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Exhibit (h)
Municipal Auction Rate Cumulative Preferred Shares
COLONIAL INSURED MUNICIPAL FUND
1,492 Shares, Series TH
Liquidation Preference $25,000 Per Share
UNDERWRITING AGREEMENT
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December 15, 1999
XXXXXXX XXXXX XXXXXX INC.
As Representative of the
several Underwriters listed in
Schedule I hereto
c/o XXXXXXX XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Colonial Insured Municipal Fund, a Massachusetts business
trust (the "Trust"), proposes, upon the terms and conditions set forth herein,
to issue and sell an aggregate of 1,492 shares of its Municipal Auction Rate
Cumulative Preferred Shares, Series TH (the "Municipal Preferred"), each with a
liquidation preference of $25,000 per share (the shares of Municipal Preferred
to be sold hereby are referred to herein, collectively, as the "Shares"). The
Shares will be authorized by, and subject to the terms and conditions of, the
Declaration of Trust, as amended, and the Amended and Restated Bylaws of the
Trust in the form filed as an exhibit to the Registration Statement referred to
in Section 1 of this agreement. The Trust and its investment adviser, Colonial
Management Associates, Inc., (the "Advisor"), wish to confirm as follows their
agreement with Xxxxxxx Xxxxx Xxxxxx Inc. (the "Representative"), as
representatives of the several Underwriters listed in Schedule I hereto (the
"Underwriters"), in connection with the purchase of the Shares by the
Underwriters.
Collectively, (i) the Management Agreement, dated as of
October 25, 1999, between the Trust and the Advisor (the "Management
Agreement"), (ii) the Custodian Agreement, dated as of August 17, 1999, between
the Trust and The Chase Manhattan Bank, as amended, (iii) the Auction Agency
Agreement, to be dated as of July 20, 1999, as supplemented by the Acceptance
Letter dated December 17, 1999, between the Trust and Bankers Trust Company and
(iv) the Broker-Dealer Agreement, to be dated as
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of December 17, 1999, as supplemented by the Acceptance Letter dated December
17, 1999, between the Trust and Xxxxxxx Xxxxx Xxxxxx Inc. are hereinafter
referred to as the "Trust Agreements". This Underwriting Agreement is
hereinafter referred to as the "Agreement".
1. REGISTRATION STATEMENT AND PROSPECTUS. The Trust has
prepared 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 rules and regulations of the Securities and Exchange
Commission (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, as amended (File Nos.
333-90445 and 811-09533), under the 1933 Act and the 1940 Act (the "registration
statement"), including a prospectus relating to the Shares, and has filed the
registration statement and prospectus in accordance with the 1933 Act and 1940
Act. The Trust also has filed a notification of registration of the Trust 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. 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 Trust 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 statement of additional information in the forms
included in the Registration Statement or, if the prospectus and 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 statement of additional information
filed with the Commission pursuant to Rule 497 under the 1933 Act, the term
"Prospectus" as used in this Agreement means the prospectus and statement of
additional information in the forms included in the Registration Statement as
supplemented by the addition of the information contained in the prospectus
filed with the Commission pursuant to Rule 497. The term "Prepricing Prospectus"
as used in this Agreement means the prospectus and statement of additional
information subject to completion in the forms included in the registration
statement at the time of filing of amendment no. 1 to the registration statement
with the Commission on December 10, 1999, and as such prospectus and 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 Trust other than the Prospectus approved
in writing by or directly or indirectly prepared by the Trust or the Advisor; 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 Trust or the Advisor. The terms "Registration Statement",
"Prospectus" and "Prepricing Prospectus" shall also include any financial
statements incorporated by reference therein.
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The Trust has furnished you with copies of such registration
statement, each amendment to such registration statement filed with the
Commission and each Prepricing Prospectus.
2. AGREEMENTS TO SELL AND PURCHASE. The Trust hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
the Underwriters and, upon the basis of the representations, warranties and
agreements of the Trust and the Advisor herein contained and subject to all the
terms and conditions set forth herein, each Underwriter agrees to purchase from
the Trust, at a purchase price of $24,750 per Share, the number of shares of
Municipal Preferred set forth opposite the name of such Underwriter in Schedule
I hereto.
3. TERMS OF PUBLIC OFFERING. The Trust and the Advisor 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 the Underwriters' judgment is advisable and initially to
offer the Shares upon the terms set forth in the Prospectus.
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to
the Underwriters of and payment for the Shares shall be made at the office of
Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, at 9:30
A.M., New York City time, on December 17, 1999 (the "Closing Date"). The place
of closing for the Shares and the Closing Date may be varied by agreement
between you and the Trust.
Certificates for the Shares shall be registered in such names
and in such denominations as you shall request prior to 9:30 A.M., New York City
time, on the second business day preceding the Closing Date. Such certificates
shall be made available to you in New York City for inspection not later than
9:30 A.M., New York City time, on the business day next preceding the Closing
Date. The certificates evidencing the Shares shall be delivered to you on the
Closing Date, through the facilities of The Depository Trust Company, against
payment of the purchase price therefor in immediately available funds.
5. AGREEMENTS OF THE TRUST AND THE ADVISOR. The Trust and the
Advisor, 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
Shares may commence, the Trust will endeavor to cause the Registration Statement
or such post-effective amendment to become effective under the 1933 Act as soon
as possible and will advise you promptly and, if requested by you, will confirm
such advice in writing when the Registration Statement or such post-effective
amendment has become effective.
(b) The Trust 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-
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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 or any Prepricing Prospectus, or any sales material (as
hereinafter 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 Trust, the Advisor, any affiliate of the Trust or the Advisor
or any representative or attorney of the Trust or the Advisor 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 Trust (if such communication relating to the Trust 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 hereinafter defined) (or any
amendment or supplement to any of the foregoing) or this Agreement or any of the
Trust 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
Trust or the Advisor 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 hereinafter
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 materials
(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 light of the circumstances under which they were made,
not misleading or of the necessity to amend or supplement the Registration
Statement, the Prospectus, or 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 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 Trust will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible time.
