FIRST AMERICAN MINNESOTA MUNICIPAL INCOME FUND II, INC.
520 Shares
Auction Preferred Shares
PURCHASE AGREEMENT
March __, 2003
U.S. BANCORP XXXXX XXXXXXX INC.
U.S. Bancorp Center
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
First American Minnesota Municipal Income Fund II, Inc., a Minnesota
corporation (the "Company"), proposes to issue and sell to U.S. Bancorp Xxxxx
Xxxxxxx Inc. (the "Underwriter") 520 shares of its authorized but unissued
Auction Preferred Shares, par value $0.01 per share (such Auction Preferred
Shares of the Company being herein called the "Preferred Shares"). The Preferred
Shares are more fully described in the Registration Statement and the Prospectus
hereinafter mentioned. U.S. Bancorp Asset Management, Inc., a Delaware
corporation (the "Investment Adviser"), is the Company's investment adviser. The
Bank of New York, a New York banking corporation (the "Auction Agent"), will be
the Company's auction agent for the Preferred Shares. The Company has entered
into a Letter Agreement, dated as of March __, 2003 (the "DTC Agreement"), with
The Depository Trust Company ("DTC").
The Company and the Investment Adviser hereby confirm the agreements
made with respect to the purchase of the Preferred Shares by the Underwriter.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has filed with
the Securities and Exchange Commission (the "Commission") a notification of
registration of the Company as an investment company under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), on Form N-8A
(the "Notification"). The Company has also filed, in accordance with the
Securities Act of 1933, as amended (the "Securities Act"), the Investment
Company Act and the published rules and regulations adopted by the Commission
under the Securities Act (the "Securities Act Rules"), and the Investment
Company Act (the "Investment Company Act Rules"), with the Commission a
registration statement on Form N-2 (File Nos. 333-102491 and 811-21193),
including the related preliminary prospectus and preliminary statement of
additional information, relating to the Preferred Shares. The Company has
furnished you with copies of such registration statement and of all amendments
thereto, if any, heretofore filed by the Company with the Commission and of each
preliminary prospectus and preliminary statement of additional information filed
by the Company with the Commission or used by the Company. The Company will not,
on or prior to the Closing Date, as hereinafter defined, file any amendment to
the registration statement or make any supplement thereto to which you shall
reasonably object in writing after being furnished with a copy thereof.
The term "Preliminary Prospectus" means any preliminary prospectus (as
referred to in Rule 430 or 430A of the Securities Act Rules) and preliminary
statement of additional information included at any time as a part of the
registration statement. If such registration statement has not become effective
as of the date hereof, a further amendment (the "Final Amendment") to such
registration statement, including the forms of final prospectus and final
statement of additional information, necessary to permit such registration
statement to become effective will promptly be filed by the Company with the
Commission. If such registration statement has become effective, a final
prospectus and final statement of additional information (the "Rule 430A
Prospectus") containing information permitted to be omitted at the time of
effectiveness by Rule 430A of the Securities Act Rules will promptly be filed by
the Company with the Commission in accordance with Rule 497(h) of the Securities
Act Rules. The registration statement as amended at the time it becomes or
became effective (the "Effective Date"), including financial statements and all
exhibits and any information deemed to be included by Rule 430A, is called the
"Registration Statement". The term "Prospectus" means the prospectus and
statement of additional information as first filed with the Commission pursuant
to Rule 497 of the Securities Act Rules or, if no such filing is required, the
forms of final prospectus and final statement of additional information included
in the Registration Statement at the Effective Date.
The Company understands that the Underwriter proposes to make a public
offering of the Preferred Shares, as described in the Prospectus, as soon after
the Effective Date (or, if later, after the date this Agreement is executed) as
you deem advisable. The Company confirms that the Underwriter and dealers have
been authorized to distribute each Preliminary Prospectus and are authorized to
distribute the Prospectus and any amendments or supplements thereto.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE INVESTMENT
ADVISER. (a) Each of the Company and the Investment Adviser hereby jointly and
severally represents and warrants to, and agrees with, the Underwriter as
follows:
(i) On the Effective Date and the date the Prospectus is first
filed with the Commission pursuant to Rule 497 (if required), when any
post-effective amendment to the Registration Statement (except any
post-effective amendment required by Rule 8b-16 of the Investment
Company Act which is filed with the Commission after the later of one
year from the date of this Agreement or the date on which the
distribution of the Preferred Shares is completed) becomes effective or
any amendment or supplement to the Prospectus is filed with the
Commission and at the Closing Date, the Registration Statement, the
Prospectus and any such amendment or supplement and the Notification
did or will comply in all material respects with the requirements of
the Securities Act, the Investment Company Act, the Securities Act
Rules and the Investment Company Act Rules. On the Effective Date and
when any post-effective amendment to the Registration Statement (except
any post-effective amendment required by Rule 8b-16 of the Investment
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Company Act which is filed with the Commission after the later of one
year from the date of this Agreement or the date on which the
distribution of the Preferred Shares is completed) becomes effective,
no part of the Registration Statement, the Prospectus or any such
amendment or supplement did or will contain any untrue statement of a
material fact or omit to state a material fact required to be stated in
it or necessary to make the statements in it not misleading. At the
Effective Date, the date the Prospectus or any amendment or supplement
to the Prospectus is filed with the Commission and at the Closing Date,
the Prospectus did not or will not contain any untrue statement of a
material fact and did not or will not omit to state a material fact
necessary to make the statements in it, in light of the circumstances
under which they were made, not misleading. The foregoing
representations do not apply to statements or omissions made in
reliance upon and in conformity with information relating to the
Underwriter furnished in writing to the Company by you expressly for
use in the Registration Statement, Prospectus, amendment or supplement.
Each Preliminary Prospectus and the Prospectus delivered to the
Underwriter for use in connection with this offering was identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(ii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Minnesota and is duly qualified as a foreign corporation and in good
standing in each jurisdiction in which its ownership or leasing of
property requires such qualification and in which the failure to
qualify would have a material adverse effect on its business or
operations. The Company has full corporate power and authority to own
its assets and conduct its business as described in the Registration
Statement.
(iii) The authorized capital stock of the Company is as described
in the Registration Statement and the Prospectus. The capital stock of
the Company conforms in all material respects to the description of it
in the Prospectus. Proper corporate proceedings have been taken validly
to authorize the outstanding shares of such capital stock (including
the Preferred Shares being issued). All the outstanding shares of such
capital stock (including the Preferred Shares, when issued, delivered
and paid for as provided in this Agreement) have been duly and validly
issued and are fully paid and nonassessable, and no holder of the
Preferred Shares will be subject to personal liability by reason of
being such a holder. The holders of outstanding shares of capital stock
of the Company are not entitled to any preemptive or other similar
rights.
