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Exhibit 99(h)(2)
Municipal Auction Rate Cumulative Preferred Shares
COLONIAL HIGH INCOME MUNICIPAL TRUST
2,400 Shares, Series W
Liquidation Preference $25,000 Per Share
UNDERWRITING AGREEMENT
August __, 1999
XXXXXXX XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Colonial High Income Municipal Trust, a Massachusetts business trust (the
"Trust"), proposes, upon the terms and conditions set forth herein, to issue and
sell an aggregate of 2,400 shares of its Municipal Auction Rate Cumulative
Preferred Shares, Series W (the "Series W Municipal Preferred"), each with a
liquidation preference of $25,000 per share (the shares of Series W Municipal
Preferred to be sold hereby are referred to herein, collectively, as the
"Shares"). Concurrently with the offering of the Series W Municipal Preferred,
the Trust is offering an additional 2,400 shares of Series T Municipal
Preferred. The shares of Series W Municipal Preferred and Series T Municipal
Preferred will be authorized by, and subject to the terms and conditions of, the
Amended and Restated By-Laws of the Trust in the form filed as an exhibit to the
Registration Statement referred to in Section 1 of this agreement. The Trust and
its investment adviser, Colonial Management Associates, Inc., (the "Advisor"),
wish to confirm as follows their agreement with Xxxxxxx Xxxxx Xxxxxx Inc. (the
"Underwriter") in connection with the purchase of the Shares by the Underwriter.
Collectively, (i) the Management Agreement, dated as of March 27, 1995,
between the Trust and the Advisor (the "Management Agreement"), (ii) the
Custodian Agreement, dated as of August 17, 1997, between the Trust and The
Chase Manhattan Bank, as amended, (iii) the Auction Agency Agreement, to be
dated as of August __, 1999, between the Trust and Bankers Trust Company and
(iv) the Broker-Dealer Agreement, to be dated as of August __, 1999, between the
Trust and Xxxxxxx Xxxxx Xxxxxx Inc. are hereinafter referred to as the "Trust
Agreements". This Underwriting Agreement is hereinafter referred to as the
"Agreement".
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1. REGISTRATION STATEMENT AND PROSPECTUS. The Trust has prepared in
conformity with the provisions of the Securities Act of 1933, as amended (the
"1933 Act"), the Investment Company Act of 1940, as amended (the "1940 Act"),
and the rules and regulations of the Securities and Exchange Commission (the
"Commission") promulgated under the 1933 Act (the "1933 Act Rules and
Regulations") and the 1940 Act (the "1940 Act Rules and Regulations" and,
together with the 1933 Act Rules and Regulations, the "Rules and Regulations") a
registration statement on Form N-2, as amended (File No. 333-81129 and
811-5754), under the 1933 Act and the 1940 Act (the "registration statement"),
including a prospectus relating to the Shares, and has filed the registration
statement and prospectus in accordance with the 1933 Act and 1940 Act. The Trust
also has filed a notification of registration of the Trust as an investment
company under the 1940 Act on Form N-8A (the "1940 Act Notification"). The term
"Registration Statement" as used in this Agreement means the registration
statement (including all financial schedules and exhibits), as amended at the
time it becomes effective under the 1933 Act or, if the registration statement
became effective under the 1933 Act prior to the execution of this Agreement, as
amended or supplemented at the time it became effective, prior to the execution
of this Agreement. If it is contemplated, at the time this Agreement is
executed, that a post-effective amendment to the registration statement will be
filed under the 1933 Act and must be declared effective before the offering of
the Shares may commence, the term "Registration Statement" as used in this
Agreement means the registration statement as amended by said post-effective
amendment. If the Trust has filed an abbreviated registration statement to
register an additional amount of Shares pursuant to Rule 462(b) under the 1933
Act (the "Rule 462 Registration Statement"), then any reference herein to the
term "Registration Statement" shall include such Rule 462 Registration
Statement. The term "Prospectus" as used in this Agreement means the prospectus
and statement of additional information in the forms included in the
Registration Statement or, if the prospectus and statement of additional
information included in the Registration Statement omit information in reliance
on Rule 430A under the 1933 Act Rules and Regulations and such information is
included in a prospectus and statement of additional information filed with the
Commission pursuant to Rule 497 under the 1933 Act, the term "Prospectus" as
used in this Agreement means the prospectus and statement of additional
information in the forms included in the Registration Statement as supplemented
by the addition of the information contained in the prospectus filed with the
Commission pursuant to Rule 497. The term "Prepricing Prospectus" as used in
this Agreement means the prospectus and statement of additional information
subject to completion in the forms included in the registration statement at the
time of filing of amendment no.1 to the registration statement with the
Commission on August __, 1999, and as such prospectus and statement of
additional information shall have been amended from time to time prior to the
date of the Prospectus, together with any other prospectus and statement of
additional information relating to the Trust other than the Prospectus approved
in writing by or directly or indirectly prepared by the Trust or the Advisor; it
being understood that the definition of Prepricing Prospectus above shall not
include any Prepricing Prospectus prepared by the Underwriter unless approved in
writing by the Trust or the Advisor. The terms "Registration Statement",
"Prospectus" and "Prepricing Prospectus" shall also include any financial
statements incorporated by reference therein.
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The Trust has furnished the Underwriter with copies of such registration
statement, each amendment to such registration statement filed with the
Commission and each Prepricing Prospectus.
2. AGREEMENTS TO SELL AND PURCHASE. The Trust hereby agrees, subject to
all the terms and conditions set forth herein, to issue and sell to the
Underwriter and, upon the basis of the representations, warranties and
agreements of the Trust and the Advisor herein contained and subject to all the
terms and conditions set forth herein, the Underwriter agrees to purchase from
the Trust, at a purchase price of $[ ] per Share, the number of shares of Series
W Municipal Preferred set forth opposite the name of the Underwriter in Schedule
I hereto.
3. TERMS OF PUBLIC OFFERING. The Trust and the Advisor have been advised
by the Underwriter that the Underwriter proposes to make a public offering of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in the Underwriter's judgment is advisable and initially to
offer the Shares upon the terms set forth in the Prospectus.
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to the
Underwriter of and payment for the Shares shall be made at the office of Xxxxxxx
Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, at 9:30 A.M., New
York City time, on August __, 1999 (the "Closing Date"). The place of closing
for the Shares and the Closing Date may be varied by agreement between the
Underwriter and the Trust.
Certificates for the Shares shall be registered in such names and in such
denominations as the Underwriter shall request prior to 9:30 A.M., New York City
time, on the second business day preceding the Closing Date. Such certificates
shall be made available to the Underwriter in New York City for inspection not
later than 9:30 A.M., New York City time, on the business day next preceding the
Closing Date. The certificates evidencing the Shares shall be delivered to the
Underwriter on the Closing Date, through the facilities of The Depository Trust
Company, against payment of the purchase price therefor in immediately available
funds.
5. AGREEMENTS OF THE TRUST AND THE ADVISOR. The Trust and the Advisor,
jointly and severally, agree with the Underwriter as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective under the 1933 Act before the offering of the Shares
may commence, the Trust will endeavor to cause the Registration Statement or
such post-effective amendment to become effective under the 1933 Act as soon as
possible and will advise the Underwriter promptly and, if requested by the
Underwriter, will confirm such advice in writing when the Registration Statement
or such post-effective amendment has become effective.
