Exhibit (h)(1)
▇▇▇▇▇ ▇▇▇▇▇ Insured Massachusetts Municipal Bond Fund
[ ] Common Shares of Beneficial Interest
Par Value $.01 Per Share
UNDERWRITING AGREEMENT
November 25, 2002
UNDERWRITING AGREEMENT
November 25, 2002
UBS Warburg LLC
▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
Prudential Securities Incorporated
CIBC World Markets Corp.
Wachovia Securities, Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
as Representatives
c/o UBS Warburg LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇ ▇▇▇▇▇ Insured Massachusetts Municipal Bond Fund, a voluntary
association with transferable shares organized and existing under and by virtue
of the laws of The Commonwealth of Massachusetts (commonly referred to as a
Massachusetts business trust) (the "Fund"), proposes to issue and sell to the
underwriters named in Schedule A annexed hereto (the "Underwriters") an
aggregate of [ ] common shares of beneficial interest (the "Firm
Shares"), par value $.01 per share (the "Common Shares"), of the Fund. In
addition, solely for the purpose of covering over-allotments, the Fund proposes
to grant to the Underwriters the option to purchase from the Fund up to an
additional [ ] Common Shares (the "Additional Shares"). The Firm Shares and the
Additional Shares are hereinafter collectively sometimes referred to as the
"Shares." The Shares are described in the Prospectus which is defined below.
The Fund has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the "Securities Act"), and with the provisions of the
Investment Company Act of 1940, as amended, and the rules and regulations
thereunder (collectively called the "Investment Company Act"), with the
Securities and Exchange Commission (the "Commission") a registration statement
on Form N-2 (File Nos. 333-100441 and 811-21225), including a prospectus and a
statement of additional information, relating to the Shares. The Fund has
furnished to the Representatives, for use by the Underwriters and by dealers,
copies of one or more preliminary prospectuses (including a preliminary
statement of additional information) (each thereof, including such preliminary
statement of additional information, being herein called a "Preliminary
Prospectus") relating to the Shares. Except where the context otherwise
requires, the registration statement, as amended when it becomes effective (the
"Effective Date"), including all documents filed as a part thereof
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or incorporated by reference therein, and including any information contained in
a prospectus subsequently filed with the Commission pursuant to Rule 497 under
the Securities Act and deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Securities Act is herein
called the "Registration Statement," and the prospectus (including the statement
of additional information), in the form filed by the Fund with the Commission
pursuant to Rule 497 under the Securities Act or, if no such filing is required,
the form of final prospectus (including the form of final statement of
additional information) included in the Registration Statement at the time it
became effective, is herein called the "Prospectus." In addition, the Fund has
filed a Notification of Registration on Form N-8A (the "Notification") pursuant
to Section 8 of the Investment Company Act. UBS Warburg LLC ("UBS Warburg" or
the "Managing Representative") will act as managing representative for the
Underwriters.
▇▇▇▇▇ ▇▇▇▇▇ Management, a Massachusetts business trust ("▇▇▇▇▇
▇▇▇▇▇" or the "Investment Adviser") will act as the Fund's investment adviser
pursuant to an Investment Advisory Agreement by and between the Fund and the
Investment Adviser, dated as of October 21, 2002 (the "Investment Advisory
Agreement"). Investors Bank & Trust Company will act as the custodian (the
"Custodian") of the Fund's cash and portfolio assets pursuant to a Master
Custodian Agreement, dated as of October 31, 2000, as amended on October 21,
2002 (the "Custodian Agreement"). PFPC Inc. will act as the Fund's transfer
agent, registrar, and dividend disbursing agent (the "Transfer Agent") pursuant
to a Master Transfer Agency Services Agreement, dated as of December 21, 1998,
as amended on October 21, 2002 (the "Transfer Agency Agreement"). ▇▇▇▇▇ ▇▇▇▇▇
will act as the administrator of the Fund pursuant to an Administration
Agreement, dated as of October 21, 2002 (the "Administration Agreement"). UBS
Warburg will act as the Fund's Shareholder Servicing Agent pursuant to a
Shareholder Servicing Agreement, dated as of November 29, 2002 (the "Shareholder
Servicing Agreement"). In addition, the Fund has adopted a dividend reinvestment
plan (the "Dividend Reinvestment Plan") pursuant to which holders of Shares may
have their dividends automatically reinvested in additional Common Shares of the
Fund if so elected.
The Fund, the Investment Adviser and the Underwriters agree as
follows:
1. SALE AND PURCHASE. Upon the basis of the warranties and representations
and subject to the terms and conditions herein set forth, the Fund agrees
to sell to the respective Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase from the Fund the aggregate
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A attached hereto in each case at a purchase price of $14.325 per
Share. The Fund is advised that the Underwriters intend (i) to make a
public offering of their respective portions of the Firm Shares as soon
after the effective date of the Registration Statement as is advisable and
(ii) initially to offer the Firm Shares upon the terms set forth in the
Prospectus. The Underwriters may from time to time increase or decrease
the public offering price after the initial public offering to such extent
as they may determine.
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In addition, the Fund hereby grants to the several Underwriters the
option to purchase, and upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth,
the Underwriters shall have the right to purchase, severally and not
jointly, from the Fund, ratably in accordance with the number of Firm
Shares to be purchased by each of them, all or a portion of the Additional
Shares as may be necessary to cover over-allotments made in connection
with the offering of the Firm Shares, at the same purchase price per Share
to be paid by the Underwriters to the Fund for the Firm Shares. This
option may be exercised by the Representatives on behalf of the several
Underwriters at any time and from time to time on or before the
forty-fifth day following the date hereof, by written notice to the Fund.
Such notice shall set forth the aggregate number of Additional Shares as
to which the option is being exercised, and the date and time when the
Additional Shares are to be delivered (such date and time being herein
referred to as the "Additional Time of Purchase"); provided, however, that
the Additional Time of Purchase shall not be earlier than the Time of
Purchase (as defined below) nor earlier than the second business day after
the date on which the option shall have been exercised. The number of
Additional Shares to be sold to each Underwriter shall be the number which
bears the same proportion to the aggregate number of Additional Shares
being purchased as the number of Firm Shares set forth opposite the name
of such Underwriter on Schedule A hereto bears to the total number of Firm
Shares (subject, in each case, to such adjustment as the Representatives
may determine to eliminate fractional shares).
2. PAYMENT AND DELIVERY. Payment of the purchase price for the Firm Shares
shall be made by the Underwriters to the Fund by Federal Funds wire
transfer, against delivery of the certificates for the Firm Shares to the
Representatives through the facilities of the Depository Trust Company for
the respective accounts of the Underwriters. Such payment and delivery
shall be made at a time mutually agreed upon by the parties on the third
business day following the date of this Underwriting Agreement (unless
another date shall be agreed to by the Representatives and the Fund). The
time at which such payment and delivery are actually made is hereinafter
sometimes called the Time of Purchase. Certificates for the Firm Shares
shall be delivered to the Representatives in definitive form in such names
and in such denominations as the Representatives shall specify on the
second business day preceding the Time of Purchase. For the purpose of
expediting the checking of the certificates for the Firm Shares by the
Representatives, the Fund agrees to make such certificates available to
the Representatives for such purpose at least one full business day
preceding the Time of Purchase.
