general principles of equity, regardless
of whether considered in a proceeding in equity or at law;
(iv) none of (A) the execution and delivery by the
Issuer of, and the performance by the Issuer of its
obligations under, each
-18-
<PAGE> 19
Fundamental Agreement, or (B) the issuance and sale by
the Issuer of the Shares as contemplated by this Agreement,
the U.S. Underwriting Agreement and the International
Agreement, contravenes or will contravene any provision of
applicable U.S., State of New York or State of Maryland law
or the charter or by-laws of the Issuer or any material
agreement or instrument binding upon the Issuer that is
known to such counsel, or any judgment, order or decree of
any U.S., State of New York or State of Maryland
governmental body, agency or court having jurisdiction over
the Issuer that is known to such counsel. No consent,
approval, authorization, permit or order of, or
qualification with, any U.S. or State of New York
governmental body or agency, self-regulatory organization
or court or other tribunal, is required for the performance
by the Issuer of this obligations under the Fundamental
Agreements, expect as may be required by the Acts, the
Exchange Acts or the securities or Blue Sky laws of the
various states and in connection with the offer and sale of
the Shares by the Underwriters and the U.S. Underwriters;
(v) the authorized capital stock of the Issuer conforms
in all material respect to the description thereof
contained in the Final Prospectus; and the charter and
by-laws of the Issuer, and the Fundamental Agreements
conform in all material respects at to legal matters to the
descriptions thereof contained in the Final Prospectus;
(vi) the charter and by-laws of the Issuer, and the
Fundamental Agreements comply with all applicable
provisions of the Acts, and all approvals of such documents
required under the Investment Company Act by the Issuer's
shareholders and Board of Directors have been obtained and
are in full force and effect;
(vii) to the knowledge of such counsel, the Fundamental
Agreements (except for this Agreement, the U.S.
Underwriting Agreement and the International
-19-
<PAGE> 20
Underwriting Agreement) are in full force and effect
and, to such counsel's knowledge, neither the Issuer nor
any other party to any such agreement is in default
thereunder and, to the knowledge of such counsel, no event
has occurred which with the passage of time or the giving
of notice or both would constitute a default thereunder. To
the knowledge of such counsel, the Issuer is not currently
in breach of, or in default under, any other written
agreement or instrument to which it or its property is
bound or affected;
(viii) the shares of Common Stock outstanding prior
to issuance of the Shares have been duly authorized and are
validly issued, fully paid and non-assessable, and the form
of certificate used to evidence the Common Stock is in due
and proper form and complies in all material respects with
all provisions of applicable law;
(ix) the Shares have been duly authorized and, when
issued, paid for and delivered in accordance with the terms
of this Agreement, the U.S. Underwriting Agreement and the
International Underwriting Agreement, will be validly
issued, fully paid and non-assessable and the issuance of
the Shares will not be subject to any pre-emptive or
similar rights;
(x) the Shares have been approved for listing on the New
York Stock Exchange, subject to official notice of
issuance,
(xi) the Issuer does not require any tax or other
rulings to enable it to quality as a regulated investment
company under Subchapter M of the Code;
(2) a copy of legal opinion of Piper & Marbury to be delivered
by the Issuer pursuant to Section 7 (e) of the U.S. Underwriting
Agreement, provided that such opinion shall be addressed to, or
shall state that it may be relied on by the Managers or shall be
accompanied by a separate letter to that effect;
-20-
<PAGE> 21
(3) a legal opinion, dated the Payment Date, of Mitsui, Yasuda,
Wani & Maeda, Japanese counsel for the Issuer, addressed to the
Managers, substantially to the effect that:
(i) the Registration has become effective and remains
effective as of the Payment Date;
(ii) the Prior Notification has been filed with the MOF
pursuant to and as required by the Foreign Exchange Control
Law and the cabinet orders and ministerial ordinances
thereunder, and the MOF has issued a notice to the Issuer
confirming that on and after __, 1994 the Issuer may effect
the transactions covered by such notification;
(iii) except for the Registration and the Prior
Notification, no approval, validation, authorization,
permit, order or consent is required to be obtained, or
filing to be made, by the Issuer under Japanese law for the
Issuer to issue and sell the Japanese Shares, to invest in
Japanese securities in the manner described in the Final
Prospectus, to enter into this Agreement and
to perform its obligations under this Agreement;
(iv) this Agreement is a valid and legally binding
agreement under Japanese law of the respective parties
thereto in accordance with its terms; the execution and
delivery of this Agreement and the performance by the
Issuer and the Investment Manager of their respective
obligations under this Agreement does not and will not
contravene any provision of applicable Japanese law or any
order of any Japanese governmental body or agency;
(v) the description of the matters relating to Japanese
law contained in the Registration Statement and the Final
Prospectus is true and correct; and
-21-
<PAGE> 22
(vi) the Registration Statement, the Preliminary
Prospectus and the Final Prospectus and any amendments and
supplements thereto made by the Issuer prior to the Payment
Date comply as to form in all material respect with the
requirements of the Securities and Exchange Law and the
Rules and Regulations.
In rendering such opinions, such counsel may rely to the extent
they deem appropriate upon certificates of officers of the
Issuer as to factual matters and, to the extent their opinion
involves matters of U.S. law, upon the opinion referred to in
sub-paragraph (D)(1) of this Article 5.
(4) such legal opinion dated the Payment Date, of Tsunematsu
Yanase & Sekine, counsel for the Managers, with respect to the
Registration Statement, this Agreement and such other matters as
the Lead Manager may reasonably require, and the Issuer or the
Investment Manager shall have furnished to such counsel such
documents as such counsel may reasonably request for the purpose
of enabling them to pass upon such matters. In rendering such
opinion, such counsel may rely as matters of the United States
law, on the opinion referred to in sub-paragraph (D)(1) of this
Article 5.
(5) a legal opinion, dated the Payment Date, of Simpson Thacher
& Bartlett counsel to the Investment Manager, addressed to the
Managers substantially to the effect that:
(i) the Investment Manager has been duly incorporated,
is validly existing as a corporation in good standing under
the laws of the State of __, has the corporate power and
authority to conduct its business as described in the
Prospectus and is duly qualified to transact business and
is in good standing in each jurisdiction in which the
conduct of its business requires such qualification, except
to the extent that failure to be so qualified or be in good
standing would not have material adverse effect on the
Investment Manager;
-22-
<PAGE> 23
(ii) the Investment Manager is duly registered as an investment
adviser under the Advisers Act and is not prohibited by the
Advisers Act or the Investment Company Act from acting
under the Management Agreement as an investment manager to
the Issuer as contemplated by the Prospectus, and no order
of suspension or revocation of such registration has been
issued or proceedings therefor initiated or, to the best of
such counsel's knowledge, threatened by the Commission;
(iii) each of this Agreement, the U.S. Underwriting Agreement,
the International Underwriting Agreement and the Management
Agreement has been duly authorized, executed and delivered
by the Investment Manager. The Management Agreement,
assuming due authorization, execution and delivery by the
Issuer, constitutes the legal, valid and binding obligation
of the Investment Manager, enforceable against the
Investment Manager in accordance with its terms, except as
such enforceability may be limited by applicable
bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting creditors'
rights generally and by general principles of equity,
regardless of whether considered in proceeding in equity or
at law;
(iv) the execution and delivery by the Investment
Manager of, and the performance of the Investment Manager
of its obligations under, this Agreement, the U.S.
Underwriting Agreement, the International Underwriting
Agreement and the Management Agreement will not contravene
any provision of applicable U.S. or State of New York law
or the certificate of incorporation or by-laws of the
Investment Manager or, to the best of such counsel's
knowledge, any agreement or other instrument binding upon
the Investment Manager that is material to the Investment
Manager, or, to the best of such counsel's knowledge, any
judgment, order or decree of any U.S. or State of New York
-23-
<PAGE> 24
governmental body, agency or court having jurisdiction
over the Investment Manager, and no consent, approval or
authorization, or order or, or qualification with, any U.S.
or State of New York governmental body or agency is
required for the performance by the Investment Manager of
its obligations under this Agreement, except such as may be
required by the Acts, the Exchange Act or the securities or
Blue Sky laws of the various states in connection with the
offer and sale or the Shares by the Underwriters and the
U.S. Underwriters; and
(v) to the best knowledge of such counsel, there are no
actions, investigations or other proceedings of any nature,
whether foreign or domestic, pending, commenced or
threatened, which in any case or in the aggregate, might
result in any material adverse change in the business of
the Investment Manager or which question the validity of
this Agreement, the U.S. Underwriting Agreement, the
International Underwriting Agreement or the Management
Agreement or the performance by 'the Investment Manager of
such Agreement.
(6) a certificate from a duly authorized officer of the
Custodian, certifying that the Custody Agreement is in full
force and effect and is the legal, valid and enforceable
obligation of the Custodian, except as such enforceability may
be limited by applicable bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting creditors'
rights generally and by general principles of equity, regardless
of whether considered in a proceeding in equity or at law and
assuming that such Agreement is a legal, valid, binding and
enforceable obligation of the other party thereto;
(7) a certificate from a duly authorized officer of the
Administrator certifying that the Administration Agreement is in
full force and effect and is the legal, valid, binding and
enforceable obligation of the Administrator, except as such
enforceability may be
-24-
<PAGE> 25
limited by applicable bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting creditor's
rights generally and by general principles of equity, regardless
of whether considered in a proceeding in equity or at law and
assuming that such Agreement is a legal, valid, binding and
enforceable obligation of the other party thereto;
(8) on the date of the U.S. Underwriting Agreement a copy of a
letter dated such date, and also on the Payment Date a letter
[dated the Delivery Date (as defined therein),] from independent
public accountants with respect to the Issuer to be delivered by
the Issuer pursuant to Section 7 (g) of the U.S. Underwriting
Agreement, provided that such letter shall be addressed to, or
shall state that it may be relied on by the Managers of shall be
accompanied by a separate letter to that effect;
(9) separate certificates of an executive officer of each of the
Issuer and the Investment Manager, dated the Payment Date, in
which such officers, to the best of their knowledge after
reasonable investigation, shall state that the representations
and warranties of their respective companies in this Agreement
are true and correct as of such date, that such party has
complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the Payment
Date;
(E) no proceedings having instituted or threatened by the
Commission which would adversely affect the Issuer's standing as a
registered investment company under the Investment Company Act or the
standing of the Investment Manager as a registered investment adviser
under the Advisers Act;
(F) not more than 10% of the assets of the Issuer being subject
to any existing mortgage, pledge, lien, encumbrance, claim or
equity;
(G) the U.S. Underwriting Agreement having been duly
executed and delivered on or before __, 1994 (New York time);
-25-
<PAGE> 26
(H) the International Underwriting Agreement having been duly
executed and delivered on or before __, 1994 (New York time); and
(I) the Shares having been duly authorized for listing on the
New York Stock Exchange, subject only to official notice of issuance
thereof.
ARTICLE 6. (Warranties and Covenants of the Managers)
1. The Managers hereby jointly and severally warrant to, and covenant
and agree with, the Issuer and the Investment Manager that:
(A) each of the Underwriters will offer the Japanese
Shares in conformity with the terms of this Agreement and the
Underwriting Agreement and the terms contained in the Final
Prospectus;
(B) any and all licenses, approvals, validations and consents
necessary under applicable laws and regulations of Japan for the
Managers to enter into this Agreement have been obtained, and such
licenses, approvals, validations and consents remain effective on the
date hereof; and
(C) each of the Managers will do all necessary acts required for
such licenses, approvals, validations and consents to remain
effective on the Payment Date.
2. Each of the Managers will indemnify and hold harmless the Issuer and
the Investment Manager against any losses, claims, damages or liabilities
(including reasonable attorney's fees and expenses and reasonable costs of
investigation) to which it may become subject insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any misrepresentation or alleged misrepresentation in
the Registration Statement, the Preliminary Prospectus or the Final
Prospectus (or any amendment or supplement to the foregoing) or any
omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was
made in the
-26-
<PAGE> 27
Registration Statement, the Preliminary Prospectus or the Final
Prospectus (or any amendment or supplement to the foregoing) in reliance
upon and in conformity with information furnished to the Issuer by such
Manager or on its behalf expressly for use therein. Promptly upon receipt
by the Issuer or the Investment Manager of notice of commencement or
threat of any action in respect of which indemnity may be sought, it shall
notify the Lead Manager thereof. In case any such action shall be brought
against the Issuer, it shall cooperate in good faith with each of the
Managers in defense of such action. In such event, the Managers at their
own expense shall be entitled to participate in, and to the extent that
they shall wish, severally or jointly, to assume the defence thereof, with
counsel reasonably satisfactory to the Issuer or the Investment Manager,
as the case may be, and after notice from the Managers to the Issuer or
the Investment Manager of their election to so assume the defence thereof.
The Managers shall not be liable to the Issuer for any legal or other
expenses subsequently incurred by it in connection with the defence
thereof other than reasonable costs of investigation. None of the Managers
shall be liable in respect of any settlement of any such action or claim
effected without their consent, provided that such consent shall not be
unreasonably withheld. The obligations of the Managers under this Article
6, paragraph 2 shall be in addition to any liability which the respective
Managers may otherwise have and shall extend, upon the same terms and
condition to each director, officer and employee of the Issuer and the
Investment Manager named as such in the Registration Statement.
ARTICLE 7. (Termination of this Agreement)
1. During the period after the execution of this Agreement and prior to
the payment of the Net Subscription Moneys pursuant to paragraph 1 of
Article 2 hereof on the Payment Date, (i) upon any material breach of the
representations, warranties and agreements contained in Article 3 hereof
or failure to perform any of the covenants contained in Article 4 hereof
to a material extent, or any change rendering any of representations
contained in Article 3 inaccurate to a material extent, coming to the
notice of the Lead Manager or (ii) if any of the conditions referred to in
Article 5 hereof is not fulfilled and such condition has not been waived
by the Managers, or (iii) if in the opinion of the Mangers, there shall
have been such material adverse change in national or international
financial, political or economic
-27-
<PAGE> 28
conditions to make it impracticable to market the Japanese Shares on
the terms and in the manner contemplated in the Final Prospectus, the Lead
Manager on behalf of the Managers may, by notice to the Issuer and the
Investment Manager, terminate this Agreement,
2. This Agreement shall also be terminated if the U.S. Underwriting
Agreement or the International Underwriting Agreement is terminated.
3. Upon any such termination set forth in paragraph 1 or 2 of this
Article the Managers, the Issuer and the Investment Manager shall be
released and discharged from their respective obligations hereunder except
for;
(i) the liability of the Issuer for the payment of costs and
expenses as provided for in paragraph 3 of Article 2 hereof or
indemnity contained in paragraph 3 of Article 4 hereof; provided,
however, in the event of termination pursuant to (iii) of paragraph 1
of this Article, the Issuer shall not be required to reimburse the
Managers pursuant to paragraph 3 (B) of Article 2 hereof;
(ii) the liability of either party hereto by reason of their
antecedent breach of any of the terms of this Agreement; and
(iii) the liability of the Managers to comply with paragraph 1
of Article 6 hereof or indemnity contained in paragraph 2 of Article
6 hereof.
ARTICLE 8. (Notice)
1. All communications hereunder shall be sent to the following
addresses:
If to the Issuer, to:
New York, New York
U.S.A.
Facsimile:
Attention:
if to the Investment Manager, to:
-28-
<PAGE> 29
New York, New York
U.S.A.
Facsimile:
Attention:
if to the Lead Manager or the Managers, to:
The Nikko Securities Co., Ltd.
3-1, Marunouchi 3-chome
Chiyoda-ku, Tokyo 100
Japan
Facsimile: 813-3283-1989
Attention: General Manager, International Finance Division
2. All notices under this Agreement shall be delivered by hand or
sent by first class airmail (if international post) or sent by facsimile
(confirmed in writing sent by airmail). Any such notice shall take effect
if delivered by hand, on delivery, in the case of airmail, seven days
after the sealed and duly stamped envelope containing the same has been
deposited in the post office and, in the case of facsimile, upon receipt
by the other party.
3. The Issuer, the Investment Manager and the Lead Manager may change
their addresses set forth in this Article by written notice given to the
other parties hereto.
ARTICLE 9. (Governing Law)
This Agreement and all the rights and obligations of the parties hereto arising
under or relating to this Agreement shall be governed by, and construed in
accordance with, the laws of Japan.
ARTICLE 10. (Jurisdiction and Agent for Service of Process)
1. Any legal action against the Issuer or the Investment Manager
relating to or arising out of this Agreement may be brought in the Tokyo
District Court or any other court competent under Japanese law to hear
appeals from such court. Any such action against the Issuer or the
Investment Manager may
-29-
<PAGE> 30
also be brought in any other competent court having jurisdiction in the
United States of America.
2. The Issuer and the Investment Manager have designated __, Japan as the
address solely for the purpose of accepting service of process in Japan in
connection with any such action instituted in Japan and appointed ___ as
the authorized agent solely to accept such service of process. The Issuer
or the Investment Manager may change said address and person, provided
that a notice to that effect shall be given to the Lead Manager.
ARTICLE 11. (Miscellaneous)
This Agreement has been prepared in a Japanese version and an English version.
The Japanese and English versions of this Agreement shall each be deemed
originals; however, in case of discrepancy between the Japanese and English
versions, the Japanese version shall prevail. It is nevertheless understood
that the representations, warranties and covenants of the Issuer or the
Investment Manager contained in Article 3 and 4 of this Agreement are, and the
certificates to be given on behalf of the Issuer or the Investment Manager
pursuant to Article 5, sub-paragraph (D)(9) of this Agreement as well as the
legal opinions called for in Article 5, sub-paragraphs (D)(1) and (D)(5) of
this Agreement will be, given or rendered in English and on the basis of the
English translations of the Registration Statement and the Prospectus and the
English version of this Agreement, and the accuracy and completeness of all of
the aforementioned English translations and version is presumed by the Issuer,
the Investment Manager and the counsels rendering such legal opinions.
-30-
<PAGE> 31
IN WITNESS WHEREOF, the Issuer, the Investment Manager and the
Managers have caused their duly authorized representatives to affix their
signatures on four (4) counterparts of this Agreement as of the date and at the
place first above stated.
LEHMAN BROTHERS LATIN AMERICA
GROWTH FUND, INC.
BY:
LEHMAN BROTHERS LATIN AMERICA
GLOBAL ASSET MANAGEMENT LIMITED
BY:
THE NIKKO SECURITIES CO., LTD.
BY:
[LEHMAN BROTHERS JAPAN INC.]
BY:
-------------------------------
-------------------------------
-31-
<PAGE> 1
EXHIBIT (h)(I)
LEHMAN BROTHERS LATIN AMERICA GROWTH FUND, INC.
__ Shares of Common Stock
With Par Value of $0.01 each
FORM OF JAPANESE UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT (this "Agreement") made and entered
into in Tokyo as of __, 1994 by and between The Nikko Securities Co., Ltd. (the
"Lead Manager") and __ (together with the Lead Manager, the "Managers") and
the underwriters listed in Schedule 1 annexed hereto (including the Managers in
their capacity as underwriters) (the "Underwriters") is with respect to the
underwriting and public offering of the Japanese Shares as defined and referred
to below.
Lehman Brothers Latin America Growth Fund, Inc., a corporation organized and
existing under the laws of the State of Maryland in the United States of
America (the "Issuer"), desires to distribute certain of its shares among, and
to be held by, Japanese investors and for such purpose proposes to issue __
shares (the "Japanese Shares") of its Common Stock with par value of $0.01 per
share (the "Common Stock") for public offering in Japan.
For the purposes of such public offering, the Manager propose to enter into a
subscription agreement (the "Subscription Agreement") with the Issuer and
Lehman Brothers Global Asset Management Management Limited (the "Investment
Manager") as of __, 1994, whereunder the Issuer will issue the Japanese Shares
and the Managers will agree jointly and severally to subscribe and pay for the
Japanese Shares at a price of $__ per share (the "Issue Price") for the purpose
of public offering in Japan.
Concurrently with the Japanese Offering, the Issuer proposes to issue and sell
up to __ shares (including the over-allotment option thereunder) of its Common
Stock through a group of underwriters (the "U.S. Underwriters") pursuant to an
underwriting agreement dated __, 1994 among the Issuer, the Investment Manager
and the U.S. Underwriters in the United States to investors at an initial public
offering price of $__ per Share. Also concurrently with the Japanese Offering,
the Issuer proposes to issue and sell up to __ shares (including the over-
allotment option thereunder) of its Common Stock through a group of
underwriters (the "International Underwriters") pursuant to an underwriting
agreement dated __, 1994 among the Issuer, the Investment Manager and the
International Underwriters outside Japan and the U.S. to investors at an
initial public offering price of $__ per share.
-1-
<PAGE> 2
In connection with the above concurrent issue and offer, the Lead Manager on
behalf of the Underwriters, the Representatives on behalf of the U.S.
Underwriters and the International Lead Manager on behalf of the International
Underwriters will enter into an agreement among themselves dated __, 1994 (the
"Agreement Between") in order to facilitate the orderly marketing of shares of
Common Stock in the above concurrent offerings, a copy of which will be
delivered to each Underwriter.
Unless otherwise indicated or the context otherwise requires, all the terms
used in this Agreement which are defined in the Subscription Agreement shall
have the same meanings as those ascribed thereto in the Subscription Agreement.
ARTICLE 1
1. Subject and pursuant to the provisions of the Subscription Agreement, the
Managers will jointly and severally subscribe for the entire amount of the
Japanese Shares at the Issue Price.
2. Each Underwriter shall underwrite the number of shares of Common Stock set
opposite its name in Schedule 1 hereto (hereinafter referred to as the
"Underwriting Portion") for the purpose of the public offering of the
Japanese Shares in accordance with the Subscription Agreement and this
Agreement. Should the Lead Manager deem that it has become impossible or
extremely difficult for whatever reason for any Underwriter to underwrite
its Underwriting Portion and so notify the other Underwriters, the
respective Underwriting Portions of such other Underwriters shall
increase, in proportion to their respective Underwriting Portions set out
in Schedule 1 hereto, until the Underwriting Portions of such failing
Underwriter shall have been covered by the increases of the Underwriting
Portions of such other Underwriters; provided, however, that in no event
shall such increased Underwriting Portion of any Underwriter exceed 110%
of its original Underwriting Portion. All references to the Underwriting
Portions hereinbelow shall, where the provisions of the preceding sentence
apply, mean references to the Underwriting Portions increased pursuant to
the preceding sentence.
3. The number of shares of Common Stock which each of the Underwriters shall
sell by public offering (hereinafter referred to as the "Sales Portion")
shall be allocated to each Underwriter by the Lead Manager in such manner
as the Lead Manager deems appropriate, to the extent that the total
number so allocated hereunder reaches the aggregate number of the Japanese
Shares; provided, however, that the Sales Portion allocated to any
Underwriter shall not exceed its Underwriting Portion provided for in the
preceding paragraph without the consent of such Underwriter.
