Ex-99.2(H)(1)
Purchase Agreement
FIRST AMERICAN MINNESOTA MUNICIPAL INCOME FUND II, INC.
1,350,000 Shares*
COMMON STOCK
PURCHASE AGREEMENT
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October 30, 2002
U.S. BANCORP ▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
As Representative of the several
Underwriters named in Schedule I hereto
U.S. Bancorp Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
First American Minnesota Municipal Income Fund II, Inc., a Minnesota
corporation (the "Company"), proposes to issue and sell 1,350,000 shares of its
authorized but unissued Common Stock, par value $0.01 per share (such Common
Stock of the Company being herein called the "Common Stock"). The shares of
Common Stock to be issued and sold by the Company and purchased by the several
Underwriters named in Schedule I hereto (the "Underwriters") are herein
collectively called the "Underwritten Stock". The Company also proposes to grant
to the Underwriters an option to purchase up to 200,000 additional shares of
Common Stock (herein called the "Option Stock" and with the Underwritten Stock
herein collectively called the "Stock"). The Common Stock is more fully
described in the Registration Statement and the Prospectus hereinafter
mentioned. U.S. Bancorp Asset Management, Inc., a Delaware corporation (the
"Investment Adviser"), will be the Company's investment adviser.
The Company and the Investment Adviser hereby confirm the agreements
made with respect to the purchase of the Stock by the several Underwriters, for
whom you are acting as representative (the "Representative").
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has filed with
the Securities and Exchange Commission (the "Commission") a notification of
registration of the Company as an investment company under the Investment
Company Act of 1940 (the "Investment Company Act") on Form N-8A (the
"Notification"). The Company has also filed, in accordance with the Securities
Act of 1933, as amended (the "Securities Act"), the Investment Company Act and
the published rules and regulations adopted by the Commission under the
___________________________
* Plus an option to purchase up to 200,000 additional shares to cover over-
allotments.
Securities Act (the "Securities Act Rules"), and the Investment Company Act (the
"Investment Company Act Rules"), with the Commission a registration statement on
Form N-2 (File Nos. 333-98937 and 811-21193), including the related preliminary
prospectus and preliminary statement of additional information, relating to the
Stock. The Company has furnished you with copies of such registration statement
and of all amendments thereto, if any, heretofore filed by the Company with the
Commission and of each preliminary prospectus and preliminary statement of
additional information filed by the Company with the Commission or used by the
Company. The Company will not, on or prior to any Closing Date, as hereinafter
defined, file any amendment to the registration statement or make any supplement
thereto to which you shall reasonably object in writing after being furnished
with a copy thereof.
The term "Preliminary Prospectus" means any preliminary prospectus (as
referred to in Rule 430 or 430A of the Securities Act Rules) and preliminary
statement of additional information included at any time as a part of the
registration statement. If such registration statement has not become effective,
a further amendment (the "Final Amendment") to such registration statement,
including the forms of final prospectus and final statement of additional
information, necessary to permit such registration statement to become effective
will promptly be filed by the Company with the Commission. If such registration
statement has become effective, a final prospectus and final statement of
additional information (the "Rule 430A Prospectus") containing information
permitted to be omitted at the time of effectiveness by Rule 430A of the
Securities Act Rules will promptly be filed by the Company with the Commission
in accordance with Rule 497(h) of the Securities Act Rules. The registration
statement as amended at the time it becomes or became effective (the "Effective
Date"), including financial statements and all exhibits and any information
deemed to be included by Rule 430A, is called the "Registration Statement". The
term "Prospectus" means the prospectus and statement of additional information
as first filed with the Commission pursuant to Rule 497 of the Securities Act
Rules or, if no such filing is required, the forms of final prospectus and final
statement of additional information included in the Registration Statement at
the Effective Date.
The Company understands that the Underwriters propose to make a public
offering of the Stock, as described in the Prospectus, as soon after the
Effective Date (or, if later, after the date this Agreement is executed) as you
deem advisable. The Company confirms that the Underwriters and dealers have been
authorized to distribute each Preliminary Prospectus and are authorized to
distribute the Prospectus and any amendments or supplements thereto.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE INVESTMENT
ADVISER. (a) Each of the Company and the Investment Adviser hereby jointly and
severally represents and warrants to, and agrees with, the several Underwriters
as follows:
(i) On the Effective Date and the date the Prospectus is first
filed with the Commission pursuant to Rule 497 (if required), when any
post-effective amendment to the Registration Statement (except any
post-effective amendment required by Rule 8b-16 of the Investment Company
Act which is filed with the Commission after the later of one year from
the date of this Agreement or the date on which the distribution of the
Stock is completed) becomes effective or any amendment or supplement to
the Prospectus is filed with the Commission and at each Closing Date, the
Registration Statement, the Prospectus and any such amendment or
supplement and the Notification did or will comply in all material
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respects with the requirements of the Securities Act, the Investment
Company Act, the Securities Act Rules and the Investment Company Act
Rules. On the Effective Date and when any post-effective amendment to the
Registration Statement (except any post-effective amendment required by
Rule 8b-16 of the Investment Company Act which is filed with the
Commission after the later of one year from the date of this Agreement or
the date on which the distribution of the Stock is completed) becomes
effective, no part of the Registration Statement, the Prospectus or any
such amendment or supplement did or will contain any untrue statement of
a material fact or omit to state a material fact required to be stated in
it or necessary to make the statements in it not misleading. At the
Effective Date, the date the Prospectus or any amendment or supplement to
the Prospectus is filed with the Commission and at each Closing Date, the
Prospectus did not or will not contain any untrue statement of a material
fact and did not or will not omit to state a material fact necessary to
make the statements in it, in light of the circumstances under which they
were made, not misleading. The foregoing representations do not apply to
statements or omissions made in reliance upon and in conformity with
information relating to the Underwriters furnished in writing to the
Company by you, or by any Underwriter through you, expressly for use in
the Registration Statement, Prospectus, amendment or supplement. Each
Preliminary Prospectus filed as part of the Registration Statement as
originally filed or as part of any pre-effective amendment thereto
complied when so filed in all material respects with the Securities Act
Rules and the Investment Company Act Rules, and each Preliminary
Prospectus and the Prospectus delivered to the Underwriters for use in
connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(ii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Minnesota and is duly qualified as a foreign corporation and in good
standing in each jurisdiction in which its ownership or leasing of
property requires such qualification and in which the failure to qualify
would have a material adverse effect on its business or operations. The
Company has full corporate power and authority to own its assets and
conduct its business as described in the Registration Statement.
(iii) The authorized capital stock of the Company is as described
in the Registration Statement and the Prospectus. The capital stock of
the Company conforms in all material respects to the description of it in
the Prospectus. Proper corporate proceedings have been taken validly to
authorize the outstanding shares of such capital stock (including the
Stock being issued). All the outstanding shares of such capital stock
(including the Stock, when issued, delivered and paid for as provided in
this Agreement) have been duly and validly issued and are fully paid and
nonassessable, and no holder of the Stock will be subject to personal
liability by reason of being such a holder. The holders of outstanding
shares of capital stock of the Company are not entitled to any preemptive
or other similar rights.