(c) The Trust will furnish to you, without charge, three
signed copies of the Registration Statement as originally filed with the
Commission and of each amendment thereto, including financial statements and all
exhibits thereto, 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, but without exhibits, as you may request.
(d) The Trust will not (i) file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus, or
any sales material (as herein defined), of which you 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 any
Underwriter or any dealer, file any information,
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documents or reports pursuant to the Securities Exchange Act of 1934, as amended
(the "1934 Act"), without delivering a copy of such information, documents or
reports to you, as Representative of the several Underwriters, prior to or
concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the
Trust has delivered to you, without charge, in such quantities as you have
requested, copies of each form of the Prepricing Prospectus. The Trust 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 several Underwriters and by dealers, prior to the date of the Prospectus,
of each Prepricing Prospectus so furnished by the Trust.
(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 by any Underwriter or any dealer, the Trust
will expeditiously deliver to each Underwriter and each dealer, without charge,
as many copies of the Prospectus (and of any amendment or supplement thereto) as
you may reasonably request. The Trust consents to the use of the Prospectus (and
of any amendment or supplement thereto) 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 several 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 by any Underwriter or any
dealer. If during such period of time any event shall occur that in the judgment
of the Trust 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 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 Trust will
forthwith prepare and, subject to the provisions of paragraph (d) above,
promptly file with the Commission an appropriate supplement or amendment
thereto, and will expeditiously furnish to the Underwriters and dealers, without
charge, a reasonable number of copies thereof. In the event that the Trust and
you, as Representative of the several Underwriters, agree that the Registration
Statement or the Prospectus should be amended or supplemented, the Trust, if
requested by you, will promptly issue a press release announcing or disclosing
the matters to be covered by the proposed amendment or supplement.
(g) The Trust will make generally available to its security
holders an earnings statement, which need not be audited, covering a
twelve-month period ending not later than 15 months after the effective date of
the Registration Statement 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.
(h) During the period of five years hereafter, the Trust will
furnish to you (i) as soon as available, a copy of each report of the Trust
mailed to shareholders or filed with the
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Commission or furnished to the American Stock Exchange (the "AMEX") other than
reports on Form N-SAR, and (ii) from time to time such other information
concerning the Trust as you may reasonably request.
(i) If this Agreement shall terminate or shall be terminated
after execution pursuant to any provisions hereof (otherwise than by notice
given by you terminating this Agreement pursuant to Section 12 hereof or
pursuant to the second paragraph of Section 11 hereof) or if this Agreement
shall be terminated by the Underwriters because of any failure or refusal on the
part of the Trust or the Advisor to comply with the terms or fulfill any of the
conditions of this Agreement, the Trust and the Advisor, jointly and severally,
agree to reimburse the Representative for all out-of-pocket expenses (including
reasonable fees and expenses of counsel for the Underwriters) incurred by the
Underwriters in connection herewith.
(j) The Trust will apply the net proceeds from the sale of the
Shares substantially in accordance with the description set forth in the
Prospectus and in such a manner as to comply with the investment objectives,
policies and restrictions of the Trust as described in the Prospectus.
(k) The Trust 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
timely file the certification permitted by Rule 497(j) of the 1933 Act Rules and
Regulations and will advise you of the time and manner of such filing.
(l) Except as provided in this Agreement, the Trust will not
sell, contract to sell, or otherwise dispose of any senior securities (as
defined in the 1940 Act) of the Trust, or grant any options or warrants to
purchase senior securities of the Trust, for a period of 120 days after the date
of the Prospectus, without the prior written consent of the Representative.
(m) The Trust will use its best efforts to cause the Municipal
Preferred, prior to the Closing Date, to be assigned a rating of 'aaa' by
Xxxxx'x Investors Service, Inc. ("Moody's") and AAA by Standard & Poor's Ratings
Services ("S&P" and, together with Moody's, the "Rating Agencies").
(n) The Trust and the Advisor will each use its 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 TRUST AND THE
ADVISOR. The Trust and the Advisor, jointly and severally, represent and warrant
to each Underwriter 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
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1933 Act Rules and Regulations, complied when so filed in all material respects
with the 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 supplement
or amendment 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 amendment or supplement thereto when filed with the
Commission, complied or will comply in all material respects with the applicable
requirements 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 light of the circumstances under which they were
made, not misleading, except that this representation and warranty does not
apply to (i) statements in or omissions from the registration statement or the
Prospectus made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Trust in writing by or on behalf of any
Underwriter expressly for use therein or (ii) with respect to the
representations of the Trust, the description of the Advisor contained in the
Prospectus heading "Management of the Fund."
(c) All the outstanding Common Shares (as defined in the
Prospectus) of the Trust have been duly authorized and validly issued, are fully
paid and, except as set forth in the Statement of Additional Information of the
Trust under "Shareholder Liability," 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, fully paid and, except as set
forth in the Statement of Additional Information of the Trust under "Shareholder
Liability," 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 Trust conforms to the description thereof in the
Registration Statement and the Prospectus (and any amendment or supplement to
either of them).
(d) The Trust is a business trust duly organized and validly
existing in good standing under the laws of the Commonwealth of Massachusetts
with full business trust 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 and is in
good standing 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 qualify does not have a material
adverse effect on the condition (financial or other), business, prospects,
properties, net assets or results of operations of the Trust; and the Trust has
no subsidiaries.
