$133,000,000
XXXXXX MUNICIPAL BOND FUND
(a Massachusetts business trust)
AUCTION RATE MUNICIPAL PREFERRED SHARES ["AMPS"(R)]
2,920 Shares Series A
2,400 Shares Series B
Liquidation Preference $25,000 Per Share
PURCHASE AGREEMENT
October __, 2001
XXXXXXX XXXXX & CO.
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx
Incorporated
4 World Financial Center
New York, New York 10281-1201
As Representative of the Several Underwriters
Dear Sirs and Mesdames:
Xxxxxx Municipal Bond Fund, a Massachusetts business trust
(the "Fund"), and Xxxxxx Investment Management, LLC, a Delaware limited
liability company (the "Adviser"), each confirms its agreement with Xxxxxxx
Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (the
"Representative") and the other Underwriters named on Schedule I hereto (the
"Underwriters") with respect to the sale by the Fund and the purchase by the
Underwriters of 2,920 Auction Rate Municipal Preferred Shares of beneficial
interest, Series A of the Fund (the "Series A AMPS") and 2,400 Auction Rate
Municipal Preferred Shares of beneficial interest, Series B of the Fund (the
"Series B AMPS"), all without par value and with a liquidation preference of
$25,000 per share plus an amount equal to accumulated but unpaid dividends
(whether or not earned or declared). The Series A AMPS and Series B AMPS are
herein collectively referred to as the "Shares". The Underwriters will purchase
Shares as set forth on said Schedule I.
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(R) Registered trademark of Xxxxxxx Xxxxx & Co., Inc.
Prior to the purchase and public offering of the Shares by the
Underwriters, the Fund and the Underwriters shall enter into an agreement
substantially in the form of Exhibit A hereto (the "Pricing Agreement"). The
Pricing Agreement may take the form of an exchange of any standard form of
written telecommunication between the Fund and the Underwriters and shall
specify such applicable information as is indicated in Exhibit A hereto. The
offering of the Shares will be governed by this Agreement, as supplemented by
the Pricing Agreement. From and after the date of the execution and delivery of
the Pricing Agreement, this Agreement shall be deemed to incorporate the Pricing
Agreement.
The Fund has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form N-2 (No. 333-68370) and a
related preliminary prospectus for the registration of the Shares under the
Securities Act of 1933, as amended (the "1933 Act"), which registration
statement also constitutes an amendment to the registration statement of the
Fund under the Investment Company Act of 1940, as amended (the "1940 Act"), and
the published rules and regulations of the Commission under the 1940 Act
(together with the published rules and regulations under the 1933 Act, the
"Rules and Regulations") and has filed such amendments to such registration
statement on Form N-2, if any, and such amended preliminary prospectuses as may
have been required to the date hereof. The Fund will prepare and file such
additional amendments thereto and such amended prospectuses as may hereafter be
required pursuant to the terms hereof. Such registration statement (as amended
at the time it becomes effective, if applicable) and the prospectus constituting
a part thereof (including in each case the information, if any, deemed to be
part thereof pursuant to Rule 430A(b) or Rule 434 of the Rules and Regulations),
as from time to time amended or supplemented pursuant to the 1933 Act, are
hereinafter referred to as the "Registration Statement" and the "Prospectus,"
respectively, except that if any revised prospectus shall be provided to the
Underwriters by the Fund for use in connection with the offering of the Shares
which differs from the Prospectus on file at the Commission at the time the
Registration Statement becomes effective (whether such revised prospectus is
required to be filed by the Fund pursuant to Rule 497(c) or Rule 497(h) of the
Rules and Regulations) the term "Prospectus" shall refer to such revised
prospectus from and after the time it is first provided to the Underwriters for
such use. If the Fund elects to rely on Rule 434 of the Rules and Regulations,
all references to the Prospectus shall be deemed to include, without limitation,
the form of prospectus and the term sheet, taken together, provided to the
Underwriters by the Fund in reliance on Rule 434 of the Rules and Regulations
(the "Rule 434 Prospectus"). If the Fund files a registration statement to
register a portion of the Shares and relies on Rule 462(b) for such registration
statement to become effective upon filing with the Commission (the "Rule 462
Registration Statement"), then any reference to "Registration Statement" herein
shall be deemed to include both the registration statement referred to above
(No. 333-68370) and the Rule 462 Registration Statement, as each such
registration statement may be amended pursuant to the 1933 Act.
The Fund understands that the Underwriters propose to make a
public offering of the Shares as soon as the Underwriters deem advisable after
the Registration Statement becomes effective and the Pricing Agreement has been
executed and delivered.
SECTION 1. Representations and Warranties. (a) The Fund and
the Adviser each severally represents and warrants to the Underwriters as of the
date hereof and as of the date of the Pricing Agreement (such latter date being
hereinafter referred to as the "Representation Date") as follows:
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(i) At the time the Registration Statement
becomes effective and at the Representation Date, the
Registration Statement will comply in all material
respects with the requirements of the 1933 Act, the
1940 Act and the Rules and Regulations 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
not misleading. The Prospectus, at the Representation
Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the
Underwriters by the Fund for use in connection with
the offering of the Shares which differs from the
Prospectus on file at the Commission at the time the
Registration Statement becomes effective, in which
case at the time it is first provided to the
Underwriters for such use) and at Closing Time
referred to in Section 2, will not contain an untrue
statement of a material fact or omit 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; provided,
however, that the representations and warranties in
this subsection shall not apply to statements in or
omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity
with information furnished to the Fund in writing by
the Underwriters expressly for use in the
Registration Statement or Prospectus and, with
respect to the representations and warranties of the
Fund, shall not apply to the description of the
Investment Advisor contained in the Prospectus under
the caption "Management of the Fund".
(ii) The accountants who certified the
financial statements included in the Registration
Statement are independent public accountants as
required by the 1933 Act and the Rules and
Regulations.
(iii) The financial statements included in
the Registration Statement present fairly the
financial position of the Fund as of the dates
indicated; and such financial statements have been
prepared in conformity with generally accepted
accounting principles applied on a consistent basis.
