Exhibit 99.(h)(i)
INVESTMENT GRADE MUNICIPAL INCOME FUND INC.
Auction Preferred Shares
Par Value $[0.001] Per Share
FORM OF UNDERWRITING AGREEMENT
, 2003
UNDERWRITING AGREEMENT
UBS Securities LLC
[other co-managers]
c/o UBS Securities LLC
as Managing Underwriter
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Investment Grade Municipal Income Fund Inc., a Maryland corporation (the
"FUND"), proposes to issue and sell to the underwriters named in Schedule A
annexed hereto (the "UNDERWRITERS") an aggregate of [ ] shares of preferred
stock of the Fund, par value $[0.001] per share, designated Series [ ]
Auction Preferred Shares of the Fund, [ ] shares of preferred stock of the
Fund , par value $[0.001] per share, designated Series [ ] Auction Preferred
Shares of the Fund, [ ] shares of preferred stock of the Fund, par value
$[0.001] per share, designated Series [ ] Auction Preferred Shares of the
Fund, [ ] shares of preferred stock of the Fund, par value $[0.001] per
share, designated Series [ ] Auction Preferred Shares of the Fund, and [ ]
shares of preferred stock of the Fund, par value $[0.001] per share, designated
Series [ ] Auction Preferred Shares of the Fund, each with a liquidation
preference of $25,000 per share (the "APS").
The Fund has filed with the Securities and Exchange Commission (the
"COMMISSION"), in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations thereunder (collectively called the
"ACT"), and with the provisions of the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder (collectively called the
"INVESTMENT COMPANY ACT"), a registration statement on Form N-2 (File Nos.
333-[ ] and 811-[ ]), including a prospectus and a statement of additional
information, relating to the APS. The Fund has furnished to you, for use by the
Underwriters and by dealers, copies of one or more preliminary prospectuses
(including a preliminary statement of additional information) (each thereof,
including such preliminary statement of additional information, being herein
called a "PRELIMINARY PROSPECTUS") relating to the APS. Except where the context
otherwise requires, the registration statement, as amended when it becomes
effective (the "EFFECTIVE DATE"), including all documents filed as a part
thereof or incorporated by reference therein, and including any information
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 497 under the Act and deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430A under the Act is herein called
the Registration Statement, and the prospectus (including the statement of
additional information), in the form filed by the Fund with the Commission
pursuant to Rule 497 under the Act or, if no such filing is required, the form
of final prospectus (including the form of final statement of additional
information) included in the Registration Statement at the time it became
effective, is herein called the Prospectus. In addition, the Fund has filed a
Notification of Registration on Form N-8A (the "NOTIFICATION") pursuant to
Section 8 of the Investment Company Act.
Xxxxxxxx Xxxxxxxx Asset Management Inc. ("Xxxxxxxx Xxxxxxxx" or the
"Adviser") acts as the Fund's investment adviser pursuant to an Investment
Advisory and Administration Contract by and between the Fund and Xxxxxxxx
Xxxxxxxx, dated as of , (the "ADVISORY CONTRACT"). State Street Bank
and Trust Company acts as the custodian (the "CUSTODIAN") of the Fund's cash and
portfolio assets pursuant to a Custodian Agreement, dated as of , (the
"CUSTODIAN AGREEMENT"). PNC
Bank acts as the Fund's transfer and dividend disbursing agent and registrar
with respect to the common shares of the Fund (the "TRANSFER AGENT") pursuant to
a Transfer Agency Services Agreement, dated as of , (the "TRANSFER AGENCY
AGREEMENT"). will act as the Fund's auction agent (the "AUCTION AGENT")
for the APS pursuant to an Auction Agency Agreement, dated as of , 2003
(the "AUCTION AGENCY AGREEMENT"). The Fund will enter into a Letter Agreement,
dated as of , 2003, with the Depository Trust Company (the "DTC
AGREEMENT").
The Fund, the Adviser and the Underwriters agree as follows:
1. SALE AND PURCHASE. Upon the basis of the warranties and representations
and subject to the terms and conditions herein set forth, the Fund agrees to
sell to the respective Underwriters and each of the Underwriters, severally and
not jointly, agrees to purchase from the Fund the aggregate number of APS set
forth opposite the name of such Underwriter in Schedule A attached hereto in
each case at a purchase price per share of $ . The Fund is advised that the
Underwriters intend (i) to make a public offering of their respective portions
of the APS as soon after the Effective Date as is advisable and (ii) initially
to offer the APS upon the terms set forth in the Prospectus. The Underwriters
may from time to time increase or decrease the public offering price after the
initial public offering to such extent as they may determine.
2. PAYMENT AND DELIVERY. Payment of the purchase price for the APS shall
be made by the Underwriters to the Fund by Federal Funds wire transfer, against
delivery of the certificates for the APS to you through the facilities of the
Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time on the second business day following the date of this Underwriting
Agreement (unless another date or time shall be agreed to by you and the Fund).
The time at which such payment and delivery are actually made is hereinafter
sometimes called the "Time of Purchase" or the "Closing Date." Certificates for
the APS shall be delivered to you in definitive form in such names and in such
denominations as you shall specify on the second business day preceding the Time
of Purchase. For the purpose of expediting the checking of the certificates for
the APS by you, the Fund agrees to make such certificates available to you for
such purpose at least one full business day preceding the Time of Purchase.
A certificate in definitive form representing the APS registered in the
name of Cede & Co., as nominee for DTC, shall be delivered by or on behalf of
the Fund to DTC for the account of the Underwriters.
3. REPRESENTATIONS AND WARRANTIES OF THE FUND AND THE ADVISER. Each of the
Fund and the Adviser jointly and severally represents and warrants to each
Underwriter as follows:
(a) On (A) the Effective Date and the date on which the Prospectus is
first filed with the Commission pursuant to Rule 497(b) or (h) under the
Act or a certification is first filed with the Commission pursuant to Rule
497(j) under the Act, 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 APS 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 Date, 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 Act and the Investment Company Act, 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
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which the distribution of the APS is completed) became or becomes
effective, neither the Registration Statement nor any such amendment 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. On the Effective Date, on the Closing
Date, and, if applicable, on the date the Prospectus or any amendment or
supplement to the Prospectus was or is filed with the Commission, 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 3(a) 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
Underwriters expressly for use in the Registration Statement, the
Prospectus or any amendments or supplements thereto, as described in
Section 9(f) hereof.