(e) There are no legal or governmental proceedings pending or,
to the knowledge of the Trust, threatened, against the Trust, or to which the
Trust 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, 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 Trust is not in violation of its Agreement and
Declaration of Trust, as amended (the "Declaration") or its amended and restated
bylaws (the "Bylaws") or other organizational documents of the Trust (together
with the Declaration and Bylaws, the "Organizational Documents"), or
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of any law, ordinance, administrative or governmental rule or regulation
applicable to the Trust or of any decree of the Commission, the NASD, any state
securities commission, any national securities exchange, any arbitrator, any
court or governmental agency, body or official having jurisdiction over the
Trust, or in default in any respect in the performance of any material
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 Trust is a party or by which it or any of its
properties may be bound, except where such violation does not have a material
adverse effect on the condition (financial or other), business, prospects,
properties, net assets or results of operations of the Trust.
(g) Neither the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement or any of the Trust
Agreements by the Trust, nor the consummation by the Trust of the transactions
contemplated hereby or thereby (i) 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, regulatory body, administrative agency or other governmental body,
agency or official (except such as may have been obtained prior to the date
hereof and such as may be required for compliance with the state securities or
blue sky laws of various jurisdictions which have been or will be effected in
accordance with this Agreement) or conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the
Organizational Documents or (ii) conflicts or will conflict with or constitutes
or will constitute a breach of, or a default under, any agreement, indenture,
lease or other instrument to which the Trust is a party or by which it or any of
its properties may be bound, or violates or will violate any statute, law,
regulation or judgment, injunction, order or decree applicable to the Trust or
any of its properties, or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Trust 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 its property or assets is subject. The Trust is not
subject to any order of any court or of any arbitrator, governmental authority
or administrative agency.
(h) The accountants, PricewaterhouseCoopers LLP, who have
certified or shall certify the financial statements included or incorporated by
reference in the Registration Statement and the Prospectus (or any amendment or
supplement to either of them) are independent public accountants as required by
the 1933 Act, the 1940 Act and the Rules and Regulations.
(i) 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 changes in financial
position of the Trust 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) are accurately presented and prepared on a basis
consistent with such financial statements and the books and records of the
Trust.
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(j) The execution and delivery of, and the performance by the
Trust of its obligations under, this Agreement and the Trust Agreements have
been duly and validly authorized by the Trust, and this Agreement and the Trust
Agreements have been duly executed and delivered by the Trust and assuming due
authorization, execution and delivery by the other parties thereto, constitute
the valid and legally binding agreements of the Trust, enforceable against the
Trust in accordance with their terms (subject to the qualification that the
enforceability of the Trust's obligations thereunder may be limited by
bankruptcy, insolvency, reorganization, moratorium, and similar laws of general
applicability relating to or affecting creditors' rights, and to general
principles of equity regardless of whether enforceability is considered in a
proceeding in equity or at law), except as rights to indemnity and contribution
hereunder and thereunder may be limited by federal or state securities laws.
(k) 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 Trust 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 Trust, and there has not been any change in the capitalization,
or material increase in the short-term debt or long-term debt, of the Trust, 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, properties, net assets or
results of operations of the Trust, whether or not arising in the ordinary
course of business (a "Material Adverse Effect").
(l) The Trust 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 any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, the
Prepricing Prospectus, the Prospectus or other materials, if any, permitted by
the 1933 Act, the 1940 Act or the Rules and Regulations.
(m) (i) The Trust has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own its properties and to conduct its business in the manner
described in the Prospectus (and any amendment or supplement thereto), except
for any such permits the absence of which would not have a Material Adverse
Effect, subject to such qualifications as may be set forth in the Prospectus;
(ii) the Trust 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 Trust 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 (iii) 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 Trust, except
where the failure of (i), (ii) or (iii) to be accurate would not, individually
or in the aggregate, have a Material Adverse Effect on the Trust.
(n) The Trust maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or
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specific authorization and with 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 and to maintain accountability for assets and to maintain 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 (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(o) The Trust has filed all tax returns required to be filed,
which returns are complete and correct in all material respects, and the Trust
is not in material default in the payment of any taxes which were payable
pursuant to said returns or any assessments with respect thereto.
(p) No holder of any security of the Trust has any right to
require registration of any Common Shares, shares of Municipal Preferred or any
other security of the Trust because of the filing of the registration statement
or consummation of the transactions contemplated by this Agreement.
(q) The Trust, 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.
(r) The conduct by the Trust of its business (as described in
the Prospectus) does not require it 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.
(s) The Trust is 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, at the time of filing thereof and any
amendment or supplement thereto, conformed in all material respects with all
applicable provisions of the 1940 Act and the 1940 Act Rules and Regulations.
The Trust has not received any notice from the Commission pursuant to Section
8(e) of the 1940 Act with respect to the 1940 Act Notification. The Trust 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 advisor of the Trust except in accordance with the
provisions 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").
(t) Except as stated in this Agreement and in the Prospectus
(and any amendment or supplement thereto), the Trust has not taken, nor will it
take, directly or indirectly, any action designed to or which might reasonably
be expected to cause or result in stabilization or manipulation of the price of
any securities issued by the Trust to facilitate the sale or resale of the
Shares, and the Trust is not aware of any such action taken or to be taken by
any affiliates of the Trust.
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(u) The Trust 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.
(v) All advertising, sales literature or other promotional
material (including "prospectus wrappers," "broker kits," "road show slides" and
"road show scripts") authorized in writing by or prepared by the Trust or the
Advisor 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 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.
(w) Each of the Trust Agreements and the Trust's obligations
under this Agreement and each of the Trust Agreements 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.
(x) The Trust currently complies with all requirements under
the Code to qualify as a regulated investment company under Subchapter M of the
Code.
(x) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), no director of
the Trust is an "interested person" (as defined in the 1940 Act) of the Trust or
an "affiliated person" (as defined in the 1940 Act) of any Underwriter.
(y) The Trust's Common Shares are duly listed on the AMEX.
