EXHIBIT H
2,280 SHARES AUCTION PREFERRED STOCK, SERIES M
2,280 SHARES AUCTION PREFERRED STOCK, SERIES T
2,280 SHARES AUCTION PREFERRED STOCK, SERIES W
2,280 SHARES AUCTION PREFERRED STOCK, SERIES TH
2,280 SHARES AUCTION PREFERRED STOCK, SERIES F
DREYFUS STRATEGIC MUNICIPALS, INC.
UNDERWRITING AGREEMENT
January __, 2000
PAINEWEBBER INCORPORATED
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Dreyfus Strategic Municipals, Inc., a Maryland corporation (the
"Fund"), proposes to issue and sell to the underwriters named in Schedule 1
hereto (the "Underwriters"), an aggregate of 11,400 shares of preferred stock,
par value $0.001 per share, 2,280 shares designated Auction Preferred Stock,
Series M, 2,280 shares designated Auction Preferred Stock, Series T, 2,280
shares designated Auction Preferred Stock, Series W, 2,280 shares designated
Auction Preferred Stock, Series TH and 2,280 shares designated Auction Preferred
Stock, Series F of the Fund, each with a liquidation preference of $25,000 per
share (collectively, the "APS").
The Dreyfus Corporation ("Dreyfus"), a New York corporation, acts as
the Fund's investment adviser pursuant to a Management Agreement by and between
the Fund and Dreyfus, dated as of August 24, 1994 (the "Management Agreement").
Boston Safe Deposit and Trust Company acts as the custodian (the "Custodian") of
the Fund's cash and portfolio assets pursuant to a Custody Agreement, dated as
of August 12, 1987 (the "Custody Agreement"). The Bank of New York acts as the
Fund's transfer agent, dividend disbursing agent and registrar (the "Transfer
Agent") pursuant to a Registrar and Transfer Agency Agreement, dated as of
August 12, 1987 (the "Transfer Agency Agreement"). Bankers Trust Company acts as
the Fund's auction agent (the "Auction Agent") pursuant to an Auction Agent
Agreement, dated as of January __, 2000 (the "Auction Agent Agreement"). The
Fund has entered into a Letter Agreement with The Depository Trust Company
("DTC"), dated as of January __, 2000 (the "DTC Agreement").
The Fund and ▇▇▇▇▇▇▇ each hereby confirms as follows their agreements
with the Underwriters.
1. SALE AND PURCHASE; COMPENSATION
(a) The Fund will issue and sell to each Underwriter, and each
Underwriter will purchase from the Fund, the number of APS set forth opposite
such Underwriter's name in Schedule 1 hereto, at the purchase price per share of
$24,750.
(b) The obligations of the Underwriters under this Underwriting
Agreement are undertaken on the basis of the representations and are subject to
the conditions set forth in this Underwriting Agreement.
2. PAYMENT AND DELIVERY. Delivery by the Fund of the APS (the "APS
Closing") to the Underwriters against payment of the purchase price by wire
transfer of Federal Funds or similar same day funds to the Fund for the APS,
will take place at the offices of PaineWebber Incorporated (the "Managing
Representative"), 1285 Avenue of the Americas, New York, New York or such other
location as is agreed upon by the parties hereto, or through the facilities of
DTC or another mutually agreeable facility, at 9:00 a.m., New York City time, on
the third business day following the date of this Underwriting Agreement, or at
such time on such other date, not later than ten business days after the date of
this Underwriting Agreement, as may be agreed upon by the Fund and the Managing
Representative (the "APS Closing Date").
A certificate in definitive form representing each series of the APS
to be purchased by the Underwriters registered in the name of Cede & Co., as
nominee for DTC, shall be delivered by or on behalf of the Fund to DTC for the
account of the Underwriters.
3. REGISTRATION STATEMENT AND PROSPECTUS; PUBLIC OFFERING. The Fund
has filed with the Securities and Exchange Commission (the "Commission"),
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), the
Investment Company Act of 1940, as amended (the "Investment Company Act"), and
the published rules and regulations adopted by the Commission under the
Securities Act (the "Securities Act Rules") and the Investment Company Act (the
"Investment Company Act Rules"), a Notification of Registration on Form N-8A
(the "Notification") pursuant to Section 8 of the Investment Company Act and a
registration statement on Form N-2 (File Nos. 333-84699 and 811-5245) relating
to the APS (the "registration statement"), including a preliminary prospectus
(including any preliminary statement of additional information), and such
amendments to such registration statement as may have been required to the date
of this Underwriting Agreement. The preliminary prospectus (including any
preliminary statement of additional information) is to be used in connection
with the offering and sale of the APS. The term "Preliminary Prospectus" as used
herein means any preliminary prospectus (including any preliminary statement of
additional information) included at any time as a part of the registration
statement and any preliminary prospectus (including any preliminary statement of
additional information) omitted therefrom pursuant to the Securities Act Rules.
The Fund has furnished the Managing Representative copies of such
registration statement, each amendment to such registration statement filed by
the Fund with the Commission and the Preliminary Prospectus filed by the Fund
with the Commission or used by the Fund. If the registration statement has not
become effective, a further amendment (the "Final Amendment") to such
registration statement, including the forms of final prospectus (including any
final statement of additional information), necessary to permit such
registration statement to become effective will promptly be filed by the Fund
with the Commission. If such registration statement has become effective and any
prospectus (including any statement of additional information) contained therein
omits certain information at the time of effectiveness pursuant to Rule 430A of
the Securities Act Rules, a final prospectus (the "Rule 430A Prospectus")
containing such omitted information will be filed by the Fund 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 (including any statement
of additional information) in the form in which it is first filed with the
Commission pursuant to Rule 497(b), (h) or (j) of the Securities Act Rules, as
the case may be.
The Fund and ▇▇▇▇▇▇▇ understand that the Underwriters propose to make
a public offering of the APS, as described in the Prospectus, as soon after the
Effective Date (or, if later, after the date this Underwriting Agreement is
signed) as the Managing Representative deems advisable. The Fund confirms that
the Underwriters and dealers have been authorized to distribute the Preliminary
Prospectus relating to the APS included in the initial filing of the
registration statement and are authorized to distribute the Prospectus and any
amendments or supplements thereto.
4. REPRESENTATIONS.
(a) The Fund represents to each Underwriter as follows:
(i) On (A) the Effective Date and the date on which the
Prospectus is first filed with the Commission pursuant to Rule 497(b), (h)
or (j) of the Securities Act Rules, as the case may be, (B) the date on
which any post-effective amendment to the Registration Statement (except
any post-effective amendment which is filed with the Commission after the
later of (x) one year from the date of this Underwriting Agreement or (y)
the date on which the distribution of the APS is completed) became or
becomes effective or any amendment or supplement to the Prospectus was or
is filed with the Commission and (C) the APS Closing Date, the Registration
Statement, the Prospectus and any such amendment or supplement thereto and
the Notification complied or will comply in all material respects with the
requirements of the Securities Act, the Investment Company Act, the
Securities Act Rules and the Investment Company Act Rules, as the case may
be. On the Effective Date and on the date that any post-effective amendment
to the Registration Statement (except any post-effective amendment which is
filed with the Commission after the later of (x) one year from the date of
this Underwriting Agreement or (y) the date on which the distribution of
the APS is completed) became or becomes effective, neither the Registration
Statement nor any such amendment did or will contain any untrue statement
of a material fact or omit to state a material fact required to be stated
in it or necessary to make the statements in it not misleading. At the
Effective Date and, if applicable, the date the Prospectus or any amendment
or supplement to the Prospectus was or is filed with the Commission and at
the APS Closing Date, the Prospectus did not or will not, as the case may
be, contain any untrue statement of a material fact or omit to state a
material fact required to be stated in it or necessary to make the
statements in it, in light of the circumstances under which they were made,
not misleading. The foregoing representations in this Section 4(a)(i) do
not apply to statements or omissions relating to the Underwriters made in
reliance on and in conformity with information furnished in writing to the
Fund by the Underwriters expressly for use in the Registration Statement,
the Prospectus, or any amendments or supplements thereto, as described in
Section 7(f) hereof.
(ii) The Fund has been duly organized and is validly existing as
a corporation under the laws of its jurisdiction of incorporation, the
Articles of Incorporation of the Fund, as amended through the date hereof
and the Articles Supplementary dated January ___, 2000 (the "Articles
Supplementary") adopted in connection with the issuance of the APS (the
"Articles of Incorporation" (which term shall include the Articles
Supplementary)), and the By-Laws of the Fund, as amended through the date
hereof (the "By-Laws"), confer upon the Fund full power and authority to
conduct all the activities conducted by it, to own or lease all assets
owned (or to be owned) or leased (or to be leased) by it and to conduct its
business as described in the Registration Statement and Prospectus; the
Fund is duly licensed and qualified to do business and in good standing in
each jurisdiction in which its ownership or leasing of property or its
conducting of business requires such qualification, except where the
failure to be so qualified or be in good standing would not have a material
adverse effect on the Fund; and the Fund owns, possesses or has obtained
and currently maintains all governmental licenses, permits, consents,
orders, approvals and other authorizations, whether foreign or domestic,
necessary to carry on its business as contemplated in the Prospectus. The
Fund has no subsidiaries.