(iv) The Registration Statement and the Prospectus comply as to
form in all material respects with the requirements of the Securities
Act, the Investment Company Act, the Securities Act Rules and the
Investment Company Act Rules. There are no contracts or other documents
that are of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits thereto which
have not been so described or filed as required.
(v) This Agreement has been duly authorized, executed and
delivered by the Company, and includes the provisions (if any) required
by, and includes no provisions inconsistent with, any applicable
provisions of the Investment Company Act and the Investment Company Act
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Rules. The Company complies with the condition set forth in Section
10(b)(2) of the Investment Company Act required for it to use, as a
principal underwriter of securities issued by it, a person of which a
director, officer or employee of it is an interested person (as defined
in the Investment Company Act). Assuming the due authorization,
execution and delivery by the other parties hereto, this Agreement
constitutes the valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
rights to indemnity and contribution hereunder may be limited by
federal or state securities laws, and except to the extent
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting the enforcement
of creditors' rights generally and by the effect of general principles
of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
(vi) Each of the Advisory Agreement (as defined in the
Prospectus), the Administration Agreement (as so defined), the Custody
Agreement (as so defined), the Transfer Agency Agreement (as so
defined), the Auction Agency Agreement (as so defined) and the DTC
Agreement (1) has been duly and validly authorized, executed and
delivered by the Company, (2) includes the provisions (if any) required
by, and includes no provisions inconsistent with, any applicable
provisions of the Investment Company Act and the Investment Company Act
Rules and (3) constitutes the legal, valid and binding obligation of
the Company enforceable in accordance with its terms, except to the
extent enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and by the effect of
general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
(vii) None of (1) the execution and delivery of this Agreement,
the Advisory Agreement, the Administration Agreement, the Custody
Agreement, the Transfer Agency Agreement, the Auction Agency Agreement
or the DTC Agreement by the Company, (2) the issue and sale by the
Company of the Preferred Shares sold by the Company as contemplated by
this Agreement or (3) the consummation by the Company of the other
transactions contemplated by such agreements conflicted or conflicts
with, or resulted or results in a breach of, the Articles of
Incorporation or By-laws of the Company, in each case as amended
through the date hereof, or any agreement or instrument to which the
Company is a party or by which the Company is bound, any law or
regulation or any order or regulation of any court, governmental
instrumentality or arbitrator.
(viii) The Company is not currently in material breach of, or in
material default under, any agreement or instrument to which it is
party or by which it or its property is bound or affected.
(ix) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of
the Registration Statement.
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(x) Subject to the filing of the Final Amendment, if not already
filed, no consent, approval, authorization or order of any court or
governmental agency or body was or is required for the consummation by
the Company of the transactions contemplated by this Agreement, the
Advisory Agreement, the Administration Agreement, the Custody
Agreement, the Transfer Agency Agreement, the Auction Agency Agreement
or the DTC Agreement, except such as have been obtained under the
Securities Act, the Investment Company Act, the Commodities Exchange
Act, the Securities Act Rules and the Investment Company Act Rules and
such as may be required under state securities or blue sky laws in
connection with the purchase and distribution of the Preferred Shares
by the Underwriter.
(xi) The Company is duly registered with the Commission under the
Investment Company Act as a closed-end, non-diversified management
investment company, and, subject to the filing of the Final Amendment,
if not already filed, all required action has been taken by the Company
under the Securities Act and the Investment Company Act to make the
public offering and consummate the sale of the Preferred Shares
provided in this Agreement.
(xii) Ernst & Young LLP, whose report appears in the Prospectus,
are independent auditors with respect to the Company, as required by
the Securities Act, the Securities Act Rules, the Investment Company
Act and the Investment Company Rules.
(xiii) The financial statements of the Company included in the
Registration Statement and the Prospectus present fairly the financial
position of the Company as at the dates indicated and the results of
operations for the periods specified and said financial statements have
been prepared in conformity with generally accepted accounting
principles in the United States applied on a consistent basis; and the
information in the Prospectus under the "Financial Highlights" and
"Capitalization" presents fairly the information shown therein and has
been compiled on a basis consistent with that of the financial
statements included in the Registration Statement.
(xiv) Since the date as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the
condition, financial or otherwise, of the Company or the Investment
Adviser, whether or not arising in the ordinary course of business, (B)
there have been no transactions entered into by the Company which are
material to the Company other than those in the ordinary course of
business and (C) except for regular monthly dividends on the Common
Shares (as hereinafter defined) declared and paid by the Company in the
ordinary course of business, there has been no dividend or distribution
of any kind declared, paid or made by the Company on any class of its
capital stock.
(xv) The Company owns or possesses or has obtained all material
governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to carry on its business as contemplated in
the Prospectus.
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(xvi) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company or the Investment Adviser,
threatened, against or affecting, the Company or the Investment Adviser
which might result in any material adverse change in the condition,
financial or otherwise, business affairs or business prospects of the
Company or the Investment Adviser; and there are no material contracts
or documents of the Company which are required to be filed as exhibits
to the Registration Statement by the Securities Act, the Investment
Company Act or by the Securities Act Rules and the Investment Company
Act Rules which have not been so filed.
(xvii) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management's general or
specific authorization and with the investment policies and
restrictions of the Company and the applicable requirements of the
Investment Company Act and the Investment Company Act Rules; (B)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles in the United States applied on a consistent basis and to
maintain accountability for assets and to maintain compliance with the
books and records requirements under the Investment Company Act and the
Investment Company Act Rules; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D)
the recorded accountability for assets is compared with existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
(xviii) Except as stated in this Agreement and in the Prospectus
(and any amendment or supplement thereto), neither the Company nor the
Investment Adviser has taken, nor will it take, directly or indirectly,
any action designed to or which might reasonably be expected to cause
or result in stabilization or manipulation of the price of any
securities issued by the Company to facilitate the sale or resale of
the Preferred Shares, and neither the Company nor the Investment
Adviser is aware of any such action taken or to be taken by any of
their respective affiliates who are not underwriters or dealers
participating in the offering of the Preferred Shares.
(xix) [Intentionally Omitted.]