Payment of the purchase price for the Additional Shares shall be
made at the Additional Time of Purchase in the same manner and at the same
office as the payment for the Firm Shares. Certificates for the Additional
Shares shall be delivered to the Representatives in definitive form in
such names and in such denominations as the Representatives shall specify
no later than the second business day preceding the Additional Time of
Purchase. For the purpose of
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expediting the checking of the certificates for the Additional Shares by
the Representatives, the Fund agrees to make such certificates available
to the Representatives for such purpose at least one full business day
preceding the Additional Time of Purchase. The Time of Purchase and the
Additional Time of Purchase are sometimes referred to herein as the
Closing Dates.
3. REPRESENTATIONS AND WARRANTIES OF THE FUND AND THE INVESTMENT ADVISER.
Each of the Fund and the Investment Adviser jointly and severally
represents and warrants to each Underwriter as follows:
(a) On (i) the Effective Date and the date on which the Prospectus is
first filed with the Commission pursuant to Rule 497(b), (h) or (j)
under the Securities Act, as the case may be, (ii) 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 Shares is
completed) became or becomes effective or any amendment or
supplement to the Prospectus was or is filed with the Commission and
(iii) the Closing Dates, 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 and the Investment Company Act,
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 Shares 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 Closing Dates, 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 3(a) 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 9(f) hereof.
(b) The Fund has been duly formed, is validly existing a business trust
under the laws of the Commonwealth of Massachusetts, with full power
and authority to conduct all the activities conducted by it, to own
or lease all assets owned or leased by it and to conduct its
business as described in the
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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 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.
(c) The capitalization of the Fund is as set forth in the Registration
Statement and the Prospectus. The Common Shares conform in all
material respects to the description of them in the Prospectus. All
the outstanding Common Shares have been duly authorized and are
validly issued, fully paid and nonassessable (except as described in
the Registration Statement). The Shares 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 with respect to the Shares.
(d) The Fund is duly registered with the Commission under the Investment
Company Act as a non-diversified, closed-end management investment
company, and, subject to the filing of any final amendment to the
Registration Statement (a "Final Amendment"), if not already filed,
all action under the Securities Act and the Investment Company Act,
as the case may be, necessary to make the public offering and
consummate the sale of the Shares as provided in this Underwriting
Agreement has or will have been taken by the Fund.
(e) The Fund has full power and authority to enter into each of this
Underwriting Agreement, the Investment Advisory Agreement, the
Custodian Agreement, the Transfer Agency Agreement, and the Dividend
Reinvestment Plan (collectively, the "Fund Agreements") and to
perform all of the terms and provisions hereof and thereof to be
carried out by it and (i) each Fund Agreement has been duly and
validly authorized, executed and delivered by or on behalf of the
Fund, (ii) each Fund Agreement does not violate in any material
respect any of the applicable provisions of the Investment Company
Act or the Investment Advisers Act of 1940, as amended, and the
rules and regulations thereunder (collectively called the "Advisers
Act"), as the case may be, and (iii) 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, (A) subject, as to
enforcement, to applicable bankruptcy, insolvency and
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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 (B) except as rights to
indemnity thereunder may be limited by federal or state securities
laws.
(f) None of (i) the execution and delivery by the Fund of the Fund
Agreements, (ii) the issue and sale by the Fund of the Shares as
contemplated by this Underwriting Agreement and (iii) 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 Declaration of
Trust or the By-laws of the Fund or any 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, applicable to the Fund, other than
state securities or "blue sky" laws applicable in connection with
the purchase and distribution of the Shares by the Underwriters
pursuant to this Underwriting Agreement.
(g) The Fund is not currently in breach of, or in default under, any
written agreement or instrument to which it is a party or by which
it or its property is bound or affected.
(h) No person has any right to the registration of any securities of the
Fund because of the filing of the registration statement.
(i) No consent, approval, authorization or order of any court or
governmental agency or body or securities exchange or association,
whether foreign or domestic, is 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 (i) have been obtained under
the Securities Act, the Investment Company Act, or the Advisers Act,
and (ii) 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 Shares by the Underwriters pursuant to this
Underwriting Agreement.
(j) The Shares are duly authorized for listing, subject to official
notice of issuance, on the New York Stock Exchange and the Fund's
Registration Statement on Form 8-A, under the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder
(collectively called the "Exchange Act"), has become effective.
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(k) Deloitte & Touche LLP, whose report appears in the Prospectus, are
independent public accountants with respect to the Fund as required
by the Securities Act and the Investment Company Act.
(l) The statement of assets and liabilities included in the Registration
Statement and the Prospectus presents fairly in all material
respects, in accordance with generally accepted accounting
principles in the United States applied on a consistent basis, the
financial position of the Fund as of the date indicated.
(m) The Fund will maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets
through an asset reconciliation procedure or otherwise at reasonable
intervals and appropriate action is taken with respect to any
differences.
(n) Since the date as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein,
(i) there has been no material adverse change in the condition,
financial or otherwise, business affairs or business of the Fund,
whether or not arising in the ordinary course of business, (ii)
there have been no transactions entered into by the Fund other than
those in the ordinary course of its business and (iii) there has
been no dividend or distribution of any kind declared, paid or made
on any class of its capital shares.
(o) 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 (i) might result in any material adverse change in the
condition, financial or otherwise, business affairs or business
prospects of the Fund or might materially adversely affect the
properties or assets of the Fund or (ii) 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.
(p) Except for stabilization transactions conducted by the Underwriters,
and except for tender offers, Share repurchases and the issuance or
purchase of Shares pursuant to the Fund's Dividend Reinvestment Plan
effected following the date on which the distribution of the Shares
is completed in
8
accordance with the policies of the Fund as set forth in the
Prospectus, the Fund has not taken and will not take, directly or
indirectly, any action designed or which might be reasonably
expected to cause or result in, or which will constitute,
stabilization or manipulation of the price of the Common Shares in
violation of applicable federal securities laws.
(q) The Fund intends to direct the investment of the proceeds of the
offering of the Shares in such a manner as to comply with the
requirements of Subchapter M of the Internal Revenue Code of 1986,
as amended (the "Code").
(r) To the knowledge of the Fund after due inquiry, no advertising,
sales literature or other promotional materials (excluding road show
slides or road show tapes) were authorized or prepared by or on
behalf of the Fund or the Investment Adviser or any representative
thereof for use in connection with the public offering or sale of
the Shares other than the definitive client brochure and the broker
selling memo which were filed with the NASD on October 15, 2002, a
draft prospecting letter which was filed with the NASD on November
1, 2002, and a draft of a prospecting letter made available on an
Intranet web site maintained by the Investment Adviser
(collectively, the "sales materials"); the sales materials and any
road show slides or road show tapes complied and comply in all
material respects with the applicable requirements of the Securities
Act and the rules and interpretations of the NASD; and no broker
kits, road show slides, road show tapes or sales materials
authorized or prepared by the Fund or authorized or prepared on
behalf of the Fund by the Investment Adviser or any representative
thereof for use in connection with the public offering or sale of
the Shares contained or contains any untrue statement of a material
fact or omitted or omits to state any material fact required to be
stated therein or necessary in order to make the statements therein
not misleading.
