EXHIBIT h.1
FundPreferred(TM) shares
NUVEEN QUALITY PREFERRED INCOME FUND 3
3,320 Shares, Series M
3,320 Shares, Series TH
Liquidation Preference $25,000 Per Share
UNDERWRITING AGREEMENT
________, 2003
XXXXXXX XXXXX XXXXXX INC.
NUVEEN INVESTMENTS, LLC
X.X. XXXXXXX & SONS, INC.
PRUDENTIAL SECURITIES INCORPORATED
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Nuveen Quality Preferred Income Fund 3, a Massachusetts
business trust (the "Fund"), proposes, upon the terms and conditions set forth
herein, to issue and sell an aggregate of 3,320 shares of its Series M and 3,320
shares of its Series TH FundPreferred(TM) shares (the "FundPreferred shares"),
par value $.01 per share, with a liquidation preference of $25,000 per share
(the shares of FundPreferred shares to be sold hereby are referred to herein,
collectively, as the "Shares"). The Shares will be authorized by, and subject to
the terms and conditions of, the Statement Establishing and Fixing the Rights
and Preferences of FundPreferred shares (the "Statement") in the form filed as
an exhibit to the registration statement referred to in Section 1 of this
Underwriting Agreement (the "Agreement"). Nuveen Institutional Advisory Corp., a
Delaware corporation (the "Investment Adviser"), is the Fund's investment
adviser. Spectrum Asset Management, Inc., a Connecticut corporation (the
"Subadviser", and together with the Investment Adviser, the "Advisers"), is the
Fund's subadviser. This is to confirm the agreement concerning the purchase of
the Shares from the Fund by Xxxxxxx Xxxxx Xxxxxx Inc. (the "Representative"),
Nuveen Investments, LLC, X.X. Xxxxxxx & Sons, Inc. and Prudential Securities
Incorporated (each an "Underwriter", and together with the Representative, the
"Underwriters"). We understand that the Representative has been duly authorized
by each of the Underwriters to execute this Agreement on behalf of such
Underwriters and has been duly authorized to act hereunder on behalf of each of
the Underwriters.
The Fund has entered into an investment management agreement
with the Investment Adviser dated December 4, 2002, a Master Custodian Agreement
with State Street Bank and Trust Company dated as of August 19, 2002 and
effective as of December 23, 2002, and a Transfer Agency Agreement with State
Street Bank and Trust Company dated October 7,
2
2002, and an auction agency agreement, including the Basic Terms in respect
thereof, with The Bank of New York to be dated as of the Closing Date and
substantially in the form as filed with the Registration Statement. Such
agreements are hereinafter referred to as the "Investment Management Agreement",
the "Custodian Agreement", the "Transfer Agency Agreement" and the "Auction
Agency Agreement", respectively. The Investment Adviser has entered into an
investment sub-advisory agreement with the Subadviser dated December 16, 2002
and such agreement is herein referred to as the "Sub-Advisory Agreement".
Collectively, the Investment Management Agreement, the Custodian Agreement, the
Transfer Agency Agreement and the Auction Agency Agreement are hereinafter
collectively referred to as the "Fund Agreements".
1. Registration Statement and Prospectus. The Fund has
prepared and filed with the Securities and Exchange Commission (the
"Commission"), in accordance 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 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
under the 1933 Act and the 1940 Act (the "registration statement"), including a
prospectus (including any statement of additional information) relating to the
Shares. The Fund also has filed a notification of registration of the Fund 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, and includes any
information deemed to be included by Rule 430A under the 1933 Act Rules and
Regulations. 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 Fund
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 or statement of additional information included in the Registration
Statement omits information in reliance on Rule 430A under the 1933 Act, all
references to the Prospectus shall be deemed to include, without limitation, the
prospectus, the statement of additional information and the term sheet, taken
together, provided to the Underwriters by the Fund in reliance on Rule 434 under
the 1933 Act and filed with the Commission pursuant to Rule 497(h) under the
1933 Act. The term "Prepricing Prospectus" as used in this Agreement means the
prospectus (including the statement of additional information) subject to
completion in the form included in the Registration Statement at the time of the
initial filing of the Registration Statement with the Commission and as such
prospectus (including the statement of additional information) shall have been
amended from time to time prior to the date of the Prospectus, together with any
other prospectus (including any other statement of additional information)
relating to the Fund other than the Prospectus approved in writing by or
directly or indirectly prepared by the Fund or the Advisers; it being understood
that the definition of
3
Prepricing Prospectus above shall not include any Prepricing Prospectus prepared
by the Underwriters unless approved in writing by the Fund or Advisers.
The Fund has furnished the Representative 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 Fund hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
the Underwriters, and, upon the basis of the representations, warranties and
agreements of the Fund and the Advisers herein contained and subject to all the
terms and conditions set forth herein, each Underwriter agrees, severally and
not jointly, to purchase from the Fund, at a purchase price of $_____ per Share,
the number of Series M Shares and the number of Series TH Shares set forth
opposite the name of each such Underwriter in Schedule I hereto.
3. Terms of Public Offering. The Fund and the Advisers have
been advised by the Underwriters that the Underwriters propose to make a public
offering of the Shares as soon after the Registration Statement and this
Agreement have become effective as in the Underwriters' 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 Underwriters of and payment to the Fund for the Shares shall be made at the
office of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000,
or through the facilities of The Depository Trust Company ("DTC") or another
mutually agreeable facility at 9:30 A.M., New York City time, on __________,
2003 (the "Closing Date"). The place of closing for the Shares and the Closing
Date may be varied by agreement between the Representative and the Fund.
A certificate evidencing the Shares shall be delivered to and
registered at DTC, against payment of the purchase price therefor in immediately
available funds.
5. Agreements of the Fund and the Advisers. The Fund and the
Advisers, jointly and severally, agree with the Underwriters 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 Fund will use its reasonable best efforts 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 Representative
promptly and, if requested by the Representative, will confirm such advice in
writing when the Registration Statement or such post-effective amendment has
become effective.
(b) The Fund will advise the Representative promptly and, if
requested by the Representative, 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 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
4
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, any Prepricing Prospectus, or any sales material (as hereinafter
defined), 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 or contemplated initiation of any proceeding for
any such purposes, (iii) of receipt by the Fund, the Advisers, any affiliate of
the Fund or the Advisers or any representative or attorney of the Fund or the
Advisers 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 Fund (if such
communication relating to the Fund 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 (as
hereinafter defined) (or any amendment or supplement to any of the foregoing) or
this Agreement or any of the Fund 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 Fund or the Advisers 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 (as hereinafter
defined) (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, the Prospectus or any Prepricing Prospectus or any sales material (as
hereinafter 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 the 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 hereinafter 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, any Prepricing Prospectus or any sales
material (as hereinafter 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 Fund will use its reasonable best efforts to obtain the
withdrawal of such order at the earliest possible time.
(c) The Fund will furnish to the Representative, 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
Representative, without charge, such number of conformed copies of the
Registration Statement as originally filed and of each amendment thereto, but
without exhibits, as the Representative may reasonably request.
(d) The Fund will not (i) file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus,
any Prepricing Prospectus or any sales material (as hereinafter defined), of
which the Representative shall not previously have been
5
advised or to which the Representative shall reasonably object after being so
advised or (ii) so long as, in the opinion of counsel for the Underwriters, a
Prospectus is required by the 1933 Act to be delivered in connection with sales
by any Underwriter or any dealer, file any information, documents or reports
pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act") or
the 1940 Act, without delivering a copy of such information, documents or
reports to the Underwriters prior to or concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the
Fund has delivered to the Representative, without charge, in such quantities as
the Representative has reasonably requested, copies of each form of any
Prepricing Prospectus. The Fund 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 several Underwriters and by
dealers, prior to the date of the Prospectus, of each Prepricing Prospectus so
furnished by the Fund.