(xx) The Company is, and intends to be, in full compliance with
the provisions applicable to it of the Xxxxxxxx-Xxxxx Act of 2002 and
the rules of the Commission thereunder that have become effective and
mandate compliance on or prior to the date hereof, including but not
limited to the requirement to maintain disclosure controls and
procedures designed to ensure that information required to be disclosed
in the reports that the Company files or submits under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the
Investment Company Act will be recorded, processed, summarized and
reported within the time periods specified in the Commission's rules
and forms.
(xxi) The common shares, par value $0.01 per share, of the
Company (the "Common Shares") are listed on the American Stock
Exchange.
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(xxii) The Preferred Shares have been, or on or prior to the
Closing Date will be, assigned a rating of "AAA" by Standard & Poor's
Ratings Services ("S&P") and "Aaa" by Xxxxx'x Investors Service, Inc.
("Xxxxx'x").
(b) The Investment Adviser also represents to the Underwriter as
follows:
(i) The Investment Adviser has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Delaware, is duly qualified as a foreign corporation and
in good standing in each other jurisdiction in which its ownership or
leasing of property or its conduct of business requires such
qualification and in which the failure to qualify would have a material
adverse effect on the business or operations of the Investment Adviser
and has full corporate power and authority to conduct its business as
described in the Registration Statement.
(ii) The Investment Adviser is duly registered with the
Commission under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), as an investment adviser and is not prohibited under
the Advisers Act, the Investment Company Act, the published rules and
regulations adopted by the Commission under the Advisers Act (the
"Advisers Act Rules") or the Investment Company Act Rules from acting
as investment adviser for the Company or otherwise under the Advisory
Agreement as contemplated by the Prospectus.
(iii) This Agreement has been duly and validly authorized,
executed and delivered by the Investment Adviser, includes the
provisions (if any) required by, and includes no provisions
inconsistent with, any applicable provisions of the Investment Company
Act and the Investment Company Act Rules, and, assuming the due
authorization, execution and delivery by the other parties hereto,
constitutes the valid and legally binding agreement of the Investment
Adviser, enforceable against the Investment Adviser in accordance with
its terms, except as rights to indemnity or contribution hereunder may
be limited by federal or state securities laws, and except to the
extent enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and by the effect of
general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
(iv) Each of the Advisory Agreement and the Administration
Agreement has been duly and validly authorized, executed and delivered
by the Investment Adviser, includes the provisions (if any) required
by, and includes no provisions inconsistent with, any applicable
provisions of the Investment Company Act, and the Investment Company
Act Rules, and constitutes a legal, valid and binding obligation of the
Investment Adviser enforceable in accordance with its terms, except to
the extent enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and by the effect of
general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
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(v) No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association was
or is required for the consummation by the Investment Adviser of the
transactions contemplated by this Agreement or the Advisory Agreement.
(vi) Neither the execution and delivery of this Agreement or the
Advisory Agreement nor the consummation by the Investment Adviser of
the transactions contemplated by this Agreement or the Advisory
Agreement conflicted or conflicts with, or resulted or results in a
breach of, the Certificate of Incorporation or By-laws of the
Investment Adviser or any agreement or instrument to which the
Investment Adviser is a party or by which the Investment Adviser is
bound, any law, rule, regulation or any order of any court,
governmental instrumentality, securities exchange or association or
arbitrator.
(vii) The description of the Investment Adviser in the Prospectus
complies with the requirements of the Securities Act, the Investment
Company Act and the Advisers Act and does not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated in it or necessary in order to make the
statements in it not misleading.
3. PURCHASE OF THE PREFERRED SHARES BY THE UNDERWRITER. (a) On the
basis of the representations and warranties and subject to the terms and
conditions herein set forth, the Company agrees to issue and sell 520 Preferred
Shares to the Underwriter, and the Underwriter agrees to purchase from the
Company such number of Preferred Shares. The initial public offering price of
the Preferred Shares shall be $25,000 per share. The purchase price at which all
Preferred Shares shall be sold by the Company and purchased by the Underwriter
shall be $24,750 per share.
(b) No later than the Closing Date, the Underwriter will provide, and
will use its reasonable best efforts to cause any selling group member to whom
it has sold Preferred Shares to provide, the Auction Agent with a list of the
record names of the persons to whom they have sold Preferred Shares, the number
of Preferred Shares sold to each such person and the number of Preferred Shares
they are holding as of the Closing Date; provided that in lieu thereof, the
Underwriter may provide the Auction Agent with a list indicating itself as the
sole holder of all of the Preferred Shares sold by the Underwriter.
4. OFFERING BY THE UNDERWRITER. (a) The terms of the initial public
offering by the Underwriter of the Preferred Shares to be purchased by the
Underwriter shall be as set forth in the Prospectus. The Underwriter may from
time to time decrease the public offering price and increase or decrease the
concessions and discounts to dealers as it may determine.
(b) The information set forth under "Underwriting" in any Preliminary
Prospectus or in the Prospectus relating to the Preferred Shares proposed to be
filed by the Company (insofar as such information relates to the Underwriter)
constitutes information furnished by you to the Company for inclusion therein,
and the Underwriter represents and warrants to the Company that the statements
made therein are correct and complete in all material respects.
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5. DELIVERY OF AND PAYMENT FOR THE PREFERRED SHARES. Delivery of
certificates for the Preferred Shares shall be made at the offices of U.S.
Bancorp Xxxxx Xxxxxxx Inc., U.S. Bancorp Center, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000, at 9:00 a.m., Central time, on the third full business day
after the date of this Agreement, or at such time on such other day, not later
than seven full business days after such third business day, or at such other
place, as shall be agreed upon in writing by you and the Company. The date and
hour of such delivery, and of payment therefor as provided in the following two
sentences, are herein called the Closing Date. Payment for the Preferred Shares
purchased from the Company shall be made to the Company or its order by wire
transfer of same day funds to a bank account designated by the Company. Such
payment shall be made upon delivery of a certificate for such Preferred Shares
in definitive form registered in the name of Cede & Co., as nominee for DTC, to
you through the facilities of DTC for your account. The certificate for the
Preferred Shares will be made available to the Underwriter for inspection and
checking not less than one full business day prior to the Closing Date.
6. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and agrees
with the Underwriter as follows:
(a) If the Registration Statement has not yet become effective, the
Company will promptly file the Final Amendment with the Commission, will use its
best efforts to cause the Registration Statement to become effective and, as
soon as the Company is advised, will advise you when the Registration Statement
or any amendment thereto has become effective. If the Registration Statement has
become effective, the Company will file the 430A Prospectus as promptly as
practicable, but no later than the second business day following the date of
this Agreement, and will provide you satisfactory evidence of the filing. The
Company will not file any prospectus or any other amendment (except any
post-effective amendment required by Rule 8b-16 of the Investment Company Act
which is filed with the Commission after the later of one year from the date of
this Agreement or the date on which the distribution of the Preferred Shares is
completed) or supplement to the Registration Statement or Prospectus unless a
copy has first been submitted to you within a reasonable time before its filing
and you shall not have reasonably objected to it within a reasonable time after
receiving the copy.
(b) The Company will advise you, promptly after it shall receive notice
or obtain knowledge thereof, (1) of the issuance by the Commission of any order
in respect of the Company, or in respect of the Investment Adviser which relates
to the Company, (2) of the initiation or threatening of any proceedings for, or
receipt by the Company of any notice with respect to, the suspension of the
qualification of the Preferred Shares for sale in any jurisdiction or the
issuance of any stop order by the Commission suspending the effectiveness of the
Registration Statement and (3) of receipt by the Company or any representative
or attorney of the Company of any other communication from the Commission
relating to the Company, the Registration Statement, the Notification, any
Preliminary Prospectus, the Prospectus or to the transactions contemplated by
this Agreement. The Company will make every reasonable effort to prevent the
issuance of a stop order suspending the effectiveness of the Registration
Statement and, if any such stop order is issued, to obtain its lifting as soon
as possible.
(c) The Company will furnish to you and your counsel three signed
copies of the Registration Statement and any amendments (except any
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post-effective amendment required by Rule 8b-16 of the Investment Company Act
which is filed with the Commission after the later of one year from the date of
this Agreement or the date on which the distribution of the Preferred Shares is
completed) to either of them (including all exhibits filed with any such
document) and as many conformed copies of the Registration Statement and of any
amendments and supplements (except any post-effective amendment required by Rule
8b-16 of the Investment Company Act which is filed with the Commission after the
later of one year from the date of this Agreement or the date on which the
distribution of the Preferred Shares is completed) to such documents as you may
from time to time reasonably request.
(d) During such period as a prospectus is required by law to be
delivered by an underwriter or a dealer, the Company will furnish to the
Underwriter and any dealers who may so request in writing, as many copies of the
Prospectus as may from time to time be reasonably requested, and, if any event
occurs during such period as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in light of
the circumstances existing when the Prospectus is delivered to a purchaser, not
misleading in any material respect, or if during such period it is necessary to
amend or supplement the Prospectus to comply with the Securities Act, the
Investment Company Act, the Securities Act Rules or the Investment Company Act
Rules, the Company will promptly prepare, submit to you, file with the
Commission and furnish to the Underwriter and to any dealers (whose names and
addresses you will furnish to the Company) to whom Preferred Shares may have
been sold by you, and to other dealers upon request, amendments or supplements
to the Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not, in light of the circumstances existing when the
Prospectus is delivered to a purchaser, be misleading in any material respect
and will comply with the Securities Act, the Investment Company Act, the
Securities Act Rules and the Investment Company Act Rules. Delivery by the
Underwriter of any such amendments or supplements to the Prospectus will not
constitute a waiver of any of the conditions in Section 11.
(e) The Company will make generally available to the Company's security
holders, as soon as practicable, but in any event not later than 15 months after
the end of the Company's current fiscal quarter, an earnings statement of the
Company, which need not be audited, satisfying the provisions of Section 11(a)
of the Securities Act and Rule 158 of the Securities Act Rules, and will advise
you in writing when such statement has been so made available.
(f) [Intentionally Omitted.]
(g) The Company, whether or not the transactions contemplated hereunder
are consummated or this Agreement is terminated, will pay or cause to be paid
(1) all expenses (including transfer taxes allocated to the respective
transferees) incurred in connection with the delivery to the Underwriter of the
Preferred Shares, (2) all expenses and fees (including, without limitation, fees
and expenses of the Company's accountants and counsel but, except as otherwise
provided below, not including fees of the Underwriter's counsel) in connection
with the preparation, printing, filing, delivery and shipping of the
Registration Statement (including all amendments, schedules and exhibits
thereto), the Preferred Shares, each Preliminary Prospectus, the Prospectus and
any amendment thereof or supplement thereto, and the printing, delivery and
shipping of this Agreement and other underwriting documents, (3) the fees and
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expenses of any transfer agent or registrar, (4) any fees charged by securities
rating services for rating the Preferred Shares, (5) the fees and expenses of
DTC and its nominee and the Auction Agent, and (6) all other costs and expenses
incident to the performance of its obligations hereunder that are not otherwise
specifically provided for herein. If the sale of the Preferred Shares provided
for herein is not consummated by reason of action by the Company pursuant to
Section 10(a) hereof which prevents this Agreement from becoming effective, or
by reason of any failure, refusal or inability on the part of the Company to
perform any agreement on its part to be performed, or because any other
condition of the Underwriter's obligations hereunder required to be fulfilled by
the Company is not fulfilled, or because this Agreement is terminated pursuant
to Section 12 hereof, the Company or the Investment Adviser will reimburse the
Underwriter for all out-of-pocket disbursements (including fees and
disbursements of counsel) incurred by the Underwriter in connection with its
investigation, preparing to market and marketing the Preferred Shares or in
contemplation of performing its obligations hereunder. The Company shall not in
any event be liable to the Underwriter for loss of anticipated profits from the
transactions covered by this Agreement.
(h) Without your prior written consent, the Company will not offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend or otherwise transfer or dispose of, directly or indirectly, or
register with the Commission, or announce an offering of, any equity securities
of the Company, within 180 days after the Effective Date, except for the
Preferred Shares.
(i) The Company will use the net proceeds received by it from the sale
of the Preferred Shares in the manner specified in the Prospectus under "Use of
Proceeds."