(iv) Since the date as of which information
is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (a)
there has been no material adverse change in the
condition, financial or otherwise, of the Fund, or in
the earnings, business affairs or business prospects
of the Fund, whether or not arising in the ordinary
course of business, (b) there have been no
transactions entered into by the Fund which are
material to the Fund other than those in the ordinary
course of business and (c) except for regular monthly
dividends on the outstanding common shares of
beneficial interest, without par value, of the Fund
(the "Common Shares") there has been no dividend or
distribution of any kind declared, paid or made by
the Fund on any class of the Common Shares.
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(v) The Fund has been duly established and
is validly existing as a voluntary association
(commonly referred to as a business trust) under the
laws of The Commonwealth of Massachusetts; the
Agreement and Declaration of Trust, as it may have
been amended (the "Declaration of Trust"), pursuant
to which the Fund was established, confers on the
trustees named therein, and their successors in
trust, power and authority to own, lease and operate
its properties and conduct its business as described
in the Prospectus; the Fund is duly qualified to
transact business and is in good standing in each
jurisdiction in which such qualification is required
or is subject to no material liability or disability
by reason of the failure to be so qualified in any
such jurisdiction; and the Fund has no subsidiaries.
(vi) The Fund has filed with the Commission
a notification on Form N-8A of the registration of
the Fund as a closed-end, management investment
company under the 1940 Act and is registered with the
Commission under the 1940 Act as a closed-end,
management investment company. The Fund since its
formation has been, and at all times through the
consummation 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 and the Rules and Regulations.
(vii) The authorized, issued and outstanding
Common Shares of the Fund are as set forth in the
Prospectus under the caption "Capitalization"; the
outstanding Common Shares have been duly authorized
and validly issued and are fully paid and
nonassessable (except as set forth in the
Prospectus); the Shares, upon the redemption of the
Existing Preferred Shares (as defined in the
Prospectus), will be duly authorized for issuance and
sale to the Underwriters pursuant to this Agreement
and, when issued and delivered by the Fund pursuant
to this Agreement against payment of the
consideration set forth in the Pricing Agreement,
will be validly issued and fully paid and
nonassessable (except as set forth in the
Prospectus); the Common Shares, and the Shares
conform in all material respects to all statements
relating thereto contained in the Prospectus; the
issuance of the Shares to be purchased by the
Underwriters is not subject to preemptive or other
similar rights; and this Agreement and the Pricing
Agreement have been duly authorized, executed and
delivered by the Fund.
(viii) The Fund is not in violation of its
Declaration of Trust or the amended and restated
by-laws of the Fund (the "By-laws") or in default in
the performance or observance of any material
obligation, agreement, covenant or condition
contained in any material contract, indenture,
mortgage, loan agreement, note, lease or other
instrument to
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which it is a party or by which it or its
properties may be bound; and the execution,
delivery and performance of this Agreement, the
Pricing Agreement and the Management Contract (as
used herein, the "Management Contract") and the
Custodian Agreement dated June 1, 2001 among the
Fund, certain affiliates of the Fund and Xxxxxx
Fiduciary Trust Company (the "Custodian Agreement")
and the Investor Servicing Agreement dated June 3,
1991 pursuant to which Xxxxxx Fiduciary Trust Company
acts as the dividend disbursing agent, transfer agent
and registrar of the Fund's Common Shares (the
"Investor Servicing Agreement") and the Letter of
Representations to be entered into by the Fund,
Deutsche Bank and The Depository Trust Company (the
"Letter of Representations") and the Auction Agent
Agreement referred to in the Registration Statement
(the "Auction Agent Agreement") and the consummation
of the transactions contemplated herein and therein,
upon the approval by the Fund's Trustees of Amendment
No. 6 to the By-laws in substantially the form filed
with the Commission as an exhibit to the Registration
Statement the redemption of the Existing Preferred
Shares, will be duly authorized by all necessary
trust action and will not conflict with or constitute
a breach of, or default under, or result in the
creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Fund
pursuant to any material contract, indenture,
mortgage, loan agreement, note, lease or other
instrument to which the Fund is a party or by which
it may be bound or to which any of the property or
assets of the Fund is subject; nor, upon the approval
by the Fund's Trustees of Amendment No. 6 to the
By-laws in substantially the form filed with the
Commission as an exhibit to the Registration
Statement the redemption of the Existing Preferred
Shares, will such action result in any violation of
the provisions of the Declaration of Trust or the
By-laws or, to the best of its knowledge, any law,
administrative regulation or administrative or court
decree; and no consent, approval, authorization or
order of any court or governmental authority or
agency is required for the consummation by the Fund
of the transactions contemplated by this Agreement,
the Pricing Agreement, the Management Contract, the
Investor Servicing Agreement, the Custodian
Agreement, the Auction Agent Agreement or the Letter
of Representations, except such as has been obtained
under the 1940 Act or as may be required under the
1933 Act, or state securities or Blue Sky laws in
connection with the purchase and distribution of the
Shares by the Underwriters.
(ix) The Management Contract, the Investor
Servicing Agreement and the Custodian Agreement have
each been duly authorized, executed and delivered by
the Fund and comply with all applicable provisions of
the 1940 Act.
(x) The Fund owns or possesses or has
obtained all material governmental licenses, permits,
consents, orders, approvals and other authorizations
necessary to lease or own, as the case may be, and to
operate its properties and to carry on its business
as contemplated in the Prospectus.
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(xi) There is no action, suit or proceeding
before or by any court or governmental agency or
body, domestic or foreign, now pending, or, to the
knowledge of the Fund, threatened against the Fund
which might result in any material adverse change in
the condition, financial or otherwise, business
affairs or business prospects of the Fund, or might
materially and adversely affect the properties or
assets of the Fund; and there are no material
contracts or documents of the Fund which are required
to be filed as exhibits to the Registration Statement
by the 1933 Act, the 1940 Act or by the Rules and
Regulations which have not been so filed.
