_____ SHARES/*/
OF COMMON STOCK
MANAGED HIGH YIELD PLUS FUND INC.
UNDERWRITING AGREEMENT
----------------------
June __, 1998
PAINEWEBBER INCORPORATED
as Representative of the Several Underwriters
named in Schedule 1 hereto
c/o PaineWebber Incorporated
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Managed High Yield Plus Fund Inc., a Maryland corporation (the
"Fund"), proposes to issue and sell to you and the other underwriters named in
Schedule 1 hereto (the "Underwriters"), for whom you are acting as
representative (the "Representative"), up to _____ shares of its common stock
(the "Firm Shares"), par value $.001 per share (the "Common Shares"). In
addition, the Fund hereby grants to the Underwriters an option (the "Option") to
purchase up to an additional
____________________
/*/ Plus an option to purchase, in the aggregate, up to _____ additional
Common Shares to cover over-allotments.
____ of its Common Shares (the "Option Shares") solely for the purpose of
covering over-allotments. The Firm Shares and the Option Shares are referred to
collectively herein as the "Shares."
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Asset Management Inc., a Delaware corporation (the
"Investment Adviser"), will act as the Fund's investment adviser and
administrator pursuant to an Investment Advisory and Administration Agreement by
and between the Fund and the Investment Adviser, dated as of June 22, 1998 (the
"Investment Advisory Agreement"). State Street Bank and Trust Company ("State
Street") will act as the custodian (the "Custodian") of the Fund's cash and
portfolio assets pursuant to a custody agreement, dated as of June 22, 1998 (the
"Custody Agreement"). PNC Bank, National Association, will act as the Fund's
dividend disbursing agent, transfer agent and registrar (the "Transfer Agent")
pursuant to a transfer agency agreement, dated June 22, 1998 (the "Transfer
Agency Agreement").
The Fund and the Investment Adviser each hereby confirms as follows
their agreements with the Representative and the several other Underwriters.
1. Sale and Purchase; Compensation
-------------------------------
(a) The Fund will issue and sell to each Underwriter, and
each Underwriter will purchase from the Fund, the number of Firm Shares opposite
such Underwriter's name in Schedule 1 hereto, at the purchase price of $15.00
per share of Common Shares.
(b) The Fund grants to the Underwriters the Option to
purchase all or any part of the Option Shares for the same consideration per
share as for the Firm Shares. The Option may be exercised only to cover over-
allotments in the sales of the Firm Shares by the Underwriters. The number of
Option Shares (adjusted by the Representative to eliminate fractions) to be
purchased by each Underwriter will be the same percentage of the aggregate
number of Option Shares being sold as such Underwriter is obligated to purchase
of the Firm Shares. Such Option may be exercised in whole or in part, only to
cover over-allotments, at any time or from time to time on or before the 45th
day after the date of this Underwriting Agreement, upon written or telefacsimile
notice (the "Option Shares Notice") from the Representative to the Fund no later
than 12:00 noon, New York City time, at least two and not more than five
business days before the date specified for closing in the Option Shares Notice
(the "Option Shares Closing Date"), setting forth the number of Option Shares to
be purchased and the time and date of such purchase. Upon delivery and receipt
of the Option Shares Notice, the Fund will issue and sell to each Underwriter,
and each Underwriter will purchase from the Fund, on the
2
Option Shares Closing Date, its portion of the number of Option Shares set forth
in the Option Shares Notice.
(c) The obligations of the Underwriters under this Underwriting
Agreement are several and not joint and are undertaken on the basis of the
representations and are subject to the conditions set forth in this Underwriting
Agreement.
(d) The Investment Adviser agrees to make the payments to the
Underwriters when and as required by Section 2 hereof.
2. Payment and Delivery. Delivery by the Fund of the Firm Shares
--------------------
(the "Firm Shares Closing") to the Representative for the accounts of the
Underwriters against payment of the purchase price by wire transfer of Federal
Funds or similar same day funds to the Fund for the Firm Shares, will take place
at the offices of PaineWebber Incorporated, 1285 Avenue of the Americas, New
York, New York, or through the facilities of the Depository Trust Company or
another mutually agreeable facility, at 9:00 a.m., New York City time, on the
third business day following the date of this Underwriting Agreement, or at such
time on such other date, not later than ten business days after the date of this
Underwriting Agreement, as may be agreed on by the Fund and the Representative
(the "Firm Shares Closing Date").
If and to the extent that the Option is exercised, delivery of the
Option Shares and payment by the Underwriters (in the manner specified above)
will take place at the offices or through the facilities specified above for the
Firm Shares Closing at the time and date (which may be the Firm Shares Closing
Date) specified in the Option Shares Notice. Any Option Shares Closing Date may
not be later than three business days following the exercise of the related
Option. The Firm Shares Closing Date and any Option Shares Closing Date are
called the "Closing Dates."
Certificates evidencing Common Shares will be in definitive form (or
temporary form acceptable to the New York Stock Exchange), registered in such
names and in such denominations as the Representative requests at least three
full business days before the Firm Shares Closing Date or, in the case of Option
Shares, on the day of notice of exercise of the Option as described in Section
1(b), and will be made available to the Representative for checking and
packaging, at a place in New York City designated by the Representative, at
least one full business day before the relevant Closing Date.
Simultaneous with delivery to the Underwriters of and payment by the
Underwriters for (i) Firm Shares on the Firm Shares Closing Date and (ii) Option
3
Shares on the Option Shares Closing Date, PaineWebber Incorporated
("PaineWebber") will pay to the Underwriters an amount equal to 5% of the
purchase price per Share for each Share to be purchased by the Underwriters on
such date by wire transfer of Federal Funds or similar same-day funds on such
Firm Shares Closing Date or Option Shares Closing Date, as the case may be, to
the order of PaineWebber Incorporated.
