Exhibit (h)(1)
[ ],000,000 SHARES
XXXXX XXXXX INSURED NEW YORK MUNICIPAL BOND FUND
COMMON STOCK
UNDERWRITING AGREEMENT
[ ], 2002
Xxxxxxx Xxxxx Barney Inc.
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
Prudential Securities Incorporated
Advest, Inc.
H&R Block Financial Advisors, Inc.
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Quick & Xxxxxx, Inc. A FleetBoston Financial Company
Xxxxxxx Xxxxx & Associates, Inc.
RBC Xxxx Xxxxxxxx, Inc.
Xxxx, Xxxx & Co., LLC
TD Waterhouse Investor Services, Inc.
Wachovia Securities, Inc.
As Representatives of the Several Underwriters
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The undersigned, Xxxxx Xxxxx Insured New York Municipal Bond Fund, a
Massachusetts business trust (the "Fund"), and Xxxxx Xxxxx Management, a
Massachusetts business trust (the "Manager"), address you as underwriters and as
the representatives (the "Representatives") of each of the other persons, firms
and corporations, if any, listed in Schedule I hereto (herein collectively
called "Underwriters"). The Fund proposes to issue and sell an aggregate of [
],000,000 shares of its common shares of beneficial interest, $0.01 par value
per share to the several Underwriters (the "Firm Shares"). The Fund also
proposes to sell to the Underwriters, upon the terms and conditions set forth in
Section 2 hereof, up to an additional [ ]00,000 shares (the "Additional Shares"
which together with the firm shares are hereinafter collectively referred to as
the "Shares"). The Fund and the Manager wish to confirm as follows
their agreements with you and the other several Underwriters on whose behalf you
are acting in connection with the several purchases of the Shares by the
Underwriters.
Collectively, the Investment Management Agreement dated as of [ ] between
the Fund and the Manager (the "Investment Management Agreement"); the Master
Custodian Agreement dated as of [ ] between the Fund and [ ] (the "Custodian
Agreement") and the Transfer Agency Agreement dated as of [ ] between the Fund
and [ ] (the "Transfer Agency Agreement") are hereinafter referred to as the
"Fund Agreements." This Underwriting Agreement is hereinafter referred to as the
"Agreement."
1. Registration Statement and Prospectus. The Fund has prepared and filed
with the Securities and Exchange Commission (the "Commission") in conformity
with the provisions of the Securities Act of 1933, as amended (the "1933 Act"),
the Investment Company Act of 1940, as amended (the "1940 Act"), and the
published rules and regulations of the Commission promulgated under the 1933 Act
(the "1933 Act Rules and Regulations") and the 1940 Act (the "1940 Act Rules and
Regulations" and together with the 1933 Act Rules and Regulations, the "Rules
and Regulations") a registration statement on Form N-2 (File No. 333-92200)
under the 1933 Act and the 1940 Act and may pursuant to the Rules and
Regulations prepare and file an additional registration statement relating to a
portion of the Shares pursuant to Rule 462(b) of the 1933 Act Rules and
Regulations (collectively, the "Registration Statement"), including a prospectus
(including any statement of additional information) relating to the Shares. The
Fund has filed a notification of registration of the Fund as an investment
company under the 1940 Act on Form N-8A (the "1940 Act Notification"). The term
"Registration Statement" as used in this Agreement means the registration
statement (including all financial schedules and exhibits), as amended at the
time it becomes effective under the 1933 Act or, if the registration statement
became effective under the 1933 Act prior to the execution of this Agreement, as
amended or supplemented, at the time it became effective prior to the execution
of this Agreement and includes any information deemed to be included by Rule
430A under the 1933 Act Rules and Regulations. If it is contemplated, at the
time this Agreement is executed, that a post-effective amendment to the
registration statement will be filed under the 1933 Act and must be declared
effective before the offering of the Shares may commence, the term "Registration
Statement" as used in this Agreement means the registration statement as amended
by said post-effective amendment. If the Fund has filed an abbreviated
Registration Statement to register an additional amount of shares pursuant to
Rule 462(b) under the 1933 Act (the "Rule 462 Registration Statement"), then any
reference herein to the term "Registration Statement" shall include such Rule
462 Registration Statement. The term "Prospectus" as used in this Agreement
means the prospectus (and the statement of additional information) in the forms
included in the Registration Statement or, if the prospectus (and the statement
of additional information) included in the Registration Statement omit
information in reliance on Rule 430A under the 1933 Act Rules and Regulations
and such information is included in a prospectus (and the statement of
additional information) filed with the Commission pursuant to Rule 497(h) under
the 1933 Act Rules and Regulations, the term "Prospectus" as used in this
Agreement means the prospectus (and the statement of additional information) in
the forms included in the Registration Statement as supplemented by the addition
of the information contained in the prospectus (and the statement
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of additional information) filed with the Commission pursuant to Rule 497(h).
The term "Prepricing Prospectus" as used in this Agreement means the prospectus
(and the statement of additional information) subject to completion in the forms
included in the Registration Statement at the time of the initial filing of the
Registration Statement with the Commission and as such prospectus (and the
statement of additional information) shall have been amended from time to time
prior to the date of the Prospectus, together with any other prospectus (and
statement of additional information) relating to the Fund other than the
Prospectus approved in writing by or directly or indirectly prepared by the Fund
or the Advisers; it being understood that the definition of Prepricing
Prospectus above shall not include any Prepricing Prospectus prepared by the
Underwriters unless approved in writing by the Fund or the Advisers. The terms
"Registration Statement," "Prospectus" and "Prepricing Prospectus" shall also
include any financial statements incorporated by reference therein.
The Fund has furnished the Representatives with copies of such
Registration Statement, each amendment to such Registration Statement filed with
the Commission and each Prepricing Prospectus, and the Representatives have
provided the same to the other Underwriters.
2. Agreements to Sell and Purchase. The Fund hereby agrees, subject to all
the terms and conditions set forth herein, to issue and to sell to each
Underwriter and, upon the basis of the representations, warranties and
agreements of the Fund and the Manager herein contained and subject to all of
the other terms and conditions set forth herein, each Underwriter agrees,
severally and not jointly, to purchase from the Fund at a purchase price per
share of $[ ] per Share (the "Purchase Price Per Share"), the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto.
The Fund also agrees, subject to all the terms and conditions set forth
herein, to issue and to sell to the Underwriters and, upon the basis of the
representations, warranties and agreements of the Fund and the Manager herein
contained and subject to all the terms and conditions set forth herein, the
Underwriters shall have the right to purchase from the Fund, at the Purchase
Price Per Share, pursuant to an option (the "Over-allotment Option") which may
be exercised at any time and from time to time prior to 9:00 P.M., New York City
time, on the 45th day after the date of the Prospectus (or if such 45th day
shall be a Saturday or a Sunday or a holiday, on the next business day
thereafter when the New York Stock Exchange (the "NYSE") is open for trading) up
to an aggregate of [ ]00,000 Additional Shares. Additional Shares may be
purchased solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. Upon any exercise of the Over-allotment
Option, upon the basis of the representations, warranties and agreements of the
Fund and the Manager herein contained and subject to all of the other terms and
conditions set forth herein, each Underwriter agrees, severally and not jointly,
to purchase from the Fund the number of Additional Shares (subject to such
adjustments as you may determine to avoid fractional shares) which bears
approximately the same proportion to the number of Additional Shares to be
purchased by the Underwriters as the number of Firm Shares set forth opposite
the name of such Underwriter in Schedule I (or such number of Firm Shares
increased as set forth in Section 10 hereof) bears to the aggregate number of
Firm Shares.
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3. Terms of Public Offering.The Fund and the Manager have been advised by
you that the Underwriters propose to make a public offering of the Shares as
soon after the Registration Statement and this Agreement have become effective
as in your judgment is advisable and initially to offer the Firm Shares upon the
terms set forth in the Prospectus.
4. Delivery of Shares and Payments Therefor.
(a) Delivery to the Underwriters of and payment to the Fund for the
Firm Shares shall be made at the office of Xxxxxxx Xxxxx Barney Inc., 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or through the facilities of
the Depository Trust Company or another mutually agreeable facility, at
9:00 A.M., New York City time, on August [__], 2002 (the "Closing Date").
The place of closing for the Firm Shares and the Closing Date may be
varied by agreement between you and the Fund.
(b) Delivery to the Underwriters of and payment to the Fund for any
Additional Shares to be purchased by the Underwriters and compensation of
the Underwriters with respect thereto shall be made at the aforementioned
office of Xxxxxxx Xxxxx Xxxxxx Inc. at such time on such date (an "Option
Closing Date"), which may be the same as the Closing Date, but shall in no
event be earlier than the Closing Date nor earlier than two nor later than
three business days after the giving of the notice hereinafter referred
to, as shall be specified in a written notice from you on behalf of the
Underwriters to the Fund of the Underwriters' determination to purchase a
number, specified in said notice, of Additional Shares. The place of
closing for any Additional Shares and the Option Closing Date for such
Additional Shares may be varied by agreement between you and the Fund.
(c) Certificates for the Firm Shares and for any Additional Shares
shall be registered in such names and in such denominations as you shall
request prior to 1:00 P.M., New York City time, (i) in respect of the Firm
Shares, on the second business day preceding the Closing Date and (ii) in
respect of Additional Shares, on the day of the giving of the written
notice in respect of such Additional Shares. Such certificates will be
made available to you in New York City for inspection and packaging not
later than 9:00 A.M., New York City time, on the business day next
preceding the Closing Date or any Option Closing Date, as the case may be.
The certificates evidencing the Firm Shares and any Additional Shares to
be purchased hereunder shall be delivered to you on the Closing Date or
the Option Closing Date, as the case may be, against payment of the
purchase price therefor in immediately available funds.