(b) The Trust will advise the Underwriter promptly and, if requested by
the Underwriter, will confirm such advice in writing: (i) of any request made by
the Commission for amendment of or a supplement to the Registration Statement,
any Prepricing Prospectus or the Prospectus (or any amendment or supplement to
any of the foregoing) or for additional
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information, (ii) of the issuance by the Commission, the National Association of
Securities Dealers, Inc. (the "NASD"), any state securities commission, any
national securities exchange, any arbitrator, any court or any other
governmental, regulatory, self-regulatory or administrative agency or any
official of any order suspending the effectiveness of the Registration
Statement, prohibiting or suspending the use of the Prospectus or any Prepricing
Prospectus, or any sales material, of any notice pursuant to Section 8(e) of the
1940 Act, of the suspension of qualification of the Shares for offering or sale
in any jurisdiction, or the initiation of any proceeding for any such purposes,
(iii) of receipt by the Trust, the Advisor, any affiliate of the Trust or the
Advisor or any representative or attorney of the Trust or the Advisor of any
other material communication from the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court or any
other governmental, regulatory, self-regulatory or administrative agency or any
official relating to the Trust (if such communication relating to the Trust is
received by such person within three years after the date of this Agreement),
the Registration Statement, the 1940 Act Notification, the Prospectus, any
Prepricing Prospectus, any sales material (or any amendment or supplement to any
of the foregoing) or this Agreement or any of the Trust Agreements and (iv)
within the period of time referred to in paragraph (f) below, of any material
adverse change in the condition (financial or other), business, prospects,
properties, net assets or results of operations of the Trust or the Advisor or
of the happening of any other event which makes any statement of a material fact
made in the Registration Statement or the Prospectus or any sales material (or
any amendment or supplement to any of the foregoing) untrue or which requires
the making of any additions to or changes in the Registration Statement or the
Prospectus, or any Prepricing Prospectus or any sales materials (as herein
defined) (or any amendment or supplement to any of the foregoing) in order to
state a material fact required by the 1933 Act, the 1940 Act or the Rules and
Regulations to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading or of the necessity to amend or supplement the Registration
Statement, the Prospectus, or any Prepricing Prospectus or any sales material
(as herein defined) (or any amendment or supplement to any of the foregoing) to
comply with the 1933 Act, the 1940 Act, the Rules and Regulations or any other
law or order of any court or regulatory body. If at any time the Commission, the
NASD, any state securities commission, any national securities exchange, any
arbitrator, any court or any other governmental, regulatory, self-regulatory or
administrative agency or any official shall issue any order suspending the
effectiveness of the Registration Statement, prohibiting or suspending the use
of the Prospectus or any sales material (as herein defined) (or any amendment or
supplement to any of the foregoing) or suspending the qualification of the
Shares for offering or sale in any jurisdiction, the Trust will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible time.
(c) The Trust will furnish to the Underwriter, without charge, three
signed copies of the Registration Statement as originally filed with the
Commission and of each amendment thereto, including financial statements and all
exhibits thereto, and will also furnish to the Underwriter, without charge, such
number of conformed copies of the Registration Statement as originally filed and
of each amendment thereto, but without exhibits, as the Underwriter may request.
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(d) The Trust will not (i) file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus, or any sales
material (as herein defined), of which the Underwriter shall not previously have
been advised or to which the Underwriter shall reasonably object after being so
advised or (ii) so long as, in the opinion of counsel for the Underwriter, a
Prospectus is required by the 1933 Act to be delivered in connection with sales
by the Underwriter or any dealer, file any information, documents or reports
pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"),
without delivering a copy of such information, documents or reports to the
Underwriter prior to or concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the Trust has
delivered to the Underwriter, without charge, in such quantities as the
Underwriter has requested, copies of each form of the Prepricing Prospectus. The
Trust consents to the use, in accordance with the provisions of the 1933 Act and
with the state securities or blue sky laws of the jurisdictions in which the
Shares are offered by the Underwriter and by dealers, prior to the date of the
Prospectus, of each Prepricing Prospectus so furnished by the Trust.
(f) As soon after the execution and delivery of this Agreement as possible
and thereafter from time to time for such period as in the opinion of counsel
for the Underwriter a prospectus is required by the 1933 Act to be delivered in
connection with sales by the Underwriter or any dealer, the Trust will
expeditiously deliver to the Underwriter and each dealer, without charge, as
many copies of the Prospectus (and of any amendment or supplement thereto) as
the Underwriter may reasonably request. The Trust consents to the use of the
Prospectus (and of any amendment or supplement thereto) in accordance with the
provisions of the 1933 Act and with the state securities or blue sky laws of the
jurisdictions in which the Shares are offered by the Underwriter and by all
dealers to whom Shares may be sold, both in connection with the offering and
sale of the Shares and for such period of time thereafter as the Prospectus is
required by the 1933 Act to be delivered in connection with sales by the
Underwriter or any dealer. If during such period of time any event shall occur
that in the judgment of the Trust or in the opinion of counsel for the
Underwriter is required to be set forth in the Registration Statement or the
Prospectus (as then amended or supplemented) or should be set forth therein in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary to supplement or
amend the Registration Statement or the Prospectus to comply with the 1933 Act,
the 1940 Act, the Rules and Regulations or any other federal law, rule or
regulation, or any state securities or blue sky disclosure laws, rules or
regulations, the Trust will forthwith prepare and, subject to the provisions of
paragraph (d) above, promptly file with the Commission an appropriate supplement
or amendment thereto, and will expeditiously furnish to the Underwriter and
dealers, without charge, a reasonable number of copies thereof. In the event
that the Trust and the Underwriter agree that the Registration Statement or the
Prospectus should be amended or supplemented, the Trust, if requested by the
Underwriter, will promptly issue a press release announcing or disclosing the
matters to be covered by the proposed amendment or supplement.
(g) The Trust will make generally available to its security holders an
earnings statement, which need not be audited, covering a twelve-month period
ending not later than 15
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months after the effective date of the Registration Statement as soon as
practicable after the end of such period, which earnings statement shall satisfy
the provisions of Section 11(a) of the 1933 Act and Rule 158 of the 1933 Act
Rules and Regulations.
(h) During the period of five years hereafter, the Trust will furnish to
the Underwriter (i) as soon as available, a copy of each report of the Trust
mailed to stockholders or filed with the Commission or furnished to the New York
Stock Exchange (the "NYSE") other than reports on Form N-SAR, and (ii) from time
to time such other information concerning the Trust as the Underwriter may
reasonably request.
(i) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than by notice given by
the Underwriter terminating this Agreement pursuant to Section 12 hereof) or if
this Agreement shall be terminated by the Underwriter because of any failure or
refusal on the part of the Trust or the Advisor to comply with the terms or
fulfill any of the conditions of this Agreement, the Trust and the Advisor,
jointly and severally, agree to reimburse the Underwriter for all out-of-pocket
expenses (including reasonable fees and expenses of counsel for the Underwriter)
incurred by the Underwriter in connection herewith.
(j) The Trust will apply the net proceeds from the sale of the Shares
substantially in accordance with the description set forth in the Prospectus and
in such a manner as to comply with the investment objectives, policies and
restrictions of the Trust as described in the Prospectus.
(k) The Trust will timely file the requisite copies of the Prospectus with
the Commission pursuant to Rule 497(c) or Rule 497(h) of the 1933 Act Rules and
Regulations, whichever is applicable or, if applicable, will timely file the
certification permitted by Rule 497(j) of the 1933 Act Rules and Regulations and
will advise the Underwriter of the time and manner of such filing.
(l) Except as provided in this Agreement, the Trust will not sell,
contract to sell, or otherwise dispose of any senior securities (as defined in
the 1940 Act) of the Trust, or grant any options or warrants to purchase senior
securities of the Trust, for a period of 120 days after the date of the
Prospectus, without the prior written consent of the Underwriter.
