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Exhibit (h)(4)
▇▇▇▇▇ ▇▇▇▇▇ MUNICIPAL INCOME TRUST
2,620 SERIES A AUCTION PREFERRED SHARES
2,620 SERIES B AUCTION PREFERRED SHARES
UNDERWRITING AGREEMENT
March 1, 1999
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
c/o PaineWebber Incorporated
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇ ▇▇▇▇▇ Municipal Income Trust, a Massachusetts business trust (the
"Trust"), proposes to issue and sell to the underwriters named in Schedule 1
hereto (the "Underwriters"), an aggregate of 2,620 preferred shares of
beneficial interest, par value $0.01 per share, designated Series A Auction
Preferred Shares of the Trust and 2,620 preferred shares of beneficial interest,
par value $0.01 per share, designated Series B Auction Preferred Shares of the
the Trust, each with a liquidation preference of $25,000 per share
(collectively, the "APS").
▇▇▇▇▇ ▇▇▇▇▇ Management, a Massachusetts business trust ("▇▇▇▇▇
▇▇▇▇▇" or the "Investment Adviser"), will act as the Trust's investment adviser
pursuant to an Investment Advisory Agreement by and between the Trust and the
Investment Adviser, dated as of December 21, 1998 (the "Investment Advisory
Agreement"). The Trust has engaged ▇▇▇▇▇ ▇▇▇▇▇ to act as its administrator
pursuant to an Administration Agreement, dated as of December 21, 1998.
Investors Bank & Trust Company ("IBT") will act as the custodian (the
"Custodian") of the Trust's cash and portfolio assets pursuant to a Custody
Agreement, effective as of December 21, 1998 (the "Custody Agreement"). First
Data Investor Services Group will act as the Trust's transfer agent and dividend
disbursing agent (the "Transfer Agent") pursuant to a transfer agency agreement,
dated as of December 21, 1998 (the "Transfer Agency Agreement").
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Banker's Trust Corporation will act as the Trust's auction agent (the "Auction
Agent") pursuant to an Auction Agency Agreement, dated as of March 4, 1999 (the
"Auction Agency Agreement"). The Trust has entered into a Letter Agreement,
dated as of March 4, 1999 with the Depository Trust Company (the "DTC
Agreement"). In addition, ▇▇▇▇▇ ▇▇▇▇▇ has retained PaineWebber Incorporated,
which is also one of the Underwriters, to serve as the Trust's Shareholder
Servicing Agent pursuant to a shareholder servicing agreement (the "Shareholder
Servicing Agreement"), dated as of January 29, 1999.
The Trust and the Investment Adviser each hereby confirms as follows
their agreements with the Underwriters.
1. Sale and Purchase; Compensation
(a) The Trust will issue and sell to each Underwriter, and each
Underwriter will purchase from the Trust, the number of each series of APS set
forth opposite such Underwriter's name in Schedule 1 hereto, at the purchase
price per share of $24,750.
(b) The obligations of the Underwriters under this Underwriting
Agreement are several and not joint and are undertaken on the basis of the
representations and are subject to the conditions set forth in this Underwriting
Agreement.
2. Payment and Delivery. Delivery by the Trust of the APS (the "APS
Closing") to the Underwriters against payment of the purchase price by wire
transfer of Federal Funds or similar same day funds to the Trust for the APS,
will take place at the offices of PaineWebber Incorporated (the "Managing
Representative"), 1285 Avenue of the Americas, New York, New York or such other
location as is agreed upon by the parties hereto, or through the facilities of
the Depository Trust Company or another mutually agreeable facility, at 9:00
a.m., New York City time, on the third business day following the date of this
Underwriting Agreement, or at such time on such other date, not later than ten
business days after the date of this Underwriting Agreement, as may be agreed
upon by the Trust and the Managing Representative (the "APS Closing Date").
A certificate in definitive form representing each series of the APS to
be purchased by the Underwriters registered in the name of Cede & Co., as
nominee for the Depository Trust Company, shall be delivered by or on behalf of
the Trust to DTC for the account of the Underwriters.
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3. Registration Statement and Prospectus; Public Offering. The Trust has
filed with the Securities and Exchange Commission (the "Commission"), pursuant
to the Securities Act of 1933, as amended (the "Securities Act"), the Investment
Company Act of 1940, as amended (the "Investment Company Act"), and the
published rules and regulations adopted by the Commission under the Securities
Act (the "Securities Act Rules") and the Investment Company Act (the "Investment
Company Act Rules"), a Notification of Registration on Form N-8A (the
"Notification") pursuant to Section 8 of the Investment Company Act and a
registration statement on Form N-2 (File Nos. 333-70725 and 811-09141) relating
to the APS (the "registration statement"), including a preliminary prospectus
(including any preliminary statement of additional information), and such
amendments to such registration statement as may have been required to the date
of this Underwriting Agreement. The preliminary prospectus (including any
preliminary statement of additional information) is to be used in connection
with the offering and sale of the APS. The term "Preliminary Prospectus" as used
herein means any preliminary prospectus (including any preliminary statement of
additional information) included at any time as a part of the registration
statement and any preliminary prospectus (including any preliminary statement of
additional information) omitted therefrom pursuant to the Securities Act Rules.