5. Agreements of the Fund and the Manager. The Fund and the Manager,
jointly and severally, agree with the several Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective under the 1933 Act before the offering of
the Firm Shares may commence, the Fund will use its best efforts to cause
the Registration Statement or such post-effective amendment to become
effective under the 1933 Act as soon as possible. If the Registration
Statement
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has become effective and the Prospectus contained therein omits certain
information at the time of effectiveness pursuant to Rule 430A of the 1933
Act Rules and Regulations, the Fund will file a prospectus including such
information pursuant to Rule 497(h) of the 1933 Act Rules and Regulations,
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 of the Registration Statement. 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 (c), (e) or (j) of the 1933 Act Rules and Regulations as promptly
as practicable, but no later than the fifth business day following the
date of the later of the effective date of the Registration Statement or
the commencement of the public offering of the Shares after the effective
date of the Registration Statement. The Fund will advise the Underwriters
promptly and, if requested by the Underwriters, will confirm such advice
in writing (i) when the Registration Statement or such post-effective
amendment has become effective, and (ii) when the Prospectus has been
timely filed pursuant to Rule 497(c) or Rule 497(h) of the 1933 Act Rules
and Regulations or the certification permitted pursuant to Rule 497(j) of
the 1933 Act Rules and Regulations has been timely filed, whichever is
applicable.
(b) For a period of three years from the date hereof, otherwise
provided herein, the Fund will advise you promptly and, if requested by
you, will confirm such advice in writing:
(i) of any request made by the Commission for amendment
of or a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectus (or any amendment or supplement to any of the
foregoing) or for additional information,
(ii) of the issuance by the Commission, the National
Association of Securities Dealers, Inc. (the "NASD"), any state securities
commission, any national securities exchange, any arbitrator, any court or
any other governmental, regulatory, self-regulatory or administrative
agency or any official of any order suspending the effectiveness of the
Registration Statement, prohibiting or suspending the use of the
Prospectus, any Prepricing Prospectus or any Sales Material (as herein
defined), of any notice pursuant to Section 8(e) of the 1940 Act, of the
suspension of qualification of the Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for any such purposes,
(iii) of receipt by the Fund, the Manager, any affiliate
of the Fund or the Manager or any representative or attorney of the Fund
or the Manager of any other material communication from the Commission,
the NASD, any state securities commission, any national securities
exchange, any arbitrator, any court or any other governmental, regulatory,
self-regulatory or administrative agency or any official relating to the
Fund (if such communication relating to the Fund is received by such
person within three years after the date of this Agreement), the
Registration Statement, the 1940 Act Notification, the Prospectus, any
Prepricing Prospectus, any Sales Material (as herein
5
defined) (or any amendment or supplement to any of the foregoing), or this
Agreement or any of the Fund Agreements and
(iv) within the period of time referred to in paragraph
(f) below, of any material adverse change in the condition (financial or
other), business, prospects, properties, net assets or results of
operations of the Fund or the Manager or of the happening of any other
event which makes any statement of a material fact made in the
Registration Statement, or the Prospectus, or any Prepricing Prospectus or
any Sales Material (as herein defined) (or any amendment or supplement to
any of the foregoing) untrue or which requires the making of any additions
to or changes in the Registration Statement, or the Prospectus, or any
Prepricing Prospectus or any Sales Material (as herein defined) (or any
amendment or supplement to any of the foregoing) in order to state a
material fact required by the 1933 Act, the 1940 Act or the Rules and
Regulations to be stated therein or necessary in order to make the
statements therein (in the case of a Prospectus, in light of the
circumstances under which they were made) not misleading or of the
necessity to amend or supplement the Registration Statement, the
Prospectus, any Prepricing Prospectus or any Sales Material (as herein
defined) (or any amendment or supplement to any of the foregoing) to
comply with the 1933 Act, the 1940 Act, the Rules and Regulations or any
other law or order of any court or regulatory body. If at any time the
Commission, the NASD, any state securities commission, any national
securities exchange, any arbitrator, any court or any other governmental,
regulatory, self-regulatory or administrative agency or any official shall
issue any order suspending the effectiveness of the Registration
Statement, prohibiting or suspending the use of the Prospectus, any
Prepricing Prospectus or any Sales Material (as herein defined) (or any
amendment or supplement to any of the foregoing) or suspending the
qualification of the Shares for offering or sale in any jurisdiction, the
Fund will make every reasonable effort to obtain the withdrawal of such
order at the earliest possible time.
(c) The Fund will furnish to the Underwriters, without charge, three
signed copies of the Registration Statement and the 1940 Act Notification
as originally filed with the Commission and of each amendment thereto,
including financial statements and all exhibits thereto (except any
post-effective amendment required by Rule 8b-16 of the 1940 Act Rules and
Regulations which is filed with the Commission after the later of (x) one
year from the date of this Agreement and (y) the date on which the
distribution of the Shares is completed) and will also furnish to you,
without charge, such number of conformed copies of the Registration
Statement as originally filed and of each amendment thereto (except any
post-effective amendment required by Rule 8b-16 of the 1940 Act Rules and
Regulations which is filed with the Commission after the later of (x) one
year from the date of this Agreement and (y) the date on which the
distribution of the Shares is completed), with or without exhibits, as the
Underwriters may reasonably request.
(d) The Fund will not (i) file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus, any
Prepricing Prospectus or any
6
Sales Material (as herein defined) (or any amendment or supplement to any
of the foregoing) of which the Underwriters shall not previously have been
advised or to which you shall reasonably object after being so advised or
(ii) so long as, in the opinion of counsel for the Underwriters, a
Prospectus is required by the 1933 Act to be delivered in connection with
sales by the Underwriters or any dealer, file any information, documents
or reports pursuant to the Securities Exchange Act of 1934, as amended
(the "1934 Act") or the 1940 Act, without delivering a copy of such
information, documents or reports to the Underwriters, prior to or
concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the Fund
has delivered to the Underwriters, without charge, in such quantities as
the Underwriters have requested, copies of each form of the Prepricing
Prospectus. The Fund consents to the use, in accordance with the
provisions of the 1933 Act and with the state securities or blue sky laws
of the jurisdictions in which the Shares are offered by the Underwriters
and by dealers, prior to the date of the Prospectus, of each Prepricing
Prospectus so furnished by the Fund.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time, for such period as in the
opinion of counsel for the Underwriters a prospectus is required by the
1933 Act to be delivered in connection with sales of Shares by the
Underwriters or any dealer, the Fund will expeditiously deliver to the
Underwriters and each dealer, without charge, as many copies of the
Prospectus (and of any amendment or supplement thereto) as the
Underwriters may request. The Fund consents to the use of the Prospectus
(and of any amendments or supplements thereto) in accordance with the
provisions of the 1933 Act and with the securities or blue sky laws of the
jurisdictions in which the Shares are offered by the Underwriters and by
all dealers to whom Shares may be sold, both in connection with the
offering and sale of the Shares and for such period of time thereafter as
the Prospectus is required by the 1933 Act to be delivered in connection
with sales of Shares by the Underwriters or any dealer. If during such
period of time any event shall occur that in the judgment of the Fund or
in the opinion of counsel for the Underwriters is required to be set forth
in the Registration Statement or the Prospectus (as then amended or
supplemented) or should be set forth therein in order to make the
statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made), not misleading, or if it is
necessary to supplement or amend the Registration Statement or the
Prospectus to comply with the 1933 Act, the 1940 Act, the Rules and
Regulations or any other federal law, rule or regulation, or any State
securities or blue sky disclosure laws, rules or regulations, the Fund
will forthwith prepare and, subject to the provisions of paragraph (d)
above, promptly file with the Commission an appropriate amendment or
supplement thereto and will expeditiously furnish to the Underwriters and
dealers, without charge, such number of copies thereof as they shall
reasonably request. In the event that the Fund and the Underwriters agree
that the Registration Statement or the Prospectus should to be amended or
supplemented, the Fund, if requested by the Underwriters, will promptly
7
issue a press release announcing or disclosing the matters to be covered
by the proposed amendment or supplement.
(g) The Fund will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the
Shares for offering and sale by the several Underwriters and by dealers
under the securities or Blue Sky laws of such jurisdictions as you may
designate and will file such consents to service of process or other
documents necessary or appropriate in order to effect such registration or
qualification; provided that in no event shall the Fund be obligated to
qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to service of
process in suits, other than those arising out of the offering or sale of
the Shares, in any jurisdiction where it is not now so subject.
(h) 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 of the Registration Statement falls, the Fund will make
generally available to its security holders an earnings statement, which
need not be audited, covering a twelve-month period commencing after the
effective date of the Registration Statement and ending not later than 15
months thereafter, as soon as practicable after the end of such period,
which earnings statement shall satisfy the provisions of Section 11(a) of
the 1933 Act and Rule 158 of the 1933 Act Rules and Regulations.
(i) The Fund will comply with the undertaking set forth in paragraph
6 of Item 33 of Part C of the Registration Statement.
(j) During the period of five years after the date of this
Agreement, the Fund will furnish to you (i) as soon as reasonably
practicable, a copy of each report of the Fund mailed to shareholders or
filed with the Commission or furnished to the American Stock Exchange
("AMEX") other than reports on Form N-SAR and (ii) from time to time such
other information concerning the Fund as you as Representatives of the
Underwriters may reasonably request.
(k) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (other than by notice given by
the Underwriters terminating this Agreement pursuant to Section 11 hereof)
or if this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Fund or the Manager to comply
with the terms or fulfill any of the conditions of this Agreement, the
Fund and the Manager, jointly and severally, agree to reimburse the
Representatives for all reasonable out-of-pocket expenses (including
reasonable fees and expenses of counsel for the Underwriters) incurred by
the Underwriters in connection herewith.
(l) The Fund will direct the investment of the net proceeds of the
offering of the Shares in accordance with the description set forth in the
Prospectus in such a manner as
8
to comply with the investment objectives, policies and restrictions of the
Fund as described in the Prospectus.
(m) The Fund will timely file the requisite copies of the Prospectus
with the Commission pursuant to Rule 497(c) or Rule 497(h) of the 1933 Act
Rules and Regulations, whichever is applicable or, if applicable, will
file in a timely fashion the certification permitted by Rule 497(j) of the
1933 Act Rules and Regulations and will advise you as Representatives of
the Underwriters of the time and manner of such filing.