4. REPRESENTATIONS AND WARRANTIES OF THE INVESTMENT ADVISER. The Investment
Adviser represents to each Underwriter as follows:
(a) The Investment Adviser has been duly formed, is validly existing as
a business trust under the laws of the Commonwealth of Massachusetts
with full power and authority to conduct all 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 the Investment Adviser 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 the Investment Adviser's
ability to provide services to the Fund; and the Investment Adviser
owns, possesses or has obtained and currently maintains all
governmental licenses, permits, consents, orders, approvals and
other authorizations,
9
whether foreign or domestic, necessary to carry on its business as
contemplated in the Registration Statement and the Prospectus.
(b) The Investment Adviser is (i) duly registered as an investment
adviser under the Advisers Act and (ii) not prohibited by the
Advisers Act or the Investment Company Act from acting as the
investment adviser for the Fund as contemplated by the Investment
Advisory Agreement, the Registration Statement and the Prospectus.
(c) The Investment Adviser has full power and authority to enter into
each of this Underwriting Agreement, the Investment Advisory
Agreement, the Administration Agreement, and the Shareholder
Servicing Agreement (collectively, the "Investment Adviser
Agreements") and to carry out all the terms and provisions hereof
and thereof to be carried out by it; and each Investment Adviser
Agreement has been duly and validly authorized, executed and
delivered by the Investment Adviser; none of the Investment Adviser
Agreements violate in any material respect any of the applicable
provisions of the Investment Company Act or the Advisers Act; and
assuming due authorization, execution and delivery by the other
parties thereto, each Investment Adviser Agreement constitutes a
legal, valid and binding obligation of the Investment Adviser,
enforceable in accordance with its terms, (i) 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 (ii) except as rights to
indemnity thereunder may be limited by federal or state securities
laws.
(d) Neither (i) the execution and delivery by the Investment Adviser of
any Investment Adviser Agreement nor (ii) the consummation by the
Investment Adviser of the transactions contemplated by, or the
performance of its obligations under any Investment Adviser
Agreement conflicts or will conflict with, or results or will result
in a breach of, the Declaration of Trust or By-Laws of the
Investment Adviser or any agreement or instrument to which the
Investment Adviser is a party or by which the Investment Adviser is
bound, 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 the
Investment Adviser.
(e) 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 the Investment
Adviser of its obligations under, any Investment Adviser Agreement,
as the case may be, except such as (i) have been obtained under the
Act, the Investment Company Act, or the Advisers Act, and (ii) may
be required by the New York Stock Exchange or under state securities
or "blue sky" laws, in
10
connection with the purchase and distribution of the Shares by the
Underwriters pursuant to this Underwriting Agreement.
(f) The description of the Investment Adviser and its business and the
statements attributable to the Investment Adviser in the
Registration Statement and the Prospectus comply with the
requirements of the Act and the Investment Company Act 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.
(g) 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 Investment Adviser, threatened against or
affecting the Investment Adviser of a nature required to be
disclosed in the Registration Statement or Prospectus or that might
reasonably be expected to result in any material adverse change in
the condition, financial or otherwise, business affairs or business
prospects of the Investment Adviser or the ability of the Investment
Adviser to fulfill its respective obligations under any Investment
Adviser Agreement.
(h) Except for stabilization activities conducted by the Underwriters
and except for tender offers, Share repurchases and the issuance or
purchase of Shares pursuant to the Fund's Dividend Reinvestment Plan
effected following the date on which the distribution of the Shares
is completed in accordance with the policies of the Fund as set
forth in the Prospectus, the Investment Adviser has not taken and
will not take, directly or indirectly, any action designed, or which
might reasonably be expected to cause or result in, or which will
constitute, stabilization or manipulation of the price of the Common
Shares in violation of applicable federal securities laws.
(i) In the event that the Fund or the Investment Adviser 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, the Investment Adviser 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 Shares has not yet
become effective, the Fund will promptly file a 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
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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 under the Act, the Fund
will file a 430A Prospectus pursuant to Rule 497(h) under the Act as
promptly as practicable, but no later than the second business day
following the earlier of the date of the determination of the
offering price of the Shares or the date the Prospectus is first
used after the Effective Date. 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 a certification pursuant to Rule 497(j) under the Act
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 Shares 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 distribution of the
Shares 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 (i) of the issuance by
the Commission of any order in respect of the Fund or the Investment
Adviser which relates to the Fund, or which relates to any material
arrangements or proposed material arrangements involving the Fund or
the Investment Adviser, (ii) of the initiation or threatening of any
proceedings for, or receipt by the Fund of any notice with respect
to, any suspension of the qualification of the Shares for sale in
any jurisdiction or the issuance of any order by the Commission
suspending the effectiveness of the Registration Statement, (iii) 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 (iv)
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
12
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 the
Notification 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 Shares is completed) to either
the Registration Statement or the Notification (including all
exhibits filed with any such document) 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 Shares 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 Representatives, the Underwriters and any
dealers, at such office or offices as the Representatives may
designate, as many copies of the Prospectus as the Representatives
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 under which they were made, not misleading in any
material respect, or if during such period it is necessary to amend
or supplement the Prospectus to comply with the Act or the
Investment Company Act, 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 Shares 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 under which
they were made, be misleading in any material respect and will
comply with the Act and the Investment Company Act. 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 the last paragraph of
Section 11(a) of the Act and, at the option of the Fund, Rule 158
under the Securities Act.
13
(f) If the transactions contemplated by this Underwriting Agreement are
consummated, the Fund shall pay all costs and expenses incident to
the performance of the obligations of the Fund under this
Underwriting Agreement (to the extent such expenses do not, in the
aggregate, exceed $0.03 per Share), including but not limited to
costs and expenses of or relating to (i) the preparation, printing
and filing of the Registration Statement and exhibits to it, each
Preliminary Prospectus, the Prospectus and all amendments and
supplements thereto, (ii) the issuance of the Shares and the
preparation and delivery of certificates for the Shares, (iii) the
registration or qualification of the Shares for offer and sale under
the securities or "blue sky" laws of the jurisdictions referred to
in the foregoing paragraph, including the fees and disbursements of
counsel for the Underwriters in that connection, and the preparation
and printing of any preliminary and supplemental "blue sky"
memoranda, (iv) the furnishing (including costs of design,
production, shipping and mailing) to the Underwriters and dealers of
copies of each Preliminary Prospectus relating to the Shares, the
sales materials, the Prospectus, and all amendments or supplements
to the Prospectus, and of the other documents required by this
Section to be so furnished, (v) the filing requirements of the NASD,
in connection with its review of the financing, including filing
fees and the disbursements of counsel for the Underwriters in that
connection, (vi) all transfer taxes, if any, with respect to the
sale and delivery of the Shares to the Underwriters, (vii) the
listing of the Shares on the American Stock Exchange, (viii) the
transfer agent for the Shares and (ix) in addition to the foregoing,
an aggregate reimbursement of up to $[ ] as partial reimbursement of
the cost and expenses of the Underwriters. To the extent the
foregoing costs and expenses incident to the performance of the
obligations of the Fund under this Underwriting Agreement exceed, in
the aggregate, $0.03 per Share, ▇▇▇▇▇ ▇▇▇▇▇ or an affiliate will pay
all such excess costs and expenses.