The Trust has furnished the Managing Representative copies of such
registration statement, each amendment to such registration statement filed by
the Trust with the Commission and the Preliminary Prospectus filed by the Trust
with the Commission or used by the Trust. If the registration statement has not
become effective, a further amendment (the "Final Amendment") to such
registration statement, including the forms of final prospectus (including any
final statement of additional information), necessary to permit such
registration statement to become effective will promptly be filed by the Trust
with the Commission. If such registration statement has become effective and any
prospectus (including any statement of additional information) contained therein
omits certain information at the time of effectiveness pursuant to Rule 430A of
the Securities Act Rules, a final prospectus (the "Rule 430A Prospectus")
containing such omitted information will be filed by the Trust with the
Commission in accordance with Rule 497(h) of the Securities Act Rules. The
registration statement as amended at the time it becomes or became effective
(the "Effective Date"), including financial statements and all exhibits, and any
information deemed to be included by Rule 430A, is called the "Registration
Statement." The term "Prospectus" means the prospectus (including any statement
of additional information) in the form in which it is first filed with the
Commission pursuant to Rule 497(b), (h) or (j) of the Securities Act Rules, as
the case may be.
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The Trust and the Investment Adviser understand that the Underwriters
propose to make a public offering of the APS, as described in the Prospectus, as
soon after the Effective Date (or, if later, after the date this Underwriting
Agreement is signed) as the Managing Representative deems advisable. The Trust
confirms that the Underwriters and dealers have been authorized to distribute
the Preliminary Prospectus relating to the APS included in the initial filing of
the registration statement and are authorized to distribute the Prospectus and
any amendments or supplements thereto.
4. Representations.
(a) Each of the Trust and the Investment Adviser jointly and
severally represents to each Underwriter as follows:
(i) On (A) the Effective Date and the date on which the
Prospectus is first filed with the Commission pursuant to Rule 497(b), (h)
or (j) of the Securities Act Rules, as the case may be, (B) the date on
which any post-effective amendment to the Registration Statement (except any
post-effective amendment which is filed with the Commission after the later
of (x) one year from the date of this Underwriting Agreement or (y) the date
on which the distribution of the APS is completed) became or becomes
effective or any amendment or supplement to the Prospectus was or is filed
with the Commission and (C) the APS Closing Date, the Registration
Statement, the Prospectus and any such amendment or supplement thereto and
the Notification complied or will comply in all material respects with the
requirements of the Securities Act, the Investment Company Act, the
Securities Act Rules and the Investment Company Act Rules, as the case may
be. On the Effective Date and on the date that any post-effective amendment
to the Registration Statement (except any post-effective amendment which is
filed with the Commission after the later of (x) one year from the date of
this Underwriting Agreement or (y) the date on which the distribution of the
APS is completed) became or becomes effective, neither the Registration
Statement nor any such amendment did or will contain any untrue statement of
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a material fact or omit to state a material fact required to be stated in it
or necessary to make the statements in it not misleading. At the Effective
Date and, if applicable, the date the Prospectus or any amendment or
supplement to the Prospectus was or is filed with the Commission and at the
APS Closing Date, the Prospectus did not or will not, as the case may be,
contain any untrue statement of a material fact or omit to state a material
fact required to be stated in it or necessary to make the statements in it,
in light of the circumstances under which they were made, not misleading.
The foregoing representations in this Section 4(a)(i) do not apply to
statements or omissions relating to the Underwriters made in reliance on and
in conformity with information furnished in writing to the Trust by the
Underwriters expressly for use in the Registration Statement, the
Prospectus, or any amendments or supplements thereto, as described in
Section 7(f) hereof.
(ii) The Trust has been duly formed and is validly
existing as a business trust under the laws of The Commonwealth of
Massachusetts; the Agreement and Declaration of Trust of the Trust, as
amended through the date hereof (the "Declaration of Trust"), and the
Amended Bylaws of the Trust, adopted in connection with the issuance of the
APS and as amended through the date hereof (the "Amended Bylaws"), confer
upon the Trust 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 Registration Statement and
Prospectus; the Trust 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 Trust; and the Trust 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 Trust has no subsidiaries.