3. Registration Statement and Prospectus; Public Offering. The Fund
------------------------------------------------------
has filed with the Securities and Exchange Commission (the "Commission"),
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), the
Investment Company Act of 1940, as amended (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"), a Notification of Registration on Form N-8A
(the "Notification" pursuant to Section 8 of the Investment Company Act and a
registration statement on Form N-2 (File Nos. 333-51017 and 811-08765) relating
to the Shares (the "registration statement"), including a preliminary prospectus
(including any preliminary statement of additional information), and such
amendments to such registration statement as may have been required to the date
of this Underwriting Agreement. The preliminary prospectus (including any
preliminary statement of additional information) is to be used in connection
with the offering and sale of the Shares. The term "Preliminary Prospectus" as
used herein means any preliminary prospectus (including any preliminary
statement of additional information) included at any time as a part of the
registration statement and any preliminary prospectus (including any preliminary
statement of additional information) omitted therefrom pursuant to the
Securities Act Rules.
The Fund has furnished the Representative copies of such registration
statement, each amendment to such registration statement filed by the Fund with
the Commission and the Preliminary Prospectus filed by the Fund with the
Commission or used by the Fund. If the registration statement has not become
effective, a further amendment (the "Final Amendment") to such registration
statement, including the forms of final prospectus (including any final
statement of additional information), necessary to permit such registration
statement to become effective will promptly be filed by the Fund with the
Commission. If such registration statement has become effective and any
prospectus (including any statement of additional information) contained therein
omits certain information at the time of effectiveness pursuant to Rule 430A of
the Securities Act Rules, a final prospectus (the "Rule 430A Prospectus")
containing such omitted information will be filed by the Fund 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
4
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 (including any statement of additional
information) in the form in which it is first filed with the Commission pursuant
to Rule 497(b), (h) or (j) of the Securities Act Rules, as the case may be.
The Fund and the Investment Adviser understand that the Underwriters
propose to make a public offering of the Firm Shares, as described in the
Prospectus, as soon after the Effective Date (or, if later, after the date this
Underwriting Agreement is signed) as the Representative deems advisable. The
Fund and the Investment Adviser confirm that the Underwriters and dealers have
been authorized to distribute the Preliminary Prospectus relating to the Shares
included in Pre-Effective Amendment No. 1 to the registration statement and are
authorized to distribute the Prospectus and any amendments or supplements
thereto.
4. Representations.
---------------
(a) Each of the Fund and the Investment Adviser jointly and
severally represents to each Underwriter as follows:
(i) On (A) the Effective Date and the date on
which the Prospectus is first filed with the Commission pursuant
to Rule 497(b), (h) or (j) of the Securities Act Rules, as the
case may be, (B) the date on which any post-effective amendment
to the Registration Statement (except any post-effective
amendment which is filed with the Commission after the later of
(x) one year from the date of this Underwriting Agreement or (y)
the date on which the distribution of the Shares is completed)
became or becomes effective or any amendment or supplement to the
Prospectus was or is filed with the Commission and (C) the
Closing Dates, the Registration Statement, the Prospectus and any
such amendment or supplement thereto and the Notification
complied 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, as
the case may be. On the Effective Date and on the date that any
post-effective amendment to the Registration Statement (except
any post-effective amendment which is filed with the Commission
after the later of (x) one year from the date of this
Underwriting Agreement or (y) the date on which the distribution
of the Shares is completed) became or becomes effective, neither
the Registration Statement nor any such amendment did or will
contain any untrue statement of a
5
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 and, if applicable, the date
the Prospectus or any amendment or supplement to the Prospectus
was or is filed with the Commission and at the Closing Dates, the
Prospectus did not or will not, as the case may be, 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, in light of the circumstances under which they
were made, not misleading. The foregoing representations in this
Section 4(a)(i) do not apply to statements or omissions relating
to the Underwriters made in reliance on and in conformity with
information furnished in writing to the Fund by the
Representative expressly for use in the Registration Statement,
the Prospectus, or any amendments or supplements thereto.
(ii) The Fund has been duly organized, is
validly existing and in good standing as a corporation under the
laws of the State of Maryland, with full power and authority to
conduct all the activities conducted by it, to own or lease all
assets owned or leased by it and to conduct its business as
described in the Registration Statement and Prospectus, and the
Fund is duly licensed and qualified to do business and in good
standing as a foreign corporation or otherwise in each
jurisdiction in which its ownership or leasing of property or its
conducting of business requires such qualification, except where
the failure to be so qualified or be in good standing would not
have a material adverse effect on the Fund, and the Fund owns,
possesses or has obtained and currently maintains all
governmental licenses, permits, consents, orders, approvals and
other authorizations, whether foreign or domestic, necessary to
carry on its business as contemplated in the Prospectus. The Fund
has no subsidiaries.
(iii) The capitalization of the Fund is as set forth in the
Registration Statement and the Prospectus. The Common Shares of the Fund
conform in all material respects to the description of them in the
Prospectus. All the outstanding Common Shares have been duly authorized
and are validly issued, fully paid and nonassessable. The Shares to be
issued and delivered to and paid for by the Underwriters in accordance with
this Underwriting Agreement against payment therefor as provided by this
Underwriting Agreement have been duly authorized and when issued and
delivered to the
6
Underwriters will have been validly issued and will be fully paid
and nonassessable. No person is entitled to any preemptive or
other similar rights with respect to the Shares.
(iv) The Fund is duly registered with the
Commission under the Investment Company Act as a diversified,
closed-end management investment company, and, subject to the
filing of the Final Amendment, if not already filed, all action
under the Securities Act, the Investment Company Act, the
Securities Act Rules and the Investment Company Act Rules, as the
case may be, necessary to make the public offering and consummate
the sale of the Shares as provided in this Underwriting Agreement
has or will have been taken by the Fund.
(v) The Fund has full power and authority to
enter into each of the Underwriting Agreement, the Investment
Advisory Agreement, the Custody Agreement and the Transfer
Agency Agreement (collectively, the "Fund Agreements") and to
perform all of the terms and provisions hereof and thereof to be
carried out by it and (A) each Fund Agreement has been duly and
validly authorized, executed and delivered by the Fund, (B) each
Fund Agreement does not violate in any material respect any of
the applicable provisions of the Investment Company Act, the
Investment Advisers Act of 1940 (the "Advisers Act"), the
Investment Company Act Rules and the rules and regulations
adopted by the Commission under the Advisers Act (the "Advisers
Act Rules"), as the case may be, and (C) assuming due
authorization, execution and delivery by the other parties
thereto, each Fund Agreement constitutes the legal, valid and
binding obligation of the Fund enforceable in accordance with
its terms, (1) subject, as to enforcement, to applicable
bankruptcy, insolvency and similar laws affecting creditors'
rights generally and to general equitable principles (regardless
of whether enforcement is sought in a proceeding in equity or at
law) and (2) except as rights to indemnity thereunder may be
limited by federal or state securities laws.