(xii) Except for the trademark "AMPS"(R) and
the name "Xxxxxx," the Fund owns or possesses, or can
acquire on reasonable terms, adequate trademarks,
service marks and trade names necessary to conduct
the business now operated by it, and the Fund has not
received any notice of infringement of or conflict
with asserted rights of others with respect to any
trademarks, service marks or trade names which,
singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would
materially adversely affect the conduct of the
business, operations, financial condition or income
of the Fund.
(xiii) The Auction Agent Agreement and the
Letter of Representations have each been duly
authorized for execution and delivery by the Fund
and, when executed and delivered by the Fund, will
each constitute a valid and binding obligation of the
Fund, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy,
insolvency, reorganization or other laws relating to
or affecting creditors' rights and to general equity
principles.
(b) The Adviser represents and warrants to
the Underwriters as follows:
(xiv) The Adviser has been duly incorporated
as a limited liability company under the laws of the
State of Delaware with corporate power and authority
to conduct its business as described in the
Prospectus.
(xv)The Adviser is duly registered as an
investment adviser under the Investment Advisers Act
of 1940, as amended (the "Advisers Act"), and is not
prohibited by the Advisers Act or the 1940 Act, or
the rules and regulations under such Acts, from
acting under the Management Contract for the Fund as
contemplated by the Prospectus.
(xvi) This Agreement has been duly
authorized, executed and delivered by the Adviser;
the Management Contract has been duly
6
authorized, executed and delivered by the Adviser and
constitutes a valid and binding obligation of the
Adviser, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy,
insolvency, reorganization or other laws relating to
or affecting creditors' rights and to general equity
principles; and neither the execution and delivery of
this Agreement or the Management Contract nor the
performance by the Adviser of its obligations
hereunder or thereunder conflict with or will
conflict with, or result in a breach of, any of the
terms and provisions of, or constitute, with or
without giving notice or lapse of time or both, a
default under, any material agreement or instrument
to which the Adviser is a party or by which the
Adviser is bound, or any law, order, rule of
regulation applicable to it of any jurisdiction,
court, federal or state regulatory body,
administrative agency or other governmental body,
stock exchange or securities association having
jurisdiction over the Adviser or its properties or
operations.
(xvii) The Adviser has the financial
resources available for the performance of its
services and obligations as contemplated in the
Prospectus.
(c) Any certificate signed by any officer of the
Fund or the Adviser and delivered to the Underwriters or to counsel for the
Underwriters shall be deemed a representation and warranty by the Fund or the
Adviser, as the case may be, to the Underwriters as to the matters covered
thereby.
SECTION 2. Sale and Delivery to the Underwriters; Closing. (a)
On the basis of the representations and warranties herein contained and subject
to the terms and conditions herein set forth, the Fund agrees to sell the Shares
to the Underwriters and the Underwriters agree to purchase the Shares from the
Fund at the price per share set forth in the Pricing Agreement.
(1) If the Fund has elected not to rely
upon Rule 430A under the Rules and Regulations, the initial public
offering price and the purchase price per share to be paid by the
Underwriters for the Shares have each been determined and set forth in
the Pricing Agreement, dated the date hereof, and an amendment to the
Registration Statement and the Prospectus will be filed before the
Registration Statement becomes effective.
(2) If the Fund has elected to rely upon
Rule 430A under the Rules and Regulations, the purchase price per share
to be paid by the Underwriters for the Shares shall be an amount equal
to the applicable initial public offering price, less an amount to be
determined by agreement between the Underwriters and the Fund. The
initial public offering price per share shall be a fixed price to be
determined by agreement between the Underwriters and the Fund. The
initial public offering price and the purchase price, when so
determined, shall be set forth in the Pricing Agreement. In the event
that such prices have not been agreed upon and the Pricing Agreement
has not been
7
executed and delivered by all parties thereto by the close of business
on the fourteenth business day following the date of this Agreement,
this Agreement shall terminate forthwith, without liability of any
party to any other party, except as provided in Section 5, unless
otherwise agreed to by the Fund, the Adviser and the Underwriters.
(b) Payment of the purchase price for, and
delivery of certificates for, the Shares shall be made at the office of Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, 0 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at
such other place as shall be agreed upon by the Underwriters and the Fund, at
10:00 A.M. on the third business day following the date the Registration
Statement becomes effective or, if the Fund has elected to rely upon Rule 430A
of the Rules and Regulations, the third business day after execution of the
Pricing Agreement, (or, if pricing takes place after 4:30 P.M. on either the
date the Registration Statement becomes effective or the date of execution of
the Pricing Agreement, as applicable, the fourth business day after such
applicable date), or such other time not later than ten business days after such
date as shall be agreed upon by the Underwriters and the Fund (such time and
date of payment and delivery being herein called "Closing Time"). Payment shall
be made to the Fund by Federal funds check or checks or similar same-day funds
payable to the order of the Fund, against delivery to the Underwriters for their
account of certificates for the Shares to be purchased by the Underwriters. The
Series A AMPS and Series B AMPS each shall be represented by a certificate
registered in the name of Cede & Co., as nominee for The Depository Trust
Company. The certificates for the Shares will be made available for examination
and packaging by the Underwriters not later than 10:00 A.M. on the last business
day prior to Closing Time.
SECTION 3. Covenants of the Fund. The Fund covenants with
the Underwriters as follows:
(a) The Fund will use its best efforts to cause
the Registration Statement to become effective under the 1933 Act, and will
advise the Underwriters promptly as to the time at which the Registration
Statement becomes so effective.
(b) The Fund will notify the Underwriters
immediately, and confirm the notice in writing, (i) of the effectiveness of the
Registration Statement and any amendment thereto (including any post-effective
amendment), (ii) when the Prospectus has been timely filed pursuant to Rule
497(c) or Rule 497(h) of the Rules and Regulations, whichever is applicable
under the Rules and Regulations, (iii) of the receipt by the Fund of any
comments from the Commission, (iv) of any request by the Commission to the Fund
for any amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for additional information, and (v) of the issuance to the
Fund by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose.
The Fund will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment. If the Fund elects to rely on Rule 434 of the Rules
and Regulations, the Fund will prepare a term sheet that complies with the
requirements of Rule 434 of the Rules and Regulations and the Fund will provide
the Underwriters with copies of the form of Rule 434 Prospectus, in such number
as the Underwriters may reasonably request by the close of business in New York
on the business day immediately succeeding the date of the Pricing Agreement.