(n) Except as provided in this Agreement or pursuant to any dividend
reinvestment plan of the Fund in effect on the date hereof, the Fund will
not sell, contract to sell or otherwise dispose of, any Common Shares, as
defined below, or any securities convertible into or exercisable or
exchangeable for Common Shares or grant any options or warrants to
purchase Common Shares, for a period of 180 days after the date of the
Prospectus, without the prior written consent of Xxxxxxx Xxxxx Xxxxxx Inc.
(o) Except as stated in this Agreement, the Prepricing Prospectus
and in the Prospectus, neither the Fund nor the Manager has taken, nor
will it take, directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation
of the price of any securities issued by the fund to facilitate the sale
or resale of the Shares.
(p) The Fund will use its best efforts to have the Common Shares
listed, subject to notice of issuance, on the AMEX concurrently with the
effectiveness of the Registration Statement and to comply with the rules
and regulations of such exchange.
(q) The Fund and the Manager will use their best efforts to perform
all of the agreements required of them and discharge all conditions to
closing as set forth in this agreement.
6. Representations and Warranties of the Fund and the Manager. The Fund
and the Manager, jointly and severally, represent and warrant to the
Underwriters that:
(a) Each Prepricing Prospectus included as part of the Registration
Statement as originally filed or as part of any amendment or supplement
thereto or filed pursuant to Rule 497 of the 1933 Act Rules and
Regulations, complied when so filed in all material respects with the
applicable provisions of the 1933 Act, the 1940 Act and the Rules and
Regulations. The Commission has not issued any order preventing or
suspending the use of any Prepricing Prospectus.
(b) The Registration Statement, in the form in which it became or
becomes effective and also in such form as it may be when any
post-effective amendment thereto shall become effective and the Prospectus
and any amendment or supplement thereto when filed with the Commission
under Rule 497 of the 1933 Act Rules and Regulations and the 1940 Act
Notification when originally filed with the Commission and any
9
amendment or supplement thereto when filed with the Commission complied or
will comply in all material respects with the provisions of the 1933 Act,
the 1940 Act and the Rules and Regulations and did not or will not at any
such times contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading; except that this
representation and warranty does not apply to statements in or omissions
from the Registration Statement or the Prospectus (or any amendment or
supplement thereto) made in reliance upon and in conformity with
information relating to the Underwriters furnished to the Fund in writing
by or on behalf of the Underwriters expressly for use therein.
(c) All the outstanding Firm Shares of the Fund have been duly
authorized and validly issued by the Fund, are fully paid and
nonassessable and are free of any preemptive or similar rights; the Shares
have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor in accordance with the terms hereof,
will be validly issued by the Fund, fully paid and nonassessable and free
of any preemptive or similar rights and will conform to the description
thereof in the Registration Statement and the Prospectus (and any
amendment or supplement to either of them); and the capitalization of the
Fund conforms to the description thereof in the Registration Statement and
the Prospectus (and any amendment or supplement to either of them).
(d) The Fund has been duly formed, is validly existing as a business
trust under the laws of the Commonwealth of Massachusetts, 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 in each jurisdiction in which
its ownership or leasing of property or its conducting of business
requires such licensing and qualification, except where failure to be so
licensed and qualified would not have a material adverse effect on the
Fund.
(e) There are no legal or governmental proceedings pending or, to
the knowledge of the Fund, threatened, against the Fund or to which the
Fund or any of its properties is subject, that are required to be
described in the Registration Statement or the Prospectus (and any
amendment or supplement to either of them) but are not described as
required by the 1933 Act, the 1940 Act or the Rules and Regulations and
there are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration
Statement or the Prospectus (and any amendment or supplement to either of
them) or to be filed as an exhibit to the Registration Statement that are
not described or filed as required by the 1933 Act, the 1940 Act or the
Rules and Regulations.
(f) The Fund is not in violation of its Declaration of Trust or
By-Laws or other organizational documents or any law, ordinance,
administrative or governmental rule or regulation applicable to the Fund
or of any decree of the Commission, the NASD, any
10
state securities commission, any national securities exchange, any
arbitrator, any court or any other governmental, regulatory,
self-regulatory or administrative agency or any official having
jurisdiction over the Fund or in breach or default in any material respect
in the performance of any obligation, agreement or condition contained in
any bond, debenture, note or any other evidence of indebtedness or in any
material agreement, indenture, lease or other instrument to which the Fund
is a party or by which it or any of its properties may be bound.
(g) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement or any of the Fund Agreements by
the Fund, nor the consummation by the Fund of the transactions
contemplated hereby or thereby (A) requires any consent, approval,
authorization or other order of or registration or filing which has not
yet been obtained or made with the Commission, the NASD, any national
securities exchange, any arbitrator, any court or any other governmental,
regulatory, self-regulatory or administrative agency or any official
(except compliance with the securities or Blue Sky laws of various
jurisdictions which have been or will be effected in accordance with this
Agreement and except for compliance with the filing requirements of the
NASD Division of Corporate Finance) or conflicts or will conflict with or
constitutes or will constitute a breach of the Declaration of Trust,
By-Laws or other organizational documents of the Fund or (B) conflicts or
will conflict with or constitutes or will constitute a breach of or a
default under, any material agreement, indenture, lease or other
instrument to which the Fund is a party or by which it or any of its
properties may be bound or violates or will violate any material statute,
law, regulation or filing or judgment, injunction, order or decree
applicable to the Fund or any of its properties or will result in the
creation or imposition of any material lien, charge or encumbrance upon
any property or assets of the Fund pursuant to the terms of any agreement
or instrument to which it is a party or by which it may be bound or to
which any of the property or assets of the Fund is subject.
(h) Since the date as of which information is given in the
Registration Statement and the Prospectus (and any amendment or supplement
to either of them), except as otherwise stated therein, (A) there has been
no material, adverse change in the condition (financial or other),
business, properties, net assets or results of operations of the Fund or
business prospects (other than as a result of a change in the financial
markets generally) of the Fund, whether or not arising in the ordinary
course of business, (B) there have been no transactions entered into by
the Fund which are material to the Fund other than those in the ordinary
course of its business as described in the Prospectus (and any amendment
or supplement thereto) and (C) there has been no dividend or distribution
of any kind declared, paid or made by the Fund on any class of its common
stock.
(i) The accountants, [ ], who have audited or shall
audit the Statement of Net Assets included or incorporated by reference in
the Registration Statement and the Prospectus (and any amendment or
supplement to either of them), are
11
an independent public accounting firm as required by the 1933 Act, the
1940 Act and the Rules and Regulations.
(j) The financial statements, together with related schedules and
notes, included or incorporated by reference in the Registration Statement
and the Prospectus (and any amendment or supplement to either of them)
present fairly the financial position, results of operations and the
financial position of the Fund on the basis stated or incorporated by
reference in the Registration Statement at the respective dates or for the
respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved except as disclosed therein; and the other financial and
statistical information and data included in the Registration Statement
and the Prospectus (and any amendment or supplement to either of them) in
all material respects are accurately presented and prepared on a basis
consistent with such financial statements and the books and records of the
Fund.
(k) The Fund, subject to the Registration Statement having been
declared effective and the filing of the Prospectus under Rule 497 under
the 1933 Act Rules and Regulations, has taken all required action under
the 1933 Act, the 1940 Act and the Rules and Regulations to make the
public offering and consummate the sale of the Shares as contemplated by
this Agreement.
(l) The execution and delivery of, and the performance by the Fund
of its obligations under, this Agreement and the Fund Agreements have been
duly and validly authorized by the Fund and this Agreement and the Fund
Agreements have been duly executed and delivered by the Fund constitute
the valid and legally binding agreements of the Fund, enforceable against
the Fund in accordance with their terms, except as enforcement of rights
to indemnity and contribution hereunder and thereunder may be limited by
federal or state securities laws or principles of public policy and
subject to the qualification that the enforceability of the Fund's
obligations hereunder and thereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, liquidation, receivership,
conservatorship, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and by general
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or a law) and fair dealing.
(m) Except as disclosed in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them), subsequent
to the respective dates as of which such information is given in the
Registration Statement and the Prospectus (and any amendment or supplement
to either of them), the Fund has not, other than in the ordinary course of
business, entered into any transaction, incurred any liability or
obligation, direct or contingent, or entered into any transaction, that is
material to the Fund and there has not been any change in the capital
stock or material increase in the short-term debt or long-term debt of the
Fund, or any material adverse change, or any development involving or
which may reasonably be expected to involve a prospective material adverse
change, in the condition (financial or other), business, prospects,
12
properties, net assets or results of operations of the Fund, whether or
not arising in the ordinary course of business, or which, in each case,
could have a material adverse effect on the ability of the Manager to
perform its obligations under this Agreement and the Custodian Agreement.
(n) The Fund has not distributed and, prior to the later to occur of
(i) the Closing Date and (ii) completion of the distribution of the
Shares, will not distribute to the public in either printed or electronic
form any offering material in connection with the offering and sale of the
Shares other than the Registration Statement, the Prepricing Prospectus
included in Pre-Effective Amendment No. 1 to the Registration Statement,
the Prospectus and the advertisements/Sales Material (defined herein)
filed by Xxxxx Xxxxx Corp. with the NASD on July 26, 2002.
(o) The Fund has such licenses, permits, and authorizations of
governmental or regulatory authorities ("Permits") as are necessary to own
its property and to conduct its business in the manner described in the
Prospectus (and any amendment or supplement thereto); the Fund has
fulfilled and performed all its material obligations with respect to such
Permits and no event has occurred which allows or, after notice or lapse
of time, would allow, revocation or termination thereof or results in any
other material impairment of the rights of the Fund under any such Permit,
subject in each case to such qualification as may be set forth in the
Prospectus (and any amendment or supplement thereto); and, except as
described in the Prospectus (and any amendment or supplement thereto),
none of such Permits contains any restriction that is materially
burdensome to the Fund.