(m) Except as stated in this Agreement and in the Prepricing Prospectus
and Prospectus, neither the Trust nor the Advisor has taken, nor will it take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of any
securities issued by the Trust to facilitate the sale or resale of the Shares.
(n) The Trust will use its best efforts to cause the Series W Municipal
Preferred, prior to the Closing Date, to be assigned a rating of 'aaa' by
Xxxxx'x Investors Service, Inc. ("Moody's") and AAA by Standard & Poor's Ratings
Services ("S&P" and, together with Moody's, the "Rating Agencies").
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(o) The Trust and the Advisor will use their best efforts to perform all
of the agreements required of them and discharge all conditions to closing as
set forth in this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF THE TRUST AND THE ADVISOR. The Trust
and the Advisor, jointly and severally, represent and warrant to the Underwriter
that:
(a) Each Prepricing Prospectus included as part of the registration
statement as originally filed or as part of any amendment or supplement thereto,
or filed pursuant to Rule 497 of the 1933 Act Rules and Regulations, complied
when so filed in all material respects with the provisions of the 1933 Act, the
1940 Act and the Rules and Regulations. The Commission has not issued any order
preventing or suspending the use of any Prepricing Prospectus.
(b) The registration statement in the form in which it became or becomes
effective and also in such form as it may be when any post-effective amendment
thereto shall become effective and the Prospectus and any supplement or
amendment thereto when filed with the Commission under Rule 497 of the 1933 Act
Rules and Regulations and the 1940 Act Notification when originally filed with
the Commission and any amendment or supplement thereto when filed with the
Commission, complied or will comply in all material respects with the provisions
of the 1933 Act, the 1940 Act and the Rules and Regulations and did not or will
not at any such times 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, except that this representation and warranty
does not apply to statements in or omissions from the registration statement or
the Prospectus made in reliance upon and in conformity with information relating
to the Underwriter furnished to the Trust in writing by or on behalf of the
Underwriter expressly for use therein.
(c) All the outstanding Common Shares (as defined in the Prospectus) of
the Trust have been duly authorized and validly issued, are fully paid and
nonassessable and are free of any preemptive or similar rights; the Shares have
been duly authorized and, when issued and delivered to the Underwriter against
payment therefor in accordance with the terms hereof, will be validly issued,
fully paid and nonassessable and free of any preemptive or similar rights and
will conform to the description thereof in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them); and the
capitalization of the Trust conforms to the description thereof in the
Registration Statement and the Prospectus (and any amendment or supplement to
either of them).
(d) The Trust is a business trust duly organized and validly existing in
good standing under the laws of the Commonwealth of Massachusetts with full
business trust power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them), and is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
so to register or qualify does not have a
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material adverse effect on the condition (financial or other), business,
prospects, properties, net assets or results of operations of the Trust; and the
Trust has no subsidiaries.
(e) There are no legal or governmental proceedings pending or, to the
knowledge of the Trust, threatened, against the Trust, or to which the Trust or
any of its properties is subject, that are required to be described in the
Registration Statement or the Prospectus (and any amendment or supplement to
either of them) but are not described as required, and there are no agreements,
contracts, indentures, leases or other instruments that are required to be
described in the Registration Statement or the Prospectus (and any amendment or
supplement to either of them) or to be filed as an exhibit to the Registration
Statement that are not described or filed as required by the 1933 Act, the 1940
Act or the Rules and Regulations.
(f) The Trust is not in violation of its Declaration of Trust (the
"Declaration") or its amended and restated bylaws (the "Bylaws") or other
organizational documents (together with the Declaration and Bylaws, the
"Organizational Documents"), or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Trust or of any decree of the
Commission, the NASD, any state securities commission, any national securities
exchange, any arbitrator, any court or governmental agency, body or official
having jurisdiction over the Trust, or in default in any material respect in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any material
agreement, indenture, lease or other instrument to which the Trust is a party or
by which it or any of its properties may be bound.
(g) Neither the issuance and sale of the Shares, the execution, delivery
or performance of this Agreement or any of the Trust Agreements by the Trust,
nor the consummation by the Trust of the transactions contemplated hereby or
thereby (i) requires any consent, approval, authorization or other order of or
registration or filing with, the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except such as may have been obtained prior to the date hereof and
such as may be required for compliance with the state securities or blue sky
laws of various jurisdictions which have been or will be effected in accordance
with this Agreement) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the Organizational Documents of the
Trust or (ii) conflicts or will conflict with or constitutes or will constitute
a breach of, or a default under, any agreement, indenture, lease or other
instrument to which the Trust is a party or by which it or any of its properties
may be bound, or violates or will violate any statute, law, regulation or
judgment, injunction, order or decree applicable to the Trust or any of its
properties, or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Trust pursuant to the terms of
any agreement or instrument to which it is a party or by which it may be bound
or to which any of its property or assets is subject. The Trust is not subject
to any order of any court or of any arbitrator, governmental authority or
administrative agency.
(h) The accountants, PricewaterhouseCoopers LLP, who have certified or
shall certify the financial statements included or incorporated by reference in
the Registration
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Statement and the Prospectus (or any amendment or supplement to either of them)
are independent public accountants as required by the 1933 Act, the 1940 Act and
the Rules and Regulations.
(i) The financial statements, together with related schedules and notes,
included or incorporated by reference in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them), present fairly
the financial position, results of operations and changes in financial position
of the Trust on the basis stated or incorporated by reference in the
Registration Statement at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data included
in the Registration Statement and the Prospectus (and any amendment or
supplement to either of them) are accurately presented and prepared on a basis
consistent with such financial statements and the books and records of the
Trust.
(j) The execution and delivery of, and the performance by the Trust of its
obligations under, this Agreement and the Trust Agreements have been duly and
validly authorized by the Trust, and this Agreement and the Trust Agreements
have been duly executed and delivered by the Trust and assuming due
authorization, execution and delivery by the other parties thereto, constitute
the valid and legally binding agreements of the Trust, enforceable against the
Trust in accordance with their terms (subject to the qualification that the
enforceability of the Trust's obligations thereunder may be limited by
bankruptcy, insolvency, reorganization, moratorium, and similar laws of general
applicability relating to or affecting creditors' rights, and to general
principles of equity regardless of whether enforceability is considered in a
proceeding in equity or at law), except as rights to indemnity and contribution
hereunder and thereunder may be limited by federal or state securities laws.
(k) Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement to either of them), subsequent to the respective
dates as of which such information is given in the Registration Statement and
the Prospectus (or any amendment or supplement to either of them), the Trust has
not incurred any liability or obligation, direct or contingent, or entered into
any transaction, not in the ordinary course of business, that is material to the
Trust, and there has not been any change in the capitalization, or material
increase in the short-term debt or long-term debt, of the Trust, or any material
adverse change, or any development involving or which may reasonably be expected
to involve, a prospective material adverse change, in the condition (financial
or other), business, prospects, properties, net assets or results of operations
of the Trust, whether or not arising in the ordinary course of business (a
"Material Adverse Effect").
(l) The Trust has not distributed and, prior to the later to occur of (i)
the Closing Date and (ii) completion of the distribution of the Shares, will not
distribute any offering material in connection with the offering and sale of the
Shares other than the Registration Statement, the Prepricing Prospectus, the
Prospectus or other materials, if any, permitted by the 1933 Act, the 1940 Act
or the Rules and Regulations.