(z) The Advisor has considered, and is taking actions to
address, the possible adverse effects of the Year 2000 on the critical computer
systems used by the Advisor and its affiliates on behalf of the Trust. Testing
and remediation of those systems is complete and the Advisor has determined that
recognition and execution of date-sensitive functions involving certain dates
prior to and after December 31, 1999 (the "Year 2000 Problem") will not pose
significant problems for the computer systems used by the Advisor on behalf of
the Trust. The Advisor believes, after reasonable inquiry, that suppliers,
vendors, or financial service organizations used in the operation of the Trust
have remedied or will remedy the Year 2000 Problem and that those suppliers,
vendors or financial service organizations believe that their modifications will
be completed on a timely basis, except to the extent that a failure to remedy by
any such supplier, vendor, or financial service organization would not have a
material adverse effect on the operations of the Trust. The Trust is in
compliance with the Commission's Release No. 33-7558 related to Year 2000
compliance, as amended to date.
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7. REPRESENTATIONS AND WARRANTIES OF THE ADVISOR. The Advisor
represents and warrants to each Underwriter as follows:
(a) The Advisor is a corporation duly incorporated and validly
existing in good standing under the laws of the Commonwealth of Massachusetts,
with full corporate 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 and is in good standing 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, prospects, properties, net assets or
results of operations of the Advisor or on the ability of the Advisor to perform
its obligations under this Agreement and the Management Agreement.
(b) The Advisor is duly registered with the Commission as an
investment advisor under the Advisers Act and is not prohibited by the Advisers
Act, the Advisers Act Rules and Regulations, the 1940 Act or the 1940 Act Rules
and Regulations from acting under the Management Agreement for the Trust as
contemplated by the Prospectus (or any amendment or supplement thereto). There
does not exist any proceeding or any facts or circumstances the existence of
which could lead to any proceeding which might adversely affect the registration
of the Advisor with the Commission.
(c) There are no legal or governmental proceedings pending or,
to the knowledge of the Advisor, threatened against the Advisor, or to which the
Advisor or 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 may reasonably be
expected to involve a prospective material adverse change, in the condition
(financial or other), business, prospects, properties, net assets or results of
operations of the Advisor or on the ability of the Advisor to perform its
obligations under this Agreement and the Management Agreement.
(d) Neither the execution, delivery or performance of this
Agreement or the performance of the Management Agreement by the Advisor, nor the
consummation by the Advisor of the transactions contemplated hereby or thereby
(A) requires the Advisor to obtain 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, regulatory body, administrative agency or other governmental body, agency
or official or conflicts or will conflict with or constitutes or will constitute
a breach of or a default under, the certificate of incorporation or by-laws, or
other organizational documents, of the Advisor or (B) conflicts or will conflict
with or constitutes or will constitute a breach of or a default under, any
agreement, indenture, lease or other instrument to which the Advisor is a party
or by which it or any of its properties may be bound, or violates or will
violate any statute, law, regulation or filing or judgment, injunction, order or
decree applicable to the Advisor or any of its properties or will result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Advisor 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 Advisor is subject. The Advisor is not subject to any order of
any court or of any arbitrator, governmental authority or administrative agency.
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(e) The execution and delivery of, and the performance by the
Advisor of its obligations under, this Agreement and the Management Agreement
have been duly and validly authorized by the Advisor, and this Agreement and the
Management Agreement have been duly executed and delivered by the Advisor and,
assuming due authorization, execution and delivery by the other parties thereto,
each constitutes the valid and legally binding agreement of the Advisor,
enforceable against the Advisor in accordance with its terms (subject to the
qualification that the enforceability of the Advisor's obligations thereunder
may be limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights, and to
general principles of equity regardless of whether enforceability is considered
in a proceeding in equity or at law), except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws.
(f) The description of the Advisor 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 light of the circumstances under
which they were made, not misleading.
(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 Advisor 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 Advisor or the Trust 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, prospects, properties, net assets or results of operations
of the Advisor, 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
Advisor to perform its obligations under this Agreement and the Management
Agreement.
(h) (i) The Advisor has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own its properties and to conduct its business in the manner
described in the Prospectus (and any amendment thereto); (ii) the Advisor 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 Advisor under any such permit; and (iii) 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
Advisor, except where the failure of (i), (ii), or (iii) to be accurate would
not, individually or in the aggregate, have a Material Adverse Effect on the
Advisor.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Trust and the
Advisor, jointly and severally, agree to indemnify and hold harmless you and
each other Underwriter and each person, if any,
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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 (including reasonable costs of investigation), joint or
several, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Prepricing Prospectus or in the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, 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 light of the circumstances under which such
statements 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 Underwriter furnished in writing to the Trust by or
on behalf of any Underwriter expressly for use in connection therewith;
provided, however, that the indemnification contained in this paragraph (a) with
respect to any Prepricing Prospectus, Prospectus or Registration Statement shall
not inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) on account of any such loss, claim, damage,
liability or expense arising from the sale of the Shares by such Underwriter to
any person if a copy of the Prospectus shall not have been delivered or sent to
such person within the time required by the 1933 Act and the 1933 Act Rules and
Regulations, and the untrue statement or alleged untrue statement or omission or
alleged omission of a material fact contained in such Prepricing Prospectus was
corrected in the Prospectus, provided that the Trust has delivered the
Prospectus to the several Underwriters in requisite quantity on a timely basis
to permit such delivery or sending. The foregoing indemnity agreement shall be
in addition to any liability which the Trust or the Advisor may otherwise have.