-2-
<PAGE> 3
4. In case the Lead Manager deems that it has become impossible or extremely
difficult for whatever reasons for any Underwriter to sell its Selling
Portion, or in other reasonable cases, the Lead Manager may, at its
discretion but within the limit set forth in the proviso to the preceding
paragraph, allocate such Sales Portion to one or more of the other
Underwriters and increase the Sales Portions allocated to such
Underwriters in accordance with the preceding paragraph.
ARTICLE 2
1. Subject to the terms and conditions of the Subscription Agreement and this
Agreement and subject to the taking effect of the registration concerning
the public offering of the Japanese Shares pursuant to the Securities and
Exchange Law of Japan (Law No. 25 of 1948) (hereinafter referred to as the
"Registration"), the Underwriters shall offer the Japanese Shares to the
public exclusively within Japan at the Issue Price during the period from
__, 1994 through __, 1994 or such other period as shall be notified by the
Lead Manager, in accordance with all applicable Japanese laws and
regulations, and shall observe all of the restrictions and perform all of
the obligations set forth herein and in the Agreement Between.
2. The underwriting commission shall be an amount equal to $__ per Share
multiplied by the Underwriting Portion of each Underwriter and will be
paid by the Lead Manager to each Underwriter after deducting therefrom
such Underwriter's share of the unreimbursed amount of the reasonable
costs and expenses incurred by the Managers in connection with the
subscription and public offering of the Japanese Shares and allocation of
any losses or expenses incurred in stabilizing the market price of shares
of Common Stock in accordance with Article __ of the Agreement Between as
well as any stabilizing profits. In addition, each Underwriter will be
allowed a selling concession equal to $__ per Share multiplied by the
Sales Portion of such Underwriter (as increased, should the provisions of
paragraph __ of such Article apply). The selling concession will be paid
by way of deduction from the payment to be made by each Underwriter
pursuant to Article 3, paragraph 1 hereof. The management commission
payable to the Managers in respect of the public offering of the Japanese
Shares shall be an amount equal to $__ per Share multiplied by the number
of the Japanese Shares.
3. The Japanese Share shall be offered, sold and delivered on the following
terms and conditions:
(A) (i) Each Underwriter agrees and represents that, as part of
the distribution of the Japanese Shares, (a) it is not
purchasing any of the Japanese Shares for the account of anyone
other than a
-3-
<PAGE> 4
Japanese Person, (b) it has not offered or sold, and will not
offer, sell, resell or deliver, directly or indirectly, any of
the Japanese Shares or distribute any Preliminary or Final
Prospectus outside Japan or to anyone other than Japanese Person
and (c) it will deliver a confirmation to any dealer to whom it
may sell any of the Japanese Shares to the effect that (x) such
dealer may not purchase any of the Japanese Shares for the
account of anyone other than a Japanese Person and that (y) such
dealer may not offer or resell, directly or indirectly, such
Japanese Shares directly or indirectly outside Japan or to
anyone other then Japanese Person.
(ii) As used herein, the term "Japanese Person" shall mean any
national or resident of Japan, or any corporation, pension,
profit-sharing or other trust or other entity organized under
the laws of Japan (other than a U.S. Person, as such term is
defined in Regulation S under the U.S. Securities Act of 1933,
as amended and other than a branch located outside of Japan of
any Japanese Person) and shall include any Japanese branch of a
person (other than a U.S. Person) and shall include any Japanese
branch of a person (other than a U.S. Person) who in otherwise
not a Japanese Person.
(iii) Each Underwriter undertakes that in connection with the
distribution of Japanese Shares it will comply with the
prohibition against trading by persons interested in a
distribution set forth in Rule 10b-6 under the United States
Securities Exchange Act of 1934.
(B) No Underwriter is authorized (i) to make any offering of
Japanese Shares or to circulate or distribute any written material
relating to the disposal of Japanese Shares except in accordance with
the restrictions in this Agreement or (ii) to make any representation
or use any information in connection with the issue, subscription,
offer and sale of the Japanese Shares other than as contained in the
Prospectus or any amendment thereto, and each Underwriter will
indemnify the Issuer, the Investment Manager and their respective
officers, employees and directors and each of them against any
losses, liabilities, claims, charges, expenses, action and demands
(including, but not limited to, all reasonable costs, charges and
expenses, paid or incurred in investigating, disputing or defending
any such claim or action) which any of them may incur or which may be
made against any of them arising out of, or in connection with, any
unauthorized action by it as aforesaid or the making by it of any
unauthorized representation or the use by it of any information which
is not contained in the Prospectus or any amendment or supplement
thereto.
-4-
<PAGE> 5
(C) In connection with the solicitation of offers to purchase
Japanese Shares prior to the time when the Registration becomes
effective, the Underwriters must use the Preliminary Prospectus
prepared by the Issuer in connection with the public offering of the
Shares and after the Registration becomes effective, the Final
Prospectus.
(D) Except as to the obligations of the Issuer to cause the
Registration to become effective and to maintain such effectiveness
pursuant to the Subscription Agreement, neither the Lead Managers nor
the Managers nor the Issuer nor the Investment Manager shall be
responsible for obtaining any consent, approval or permission
required for any consent, approval or permission required for any
Underwriter to underwrite, offer or sell the Japanese Shares under
applicable Japanese laws and regulations or otherwise to make any
arrangements necessary for it to underwrite, offer and sell the
Japanese shares hereunder, and each Underwriter shall obtain such
consent, approval or permission, comply with such laws and
regulations and make such arrangements.
(E) On or prior to the Payment Date each Underwriter shall not
sell or attempt to cause any securities dealer who purchases Japanese
Shares from such Underwriter to sell, any Japanese Shares which are
acquired by such Underwriter under this Agreement to any person at
less than the Issue Price, either within Japan or outside Japan.
ARTICLE 3
1. Each Underwriter shall pay, in accordance with the procedures for the
offering of the Japanese Shares (the "Offering Procedures") which the Lead
Manager will prescribe and notify each Underwriter, to the Lead Manager an
amount equal to the Issue Price of such Underwriter's Sale Portion
provided by Article 1, paragraph 3 of this Agreement (should the
provisions of paragraph 4 of such Article be applied, the number of shares
of Common Stock increased by such provisions) less the selling concession
applicable to such Underwriter's Sales Portion in U.S. Dollars.
2. No interest shall accrue on any amount paid by the Underwriters pursuant
to paragraph 1 of this Article.
3. On the Payment Date (unless otherwise notified to the Underwriters, __,
1994), the Lead Manager will pay to the order of the Issuer the Net
Subscription Moneys for the Japanese Shares in accordance with the
provisions of Article 2, paragraph 1 of the Subscription Agreement.
-5-
<PAGE> 6
4. Should any Underwriter fail to pay the entire amount of the payment
required by paragraph 1 of this Article in accordance therewith, the Lead
Manager may, but is not obliged to, in its discretion and to the extent
permitted by applicable Japanese laws and regulations, make on the
Payment Date the payment on behalf of such Underwriter with respect to
such Underwriter's Sales Portion. In such case, terms and conditions on
which such payment will be made on behalf of such failing Underwriter
shall be determined at the discretion of the Lead Manager.
5. If, in the case of the preceding paragraph, the Lead Manager
elects not to make the payment under the preceding paragraph on behalf of
such failing Underwriter, such failing Underwriter shall lose all of its
rights under this Agreement and the Subscription Agreement (provided that
such election by the Lead Manager shall in no way affect claims and any
other legal remedy available to the other Underwriters (including the Lead
Manager) against such failing Underwriter under this Agreement). In such
case, the Lead Manager shall, at its discretion but within the limit set
forth in the proviso to paragraph 3 of Article 1 hereof, allocate the
Sales Portion of such failing Underwriter to one or more of the other
Underwriters to increase their Sales Portions. If the Lead Manager has
notified one or more of such other Underwriters of such additional
allocation, the Underwriter or Underwriters so notified shall immediately
make the payment in the manner provided in the preceding paragraph of the
entire amount or the Issue Price of the share of Common Stock equal to
their respective additional Sales Portions less the amount of the related
selling concession. The foregoing provision shall not be construed to
prevent the Lead Manager from notifying one or more of such Underwriters
of such additional allocation after making, at its discretion and to the
extent permitted by applicable laws and regulations, on the Payment Date,
the payments on behalf of one or more of such other Underwriters with
respect to such additional Sales Portions. In such case, terms and
conditions on which such payments shall be made on behalf of such other
Underwriter or Underwriters shall be determined at the discretion of the
Lead Manager. In no event, however, shall any increased Sales Portions of
any Underwriter pursuant to this paragraph exceed 110% of its Underwriting
Portion without the consent of such Underwriter.
6. The Lead Manager may, in its absolute discretion, in order to make
the amount to be paid by it to the Issuer pursuant to paragraph 1 of
Article 2 of the Subscription Agreement to be the full Net Subscription
Moneys of the Japanese Shares, borrow from or otherwise make arrangements
with such financial institution or institutions and at such terms and
conditions, as the Lead Manager shall deem to be appropriate and
practicable under the circumstances. Any and all costs and expenses,
including interest costs, related to such financing shall he deemed to be
a part of the Managers' costs
-6-
<PAGE> 7
and expenses incurred by the Managers as referred to in the first
sentence of paragraph 2 of Article 2 hereof.
7. The Lead Manager may, if it deems it necessary, demand from the other
Underwriters or Managers payment or disbursement of costs and expenses
to be incurred in connection with the performance of the Underwriters'
obligations and the preparation therefor pursuant to the Subscription
Agreement, this Agreement and the Agreement Between. In such case, the
other Underwriters or Managers which have received such demand from the
Lead Manager shall forthwith make such payment or disbursement as so
demanded.
8. The Lead Manager may, in its absolute discretion, determine how to
allocate the amount of reimbursement of the Managers' out-of-pocket
expenses which will be paid by the Issuer to the Lead Manager pursuant to
Article 2, paragraph 3, sub-paragraph (B) of the Subscription Agreement.
ARTICLE 4
Each Underwriter hereby confirms that it has obtained all licenses,
validations, approvals and consents and filed all notifications necessary under
applicable Japanese laws and regulations for it to enter into and perform this
Agreement and if such Underwriter is not a designated securities company, it
has made such arrangements as would enable it to perform its obligations
hereunder. Each Underwriter covenants that it will use its best endeavours to
keep such licenses, validations, approvals, consents and notifications (or, as
the case may be, such arrangements) in full force and effect up to the payment
on the Payment Date as provided for in Article 3, paragraph 3 hereof and should
any situation which might render any of such license, validations, approvals,
consents and notifications (or, as the case may be, arrangement) invalid or
materially altered arise, such Underwriter shall forthwith give notice thereof
to the Lead Manager and shall after consultation with the Lead Manager follow
the latter's instruction.
ARTICLE 5
Upon the happening of a certain event the Subscription Agreement may be
terminated. If the Subscription Agreement is terminated, then this Agreement
shall automatically be terminated and no party hereto shall have any rights or
liabilities arising hereunder except for its liability arising from the breach
of the provisions of paragraph 3 of Article 2 hereof.
-7-
<PAGE> 8
ARTICLE 6
1. Each of the Managers and The Nikko Securities Co., Ltd. are hereby
authorized to act as Managers and the Lead Manager, respectively, in
connection with the underwriting of the Japanese Shares, making
arrangements for the offers and sales of the Japanese shares under the
Subscription Agreement and this Agreement and entering into and acting
under the Subscription Agreement substantially in the form annexed hereto
as Exhibit A with such changes as shall be agreed to by the Managers (or,
as the case may be, the Lead Manager) and all actions taken by and any of
them in connection with any of the foregoing are hereby ratified. The
Underwriters hereby authorize The Nikko Securities Co., Ltd. to execute
and deliver the Agreement Between on behalf of the Underwriters.
2. Neither the Lead Managers nor any of the Manager shall be liable to any
Underwriter or Manager for any losses or damages which may be incurred by
it as result of or in connection with the performance by the Lead Manager
or by any of the Managers of their respective duties provided for in the
Subscription Agreement; provided that the Lead Manager or the Managers
shall be responsible for any such losses or damages resulting from willful
misconduct or negligence on their part in performing such duties.
3. The Lead Manager and the Managers shall have the sole and full discretion
in making decisions or judgments in respect of any matters which are
provided for in this Agreement or the Subscription Agreement to be
decided as the case may be, at its or their discretion, and
notwithstanding the proviso to the preceding paragraph, neither the Lead
Manager nor any of the Managers shall be responsible for any losses or
damages which may be incurred by any Underwriter or Manager as a result
of its or their decisions or judgments so made.
4. Neither the Issuer nor the Investment Manager shall be subject to any
obligations under, or bound by, this Agreement (without prejudice to its
obligations under this Subscription Agreement).
ARTICLE 7
Any matters necessary in connection with the underwriting and public
offering of the Japanese Shares under this Agreement which are not provided in
this Agreement shall be determined by the Lead Manager and a summary thereof
shall be provided to each Underwriter as necessity arises.
-8-
<PAGE> 9
ARTICLE 8
This Agreement shall be governed by, and construed in accordance with, the laws
of Japan.
ARTICLE 9
This Agreement shall be prepared in the Japanese language which shall be the
only controlling version. An English translation of such version is attached
hereto but shall have no binding force.
IN WITNESS WHEREOF, each of the parties hereto has caused its
representative or attorney-in-fact to affix his name and seal or signature on
one original of this Agreement as of the day and year first above stated. Such
original shall be kept by The Nikko Securities Co., Ltd. and the other
Underwriters will each keep a copy thereof.
THE NIKKO SECURITIES CO., LTD.
BY:
-9-
<PAGE> 1
EXHIBIT (h)(J)
7,000,000 SHARES
LEHMAN BROTHERS LATIN AMERICA GROWTH FUND, INC.
COMMON STOCK
AGREEMENT BETWEEN U.S. UNDERWRITERS,
INTERNATIONAL MANAGERS AND JAPANESE UNDERWRITERS
_______________ __, 1994
AGREEMENT by and between (a) the U.S. Underwriters (the "U.S.
Underwriters") named in Schedule 1 to the U.S. Underwriting Agreement dated the
date hereof (the "U.S. Underwriting Agreement") among Lehman Brothers Latin
America Growth Fund, Inc., a Maryland corporation (the "Company"); Lehman
Brothers Global Asset Management Limited, a _______________ (the "Adviser");
and, Lehman Brothers Inc., The Nikko Securities Co. International, Inc.,
Advest, Inc., Dain Bosworth Incorporated, Fahnestock & Co. Inc., First of
Michigan Corporation, Principal Financial Securities, Inc. and Rauscher Pierce
Refsnes, Inc., as Representatives (the "Representatives") of the U.S.
Underwriters; (b) the International Managers (the "International Managers")
named in Schedule 1 to the International Underwriting Agreement dated the date
hereof (the "International Underwriting Agreement") among the Company, the
Adviser and Lehman Brothers International (Europe) and Nikko Europe Plc, as
International Lead Managers (the "International Lead Managers") for the
International Managers; and (c) the Japanese Underwriters (the "Japanese
Underwriters") named in Schedule 1 to the Japanese Underwriting Agreement dated
______________ __, 1994 (Tokyo time) (the "Japanese Underwriting Agreement")
among The Nikko Securities Co., Ltd., as Japanese Lead Manager, the other
Japanese Manager (named in the Subscription Agreement as defined below) and the
Japanese Underwriters (including the Japanese Managers in their capacity as
Japanese Underwriters).
WHEREAS, the U.S. Underwriters, pursuant to the U.S. Underwriting
Agreement, have agreed to purchase from the Company ________ shares (the "U.S.
Shares") of the Company's
<PAGE> 2
Common Stock, par value $.01 per share (the "Common Stock"), and the
International Managers, pursuant to the International Underwriting Agreement,
have agreed to purchase from the Company __________ shares of the Company's
Common Stock (the "International Shares") and the Japanese Managers, pursuant
to the Japanese Subscription Agreement dated ____________ __, 1994 (Tokyo time)
(the "Japanese Subscription Agreement") among the Company, the Adviser and the
Japanese Managers, will agree to purchase from the Company _____________ shares
of the Company's Common Stock (the "Japanese Shares" and, together with the
International Shares and the U.S. Shares, the "Firm Shares"); and
WHEREAS, solely for the purpose of covering over-allotments, the U.S.
Underwriters, pursuant to the U.S. Underwriting Agreement, and the
International Managers, pursuant to the International Underwriting Agreement,
have been granted options by the Company to purchase up to __________
additional shares of the Company's Common Stock (the "Option Shares") of which
_________ shares may be purchased pursuant to the U.S. Underwriting Agreement
and _________ shares may be purchased pursuant to the International
Underwriting Agreement (the Firm Shares and the Option Shares are hereinafter
collectively called the "Shares"); and
WHEREAS, in connection with the foregoing, the Representatives, the
International Lead Managers and the Japanese Lead Manager deem it necessary and
advisable that certain of the activities of the U.S. Underwriters, the
International Managers and the Japanese Underwriters be coordinated pursuant to
this Agreement;
NOW, THEREFORE, the Representatives (on behalf of the U.S.
Underwriters), the International Lead Managers (on behalf of the International
Managers) and the Japanese Lead Manager (on behalf of the Japanese Underwriters
and subject to the execution of the Japanese Subscription Agreement) hereby
agree as follows:
1.(a) The U.S. Underwriters, acting through the Representatives, the
International Managers, acting through the International Lead Managers, and the
Japanese Underwriters, acting through the Japanese Lead Manager, agree that
they will consult with each other as to the availability for sale to the public
of Shares purchased pursuant to the U.S. Underwriting Agreement, the
International Underwriting Agreement and the Japanese Subscription Agreement,
from time to time until the earliest of (i) the termination of the provisions
of the Supplemental Agreement Among U.S. Underwriters dated the date hereof
(the "Agreement Among U.S. Underwriters"), (ii) the termination of the
provisions of the Agreement Among International Managers dated the date hereof
(the "Agreement Among International Managers"), (iii) the termination of the
provisions of the Japanese Subscription Agreement, or (iv) a mutual agreement
of the U.S. Underwriters, acting through the Representatives, the International
Managers, acting through the International Lead Managers, and the Japanese
Underwriters, acting through the Japanese Lead Manager, to terminate the
selling restrictions set forth in Sections 2(a), 2(b) and 2(c) of this
Agreement.
2
<PAGE> 3
(b) At any time and from time to time as mutually agreed between the
Representatives and the International Lead Managers, the Representatives may
sell (for the accounts of one or more U.S. Underwriters) to the International
Lead Managers (for the accounts of the International Managers) such number of
Shares purchased pursuant to the U.S. Underwriting Agreement and remaining
unsold, as may be determined by Lehman Brothers Inc. From time to time as
mutually agreed between the International Lead Managers and the
Representatives, the International Lead Managers may sell (for the accounts of
one or more International Managers) to the Representatives (for the accounts of
the U.S. Underwriters) such number of Shares purchased pursuant to the
International Underwriting Agreement and remaining unsold, as may be determined
by Lehman Brothers Inc.
(c) Unless otherwise determined by mutual agreement, the price of
any Shares so purchased or sold shall be the public offering price as then in
effect for Shares being sold by the U.S. Underwriters and the International
Managers less the selling concession allocable to such Shares. Settlement
between the Representatives and the International Lead Managers with respect to
any Shares which the Representatives and the International Lead Managers have
agreed to purchase or sell pursuant to this Agreement at least three business
days prior to each Delivery Date specified in the U.S. Underwriting Agreement
shall be made on such Delivery Date and, in the case of purchases and sales
made thereafter, as promptly as practicable but in not event later than five
business days after the transaction date. Certificates for the Shares so
purchased shall be delivered on the respective settlement dates. The liability
for payment to the Company of the purchase price of the Shares being purchased
by the U.S. Underwriters under the U.S. Underwriting Agreement and the
liability for payment to the Company of the purchase price of the Shares being
purchased by the International Managers under the International Underwriting
Agreement, respectively, shall not be affected by the provisions of this
Agreement. The U.S. Underwriters shall pay any sale or transfer taxes, fees or
other charges payable in connection with the sale or delivery of the Shares
sold by them under this Agreement.
(d) The obligations of the U.S. Underwriters in respect of any
purchase or sale of Shares hereunder shall be pro rata in accordance with the
proportion of the total number of Shares which the U.S. Underwriters are
obligated to purchase from the Company pursuant to the U.S. Underwriting
Agreement; provided, however, that if the net purchases of International Shares
hereunder by the U.S. Underwriters exceed 15% of the aggregate number of Shares
to be purchased from the Company by the U.S. Underwriters pursuant to the U.S.
Underwriting Agreement, the excess International Shares shall be purchased by
such U.S. Underwriters as shall be designated by the Representatives.
2.(a) Each U.S. Underwriter agrees that, except for (i) purchases and
sales pursuant to Section 1 hereof, (ii) transactions described in paragraph
(d) of this Section 2, (iii) stabilization transactions contemplated under
Section 3 hereof and (iv) other transactions specifically approved by the
Representatives, the International Lead Managers and the Japanese Lead Manager,
(A) it is not purchasing any Shares for the account of anyone other than a U.S.
Person (as defined
3
<PAGE> 4
below), (B) it has not offered or sold, and will not offer, sell, resell or
deliver, directly or indirectly, any of the Shares or distribute any U.S.
Preliminary Prospectus or U.S. Prospectus (each as defined in the U.S.
Underwriting Agreement) to anyone other than a U.S. Person and (C) any dealer
to whom it may sell any of the Shares (x) will represent that it is not
purchasing for the account of anyone other than a U.S. Person and (y) will
agree that it will not offer, sell, resell or deliver, directly or indirectly,
any of the Shares or distribute the U.S. Preliminary Prospectus or the U.S.
Prospectus to anyone other than a U.S. Person or to any other dealer who does
not so represent and agree.
(b) Each International Manager agrees that, except for (i) purchases
and sales pursuant to Section 1 hereof, (ii) transactions described in
paragraph (d) of this Section 2, (iii) stabilization transactions contemplated
under Section 3 hereof and (iv) other transactions specifically approved by the
International Lead Managers, Japanese Lead Manager and the Representatives, (A)
it is not purchasing any Shares for the account of any U.S. Person or Japanese
Person, (B) it has not offered or sold, and will not offer, sell, resell or
deliver, directly or indirectly, any of the Shares or distribute any
Preliminary International Offering Circular or International Offering Circular
(each as defined in the International Underwriting Agreement) to any U.S.
Person or Japanese Person and (C) any dealer to whom it may sell any of the
Shares (x) will represent that it is not purchasing for the account of any U.S.