(b) The Fund has been duly formed and is validly existing as a
corporation in good standing under the laws of the State of Maryland and
has full corporate 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 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.
(c) The capitalization of the Fund is as set forth in the Registration
Statement and the Prospectus. The shares of common stock of the Fund, par
value $0.001 per share (the "COMMON SHARES"), and the APS conform in all
material respects to the description of them in the Prospectus. All
outstanding Common Shares have been duly authorized and are validly issued,
fully paid and nonassessable (except as described in the Registration
Statement). The APS 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 Underwriters will have been
validly issued and will be fully paid and nonassessable (except as
described in the Registration Statement). No person is entitled to any
preemptive or other similar rights in connection with the issuance of the
APS.
(d) 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 any final amendment to the
Registration Statement (a "FINAL AMENDMENT"), if not already filed, all
action under the Act and the Investment Company Act, as the case may be,
necessary to make the public offering and consummate the sale of the APS as
provided in this Underwriting Agreement has or will have been taken by the
Fund.
(e) The Fund has, or at the relevant time had, full power and
authority to enter into each of this Underwriting Agreement, the Advisory
Contract, the Custodian Agreement, the Transfer Agency Agreement, the
Auction Agency Agreement and the DTC Agreement (collectively, the "FUND
AGREEMENTS") and to perform all of the terms and provisions hereof and
thereof to be carried out by it and (i) each Fund Agreement has been duly
and validly authorized, executed and delivered by or on behalf of the Fund,
(ii) each Fund Agreement does not violate in any material
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respect any of the applicable provisions of the Investment Company Act or
the Investment Advisers Act of 1940, as amended, and the rules and
regulations thereunder (collectively called the "ADVISERS ACT"), as the
case may be, and (iii) 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, (A) 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 (B) except as rights to indemnity
thereunder may be limited by federal or state securities laws.
(f) None of (i) the execution and delivery by the Fund of the Fund
Agreements, (ii) the issue and sale by the Fund of the APS as contemplated
by this Underwriting Agreement and (iii) the performance by the Fund of its
obligations under any of the Fund Agreements or consummation by the Fund of
the other transactions contemplated by the Fund Agreements conflicts with
or will conflict with, or results or will result in a breach of, the
Articles of Incorporation of the Fund, as amended through the date hereof
(the "ARTICLES OF INCORPORATION"), and the By-Laws of the Fund (the
"BY-LAWS"), or any agreement or instrument to which the Fund is a party or
by which the Fund is bound, except where such violation does not have a
material adverse effect on the condition (financial or other), business
prospects, properties, net assets or results of operations of the Fund, 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 securities or
"blue sky" laws applicable in connection with the purchase and distribution
of the APS by the Underwriters pursuant to this Underwriting Agreement.
(g) 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, except where such violation does not
have a material adverse effect on the condition (financial or other),
business prospects, properties, net assets or results of operations of the
Fund.
(h) No person has any right to the registration of any securities of
the Fund because of the filing of the Registration Statement.
(i) 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 (i)
have been obtained under the Act, the Investment Company Act or the
Advisers Act, and (ii) may be required under state securities or "blue sky"
laws, in connection with the purchase and distribution of the APS by the
Underwriters pursuant to this Underwriting Agreement.
(j) To the knowledge of the Fund and Adviser after due inquiry, based
on representations from PricewaterhouseCoopers LLP, whose report appears in
the Prospectus, PricewaterhouseCoopers LLP are independent public
accountants with respect to the Fund as required by the Act and the
Investment Company Act.
(k) 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 of the date indicated.
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(l) The Fund will maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets through an asset reconciliation procedure or
otherwise at reasonable intervals and appropriate action is taken with
respect to any differences.
(m) Since the date as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, (i) there has been no material adverse change in the condition,
financial or otherwise, business affairs or business of the Fund, whether
or not arising in the ordinary course of business, (ii) there have been no
transactions entered into by the Fund other than those in the ordinary
course of its business and (iii) there has been no dividend or distribution
of any kind declared, paid or made on any class of its capital shares.
(n) 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 (i) 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 (ii) 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 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.
(o) The Fund intends to direct the investment of the proceeds of the
offering of the APS in such a manner as to comply with the requirements of
Subchapter M of the Internal Revenue Code of 1986, as amended (the "CODE").
(p) The Common Shares are listed on the New York Stock Exchange.
(q) The APS have been, or prior to the Closing Date will be,
assigned a rating of "Aaa" by Xxxxx'x Investors Service, Inc. and
assigned a rating of "AAA" by Standard & Poor's.
(r) No advertising, sales literature or other promotional materials
(excluding road show slides or road show tapes) were authorized or prepared
by or on behalf of the Fund, the Adviser or any representative thereof for
use in connection with the public offering or sale of the APS (collectively
referred to as the "SALES MATERIALS"); any road show slides or road show
tapes complied and comply in all material respects with the applicable
requirements of the Act and the rules and interpretations of the National
Association of Securities Dealers, Inc.; 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 either of the
Adviser or any representative thereof for use in connection with the public
offering or sale of the APS 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.
4. REPRESENTATIONS AND WARRANTIES OF THE ADVISER. The Adviser represents
to each Underwriter as follows:
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(a) The Adviser has been duly formed, is validly existing as a
corporation under the laws of the State of Delaware with full corporate
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
Adviser is duly licensed and qualified to do business 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 effect on the Adviser's ability to provide services
to the Fund; and the 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.
(b) The Adviser is (i) duly registered as an investment adviser under
the Advisers Act and (ii) not prohibited by the Advisers Act or the
Investment Company Act from acting as the investment adviser for the Fund
as contemplated by the Advisory Contract, the Registration Statement and
the Prospectus.