(iii) The capitalization of the Fund is as set forth in the
Registration Statement and the Prospectus. The shares of common stock of
the Fund, par value $0.001 per share (the "Common Stock"), and the APS
conform in all material respects to the description of them in the
Prospectus. All the outstanding shares of Common Stock have been duly
authorized and are validly issued, fully paid and nonassessable (except as
described in the Registration Statement). The APS to be issued and
delivered to and paid for by the Underwriters in accordance with this
Underwriting Agreement against payment therefor as provided by this
Underwriting Agreement have been duly authorized and when issued and
delivered to the Underwriters will have been validly issued and will be
fully paid and nonassessable (except as described in the Registration
Statement). No person is entitled to any preemptive or other similar rights
in connection with the issuance of the APS.
(iv) The Fund is duly registered with the Commission under the
Investment Company Act as a diversified, closed-end management investment
company, and, subject to the filing of the Final Amendment, if not already
filed, all action under the Securities Act, the Investment Company Act, the
Securities Act Rules and the Investment Company Act Rules, as the case may
be, necessary to make the public offering and consummate the sale of the
APS as provided in this Underwriting Agreement has or will have been taken
by the Fund.
(v) The Fund has full power and authority to enter into each of
this Underwriting Agreement, the Management Agreement, the Custody
Agreement, the Transfer Agency Agreement, the Auction Agent Agreement and
the DTC Agreement (collectively, the "Fund Agreements") and to perform all
of the terms and provisions hereof and thereof to be carried out by it and
(A) each Fund Agreement has been duly and validly authorized, executed and
delivered by or on behalf of the Fund, (B) each Fund Agreement does not
violate in any material respect any of the applicable provisions of the
Investment Company Act, the Investment Advisers Act of 1940 (the "Advisers
Act") and the Investment Company Act Rules and the rules and regulations
adopted by the Commission under the Advisers Act (the "Advisers Act
Rules"), as the case may be, and (C) assuming due authorization, execution
and delivery by the other parties thereto, each Fund Agreement constitutes
the legal, valid and binding obligation of the Fund enforceable in
accordance with its terms, (1) subject, as to enforcement, to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and to general equitable principles (regardless of whether
enforcement is sought in a proceeding in equity or at law) and (2) except
as rights to indemnity thereunder may be limited by federal or state
securities laws.
(vi) None of (A) the execution and delivery by the Fund of the
Fund Agreements, (B) the issue and sale by the Fund of the APS as
contemplated by this Underwriting Agreement and (C) the performance by the
Fund of its obligations under any of the Fund Agreements or consummation by
the Fund of the other transactions contemplated by the Fund Agreements
conflicts with or will conflict with, or results or will result in a breach
of, the Articles of Incorporation or By-Laws or any material agreement or
instrument to which the Fund is a party or by which the Fund is bound, or
any law, rule or regulation, or order of any court, governmental
instrumentality, securities exchange or association or arbitrator, whether
foreign or domestic, having jurisdiction over the Fund, other than state
securities or "blue sky" laws applicable in connection with the purchase
and distribution of the APS by the Underwriters pursuant to this
Underwriting Agreement.
(vii) The Fund is not currently in breach of, or in default
under, in any material respect, any written agreement or instrument to
which it is a party or by which it or its property is bound or affected.
(viii) No person has any right to the registration of any
securities of the Fund because of the filing of the Registration Statement.
(ix) No consent, approval, authorization or order of any court or
governmental agency or body or securities exchange or association, whether
foreign or domestic, is legally required by the Fund for the consummation
by the Fund of the transactions to be performed by the Fund or the
performance by the Fund of all the terms and provisions to be performed by
or on behalf of it in each case as contemplated in the Fund Agreements,
except such as (A) have been obtained under the Securities Act, the
Investment Company Act, the Advisers Act, the Securities Act Rules, the
Investment Company Act Rules, and the Advisers Act Rules, and (B) may be
required by the New York Stock Exchange or under state securities or "blue
sky" laws, in connection with the purchase and distribution of the APS by
the Underwriters pursuant to this Underwriting Agreement.
(x) Ernst & Young LLP, whose report appears in the Prospectus,
are independent public accountants with respect to the Fund as required by
the Securities Act, the Investment Company Act, the Securities Act Rules
and the Investment Company Act Rules.
(xi) The financial statements included in the Registration
Statement and the Prospectus present fairly in all material respects, in
accordance with generally accepted accounting principles in the United
States applied on a consistent basis, the financial condition of the Fund
at the dates and for the periods indicated.
(xii) The Fund will maintain 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; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (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 through an asset reconciliation procedure or
otherwise at reasonable intervals and appropriate action is taken with
respect to any differences.
(xiii) Other than as set forth in the Prospectus, subsequent to
the date of the financial statements in the Registration Statement and
Prospectus, (A) the Fund has not incurred any liabilities or obligations,
direct or contingent (whether or not in the ordinary course of business),
or entered into any transactions, not in the ordinary course of business,
that are material to the Fund, (B) there has not been any material change
in the Common Stock or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, shareholders' equity or
results of operations of the Fund, that might materially and adversely
affect the property or assets thereof, (C) except for the Fund's regular
monthly dividend, there has been no dividend or distribution paid or
declared in respect of any class of the Fund's shares of Common Stock, and
(D) the Fund has not issued any senior security or materially increased any
debt.
(xiv) There is no action, suit or proceeding before or by any
court, commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending, or, to the
knowledge of the Fund, threatened against or affecting the Fund, which (A)
is reasonably expected to result in any material adverse change in the
condition, financial or otherwise, or business affairs of the Fund or is
reasonably expected to materially adversely affect the properties or assets
of the Fund or (B) is of a character required to be described in the
Registration Statement or the Prospectus; and there are no contracts,
franchises or other documents that are of a character required to be
described in, or that are required to be filed as exhibits to, the
Registration Statement that have not been described or filed as required.
(xv) The Fund intends to direct the investment of the proceeds of
the offering of the APS in such a manner as to comply with the requirements
of Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code").
(xvi) The shares of Common Stock are listed on the New York Stock
Exchange.
(xvii) All advertisements and other sales literature
(collectively, "sales materials") authorized in writing or prepared by the
Fund for use in connection with the public offering of the APS complied and
comply in all material respects with the requirements of the Securities
Act, the Securities Act Rules and the rules and interpretations of the NASD
and no such sales materials contained or contain any untrue statement of a
material fact or omitted or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading in light of the circumstances in which they were made, including
the Securities Act and the Securities Act Rules.
(b) ▇▇▇▇▇▇▇ represents to each Underwriter as follows:
(i) On the Effective Date and on the date that any post-
effective amendment to the Registration Statement (except any
post-effective amendment which is filed with the Commission after the
expiration of such period as a prospectus is required by law to be
delivered by an underwriter or a dealer) became or becomes effective,
neither the Registration Statement nor any such amendment did or will
contain any untrue statement of a material fact or omit to state a material
fact required to be stated in it or necessary to make the statements in it
not misleading; provided, however, that the foregoing shall apply only to
statements in the Registration Statement describing Dreyfus and its
business. At the Effective Date and, if applicable, the date the Prospectus
or any amendment or supplement to the Prospectus was or is filed with the
Commission and at the APS Closing Date, the Prospectus did not or will not,
as the case may be, contain any untrue statement of a material fact or omit
to state a material fact required to be stated in it or necessary to make
the statements in it, in light of the circumstances under which they were
made, not misleading; provided, however, that the foregoing shall apply
only to statements in the Prospectus describing ▇▇▇▇▇▇▇ and its business.
(ii) ▇▇▇▇▇▇▇ has been duly organized, is validly existing as a
corporation under the laws of its jurisdiction of incorporation with full
corporate power and authority to conduct all of the activities conducted by
it, to own or lease all of the assets owned or leased by it and to conduct
its business as described in the Registration Statement and Prospectus, and
▇▇▇▇▇▇▇ is duly licensed and qualified to do business and in good standing
in each jurisdiction in which it is required to be so qualified, except to
the extent that failure to be so qualified or be in good standing would not
have a material adverse affect on ▇▇▇▇▇▇▇; and ▇▇▇▇▇▇▇ owns, possesses or
has obtained and currently maintains all governmental licenses, permits,
consents, orders, approvals and other authorizations, whether foreign or
domestic, necessary to carry on its business as contemplated in the
Registration Statement and the Prospectus.
(iii) ▇▇▇▇▇▇▇ is (A) duly registered as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act"),
and (B) not prohibited by the Advisers Act, the Investment Company Act, the
Advisers Act Rules or the Investment Company Act Rules from acting as the
investment adviser for the Fund as contemplated by the Management
Agreement, the Registration Statement and the Prospectus.
(iv) ▇▇▇▇▇▇▇ has full power and authority to enter into each of
this Underwriting Agreement and the Management Agreement (collectively, the
"Dreyfus Agreements") and to carry out all the terms and provisions hereof
and thereof to be carried out by it; and each Dreyfus Agreement has been
duly and validly authorized, executed and delivered by ▇▇▇▇▇▇▇; none of the
Dreyfus Agreements violate in any material respect any of the applicable
provisions of the Investment Company Act, the Advisers Act, the Investment
Company Act Rules and the Advisers Act Rules; and assuming due
authorization, execution and delivery by the other parties thereto, each
Dreyfus Agreement constitutes a legal, valid and binding obligation of
Dreyfus, enforceable in accordance with its terms, (1) subject, as to
enforcement, to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general equitable principles
(regardless of whether enforcement is sought in a proceeding in equity or
at law) and (2) except as rights to indemnity thereunder may be limited by
federal or state securities laws.