(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 Underwriters a Prospectus is required by the 1933 Act to be
delivered in connection with sales of Shares by the Underwriters or any dealer,
the Fund will expeditiously deliver to the Underwriters and each dealer, without
charge, as many copies of the Prospectus (and of any amendment or supplement
thereto) as the Representative may reasonably request. The Fund 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 Underwriters
and by all dealers to whom the Shares may be sold, both in connection with the
offering or 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
of the Shares by the Underwriters or any dealer. If during such period of time
any event shall occur that in the judgment of the Fund or in the opinion of
counsel for the Underwriters 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 Fund 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 promptly furnish to the
Underwriters and dealers, without charge, such number of copies thereof as they
shall reasonably request. In the event that the Registration Statement or the
Prospectus should be amended or supplemented, the Fund, if requested by the
Representative and to the extent consistent with applicable law, will promptly
issue a press release announcing or disclosing the matters to be covered by the
proposed amendment or supplement.
(g) The Fund will cooperate with the Representative and with
counsel for the Underwriters in connection with the registration or
qualification of the Shares for offering and sale by the Underwriters and by
dealers under the securities or Blue Sky laws of such jurisdictions as the
Representative may designate and will file such consents to service of process
or other documents necessary or appropriate in order to effect such registration
or qualification; provided that in no event shall the Fund be obligated to
qualify to do business in any jurisdiction
6
where it is not now so qualified or to take any action which would subject it to
service of process in suits, other than those arising out of the offering or
sale of the Shares, in any jurisdiction where it is not now so subject.
(h) The Fund will make generally available to its security
holders an earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, 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.
(i) The Fund will comply with the undertaking set forth in
paragraph 6 of Item 33 of Part C of the Registration Statement.
(j) During the period of five years hereafter, the Fund will
furnish to the Underwriters (i) as soon as available, a copy of each report of
the Fund 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 Fund as the
Representative may reasonably request.
(k) The Fund will direct the investment of the net proceeds
from the sale of the Shares 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 Fund as described in the Prospectus.
(l) The Fund will file the requisite copies of the Prospectus
with the Commission in a timely fashion 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 Representative of the time
and manner of such filing.
(m) Except as provided in this Agreement, the Fund will not
sell, contract to sell, or otherwise dispose of any senior securities (as
defined in the 1940 Act) of the Fund, or any securities convertible into or
exercisable or exchangeable for senior securities or grant any options or
warrants to purchase senior securities of the Fund, for a period of 180 days
after the date of the Prospectus other than FundPreferred shares, without the
prior written consent of the Representative.
(n) Except as stated in this Agreement and in the Prospectus,
neither the Fund nor the Advisers have 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 Fund to facilitate the sale or resale of the Shares.
(o) The Fund will use its reasonable best efforts to cause the
Shares, prior to the Closing Date, to be assigned a rating of `Aaa' by Xxxxx'x
Investors Service, Inc. ("Moody's") and `AAA' by Fitch, Inc. ("Fitch" and,
together with Moody's, the "Rating Agencies").
7
(p) The Fund and the Advisers will use their reasonable
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 Fund and the
Advisers. The Fund and the Advisers, jointly and severally, represent and
warrant to the Underwriters that, as of the date hereof or at such other time or
times identified below:
(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 (in the case of the Prospectus, in the light of the
circumstances under which they were made) not misleading, except that this
representation and warranty does not apply to statements in or omissions from
the Registration Statement or the Prospectus (or any amendment or supplement
thereto) made in reliance upon and in conformity with information relating to
the Underwriters furnished to the Fund in writing by or on behalf of the
Underwriters expressly for use therein.
(c) All the outstanding shares of beneficial interest of the
Fund have been duly authorized and validly issued, are fully paid and
nonassessable and are free of any preemptive or similar rights, except that, as
set forth in the Registration Statement, shareholders of a Massachusetts
business trust may under certain circumstances be held personally liable for its
obligations; the Shares have been duly authorized and, when issued and delivered
to the Underwriters 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 that entitle or will entitle any person to acquire
any Shares upon issuance thereof by the Fund, except as stated above, 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 shares
of beneficial interest of the Fund conform to the description thereof in the
Registration Statement and the Prospectus (and any amendment or supplement to
either of them).
(d) The Fund has been duly established and is validly existing
and in good standing as a voluntary association (commonly referred to as a
"Massachusetts business trust") 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 any amendment or supplement to either of
them), and is duly
8
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 to
so register or to qualify does not have a material adverse effect on the
condition (financial or otherwise), business, properties, prospects, net assets
or results of operations of the Fund; and the Fund has no subsidiaries.
(e) There are no legal or governmental proceedings pending or,
to the knowledge of the Fund, threatened, against the Fund, or to which the Fund
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 by the 1933 Act, the 1940 Act
or the Rules and Regulations, and there are no agreements, contracts,
indentures, leases or other instruments that are required to be described in the
Registration Statement or the Prospectus (or 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 Fund is not in violation of its Declaration of Trust,
as it may be amended (the "Declaration"), the Statement or by-laws (the
"By-Laws"), or other organizational documents (together, the "Organizational
Documents") of the Fund or of any material law, ordinance, administrative or
governmental rule or regulation applicable to the Fund or any material decree of
the Commission, the NASD, any state securities commission, any national
securities exchange, any arbitrator, any court or other governmental,
regulatory, self-regulatory or administrative agency, body or official having
jurisdiction over the Fund, or in breach or default in any material respect in
the performance of any obligation, agreement or condition contained in any
material bond, debenture, note or any other evidence of indebtedness or in any
material agreement, indenture, lease or other instrument to which the Fund 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 nor any of the Fund
Agreements by the Fund, nor the consummation by the Fund of the transactions
contemplated hereby or thereby (A) 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 or made prior to the
date hereof and such as may be required for compliance with the state securities
or Blue Sky laws of various jurisdictions and the filing of the Statement with
the Secretary of State of the Commonwealth of Massachusetts 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 Fund 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 Fund is a party or
by which it or any of its properties may be bound, or violates or will violate
any statute, law, regulation, filing, judgment, injunction, order or decree
applicable to the Fund 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 Fund 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, except where such conflict, breach, default, violation, creation or
imposition
9
would not have a material adverse effect on the condition (financial or
otherwise), business, properties, prospects net assets or results of operations
of the Fund or on the ability of the Fund to perform its obligations under this
Agreement and the Fund Agreements. The Fund is not subject to any order of any
court or of any arbitrator, governmental authority or administrative agency,
except such orders which do not have a material adverse effect on the condition
(financial or otherwise), business, properties, prospects net assets or results
of operations of the Fund or on the ability of the Fund to perform its
obligations under this Agreement and the Fund Agreements.
(h) Since the date as of which information is given in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), except as otherwise stated therein, (A) there has been no material,
adverse change in the condition (financial or other), business, properties, net
assets or results of operations of the Fund or business prospects (other than as
a result of a change in the financial markets generally) of the Fund, whether or
not arising in the ordinary course of business, and (B) there have been no
transactions entered into by the Fund which are material to the Fund other than
those in the ordinary course of its business.
(i) The accountants, Xxxxx & Young LLP, who have certified or
shall certify the statement of assets and liabilities and statement of
operations included or incorporated by reference in the Registration Statement
and the Prospectus (or any amendment or supplement to either of them), are an
independent public accounting firm as required by the 1933 Act, the 1940 Act and
the Rules and Regulations.
(j) 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 Fund on the basis stated or incorporated by reference in the
Registration Statement and the Prospectus 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 thereto), are accurately derived from such financial statements and
the books and records of the Fund.
(k) The execution and delivery of, and the performance by the
Fund of its obligations under, this Agreement and the Fund Agreements have been
duly and validly authorized by the Fund, and this Agreement and the Fund
Agreements have been duly executed and delivered by the Fund and constitute the
valid and legally binding agreements of the Fund, enforceable against the Fund
in accordance with their terms, except as rights to indemnity and contribution
hereunder and thereunder may be limited by federal or state securities laws and
subject to the qualification that the enforceability of the Fund's obligations
hereunder and thereunder may be limited to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting creditors'
rights generally and by general equitable principles.
(l) 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
10
information is given in the Registration Statement and the Prospectus (or any
amendment or supplement to either of them), the Fund 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 Fund, and there
has not been any change in the shares of beneficial interest, or material
increase in the short-term debt or long-term debt, of the Fund, or any material
adverse change, or any development involving or which would 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 Fund, whether or not arising in the ordinary course of
business.
