In addition, Maryland law permits a Maryland corporation to advance
reasonable expenses to a director or officer upon the corporation’s
receipt of (a) a written affirmation by the director or
officer of his or her good faith belief that he or she has met the
standard of conduct necessary for indemnification by the
corporation and (b) a written undertaking by him or her or on
his or her behalf to repay the amount paid or reimbursed by the
corporation if it is ultimately determined that the standard of
conduct was not met.
The Fund’s charter authorizes it to obligate itself, and its Bylaws
require it, to the maximum extent permitted by Maryland law and
subject to the requirements of the 1940 Act, to indemnify any
present or former director or officer or any individual who, while
a director or officer of the Fund and at the request of the Fund,
serves or has served another corporation, real estate investment
trust, partnership, joint venture, limited liability company,
trust, employee benefit plan or other enterprise as a director,
officer, partner, manager, managing member or trustee, from and
against any claim or liability to which that individual may become
subject or which that individual may incur by reason of his or her
service in any of the foregoing capacities and to pay or reimburse
his or her reasonable expenses in advance of final disposition of a
proceeding, without requiring a preliminary determination of the
ultimate entitlement to indemnification. The Fund’s charter and
Bylaws also permit it to indemnify and advance expenses to any
individual who served any predecessor of the Fund in any of the
capacities described above and any employee or agent of the Fund or
any predecessor of the Fund.
In accordance with the Investment Company Act, the Fund will not
indemnify any person for any liability to which such person would
be subject by reason of such person’s willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
Advisory Agreement Indemnification. Please refer to
Section 13 of the
Investment Management and Advisory Agreement (“Advisory
Agreement”) between the Fund and the Adviser. In Section 13 of
the Advisory Agreement, the Fund agrees to indemnify the Adviser
(and its officers, managers, partners, agents, employees,
controlling persons, members and any person or entity affiliated
with the Adviser), against certain liabilities arising in
connection with Adviser’s performance as an investment adviser to
the Fund.
Administrative Services and Reimbursement Agreement. Please
refer to Section 3 of the
Administrative Services and Reimbursement Agreement (the
“Services Agreement”) between the Fund and the Adviser. In
Section 3 of the Services Agreement, the Fund agrees to
indemnify the Adviser, as administrator, (and its officers,
managers, partners, agents, employees, controlling persons, members
and any person or entity affiliated with the Adviser), against
certain liabilities arising in connection with Adviser’s provision
of services under the Services Agreement.
Indemnification Agreement Indemnification. Reference is made
to an Indemnification Agreement between the Fund and each Director
and Officer of the Fund. Under the Indemnification Agreement, the
Fund agrees to indemnify each Director and Officer for certain
liabilities arising in connection with their duties as Directors or
Officers, as applicable, of the Fund.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the “Securities 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 SEC such
indemnification is against public policy as expressed in the
Securities 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 Securities Act and will be governed by the final adjudication
of such issue.
- 4 -