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(m) (i) The Trust has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own its properties and to conduct its business in the manner
described in the Prospectus (and any amendment or supplement thereto), subject
to such qualifications as may be set forth in the Prospectus; (ii) the Trust has
fulfilled and performed all its material obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other material
impairment of the rights of the Trust under any such permit, subject in each
case to such qualification as may be set forth in the Prospectus (and any
amendment or supplement thereto); and (iii) except as described in the
Prospectus (and any amendment or supplement thereto), none of such permits
contains any restriction that is materially burdensome to the Trust, except
where the failure of (i), (ii) or (iii) to be accurate would not, individually
or in the aggregate, have a Material Adverse Effect on the Trust.
(n) The Trust maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization and with the
applicable requirements of the 1940 Act, the 1940 Act Rules and Regulations and
the Internal Revenue Code of 1986, as amended (the "Code"); (ii) transactions
are recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets and to maintain compliance with the books and records
requirements under the 1940 Act and the 1940 Act Rules and Regulations; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(o) The Trust has filed all tax returns required to be filed, which
returns are complete and correct in all material respects, and the Trust is not
in material default in the payment of any taxes which were payable pursuant to
said returns or any assessments with respect thereto.
(p) No holder of any security of the Trust has any right to require
registration of shares of beneficial interest, shares of Series W Municipal
Preferred or any other security of the Trust because of the filing of the
registration statement or consummation of the transactions contemplated by this
Agreement.
(q) The conduct by the Trust of its business (as described in the
Prospectus) does not require it to be the owner, possessor or licensee of any
patents, patent licenses, trademarks, service marks or trade names which it does
not own, possess or license.
(r) The Trust is registered under the 1940 Act as a closed-end
non-diversified management investment company and the 1940 Act Notification has
been duly filed with the Commission and, at the time of filing thereof and any
amendment or supplement thereto, conformed in all material respects with all
applicable provisions of the 1940 Act and the Rules and Regulations. The Trust
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
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conditions of the 1933 Act and the 1940 Act. No person is serving or acting as
an officer, director or investment Advisor of the Trust except in accordance
with the provisions of the 1940 Act and the 1940 Act Rules and Regulations and
the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and the
rules and regulations of the Commission promulgated under the Advisers Act (the
"Advisers Act Rules and Regulations").
(s) Except as stated in this Agreement and in the Prospectus (and any
amendment or supplement thereto), the Trust has not taken, nor will it take,
directly or indirectly, any action designed to or which might reasonably be
expected to cause or result in stabilization or manipulation of the price of any
securities issued by the Trust to facilitate the sale or resale of the Shares,
and the Trust is not aware of any such action taken or to be taken by any
affiliates of the Trust.
(t) The Trust has filed in a timely manner each document or report
required to be filed by it pursuant to the 1934 Act and the rules and
regulations of the Commission promulgated thereunder (the "1934 Act Rules and
Regulations"); each such document or report at the time it was filed conformed
to the requirements of the 1934 Act and the 1934 Act Rules and Regulations; and
none of such documents or reports contained an untrue statement of any material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(u) All advertising, sales literature or other promotional material
(including "prospectus wrappers," "broker kits," "road show slides" and "road
show scripts") authorized in writing by or prepared by the Trust or the Advisor
for use in connection with the offering and sale of the Shares (collectively
"sales material") complied and comply in all material respects with the
applicable requirements of the 1933 Act, the 1940 Act, the Rules and Regulations
and the rules and interpretations of the NASD and no such sales material
contained or contains an untrue statement of a material fact or omitted or omits
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.
(v) Each of the Trust Agreements and the Trust's and the Advisor's
obligations under this Agreement and each of the Trust Agreements comply in all
material respects with all applicable provisions of the 1940 Act, the 1940 Act
Rules and Regulations, the Advisers Act and the Advisers Act Rules and
Regulations.
(w) The Trust currently complies with all requirements under the Code to
qualify as a regulated investment company under Subchapter M of the Code.
(x) Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement to either of them), no director of the Trust is
an "interested person" (as defined in the 1940 Act) of the Trust or an
"affiliated person" (as defined in the 1940 Act) of the Underwriter.
(y) The Trust's Common Shares are duly listed on the NYSE.
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(z) The Advisor has considered, and is taking actions to address, the
possible adverse effects of the Year 2000 on the critical computer systems used
by the Advisor and its affiliates on behalf of the Trust. Testing and
remediation of those systems is complete and the Advisor has determined that
recognition and execution of date-sensitive functions involving certain dates
prior to and after December 31, 1999 (the "Year 2000 Problem") will not pose
significant problems for the computer systems used by the Advisor on behalf of
the Trust. The Advisor believes, after reasonable inquiry, that suppliers,
vendors, or financial service organizations used in the operation of the Trust
have remedied or will remedy the Year 2000 Problem and that those suppliers,
vendors or financial service organizations believe that their modifications will
be completed on a timely basis, except to the extent that a failure to remedy by
any such supplier, vendor, or financial service organization would not have a
material adverse effect on the operations of the Trust. The Trust is in
compliance with the Commission's Release No. 33-7558 related to Year 2000
compliance, as amended to date.
(aa) The proxy statement and all related materials distributed to holders
of Common Shares of the Trust in connection with the shareholder meeting held on
May 20, 1999, as adjourned to _______ __, 1999 (the "Shareholder Meeting") did
not, as of its date or the date of the Shareholder Meeting, 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, and
the holders of the Common Shares duly approved all of the items proposed at such
meeting, in accordance with the Organizational Documents of the Trust and
applicable law.
7. REPRESENTATIONS AND WARRANTIES OF THE ADVISOR. The Advisor represents
and warrants to the Underwriter as follows:
(a) The Advisor is a corporation duly incorporated and validly existing in
good standing under the laws of the Commonwealth of Massachusetts, with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them), and is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
so to register or to qualify does not have a material adverse effect on the
condition (financial or other), business, prospects, properties, net assets or
results of operations of the Advisor or on the ability of the Advisor to perform
its obligations under this Agreement and the Management Agreement.
(b) The Advisor is duly registered with the Commission as an investment
advisor under the Advisers Act and is not prohibited by the Advisers Act, the
Advisers Act Rules and Regulations, the 1940 Act or the 1940 Act Rules and
Regulations from acting under the Management Agreement for the Trust as
contemplated by the Prospectus (or any amendment or supplement thereto). There
does not exist any proceeding or any facts or circumstances the existence of
which could lead to any proceeding which might adversely affect the registration
of the Advisor with the Commission.
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(c) There are no legal or governmental proceedings pending or, to the
knowledge of the Advisor, threatened against the Advisor, or to which the
Advisor or any of its properties is subject, that are required to be described
in the Registration Statement or the Prospectus (or any amendment or supplement
to either of them) but are not described as required or that may reasonably be
expected to involve a prospective material adverse change, in the condition
(financial or other), business, prospects, properties, net assets or results of
operations of the Advisor or on the ability of the Advisor to perform its
obligations under this Agreement and the Management Agreement.
(d) Neither the execution, delivery or performance of this Agreement or
the performance of the Management Agreement by the Advisor, nor the consummation
by the Advisor of the transactions contemplated hereby or thereby (A) requires
the Advisor to obtain any consent, approval, authorization or other order of or
registration or filing with, the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court,
regulatory body, administrative agency or other governmental body, agency or
official or conflicts or will conflict with or constitutes or will constitute a
breach of or a default under, the certificate of incorporation or by-laws, or
other organizational documents, of the Advisor or (B) conflicts or will conflict
with or constitutes or will constitute a breach of or a default under, any
agreement, indenture, lease or other instrument to which the Advisor is a party
or by which it or any of its properties may be bound, or violates or will
violate any statute, law, regulation or filing or judgment, injunction, order or
decree applicable to the Advisor or any of its properties or will result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Advisor pursuant to the terms of any agreement or instrument to
which it is a party or by which it may be bound or to which any of the property
or assets of the Advisor is subject. The Advisor is not subject to any order of
any court or of any arbitrator, governmental authority or administrative agency.