Person or Japanese Person and (y) will agree that it will not offer, sell,
resell or deliver, directly or indirectly, any of the Shares or distribute the
Preliminary Prospectus or the Prospectus or Japanese Prospectus to any U.S.
Person or Japanese Person or to any other dealer who does not so represent and
agree.
(c) Each Japanese Underwriter agrees that, except for (i)
transactions described in paragraph (d) of this Section 2 and (ii) other
transactions specifically approved by the Japanese Lead Manager, International
Lead Managers and the Representatives, (A) it is not purchasing any Shares for
the account of anyone other than a Japanese Person, (B) it has not offered or
sold, and will not offer, sell, resell or deliver, directly or indirectly, any
of the Shares or distribute any Japanese Preliminary Prospectus or Japanese
Prospectus outside Japan or to anyone other than a Japanese Person and (C) each
Japanese Underwriter will deliver a confirmation to every dealer to whom it may
sell any of the Shares to the effect that (x) such dealer is not purchasing for
the account of anyone other than a Japanese Person and (y) that such dealer
will not offer, sell, resell or deliver, directly or indirectly, any of the
Shares or distribute the Japanese Preliminary Prospectus or the Japanese
Prospectus outside Japan or to anyone other than a Japanese Person.
(d) The limitations of this Section 2 shall not restrict (i) offers,
sales, resales, deliveries or distributions by a U.S. Underwriter to or through
investment advisors who are U.S. Persons, or other U.S. Persons exercising
investment discretion, who are purchasing for the account of anyone other than
a U.S. Person, or offers, sales, resales, deliveries or distributions by an
International Manager to or through investment advisors who are not U.S.
Persons or Japanese Persons, or other persons exercising investment discretion
who are not U.S. Persons or Japanese
4
<PAGE> 5
Persons, who are purchasing for the account of a U.S. Person or a Japanese
Person, or offers, sales, resales, deliveries or distributions by a Japanese
Underwriter to or through investment advisors who are Japanese Persons, or
other persons exercising investment discretion who are Japanese Persons, who
are purchasing for the account of anyone other than a Japanese Person, (ii)
purchases by a U.S. Underwriter who is also acting as an International Manager
of Shares for the account of anyone who is not a U.S. Person or (iii) offers
or sales by a U.S. Underwriter who is also acting as an International Manager
of Shares to anyone who is not a U.S. Person or offers or sales by an
International Manager who is also acting as a U.S. Underwriter of Shares to a
U.S. Person.
(e) As used herein, the term "United States" shall mean the United
States of America (including the District of Columbia) and its territories, its
possessions and other areas subject to its jurisdiction, and "U.S. Person"
shall mean any resident or citizen of the United States, any corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, or any estate or trust the
income of which is subject to United States federal income taxation regardless
of the source of its income. "Japanese Person" shall mean any national or
resident of Japan, or any corporation, pension, profit-sharing or other trust
or other entity organized under the laws of Japan (other than a U.S. Person, as
such term is defined in Regulation S of the United States Securities Act of
1933, as amended, and other than a branch located outside of Japan of any
Japanese Person).
(f) Each International Manager represents that it has not offered or
sold, and agrees not to offer or sell, any Common Shares, directly or
indirectly, in Canada in contravention of the securities laws of Canada or any
province or territory thereof. Each International Manager further agrees to
send any dealer who purchases from it any Common Shares a notice stating in
substance that, by purchasing such Common Shares, such dealer represents and
agrees that it has not offered or sold and will not offer or sell, directly or
indirectly, any such Common Shares in Canada in contravention of the securities
laws of Canada or any province or territory thereof, and that such dealer will
deliver to any other dealer to whom it sells any of such Common Shares a notice
to the foregoing effect.
(g) Each International Manager represents and agrees that (i) it has
not offered or sold and that it will not offer or sell any Common Shares in the
United Kingdom by means of any document, other than to persons whose ordinary
business it is to buy or sell shares or debentures, whether as principal or
agent (other than in circumstances which do not constitute an offer to the
public within the meaning of the Companies Act 1985), (ii) it has complied and
will comply with all applicable provisions of the Financial Services Act 1986
with respect to anything done by it in relation to the shares of Common Stock,
in, from or otherwise involving the United Kingdom, (iii) it has only issued or
passed on and will only issue or pass on to any person in the United Kingdom
any publication or document received by it in connection with the issuances of
the shares of Common Stock if that person is of a kind described in Article
9(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1988 (as
5
<PAGE> 6
amended) of Great Britain or is a person to whom the document may otherwise
lawfully be issued or passed on, and (iv) it will send to any dealer who
purchases from it any of such shares of Common Stock a confirmation stating in
substance that such dealer may not purchase any of such shares of Common Stock
for the account of a U.S. Person or a Japanese Person and that such dealer may
not offer or resell such shares of Common Stock, directly or indirectly, in the
United States or Japan or to a U.S. Person or a Japanese Person.
(h) Each Japanese Underwriter represents and agrees that it has not,
directly or indirectly, offered or sold, and will not, directly or indirectly,
offer or sell any Common Shares in Japan or to, or for the benefit of, any
resident of Japan, except in compliance with or pursuant to an exemption
available from the registration requirements under the Securities and Exchange
Law of Japan.
(i) Each International Manager agrees that (i) Common Shares may not
be offered or sold in Hong Kong by means of the Prospectus (as defined in the
International Underwriting Agreement) or any other document, other than to
persons whose ordinary business is to buy or sell shares or debentures, whether
as principal or agent, or in other circumstances which do not constitute an
offer to the public for the purposes of the Hong Kong Companies Ordinance, and
(ii) unless permitted to do so by the securities laws of Hong Kong, no person
may issue or cause to be issued in Hong Kong the Prospectus or any amendment or
supplement thereto or any other invitation, advertisement or document relating
to the Common Shares to anyone other than a person whose business involves the
acquisition, disposal, or holding, of securities, whether as principal or as
agent.
3.(a) All stabilization transactions conducted in the United States
shall be conducted through Lehman Brothers Inc. and all stabilization
transactions, if any, conducted outside the United States shall be conducted
through Lehman Brothers Inc. and the Japanese Lead Manager, as Global
Coordinators (the "Global Coordinators"), so that stabilization activities both
within and outside the United States shall be coordinated and conducted in
compliance with any applicable laws and regulations. No stabilization
transactions will be conducted in Japan.
(b) The U.S. Underwriters shall have responsibility with respect to
any action which the Representatives may take to make over-allotments in
arranging for sales of Shares in the United States, and the International
Managers shall have responsibility with respect to any action which the
International Lead Managers may take to make over-allotments in arranging for
sales of Shares outside the United States and Japan.
(c) The International Lead Managers undertake, and agree to cause
each of the International Managers to undertake, that in connection with the
distribution of the Shares they will comply with the prohibitions against
trading by persons interested in a distribution set forth in Rules 10b-6 and
10b-7 under the United States Securities Exchange Act of 1934 and Section 9 of
the Agreement Among International Managers. The International Managers will
cause each
6
<PAGE> 7
dealer who has agreed to participate or is participating in the distribution to
give a similar undertaking. The Japanese Lead Manager undertakes, and agrees
to cause each of the Japanese Underwriters to undertaken, that in connection
with the distribution of Shares they will comply with the prohibitions against
trading by persons interested in a distribution set forth in Rule 10b-6 under
the United States Securities Exchange Act of 1934.
(d) All stabilization transactions conducted by the Global
Coordinators shall be for the respective accounts of the several U.S.
Underwriters, the several International Managers and the several Japanese
Underwriters in the proportions set forth in Section 4 hereof. In no event
shall the net commitment pursuant to over-allotments or such stabilization
transactions, including the net commitments for long or short account
represented by shares of the Shares purchased or sold pursuant to Section 1
hereof, exceed in the case of each U.S. Underwriter, International Manager or
Japanese Manager, 30% of the aggregate public offering price of the total
number of Shares which such U.S. Underwriter, International Manager or Japanese
Manager is obligated to purchase pursuant to the U.S. Underwriting Agreement,
International Underwriting Agreement or Japanese Subscription Agreement, as the
case may be, and this Agreement.
4. The Representatives, the International Lead Managers and the
Japanese Lead Manager shall agree as to the expenses which will constitute
expenses of the underwriting and distribution of the Shares common to the U.S.
Underwriters, the International Managers and the Japanese Underwriters, which
expenses, as well as any stabilizing profits, shall be allocated among the U.S.
Underwriters, the International Managers and the Japanese Underwriters, in the
same proportions as the aggregate number of Shares agreed to be purchased under
the U.S. Underwriting Agreement, the aggregate number of Shares agreed to be
purchased under the International Underwriting Agreement and the aggregate
number of Shares agreed to be purchased under the Japanese Subscription
Agreement bear to the total number of Shares. It is agreed that such common
expenses shall, unless otherwise agreed by the Representatives, the
International Lead Managers and the Japanese Lead Manager, be limited to any
losses or expenses incurred in stabilizing the market price of the Shares in
accordance with Section 3 hereof. Except with respect to such common expenses,
the U.S. Underwriters will pay the aggregate expenses incurred in connection
with the purchase, carrying or sale of the U.S. Shares, the International
Managers will pay the aggregate expenses incurred in connection with the
purchase, carrying or sale of the International Shares, and the Japanese
Underwriters will pay the aggregate expenses incurred in connection with the
purchase, carrying or sale of the Japanese Shares.
5. The Representatives, the International Lead Managers and the
Japanese Lead Manager agree that:
(a) the International Lead Managers and the Japanese Lead
Manager will not establish a Delivery Date under the International
Underwriting Agreement and the Japanese Subscription Agreement which
differs from that established under the U .S.
7
<PAGE> 8
Underwriting Agreement, and if such Delivery Date is postponed by
action of the U.S. Underwriters as provided in the U.S. Underwriting
Agreement or by action of the International Managers or the Japanese
Underwriters as provided in the International Underwriting Agreement
or the Japanese Subscription Agreement, respectively, it will be
postponed to a date and time mutually agreed upon by the
Representatives, the International Lead Managers and the Japanese
Lead Manager;
(b) changes in the respective public offering prices or in the
respective selling concessions and reallowances to dealers will be
made only in accordance with the direction of the Global Coordinators
until the time specified in Section 1(a) hereof;
(c) the Representatives, the International Lead Managers and
the Japanese Lead Manager will each keep the other fully informed of
the progress of the offering and distribution of the Shares;
(d) the Representatives will not cause the termination of the
Agreement Among U.S. Underwriters, the International Lead Managers
will not cause the termination of the Agreement Among International
Managers and the Japanese Lead Manager will not cause the termination
of the Japanese Subscription Agreement without, in each case, the
consent of the others until 45 days after the date hereof; and
(e) advertising with respect to the offering shall be as
mutually agreed upon by the Representatives, the International Lead
Managers and the Japanese Lead Manager.
6. This Agreement may be amended prior to any Delivery Date
specified in the U.S. Underwriting Agreement, the International Underwriting
Agreement and the Japanese Subscription Agreement by mutual written consent of
the Representatives, the International Lead Managers and the Japanese Lead
Manager.
7. This Agreement may be signed in several counterparts, which
together shall constitute one and the same instrument.
8. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CHOICE OF
LAW OR CONFLICTS OF LAW PRINCIPLES THEREOF.
8
<PAGE> 9
IN WITNESS WHEREOF, this Agreement has been executed on the date first
above written.
LEHMAN BROTHERS INC.
THE NIKKO SECURITIES CO. INTERNATIONAL, INC.
ADVEST, INC.
DAIN BOSWORTH INCORPORATED
FAHNESTOCK & CO. INC.
FIRST OF MICHIGAN CORPORATION
PRINCIPAL FINANCIAL SECURITIES, INC. AND
RAUSCHER PIERCE REFSNES, INC.
For themselves and as Representative for
each of the several U.S. Underwriters
named in Schedule 1,
By: LEHMAN BROTHERS INC.
By:_____________________________________________
Authorized Representative
LEHMAN BROTHERS INTERNATIONAL (EUROPE)
NIKKO EUROPE Plc
For themselves and as International Lead
Managers for each of the several International
Managers named in Schedule 1,
By: LEHMAN BROTHERS INTERNATIONAL (EUROPE)
By:_____________________________________________
Authorized Representative
9
<PAGE> 10
THE NIKKO SECURITIES CO., LTD.
For itself and as Japanese Lead Manager
for each of the several Japanese
Underwriters
By: THE NIKKO SECURITIES CO., LTD.
By:_____________________________________________
Authorized Representative
<PAGE> 1
DRAFT
EXHIBIT (j)
LEHMAN BROTHERS LATIN AMERICA GROWTH FUND, INC.
FORM OF CUSTODY AGREEMENT
THIS AGREEMENT is made as of _______, 1994 between LEHMAN BROTHERS
LATIN AMERICA GROWTH FUND, INC. (the "Fund") a Maryland corporation having its
principal office and place of business at 3 World Financial Center, New York,
New York 10285 and BOSTON SAFE DEPOSIT AND TRUST COMPANY (the "Custodian"), a
Massachusetts trust company having its principal place of business at One
Boston Place, Boston, Massachusetts 02108.
W I T N E S S E T H:
That for and in consideration of the mutual premises and covenants
hereinafter set forth, the Fund and the Custodian agree as follows:
1. Definitions.
Whenever used in this Agreement or in any Schedules to this Agreement,
the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
(a) "Articles of Incorporation" shall mean the Articles of
Incorporation dated _______, 1994 of the Fund filed with the
State of Maryland, as now in effect and as the same may be
amended from time to time.
(b) "Authorized Person" shall be deemed to include the President,
any Vice President, the Secretary, any Assistant Secretary,
the Treasurer or Assistant Treasurer or any other person,
whether or not any such person is an officer or employee of
the Fund, duly authorized by the Board of Directors of the
Fund to give Oral Instructions and Written Instructions on
behalf of the Fund and listed in a certification in the form
annexed hereto as Appendix A or such other certification as
may be received by the Custodian from time to time.
(c) "Book-Entry System" shall mean the Federal Reserve/ Treasury
book-entry system for United States and federal agency
securities, its successor or successors and its nominee or
nominees.
(d) "Depository" shall mean The Depository Trust Company ("DTC"),
a clearing agency registered with the Securities and Exchange
Commission under Section 17(a) of the Securities Exchange Act
of 1934, as amended, its successor or successors and its
nominee or nominees, in which the Custodian is specifically
authorized by the Fund's Board to make deposits. The term
"Depository" shall
<PAGE> 2
further mean and include any other person to be named in
Written Instructions authorized to act as a depository
under the 1940 Act, its successor or successors and
its nominee or nominees.
(e) "Money Market Securities" shall be deemed to include, without
limitation, debt obligations issued or guaranteed as to
interest and principal by the Government of the United States
or agencies or instrumentalities thereof, commercial paper,
bank certificates of deposit, bankers' acceptances and
short-term corporate obligations, where the purchase or sale
of such securities normally requires settlement in federal
funds on the same day as such purchase or sale, and repurchase
and reverse repurchase agreements with respect to any of the
foregoing types of securities.
(f) "Oral Instructions" shall mean verbal instructions actually
received by the Custodian from an Authorized Person or a
person reasonably believed by the Custodian to be an
Authorized Person.
(g) "Prospectus" shall mean the Fund's current prospectus relating
to the registration of the Fund's Shares under the Securities
Act of 1933, as amended.
(h) "Shares" refers to the shares of common stock, par value $.001
per share, as may be issued by the Fund from time to time.
(i) "Security" or Securities" shall be deemed to include bonds,
debentures, notes, stocks, shares, evidences of indebtedness,
and other securities and investments from time to time of the
Fund, including futures contracts and options on futures
contracts.
(j) "Transfer Agent" shall mean the person which performs the
transfer agent, dividend disbursing agent and shareholder
servicing agent functions for the Fund.
(k) "Written Instructions" shall mean a written communication
actually received by the Custodian from two Authorized Persons
or from persons reasonably believed by the Custodian to be
Authorized Persons by telex or facsimile machine or any other
such system whereby the receiver of such communication is able
to verify through codes or otherwise with a reasonable degree
of certainty the authenticity of the sender of such
communication.
(l) The "1940 Act" refers to the Investment Company Act of 1940,
and the rules and regulations thereunder, all as amended from
time to time.
-2-
<PAGE> 3
2. Appointment of Custodian.
(a) The Fund hereby constitutes and appoints the Custodian as
custodian of all of the Securities and monies at any time
owned by or in the possession of the Fund during the period of
this Agreement.
(b) The Custodian hereby accepts appointment as such custodian for
the Fund and agrees to perform the duties thereof as
hereinafter set forth.
3. Compensation.
(a) The Fund will compensate the Custodian for its services
rendered under this Agreement in accordance with the fees set
forth in Schedule I attached hereto, as the same may be
amended from time to time (the "Fee Schedule"). Such Fee
Schedule does not include out-of-pocket disbursements of the
Fund for which the Custodian shall be entitled to bill
separately. Out-of-pocket disbursements shall include, but
shall not be limited to, the items specified in Schedule II
and incorporated herein (the "Expense Schedule"), which
Expense Schedule may be modified by the Custodian upon not
less than sixty (60) days' prior written notice to the Fund.
(b) The Custodian will bill the Fund in respect of out-of-pocket
expenses as soon as practicable after the end of each calendar
month, and said billings will be detailed in accordance with
the Expense Schedule. The Fund will promptly pay to the
Custodian the amount of such billing.
4. Custody of Cash and Securities.
(a) Receipt and Holding of Assets. The Fund will deliver or cause
to be delivered to the Custodian all Securities and monies
owned by the Fund, including cash received from the issuance
of its Shares, at any time during the period of this
Agreement. The Custodian will not be responsible for such
Securities and monies until actually received by it. The Fund
shall instruct the Custodian from time to time in its sole
discretion, by means of Written Instructions, or in connection
with the purchase or sale of Money Market Securities, by means
of Oral Instructions or Written Instructions, as to the manner
in which and in what amounts Securities and monies of the Fund
are to be deposited on behalf of the Fund in the Book-Entry
System or a Depository and specifically allocated on the books
of the Custodian to the Fund; provided, however, that prior to
the initial deposit of Securities of the Fund in the
Book-Entry System or the Depository, the Custodian shall have
received Written Instructions specifically approving such
deposit by the Custodian in the Book-Entry System or a
Depository.
-3-
<PAGE> 4
(b) Accounts and Disbursements. The Custodian shall establish and
maintain a separate account for the Fund and shall credit to
the separate account of the Fund all monies received by it for
the account of such Fund and shall disburse the same only:
(i) In payment for Securities purchased for the Fund, as
provided in Section 5 hereof;
(ii) For the payment of any expense or liability incurred
by the Fund, including but not limited to the
following payments for the account of the Fund:
interest, taxes, management, accounting, transfer
agent and legal fees and operating expenses of the
Fund whether or not such expenses are, in whole or in
part, to be capitalized or treated as deferred
expenses;
(iii) For payment of the amount of dividends received in
respect of Securities sold short;
(iv) In payment of dividends or distributions with respect
to the Shares of the Fund, as provided in Section 7
hereof;
(v) In payment of original issue or other taxes with
respect to the Shares of the Fund;
(vi) In payment for Shares which have been repurchased by
the Fund, in the open market or otherwise;
(vii) Pursuant to Written Instructions or, with respect to
Money Market Securities, Oral Instructions or Written
Instructions, setting forth the name and address of
the person to whom the payment is to be made, the
amount to be paid and the purpose for which payment
is to be made; or
(viii) In payment of fees and in reimbursement of the
expenses and liabilities of the Custodian
attributable to the Fund, as provided in Section 3(a)
and Section 10(h) hereof.
(c) Confirmation and Statements. Promptly after the close of
business on each day, the Custodian shall furnish the Company
with confirmations and a summary of all transfers to or from
the account of the Fund during said day. Where securities
purchased by the Fund are in a tangible bulk of securities
registered in the name of the Custodian (or its nominee) or
shown on the Custodian's account on the books of the
Depository or the Book-Entry System, the Custodian shall by
book entry or otherwise identify the quantity of those
securities belonging to the Fund. At least monthly, the
Custodian shall furnish the Fund with a detailed statement of
the Securities and monies held for the Fund under this
Agreement.
-4-
<PAGE> 5
(d) Registration of Securities and Physical Separation. All
Securities held for the Fund which are issued or issuable only
in bearer form, except such Securities as are held in the
Book-Entry System, shall be held by the Custodian in that
form; all other Securities held for the Fund may be registered
in the name of the Fund, in the name of any duly appointed
registered nominee of the Custodian as the Custodian may from
time to time determine, or in the name of the Book-Entry
System or a Depository or their successor or successors, or
their nominee or nominees. The Fund reserves the right to
instruct the Custodian as to the method of registration and
safekeeping of the Securities of the Fund. The Fund agrees to
furnish to the Custodian appropriate instruments to enable the
Custodian to hold or deliver in proper form for transfer, or
to register in the name of its registered nominee or in the
name of the Book-Entry System or a Depository, any Securities
which it may hold for the account of the Fund and which may
from time to time be registered in the name of the Fund. The
Custodian shall hold all such Securities which are not held in
the Book-Entry System or the Depository in a separate account
for the Fund physically segregated at all times from those of
any other person or persons.
(e) Collection of Income and Other Matters Affecting Securities.
Unless otherwise instructed to the contrary by Written
Instructions, the Custodian by itself, or through the use of
the Book-Entry System or the Depository with respect to
Securities therein deposited, shall with respect to all
Securities held for the Fund in accordance with this
Agreement:
(i) Collect on a timely basis all income due or payable;
(ii) Present on a timely basis for payment and collect the
amount payable upon all Securities which may mature
or be called, redeemed or retired, or otherwise
become payable. Notwithstanding the foregoing, the
Custodian shall have no responsibility to the Fund
for monitoring or ascertaining any call, redemption
or retirement dates with respect to any put bonds
which are owned by the Fund and held by the Custodian
or its nominee, nor shall the Custodian have any
responsibility or liability to the Fund for any loss
by the Fund for any missed payment or other default
resulting therefrom; unless the Custodian received
timely notification from the Fund specifying the
time, place and manner for the presentment of any
such put bond owned by the Fund and held by the
Custodian or its nominee. The Custodian shall not be
responsible and assumes no liability to the Fund for
the accuracy or completeness of any notification the
Custodian may furnish to the Fund with respect to put
bonds;
(iii) Surrender Securities in temporary form for definitive
Securities;
(iv) Execute any necessary declarations or certificates of
ownership under the Federal income tax laws or the
laws or regulations of any other taxing authority now
or hereafter in effect; and
-5-
<PAGE> 6
(v) Hold directly, or through the Book-Entry System or a
Depository with respect to Securities therein
deposited, for the account of the Fund all rights and
similar Securities issued with respect to any
Securities held by the Custodian hereunder for the
Fund.