(c) The Adviser has, or at the relevant time had, full power and
authority to enter into each of this Underwriting Agreement and the
Advisory Contract (collectively, this Underwriting Agreement and the
Advisory Contract being referred to as the "ADVISER AGREEMENTS") and to
carry out all the terms and provisions hereof and thereof to be carried out
by it; and each Adviser Agreement has been duly and validly authorized,
executed and delivered by the Adviser; none of the Adviser Agreements
violates in any material respect any of the applicable provisions of the
Investment Company Act or the Advisers Act; and assuming due authorization,
execution and delivery by the other parties thereto, each Adviser Agreement
constitutes a legal, valid and binding obligation of the Adviser,
enforceable in accordance with its terms, (i) 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 (ii) except
as rights to indemnity thereunder may be limited by federal or state
securities laws.
(d) Neither (i) the execution and delivery by the Adviser of any
Adviser Agreement nor (ii) the consummation by the Adviser of the
transactions contemplated by, or the performance of its obligations under,
any Adviser Agreement conflicts or will conflict with, or results or will
result in a breach of, the certificate of incorporation or by-laws of the
Adviser or any agreement or instrument to which the Adviser is a party or
by which the 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 Adviser.
(e) 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 Adviser of its obligations under
any Adviser Agreement, as the case may be, except such as (i) have been
obtained under the Act, the Investment Company Act or the Advisers Act, and
(ii) may be required under state securities or "blue sky" laws, in
connection with the purchase and distribution of the APS by the
Underwriters pursuant to this Underwriting Agreement.
(f) The descriptions of the Adviser and its business, and the
statements attributable to the Adviser, in the Registration Statement and
the Prospectus comply with the requirements of the Act and the Investment
Company Act and do 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.
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(g) 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 Adviser, threatened against or affecting the Adviser of a nature
required to be disclosed in the Registration Statement or Prospectus or
that might reasonably be expected to result in any material adverse change
in the ability of the Adviser to fulfill its respective obligations under
any Adviser Agreement.
(h) Neither the Fund nor the Adviser have made available any
promotional materials intended for use only by qualified broker-dealers and
registered representatives thereof by means of an Internet web site or
similar electronic means.
5. AGREEMENTS OF THE PARTIES.
(a) If the registration statement relating to the APS has not yet
become effective, the Fund will promptly file any 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 UBS Securities LLC (the "MANAGING
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 under the Act, the Fund will file a
430A prospectus pursuant to Rule 497(h) under the Act 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 APS
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 a certification pursuant to Rule 497(j) under
the Act 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 APS after the Effective Date. In
either case, the Fund will provide you 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 APS is
completed) or supplement to the Registration Statement or the Prospectus
unless a copy has first been submitted to the Managing Representative a
reasonable time before its filing and the Managing 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 Managing Representative promptly of (1) the issuance by the
Commission of any order in respect of the Fund or the Adviser which relates
to the Fund, or which relates to any material arrangements or proposed
material arrangements involving the Fund or the Adviser, (2) the initiation
or threatening of any proceedings for, or receipt by the Fund of any notice
with respect to, any suspension of the qualification of the APS for sale in
any jurisdiction or the issuance of any order by the Commission suspending
the effectiveness of the Registration Statement, (3) receipt by the Fund,
or any representative or attorney of the Fund, of any other communication
from the Commission relating in any material way 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 in any
material way to the Fund or any material arrangements or proposed material
arrangements involving the Fund. The Fund will make every reasonable effort
to prevent the
7
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 Managing 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 APS
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 which the distribution of the APS is completed) (excluding
exhibits) as the Managing 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 you, the Underwriters and any dealers, at such office or offices
as you may designate, as many copies of the Prospectus as you 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 under which they
were made, not misleading in any material respect, or if during such period
it is necessary to amend or supplement the Prospectus to comply with the
Act or the Investment Company Act, the Fund promptly will prepare, submit
to the Managing Representative, file with the Commission and deliver,
without charge, to the Underwriters and to dealers (whose names and
addresses the Managing Representative will furnish to the Fund) to whom APS
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 under which they were made, be misleading in any material
respect and will comply with the Act and the Investment Company Act;
provided that if the amendment or supplement is required exclusively as a
result of a misstatement in or omission from the information provided to
the Fund in writing by the Underwriters expressly for use in the
Prospectus, the Fund may deliver such amendment or supplement to the
Underwriters and dealers at a reasonable charge not to exceed the actual
cost thereof to the Fund. 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 the last paragraph of Section 11(a) of the Act and, at the
option of the Fund, Rule 158 under the Act.
(f) The Fund will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Fund's counsel and accountants in
connection with the registration of the APS and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or reproducing this
Underwriting Agreement and any other documents in connection with the
offering, purchase, sale and delivery of the APS (including advertising
expenses of the Underwriters, if any); (iii) the cost of preparing share
certificates; (iv) the expenses (including, but not limited to, travel,
hotels and other accommodations) incurred by the
8
Fund's directors, officers, employees and other personnel in connection
with meetings held with registered brokers in connection with the offering
of the APS, the preparing to market and the marketing of the APS; (v) any
fees charged by securities rating services for rating the APS; (vi) the
fees and expenses of the DTC and its nominee, the Custodian and the Auction
Agent; and (vii) all other costs and expenses incident to the performance
of its obligations hereunder which are not otherwise specifically provided
for. It is understood, however, that, except as provided in this Section 5
and Section 7 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel and stock transfer taxes, if
any, on resale of any of the APS by them, except any advertising expenses
connected with any offers they may make.
(g) 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 (i) if this
Underwriting Agreement is terminated by (A) the Fund or the Adviser
pursuant to any of the provisions hereof or (B) by you or the Underwriters
because of any inability, failure or refusal on the part of the Fund or the
Adviser to comply with any material terms or because any of the conditions
in Section 6 are not satisfied, the Adviser or an affiliate and the Fund,
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 APS and (ii) no Underwriter who
has failed or refused to purchase the APS 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, the
Adviser and the other Underwriters for damages occasioned by its default.
(h) Without the prior written consent of the Managing 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 for the APS as described in the Prospectus and
any issuance of Common Shares pursuant to the dividend reinvestment plan
established by the Fund.
(i) The Fund will direct the investment of the net proceeds of the
offering of the APS in such a manner as to comply with the investment
objective and policies of the Fund as described in the Prospectus.