(v) Neither (A) the execution and delivery by ▇▇▇▇▇▇▇ of any
Dreyfus Agreement nor (B) the consummation by ▇▇▇▇▇▇▇ of the transactions
contemplated by, or the performance of its obligations under any Dreyfus
Agreement conflicts or will conflict with, or results or will result in a
breach of, the articles of incorporation or by-laws of Dreyfus or any
material agreement or instrument to which ▇▇▇▇▇▇▇ is a party or by which
▇▇▇▇▇▇▇ is bound, or any law, rule or regulation, or order of any court,
governmental instrumentality, securities exchange or association or
arbitrator, whether foreign or domestic, applicable to ▇▇▇▇▇▇▇.
(vi) No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association, whether
foreign or domestic, is required for the consummation of the transactions
contemplated in, or the performance by ▇▇▇▇▇▇▇ of its obligations under,
any Dreyfus Agreement, as the case may be, except such as (A) have been
obtained under the Investment Company Act, the Advisers Act, the Securities
Act, the Investment Company Act Rules, the Advisers Act Rules and the
Securities Act Rules, and (B) may be required under state securities or
"blue sky" laws, in connection with the purchase and distribution of the
APS by the Underwriters pursuant to this Underwriting Agreement.
(vii) The description of Dreyfus and its business, and the
statements attributable to the Investment Adviser, in the Registration
Statement and the Prospectus complies with the requirements of the
Securities Act, the Investment Company Act, the Securities Act Rules and
the Investment Company Act Rules.
(viii) There is no action, suit or proceeding before or by any
court, commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending or, to
▇▇▇▇▇▇▇'s knowledge, threatened against or affecting ▇▇▇▇▇▇▇ that
reasonably is expected to result in any material adverse change in the
condition, financial or otherwise, business affairs or business prospects
of Dreyfus or the ability of Dreyfus to fulfill its respective obligations
under any Dreyfus Agreement.
(ix) In the event that the Fund or Dreyfus makes available any
promotional materials (other than the sales materials) intended for use
only by qualified broker-dealers and registered representatives thereof by
means of an Internet web site or similar electronic means, ▇▇▇▇▇▇▇ will
install and maintain pre-qualification and password-protection or similar
procedures which will effectively prohibit access to such promotional
materials by persons other than qualified broker-dealers and registered
representatives thereof.
5. AGREEMENTS OF THE PARTIES.
(a) If the registration statement relating to the APS has not yet
become effective, the Fund will promptly file the Final Amendment, if not
previously filed, with the Commission, and will use its best efforts to cause
such registration statement to become effective and, as soon as the Fund is
advised, will advise the Managing Representative when the Registration Statement
or any amendment thereto has become effective. If the Registration Statement has
become effective and the Prospectus contained therein omits certain information
at the time of effectiveness pursuant to Rule 430A of the Securities Act Rules,
the Fund will file a 430A Prospectus pursuant to Rule 497(h) of the Securities
Act Rules as promptly as practicable, but no later than the second business day
following the earlier of the date of the determination of the offering price of
the APS or the date the Prospectus is first used after the Effective Date. If
the Registration Statement has become effective and the Prospectus contained
therein does not so omit such information, the Fund will file a Prospectus
pursuant to Rule 497(b) or (j) of the Securities Act Rules as promptly as
practicable, but no later than the fifth business day following the date of the
later of the Effective Date or the commencement of the public offering of the
APS after the Effective Date. In either case, the Fund will provide the Managing
Representative satisfactory evidence of the filing. The Fund will not file with
the Commission any Prospectus or any other amendment (except any post-effective
amendment which is filed with the Commission after the later of (x) one year
from the date of this Underwriting Agreement or (y) the date on which the
distribution of the APS is completed) or supplement to the Registration
Statement or the Prospectus unless a copy has first been submitted to the
Managing Representative a reasonable time before its filing and the Managing
Representative has not objected to it in writing within a reasonable time after
receiving the copy.
(b) For the period of three years from the date hereof, the Fund
will advise the Managing Representative promptly (1) of the issuance by the
Commission of any order in respect of the Fund or Dreyfus which relates to the
Fund, or which relates to any material arrangements or proposed material
arrangements involving the Fund and ▇▇▇▇▇▇▇, (2) of the initiation or
threatening of any proceedings for, or receipt by the Fund of any notice with
respect to, the suspension of the qualification of the APS for sale in any
jurisdiction or the issuance of any order by the Commission suspending the
effectiveness of the Registration Statement, (3) of receipt by the Fund, or any
representative or attorney of the Fund, of any other communication from the
Commission relating in any material way to the Fund, the Registration Statement,
the Notification, any Preliminary Prospectus, the Prospectus or to the
transactions contemplated by this Underwriting Agreement and (4) the issuance by
any court, regulatory body, administrative agency or other governmental agency
or body, whether foreign or domestic, of any order, ruling or decree, or the
threat to initiate any proceedings with respect thereto, regarding the Fund,
which relates in any material way to the Fund or any material arrangements or
proposed material arrangements involving the Fund. The Fund will make every
reasonable effort to prevent the issuance of any order suspending the
effectiveness of the Registration Statement and, if any such order is issued, to
obtain its lifting as soon as possible.
(c) If not delivered prior to the date of this Underwriting
Agreement, the Fund will deliver to the Managing Representative, without charge,
a signed copy of the registration statement and of any amendments (except any
post-effective amendment which is filed with the Commission after the later of
(x) one year from the date of this Underwriting Agreement or (y) the date on
which the distribution of the APS is completed) and as many conformed copies of
the registration statement and any amendments thereto (except any post-effective
amendment which is filed with the Commission after the later of (x) one year
from the date of this Underwriting Agreement or (y) the date on which the
distribution of the APS is completed) (excluding exhibits) as the Managing
Representative may reasonably request.
(d) During such period as a prospectus is required by law to be
delivered by an underwriter or a dealer, the Fund will deliver, without charge,
to the Underwriters and any dealers, at such office or offices as the
Underwriters may designate, as many copies of the Prospectus as the Underwriters
may reasonably request, and, if any event occurs during such period as a result
of which it is necessary to amend or supplement the Prospectus, in order to make
the statements therein, in light of the circumstances existing when such
Prospectus is delivered to a purchaser of APS, 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 Fund promptly will
prepare, submit to the Managing Representative, file with the Commission and
deliver, without charge, to the Underwriters and to dealers (whose names and
addresses the Managing Representative will furnish to the Fund) to whom APS may
have been sold by the Underwriters, and to other dealers on request, amendments
or supplements to the Prospectus so that the statements in such Prospectus, as
so amended or supplemented, will not, in light of the circumstances existing
when such 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 6 hereof.
(e) The Fund will make generally available to holders of the
Fund's securities, as soon as practicable but in no event later than the last
day of the 18th full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement, if applicable, satisfying the
provisions of Section 11(a) of the Securities Act and, at the option of the
Fund, Rule 158 of the Securities Act Rules.
(f) The Fund will take such actions as the Managing
Representative reasonably requests in order to qualify the APS for offer and
sale under the securities or "blue sky" laws of such jurisdictions as the
Underwriters reasonably designate; provided that the Fund shall not be required
in connection therewith or as a condition thereof to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction.
(g) The Fund will pay, or reimburse if paid by the Managing
Representative, whether or not the transactions with respect to the Fund
contemplated by this Underwriting Agreement are consummated or this Underwriting
Agreement is terminated (irrespective of who the party terminating any such
agreement is or the reason therefor), all costs and expenses incident to the
performance of the obligations of the Fund under this Underwriting Agreement,
including but not limited to the following: (i) the fees, disbursements and
expenses of the Fund's counsel and accountants in connection with the
registration of the APS and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus and the Prospectus and amendments and supplements thereto and of any
sales materials and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or reproducing this
Underwriting Agreement and any other documents in connection with the offering,
purchase, sale and delivery of the APS (including advertising expenses of the
Underwriters, if any); (iii) the cost of preparing share certificates; (iv) the
expenses (including, but not limited to, travel, hotels and other
accommodations) incurred by the Fund's or Dreyfus's directors, officers,
employees and other personnel in connection with meetings held with registered
brokers in connection with the offering of the APS, the preparing to market and
the marketing of the APS; (v) any fees charged by securities rating services for
rating the APS; (vi) the fees and expenses of DTC and its nominee, the Custodian
and the Auction Agent; (vii) the fees and expenses, if any, including reasonable
fees, expenses and disbursements of legal counsel, in connection with the
registration and qualification of the APS under state securities or "blue sky"
laws; and (viii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for. It is
understood, however, that, except as provided in this Section 5 and Section 7
hereof, the Underwriters will pay all of their own costs and expenses, including
the fees of their counsel and stock transfer taxes, if any, on resale of any of
the APS by them.
(h) If the transactions contemplated by this Underwriting
Agreement are not consummated, except as otherwise provided herein, no party
will be under any liability to any other party, except that (1) if this
Underwriting Agreement is terminated by (x) the Fund or Dreyfus pursuant to any
of the provisions hereof (otherwise than pursuant to Section 8 hereof) or (y) by
the Underwriters because of any inability, failure or refusal on the part of the
Fund or ▇▇▇▇▇▇▇ to comply with any material terms hereunder or because any of
the conditions in Section 6 are not satisfied, the Fund or Dreyfus will
reimburse the Underwriters for all out-of-pocket expenses (including the
reasonable fees, disbursements and other charges of their counsel) reasonably
incurred by them in connection with the proposed purchase and sale of the APS
and (2) no Underwriter who has failed or refused to purchase the APS agreed to
be purchased by it under this Underwriting Agreement, in breach of its
obligations pursuant to this Underwriting Agreement, will be relieved of
liability to the Fund and ▇▇▇▇▇▇▇ and the other Underwriters for damages
occasioned by its default.