(iv) The Registration Statement and the Prospectus comply as to
form in all material respects with the requirements of the Securities
Act, the Investment Company Act, the Securities Act Rules and the
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Investment Company Act Rules. There are no contracts or other documents
that are of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits thereto which have
not been so described or filed as required.
(v) This Agreement has been duly authorized, executed and
delivered by the Company, and includes the provisions (if any) required
by, and includes no provisions inconsistent with, any applicable
provisions of the Investment Company Act and the Investment Company Act
Rules. The Company complies with the condition set forth in Section
10(b)(2) of the Investment Company Act required for it to use, as a
principal underwriter of securities issued by it, a person of which a
director, officer or employee of it is an interested person (as defined
in the Investment Company Act). Assuming the due authorization, execution
and delivery by the other parties hereto, this Agreement constitutes the
valid and legally binding agreement of the Company, enforceable against
the Company in accordance with its terms, except as rights to indemnity
and contribution hereunder may be limited by federal or state securities
laws, and except to the extent enforceability may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
by the effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
(vi) Each of the Advisory Agreement (as defined in the
Prospectus), the Administration Agreement (as so defined), the Custody
Agreement (as so defined) and the Transfer Agency Agreement (as so
defined) (1) has been duly and validly authorized, executed and delivered
by the Company, (2) includes the provisions (if any) required by, and
includes no provisions inconsistent with, any applicable provisions of
the Investment Company Act and the Investment Company Act Rules and (3)
constitutes the legal, valid and binding obligation of the Company
enforceable in accordance with its terms, except to the extent
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by the effect of general principles of
equity (regardless of whether enforceability is considered in a
proceeding in equity or at law) and to termination under the Investment
Company Act.
(vii) None of (1) the execution and delivery of this Agreement,
the Advisory Agreement, the Administration Agreement, the Custody
Agreement or the Transfer Agency Agreement by the Company, (2) the issue
and sale by the Company of the Stock sold by the Company as contemplated
by this Agreement or (3) the consummation by the Company of the other
transactions contemplated by such agreements conflicts with, or results
in a breach of, the Articles of Incorporation or By-laws of the Company
or any agreement or instrument to which the Company is a party or by
which the Company is bound, any law or regulation or any order or
regulation of any court, governmental instrumentality or arbitrator.
(viii) The Company is not currently in breach of, or in default
under, any agreement or instrument to which it is party or by which it or
its property is bound or affected.
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(ix) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of
the Registration Statement.
(x) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the
Company of the transactions contemplated by this Agreement, the Advisory
Agreement, the Administration Agreement, the Custody Agreement or the
Transfer Agency Agreement, except such as have been obtained under the
Securities Act, the Investment Company Act, the Commodities Exchange Act,
the Securities Act Rules and the Investment Company Act Rules and such as
may be required under state securities or blue sky laws in connection
with the purchase and distribution of the Stock by the Underwriters.
(xi) The Stock will, on the First Closing Date (as herein
defined), be duly authorized for listing, subject to official notice of
issuance, on the American Stock Exchange.
(xii) The Company is duly registered with the Commission under the
Investment Company Act as a closed-end, non-diversified management
investment company, and all required action has been taken by the Company
under the Securities Act and the Investment Company Act to make the
public offering and consummate the sale of the Stock provided in this
Agreement.
(xiii) Ernst & Young LLP, whose report appears in the Prospectus,
are independent public accountants with respect to the Company, as
required by the Securities Act, the Securities Act Rules, the Investment
Company Act and the Investment Company Rules.
(xiv) The statement of assets and liabilities of the Company
included in the Registration Statement and the Prospectus presents fairly
the financial position of the Company as at the date indicated and said
statement has been prepared in conformity with generally accepted
accounting principles in the United States applied on a consistent basis.
(xv) Since the date as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, of the Company or the Investment Adviser, whether
or not arising in the ordinary course of business, (B) there have been no
transactions entered into by the Company which are material to the
Company other than those in the ordinary course of business and (C) there
has been no dividend or distribution of any kind declared, paid or made
by the Company on any class of its capital stock.
(xvi) The Company owns or possesses or has obtained all material
governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to carry on its business as contemplated in the
Prospectus.
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(xvii) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company or the Investment Adviser,
threatened, against or affecting, the Company or the Investment Adviser
which might result in any material adverse change in the condition,
financial or otherwise, business affairs or business prospects of the
Company or the Investment Adviser; and there are no material contracts or
documents of the Company which are required to be filed as exhibits to
the Registration Statement by the Securities Act, the Investment Company
Act or by the Securities Act Rules and the Investment Company Act Rules
which have not been so filed.
(xviii) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management's general or
specific authorization and with the investment policies and restrictions
of the Company and the applicable requirements of the Investment Company
Act and the Investment Company Act Rules; (B) transactions are recorded
as necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles in the United States
applied on a consistent basis and to maintain accountability for assets
and to maintain compliance with the books and records requirements under
the Investment Company Act and the Investment Company Act Rules; (C)
access to assets is permitted only in accordance with management's
general or specific authorization; and (D) the recorded accountability
for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xix) Except as stated in this Agreement and in the Prospectus
(and any amendment or supplement thereto), neither the Company nor the
Investment Adviser has 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 Company to facilitate the sale or resale of the Stock, and
neither the Company nor the Investment Adviser is aware of any such
action taken or to be taken by any of their respective affiliates who are
not underwriters or dealers participating in the offering of the Stock.
(xx) All advertising, sales literature or other promotional
material (including "prospectus wrappers") intended for public
distribution and authorized, approved or prepared by the Company or the
Investment Adviser for use in connection with the marketing or the
offering and sale of the Stock (collectively, "Sales Material") complied
and complies in all material respects with the applicable requirements of
the Securities Act, the Investment Company Act, the Securities Act Rules,
the Investment Company Act Rules and the rules and interpretations of the
National Association of Securities Dealers, Inc. (the "NASD") and no such
Sales Material, when read together with the Prospectus, 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. No advertising, sales literature or other
promotional material (including "broker kits", "road show slides" and
"road show scripts") not intended for public distribution and authorized
in writing by or prepared by the Company or the Investment Adviser for
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use in connection with the offering and sale of the Stock was or is, when
read together with the Prospectus, materially false or misleading. The
representations contained in this paragraph (xx) do not apply to any
statement in the Sales Material to the effect that U.S. Bancorp ▇▇▇▇▇
▇▇▇▇▇▇▇ is acting as the lead underwriter in connection with the offering
of the Stock contemplated hereto, which statement has been made in
reliance upon and in conformity with information relating to the
Underwriters furnished in writing to the Company by you expressly for use
in the Sales Material.