(j) No later than the Closing Date, the Underwriters will provide, and
will cause any selling group member to whom they have sold APS to provide,
the Auction Agent with a list of the record names of the persons to whom
they have sold APS, the number of APS sold to each such person, and the
number of APS they are holding as of the Closing Date; provided that in
lieu of thereof, an Underwriter may provide the Auction Agent with a list
indicating itself as the sole holder of all the APS sold by such
Underwriter.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase the APS are subject to the accuracy on the date of this
Underwriting Agreement, and on the Closing Date, of the representations of the
Fund and the Adviser in this Underwriting Agreement, to the accuracy and
completeness of all material statements made by the Fund and the Adviser or any
of their respective officers in any certificate delivered to the Managing
Representative or its counsel pursuant to this Underwriting Agreement, to the
performance by the Fund and the 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 Managing
9
Representative consents to in writing. The Prospectus must have been filed
in accordance with Rule 497(b) or (h) or a certificate must have been filed
in accordance with Rule 497(j), as the case may be, under the Act.
(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 Managing Representative.
(c) Since the dates as of which information is given in the
Registration Statement and the Prospectus, (i) there must not have been any
material change in the Common Shares, the APS or the liabilities of the
Fund except as set forth in or contemplated by the Prospectus; (ii) 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 Adviser whether or not arising from
transactions in the ordinary course of business as set forth in or
contemplated by the Prospectus which in the opinion of the Managing
Representative would materially adversely affect the market for the APS;
(iii) 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
(iv) 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.
(d) The Managing Representative must have received on the Closing Date
a certificate, dated such date, of the President, a Vice President or
Managing Director and the chief financial or accounting officer of each of
the Fund and the Adviser certifying that (i) the signers have carefully
examined the Registration Statement, the Prospectus, and this Underwriting
Agreement, (ii) the representations of the Fund (with respect to the
certificates from such Fund officers) and the representations of the
Adviser (with respect to the certificates from such officers of the
Adviser) in this Underwriting Agreement are accurate on and as of the date
of the certificate, (iii) 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 Adviser (with respect to the certificates from
such officers of the Adviser), which change would materially and adversely
affect the ability of the Fund or the Adviser, as the case may be, to
fulfill its obligations under this Underwriting Agreement or the Advisory
Contract, whether or not arising from transactions in the ordinary course
of business, (iv) 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 APS or otherwise 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, (v) to the knowledge of the officers of the Adviser, after
reasonable investigation, no order having a material adverse effect on the
ability of the Adviser to fulfill its obligations under this Underwriting
Agreement or the Advisory Contract, 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 body, whether foreign or domestic, and
(vi) each of the Fund (with respect to the certificates from such Fund
officers) and
10
the Adviser (with respect to the certificates from such officers of the
Adviser) has performed all of its respective agreements that this
Underwriting Agreement requires it to perform by the Closing Date (to the
extent not waived in writing by the Managing Representative).
(e) You must have received on the Closing Date the opinions, dated the
Closing Date, substantially in the form of Schedules B and C to this
Underwriting Agreement from the counsel identified in each such Schedule,
or in such other form as is acceptable to counsel for the Underwriters.
(f) You must have received on the Closing Date from Xxxxxxxx Chance US
LLP an opinion, dated the Closing Date, with respect to the Fund, the APS,
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 APS. 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 Managing
Representative. The Fund and the 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 Managing Representative must have received on the date this
Underwriting Agreement is signed and delivered by you a signed letter,
dated such date, substantially in the form of Schedule E to this
Underwriting Agreement from the firm of accountants designated in such
Schedule. The Managing Representative also must have received on the
Closing Date a signed letter from such accountants, dated as of 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 five business days before the
date of this Underwriting Agreement, specified in the letter, to a date not
more than five business days before the Closing Date, that would require
any change in their letter referred to in the foregoing sentence.
(h) The APS shall have been accorded a rating of "Aaa" by Xxxxx'x
Investors Service, Inc. and a rating of "AAA" by Standard & Poors, and
letters to such effect, dated on or before the Closing Date, shall have
been delivered to the Managing Representative.
(i) As of the Closing Date, and assuming the receipt of the net
proceeds from the sale of the APS, the 1940 Act APS Asset Coverage and the
APS Basic Maintenance Amount (each as defined in the Prospectus) each will
be met.
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 Underwriters, provided that
any such documents, forms of which are annexed hereto, shall be deemed
satisfactory to such counsel if substantially in such form.
7. TERMINATION. This Underwriting Agreement may be terminated by the
Managing 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 APS are first generally offered
pursuant to this Underwriting Agreement by the Managing Representative to
dealers by letter or telegram;
(b) at or before the Closing Date if, in the sole judgment of the
Managing Representative, payment for and delivery of any APS is rendered
impracticable or inadvisable
11
because (i) trading in the APS or the Common Shares of the Fund is
suspended by the Commission or the principal exchange that lists the Common
Shares, (ii) trading in securities generally on the New York Stock Exchange
or the Nasdaq Stock Market shall have been suspended or limited or minimum
or maximum prices shall have been generally established on such exchange or
over-the-counter market, (iii) additional 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, (iv) a general banking moratorium has been
established by U.S. federal or New York authorities or (v) any material
adverse change in the financial or securities markets in the United States
or in political, financial or economic conditions in the United States or
any outbreak or material escalation of hostilities or declaration by the
United States of a national emergency or war or other calamity or crisis
shall have occurred the effect of any of which is such as to make it, in
the sole judgment of the Managing Representative, impracticable or
inadvisable to market the APS on the terms and in the manner contemplated
by the Prospectus; or
(c) at or before the Closing Date, if any of the conditions specified
in Section 6 have not been fulfilled when and as required by this
Underwriting Agreement.
8. 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 the Closing Date the APS agreed to be
purchased on the Closing Date by such Underwriter or Underwriters, the Managing
Representative may find one or more substitute underwriters to purchase such APS
or make such other arrangements as the Managing Representative deems advisable,
or one or more of the remaining Underwriters may agree to purchase such APS in
such proportions as may be approved by the Managing Representative, in each case
upon the terms set forth in this Underwriting Agreement. If no such arrangements
have been made within 36 hours after the Closing Date, and
(a) the number of APS to be purchased by the defaulting Underwriters
on the Closing Date does not exceed 10% of the APS that the Underwriters
are obligated to purchase on such Closing Date, each of the nondefaulting
Underwriters will be obligated to purchase such APS on the terms set forth
in this Underwriting Agreement in proportion to their respective
obligations under this Underwriting Agreement, or
(b) the number of APS to be purchased by the defaulting Underwriters
on the Closing Date exceeds 10% of the APS to be purchased by all the
Underwriters on the 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 Managing Representative to
purchase such APS on the terms set forth in this Underwriting Agreement.