(m) The Fund has filed all tax returns required to be filed,
which returns are complete and correct in all material respects, and the Fund is
not in material default in the payment of any taxes which were payable pursuant
to said returns or any assessments with respect thereto.
(n) The Fund 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 Fund
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
conditions of the 1933 Act and the 1940 Act. No person is serving or acting as
an officer, director or investment adviser of the Fund 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").
(o) As required by Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"), the Fund is currently in compliance with the
requirements to qualify as a regulated investment company under the Code.
(p) The Fund's Common Shares (as defined in the Prospectus)
are duly listed on the NYSE.
(q) The Fund 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 to the public any offering material in connection
with the offering and sale of the Shares other than the Registration Statement,
any Prepricing Prospectus, the Prospectus or other materials, if any, permitted
by the 1933 Act, the 1940 Act or the Rules and Regulations.
(r) The Fund has such licenses, permits, and authorizations of
governmental or regulatory authorities ("permits") as are necessary to own its
property and to conduct its business in the manner described in the Prospectus
(and any amendment or supplement thereto); the Fund 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 Fund under any such permit, subject in each case to such qualification as
may be set forth in the Prospectus
11
(and any amendment or supplement thereto); and, 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 Fund.
(s) The Fund maintains and will maintain 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 investment policies and restrictions of the Fund and
the applicable requirements of the 1940 Act, the 1940 Act Rules and Regulations
and the Code; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles, to calculate net asset value, to maintain accountability for assets
and to maintain material 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 account for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(t) No holder of any security of the Fund has any right to
require registration of shares of beneficial interest, FundPreferred shares or
any other security of the Fund because of the filing of the Registration
Statement or consummation of the transactions contemplated by this Agreement.
(u) The conduct by the Fund 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.
(v) Except as stated in this Agreement and in the Prospectus
(and any amendment or supplement thereto), the Fund has not taken, nor will it
take, directly or indirectly, any action designed to or which would reasonably
be expected to cause or result in stabilization or manipulation of the price of
any securities issued by the Fund to facilitate the sale or resale of the
Shares, and the Fund is not aware of any such action taken or to be taken by any
affiliates of the Fund.
(w) The Fund has filed in a timely manner each document or
report required to be filed by it pursuant to the 1940 Act, the 1940 Act Rules
and Regulations, 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 in all material respects
with all applicable 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, in the light of the circumstances under which they were made, not
misleading. The Fund has not received any notice from the Commission pursuant to
Section 8(e) of the 1940 Act with respect to the 1940 Act Notification or the
Registration Statement (or any amendment or supplement to either of them).
(x) 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 Fund or the
Advisers for use in connection with the offering and sale of the
12
Shares (collectively, "sales material") complied and comply in all material
respects, to the Fund's and Advisers' best knowledge, with the applicable
requirements of the 1933 Act, the 1940 Act, the Rules and Regulations and the
rules and interpretations of the NASD and, if required to be filed with the NASD
under the NASD's conduct rules, all sales material were so filed, 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 the light of the circumstances
under which they were made, not misleading.
(y) This Agreement and each of the Fund Agreements complies 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.
(z) The Fund intends to direct the investment of the proceeds
of the offering of the Shares in such a manner as to comply with the
requirements of Subchapter M of the Code.
7. Representations and Warranties of the Advisers. Each of the
Investment Adviser and the Subadviser, severally as to itself only and not
jointly or as to any other party, represents and warrants to each Underwriter
that, as of the date hereof or at such other time or times identified below:
(a) Each Adviser is a corporation duly organized and validly
existing in good standing under the laws of its jurisdiction of incorporation,
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 would not have a material adverse effect on the
condition (financial or other), business, prospects, properties, net assets or
results of operations of such Adviser.
(b) Each Adviser has such licenses, permits and authorizations
of governmental or regulatory authorities ("permits") as are necessary to own
its property and to conduct its business in the manner described in the
Prospectus; each Adviser has fulfilled and performed all its respective 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 such Adviser under
any permit.
(c) Each Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the Advisers
Act, the Advisers Act Rules and Regulations, the 1940 Act or the 1940 Act Rules
and Regulations from acting under the Investment Management Agreement or the
Sub-Advisory Agreement for the Fund as contemplated by the Prospectus (or any
amendment or supplement thereto). There does not exist any proceeding, to the
best of such Adviser's knowledge after reasonable investigation, or any facts or
circumstances the existence of which could lead to any proceeding which would
reasonably be expected to adversely affect the registration of such Adviser as
an investment adviser with the Commission.
13
(d) There are no legal or governmental proceedings pending or,
to the knowledge of such Adviser, threatened against such Adviser, or to which
such Adviser 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 would
reasonably be expected to involve a prospective material adverse change in the
condition (financial or other), business, prospects, properties, assets or
results of operations of such Adviser or on the ability of such Adviser to
perform its obligations under this Agreement, the Sub-Advisory Agreement or
under the Fund Agreements to which it is a party.
(e) Such Adviser is not in violation of its corporate charter
or by-laws, or other organizational documents, 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 except where such violation would not have a
material adverse effect on the condition (financial or other), business,
prospects, properties, net assets or results of operations of such Adviser or on
the ability of such Adviser to perform its obligations under this Agreement or
under the Fund Agreements to which it is a party.
(f) Neither the execution, delivery or performance of this
Agreement, the Sub-Advisory Agreement or the Fund Agreements by such Adviser
which is a party thereto, nor the consummation by such Adviser of the
transactions contemplated hereby or thereby (A) requires such Adviser 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 (except such as may have
been obtained or made prior to the date hereof) or conflicts or will conflict
with or constitutes or will constitute a breach of or a default under, the
corporate charter or by-laws, or other organizational documents, of such
Adviser, except where the failure to obtain such consent, approval,
authorization or other order of, or make such registration or filing, or such
conflict, breach or default would not have a material adverse effect on the
condition (financial or otherwise), business, prospects, properties, net assets
or result of operations of such Adviser or on the ability of such Adviser to
perform its obligations under this Agreement, the Sub-Advisory Agreement and the
Fund Agreements to which it is a party 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 such Adviser 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 such Adviser 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 such Adviser 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 such Adviser is subject, except where such conflict, breach,
default or violation would not have a material adverse effect on the condition
(financial or otherwise), prospects, business, properties, net assets or results
of operations of such Adviser or on the ability of such Adviser to perform its
obligations under this Agreement, the Sub-Advisory Agreement and the Fund
Agreements to which it is a party. Such Adviser is not subject to any order of
any court or of any arbitrator, governmental authority or administrative agency,
except such orders which do not have a material adverse effect on the condition
(financial or otherwise), business, prospects, properties, net assets or results
of operations of such Adviser or on the
14
ability of such Adviser to perform its obligations under this Agreement and the
Fund Agreements to which it is a party.
(g) Such Adviser has full power and authority to enter into
this Agreement and the Fund Agreements to which it is a party, the execution and
delivery of, and the performance by such Adviser of its obligations under, this
Agreement, the Sub-Advisory Agreement and the Fund Agreements to which it is a
party have been duly and validly authorized by such Adviser, and this Agreement,
the Sub-Advisory Agreement and the Fund Agreements to which it is a party have
been duly executed and delivered by such Adviser and each constitutes the valid
and legally binding agreement of such Adviser, enforceable against such Adviser
in accordance with its terms, except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws and subject to the
qualification that the enforceability of such Adviser's obligations hereunder
and thereunder may be limited to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights generally
and by general equitable principles.
(h) Such Adviser has the financial resources available to it
necessary for the performance of its services and obligations as contemplated in
the Prospectus (or any amendment or supplement thereto) and under this
Agreement, the Sub-Advisory Agreement and the Fund Agreements to which it is a
party.
(i) The description of such Adviser, its business and the
statements attributable to such Adviser 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.