(e) The execution and delivery of, and the performance by the Advisor of
its obligations under, this Agreement and the Management Agreement have been
duly and validly authorized by the Advisor, and this Agreement and the
Management Agreement have been duly executed and delivered by the Advisor and
each constitutes the valid and legally binding agreement of the Advisor,
enforceable against the Advisor in accordance with its terms (subject to the
qualification that the enforceability of the Advisor's obligations thereunder
may be limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights, and to
general principles of equity regardless of whether enforceability is considered
in a proceeding in equity or at law), except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws.
(f) The description of the Advisor in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) complied and comply in all
material respects with the provisions of the 1933 Act, the 1940 Act, the
Advisers Act, the Rules and Regulations and the Advisers Act Rules and
Regulations and did not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
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(g) Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement to either of them), subsequent to the respective
dates as of which such information is given in the Registration Statement and
the Prospectus (or any amendment or supplement to either of them), the Advisor
has not incurred any liability or obligation, direct or contingent, or entered
into any transaction, not in the ordinary course of business, that is material
to the Advisor or the Trust and that is required to be disclosed in the
Registration Statement or the Prospectus and there has not been any material
adverse change, or any development involving or which may reasonably be expected
to involve, a prospective material adverse change, in the condition (financial
or other), business, prospects, properties, net assets or results of operations
of the Advisor, whether or not arising in the ordinary course of business, or
which, in each case, could have a material adverse effect on the ability of the
Advisor to perform its obligations under this Agreement and the Management
Agreement.
(h) (i) The Advisor has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own its properties and to conduct its business in the manner
described in the Prospectus (and any amendment thereto); (ii) the Advisor has
fulfilled and performed all its material obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other material
impairment of the rights of the Advisor under any such permit; and (iii) except
as described in the Prospectus (and any amendment or supplement thereto), none
of such permits contains any restriction that is materially burdensome to the
Advisor, except where the failure of (i), (ii), or (iii) to be accurate would
not, individually or in the aggregate, have a Material Adverse Effect on the
Advisor.
(8) INDEMNIFICATION AND CONTRIBUTION. (a) The Trust and the Advisor,
jointly and severally, agree to indemnify and hold harmless each of the
Underwriter and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act from and
against any and all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation), joint or several, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Prepricing Prospectus or in the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or expenses arise
out of or are based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in
reliance upon and in conformity with the information relating to the Underwriter
furnished in writing to the Trust by or on behalf of the Underwriter expressly
for use in connection therewith; provided, however, that the indemnification
contained in this paragraph (a) with respect to any Prepricing Prospectus shall
not inure to the benefit of the Underwriter (or to the benefit of any person
controlling the Underwriter) on account of any such loss, claim, damage,
liability or expense arising from the sale of the Shares by the Underwriter to
any person if a copy of the Prospectus shall not have been delivered or sent to
such person within the time required by the 1933 Act and the 1933 Act Rules and
Regulations, and the untrue statement or alleged untrue statement or omission or
alleged omission of a material fact contained in such Prepricing Prospectus was
corrected in the
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Prospectus, provided that the Trust has delivered the Prospectus to the
Underwriter in requisite quantity on a timely basis to permit such delivery or
sending. The foregoing indemnity agreement shall be in addition to any liability
which the Trust or the Advisor may otherwise have.
(b) Any party that proposes to assert the right to be indemnified under
this Section 8 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 8, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission to so notify such indemnifying party (i) will
not relieve it from any liability that it may have to any indemnified party
under the foregoing provision of this Section 8 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party and (ii) will not, in any event, relieve such
indemnifying party from any other obligation (other than pursuant to the
foregoing provision of this Section 8) it may have under this Agreement. If any
action, suit or proceeding shall be brought against the Underwriter or any
person controlling the Underwriter in respect of which indemnity may be sought
against the Trust or the Advisor, the Underwriter or such controlling person
shall promptly notify the Trust or the Advisor, and the Trust or the Advisor
may, at its option and upon notice to the Underwriter assume the defense
thereof, including the employment of counsel and payment of all fees and
expenses. The Underwriter or any such controlling person shall have the right to
employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Underwriter or such controlling person unless (i)
the Trust or the Advisor has agreed in writing to pay such fees and expenses,
(ii) the Trust and the Advisor have failed to assume the defense and employ
counsel, or (iii) the named parties to any such action, suit or proceeding
(including any impleaded parties) include both the Underwriter or such
controlling person and the Trust or the Advisor and the Underwriter or such
controlling person shall have been advised by its counsel that representation of
such indemnified party and the Trust or the Advisor by the same counsel would be
inappropriate under applicable standards of professional conduct (whether or not
such representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the Trust and the
Advisor shall not have the right to assume the defense of such action, suit or
proceeding on behalf of the Underwriter or such controlling person). It is
understood, however, that the Trust and the Advisor shall, in connection with
any one such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for the Underwriter and controlling persons not having
actual or potential differing interests with you or among themselves, which firm
shall be designated in writing by the Underwriter, and that all such fees and
expenses shall be reimbursed as they are incurred. The Trust and the Advisor
shall not be liable for any settlement of any such action, suit or proceeding
effected without its written consent (which shall not be unreasonably withheld),
but if settled with such written consent, or if there be a final judgment for
the plaintiff in any such action, suit or proceeding, the Trust and the Advisor
agree to indemnify and hold harmless the Underwriter, to the extent provided in
the
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preceding paragraph, and any such controlling person from and against any loss,
claim, damage, liability or reasonable expense by reason of such settlement or
judgment.
(c) The Underwriter agrees to indemnify and hold harmless the Trust and
the Advisor, their directors, trustees and officers who sign the Registration
Statement, and any person who controls the Trust or the Advisor within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, to the same
extent as the foregoing indemnity from the Trust and the Advisor to the
Underwriter, but only with respect to information relating to the Underwriter
furnished in writing by or on behalf of the Underwriter expressly for use in the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto. If any action, suit or proceeding shall be
brought against the Trust or the Advisor, any of their directors, any such
officer, or any such controlling person based on the Registration Statement, the
Prospectus or any Prepricing Prospectus, or any amendment or supplement thereto,
and in respect of which indemnity may be sought against the Underwriter pursuant
to this paragraph (c), the Underwriter shall have the rights and duties given to
the Trust and the Advisor by paragraph (b) above (except that if the Trust or
the Advisor shall have assumed the defense thereof the Underwriter shall not be
required to do so, but may employ separate counsel therein and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
Underwriter's expense), and the Trust and the Advisor, their directors, trustees
and any such officer, and any such controlling person shall have the rights and
duties given to the Underwriter by paragraph (b) above. The foregoing indemnity
agreement shall be in addition to any liability which the Underwriter may
otherwise have.