(p) The Fund maintains and will maintain a system of internal
accounting controls sufficient to provide reasonable assurances that
(i) transactions in portfolio securities are executed in
accordance with management's general or specific authorization and
with the investment policies and restrictions of the Fund and the
applicable requirements of the 1940 Act, the 1940 Act Rules and
Regulations and the Internal Revenue Code of 1986, as amended (the
"Code");
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles, to calculate net asset value, to
maintain accountability for assets and to maintain material
compliance with the books and records requirements under the 1940
Act and the 1940 Act Rules and Regulations;
(iii) access to assets is permitted only in accordance with
management's general or specific authorization; and
13
(iv) the recorded accounting for assets is compared with
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(q) The conduct by the Fund of its business does not require the
Fund to be the owner, possessor or licensee of any patents, patent
licenses, trademarks, service marks or trade names which it does not own,
possess or license.
(r) Except as stated in this Agreement and in the Prospectus (and
any amendment or supplement thereto), the Fund has not taken and will not
take, directly or indirectly, any action designed to or which should
reasonably be expected to cause or result in or which will constitute
stabilization or manipulation of the price of the Common Shares in
violation of federal securities laws and the Fund is not aware of any such
action taken or to be taken by any affiliates of the Fund.
(s) The Fund is duly registered under the 1940 Act as a closed-end,
non-diversified management investment company and the 1940 Act
Notification has been duly filed with the Commission and conforms in all
material respects with all applicable provisions of the 1940 Act and the
Rules and Regulations. The Fund is, and at all times through the
completion of the transactions contemplated hereby, will be, in compliance
in all material respects with the terms and conditions of the 1933 Act and
the 1940 Act. No person is serving or acting as an officer, director or
investment adviser of the Fund except in accordance with the provision of
the 1940 Act and the 1940 Act Rules and Regulations and the Investment
Advisers Act of 1940, as amended (the "Advisers Act"), and the rules and
regulations of the Commission promulgated under the Advisers Act (the
"Advisers Act Rules and Regulations"). The Fund has not received any
notice from the Commission pursuant to Section 8(e) of the 1940 Act with
respect to the 1940 Act Notification or the Registration Statement (or any
amendment or supplement to either of them).
(t) All advertising, sales literature or other promotional material
(including "prospectus wrappers" and "broker kits", "road show slides" and
"road show scripts"), whether in printed or electronic form, authorized in
writing by or prepared by the Fund or the Manager for use in connection
with the offering and sale of the Shares (collectively, "Sales Material")
complied and comply in all material respects with the applicable
requirements of the 1933 Act, the 1940 Act, the Rules and Regulations and
the rules and interpretations of the NASD and if required to be filed with
the NASD under the NASD's conduct rules were so filed. No such Sales
Material contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(u) This Agreement and each of the Fund Agreements complies in all
material respects with all applicable provisions of the 1940 Act, the 1940
Act Rules and Regulations, the Advisers Act and the rules and the Advisers
Act Rules and Regulations.
14
(v) No holder of any security of the Fund has any right to require
registration of Common Shares or any other security of the Fund because of
the filing of the Registration Statement or consummation of the
transactions contemplated by this Agreement.
(w) The Shares have been duly approved for listing upon notice of
issuance on the AMEX and the Fund's registration statement on Form 8-A,
under the 1934 Act, has become effective.
(x) The Fund intends to direct the investment of the proceeds of the
offering of the Shares in such a manner as to comply with the requirements
of Subchapter M of the Code.
(y) To the Fund's knowledge, neither the Fund nor any employee or
agent of the Fund has made any payment of funds of the Fund or received or
retained any funds, which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus and that is not so
disclosed.
(z) The Fund has filed all tax returns required to be filed, which
returns are complete and correct in all material respects, and the Fund is
not in material default in the payment of any taxes which were payable
pursuant to said returns or any assessments with respect thereto, except
where failure to file would not have a material adverse effect on the
fund.
(aa) Except as described in the Prospectus, there are no outstanding
options, warrants or other rights calling for the issuance of, and the
Fund has no agreement to issue, any shares of capital stock of the Fund or
any security convertible into or exchangeable or exercisable for shares of
capital stock of the Fund.
(bb) The Fund has filed in a timely manner each document or report
required to be filed by it pursuant to the 1934 Act and the rules and
regulations of the Commission promulgated thereunder (the "1934 Act Rules
and Regulations"); each such document or report at the time it was filed
conformed to the requirements of the 1934 Act and the 1934 Act Rules and
Regulations; and none of such documents or reports contained an untrue
statement of any material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading.
(cc) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), no director
of the Fund is an "interested person" (as defined in the 0000 Xxx) of the
Fund or an "affiliated person" (as defined in the 0000 Xxx) of any
Underwriter listed on Schedule I hereto.
7. Representations and Warranties of the Manager. The Manager represents
and warrants to each Underwriter as follows:
15
(a) The Manager has been duly formed, is validly existing as a
business trust under the laws of the Commonwealth of Massachusetts, 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 Manager
is duly licensed and qualified to do business in each jurisdiction in
which its ownership or leasing of property or its conducting of business
requires such licensing and qualification, except where failure to be so
licensed and qualified would not have a material adverse effect on the
Manager.
(b) The Manager is duly registered as an investment adviser under
the Advisers Act and is not prohibited by the Advisers Act, the 1940 Act,
the Advisers Act Rules and Regulations or the 1940 Act Rules and
Regulations from acting under the Investment Management Agreement for the
Fund as contemplated by the Registration Statement and the Prospectus (or
any amendment or supplement thereto). There does not exist any proceeding,
or any facts or circumstances of which could lead to any proceeding which
might adversely affect the registration of the Manager with the
Commission.
(c) The Manager has full power and authority to enter into this
Agreement and the Investment Management Agreement, the execution and
delivery of, and the performance by the Manager of its obligations under,
this Agreement and the Investment Management Agreement have been duly and
validly authorized by the Manager and this Agreement and the Investment
Management Agreement have been duly executed and delivered by the Manager
and constitute the valid and legally binding agreements of the Manager,
enforceable against the Manager in accordance with their terms, except as
rights to indemnity and contribution hereunder may be limited by federal
or state securities laws and subject to the qualification that the
enforceability of the Manager's obligations hereunder and thereunder may
be limited by bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and by general
equitable principles.
(d) The Manager has the financial resources available to it
necessary for the performance of its services and obligations as
contemplated in the Registration Statement, the Prospectus (or any
amendment or supplement thereto) and under this Agreement and the
Investment Management Agreement.
(e) The description of the Manager and its business, and the
statements attributable to the Manager, in the Registration Statement and
the Prospectus (and any amendment or supplement thereto) complied and
comply in all material respects with the provisions of the 1933 Act, the
1940 Act, the Advisers Act, the Rules and Regulations and the Advisers Act
Rules and Regulations and did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading.
16
(f) There are no legal or governmental proceedings pending or, to
the knowledge of the Manager, threatened against the Manager or to which
any of its properties is subject, that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
to either of them) but are not described as required or that reasonably
should be expected to result in any material, adverse change in the
condition (financial or other), business, properties, net assets or
results of operations of the Manager or that reasonably should be expected
to have a material, adverse effect on the ability of the Manager to
fulfill its obligations hereunder or under the Investment Management
Agreement.
(g) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), subsequent
to the respective dates as of which such information is given in the
Registration Statement and the Prospectus (or any amendment or supplement
to either of them), the Manager has not incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in
the ordinary course of business, that is material to the Manager or the
Fund and that is required to be disclosed in the Registration Statement or
the Prospectus and there has not been any material adverse change, or any
development involving or which may reasonably be expected to involve, a
prospective material adverse change, in the condition (financial or
other), business, business prospects, properties, net assets or results of
operations of the Manager, whether or not arising in the ordinary course
of business, or which, in each case, could have a material adverse effect
on the ability of the Manager to perform its obligations under this
Agreement and the Custodian Agreements.
(h) The Manager has such Permits as are necessary to own its
property and to conduct its business in the manner described in the
Prospectus; the Manager has fulfilled and performed all its material
obligations with respect to such Permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the Manager under any such Permit.
(i) This Agreement and the Investment Management Agreement comply in
all material respects with all applicable provisions of the 1940 Act, the
1940 Act Rules and Regulations, the Advisers Act and the Advisers Act
Rules and Regulations.
(j) Neither the execution, delivery or performance of this Agreement
or the Investment Management Agreement by the Manager, nor the
consummation by the Manager of the transactions contemplated hereby or
thereby (A) requires any consent, approval, authorization or other order
of or registration or filing with the Commission, the NASD, any state
securities commission, any national securities exchange, any arbitrator,
any court or any other governmental, regulatory, self-regulatory or
administrative agency or any official (except compliance with the
securities or Blue Sky laws of various jurisdictions which have been or
will be effected in accordance with this Agreement and except for
compliance with the filing requirements of the NASD Division of Corporate
Finance) or conflicts or will conflict with or constitutes or will
constitute a breach of or a
17
default under, the Certificate of Incorporation or By-Laws of the Manager
or (B) conflicts or will conflict with or constitutes or will constitute a
breach of or a default under, any material agreement, indenture, lease or
other instrument to which the Manager is a party or by which it or any of
its properties may be bound or materially violates or will materially
violate any material statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Manager or any of its
properties or will result in the creation or imposition of any material
lien, charge or encumbrance upon any property or assets of the Manager
pursuant to the terms of any agreement or instrument to which it is a
party or by which it may be bound or to which any of the property or
assets of the Manager is subject. The Manager is not in violation of any
order of any court or any arbitrator, governmental authority or
administrative agency.
(k) Except as stated in this Agreement and in the Prospectus (and in
any amendment or supplement thereto), the Manager has not taken and will
not take, directly or indirectly, any action designed to or might should
reasonably be expected to cause or result in or which will constitute,
stabilization or manipulation of the price of any securities issued by the
Fund to facilitate the sale or resale of the Shares, and the Manager is
not aware of any such action taken or to be taken by any affiliates of the
Manager.
(l) In the event that the Fund or the Manager makes available any
promotional materials regarding the Fund intended for use only by
qualified broker-dealers and registered representatives thereof by means
of an Internet web site or similar electronic means, the Manager will
install and maintain pre-qualification and password-protection or similar
procedures which are reasonably designed to effectively prohibit access to
such promotional materials by persons other than qualified broker-dealers
and registered representatives thereof.