(j) 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),
such Adviser 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 such Adviser or the Fund and that is required to be disclosed by the
1933 Act, the 1940 Act or the Rules and Regulations in the Registration
Statement or the Prospectus and there has not been any material adverse change,
or any development involving or which would reasonably be expected to involve, a
prospective material adverse change, in the condition (financial or other),
business, prospects, properties, assets or results of operations of such
Adviser, 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 such Adviser
to perform its obligations under this Agreement, the Sub-Advisory Agreement and
the Fund Agreements to which it is a party.
(k) In the event that the Fund or the Advisers make available
any promotional materials intended for use only by qualified broker-dealers and
registered representatives thereof by means of an Internet web site or similar
electronic means, such Adviser will install and maintain pre-qualification and
password-protection or similar procedures which are reasonably
15
designed to effectively prohibit access to such promotional materials by persons
other than qualified broker-dealers and registered representatives thereof.
8. Indemnification and Contribution.
(a) The Fund and the Advisers, jointly and severally, agree to
indemnify and hold harmless each of the Underwriters and each person, if any,
who controls the Underwriters 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 any sales material 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, in the light of the circumstances
under which they were made, 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 Underwriters furnished in writing to the Fund by
or on behalf of the Underwriters expressly for use in connection therewith;
provided, however, that the indemnification contained in this paragraph (a) with
respect to the Registration Statement, the Prospectus or any Prepricing
Prospectus (or any amendment or supplement to any of the foregoing) shall not
inure to the benefit of the Underwriters (or to the benefit of any person
controlling the Underwriters) on account of any such loss, claim, damage,
liability or expense arising from the sale of the Shares by the Underwriters to
any person if it is shown that a copy of the Prospectus, as then amended or
supplemented, was not delivered or sent to such person by or on behalf of the
Underwriters 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 was corrected in the Prospectus, provided
that the Fund has delivered the Prospectus to the Underwriters in the requisite
quantity and on a timely basis to permit such delivery or sending. The foregoing
indemnity agreement shall be in addition to any liability which the Fund or the
Advisers may otherwise have.
(b) If any action, suit or proceeding shall be brought against
the Underwriters or any person controlling any Underwriter in respect of which
indemnity may be sought against the Fund or the Advisers, the Underwriters or
such controlling person shall promptly notify the Fund or the Advisers, and the
Fund or the Advisers shall assume the defense thereof, including the employment
of counsel and payment of all fees and expenses. The Underwriters 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 Underwriters or
such controlling person unless (i) the Fund or the Advisers has agreed in
writing to pay such fees and expenses, (ii) the Fund and the Advisers have
failed within a reasonable time 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 Underwriters or such controlling person and
the Fund or the Advisers and the Underwriters or such controlling person shall
have been advised by its counsel that representation of such indemnified party
and the Fund or the Advisers by the same counsel
16
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 Fund
and the Advisers shall not have the right to assume the defense of such action,
suit or proceeding on behalf of the Underwriters or such controlling person). It
is understood, however, that the Fund and the Advisers 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 if there is any action, suit or proceeding in more than one
jurisdiction) at any time for the Underwriters and controlling persons not
having actual or potential differing interests with you or among themselves,
which firm shall be designated in writing by the Representative, and that all
such fees and expenses shall be reimbursed promptly as they are incurred. The
Fund and the Advisers shall not be liable for any settlement of any such action,
suit or proceeding effected without its written consent, 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 Fund and the Advisers agree to indemnify
and hold harmless the Underwriters, to the extent provided in the preceding
paragraph, and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
(c) The Underwriters agree, severally and not jointly, to
indemnify and hold harmless the Fund and the Advisers, their trustees,
directors, any officers who sign the Registration Statement, and any person who
controls the Fund or the Advisers 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 Fund and the Advisers to the Underwriters, but only with respect to
information relating to the Underwriters furnished in writing by or on behalf of
the Underwriters 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 Fund or the Advisers,
any of their trustees, 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 Underwriters pursuant to this paragraph (c),
the Underwriters shall have the rights and duties given to the Fund and the
Advisers by paragraph (b) above (except that if the Fund or the Advisers shall
have assumed the defense thereof the Underwriters 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 Underwriters'
expense), and the Fund and the Advisers, their directors, any such officer, and
any such controlling person shall have the rights and duties given to the
Underwriters by paragraph (b) above. The foregoing indemnity agreement shall be
in addition to any liability which the Underwriters 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 expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Fund and the Advisers on the one hand (treated jointly for this purpose as one
person) and the Underwriters on the other hand from the
17
offering of the Shares, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Fund and the Advisers on the one hand (treated jointly
for this purpose as one person) and the Underwriters 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.
The relative benefits received by the Fund and the Advisers on the one hand
(treated jointly for this purpose as one person) and the Underwriters 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 Fund bear to the
total sales load received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of the Fund and
the Advisers on the one hand (treated jointly for this purpose as one person)
and the Underwriters 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 the Fund and the Advisers on the one hand (treated
jointly for this purpose as one person) or by the Underwriters on the other hand
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The Fund, the Advisers and the Underwriters 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 Underwriters
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 Underwriters have 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. The
Underwriters' obligations to contribute pursuant to this Section 8 are several
in proportion to the respective number of Shares set forth opposite their names
in Schedule I and not joint.
(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) 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
18
and the representations and warranties of the Fund and the Advisers 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 Underwriters or any person
controlling the Underwriters, the Fund, the Advisers, their trustees, directors
or officers, or any person controlling the Fund or the Advisers, (ii) acceptance
of any Shares and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to the Underwriters or any person controlling any
Underwriter, or to the Fund, the Advisers, their trustees, directors or
officers, or any person controlling the Fund or the Advisers, shall be entitled
to the benefits of the indemnity, contribution, and reimbursement agreements
contained in this Section 8.
(h) Any indemnification by the Fund shall be subject to the
requirements and limitations of Section 17(i) of the 1940 Act.
9. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase any Shares hereunder are subject to,
in the good faith judgment of the Underwriters, the accuracy of and compliance
with the representations, warranties and agreements of and by the Fund and the
Advisers contained herein on and as of the date hereof, the date on which the
Registration Statement becomes or became effective, the date of the Prospectus
(and of any amendment or supplement thereto) and the Closing Date; to the
accuracy and completeness of all statements made by the Fund, the Advisers or
any of their officers in any certificate delivered to the Underwriters or their
counsel pursuant to this Agreement and 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
Underwriters, 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 Fund, the Advisers or the Underwriters, 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 Underwriters' 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 Fund or the
Advisers not contemplated by the Prospectus, which in the Underwriters' opinion
would materially and adversely affect the market for the Shares, or (ii) any
event or development relating to or involving the Fund or the Advisers or any
officer, trustee or director of the Fund or the Advisers which makes any
statement of a material fact made in the Prospectus untrue or which, in the
opinion of the Fund and its counsel or the Underwriters and their 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, in the light of the
19
circumstances under which they were made, not misleading, if amending or
supplementing the Prospectus to reflect such event or development would, in the
Underwriters' opinion, materially adversely affect the market for the Shares.
(c) The Fund shall have furnished to the Representative as
soon as practicable from the Closing Date a report showing compliance with the
asset coverage requirements of the 1940 Act and a Basic Maintenance Report (as
defined in the Statement), in form and substance reasonably satisfactory to the
Representative.