(vi) None of (A) the execution and delivery by
the Fund of the Fund Agreements, (B) the issue and sale by the
Fund of the Shares as contemplated by this Underwriting Agreement
and (C) the performance by the Fund of its obligations under the
Fund Agreements or consummation by the Fund of the other
transactions contemplated by the Fund Agreements conflicts with
or will conflict
7
with, or results or will result in a breach of, the Articles of
Incorporation or the By-laws of the Fund or any agreement or
instrument to which the Fund is a party or by which the Fund is
bound, or any law, rule or regulation, or order of any court,
governmental instrumentality, securities exchange or association
or arbitrator, whether foreign or domestic, applicable to the
Fund, other than state or foreign securities or "blue sky" laws
applicable in connection with the purchase and distribution of
the Shares by the Underwriters pursuant to this Underwriting
Agreement.
(vii) The Fund is not currently in breach of, or
in default under, any written agreement or instrument to which it
is a party or by which it or its property is bound or affected.
(viii) No person has any right to the registration
of any securities of the Fund because of the filing of the
registration statement.
(ix) No consent, approval, authorization or
order of any court or governmental agency or body or securities
exchange or association, whether foreign or domestic, is required
by the Fund for the consummation by the Fund of the transactions
to be performed by the Fund or the performance by the Fund of all
the terms and provisions to be performed by or on behalf of it in
each case as contemplated in the Fund Agreements, except such as
(A) have been obtained under the Securities Act, the Investment
Company Act, the Advisers Act, the Securities Act Rules, the
Investment Company Act Rules, and the Advisers Act Rules, and
(B) may be required by the New York Stock Exchange or under state
or foreign securities or "blue sky" laws, in connection with the
purchase and distribution of the Shares by the Underwriters
pursuant to this Underwriting Agreement.
(x) The Shares are duly authorized for listing,
subject to official notice of issuance, on the New York Stock
Exchange and the Fund's Registration Statement on Form 8-A, under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), has become effective.
(xi) Ernst & Young LLP, whose report appears in
the Prospectus, are independent public accountants with respect
to
8
the Fund as required by the Securities Act, the Investment
Company Act, the Securities Act Rules and the Investment Company
Act Rules.
(xii) The statement of assets and liabilities
included in the Registration Statement and the Prospectus
presents fairly in all material respects, in accordance with
generally accepted accounting principles in the United States
applied on a consistent basis, the financial position of the Fund
as at the date indicated.
(xiii) The Fund will maintain 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; (B) transactions
are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (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.
(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, business affairs
or business prospects of the Fund, whether or not arising in the
ordinary course of business, (B) there have been no transactions
entered into by the Fund other than those in the ordinary course
of its business and (C) there has been no dividend or
distribution of any kind declared, paid or made on any class of
its capital shares.
(xv) There is no action, suit or proceeding
before or by any court, commission, regulatory body,
administrative agency or other governmental agency or body,
foreign or domestic, now pending, or, to the knowledge of the
Fund, threatened against or affecting the Fund, which (A) might
result in any material adverse change in the condition, financial
or otherwise, business affairs or business prospects of the Fund
or might materially adversely affect the properties or assets of
the Fund or (B) is of a character required to be described in the
Registration Statement or the Prospectus; and there are no
contracts, franchises or other documents that are of a
9
character required to be described in, or that are required to be
filed as exhibits to, the Registration Statement that have not
been described or filed as required.
(xvi) Except for stabilization transactions
conducted by the Underwriters, and except for tender offers,
Share repurchases and the issuance or purchase of Shares pursuant
to the Fund's dividend reinvestment plan ("DRP") effected
following the date on which the distribution of the Shares is
completed in accordance with the policies of the Fund as set
forth in the Prospectus, the Fund has not taken and will not
take, directly or indirectly, any action designed or which might
be reasonably expected to cause or result in, or which will
constitute, stabilization or manipulation of the price of the
Common Shares.
(xvii) 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 Internal
Revenue Code of 1986, as amended (the "Code").
(xviii) To the knowledge of the Fund after due
inquiry, no advertising, sales literature or other promotional
materials (excluding broker kits, which include the broker fact
sheet, road show slides or road show tapes) were authorized or
prepared by or on behalf of the Fund and the Investment Adviser
or any representative thereof for use in connection with the
public offering or sale of the Shares other than the definitive
client brochure drafts of which were filed with the NASD on May
19, 1998 (the "sales materials"); the sales materials complied
and comply in all material respects with the applicable
requirements of the Securities Act, the Securities Act Rules and
the rules and interpretations of the NASD; and no broker kits,
road show slides, road show tapes or sales materials authorized
or prepared by the Fund or authorized or prepared on behalf of
the Fund by the Investment Adviser or any representative thereof
for use in connection with the public offering or sale of the
Shares contained or contains any untrue statement of a material
fact or omitted or omits to state any material fact required to
be stated therein or necessary in order to make the statements
therein not misleading.
10
(b) The Investment Adviser represents to each Underwriter as
follows:
(i) The Investment Adviser has been duly
organized, is validly existing and in good standing as a
corporation under the laws of the State of Delaware with full
power and authority to conduct all of the activities conducted by
it, to own or lease all of the assets owned or leased by it and
to conduct its business as described in the Registration
Statement and Prospectus, and the Investment Adviser is duly
licensed and qualified as a foreign corporation and in good
standing in each jurisdiction in which it is required to be so
qualified, except to the extent that failure to be so qualified
or be in good standing would not have a material adverse affect
on the Investment Adviser; and the Investment Adviser owns,
possesses or has obtained and currently maintains all
governmental licenses, permits, consents, orders, approvals and
other authorizations, whether foreign or domestic, necessary to
carry on its business as contemplated in the Registration
Statement and the Prospectus.