(iii) The capitalization of the Trust is as set forth in
the Registration Statement and the Prospectus. The common shares of
beneficial interest of the Trust, par value $.01 per share (the "Common
Shares"), and the APS 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 APS to be issued and delivered
to and paid for by the Underwriters in accordance with this Underwriting
Agreement against payment therefor as provided by this Underwriting
Agreement have been duly authorized
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and when issued and delivered to the Underwriters will have been validly
issued and will be fully paid and nonassessable (except as described in
the Registration Statement). No person is entitled to any preemptive or
other similar rights in connection with the issuance of the APS.
(iv) The Trust 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 the Final
Amendment, if not already filed, all action under the Securities Act, the
Investment Company Act, the Securities Act Rules and the Investment
Company Act Rules, as the case may be, necessary to make the public
offering and consummate the sale of the APS as provided in this
Underwriting Agreement has or will have been taken by the Trust.
(v) The Trust has full power and authority to enter into
each of this Underwriting Agreement, the Investment Advisory Agreement,
the Administration Agreement, the Custody Agreement, the Transfer Agency
Agreement, the Auction Agency Agreement and the DTC Agreement
(collectively, the "Trust Agreements") and to perform all of the terms
and provisions hereof and thereof to be carried out by it and (A) each
Trust Agreement has been duly and validly authorized, executed and
delivered by or on behalf of the Trust, (B) each Trust Agreement does not
violate in any material respect any of the applicable provisions of the
Investment Company Act, the Investment Advisers Act of 1940 (the
"Advisers Act"), the Investment Company Act Rules and the rules and
regulations adopted by the Commission under the Advisers Act (the
"Advisers Act Rules"), as the case may be, and (C) assuming due
authorization, execution and delivery by the other parties thereto, each
Trust Agreement constitutes the legal, valid and binding obligation of
the Trust enforceable in accordance with its terms, (1) subject, as to
enforcement, to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general equitable principles
(regardless of whether enforcement is sought in a proceeding in equity or
at law) and (2) except as rights to indemnity thereunder may be limited
by federal or state securities laws.
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(vi) None of (A) the execution and delivery by the Trust
of the Trust Agreements, (B) the issue and sale by the Trust of the APS
as contemplated by this Underwriting Agreement and (C) the performance by
the Trust of its obligations under any of the Trust Agreements or
consummation by the Trust of the other transactions contemplated by the
Trust Agreements conflicts with or will conflict with, or results or will
result in a breach of, the Agreement and Declaration of Trust of the
Trust, dated as of December 10, 1998 (the "Declaration of Trust") or the
Bylaws of the Trust, as amended through the date hereof, establishing the
powers, preferences and rights of the APS (the "Amended Bylaws") or any
agreement or instrument to which the Trust is a party or by which the
Trust 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 Trust, other
than state securities or "blue sky" laws applicable in connection with
the purchase and distribution of the APS by the Underwriters pursuant to
this Underwriting Agreement.
(vii) The Trust 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.
(viii) No person has any right to the registration of any
securities of the Trust because of the filing of the registration
statement.
(ix) No consent, approval, authorization or order of any
court or governmental agency or body or securities exchange or
association, whether foreign or domestic, is required by the Trust for
the consummation by the Trust of the transactions to be performed by the
Trust or the performance by the Trust of all the terms and provisions to
be performed by or on behalf of it in each case as contemplated in the
Trust Agreements, except such as (A) have been obtained under the
Securities Act, the Investment Company Act, the Advisers Act, the
Securities Act Rules, the Investment Company Act Rules, and the Advisers
Act Rules, and (B) may be required by the New York Stock Exchange or
under state securities or "blue sky" laws, in connection with the
purchase and distribution of the APS by the Underwriters pursuant to this
Underwriting Agreement.
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(x) Deloitte & Touche LLP, whose report appears in the
Prospectus, are independent public accountants with respect to the Trust
as required by the Securities Act, the Investment Company Act, the
Securities Act Rules and the Investment Company Act Rules.
(xi) The financial statements included in the
Registration Statement and the Prospectus present fairly in all material
respects, in accordance with generally accepted accounting principles in
the United States applied on a consistent basis, the financial condition
of the Trust at the dates and for the periods indicated.
(xii) The Trust will maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management's general or
specific authorization; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(C) access to assets is permitted only in accordance with management's
general or specific authorization; and (D) the recorded accountability
for assets is compared with existing assets through an asset
reconciliation procedure or otherwise at reasonable intervals and
appropriate action is taken with respect to any differences.