8
(c) During any period in which the Underwriters
are required to deliver a prospectus in connection with the sale or offer of
Shares until 90 days after the Closing Time, the Fund will give the Underwriters
notice of its intention to file any amendment to the Registration Statement
(including any post-effective amendment) or any amendment or supplement to the
Prospectus (including any revised prospectus which the Fund proposes for use by
the Underwriters in connection with the offering of the Shares, which differs
from the prospectus on file at the Commission at the time the Registration
Statement becomes effective, whether such revised prospectus is required to be
filed pursuant to Rule 497(c) or Rule 497(h) of the Rules and Regulations, or
any term sheet prepared in reliance on Rule 434 of the Rules and Regulations),
whether pursuant to the 1940 Act, the 1933 Act, or otherwise, and will furnish
the Underwriters with copies of any such amendment or supplement a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file any such amendment or supplement to which the Underwriters or
counsel for the Underwriters shall reasonably object.
(d) The Fund will deliver to the Underwriters,
as soon as practicable, two signed copies of the Registration Statement as
originally filed and of each amendment thereto, in each case with two sets of
the exhibits filed therewith, and will also deliver to the Underwriters a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (but without exhibits to the Registration Statement or any
such amendment) for the Underwriters.
(e) The Fund will furnish to the Underwriters,
from time to time during the period when the Prospectus is required to be
delivered under the 1933 Act until 90 days after the Closing Time, such number
of copies of the Prospectus (as amended or supplemented) as the Underwriters may
reasonably request for the purposes contemplated by the 1933 Act, the 1940 Act
or the Rules and Regulations.
(f) During any period in which the Underwriters
are required to deliver a prospectus in connection with the sale or offer of
Shares until 90 days after the Closing Time, if any event shall occur as a
result of which it is necessary, in the reasonable opinion of counsel for the
Underwriters, to amend or supplement the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances existing at the time
it is delivered to a purchaser, the Fund will forthwith amend or supplement the
Prospectus by preparing and furnishing to the Underwriters a reasonable number
of copies of an amendment or amendments of, or a supplement or supplements to,
the Prospectus (in form and substance reasonably satisfactory to counsel for the
Underwriters), so that, as so amended or supplemented, the Prospectus will not
contain an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time the Prospectus is delivered to a purchaser,
not misleading; and, in case the Underwriters are required to deliver a
Prospectus nine months or more after the effective date of the Registration
Statement in connection with sales of any of the Shares, the Fund will prepare
promptly, upon request of such Underwriters, and at the expense of such
Underwriters, such amendment or amendments to the Registration Statement, and
such Prospectus, as may be necessary to permit compliance with the 1933 Act, the
1940 Act and the Rules and Regulations.
(g) The Fund will endeavor, in cooperation with
the Underwriters, to qualify the Shares for offering and sale under the
applicable securities laws of such states and
9
other jurisdictions of the United States as the Underwriters may designate,
and will maintain such qualifications in effect for a period of not less than
one year after the date hereof. The Fund will file such statements and
reports as may be required by the laws of each jurisdiction in which the
Shares have been qualified as above provided; provided, however, the Fund
shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction where it is not now
so qualified or required to file such a consent.
(h) The Fund will make generally available to
its security holders as soon as practicable, but not later than 60 days after
the close of the period covered thereby an earning statement (in form complying
with the provisions of Rule 158 of the Rules and Regulations) covering a twelve
month period beginning not later than the first day of the Fund's fiscal quarter
next following the "effective" date (as defined in said Rule 158) of the
Registration Statement.
(i) If, at the time that the Registration
Statement becomes effective, any information shall have been omitted therefrom
in reliance upon Rule 430A of the Rules and Regulations, then immediately
following the execution of the Pricing Agreement, the Fund will prepare, and
file or transmit for filing with the Commission in accordance with such Rule
430A and Rule 497(h) of the Rules and Regulations copies of an amended
Prospectus or, if required by such Rule 430A, a post-effective amendment to the
Registration Statement (including an amended Prospectus) containing all
information so omitted.
(j) Until 30 days after the date of this
Agreement, the Fund will not, without the Underwriters' prior consent, offer or
sell, or enter into any agreement to sell, any equity related securities of the
Fund other than the Shares and the Common Shares issued in reinvestment of
dividends or distributions.
(k) The Fund will use the proceeds of the sale
of the Shares as set forth in the Prospectus under the Caption "Use of
Proceeds."
SECTION 4. Covenants of the Underwriters. The Underwriters
covenant and agree with the Fund that as soon as practicable after Closing Time,
but not later than the fifth business day after Closing Time, the Underwriters
will provide the Fund and the Auction Agent with (i) a list of the Beneficial
Owners (as such term is defined in the By-Laws of the Fund) (other than the
Underwriters) in whose names Shares are to be registered in the books to be
maintained by the Auction Agent and the respective numbers of Shares acquired by
such Beneficial Owners from the Underwriters and (ii) the number of Shares they
are holding as Beneficial Owners for their own account and (on an aggregate
basis) as nominee for the accounts of others as of the date of such notice.
SECTION 5. Payment of Expenses. The Fund will pay all expenses
incident to the performance of its obligations under this Agreement, including,
but not limited to, expenses relating to (i) the printing and filing of the
registration statement as originally filed and of each amendment thereto, (ii)
the preparation, issuance and delivery of the certificates for the Shares to the
Underwriters, (iii) the fees and disbursements of the Fund's counsel and
accountants, (iv) the qualification of the Shares under securities laws in
accordance with the provisions of Section 3(g) of this Agreement, including
filing fees and any reasonable fees or disbursements of counsel
10
for the Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey, (v) the printing and delivery to the
Underwriters of copies of the registration statement as originally filed and
of each amendment thereto, of the preliminary prospectuses and of the
Prospectus and any amendments or supplements thereto, (vi) the printing and
delivery to the Underwriters of copies of the Blue Sky Survey and (vii) the
fees charged by rating agencies for the rating of the Shares.