(ii) The Investment Adviser is (A) duly
registered as an investment adviser under the Advisers Act and
(B) not prohibited by the Advisers Act, the Investment Company
Act, the Advisers Act Rules or the Investment Company Act Rules
from acting as the investment adviser for the Fund as
contemplated by the Investment Advisory Agreement, the
Registration Statement and the Prospectus.
(iii) The Investment Adviser has full power and
authority to enter into each of this Underwriting Agreement and
the Investment Advisory Agreement and to carry out all the terms
and provisions hereof and thereof to be carried out by it, and
each such agreement has been duly and validly authorized,
executed and delivered by the Investment Adviser; each of the
Investment Advisory Agreement and this Underwriting Agreement
does not violate in any material respect any of the applicable
provisions of the Investment Company Act, the Advisers Act, the
Investment Company Act Rules and the Advisers Act Rules; and
assuming due authorization, execution and delivery by the other
parties thereto, each of this Underwriting Agreement and the
Investment Advisory Agreement constitutes a legal, valid and
binding obligation of the Investment Adviser, enforceable in
accordance with its terms, (1) subject, as to enforcement,
11
to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general equitable principles
(regardless of whether enforcement is sought in a proceeding in
equity or at law) and (2) except as rights to indemnity
thereunder may be limited by federal or state securities laws.
(iv) Neither (A) the execution and delivery by
the Investment Adviser of the Underwriting Agreement or the
Investment Advisory Agreement by the Investment Adviser nor (B)
the consummation by the Investment Adviser of the transactions
contemplated by, or the performance of its obligations under
such agreements conflicts or will conflict with, or results or
will result in a breach of, the Articles 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, or any law, rule or regulation, or
order of any court, governmental instrumentality, securities
exchange or association or arbitrator, whether foreign or
domestic, applicable to the Investment Adviser.
(v) No consent, approval, authorization or
order of any court, governmental agency or body or securities
exchange or association, whether foreign or domestic, is required
for the consummation of the transactions contemplated in, or the
performance by the Investment Adviser of its obligations under,
the Underwriting Agreement or the Investment Advisory Agreement,
as the case may be, except such as (A) have been obtained under
the Investment Company Act, the Advisers Act, the Securities Act,
the Investment Company Act Rules, the Advisers Act Rules and the
Securities Act Rules, and (B) may be required by the New York
Stock Exchange or under state or foreign securities or "blue sky"
laws, in connection with the purchase and distribution of the
Shares by the Underwriters pursuant to this Underwriting
Agreement.
(vi) The description of the Investment Adviser
and its business in the Registration Statement and the Prospectus
complies with the requirements of the Securities Act, the
Investment Company Act, the Securities Act Rules and the
Investment Company Act Rules and does not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading.
12
(vii) There is no action, suit or
proceeding before or by any court, commission, regulatory
body, administrative agency or other governmental agency or
body, foreign or domestic, now pending or, to the knowledge
of the Investment Adviser, threatened against or affecting
the Investment Adviser of a nature required to be disclosed
in the Registration Statement or Prospectus or that might
result in any material adverse change in the condition,
financial or otherwise, business affairs or business
prospects of the Investment Adviser or the ability of the
Investment Adviser to fulfill its respective obligations
under the Underwriting Agreement or under the Investment
Advisory Agreement.
(viii) Except for stabilization activities
conducted by the Underwriters and except for tender offers,
Share repurchases and the issuance or purchase of Shares
pursuant to the Fund's dividend reinvestment plan ("DRP")
effected following the date on which the distribution of the
Shares is completed in accordance with the policies of the
Fund as set forth in the Prospectus, the Investment Adviser
has not taken and will not take, directly or indirectly, any
action designed, or which might reasonably be expected to
cause or result in, or which will constitute, stabilization
or manipulation of the price of the Common Shares.
5. Agreements of the Parties.
-------------------------
(a) If the registration statement relating to the Shares has not
yet become effective, the Fund will promptly file the Final Amendment, if not
previously filed, with the Commission, and will use its best efforts to cause
such registration statement to become effective and, as soon as the Fund is
advised, will advise the Representative when the Registration Statement or any
amendment thereto has become effective. If the Registration Statement has become
effective and the Prospectus contained therein omits certain information at the
time of effectiveness pursuant to Rule 430A of the Securities Act Rules, the
Fund will file a 430A Prospectus pursuant to Rule 497(h) of the Securities Act
Rules as promptly as practicable, but no later than the second business day
following the earlier of the date of the determination of the offering price of
the Shares or the date the Prospectus is first used after the Effective Date. If
the Registration Statement has become effective and the Prospectus contained
therein does not so omit such information, the Fund will file a Prospectus
pursuant to Rule 497(b) or (j) of the Securities Act Rules as promptly as
practicable, but no later than the fifth business day following the date of the
later of the Effective Date or the commencement of the public offering of the
13
Shares after the Effective Date. In either case, the Fund will provide the
Representative satisfactory evidence of the filing. The Fund will not file with
the Commission any Prospectus or any other amendment (except any post-effective
amendment which is filed with the Commission after the later of (x) one year
from the date of this Underwriting Agreement or (y) the date on which
distribution of the Shares is completed) or supplement to the Registration
Statement or the Prospectus unless a copy has first been submitted to the
Representative a reasonable time before its filing and the Representative has
not objected to it in writing within a reasonable time after receiving the copy.
(b) For the period of three years from the date hereof, the Fund
will advise the Representative promptly (1) of the issuance by the Commission of
any order in respect of the Fund or the Investment Adviser which relates to the
Fund, or which relates to any arrangements or proposed arrangements involving
the Fund or the Investment Adviser, (2) of the initiation or threatening of any
proceedings for, or receipt by the Fund of any notice with respect to, the
suspension of the qualification of the Shares for sale in any jurisdiction or
the issuance of any order by the Commission suspending the effectiveness of the
Registration Statement, (3) of receipt by the Fund, or any representative or
attorney of the Fund, of any other communication from the Commission relating to
the Fund, the Registration Statement, the Notification, any Preliminary
Prospectus, the Prospectus or to the transactions contemplated by this
Underwriting Agreement and (4) the issuance by any court, regulatory body,
administrative agency or other governmental agency or body, whether foreign or
domestic, of any order, ruling or decree, or the threat to initiate any
proceedings with respect thereto, regarding the Fund, which relates to the Fund
or any arrangements or proposed arrangements involving the Fund. The Fund will
make every reasonable effort to prevent the issuance of any order suspending the
effectiveness of the Registration Statement and, if any such order is issued, to
obtain its lifting as soon as possible.