(g) 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 (i) if this
Underwriting Agreement is terminated by (x) the Fund or the
Investment Adviser pursuant to any of the provisions hereof or (y)
by the Representatives or the Underwriters because of any inability,
failure or refusal on the part of the Fund or the Investment Adviser
to comply with any material terms or because any of the conditions
in Section 6 are not satisfied, the Investment Adviser or an
affiliate and the Fund, jointly and severally, 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 Shares and (ii) no Underwriter who has failed or
refused to purchase the Shares agreed to be purchased by it under
this Underwriting Agreement, in breach of its obligations pursuant
to this Underwriting Agreement, will be
14
relieved of liability to the Fund, the Investment Adviser and the
other Underwriters for damages occasioned by its default.
(h) 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 Shares as
described in the Prospectus and any issuances of Common Shares
pursuant to the Dividend Reinvestment Plan and except in connection
with any offering of preferred shares of beneficial interest as
contemplated by the Prospectus.
(i) The Fund will use its best efforts to list the Shares on the
American Stock Exchange prior to the date the Shares are issued and
comply with the rules and regulations of such exchange.
(j) The Fund will direct the investment of the net proceeds of the
offering of the Shares in such a manner as to comply with the
investment objective and policies of the Fund as described in the
Prospectus.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase the Shares are subject to the accuracy on the
date of this Underwriting Agreement, and on each of the Closing Dates, of
the representations of the Fund and the Investment Adviser in this
Underwriting Agreement, to the accuracy and completeness of all material
statements made by the Fund or the Investment Adviser 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 the Investment Adviser 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) or (h) or a certificate must have been filed in
accordance with Rule 497(j), as the case may be, under the
Securities Act.
(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, (i) there must not have been any
material
15
change in the Common Shares or liabilities of the Fund except as set
forth in or contemplated by the Prospectus; (ii) there must not have
been any material adverse change in the general affairs, prospects,
management, business, financial condition or results of operations
of the Fund or the Investment Adviser whether or not arising from
transactions in the ordinary course of business as set forth in or
contemplated by the Prospectus which in the opinion of the Managing
Representative would materially adversely affect the market for the
Shares; (iii) the Fund must not have sustained any material loss or
interference with its business from any court or from legislative or
other governmental action, order or decree, whether foreign or
domestic, or from any other occurrence not described in the
Registration Statement and Prospectus; and (iv) 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
(i), (ii), (iii), or (iv) of this paragraph (c) makes it
impracticable or inadvisable to consummate the sale and delivery of
the Shares pursuant to this Underwriting Agreement by the
Underwriters, at the initial public offering price of the Shares.
(d) The Managing Representative must have received on each Closing Date
a certificate, dated such date, of the President or a Vice-President
and the chief financial or accounting officer of each of the Fund
and the Investment Adviser certifying that (i) the signers have
carefully examined the Registration Statement, the Prospectus, and
this Underwriting Agreement, (ii) the representations of the Fund
(with respect to the certificates from such Fund officers) and the
representations of the Investment Adviser (with respect to the
certificates from such officers of the Investment Adviser) in this
Underwriting Agreement are accurate on and as of the date of the
certificate, (iii) there has not been any material adverse change in
the general affairs, prospects, management, business, financial
condition or results of operations of the Fund (with respect to the
certificates from such Fund officers) or the Investment Adviser
(with respect to the certificates from such officers of the
Investment Adviser), which change would materially and adversely
affect the ability of the Fund or the Investment Adviser, as the
case may be, to fulfill its obligations under this Underwriting
Agreement or the Investment Advisory Agreement, whether or not
arising from transactions in the ordinary course of business, (iv)
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 Shares or otherwise having a material adverse effect on
the Fund has been issued and no proceedings for any such purpose are
16
pending before or threatened by the Commission or any other
regulatory body, whether foreign or domestic, (v) to the knowledge
of the officers of the Investment Adviser, after reasonable
investigation, no order having a material adverse effect on the
ability of the Investment Adviser to fulfill its obligations under
this Underwriting Agreement or the Investment Advisory Agreement, as
the case may be, 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, and (vi) each of
the Fund (with respect to the certificates from such Fund officers)
and the Investment Adviser (with respect to the certificates from
such officers of the Investment Adviser) has performed all of its
respective agreements that this Underwriting Agreement requires it
to perform by such Closing Date (to the extent not waived in writing
by the Managing Representative).
(e) The Managing Representative must have received on each Closing Date
the opinions dated such Closing Date substantially in the form of
Schedules B and C to this Underwriting Agreement from the counsel
identified in each such Schedules.
(f) The Managing Representative must have received on each Closing Date
from Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP and its affiliated
entities an opinion dated such Closing Date with respect to the
Fund, the Shares, 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
Shares. 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 the Investment Adviser 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 Managing Representative must have received on the date this
Underwriting Agreement is signed and delivered by you a signed
letter, dated such date, substantially in the form of Schedule D to
this Underwriting Agreement from the firm of accountants designated
in such Schedule. The Managing Representative also must have
received on each Closing Date a signed letter from such accountants,
dated as of such Closing Date, confirming on the basis of a review
in accordance with the procedures set forth in their earlier letter
that nothing has come to their attention during the period from a
date not more than 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 Closing Date, that would require
any change in their letter referred to in the foregoing sentence.
17
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. 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 Shares are first generally offered
pursuant to this Underwriting Agreement by the Managing
Representative to dealers by letter or telegram;
(b) at or before any Closing Date if, in the sole judgment of the
Managing Representative, payment for and delivery of any Shares is
rendered impracticable or inadvisable because (i) trading in the
equity securities of the Fund is suspended by the Commission or by
the principal exchange that lists the Shares, (ii) trading in
securities generally on the New York Stock Exchange or the Nasdaq
Stock Market shall have been suspended or limited or minimum or
maximum prices shall have been generally established on such
exchange or over-the-counter market, (iii) additional material
governmental restrictions, not in force on the date of this
Underwriting Agreement, have been imposed upon trading in securities
or trading has been suspended on any U.S. securities exchange, (iv)
a general banking moratorium has been established by U.S. federal or
New York authorities or (v) 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 judgment of the Managing Representative,
impracticable or inadvisable to market the Shares on the terms and
in the manner contemplated by the Prospectus; or
(c) at or before any Closing Date, if any of the conditions specified in
Section 6 have not been fulfilled when and as required by this
Underwriting Agreement.