Upon the occurrence of the circumstances described in the foregoing
paragraph (b), either the Managing Representative or the Fund will have the
right to postpone the 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 Managing Representative and the Fund. If the number of APS to be purchased
on the Closing Date by such defaulting Underwriter or Underwriters exceeds 10%
of the APS that the Underwriters are obligated to purchase on the 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 APS
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 Adviser, except as provided in Sections 5(g) and 9 hereof. Any
action taken under this Section will not affect the liability of any defaulting
12
Underwriter to the Fund or to the nondefaulting Underwriters arising out of such
default. A substitute underwriter will become an Underwriter for all purposes of
this Underwriting Agreement.
9. INDEMNITY AND CONTRIBUTION.
(a) Each of the Fund and the Adviser, jointly and severally, agrees to
indemnify, defend and hold harmless each Underwriter, its partners,
directors and officers, and any person who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and
the successors and assigns of all of the foregoing persons from and against
any loss, damage, expense, liability or claim (including the reasonable
cost of investigation) which, jointly or severally, any such Underwriter or
any such person may incur under the Act, the Exchange Act, the Investment
Company Act, the Advisers Act, the common law or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration Statement
as amended by any post-effective amendment thereof by the Fund) or in a
Prospectus (the term "Prospectus" for the purpose of this Section 9 being
deemed to include any Preliminary Prospectus, any Sales Materials, the
Prospectus and the Prospectus as amended or supplemented by the Fund), or
arises out of or is based upon any omission or alleged omission to state a
material fact required to be stated in either such Registration Statement
or Prospectus or necessary to make the statements made therein (with
respect to the Prospectus, in light of the circumstances under which they
were made) not misleading, except insofar as any such loss, damage,
expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in and
in conformity with information furnished in writing by or on behalf of any
Underwriter to the Fund or the Adviser expressly for use with reference to
any Underwriter in such Registration Statement or such Prospectus or arises
out of or is based upon any omission or alleged omission to state a
material fact in connection with such information required to be stated in
such Registration Statement or such Prospectus or necessary to make such
information (with respect to the Prospectus, in light of the circumstances
under which they were made) not misleading, provided, however, that the
indemnity agreement contained in this subsection (a) with respect to any
Preliminary Prospectus or amended Preliminary Prospectus shall not inure to
the benefit of any Underwriter (or to the benefit of any person controlling
such Underwriter) from whom the person asserting any such loss, damage,
expense, liability or claim purchased the APS which is the subject thereof
if the Prospectus corrected any such alleged untrue statement or omission
and if such Underwriter failed to send or give a copy of the Prospectus to
such person at or prior to the written confirmation of the sale of such APS
to such person, unless the failure is the result of noncompliance by the
Fund with Section 5(d) hereof.
If any action, suit or proceeding (together, a "Proceeding") is brought
against an Underwriter or any such person in respect of which indemnity may
be sought against the Fund or the Adviser pursuant to the foregoing
paragraph, such Underwriter or such person shall promptly notify the Fund
and the Adviser in writing of the institution of such Proceeding and the
Fund or the Adviser shall assume the defense of such Proceeding, including
the employment of counsel reasonably satisfactory to such indemnified party
and payment of all fees and expenses; provided, however, that the omission
to so notify the Fund or the Adviser shall not relieve the Fund or the
Adviser from any liability which the Fund or the Adviser may have to any
Underwriter or any such person or otherwise. Such Underwriter or such
person shall have the right to employ its or their own counsel in any such
case, but the reasonable fees and expenses of such counsel shall be at the
expense of such Underwriter or of such person unless the employment of such
counsel shall have been authorized in writing by the Fund or the Adviser,
as the case may be, in connection with the defense of such Proceeding or
the Fund or the Adviser shall not have, within a reasonable period
13
of time in light of the circumstances, employed counsel to have charge of
the defense of such Proceeding or such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or
them which are different from, additional to or in conflict with those
available to the Fund or the Adviser (in which case neither the Fund nor
the Adviser shall have the right to direct the defense of such Proceeding
on behalf of the indemnified party or parties, but the Fund or the Adviser,
as the case may be, may employ counsel and participate in the defense
thereof but such fees and expenses of such counsel shall be at the expense
of the Fund or the Adviser, as the case may be), in any of which events
such reasonable fees and expenses shall be borne by the Fund or the Adviser
and paid as incurred (it being understood, however, that the Fund or the
Adviser shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or series
of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). Neither the Fund
nor the Adviser shall be liable for any settlement of any Proceeding
effected without its written consent but if settled with the written
consent of the Fund or the Adviser, the Fund or the Adviser, as the case
may be, agrees to indemnify and hold harmless any Underwriter and any such
person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified
party for reasonable fees and expenses of counsel as contemplated by the
second sentence of this paragraph, then the indemnifying party agrees that
it shall be liable for any settlement of any Proceeding effected without
its written consent if (i) such settlement is entered into more than 60
business days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
Proceeding in respect of which any indemnified party is or could have been
a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter
of such Proceeding and does not include an admission of fault, culpability
or a failure to act, by or on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Fund and the Adviser, and each of their respective
shareholders, partners, managers, members, trustees, directors and
officers, and any person who controls the Fund or the Adviser within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the
successors and assigns of all of the foregoing persons from and against any
loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Fund or the Adviser or any
such person may incur under the Act, the Exchange Act, the Investment
Company Act, the Advisers Act, the common law or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information furnished in writing by or
on behalf of such Underwriter to the Fund or the Adviser expressly for use
with reference to such Underwriter in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof
by the Fund) or in a Prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with
such information required to be stated in such Registration Statement or
such Prospectus or necessary to make such information not misleading (with
respect to the Prospectus, in light of the circumstances under which they
were made).