(f) Delivery of Securities and Evidence of Authority. Upon
receipt of Written Instructions and not otherwise, except for
subparagraphs (v) - (xii) below which may be effected by Oral
or Written Instructions, the Custodian, directly or through
the use of the Book-Entry System or a Depository, shall:
(i) Execute and deliver or cause to be executed and
delivered to such persons as may be designated in
such Written Instructions proxies, consents,
authorizations and any other instruments whereby the
authority of the Fund as owner of any Securities may
be exercised;
(ii) Deliver or cause to be delivered any Securities held
for the Fund in exchange for other Securities or cash
issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise
of any conversion privilege;
(iii) Deliver or cause to be delivered any Securities held
for the Fund to any protective committee,
reorganization committee or other person in
connection with the reorganization, refinancing,
merger, consolidation or recapitalization or sale of
assets of any corporation, and receive and hold under
the terms of this Agreement in the separate account
for the Fund such certificates of deposit, interim
receipts or other instruments or documents as may be
issued to it to evidence such delivery;
(iv) Make or cause to be made such transfers or exchanges
of the assets specifically allocated to the separate
account of the Fund and take such other steps as
shall be stated in said Written Instructions to be
for the purpose of effectuating any duly authorized
plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Fund
(v) Deliver Securities owned by the Fund upon sale of
such Securities for the account of the Fund pursuant
to Section 5;
(vi) Deliver Securities owned by the Fund upon the receipt
of payment in connection with any repurchase
agreement related to such Securities entered into by
the Fund;
(vii) Deliver Securities owned by the Fund to the issuer
thereof or its agent when such Securities are called,
redeemed, retired or otherwise become
-6-
<PAGE> 7
payable; provided, however, that in any such case
the cash or other consideration is to be delivered
to the Custodian. Notwithstanding the foregoing, the
Custodian shall have no responsibility to the Fund
for monitoring or ascertaining any call, redemption
or retirement dates with respect to any put bonds
which are owned by the Fund and held by the Custodian
or its nominee, nor shall the Custodian have any
responsibility or liability the Fund for any loss by
the Fund for any missed payment or other default
resulting therefrom unless the Custodian received
timely notification from the Fund specifying the
time, place and manner for the presentment of any
such put bond owned by the Fund and held by the
Custodian or its nominee. The Custodian shall not be
responsible and assumes no liability the Fund for the
accuracy or completeness of any notification the
Custodian may furnish the Fund with respect to put
bonds;
(viii) Deliver Securities owned by the Fund to the issuer
thereof, or its agent, for transfer into the name of
the Fund or into the name of any nominee or nominees
of the Custodian or into the name or nominee name of
any agent appointed pursuant to Section 10(f) or into
the name or nominee name of any sub-custodian
appointed pursuant to Section 10(e); or for exchange
for a different number of bonds, certificates or
other evidence representing the same aggregate face
amount or number of units; provided, however, that in
any such case, the new Securities are to be delivered
to the Custodian;
(ix) Deliver Securities owned by the Fund to the broker
for examination in accordance with "street delivery"
custom;
(x) Deliver Securities owned by the Fund in accordance
with the provisions of any agreement among the Fund,
the Custodian and a broker-dealer registered under
the Securities Exchange Act of 1934 (the "Exchange
Act") and a member of the National Association of
Securities Dealers, Inc. (the "NASD"), relating to
compliance with the rules of The Options Clearing
Corporation and of any registered national securities
exchange, or of any similar organization or
organizations, regarding escrow or other arrangements
in connection with transactions by the Fund;
(xi) Deliver Securities owned by the Fund in accordance
with the provisions of any agreement among the Fund,
the Custodian, and a futures commission merchant
registered under the Commodity Exchange Act, relating
to compliance with the rules of the Commodity Futures
Trading Commission and/or any Contract Market, or any
similar organization or organizations, regarding
account deposits in connection with transactions by
the Fund;
(xii) Deliver Securities owned by the Fund for delivery in
connection with any loans of Securities made by the
Fund but only against receipt of adequate collateral
as agreed upon from time to time by the Custodian and
the Fund
-7-
<PAGE> 8
which may be in the form of cash or obligations
issued by the United States government, its agencies
or instrumentalities;
(xiii) Deliver Securities owned by the Fund for delivery as
security in connection with any borrowings by the
Fund requiring a pledge of the Fund assets, but only
against receipt of amounts borrowed;
(xiv) Deliver Securities owned by the Fund upon receipt of
instructions from the Fund for delivery to the
Transfer Agent or to the holders of Shares in
connection with distributions in kind, as may be
described from time to time in the Fund's Prospectus,
in satisfaction of requests by holders of Shares for
redemption; and
(xv) Deliver Securities owned by the Fund for any other
proper business purpose, but only upon receipt of, in
addition to Written Instructions, a certified copy of
a resolution of the Board of Directors signed by an
Authorized Person and certified by the Secretary of
the Fund specifying the Securities to be delivered,
setting forth the purpose for which such delivery is
to be made, declaring such purpose to be a proper
business purpose, and naming the person or persons to
whom delivery of such Securities shall be made.
(g) Endorsement and Collection of Checks, Etc. The Custodian is
hereby authorized to endorse and collect all checks, drafts or
other orders for the payment of money received by the
Custodian for the account of the Fund; provided, however, that
the Custodian shall not be liable for any money, whether or
not represented by any check, draft, or other instrument for
the payment of money, received by it on behalf of the Fund
until the Custodian actually receives and collects such money
directly or by the final crediting of the account representing
the Fund's interest in the Book-Entry System or the
Depository.
5. Purchase and Sale of Investments of the Fund.
(a) Promptly after each purchase of Securities for the Fund, the
Fund shall deliver to the Custodian (i) with respect to each
purchase of Securities which are not Money Market Securities,
Written Instructions, and (ii) with respect to each purchase
of Money Market Securities, either Written Instructions or
Oral Instructions, in either case specifying with respect to
each purchase: (1) the name of the issuer and the title of
the Securities; (2) the number of shares or the principal
amount purchased and accrued interest, if any; (3) the date of
purchase and settlement; (4) the purchase price per unit; (5)
the total amount payable upon such purchase; (6) the name of
the person from whom or the broker through whom the purchase
was made, if any; (7) whether or not such purchase is to be
settled through the Book-Entry System or the Depository; and
(8) whether the Securities purchased are to be deposited in
the Book-Entry System or the Depository. The Custodian shall
-8-
<PAGE> 9
receive the Securities purchased by or for the Fund and upon
receipt of such Securities shall pay out of the monies held
for the account of the Fund the total amount payable upon such
purchase, provided that the same conforms to the total amount
payable as set forth in such Written Instructions or Oral
Instructions.
(b) Promptly after each sale of Securities of the Fund, the Fund
shall deliver to the Custodian (i) with respect to each sale
of Securities which are not Money Market Securities, Written
Instructions, and (ii) with respect to each sale of Money
Market Securities, either Written or Oral Instructions, in
either case specifying with respect to such sale: (1) the
name of the issuer and the title of the Securities; (2) the
number of shares or principal amount sold, and accrued
interest, if any; (3) the date of sale; (4) the sale price per
unit; (5) the total amount payable to the Fund upon such sale;
(6) the name of the broker through whom or the person to whom
the sale was made; and (7) whether or not such sale is to be
settled through the Book-Entry System or the Depository. The
Custodian shall deliver or cause to be delivered the
Securities to the broker or other person designated by the
Fund upon receipt of the total amount payable to the Fund upon
such sale, provided that the same conforms to the total amount
payable to the Fund as set forth in such Written or such Oral
Instructions. Subject to the foregoing, the Custodian may
accept payment in such form as shall be satisfactory to it,
and may deliver Securities and arrange for payment in
accordance with the customs prevailing among dealers in
Securities.
6. Lending of Securities.
(a) If the Fund is permitted as disclosed in its current
Prospectus to lend Securities, within 24 hours after each loan
of Securities, the Fund shall deliver or cause to be delivered
to the Custodian Written Instructions specifying with respect
to each such loan: (1) the name of the issuer and the title
of the Securities; (2) the number of shares or the principal
amount loaned; (3) the date of loan and delivery; (4) the
total amount to be delivered to the Custodian, including the
amount of cash collateral and the premium, if any, separately
identified; (5) the name of the broker, dealer or financial
institution to which the loan was made; and (6) whether the
Securities loaned are to be delivered through the Book-Entry
System or the Depository. Promptly after each termination of
a loan of Securities, the Fund shall deliver to the Custodian
Written Instructions specifying with respect to each such loan
termination and return of Securities: (1) the name of the
issuer and the title of the Securities to be returned; (2) the
number of shares or the principal amount to be returned; (3)
the date of termination; (4) the total amount to be delivered
by the Custodian (including the cash collateral for such
Securities minus any offsetting credits as described in said
Written Instructions); (5) the name of the broker, dealer or
financial institution from which the Securities will be
returned; and (6) whether such return is to be effected
through the Book-Entry System or the Depository. The
Custodian shall receive all Securities returned from the
broker, dealer or financial institution to which such
Securities were loaned and upon
-9-
<PAGE> 10
receipt thereof shall pay, out of the monies held for the
account of such Fund, the total amount payable upon such
return of Securities as set forth in the Written Instructions.
Securities returned to the Custodian shall be held as they
were prior to such loan.
7. Payment of Dividends or Distributions.
(a) The Fund shall furnish to the Custodian a copy of the
resolution of the Board of Directors of the Fund certified by
the Secretary or an Assistant Secretary (i) authorizing the
declaration of dividends or distributions with respect to the
Fund on a specified periodic basis and authorizing the
Custodian to rely on Oral or Written Instructions specifying
the date of the declaration of such dividend or distribution,
the date of payment thereof, the record date as of which
shareholders entitled to payment shall be determined and the
amount payable per share to the shareholders of record as of
the record date, or (ii) setting forth the date of declaration
of any dividend or distribution with respect to such Fund, the
date of payment thereof, the record date as of which
shareholders entitled to payment shall be determined and the
amount payable per share to the shareholders of record as of
the record date.
(b) Prior to the payment date specified in such resolution, Oral
Instructions or Written Instructions, as the case may be, the
Fund shall deliver to the Custodian Oral Instructions or
Written Instructions specifying the total amount payable to
the Transfer Agent.
(c) Upon the payment date specified in such resolution, Oral
Instructions or Written Instructions, as the case may be,
the Custodian shall pay to the Transfer Agent out of monies
specifically allocated to and held for the account of the Fund
the total amount payable to the Transfer Agent.
8. Sale and Redemption of Shares of the Fund.
(a) Whenever the Fund shall sell any Shares, the Fund shall
deliver or cause to be delivered to the Custodian a Written
Instruction duly specifying:
1. The name of Shares sold, trade date, and price; and
2. The amount of money to be received by the Custodian
for the sale of such Shares.
The Custodian understands and agrees that Written Instructions
may be furnished subsequent to the purchase of Shares and that the
information contained therein will be derived from the sales of Shares
as reported to the Fund by the Transfer Agent.
-10-
<PAGE> 11
(b) Upon receipt of such money from the Transfer Agent, the
Custodian shall credit such money to the separate account of
the Fund.
(c) Upon issuance of any Shares in accordance with the foregoing
provisions of this Section 8, the Custodian shall pay all
original issue or other taxes required to be paid in
connection with such issuance upon the receipt of a Written
Instruction specifying the amount to be paid.
(d) Except as provided hereafter, whenever any Shares are
redeemed, the Fund shall cause the Transfer Agent to promptly
furnish to the Custodian Written Instructions, specifying:
1. The number of Shares redeemed; and
2. The amount to be paid for the Shares redeemed.
The Custodian further understands that the information
contained in such Written Instructions will be derived from the
redemption of Shares as reported to the Fund by the Transfer Agent.
(e) Upon receipt from the Transfer Agent of advice setting forth
the number of Shares received by the Transfer Agent for
redemption and that such Shares are valid and in good form for
redemption, the Custodian shall make payment to the Transfer
Agent of the total amount specified in a Written Instruction
issued pursuant to paragraph (d) of this Section 8.
(f) Notwithstanding the above provisions regarding the redemption
of Shares, whenever such Shares are redeemed pursuant to any
check redemption privilege which may from time to time be
offered by the Fund, the Custodian, unless otherwise
instructed by a Written Instruction shall, upon receipt of
advice from the Fund or its agent stating that the redemption
is in good form for redemption in accordance with the check
redemption procedure, honor the check presented as part of
such check redemption privilege out of the monies specifically
allocated to the Fund in such advice for such purpose.
9. Indebtedness.
(a) The Fund will cause to be delivered to the Custodian by any
bank (excluding the Custodian) from which the Fund borrows
money using Securities as collateral for such borrowings, a
notice or undertaking in the form currently employed by any
such bank setting forth the amount which such bank will loan
to the Company against delivery of a stated amount of
collateral. The Company shall promptly deliver to the
Custodian Written or Oral Instructions stating with respect to
each such borrowing: (1) the name of the bank; (2) the amount
and terms of the borrowing, which may be set forth by
incorporating by reference an attached
-11-
<PAGE> 12
promissory note, duly endorsed by the Fund, or other
loan agreement; (3) the time and date, if known, on which the
loan is to be entered into (the "Borrowing Date"); (4) the
date on which the loan becomes due and payable; (5) the total
amount payable to the Fund on the Borrowing Date; (6) the
market value of Securities to be delivered as collateral for
such loan, including the name of the issuer, the title and the
number of shares or the principal amount of any particular
Securities; (7) whether the Custodian is to deliver such
collateral through the Book-Entry System or the Depository;
and (8) a statement that such loan is in conformance with the
1940 Act and the Fund's Prospectus.
(b) Upon receipt of the Written or Oral Instructions referred to
in subparagraph (a) above, the Custodian shall deliver on the
Borrowing Date the specified collateral and the executed
promissory note, if any, against delivery by the lending bank
of the total amount of the loan payable, provided that the
same conforms to the total amount payable as set forth in the
Written or Oral Instructions. The Custodian may, at the
option of the lending bank, keep such collateral in its
possession, but such collateral shall be subject to all rights
therein given the lending bank by virtue of any promissory
note or loan agreement. The Custodian shall deliver as
additional collateral in the manner directed by the Company
from time to time such Securities as may be specified in
Written or Oral Instructions to collateralize further any
transaction described in this Section 9. The Fund shall cause
all Securities released from collateral status to be returned
directly to the Custodian, and the Custodian shall receive
from time to time such return of collateral as may be tendered
to it. In the event that the Fund fails to specify in Written
or Oral Instructions all of the information required by this
Section 9, the Custodian shall not be under any obligation to
deliver any Securities or to seek the return of the
collateral; provided, however, that the Custodian shall
promptly notify the Fund of any information required by this
Section 9 and not specified in Written or Oral Instructions.
Collateral returned to the Custodian shall be held hereunder
as it was prior to being used as collateral.
10. Persons Having Access to Assets of the Company.
(a) No Director, employee or agent of the Fund, and no officer,
director, employee or agent of the Fund's investment adviser,
shall have physical access to the assets of the Fund held by
the Custodian or be authorized or permitted to withdraw any
investments of the Fund, nor shall the Custodian deliver any
assets of the Fund to any such person. No officer, director,
employee or agent of the Custodian who holds any similar
position with the Fund or its investment adviser shall have
access to the assets of the Fund.
(b) The individual employees of the Custodian duly authorized by
the Board of Directors of the Custodian to have access to the
assets of the Fund are listed in the certification annexed
hereto as Appendix A. The Custodian shall advise the Fund of
any change in the individuals authorized to have access to the
assets of the Fund
-12-
<PAGE> 13
by written notice to the Custodian and the Fund accompanied
by a certified copy of the authorizing resolution of the
Custodian's Board of Directors approving such change.
(c) Nothing in this Section shall prohibit any officer, employee
or agent of the Fund, or any officer, director, employee or
agent of the Fund's investment adviser, from giving Oral
Instructions or Written Instructions to the Custodian or
executing a certificate so long as it does not result in
delivery of or access to assets of the Fund as prohibited by
subparagraph (a) of this Section.
11. Concerning the Custodian.
(a) Standard of Conduct. Except as otherwise provided herein,
neither the Custodian nor its nominee shall be liable for any
loss or damage, including counsel fees, resulting from its
action or omission to act or otherwise, except for any such
loss or damage arising out of its own negligence, bad faith or
willful misconduct. The Custodian may, with respect to
questions of law, apply for and obtain the advice and opinion
of counsel to the Fund (at the expense of the Fund) or of its
own counsel and shall be fully protected with respect to
anything done or omitted by it in good faith in conformity
with such advice or opinion. The Custodian shall be liable to
the Fund for any loss or damage resulting from the use of the
Book-Entry System or the Depository arising by reason of any
negligence, misfeasance or misconduct on the part of the
Custodian or any of its employees or agents.
(b) Limit of Duties. Without limiting the generality of the
foregoing, the Custodian shall be under no duty or obligation
to inquire into, and shall not be liable for:
(i) The validity of the issue of any Securities purchased
by the Fund, the legality of the purchase thereof, or
the propriety of the amount paid therefor;
(ii) The legality of the sale of any Securities by the
Fund or the propriety of the amount for which the
same are sold;
(iii) The legality of the issue or sale of any Shares, or
the sufficiency of the amount to be received therefor;
(iv) The legality of the repurchase of any Shares, or the
propriety of the amount to be paid therefor;
(v) The legality of the declaration or payment of any
dividend or other distribution of any Fund; or
(vi) The legality of any borrowing for temporary or
emergency administrative purposes.
-13-
<PAGE> 14
(c) Amounts Due from Transfer Agent. The Custodian shall not be
under any duty or obligation to take action to effect
collection of any amount due to the Fund from the Transfer
Agent nor to take any action to effect payment or distribution
by the Transfer Agent of any amount paid by the Custodian to
the Transfer Agent in accordance with this Agreement.
(d) Collection Where Payment Refused. The Custodian shall not be
under any duty or obligation to take action to effect
collection of any amount, if the Securities upon which such
amount is payable are in default, or if payment is refused
after due demand or presentation, unless and until (i) it
shall be directed to take such action by Written Instructions
and (ii) it shall be assured to its satisfaction of
reimbursement of its costs and expenses in connection with any
such action.
(e) Appointment of Sub-Custodians. The Custodian may appoint one
or more qualified institutions, including but not limited to
banking institutions, to act as Depository or Depositories or
as Sub-Custodian or Sub-Custodians of Securities and monies at
any time owned by the Fund, upon terms and conditions
specified in Written Instructions. The Custodian shall use
reasonable care in selecting any such Depository and/or
Sub-Custodian and shall oversee the maintenance of any
Securities or monies of the Company by the Sub-Custodian. In
addition, the Custodian may from time to time appoint one or
more of the institutions listed in Appendix C hereto, or such
other institutions as may hereafter be approved by vote of the
Directors of the Fund, as foreign sub-custodians for the
Company's securities located outside the United States,
provided that any such institution shall constitute an
"Eligible Foreign Custodian" within the meaning of Rule 17f-5
under the 1940 Act.
The Custodian shall maintain such records as shall be
necessary to identify the assets of the Fund held by any
foreign sub-custodians. The Custodian shall furnish to the
Fund such periodic reports as the Fund shall reasonably
request with respect to the assets of the Fund held by each
foreign sub-custodian, and shall furnish to the Fund such
notices of transfers of securities, deposits or other assets
to or from the Fund's account by any foreign sub- custodian as
the Fund shall request.
The Custodian shall advise the Fund promptly if it learns that
any foreign agent or sub-custodian no longer constitutes an
"Eligible Foreign Custodian" and of any failure by any foreign
sub-custodian to observe any material term of its appointment.
The Custodian may authorize one or more of the foreign
sub-custodians to use the facilities of one or more foreign
central securities depositories or clearing agencies listed in
Appendix D hereto, or as may hereafter be approved by vote of
the Directors of the Fund; provided that any such organization
shall constitute an "Eligible Foreign Custodian."
-14-
<PAGE> 15
In the event that any foreign sub-custodian fails to perform
any of its obligations under the terms of its appointment, the
Custodian shall use its best efforts to cause such foreign
sub-custodian to perform such obligations. At the written
request of the Fund, the Custodian shall use its best efforts
to assert and collect any claim for liability for any loss or
damage incurred by the Fund arising out of the failure of any
such sub- custodian to perform such obligations.
(f) Appointment of Agents. The Custodian may at any time or times
in its discretion appoint, and may at any time remove, any
other bank or company which is itself qualified under the 1940
Act to act as a custodian, as its agent to carry out such of
the provisions of this Agreement as the Custodian may from
time to time direct. The Custodian shall be liable for the
actions of its agents.
(g) No Duty to Ascertain Authority. The Custodian shall not be
under any duty or obligation to ascertain whether any
Securities at any time delivered to or held by it for the Fund
are such as may properly be held by the Fund under the
provisions of its Articles of Incorporation and the
Prospectus.
(h) Payments to the Custodian. The Custodian may charge against
any money held by it for the account of the Fund any expenses
incurred by the Custodian in the performance of its duties
pursuant to this Agreement with respect to the Fund. The
Custodian shall also be entitled to charge against any money
of the Fund held by it the amount of any loss, damage,
liability or expense incurred with respect to the Fund
including counsel fees, for which it shall be entitled to
reimbursement under the provisions of this Agreement.
(i) Reliance on Certificates and Instructions. The Custodian
shall be entitled to rely upon any certificate, notice or
other instrument in writing received by the Custodian and
reasonably believed by the Custodian to be genuine and to be
signed by an Authorized Person. The Custodian shall be
entitled to rely upon any Written Instructions or Oral
Instructions actually received by the Custodian pursuant to
the applicable Sections of this Agreement and reasonably
believed by the Custodian to be genuine and to be given by an
Authorized Person. The Fund agrees to forward to the
Custodian Written Instructions from an Authorized Person
confirming such Oral Instructions in such manner so that such
Written Instructions are received by the Custodian, whether by
hand delivery, telex or otherwise, by the close of business on
the same day that such Oral Instructions are given to the
Custodian. The Fund agrees that the fact that such confirming
instructions are not received by the Custodian shall in no way
affect the validity of the transactions or enforceability of
the transactions hereby authorized by the Fund. The Fund
agrees that the Custodian shall incur no liability to the Fund
in acting upon Oral Instructions given to the Custodian
hereunder concerning such transactions, provided such
instructions reasonably appear to have been received from a
duly Authorized Person.
-15-
<PAGE> 16
12. Records. The Custodian shall create and maintain all records relating
to its activities and obligations under this Agreement in such a
manner as will meet the obligations of the Fund under the 1940 Act,
with particular attention to Section 31 thereof, Rules 31a-1 and 31a-2
thereunder, applicable federal and state tax laws and any law or
administrative rules or procedures which may be applicable to the
Fund. All such records shall be the property of the Fund and shall at
all times during regular business hours of the Custodian be open for
inspection by duly authorized officers, employees or agents of the
Fund and employees and agents of the Securities and Exchange
Commission.