(d) If the indemnification provided for in this Section 8 is unavailable
to an indemnified party under paragraphs (a) or (c) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or reasonable expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Trust and the Advisor on the one hand (treated jointly for this purpose as one
person) and the Underwriter on the other hand from the offering of the Shares,
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Trust and the Advisor on the one hand (treated jointly for this purpose as
one person) and the Underwriter on the other in connection with the statements
or omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations with respect to
the offering of the Shares. The relative benefits received by the Trust and the
Advisor on the one hand (treated jointly for this purpose as one person) and the
Underwriter on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Trust bear to the total underwriting discounts and commissions received by the
Underwriter, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Trust and the Advisor on the one hand
(treated jointly for this purpose as one person) and the Underwriter on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
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the Trust and the Advisor on the one hand (treated jointly for this purpose as
one person) or by the Underwriter on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action against such party in
respect of which a claim for contribution may be made under this Section 8(d),
notify such party or parties from whom contribution may be sought, but the
omission so to notify (i) will not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have under
this Section 8(d), unless such omission results in the forfeiture of substantive
rights or defenses by the party or parties from whom contribution is being
sought and (ii) will not, in any event, relieve the party or parties from whom
contribution may be sought from any other obligation (other than pursuant to
this Section 8(d)) it or they may have under this Agreement. Except for a
settlement entered into pursuant to the last sentence of Section 8(b) hereof, no
party will be liable for contribution with respect to any action or claim
settled without its written consent (which consent shall not be unreasonably
withheld).
(e) The Trust, the Advisor and the Underwriter agree that it would not be
just and equitable if contribution pursuant to this Section 8 were determined by
a pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 8, the Underwriter
shall not be required to contribute any amount in excess of the amount by which
the total price of the Shares underwritten by it and distributed to the public
exceeds the amount of any damages which the Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
(f) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding.
(g) Notwithstanding any other provisions in this Section 8, no party shall
be entitled to the benefit of any provision under this Agreement which protects
or purports to protect such person against any liability to the Trust or its
security holders to which such person would otherwise be subject by reason of
such person's willful misfeasance, bad faith, or gross negligence, in the
performance of such person's duties hereunder, or by reason of such person's
reckless disregard of such person's obligations and duties hereunder.
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(h) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Trust and the Advisor set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of the Underwriter or any person
controlling the Underwriter, the Trust, the Advisor, their directors or
officers, or any person controlling the Trust or the Advisor, (ii) acceptance of
any Shares and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to the Underwriter or any person controlling the
Underwriter, or to the Trust, the Advisor, their directors or officers, or any
person controlling the Trust or the Advisor, shall be entitled to the benefits
of the indemnity, contribution, and reimbursement agreements contained in this
Section 8.
9. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligation of the
Underwriter to purchase the Shares hereunder are subject to the following
conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
registration statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by the
Underwriter, and all filings, if any, required by Rules 497 and 430A under the
1933 Act and the 1933 Act Rules and Regulations shall have been timely made; no
stop order suspending the effectiveness of the Registration Statement or order
pursuant to Section 8(e) of the 1940 Act shall have been issued and no
proceeding for those purposes shall have been instituted or, to the knowledge of
the Trust, the Advisor or the Underwriter, threatened by the Commission, and any
request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with to the Underwriter's reasonable satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall not
have occurred (i) any change or any development involving a prospective change
in or affecting the condition (financial or other), business, prospects,
properties, net assets, or results of operations of the Trust or the Advisor not
contemplated by the Prospectus, which in the Underwriter's reasonable opinion
would materially and adversely affect the market for the Shares, or (ii) any
event or development relating to or involving the Trust or the Advisor or any
officer or director of the Trust or the Advisor which makes any statement made
in the Prospectus untrue or which, in the reasonable opinion of the Trust and
its counsel or the Underwriter and its counsel, requires the making of any
addition to or change in the Prospectus in order to state a material fact
required by the 1933 Act, the 1940 Act or the Rules and Regulations or any other
law to be stated therein or necessary in order to make the statements therein
not misleading, if amending or supplementing the Prospectus to reflect such
event or development would, in the Underwriter's opinion, materially adversely
affect the market for the Shares.
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(c) The Trust shall have furnished to the Underwriter a report showing
compliance with the asset coverage requirements of the 1940 Act and a Basic
Maintenance Report (as defined in the By-laws), each dated the Closing Date and
in form and substance satisfactory to the Underwriter. Each such report may use
portfolio holdings and valuations as of the close of business of any day not
more than six business days preceding the Closing Date, provided, however, that
the Trust represents in such report that its total net assets as of the Closing
Date have not declined by 5% or more from such valuation date.
(d) The Underwriter shall have received on the Closing Date, an opinion of
Ropes & Gray, counsel for the Trust, dated the Closing Date and addressed to the
Underwriter, in form and substance satisfactory to the Underwriter and to the
effect set forth in Exhibit A hereto.
(e) The Underwriter shall have received on the Closing Date an opinion of
the General Counsel for the Advisor, dated the Closing Date and addressed to the
Underwriter, in form and substance satisfactory to the Underwriter and to the
effect set forth in Exhibit B hereto.
(f) The Underwriter shall have received on the Closing Date an opinion of
Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Underwriter, dated the Closing Date
and addressed to the Underwriter, with respect to such matters as the
Underwriter may reasonably request.
(g) The Underwriter shall have received letters addressed to the
Underwriter and dated the date hereof and the Closing Date from
PricewaterhouseCoopers LLP, independent certified public accountants,
substantially in the forms heretofore approved by the Underwriter.
(h) (i) No order suspending the effectiveness of the Registration
Statement or prohibiting or suspending the use of the Prospectus (or any
amendment or supplement thereto) or any Prepricing Prospectus or any sales
material shall have been issued and no proceedings for such purpose or for the
purpose of commencing an enforcement action against the Trust, the Advisor or,
with respect to the transactions contemplated by the Prospectus (or any
amendment or supplement thereto) and this Agreement, the Underwriter, may be
pending before or, to the knowledge of the Trust, the Advisor or the Underwriter
or in the reasonable view of counsel to the Underwriter, shall be threatened or
contemplated by the Commission at or prior to the Closing Date and that any
request for additional information on the part of the Commission (to be included
in the Registration Statement, the Prospectus or otherwise) be complied with to
the satisfaction of the Underwriter; (ii) there shall not have been any change
in the shares of beneficial interest of the Trust nor any material increase in
the short-term or long-term debt of the Trust (other than in the ordinary course
of business) from that set forth or contemplated in the Registration Statement
or the Prospectus (or any amendment or supplement thereto); (iii) there shall
not have been, subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus (or any amendment or
supplement thereto), except as may otherwise be stated in the Registration
Statement and Prospectus (or any amendment or supplement thereto), any material
adverse change in the condition (financial or other), business, prospects,
properties, net assets or results of operations of the Trust or the Advisor;
(iv) the Trust shall not have any liabilities or obligations, direct or
contingent (whether or not in the ordinary course of business), that are
material to the Trust, other than those reflected in the Registration
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Statement or the Prospectus (or any amendment or supplement to either of them);
and (v) all the representations and warranties of the Trust and the Advisor
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date, and the Underwriter shall have received a certificate of the Trust and the
Advisor, dated the Closing Date and signed by the chief executive officer and
the chief financial officer of each of the Trust and the Advisor (or such other
officers as are acceptable to the Underwriter), to the effect set forth in this
Section 9(h) and in Section 9(i) hereof.
(i) Neither the Trust nor the Advisor shall have failed at or prior to the
Closing Date to have performed or complied in all material respects with any of
its agreements herein contained and required to be performed or complied with by
it hereunder at or prior to the Closing Date.
(j) The Trust shall have delivered and the Underwriter shall have received
evidence satisfactory to the Underwriter that the Shares are rated 'aaa' by
Xxxxx'x and AAA by S&P as of the Closing Date, and there shall not have been
given any notice of any intended or potential downgrading, or of any review for
a potential downgrading, in the rating accorded to the shares of Series W
Municipal Preferred by any Rating Agency.