8. Indemnification and Contribution.
(a) The Fund and the Manager, jointly and severally, agree to
indemnify and hold harmless each of you and each of the Underwriters and
each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against
any and all losses, claims, damages, liabilities and expenses, joint or
several (including reasonable costs of investigation) arising out of or
based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Prospectus, any
Prepricing Prospectus, any Sales Material (or any amendment or supplement
to any of the foregoing) or arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission
or alleged untrue statement or omission which has been made therein or
omitted therefrom in reliance upon and in conformity with the information
relating to such Underwriters furnished in writing to the Fund by or on
behalf of any Underwriter through you expressly for use in connection
therewith;
18
provided, however, that the foregoing indemnity with respect to the
Registration Statement, the Prospectus or any Prepricing Prospectuses (or
any amendment or supplement to any of the foregoing) shall not inure to
the benefit of any Underwriter from whom the person asserting any loss,
claim, damage, liability or expense purchased Shares, if it is shown that
a copy of the Prospectus, as then amended or supplemented, which would
have cured any defect giving rise to such loss, claim, damage, liability
or expense was not sent or delivered to such person by or on behalf of
such Underwriter, if required by law to be so delivered, at or prior to
the confirmation of the sale of such Shares to such person and such
Prospectus, amendments and supplements had been provided by the Fund to
the Underwriters in the requisite quantity and on a timely basis to permit
proper delivery. The foregoing indemnity agreement shall be in addition to
any liability which the Fund or the Manager may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Fund or the Manager, such Underwriter
or such controlling person shall promptly notify the Fund or the Manager
and the Fund or the Manager shall assume the defense thereof, including
the employment of counsel and the payment of all fees and expenses. Such
Underwriter or any such controlling person shall have the right to employ
separate counsel in any such action, suit or proceeding and to participate
in the defense thereof, but the fees and expenses of such counsel shall be
at the expense of such Underwriter or controlling person unless (i) the
Fund or the Manager have agreed in writing to pay such fees and expenses,
(ii) the Fund and the Manager have failed within a reasonable time to
assume the defense and employ counsel or (iii) the named parties to any
such action, suit or proceeding (including any impleaded parties) include
both such Underwriter or such controlling person and the Fund or the
Manager and such Underwriter or such controlling person shall have been
advised by its counsel that representation of such indemnified party and
the Fund or the Manager by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the Fund and the
Manager shall not have the right to assume the defense of such action,
suit or proceeding on behalf of such Underwriter or such controlling
person).
It is understood, however, that the Fund and the Manager shall, in
connection with any one such action, suit or proceeding or separate but
substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances
be liable for the reasonable fees and expenses of only one separate firm
of attorneys (in addition to not more than one local counsel if there is
any action, suit or proceeding in more than one jurisdiction) at any time
for all such Underwriters and controlling persons not having actual or
potential differing interests with you or among themselves, which firm
shall be designated in writing by Xxxxxxx Xxxxx Xxxxxx Inc. and that,
subject to the requirements of 1940 Act Release No. 11330, all such fees
and
19
expenses shall be reimbursed promptly as they are incurred. The Fund and
the Manager shall not be liable for any settlement of any such action,
suit or proceeding effected without the written consent of the Fund or the
Manager, but if settled with such written consent or if there be a final
judgment for the plaintiff in any such action, suit or proceeding, the
Fund and the Manager agree to indemnify and hold harmless any Underwriter,
to the extent provided in the preceding paragraph, and any such
controlling person from and against any loss, claim, liability, damage or
expense by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Fund and the Manager, their trustees, directors, any
officers of the Fund who sign the Registration Statement and any person
who controls the Fund or the Manager within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, to the same extent as the
foregoing indemnity from the Fund and the Manager to each Underwriter, but
only with respect to information relating to such Underwriter furnished in
writing by or on behalf of such Underwriter through you expressly for use
in the Registration Statement or the Prospectus (or any amendment or
supplement to either of them). If any action, suit or proceeding shall be
brought against the Fund or the Manager, any of their trustees, directors,
any such officer or any such controlling person, based on the Registration
Statement, the Prospectus or any Prepricing Prospectus (or any amendment
or supplement to either of them) and in respect of which indemnity may be
sought against any Underwriter pursuant to this paragraph (c), such
Underwriter shall have the rights and duties given to the Fund by
paragraph (b) above (except that if the Fund or the Manager shall have
assumed the defense thereof such Underwriter shall not be required to do
so, but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at such
Underwriter's expense) and the Fund and the Manager, their trustees,
directors, any such officer and any such controlling person shall have the
rights and duties given to the Underwriters by paragraph (b) above. The
foregoing indemnity agreement shall be in addition to any liability which
the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred
to therein, then an indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities
or expenses
(i) in such proportion as is appropriate to reflect the
relative benefits received by the Fund and the Manager on the one
hand (treated jointly for this purpose as one person) and the
Underwriters on the other hand from the offering of the Shares or
(ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Fund and
20
the Manager on the one hand (treated jointly for this purpose as one
person) and of the Underwriters on the other hand in connection with
the statements or omissions which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Fund
and the Manager on the one hand (treated jointly for this purpose as
one person) 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 as set
forth in the table on the cover page of the Prospectus bear to the
total payments received by the Underwriters with respect to the Firm
Shares as set forth in the table on the cover page of the
Prospectus. The relative fault of the Fund and the Manager on the
one hand (treated jointly for this purpose as one person) and of the
Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Fund and the
Manager on the one hand (treated jointly for this purpose as one
person) or by the Underwriters on the other hand and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The Fund, the Manager and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 8 were
determined by a pro rata allocation (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
paragraph (d) above. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages, liabilities and expenses referred
to in paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating any
claim or defending any such action, suit or proceeding. Notwithstanding
the provisions of this Section 8, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price of
the Shares underwritten by it and distributed to the public exceeds the
amount of any damages which such Underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this Section 8 are several in proportion to the respective number of Firm
Shares set forth opposite their names in Schedule I (or such numbers of
Firm Shares increased as set forth in Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified
party is or could have been a party and
21
indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such
indemnified party from all liability from claimants on claims that are the
subject matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under
this Section 8 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are
incurred. The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the Fund and the
Manager set forth in this Agreement shall remain operative and in full
force and effect, regardless of (i) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter, the Fund,
the Manager or their trustees, directors or officers or any person
controlling the Fund or the Manager, (ii) acceptance of any Shares and
payment therefor hereunder and (iii) any termination of this Agreement.
A successor to any Underwriter or any person controlling any Underwriter,
or to the Fund, the Manager, their directors, partners or officers, or any
person controlling the Fund or the Manager shall be entitled to the benefits of
the indemnity, contribution, and reimbursement agreements contained in this
Section 8.
9. Conditions of Underwriters' Obligations. The several obligations of the
Underwriters to purchase the Shares hereunder are subject to, in the good faith
judgment of the Underwriters, the accuracy of and compliance with the
representations, warranties and agreements of and by the Fund and the Manager
contained herein on and as of the date hereof, the date on which the
Registration Statement becomes or became effective, the date of the Prospectus
(and of any amendment or supplement thereto), the Closing Date and, with respect
to any Additional Shares, any Option Closing Date; to the accuracy and
completeness of all statements made by the Fund, the Manager or any of their
officers in any certificate delivered to the Representatives or their counsel
pursuant to this Agreement and to the following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may
commence, the Registration Statement or such post-effective amendment
shall have become effective not later than 5:30 p.m., New York City time,
on the date hereof or at such later date and time as shall be consented to
in writing by the Underwriters and all filings, if any, required by Rules
497 and 430A under the 1933 Act and the 1933 Act Rules and Regulations
shall have been timely made; no stop order suspending the effectiveness of
the Registration Statement or order pursuant to Section 8(e) of the 1940
Act shall have been issued and no proceeding for those purposes shall have
been instituted or, to the knowledge of the Fund, the Manager or any
Underwriter, threatened by the Commission and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to
your satisfaction.