(d) Xxxxxx, Xxxxx, Xxxxxxx & Xxxxxxxx, counsel to the Fund,
shall have furnished to the Representative on the Closing Date its opinion
addressed to the Underwriters and dated the Closing Date, to the effect that:
(i) The Fund is (A) duly established and validly
existing under the Fund's Declaration and the laws of the
Commonwealth of Massachusetts as a voluntary association with
transferable shares of beneficial interest, commonly referred
to as a "Massachusetts business trust," (B) is in good
standing with the Secretary of the Commonwealth of
Massachusetts, (C) has full power and authority as a business
trust, to own, lease and operate its properties and to conduct
its business, in each case as described in the Registration
Statement and the Prospectus (and any amendment or supplement
to either of them through the date of the opinion);
(ii) The Shares have been duly authorized by the Fund
for issuance and sale to the Underwriters pursuant to the
Underwriting Agreement and, when issued and delivered to the
Underwriters against payment therefor in accordance with the
terms of the Underwriting Agreement, will be validly issued,
fully paid and nonassessable, except that, as set forth in the
Registration Statement, shareholders of a Massachusetts
business trust may under certain circumstances be held liable
for its obligations, and are free of any statutory preemptive
rights. Except as set forth in the Declaration and the
Statement, there are no restrictions upon the transfer of any
Shares pursuant to the Declaration or By-Laws of the Fund or,
to the best knowledge of such counsel, any agreement or other
outstanding instrument to which the Fund is a party. The form
of certificate evidencing the Shares complies as to form with
all requirements of Massachusetts law;
(iii) The description of the authorized shares of
beneficial interest of the Fund contained under the caption
"Description of Common Shares" in the Prospectus conforms in
all material respects as to legal matters to the terms thereof
contained in the Fund's Declaration. The statements in the
first two paragraphs under the caption "Certain Provisions in
the Declaration of Trust" in the Prospectus, to the extent
that they constitute descriptions of Massachusetts law, are in
summary form accurate in all material respects. The
description of the Shares contained under the captions
"Description of FundPreferred Shares" and "The Auction" in the
Prospectus conforms in all material respects as to legal
matters to the terms thereof contained in the Fund's
Declaration and Statement;
20
(iv) All of the outstanding common shares of the Fund
have been duly authorized by the Fund and validly issued, are
fully paid and nonassessable, except that, as set forth in the
Registration Statement, shareholders of a Massachusetts
business trust may under certain circumstances be held liable
for its obligations, and are free of any statutory preemptive
rights;
(v) The Registration Statement is effective under the
1933 Act and was filed under 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; no stop-order suspending the effectiveness of the
Registration Statement or order pursuant to Section 8(e) of
the 1940 Act has been issued and to the best of such counsel's
knowledge, no proceeding for any such purpose has been
instituted or is pending or threatened in writing by the
Commission;
(vi) The Fund's notification of registration as an
investment company under the 1940 Act on Form N-8A (the "1940
Act Notification"), the Registration Statement and the
Prospectus and each amendment or supplement to the
Registration Statement and the Prospectus as of their
respective issue dates (except the financial statements and
other financial data contained therein, as to which we express
no opinion) complies as to form in all material respects with
the requirements of the 1933 Act, the 1940 Act and the Rules
and Regulations;
(vii) The statements made in the Prospectus under the
captions "The Auction," "Description of FundPreferred Shares"
and "Additional Information Concerning The Auctions for
FundPreferred Shares," insofar as they purport to summarize
the provisions of the Statement or other documents or
agreements specifically referred to therein, constitute
accurate summaries of the terms of the Statement or such other
documents, in all material respects;
(viii) The statements made in the Prospectus under
the captions "Prospectus Summary -- Federal Income Taxes" and
"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, and fairly present the information called
for with respect thereto by Form N-2, in all material
respects;
(ix) To the best of such counsel's knowledge, there
are no legal or governmental proceedings pending or threatened
in writing against the Fund, or to which the Fund or any of
its properties is subject, that are required to be described
in the Registration Statement or the Prospectus, but are not
described therein as required;
(x) The Underwriting Agreement and the Fund
Agreements have each been duly and validly authorized,
executed and delivered by the Fund, each complies with all
applicable provisions of the 1940 Act and the 1940 Act Rules
and Regulations and the Advisers Act and the rules and
regulations thereunder,
21
and each constitutes the valid and binding agreement of the
Fund, enforceable against the Fund in accordance with its
terms;
(xi) The Fund is registered under the 1940 Act as a
closed-end non-diversified management investment company; the
provisions of the Declaration, Statement and By-Laws of the
Fund and the investment policies and restrictions described in
the Prospectus do not violate the requirements of the 1940 Act
in any material respect;
(xii) None of the issuance and sale of the Shares by
the Fund pursuant to the Underwriting Agreement, the execution
and delivery of the Underwriting Agreement or any of the Fund
Agreements by the Fund, or the performance by the Fund of its
agreements under the Underwriting Agreement or any of the Fund
Agreements (A) requires any consent, approval, authorization
or other order of or registration or filing with, the
Commission, the National Association of Securities Dealers,
Inc., or any national securities exchange or governmental body
or agency or arbitrator or court of the United States, State
of Illinois or the Commonwealth of Massachusetts (except (1)
any, the absence of which, either individually or in the
aggregate, would not have a material adverse effect on the
Fund; (2) such as may have been obtained prior to the date
hereof; and (3) such as may be required for compliance with
the New York Stock Exchange or state securities or Blue Sky
laws of various jurisdictions in accordance with the
Underwriting Agreement) or violates or will violate or
constitutes or will constitute a breach of any of the
provisions of the Organizational Documents of the Fund or (B)
violates or will violate or constitutes or will constitute a
breach of, or a default under, any material agreement,
indenture, lease or other instrument known to such counsel to
which the Fund is party or by which it or any of its
properties may be bound, or violates any material United
States, State of Illinois or the Commonwealth of Massachusetts
statute, law, regulation (assuming compliance with all
applicable state securities and Blue Sky laws), judgment,
injunction, order or decree applicable to the Fund or any of
its properties, or will result in the creation or imposition
of any material lien, charge or encumbrance upon any property
or assets of the Fund pursuant to the terms of any agreement
or instrument known to such counsel to which the Fund is a
party or by which any of its property or assets is bound. To
the best of such counsel's knowledge, the Fund is not subject
to any order of any court or of any arbitrator, governmental
authority or administrative agency of the United States of
America, the State of Illinois or the Commonwealth of
Massachusetts;
(xiii) No holder of any security of the Fund has any
right pursuant to any agreement known to such counsel to which
the Fund is a party to require registration of shares of
beneficial interest, FundPreferred shares or any other
security of the Fund because of the filing of the Registration
Statement or consummation of the transactions contemplated by
the Underwriting Agreement;
(xiv) To the best of such counsel's knowledge, there
are no agreements, contracts, indentures, leases or other
instruments that are required to be described
22
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; and
(xv) Such counsel shall state that it has
participated in conferences with officers and employees of the
Fund and the Advisers, representatives of the independent
accountants for the Fund, Massachusetts counsel to the Fund,
the Underwriters and counsel for the Underwriters at which the
contents of the Registration Statement and the Prospectus and
related matters were discussed and, although it is not passing
upon, and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except to the
limited extent otherwise covered by paragraphs (iii), (vii)
and (viii) above, and has made no independent check or
verification thereof, on the basis of the foregoing, no facts
have come to its attention that would have led it to believe
that (A) the Registration Statement, at the time it became
effective, contained an untrue statement of a material fact or
omitted to state any material fact required to be stated
therein or necessary to make the statements contained therein
not misleading, (B) the Prospectus, as of its date contained
or as of the Closing Date 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 contained therein, in the light of the
circumstances under which they were made, not misleading, or
(C) the 1940 Act Notification as of its date contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in
order to make the statements therein not misleading, except
that in each case it expresses no opinion with respect to the
financial statements, schedules and other financial
information and statistical data included therein or excluded
therefrom or the exhibits to the Registration Statement.
In giving such opinion, Xxxxxx, Xxxxx, Xxxxxxx & Xxxxxxxx may
rely on the opinion of Xxxxxxx XxXxxxxxx LLP as to matters of Massachusetts law,
provided that Xxxxxx, Xxxxx, Xxxxxxx & Kammholz furnish a copy thereof to the
Underwriters and state that such opinion is satisfactory in substance and form
and that the Underwriters and counsel for the Underwriters are entitled to rely
thereon.