(xxi) The Company is, and intends to be, in full compliance with
the provisions applicable to it of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002,
including but not limited to the requirement to maintain disclosure
controls and procedures designed to ensure that information required to
be disclosed in the reports that the Company files or submits under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
Investment Company Act will be recorded, processed, summarized and
reported within the time periods specified in the Commission's rules and
forms.
(b) The Investment Adviser also represents to the several Underwriters
as follows:
(i) The Investment Adviser has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Delaware, is duly qualified as a foreign corporation and in good
standing in each other jurisdiction in which its ownership or leasing of
property or its conduct of business requires such qualification and in
which the failure to qualify would have a material adverse effect on the
business or operations of the Investment Adviser and has full corporate
power and authority to conduct its business as described in the
Registration Statement.
(ii) The Investment Adviser is duly registered with the Commission
under the Investment Advisers Act of 1940 (the "Advisers Act") as an
investment adviser and is not prohibited under the Advisers Act, the
Investment Company Act, the published rules and regulations adopted by
the Commission under the Advisers Act (the "Advisers Act Rules") or the
Investment Company Act Rules from acting as investment adviser for the
Company or otherwise under the Advisory Agreement as contemplated by the
Prospectus.
(iii) This Agreement has been duly and validly authorized,
executed and delivered by the Investment Adviser, includes the provisions
(if any) required by, and includes no provisions inconsistent with, any
applicable provisions of the Investment Company Act and the Investment
Company Act Rules, and, assuming the due authorization, execution and
delivery by the other parties hereto, constitutes the valid and legally
binding agreement of the Investment Adviser, enforceable against the
Investment Adviser in accordance with its terms, except as rights to
indemnity or contribution hereunder may be limited by federal or state
securities laws, and except to the extent enforceability may be limited
by applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
by the effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
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(iv) Each of the Advisory Agreement and the Administration
Agreement has been duly and validly authorized, executed and delivered by
the Investment Adviser, includes the provisions (if any) required by, and
includes no provisions inconsistent with, any applicable provisions of
the Investment Company Act, and the Investment Company Act Rules, and
constitutes a legal, valid and binding obligation of the Investment
Adviser enforceable in accordance with its terms, except to the extent
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by the effect of general principles of
equity (regardless of whether enforceability is considered in a
proceeding in equity or at law) and to termination under the Investment
Company Act.
(v) No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association is
required for the consummation by the Investment Adviser of the
transactions contemplated by this Agreement or the Advisory Agreement.
(vi) Neither the execution and delivery of this Agreement or the
Advisory Agreement nor the consummation by the Investment Adviser of the
transactions contemplated by this Agreement or the Advisory Agreement
conflicts with, or results in a breach of, the Certificate of
Incorporation or By-laws of the Investment Adviser or any agreement or
instrument to which the Investment Adviser is a party or by which the
Investment Adviser is bound, any law, rule, regulation or any order of
any court, governmental instrumentality, securities exchange or
association or arbitrator.
(vii) The description of the Investment Adviser in the Prospectus
complies with the requirements of the Securities Act, the Investment
Company Act and the Advisers Act and does not contain any untrue
statement of a material fact or omit to state any material fact required
to be stated in it or necessary in order to make the statements in it not
misleading.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS. (a) On the basis of the
representations and warranties and subject to the terms and conditions herein
set forth, the Company agrees to issue and sell 1,350,000 shares of the
Underwritten Stock to the several Underwriters, and each Underwriter agrees to
purchase from the Company such number of shares of Underwritten Stock. The
initial public offering price of the Underwritten Stock shall be $15.00 per
share. The purchase price at which all shares of Underwritten Stock shall be
sold by the Company and purchased by the Underwriters shall be $14.325 per
share. In making this Agreement, each Underwriter is contracting severally and
not jointly; except as provided in paragraph (c) of this Section 3 and in
Section 9 hereof, the agreement of each Underwriter is to purchase only the
respective number of shares of Underwritten Stock specified in Schedule I.
(b) On the basis of the representations and warranties and subject to
the terms and conditions herein set forth, the Company hereby grants an option
to the several Underwriters to purchase up to 200,000 shares in the aggregate of
the Option Stock from the Company, which shall be authorized but unissued shares
of Common Stock, at the same purchase price per share as the Underwriters shall
pay for the Underwritten Stock. Such option may be exercised only to cover
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over-allotments in the sale of the Underwritten Stock by the Underwriters. Such
option may be exercised in whole or in part at any time (but not more than once)
within 30 days after the date of this Agreement upon written notice by you to
the Company setting forth the aggregate number of shares of the Option Stock as
to which the several Underwriters are exercising the option, the names and
denominations in which the certificates for such shares are to be registered and
the time and place at which such certificates are to be delivered, such time
(which, unless otherwise determined by you and the Company, shall not be earlier
than four nor later than seven full business days after the exercise of such
option) being herein called the "Second Closing Date".
(c) It is understood that you, individually and not as Representative
of the several Underwriters, may (but shall not be obligated to) make payment to
the Company on behalf of any Underwriter for the Stock to be purchased by such
Underwriter. Any such payment by you shall not relieve any such Underwriter of
any of its obligations hereunder. Nothing herein contained shall constitute any
of the Underwriters an unincorporated association or partner with the Company.
4. OFFERING BY THE UNDERWRITERS. (a) The terms of the initial public
offering by the several Underwriters of the Stock to be purchased by the several
Underwriters shall be as set forth in the Prospectus. The Underwriters may from
time to time decrease the public offering price and increase or decrease the
concessions and discounts to dealers as it may determine.
(b) The information set forth under "Underwriting" in any Preliminary
Prospectus or in the Prospectus relating to the Stock proposed to be filed by
the Company (insofar as such information relates to the Underwriters)
constitutes information furnished by you, or by any Underwriter through you, to
the Company for inclusion therein, and each Underwriter represents and warrants
to the Company that the statements made therein are correct in all material
respects.
5. DELIVERY OF AND PAYMENT FOR THE STOCK. Delivery of certificates for
the shares of the Underwritten Stock shall be made to you for the accounts of
the several Underwriters at the offices of U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc., U.S.
Bancorp Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 9:00 a.m.,
Central time, on the third full business day after the date of this Agreement,
or at such time on such other day, not later than seven full business days after
such third business day, as shall be agreed upon in writing by you and the
Company. The date and hour of such delivery, and of payment therefor as provided
in the following two sentences, are herein called the First Closing Date.
Payment for the Underwritten Stock purchased from the Company shall be made to
the Company or its order by wire transfer of same day funds to a bank account
designated by the Company. Such payment shall be made upon delivery of
certificates for such Underwritten Stock to you for the accounts of the several
Underwriters against receipt therefor signed by you. Upon exercise of the option
as provided in Section 3(b) hereof, the Company will deliver certificates for
the Option Stock being purchased to you on the Second Closing Date against
payment of the purchase price therefor by wire transfer of same day funds to a
bank account designated by the Company. The certificates for the Underwritten
Stock and the Option Stock, respectively, shall be registered in such name or
names and shall be in such denominations as you, at least two business days
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before the First Closing Date and the Second Closing Date, respectively, may
request, and will be made available to the Underwriter for inspection, checking
and packaging at the offices of U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc., U.S. Bancorp
Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, not less than one full
business day prior to the First Closing Date and the Second Closing Date,
respectively. If you so elect, delivery of the Underwritten Stock or the Option
Stock may be made by credit through full fast transfer to the accounts at The
Depository Trust Company designated by you.
6. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and agrees
with the several Underwriters as follows:
(a) If the Registration Statement has not yet become effective, the
Company will promptly file the Final Amendment with the Commission, will use its
best efforts to cause the Registration Statement to become effective and, as
soon as the Company is advised, will advise you when the Registration Statement
or any amendment thereto has become effective. If the Registration Statement has
become effective, the Company will file the 430A Prospectus as promptly as
practicable, but no later than the second business day following the date of
this Agreement, and will provide you satisfactory evidence of the filing. The
Company will not file any prospectus or any other amendment (except any
post-effective amendment required by Rule 8b-16 of the Investment Company Act
which is filed with the Commission after the later of one year from the date of
this Agreement or the date on which the distribution of the Stock is completed)
or supplement to the Registration Statement or Prospectus unless a copy has
first been submitted to you within a reasonable time before its filing and you
shall not have reasonably objected to it within a reasonable time after
receiving the copy, and the Company will not utilize or distribute any Sales
Material unless a copy has first been submitted to you within a reasonable time
before its utilization or distribution and you shall not have reasonably
objected to it within a reasonable time after receiving the copy.
(b) The Company will advise you, promptly after it shall receive
notice or obtain knowledge thereof, (1) of the issuance by the Commission of any
order in respect of the Company, or in respect of the Investment Adviser which
relates to the Company, (2) of the initiation or threatening of any proceedings
for, or receipt by the Company of any notice with respect to, the suspension of
the qualification of the Stock for sale in any jurisdiction or the issuance of
any stop order by the Commission suspending the effectiveness of the
Registration Statement and (3) of receipt by the Company or any representative
or attorney of the Company of any other communication from the Commission
relating to the Company, the Registration Statement, the Notification, any
Preliminary Prospectus, the Prospectus or to the transactions contemplated by
this Agreement. The Company will make every reasonable effort to prevent the
issuance of a stop order suspending the effectiveness of the Registration
Statement and, if any such stop order is issued, to obtain its lifting as soon
as possible.
(c) The Company will furnish to the Underwriters and counsel for the
Underwriters three signed copies of the Registration Statement and the
Notification and any amendments (except any post-effective amendment required by
Rule 8b-16 of the Investment Company Act which is filed with the Commission
after the later of one year from the date of this Agreement or the date on which
the distribution of the Stock is completed) to either of them (including all
exhibits filed with any such document) and as many conformed copies of the
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Registration Statement and of any amendments and supplements (except any
post-effective amendment required by Rule 8b-16 of the Investment Company Act
which is filed with the Commission after the later of one year from the date of
this Agreement or the date on which the distribution of the Stock is completed)
to such documents as you may from time to time reasonably request.
(d) During such period as a prospectus is required by law to be
delivered by an underwriter or a dealer, the Company will furnish to the
Underwriters and any dealers who may so request in writing, as many copies of
the Prospectus as may from time to time be reasonably requested, and, if any
event occurs during such period as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in light of
the circumstances existing when the Prospectus is delivered to a purchaser, not
misleading in any material respect, or if during such period it is necessary to
amend or supplement the Prospectus to comply with the Securities Act, the
Investment Company Act, the Securities Act Rules or the Investment Company Act
Rules, the Company will promptly prepare, submit to you, file with the
Commission and furnish to the Underwriters and to any dealers (whose names and
addresses you will furnish to the Company) to whom Stock may have been sold by
you, and to other dealers upon request, amendments or supplements to the
Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not, in light of the circumstances existing when the
Prospectus is delivered to a purchaser, be misleading in any material respect
and will comply with the Securities Act, the Investment Company Act, the
Securities Act Rules and the Investment Company Act Rules. Delivery by the
Underwriters of any such amendments or supplements to the Prospectus will not
constitute a waiver of any of the conditions in Section 11.
(e) The Company will make generally available to the Company's
security holders, as soon as practicable, but in any event not later than 15
months after the end of the Company's current fiscal quarter, an earnings
statement of the Company, which need not be audited, satisfying the provisions
of Section 11(a) of the Securities Act and Rule 158 of the Securities Act Rules,
and will advise you in writing when such statement has been so made available.
(f) The Company will take such actions, if any, as you reasonably
request in order to qualify the Stock for offer and sale under the securities or
"blue sky" laws of such jurisdictions as you reasonably designate.
(g) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is prevented from becoming effective
under the provisions of Section 9(b) hereof or is terminated, will pay or cause
to be paid (1) all expenses (including transfer taxes allocated to the
respective transferees) incurred in connection with the delivery to the
Underwriters of the Stock, (2) all expenses and fees (including, without
limitation, fees and expenses of the Company's accountants and counsel but,
except as otherwise provided below, not including fees of the Underwriters'
counsel) in connection with the preparation, printing, filing, delivery and
shipping of the Registration Statement (including all amendments, schedules and
exhibits thereto), the Stock, each Preliminary Prospectus, the Prospectus and
any amendment thereof or supplement thereto, and the printing, delivery and
shipping of this Agreement and other underwriting documents, including Blue Sky
Memoranda (covering the states and other applicable jurisdictions), (3) all
filing fees and fees and disbursements of the Underwriters' counsel incurred in
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connection with the qualification of the Stock for offering and sale by the
Underwriters or by dealers under the securities or blue sky laws of the states
and other jurisdictions which you shall designate or are necessary to distribute
the Stock, (4) the fees and expenses of any transfer agent or registrar, (5) the
filing fees incident to any required review by the NASD of the terms and sale of
the Stock, (6) listing fees, if any, and (7) all other costs and expenses
incident to the performance of its obligations hereunder that are not otherwise
specifically provided for herein. If the sale of the Stock provided for herein
is not consummated by reason of action by the Company pursuant to Section 10(a)
hereof which prevents this Agreement from becoming effective, or by reason of
any failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled, or because this Agreement is terminated pursuant to Section 12
hereof, the Company or the Investment Adviser will reimburse the several
Underwriters for all out-of-pocket disbursements (including fees and
disbursements of counsel) incurred by the Underwriters in connection with their
investigation, preparing to market and marketing the Stock or in contemplation
of performing their obligations hereunder. The Company shall not in any event be
liable to any of the Underwriters for loss of anticipated profits from the
transactions covered by this Agreement.
(h) Without your prior written consent, the Company will not offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend or otherwise transfer or dispose of, directly or indirectly, or
register with the Commission, or announce an offering of, any equity securities
of the Company, within 180 days after the Effective Date, except for the Stock
and as otherwise contemplated in the Prospectus with respect to the offering of
shares of preferred stock of the Company.