(i) Without the prior written consent of the Managing
Representative, the Fund will not offer, sell or register with the Commission,
or announce an offering of, any equity securities of the Fund, within 180 days
after the Effective Date, except for the APS as described in the Prospectus and
any issuances of shares of Common Stock pursuant to the dividend reinvestment
plan established by the Fund.
(j) The Fund will direct the investment of the net proceeds of
the offering of the APS in such a manner as to comply with the investment
objective and policies of the Fund as described in the Prospectus.
(k) No later than the APS Closing Date, the Underwriters will
provide, and will cause any selling group member to whom they have sold APS to
provide, the Auction Agent with a list of the record names of the persons to
whom they have sold APS, the number of APS sold to each such person, and the
number of APS they are holding as of the APS Closing Date; provided that in lieu
of thereof, an Underwriter may provide the Auction Agent with a list indicating
itself as the sole holder of all the APS sold by such Underwriter.
(l) The Fund will use its best efforts to cause the APS, prior to
the APS Closing Date, to be assigned a rating of "AAA" by Standard & Poor's
Ratings Group ("Standard & Poor's").
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase the APS are subject to the accuracy on the date of this
Underwriting Agreement, and on the APS Closing Date, of the representations of
the Fund and ▇▇▇▇▇▇▇ in this Underwriting Agreement, to the accuracy and
completeness of all statements made by the Fund or Dreyfus or any of their
respective officers in any certificate delivered to the Managing Representative
or its counsel pursuant to this Underwriting Agreement, to performance by the
Fund and Dreyfus of their respective obligations under this Underwriting
Agreement and to each of the following additional conditions:
(a) The registration statement must have become effective by 5:30
p.m., New York City time, on the date of this Underwriting Agreement or such
later date and time as the Managing Representative consents to in writing. The
Prospectus must have been filed in accordance with Rule 497(b), (h) or (j), as
the case may be, of the Securities Act Rules.
(b) No order suspending the effectiveness of the Registration
Statement may be in effect and no proceedings for such purpose may be pending
before or, to the knowledge of counsel to the Underwriters, threatened by the
Commission, and any requests for additional information on the part of the
Commission (to be included in the Registration Statement or the Prospectus or
otherwise) must be complied with or waived to the reasonable satisfaction of the
Managing Representative.
(c) Since the dates as of which information is given in the
Registration Statement and the Prospectus, (1) there must not have been any
material change in the Common Stock, the APS or the liabilities of the Fund
except as set forth in or contemplated by the Prospectus; (2) there must not
have been any material adverse change in the general affairs, management,
business, financial condition or results of operations of the Fund or Dreyfus
whether or not arising from transactions in the ordinary course of business as
set forth in or contemplated by the Prospectus; (3) the Fund must not have
sustained any material loss or material interference with its business from any
court or from legislative or other governmental action, order or decree, whether
foreign or domestic, or from any other occurrence not described in the
Registration Statement and Prospectus; and (4) there must not have occurred any
event that makes untrue or incorrect in any material respect any statement or
information contained in the Registration Statement or Prospectus or that is not
reflected in the Registration Statement or Prospectus but should be reflected
therein in order to make the statements or information therein (in the case of
the Prospectus, in light of the circumstances in which they were made) not
misleading in any material respect; if, in the judgment of the Managing
Representative, any such development referred to in clause (1), (2), (3) or (4)
of this paragraph (c) makes it impracticable or inadvisable to consummate the
sale and delivery of the APS pursuant to this Underwriting Agreement by the
Underwriters, at the initial public offering price of the APS.
(d) The Managing Representative must have received on the APS
Closing Date a certificate, dated such date, of the President or a Vice
President or a Vice Chairman and the Controller, Treasurer, an Assistant
Treasurer, chief financial or accounting officer of each of the Fund and Dreyfus
certifying that (1) the signers have carefully examined the Registration
Statement, the Prospectus, and this Underwriting Agreement, (2) the
representations of the Fund (with respect to the certificates from such Fund
officers) and the representations of ▇▇▇▇▇▇▇ (with respect to the certificates
from such officers of ▇▇▇▇▇▇▇) in this Underwriting 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, management, business, financial condition
or results of operations of the Fund (with respect to the certificates from such
Fund officers) or ▇▇▇▇▇▇▇ (with respect to the certificates from such officers
of ▇▇▇▇▇▇▇), that is reasonably expected to materially and adversely affect the
ability of the Fund or ▇▇▇▇▇▇▇, as the case may be, to fulfill its obligations
under this Underwriting Agreement or the Management Agreement, whether or not
arising from transactions in the ordinary course of business, (4) with respect
to the Fund only, to the knowledge of such officers after reasonable
investigation, no order suspending the effectiveness of the Registration
Statement, prohibiting the sale of any of the APS or otherwise having a material
adverse effect on the Fund has been issued and no proceedings for any such
purpose are pending before or threatened by the Commission or any other
regulatory body, whether foreign or domestic, (5) to the knowledge of the
officers of ▇▇▇▇▇▇▇, after reasonable investigation, no order is reasonably
expected to have a material adverse effect on the ability of Dreyfus to fulfill
its obligations under this Underwriting Agreement or the Management Agreement,
as the case may be, has been issued and no proceedings reasonably expected to
have such effect are pending before or threatened by the Commission or any other
regulatory body, whether foreign or domestic, and (6) the Fund (with respect to
the certificates from such Fund officers) and ▇▇▇▇▇▇▇ (with respect to the
certificates from such officers of ▇▇▇▇▇▇▇) has performed all of its respective
agreements that this Underwriting Agreement requires it to perform by the APS
Closing Date (to the extent not waived in writing by the Managing
Representative).
(e) The Underwriters must receive on the APS Closing Date the
opinions dated such date substantially in the form of Annexes A and B to this
Underwriting Agreement from the counsel identified in each such Annex.
(f) The Underwriters must receive on the APS Closing Date from
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP and its affiliated entities, their
counsel, an opinion dated such date with respect to the Fund, the APS, the
Registration Statement and the Prospectus, this Underwriting Agreement and the
form and sufficiency of all proceedings taken in connection with the sale and
delivery of the APS. Such opinion and proceedings shall fulfill the requirements
of this Section 6(f) only if such opinion and proceedings are satisfactory in
all respects to the Managing Representative. The Fund and ▇▇▇▇▇▇▇ must have
furnished to such counsel such documents as counsel may reasonably request for
the purpose of enabling them to render such opinion.
(g) The Underwriters must receive on the date this Underwriting
Agreement is signed and delivered by the Underwriters a signed letter, dated
such date, substantially in the form of Annex C to this Underwriting Agreement
from the firm of accountants designated in such Annex. The Underwriters also
must receive on the APS Closing Date a signed letter from such accountants,
dated as of such date, confirming on the basis of a review in accordance with
the procedures set forth in their earlier letter that nothing has come to their
attention during the period from a date not more than five business days before
the date of this Underwriting Agreement, specified in the letter, to a date not
more than five business days before such date, that would require any change in
their letter referred to in the foregoing sentence.
(h) The APS shall have been accorded a rating of "AAA" by
Standard & Poor's and a letter to such effect, dated the APS Closing Date, shall
have been delivered to the Managing Representative.
(i) As of the APS Closing Date and assuming the receipt of the
net proceeds from the sale of the APS, the Investment Company Act Asset Coverage
and the Preferred Stock Basic Maintenance Amount (each as defined in the
Prospectus) each will be met.