(b) Any party that proposes to assert the right to be
indemnified under this Section 8 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 8, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission to so notify such indemnifying party
(i) will not relieve it from any liability that it may have to any indemnified
party under the foregoing provision of this Section 8 unless, and only to the
extent that, such omission results in the forfeiture of substantive rights or
defenses by the indemnifying party and (ii) will not, in any event, relieve such
indemnifying party from any other obligation (other than pursuant to the
foregoing provision of this Section 8) it may have under this Agreement. 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 Trust or the Advisor, such Underwriter or such controlling person
shall promptly notify the Trust or the Advisor, and the Trust or the Advisor
shall assume the defense thereof, including the employment of counsel and
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 such
controlling person unless (i) the Trust or the Advisor has agreed in writing to
pay such fees and expenses, (ii) the Trust and the Advisor have failed 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 Trust or the Advisor and such
Underwriter or such controlling person shall have been advised by its counsel
that representation of such indemnified party and the Trust or the Advisor by
the same counsel would be inappropriate under applicable
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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 Trust and the Advisor 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
Trust and the Advisor 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 any local counsel) 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 the Representative, and that all such fees and expenses shall be
reimbursed as they are incurred. The Trust and the Advisor shall not be liable
for any settlement of any such action, suit or proceeding effected without its
written consent (which consent shall not be unreasonably withheld), 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 Trust and the Advisor
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, damage, liability or expense by reason of such settlement or
judgment.
(c) Each Underwriter agrees to indemnify and hold harmless the
Trust and the Advisor, their directors, trustees and officers who sign the
Registration Statement, and any person who controls the Trust or the Advisor
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 Trust and the Advisor to
each Underwriter, but only with respect to information relating to such
Underwriter furnished in writing by or on behalf of such Underwriter expressly
for use in the Registration Statement, the Prospectus or any Prepricing
Prospectus, or any amendment or supplement thereto. If any action, suit or
proceeding shall be brought against the Trust or the Advisor, any of their
directors or trustees, any such officer, or any such controlling person based on
the Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto, 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 Trust and the Advisor by paragraph (b)
above (except that if the Trust or the Advisor 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 Trust
and the Advisor, their directors, trustees and any such officer, and any such
controlling person shall have the rights and duties given to the Underwriter by
paragraph (b) above. The foregoing indemnity agreement shall be in addition to
any liability which such Underwriter 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 reasonable expenses
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Trust and the Advisor 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
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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 Trust and the Advisor on the one hand (treated jointly for this purpose as
one person) and the Underwriters on the other in connection with the statements
or omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations with respect to
the offering of the Shares. The relative benefits received by the Trust and the
Advisor on the one hand (treated jointly for this purpose as one person) and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Trust bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Trust and the Advisor on the one hand
(treated jointly for this purpose as one person) and 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 Trust
and the Advisor 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. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action against such party in respect of
which a claim for contribution may be made under this Section 8(d), notify such
party or parties from whom contribution may be sought, but the omission so to
notify (i) will not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have under this Section 8(d),
unless such omission results in the forfeiture of substantive rights or defenses
by the party or parties from whom contribution is being sought and (ii) will
not, in any event, relieve the party or parties from whom contribution may be
sought from any other obligation (other than pursuant to this Section 8(d)) it
or they may have under this Agreement. Except for a settlement entered into
pursuant to the last sentence of Section 8(b) hereof, no party will be liable
for contribution with respect to any action or claim settled without its written
consent (which consent shall not be unreasonably withheld).
(e) The Trust, the Advisor 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 not 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 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 8 are several
in proportion to the respective numbers of Shares set forth opposite their names
in Schedule I hereto and not joint.
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(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 indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
(g) Notwithstanding any other provisions in this Section 8, no
party shall be entitled to the benefit of any provision under this Agreement
which protects or purports to protect such person against any liability to the
Trust or its security holders to which such person would otherwise be subject by
reason of such person's willful misfeasance, bad faith, or gross negligence, in
the performance of such person's duties hereunder, or by reason of such person's
reckless disregard of such person's obligations and duties hereunder.
(h) 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 Trust and the Advisor 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 the Underwriter or any person
controlling the Underwriter, the Trust, the Advisor, their directors, trustees
or officers, or any person controlling the Trust or the Advisor, (ii) acceptance
of any Shares and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to the Underwriter or any person controlling the
Underwriter, or to the Trust, the Advisor, their directors, trustees or
officers, or any person controlling the Trust or the Advisor, shall be entitled
to the benefits of the indemnity, contribution, and reimbursement agreements
contained in this Section 8.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligation of
the Underwriters to purchase the Shares hereunder are subject 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 you, 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 Trust, the Advisor 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 reasonable
satisfaction.
(b) 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 affecting the condition (financial or other), business,
prospects, properties, net assets, or results of operations of the
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Trust or the Advisor not contemplated by the Prospectus, which in your opinion,
as Representative of the several Underwriters, would materially adversely affect
the market for the Shares, or (ii) any event or development relating to or
involving the Trust or the Advisor or any officer or director of the Trust or
the Advisor which makes any statement made in the Prospectus untrue or which, in
the reasonable opinion of the Trust and its counsel or the Underwriters and
their counsel, requires the making of any addition to or change in the
Prospectus in order to state a material fact required by the 1933 Act, the 1940
Act or the Rules and Regulations or any other law to be stated therein or
necessary in order to make the statements therein not misleading, if amending or
supplementing the Prospectus to reflect such event or development would, in your
opinion, as Representative of the several Underwriters, materially adversely
affect the market for the Shares.
(c) The Trust shall have furnished to the Underwriter a report
showing compliance with the asset coverage requirements of the 1940 Act and a
Basic Maintenance Report (as defined in the Bylaws), each dated the Closing Date
and in form and substance satisfactory to the Underwriters. Each such report may
use portfolio holdings and valuations as of the close of business of any day not
more than six business days preceding the Closing Date, provided, however, that
the Trust represents in such report that its total net assets as of the Closing
Date have not declined by 5% or more from such valuation date.