(i) The Company will use its best efforts to obtain the approval of
the Stock for listing on the American Stock Exchange.
(j) The Company will use the net proceeds received by it from the sale
of the Stock in the manner specified in the Prospectus under "Use of Proceeds."
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7. INDEMNIFICATION AND CONTRIBUTION. (a) Each of the Company and the
Investment Adviser, jointly and severally, agrees to indemnify and hold harmless
each Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Securities Act,
the Exchange Act, the Investment Company Act, the Advisers Act or other Federal
or state statutory law or regulation or the common law or otherwise (including
in settlement of any litigation if such settlement is effected with the written
consent of the Company and the Investment Adviser), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, including the information deemed
to be a part of the Registration Statement at the time of effectiveness pursuant
to Rule 430A of the Securities Act Rules, if applicable, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or in any
Sales Material, including any roadshow or investor presentations made to
investors by the Company or the Investment Adviser (whether in person or
electronically) or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by it in
connection with the investigating or defending against such loss, claim, damage,
liability or action; provided, however, that the Company and the Investment
Adviser shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or any
such amendment or supplement, or in any Sales Material, in reliance upon and in
conformity with written information furnished to the Company by you, or by any
Underwriter through you, specifically for use in the preparation thereof and,
provided further, that with respect to any actual or alleged untrue statement
made in or omission from any Preliminary Prospectus which is eliminated or
remedied in the Prospectus, the indemnity agreement of the Company and the
Investment Adviser contained in this paragraph (a) shall not inure to the
benefit of any Underwriter to the extent that any such loss, claim, damage or
liability results from the fact that such Underwriter sold Stock to a person to
whom such Underwriter shall have failed to send or give, at or prior to the
written confirmation of the sale of such Stock, a copy of the Prospectus, unless
such failure to deliver the Prospectus was the result of noncompliance by the
Company with Section 6(d) hereof.
In addition to its obligations under this Section 7(a), the Company
and the Investment Adviser agree that, as an interim measure during the pendency
of any claim, action, investigation, inquiry or other proceeding arising out of
or based upon any statement or omission, or any alleged statement or omission,
described in the Section 7(a), they will reimburse each Underwriter on a monthly
basis for all reasonable legal fees or other expenses incurred in connection
with investigating or defending any such claim, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a judicial determination as
to the propriety and enforceability of the Company's or the Investment Adviser's
obligation to reimburse the Underwriters for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction; provided, however, that any such reimbursement shall be
made only to the extent it may be made consistent with any publicly-announced
position of the Commission or its staff with respect to advancement of such
legal fees and other expenses. To the extent that any such interim reimbursement
payment is so held to have been improper, the Underwriter that received such
payment shall promptly return it to the party or parties that made such payment,
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together with interest, compounded daily, determined on the basis of the prime
rate (or other commercial lending rate for borrowers of the highest credit
standing) announced from time to time by U.S. Bank, N.A. (the "Prime Rate"). Any
such reimbursement payments which are not made to an Underwriter within 30 days
of a request for reimbursement shall bear interest at the Prime Rate from the
date of such request. This indemnity agreement shall be in addition to any
liabilities which the Company or the Investment Adviser may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company and
the Investment Adviser against any losses, claims, damages or liabilities to
which the Company or the Investment Adviser may become subject, under the
Securities Act, the Exchange Act, the Investment Company Act, the Advisers Act
or other Federal or state statutory law or regulation or the common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Underwriter), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by you, or by any Underwriter through you,
specifically for use in the preparation thereof, and will reimburse the Company
and the Investment Adviser for any legal or other expenses reasonably incurred
by the Company or the Investment Adviser in connection with investigating or
defending against any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
that it may have to an indemnified party except to the extent such indemnifying
party has been materially prejudiced by such failure. In case any such action
shall be brought against any indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish, jointly with
any other indemnifying person similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of the indemnifying
party's election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party in connection with the defense thereof
other than reasonable costs of investigation; PROVIDED, HOWEVER, that if the
indemnified party or parties reasonably determine that there may be a conflict
between the positions of the indemnifying party or parties and of the
indemnified party or parties in conducting the defense of such action or that
there may be legal defenses available to such indemnified party or parties
different from or in addition to those available to the indemnifying party or
parties, counsel for the indemnified party or parties shall be entitled to
conduct the defense of the indemnified party or parties and the reasonable fees
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and expenses of such counsel shall be borne by the indemnifying party or
parties. An indemnifying party shall not be obligated under any settlement
agreement relating to any action under this Section 7 to which it has not agreed
in writing.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Investment Adviser on the one hand and the Underwriters
on the other hand from the offering of the Stock or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relatively benefits
referred to in clause (i) above but also to the relative fault of the Company
and the Investment Adviser on the one hand and the Underwriters on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Investment
Adviser on the one hand and the Underwriters on the other hand shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Stock (before deducting expenses) received by the Company bear to the total
underwriting commissions or sales load received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault 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 of a material fact relates to information supplied by the Company and
the Investment Adviser on the one hand or the Underwriters on the other hand and
the parties' relevant intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The Company, the
Investment Adviser and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were to be determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the first sentence of
this subsection (d). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
against any action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Stock underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that 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 Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The obligations of the Company and the Investment Adviser under
this Section 7 shall be in addition to any liability which the Company or the
Investment Adviser may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Securities Act; and the obligations of the Underwriters under
this Section 7 shall be in addition to any liability that the respective
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Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company (including any person who, with his
or her consent, is named in the Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company or
the Investment Adviser within the meaning of the Securities Act.
(f) The Underwriters severally confirm and the Company and the
Investment Adviser acknowledge that the statements with respect to the public
offering of the Stock by the Underwriters set forth on the cover page of, and
the concession and reallowance figures and the statements with respect to
stabilization transactions appearing under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information furnished in writing
to the Company by or on behalf of the Underwriters specifically for inclusion in
the Registration Statement and the Prospectus.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of the Company and the Investment
Adviser contained herein or in certificates delivered pursuant hereto, and the
agreements of the several Underwriters, the Company and the Investment Adviser
contained in Section 7 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter
or any controlling person thereof, or the Company or the Investment Adviser or
any of their respective officers, directors or controlling persons and shall
survive delivery of, and payment for, the Stock to and by the Underwriters
hereunder.