22
(b) You shall have received on the Closing Date an opinion of
Xxxxxxxxxxx & Xxxxxxxx LLP, counsel for the Fund, dated the Closing Date
and addressed to you, as Representatives of the several Underwriters, to
the effect that:
(i) The Fund is a business trust duly established and validly
existing under the laws of the Commonwealth of Massachusetts with
full power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement
thereto through the date of the opinion) and is duly registered and
qualified to conduct its business in each jurisdiction where the
nature of its properties or the conduct of its business requires
such registration or qualification, except where the failure so to
register or to qualify does not have a material, adverse effect on
the condition (financial or other), business, properties, net assets
or results of operations of the Fund;
(ii) The authorized and outstanding capital stock of the Fund
is as set forth in the Registration Statement and Prospectus (or any
amendment or supplement thereto through the date of the opinion);
and the description of the authorized capital stock of the Fund
contained in the Prospectus (or any amendment or supplement thereto
through the date of the opinion) under the caption "Description of
Capital Structure" conforms in all material respects as to legal
matters to the terms thereof contained in the Fund's Declaration of
Trust;
(iii) All of the shares of capital stock of the Fund
outstanding prior to the issuance of the Shares have been duly
authorized and validly issued and are fully paid and nonassessable,
except that, as described in the Prospectus under the heading,
"Description of Capital Structure," shareholders of the Fund may
under certain circumstances be held personally liable for its
obligations;
(iv) The Shares have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor in accordance
with the terms hereof, will be validly issued, fully paid and
nonassessable and not subject to any preemptive rights that entitle
or will entitle any person to acquire any Shares upon the issuance
thereof by the Fund, except that, as described in the Prospectus
under the heading, "Description of Capital Structure," shareholders
of the Fund may under certain circumstances be held personally
liable for its obligations;
(v) The form of certificate for the Shares is in due and
proper form and complies with the requirements of all applicable
laws and the AMEX;
(vi) The Fund has the power and authority to enter into this
Agreement and the Fund Agreements and to issue, sell and deliver the
Shares to the Underwriters as provided herein and this Agreement and
each of the Fund Agreements have been duly authorized, executed and
delivered by the Fund and
23
assuming due authorization, execution and delivery by the other
parties thereto and that the performance of the Underwriting
Agreement and the Fund Agreements by the other parties thereto will
not violate law, agreements to which such other parties or their
properties are subject or orders applicable to such other parties,
constitute the valid, legal and binding agreements of the Fund,
enforceable against the Fund in accordance with their terms, except
as enforcement of rights to indemnity hereunder may be limited by
federal or state securities laws or principles of public policy and
subject to the qualification that the enforceability of the Fund's
obligations hereunder and thereunder may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and by general equitable
principles, whether enforcement is considered in a proceeding in
equity or at law;
(vii) This Agreement constitutes a valid, legal and binding
agreement of the Manager, enforceable against the Manager in
accordance with its terms, except as enforcement of rights to
indemnity hereunder may be limited by Federal or state securities
laws or principles of public policy and subject to the qualification
that the enforceability of the Manager's obligations hereunder may
be limited by bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and
by general equitable principles, whether enforcement is considered
in a proceeding in equity or at law;
(viii) The Fund Agreements comply in all material respects
with all applicable provisions of the 1933 Act, the 1940 Act, the
Advisers Act, the Rules and Regulations and the Advisers Act Rules
and Regulations;
(ix) The Fund is not in violation of its Declaration of Trust
or By-Laws or to the knowledge of such counsel after reasonable
inquiry, is not in material default in the performance of any
material obligation, agreement or condition contained in any bond,
debenture, note or other evidence of indebtedness, except as may be
disclosed in the Prospectus (and any amendment or supplement
thereto);
(x) No consent, approval, authorization or order of or
registration or filing with the Commission, the NASD, any state
securities commission, any national securities exchange, any
arbitrator, any court or any other governmental body, agency or
regulatory, self-regulatory or administrative agency or any official
is required on the part of the Fund (except as have been obtained
under the 1933 Act and the 1934 Act or such as may be required under
state securities or Blue Sky laws governing the purchase and
distribution of the Shares) for the valid issuance and sale of the
Shares to the Underwriters as contemplated by this Agreement,
performance of the Fund Agreements or this Agreement by the Fund,
the consummation by the Fund of the transactions contemplated
thereby or hereby or the adoption of the Fund's Dividend
Reinvestment Plan;
24
(xi) Neither the offer, sale or delivery of the Shares, the
execution, delivery or performance of this Agreement or the Fund
Agreements, compliance by the Fund with the provisions hereof or
thereof, consummation by the Fund of the transactions contemplated
hereby or thereby nor the adoption of the Fund's Dividend
Reinvestment Plan violates the Declaration of Trust or By-Laws of
the Fund or any material agreement, indenture, lease or other
instrument to which the Fund is a party or by which it or any of its
properties is bound that is an exhibit to the Registration Statement
or that is known to such counsel after reasonable inquiry or, to
such counsel's knowledge after reasonable inquiry, will result in
the creation or imposition of any material lien, charge or
encumbrance upon any property or assets of the Fund, nor, to the
best of such counsel's knowledge after reasonable inquiry, will any
such action result in any violation of any existing material law,
regulation, ruling (assuming compliance with all applicable state
securities and Blue Sky laws), judgment, injunction, order or decree
known to such counsel after reasonable inquiry, applicable to the
Fund or any of its properties, except that, in the published opinion
of the Commission, the indemnification provisions in this Agreement
and the Fund Agreements, insofar as they relate to indemnification
for liabilities arising under the 1933 Act, are against public
policy as expressed in the 1933 Act and therefore unenforceable;
(xii) The Registration Statement and all post-effective
amendments, if any, have become effective under the 1933 Act and, to
the knowledge of such counsel after reasonable inquiry, no order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose are pending before or
contemplated by the Commission; and any filing of the Prospectus and
any amendments or supplements thereto required pursuant to Rule 497
of the 1933 Act Rules and Regulations prior to the date of such
opinion has been made in accordance with Rule 497;
(xiii) The Fund is duly registered with the Commission under
the 1940 Act as a closed-end, non-diversified management investment
company and all action has been taken by the Fund as required by the
1933 Act and the 1940 Act and the Rules and Regulations in
connection with the issuance and sale of the Shares to make the
public offering and consummate the sale of the Shares as
contemplated by this Agreement;
(xiv) The statements made in the Registration Statement and
the Prospectus (and any amendment or supplement to either of them
through the date of the opinion) under the caption "Distribution and
Taxes" and "Taxes" have been reviewed by such counsel and to the
extent they describe or summarize tax laws, doctrines or practices
of the United States, present a fair and accurate description or
summary thereof as of the date of the opinion;
(xv) The statements in the Registration Statement and
Prospectus (and any amendment or supplement to either of them
through the date of the opinion),
25
insofar as they are descriptions of contracts, agreements or other
legal documents or refer to statements of law or legal conclusions,
are accurate and present fairly the information required to be
shown;
(xvi) The Registration Statement and the Prospectus (and any
amendment or supplement to either of them through the date of the
opinion) comply as to form in all material respects with the
requirements of the 1933 Act, the 1940 Act and the Rules and
Regulations (except that no opinion need be expressed as to the
financial statements and the notes thereto and the schedules and
other financial and statistical data included therein as to which
such counsel need not express any opinion);
(xvii) To the knowledge of such counsel after reasonable
inquiry, (A) other than as described or contemplated in the
Prospectus (or any amendment or supplement thereto through the date
of the opinion), there are no actions, suits or other legal or
governmental proceedings pending or expressly threatened against the
Fund (through the date of the opinion) and (B) there are no material
agreements, contracts, indentures, leases or other instruments that
are required to be described in the Registration Statement or the
Prospectus (or any amendment or supplement to either of them through
the date of the opinion) or to be filed as an exhibit to the
Registration Statement that are not described or filed as required,
as the case may be;
(xviii) To the knowledge of such counsel after reasonable
inquiry, the Fund is not in violation of any law, ordinance,
administrative or governmental rule or regulation applicable to the
Fund or of any decree of the Commission, the NASD, any state
securities commission, any national securities exchange, any
arbitrator, any court or any other governmental, regulatory,
self-regulatory or administrative agency or any official having
jurisdiction over the Fund; and
(xix) The Shares are duly authorized for listing, subject to
official notice of issuance, on AMEX and the Fund's Registration
Statement on Form 8-A under the 1934 Act is effective.
Such counsel shall also state that although counsel has not
undertaken, except as otherwise indicated in their opinion, to determine
independently and does not assume any responsibility for, the accuracy or
completeness of the statements in the Registration Statement, such counsel
has participated in the preparation of the Registration Statement and the
Prospectus, including review and discussion of the contents thereof, and
nothing has come to the attention of such counsel that has caused it to
believe that the Registration Statement, at the time the Registration
Statement became effective or the Prospectus, as of its date and as of the
Closing Date or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
(in the case of a prospectus, in light of the circumstances under which
they were made) not misleading or that any
26
amendment or supplement to the Prospectus, as of the Closing Date or the
Option Closing Date, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no view
with respect to the financial statements and the notes thereto and the
schedules and other financial and statistical data included in the
Registration Statement or the Prospectus).
In rendering such opinion, such counsel may limit such opinion to
matters involving the application of the laws of the Commonwealth of
Massachusetts and the United States. To the extent they deem proper and to
the extent specified in such opinion, such counsel may rely, as to matters
involving the application of laws of the State of New York, upon the
opinion of Sidley Xxxxxx Xxxxx & Xxxx LLP or, as to other matters, other
counsel of good standing whom they believe to be reliable and who are
satisfactory to the Representatives; provided that (x) such reliance is
expressly authorized by the opinion so relied upon and a copy of each such
opinion is delivered to the Representatives and is, in form and substance,
satisfactory to them and their counsel and (y) Xxxxxxxxxxx & Xxxxxxxx LLP
states in their opinion that they believe that they and the Underwriters
are justified in relying thereon.
(c) You shall have received on the Closing Date an opinion of, Xxxx
X. Xxxxxx, Vice President, Secretary and Chief Legal Officer, for the
Manager, dated the Closing Date and addressed to you, as Representatives
of the several Underwriters, to the effect that:
(i) The Manager is a business trust duly organized and validly
existing under the laws of the Commonwealth of Massachusetts with
full power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement to
either of them) and is duly registered and qualified to conduct its
business in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration
or qualification, except where the failure so to register or to
qualify does not have a material, adverse effect on the condition
(financial or other), business, properties, net assets or results of
operations of the Manager;
(ii) The Manager is duly registered with the Commission under
the Advisers Act as an investment adviser and is not prohibited by
the Advisers Act, the 1940 Act or the Rules and Regulations under
such acts from acting for the Fund under the Investment Management
Agreement as contemplated by the Prospectus (and any amendment or
supplement thereto);
(iii) The Manager has corporate power and authority to enter
into this Agreement and the Investment Management Agreement and this
Agreement and the Investment Management Agreement have been duly
authorized, executed and delivered by the Manager and the Investment
Management Agreement is a valid,
27
legal and binding agreement of the Manager, enforceable against the
Manager in accordance with its terms, except as enforcement of
rights to indemnity and contribution hereunder may be limited by
Federal or state securities laws or principles of public policy and
subject to the qualification that the enforceability of the
Manager's obligations hereunder and thereunder may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws
relating to or affecting creditors' rights generally and by general
equitable principles;
(iv) The Investment Management Agreement complies in all
material respects with all applicable provisions of the Advisers
Act, the 1940 Act and the Advisers Act Rules and Regulations and the
1940 Act Rules and Regulations;
(v) Neither the execution and delivery by the Manager of this
Agreement or the Investment Management Agreement nor the
consummation by the Manager of the transactions contemplated
hereunder or thereunder constitutes or will constitute a breach of
or a default under the Certificate of Incorporation or By-Laws of
the Manager or any material agreement, indenture, lease or other
instrument to which the Manager is a party or by which it or any of
its properties is bound that is known to such counsel after
reasonable inquiry, or will result in the creation or imposition of
any material lien, charge or encumbrance upon any property or assets
of the Manager, nor will any such action result in any violation of
any existing material law, regulation, ruling (assuming compliance
with all applicable state securities and Blue Sky laws), judgment,
injunction, order or decree known to such counsel after reasonable
inquiry, applicable to the Fund or any of its properties;
(vi) The description of the Manager and its business in the
Prospectus (and any amendment or supplement thereto) complies in all
material respects with all requirements of the 1933 Act, the 1940
Act and the Rules and Regulations;
(vii) To the best knowledge of such counsel after reasonable
inquiry, other than as described or contemplated in the Prospectus
(and any amendment or supplement thereto), there are no actions,
suits or other legal or governmental proceedings pending or
threatened against the Manager or to which the Manager or any of its
property is subject which are required to be described in the
Registration Statement or Prospectus (or any amendment or supplement
to either of them);
(viii) The Manager owns, possesses or has obtained and
currently maintains all governmental licenses, permits, consents,
orders, approvals and other authorizations as are necessary for the
Manager to carry on its business as contemplated in the Prospectus
(and any amendment or supplement thereto); and
(ix) No material consent, approval, authorization or order of
or registration or filing with any court, regulatory body,
administrative or other
28
governmental body, agency or official is required on the part of the
Manager for the performance of this Agreement or the Investment
Management Agreement by the Manager or for the consummation by the
Manager of the transactions contemplated hereby or thereby.