(c) If not delivered prior to the date of this Underwriting
Agreement, the Fund will deliver to the Representative, without charge, a signed
copy of the registration statement and the Notification and of any amendments
(except any post-effective amendment which is filed with the Commission after
the later of (x) one year from the date of this Underwriting Agreement or (y)
the date on which the distribution of the Shares is completed) to either the
Registration Statement or the Notification (including all exhibits filed with
any such document) and as many conformed copies of the registration statement
and any amendments thereto (except any post-effective amendment which is filed
with the Commission after the later of (x) one year from the date of this
Underwriting Agreement or (y) the date on
14
which the distribution of the Shares is completed) (excluding exhibits) as the
Representative may reasonably request.
(d) During such period as a prospectus is required by law to be
delivered by an underwriter or a dealer, the Fund will deliver, without charge,
to the Representative, the Underwriters and any dealers, at such office or
offices as the Representative may designate, as many copies of the Prospectus as
the Representative may reasonably request, 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 such prospectus is delivered to a purchaser of
Shares, 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 Fund promptly will prepare, submit to the Representative,
file with the Commission and deliver, without charge, to the Underwriters and to
dealers (whose names and addresses the Representative will furnish to the Fund)
to whom Shares may have been sold by the Underwriters, and to other dealers on
request, amendments or supplements to the Prospectus so that the statements in
such Prospectus, as so amended or supplemented, will not, in light of the
circumstances existing when such 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 Underwriters of any such amendments or supplements to the
Prospectus will not constitute a waiver of any of the conditions in Section 6
hereof.
(e) The Fund will make generally available to holders of the
Fund's securities, as soon as practicable but in no event later than the last
day of the 18th full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement, if applicable, satisfying the
provisions of Section 11(a) of the Securities Act and, at the option of the
Fund, Rule 158 of the Securities Act Rules.
(f) The Fund will take such actions as the Representative
reasonably requests in order to qualify the Shares for offer and sale under the
securities or "blue sky" laws of such jurisdictions as the Representative
reasonably designates; provided that the Fund shall not be required in
connection therewith or as a condition thereof to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction.
(g) If the transactions contemplated by this Underwriting
Agreement are consummated, PaineWebber will pay all costs and expenses incident
15
to the performance of the obligations of the Fund under this Underwriting
Agreement, including but not limited to costs and expenses of or relating to (1)
the preparation, printing and filing of the registration statement and exhibits
to it, each Preliminary Prospectus, the Prospectus and all amendments and
supplements thereto, (2) the issuance of the Shares and the preparation and
delivery of certificates for the Shares, (3) the registration or qualification
of the Shares for offer and sale under the securities or "blue sky" laws of the
jurisdictions referred to in the foregoing paragraph, including the fees and
disbursements of counsel for the Underwriters in that connection, and the
preparation and printing of preliminary and supplemental "blue sky" memoranda,
(4) the furnishing (including costs of design, production, shipping and mailing)
to the Underwriters and dealers of copies of each Preliminary Prospectus
relating to the Shares, the sales materials, the Prospectus, and all amendments
or supplements to the Prospectus, and of the other documents required by this
Section to be so furnished, (5) the filing requirements of the National
Association of Securities Dealers, Inc., in connection with its review of the
financing, including filing fees and the fees, disbursements and other charges
of counsel for the Underwriters in that connection, (6) all transfer taxes, if
any, with respect to the sale and delivery of the Shares to the Underwriters,
(7) the listing of the Shares on the New York Stock Exchange, and (8) the
transfer agent for the Shares.
(h) If the transactions contemplated by this Underwriting
Agreement are not consummated, except as otherwise provided herein, no party
will be under any liability to any other party, except that (1) if this
Underwriting Agreement is terminated by (x) the Fund or the Investment Adviser
pursuant to any of the provisions hereof (otherwise than pursuant to Section 9
hereof) or (y) by the Representative or the Underwriters because of any
inability, failure or refusal on the part of the Fund or the Investment Adviser
to comply with its terms or because any of the conditions in Section 6 are not
satisfied, PaineWebber and the Investment Adviser, jointly and severally, will
reimburse the Underwriters for all out-of-pocket expenses (including the
reasonable fees, disbursements and other charges of their counsel) reasonably
incurred by them in connection with the proposed purchase and sale of the Shares
and (2) no Underwriter who has failed or refused to purchase the Shares agreed
to be purchased by it under this Underwriting Agreement, in breach of its
obligations pursuant to this Underwriting Agreement, will be relieved of
liability to the Fund and the Investment Adviser and the other Underwriters for
damages occasioned by its default.
(i) Without the prior written consent of the Representative, the
Fund will not offer, sell or register with the Commission, or announce an
offering of, any equity securities of the Fund, within 180 days after the
Effective Date, except
16
for the Shares as described in the Prospectus and any issuances of Common Shares
pursuant to the dividend reinvestment plan established by the Fund.
(j) The Fund will use its best efforts to list the Shares on the
New York Stock Exchange and comply with the rules and regulations of such
exchange.
(k) The Fund will direct the investment of the net proceeds of
the offering of the Shares in such a manner as to comply with the investment
objective and policies of the Fund as described in the Prospectus.