All opinions, letters, evidence and certificates mentioned above
or elsewhere in this Underwriting Agreement will comply only if they are in form
and scope reasonably satisfactory to counsel for the Underwriters, provided that
any such documents, forms of which are annexed hereto, shall be deemed
satisfactory to such counsel if substantially in such form.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) Indemnification and contribution by the Fund and Dreyfus:
(i) Each of the Fund and Dreyfus, jointly and severally,
will indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of such Underwriter and each person, if any, who
controls such Underwriter within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act from and against any and
all losses, claims, liabilities, expenses and damages (including, but not
limited to, any and all investigative, legal and other expenses reasonably
incurred in connection with, and any and all amounts paid in settlement of,
any action, suit or proceeding between any of the indemnified parties and
any indemnifying parties or between any indemnified party and any third
party, or otherwise, or any claim asserted), as and when incurred, to which
such Underwriter or any such person, or any of them, 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, at
common law or otherwise, whether foreign or domestic, insofar as such
losses, claims, liabilities, expenses or damages arise out of or are based
on (i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Preliminary Prospectus, the
Prospectus, the sales materials or any amendment or supplement to the
Registration Statement, the Preliminary Prospectus, the Prospectus, or the
sales materials or in any documents filed under the Exchange Act and deemed
to be incorporated by reference into the Registration Statement, the
Preliminary Prospectus or the Prospectus, or in any application or other
document executed by or on behalf of the Fund or based on written
information furnished by or on behalf of the Fund filed in any jurisdiction
in order to qualify the APS under the securities laws thereof or filed with
the Commission, (ii) the omission or alleged omission to state, in any or
all such documents, a material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any act or
failure to act or any alleged act or failure to act by such Underwriter in
connection with, or relating in any manner to, the APS or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, liability, expense or damage arising out of or based upon
matters covered by clause (i) or (ii) above (provided, however, that
neither the Fund nor ▇▇▇▇▇▇▇ shall be liable under this clause (iii) to the
extent it is finally judicially determined by a court of competent
jurisdiction that such loss, claim, liability, expense or damage resulted
directly from any such acts or failures to act undertaken or omitted to be
taken by such Underwriter through its gross negligence, bad faith or
willful misconduct); provided that neither the Fund nor Dreyfus will be
liable to the extent that such losses, claims, liabilities, expenses or
damages (A) arise from the sale of the APS in the public offering to any
person by any Underwriter and is based on an untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in
conformity with information furnished in writing to the Fund by any
Underwriter expressly for inclusion in the Registration Statement, the
Preliminary Prospectus, the Prospectus, the sales material or any such
document (or) (B) results solely from an untrue statement of material fact
contained in, or the omission of a material fact from, the Preliminary
Prospectus, which untrue statement or omission was completely corrected in
the Prospectus (as then amended or supplemented) if the Fund shall sustain
the burden of proving that the Underwriters sold APS to the person alleging
such loss, claim, liability, expense or damage without sending or giving,
at or prior to written confirmation of such sale, a copy of the Prospectus
(as then amended or supplemented) if the Fund had previously furnished
copies thereof to the Underwriters within a reasonable amount of time prior
to such sale or such confirmation, and the Underwriters failed, to deliver
the corrected Prospectus, if required by law to have so delivered it and if
delivered would have been a complete defense against the person asserting
such loss, claim, liability, expense or damage; provided, further, that the
indemnification contained in this paragraph (a) with respect to any
Preliminary Prospectus shall not inure to the benefit of the Underwriters
(or to the benefit of any person controlling the Underwriters) on account
of any such loss, claim, damage, liability or expense arising from the sale
of the APS by the Underwriters 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 Securities Act and the Securities Act Rules and
Regulations, and the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus, provided that the
Fund has delivered the Prospectus to the Underwriters in requisite quantity
on a timely basis to permit such delivery or sending. This indemnity
agreement will be in addition to any liability that the Fund or Dreyfus
might otherwise have; provided, however, that any Underwriter shall not
seek indemnification from Dreyfus as to a Claim (as defined below) until 90
days after such Underwriter has notified the Fund pursuant to Section 7(c)
of its proposal to claim the right to indemnification or its right to
reimbursement of fees, disbursements and other charges (collectively, a
"Claim"), and the Fund failed to pay or reimburse such Underwriter within
such 90-day period for all amounts so claimed by such party to be payable
or reimbursable with respect to such Claim (on a case by case basis)
pursuant to this Section 7(a)(i); provided, however, that if the Fund
agrees in writing to pay such amounts claimed within such 90-day period,
such Underwriter shall not seek indemnification from Dreyfus until the Fund
has had a reasonable time period to remit to such Underwriter such amounts
claimed, and such period shall be the longer of 30 days after the 90-day
period or such other period agreed to in writing between the Fund and such
Underwriter.
(ii) Notwithstanding Section 7(a)(i), ▇▇▇▇▇▇▇ will in
addition indemnify and hold harmless the Underwriter, the directors,
officers, employees and agents of such Underwriter and each person, if any,
who controls such Underwriter within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act from and against any and
all losses, claims, liabilities, expenses and damages (including, but not
limited to, any and all investigative, legal and other expenses reasonably
incurred in connection with, and any and all amounts paid in settlement of,
any action, suit or proceeding between any of the indemnified parties and
any indemnifying parties or between any indemnified party and any third
party, or otherwise, or any claim asserted), as and when incurred, to which
such Underwriter or any such person, or any of them, 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, at
common law or otherwise, whether foreign or domestic, insofar as such
losses, claims, liabilities, expenses or damages arise out of or are based
on (i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Preliminary Prospectus, the
Prospectus, the sales materials or any amendment or supplement to the
Registration Statement, the Preliminary Prospectus, the Prospectus, or the
sales materials or in any documents filed under the Exchange Act and deemed
to be incorporated by reference into the Registration Statement, the
Preliminary Prospectus or the Prospectus, or in any application or other
document executed by or on behalf of the Fund or based on written
information furnished by or on behalf of the Fund filed in any jurisdiction
in order to qualify the APS under the securities laws thereof or filed with
the Commission, but only to the extent that such untrue statement or
alleged untrue statement concerns statements therein describing ▇▇▇▇▇▇▇ and
its business, (ii) the omission or alleged omission to state, in any or all
such documents, a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that
such omission or alleged omission concerns statements therein describing
▇▇▇▇▇▇▇ and its business, or (iii) any act or failure to act or any alleged
act or failure to act by such Underwriter in connection with, or relating
in any manner to, the APS or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, liability, expense
or damage arising out of or based upon matters covered by clause (i) or
(ii) above (provided, however, that ▇▇▇▇▇▇▇ shall not be liable under this
clause (iii) to the extent it is finally judicially determined by a court
of competent jurisdiction that such loss, claim, liability, expense or
damage resulted directly from any such acts or failures to act undertaken
or omitted to be taken by such Underwriter through its gross negligence,
bad faith or willful misconduct); provided that ▇▇▇▇▇▇▇ will not be liable
to the extent that such losses, claims, liabilities, expenses or damages
(A) arise from the sale of the APS in the public offering to any person by
the Underwriter and is based on an untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information relating to the Underwriter furnished in writing to the Fund by
the Underwriter expressly for inclusion in the Registration Statement, the
Preliminary Prospectus, the Prospectus, the sales material or any such
document or (B) results solely from an untrue statement of material fact
contained in, or the omission of a material fact from, such Preliminary
Prospectus, which untrue statement or omission was completely corrected in
the Prospectus (as then amended or supplemented) if ▇▇▇▇▇▇▇ shall sustain
the burden of proving that the Underwriter sold APS to the person alleging
such loss, claim, liability, expense or damage without sending or giving,
at or prior to written confirmation of such sale, a copy of the Prospectus
(as then amended or supplemented) if the Fund had previously furnished
copies thereof to the Underwriter within a reasonable amount of time prior
to such sale or such confirmation, and the Underwriter failed, to deliver
the corrected Prospectus, if required by law to have so delivered it and if
delivered ▇▇▇▇ have been a complete defense against the person asserting
such loss, claim, liability, expense or damage; provided, further, that the
indemnification contained in this paragraph (a)(ii) with respect to any
Preliminary Prospectus shall not inure to the benefit of the Underwriters
(or to the benefit of any person controlling the Underwriters) on account
of any such loss, claim, damage, liability or expense arising from the sale
of the APS by the Underwriters 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 Securities Act and the Securities Act Rules and
Regulations, and the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus, provided that the
Fund has delivered the Prospectus to the Underwriters in requisite quantity
on a timely basis to permit such delivery or sending. This indemnity
agreement will be in addition to any liability that ▇▇▇▇▇▇▇ might otherwise
have.
(b) Each Underwriter will indemnify and hold harmless the Fund
and ▇▇▇▇▇▇▇, each person, if any, who controls the Fund or Dreyfus within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
each director of the Fund and each officer of the Fund who signs the
Registration Statement to the same extent as the foregoing indemnity from the
Fund or Dreyfus to the Underwriter, but only insofar as losses, claims,
liabilities, expenses or damages arise out of or are based on any untrue
statement or omission or alleged untrue statement or omission of a material fact
made in reliance on and in conformity with information relating to such
Underwriter furnished in writing to the Fund by such Underwriter expressly for
use in the Registration Statement, the Preliminary Prospectus or Prospectus.
This indemnity will be in addition to any liability that such Underwriter might
otherwise have; provided, however, that in no case shall such Underwriter be
liable or responsible for any amount in excess of the fees and commissions
received by such Underwriter (whether from the Fund or otherwise).