14
If any Proceeding is brought against the Fund, the Adviser or any such
person in respect of which indemnity may be sought against any Underwriter
pursuant to the foregoing paragraph, the Fund, the Adviser or such person
shall promptly notify such Underwriter in writing of the institution of
such Proceeding and such Underwriter shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory to
such indemnified party and payment of all fees and expenses; provided,
however, that the omission to so notify such Underwriter shall not relieve
such Underwriter from any liability which such Underwriter may have to the
Fund, the Adviser or any such person or otherwise. The Fund, the Adviser or
such person shall have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall be at the
expense of the Fund, the Adviser or such person, as the case may be, unless
the employment of such counsel shall have been authorized in writing by
such Underwriter in connection with the defense of such Proceeding or such
Underwriter shall not have, within a reasonable period of time in light of
the circumstances, employed counsel to have charge of the defense of such
Proceeding or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are
different from or additional to or in conflict with those available to such
Underwriter (in which case such Underwriter shall not have the right to
direct the defense of such Proceeding on behalf of the indemnified party or
parties, but such Underwriter may employ counsel and participate in the
defense thereof but such fees and expenses of such counsel shall be at the
expense of such Underwriter), in any of which events such fees and expenses
shall be borne by such Underwriter and paid as incurred (it being
understood, however, that such Underwriter shall not be liable for the
expenses of more than one separate counsel (in addition to any local
counsel) in any one Proceeding or series of related Proceedings in the same
jurisdiction representing the indemnified parties who are parties to such
Proceeding). No Underwriter shall be liable for any settlement of any such
Proceeding effected without the written consent of such Underwriter but if
settled with the written consent of such Underwriter, such Underwriter
agrees to indemnify and hold harmless the Fund, the Adviser and any such
person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it
shall be liable for any settlement of any Proceeding effected without its
written consent if (i) such settlement is entered into more than 60
business days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
Proceeding in respect of which any indemnified party is or could have been
a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter
of such Proceeding and does not include an admission of fault, culpability
or a failure to act, by or on behalf of such indemnified party.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, damages, expenses, liabilities or
claims referred to therein, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
damages, expenses, liabilities or claims (i) in such proportion as is
appropriate to reflect the relative benefits received by the Fund and the
Adviser on the one hand and the Underwriters on the other hand from the
offering of the APS or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is
15
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Fund and the Adviser on the
one hand and of the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, damages, expenses,
liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Fund and the Adviser
on the one hand and the Underwriters on the other shall be deemed to be in
the same respective proportions as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting
expenses) received by the Fund and the total underwriting discounts and
commissions received by the Underwriters, bear to the aggregate public
offering price of the APS. The relative fault of the Fund and the Adviser
on the one hand and of the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission relates
to information supplied by the Fund or the Adviser or by the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, damages, expenses,
liabilities and claims referred to in this subsection shall be deemed to
include any legal or other fees or expenses reasonably incurred by such
party in connection with investigating, preparing to defend or defending
any Proceeding.
(d) The Fund, the Adviser and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in subsection
(c) above. Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the fees and
commissions received by such Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of the Fund
contained in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of any Underwriter,
its partners, directors or officers or any person (including each partner,
officer or director of such person) who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, or by
or on behalf of the Fund or the Adviser, its shareholders, partners,
managers, members, trustees, directors or officers or any person who
controls the Fund or the Adviser within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, and shall survive any termination of
this Agreement or the issuance and delivery of the APS. The Fund and the
Adviser and each Underwriter agree promptly to notify each other of the
commencement of any Proceeding against it and, in the case of the Fund or
the Adviser, against any of the Fund's or the Adviser's shareholders,
partners, managers, members, trustees, directors or officers in connection
with the issuance and sale of the APS, or in connection with the
Registration Statement or Prospectus.
(f) The Fund and the Adviser each acknowledge that the statements with
respect to (1) the public offering of the APS as set forth on the cover
page of, and (2) selling concessions and reallowances of selling
concessions under the caption "Underwriting" in, the Prospectus constitute
the only information furnished in writing to the Fund by the Underwriters
expressly for use in such document. The Underwriters severally confirm that
these statements are correct in all material respects and were so furnished
by or on behalf of the Underwriters severally for use in the Prospectus.
16
(g) Notwithstanding any other provisions in this Section 9, no party
shall be entitled to indemnification or contribution under this
Underwriting Agreement against any loss, claim, liability, expense or
damage arising by reason of such person's willful misfeasance, bad faith,
gross negligence or reckless disregard of its duties in the performance of
its duties hereunder.
10. NOTICES. Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered or sent to UBS
Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention: Syndicate
Department and, if to the Fund or the Adviser, shall be sufficient in all
respects if delivered or sent to the Fund or the Adviser, as the case may be, at
the offices of the Fund or the Adviser at Xxxxxxxx Xxxxxxxx Asset Management
Inc. at [ ], Attention: [ ].
11. GOVERNING LAW; CONSTRUCTION. This Agreement and any claim, counterclaim
or dispute of any kind or nature whatsoever arising out of or in any way
relating to this Agreement ("Claim"), directly or indirectly, shall be governed
by, and construed in accordance with, the laws of the State of New York. The
Section headings in this Agreement have been inserted as a matter of convenience
of reference and are not a part of this Agreement.
12. SUBMISSION TO JURISDICTION. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Fund and UBS
Securities LLC each consent to the jurisdiction of such courts and personal
service with respect thereto. The Fund and UBS Securities LLC hereby consent to
personal jurisdiction, service and venue in any court in which any Claim arising
out of or in any way relating to this Agreement is brought by any third party
against UBS Securities LLC or any indemnified party. Each of UBS Securities LLC,
the Fund (on its behalf and, to the extent permitted by applicable law, on
behalf of its stockholders and affiliates) and the Adviser (on its behalf and,
to the extent permitted by applicable law, on behalf of its members and
affiliates) waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. Each of the Fund and the Adviser agrees
that a final judgment in any such action, proceeding or counterclaim brought in
any such court shall be conclusive and binding upon the Fund and the Adviser, as
the case may be, and may be enforced in any other courts in the jurisdiction of
which the Fund or the Adviser, as the case may be, is or may be subject, by suit
upon such judgment.