8. 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 any Closing Date the Shares agreed
to be purchased on such Closing Date by such Underwriter or Underwriters,
the Managing Representative may find one or more substitute underwriters
to purchase such Shares or make such other arrangements as the Managing
Representative deems advisable, or one or more of the remaining
Underwriters may agree to purchase
18
such Shares 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 Closing Date, and
(a) the number of Shares to be purchased by the defaulting Underwriters
on such Closing Date does not exceed 10% of the Shares that the
Underwriters are obligated to purchase on such Closing Date, each of
the nondefaulting Underwriters will be obligated to purchase such
Shares on the terms set forth in this Underwriting Agreement in
proportion to their respective obligations under this Underwriting
Agreement, or
(b) the number of Shares to be purchased by the defaulting Underwriters
on such Closing Date exceeds 10% of the Shares to be purchased by
all the Underwriters on such 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 Shares on the terms set forth in
this Underwriting Agreement.
Upon the occurrence of the circumstances described in the foregoing
paragraph (b), either the Managing Representative or the Fund will have
the right to postpone the applicable 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 Shares to be purchased on such Closing Date by such
defaulting Underwriter or Underwriters exceeds 10% of the Shares that the
Underwriters are obligated to purchase on such Closing 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 Shares that
the defaulting Underwriters agreed to purchase, this Underwriting
Agreement will terminate without liability on the part of any
nondefaulting Underwriter, the Fund, or the Investment Adviser, except as
provided in Sections 5(g) and 9 hereof. Any action taken under this
Section will not affect the liability of any defaulting Underwriter to the
Fund or the Investment Adviser or to any nondefaulting Underwriters
arising out of such default. A substitute underwriter will become an
Underwriter for all purposes of this Underwriting Agreement.
9. INDEMNITY AND CONTRIBUTION.
(a) Each of the Fund and the Investment Adviser, jointly and severally,
agrees to indemnify, defend and hold harmless each Underwriter, its
partners, directors and officers, and any person who controls any
Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, and their successors and assigns
of all of the foregoing persons from and against any loss, damage,
expense, liability or claim
19
(including the reasonable cost of investigation) which, jointly or
severally, any such Underwriter or any such person may incur under
the Securities Act, the Exchange Act, the Investment Company Act,
the Advisers Act, the common law or otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Fund) or in a Prospectus (the term "Prospectus" for the purpose of
this Section 9 being deemed to include any Preliminary Prospectus,
the sales materials, the Prospectus and the Prospectus as amended or
supplemented by the Fund), or arises out of or is based upon any
omission or alleged omission to state a material fact required to be
stated in either such Registration Statement or Prospectus or
necessary to make the statements made therein (with respect to the
Prospectus, in light of the circumstances under which they were
made) not misleading, except insofar as any such loss, damage,
expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information furnished in writing
by or on behalf of any Underwriter to the Fund or the Investment
Adviser expressly for use with reference to any Underwriter in such
Registration Statement or such Prospectus or arises out of or is
based upon any omission or alleged omission to state a material fact
in connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such
information (with respect to the Prospectus, in light of the
circumstances under which they were made) not misleading, provided,
however, that the indemnity agreement contained in this subsection
(a) with respect to any Preliminary Prospectus or amended
Preliminary Prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such
Underwriter) from whom the person asserting any such loss, damage,
expense, liability or claim purchased the Shares which is the
subject thereof if the Prospectus corrected any such alleged untrue
statement or omission and if such Underwriter failed to send or give
a copy of the Prospectus to such person at or prior to the written
confirmation of the sale of such Shares to such person, unless the
failure is the result of noncompliance by the Fund with Section 5(d)
hereof.
If any action, suit or proceeding (together, a "Proceeding")
is brought against an Underwriter or any such person in respect of
which indemnity may be sought against the Fund or the Investment
Adviser pursuant to the foregoing paragraph, such Underwriter or
such person shall promptly notify the Fund and the Investment
Adviser in writing of the institution of such Proceeding and the
Fund or the Investment Adviser shall assume the defense of such
Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and
expenses; provided, however, that the omission to so notify the Fund
or the Investment Adviser shall not relieve the Fund or the
20
Investment Adviser from any liability which the Fund or the
Investment Adviser may have to any Underwriter or any such person or
otherwise. Such Underwriter or such person shall have the right to
employ its or their own counsel in any such case, but the reasonable
fees and expenses of such counsel shall be at the expense of such
Underwriter or of such person unless the employment of such counsel
shall have been authorized in writing by the Fund or the Investment
Adviser, as the case may be, in connection with the defense of such
Proceeding or the Fund or the Investment Adviser shall not have,
within a reasonable period of time in light of the circumstances,
employed counsel to have charge of the defense of such Proceeding or
such indemnified party or parties shall have reasonably concluded
that there may be defenses available to it or them which are
different from, additional to or in conflict with those available to
the Fund or the Investment Adviser (in which case the Fund or the
Investment Adviser shall not have the right to direct the defense of
such Proceeding on behalf of the indemnified party or parties), in
any of which events such reasonable fees and expenses shall be borne
by the Fund or the Investment Adviser and paid as incurred (it being
understood, however, that the Fund or the Investment Adviser shall
not be liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). Neither the
Fund nor the Investment Adviser shall be liable for any settlement
of any Proceeding effected without its written consent but if
settled with the written consent of the Fund or the Investment
Adviser, the Fund or the Investment Adviser, as the case may be,
agrees to indemnify and hold harmless any Underwriter and any such
person from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses of
counsel as contemplated by the second sentence of this paragraph,
then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if
(i) such settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention
to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any
pending or threatened Proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such Proceeding
and does not include an
21
admission of fault, culpability or a failure to act, by or on behalf
of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Fund and the Investment Adviser, and each of their
respective shareholders, partners, managers, members, trustees,
directors and officers, and any person who controls the Fund or the
Investment Adviser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, and the successors
and assigns of all of the foregoing persons from and against any
loss, damage, expense, liability or claim (including the reasonable
cost of investigation) which, jointly or severally, the Fund or the
Investment Adviser or any such person may incur under the Securities
Act, the Exchange Act, the Investment Company Act, the Advisers Act,
the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained
in and in conformity with information furnished in writing by or on
behalf of such Underwriter to the Fund or the Investment Adviser
expressly for use with reference to such Underwriter in the
Registration Statement (or in the Registration Statement as amended
by any post-effective amendment thereof by the Fund) or in a
Prospectus, or arises out of or is based upon any omission or
alleged omission to state a material fact in connection with such
information required to be stated in such Registration Statement or
such Prospectus or necessary to make such information not misleading
(with respect to the Prospectus, in light of the circumstances under
which they were made).