7. INDEMNIFICATION AND CONTRIBUTION. (a) Each of the Company and the
Investment Adviser, jointly and severally, agrees to indemnify and hold harmless
the Underwriter against any losses, claims, damages or liabilities to which the
Underwriter may become subject, under the Securities Act, the Exchange Act, the
Investment Company Act, the Advisers Act or other Federal or state statutory law
or regulation or the common law or otherwise (including in settlement of any
litigation if such settlement is effected with the written consent of the
Company and the Investment Adviser), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, including the information deemed to be a part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A of the
Securities Act Rules, if applicable, any Preliminary Prospectus, the Prospectus,
or any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Underwriter for any legal or other expenses reasonably
incurred by it in connection with investigating or defending against such loss,
claim, damage, liability or action; provided, however, that the Company and the
Investment Adviser shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, any Preliminary Prospectus, the Prospectus,
or any such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by you specifically for use in the
-11-
preparation thereof and, provided further, that with respect to any actual or
alleged untrue statement made in or omission from any Preliminary Prospectus
which is eliminated or remedied in the Prospectus, the indemnity agreement of
the Company and the Investment Adviser contained in this paragraph (a) shall not
inure to the benefit of the Underwriter to the extent that any such loss, claim,
damage or liability results from the fact that the Underwriter sold Preferred
Shares to a person to whom the Underwriter shall have failed to send or give, at
or prior to the written confirmation of the sale of such Preferred Shares, a
copy of the Prospectus, unless such failure to deliver the Prospectus was the
result of noncompliance by the Company with Section 6(d) hereof.
In addition to its obligations under this Section 7(a), the Company and
the Investment Adviser agree that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in the Section 7(a), they will reimburse the Underwriter on a monthly
basis for all reasonable legal fees or other expenses incurred in connection
with investigating or defending any such claim, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a judicial determination as
to the propriety and enforceability of the Company's or the Investment Adviser's
obligation to reimburse the Underwriter for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction; provided, however, that any such reimbursement shall be
made only to the extent it may be made consistent with any publicly-announced
position of the Commission or its staff with respect to advancement of such
legal fees and other expenses. To the extent that any such interim reimbursement
payment is so held to have been improper, the Underwriter shall promptly return
it to the party or parties that made such payment, together with interest,
compounded daily, determined on the basis of the prime rate (or other commercial
lending rate for borrowers of the highest credit standing) announced from time
to time by U.S. Bank, N.A. (the "Prime Rate"). Any such reimbursement payments
which are not made to the Underwriter within 30 days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request. This indemnity agreement shall be in addition to any liabilities which
the Company or the Investment Adviser may otherwise have.
(b) The Underwriter will indemnify and hold harmless the Company and
the Investment Adviser against any losses, claims, damages or liabilities to
which the Company or the Investment Adviser may become subject, under the
Securities Act, the Exchange Act, the Investment Company Act, the Advisers Act
or other Federal or state statutory law or regulation or the common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Underwriter), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by you specifically for use in the
-12-
preparation thereof, and will reimburse the Company and the Investment Adviser
for any legal or other expenses reasonably incurred by the Company or the
Investment Adviser in connection with investigating or defending against any
such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve the indemnifying party from any liability that it may have to an
indemnified party except to the extent such indemnifying party has been
materially prejudiced by such failure. In case any such action shall be brought
against any indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
person similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of the indemnifying party's
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party in connection with the defense thereof other
than reasonable costs of investigation; PROVIDED, HOWEVER, that if the
indemnified party or parties reasonably determine that there may be a conflict
between the positions of the indemnifying party or parties and of the
indemnified party or parties in conducting the defense of such action or that
there may be legal defenses available to such indemnified party or parties
different from or in addition to those available to the indemnifying party or
parties, counsel for the indemnified party or parties shall be entitled to
conduct the defense of the indemnified party or parties and the reasonable fees
and expenses of such counsel shall be borne by the indemnifying party or
parties. An indemnifying party shall not be obligated under any settlement
agreement relating to any action under this Section 7 to which it has not agreed
in writing.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Investment Adviser on the one hand and the Underwriter on
the other hand from the offering of the Preferred 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 to the relative fault of the Company
and the Investment Adviser on the one hand and the Underwriter on the other hand
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Investment
Adviser on the one hand and the Underwriter on the other hand shall be deemed to
be in the same proportion as the total net proceeds from the offering of the
Preferred Shares (before deducting expenses) received by the Company bear to the
total underwriting commissions or sales load received by the Underwriter, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault 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 of a material fact relates to information supplied by the
-13-
Company and the Investment Adviser on the one hand or the Underwriter on the
other hand and the parties' relevant intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Company, the Investment Adviser and the Underwriter agree that it would not be
just and equitable if contributions pursuant to this subsection (d) were to be
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the first
sentence of this subsection (d). The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending against any action or claim which is the subject of
this subsection (d). Notwithstanding the provisions of this subsection (d), the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Preferred Shares underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages that the Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company and the Investment Adviser under
this Section 7 shall be in addition to any liability which the Company or the
Investment Adviser may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls the Underwriter within the
meaning of the Securities Act; and the obligations of the Underwriter under this
Section 7 shall be in addition to any liability that the Underwriter may
otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company (including any person who, with his or her consent, is
named in the Registration Statement as about to become a director of the
Company), to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company or the Investment
Adviser within the meaning of the Securities Act.
(f) The Underwriter confirms and the Company and the Investment Adviser
acknowledge that the statements with respect to the public offering of the
Preferred Shares by the Underwriter set forth on the cover page of, and the
concession and reallowance figures and the statements with respect to
stabilization transactions appearing under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information furnished in writing
to the Company by or on behalf of the Underwriter specifically for inclusion in
the Registration Statement and the Prospectus.
(g) The obligations of the Company to pay any indemnification or
contribution, under this Section 7 or otherwise, shall be subject in every case
to Section 17(i) of the 1940 Act.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of the Company and the Investment
Adviser contained herein or in certificates delivered pursuant hereto, and the
agreements of the Underwriter, the Company and the Investment Adviser contained
in Section 7 hereof, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Underwriter or any
controlling person thereof, or the Company or the Investment Adviser or any of
-14-
their respective officers, directors or controlling persons and shall survive
delivery of, and payment for, the Preferred Shares to and by the Underwriter
hereunder.
9. [INTENTIONALLY OMITTED.]
10. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective at 10:00 a.m., Central time,
on the first full business day following the effective time of the Registration
Statement, or at such earlier time after the effective time of the Registration
Statement as you in your discretion shall first release the Preferred Shares for
sale to the public; PROVIDED, that if the Registration Statement is effective at
the time this Agreement is executed, this Agreement shall become effective at
such time as you in your discretion shall first release the Preferred Shares for
sale to the public. For the purpose of this Section 10, the Preferred Shares
shall be deemed to have been released for sale to the public upon release by you
of an electronic communication authorizing the commencement of the offering of
the Preferred Shares for sale by the Underwriter or other securities dealers. By
giving notice as hereinafter specified before the time this Agreement becomes
effective, you or the Company may prevent this Agreement from becoming effective
without liability of any party to any other party, except that the provisions of
Section 6(g) and Section 7 hereof shall at all times be effective.