13. PARTIES AT INTEREST. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Fund and the Adviser and to
the extent provided in Section 9 hereof the controlling persons, shareholders,
partners, members, trustees, managers, directors and officers referred to in
such section, and their respective successors, assigns, heirs, personal
representatives and executors and administrators. No other person, partnership,
association or corporation (including a purchaser, as such purchaser, from any
of the Underwriters) shall acquire or have any right under or by virtue of this
Agreement.
14. COUNTERPARTS. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Underwriters, the Fund and the Adviser, and any successor or assign of any
substantial portion of the Fund's, the Adviser's, or any of the Underwriters'
respective businesses and/or assets.
17
If the foregoing correctly sets forth the understanding among the Fund, the
Adviser and the Underwriters, please so indicate in the space provided below,
whereupon this letter and your acceptance shall constitute a binding agreement
among the Fund, the Adviser and the Underwriters, severally.
Very truly yours,
INVESTMENT GRADE MUNICIPAL INCOME
FUND INC.
------------------------
By:
Title:
XXXXXXXX XXXXXXXX ASSET MANAGEMENT
INC.
By:
-----------------------------------
Name:
Title:
Accepted and agreed to as of the
date first above written, on
behalf of themselves and
the other several Underwriters
named in Schedule A
UBS SECURITIES LLC
[other co-managers]
By: UBS SECURITIES LLC
--------------------------
By: Xxxxx Xxxxxxxx
Title: Managing Director
--------------------------
By: Xxxx X. Reit
Title: Executive Director
18
SCHEDULE A
NAME NUMBER OF SHARES TO
BE PURCHASED
-------------------
UBS Securities LLC
-------------------
Total
19
SCHEDULE B
FORM OF OPINION OF
DECHERT LLP REGARDING THE FUND
, 2003
1. The Registration Statement and all post-effective amendments on or
before the Closing Date, if any, are effective under the Securities Act; the
filing of the Prospectus pursuant to Rule 497 under the Securities Act has been
made in the manner and within the time period required by Rule 497; and based
upon oral inquiries to the Commission staff on the date hereof, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceeding for any such purpose is pending or threatened by the Commission.
2. The Fund has been duly organized and is validly existing and in good
standing as a corporation under the laws of the State of Maryland and has
corporate power and authority to own or lease its properties and to conduct its
business as described in the Registration Statement and the Prospectus.
3. The Fund's authorized capitalization is as set forth in the
Registration Statement and the Prospectus. The Fund has authorized [ ]
shares of common stock, par value $[0.001] per share and [ ] shares of
preferred stock, par value $[0.001] per share. The APS conform in all material
respects as to legal matters to the description of them under the caption
entitled "Description of APS" and "Description of capital structure" in the
Prospectus. All outstanding shares of common stock of the Fund have been duly
authorized and are validly issued, fully paid and non-assessable. The APS have
been duly authorized and, when issued and delivered to the Underwriters against
payment therefor in accordance with the terms of the Underwriting Agreement,
will be validly issued, fully paid and non-assessable. No person is entitled to
any preemptive or other similar rights with respect to the APS.
4. The form of the certificates for the APS conforms to the requirements
of the Maryland General Corporation Law.
5. To the best of our knowledge after due inquiry, the Fund was deemed to
be registered with the Commission under Section 8(a) of the Investment Company
Act upon receipt by the Commission of the Notification of Registration. To our
knowledge after due inquiry, the Commission has not issued to the Fund notice of
any hearing or other proceeding to consider suspension or revocation of any such
registration. To the best of our knowledge after due inquiry, all required
action has been taken by the Fund under the Securities Act, the Investment
Company Act and the rules and regulations thereunder in connection with the
issuance and sale of the APS to make the public offering and consummate the sale
of the APS pursuant to the Underwriting Agreement.
6. The Fund has full power and authority to enter into each of the Fund
Agreements and to perform all of the terms and provisions thereof to be carried
out by it. Each Fund Agreement has been duly and validly authorized, executed
and delivered by the Fund. Each Fund Agreement complies in all material respects
with all applicable provisions of the Investment Company Act and the Investment
Advisers Act of 1940, as amended, as the case may be. Assuming due
authorization, execution and
20
delivery by the other parties thereto, and, each Fund Agreement constitutes the
legal, valid and binding obligation of the Fund enforceable in accordance with
its terms, subject as to enforcement to bankruptcy, insolvency, moratorium,
reorganization and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles (regardless of whether
enforceability is considered in a proceeding in equity or at law).
7. The Fund has, or at the relevant time had, full power and authority to
enter into each of the Advisory Contract and the Underwriting Agreement and to
perform all of the terms and provisions thereof to be carried out by it. The
Advisory Contract and the Underwriting Agreement have been duly and validly
authorized, executed and delivered by the Fund.
8. None of (a) the execution and delivery by the Fund of the Advisory
Contract, the Underwriting Agreement or any of the Fund Agreements, (b) the
issue and sale by the Fund of the APS as contemplated by the Underwriting
Agreement and (c) the performance by the Fund of its obligations under the
Advisory Contract, the Underwriting Agreement or any of the Fund Agreements or
consummation by the Fund of the other transactions contemplated by the Advisory
Contract, the Underwriting Agreement or any of the Fund Agreements conflicts or
will conflict with, or results or will result in a breach of, the Articles of
Incorporation or the By-Laws or, to our knowledge, any agreement or instrument
to which the Fund is a party or by which the Fund is bound, or violates or will
violate any federal statute, law or regulation or any judgment, injunction,
order or decree of any federal governmental agency or body that is applicable to
the Fund and that is known to us, which violation would have a material adverse
effect on the condition or business of the Fund.
9. To the best of our knowledge after due inquiry, the Fund is not
currently in breach of, or in default under, any material written agreement or
instrument to which it is a party or by which it or its property is bound or
affected.
10. No consent, approval, authorization or order of any court or
governmental agency or body or securities exchange or securities association is
required by the Fund for the consummation by the Fund of the transactions
contemplated in the Advisory Contract, the Underwriting Agreement and the Fund
Agreements, except such as (a) have been obtained under the Securities Act, the
Investment Company Act or the Exchange Act and (b) may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the APS by the Underwriters pursuant to the Underwriting Agreement.