If any Proceeding is brought against the Fund, the Investment
Adviser or any such person in respect of which indemnity may be
sought against any Underwriter pursuant to the foregoing paragraph,
the Fund, the Investment Adviser or such person shall promptly
notify such Underwriter in writing of the institution of such
Proceeding and such Underwriter shall assume the defense of such
Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and
expenses; provided, however, that the omission to so notify such
Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Fund, the Investment Adviser
or any such person or otherwise. The Fund, the Investment Adviser or
such person shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the
expense of the Fund, the Investment Adviser or such person, as the
case may be, unless the employment of such counsel shall have been
authorized in writing by such Underwriter in connection with the
defense of such Proceeding or such Underwriter shall not have,
within a reasonable period of time in light of the circumstances,
employed counsel to have charge of the defense of such Proceeding or
such indemnified party or parties shall have reasonably concluded
that there may be defenses available to it or them which are
22
different from or additional to or in conflict with those available
to such Underwriter (in which case such Underwriter shall not have
the right to direct the defense of such Proceeding on behalf of the
indemnified party or parties, but such Underwriter may employ
counsel and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such
Underwriter), in any of which events such fees and expenses shall be
borne by such Underwriter and paid as incurred (it being understood,
however, that such Underwriter shall not be liable for the expenses
of more than one separate counsel (in addition to any local counsel)
in any one Proceeding or series of related Proceedings in the same
jurisdiction representing the indemnified parties who are parties to
such Proceeding). No Underwriter shall be liable for any settlement
of any such Proceeding effected without the written consent of such
Underwriter but if settled with the written consent of such
Underwriter, such Underwriter agrees to indemnify and hold harmless
the Fund, the Investment Adviser and any such person from and
against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement
of any Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after receipt
by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have reimbursed the indemnified party
in accordance with such request prior to the date of such settlement
and (iii) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is
or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes
an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such Proceeding
and does not include an admission of fault, culpability or a failure
to act, by or on behalf of such indemnified party.
(c) If the indemnification provided for in this Section 9 is unavailable
to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, damages, expenses, liabilities
or claims referred to therein, then each applicable indemnifying
party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party
as a result of such losses, damages, expenses, liabilities or claims
(i) in such proportion as is appropriate to reflect the relative
benefits received by the Fund and the Investment Adviser on the one
hand and the Underwriters on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause (i) above is not
permitted by
23
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also
the relative fault of the Fund and the Investment Adviser on the one
hand and of the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, damages,
expenses, liabilities or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Fund
and the Investment Adviser on the one hand and the Underwriters on
the other shall be deemed to be in the same respective proportions
as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by
the Fund and the total underwriting discounts and commissions
received by the Underwriters, bear to the aggregate public offering
price of the Shares. The relative fault of the Fund and the
Investment Adviser on the one hand and of the Underwriters on the
other shall be determined by reference to, among other things,
whether the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission relates to information
supplied by the Fund or the Investment Adviser or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the
losses, damages, expenses, liabilities and claims referred to in
this subsection shall be deemed to include any legal or other fees
or expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any Proceeding.
(d) The Fund, the Investment Adviser and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the
equitable considerations referred to in subsection (c) above.
Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the fees and
commissions received by such Underwriter. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 9 are several in
proportion to their respective underwriting commitments and not
joint.
(e) The indemnity and contribution agreements contained in this Section
9 and the covenants, warranties and representations of the Fund
contained in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of any
Underwriter, its partners, directors or officers or any person
(including each partner, officer or director of such person) who
controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, or
24
by or on behalf of the Fund or the Investment Adviser, its
shareholders, partners, Advisers, members, trustees, directors or
officers or any person who controls the Fund or the Investment
Adviser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and shall survive any termination of
this Agreement or the issuance and delivery of the Shares. The Fund
and the Investment Adviser and each Underwriter agree promptly to
notify each other of the commencement of any Proceeding against it
and, in the case of the Fund or the Investment Adviser, against any
of the Fund's or the Investment Adviser's shareholders, partners,
managers, members, trustees, directors or officers in connection
with the issuance and sale of the Shares, or in connection with the
Registration Statement or Prospectus.
(f) The Fund and the Investment Adviser each acknowledge that the
statements with respect to (1) the public offering of the Shares as
set forth on the cover page of and (2) stabilization and selling
concessions and reallowances of selling concessions and payment of
fees to Underwriters that meet certain minimum sales thresholds
under the caption "Underwriting" 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
severally for use in the Prospectus.
(g) Notwithstanding any other provisions in this Section 9, 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, gross negligence or reckless disregard of its duties in
the performance of its duties hereunder.
10. NOTICES. Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Warburg LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
Syndicate Department and, if to the Fund or the Investment Adviser, shall
be sufficient in all respects if delivered or sent to the Fund or the
Investment Adviser, as the case may be, at the offices of the Fund or the
Investment Adviser at ▇▇▇▇▇ ▇▇▇▇▇ Management, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇.
11. GOVERNING LAW; CONSTRUCTION. This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way
relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of
New York. The Section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.
25
12. SUBMISSION TO JURISDICTION. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of
the State of New York located in the City and County of New York or in the
United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and
the Fund and UBS Warburg each consent to the jurisdiction of such courts
and personal service with respect thereto. The Fund and UBS Warburg hereby
consent to personal jurisdiction, service and venue in any court in which
any Claim arising out of or in any way relating to this Agreement is
brought by any third party against UBS Warburg or any indemnified party.
Each of UBS Warburg, the Fund (on its behalf and, to the extent permitted
by applicable law, on behalf of its stockholders and affiliates) and the
Investment Adviser (on its behalf and, to the extent permitted by
applicable law, on behalf of its unitholders and affiliates) waives all
right to trial by jury in any action, proceeding or counterclaim (whether
based upon contract, tort or otherwise) in any way arising out of or
relating to this Agreement. Each of the Fund and the Investment Adviser
agrees that a final judgment in any such action, proceeding or
counterclaim brought in any such court shall be conclusive and binding
upon the Fund and the Investment Adviser, as the case may be, and may be
enforced in any other courts in the jurisdiction of which the Fund or the
Investment Adviser, as the case may be, is or may be subject, by suit upon
such judgment.
13. PARTIES AT INTEREST. The Agreement herein set forth has been and is made
solely for the benefit of the Underwriters, the Fund and the Investment
Adviser and to the extent provided in Section 9 hereof the controlling
persons, shareholders, partners, members, trustees, managers, directors
and officers referred to in such section, and their respective successors,
assigns, heirs, personal representatives and executors and administrators.
No other person, partnership, association or corporation (including a
purchaser, as such purchaser, from any of the Underwriters) shall acquire
or have any right under or by virtue of this Agreement.
14. COUNTERPARTS. This Agreement may be signed by the parties in one or more
counterparts which together shall constitute one and the same agreement
among the parties.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Underwriters, the Fund and the Investment Adviser, and any successor or
assign of any substantial portion of the Fund's, the Investment Adviser's,
or any of the Underwriters' respective businesses and/or assets.