(b) You shall have the right to terminate this Agreement by giving
notice as hereinafter specified at any time at or prior to the Closing Date, if
(1) the Company shall have failed, refused or been unable, at or prior to the
Closing Date, to perform any agreement on its part to be performed hereunder,
(2) any other condition of the Underwriter's obligations hereunder is not
fulfilled, (3) trading on the Nasdaq National Market, the New York Stock
Exchange or the American Stock Exchange shall have been wholly suspended, (4)
minimum or maximum prices for trading shall have been fixed, or maximum ranges
for prices of securities shall have been required, on the Nasdaq National
Market, the New York Stock Exchange or the American Stock Exchange, by such
Exchange or by order of the Commission or any other governmental authority
having jurisdiction, (5) a banking moratorium shall have been declared by
federal or state authorities, or (6) there has occurred any material adverse
change in the financial markets in the United States or an outbreak of major
hostilities (or an escalation thereof) in which the United States is involved, a
declaration of war by Congress, any other substantial national or international
calamity or any other event or occurrence of a similar character shall have
occurred since the execution of this Agreement that, in your judgment, makes it
impractical or inadvisable to proceed with the completion of the sale of and
payment for the Preferred Shares. Any such termination shall be without
liability of any party to any other party except that the provisions of Section
6(g) and Section 7 hereof shall at all times be effective.
(c) If you elect to prevent this Agreement from becoming effective or
to terminate this Agreement as provided in this Section 10, the Company and the
Investment Adviser shall be notified promptly by you by telephone, confirmed by
letter. If the Company elects to prevent this Agreement from becoming effective,
you shall be notified by the Company by telephone, confirmed by letter.
-15-
11. CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS. The obligations of the
Underwriter to purchase and pay for the Preferred Shares on the Closing Date
shall be subject to the accuracy of, and compliance with, all representations,
warranties and agreements of the Company and the Investment Adviser contained
herein and the performance by the Company and the Investment Adviser of all of
their respective obligations to be performed hereunder at or prior to the
Closing Date and to the following further conditions:
(a) The Registration Statement must have become effective not later
than 5:00 p.m., Central time, on the date of this Agreement or such later date
and time as you consent to in writing. If required, the Prospectus must have
been filed in accordance with Rule 497(b) or (h) of the Securities Act Rules.
(b) No stop order suspending the effectiveness of the Registration
Statement or any amendment thereof shall have been issued and no proceedings for
such purpose may be pending before or threatened by the Commission, and any
requests for additional information on the part of the Commission (to be
included in the Registration Statement or Prospectus or otherwise) must be
complied with to your reasonable satisfaction.
(c) You shall have received from Sidley Xxxxxx Xxxxx & Xxxx, your
counsel, an opinion addressed to you and dated the Closing Date with respect to
the Company, the Preferred Shares, the Registration Statement and Prospectus,
this Agreement and the form and sufficiency of all proceedings taken in
connection with the sale and delivery of the Preferred Shares and other related
matters as you reasonably may request. Such opinion shall be satisfactory in all
respects to you. The Company and the Investment Adviser shall have furnished to
such counsel such documents as they may reasonably request for the purpose of
enabling them to render such opinion.
(d) You shall have received from Xxxxxx Xxxxx, Esq., counsel for the
Investment Adviser, an opinion, addressed to you and dated the Closing Date,
substantially in the form of Appendix A to this Agreement.
(e) You shall have received from Xxxxxx & Xxxxxxx LLP, counsel for the
Company, an opinion, addressed to you and dated the Closing Date, substantially
in the form of Appendix B to this Agreement.
(f) You shall have received from Xxxxxxxxxxx & Xxxxxxxx LLP, counsel
for the Company, an opinion, addressed to you and dated the Closing Date,
substantially in the form of Appendix C to this Agreement.
(g) Since the dates as of which information is given in the
Registration Statement and Prospectus, (1) there must not have been any material
change in the capital stock or liabilities of the Company and its subsidiaries,
(2) there must not have been any material adverse change in the general affairs,
prospects, management, business, financial condition or results of operations of
the Company, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated by the Prospectus, (3) the
Company must not have sustained any material loss or interference with its
business from any court or legislative or other governmental action, order or
decree, or any other occurrence, not described in the Prospectus, and (4) there
-16-
must not have occurred any event that makes untrue or incorrect in any material
respect any statement or information contained in the Prospectus or that is not
reflected in the Prospectus but should be reflected in it in order to make the
statements or information in it not misleading in any material respect, if, in
your judgment, any such development referred to in clause (1), (2), (3) or (4)
makes it impractical or inadvisable to offer or deliver the Preferred Shares on
the terms and in the manner contemplated in the Prospectus.
(h) You must have received on the date of this Agreement certificates,
dated such date, of the chief executive or operating officer and the chief
financial or accounting officer of each of the Company and the Investment
Adviser certifying that (1) such officers have carefully examined the
Registration Statement, the Prospectus and this Agreement, (2) the
representations of the Company and the Investment Adviser in this Agreement are
accurate on and as of the date of the certificate, (3) there has not been any
material adverse change in the general affairs, prospects, management, business,
financial condition or results of operations of the Company, whether or not
arising from transactions in the ordinary course of business, except as set
forth in or contemplated by the Prospectus, and (4) to the knowledge of such
officers, no actions to delay the effectiveness of the Registration Statement,
to prohibit the sale of the Preferred Shares or having or which may have any
material adverse effect on the Company or the Investment Adviser have been taken
or threatened by the Commission. You must receive on the Closing Date
certificates, dated the Closing Date, of such officers certifying to the effect
set forth in (1), (2), and (3) above and that (1) to the knowledge of such
officers, no stop order suspending the effectiveness of the Registration
Statement, prohibiting the sale of the Preferred 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 and (2) each
of the Company and the Investment Adviser has performed all agreements that this
Agreement requires it to perform by the Closing Date.
(i) You must receive by 1:00 p.m., Central time, on the date that this
Agreement is signed and delivered by you a signed letter, dated such date and
addressed to the Underwriter from Ernst & Young LLP. You must also receive on
the Closing Date a signed letter from such accountants, dated the Closing Date,
confirming on the basis of a review in accordance with the procedures set forth
in their earlier letter that nothing has come to their attention during the
period from a date not more than three business days before the date of this
Agreement, specified in the letter to be dated the Closing Date, to a date not
more than three business days before the Closing Date that would require any
change in their letter referred to in the foregoing sentence.