9. SUBSTITUTION OF UNDERWRITERS.
(a) If any Underwriter or Underwriters shall fail to take up and pay
for the amount of Underwritten Stock agreed by such Underwriter or Underwriters
to be purchased hereunder, upon tender of such Underwritten Stock in accordance
with the terms hereof, and the amount of Underwritten Stock not purchased does
not aggregate more than 10% of the total amount of Underwritten Stock set forth
in Schedule I hereto, the remaining Underwriters shall be obligated to take up
and pay for (in proportion to their respective underwriting obligations
hereunder as set forth in Schedule I hereto except as may otherwise be
determined by you) the Underwritten Stock that the withdrawing or defaulting
Underwriters agreed but failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up and pay
for the amount of Underwritten Stock agreed by such Underwriter or Underwriters
to be purchased hereunder, upon tender of such Underwritten Stock in accordance
with the terms hereof, and the amount of Underwritten Stock not purchased
aggregates more than 10% of the total amount of Underwritten Stock set forth in
Schedule I hereto, and arrangements satisfactory to you for the purchase of such
Underwritten Stock by other persons are not made within 36 hours thereafter,
this Agreement shall terminate. In the event of any such termination the Company
shall not be under any liability to any Underwriter (except to the extent
provided in Section 6(g) and Section 7 hereof) nor shall any Underwriter (other
than an Underwriter who shall have failed, otherwise than for some reason
permitted under this Agreement, to purchase the amount of Underwritten Stock
agreed by such Underwriter to be purchased hereunder) be under any liability to
the Company (except to the extent provided in Section 7 hereof).
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If Underwritten Stock to which a default relates is to be purchased by
the non-defaulting Underwriters or by any other party or parties, the
Representative or the Company shall have the right to postpone the First Closing
Date for not more than seven business days in order that the necessary changes
in the Registration Statement, Prospectus and any other documents, as well as
any other arrangement, may be effected. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 9.
10. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective at 10:00 a.m., Central time,
on the first full business day following the effective time of the Registration
Statement, or at such earlier time after the effective time of the Registration
Statement as you in your discretion shall first release the Stock for sale to
the public; provided, that if the Registration Statement is effective at the
time this Agreement is executed, this Agreement shall become effective at such
time as you in your discretion shall first release the Stock for sale to the
public. For the purpose of this Section 10, the Stock shall be deemed to have
been released for sale to the public upon release by you of an electronic
communication authorizing the commencement of the offering of the Stock for sale
by the Underwriters or other securities dealers. By giving notice as hereinafter
specified before the time this Agreement becomes effective, you, as
Representative of the several Underwriters, or the Company, may prevent this
Agreement from becoming effective without liability of any party to any other
party, except that the provisions of Section 6(g) and Section 7 hereof shall at
all times be effective.
(b) You, as Representative of the several Underwriters, shall have the
right to terminate this Agreement by giving notice as hereinafter specified at
any time at or prior to the First Closing Date, and the option referred to in
Section 3(b), if exercised, may be canceled at any time prior to the Second
Closing Date , if (1) the Company shall have failed, refused or been unable, at
or prior to such Closing Date, to perform any agreement on its part to be
performed hereunder, (2) any other condition of the Underwriters' obligations
hereunder is not fulfilled, (3) trading on the Nasdaq National Market, the New
York Stock Exchange or the American Stock Exchange shall have been wholly
suspended, (4) minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices of securities shall have been required, on the Nasdaq
National Market, the New York Stock Exchange or the American Stock Exchange, by
such Exchange or by order of the Commission or any other governmental authority
having jurisdiction, (5) a banking moratorium shall have been declared by
federal or state authorities, or (6) there has occurred any material adverse
change in the financial markets in the United States or an outbreak of major
hostilities (or an escalation thereof) in which the United States is involved, a
declaration of war by Congress, any other substantial national or international
calamity or any other event or occurrence of a similar character shall have
occurred since the execution of this Agreement that, in your judgment, makes it
impractical or inadvisable to proceed with the completion of the sale of and
payment for the Stock. Any such termination shall be without liability of any
party to any other party except that the provisions of Section 6(g) and Section
7 hereof shall at all times be effective.
(c) If you elect to prevent this Agreement from becoming effective or
to terminate this Agreement as provided in this Section 10, the Company and the
Investment Adviser shall be notified promptly by you by telephone, confirmed by
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letter. If the Company elects to prevent this Agreement from becoming effective,
you shall be notified by the Company by telephone, confirmed by letter.
11. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriter to purchase and pay for the Underwritten Stock on the
First Closing Date and the Option Stock on the Second Closing Date shall be
subject to the accuracy of, and compliance with, all representations, warranties
and agreements of the Company and the Investment Adviser contained herein and
the performance by the Company and the Investment Adviser of all of their
respective obligations to be performed hereunder at or prior to such applicable
Closing Date and to the following further conditions:
(a) The Registration Statement must have become effective not later
than 5:00 p.m., Central time, on the date of this Agreement or such later date
and time as you consent to in writing. If required, the Prospectus must have
been filed in accordance with Rule 497(b) or (h) of the Securities Act Rules.
(b) No stop order suspending the effectiveness of the Registration
Statement or any amendment thereof shall have been issued and no proceedings for
such purpose may be pending before or threatened by the Commission, and any
requests for additional information on the part of the Commission (to be
included in the Registration Statement or Prospectus or otherwise) must be
complied with to your reasonable satisfaction.
(c) You, as Representative of the several Underwriters, shall have
received from Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇, your counsel, an opinion addressed to
you and dated such Closing Date with respect to the Company, the Stock, the
Registration Statement and Prospectus, this Agreement and the form and
sufficiency of all proceedings taken in connection with the sale and delivery of
the Stock and other related matters as you reasonably may request. Such opinion
shall be satisfactory in all respects to you. The Company and the Investment
Adviser shall have furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to render such opinion.
(d) You, as Representative of the several Underwriters, shall also
have received from ▇▇▇▇▇▇ ▇▇▇▇▇, Esq., an opinion, addressed to you and dated
such Closing Date, substantially in the form of Appendix A to this Agreement.
(e) You, as Representative of the several Underwriters, shall have
received from ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the Company, an opinion,
addressed to you and dated such Closing Date, substantially in the form of
Appendix B to this Agreement.
(f) Since the dates as of which information is given in the
Registration Statement and Prospectus, (1) there must not have been any material
change in the capital stock or liabilities of the Company and its subsidiaries,
(2) there must not have been any material adverse change in the general affairs,
prospects, management, business, financial condition or results of operations of
the Company, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated by the Prospectus, (3) the
Company must not have sustained any material loss or interference with its
business from any court or legislative or other governmental action, order or
decree, or any other occurrence, not described in the Prospectus, and (4) there
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must not have occurred any event that makes untrue or incorrect in any material
respect any statement or information contained in the Prospectus or that is not
reflected in the Prospectus but should be reflected in it in order to make the
statements or information in it not misleading in any material respect, if, in
your judgment, any such development referred to in clause (1), (2), (3) or (4)
makes it impractical or inadvisable to offer or deliver the Stock on the terms
and in the manner contemplated in the Prospectus.