(e) Xxxxxxx X. Xxxxxxxxx, Esq., Managing Director, Assistant
Secretary and General Counsel for the Investment Adviser, shall have furnished
to the Representative on the Closing Date his opinion addressed to the
Underwriters and dated the Closing Date, to the effect that:
(i) The Investment Adviser has been duly organized
and is validly existing and in good standing as a corporation
under the laws of the State of Delaware, 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
23
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, properties, prospects, net assets or results
of operations of the Investment Adviser;
(ii) The Investment Adviser is duly registered and in
good standing 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
Investment Management Agreement and the Sub-Advisory Agreement
for the Fund as contemplated by the Prospectus (or any
amendment or supplement thereto); there does not exist any
proceeding or, to the best of such counsel's knowledge after
reasonable investigation, any facts or circumstances the
existence of which could lead to any proceeding which would
materially and adversely affect the registration of the
Investment Adviser with the Commission;
(iii) To the best of such counsel's knowledge, there
are no legal or governmental proceedings pending or threatened
against the Investment Adviser, or to which the Investment
Adviser 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 would reasonably be
expected to involve a prospective material adverse change, in
the condition (financial or other), business, prospects,
properties, assets or results of operations of the Investment
Adviser or on the ability of the Investment Adviser to perform
its obligations under the Underwriting Agreement, the
Investment Management Agreement and the Sub-Advisory
Agreement;
(iv) To the best of such counsel's knowledge, the
Investment Adviser is not in violation of its corporate
charter or by-laws or other organizational documents, nor is
the Investment Adviser 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;
(v) The Investment Adviser has corporate power and
authority to enter into this Agreement, the Investment
Management Agreement and the Sub-Advisory Agreement and each
Agreement has been duly and validly authorized, executed and
delivered by the Investment Adviser, each complies with all
applicable provisions of the 1940 Act and the Advisers Act and
the 1940 Act Rules and Regulations and the Advisers Act Rules
and Regulations and each constitutes the valid and legally
binding agreement of the Investment Adviser, enforceable
against the Investment Adviser 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;
(vi) The description of the Investment Adviser in the
Registration Statement and the Prospectus (and any amendment
or supplement thereto)
24
complies 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
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;
(vii) To the best knowledge of such counsel after
reasonable inquiry, other than as described or contemplated 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 Investment Adviser 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 Investment Adviser or the
Fund 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, assets or results of
operations of the Investment Adviser, 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
Investment Adviser to perform its obligations under the
Underwriting Agreement, the Investment Management Agreement
and the Sub-Advisory Agreement; and
(viii) Neither the execution, delivery or performance
of the Underwriting Agreement, the Investment Management
Agreement or the Sub-Advisory Agreement by the Investment
Adviser, nor the consummation by the Investment Adviser of the
transactions contemplated in the Underwriting Agreement, the
Investment Management Agreement or the Sub-Advisory Agreement
(A) requires the Investment Adviser 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 (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 in accordance with the
Underwriting Agreement) or conflicts or will conflict with or
constitutes or will constitute a breach of or a default under,
the corporate charter or by-laws, or other organizational
documents, of the Investment Adviser or (B) conflicts or will
conflict with or constitutes or will constitute a breach of or
a default under its corporate charter or by-laws or any
material agreement, indenture, lease or other instrument to
which the Investment Adviser is a party or by which it or any
of its properties may be bound, or violates or will violate
any material statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Investment
Adviser or any of its properties or will result in the
creation or imposition of any material lien, charge or
encumbrance upon any property or assets of the Investment
Adviser pursuant
25
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 Investment Adviser is subject. The
Investment Adviser is not subject to any order of any court or
of any arbitrator, governmental authority or administrative
agency, except such orders which do not have a material
adverse effect on the condition (financial or otherwise),
business, properties, prospects, net assets or results of
operations of the Fund or on the ability of the Fund to
perform its obligations under this Agreement and the Fund
Agreements.
Such counsel shall also state that although counsel has not
undertaken, except as otherwise indicated in its opinion, to determine
independently and does not assume any responsibility for, the accuracy
or completeness of the statements in the Registration Statement, such
counsel has participated in the preparation of the Registration
Statement and the Prospectus, including review and discussion of the
contents thereof and nothing has come to its attention that has caused
it to believe that the Registration Statement at the time it became
effective or the Prospectus, as of its date and as of the Closing Date,
as the case may be, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of a prospectus,
in light of the circumstances under which they were made) not
misleading or that any amendment or supplement to the Prospectus, as of
its date and as of the Closing Date, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading (it being understood that such counsel
need express no opinion with respect to the financial statements and
the notes thereto and the schedules and other financial and statistical
data included in the Registration Statement or the Prospectus).
In rendering such opinion, counsel may limit such opinion to
matters involving the application of the laws of the State of Illinois,
the Delaware General Corporation Law statute and the laws of the United
States and may rely upon an opinion or opinions, each dated the Closing
Date, of other counsel retained by the Investment Adviser as to laws of
any jurisdiction other than the United States, the State of Illinois
and the Delaware General Corporation Law statute, provided that (X)
each such local counsel is acceptable to the Representative, (Y) such
reliance is expressly authorized by each opinion so relied upon and a
copy of each such opinion is delivered to the Representative and is, in
form and substance satisfactory to it and its counsel and (Z) counsel
shall state in their view that they believe that they and the
Underwriters are justified in relying thereon.
(f) Xxxx, Block, Xxxxxx and Xxxxx-Xxxxx LLP, special counsel
for the Subadviser, shall have furnished to the Representative on the Closing
Date their opinion addressed to the Underwriters and dated the Closing Date, to
the effect that:
(i) The Subadviser is a corporation duly incorporated
and validly existing in good standing under the laws of the
State of Connecticut 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
26
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, properties, net
assets or results of operations of the Subadviser;
(ii) The Subadviser is duly registered with the
Commission under the Advisers Act as an investment adviser and
is not prohibited by the Advisers Act, the 1940 Act or the
rules and regulations promulgated by the Commission under such
acts from acting for the Fund under the Sub-Advisory Agreement
as contemplated by the Prospectus (and any amendment or
supplement thereto);
(iii) The Subadviser has corporate power and
authority to enter into this Agreement and the Sub-Advisory
Agreement and this Agreement and the Sub-Advisory Agreement
have been duly authorized, executed and delivered by the
Subadviser and each of this Agreement and the Sub-Advisory
Agreement is a valid, legal and binding agreement of the
Subadviser, enforceable against the Subadviser in accordance
with its terms, except as enforcement of rights to indemnity
and contribution hereunder may be limited by Federal or state
securities laws or principles of public policy and subject to
the qualification that the enforceability of the Subadviser's
obligations hereunder and thereunder may be limited by
bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and
by general equitable principles;
(iv) The Sub-Advisory Agreement complies in all
material respects with all applicable provisions of the
Advisers Act, the 1940 Act and the Advisers Act Rules and
Regulations and the 1940 Act Rules and Regulations;
(v) Neither the execution and delivery by the
Subadviser of this Agreement or the Sub-Advisory Agreement nor
the consummation by the Subadviser of the transactions
contemplated hereunder or thereunder constitutes or will
constitute a breach of or a default under the Amended and
Restated Certificate of Incorporation or By-Laws of the
Subadviser or any material agreement, indenture, lease or
other instrument to which the Subadviser is a party or by
which it or any of its properties is bound that is known to
such counsel after reasonable inquiry, or will result in the
creation or imposition of any material lien, charge or
encumbrance upon any property or assets of the Subadviser, nor
will any such action result in any violation of any existing
material law, regulation, ruling (assuming compliance with all
applicable state securities and Blue Sky laws), judgment,
injunction, order or decree known to such counsel after
reasonable inquiry, applicable to the Subadviser or any of its
properties;
(vi) The description of the Subadviser and its
business in the Prospectus (and any amendment or supplement
thereto) complies in all material respects with all
requirements of the 1933 Act, the 1940 Act and the Rules and
Regulations;
27
(vii) To the best knowledge of such counsel after
reasonable inquiry, other than as described or contemplated in
the Prospectus (and any amendment or supplement thereto),
there are no actions, suits or other legal or governmental
proceedings pending or threatened against the Subadviser or to
which the Subadviser or any of its property is subject which
are required to be described in the Registration Statement or
Prospectus (or any amendment or supplement to either of them);
(viii) The Subadviser owns, possesses or has obtained
and currently maintains all governmental licenses, permits,
consents, orders, approvals and other authorizations as are
necessary for the Subadviser to carry on its business as
contemplated in the Prospectus (and any amendment or
supplement thereto); and
(ix) No material consent, approval, authorization or
order of or registration or filing with any court, regulatory
body, administrative or other governmental body, agency or
official is required on the part of the Subadviser for the
performance of this Agreement or the Sub-Advisory Agreement by
the Subadviser or for the consummation by the Subadviser of
the transactions contemplated hereby or thereby.