(c) Any party that proposes to assert the right to be indemnified
under this Section 7 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 7, 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 will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provision of this Section 7 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel reasonably satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
disbursements and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on the advice of counsel) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. Subject to the requirements of
Investment Company Act Release No. 11330, all such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they are
incurred. It is understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than
one separate firm (in addition to local counsel) admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. An
indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent (which consent will not be unreasonably
withheld). No indemnifying party shall, without the prior written consent of
each indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding relating to
the matters contemplated by this Section 7 (whether or not any indemnified party
is a party thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 7 is
applicable in accordance with its terms but for any reason is held to be
unavailable from the Fund, ▇▇▇▇▇▇▇ or the Underwriters, the Fund, ▇▇▇▇▇▇▇ and
the Underwriters will contribute to the total losses, claims, liabilities,
expenses and damages (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Fund and ▇▇▇▇▇▇▇ from persons other than the
Underwriters, such as persons who control the Fund or Dreyfus within the meaning
of the Securities Act or the Exchange Act, officers of the Fund who signed the
Registration Statement and directors of the Fund, who may also be liable for
contribution) to which the Fund, ▇▇▇▇▇▇▇ and the Underwriters may be subject in
such proportion as shall be appropriate to reflect the relative benefits
received by the Fund and ▇▇▇▇▇▇▇ on the one hand and the Underwriters on the
other. The relative benefits received by the Fund and ▇▇▇▇▇▇▇ 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 (before deducting
expenses) received by the Fund bear to the total discounts, fees and commissions
received by the Underwriters (whether from the Fund or otherwise). If, but only
if, the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such proportion
as is appropriate to reflect not only such relative benefits referred to in the
foregoing sentence but also the relative fault of the Fund and ▇▇▇▇▇▇▇ on the
one hand and the Underwriters on the other hand in connection with respect to
the statements or omissions or alleged statements or omissions that resulted in
the losses, claims, liabilities, expenses or damages joint or several (including
any investigative, legal or other expenses reasonably incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claim asserted), as well as any other relevant equitable considerations
appropriate in the circumstances. Such relative fault of the parties shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Fund, ▇▇▇▇▇▇▇ or the Underwriters, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission and any other
equitable considerations appropriate in the circumstances. The Fund, ▇▇▇▇▇▇▇ and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 7(d) were to be determined by pro rata allocation or by
any other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, liability, expense or damage, or action in
respect thereof, referred to above in this Section 7(d) shall be deemed to
include, for purposes of this Section 7(d) any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding any other provisions of
this Section 7(d), the Underwriters shall not be required to contribute any
amount in excess of the fees and commissions received by them (whether from the
Fund or otherwise)and no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7(d), any person who controls a
party to this Underwriting Agreement within the meaning of the Securities Act
will have the same rights to contribution as that party, and each director of
the Fund and each officer of the Fund who signed the Registration Statement will
have the same rights to contribution as the Fund, subject in each case to the
provisions hereof. 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 7(d), notify such
party or parties from whom contribution may be sought, but the omission so to
notify 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 7(d). 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). The Underwriters' obligations to contribute pursuant to this Section
7 are several in proportion to the respective number of APS set forth opposite
their names in Schedule 1 (or such number of APS as determined pursuant to
Section 9 hereof) and not joint.
(e) Notwithstanding any other provisions in this Section 7, no
party shall be entitled to indemnification or contribution under this
Underwriting Agreement against any loss, claim, liability, expense or damage
arising by reason of such person's willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder, or by reason of such
persons's reckless disregard of such person's obligations and duties hereunder.
(f) The Fund and ▇▇▇▇▇▇▇ acknowledge that the statements (1) with
respect to the public offering of the APS as set forth on the cover page of, and
(2) in the second paragraph under the caption "Underwriting" relating to dealer
concessions and reallowances in the Prospectus constitute the only information
furnished in writing to the Fund by the Underwriters expressly for use in such
document. The Underwriters severally confirm that these statements are correct
in all material respects and were so furnished by or on behalf of the
Underwriters for use in the Prospectus.
8. TERMINATION. This Underwriting Agreement may be terminated by the
Managing Representative by notifying the Fund at any time:
(a) before the later of the effectiveness of the Registration
Statement and the time when any of the APS are first generally offered pursuant
to this Underwriting Agreement by the Managing Representative to dealers by
letter or telegram;
(b) at or before the APS Closing Date if, in the sole judgment of
the Managing Representative, payment for and delivery of any APS is rendered
impracticable or inadvisable because (1) trading in the APS or the Common Stock
of the Fund is suspended by the Commission or trading in the Common Stock is
suspended by the principal exchange that lists the Common Stock, (2) trading in
securities generally on the New York Stock Exchange or the Nasdaq Stock Market
or other comparable U.S. securities exchange shall have been suspended or
limited or minimum or maximum prices shall have been generally established on
such exchange or over-the-counter market, (3) additional material governmental
restrictions, not in force at the date of this Underwriting Agreement, have been
imposed upon trading in securities or trading has been suspended on any U.S.
securities exchange, (4) a general banking moratorium has been established by
U.S. federal or New York authorities or (5) any material adverse change in the
financial or securities markets in the United States or in political, financial
or economic conditions in the United States or any outbreak or material
escalation of hostilities or declaration by the United States of a national
emergency or war or other calamity or crisis shall have occurred the effect of
any of which is such as to make it, in the sole judgement of the Managing
Representative, impracticable or inadvisable to market the APS on the terms and
in the manner contemplated by the Prospectus; or
(c) at or before the APS Closing Date, if any of the conditions
specified in Section 6 have not been fulfilled when and as required by this
Underwriting Agreement.
9. SUBSTITUTION OF UNDERWRITERS. If one or more of the Underwriters
fails (other than for a reason sufficient to justify the termination of this
Underwriting Agreement) to purchase on the APS Closing Date the APS agreed to be
purchased on such date by such Underwriter or Underwriters, the Managing
Representative may find one or more substitute underwriters to purchase such APS
or make such other arrangements as the Managing Representative deems advisable,
or one or more of the remaining Underwriters may agree to purchase such APS in
such proportions as may be approved by the Managing Representative, in each case
upon the terms set forth in this Underwriting Agreement. If no such arrangements
have been made within 36 hours after such date, and
(a) the number of APS to be purchased by the defaulting
Underwriters on such date does not exceed 10% of the APS that the Underwriters
are obligated to purchase on the APS Closing Date, each of the nondefaulting
Underwriters will be obligated to purchase such APS on the terms set forth in
this Underwriting Agreement in proportion to their respective obligations under
this Underwriting Agreement, or
(b) the number of APS to be purchased by the defaulting
Underwriters on the APS Closing Date exceeds 10% of the APS to be purchased by
all the Underwriters on the APS Closing Date, the Fund will be entitled to an
additional period of 24 hours within which to find one or more substitute
underwriters reasonably satisfactory to the Managing Representative to purchase
such APS on the terms set forth in this Underwriting Agreement.
In any such case, either the Managing Representative or the Fund will
have the right to postpone the APS Closing Date for not more than five business
days in order that necessary changes and arrangements (including any necessary
amendments or supplements to the Registration Statement or the Prospectus) may
be effected by the Managing Representative and the Fund. If the number of APS to
be purchased on the APS Closing Date by such defaulting Underwriter or
Underwriters exceeds 10% of the APS that the Underwriters are obligated to
purchase on such date, and none of the nondefaulting Underwriters or the Fund
makes arrangements pursuant to this Section within the period stated for the
purchase of the APS that the defaulting Underwriters agreed to purchase, this
Underwriting Agreement will terminate without liability on the part of any
nondefaulting Underwriter, the Fund or Dreyfus, except as provided in Sections
5(g) and 7 hereof. This Section 9 will not affect the liability of any
defaulting Underwriter to the Fund or the nondefaulting Underwriters arising out
of such default. A substitute underwriter will become an Underwriter for all
purposes of this Underwriting Agreement.
10. MISCELLANEOUS.
(a) The reimbursement, indemnification and contribution
agreements in Sections 5(g) and 7 hereof and the representations of the Fund,
▇▇▇▇▇▇▇ and the Underwriters in this Underwriting Agreement will remain in full
force and effect regardless of any termination of this Underwriting Agreement.
The reimbursement, indemnification and contribution agreements in Sections 5(g)
and 7 hereof and the representations and agreements of the Fund, ▇▇▇▇▇▇▇ and the
Underwriters in this Underwriting Agreement shall survive the APS Closing Date
and shall remain in full force and effect regardless of any investigation made
by or on behalf of any Underwriter, the Fund, ▇▇▇▇▇▇▇ or any controlling person
and delivery of and payment for the APS.
(b) This Underwriting Agreement is for the benefit of the
Underwriters, the Fund, ▇▇▇▇▇▇▇ and their successors and assigns, and, to the
extent expressed in this Underwriting Agreement, for the benefit of persons
controlling any of the Underwriters, the Fund, ▇▇▇▇▇▇▇ and directors and
officers of the Fund and ▇▇▇▇▇▇▇, and their respective successors and assigns,
and no other person, partnership, association or corporation will acquire or
have any right under or by virtue of this Underwriting Agreement. The term
"successors and assigns" does not include any purchaser of the APS from any
Underwriter merely because of such purchase.
(c) All notices and communications under this Underwriting
Agreement will be in writing, effective only on receipt and mailed or delivered,
by messenger, facsimile transmission or otherwise, to the Underwriters in care
of PaineWebber Incorporated, Attn: Financial Institutions Group, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, to the Fund or Dreyfus at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
(d) This Underwriting Agreement may be signed in multiple
counterparts that taken as a whole constitute one agreement.
(e) This Underwriting Agreement will be governed by and construed
in accordance with the laws of the State of New York without reference to choice
of law principles thereof.
[REMAINDER OF THIS PAGE BLANK]
Please confirm that the foregoing correctly sets forth the
agreement between us.
Very truly yours,
Dreyfus Strategic Municipals, Inc.
By: ______________________________
Name:
Title:
The Dreyfus Corporation
By: ______________________________
Name:
Title:
Confirmed:
PaineWebber Incorporated
c/o PaineWebber Incorporated
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
By: PaineWebber Incorporated
By: _____________________________
Name:
Title:
Acting on behalf of itself
and the Underwriters
named in Schedule 1
SCHEDULE 1
NUMBER OF NUMBER OF NUMBER OF NUMBER OF NUMBER OF
SERIES M APS TO SERIES T APS TO SERIES W APS TO SERIES TH APS TO SERIES F APS TO
NAME BE PURCHASED BE PURCHASED BE PURCHASED BE PURCHASED BE PURCHASED
---- ------------ ------------ ------------ ------------ ------------
PaineWebber
Incorporated 2,280 2,280 2,280 2,280 2,280
ANNEX A
FORM OF OPINION OF
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP REGARDING THE FUND
1. The Registration Statement and all post-effective amendments, if any,
are effective under the Securities Act and, to the best of our
knowledge, no stop order with respect thereto has been issued and no
proceeding for that purpose has been instituted or is threatened by
the Commission. Any filing of the Prospectus or any supplements
thereto required under Rule 497 of the Securities Act Rules prior to
the date hereof have been made in the manner and within the time
required by such Rule.