(k) The Trust and the Advisor shall have furnished or caused to be
furnished to the Underwriter such further certificates and documents as the
Underwriter shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Underwriter and the Underwriter's counsel.
Any certificate or document signed by any officer of the Trust or the
Advisor and delivered to the Underwriter, or to counsel for the Underwriter,
shall be deemed a representation and warranty by the Trust or the Advisor to the
Underwriter as to the statements made therein.
10. EXPENSES. The Trust agrees to pay the following costs and expenses and
all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing or reproduction, and filing
with the Commission of the registration statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the 1940 Act
Notification, the Prospectus and each amendment or supplement to any of them
(including, without limitation, the filing fees prescribed by the 1933 Act, the
1940 Act and the Rules and Regulations); (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, each Prepricing
Prospectus, the Prospectus, any sales material and all amendments or supplements
to any of them as may be reasonably requested for use in connection with the
offering and sale of the Shares; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares, including
any stamp taxes in connection with the original issuance and sale of the Shares;
(iv) the reproduction and delivery of this Agreement, any dealer agreements, the
preliminary blue sky memorandum, if any, and all other agreements or
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documents reproduced and delivered in connection with the offering of the
Shares; (v) the registration of the Shares under the 1934 Act; (vi) the
reasonable fees, expenses and disbursements of counsel for the Underwriter
relating to the preparation, reproduction, and delivery of any preliminary blue
sky memorandum; (vii) fees paid to the Rating Agencies; (viii) the
transportation and other expenses incurred by or on behalf of Trust
representatives in connection with presentations to prospective purchasers of
the Shares; and (ix) the fees and expenses of the Trust's accountants and the
fees and expenses of counsel (including local and special counsel) for the
Trust; provided, that (a) the Trust, the Advisor and the Underwriter shall pay
its own costs and expenses in attending any information meeting relating to the
Trust, (b) the Underwriter shall pay the costs and expenses of any sales
material prepared by it in connection with the public offering of the Shares,
(c) the Underwriter shall pay the costs and expenses of any "tombstone"
advertisements, and (d) except as provided in this Section and in Section 5
hereof, the Underwriter shall pay its own costs and expenses, including the fees
and expenses of their counsel.
11. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
registration statement or a post-effective amendment thereto to be declared
effective before the offering of the Shares may commence, when notification of
the effectiveness of the registration statement or such post-effective amendment
has been released by the Commission. Until such time as this Agreement shall
have become effective, it may be terminated by the Trust, by notifying the
Underwriter, or by the Underwriter, by notifying the Trust. Any notice under
this Section 11 may be given by telegram, telecopy or telephone but shall be
subsequently confirmed by letter.
12. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in the Underwriter's absolute discretion, without liability on the
part of the Underwriter to the Trust or the Advisor, by notice to the Trust, if
prior to the Closing Date (i) trading in securities generally on the NYSE shall
have been suspended or materially limited, (ii) a general moratorium on
commercial banking activities in New York shall have been declared by either
federal or state authorities, or (iii) there shall have occurred any outbreak or
escalation of hostilities or other international or domestic calamity, crisis or
change in political, financial or economic conditions, the effect of which on
the financial markets of the United States is to make it, in the Underwriter's
judgment, impracticable or inadvisable to commence or continue the offering of
the Shares at the offering price to the public set forth on the cover page of
the Prospectus or to enforce contracts for the resale of the Shares by the
Underwriter. Notice of such termination may be given to the Trust by telegram,
telecopy or telephone and shall be subsequently confirmed by letter.
13. INFORMATION FURNISHED BY THE UNDERWRITER. The statements set forth in
the last paragraph on the cover page and the statements in the first and fourth
sentences of the third paragraph and in the fifth paragraph under the caption
"Underwriting" in any Prepricing Prospectus and in the Prospectus, constitute
the only information furnished by or on behalf of the Underwriter as such
information is referred to in Sections 6(b) and 8 hereof.
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14. MISCELLANEOUS. Except as otherwise provided in Sections 5, 11 and 12
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Trust or the Advisor, at the office
of the Trust at Xxx Xxxxxxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Secretary; or
(ii) if to the Underwriter, to Xxxxxxx Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Manager, Investment Banking Division.
15. DISCLAIMER. A copy of the document establishing the Trust is filed
with the Secretary of the Commonwealth of Massachusetts. This Agreement is
executed by officers not as individuals and is not binding upon any of the
Trustees, officers, or shareholders of the Trust individually but only upon the
assets of the Trust.
This Agreement has been and is made solely for the benefit of the
Underwriter, the Trust, the Advisor, their directors and officers, and the other
controlling persons referred to in Section 8 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from the Underwriter of any of the Shares in his
status as such purchaser.
16. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
[End of Text]
23
Please confirm that the foregoing correctly sets forth the agreement among
the Trust, the Advisor and the Underwriter.
Very truly yours,
COLONIAL HIGH INCOME MUNICIPAL TRUST
By:
-------------------------------------
COLONIAL MANAGEMENT ASSOCIATES, INC.
By:
-------------------------------------
Confirmed as of the date first
above mentioned.
XXXXXXX XXXXX XXXXXX INC.
By:
--------------------------------
Managing Director
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SCHEDULE I
COLONIAL HIGH INCOME MUNICIPAL TRUST
Number of
Shares of
Series W
Municipal
Underwriter Preferred
----------- ---------
Xxxxxxx Xxxxx Xxxxxx Inc. 2,400
-------
Total 2,400
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EXHIBIT A
FORM OF OPINION OF ROPES & GRAY
The Underwriter shall have received on the Closing Date an opinion of
Ropes & Gray, counsel for the Trust, dated the Closing Date and addressed to the
Underwriter, in form and substance satisfactory to the Underwriter and to the
effect that:
a. The Trust is a business trust duly organized and validly existing
in good standing under the laws of the Commonwealth of
Massachusetts with full power and authority to own, lease and
operate its properties and to conduct its business as described
in the Registration Statement and the Prospectus and to issue and
sell the Shares as contemplated by the Underwriting Agreement;
b. The Shares have been duly authorized and, when issued and
delivered to the Underwriter against payment therefor in
accordance with the terms of the Underwriting Agreement, will be
validly issued, fully paid and nonassessable and free of any
preemptive or similar rights and will conform to the description
thereof in the Registration Statement and the Prospectus; the
Certificate evidencing the Shares complies with all requirements
of Massachusetts law; and the relative rights, interests, powers
and preferences of the Shares, and the obligation of the Trust to
redeem such Shares upon the terms and conditions set forth in the
By-Laws, are legal, valid, binding and enforceable under
Massachusetts law;
c. The Shares conform in all material respects with the statements
concerning them contained in the Prospectus, and the authorized
and outstanding shares of beneficial interest of the Trust are as
set forth in the Prospectus;
d. The Registration Statement is effective under the 1933 Act and
the 1940 Act; any required filing of the Prospectus pursuant to
Rule 497 of the 1933 Act Rules and Regulations has been made
within the time periods required by Rule 497(b) or (h), as the
case may be; to the best knowledge of such counsel, no stop order
suspending its effectiveness or order pursuant to Section 8(e) of
the 1940 Act relating to the Trust has been issued and no
proceeding for any such purpose is pending or threatened by the
Commission;
e. The Registration Statement and the Prospectus comply as to form
in all material respects with the provisions of the 1933 Act, the
1940 Act and the Rules and Regulations (except that no opinion
need be expressed as to the financial statements or other
financial data contained therein);
f. The statements made in the Prospectus (including the Statement of
Additional Information) under the captions "The Auction" and
"Description of Municipal
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Preferred", insofar as they purport to summarize the provisions
of the Bylaws or other documents or agreements specifically
referred to therein, constitute accurate summaries of the terms
of any such documents;
g. The statements made in the Prospectus (including the Statement of
Additional Information) under the captions "Tax Matters", insofar