16. DISCLAIMER OF LIABILITY OF TRUSTEES AND BENEFICIARIES. A copy of the
Agreement and Declaration of Trust of each of the Funds and ▇▇▇▇▇ ▇▇▇▇▇ is
on file with the Secretary of State of The Commonwealth of Massachusetts,
and notice hereby is given that this Underwriting Agreement is executed on
behalf of the Fund and ▇▇▇▇▇ ▇▇▇▇▇, respectively, by an officer or Trustee
of the Fund or ▇▇▇▇▇ ▇▇▇▇▇, as the case may be, in his or her capacity as
an officer or Trustee of
26
the Fund and not individually and that the obligations under or arising
out of this Underwriting Agreement are not binding upon any of the
Trustees, officers or shareholders individually but are binding only upon
the assets and properties of the Fund or ▇▇▇▇▇ ▇▇▇▇▇, as the case may be.
27
If the foregoing correctly sets forth the understanding among the Fund, the
Investment Adviser and the Underwriters, please so indicate in the space
provided below, whereupon this letter and your acceptance shall constitute a
binding agreement among the Fund, the Investment Adviser and the Underwriters,
severally.
Very truly yours,
▇▇▇▇▇ ▇▇▇▇▇ INSURED
MASSACHUSETTS MUNICIPAL BOND
FUND
--------------------------
By:
Title:
▇▇▇▇▇ ▇▇▇▇▇ MANAGEMENT
--------------------------
By:
Title:
28
Accepted and agreed to as of the date first above
written, on behalf of themselves and the other several
underwriters named in Schedule A
UBS WARBURG LLC
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
PRUDENTIAL SECURITIES INCORPORATED
CIBC WORLD MARKETS CORP.
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ INCORPORATED
WACHOVIA SECURITIES, INC.
By: UBS WARBURG LLC
--------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
--------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Director
29
SCHEDULE A
NUMBER OF SHARES TO
NAME BE PURCHASED
---- ------------
UBS Warburg LLC
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
Prudential Securities Incorporated
CIBC World Markets Corp.
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated
Wachovia Securities, Inc.
TOTAL
A-1
SCHEDULE B
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 no stop order with respect
thereto has been issued and no proceeding for that purpose has been instituted
or, to the best of our knowledge, 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 formed and is validly existing as a
Massachusetts business trust under the laws of the Commonwealth of
Massachusetts, with full power and authority to conduct all the activities
conducted by it, to own or lease all assets owned (or 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 or its conducting of business requires such qualification,
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.
3. The capitalization of the Fund is as set forth in the
Registration Statement and the Prospectus. The Shares of Beneficial Interest of
the Fund conform in all respects to the description of them in the Prospectus.
All the outstanding Shares of Beneficial Interest have been duly authorized and
are validly issued, fully paid and nonassessable. The Shares to be issued and
delivered to and paid for by 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 with respect to the Shares.
4. The Fund is duly registered with the Commission under the
Investment Company Act as a non-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 Shares as
provided in the Underwriting Agreement has or will have been taken by the Fund.
5. The Fund has full power and authority to enter into each of the
Underwriting Agreement, the Investment Advisory Agreement, the Custodian
Agreement and the Transfer Agency Agreement (collectively, the "Fund
Agreements") and to
B-1
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 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.
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 Shares 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 Declaration of Trust or the
By-laws of the Fund or any 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, applicable to 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 Shares by the Underwriters
pursuant to the Underwriting Agreement.
7. The Fund is not currently in breach of, or in default under, 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 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 Shares by the Underwriters pursuant to the Underwriting Agreement.
9. The Shares have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance, and the Fund's Registration
Statement on Form 8-A under the 1934 Act is effective.
B-2
10. 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 the Fund, which is required to be disclosed in the
Prospectus that is not disclosed in 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.
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 "Distributions
and Taxes" and the section 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 Shares.
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.
In connection with the registration of the Shares, we have advised
the Fund 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 the Fund in the course of its
preparation of the Registration Statement and the Prospectus. 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 at which the contents of the
Registration Statement and Prospectus and related matters 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 the 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 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 the statements therein not misleading, or that 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 the statements therein, in the light of the
circumstances under which they were made, not misleading or
B-3
that 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 the
statements in the Prospectus, in the light of the circumstances under which they
were made, not misleading (except the financial statements, schedules and other
financial data included therein, as to which we express no view).
B-4
SCHEDULE C
FORM OF OPINION OF INTERNAL COUNSEL
REGARDING ▇▇▇▇▇ ▇▇▇▇▇ MANAGEMENT
1. ▇▇▇▇▇ ▇▇▇▇▇ has been duly formed and is validly existing as a
Massachusetts business trust 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 ▇▇▇▇▇ ▇▇▇▇▇ owns,
possesses or has obtained and currently maintains all governmental licenses,
permits, consents, orders, approvals and other authorizations, whether foreign
or domestic, necessary for ▇▇▇▇▇ ▇▇▇▇▇ 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 Investment Advisory
Agreement, the Registration Statement and the Prospectus.
3. ▇▇▇▇▇ ▇▇▇▇▇ has full power and authority to enter into each of
the Underwriting Agreement, the Investment Advisory Agreement, the
Administration Agreement and the Shareholder Servicing Agreement (collectively,
the "▇▇▇▇▇ ▇▇▇▇▇ 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 ▇▇▇▇▇ ▇▇▇▇▇
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 ▇▇▇▇▇ ▇▇▇▇▇ Agreement constitutes a legal,
valid and binding obligation of ▇▇▇▇▇ ▇▇▇▇▇, 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
▇▇▇▇▇ ▇▇▇▇▇ Agreement nor (B) the consummation by ▇▇▇▇▇ ▇▇▇▇▇ of the
transactions contemplated by, or the performance of its obligations under any
▇▇▇▇▇ ▇▇▇▇▇ Agreement conflicts or will conflict with, or results or will result
in a breach of, the Agreement and Declaration of Trust or By-Laws of ▇▇▇▇▇ ▇▇▇▇▇
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
C-1
exchange or association or arbitrator, whether foreign or domestic, applicable
to ▇▇▇▇▇ ▇▇▇▇▇.
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
▇▇▇▇▇ ▇▇▇▇▇ 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 ▇▇▇▇▇ ▇▇▇▇▇ and its business, and the
statements attributable to ▇▇▇▇▇ ▇▇▇▇▇, 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 ▇▇▇▇▇ ▇▇▇▇▇ 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 ▇▇▇▇▇ ▇▇▇▇▇ or the ability of ▇▇▇▇▇ ▇▇▇▇▇ to
fulfill its respective obligations under any ▇▇▇▇▇ ▇▇▇▇▇ Agreement.
8. 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, appeared on their face to be appropriately
responsive 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 ▇▇▇▇▇
▇▇▇▇▇.
In connection with the registration of the Shares, we have advised
▇▇▇▇▇ ▇▇▇▇▇ 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. 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 ▇▇▇▇▇ ▇▇▇▇▇ at which the
contents of the registration and Prospectus and related matters were discussed.