(d) You shall have received on the Closing Date, an opinion of
Ropes & Gray, counsel for the Trust, dated the Closing Date and addressed to
you, as Representative of the several Underwriters, in form and substance
satisfactory to you and to the effect that:
(i) The Trust has been duly organized and is validly existing
and in good standing as an unincorporated voluntary association
(commonly known as a Massachusetts business trust) under the laws of
the Commonwealth of Massachusetts and has full business trust power and
authority to own, lease and operate its properties, to conduct its
business as described in the Registration Statement and the Prospectus
(and any amendment or supplement to either of them);
(ii) The Shares have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor in accordance
with the terms of this Agreement, will be validly issued, fully paid
and, except as set forth in the Statement of Additional Information
under "Shareholder Liability," nonassessable and free of any preemptive
or similar rights and will conform in all material respects to the
description thereof in the Registration Statement and the Prospectus
(and any amendment or supplement to either of them); the Certificate
evidencing the Shares complies with all requirements of Massachusetts
law; and the relative rights, interests, powers and preferences of the
Shares, and the obligation of the Trust to redeem such Shares upon the
terms and conditions set forth in the Bylaws, are legal, valid, binding
and enforceable under Massachusetts law;
(iii) The Shares conform in all material respects with the
statements concerning them contained in the Prospectus, and the
authorized and outstanding shares of beneficial interest of the Trust
are as set forth in the Prospectus;
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(iv) The Registration Statement is effective under the 1933
Act and the 1940 Act; any required filing of the Prospectus pursuant to
Rule 497 of the 1933 Act Rules and Regulations has been made within the
time periods required by Rule 497(b) or (h), as the case may be; to the
knowledge of such counsel, no stop order suspending its effectiveness
or order pursuant to Section 8(e) of the 1940 Act relating to the Trust
has been issued and no proceeding for any such purpose is pending or
threatened by the Commission;
(v) The Registration Statement, the Prospectus (and each
amendment thereof or supplement thereto) comply as to form in all
material respects with the applicable 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 or other financial data
contained therein);
(vi) The statements made in the Prospectus (including the
Statement of Additional Information) under the captions "The Auction"
and "Description of Municipal Preferred", insofar as they purport to
summarize the provisions of the Bylaws or other documents or agreements
specifically referred to therein, constitute accurate summaries of the
terms of any such documents in all material respects;
(vii) The statements made in the Prospectus (including the
Statement of Additional Information) under the caption "Tax Matters,"
insofar as they constitute matters of law or legal conclusions, have
been reviewed by such counsel and constitute accurate statements of any
such matters of law or legal conclusions in all material respects, and
fairly present the information called for with respect thereto by Form
N-2 under the 1940 Act;
(viii) To such counsel's knowledge (but without a search of
the dockets of any court, administrative body or filing office in any
jurisdiction), there are no legal or governmental proceedings pending
or threatened against the Trust, or to which the Trust or any of its
properties is subject, that are required to be described in the
Registration Statement or the Prospectus but are not described as
required;
(ix) To such counsel's knowledge after reasonable inquiry,
there are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement by the 1933 Act that have not been so described
or filed as an exhibit, or incorporated by reference as permitted by
the 1933 Act, the 1940 Act or the Rules and Regulations;
(x) Neither the issuance, sale or delivery of the Shares, the
execution, delivery or performance of this Agreement or any of the
Trust Agreements by the Trust, nor the consummation by the Trust of the
transactions contemplated thereby (A) requires any consent, approval,
authorization or other order of or registration or filing by the Trust
with the Commission, the NASD, any national securities exchange, any
arbitrator, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may have been
obtained prior to the date hereof and such as may be required for
compliance with state
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securities and blue sky laws) or conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the
Declaration, the Bylaws or other organizational documents of the Trust
or (B) (i) conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, any agreement, indenture,
lease or other instrument to which the Trust is a party or by which it
or any of its properties may be bound and that is identified, in an
officer's certificate of the Trust, as material to the business,
financial condition, operations, properties or prospects of the Trust
(the "Agreements and Instruments"), (ii) violates or will violate any
statute, law or regulation (assuming compliance with state securities
and blue sky laws), except that such counsel may state that it
expresses no opinion as to the reasonableness or fairness of
compensation payable under the Management Agreement or as to rights to
indemnity and contribution in this Agreement or the Trust Agreements,
(iii) violates or will violate any judgment, injunction, order or
decree that is applicable to the Trust or any of its properties and
that is known to such counsel, or (iv) will result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Trust pursuant to the terms of the Agreements and
Instruments;
(xi) The Trust has business trust power and authority to
issue, sell and deliver the shares to the Underwriters as provided
herein, and this Agreement and the Trust Agreements have been duly
authorized, executed and delivered by the Trust and each complies with
all applicable provisions of the 1940 Act and the Advisers Act (except
that such counsel may state that it expresses no opinion as to the
reasonableness or fairness of compensation payable under the Management
Agreement); assuming due authorization, execution and delivery by the
other parties thereto, this Agreement and each Trust Agreement
constitutes the valid and binding obligation of the Trust enforceable
in accordance with its terms, except as rights to indemnity and
contribution hereunder and thereunder may be limited by Federal or
state securities laws or principles of public policy and except that
such counsel may state that it expresses no opinion as to the
reasonableness or fairness of compensation payable under the Management
Agreement, subject to enforcement to bankruptcy, fraudulent conveyance
insolvency, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and to general
equitable principles;
(xii) The Trust is duly registered under the 1940 Act as a
closed-end non-diversified management investment company; and
(xiii) The provisions of the Declaration and Bylaws and the
investment policies and restrictions described in the Prospectus
(including the Statement of Additional Information) under the captions
"Investment Objectives and Policies" and "Miscellaneous Investment
Practices" comply with the requirements of the 1940 Act and the 1940
Act Rules and Regulations.