13. Opinion of the Fund's Independent Accountants. The Custodian shall
take all reasonable action as the Fund may from time to time request,
to obtain from year to year favorable opinions from the Fund's
independent accountants with respect to the activities hereunder in
connection with the preparation of Amendments to the Fund's
Registration Statement, and Form N-SAR or other annual reports to the
Securities and Exchange Commission, and with respect to any other
requirements of such Commission.
14. Reports to Fund by Independent Public Accountants. The Custodian
shall provide the Fund with reports by independent public accountants
on the accounting system, internal accounting controls and procedures
for safeguarding Securities, including securities deposited and/or
maintained in a Depository or Book-Entry System, relating to the
services provided by the Custodian under this Agreement.
15. Miscellaneous.
(a) Annexed hereto as Appendix A is a certification signed by the
Secretary or an Assistant Secretary of the Fund setting forth
the names and the signatures of the present Authorized
Persons. The Fund agrees to furnish to the Custodian a new
certification in similar form in the event that any such
present Authorized Person ceases to be such an Authorized
Person or in the event that other or additional Authorized
Persons are elected or appointed. Until such new
certification shall be received, the Custodian shall be fully
protected in acting under the provisions of this Agreement
upon Oral Instructions or signatures of the present Authorized
Persons as set forth in the last delivered certification.
(b) Annexed hereto as Appendix B is a certification signed by the
Secretary or an Assistant Secretary of the Fund setting forth
the names and the signatures of the present officers of the
Fund. The Fund agrees to furnish to the Custodian a new
certification in similar form in the event that any such
present officer ceases to be an officer of the Fund or in the
event that other or additional officers are elected or
appointed. Until such new certification shall be received,
the Custodian shall be fully protected in acting under the
provisions of this Agreement upon the signature of the officer
as set forth in the last delivered certification.
-16-
<PAGE> 17
(c) Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Custodian,
shall be sufficiently given if addressed to the Custodian and
mailed or delivered to it at its offices at One Boston Place,
Boston, Massachusetts 02108, or at such other place as the
Custodian may from time to time designate in writing.
(d) Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Fund, shall be
sufficiently given if addressed to the Company and mailed or
delivered to it at One Exchange Place, Boston, MA 02109,
Attention: Patricia L. Bickimer, Secretary or at such other
place as the Company may from time to time designate in
writing.
(e) This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties with
the same formality as this Agreement.
(f) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable
by the Fund without the written consent of the Custodian, or
by the Custodian without the written consent of the Fund
authorized or approved by a resolution of the Board of
Directors of the Fund, and any attempted assignment without
such written consent shall be null and void.
(g) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original but such
counterparts shall, together, constitute only one agreement.
(h) The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or
effect.
16. Termination of Agreement
(a) This Agreement shall become effective on the date hereof and
shall remain in force unless terminated pursuant to the
provisions of subparagraph (b) of this Section 16.
(b) This Agreement may be terminated at any time without payment
of any penalty, upon sixty (60) days' written notice, by vote
of the holders of a majority of the outstanding voting
securities of the Fund, by vote of a majority of the Board of
Directors of the Fund, or by the Custodian. In the event such
notice is given by the Fund, it shall be accompanied by a
certified vote of the Board of Directors of the Fund, electing
a successor custodian or custodians. In the event such notice
is given by the Custodian, the Fund shall, on or before the
termination date, deliver to the Custodian a certified
resolution of the Board of Directors of the Fund,
-17-
<PAGE> 18
designating a successor custodian or custodians. In the
absence of such designation, the Custodian may designate a
successor custodian which shall be qualified to so act under
the 1940 Act. If the Fund fails to designate a successor
custodian, upon the delivery by the Custodian of all
Securities and monies then owned by the Fund to a successor
custodian designated by the Custodian, the Custodian shall
thereby be relieved of all duties and responsibilities
pursuant to this Agreement.
(c) Upon the date set forth in such notice under this Section 16,
this Agreement shall terminate to the extent specified in such
notice, and the Custodian shall upon receipt of a notice of
acceptance by the successor custodian on that date deliver
directly to the successor custodian all Securities and monies
then held by the Custodian, after deducting all fees, expenses
and other amounts for the payment or reimbursement of which it
shall then be entitled.
17. Governing Law.
This agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
-18-
<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their duly authorized officers as of the date
first set forth above.
LEHMAN BROTHERS LATIN AMERICA
GROWTH FUND, INC.
By: ________________________
Name:
Title:
BOSTON SAFE DEPOSIT AND
TRUST COMPANY
By: ________________________
Name:
Title:
-19-
<PAGE> 20
CUSTODY AGREEMENT
APPENDIX A
I, Patricia Bickimer, Secretary of Lehman Brothers Latin America
Growth Fund, Inc. (the "Fund"), do hereby certify that the following
individuals have been duly authorized by the Board of Directors of the Fund in
conformity with the Fund's Articles of Incorporation and By-Laws to give Oral
Instructions and Written Instructions on behalf of the Fund and the signatures
set forth opposite their respective names are their true and correct
signatures:
<TABLE>
<CAPTION>
Name Signature
- ---- ---------
<S> <C>
Diane Contardo
------------------------------------------------
Marie F. Culleton
------------------------------------------------
Karen D. Devitto
------------------------------------------------
Joan M. Donahue
------------------------------------------------
Claire J. Lurie
------------------------------------------------
Eleanor L. Millan
------------------------------------------------
Cynthia E. Peluso
------------------------------------------------
Geraldine E. Ryan
------------------------------------------------
Mary A. Sannella
------------------------------------------------
Daniel J. Smith
------------------------------------------------
Merton E. Thompson III
------------------------------------------------
George H. Whitney III
------------------------------------------------
------------------------------------------------
Patricia L. Bickimer
Secretary
</TABLE>
-20-
<PAGE> 21
CUSTODY AGREEMENT
APPENDIX B
I, Patricia Bickimer, Secretary of Lehman Brothers Latin America
Growth Fund, Inc. (the "Fund"), do hereby certify that the following
individuals serve in the following positions with the Fund and each individual
has been duly elected or appointed by the Board of Directors of the Fund to
each such position and qualified therefor in conformity with the Fund's
Articles of Incorporation and By-Laws, and the signature set forth opposite
their respective names are their true and correct signatures:
<TABLE>
<CAPTION>
Name Position Signature
- ---- -------- ---------
<S> <C> <C>
Clinton Kendrick Chairman and ----------------------------------
Investment Officer
Andrew Gordon President and ----------------------------------
Investment Officer
Ian King Vice President and ----------------------------------
Investment Officer
Robert Pennells Vice President and ----------------------------------
Investment Officer
Michael C. Kardok Treasurer ----------------------------------
Patricia L. Bickimer Secretary ----------------------------------
Christine A. Pastelis Assistant Secretary ----------------------------------
Julie Tedesco Assistant Secretary ----------------------------------
Richard W. Ingram Assistant Treasurer ----------------------------------
----------------------------------
Patricia L. Bickimer
Secretary
</TABLE>
-21-
<PAGE> 22
CUSTODY AGREEMENT
APPENDIX C
None
-22-
<PAGE> 23
CUSTODY AGREEMENT
APPENDIX D
Transnational Depositories:
-23-
<PAGE> 24
LEHMAN BROTHERS FUNDS, INC.
SCHEDULE I
BOSTON SAFE DEPOSIT AND TRUST COMPANY
CUSTODY FEE SCHEDULE
A. Domestic Safekeeping:
<TABLE>
<S> <C>
First $ 50 million - .033%
Next $ 50 million - .017%
Next $900 million - .010%
Next $ 2 billion - .0085%
Excess - .007%
</TABLE>
B. PLUS $5/security holding charge per
month
C. PLUS Transaction charges:
<TABLE>
<S> <C>
DTC eligible - $10
Non-DTC eligible - $30
Fed Book Entry - $10
Options - $25
Futures - $ 8
GNMA Paydowns - $ 5
Repo - depository - $10
- non-deposit - $17
Physical - Govt - $30
Physical - Corp/Muni - $30
Commercial Paper - $30
Euro-CDs (London) - $30
</TABLE>
-24-
<PAGE> 25
BOSTON SAFE DEPOSIT AND TRUST COMPANY
GLOBAL CUSTODY FEE SCHEDULE
D. Global Safekeeping:
<TABLE>
<S> <C> <C>
Group I Assets 5.0 BP
*Group II Assets
First $50 million 12.0 BP
Next $50 million 9.0 BP
Next $200 million 6.0 BP
Excess 4.0 BP
Group III Assets 12.0 BP
Group IV Assets 15.0 BP
Group V Assets 18.0 BP
Group VI Assets 25.0 BP
</TABLE>
E. PLUS Transaction Charges:
<TABLE>
<S> <C>
Group I Transactions $25
Group II Transactions $30
Group III Transactions $30
Group IV Transactions $45
Group V Transactions $60
Group VI Transactions $75
*Third Party F/X $20
</TABLE>
___________________________
* The breakpoint levels are based upon assets within each category.
** A Third Party F/X is one in which Boston Safe is not the currency
broker. This charge will be assessed only on transactions where funds
are actually transferred.
-25-
<PAGE> 26
COUNTRY GROUPS
<TABLE>
<CAPTION>
Group I Group II Group III Group IV Group V Group VI
- ------- -------- --------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Japan Cedel Austria Australia Brazil Argentina
Euroclear Canada Belgium Denmark Greece
Germany Luxembourg Finland Indonesia
Netherlands France Jordan
New Zealand Hong Kong Mexico
Switzerland Ireland Philippines
Italy Spain
Malaysia Sweden
Norway Turkey
Pakistan Venezuela
Peru
Poland
Portugal
Shanghai
Shenzen
Singapore
Thailand
United Kingdom
Uruguay
</TABLE>
-26-
<PAGE> 27
CUSTODY AGREEMENT
SCHEDULE II
Out-of-Pocket Expenses
The Company will pay to the Custodian as soon as possible after the end of each
month all out-of-pocket expenses reasonably incurred in connection with the
assets of the Company.
Out of pocket expenses include, but are not limited to, the following:
- - Telephone
- - Wire charges ($5.25 per wire)
- - Postage and Insurance
- - Courier Charges
- - Supplies
- - Duplicating
- - Transfer Fees
- - Sub-custodian charges
- - Single Audit Letter
- - Stamp duties
-27-
<PAGE> 1
EXHIBIT (k)(A)
DRAFT
FORM OF TRANSFER AGENCY AND REGISTRAR AGREEMENT
AGREEMENT, dated as of ___________, 1994, between LEHMAN BROTHERS
LATIN AMERICA GROWTH FUND, INC. (the "Fund"), a Maryland corporation having
it's principal place of business at 3 World Financial Center, New York, New
York 10285, and THE SHAREHOLDER SERVICES GROUP, INC. (the "Transfer Agent"),
a Massachusetts corporation having its principal place of business at One
Exchange Place, 53 State Street, Boston, Massachusetts 02109.
W I T N E S S E T H
That for and in consideration of the mutual covenants and promises
hereinafter set forth, the Fund and the Transfer Agent agree as follows:
1. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
(a) "Articles of Incorporation" shall mean the Articles
of Incorporation, Declaration of Trust, Partnership Agreement, or similar
organizational document as the case may be, of the Fund as the same may be
amended from time to time.
(b) "Authorized Person" shall be deemed to include any
person, whether or not such person is an officer or employee of the Fund, duly
authorized to give Oral Instructions or Written Instructions on behalf of the
Fund as indicated in a certificate furnished to the Transfer Agent pursuant to
Section 4(c) hereof as may be received by the Transfer Agent from time to time.
(c) "Board of Directors" shall mean the Board of
Directors, Board of Trustees or, if the Fund is a limited partnership, the
General Partner(s) of the Fund, as the case may be.
(d) "Commission" shall mean the Securities and Exchange
Commission.
(e) "Custodian" refers to any custodian or sub-custodian
of securities and other property which the Fund may from time to time deposit,
or cause to be deposited or held under the name or account of such a custodian
pursuant to a Custody Agreement.
(f) "Fund shall mean the entity executing this Agreement,
and if it is a series fund, as such term is used in the 1940 Act, such term
shall mean each series of the Fund hereafter created except that appropriate
documents with respect to each series must be
<PAGE> 2
presented to the Transfer Agent before this Agreement shall become
effective with respect to each such series.
(g) "1940 Act" shall mean the Investment Company Act of
1940.
(h) "Oral Instructions" shall mean instructions, other
than Written Instructions, actually received by the Transfer Agent from a
person reasonably believed by the Transfer Agent to be an Authorized Person.
(i) "Prospectus" shall mean the most recently dated Fund
Prospectus, including any supplements thereto, which has become effective under
the Securities Act of 1933 and the 1940 Act.
(j) "Shares" refers collectively to such shares of
capital stock, beneficial interest or limited partnership interests, as the
case may be, of the Fund as may be issued from time to time and, if the Fund is
a closed-end or a series fund, as such terms are used in the 1940 Act any other
classes or series of stock, shares of beneficial interest or limited
partnership interests that may be issued from time to time.
(k) "Shareholder" shall mean a holder of shares of
capital stock, beneficial interest or any other class or series, and also
refers to partners of limited partnerships.
(l) "Written Instructions" shall mean a written
communication signed by a person reasonably believed by the Transfer Agent to
be an Authorized Person and actually received by the Transfer Agent. Written
Instructions shall include manually executed originals and authorized
electronic transmissions, including telefacsimile of a manually executed
original or other process.
2. Appointment of the Transfer Agent. The Fund hereby appoints
and constitutes the Transfer Agent as transfer agent, registrar and dividend
disbursing agent for Shares of the Fund and as shareholder servicing agent for
the Fund and as plan agent under the Fund's Dividend Reinvestment Plan. The
Transfer Agent accepts such appointments and agrees to perform the duties
hereinafter set forth.
3. Compensation.
(a) The Fund will compensate or cause the Transfer Agent to
be compensated for the performance of its obligations hereunder in accordance
with the fees set forth in Schedule A hereto and incorporated herein. The
Transfer Agent will transmit a detailed invoice to the Fund as soon as
practicable after the end of each calendar month, and the Fund will pay to the
Transfer Agent the amount of such invoice within fifteen (15) days after the
Fund's receipt of the invoice.
In addition, the Fund agrees to pay, and will be billed
separately for, reasonable out-of-pocket expenses incurred by the Transfer
Agent in the performance of its duties
- 2 -
<PAGE> 3
hereunder. Out-of-pocket expenses shall include, but shall not be limited to,
the items specified in the written schedule of out- of-pocket charges annexed
hereto as Schedule B and incorporated herein. Unspecified out-of-pocket
expenses shall be limited to those out-of-pocket expenses reasonably incurred
by the Transfer Agent in the performance of its obligations hereunder.
Reimbursement by the Fund for expenses incurred by the Transfer Agent in any
month shall be made as soon as practicable but no later than 15 days after the
receipt of an itemized bill from the Transfer Agent.
(b) Any compensation agreed to hereunder may be adjusted
from time to time by attaching hereto an amendment to Schedule A, including a
revised fee schedule, which amendment has been executed and dated by the
parties to this Agreement.
4. Documents. In connection with the appointment of the Transfer
Agent, the Fund shall deliver or caused to be delivered to the Transfer Agent
the following documents on or before the date this Agreement goes into effect,
but in any case within a reasonable period of time for the Transfer Agent to
prepare to perform its duties hereunder:
(a) If applicable, specimens of the certificates for
Shares of the Fund;
(b) All account application forms and other documents
relating to Shareholder accounts or to any plan, program or service offered by
the Fund;
(c) A signature card bearing the signatures of any
officer of the Fund or other Authorized Person who will sign Written
Instructions or is authorized to give Oral Instructions;
(d) A certified copy of the Articles of Incorporation, as
amended;
(e) A certified copy of the By-laws of the Fund, as
amended;
(f) A copy of the resolution of the Board of Directors
authorizing the execution and delivery of this Agreement;
(g) A certified list of Shareholders of the Fund with the
name, address and taxpayer identification number of each Shareholder, and the
number of Shares of the Fund held by each, certificate numbers and
denominations (if any certificates have been issued), lists of any accounts
against which stop transfer orders have been placed, together with the reasons
therefore, and the number of Shares redeemed by the Fund; and
(h) An opinion of counsel for the Fund with respect to
the validity of the Shares and the status of such Shares under the Securities
Act of 1933, as amended.
5. Further Documentation. The Fund will also furnish the
Transfer Agent with copies of the following documents promptly after the same
shall become available:
- 3 -
<PAGE> 4
(a) each resolution of the Board of Directors authorizing
the issuance of Shares;
(b) any registration statements filed on behalf of the
Fund and all pre-effective and post-effective amendments thereto filed with the
Commission;
(c) a certified copy of each amendment to the Articles of
Incorporation or the By-laws of the Fund;
(d) certified copies of each resolution of the Board of
Directors or other authorization designating Authorized Persons; and
(e) such other certificates, documents or opinions as the
Transfer Agent may reasonably request in connection with the performance of its
duties hereunder.
6. Representations of the Fund. The Fund represents to the
Transfer Agent that all outstanding Shares are validly issued, fully paid and
non-assessable. When Shares are hereafter issued in accordance with the terms
of the Fund's Articles of Incorporation and its Prospectus, such Shares shall
be validly issued, fully paid and non-assessable.
7. Distributions Payable in Shares. In the event that the Board
of Directors of the Fund shall declare a distribution payable in Shares, the
Fund shall deliver or cause to be delivered to the Transfer Agent written
notice of such declaration signed on behalf of the Fund by an officer thereof,
upon which the Transfer Agent shall be entitled to rely for all purposes,
certifying (i) the identity of the Shares involved, (ii) the number of Shares
involved, and (iii) that all appropriate action has been taken.
8. Duties of the Transfer Agent. The Transfer Agent shall be
responsible for administering and/or performing those functions typically
performed by a transfer agent; for acting as service agent in connection with
dividend and distribution functions and as plan agent under the Fund's Dividend
Reinvestment Plan; and for performing shareholder account and administrative
agent functions in connection with the issuance, transfer and redemption or
repurchase (including coordination with the Custodian) of Shares in accordance
with the terms of the Prospectus and applicable law. The operating standards
and procedures to be followed shall be determined from time to time by
agreement between the Fund and the Transfer Agent and shall initially be as
described in Schedule C attached hereto. In addition, the Fund shall deliver
to the Transfer Agent all notices issued by the Fund with respect to the Shares
in accordance with and pursuant to the Articles of Incorporation or By-laws of
the Fund or as required by law and shall perform such other specific duties as
are set forth in the Articles of Incorporation including the giving of notice
of any special or annual meetings of shareholders and any other notices
required thereby.
9. Record Keeping and Other Information. The Transfer Agent
shall create and maintain all records required of it pursuant to its duties
hereunder and as set forth in Schedule C in accordance with all applicable
laws, rules and regulations, including records required by
- 4 -
<PAGE> 5
Section 31(a) of the 1940 Act. All records shall be available during regular
business hours for inspection and use by the Fund. Where applicable, such
records shall be maintained by the Transfer Agent for the periods and in the
places required by Rule 31a-2 under the 1940 Act.
Upon reasonable notice by the Fund, the Transfer Agent shall make
available during regular business hours such of its facilities and premises
employed in connection with the performance of its duties under this Agreement
for reasonable visitation by the Fund, or any person retained by the Fund as
may be necessary for the Fund to evaluate the quality of the services performed
by the Transfer Agent pursuant hereto.
10. Other Duties. In addition to the duties set forth in Schedule
C, the Transfer Agent shall perform such other duties and functions, and shall
be paid such amounts therefor, as may from time to time be agreed upon in
writing between the Fund and the Transfer Agent. The compensation for such
other duties and functions shall be reflected in a written amendment to
Schedule A or Schedule B and the duties and functions shall be reflected in an
amendment to Schedule C, both dated and signed by authorized persons of the
parties hereto.
11. Reliance by Transfer Agent; Instructions.
(a) The Transfer Agent will have no liability when acting
upon Written or Oral Instructions believed to have been executed or orally
communicated by an Authorized Person and will not be held to have any notice of
any change of authority of any person until receipt of a Written Instruction
thereof from the Fund pursuant to Section 4(c). The Transfer Agent will also
have no liability when processing Share certificates which it reasonably
believes to bear the proper manual or facsimile signatures of the officers of
the Fund and the proper countersignature of the Transfer Agent.
(b) At any time, the Transfer Agent may apply to any
Authorized Person of the Fund for Written Instructions and may seek advice from
legal counsel for the Fund, or its own legal counsel, with respect to any
matter arising in connection with this Agreement, and it shall not be liable
for any action taken or not taken or suffered by it in good faith in accordance
with such Written Instructions or in accordance with the opinion of counsel for
the Fund or for the Transfer Agent. Written Instructions requested by the
Transfer Agent will be provided by the Fund within a reasonable period of time.
In addition, the Transfer Agent, its officers, agents or employees, shall
accept Oral Instructions or Written Instructions given to them by any person
representing or acting on behalf of the Fund only if said representative is an
Authorized Person. The Fund agrees that all Oral Instructions shall be
followed within one business day by confirming Written Instructions, and that
the Fund's failure to so confirm shall not impair in any respect the Transfer
Agent's right to rely on Oral Instructions. The Transfer Agent shall have no
duty or obligation to inquire into, nor shall the Transfer Agent be responsible
for, the legality of any act done by it upon the request or direction of a
person reasonably believed by the Transfer Agent to be an Authorized Person.
(c) Notwithstanding any of the foregoing provisions of
this Agreement, the Transfer Agent shall be under no duty or obligation to
inquire into, and shall not be liable for:
- 5 -
<PAGE> 6
(i) the legality of the issuance or sale of any shares or the sufficiency of
the amount to be received therefor; (ii) the legality of the redemption of any
Shares, or the propriety of the amount to be paid therefor; (iii) the legality
of the declaration of any dividend by the Board of Directors, or the legality
of the issuance of any Shares in payment of any dividend; or (iv) the legality
of any recapitalization or readjustment of the Shares.
12. Acts of God, etc. The Transfer Agent will not be liable or
responsible for delays or errors by acts of God or by reason of circumstances
beyond its control, including acts of civil or military authority, national
emergencies, labor difficulties, mechanical breakdown, insurrection, war,
riots, or failure or unavailability of transportation, communication or power
supply, fire, flood, or other catastrophe.