Such counsel shall also state that although counsel has not
undertaken, except as otherwise indicated in its opinion, to determine
independently and does not assume any responsibility for, the accuracy
or completeness of the statements in the Registration Statement, such
counsel has participated in the preparation of the Registration
Statement and the Prospectus, including review and discussion of the
contents thereof and nothing has come to its attention that has caused
it to believe that the Registration Statement at the time it became
effective or the Prospectus, as of its date and as of the Closing Date,
as the case may be, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of a prospectus,
in light of the circumstances under which they were made) not
misleading or that any amendment or supplement to the Prospectus, as of
its date and as of the Closing Date, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading (it being understood that such counsel
need express no opinion with respect to the financial statements and
the notes thereto and the schedules and other financial and statistical
data included in the Registration Statement or the Prospectus).
In rendering such opinion, counsel may limit such opinion to
matters involving the application of the laws of the State of New York,
and the laws of the United States and may rely upon an opinion or
opinions, each dated the Closing Date, of other counsel retained by the
Subadviser as to laws of any jurisdiction other than the United States
and the State of New York, provided that (X) each such local counsel is
acceptable to the Representatives, (Y) such reliance is expressly
authorized by each opinion so relied upon and a copy of each such
opinion is delivered to the Representatives and is, in form and
substance satisfactory to them and their counsel and (Z) counsel shall
state in their view that they believe that they and the Underwriters
are justified in relying thereon. In
28
addition, in rendering the opinions dependent upon the laws of the
State of Connecticut contained in Sections 9(f)(i) and (iii) above,
such counsel may state that in its investigations of such law nothing
has come to the attention of such counsel that has caused it to believe
that such opinions would not be true.
(g) The Representative shall have received on the Closing Date
an opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Underwriters, dated
the Closing Date and addressed to the Underwriters, with respect to such matters
as the Underwriters may reasonably request and the Fund, each Adviser and their
respective counsels shall have furnished to such counsel such documents as they
may request for the purpose of enabling them to pass upon such matters.
(h) The Fund shall have furnished to the Representative on the
Closing Date a certificate, dated the Closing Date, of its President or a Vice
President and its Controller or Treasurer stating that:
(i) the signers have carefully examined the
Registration Statement, the Prospectus (and any amendments or
supplements to either of them) and this Agreement, (ii) the
representations and warranties of the Fund in this Agreement
are true and correct on and as of the date of the certificate
as if made on such date, (iii) since the date of the
Prospectus (and any amendment or supplement thereto) there has
not been any material, adverse change in the condition
(financial or other), business, prospects (other than as a
result of a change in the financial markets generally),
properties, net assets or results of operations of the Fund,
(iv) to the knowledge of such officers after reasonable
investigation, no order suspending the effectiveness of the
Registration Statement or prohibiting the sale of any of the
Shares or having a material, adverse effect on the Fund has
been issued and no proceedings for any such purpose are
pending before or threatened by the Commission or any court or
other regulatory body, 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, (v)
the Fund has performed and complied in all material respects
with all agreements that this Agreement requires it to perform
by such Closing Date, (vi) the Fund has not sustained any
material loss or interference with its business from any court
or from legislative or other governmental action, order or
decree or from any other occurrence not described in the
Registration Statement and the Prospectus and any amendment or
supplement to either of them and (vii) there has not been any
change in the capital stock of the Fund nor any material
increase in the debt of the Fund from that set forth in the
Prospectus (and any amendment or supplement thereto) and the
Fund has not sustained any material liabilities or
obligations, direct or contingent, other than those reflected
in the Prospectus (and any amendment or supplement thereto).
(i) The Investment Adviser shall have furnished to the
Representative on the Closing Date a certificate, dated the Closing Date, of its
Chairman of the Board, President or a Vice President and its Controller or
Treasurer stating that:
29
(i) the signers have carefully examined the
Registration Statement, the Prospectus (and any amendments or
supplements to either of them) and this Agreement, (ii) the
representations and warranties of the Investment Adviser in
this Agreement are true and correct on and as of the date of
the certificate as if made on such date, (iii) since the date
of the Prospectus (and any amendment or supplement thereto)
there has not been any material, adverse change in the
condition (financial or other), business, prospects (other
than as a result of a change in the financial markets
generally), properties, net assets or results of operations of
the Investment Adviser, (iv) to the knowledge of such officers
after reasonable investigation, no order suspending the
effectiveness of the Registration Statement or prohibiting the
sale of any of the Shares or having a material, adverse effect
on the Investment Adviser has been issued and no proceedings
for any such purpose are pending before or threatened by the
Commission or any court or other regulatory body, 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, (v) the Investment Adviser has performed and
complied in all material respects with all agreements that
this Agreement requires it to perform by such Closing Date,
and (vi) the Investment Adviser has not sustained any material
loss or interference with its business from any court or from
legislative or other governmental action, order or decree or
from any other occurrence not described in the Registration
Statement and the Prospectus and any amendment or supplement
to either of them.
(j) The Subadviser shall have furnished to the Representative
on the Closing Date a certificate, dated the Closing Date, of its Chairman of
the Board, President or a Vice President and its Controller or Treasurer stating
that:
(i) the signers have carefully examined the
Registration Statement, the Prospectus (and any amendments or
supplements to either of them) and this Agreement, (ii) the
representations and warranties of the Subadviser in this
Agreement are true and correct on and as of the date of the
certificate as if made on such date, (iii) since the date of
the Prospectus (and any amendment or supplement thereto) there
has not been any material, adverse change in the condition
(financial or other), business, prospects (other than as a
result of a change in the financial markets generally),
properties, net assets or results of operations of the
Subadviser, (iv) to the knowledge of such officers after
reasonable investigation, no order suspending the
effectiveness of the Registration Statement or prohibiting the
sale of any of the Shares or having a material, adverse effect
on the Subadviser has been issued and no proceedings for any
such purpose are pending before or threatened by the
Commission or any court or other regulatory body, 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, (v) the Subadviser has performed and complied in all
material respects with all agreements that this Agreement
requires it to perform by such Closing Date, and (vi) the
Subadviser has not sustained any material loss or interference
with its
30
business from any court or from legislative or other
governmental action, order or decree or from any other
occurrence not described in the Registration Statement and the
Prospectus and any amendment or supplement to either of them.
(k) The Representative shall have received letters addressed
to the Underwriters, and dated the date hereof and the Closing Date from Ernst &
Young LLP, independent certified public accountants, substantially in the forms
heretofore approved by the Representative.
(l) (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 Fund, the Advisers
or, with respect to the transactions contemplated by the Prospectus (or any
amendment or supplement thereto) and this Agreement, the Underwriters, may be
pending before or, to the knowledge of the Fund, the Advisers or the
Underwriters or in the reasonable view of counsel to the Underwriters, 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 Representative; (ii) there shall not have been
any change in the shares of beneficial interest of the Fund nor any material
increase in the short-term or long-term debt of the Fund (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 Fund
or the Advisers; (iv) the Fund shall not have any liabilities or obligations,
direct or contingent (whether or not in the ordinary course of business), that
are material to the Fund, other than those reflected in the Registration
Statement or the Prospectus (or any amendment or supplement to either of them);
and (v) all the representations and warranties of the Fund and the Adviser
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.
(m) Neither the Fund nor the Advisers 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.
(n) The Fund shall have delivered and the Underwriters shall
have received evidence satisfactory to the Representative that the shares of
FundPreferred shares are rated `Aaa' by Xxxxx'x and `AAA' by Fitch 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 any outstanding shares of beneficial interest of the Fund by
any rating agency.
31
(o) The Fund and the Advisers shall have furnished or caused
to be furnished to the Underwriters such further certificates and documents as
the Representative shall have reasonably requested.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are satisfactory
in form and substance to the Representative and the Underwriters' counsel.