Such counsel shall also state that although counsel has not
undertaken, except as otherwise indicated in its opinion, to
determine independently and does not assume any responsibility for,
the accuracy or completeness of the statements in the Registration
Statement, such counsel has participated in the preparation of the
Registration Statement and the Prospectus, including review and
discussion of the contents thereof and nothing has come to its
attention that has caused it to believe that the Registration
Statement at the time it became effective or the Prospectus, as of
its date and as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of a
prospectus, in light of the circumstances under which they were
made) not misleading or that any amendment or supplement to the
Prospectus, as of the Closing Date or the Option Closing Date,
contained an untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no
opinion with respect to the financial statements and the notes
thereto and the schedules and other financial and statistical data
included in the Registration Statement or the Prospectus).
In rendering such opinion, counsel may limit such opinion to
matters involving the application of the laws of the Commonwealth of
Massachusetts, the Delaware General Corporation Law statute and the
laws of the United States and may rely upon an opinion or opinions,
each dated the Closing Date, of other counsel retained by the
Manager as to laws of any jurisdiction other than the United States,
the Commonwealth of Massachusetts and the Delaware General
Corporation Law statute, provided that (x) each such local counsel
is acceptable to the Representatives, (y) such reliance is expressly
authorized by each opinion so relied upon and a copy of each such
opinion is delivered to the Representatives and is in form and
substance satisfactory to them and their counsel and (z) counsel
shall state in his view that he believes that he and the
Underwriters are justified in relying thereon.
(d) (i) You shall have received on the Closing Date an opinion of
Sidley Xxxxxx Xxxxx & Xxxx LLP, special New York counsel to the Fund,
dated the Closing Date and addressed to you, as Representatives of the
several Underwriters, to the effect that:
The statements contained in the Prospectus under the
headings "Investment Objective, Policies & Risks - Additional Risk
Considerations - New York Concentration" and "Distributions and
Taxes - New York Taxes" and in the
29
statement of additional information under the heading "Taxes" and in
Appendix C to the statement of additional information under the
headings "New York and U.S. Territory Information", to the extent
that such statements constitute matters of law or legal conclusions,
provide a fair and accurate summary of such law or conclusions. Such
statements are based on current law and special counsel's
understanding of the Fund's proposed operations, as disclosed in the
Prospectus.
Such counsel shall also state that although special counsel does not
pass upon or assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus (other than to the extent set forth above), and has not made any
independent check or verification thereof, no facts have come to the
attention of such special counsel which would lead it to believe that the
material contained in the Prospectus under the headings "Investment
Objective, Policies & Risks - Additional Risk Considerations - New York
Concentration" and "Distributions and Taxes - New York Taxes" and in
Appendix C to the statement of additional information under the headings
"New York and U.S. Territory Information", as of their respective dates or
the Closing Date or the Option Closing Date, contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading or that any
statement contained in any amendment or supplement to the Prospectus or
statement of additional information under such headings, as of its
respective date, and as of the Closing Date or the Option Closing Date,
contained any 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.
In rendering such opinion, such special counsel may rely as to matters of
fact, to the extent such special counsel deems proper, on certificates of
responsible officers of the Fund and of the Manager, and of public
officials.
(ii) You shall have received on the Closing Date a comfort
letter, substantially in the form heretofore approved by you, from Sidley
Xxxxxx Xxxxx & Xxxx LLP, special counsel to the Fund, dated the Closing
Date and addressed to you, as Representatives of the several Underwriters,
with respect to the information presented in Appendix B to the statement of
additional information under the heading "Taxable Equivalent Yield Table".
(e) That you shall have received on the Closing Date, an opinion,
dated the Closing Date, of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the
Underwriters, dated the Closing Date and addressed to you, as
Representatives of the several Underwriters, with respect to such matters
as the Underwriters may require and the Fund, the Manager and their
respective counsels shall have furnished to such counsel such documents as
they may request for the purpose of enabling them to pass upon such
matters. It is agreed that Xxxxxxx Xxxxxxx & Xxxxxxxx may rely on the
opinions of Xxxxxxxxxxx & Xxxxxxxx LLP to the extent those opinions relate
to or are dependent upon matters governed by the laws of
30
the Commonwealth of Massachusetts and on the opinion[s] of Sidley Xxxxxx
Xxxxx & Xxxx LLP to the extent those opinions relate to or are dependent
upon matters governed by the laws of the state of New York.
(f) That you shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and
the Closing Date from [ ], independent certified public
accountants, substantially in the forms heretofore approved by you.
(g) (i) No order suspending the effectiveness of the Registration
Statement or prohibiting or suspending the use of the Prospectus (or any
amendment or supplement thereto) or any Prepricing Prospectus or any Sales
Material shall have been issued and no proceedings for such purpose or for
the purpose of commencing an enforcement action against the Fund, the
Manager or, with respect to the transactions contemplated by the
Prospectus (or any amendment or supplement thereto) and this Agreement,
any Underwriter, may be pending before or, to the knowledge of the Fund,
the Manager or any Underwriter or in the reasonable view of counsel to the
Underwriters, shall be threatened or contemplated by the Commission at or
prior to the Closing Date and that any request for additional information
on the part of the Commission (to be included in the Registration
Statement, the Prospectus or otherwise) be complied with to the
satisfaction of the Representatives,
(ii) there shall not have been any change in the capital stock
of the Fund nor any material increase in debt of the Fund from that
set forth in the Prospectus (and any amendment or supplement
thereto) and the Fund shall not have sustained any material
liabilities or obligations, direct or contingent, other than those
reflected in the Prospectus (and any amendment or supplement
thereto);
(iii) since the date of the Prospectus there shall not have
been any material, adverse change in the condition (financial or
other), business, prospects, properties, net assets or results of
operations of the Fund or the Manager;
(iv) the Fund and the Manager 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 or
from any other occurrence not described in the Registration
Statement and the Prospectus (and any amendment or supplement to
either of them); and
(v) all of the representations and warranties of the Fund and
the Manager contained in this Agreement shall be true and correct on
and as of the date hereof and as of the Closing Date as if made on
and as of the Closing Date.
(h) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change or any development involving a
prospective change in or
31
affecting the condition (financial or other), business, prospects,
properties, net assets or results of operations of the Fund or the Manager
not contemplated by the Prospectus (and any amendment or supplement
thereto), which in your opinion, as Representatives of the several
Underwriters, would materially, adversely affect the market for the Shares
or (ii)any event or development relating to or involving the Fund, the
Manager or any officer or trustee or director of the Fund or the Manager
which makes any statement of a material fact made in the Prospectus (or
any amendment or supplement thereto) untrue or which, in the opinion of
the Fund and its counsel or the Underwriters and their counsel, requires
the making of any addition to or change in the Prospectus (or any
amendment or supplement thereto) in order to state a material fact
required by the 1933 Act, the 1940 Act, the Rules and Regulations or any
other law to be stated therein or necessary in order to make the
statements therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading, if amending or
supplementing the Prospectus (or any amendment or supplement thereto) to
reflect such event or development would, in your opinion, as
Representatives of the several Underwriters, materially, adversely affect
the market for the Shares.
(i) That neither the Fund nor the Manager shall have failed at or
prior to the Closing Date to have performed or complied with any of the
agreements herein contained and required to be performed or complied with
by them at or prior to the Closing Date.
(j) That you shall have received on the Closing Date a certificate,
dated such date, of the president or any vice president and of the
controller or treasurer of each of the Fund and the Manager certifying
that
(i) the signers have carefully examined the Registration
Statement, the Prospectus (and any amendments or supplements to
either of them) and this Agreement,
(ii) the representations and warranties of the Fund (with
respect to the certificates from such Fund officers) and the
representations of the Manager (with respect to the certificates
from such officers of the Manager) in this Agreement are true and
correct on and as of the date of the certificate as if made on such
date,
(iii) since the date of the Prospectus (and any amendment or
supplement thereto) there has not been any material, adverse change
in the condition (financial or other), business, prospects (other
than as a result of a change in the financial markets generally),
properties, net assets or results of operations of the Fund (with
respect to the certificates from such Fund officers) or the Manager
(with respect to the certificates from such officers of the
Manager),
(iv) to the knowledge of such officers after reasonable
investigation, no order suspending the effectiveness of the
Registration Statement or prohibiting the sale of any of the Shares
or having a material, adverse effect on the Fund (with respect to
32
the certificates from such Fund officers) or the Manager (with
respect to the certificates from such officers of the Manager) has
been issued and no proceedings for any such purpose are pending
before or threatened by the Commission or any court or other
regulatory body, the NASD, any state securities commission, any
national securities exchange, any arbitrator, any court or any other
governmental, regulatory, self-regulatory or administrative agency
or any official,
(v) each of the Fund (with respect to certificates from such
Fund officers) and the Manager (with respect to certificates from
such officers of the Manager) has performed and complied with all
agreements that this Agreement requires it to perform by such
Closing Date,
(vi) neither the Fund (with respect to the certificate from
such officers of the Fund) nor the Manager (with respect to the
certificate from such officers of the Manager) has sustained any
material loss or interference with its business from any court or
from legislative or other governmental action, order or decree or
from any other occurrence not described in the Registration
Statement and the Prospectus and any amendment or supplement to
either of them; and
(vii) with respect to the certificate from such officers of
the Fund, there has not been any change in the capital stock of the
Fund nor any material increase in the debt of the Fund from that set
forth in the Prospectus (and any amendment or supplement thereto)
and the Fund has not sustained any material liabilities or
obligations, direct or contingent, other than those reflected in the
Prospectus (and any amendment or supplement thereto).