13. Duty of Care and Indemnification. Each party hereto (the
"Indemnifying Party") will indemnify the other party (the "Indemnified Party")
against and hold it harmless from any and all losses, claims, damages,
liabilities or expenses of any sort or kind (including reasonable counsel fees
and expenses) resulting from any claim, demand, action or suit or other
proceeding (a "Claim") unless such Claim resulted from a negligent failure to
act or omission to act or bad faith of the Indemnified Party in the performance
of its duties hereunder. In addition, the Fund will indemnify the Transfer
Agent against and hold it harmless from any Claim, damages, liabilities or
expenses (including reasonable counsel fees) that is a result of: (i) any
action taken in accordance with Written or Oral Instructions, or any other
instructions, or share certificates reasonably believed by the Transfer Agent
to be genuine and to be signed, countersigned or executed, or orally
communicated by an Authorized Person; (ii) any action taken in accordance with
written or oral advice reasonably believed by the Transfer Agent to have been
given by counsel for the Fund or its own counsel; or (iii) any action taken as
a result of any error or omission in any record (including but not limited to
magnetic tapes, computer printouts, hard copies and microfilm copies)
delivered, or caused to be delivered by the Fund to the Transfer Agent in
connection with this Agreement.
In any case in which the Indemnifying Party may be asked to indemnify
or hold the Indemnified Party harmless, the Indemnifying Party shall be advised
of all pertinent facts concerning the situation in question. The Indemnified
Party will notify the Indemnifying Party promptly after identifying any
situation which it believes presents or appears likely to present a claim for
indemnification against the Indemnifying Party although the failure to do so
shall not prevent recovery by the Indemnified Party. The Indemnifying Party
shall have the option to defend the Indemnified Party against any Claim which
may be the subject of this indemnification, and, in the event that the
Indemnifying Party so elects, such defense shall be conducted by counsel chosen
by the Indemnifying Party and satisfactory to the Indemnified Party, and
thereupon the Indemnifying Party shall take over complete defense of the Claim
and the Indemnified Party shall sustain no further legal or other expenses in
respect of such Claim. The Indemnified Party will not confess any Claim or
make any compromise in any case in which the Indemnifying Party will be asked
to provide indemnification, except with the Indemnifying Party's prior written
consent. The obligations of the parties hereto under this Section shall
survive the termination of this Agreement.
- 6 -
<PAGE> 7
14. Consequential Damages. In no event and under no circumstances
shall either party under this Agreement be liable to the other party for
indirect loss of profits, reputation or business or any other special damages
under any provision of this Agreement or for any act or failure to act
hereunder.
15. Term and Termination.
(a) This Agreement shall be effective on the date first
written above and shall continue for a term of three years from the Effective
Date of this Agreement. This Agreement thereafter shall automatically continue
for successive annual periods ending on the anniversary date of the date first
written above, provided that it may be terminated during the successive annual
periods by either party upon written notice given at least 60 days prior to
termination.
(b) In the event a termination notice is given by the
Fund, it shall be accompanied by a resolution of the Board of Directors,
certified by the Secretary of the Fund, designating a successor transfer agent
or transfer agents. Upon such termination and at the expense of the Fund, the
Transfer Agent will deliver to such successor a certified list of shareholders
of the Fund (with names and addresses), and all other relevant books, records,
correspondence and other Fund records or data in the possession of the Transfer
Agent, and the Transfer Agent will cooperate with the Fund and any successor
transfer agent or agents in the substitution process.
16. Confidentiality. Both parties hereto agree that any non
public information obtained hereunder concerning the other party is
confidential and may not be disclosed to any other person without the consent
of the other party, except as may be required by applicable law or at the
request of the Commission or other governmental agency. The parties further
agree that a breach of this provision would irreparably damage the other party
and accordingly agree that each of them is entitled, without bond or other
security, to an injunction or injunctions to prevent breaches of this
provision.
17. Amendment. This Agreement may only be amended or modified by
a written instrument executed by both parties.
18. Subcontracting. The Fund agrees that the Transfer Agent may,
in its discretion, subcontract for certain of the services described under this
Agreement or the Schedules hereto; provided, that the appointment of any such
Transfer Agent shall not relieve the Transfer Agent of its responsibilities
hereunder.
19. Miscellaneous.
(a) Notices. Any notice or other instrument authorized
or required by this Agreement to be given in writing to the Fund or the
Transfer Agent, shall be sufficiently given if addressed to that party and
received by it at its office set forth below or at such other place as it may
from time to time designate in writing.
- 7 -
<PAGE> 8
To the Fund:
Lehman Brothers Latin America Growth Fund, Inc.
3 World Financial Center
New York, New York 10285
Attention: Andrew Gordon
To the Transfer Agent:
The Shareholder Services Group, Inc.
One Exchange Place
53 State Street
Boston, Massachusetts 02109
Attention: Robert F. Radin, President
with a copy to TSSG Counsel.
(b) Successors. This Agreement shall extend to and shall be
binding upon the parties hereto, and their respective successors and assigns,
provided, however, that this Agreement shall not be assigned to any person
other than a person controlling, controlled by or under common control with the
assignor without the written consent of the other party, which consent shall
not be unreasonably withheld.
(c) Governing Law. This Agreement shall be governed exclusively
by the laws of the State of New York without reference to the choice of law
provisions thereof. Each party hereto hereby agrees that (i) the Supreme Court
of New York sitting in New York County shall have exclusive jurisdiction over
any and all disputes arising hereunder; (ii) hereby consents to the personal
jurisdiction of such court over the parties hereto, hereby waiving any defense
of lack of personal jurisdiction; and (iii) appoints the person to whom notices
hereunder are to be sent as agent for service of process.
(d) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original; but such
counterparts shall, together, constitute only one instrument.
(e) Captions. The captions of this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
(f) Use of Transfer Agent's Name. The Fund shall not use the name
of the Transfer Agent in any Prospectus, shareholders' report, sales literature
or other material relating to the Fund in a manner not approved prior thereto
in writing; provided, that the Transfer Agent need only receive notice of all
reasonable uses of its name which merely refer in accurate terms to its
appointment hereunder or which are required by any government
- 8 -
<PAGE> 9
agency or applicable law or rule. Notwithstanding the foregoing, any reference
to the Transfer Agent shall include a statement to the effect that it is a
wholly owned subsidiary of First Data Corporation.
(g) Use of Fund's Name. The Transfer Agent shall not use the name
of the Fund or material relating to the Fund on any documents or forms for
other than internal use in a manner not approved prior thereto in writing;
provided, that the Fund need only receive notice of all reasonable uses of its
name which merely refer in accurate terms to the appointment of the Transfer
Agent or which are required by any government agency or applicable law or rule.
(h) Independent Contractors. The parties agree that they are
independent contractors and not partners or co-venturers.
(i) Entire Agreement; Severability. This Agreement and the
Schedules attached hereto constitute the entire agreement of the parties hereto
relating to the matters covered hereby and supersede any previous agreements.
If any provision is held to be illegal, unenforceable or invalid for any
reason, the remaining provisions shall not be affected or impaired thereby.
- 9 -
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers, as of the day and year first
above written.
LEHMAN BROTHERS LATIN AMERICA
GROWTH FUND, INC.
By: _____________________
Title: ____________________
THE SHAREHOLDER SERVICES
GROUP, INC.
By: _____________________
Title: ____________________
- 10 -
<PAGE> 11
Schedule A
<TABLE>
<S> <C>
Annual Transfer Agent Fee: $10.50 per account (but not less
than $2,500.00 total per month)
Dividend Reinvestment
Participant Account Establishment $0.50 per account
</TABLE>
A-1
<PAGE> 12
Schedule B
OUT-OF-POCKET EXPENSES
The Fund shall reimburse the Transfer Agent monthly for applicable
out-of-pocket expenses, including, but not limited to the following items:
- Microfiche/microfilm production
- Magnetic media tapes and freight
- Printing costs, including certificates, envelopes,
checks and stationery
- Postage (bulk, pre-sort, ZIP+4, barcoding, first
class) direct pass through to the Fund
- Due diligence mailings
- Telephone and telecommunication costs, including
all lease, maintenance and line costs.
- Proxy solicitations, mailings and tabulations
- Daily & Distribution advice mailings
- Shipping, Certified and Overnight mail and insurance
- Year-end form production and mailings
- Terminals, communication lines, printers and other
equipment and any expenses incurred in connection
with such terminals and lines
- Duplicating services
- Courier services
- Incoming and outgoing wire charges
- Federal Reserve charges for check clearance
- Record retention, retrieval and destruction costs,
including, but not limited to exit fees charged
by third party record keeping vendors.
- Third party audit reviews
- Insurance
- Such other miscellaneous expenses reasonably
incurred by the Transfer Agent in performing
its duties and responsibilities under this
Agreement.
The Fund agrees that postage and mailing expenses will be paid on the
day of or prior to mailing as agreed with the Transfer Agent. In addition, the
Fund will promptly reimburse the Transfer Agent for any other unscheduled
expenses incurred by the Transfer Agent whenever the Fund and the Transfer
Agent mutually agree that such expenses are not otherwise properly borne by the
Transfer Agent as part of its duties and obligations under the Agreement.
B-1
<PAGE> 13
Schedule C
DUTIES OF THE TRANSFER AGENT
1. Shareholder Information. The Transfer Agent or its agent
shall maintain a record of the number of Shares held by each holder of record
which shall include name, address, taxpayer identification and which shall
indicate whether such Shares are held in certificates or uncertificated form.
2. Shareholder Services. The Transfer Agent or its agent will
investigate all inquiries from Shareholders of the Fund relating to Shareholder
accounts and will respond to all communications from Shareholders and others
relating to its duties hereunder and such other correspondence as may from time
to time be mutually agreed upon between the Transfer Agent and the Fund. The
Transfer Agent shall provide the Fund with reports concerning shareholder
inquiries and the responses thereto by the Transfer Agent, in such form and at
such time as are agreed to by the Fund and the Transfer Agent.
3. Share Certificates.
(a) At the expense of the Fund, it shall supply the
Transfer Agent or its agent with an adequate supply of blank share certificates
to meet the Transfer Agent's or its agent's requirements therefor. Such Share
certificates shall be properly signed by facsimile. The Fund agrees that,
notwithstanding the death, resignation, or removal of any officer of the Fund
whose signature appears on such certificates, the Transfer Agent or its agent
may continue to countersign certificates which bear such signatures until
otherwise directed by Written Instructions.
(b) The Transfer Agent or its agent shall issue
replacement Share certificates in lieu of certificates which have been lost,
stolen or destroyed, upon receipt by the Transfer Agent or its agent of
properly executed affidavits and lost certificate bonds, in form satisfactory
to the Transfer Agent or its agent, with the Fund and the Transfer Agent or its
agent as obligees under the bond.
(c) The Transfer Agent or its agent shall also maintain a
record of each certificate issued, the number of Shares represented thereby and
the holder of record. With respect to Shares held in open accounts or
uncertificated form, i.e., no certificate being issued with respect thereto,
the Transfer Agent or its agent shall maintain comparable records of the record
holders thereof, including their names, addresses and taxpayer identification.
The Transfer Agent or it agent shall further maintain a stop transfer record on
lost and/or replaced certificates.
4. Mailing Communications to Shareholders; Proxy Materials. The
Transfer Agent or its agent will address and mail to Shareholders of the Fund,
all reports to
C-1
<PAGE> 14
Shareholders, dividend and distribution notices and proxy material for the
Fund's meetings of Shareholders. In connection with meetings of Shareholders,
the Transfer Agent or its Agent will prepare Shareholder lists, mail and
certify as to the mailing of proxy materials, process and tabulate returned
proxy cards, report on proxies voted prior to meetings, act as inspector of
election at meetings and certify Shares voted at meetings.
5. Dividend Reinvestment Plan. The Transfer Agent agrees to
perform the services required to be performed by the plan agent, as set forth
in the Fund's Dividend Reinvestment Plan.
6. Sales of Shares
(a) Processing of Investment Checks or Other Investments.
Upon receipt of any check or other instrument drawn or endorsed to it as agent
for, or identified as being for the account of, the Fund, or drawn or endorsed
to the Distributor for the purchase of Shares, the Transfer Agent shall stamp
the check with the date of receipt, shall forthwith process the same for
collection and shall record the number of Shares sold, the trade date and the
price per Share, and the amount of money to be delivered to the Custodian of
the Fund for the sale of such Shares.
(b) Issuance of Shares. Upon receipt of notification
that the Custodian has received the amount of money specified in the
immediately preceding paragraph, the Transfer Agent shall issue to and hold in
the account of the purchaser/shareholder, or if no account is specified
therein, in a new account established in the name of the specified purchaser,
the amount of Shares such purchaser is entitled to receive, as determined in
accordance with applicable Federal law or regulation.
(c) Confirmation. The Transfer Agent shall send to the
purchaser/shareholder a confirmation of each purchase which will show the new
share balance, the new Shares held under a particular plan, if any, for
withdrawing investments, the amount invested and the price paid for the newly
purchased Shares, or will be in such other form as the Fund and the Transfer
Agent may agree from time to time.
(d) Suspension of Sale of Shares. The Transfer Agent or
its agent shall not be required to issue any Shares of the Fund where it has
received a Written Instruction from the Fund or official notice from any
appropriate Federal or state authority that the sale of the Shares of the Fund
has been suspended or discontinued. The existence of such Written Instructions
or such official notice shall be conclusive evidence of the right of the
Transfer Agent or its agent to rely on such Written Instructions or official
notice.
(e) Taxes in Connection with Issuance of Shares.
Upon the issuance of any Shares in accordance with the foregoing provisions of
this Section, the Transfer Agent shall not be responsible for the payment of
any original issue or other taxes required to be paid in connection with such
issuance.
C-2
<PAGE> 15
(f) Returned Checks. In the event that any check or
other order for the payment of money is returned unpaid for any reason, the
Transfer Agent or its agent will: (i) give prompt notice of such return to the
Fund or its designee; (ii) place a stop transfer order against all Shares
issued as a result of such check or order; and (iii) take such actions as the
Transfer Agent may from time to time deem appropriate.
7. Transfer and Repurchase
(a) Requirements for Transfer or Repurchase of Shares.
The Transfer Agent or its agent shall process all requests to transfer or
redeem Shares in accordance with the transfer or repurchase procedures
determined by the Fund.
The Transfer Agent or its agent will transfer or repurchase
Shares upon receipt of Oral or Written Instructions or otherwise pursuant to
the Prospectus and Share certificates, if any, properly endorsed for transfer
or redemption, accompanied by such documents as the Transfer Agent or its agent
reasonably may deem necessary.
The Transfer Agent or its agent reserves the right to refuse
to transfer or repurchase Shares until it is satisfied that the endorsement on
the instructions is valid and genuine. The Transfer Agent or its agent also
reserves the right to refuse to transfer or repurchase Shares until it is
satisfied that the requested transfer or repurchase is legally authorized, and
it shall incur no liability for the refusal, in good faith, to make transfers
or repurchases which the Transfer Agent or its agent, in its good judgment,
deems improper or unauthorized, or until it is reasonably satisfied that there
is no basis to any claims adverse to such transfer or repurchase.
(b) Notice to Custodian and Fund. When Shares are
redeemed, the Transfer Agent or its agent shall, upon receipt of the
instructions and documents in proper form, deliver to the Custodian and the
Fund or its designee a notification setting forth the number of Shares to be
repurchased. Such repurchased Shares shall be reflected on appropriate
accounts maintained by the Transfer Agent or its agent reflecting outstanding
Shares of the Fund and Shares attributed to individual accounts.
(c) Payment of Repurchase Proceeds. The Transfer Agent
or its agent shall, upon receipt of the moneys paid to it by the Custodian for
the repurchase of Shares, pay such moneys as are received from the Custodian,
all in accordance with the procedures described in the Written Instruction
received by the Transfer Agent or its agent from the Fund.
The Transfer Agent or its agent shall not process or effect
any repurchase with respect to Shares of the Fund after receipt by the Transfer
Agent or its agent of notification of the suspension of the determination of
net asset value of the Fund.
8. Dividends
C-3
<PAGE> 16
(a) Notice to Agent and Custodian. Upon the
declaration of each dividend and each capital gains distribution by the Board
of Directors of the Fund with respect to Shares of the Fund, the Fund shall
furnish or cause to be furnished to the Transfer Agent or its agent a copy of a
resolution of the Fund's Board of Directors certified by the Secretary of the
Fund setting forth the date of the declaration of such dividend or
distribution, the ex-dividend date, the date of payment thereof, the record
date as of which shareholders entitled to payment shall be determined, the
amount payable per Share to the shareholders of record as of that date, the
total amount payable to the Transfer Agent or its agent on the payment date and
whether such dividend or distribution is to be paid in Shares of such class at
net asset value.
On or before the payment date specified in such resolution of
the Board of Directors, the Custodian of the Fund will pay to the Transfer
Agent sufficient cash to make payment to the shareholders of record as of such
payment date that are not participating in the Fund's Dividend Reinvestment
Plan.
(b) Insufficient Funds for Payments. If the Transfer
Agent or its agent does not receive sufficient cash from the Custodian to make
total dividend and/or distribution payments to all shareholders of the Fund as
of the record date that are not participating in the Fund's Dividend
Reinvestment Plan, the Transfer Agent or its agent will, upon notifying the
Fund, withhold payment to all Shareholders of record as of the record date
until sufficient cash is provided to the Transfer Agent or its agent.
C-4
<PAGE> 17
Exhibit 1
to
Schedule C
Summary of Services
The services to be performed by the Transfer Agent or its agent shall
be as follows:
A. DAILY RECORDS
Maintain daily the following information with respect to each
Shareholder account as received:
- - Name and Address (Zip Code)
- - Class of Shares
- - Taxpayer Identification Number
- - Balance of Shares held by Agent
- - Beneficial owner code: i.e., male, female, joint tenant, etc.
- - Dividend code (reinvestment)
- - Number of Shares held in certificate form
B. OTHER DAILY ACTIVITY
- - Answer written inquiries relating to Shareholder accounts (matters
relating to portfolio management, distribution of Shares and other
management policy questions will be referred to the Fund).
- - Process additional payments into established Shareholder accounts in
accordance with Written Instruction from the Fund.
- - Upon receipt of proper instructions and all required documentation,
process requests for repurchase of Shares.
- - Identify redemption requests made with respect to accounts in which Shares
have been purchased within an agreed-upon period of time for determining
whether good funds have been collected with respect to such purchase and
process as agreed by the Transfer Agent in accordance with Written
Instructions set forth by the Fund.
- - Examine and process all transfers of Shares, ensuring that all transfer
requirements and legal documents have been supplied.
- - Issue and mail replacement checks.
- - Open new accounts and maintain records of exchanges between accounts.
C-5
<PAGE> 18
C. DIVIDEND ACTIVITY
- - Calculate and process Share dividends and distributions as instructed by
the Fund.
- - Compute, prepare and mail all necessary reports to Shareholders or various
authorities as requested by the Fund. Report to the Fund reinvestment
plan share purchases and determination of the reinvestment price.
D. MEETINGS OF SHAREHOLDERS
- - Cause to be mailed proxy and related material for all meetings of
Shareholders. Tabulate returned proxies (proxies must be adaptable to
mechanical equipment of the Transfer Agent or its agents) and supply daily
reports when sufficient proxies have been received.
- - Prepare and submit to the Fund an Affidavit of Mailing.
- - At the time of the meeting, furnish a certified list of Shareholders, hard
copy, microfilm or microfiche and, if requested by the Fund, Inspection of
Election.
E. PERIODIC ACTIVITIES
- - Cause to be mailed reports, Prospectuses, and any other enclosures
requested by the Fund (material must be adaptable to mechanical equipment
of the Transfer Agent or its agents).
- - Receive all notices issued by the Fund with respect to the Preferred
Shares in accordance with and pursuant to the Articles of Incorporation
and the Indenture and perform such other specific duties as are set forth
in the Articles of Incorporation including a giving of notice of a special
meeting and notice of redemption in the circumstances and otherwise in
accordance with all relevant provisions of the Articles of Incorporation.
C-6
<PAGE> 19
Schedule D
TRANSFER AGENT PERFORMANCE STANDARDS
1. SCOPE
The Transfer Agent agrees to meet or exceed the processing standards
set forth in this schedule, for those items received by the Transfer Agent in
the proper condition, form and order to permit the Transfer Agent to process
the item within the requirements of this Agreement. The Funds agree to waive
the standards for the 90 days following each system conversion for the Funds by
the Transfer Agent, or as otherwise agreed to by the Funds and the Transfer
Agent.
"Turnaround", for the purposes of this Agreement, shall be tracked by
the Transfer Agent and shall consist of the date the Transfer Agent receives
the item in good order ("R") and such additional business days (e.g. R+1, R+2)
as designated. For the purposes of this Agreement, "business days" shall be
the calendar days on which the New York Stock Exchange is opened and such other
days as agreed to in writing by the Transfer Agent and the Funds. The Transfer
Agent shall track the processing of items on a calendar month basis and shall
report to the Funds the percentage of the total number of items received and
the percentage of items that were processed within the specified Turnaround
period.
With respect to these turnaround and error standards, the Transfer
Agent shall be responsible for its own conduct only and shall not be held
responsible for delays and other problems arising from the actions or omissions
of the Funds, other agents of the Funds or third parties not affiliated with
the Transfer Agent. In addition, the Funds agree that these performance
standards shall be waived for any calendar month in which the number of Funds
items received by the Transfer Agent for processing exceeds by more than 20%
the average monthly number of items received by the Transfer Agent during the
90 day period prior to that calendar month.
2. CORRECTIVE ACTIONS
If performance standards are not met for any type of transaction for a
given monthly period, the Transfer Agent shall report to the Funds the reason
for the deficiency and the corrective action being taken by the Transfer Agent.
The Funds may terminate this Agreement if either: (i) one-third or
more of the performance standards listed in this Agreement are not met by the
Transfer agent for four consecutive months, (ii) any one performance standard
is not met by the Transfer Agent for any six months during a 12 month period,
or (iii) a client holding the lesser of (a) shares in the Fund valued in the
aggregate of $35 million or more, or (b) shares representing 10% or more of the
Fund, redeems 90% or more of the shares in their account, primarily and
directly as a result of the Transfer Agent's failure to meet one or more of the
performance standards specified in this Schedule. The failure will require a
written notification by the client documenting their reasons,
D-1
<PAGE> 20
and the Transfer Agent may require independent verification in a manner
mutually agreed upon by the parities to this Agreement. Unless the Funds
provides the Transfer Agent with notice of the Funds' intent to exercise this
option within 45 days of the occurrence, the Funds shall have waived its option
to terminate under this provision.
3. PERFORMANCE STANDARDS
For purposes of this Section, the Transfer Agent shall not be liable
for any item overdue because of incomplete or inaccurate data maintained by a
previous transfer agent or by the Funds. All priority items (i.e. adjustments
and research) must be received at the Transfer Agent's facility by noon E.S.T.
to receive the designated turnaround time. Additionally, turnaround times for
special projects with high volumes will be negotiated.