If this Agreement is terminated by the Underwriters because of
the failure of the Fund or the Adviser to comply with the terms of this
Agreement or to use its best efforts to satisfy the conditions of this
Agreement, the Fund or the Adviser shall reimburse the Underwriters for all of
their reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters.
SECTION 6. Conditions of Underwriters' Obligations. The
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Fund and the Adviser herein contained, to
the performance by the Fund and the Adviser of their respective obligations
hereunder, and to the following further conditions:
(a) The Registration Statement shall have become
effective not later than 5:30 P.M. on the date hereof, or with the consent of
the Underwriters, at a later time and date not later, however, than 5:30 P.M. on
the first business day following the date hereof, or at such later time and date
as may be approved by the Underwriters, and at Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or threatened by the
Commission. If the Fund has elected to rely upon Rule 430A of the Rules and
Regulations, the price of the Shares and any price-related information
previously omitted from the effective Registration Statement pursuant to such
Rule 430A shall have been transmitted to the Commission for filing pursuant to
Rule 497(h) of the Rules and Regulations within the prescribed time period, and
prior to Closing Time the Fund shall have provided evidence satisfactory to the
Underwriters of such timely filing, or a post-effective amendment providing such
information shall have been promptly filed and declared effective in accordance
with the requirements of Rule 430A of the Rules and Regulations.
(b) At Closing Time the Underwriters shall
have received:
(1) The favorable opinion, dated as of
Closing Time, of Ropes & Gray, counsel for the Fund, in form and
substance satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Fund has been duly
organized and is validly existing as an unincorporated association
commonly referred to as a business trust under the laws of The
Commonwealth of Massachusetts.
(ii) The Fund has power and
authority to own, lease and operate its properties and conduct its
business as described in the Registration Statement and the Prospectus.
11
(iii) The outstanding Common
Shares have been duly authorized and validly issued and are fully paid
and nonassessable (except as set forth in the Statement of Additional
Information).
(iv) The Shares have been duly
authorized for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Fund pursuant to this
Agreement against payment of the consideration set forth in the Pricing
Agreement, will be validly issued and fully paid and nonassessable
(except as set forth in the Statement of Additional Information); and
the issuance of the Shares is not subject to preemptive or other
similar rights.
(v) Each of this Agreement and
the Pricing Agreement has been duly authorized, executed and delivered
by the Fund.
(vi) The Registration Statement
is effective under the 1933 Act and, to their knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission.
(vii) At the time the
Registration Statement became effective and at the Representation Date,
the Registration Statement (other than the financial statements and
other financial data included therein, as to which no opinion need be
rendered) complied as to form in all material respects with the
requirements of the 1933 Act, the 1940 Act and the Rules and
Regulations. The Rule 434 Prospectus conforms to the requirements of
Rule 434 in all material respects.
(viii) The authorized shares of
beneficial interest of the Fund conform in all material respects to the
description thereof contained in the Prospectus under the captions
"Description of AMPS" and "Description of Capital Stock", and the form
of certificate used to evidence the Shares are in proper form and
comply with all applicable statutory requirements.
(ix) To their knowledge, there
are no legal or governmental proceedings pending or threatened against
the Fund which are required to be disclosed in the Registration
Statement, other than those disclosed therein.
(x) To their knowledge, (i)
there are no contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments of the Fund required to be described in the
Registration Statement or to be filed as exhibits thereto which are not
so described therein or filed as exhibits thereto, and (ii) the
descriptions thereof are correct in all material respects.
(xi) No consent, approval,
authorization or order of any court or governmental authority or agency
is required in connection with the sale of the Shares to the
Underwriters, except such as has been obtained under
12
the 1933 Act, the 1940 Act or the Rules and Regulations or such as may
be required under state securities laws; and to their knowledge, the
execution and delivery of this Agreement, the Pricing Agreement, the
Auction Agent Agreement, or the Letter of Representations and the
consummation of the transactions contemplated herein and therein, will
not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Fund pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Fund is a party or by which it may be bound or
to which any of the property or assets of the Fund is subject, nor to
their knowledge will such action result in any violation of the
provisions of the Declaration of Trust or By-laws, or any law,
administrative regulation or administrative or court decree.
(xii) The Management Contract and
the Custodian Agreement have each been duly authorized, executed and
delivered by the Fund; the Management Contract complies with Section
15(a) of the 1940 Act and the Custodian Agreement complies, in all
material respects, with all applicable provisions of the 1940 Act.
(xiii) The Fund is registered with
the Commission under the 1940 Act as a closed-end diversified
management investment company, and all required action has been taken
by the Fund under the 1940 Act and the published rules and regulations
thereunder to make the public offering and consummate the sale of the
Shares pursuant to this Agreement; and the provisions of the
Declaration of Trust and the By-laws comply as to form in all material
respects with the requirements of the 1940 Act.
(xiv) The information in the
Prospectus under the caption "Taxes", to the extent that it constitutes
matters of law or legal conclusions, provides a fair summary of such
law or conclusions.
(xv) The Auction Agent Agreement
and the Letter of Representations each have been duly authorized,
executed and delivered by the Fund.
(2) The favorable opinion, dated as of
Closing Time, of [Xxxxxxx X. Xxxxxxxxxx, Esq.], general counsel to the
Adviser, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Adviser has been duly
organized as a limited liability company under the laws of [the State
of Delaware] with corporate power and authority to conduct its business
as described in the Prospectus.
(ii) The Adviser is duly
registered as an investment adviser under the Advisers Act and is not
prohibited by the Advisers Act or the 1940 Act, or the rules and
regulations under such Acts, from acting under the Management Contract
for the Fund as contemplated by the Prospectus.
13
(iii) This Agreement has been
duly authorized, executed and delivered by the Adviser; the Management
Contract is in full force and effect and constitutes a valid and
binding obligation of the Adviser, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization or other laws relating to or affecting creditors' rights
and to general equity principles; and, to the best of his knowledge and
information, neither the execution and delivery of this Agreement or
the Management Contract nor the performance by the Adviser of its
obligations hereunder or thereunder will conflict with, or result in a
breach of, any of the terms and provisions of, or constitute, with or
without giving notice or lapse of time or both, a default under, any
material agreement or instrument to which it is a party or by which the
Adviser is bound, or any law, order, rule or regulation applicable to
the Adviser of any jurisdiction, court, Federal or state regulatory
body, administrative agency or other governmental body, stock exchange
or securities association having jurisdiction over the Adviser or its
respective properties or operations.