(k) That the Fund and the Manager shall have furnished to you such
further certificates, documents and opinions of counsel as you shall
reasonably request (including certificates of officers of the Fund and the
Manager).
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in
form and substance to you and your counsel.
Any certificate or document signed by any officer of the Fund or the
Manager and delivered to you, as Representatives of the Underwriters or to
Underwriters' counsel, shall be deemed a representation and warranty by
the Fund or the Manager to each Underwriter as to the statements made
therein.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to (i) the accuracy of and compliance with
the representations and warranties of the Fund and the Manager contained
herein on and as of the Option Closing Date as though made on any Option
Closing Date, (ii) satisfaction on and as of any Option Closing Date of
the conditions set forth in this Section 9 except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions
and letters referred
33
to in paragraphs (b), (c), (d), (e), (f), (j), (k) and this paragraph
shall be dated the Option Closing Date in question and the opinions and
letters called for by paragraphs (b), (c), (d) and (e) shall be revised to
reflect the sale of Additional Shares and (iii) the absence of
circumstances on or prior to the Option Closing Date which would permit
termination of this Agreement pursuant to Section 11 hereof if they
existed on or prior to the Closing Date.
10. Effective Date of Agreement.This Agreement shall become effective: (i)
upon the execution and delivery hereof by the parties hereto; or (ii) if, at the
time this Agreement is executed and delivered, it is necessary for the
Registration Statement or a post-effective amendment thereto to be declared
effective before the offering of the Shares may commence, when notification of
the effectiveness of the Registration Statement or such post-effective amendment
has been released by the Commission. Until such time as this Agreement shall
have become effective, it may be terminated by the Fund by notifying you or by
you, as Representatives of the several Underwriters, by notifying the Fund.
If any one or more of the Underwriters shall fail or refuse to
purchase Firm Shares which it or they have agreed to purchase hereunder and the
aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of the Firm Shares which the Underwriters are obligated
to purchase on the Closing Date, each non-defaulting Underwriter shall be
obligated, severally, in the proportion which the aggregate number of Firm
Shares set forth opposite its name in Schedule I hereto bears to the aggregate
number of Firm Shares set forth opposite the names of all non-defaulting
Underwriters or in such other proportion as you may specify in accordance with
Section 20 of the Xxxxxxx Xxxxx Barney Master Agreement Among Underwriters, to
purchase Firm Shares which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase. If any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares which the Underwriters are obligated to
purchase on the Closing Date and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares and arrangements satisfactory to you and the Fund for the
purchase of such Firm Shares by one or more non-defaulting Underwriters or other
party or parties approved by you and the Fund are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Fund. In any such case which does not result
in termination of this Agreement, either you or the Fund shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any such default of any such Underwriter under this
Agreement. The term "Underwriter" as used in this Agreement includes, for all
purposes of this Agreement, any party not listed in Schedule I hereto who, with
your approval and the approval of the Fund, purchases Firm Shares which a
defaulting Underwriter agreed, but failed or refused, to purchase.
34
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. Termination of Agreement.This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Fund or the Manager by notice to the Fund or the Manager if
prior to the Closing Date or any Option Closing Date (if different from the
Closing Date and then only as to the Additional Shares), as the case may be, (i)
trading in the Shares or securities generally on the NYSE, AMEX, Nasdaq National
Market or the Nasdaq Stock Market shall have been suspended or materially
limited, (ii) additional material governmental restrictions not in force on the
date of this Agreement have been imposed upon trading in securities generally or
a general moratorium on commercial banking activities in New York shall have
been declared by either Federal or state authorities or (iii) any outbreak or
material escalation of hostilities or other international or domestic calamity,
crisis or change in political, financial or economic conditions, occurs, the
effect of which is such as to make it, in your judgment, impracticable or
inadvisable to commence or continue the offering of the Shares at the offering
price to the public set forth on the cover page of the Prospectus or to enforce
contracts for the resale of the Shares by the Underwriters. Notice of such
termination may be given to the Fund or the Manager by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
12. Expenses. The Fund agrees to pay the following costs and expenses and
all other costs and expenses incident to the performance by the Fund of its
obligations hereunder: (a) the preparation, printing or reproduction, filing
(including, without limitation, the filing fees prescribed by the 1933 Act, the
1940 Act and the Rules and Regulations) and distribution of the Registration
Statement (including exhibits thereto), the Prospectus, each Prepricing
Prospectus and the 1940 Act Notification and all amendments or supplements to
any of them, (b) the printing (or reproduction) and delivery (including postage,
air freight charges and charges for counting and packaging) of such copies of
the Registration Statement, the Prospectus, each Prepricing Prospectus, any
Sales Material and all amendments or supplements to any of them as may be
reasonably requested for use in connection with the offering and sale of the
Shares, (c) the preparation, printing, authentication, issuance and delivery of
certificates for the Shares, including any stamp taxes and transfer agent and
registrar fees payable in connection with the original issuance and sale of such
Shares, (d) the registrations or qualifications of the Shares for offer and sale
under the securities or Blue Sky laws of the several states as provided in
Section 5(g) hereof (including the reasonable fees, expenses and disbursements
of counsel for the Underwriters relating to the preparation, printing or
reproduction and delivery of the preliminary and supplemental Blue Sky Memoranda
and such registration and qualification), (e) the reasonable fees and expenses
of the Fund's independent accountants, counsel for the Fund and of the transfer
agent, (f) the expenses of delivery to the Underwriters and dealers (including
postage, air freight and the cost of counting and packaging) of copies of the
Prospectus, the Prepricing Prospectus, any Sales Material and all amendments or
supplements to the Prospectus as may be requested for use in connection with the
offering and sale of the Shares, (g) the printing (or reproduction) and delivery
of this Agreement, any dealer agreements, the preliminary and supplemental Blue
Sky Memoranda and all other company-authorized agreements or other
35
documents printed (or reproduced) and delivered in connection with the offering
of the Shares, (h) the filing fees and the reasonable fees and expenses of
counsel for the Underwriters in connection with any filings required to be made
with the NASD and incurred with respect to the review of the offering of the
Shares by the NASD, (i) the registration of the Shares under the 1934 Act and
the listing of the Shares on the AMEX, (j) the transportation and other expenses
incurred by or on behalf of Fund representatives in connection with
presentations to prospective purchasers of the Shares.
Notwithstanding the foregoing, in the event that the sale of the Firm
Shares is not consummated pursuant to Section 2 hereof, the Manager will pay the
costs and expenses of the Fund set forth above in this Section 12 (a) through
(i), and reimbursements of Underwriter expenses in connection with the offering
shall be made in accordance with Section 5(k) hereof.
13. Information Furnished by the Underwriters. The names of the
underwriters and numbers of Shares listed opposite such names in the first
paragraph under the caption "Underwriting" in the Prospectus, as well as, under
the same caption, [the last sentence of the second paragraph, the first sentence
of the tenth paragraph, the first sentence of the twelfth paragraph, the
seventeenth paragraph and the eighteenth paragraph] constitute the only
information relating to any Underwriter furnished to the Fund in writing by or
on behalf of the Underwriters through you as such information is referred to
herein, expressly for use in the Prospectus.
14. Miscellaneous. Except as otherwise provided in Sections 5, 10 and 11
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (a) if to the Fund or the Manager, c/o Xxxxx
Xxxxx Corp. at 000 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, Attention: [ ] or (b) if
to you, as Representatives of the Underwriters, at the office of Xxxxxxx Xxxxx
Barney Inc. at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Fund, the Manager, their trustees, directors and officers and
the other controlling persons referred to in Section 8 hereof and their
respective successors and assigns to the extent provided herein and no other
person shall acquire or have any right under or by virtue of this Agreement.
Neither the term "successor" or the term "successors and assigns" as used in
this Agreement shall include a purchaser from any Underwriter of any of the
Shares in his status as such purchaser.
A copy of the Agreements and Declarations of Trust of the Fund and
Manager, respectively, are on file with the Secretary of the Commonwealth of
Massachusetts, and notice hereby is given that this Underwriting Agreement is
executed on behalf of the Trustees of the Fund and the Manager, each as Trustees
and not individually and that the obligations or arising out of this
Underwriting Agreement are not binding upon any of the Trustees of the Fund and
the Manager, respectively, or beneficiaries of each individually but are binding
only upon the assets and properties of the Trust.
36
15. Applicable Law; Counterparts. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
37
Please confirm that the foregoing correctly sets forth the agreement among
the Fund and the Manager and the several Underwriters.
Very truly yours,
XXXXX XXXXX INSURED NEW YORK
MUNICIPAL BOND FUND
By:
----------------------------------
Title:
XXXXX XXXXX MANAGEMENT
By:
----------------------------------
Title:
38
Confirmed as of the date
first above written on
behalf of themselves and
the other several Underwriters
named in Schedule I hereto.
By: Xxxxxxx Xxxxx Xxxxxx Inc.
AS REPRESENTATIVES OF THE SEVERAL UNDERWRITERS
By: XXXXXXX XXXXX BARNEY INC.
By:
-----------------------------------
Title:
39
SCHEDULE I
NAME OF UNDERWRITERS NUMBER OF SHARES
Xxxxxxx Xxxxx Barney Inc. [ ]
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
Prudential Securities Incorporated
Advest, Inc.
H&R Block Financial Advisors, Inc.
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Quick & Xxxxxx, Inc. A FleetBoston Financial Company
Xxxxxxx Xxxxx & Associates, Inc.
RBC Xxxx Xxxxxxxx, Inc.
Xxxx, Xxxx & Co., LLC
TD Waterhouse Investor Services, Inc.
Wachovia Securities, Inc.
Total [ ],000,000