2. The Fund has been duly organized and is validly existing as a
corporation under the laws of the State of Maryland, with full
corporate power and authority to conduct all of the activities
conducted by it, to own or lease all assets owned (or to be owned) or
leased (or to be leased) by it and to conduct its business as
described in the Registration Statement and Prospectus, and the Fund
is duly licensed and qualified to do business and in good standing in
each jurisdiction in which its ownership or leasing of property
requires such qualification, except where the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Fund. The Fund has no subsidiaries.
3. The capitalization of the Fund is as set forth in the Registration
Statement and the Prospectus. The shares of Common Stock and the APS
conform in all material respects to the description of them in the
Prospectus. All the outstanding shares of Common Stock have been duly
authorized and are validly issued, fully paid and nonassessable. The
APS to be issued and delivered to the Underwriters in accordance with
the Underwriting Agreement against payment therefor as provided by the
Underwriting Agreement have been duly authorized and when issued and
delivered to the Underwriters will have been validly issued and will
be fully paid and nonassessable (except as described in the
Registration Statement). No person is entitled to any preemptive or
other similar rights in connection with the issuance of the APS.
4. The Fund is duly registered with the Commission under the Investment
Company Act as a diversified, closed-end management investment company
and all action under the Securities Act, the Investment Company Act,
the Securities Act Rules and the Investment Company Act Rules, as the
case may be, necessary to make the public offering and consummate the
sale of the APS as provided in the Underwriting Agreement has been
taken by the Fund.
5. The Fund has full corporate power and authority to enter into each of
the Underwriting Agreement, the Management Agreement the Custody
Agreement, the Transfer Agency Agreement, the Auction Agent Agreement
and the DTC Agreement (collectively, the "Fund Agreements") and to
perform all of the terms and provisions thereof to be carried out by
it and (A) each Fund Agreement has been duly and validly authorized,
executed and delivered by the Fund, (B) each Fund Agreement complies
in all material respects with all applicable provisions of the
Investment Company Act, the Advisers Act, the Investment Company Act
Rules and the Advisers Act Rules, as the case may be, and (C) assuming
due authorization, execution and delivery by the other parties
thereto, each Fund Agreement constitutes the legal, valid and binding
obligation of the Fund enforceable in accordance with its terms, (1)
subject, as to enforcement, to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and similar laws
relating to or affecting creditors' rights generally and court
decisions with respect thereto, and to general equitable principles
(regardless of whether enforcement is sought in a proceeding in equity
or at law) and to termination under the Investment Company Act, and
(2) except as rights to indemnity thereunder may be limited by Federal
or state securities laws.
6. None of (A) the execution and delivery by the Fund of the Fund
Agreements, (B) the issue and sale by the Fund of the APS as
contemplated by the Underwriting Agreement and (C) the performance by
the Fund of its obligations under the Fund Agreements or consummation
by the Fund of the other transactions contemplated by the Fund
Agreements conflicts with or will conflict with, or results or will
result in a breach of, the Articles of Incorporation or the By-Laws of
the Fund or any Material Agreement ("Material Agreement" means those
material agreements or instruments, other than Fund Agreements, which
have been identified to us by representatives of the Fund as all
agreements and instruments which are material to the business or
financial condition of the Fund and which have been listed on Schedule
A hereto) to which the Fund is a party or by which the Fund is bound,
or any law, rule or regulation known to us to be applicable to the
Fund, or, to our knowledge, order of any court, governmental
instrumentality, securities exchange or association or arbitrator,
whether foreign or domestic, having jurisdiction over the Fund, except
that we express no opinion as to the securities or "blue sky" laws
applicable in connection with the purchase and distribution of the APS
by the Underwriters pursuant to the Underwriting Agreement.
7. To our knowledge, based on inquiry of appropriate officers and
representatives of the Fund, the Fund is not currently in breach of,
or in default under, in any material respect, any written agreement or
instrument to which it is a party or by which it or its property is
bound or affected.
8. No consent, approval, authorization or order of any court or
governmental agency or body or securities exchange or association,
whether foreign or domestic, is legally required by the Fund for the
consummation by the Fund of the transactions to be performed by the
Fund or the performance by the Fund of all the terms and provisions to
be performed by or on behalf of it in each case as contemplated in the
Fund Agreements, except such as (A) have been obtained under the
Securities Act, the Investment Company Act, the Advisers Act, the
Securities Act Rules, the Investment Company Act Rules and the
Advisers Act Rules and (B) may be required by the American Stock
Exchange or under state securities or "blue sky" laws in connection
with the purchase and distribution of the APS by the Underwriters
pursuant to the Underwriting Agreement.
9. To our knowledge, based, as to the existence thereof, solely on
inquiry of appropriate officers and representatives of the Fund and
not on any docket search or any other independent inquiry, there is no
action, suit or proceeding before or by any court, commission,
regulatory body, administrative agency or other governmental agency or
body, foreign or domestic, now pending or threatened against or
affecting the Fund, which is required to be disclosed in the
Prospectus that is not disclosed in the Prospectus, and to the best of
our knowledge, based on inquiry of appropriate officers and
representatives of the Fund, there are no contracts, franchises or
other documents that are of a character required to be described in,
or that are required to be filed as exhibits to, the Registration
Statement that have not been adequately described or filed as
required.
10. The Common Stock is listed on the New York Stock Exchange.
11. The Fund does not require any tax or other rulings to enable it to
qualify as a regulated investment company under Subchapter M of the
Code.
12. Each of the sections in the Prospectus entitled "Taxes" and in the
Statement of Additional Information entitled "Taxes" is a fair summary
of the principal United States Federal income tax rules currently in
effect applicable to the Fund and to the purchase, ownership and
disposition of the APS.
13. The Registration Statement (except the financial statements and
schedules and other financial data included therein as to which we
express no view), at the time it became effective, and the Prospectus
(except as aforesaid), as of the date thereof, complied as to form in
all material respects to the requirements of the Securities Act, the
Investment Company Act and the rules and regulations of the Commission
thereunder.
In rendering our opinion, we have relied, as to factual matters, upon
the attached written certificates and statements of officers of the Fund. As to
matters of Maryland law, we have relied with your consent on the opinion of
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, LLP dated as of an even date herewith.
While we have not verified, and are not passing upon and do not assume
any responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus, we have participated
in conferences with certain officers and other representatives of the Fund,
▇▇▇▇▇▇▇, counsel for ▇▇▇▇▇▇▇, representatives of the independent auditors for
the Fund and your representatives, at which the contents of the Registration
Statement and Prospectus and related matters were discussed and, on the basis of
the foregoing (relying as to materiality to a large extent on the opinions of
officers and other representatives of the Fund and ▇▇▇▇▇▇▇), no facts have come
to our attention that lead us to believe that the Registration Statement (except
with respect to the financial statements, schedules and other financial data,
including therein, as to which we make no statement), at the time it became
effective, 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, in the light of the circumstances under which they were
made, not misleading or that the Prospectus (except with respect to the
financial statements, schedules and other financial data included therein, as to
which we make no statement), as of its date, and as of the date hereof, contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
ANNEX B
FORM OF OPINION OF INTERNAL COUNSEL
REGARDING THE DREYFUS CORPORATION
1. ▇▇▇▇▇▇▇ has been duly formed and is validly existing as a corporation
under the laws of its jurisdiction of incorporation with full power
and authority to conduct all of the activities conducted by it, to own
or lease all of the assets owned or leased by it and to conduct its
business as described in the Registration Statement and Prospectus,
and ▇▇▇▇▇▇▇ is duly licensed and qualified and in good standing in
each other jurisdiction in which it is required to be so qualified and
Dreyfus owns, possesses or has obtained and currently maintains all
governmental licenses, permits, consents, orders, approvals and other
authorizations, whether foreign or domestic, necessary for Dreyfus to
carry on its business as contemplated in the Registration Statement
and the Prospectus.
2. ▇▇▇▇▇▇▇ is duly registered as an investment adviser under the Advisers
Act and is not prohibited by the Advisers Act, the Investment Company
Act, the Advisers Act Rules or the Investment Company Act Rules from
acting as investment adviser for the Fund as contemplated by the
Management Agreement, the Registration Statement and the Prospectus.
3. ▇▇▇▇▇▇▇ has full power and authority to enter into each of the
Underwriting Agreement and the Management Agreement (collectively, the
"Dreyfus Agreements") and to carry out all the terms and provisions
thereof to be carried out by it, and each such agreement has been duly
and validly authorized, executed and delivered by ▇▇▇▇▇▇▇; each
Dreyfus Agreement complies in all material respects with all
provisions of the Investment Company Act, the Advisers Act, the
Investment Company Act Rules and the Advisers Act Rules; and assuming
due authorization, execution and delivery by the other parties
thereto, each Dreyfus Agreement constitutes a legal, valid and binding
obligation of Dreyfus, enforceable in accordance with its terms, (1)
subject, as to enforcement, to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and to general
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law) and (2) as rights to indemnity
thereunder may be limited by federal or state securities laws.