(g) You, as Representative of the several Underwriters, must have
received on the date of this Agreement certificates, dated such date, of the
chief executive or operating officer and the chief financial or accounting
officer of each of the Company and the Investment Adviser certifying that (1)
such officers have carefully examined the Registration Statement, the Prospectus
and this Agreement, (2) the representations of the Company and the Investment
Adviser in this Agreement are accurate on and as of the date of the certificate,
(3) there has not been any material adverse change in the general affairs,
prospects, management, business, financial condition or results of operations of
the Company, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated by the Prospectus, and (4) to
the knowledge of such officers, no actions to delay the effectiveness of the
Registration Statement, to prohibit the sale of the Stock or having or which may
have any material adverse effect on the Company or the Investment Adviser have
been taken or threatened by the Commission. You, as Representative of the
several Underwriters, must receive on each Closing Date certificates, dated such
Closing Date, of such officers certifying to the effect set forth in (1), (2),
and (3) above and that (1) to the knowledge of such officers, no stop order
suspending the effectiveness of the Registration Statement, prohibiting the sale
of the Stock or having a material adverse effect on the Investment Adviser has
been issued and no proceedings for any such purpose are pending before or
threatened by the Commission and (2) each of the Company and the Investment
Adviser has performed all agreements that this Agreement requires it to perform
by such Closing Date.
(h) You, as Representative of the several Underwriters, must receive
by 1:00 p.m., Central time, on the date that this Agreement is signed and
delivered by you a signed letter, dated such date and addressed to the
Underwriter, substantially in the form of Appendix C to this Agreement from
Ernst & Young LLP. You, as Representative of the several Underwriters, must also
receive on each Closing Date a signed letter from such accountants, dated such
Closing Date, confirming on the basis of a review in accordance with the
procedures set forth in their earlier letter that nothing has come to their
attention during the period from a date not more than three business days before
the date of this Agreement, specified in the letter, to a date not more than
three business days before such Closing Date that would require any change in
their letter referred to in the foregoing sentence.
(i) The representations and warranties of the Company and the
Investment Adviser herein and the statements made by the Company or the
Investment Adviser or any of their respective officers in any certificate
delivered to you or counsel for the Underwriters pursuant to this Agreement
shall be true and correct in all material respects as of each Closing Date.
(j) You, as Representative of the several Underwriters, shall have
been furnished evidence in usual written or telegraphic form from the
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appropriate authorities of the several states, or other evidence satisfactory to
you, of the qualifications referred to in paragraph (f) of Section 6 hereof.
All the opinions, certificates, letters or other documents mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if you and Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇, counsel for
the several Underwriters, shall be satisfied that they comply in form.
12. CONDITIONS OF THE OBLIGATION OF THE COMPANY. The obligation of the
Company to deliver the Stock shall be subject to the conditions that (a) the
Registration Statement shall have become effective not later than 5:00 p.m.,
Central time, on the date of this Agreement, and (b) no stop order suspending
the effectiveness thereof or any amendment thereof shall have been issued, and
no proceedings therefor shall be pending or threatened by the Commission at the
First Closing Date. In case any of the conditions specified in this Section 12
shall not be fulfilled, this Agreement may be terminated by the Company by
giving notice to you.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of the Company, the Investment Adviser, each Underwriter
and, with respect to the provisions of Section 7 hereof, the several parties (in
addition to the Company and the several Underwriters) indemnified under the
provisions of such Section 7, and their respective personal representatives,
successors and assigns. Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term "successors and assigns" as herein used shall not
include any purchaser, as such purchaser, of any of the Stock from any of the
several Underwriters.
14. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing and shall be mailed or delivered (i) if to the
Underwriters, to the Representative c/o U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc., U.S.
Bancorp Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; except that
notices given to an Underwriter pursuant to Section 7 hereof shall be sent to
such Underwriter at the address stated in the Underwriters' Questionnaire
furnished by such Underwriter in connection with this offering; (ii) if to the
Company, to: First American Minnesota Municipal Income Fund II, Inc., c/o U.S.
Bancorp Asset Management, Inc., U.S. Bancorp Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and (iii) if to the Investment Adviser, to: U.S.
Bancorp Asset Management, Inc., U.S. Bancorp Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
15. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original and all such counterparts
shall together constitute one and the same instrument.
-20-
Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement among the Company,
the Investment Adviser and the several Underwriters in accordance with its
terms.
Very truly yours,
FIRST AMERICAN MINNESOTA MUNICIPAL
INCOME FUND II, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President, Administration
U.S. BANCORP ASSET MANAGEMENT, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Operating Officer
Confirmed as of the date first
above mentioned, on behalf of
itself and the other several
Underwriters named in Schedule I
hereto.
U.S. BANCORP ▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Managing Director
-21-
SCHEDULE I
Number of shares of
Underwriter Underwritten Stock(1)
----------- ---------------------
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc. 573,750
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. 573,750
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. 30,375
Prudential Securities Incorporated 30,375
UBS Warburg LLC 30,375
Wachovia Securities, Inc. 30,375
▇▇▇▇▇ Fargo Securities, LLC. 30,375
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated 16,875
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C. 16,875
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated 16,875
---------------------------
TOTAL .............................................. 1,350,000
===========================
-------------
(1) The Underwriters may purchase up to an additional 200,000 shares of Option
Stock, to the extent the option described in Section 3(b) of the Agreement
is exercised, in the proportions and in the manner described in the
Agreement.
APPENDIX A
OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇, ESQ.
1. The Investment Adviser has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware and has full corporate power and authority to conduct its business as
described in the Registration Statement.
2. The Investment Adviser is duly registered with the Commission under
the Advisers Act as an investment adviser and, to my knowledge, is not
prohibited under the Advisers Act, the Investment Company Act, the Advisers Act
Rules or the Investment Company Act Rules from acting as investment adviser or
otherwise under the Advisory Agreement for the Company as contemplated by the
Prospectus.
3. The Agreement has been duly and validly authorized, executed and
delivered by the Investment Adviser, and includes the provisions (if any)
relating to the Investment Adviser required by, and includes no provisions
relating to the Investment Adviser inconsistent with, any applicable provisions
of the Investment Company Act and the Investment Company Act Rules.
4. Each of the Advisory Agreement and the Administration Agreement (as
defined in the Prospectus) has been duly and validly authorized, executed and
delivered by the Investment Adviser, includes the provisions (if any) required
by, and includes no provisions inconsistent with, any applicable provisions of
the Investment Company Act and the Investment Company Act Rules, and constitutes
a legal, valid and binding obligation of the Investment Adviser enforceable in
accordance with its terms, except to the extent enforceability may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by the effect
of general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law) and to termination under the
Investment Company Act.
5. No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association which has not
been obtained is required for the consummation by the Investment Adviser of the
transactions contemplated in the Agreement or the Advisory Agreement.
6. Neither the execution and delivery of the Agreement or the Advisory
Agreement nor the consummation by the Investment Adviser of the transactions
contemplated by the Agreement or the Advisory Agreement conflicts with, or
results in a breach of, the Certificate of Incorporation or By-laws of the
Investment Adviser or, to my knowledge, any material agreement or instrument
known to me to which the Investment Adviser is a party or by which the
Investment Adviser is bound, any law, rule, regulation or, so far as is known to
me, any order of any court, governmental instrumentality, securities exchange or
association or arbitrator.