D-2
<PAGE> 21
LEHMAN BROTHERS LATIN AMERICA GROWTH FUND, INC.
QUALITY STANDARDS
<TABLE>
<S> <C> <C> <C>
A. CONTROL
Timeliness:
- - Redemption Wires R 98%
- - Dividend Wires 1st Business Day, (following month end) 98%
- - Dividend Reinvestment 1st Business Day, (following month end) 98%
- - Reports to Fund Accountants* 12:30 PM, 1:30 PM, 2:30 PM, 3:15 PM 98%
- - Reports to custody 12:45 PM, 3:15 PM 98%
Accuracy:
- - Redemption Wires R 98%
- - Dividend Wires 1st Business Day (following month end) 98%
- - Dividend Reinvestment 1st Business Day (following month end)
- - Reports to Fund Accountants* 12:30 PM, 1:30 PM. 2:30 PM. 3:15 PM 98%
- - Reports to custody 12:45 PM, 3:15 PM 98%
B. ACCOUNT RESEARCH
- - Priority** R 98%
- - Non-Priority R+2 98%
C. ACCOUNT ADJUSTMENTS
- - Priority *** R 98%
- - Non-Priority R+2 98%
D. ADMINISTRATION
- -Daily Confirms Mailed T+1 98%
- - Monthly Statements Mailed T+5 98%
E. SYSTEM AVAILABILITY AND RESPONSE
These systems standards shall apply on business days for the FSR system.
- - System availability between Measured monthly 98%
(8:00 AM to 6:00 PM EST)
- - Average response time of 5 Measured monthly 98%
seconds or less
(8:00 AM to 6:00 PM EST)
- --------------------------
</TABLE>
* All information must be received by the Transfer Agent in good order
1/2 hour before the agreed upon time frames.
** Research Priority items are directly related to incoming or outgoing
wires. All Requests must be received in good order prior to 12 noon
or agreed upon by the transfer agent. A
D-3
<PAGE> 22
timeframe for any requests for non-standard items i.e. transcripts, will be
agreed upon at the time of the request.
*** Adjustment Priority items are monetary or highly sensitive issues, and
must be received in good order by 12:00 noon or as agreed upon by the
transfer agent.
D-4
<PAGE> 1
EXHIBIT (k)(B)
(TRANSLATION)
FORM OF SERVICE AGREEMENT
This Agreement is entered into by and among Lehman Brothers Latin America
Growth Fund, Inc. (hereinafter called the "Company"), Japan Securities Clearing
Corporation (hereinafter called "JSCC"), which nominally owns, under its name
or its nominee's name, stock issued by the Company, and The Toyo Trust and
Banking Company, Limited (hereinafter called the "Shareholder Service
Organization"), which is a shareholder service organization designated by the
Company in accordance with Article 18 of the Regulations Concerning Notices
etc. of Issuers of Listed Securities of the Osaka Securities Exchange regarding
services to be rendered to persons (hereinafter called the "Beneficial
Shareholders") who beneficially own, under the Central Depository Clearing
System of Foreign Investment Company Shares of the Osaka Securities Exchange
(hereinafter called the "System"), stock issued by the Company.
Article 1. Entrusting of Services and Acceptance
JSCC hereby entrusts the following services (hereinafter called the "Services")
to the Shareholder Service Organization and the Shareholder Service
Organization accepts such entrustment.
(1) To prepare and maintain a detailed list of the Beneficial
Shareholders.
(2) To send notices of general shareholder's meetings, business
reports and other related documents, all of which JSCC or its
nominee will receive from the Company in its capacity as
nominal shareholder.
(3) To prepare and send the Instruction Form of Proxy Voting and
to calculate the number of voting rights and report the
results of such calculation to JSCC.
(4) To calculate dividends and tax refunds with respect to
overpaid taxes on such dividends, and to perform work
necessary for the payment of dividends.
(5) To pay revenue stamp taxes imposed on notices of transfer of
dividends, etc.
(6) To calculate the allotment of subscription rights to new
shares of the Company and to perform whatever work may be
necessary to render payment of proceeds from the disposal or
subscription of
<PAGE> 2
- 2 -
all or part of said shares.
(7) To calculate the number of shares which are attributed to each
of the Beneficial Shareholders in connection with the issuance
of share dividends, splits or reverse splits of shares,
distribution of shares without consideration, etc., and to
calculate the proceeds from the sale of all or a part of such
shares and to perform work necessary for the payment of such
proceeds.
(8) To convert into Japanese yen the proceeds from the disposal of
subscription rights to new shares and the proceeds which will
arise in connection with share dividends, splits or reverse
splits of share and the distribution of share without
consideration, etc., (hereinafter called the "Proceeds") and
to distribute the Proceeds among the Beneficial Shareholders.
(9) To perform any task necessary for the payment in Japan of
withholding income taxes relating to dividends, share
dividends, etc.
(10) To perform any task necessary for the payment in Japan of
withholding income taxes relating to the distribution of the
Proceeds.
(11) To perform any task ancillary to any item mentioned above and
to do whatever is necessary for protecting the rights of the
Beneficial Shareholders.
Article 2. Furnishing Information on Beneficial Shareholders
To enable the Shareholder Service Organization to complete a detailed list of
the Beneficial Shareholders, JSCC shall furnish such Organization with
necessary information on the Beneficial Shareholders.
Article 3. Sending of Notices and Documents
The Company shall send directly to the Shareholder Service Organization such
notices and documents in Japanese that are the same in substance as the notices
and documents to be sent by the Company to JSCC or its nominee in accordance
with the relevant U.S. laws or regulations, the Articles of Incorporation of
the By-Laws of the Company or in
<PAGE> 3
- 3 -
accordance with commercial practices.
Article 4. Receipt of Proceeds and Conversion thereof into Japanese yen
1) The Shareholder Service Organization shall receive the Proceeds
remitted to it from the custodian appointed by JSCC which has disposed
of, on behalf of JSCC, in the home country of the Company, the
subscription rights to new shares and all or part of new shares which
will arise in connection with share dividends, splits or reverse
splits of shares and distributions of shares without consideration,
etc.
2) The Shareholder Service Organization shall convert the Proceeds which
it receives in accordance with the preceding paragraph into Japanese
yen at the Spot Telegraphic Transfer Buying Rate prevailing on the
date it receives the Proceeds.
3) If the Spot Telegraphic Transfer Buying Rate is not available because
of a reason such as the closure of the Tokyo Foreign Exchange Market,
the Shareholder Service Organization shall apply the Spot Telegraphic
Transfer Buying Rate which will be available immediately after the
above-mentioned reason ceases.
Article 5. Distribution of the Proceeds to Beneficial Shareholders
1) The Shareholder Service Organization shall without delay distribute
the Proceeds converted into Japanese yen (the balance remaining after
the deduction of Japanese withholding income taxes, in cases where
such taxes must be deducted and paid) to each of the Beneficial
Shareholders in accordance with the detailed list of the Beneficial
Shareholders it has prepared. However, any fractional sum less than
one yen due to each of the Beneficial Shareholders shall not be
distributed.
2) The Shareholder Service Organization need not pay interest on the
Proceeds for the period from the date on which it receives the
Proceeds in accordance with the preceeding paragraph to the date on
which it distributes the Proceeds to each of the Beneficial
Shareholders.
3) If after the distribution of the Proceeds to each of the Beneficial
Shareholders there is a balance remaining
<PAGE> 4
- 4 -
of the Proceeds because of a reason such as the non-distribution of
fractional sums less than one yen or the impossibility of payment to
the Beneficial Shareholders, etc., the Shareholder Service
Organization shall immediately transfer such balance to a bank account
designated by JSCC.
Article 6. Standard for Performance of Services
1) The Shareholder Service Organization shall perform the Services in
accordance with the provisions of this Agreement, Japanese laws and
regulations, as well as rules established by the Osaka Securities
Exchange or JSCC in relation to the System.
2) With respect to the details of the Services, with JSCC's prior consent
the Shareholder Service Organization shall prepare a "Manual of
Procedures for Handling Shares of U.S. Investment Companies."
3) In the event the Shareholder Service Organization intends to amend the
Manual of Procedures for Handling Shares of U.S. Investment
Companies, the Shareholder Service Organization shall obtain JSCC's
prior consent to such amendment.
Article 7. Bona Fide Agent Care
The Shareholder Service Organization shall provide the Services with, the care
of a bona fide agent.
Article 8. Reports, etc.
1) The Shareholder Service Organization shall report semi-annually in
writing to the Company and to JSCC, the performance results of the
Services.
2) The Company and JSCC shall have the right to request the Shareholder
Service Organization to provide them with an opportunity to inspect
relevant documents, or to furnish reports on the performance of the
Services so far as such request will not interfere with the business
of the Shareholder Service Organization.
Article 9. Furnishing of Information
The Shareholder Service Organization shall provide the
<PAGE> 5
- 5 -
Company with necessary information to enable the Company to complete whatever
reports are required to be submitted to the competent authorities or the Osaka
Securities Exchange in accordance with the provisions of Japanese laws and
regulations or the rules established by the Osaka Securities Exchange or JSCC.
Article 10. Notification
1) Upon the adoption of resolutions of the board of directors meeting or
general shareholders' meeting of the Company on the following matters,
the Company shall immediately notify the Shareholder Service
Organization of the following:
(1) record date for general shareholders' meetings, date of
general shareholders' meetings, record date for dividend
payments, date of dividend payments and dividend amount per
share;
(2) matters related to issuance of new shares, share dividends,
splits or reverse splits of shares, and distributions of
shares without consideration;
(3) other matters related to the exercise of shareholders' rights.
2) The Shareholder Service Organization shall furnish to the Dividend
Paying Bank which is designated by the Company in accordance with
Article 19 of the Regulations Concerning Notices etc. of Issuers of
Listed Securities of the Osaka Securities Exchange such documents as
to enable such bank to pay dividends and tax refunds with respect to
the overpaid taxes on such dividends to Beneficial Shareholders.
Article 11. Operation Offices
1) The parties hereto shall carry on the business under this Agreement at
the offices of the following addresses. Notices and documents shall
be sent to such addresses.
<PAGE> 6
- 6 -
The Company:
Lehman Brothers Latin America Growth Fund, Inc.
3 World Financial Center, 7th floor
New York, New York 10285
U.S.A.
JSCC:
Japan Securities Clearing Corporation
1-1, Nihonbashi Kayaba-cho 2-chome
Chuo-ku, Tokyo
Japan
The Shareholder Service Organization:
The Toyo Trust and Banking Company, Limited
Corporate Agency Department
5-3, Nihonbashi 1-chome
Chuo-ku, Tokyo
Japan
2) Each party hereto who intends to change its office referred to in the
preceding paragraph shall give prior notice to the other parties
hereto.
Article 12. Commissions and Expenses
1) The Company shall pay commissions and expenses for the performance of
the Services directly to the Shareholder Service Organization.
2) The Company and the Shareholder Service Organization shall agree
separately on the amount of commissions and the method of payment of
such commissions and expenses as stated in the preceeding paragraph
and amendments thereof shall be decided by mutual agreement after
consultation between the Company and the Shareholder Service
Organization.
Article 13. Prohibition of Assignment of Rights, etc.
Without prior consent of all of the other parties hereto, each party hereto
shall not assign or offer as security to a third party any rights under this
Agreement, and shall not have a third party accept any obligation under this
Agreement.
Article 14. Compensation for Losses and Damages
Each party hereto shall compensate for any losses and
<PAGE> 7
- 7 -
damages caused to the other parties hereto in relation to the performance of
such party's obligations hereunder for any reason for which such party is
responsible.
Article 15. Effective Date and Terms
1) This Agreement shall become effective on xxxxxxx xx, 1994.
2) This Agreement shall remain in full force for one year from the
effective date hereof, and shall be renewed automatically for
additional one year period unless otherwise notified by any party
hereto in writing sixty (60) days prior to the expiration of the
then current period.
Article 16. Amendments
When any party hereto deems it necessary to amend the provisions of this
Agreement, such amendment shall be decided by mutual agreement after
consultation among all of the parties hereto.
Article 17. Non-effectiveness
This Agreement shall cease to be effective when the stock of the Company are
delisted from the Osaka Securities Exchange. However, if there remains any
work in connection with this Agreement, this Agreement shall apply mutatis
mutandis pending the completion of such work.
Article 18. Termination
In the event any party hereto violates any provisions of this Agreement, the
other party or parties hereto, after requesting the violating party in writing
to correct the violation within thirty (30) days and sending a copy thereof to
the other nonviolating party, may cancel this Agreement upon thirty (30) days
prior written notice to both of the other parties when the violating party does
not correct the violation within the required period.
Article 19. Procedures after Termination
1) When this Agreement ceases to be effective in accordance with Article
17 hereof, the Shareholder
<PAGE> 8
- 8 -
Service Organization shall immediately complete any remaining work and
inform the Company and JSCC of the result thereof.
2) When this Agreement terminates in accordance with Article 15,
Paragraph 2 hereof or Article 18 hereof, the Shareholder Service
Organization shall continue to provide the Services until a new
shareholder service organization is designated by the Company, and
shall transfer the Services to such new shareholder service
organization.
Article 20. Jurisdiction
The District Court which has jurisdiction over the place where JSCC's head
office is located shall have exclusive jurisdiction in any action arising in
connection with this Agreement.
Article 21. Governing Law
This Agreement shall be governed by and construed in accordance with Japanese
laws and regulations.
Article 22. Controlling Version
The Japanese version of this Agreement is controlling.
Article 23. Consultation
Any matters which are not stipulated in this Agreement or any doubts as to the
interpretation of any provision of this Agreement shall be resolved by mutual
agreement after consultation among all of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
triplicate, each copy being equally authentic and held by each party.
<PAGE> 9
- 9 -
Date: xxxxxxx xx, 1994
Lehman Brothers Latin America Growth Fund, Inc.
3 World Financial Center, 7th floor
New York, New York 10285
U.S.A.
By:_________________________________________
Japan Securities Clearing Corporation
1-1, Nihonbashi Kayaba-cho 2-chome
Chuo-ku, Tokyo
Japan
By:_________________________________________
Ken-ichi Isaka
President
The Toyo Trust and Banking Company,
Limited
4-3, Marunouchi 1-chome
Chiyoda-ku, Tokyo
Japan
By:_________________________________________
Nobuyoshi Takeuchi
President
<PAGE> 10
(TRANSLATION)
MANUAL OF PROCEDURES FOR HANDLING
SHARES OF U.S. INVESTMENT COMPANIES
The Toyo Trust and Banking Company, Limited (hereinafter called "Toyo Trust")
hereby prepares a manual with respect to the details of the services entrusted
by Japan Securities Clearing Corporation (hereinafter called "JSCC") relating
to shares of U.S. Investment Companies.
Chapter I. Services concerning General Meetings of Shareholders
Article 1. Coverage of Services
Toyo Trust shall perform the following services concerning the general meetings
of shareholders of the Issuing Company.
(1) Prepare and maintain a detailed list of the Beneficial
Shareholders as of the record date of each of the general
shareholders' meetings.
(2) Prepare the Instruction Forms of Proxy Voting (hereinafter
called the "Instruction Forms").
(3) Send to each of the Beneficial Shareholders notices of general
meetings of shareholders and documents concerning solicitation
for the exercise of voting rights by proxy (hereinafter
collectively called the "Notices Regarding General Meetings of
Shareholders") and the Instruction Forms.
(4) Calculate the Beneficial Shareholders' voting results from the
Instruction Forms and report in writing the results of such
calculation to JSCC.
(5) Perform services which are ancillary to any of the items
mentioned above.
Article 2. Date of Sending Notices Regarding General Meeting of
Shareholders, etc.
The Notices Regarding General Meetings of Shareholders and the Instruction
Forms shall be sent by Toyo Trust as a rule at least fifteen (15) days prior to
the date of each of the general shareholders' meetings.
<PAGE> 11
- 2 -
Article 3. Report on Results of Voting from Instruction Forms
1) Toyo Trust shall calculate the number of votes from the Instruction
Forms which have been returned to Toyo Trust's operation office by as
a rule five (5) business days prior to the date of each of the general
shareholders' meetings and shall without delay report in writing the
results of the calculation to JSCC.
2) Toyo Trust shall tabulate the votes with respect to each resolution
submitted to a vote of the shareholders according to the three
categories of approved, disapproved and abstained, provided, however,
that with respect to the election of directors Toyo Trust shall
specify the number of votes approving all the proposed candidates,
number of votes approving a part of the proposed candidates and the
number of votes withheld on an individual candidates basis, the number
of votes disapproving all the proposed candidates, the number of votes
abstaining as to all the proposed candidates, and the number of votes
withheld as to all the proposed candidates, provided further however,
that in case of cumulative voting Toyo Trust shall specify the total
number of votes to be exercised in the cumulative voting and the
number of approving votes on an individual candidate basis.
Chapter II. Services concerning Sending of Business Reports
Article 4. Services concerning Sending of Business Reports
The date and methods of sending annual reports, half-year reports, quarterly
reports and revised reports thereof to the Beneficial Shareholders shall be
decided after consultation with the Issuing Company.
Chapter III. Services concerning Payment of Dividends
Article 5. Coverage of Services
Toyo Trust shall provide the following services concerning payment of dividends
of the Issuing Company.
<PAGE> 12
- 3 -
(1) Calculate the amount of dividends and the amount of Japanese
withholding tax imposed on payment of such dividends for each
of the Beneficial Shareholders as of the record date of
dividends and prepare a detailed list of dividends to be paid
to each of the Beneficial Shareholders.
(2) Prepare documents necessary for the transfer of dividends and
documents relating to the withholding tax in Japan and deliver
such documents to the paying bank.
(3) Prepare documents necessary for postal transfers and documents
relating to the withholding tax in Japan and deliver such
documents to the paying bank.
(4) Prepare and send to each of the Beneficial Shareholders
notices concerning the payment of dividends.
(5) Prepare the statement etc. of withholding tax regarding
dividend income and deliver the same to JSCC.
(6) Prepare a detailed list of the withholding tax classified by
business office of securities companies, etc. and deliver such
list to JSCC.
(7) Pay revenue stamp taxes imposed on notices of payment of
dividends.
(8) Prepare documents to be submitted to the U.S. tax authorities
and deliver such documents to JSCC.
(9) Prepare a detailed list of dividends which are unable to be
paid.
(10) Perform tasks ancillary to items mentioned above.
Article 6. Payment Date of Dividends
The payment date of dividends in Japan (hereinafter called the "Payment Date of
Dividends") shall be decided by Toyo Trust and such date shall as a rule be
within twenty-five (25) business days after the date on which Toyo Trust
receives a report on the amount of dividend in Japanese yen from the paying
bank.
<PAGE> 13
- 4 -
Chapter IV. Services concerning Payment of Tax Refunds (Applicable only
when tax refunds exist)
Article 7. Coverage of Services
Toyo Trust shall provide the following services concerning payment of tax
refunds with respect to overpaid tax on dividends (hereinafter called the "Tax
Refunds").
(1) Calculate the amount of the Tax Refunds for each of the
Beneficial Shareholders as of the record date of dividends and
prepare a detailed list of Tax Refunds to be paid to each of
the Beneficial Shareholders.
(2) Prepare documents necessary for the bank transfer or postal
transfer of the Tax Refunds and deliver such documents to the
paying bank.
(3) Send to each of the Beneficial Shareholders notices concerning
payment of the Tax Refunds.
(4) Prepare documents necessary for the application for Tax
Refunds to the U.S. tax authority and deliver such documents
to JSCC.
(5) Prepare a detailed list of Tax Refunds which are unable to be
paid.
(6) Perform tasks ancillary to items mentioned above.
Article 8. Payment Date of Tax Refunds
The payment date of Tax Refunds in Japan (hereinafter called the "Payment Date
of Tax Refunds") shall be decided by Toyo Trust and such date shall as a rule
be within twenty-five (25) business days after the date on which Toyo Trust
receives a report on the amount of the Tax Refunds in Japanese yen from the
paying bank.
Chapter V. Services concerning Payment of Sales Proceeds of Subscription
Rights to New shares
<PAGE> 14
- 5 -
Article 9. Coverage of Services
When subscription rights to new shares are granted, Toyo Trust shall provide
the following services in accordance with the instructions from JSCC.
(1) Services in case subscription rights are sold in whole:
a Receive and convert the sales proceeds of such rights
(hereinafter called the "Proceeds") into Japanese
yen.
b Calculate the amount of the Proceeds for each of the
Beneficial Shareholders as of the record date for
granted subscription rights and the amount of capital
gains tax imposed in Japan with respect to the
Proceeds and prepare a detailed list of the Proceeds
to be paid to each of the Beneficial Shareholders.
c Prepare documents relating to the withholding tax in
Japan and documents necessary for the payment through
bank transfer of the Proceeds and pay the Proceeds to
each of the Beneficial Shareholders in accordance
with such documents.
d Prepare documents relating to the withholding tax in
Japan and documents necessary for the payment through
postal transfer of the Proceeds and pay the Proceeds
to each of the Beneficial Shareholders in accordance
with such documents.
e Send to each of the Beneficial Shareholders notices
concerning the payment of the Proceeds.
f Pay the withholding tax as related to the Proceeds in
Japan to the Tax Authority.
g Prepare the statement of tax concerning the transfer
of shares, etc. and submit the same statement to JSCC.
h Prepare a detailed list of the Proceeds which are
unable to be paid.
i Perform tasks ancillary to items mentioned above.
(2) Services in case subscription rights are able to be exercised:
<PAGE> 15
- 6 -
In addition to providing services similar to those
provided for in the preceeding paragraph Toyo Trust
shall provide other necessary services.
Article 10. Payment Date of Proceeds
The payment date of the Proceeds shall be decided by Toyo Trust and such date
shall as a rule be within twenty-five (25) business days after the date on
which the Proceeds have been converted into Japanese yen.
Chapter VI. Services concerning Stock Dividends, etc.
Article 11. Coverage of Services
Toyo Trust shall provide the following services concerning the calculation of
the number of shares (hereinafter called the "New Shares") to be distributed to
each of the Beneficial Shareholders in connection with stock dividends, splits
or reverse-splits of shares and distribution of shares without consideration
(hereinafter collectively called the "Stock Dividends, etc.") and concerning
the payment of proceeds from the disposal of the New Shares (the "Proceeds from
New Shares").