4. Neither (A) the execution and delivery by ▇▇▇▇▇▇▇ of any Dreyfus
Agreement nor (B) the consummation by ▇▇▇▇▇▇▇ of the transactions
contemplated by, or the performance of its obligations under any
Dreyfus Agreement conflicts or will conflict with, or results or will
result in a breach of, the Articles of Incorporation or Bylaws of
Dreyfus or any agreement or instrument to which ▇▇▇▇▇▇▇ is a party or
by which ▇▇▇▇▇▇▇ is bound, or any law, rule or regulation, or order of
any court, governmental instrumentality, securities exchange or
association or arbitrator, whether foreign or domestic, applicable to
Dreyfus.
5. No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association,
whether foreign or domestic, is required for the consummation of the
transactions contemplated in, or the performance by ▇▇▇▇▇▇▇ of its
obligations under, any Dreyfus Agreement, except such as have been
obtained under the Investment Company Act, the Advisers Act, the
Securities Act, the Investment Company Act Rules, the Advisers Act
Rules and the Securities Act Rules.
6. The description of Dreyfus and its business, and the statements
attributable to Dreyfus, in the Registration Statement and the
Prospectus complies with the requirements of the Securities Act, the
Investment Company Act, the Securities Act Rules and the Investment
Company Act Rules and do not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading.
7. There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending or, to
our knowledge, threatened against or affecting Dreyfus of a nature
required to be disclosed in the Registration Statement or Prospectus
or that might reasonably result in any material adverse change in the
condition, financial or otherwise, business affairs or business
prospects of Dreyfus or the ability of Dreyfus to fulfill its
respective obligations under any Dreyfus Agreement.
In connection with the registration of the APS, ▇▇▇▇▇▇▇ has been
advised by myself and/or other counsel on the legal staff of Dreyfus as to the
requirements of the Securities Act, the Investment Company Act and the
applicable rules and regulations of the Commission thereunder and have rendered
other legal advice and assistance to ▇▇▇▇▇▇▇ in the course of the preparation of
the Registration Statement and the Prospectus describing ▇▇▇▇▇▇▇ and its
business. Rendering such assistance involved, among other things, discussions
and inquiries concerning various legal and related subjects and reviews of
certain corporate records, documents and proceedings. We also participated in
conferences with representatives of the Fund and its accountants and Dreyfus at
which statements describing ▇▇▇▇▇▇▇ and its business in the Registration
Statement and Prospectus were discussed. With your permission, we have not
undertaken, except as otherwise indicated herein, to determine independently,
and do not assume any responsibility for, the accuracy, completeness or fairness
of those statements in the Registration Statement or Prospectus. On the basis of
the information which was developed in the course of the performance of the
services referred to above, no information has come to our attention that would
lead us to believe that the statements describing ▇▇▇▇▇▇▇ and its business in
the Registration Statement, at the time it became effective, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make those statements not misleading or
that the statements describing ▇▇▇▇▇▇▇ and its business in the Prospectus, as of
its date and as of the date hereof, contained or contains an untrue statement of
a material fact or omitted or omits to state a material fact necessary in order
to make those statements, in the light of the circumstances under which they
were made, not misleading or that the statements describing ▇▇▇▇▇▇▇ and its
business in any amendment or supplement to the Prospectus, as of its respective
date, and as of the date hereof, contained any untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make
those statements in the Prospectus, in the light of the circumstances under
which they were made, not misleading.
ANNEX C
FORM OF ACCOUNTANT'S LETTER
January ___, 2000
PAINEWEBBER INCORPORATED
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
We have audited the statement of assets and liabilities of Dreyfus Strategic
Municipals, Inc. (the "Fund"), including the statement of investments, as of
September 30, 1999, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended and financial highlights for each of the five years in the
period then ended (the "September 30, 1999 Financial Statements"), incorporated
by reference in the Registration Statement on Form N-2 filed by the Fund under
the Securities Act of 1933 (the "Act") (No. 333-84699) and under the Investment
Company Act of 1940 (the "1940 Act") (No. 811-5245); our report with respect
thereto also is incorporated by reference in such Registration Statement as
amended by Pre-Effective Amendment No. 1 under the Act and Amendment No. 10
under the 1940 Act to be filed with the Securities Exchange Commission on
January , 2000, herein referred to as the "Registration Statement".
In connection with the Registration Statement:
1. We are independent auditors with respect to the Fund within the
meaning of the Act and the applicable published rules and regulations
thereunder.
2. In our opinion the September 30, 1999 Financial Statements audited by
us and incorporated by reference in the Registration Statement comply
as to form in all material respects with the applicable accounting
requirements of the Act, the 1940 Act and the related published rules
and regulations thereunder.
3. For the purposes of this letter, we have read the minutes of all
meetings of the shareholders, the Board of Directors and all
committees thereof as set forth in the minute books of the Fund,
officials of the Fund having advised us that the Minutes of all such
meetings through January , 2000, were set forth therein.
4. We have not audited any financial statements of the Fund as of any
date or for any period subsequent to September 30, 1999. The purpose
(and therefore the scope) of our audit as of September 30, 1999, was
to enable us to express our opinion on the September 30, 1999
Financial Statements. Therefore, we are unable to express and do not
express an opinion on the financial position, results of operations,
or changes in net assets of the Fund as of any date or for any period
subsequent to September 30, 1999.
5. Fund officials have advised us that no financial statements as of any
date or for any period subsequent to September 30, 1999 are available
We have inquired of certain officials of the Fund who have
responsibility for financial and accounting matters as to whether
there was any change at January ___, 2000 (our work did not extend to
the period from January ___, 2000 to January ___, 2000, inclusive) in
the capital stock or net assets of the Fund or any increase in the
long-term debt of the Fund as compared with the amounts shown on the
September 30, 1999 Annual Financial Statements incorporated by
reference in the Registration Statement. On the basis of these
inquiries, nothing came to our attention that caused us to believe
that there was any such change in capital stock or net assets of the
Fund or any such increase in the long-term debt of the Fund, except
for a decrease in net assets from $___________ as of September 30,
1999 to $____________ as of January ___, 2000 and except in all
instances for changes or increases that the Registration Statement
discloses have occurred or may occur.
6. For purposes of this letter, we have read the following information as
set forth in the Registration Statement and have performed the
additional procedures stated below with respect to such information.
PAGE PROCEDURES AND FINDINGS
14 "Capitalization." - We compared the dollar amounts shown in the column
titled "Actual" to information found in the accounting records of the
Fund provided by management and found them to be in agreement. We
compared the dollar amounts shown under the caption "Actual" with the
dollar amounts shown under the caption "As Adjusted" and found them to
be in agreement with the exception of the inclusion of $300,000,000 of
Preferred Stock and "Capital in excess of par value attributable to
common stock," which we have been advised by management, has been
adjusted for estimated offering costs and sales load expenses of
$________ attributable to the Preferred Stock (however, we do not
comment as to the reasonableness of the offering costs and sales load
expenses or whether such issuance will actually take place). We
express no opinion on the reasonableness of the amounts in that they
were based on accounting records which were not audited by us.
14 "Portfolio Composition." - We recalculated the "Number of Issues,"
"Value (In Thousands)" and "Percent" amounts shown in the table in the
section "Portfolio Composition" based upon information found in the
accounting records of the Fund provided by management and found no
exceptions. We express no opinion on the reasonableness of the amounts
in that they were based on accounting records which were not audited
by us.
37 "Investment Company Act Preferred Stock Asset Coverage." - We proved
the arithmetic accuracy of the percentage computation shown, after
rounding. We express no opinion on the reasonableness of the amounts
in that they were based on analyses prepared by management of the Fund
which were not audited by us. 437 "Description of Capital Structure."
- We recalculated the net asset value per share of common stock at
December 31, 1999 based on information found in the accounting records
of the Fund provided by management and found such information to be in
agreement. We express no opinion on the reasonableness of the amounts
in that they were based on accounting records which were not audited
by us.
47. "Description of Capital Structure." - We recalculated the net asset
value per share of common stock at December 31, 1999 based on
information found in the accounting records of the Fund provided
by management and found such information to be in agreement. We
express no opinion on the reasonableness of the amounts in that they
were based on accounting records which were not audited by us.
7. It should be understood that we make no representations as to
questions of legal interpretation or as to the sufficiency for your
purposes of the procedures enumerated in the preceding paragraph;
also, such procedures would not necessarily reveal any material
misstatement of the information identified in 5 above. Further, we
have addressed ourselves solely to the foregoing data as set forth in
the Registration Statement and make no representations as to the
adequacy of disclosure or as to whether any material facts have been
omitted.
8. Our audit of the September 30, 1999 Financial Statements, referred to
in the introductory paragraph of this letter was comprised of audit
tests and procedures deemed necessary for the purpose of expressing an
opinion on such financial statements taken as a whole. For neither the
date referred to therein nor any other period did we perform audit
tests for the purpose of expressing an opinion on individual balances
of accounts or summaries of selected transactions such as those
enumerated above and accordingly, we do not express an opinion
thereon.
9. This letter is solely for the information of the addressees and to
assist the underwriters in conducting and documenting their
investigation of the affairs of the Fund in connection with the
offering of the securities covered by the Registration Statement, and
is not to be used, circulated, quoted or otherwise referred to for any
other purpose, including but not limited to, the registration,
purchase or sale of securities, nor is it to be filed with or referred
to in whole or in part in the Registration Statement or any other
document, except that reference may be made to it in the underwriting
agreement or in any list of closing documents pertaining to the
offering of the securities covered by the Registration Statement.
Very truly yours,