Any certificate or document signed by any officer of the Fund
or the Advisers and delivered to the Underwriters, or to counsel for the
Underwriters, shall be deemed a representation and warranty by the Fund or the
Advisers to the Underwriters as to the statements made therein.
10. Expenses. The Fund agrees to pay the costs incident to the
authorization, issuance, sale and delivery of the Shares to be sold by the Fund
to the Underwriters and any taxes payable in that connection; the costs incident
to the preparation, printing and filing under the 1933 Act and 1940 Act of the
Registration Statement and any amendments and exhibits thereto; the costs of
preparing, printing and distributing the Registration Statement as originally
filed and each amendment and any post-effective amendment thereto (including
exhibits), any Prepricing Prospectus, the Prospectus and any amendment or
supplement to the Prospectus; the costs of printing this Agreement and
distributing the terms of agreements relating to the organization of any
underwriting syndicate by mail, telex or other means of communication; the fees
paid to Rating Agencies in connection with the rating of the Shares; the fees
and expenses of qualifying the Shares under the securities laws of the several
jurisdictions as provided in this Section and of preparing and printing a Blue
Sky survey (including related fees and expenses of counsel to the Underwriters);
the fees and expenses of the Auction Agent as set forth in the Auction Agency
Agreement; and all other costs and expenses incident to the performance of the
obligations of the Fund under this Agreement; provided (i) the Fund, the
Advisers and each Underwriter shall pay its own costs and expenses in attending
any information meeting relating to the Fund, (ii) each Underwriter shall pay
the costs and expenses of preparing and distributing any sales material prepared
by it in connection with the public offering of the Shares, (iii) the
Underwriters shall pay the costs and expenses of any "tombstone advertisements
and (iv) except as provided in this Section and in Section 5 hereof, the
Underwriters shall pay their own costs and expenses, including the fees and
expenses of their counsel and any transfer taxes on the Shares which they may
sell.
If notice shall have been given pursuant to Paragraph 12
terminating the Underwriters' obligations hereunder, or if the sale of the
Shares provided for herein is not consummated because of any failure, refusal or
inability on the part of the Fund or Adviser to perform any agreement on its
part to be performed or if the Underwriters shall decline to purchase the Shares
for any reason permitted under this Agreement, the Fund shall reimburse the
Underwriters for the reasonable fees and expenses of their counsel and for such
other out-of-pocket expenses as shall have been reasonably incurred by them in
connection with this Agreement and the proposed purchase of the Shares, and upon
demand the Fund shall pay the full amount thereof to the Underwriters; it being
understood that the Fund shall not in any event be liable to any of the
Underwriters for damages on account of loss of anticipated profits from
32
the sale by them of the Shares. If the Fund fails to reimburse the Underwriters
for such fees and expenses, the Advisers shall upon demand, pay the full amount
thereof to the Underwriters.
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 Fund, by
notifying the Underwriters, or by the Underwriters, by notifying the Fund.
If any of the Underwriters shall fail or refuse to purchase
Shares which it is obligated to purchase hereunder on the Closing Date, and the
aggregate number of Shares which such defaulting Underwriter is obligated but
fails or refuses to purchase is not more than one-tenth of the aggregate number
of Shares which the Underwriters are obligated to purchase on the Closing Date,
the non-defaulting Underwriters shall be obligated severally, in the proportion
which the aggregate number of Shares set forth opposite its name in Schedule I
hereto bears to the aggregate number of Shares set forth opposite the names of
all non-defaulting Underwriters or in such other proportion as the
Representative may specify in accordance with the Xxxxxxx Xxxxx Xxxxxx Master
Agreement Among Underwriters, to purchase on the Closing Date the Shares which
such defaulting Underwriter is obligated, but fails or refuses, to purchase. If
any of the Underwriters shall fail or refuse to purchase Shares which it is
obligated to purchase on the Closing Date and the number of Shares with respect
to which such default occurs is more than one-tenth of the aggregate number of
Shares which the Underwriters are obligated to purchase on the Closing Date and
arrangements satisfactory to the Representative and the Fund for the purchase of
such Shares by the non-defaulting Underwriter or other party or parties approved
by you and the Fund are not made within 36 hours after such default, this
Agreement will terminate without liability on the part of the non-defaulting
Underwriter or the Fund. In any such case which does not result in termination
of this Agreement, either the Representative or the Fund shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve the defaulting Underwriter from
liability in respect of any such default of any such Underwriter under this
Agreement. The term "Underwriter" as used in this Agreement includes, for all
purposes of this Agreement, any party not listed in Schedule I hereto who, with
your approval and the approval of the Fund, purchases Shares which a defaulting
Underwriter is obligated, but fails or refuses, to purchase.
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 Representative's absolute discretion, without liability on
the part of the Underwriters to the Fund or the Advisers, by notice to the Fund
or the Advisers, prior to delivery of and payment for the FundPreferred shares,
if at any time prior to such time (i) trading in the Fund's Common Shares (as
defined in the Prospectus) shall have been suspended by the Commission or the
33
NYSE or trading in securities generally on the NYSE shall have been suspended or
limited or minimum prices for trading in securities generally shall have been
established on the NYSE, (ii) a commercial banking moratorium shall have been
declared by either federal or New York state authorities, or (iii) there shall
have occurred any outbreak or escalation of hostilities or a declaration by the
United States of a national emergency or war, or other calamity or crisis the
effect of which on financial markets in the United States is such as to make it,
in the Representative's sole judgment, impracticable or inadvisable to proceed
with the offering or delivery of the FundPreferred shares as contemplated by the
Prospectus (exclusive of any supplement thereto). Notice of such termination may
be given to the Fund by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
13. Information Furnished by the Underwriters. The statements
set forth in the last paragraph of the cover page and the first, third and
eighth paragraphs under the caption "Underwriting" in any Prepricing Prospectus
and in the Prospectus, constitute the only information furnished by or on behalf
of the Underwriters as such information is referred to in Sections 6(b) and 8
hereof.
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 Fund or the Investment
Adviser, at the office of the Fund at 000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, XX 00000,
Attention: Xxxxxxx X. Xxxxxxxxx, Managing Director, Assistant Secretary and
General Counsel to the Investment Adviser; (ii) if to the Subadviser, at the
offices of Spectrum Asset Management, Inc. at 0 Xxxx Xxxxx Xxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000, Attention: Xxxx X. Xxxx or (iii) if to the Underwriters, to
Xxxxxxx Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of
the Underwriters, the Fund, the Adviser, 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 Underwriters of any of the Shares in his
status as such purchaser.
15. Applicable Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
16. Limitation of Liability. Consistent with the Fund's
Declaration, notice is hereby given and the parties hereto agree that this
instrument is executed or made by or on behalf of the Fund by the Trustee(s) or
officer(s) of the Fund and not individually by them and that the obligations of
this instrument are not binding upon any of them or the shareholders of the Fund
individually but are binding only upon the assets and property of the Fund.
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]
Please confirm that the foregoing correctly sets forth the
agreement among the Fund, the Advisers and the Underwriters.
Very truly yours,
NUVEEN QUALITY PREFERRED INCOME FUND 3
By: ____________________________
Name:
Title:
NUVEEN INSTITUTIONAL ADVISORY CORP.
By: _____________________________
Name:
Title:
SPECTRUM ASSET MANAGEMENT, INC.
By: _____________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX XXXXX XXXXXX INC.
By: _____________________________
Name:
Title:
For itself and the other Underwriters
named in Schedule I to the foregoing
Agreement
SCHEDULE I
NUVEEN QUALITY PREFERRED INCOME FUND 3
Underwriters Number of Shares of Number of Shares of
------------ Series M Series TH
------------------------- -----------------------
Xxxxxxx Xxxxx Xxxxxx Inc. ..........................
------- -------
Nuveen Investments, LLC ...........................
------- -------
X.X. Xxxxxxx & Sons, Inc. ..........................
Prudential Securities Incorporated .................
Total ..............................................
------- -------
======================== =======================