C-2
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 the 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 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 the statements therein not misleading, or that 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 the statements therein, in the light of the
circumstances under which they were made, not misleading or that 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 the statements in the
Prospectus, in the light of the circumstances under which they were made, not
misleading (except the financial statements, schedules and other financial data
included therein, as to which we express no view).
C-3
SCHEDULE D
FORM OF ACCOUNTANT'S LETTER
November 25, 2002
The Board of Trustees of
▇▇▇▇▇ ▇▇▇▇▇ Insured [insert state] Municipal Bond Fund
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
UBS Warburg LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
as Managing Representative of the Underwriters
Ladies and Gentlemen:
We have audited the statement of assets and liabilities of ▇▇▇▇▇
▇▇▇▇▇ Insured [insert state] Municipal Bond Fund (the "Fund") as of October [ ],
2002 included in the Registration Statement on Form N-2 filed by the Fund under
the Securities Act of 1933 (the "Securities Act") (File No. 333-[ ]) and under
the Investment Company Act of 1940 (the "Investment Company Act") (File No.
811-[ ]); such statement and our report with respect to such statement are
included in the Registration Statement.
In connection with the Registration Statement:
1. We are independent public accountants with respect to the Fund
within the meaning of the Act and the applicable rules and regulations
thereunder.
2. In our opinion, the statement of assets and liabilities included
in the Registration Statement and audited by us complies as to form in all
respects with the applicable accounting requirements of the Securities Act, the
Investment Company Act and the respective rules and regulations thereunder.
3. For purposes of this letter we have read the minutes of all
meetings of the Shareholders, the Board of Trustees and all Committees of the
Board of Trustees of the Fund as set forth in the minute books at the offices of
the Fund, officials of the Fund having advised us that the minutes of all such
meetings through October [ ], 2002, were set forth therein.
4. Fund officials have advised us that no financial statements as of
any date subsequent to October [ ], 2002, are available. We have made inquiries
of certain officials of the Fund who have responsibility for financial and
accounting matters regarding whether there was any change at October [ ], 2002,
in the capital shares or net
D-1
assets of the Fund as compared with amounts shown in the October [ ], 2002,
statement of assets and liabilities included in the Registration Statement,
except for changes that the Registration Statement discloses have occurred or
may occur. On the basis of our inquiries and our reading of the minutes as
described in Paragraph 3, nothing came to our attention that caused us to
believe that there were any such changes.
The foregoing procedures do not constitute an audit made in
accordance with generally accepted auditing standards. Accordingly, we make no
representations as to the sufficiency of the foregoing procedures for your
purposes.
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 within or without the underwriting group 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,
DELOITTE & TOUCHE LLP
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SCHEDULE E
FORM OF [LOCAL COUNSEL] OPINION
November 25, 2002
UBS Warburg LLC
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
Prudential Securities Incorporated
CIBC World Markets Corp.
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated
Wachovia Securities, Inc.
as Managing Underwriters
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: ▇▇▇▇▇ ▇▇▇▇▇ Insured [insert state] Municipal Bond Fund
Registration Statement on Form N-2
Ladies and Gentlemen:
We have acted as special [insert state] counsel to the ▇▇▇▇▇ ▇▇▇▇▇
Insured [insert state] Municipal Bond Fund, a Massachusetts business trust (the
"Fund"), in connection with the Fund's sale to the Underwriters of an aggregate
of [ ] common shares of beneficial interest of the Fund, pursuant to a
registration statement on Form N-2 under the Securities Act of 1933, as amended
(the "Securities Act") and the Investment Company Act of 1940, as amended (the
"Investment Company Act"), filed with the Securities and Exchange Commission
(the "Commission") on October [ ], 2002 (Act File No. 333-[ ], and Investment
Company Act File No. 811-[ ]), as amended by Amendment No. 1 filed with the
Commission on October [ ], 2002 (the "Registration Statement"), and an
underwriting agreement dated October [ ], 2002 by and between the Underwriters,
the Fund, and ▇▇▇▇▇ ▇▇▇▇▇ Management (the "Underwriting Agreement").
This opinion is rendered to the Underwriters pursuant to Section
7(e) of the Underwriting Agreement. Capitalized terms used herein without
definition have the meanings assigned to them in the Underwriting Agreement.
In our capacity as special [insert state] counsel to the Fund, we
have relied as to matters of fact, to the extent we deem proper, on statements
contained in the Registration Statement, Prospectus and Statement of Additional
Information and on publicly available sources of information published by the
State of [insert state]. In addition, we have made such legal and factual
examinations and inquiries, including an examination of originals or copies
certified or otherwise identified to our satisfaction of such documents,
corporate records and other instruments as we have deemed necessary or
appropriate for purposes of this opinion. For purposes of our opinion, we have
not
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conducted an independent investigation or audit of the facts set forth in the
foregoing certificates or documents. In our examination, we have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures thereon, the legal capacity of natural persons executing such
documents and the conformity to authentic original documents of all documents
submitted to us as copies.
No opinion is expressed as to any matter not discussed herein. We
are opining herein only as to the effect of the [insert state] tax laws, and we
express no opinion with respect to the applicability or effect of federal laws,
other [insert state] laws, the laws of any other state or jurisdiction or as to
any matters of municipal law or the laws of any other local agencies within any
state.
Based upon such facts, assumptions and representations, including
the facts set forth in the Registration Statement, Prospectus, and Statement of
Additional Information, the statements contained in the Prospectus under the
heading "Tax Matters - [insert state] Tax Matters" and in Appendix B to the
Statement of Additional Information under the heading "Factors Pertaining to
[insert state] - [insert state] Tax Matters," to the extent that such statements
constitute matters of law or legal conclusions, are correct in all material
respects. This opinion is based on current [insert state] tax laws and
interpretations thereof by courts having jurisdiction over such matters, both of
which are subject to change either prospectively or retroactively.
Although we do not pass upon or assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, and have not made any independent
check or verification thereof, no facts have come to our attention which would
lead us to believe that the material contained in the Prospectus under the
heading "Tax Matters - [insert state] Tax Matters" and in Appendix B to the
Statement of Additional Information under the heading "Factors Pertaining to
[insert state]," at the time the Registration Statement 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 the statements therein
not misleading, or that 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 the statements
therein, in the light of the circumstances under which they were made, not
misleading or that 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 the statements in the Prospectus, in the light of the circumstances under
which they were made, not misleading.
This opinion is rendered to the Underwriters as of the date of this
letter, and we undertake no obligation to update this information subsequent to
the date hereof. Any variation or difference in the facts from those set forth
in the representations described above, including in the Registration Statement,
Prospectus and Statement of Additional Information, may affect the conclusions
stated herein.
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This opinion is rendered to the Underwriters and is for their
benefit in connection with the filing of the Registration Statement with the
Commission. This opinion may not be relied upon for any other purpose, or
furnished to, quoted to or relied upon by any other person, firm or corporation
for any purpose, without prior written consent.
Very truly yours,
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