(j) The representations and warranties of the Company and the
Investment Adviser herein and the statements made by the Company or the
Investment Adviser or any of their respective officers in any certificate
delivered to you or your counsel pursuant to this Agreement shall be true and
correct in all material respects as of the Closing Date.
(k) [Intentionally Omitted.]
(l) The Preferred Shares shall have been accorded a rating of "AAA" by
S&P and "Aaa" by Xxxxx'x, and letters to such effect, dated on or before the
Closing Date, shall have been delivered to you.
-17-
(m) As of the Closing Date, and assuming the receipt of the net
proceeds from the sale of the Preferred Shares, the 1940 Act Preferred Shares
Asset Coverage and the Preferred Shares Basic Maintenance Amount (each as
defined in the Prospectus) each will be met.
All the opinions, certificates, letters or other documents mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if you and Sidley Xxxxxx Xxxxx & Xxxx, your counsel,
shall be satisfied that they comply in form, the determination of which shall
not be unreasonably withheld.
12. CONDITIONS OF THE OBLIGATION OF THE COMPANY. The obligation of the
Company to deliver the Preferred Shares shall be subject to the conditions that
(a) the Registration Statement shall have become effective not later than 5:00
p.m., Central time, on the date of this Agreement, and (b) no stop order
suspending the effectiveness thereof or any amendment thereof shall have been
issued, and no proceedings therefor shall be pending or threatened by the
Commission at the Closing Date. In case any of the conditions specified in this
Section 12 shall not be fulfilled, this Agreement may be terminated by the
Company by giving notice to you.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of the Company, the Investment Adviser, the Underwriter
and, with respect to the provisions of Section 7 hereof, including without
limitation Section 7(e) hereof, the several parties (in addition to the Company
and the Underwriter) indemnified under the provisions of such Section 7, and
their respective personal representatives, successors and assigns. Nothing in
this Agreement is intended or shall be construed to give to any other person,
firm or corporation any legal or equitable remedy or claim under or in respect
of this Agreement or any provision herein contained. The term "successors and
assigns" as herein used shall not include any purchaser, as such purchaser, of
any of the Preferred Shares from the Underwriter.
14. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing and shall be mailed or delivered (i) if to the
Underwriter, to U.S. Bancorp Xxxxx Xxxxxxx Inc., U.S. Bancorp Center, 000
Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000; (ii) if to the Company, to: First
American Minnesota Municipal Income Fund II, Inc., c/o U.S. Bancorp Asset
Management, Inc., U.S. Bancorp Center, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000; and (iii) if to the Investment Adviser, to: U.S. Bancorp Asset
Management, Inc., U.S. Bancorp Center, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original and all such counterparts
shall together constitute one and the same instrument.
-18-
Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement among the Company,
the Investment Adviser and the Underwriter in accordance with its terms.
Very truly yours,
FIRST AMERICAN MINNESOTA MUNICIPAL
INCOME FUND II, INC.
By:
-------------------------------------
Xxxxxxx X. Xxxxxx
Vice President, Administration
U.S. BANCORP ASSET MANAGEMENT, INC.
By:
-------------------------------------
Xxxxxx X. Xxxxxx
Chief Operating Officer
Confirmed as of the date first
above mentioned.
U.S. BANCORP XXXXX XXXXXXX INC.
By:
--------------------------------------------
Xxxxx Xxxxxx Xxxxxxxx
Managing Director
-19-
APPENDIX A
OPINION OF XXXXXX XXXXX, ESQ.
1. The Investment Adviser has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware and has full corporate power and authority to conduct its business as
described in the Registration Statement.
2. The Investment Adviser is duly registered with the Commission under
the Advisers Act as an investment adviser and, to my knowledge, is not
prohibited under the Advisers Act, the Investment Company Act, the Advisers Act
Rules or the Investment Company Act Rules from acting as investment adviser or
otherwise under the Advisory Agreement for the Company as contemplated by the
Prospectus.
3. The Agreement has been duly and validly authorized, executed and
delivered by the Investment Adviser, and includes the provisions (if any)
relating to the Investment Adviser required by, and includes no provisions
relating to the Investment Adviser inconsistent with, any applicable provisions
of the Investment Company Act and the Investment Company Act Rules.
4. Each of the Advisory Agreement and the Administration Agreement (as
defined in the Prospectus) has been duly and validly authorized, executed and
delivered by the Investment Adviser, includes the provisions (if any) required
by, and includes no provisions inconsistent with, any applicable provisions of
the Investment Company Act and the Investment Company Act Rules, and constitutes
a legal, valid and binding obligation of the Investment Adviser enforceable in
accordance with its terms, except to the extent enforceability may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by the effect
of general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law) and to termination under the
Investment Company Act.
5. No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association which has not
been obtained was or is required for the consummation by the Investment Adviser
of the transactions contemplated in the Agreement or the Advisory Agreement.
6. Neither the execution and delivery of the Agreement or the Advisory
Agreement nor the consummation by the Investment Adviser of the transactions
contemplated by the Agreement or the Advisory Agreement conflicted or conflicts
with, or resulted or results in a breach of, the Certificate of Incorporation or
By-laws of the Investment Adviser or, to my knowledge, any material agreement or
instrument known to me to which the Investment Adviser is a party or by which
the Investment Adviser is bound, any law, rule, regulation or, so far as is
known to me, any order of any court, governmental instrumentality, securities
exchange or association or arbitrator.
A-1
7. No fact has come to my attention which has caused me to believe that
the description of the Investment Adviser in the Registration Statement or the
Prospectus contains any untrue statement of a material fact or omits to state
any material fact required to be stated in it or necessary in order to make the
statements in it, in light of the circumstances under which they were made, not
misleading (except as to any financial statements, financial data or statistical
data included or incorporated by reference in the Registration Statement or the
Prospectus or any amendments or supplements thereto, as to which I express no
opinion).
The reasonableness of the level of the fees payable under the
Agreement, the Advisory Agreement and the Administration Agreement is a question
of fact, and in rendering the opinions in paragraphs 4 and 6 above, counsel will
not be required to express any opinion thereon.
In rendering the foregoing opinions, counsel may rely as to matters of
fact to the extent deemed proper, on certificates of responsible officers of the
Company and the Investment Adviser and of public officials.
In rendering the opinions included in paragraph 3 above, counsel may
rely upon the opinion of Xxxxxx & Whitney LLP as to compliance by the Company
with Section 10(b)(2) of the Investment Company Act.