Such counsel shall also have furnished to you a statement,
addressed to you, as Representative of the several Underwriters, dated the
Closing Date, to the effect that:
They have not independently verified the accuracy,
completeness or fairness of the statements made or the information
contained in the Registration Statement or the
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Prospectus, and, except for the statements referred to in paragraphs
(vi) and (vii) above and the information referred to in paragraph
(xiii) above, they are not passing upon and do not assume any
responsibility therefor. In the course of the preparation by the Trust
of the Registration Statement and the Prospectus, they have
participated in discussions with the Representatives and employees and
officers of the Trust and the Advisor and in discussions with the
Trust's independent accountants, in which the business and the affairs
of the Trust and the Advisor and the contents of the Registration
Statement and the Prospectus were discussed. On the basis of
information that they have gained in the course of their representation
of the Trust in connection with its preparation of the Registration
Statement and the Prospectus and their participation in the discussions
referred to above, no facts have come to their attention that would
lead them to believe that as of its effective date, the Registration
Statement contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading, or that as of
the Closing Date the Prospectus contained an untrue statement of
material fact or omitted 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 (in each case
other than the financial statements and schedules, the notes thereto
and any schedules and other financial data contained or incorporated by
reference therein or omitted therefrom, as to which they need express
no opinion).
Such counsel may also state that they do not express any
opinion concerning any law other than the law of the Commonwealth of
Massachusetts and the federal law of the United States.
(e) You shall have received on the Closing Date an opinion of
the General Counsel for the Advisor, dated the Closing Date and addressed to
you, as Representative of the several Underwriters in form and substance
satisfactory to you and to the effect that:
(i) The Advisor is a corporation duly incorporated and validly
existing and in good standing under the laws of The Commonwealth of
Massachusetts, with full corporate 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),
(ii) The Advisor is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the
Advisers Act, the Advisers Act Rules and Regulations, the 1940 Act or
the 1940 Act Rules and Regulations from acting as the investment
advisor to the Trust pursuant to the Management Agreement as described
in the Prospectus;
(iii) To the best of such counsel's knowledge after reasonable
inquiry, there are no legal or governmental proceedings pending or
threatened against the Advisor, or to which the Advisor or any of its
properties is subject, that are required to be described in the
Registration Statement or the Prospectus but are not described as
required;
(iv) To the best of such counsel's knowledge after reasonable
inquiry, the Advisor is not in violation of its corporate charter or
by-laws, nor is the Advisor in default under any
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material agreement, indenture or instrument or in breach or violation
of any judgment, decree, order, rule or regulation of any court or
governmental or self-regulatory agency or body;
(v) Neither the execution, delivery or performance of this
Agreement nor the consummation by the Advisor of the transactions
contemplated hereby (A) requires the Advisor to obtain any consent,
approval, authorization or other order of or registration or filing
with, the Commission, the NASD, any national securities exchange, any
arbitrator, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may have been
obtained prior to the date hereof and such as may be required for
compliance with state securities or blue sky laws) or conflicts or will
conflict with or constitutes or will constitute a breach of, or a
default under, the certificate of incorporation or by-laws, or other
organizational documents, of the Advisor or (B) (i) 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 Advisor is a party or by which it or any of its
properties may be bound (the "Agreements and Instruments"), (ii)
violates or will violate any statute, law or regulation (assuming
compliance with state securities and blue sky laws), (iii) violates or
will violate any judgment, injunction, order or decree that is
applicable to the Advisor or any of its properties and that is known to
such counsel, or (iv) will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Advisor
pursuant to the terms of the Agreements and Instruments;
(vi) The Adviser has the corporate power and authority to
enter into this Agreement and the Management Agreement, and this
Agreement and the Management Agreement have been duly authorized,
executed and delivered by the Advisor; assuming due authorization,
execution and delivery by the other parties thereto, this Agreement and
the Management Agreement each constitutes the valid and binding
obligation of the Advisor enforceable in accordance with its terms
(except as rights to indemnity and contribution in this Agreement and
the Management Agreement may be limited by Federal or state securities
laws), subject as to enforcement to bankruptcy, insolvency, moratorium,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles
(regardless of whether enforceability is considered in a proceeding in
equity or at law); and
(vii) The description of the Advisor (other than statements as
to the Advisor's investment decisions, beliefs and strategies regarding
the Trust's portfolio as to which such counsel need express no opinion)
in the Registration Statement and the Prospectus does 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 light of the circumstances under which they were made, not
misleading.
(f) You shall have received on the Closing Date an opinion of
Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Underwriters, dated the Closing Date
and addressed to you, as Representative of the several Underwriters, with
respect to such matters as you may reasonably request.
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(g) You shall have received letters addressed to the
Underwriter and dated the date hereof and the Closing Date from
PricewaterhouseCoopers LLP, independent certified public accountants,
substantially in the forms heretofore approved by the Representative.
(h) (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 Trust, the Advisor
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 Trust, the Advisor or any Underwriter
or in the reasonable view of counsel to the Underwriter, 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 Underwriters; (ii) there shall not have been any change
in the shares of beneficial interest of the Trust nor any material increase in
the short-term or long-term debt of the Trust (other than in the ordinary course
of business) from that set forth or contemplated in the Registration Statement
or the Prospectus (or any amendment or supplement thereto); (iii) there shall
not have been, subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus (or any amendment or
supplement thereto), except as may otherwise be stated in the Registration
Statement and Prospectus (or any amendment or supplement thereto), any material
adverse change in the condition (financial or other), business, prospects,
properties, net assets or results of operations of the Trust or the Advisor;
(iv) the Trust shall not have any liabilities or obligations, direct or
contingent (whether or not in the ordinary course of business), that are
material to the Trust, other than those reflected in the Registration Statement
or the Prospectus (or any amendment or supplement to either of them); and (v)
all the representations and warranties of the Trust and the Advisor contained in
this Agreement shall be true and correct on and as of the date hereof and on and
as of the Closing Date as if made on and as of the Closing Date, and you, as
Representative of the several Underwriters shall have received a certificate of
the Trust and the Advisor, dated the Closing Date and signed by the chief
executive officer and the chief financial officer of each of the Trust and the
Advisor (or such other officers as are acceptable to you, as Representative of
the several Underwriters), to the effect set forth in this Section 9(h) and in
Section 9(i) hereof.