6. Conditions of the Underwriters' Obligations. The obligations of
-------------------------------------------
the Underwriters to purchase the Shares are subject to the accuracy on the date
of this Underwriting Agreement, and on the Closing Dates, of the representations
of the Fund and the Investment Adviser in this Underwriting Agreement, to the
accuracy and completeness of all statements made by the Fund or the Investment
Adviser or any of their respective officers in any certificate delivered to the
Representative or their counsel pursuant to this Underwriting Agreement, to
performance by the Fund and the Investment Adviser of their respective
obligations under this Underwriting Agreement and to each of the following
additional conditions:
(a) The registration statement must have become effective by
5:30 p.m., New York City time, on the date of this Underwriting Agreement or
such later date and time as the Representative consents to in writing. The
Prospectus must have been filed in accordance with Rule 497(b), (h) or (j), as
the case may be, of the Securities Act Rules.
(b) No order suspending the effectiveness of the Registration
Statement may be in effect and no proceedings for such purpose may be pending
before or, to the knowledge of counsel to the Underwriters, threatened by the
Commission, and any requests for additional information on the part of the
Commission (to be included in the Registration Statement or the Prospectus or
otherwise) must be complied with or waived to the reasonable satisfaction of the
Representative.
(c) Since the dates as of which information is given in the
Registration Statement and the Prospectus, (1) there must not have been any
material change in the Common Shares or liabilities of the Fund except as set
forth in or contemplated by the Prospectus; (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 Fund or the Investment
Adviser whether or not arising from transactions in the ordinary course of
business as set forth in or contemplated
17
by the Prospectus; (3) the Fund must not have sustained any material loss or
interference with its business from any court or from legislative or other
governmental action, order or decree, whether foreign or domestic, or from any
other occurrence not described in the Registration Statement and Prospectus; and
(4) there must not have occurred any event that makes untrue or incorrect in any
material respect any statement or information contained in the Registration
Statement or Prospectus or that is not reflected in the Registration Statement
or Prospectus but should be reflected therein in order to make the statements or
information therein (in the case of the Prospectus, in light of the
circumstances in which they were made) not misleading in any material respect;
if, in the judgment of the Representative, any such development referred to in
clause (1), (2), (3) or (4) of this paragraph (c) makes it impracticable or
inadvisable to consummate the sale and delivery of the Shares pursuant to the
Underwriting Agreement by the Underwriters, at the initial public offering price
of the Shares.
(d) The Representative must have received on each Closing Date
a certificate, dated such date, of a President or Vice-President and the chief
financial or accounting officer of each of the Fund and the Investment Adviser
certifying that (1) the signers have carefully examined the Registration
Statement, the Prospectus, and this Underwriting Agreement, (2) the
representations of the Fund (with respect to the certificates from such Fund
officers) and the representations of the Investment Adviser (with respect to the
certificates from such officers of the Investment Adviser) in this Underwriting
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 Fund
(with respect to the certificates from such Fund officers) or the Investment
Adviser (with respect to the certificates from such officers of the Investment
Adviser), which change would materially and adversely affect the ability of the
Fund or the Investment Adviser, as the case may be, to fulfill its obligations
under this Underwriting Agreement or the Investment Advisory Agreement, whether
or not arising from transactions in the ordinary course of business, (4) with
respect to the Fund only, to the knowledge of such officers after reasonable
investigation, no order suspending the effectiveness of the Registration
Statement, 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 other
regulatory body, whether foreign or domestic, (5) to the knowledge of the
officers of the Investment Adviser, after reasonable investigation, no order
having an adverse effect on the ability of the Investment Adviser to fulfill its
obligations under this Underwriting Agreement or the Investment Advisory
Agreement, as the case may be, has been issued and no proceedings for any such
purpose are pending before or threatened by the Commission or any other
regulatory
18
body, whether foreign or domestic, and (6) each of the Fund (with respect to the
certificates from such Fund officers) and the Investment Adviser (with respect
to the certificates from such officers of the Investment Adviser) has performed
all of its respective agreements that this Underwriting Agreement requires it to
perform by such Closing Date.
(e) The Representative must receive on each Closing Date the
opinions dated such Closing Date substantially in the form of Annexes A and B to
this Underwriting Agreement from the counsel identified in each such Annex.
(f) The Representative must receive on each Closing Date from
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP or its affiliates, their counsel, an
opinion dated such Closing Date with respect to the Fund, the Shares, the
Registration Statement and the Prospectus, this Underwriting Agreement and the
form and sufficiency of all proceedings taken in connection with the sale and
delivery of the Shares. Such opinion and proceedings shall fulfill the
requirements of this Section 6(f) only if such opinion and proceedings are
satisfactory in all respects to the Representative. The Fund and the Investment
Adviser must have furnished to such counsel such documents as counsel may
reasonably request for the purpose of enabling them to render such opinion.
(g) The Representative must receive on the date this
Underwriting Agreement is signed and delivered by the Representative a signed
letter, dated such date, substantially in the form of Annex C to this
Underwriting Agreement from the firm of accountants designated in such Annex.
The Representative also must receive on each Closing Date a signed letter from
such accountants, dated such 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 five
business days before the date of this Underwriting Agreement, specified in the
letter, to a date not more than five business days before such Closing Date,
that would require any change in their letter referred to in the foregoing
sentence.
All opinions, letters, evidence and certificates mentioned above
or elsewhere in this Underwriting Agreement will comply only if they are in form
and scope reasonably satisfactory to counsel for the Representative, provided
that any such documents, forms of which are annexed hereto, shall be deemed
satisfactory to such counsel if substantially in such form.