(iv) To the best of such
counsel's knowledge and information, the description of the Adviser in
the Registration Statement and the Prospectus does not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(v) To the best of such
counsel's knowledge and information, no default by the Fund exists in
the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture,
loan agreement, note or lease described in the Registration Statement
or filed as exhibits thereto.
(3) The favorable opinion, dated as of
Closing Time, of Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for
the Underwriters, with respect to the matters set forth in (i), (iv) to
(vii), inclusive, and (xiii) of subsection (b)(1) of this Section.
(4) In giving their opinions required by
subsection (b)(1) and (b)(3), respectively, of this Section, Ropes &
Gray and Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP shall each
additionally state that nothing has come to their attention that would
lead them to believe that the Registration Statement (excluding the
financial statements and other financial data included therein, as to
which such counsel need express no belief), at the time it became
effective or at the Representation Date, contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus (except for the financial statements
and other financial data included therein, as to which such counsel
need express no belief), at the Representation Date (unless the term
"Prospectus" refers to a prospectus which has been provided to the
Underwriters by the Fund for use in connection with the offering of the
Shares which differs
14
from the Prospectus on file at the Commission at the time the
Registration Statement becomes effective, in which case at the
time it is first provided to the Underwriters for such use) or at
Closing Time, included an untrue statement of a material fact or
omitted 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 giving their opinion, Ropes & Xxxx may
state that their opinion is limited to matters governed by the Federal
laws of the United States and the laws of The Commonwealth of
Massachusetts. Xxxxx & Xxxx, Xx. Xxxxxxxxxx, Xxxxxxx, Arps, Slate,
Xxxxxxx & Xxxx LLP and PricewaterhouseCoopers L.L.P. may rely, as to
matters of fact, upon certificates and written statements of officers
and employees of and accountants for the Fund and the Adviser.
(c) At Closing Time (i) the Registration
Statement and the Prospectus shall contain all statements which are required to
be stated therein in accordance with the 1933 Act, the 1940 Act and the Rules
and Regulations and in all material respects shall conform to the requirements
of the 1933 Act, the 1940 Act and the Rules and Regulations, and the Prospectus
shall not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein in the light of the
circumstances under which they were made, not misleading and no action, suit or
proceeding at law or in equity shall be pending or, to the knowledge of the Fund
or the Adviser, threatened against the Fund or the Adviser which would be
required to be set forth in the Prospectus other than as set forth therein, (ii)
there shall not have been, since the date as of which information is given in
the Prospectus, any material adverse change in the condition, financial or
otherwise, of the Fund or in its earnings, business affairs or business
prospects, whether or not arising in the ordinary course of business, from that
set forth in the Prospectus, (iii) the Adviser shall have the financial
resources available to it necessary for the performance of its services and
obligations as contemplated in the Registration Statement and the Prospectus,
(iv) no proceedings shall be pending or, to the knowledge of the Fund or the
Adviser, threatened against the Fund or the Adviser before or by any Federal,
state or other commission, board or administrative agency wherein an unfavorable
decision, ruling or finding would materially and adversely affect the business,
property, financial condition or income of either the Fund or the Adviser other
than as set forth in the Registration Statement and the Prospectus and (v)
Xxxxx'x Investors Service, Inc. ("Moody's") and Fitch ICBA, Inc. ("Fitch") shall
have confirmed that the Shares have been rated "AAA" and AAA, respectively, by
such agencies; and the Underwriters shall have received, at Closing Time, a
certificate of the Fund signed by the President or Treasurer of the Fund and of
the Adviser signed by the President, a Managing Director or a Vice President of
the Adviser dated as of Closing Time, evidencing compliance with the appropriate
provisions of this subsection (c), together with true and correct copies of
letters from Moody's and Fitch confirming their rating. As used in this
subsection (c), the term "Prospectus" means the Prospectus in the form first
used to confirm sales of the Shares.
(d) At Closing Time, the Underwriters shall
have received certificates, dated as of Closing Time, (i) of the Fund signed
by the President or Treasurer of the Fund to the effect that the
representations and warranties of the Fund contained in Section l(a) are true
and correct with the same force and effect as though expressly made at and as
of Closing Time and (ii) of the Adviser signed by the President, a Managing
Director or a Vice President of the Adviser to the effect that the
representations and warranties of the Adviser contained in Sections l(a) and
(b) are true and correct with the same force and effect as though expressly
made at and as of Closing Time.
15
(e) At the time of execution of this Agreement,
the Underwriters shall have received from PricewaterhouseCoopers L.L.P., a
letter, dated the date hereof, in form and substance satisfactory to the
Underwriters, to the effect that:
(1) they are independent accountants
with respect to the Fund within the meaning of the 1933 Act and the
Rules and Regulations;
(2) in their opinion, the financial
statements examined by them and included in the Registration Statement
complies as to form in all material respects with the applicable
accounting requirements of the 1933 Act and 1940 Act and the Rules and
Regulations;
(3) they have performed specified
procedures, not constituting an audit, including a reading of the
latest available interim financial statements of the Fund, a reading of
the minute books of the Fund, inquiries of officials of the Fund
responsible for financial accounting matters and such other inquiries
and procedures as may be specified in such letter, and on the basis of
such inquiries and procedures nothing came to their attention that
caused them to believe that during the period from April 30, 2000 to a
specified date not more than three days prior to the date of this
Agreement, there was any change in the shares of beneficial interest of
the Fund or any increase in the long-term debt of the Fund, as compared
with amounts shown on the audited financial statements included in the
Registration Statement, except for changes which the Registration
Statement discloses have occurred or may occur; and
(4) in addition to the procedures
referred to in clause (iii) above, they have performed other specified
procedures, not constituting an audit, with respect to certain amounts,
percentages, numerical data, financial information and financial
statements appearing in the Registration Statement, which have
previously been specified by you and which shall be specified in such
letter, and have compared certain of such items with, and have found
such items to be in agreement with, the accounting and financial
records of the Fund.