(i) Neither the Trust nor the Advisor shall have failed at or
prior to the Closing Date to have performed or complied in all material respects
with any of its agreements herein contained and required to be performed or
complied with by it hereunder at or prior to the Closing Date.
(j) The Trust shall have delivered and the Underwriter shall
have received evidence satisfactory to the Underwriter that the Shares are rated
'aaa' by Xxxxx'x and AAA by S&P as of the Closing Date, and there shall not have
been given any notice of any intended or potential downgrading, or of any review
for a potential downgrading, in the rating accorded to the shares of Municipal
Preferred by any Rating Agency.
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(k) The Trust and the Advisor shall have furnished or caused
to be furnished to the Underwriter such further certificates and documents as
the Underwriter shall have reasonably requested.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Underwriters and their counsel.
Any certificate or document signed by any officer of the Trust
or the Advisor and delivered to you, as Representative of the several
Underwriters, or to counsel for the Underwriters, shall be deemed a
representation and warranty by the Trust or the Advisor to each Underwriter as
to the statements made therein.
10. EXPENSES. The Trust agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the registration statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the 1940 Act
Notification, the Prospectus and each amendment or supplement to any of them
(including, without limitation, the filing fees prescribed by the 1933 Act, the
1940 Act and the Rules and Regulations); (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, each Prepricing
Prospectus, the 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; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares, including
any stamp taxes in connection with the original issuance and sale of the Shares;
(iv) the reproduction and delivery of this Agreement, any dealer agreements, the
preliminary blue sky memorandum, if any, and all other agreements or documents
reproduced and delivered in connection with the offering of the Shares; (v) the
registration of the Shares under the 1934 Act; (vi) the reasonable fees,
expenses and disbursements of counsel for the Underwriters relating to the
preparation, reproduction, and delivery of any preliminary blue sky memorandum;
(vii) fees paid to the Rating Agencies; (viii) the transportation and other
expenses incurred by or on behalf of Trust representatives in connection with
presentations to prospective purchasers of the Shares; and (ix) the fees and
expenses of the Trust's accountants and the fees and expenses of counsel
(including local and special counsel) for the Trust.
11. 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 Trust,
by notifying you, or by you, as Representative of the several Underwriters, by
notifying the Trust.
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If any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of 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 number of Shares set forth
opposite its name in Schedule I hereto bears to the aggregate number of Shares
set forth opposite the names of all non-defaulting Underwriters or in such other
proportion as you may specify, to purchase the Shares which such defaulting
Underwriter or Underwriters are obligated, but fail or refuse, to purchase. If
any one or more of the Underwriters shall fail or refuse to purchase Shares
which it or they are obligated to purchase on the Closing Date and the aggregate
number of Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Shares which the Underwriters are obligated
to purchase on the Closing Date and arrangements satisfactory to you and the
Trust for the purchase of such Shares by one or more non-defaulting Underwriters
or other party or parties approved by you and the Trust 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 Trust. In any such case which does
not result in termination of this Agreement, either you or the Trust 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 Trust, purchases Shares which a defaulting
Underwriter is obligated, but fails or refuses, to purchase.
Any notice under this Section 11 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed by letter.
12. TERMINATION OF AGREEMENT. This Agreement shall be subject
to termination in your absolute discretion, without liability on the part of any
Underwriter to the Trust or the Advisor, by notice to the Trust, if prior to the
Closing Date (i) trading in securities generally on the AMEX shall have been
suspended or materially limited, (ii) a general moratorium on commercial banking
activities in New York shall have been declared by either federal or state
authorities, or (iii) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is 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 Trust by telegram,
telecopy or telephone and shall be subsequently confirmed by letter.
13. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements
set forth in the last paragraph on the cover page and the statements in the
first and third sentences of the third paragraph and in the fifth paragraph
under the caption "Underwriting" in any Prepricing Prospectus and in the
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Prospectus, constitute the only information furnished by or on behalf of the
Underwriters through you as such information is referred to in Sections 6(b) and
8 hereof.
14. MISCELLANEOUS. Except as otherwise provided in Sections 5,
11 and 12 hereof, notice given pursuant to any provision of this Agreement shall
be in writing and shall be delivered (i) if to the Trust or the Advisor, at the
office of the Trust at Xxx Xxxxxxxxx Xxxxxx, Xxxxxx, XX 00000, Attention:
Secretary; or (ii) if to you, as Representative of the several Underwriters, to
Xxxxxxx Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Manager, Investment Banking Division.
15. DISCLAIMER. A copy of the document establishing the Trust
is filed with the Secretary of the Commonwealth of Massachusetts. This Agreement
is executed by officers not as individuals and is not binding upon any of the
Trustees, officers, or shareholders of the Trust individually but only upon the
assets of the Trust.
This Agreement has been and is made solely for the benefit of
the Underwriters, the Trust, the Advisor, their 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" nor 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.
16. 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.
[End of Text]
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Please confirm that the foregoing correctly sets forth the
agreement among the Trust, the Advisor and the Underwriter.
Very truly yours,
COLONIAL INSURED MUNICIPAL FUND
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
COLONIAL MANAGEMENT ASSOCIATES, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Confirmed as of the date first
above mentioned.
XXXXXXX XXXXX XXXXXX INC.
As Representative of the Several
Underwriters
By: /s/ X.X. Xxxx Xx.
----------------------------
Director
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SCHEDULE I
COLONIAL INSURED MUNICIPAL FUND
Number of
Shares of
Municipal
Underwriter Preferred
----------- ---------
Xxxxxxx Xxxxx Xxxxxx Inc. ..................... 1,119
X.X. Xxxxxxx & Sons, Inc. ..................... 373
Total ......................................... 1,492
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