7. Indemnification and Contribution.
--------------------------------
19
(a) Each of the Fund and the Investment Adviser, jointly and
severally, will indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of such Underwriter and each person, if any, who
controls such Underwriter within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act from and against any and all losses, claims,
liabilities, expenses and damages (including, but not limited to, any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any and all amounts paid in settlement of, any action, suit or proceeding
between any of the indemnified parties and any indemnifying parties or between
any indemnified party and any third party, or otherwise, or any claim asserted),
to which such Underwriter or any such person, or any of them, 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, at common
law or otherwise, whether foreign or domestic, insofar as such losses, claims,
liabilities, expenses or damages arise out of or are based on (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Preliminary Prospectus, the Prospectus, the sales
materials, or any amendment or supplement to the Registration Statement, the
Preliminary Prospectus, the Prospectus, the sales materials or in any documents
filed under the Exchange Act and deemed to be incorporated by reference into the
Registration Statement, the Preliminary Prospectus, the Prospectus, or in any
application or other document executed by or on behalf of the Fund or based on
written information furnished by or on behalf of the Fund filed in any
jurisdiction in order to qualify the Shares under the securities laws thereof or
filed with the Commission, (ii) the omission or alleged omission to state, in
any or all such documents, a material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any act or
failure to act or any alleged act or failure to act by such Underwriter in
connection with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, liability, expense or damage arising out of or based upon matters
covered by clause (i) or (ii) above (provided, however, that neither the Fund
nor the Investment Adviser shall be liable under this clause (iii) to the extent
it is finally judicially determined by a court of competent jurisdiction that
such loss, claim, liability, expense or damage resulted directly from any such
acts or failures to act undertaken or omitted to be taken by such Underwriter
through its gross negligence or willful misconduct); provided that neither the
Fund nor the Investment Adviser will be liable to the extent that such losses,
claims, liabilities, expenses or damages are based on an untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to the Underwriter furnished in writing to
the Fund by the Underwriter expressly for inclusion in the Registration
Statement, the Preliminary Prospectus or the Prospectus. This indemni-
20
ty agreement will be in addition to any liability that the Fund or the
Investment Adviser might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Fund
and the Investment Adviser, each person, if any, who controls the Fund or the
Investment Adviser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, each director of the Fund and each officer of
the Fund who signs the Registration Statement to the same extent as the
foregoing indemnity from the Fund or the Investment Adviser to the Underwriter,
but only insofar as losses, claims, liabilities, expenses or damages arise out
of or are based on any untrue statement or omission or alleged untrue statement
or omission made in reliance on and in conformity with information relating to
such Underwriter furnished in writing to the Fund by such Underwriter expressly
for use in the Registration Statement, the Preliminary Prospectus or Prospectus.
This indemnity will be in addition to any liability that such Underwriter might
other wise have; provided, however, that in no case shall such Underwriter be
liable or responsible for any amount in excess of the fees and commissions
received by the Underwriter.
(c) Any party that proposes to assert the right to be
indemnified under this Section 7 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 7, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission to so notify such indemnifying party
will not relieve it from any liability that it may have to any indemnified party
under the foregoing provision of this Section 7 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the extent that it
elects by delivering written notice to the indemnified party promptly after
receiving notice of the commencement of the action from the indemnified party,
jointly with any other indemnifying party similarly notified, to assume the
defense of the action, with counsel satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
disbursements and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the
21
indemnified party has reasonably concluded (based on the advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party
(3) a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. All such
fees, disbursements and other charges will be reimbursed by the indemnifying
party promptly as they are incurred. It is understood that the indemnifying
party or parties shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. An indemnifying party will not be liable for any settlement of any
action or claim effected without its written consent (which consent will not be
unreasonably withheld). No indemnifying party shall, without the prior written
consent of each indemnified party, settle or compromise or consent to the entry
of any judgment in any pending or threatened claim, action or proceeding
relating to the matters contemplated by this Section 7 (whether or not any
indemnified party is a party thereto), unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising or that may arise out of such claim, action or proceeding.
Notwithstanding any other provision of this Section 7(c), if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees, disbursements and other charges of counsel, such
indemnifying party agrees that it shall be liable for any settlement effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 7 is
applicable in accordance with its terms but for any reason is held to be
unavailable from the Fund, the Investment Adviser or the Underwriters, the Fund,
the Investment Adviser and the Underwriters will contribute to the total losses,
claims, liabilities, expenses and damages (including any investigative, legal
and other expenses
22
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Fund and the Investment Adviser from persons other
than the Underwriter, such as persons who control the Fund or the Investment
Adviser within the meaning of the Securities Act or the Ex-change Act, officers
of the Fund who signed the Registration Statement and directors of the Fund, who
may also be liable for contribution) to which the Fund, the Investment Adviser
and the Underwriters may be subject in such proportion as shall be appropriate
to reflect the relative benefits received by the Fund and the Investment Adviser
on the one hand and the Underwriters on the other. The relative benefits
received by the Fund and the Investment Adviser (treated jointly for this
purpose as one person) on the one hand and the Underwriters on the other hand
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 fees
and commissions received by the Underwriters. If, but only if, the allocation
provided by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is appropriate to
reflect not only such relative benefits referred to in the foregoing sentence
but also the relative fault of the Fund and the Investment Adviser (treated
jointly for this purpose as one person) on the one hand and the Underwriters on
the other hand in connection with respect to the statements or omissions or
alleged statements or omissions that resulted in the losses, claims,
liabilities, expenses or damages (including any investigative, legal or other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted), as well as
any other relevant equitable considerations appropriate in the circumstances.
Such relative fault of the parties shall be determined by reference to 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, the Investment Adviser or the Underwriters, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission and any other equitable considerations
appropriate in the circumstances. The Fund, the Investment Adviser and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 7(d) were to be determined by pro rata allocation or by
any other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, liability, expense or damage, or action in
respect thereof, referred to above in this Section 7(d) shall be deemed to
include, for purposes of this Section 7(d) any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding any other provisions of
this Section 7(d), the Underwriters shall not be required to contribute any
amount in excess of the fees and commissions received by it and no person found
guilty of
23
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7(d),
any person who controls a party to this Agreement within the meaning of the
Securities Act will have the same rights to contribution as that party, and
each trustee of the Fund and each officer of the Fund who signed the
Registration Statement will have the same rights to contribution as the Fund,
subject in each case to the provisions hereof. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim for contribution may be
made under this Section 7(d), notify such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 7(d). Except for a settlement entered
into pursuant to the last sentence of Section 7(c) hereof, no party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent shall not be unreasonably withheld).
(e) Notwithstanding any other provisions in this Section 7, no
party shall be entitled to indemnification or contribution under this Agreement
against any loss, claim, liability, expense or damage arising by reason of such
person's willful misfeasance, bad faith or gross negligence in the performance
of its duties hereunder, or by reason of such person's reckless disregard of
such person's obligations and duties hereunder.
(f) The Fund and the Investment Adviser acknowledge that the
statements with respect to stabilization on the second page of and under the
caption "Underwriting" in the Prospectus constitute the only information
furnished in writing to the Fund by the Representative on behalf of the
Underwriters expressly for use in such document.