(f) At Closing Time, the Underwriters shall have
received from PricewaterhouseCoopers L.L.P. a letter, dated as of Closing Time,
to the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section, except that the "specified date"
referred to shall be a date not more than three days prior to Closing Time.
(g) At Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions as they
may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Shares as herein contemplated and to pass upon related
proceedings, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Fund and the Adviser in connection with the
organization and registration of the Fund under the 1940 Act and the issuance
and sale of the Shares as herein contemplated shall be satisfactory in form and
substance to the Underwriters and counsel for the Underwriters.
16
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Underwriters by notice to the Fund at any time at or prior to Closing
Time, and such termination shall be without liability of any party to any other
party except as provided in Section 5 and except that Sections 7 and 8 hereof
shall survive any such termination and remain in full force and effect.
(h) At Closing Time, the Fund's Trustee will
have approved Amendment No. 6 to the Bylaws in form and substance similar in
all material respects to the form filed with the Commission as an exhibit to
the Registration Statement.
SECTION 7. Indemnification. (a) The Fund and the
Adviser, jointly and severally, agree to indemnify and hold harmless the
Underwriters and each person, if any, who controls an Underwriter within the
meaning of Section 15 of the 1933 Act as follows:
(1) against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, arising out of any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto)
including the information deemed to be a part of the Registration
Statement pursuant to Rule 430A or Rule 434 of the Rules and
Regulations, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(2) against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, provided that (subject to Section 7(d) below) any such
settlement is effected with the written consent of the Fund and the
Adviser; and
(3) against any and all expenses
whatsoever, as incurred (including the fees and disbursements of
counsel chosen by the Underwriters), reasonably incurred in
investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information
17
furnished to the Fund by the Underwriters expressly for use in the
Registration Statement (or any amendment thereto), including the information
deemed to be part of the Registration Statement pursuant to Rule 430A or Rule
434 of the Rules and Regulations, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) and provided further, the
foregoing indemnification with respect to any preliminary prospectus shall
not inure to the benefit of the Underwriters if the person asserting any such
losses, claims, damages or liabilities purchased Shares (or to the benefit of
any person controlling any such Underwriters) if a copy of the Prospectus (as
then amended or supplemented if the Fund shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of the
Underwriters to such person, if such is required by law, at or prior to the
written confirmation of the sales of such Shares to such person and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage or liability.
(b) The Underwriters agree to indemnify and hold
harmless the Fund and the Adviser, their respective trustees or directors, as
the case may be, each of the Fund's officers who signed the Registration
Statement, and each person, if any, who controls the Fund or the Adviser within
the meaning of Section 15 of the 1933 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendment thereto), including the information deemed to be part of the
Registration Statement pursuant to Rule 430A or Rule 434 of the Rules and
Regulations, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) in reliance upon and in conformity with written
information furnished to the Fund by the Underwriters expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as
promptly as reasonably practical to each indemnifying party of any action
commenced against it in respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially prejudiced
as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for the
fees and expenses of more than one counsel (in addition to local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 7 or Section 8 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
18
(d) If at any time an indemnified party shall
have requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel, such indemnifying party agrees that it shall be liable
for any settlement of the nature contemplated by Section 7(a)(ii) effected
without its written consent if (i) such settlement is entered into more than 90
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 60 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 7(a)(ii)
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (ii) provides written notice to the
indemnified party objecting to the unpaid balance as unreasonable, in each case
prior to the date of such settlement.
SECTION 8. Contribution. If the indemnification provided for
in Section 7 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Fund and the Adviser on the one hand and the Underwriters on the other hand from
the offering of the Shares pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Fund and the Adviser on the one
hand and of the Underwriters on the other hand in connection with the statements
or omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Fund and the Adviser on
the one hand and the Underwriters on the other hand in connection with the
offering of the Shares pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
Shares pursuant to this Agreement (before deducting expenses) received by the
Fund and the total underwriting discount received by the Underwriters, in each
case as set forth on the cover of the Prospectus, or, if Rule 434 is used, the
corresponding location on the term sheet, bear to the aggregate initial public
offering price of the Shares as set forth on such cover.
The relative fault of the Fund and the Adviser on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Fund and the Adviser or by the Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
19
The Fund, the Adviser and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 8. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
8 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, the
Underwriters shall not be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which the Underwriters have otherwise been required to pay by reason of
any such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who
controls any Underwriters within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as such Underwriters, and each trustee and
director of the Fund and the Adviser, respectively, each officer of the Fund who
signed the Registration Statement, and each person, if any, who controls the
Fund and the Adviser within the meaning of Section 15 of the 1933 Act shall have
the same rights to contribution as the Fund.
SECTION 9. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement or the Pricing Agreement, or contained in certificates of
officers of the Fund or the Adviser submitted pursuant hereto or thereto, shall
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of any Underwriters or any controlling person, or by or on
behalf of the Fund or the Adviser or any controlling person and shall survive
delivery of the Shares to the Underwriters.
SECTION 10. Termination of Agreement. (a) The Underwriters may
terminate this Agreement, by written notice to the Fund, at any time at or prior
to Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Fund or the Adviser, whether or not arising in the ordinary course of business,
or (ii) if there has occurred any material adverse change in the financial
markets in the United States, any outbreak of hostilities or escalation thereof
or other calamity or crisis or any change or development involving a prospective
change in national or international political, financial or economic conditions,
in each case the effect of which is such as to make it, in the judgment of the
Underwriters, impracticable to market the Shares or to enforce contracts for the
sale of Shares, or (iii) if trading in the Common Shares has been suspended or
materially limited by the Commission or if trading
20
generally on the American Stock Exchange or the New York Stock Exchange or in
the Nasdaq National Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc.
or any other governmental authority, or (iv) if a banking moratorium has been
declared by Federal, New York or Massachusetts authorities. As used in this
Section 10, the term "Prospectus" means the Prospectus in the form first used
to confirm sales of the Shares.