(1) Services to be provided when the Stock Dividends, etc. are not
considered to be dividend income under Japanese tax law:
a Receive and convert the Proceeds from New Shares
into Japanese Yen.
b Calculate the number of New Shares to be distributed
to each of the Beneficial Shareholders as of the
record date of allotment of New Shares and the amount
of capital gains tax imposed in Japan with respect to
the Proceeds from New Shares and prepare a detailed
list of the New Shares to be distributed to each of
the Beneficial Shareholders, notices on the
distribution of the New Shares and a detailed list of
the Proceeds from New Shares to be paid to each of
the Beneficial Shareholders.
c Deliver to JSCC a detailed list of the New Shares to
be distributed to each of the
<PAGE> 16
- 7 -
Beneficial Shareholders.
d Deliver to each of the Beneficial Shareholders a
notice on the distribution of the New Shares.
e Prepare documents relating to the withholding tax in
Japan and documents necessary for the payment through
bank transfer of the Proceeds from New Shares and pay
the Proceeds from New Shares to each of the
Beneficial Shareholders in accordance with such
documents.
f Prepare documents relating to the withholding tax in
Japan and documents necessary for the payment through
postal transfer of the Proceeds from New Shares and
pay the Proceeds from New Shares to each of the
Beneficial Shareholders in accordance with such
documents.
g Send to each of the Beneficial Shareholders notices
concerning payment of the Proceeds from New Shares.
h Pay the withholding tax as related to the proceeds
from New Shares in Japan to the Tax Authority.
i Prepare the statement of tax concerning the transfer
of shares, etc. and submit the same statement to JSCC.
j Prepare a detailed list of the Proceeds from New
Shares which are unable to be paid.
k Perform tasks ancillary to items mentioned above.
(2) Services to be provided when the Stock Dividends, etc. are considered
to be dividend income under Japanese tax law:
In addition to offering services similar to those provided for
in the preceding paragraph, other necessary services in
accordance with instruction from JSCC concerning the
withholding tax in Japan and other matters are to be provided.
<PAGE> 17
- 8 -
Article 12. Payment Date of Proceeds
The payment date of the Proceeds from New Shares shall be decided by Toyo Trust
and such date shall as a rule be within twenty-five (25) business days after
the date on which the Proceeds from New Shares are converted into Japanese Yen
by Toyo Trust.
Chapter VII. Reporting Documents
Article 13. Reporting Documents to be delivered to the Issuing Company
Toyo Trust shall deliver the following documents to the Issuing Company.
(1) Lists of the Beneficial Shareholders by type of shareholder
and by number of shares owned, and a list of major
shareholders as of each record date,
(2) A semi-annual report on the results of the services.
(3) Other reports which may be requested by the Issuing Company.
Article 14. Reporting Documents to be delivered to JSCC
Toyo Trust shall deliver the following documents to JSCC.
(1) A semi-annual report on the results of the services.
(2) Other reports which may be requested by JSCC.
Chapter VIII. Keeping of Documents
Article 15. Keeping of Documents
The following documents shall be kept for the following periods and shall be
destroyed thereafter.
<PAGE> 18
<TABLE>
<S> <C>
Documents Period for Keeping
- --------- ------------------
Detailed Lists of For seven years from the date
Beneficial Shareholders of the general
(for use for general shareholders meeting concerned
meetings of shareholders)
Instruction Forms of For one year from the
Proxy Voting date of the general
shareholders meeting
concerned
Detailed Lists of Dividends For seven years from
to be paid to each the Payment Date of Dividends
Beneficial Shareholder concerned
Detailed Lists of the Tax For seven years from
Refunds to be paid to each the Payment Date of Tax Refunds
Beneficial Shareholder concerned
Detailed Lists of various For ten years from the
proceeds to be paid to Payment Date of each such
each Beneficial Shareholder proceed concerned
Detailed Lists of the New Shares For seven years from
to be distributed the record date of allotment of
to each Beneficial Shareholder the New Shares concerned
Detailed Lists of various funds For one year from the
which are unable to date on which such lists were
be paid prepared
</TABLE>
Chapter IX. Miscellaneous
Article 16. Other Services
The services which are necessary for protecting the rights of the Beneficial
Shareholders other than the services provided for in Chapters I through VI
shall be decided from time to time by consultation with JSCC.
Article 17. Methods of Calculation
Dividends, Tax Refunds and various proceeds (hereinafter collectively called
the "Dividends, etc.") shall be calculated in accordance with methods
separately decided by JSCC.
<PAGE> 19
- 10 -
Article 18. Reporting of the Results Of Calculation
Toyo Trust shall deliver to JSCC a report setting forth the results of
calculation Of the Dividends, etc., in principle, no later than five (5)
business days prior to the paying dates of the Dividends, etc.
Article 19. Return of the Balance
Toyo Trust shall remit the balance of the Dividends, etc., if any, which are
unable to be paid, or the balance of any funds occurring, due to the
round-downwards to the nearest one Japanese yen, to the bank account designated
by JSCC, in principle, within sixty (60) days after the paying date of the
Dividends, etc.
Article 20. Sending of the Detailed List of various funds which are unable
to be paid
Toyo Trust shall prepare within thirty (30) days after the paying date of the
Dividends, etc. and send to JSCC a detailed list of the Dividends, etc. which
are unable to be paid and a detailed list of the balance occurring due to the
round-downwards to the nearest one Japanese Yen.
Article 21. Handling Returned Notices
Toyo Trust shall send in one lot to JSCC, in principle, within thirty (30) days
after the date of payment of the Dividends, etc., all notices concerning the
transfer of the Dividends, etc. which have been returned to Toyo Trust.
<PAGE> 1
EXHIBIT (k)(C)
(TRANSLATION)
FORM OF PAYING AGREEMENT
This Agreement is entered into by and among Lehman Brothers Latin America
Growth Fund, Inc. (hereinafter called the "Company"), Japan Securities
Clearing Corporation (hereinafter called "JSCC"), which nominally owns, under
its name or its nominee's name, stock issued by the Company, and The Toyo Trust
and Banking Company, Limited (hereinafter called the "Paying Bank"), which is
the paying bank designated by the Company in accordance with Article 19 of the
Regulations Concerning Notices, etc. of Issuers of Listed Securities of the
Osaka Securities Exchange regarding the distribution of dividends to be paid by
the Company and tax refunds thereof (hereinafter collectively called
"Distribution Funds"), to persons (hereinafter called the "Beneficial
Shareholders") who beneficially own under the Book Entry Clearing System
Specifications for Share Certificates of Foreign Investment Companies listed on
the Osaka Securities Exchange.
Article 1. Entrusting of Services and Acceptance
JSCC hereby entrusts the following services (hereinafter called the "Services")
to the Paying Bank and the Paying Bank accepts such entrustment.
(1) To receive the Distribution Funds and convert them into
Japanese yen.
(2) To withhold and pay Japanese withholding income taxes imposed
on the Distribution Funds.
(3) To distribute to each Beneficial Shareholders the remaining
balance of the Distribution Funds converted into Japanese yen,
after the deduction of Japanese withholding income taxes.
(4) To perform any tasks ancillary to any item mentioned above.
Article 2. Receipt and Conversion into Japanese yen of Distribution Funds
1) The Paying Bank shall receive the Distribution Funds by remittance
from a custodian appointed by the JSCC which collects and receives the
Distribution Funds on behalf of JSCC in the home country of the
Company.
2) The Paying Bank shall convert the Distribution Funds, which it
receives in accordance with the preceding
<PAGE> 2
- 2 -
paragraph, into Japanese yen at the Spot Telegraphic Transfer Buying
Rate vis-a-vis customers (hereinafter called the "Rate") prevailing on
the date it receives the Distribution Funds.
3) If the Rate is not available because of a reason such as the closure
of the Tokyo Foreign Exchange Market, the Paying Bank shall apply the
Rate which will be available immediately after the above mentioned
reason ceases.
4) After the conversion of the Distribution Funds, the Paying Bank shall
notify the shareholder service organization designated by the Company
in accordance with Article 19 of the Regulations Concerning Notices
etc. of Issuers of Listed Securities of the Osaka Securities Exchange
(hereinafter called the "Shareholder Service Organization") of the
foreign exchange rate applied to the conversion of the Distribution
Funds and the Japanese yen amount resulting from the conversion of the
Distribution Funds.
Article 3. Withholding and Payment of Japanese Withholding Taxes
In accordance with related tax laws, the Paying Bank shall deduct and pay
Japanese withholding income taxes imposed on the Distribution Funds converted
into Japanese yen.
Article 4. Distribution of Distribution Funds to Beneficial Shareholders
1) The Paying Bank shall without delay distribute the remaining balance
of the Distribution Funds converted into Japanese yen after the
deduction of Japanese withholding income taxes, to each Beneficial
Shareholder in accordance with the information regarding the
Beneficial Shareholders furnished by the Shareholder Service
Organization, provided, however, any fractional sum less than one yen
due to each Beneficial Shareholder shall not be distributed.
2) The Paying Bank need not pay interest on the Distribution Funds for
the period from the date on which it receives the Distribution Funds
in accordance with Article 2, Paragraph 1 to the date on which it
distributes the Distribution Funds to each of the Beneficial
Shareholders.
<PAGE> 3
- 3 -
3) If after the distribution of Distribution Funds to each of the
Beneficial Shareholders there is a balance remaining of the
Distribution Funds because of a reason such as fractional sums less
than one yen or the impossibility of payment to the Beneficial
Shareholders, etc., the Paying Bank shall transfer without delay such
balance to a bank account designated by JSCC, notify the Shareholder
Service Organization of the reasons for such balance and send relevant
documents to such Organization.
Article 5. Bona Fide Agent Care
The Paying Bank shall provide the Services with the care of a bona fide agent.
Article 6. Reporting, etc.
The Company and JSCC shall have the right to request the Paying Bank to provide
either of them with an opportunity to inspect relevant documents, or to furnish
reports on the performance on the Services so far as such request will not
interfere with the business of the Paying Bank.
Article 7. Operation Offices
1) Notices and documents shall be sent to the following
addresses by each party hereto.
The Company:
Lehman Brothers Latin America Growth Fund, Inc.
3 World Financial Center, 7th floor
New York, New York 10285
JSCC:
Japan Securities Clearing Corporation
1-1, Nihonbashi Kayaba-cho 2-chome
Chuo-ku, Tokyo, Japan
The Paying Bank:
The Toyo Trust and Banking Company, Limited
Corporate Agency Department
5-3, Nihonbashi 1-chome
Chuo-ku, Tokyo, Japan
<PAGE> 4
- 4 -
2) Each party hereto who intends to change the preceding address shall
give prior notice thereof to the other parties hereto.
Article 8. Commissions and Expenses
1) The Company shall pay commissions and expenses for the performance of
the Services directly to the Paying Bank.
2) Such commissions, expenses and the method of payment thereof are
specified in the Exhibit hereto, and amendments to such commissions,
expenses and the method of payment thereof shall be decided upon by
mutual agreement after consultation between the Company and the Paying
Bank.
Article 9. Prohibition of Assignment of Rights, etc.
Without prior consent of all of the other parties hereto, each party hereto
shall not assign or offer as security to a third party any rights under this
Agreement, and shall not have a third party accept any obligations under this
Agreement.
Article 10. Compensation for Losses and Damages
Each party hereto shall compensate for any losses and damages caused to other
parties hereto for any reason for which such party is responsible.
Article 11. Effective Date and Terms
1) This Agreement shall become effective on __________, 19__.
2) This Agreement shall remain in full force for one year from the
effective date hereof, and shall be renewed automatically for
additional one year period unless otherwise notified by any party
hereto in writing sixty (60) days prior to the expiration of the then
current period.
<PAGE> 5
- 5 -
Article 12. Amendments
When any party hereto deem it necessary to amend the provisions of this
Agreement, such amendment shall be decided upon by mutual agreement after
consultation among all of the parties hereto.
Article 13. Non-effectiveness
This Agreement shall cease to be effective when the shares of the Company are
delisted from the Osaka Securities Exchange.
Article 14. Termination
In the event any party hereto violates any provisions of this Agreement, the
other party whose interest is affected by such violation, after requesting the
violating party in writing to correct the violation within thirty (30) days and
sending a copy of thereof to the other nonviolating party, may terminate this
Agreement upon thirty (30) days prior written notice to both of the other
parties when the violating party does not correct the violation within the
required period.
Article 15. Procedures after Termination
1) When this Agreement ceases to be effective in accordance with Article
13 hereof, the Paying Bank shall immediately complete any remaining
work and inform the Company and JSCC of the result thereof.
2) When this Agreement terminates in accordance with Article 11,
Paragraph 2 hereof or the preceding Article, the Paying Bank shall
continue to perform the Services until a new paying bank is designated
by the Company, and shall transfer the Services to such new paying
bank.
Article 16. Jurisdiction
The District Court which has jurisdiction over the place where JSCC's head
office is located shall have exclusive jurisdiction in any action arising in
connection with this Agreement.
<PAGE> 6
- 6 -
Article 17. Governing Law
This Agreement shall be governed and construed in accordance with Japanese laws
and regulations.
Article 18. Controlling Version
The Japanese version of this Agreement is controlling.
Article 19. Consultation
Any matters which are not stipulated in this Agreement or any doubts as to the
interpretation of any provision of this Agreement shall be resolved by mutual
agreement after consultation among all of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
triplicate, each copy being equally authentic and held by each party.
_________, 19__,
Lehman Brothers Latin America Growth Fund, Inc.
3 World Financial Center, 7th floor
New York, New York 10285
By:____________________________________________
Japan Securities Clearing Corporation
1-1, Nihonbashi Kayaba-cho 2-chome
Chuo-ku, Tokyo, Japan
By:____________________________________________
Ken-ichi Isaka
President
The Toyo Trust and Banking Company, Limited
4-3, Marunouchi 1-chome
Chiyoda-ku, Tokyo, Japan
By:____________________________________________
Nobuyosi Takeuchi
President
<PAGE> 7
(TRANSLATION)
EXHIBIT
Commissions and expenses, and method of payment thereof under Article 8,
paragraph 2 of the Agreement.
1. Commissions and expenses:
(1) Commissions for payments at the main or branch offices of the
Paying Bank
Yen 30 per one payment.
Commissions for payments through other banks
Yen 50 per one payment.
(2) Expenses incurred in connection with payment
2. Method of payment for commissions and other expenses:
Whenever the Paying Bank has provided the Services, they will request
the Company to pay the commissions and expenses relating thereto,
provide the Company with a supporting statement setting forth its
calculations thereof, and the Company shall promptly pay the Paying
Bank in yen the sum so requested.
<PAGE> 1
DRAFT
EXHIBIT (k)(D)
(TRANSLATION)
FORM OF AGREEMENT OF COMMISSIONS
CONCERNING ENTRUSTMENT OF SERVICES
This Agreement is made and entered into by and between Lehman Brothers Latin
America Growth Fund, Inc. (hereinafter referred to as "A") and The Toyo Trust
and Banking Company, Limited (hereinafter referred to as "B"), pursuant to the
Article 12 of the Service Agreement dated xxxxxx xth, 1994 by and among A, B
and Japan Securities Clearing Corporation (hereinafter referred to as the
"Service Agreement"), concerning commissions and expenses for performance of
certain services.
Article 1. Commissions for performance of Services
A shall pay to B commissions for performance of the services provided for in
the schedule attached hereto. Provided that commissions for performance of the
services enumerated in Items (6) through (8) of Article 1 of the Service
Agreement shall be determined from time to time by mutual agreement after
consultation between A and B.
Article 2. Expenses
The following expenses shall be borne by A:
(1) Expenses for preparation of Instruction Forms of Proxy Voting,
notices of transfer of dividends, tax protocols of dividend
income, documents concerning payment of dividends, etc.
(2) Expenses for preparation of envelopes necessary for sending
various notices and business reports, etc.
(3) Communication expenses including postage, telex charges, stamp
taxes, etc.
Article 3. Methods of calculation of commissions
Methods of calculating commissions shall be as follows:
(1) Calculation period:
Except for commissions for performance of the services
enumerated in Items (6) through (8) of Article 1 of the
Service Agreement, commissions shall be calculated for
six-month period: the six-month period from March 1 through
August 31 of
<PAGE> 2
- 2 -
each year and the six-month period from September I of each
year through February 28 (February 29 in the case of a leap
year) of the following year.
(2) Methods of calculation:
Basic commissions shall be calculated on the basis of the
number of Beneficial Shareholders obtained by dividing the
aggregate of the number of Beneficial Shareholders as of each
record date falling within the calculation period by the
number of such record dates.
Commissions other than the basic commission, including
maintenance fees of detailed list for payment of dividends,
etc. shall be calculated in accordance with the schedule
attached hereto.
Article 4. Request for payment of commissions and method of payment
After termination of each calculation period, B shall request A to pay the
commissions calculated in accordance with the methods provided for in Article 3
hereof with a statement of calculation of commissions by March 15 and September
15, respectively, each year.
A shall pay to B the amount of such commission in yen by March 31 and September
30, each year respectively.
Article 5. Deposit of actual costs
A shall deposit in advance, upon B's request, such part of the actual costs
enumerated in Article 2 hereof as is necessary to be paid by B on behalf of A.
The money so deposited shall not bear any interest.
Article 6. Settlement of money disbursed
In case B has disbursed any expenses to be borne by A, B will request A's
payment thereof and A shall pay the same in yen to B without delay.
Article 7. Effective date of this Agreement
This Agreement shall become effective on xxxxxx xth, 1994.
<PAGE> 3
- 3 -
Article 8. Amendments to this Agreement
When A and B deem it necessary to amend any provision of this Agreement, such
provision may be amended by mutual agreement after consultation between both
parties hereto.
Article 9. Controlling version
The Japanese version of this Agreement shall be controlling.
Article 10. Consultation
Any matters which are not stipulated in this Agreement or any doubts as to
interpretation of any provision of this Agreement shall be resolved by mutual
agreement after consultation between A and B.
IN WITNESS WHEREOF, A and B have executed this Agreement in duplicate, each
copy being equally authentic and retained by each party.
Date: xxxxxx xth, 1994
A: Lehman Brothers Latin America Growth Fund, Inc.
3 World Financial Center, 7th floor
New York, New York 10285
U.S.A.
By:_______________________________________
B: The Toyo Trust and Banking Co., Ltd.
4-3, Marunouchi 1-chome
Chiyoda-ku, Tokyo
Japan
By:_______________________________________
Nobuyoshi Takeuchi
President
<PAGE> 4
(FEE SCHEDULE)
COMMISSIONS FOR PERFORMANCE OF SERVICES
Basic commissions
Basic commissions shall be calculated on the basis of Beneficial Shareholders
as in the following table.
Number of
Beneficial Shareholders Rates
----------------------- -----
1) Up to 5,000 Yen 700 per Shareholder per year
2) between 5,001 and 10,000 Yen 600 per Shareholder per year
3) More than 10,001 Yen 500 per Shareholder per year
(minimum Yen 1,400,000)
(Substance of Services)
1. Maintenance of names and addresses of, and amount of shares held by
Beneficial Shareholders as of record dates.
2. Preparation of the detailed lists of Beneficial Shareholders as of
record dates and of various materials for reports.
3. Payment of stamp taxes and other services relating to taxes.
4. Other services incidental to any item mentioned above.
____________________________________________________________________________
Maintenance fees of detailed lists for payment of dividends and tax refunds
Fees shall be calculated an the basis of Beneficial Shareholders of a
record date as in the following table.
Number of
Beneficial Shareholders Rates
----------------------- -----
1) Up to 5,000 Yen 180 per Shareholder
2) between 5,001 and 10,000 Yen 170 per Shareholder
3) More than 10,001 Yen 160 per Shareholder
(minimum Yen 360,000)
(Substance of Services)
1. Preparation of detailed lists for payment of dividends and tax
refunds.
2. Preparation of notices of transfer of dividends and tax refunds,
detailed statements of payment of dividends and tax refunds, various
lists concerning dividends and statement of dividends and tax
protocols of dividend income.
3. Determination of dividends and tax refunds unable to be paid to
Beneficial Shareholders.
<PAGE> 5
____________________________________________________________________________
Mailing fees of various notices
Fees for enclosing one or two items into a regular size window
envelope shall be calculated on the basis of number of mailings for
shareholders.
Yen 10 per mailing (minimum Yen 20,000)
For items in excess of two in an envelope:
Yen 5 per mailing shall be added for each such item
(Substance of Services)
Enclosing and mailing notices of general meetings of shareholders,
annual reports, quarterly reports, notices of transfer of dividends
and tax refunds, etc.
Other expenses for mailing irregular sized mail, additional enclosures
and printing of addresses shall be fixed separately.
____________________________________________________________________________
Fees for preparation of the Instruction Forms of Proxy
Voting, Vote by Mail and calculation relating thereto
Fees shall be calculated on the basis of number of forms.
Yen 15 per form (minimum Yen 30,000)
(Substance of Services)
1. Preparation and receipt of Instruction Forms of Proxy Voting,
Vote by Mail and calculation relating thereto.
2. Reports of the result of such calculation to Japan Securities
Clearing Corporation.
<PAGE> 1
EXHIBIT (p)
FORM OF PURCHASE AGREEMENT
Lehman Brothers Latin America Growth Fund, Inc. (the "Fund"), a
Maryland corporation, and Lehman Brothers Inc. (the "U.S. Underwriter"),
hereby agree as follows:
1. The Fund hereby offers the U.S. Underwriter and the U.S.
Underwriter hereby purchases 7,169 shares at $13.95 per share in such classes
of the Fund, with par value of $.001 per share as determined by the U.S.
Underwriter. The shares are the "initial shares" of the Fund. The U.S.
Underwriter hereby acknowledges receipt of a purchase confirmation reflecting
the purchase of 7,169 shares, and the Fund hereby acknowledges receipt from the
U.S. Underwriter of funds in the amount of $100,008 in full payment for the
shares.
2. The U.S. Underwriter represents and warrants to the Fund that the
shares are being acquired for investment purposes and not for the purpose of
distribution.
3. The U.S. Underwriter agrees that if it or any direct or indirect
transferee of the shares redeems the shares prior to the fifth anniversary of
the date that the Fund begins its investment activities, the U.S. Underwriter
will pay to the Company an amount equal to the number resulting from
multiplying the Fund's total unamortized organizational expenses by a fraction,
the numerator of which is equal to the number of shares redeemed by the U.S.
Underwriter or such transferee and the denominator of which is equal to the
number of shares outstanding as of the date of such redemption, as long as the
administrative position of the staff of the Securities and Exchange Commission
requires such reimbursement.
4. The Fund represents that a copy of its Articles of Amendment and
Restatement, is on file in the Office of the Secretary of the State of
Maryland.
5. This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his capacity as an officer of the Fund. The
obligations of this Agreement shall be binding only upon the assets and
property of the
<PAGE> 2
Fund and shall not be binding upon any Director, officer or
shareholder of the Fund individually.
6. This agreement shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the _____ day of _________, 1994.
LEHMAN BROTHERS LATIN
AMERICA GROWTH FUND, INC.
Attest:
____________________________ By:
____________________________
Attest: LEHMAN BROTHERS INC.
____________________________ By:
____________________________