8. Termination. This Underwriting Agreement may be terminated by
-----------
the Representative by notifying the Fund at any time:
(a) before the later of the effectiveness of the Registration
Statement and the time when any of the Shares are first generally offered
pursuant to the Underwriting Agreement by the Representative to dealers by
letter or telegram;
(b) at or before any Closing Date if, in the sole judgment of
the Representative, payment for and delivery of any Shares is rendered
impracticable or inadvisable because (1) trading in the equity securities of the
Fund is suspended by the Commission or by the principal exchange that lists the
Shares, (2) additional
24
material governmental restrictions, not in force on the date of this
Underwriting Agreement, have been imposed upon trading in securities or trading
has been suspended on any U.S. securities exchange, (3) a general banking
moratorium has been established by U.S. federal or New York authorities or (4)
any outbreak or material escalation of hostilities or other calamity or crisis
occurs, the effect of which is such as to make it impracticable to market any of
the Shares; or
(c) at or before any Closing Date, if any of the conditions
specified in Section 6 have not been fulfilled when and as required by this
Underwriting Agreement.
9. Substitution of Underwriters. If one or more of the Underwriters
----------------------------
fails (other than for a reason sufficient to justify the termination of this
Underwriting Agreement) to purchase on any Closing Date the Shares agreed to be
purchased on such Closing Date by such Underwriter or Underwriters, the
Representative may find one or more substitute underwriters to purchase such
Shares or make such other arrangements as the Representative deems advisable, or
one or more of the remaining Underwriters may agree to purchase such Shares in
such proportions as may be approved by the Representative, in each case upon the
terms set forth in this Underwriting Agreement. If no such arrangements have
been made within 36 hours after such Closing Date, and
(a) the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date does not exceed 10% of the Shares that the
Underwriters are obligated to purchase on such Closing Date, each of the
nondefaulting Underwriters will be obligated to purchase such Shares on the
terms set forth in this Underwriting Agreement in proportion to their respective
obligations under this Underwriting Agreement, or
(b) the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date exceeds 10% of the Shares to be purchased by
all the Underwriters on such Closing Date, the Fund will be entitled to an
additional period of 24 hours within which to find one or more substitute
underwriters reasonably satisfactory to the Representative to purchase such
Shares on the terms set forth in this Underwriting Agreement.
In any such case, either the Representative or the Fund will have the
right to postpone the applicable Closing Date for not more than five business
days in order that necessary changes and arrangements (including any necessary
amendments or supplements to the Registration Statement or the Prospectus) may
be effected by the Representative and the Fund. If the number of Shares to be
pur-
25
chased on such Closing Date by such defaulting Underwriter or Underwriters
exceeds 10% of the Shares that the Underwriters are obligated to purchase on
such Closing Date, and none of the nondefaulting Underwriters or the Fund makes
arrangements pursuant to this Section within the period stated for the purchase
of the Shares that the defaulting Underwriters agreed to purchase, this
Underwriting Agreement will terminate without liability on the part of any
nondefaulting Underwriter, the Fund or the Investment Adviser, except as
provided in Sections 5(g) and 7 hereof. This Section will not affect the
liability of any defaulting Underwriter to the Fund or the nondefaulting
Underwriters arising out of such default. A substitute underwriter will become a
Underwriter for all purposes of this Underwriting Agreement.
10. Miscellaneous.
-------------
(a) The reimbursement, indemnification and contribution
agreements in Sections 5(g) and 7 hereof and the representations of the Fund,
the Investment Adviser and the Underwriters in this Underwriting Agreement will
remain in full force and effect regardless of any termination of this
Underwriting Agreement. The reimbursement, indemnification and contribution
agreements in Sections 5(g) and 7 hereof and the representations and agreements
of the Fund, the Investment Adviser and the Underwriters in this Underwriting
Agreement shall survive the Closing Dates and shall remain in full force and
effect regardless of any investigation made by or on behalf of any Underwriter,
the Fund, the Investment Adviser or any controlling person and delivery of and
payment for the Shares.
(b) This Underwriting Agreement is for the benefit of the
Underwriters, the Fund, the Investment Adviser and their successors and assigns,
and, to the extent expressed in this Underwriting Agreement, for the benefit of
persons controlling any of the Underwriters, the Fund, the Investment Adviser
and directors and officers of the Fund and the Investment Adviser, and their
respective successors and assigns, and no other person, partnership, association
or corporation will acquire or have any right under or by virtue of this
Underwriting Agreement. The term "successors and assigns" does not include any
purchaser of the Shares from any Underwriter merely because of such purchase.
(c) All notices and communications under this Underwriting
Agreement will be in writing, effective only on receipt and mailed or delivered,
by messenger, facsimile transmission or otherwise, to the Representative in care
of PaineWebber Incorporated, Attn: Financial Institutions Group, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, to the Fund at 1285 Avenue of the
▇▇▇▇▇-
▇▇
▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and to the Investment Adviser at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
(d) Any action required or permitted to be taken by the
Representative under this Underwriting Agreement may be taken by them jointly
through PaineWebber Incorporated.
(e) This Underwriting Agreement may be signed in multiple
counterparts that taken as a whole constitute one agreement.
(f) This Underwriting Agreement will be governed by and construed
in accordance with the laws of the State of New York without reference to choice
of law principles thereof.
27
Please confirm that the foregoing correctly sets forth the
agreement between us.
Very truly yours,
Managed High Yield Plus Fund Inc.
By:______________________________
Name:_________________________
Title:________________________
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Asset Management Inc.
By:______________________________
Name:_________________________
Title:________________________
Confirmed:
PaineWebber Incorporated
As Representative of the Underwriters
c/o PaineWebber Incorporated
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
By: PaineWebber Incorporated
By:_____________________________
Name:_______________________
Title:______________________
Acting on behalf of itself
and the Underwriters
named in Schedule 1
28
SCHEDULE 1
NAME NUMBER OF FIRM SHARES
TO BE PURCHASED
PaineWebber Incorporated......................
Total....................................
____________
29