(b) If this Agreement is terminated pursuant
to this Section, such termination shall be without liability of any party to
any other party except as provided in Section 5 hereof, and provided further
that Sections 7 and 8 shall survive such termination and remain in full force
and effect.
SECTION 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of written telecommunication. Notices
to the Underwriters shall be directed to Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Xxxxxx, Xxxxxx & Xxxxx Incorporated, Xxxxxxx Xxxxx World Headquarters, 4 World
Financial Center, New York, New York 10281-1209, attention of Xxxxxxx Xxxxxxxxx;
notices to the Fund or the Adviser shall be directed to each of them at One Post
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, attention of Xxxx X. Xxxxxx, Vice
President.
SECTION 12. Parties. This Agreement and the Pricing Agreement
shall each inure to the benefit of and be binding upon the Underwriters, the
Fund and the Adviser and their respective successors. Nothing expressed or
mentioned in this Agreement or the Pricing Agreement is intended or shall be
construed to give any person, firm or corporation, other than the parties hereto
and their respective successors and the controlling persons and officers,
trustees and directors referred to in Sections 7 and 8 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or the Pricing Agreement or any provision herein or
therein contained. This Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of the parties
hereto and their respective successors, and said controlling persons and
officers, trustees and directors and their heirs and legal representatives, and
for the benefit of no other person, firm or corporation. No purchaser of Shares
from the Underwriters shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. Liability of Shareholders, Trustees and Officers.
A copy of the Agreement and Declaration of Trust of the Fund is on file with the
Secretary of State of The Commonwealth of Massachusetts and notice is hereby
given that this Agreement has been executed on behalf of the Fund by an officer
of the Fund as an officer and not individually and the obligations of the Fund
arising out of this Agreement are not binding upon any of the trustees, officers
or shareholders of the Fund individually but are binding only upon the assets
and property of the Fund.
SECTION 14. Governing Law and Time. This Agreement and the
Pricing Agreement shall be governed by and construed in accordance with the laws
of the State of New York applicable to the agreements made and to be performed
in such State. Specified times of day refer to New York City time.
21
If the foregoing is in accordance with your understanding of
our Agreement, please sign and return to the Fund and the Adviser a counterpart
hereof, whereupon this instrument along with all counterparts will become a
binding agreement among the Underwriters, the Fund and the Adviser and in
accordance with its terms.
Very truly yours,
XXXXXX MUNICIPAL BOND FUND
By:_________________________________
Authorized Officer
XXXXXX INVESTMENT MANAGEMENT, LLC
By:_________________________________
Authorized Officer
CONFIRMED AND ACCEPTED, as of the date first above written:
XXXXXXX LYNCH, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By:_______________________________________
Authorized Officer
22
SCHEDULE I
SERIES A
NUMBER OF
NAME OF UNDERWRITER INITIAL SECURITIES
------------------- ------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated 2,920
Total 2,920
SERIES B
NUMBER OF
NAME OF UNDERWRITER INITIAL SECURITIES
------------------- ------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
X.X. Xxxxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx
Total 2,400
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EXHIBIT A
$133,000,000
XXXXXX MUNICIPAL INCOME FUND
(a Massachusetts business trust)
AUCTION RATE MUNICIPAL PREFERRED SHARES [AMPS"(R)]
2,920 Shares Series A
2,400 Shares Series B
Liquidation Preference, $25,000 Per Share
PRICING AGREEMENT
October __, 2001
XXXXXXX XXXXX & CO.
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx Incorporated
4 World Financial Center
New York, New York 10281-1201
As Representative of the Several Underwriters
Dear Sirs and Mesdames:
Reference is made to the
Purchase Agreement, dated October 29,
2001 (the "
Purchase Agreement"), relating to the purchase by Xxxxxxx Xxxxx &
Co., Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated as representative of the
several Underwriters listed on Schedule I to the
Purchase Agreement (the
"Underwriters") of 2,920 Auction Rate Municipal Preferred shares of beneficial
interest, Series A (the "Series A AMPS") and 2,400 Auction Rate Municipal
preferred shares of beneficial interest, Series B (the "Series Auction Rate
Municipal Preferred," and with the Series A AMPS, the "Shares), all without par
value and with a liquidation preference of $25,000 per share plus an amount
equal to accumulated but unpaid dividends (whether or not earned or declared) of
Xxxxxx Municipal Bond Fund (the "Fund").
-------------------
(R) Registered trademark of Xxxxxxx Xxxxx & Co., Inc.
Pursuant to Section 2 of the
Purchase Agreement, the Fund
agrees with the Underwriters as follows:
1. The initial public offering price per share for the Shares,
determined as provided in said Section 2, shall be $25,000, plus accumulated
dividends, if any, from the date of original issue.
2. The purchase price per share for the Series A AMPS to be paid by the
Underwriters shall be $___________ plus accumulated dividends, if any from the
date of the initial issue, being an amount equal to the initial public offering
price.
3. The purchase price per share for the Series B AMPS to be paid by the
Underwriters shall be $25,000, plus accumulated dividends, if any, from the date
of original issue, being an amount equal to the initial public offering price
set forth above less $___ per share.
4. The dividend rate on the Series A AMPS for the initial dividend
period ending November __, 2001 will be ___% and the dividend rate on the Series
B AMPS for the initial dividend period ending November __, 2001 will be %.
A copy of the Agreement and Declaration of Trust of the Fund
is on file with the Secretary of State of The Commonwealth of Massachusetts and
notice is hereby given that this Agreement has been executed on behalf of the
Fund by an officer of the Fund as an officer and not individually and the
obligations of the Fund arising out of this Agreement are not binding upon any
of the trustees, officers or shareholders of the Fund individually but are
binding only upon the assets and property of the Fund.
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If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Fund a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Fund in accordance with its terms.
Very truly yours,
XXXXXX MUNICIPAL BOND FUND
By:_________________________________
Authorized Officer
CONFIRMED AND ACCEPTED, as of the date first above written:
XXXXXXX LYNCH, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By:________________________________________
Authorized Officer
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