A-2
APPENDIX B
OPINION OF XXXXXX & XXXXXXX LLP
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Minnesota. The
Company has full corporate power and authority to own its properties and conduct
its business as described in the Registration Statement.
2. The authorized capital stock of the Company is as described in the
Registration Statement and the Prospectus. The capital stock of the Company
conforms in all material respects to the description of it in the Prospectus.
Proper corporate proceedings have been taken validly to authorize the
outstanding shares of such capital stock (including the Preferred Shares being
issued). All the outstanding shares of such capital stock (including the
Preferred Shares, when issued, delivered and paid for as provided in the
Agreement) have been duly and validly issued and are fully paid and
nonassessable, and no holder of the Preferred Shares will be subject to personal
liability by reason of being such a holder. The holders of outstanding shares of
capital stock of the Company are not entitled to any preemptive or other similar
rights.
3. To the best of our knowledge, there are no franchises, contracts or
other documents of the Company or any pending or threatened proceedings, legal
or otherwise, before any court, governmental body or arbitrator, relating to the
Company, that are of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement and that are not adequately described or filed as required.
4. The Company has full corporate power and authority to enter into the
Agreement, and the Agreement has been duly authorized, executed and delivered by
the Company, and includes the provisions (if any) required by, and includes no
provisions inconsistent with, any applicable provisions of the Investment
Company Act and the Investment Company Act Rules. The Company complies with the
condition set forth in Section 10(b)(2) of the Investment Company Act for using,
as a principal underwriter of securities issued by it, a person of which a
director, officer or employee of it is an interested person (as defined in the
Investment Company Act).
5. Each of the Advisory Agreement, the Administration Agreement (as
defined in the Prospectus), the Custody Agreement (as so defined), the Transfer
Agency Agreement (as so defined), the Auction Agency Agreement (as so defined)
and the DTC Agreement (i) has been duly and validly authorized, executed and
delivered by the Company, (ii) includes the provisions (if any) required by, and
includes no provisions inconsistent with, any applicable provisions of the
Investment Company Act and the Investment Company Act Rules and (iii)
constitutes the legal, valid and binding obligation of the Company enforceable
in accordance with its terms, except to the extent enforceability may be limited
by applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and by the
effect of general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law) and to termination under the
Investment Company Act.
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6. None of (i) the execution and delivery of the Agreement, the
Advisory Agreement, the Administration Agreement, the Custody Agreement, the
Transfer Agency Agreement, the Auction Agency Agreement or the DTC Agreement,
(ii) the issue and sale by the Company of the Preferred Shares sold by the
Company as contemplated by the Agreement or (iii) the consummation by the
Company of the other transactions contemplated by such agreements conflicted or
conflicts with, or resulted or results in a breach of, the Articles of
Incorporation or By-laws of the Company, in each case as amended through the
date hereof, or any agreement or instrument known to us to which the Company is
a party or by which the Company is bound, any law or regulation or, so far as is
known to us, any order or regulation of any court, governmental instrumentality
or arbitrator.
7. To the best of our knowledge, the Company is not currently in breach
of, or in default under, any material written agreement or instrument to which
it is party or by which it or its property is bound or affected.
8. To the best of our knowledge, no holder of securities of the Company
has rights to the registration of any securities of the Company because of the
filing of the Registration Statement.
9. No consent, approval, authorization or order of, or filing with, any
court or governmental agency or body was or is required for the consummation by
the Company of the transactions contemplated in the Agreement, the Advisory
Agreement, the Administration Agreement, the Custody Agreement, the Transfer
Agency Agreement, the Auction Agency Agreement or the DTC Agreement, except such
as have been obtained under the Securities Act, the Investment Company Act, the
Commodity Exchange Act, the Securities Act Rules and the Investment Company Act
Rules and such as may be required under state securities or blue sky laws in
connection with the purchase and distribution of the Preferred Shares by the
Underwriter.
10. The Company is duly registered with the Commission under the
Investment Company Act as a closed-end non-diversified management investment
company, and all required action has been taken by the Company under the
Securities Act and the Investment Company Act to make the public offering and
consummate the sale of the Preferred Shares provided in the Agreement.
In rendering the foregoing opinions, Xxxxxx & Whitney LLP may rely (i)
as to matters involving the application of laws of any jurisdiction other than
the State of Minnesota, the General Corporation Law of the State of Delaware or
the United States, to the extent they deem proper and specify in such opinion,
upon the opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriter and (ii) as to
matters of fact to the extent they deem proper, on certificates of responsible
officers of the Company and public officials.
B-2
The reasonableness of the level of fees payable under the Agreement,
the Advisory Agreement, the Administration Agreement, the Custody Agreement and
the Auction Agency Agreement is a question of fact, and in rendering the opinion
in paragraphs 4, 5 and 6 above, Xxxxxx & Xxxxxxx LLP will not be required to
express any opinion thereon.
B-3
APPENDIX C
OPINION OF XXXXXXXXXXX & XXXXXXXX LLP
1. The Registration Statement has become effective under the Securities
Act and, to the best of our knowledge, no stop order suspending the
effectiveness of the Registration Statement or suspending or preventing the use
of the Prospectus is in effect, and no proceedings for that purpose have been
instituted or are pending or contemplated by the Commission. Any required filing
of the Prospectus or any supplements thereto have been made in accordance with
Rule 497 of the Securities Act Rules.
2. The Registration Statement and the Prospectus (except as to any
financial statements, financial data, statistical data and supporting schedules
included or incorporated by reference therein, as to which we express no
opinion) comply as to form in all material respects with the requirements of the
Securities Act, the Investment Company Act, the Securities Act Rules and the
Investment Company Act Rules.
3. The statements in the Prospectus under the heading "Taxation", as
qualified therein, insofar as they constitute statements of law or legal
conclusions as to the likely outcome of material issues under the Federal income
tax laws affecting shareholders of the Company, are accurate and provide a fair
summary of such law or conclusions.
4. No fact has come to our attention which has caused us to believe
that the description of the Company set forth in the Registration Statement or
the Prospectus contains any untrue statement of a material fact or omits to
state any material fact required to be stated in it or necessary in order to
make the statements in it, in light of the circumstances under which they were
made, not misleading (except as to any financial statements, financial data,
statistical data and supporting schedules included or incorporated by reference
in the Registration Statement or the Prospectus, or any amendments or
supplements thereto, as to which we express no opinion).
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