as they constitute matters of law or legal conclusions, have been
reviewed by such counsel and constitute accurate statements of
any such matters of law or legal conclusions in all material
respects, and fairly present the information called for with
respect thereto by Form N-2 under the 1940 Act;
h. To such counsel's knowledge (but without a search of the dockets
of any court, administrative body or filing office in any
jurisdiction), there are no legal or governmental proceedings
pending or threatened against the Trust, or to which the Trust or
any of its properties is subject, that are required to be
described in the Registration Statement or the Prospectus but are
not described as required;
i. To the best of such counsel's knowledge after reasonable inquiry,
there are no agreements, contracts, indentures, leases or other
instruments 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 by the 1933 Act, the 1940 Act or the Rules and
Regulations;
j. Neither the issuance and sale of the Shares, the execution,
delivery or performance of the Underwriting Agreement or any of
the Trust Agreements by the Trust, nor the consummation by the
Trust of the transactions contemplated thereby (A) requires any
consent, approval, authorization or other order of or
registration or filing by the Trust with the Commission, the
NASD, any national securities exchange, any arbitrator, any
court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may have
been obtained prior to the date hereof and such as may be
required for compliance with state securities and blue sky laws)
or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the Declaration, the
By-Laws or other organizational documents of the Trust or (B) (i)
conflicts or will conflict with or constitutes or will constitute
a breach of, or a default under, any agreement, indenture, lease
or other instrument to which the Trust is a party or by which it
or any of its properties may be bound and that is identified, in
an officer's certificate of the Trust, as material to the
business, financial condition, operations, properties or
prospects of the Trust (the "Agreements and Instruments"), (ii)
violates or will violate any statute, law or regulation (assuming
compliance with state securities and blue sky laws), (iii)
violates or will violate any judgment, injunction, order or
decree that is applicable to the Trust or any of its properties
and that is known to such counsel, or (iv) will result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Trust pursuant to the terms of the
Agreements and Instruments;
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3
k. The Underwriting Agreement and the Trust Agreements have been
duly authorized, executed and delivered by the Trust and each
complies with all applicable provisions of the 1940 Act; assuming
due authorization, execution and delivery by the other parties
thereto, each Trust Agreement constitutes the valid and binding
obligation of the Trust enforceable in accordance with its terms,
except as rights to indemnity and contribution in the
Underwriting Agreements and Trust Agreements may be limited by
Federal or state securities laws, subject as to enforcement to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles;
l. The Trust is duly registered under the 1940 Act as a closed-end
non-diversified management investment company;
m. The provisions of the Declaration and By-Laws of the Trust and
the investment policies and restrictions described in the
Prospectus (including the Statement of Additional Information)
under the captions "Investment Objectives and Policies" and
"Miscellaneous Investment Practices" comply with the requirements
of the 1940 Act and the 1940 Act Rules and Regulations; and
n. The portions of the proxy statement and all related materials
distributed to holders of Common Shares of the Trust in
connection with the shareholder meeting held on May 20, 1999, as
adjourned to ________ __, 1999 (the "Shareholder Meeting"), and
in connection with amending the Declaration to permit the
issuance of preferred shares (the "Preferred Share Proxy
Materials") did not, as of its date or the date of the
Shareholder Meeting, 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, and the Preferred Share Proxy Materials complied as
to form, as of its date and as of the date of the Shareholder
Meeting, in all material respects with the provisions of the 1934
Act, the 1940 Act and the Rules and Regulations.
Such counsel shall also have furnished to the Underwriter a statement,
addressed to the Underwriter, dated the Closing Date, to the effect that such
counsel has acted for the Trust in connection with the preparation of the
Registration Statement, and based on the foregoing, while such counsel has not
themselves independently verified the accuracy or completeness of or otherwise
verified and is not passing upon and assumes no responsibility for the
Registration Statement or the Prospectus (other than as set forth in (f), (g)
and (m) above) in the course of their review of the Registration Statement and
Prospectus and discussion of the contents of the Registration Statement and
Prospectus with certain officers and employees of the Trust and its independent
accountants, no facts have come to the attention of such counsel which would
lead them to believe that the Registration Statement (excluding the financial
statements, including the notes and schedules thereto, or other financial data
contained or referred to therein, as to which such counsel need express no
belief), as of its effective date, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
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necessary in order to make the statements therein not misleading or that the
Prospectus (except for the financial statements, including the notes and
schedules thereto, or other financial data contained or referred to therein, as
to which such counsel need express no belief) contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Such counsel may also state that they do not express any opinion
concerning any law other than the law of the Commonwealth of Massachusetts and
the federal law of the United States.
29
EXHIBIT B
FORM OF OPINION OF GENERAL COUNSEL OF ADVISER
The Underwriter shall have received on the Closing Date an opinion of
the General Counsel of the Advisor, addressed to the Underwriter and dated the
Closing Date, in form and substance satisfactory to the Underwriter and to the
effect that:
a. The Advisor is a corporation duly incorporated and validly
existing and in good standing under the laws of The Commonwealth
of Massachusetts, with full corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus;
b. The Underwriting Agreement and the Management Agreement have been
duly authorized, executed and delivered by the Advisor and each
complies with all applicable provisions of the Advisers Act and
the Management Agreement constitutes the valid and binding
obligation of the Advisor enforceable in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency,
reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity
principles;
c. The Advisor is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited
by the Advisers Act, the Advisers Act Rules and Regulations, the
1940 Act or the 1940 Act Rules and Regulations from acting under
the Management Agreement for the Trust as contemplated by the
Prospectus;
d. To the best of such counsel's knowledge after reasonable inquiry,
there are no legal or governmental proceedings pending or
threatened against the Advisor, or to which the Advisor or any of
its properties is subject, that are required to be described in
the Registration Statement or the Prospectus but are not
described as required;
e. To the best of such counsel's knowledge after reasonable inquiry,
the Advisor is not in violation of its corporate charter or
by-laws, nor is the Advisor in default under any material
agreement, indenture or instrument or in breach or violation of
any judgment, decree, order, rule or regulation of any court or
governmental or self-regulatory agency or body;
f. Neither the execution, delivery or performance of the
Underwriting Agreement nor the consummation by the Advisor of the
transactions contemplated hereby or thereby (A) requires the
Advisor to obtain any consent, approval, authorization or other
order of or registration or filing with, the Commission, the
NASD, any national securities exchange, any arbitrator, any
court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may have
been obtained prior to the date hereof and such as may be
required for compliance with state securities or blue sky laws)
or conflicts or will conflict with or constitutes or will
constitute a breach of, or
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2
a default under, the certificate of incorporation or by-laws, or
other organizational documents, of the Advisor or (B) (i)
conflicts or will conflict with or constitutes or will constitute
a breach of, or a default under, any material agreement,
indenture, lease or other instrument to which the Trust is a
party or by which it or any of its properties may be bound (the
"Agreements and Instruments") or any other Agreements and
Instruments known to such counsel after due inquiry, (ii)
violates or will violate any statute, law or regulation (assuming
compliance with state securities and blue sky laws), (iii)
violates or will violate any judgment, injunction, order or
decree that is applicable to the Advisor or any of its properties
and that is known to such counsel, or (iv) will result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Advisor pursuant to the terms of
the Agreements and Instruments; and
g. The description of the Advisor in the Registration Statement and
the Prospectus does not contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