11. To our knowledge after due inquiry, there are no legal or governmental
proceedings pending or threatened against the Fund, or to which the Fund or any
of its properties is subject, that are required to be described in the
Registration Statement or the Prospectus but are not described therein as
required.
12. To the best of our knowledge after due inquiry, there are no
agreements, contracts, indentures, leases or other instruments that are required
to be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement which have not been so described or
filed as an exhibit or incorporated therein by reference.
13. Each of the sections in the Prospectus entitled "Tax matters," to the
extent that it states matters of United States law or legal conclusions with
respect thereto, presents a fair summary of the principal federal income tax
rules currently in effect applicable to the Fund and to the purchase, ownership
and disposition of the APS.
14. The Registration Statement (except for the financial statements and
schedules, the notes thereto and any schedules and other financial data
contained or incorporated by reference therein or
21
omitted therefrom, as to which we express no opinion), at the effective time set
forth above, and the Prospectus (except as aforesaid), as of the date thereof,
complied as to form in all material respects to the applicable requirements of
the Securities Act and the Investment Company Act.
We have not independently verified the accuracy, completeness or fairness
of the statements made or the information contained in the Registration
Statement or the Prospectus and, except in the respects and to the extent set
forth in paragraphs 3, 12 and 13 above, we are not passing upon and do not
assume any responsibility therefor. In the course of the preparation by the Fund
of the Registration Statement and the Prospectus, we have participated in
discussions with your representatives and employees and officers of the Fund and
the Adviser and in discussions with the Fund's independent accountants, in which
the business and the affairs of the Fund and the Adviser and the contents of the
Registration Statement and the Prospectus were discussed. On the basis of
information that we have gained in the course of our representation of the Fund
in connection with its preparation of the Registration Statement and the
Prospectus and our participation in the discussions referred to above, no facts
have come to our attention that would lead us to believe that at the time such
Registration Statement became effective, the Registration Statement contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that the Prospectus (except for the financial statements, supporting
schedules and other financial data included therein or omitted therefrom and for
statistical information derived from such financial statements, supporting
schedules or other financial data, as to which we do not express any belief), at
the time the Prospectus was issued, or at the Closing Date, included or includes
an untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
This letter and the opinions expressed herein are furnished by us to you
and are solely for benefit of the Underwriters.
Very truly yours,
22
SCHEDULE C
FORM OF OPINION OF COUNSEL
REGARDING XXXXXXXX XXXXXXXX ASSET MANAGEMENT INC.
, 2003
(i) The Adviser has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of Delaware.
(ii) The Adviser has full corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Underwriting
Agreement.
(iii) The Adviser is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not result in a material adverse effect.
(iv) The Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the Advisers
Act, the Advisers Act Rules and Regulations, the Investment Company Act or the
Rules and Regulations from acting under the Advisory Contract for the Trust as
contemplated by the Prospectus.
(v) The Underwriting Agreement and the Advisory Contract have been
duly authorized, executed and delivered by the Adviser, and the Advisory
Contract constitutes a valid and binding obligation of the Adviser, enforceable
in accordance with its terms, except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).
(vi) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to which the
Adviser is a party, or to which the property of the Adviser is subject, before
or brought by any court or governmental agency or body, domestic or foreign,
which might reasonably be expected to result in any material adverse change in
the condition, financial or otherwise, in the earnings, business affairs or
business prospects of the Adviser, materially and adversely affect the
properties or assets of the Adviser or materially impair or adversely affect the
ability of the Adviser to function as an investment adviser or perform its
obligations under the Advisory Contract, which is required to be disclosed in
the Registration Statement or the Prospectus.
(vii) To the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in all material
respects.
23
(viii) To the best of our knowledge, the Adviser is not in violation
of its certificate of incorporation, by-laws or other organizational documents
and no default by the Adviser exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or the
Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement.
(ix) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the Act, the
Investment Company Act and the Rules and Regulations, which have been obtained,
or as may be required under the securities or blue sky laws of the various
states, as to which we need express no opinion) is necessary or required in
connection with the due authorization, execution and delivery of the
Underwriting Agreement.
(x) The execution, delivery and performance of the Underwriting
Agreement and the consummation of the transactions contemplated in the
Underwriting Agreement and in the Registration Statement and compliance by the
Adviser with their obligations under the Underwriting Agreement do not and will
not, whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Adviser pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or any other agreement or
instrument, known to us, to which the Adviser is a party or by which it or any
of them may be bound, or to which any of the property or assets of the Adviser
is subject (except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a material adverse effect), nor will such
action result in any violation of the provisions of the charter or by-laws of
the Adviser, or any applicable law, statute, rule, regulation, judgment, order,
writ or decree, known to us, of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Adviser or any of its
properties, assets or operations.
In addition, we have participated in the preparation of the Registration
Statement and the Prospectus and participated in discussions with certain
officers, trustees and employees of the Trust, representatives of
PricewaterhouseCoopers LLP, the independent accountants who examined the
statement of assets and liabilities of the Trust included or incorporated by
reference in the Registration Statement and the Prospectus, and you and your
representatives and we have reviewed certain Trust records and documents. While
we have not independently verified and are not passing upon, and do not assume
any responsibility for, the accuracy, completeness or fairness of the
information contained in the Registration Statement and the Prospectus, except
to the extent necessary to enable us to give the opinions with respect to the
Trust in paragraphs (A)(v), (xiv) and (xix), on the basis of such participation
and review, nothing has come to our attention that would lead us to believe that
the Registration Statement (except for financial statements, supporting
schedules and other financial data included therein or omitted therefrom and for
statistical information derived from such financial statements, supporting
schedules or other financial data, as to which we do not express any belief), at
the time such Registration Statement became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus (except for financial statements, supporting schedules and
other financial data included therein or omitted therefrom and for statistical
information derived from such financial statements, supporting schedules or
other financial data, as to which we do not express any belief), at the time the
Prospectus was issued, or at the Closing Date, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Very truly yours,
24
SCHEDULE D
FORM OF ACCOUNTANT'S LETTER
[To be agreed]
25