A-1
7. No fact has come to my attention which has caused me to believe
that the description of the Investment Adviser in the Registration Statement or
the Prospectus contains any untrue statement of a material fact or omits to
state any material fact required to be stated in it or necessary in order to
make the statements in it, in light of the circumstances under which they were
made, not misleading (except as to any financial statements, financial data or
statistical data included or incorporated by reference in the Registration
Statement or the Prospectus or any amendments or supplements thereto, as to
which I express no opinion).
The reasonableness of the level of the fees payable under the
Agreement, the Advisory Agreement and the Administration Agreement is a question
of fact, and in rendering the opinions in paragraphs 4 and 6 above, counsel will
not be required to express any opinion thereon.
In rendering the foregoing opinions, counsel may rely as to matters of
fact to the extent deemed proper, on certificates of responsible officers of the
Company and the Investment Adviser and of public officials.
In rendering the opinions included in paragraph 3 above, counsel may
rely upon the opinion of ▇▇▇▇▇▇ & Whitney LLP as to compliance by the Company
with Section 10(b)(2) of the Investment Company Act.
A-2
APPENDIX B
OPINION OF ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Minnesota The
Company has full corporate power and authority to own its properties and conduct
its business as described in the Registration Statement.
2. The authorized capital stock of the Company is as described in the
Registration Statement and the Prospectus. The capital stock of the Company
conforms in all material respects to the description of it in the Prospectus.
Proper corporate proceedings have been taken validly to authorize the
outstanding shares of such capital stock (including the Stock being issued). All
the outstanding shares of such capital stock (including the Stock, when issued,
delivered and paid for as provided in the Agreement) have been duly and validly
issued and are fully paid and nonassessable, and no holder of the Stock will be
subject to personal liability by reason of being such a holder. The holders of
outstanding shares of capital stock of the Company are not entitled to any
preemptive or other similar rights.
3. The Registration Statement has become effective under the
Securities Act and, to the best of our knowledge, no stop order suspending the
effectiveness of the Registration Statement or suspending or preventing the use
of the Prospectus is in effect, and no proceedings for that purpose have been
instituted or are pending or contemplated by the Commission. Any required filing
of the Prospectus or any supplements thereto have been made in accordance with
Rule 497 of the Securities Act Rules.
4. The Registration Statement and the Prospectus (except as to any
financial statements, financial data, statistical data and supporting schedules
included or incorporated by reference therein, as to which we express no
opinion) comply as to form in all material respects with the requirements of the
Securities Act, the Investment Company Act, the Securities Act Rules and the
Investment Company Act Rules.
5. To the best of our knowledge, there are no franchises, contracts or
other documents of the Company or any pending or threatened proceedings, legal
or otherwise, before any court, governmental body or arbitrator, relating to the
Company, that are of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement and that are not adequately described or filed as required.
6. The Company has full corporate power and authority to enter into
the Agreement, and the Agreement has been duly authorized, executed and
delivered by the Company, and includes the provisions (if any) required by, and
includes no provisions inconsistent with, any applicable provisions of the
Investment Company Act and the Investment Company Act Rules. The Company
complies with the condition set forth in Section 10(b)(2) of the Investment
Company Act for using, as a principal underwriter of securities issued by it, a
person of which a director, officer or employee of it is an interested person
(as defined in the Investment Company Act).
B-1
7. Each of the Advisory Agreement, the Administration Agreement (as
defined in the Prospectus), the Custody Agreement (as so defined) and the
Transfer Agency Agreement (as so defined) (i) has been duly and validly
authorized, executed and delivered by the Company, (ii) includes the provisions
(if any) required by, and includes no provisions inconsistent with, any
applicable provisions of the Investment Company Act and the Investment Company
Act Rules and (iii) constitutes the legal, valid and binding obligation of the
Company enforceable in accordance with its terms, except to the extent
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law) and to termination under the Investment Company Act.
8. None of (i) the execution and delivery of the Agreement, the
Advisory Agreement, the Administration Agreement, the Custody Agreement or the
Transfer Agency Agreement, (ii) the issue and sale by the Company of the Stock
sold by the Company as contemplated by the Agreement or (iii) the consummation
by the Company of the other transactions contemplated by such agreements
conflicts with, or results in a breach of, the Articles of Incorporation or
By-laws of the Company or any agreement or instrument known to us to which the
Company is a party or by which the Company is bound, any law or regulation or,
so far as is known to us, any order or regulation of any court, governmental
instrumentality or arbitrator.
9. To the best of our knowledge, the Company is not currently in
breach of, or in default under, any material written agreement or instrument to
which it is party or by which it or its property is bound or affected.
10. To the best of our knowledge, no holder of securities of the
Company has rights to the registration of any securities of the Company because
of the filing of the Registration Statement.
11. No consent, approval, authorization or order of, or filing with,
any court or governmental agency or body is required for the consummation by the
Company of the transactions contemplated in the Agreement, the Advisory
Agreement, the Administration Agreement, the Custody Agreement or the Transfer
Agency Agreement, except such as have been obtained under the Securities Act,
the Investment Company Act, the Commodity Exchange Act, the Securities Act Rules
and the Investment Company Act Rules and such as may be required under state
securities or blue sky laws in connection with the purchase and distribution of
the Stock by the Underwriters.
12. The Stock has been approved for listing on the American Stock
Exchange.
13. The Company is duly registered with the Commission under the
Investment Company Act as a closed-end non-diversified management investment
company, and all required action has been taken by the Company under the
Securities Act and the Investment Company Act to make the public offering and
consummate the sale of the Stock provided in the Agreement.
B-2
14. The statements in the Prospectus under the heading "Taxation", as
qualified therein, insofar as they constitute statements of law or legal
conclusions as to the likely outcome of material issues under the Federal income
tax laws affecting shareholders of the Company, are accurate and provide a fair
summary of such law or conclusions.
15. No fact has come to our attention which has caused us to believe
that the description of the Company set forth in the Registration Statement or
the Prospectus contains any untrue statement of a material fact or omits to
state any material fact required to be stated in it or necessary in order to
make the statements in it, in light of the circumstances under which they were
made, not misleading (except as to any financial statements, financial data,
statistical data and supporting schedules included or incorporated by reference
in the Registration Statement or the Prospectus, or any amendments or
supplements thereto, as to which we express no opinion).
In rendering the foregoing opinions, ▇▇▇▇▇▇ & Whitney LLP may rely (i)
as to matters involving the application of laws of any jurisdiction other than
the State of Minnesota, the General Corporation Law of the State of Delaware or
the United States, to the extent they deem proper and specify in such opinion,
upon the opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriter and (ii) as to
matters of fact to the extent they deem proper, on certificates of responsible
officers of the Company and public officials.
The reasonableness of the level of fees payable under the Agreement,
the Advisory Agreement, the Administration Agreement and the Custody Agreement
is a question of fact, and in rendering the opinion in paragraphs 6, 7 and 8
above, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP will not be required to express any opinion thereon.
▇-▇
▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇
▇-▇