(xiii) Other than as set forth in the Prospectus,
subsequent to the date of the unaudited financial statements in the
Registration Statement and Prospectus, (A) the Trust has not incurred any
liabilities or obligations, direct or contingent (whether or not in the
ordinary course of business), or entered into any transactions, not in
the ordinary course of business, that are material to the Trust, (B)
there has not been any material change in the Common Shares or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of the
Trust, that might materially and adversely affect the property or assets
thereof, (C) there has been no dividend or distribution paid or declared
in respect of any class of the Trust's shares of beneficial interest, and
(D) the Trust has not incurred any debt or issued any senior security;
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(xiv) There is no action, suit or proceeding before or by
any court, commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending, or, to the
knowledge of the Trust, threatened against or affecting the Trust, which
(A) might result in any material adverse change in the condition,
financial or otherwise, business affairs or business prospects of the
Trust or might materially adversely affect the properties or assets of
the Trust or (B) is of a character required to be described in the
Registration Statement or the Prospectus; and there are no contracts,
franchises or other documents that are of a character required to be
described in, or that are required to be filed as exhibits to, the
Registration Statement that have not been described or filed as required.
(xv) The Trust intends to direct the investment of the
proceeds of the offering of the APS in such a manner as to comply with
the requirements of Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code").
(xvi) The Common Shares are listed on the New York Stock
Exchange.
(xvii) The APS have been, or prior to the APS Closing
Date will be, assigned a rating of "AAA" by Standard & Poor's Ratings
Group ("Standard & Poor's").
(xviii) All advertisements and other sales literature
(collectively, "sales materials") authorized in writing or prepared by
the Trust for use in connection with the public offering of the APS
complied and comply with the requirements of the Securities Act, the
Securities Act Rules and the rules and interpretations of the NASD and no
such sales materials contained or contain any untrue statement of a
material fact or omitted or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein
not misleading in light of the circumstances in which they were made,
including the Securities Act and the Securities Act Rules.
(b) The Investment Adviser represents to each Underwriter as
follows:
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(i) 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; and the Investment
Adviser owns, possesses or has obtained and currently maintains all
governmental licenses, permits, consents, orders, approvals and other
authorizations, whether foreign or domestic, necessary to carry on its
business as contemplated in the Registration Statement and the
Prospectus.
(ii) The Investment Adviser is (A) duly registered as an
investment adviser under the Advisers Act and (B) not prohibited by the
Advisers Act, the Investment Company Act, the Advisers Act Rules or the
Investment Company Act Rules from acting as the investment adviser for
the Trust as contemplated by the Investment Advisory Agreement, the
Registration Statement and the Prospectus.
(iii) 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, this Underwriting Agreement, the
Investment Advisory Agreement, the Administration Agreement and the
Shareholder Servicing Agreement being referred to as 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, 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 Investment
Adviser Agreement constitutes a legal, valid and binding obligation of
the Investment Adviser, enforceable in accordance with its terms, (1)
subject, as to enforcement, to applicable
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bankruptcy, insolvency and similar laws affecting creditors' rights
generally and to general equitable principles (regardless of whether
enforcement is sought in a proceeding in equity or at law) and (2) except
as rights to indemnity thereunder may be limited by federal or state
securities laws.
(iv) Neither (A) the execution and delivery by the
Investment Adviser of any Investment Adviser Agreement by the Investment
Adviser nor (B) 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 Agreement and Declaration of
Trust or Bylaws 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.
(v) 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 (A) have been obtained under the
Investment Company Act, the Advisers Act, the Securities Act, the
Investment Company Act Rules, the Advisers Act Rules and the Securities
Act Rules, and (B) may be required under state securities or "blue sky"
laws, in connection with the purchase and distribution of the APS by the
Underwriters pursuant to this Underwriting Agreement.
(vi) The description of the Investment Adviser and its
business, and the statements attributable to the Investment Adviser, in
the Registration Statement and the Prospectus complies with the
requirements of the Securities Act, the Investment Company Act, the
Securities Act Rules and the Investment Company Act Rules 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.
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(vii) 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.
(viii) In the event that the Trust 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 APS has
not yet become effective, the Trust will promptly file the Final Amendment, if
not previously filed, with the Commission, and will use its best efforts to
cause such registration statement to become effective and, as soon as the Trust
is advised, will advise the Representative when the Registration Statement or
any amendment thereto has become effective. If the Registration Statement has
become effective and the Prospectus contained therein omits certain information
at the time of effectiveness pursuant to Rule 430A of the Securities Act Rules,
the Trust will file a 430A Prospectus pursuant to Rule 497(h) of the Securities
Act Rules as promptly as practicable, but no later than the second business day
following the earlier of the date of the determination of the offering price of
the APS or the date the Prospectus is first used after the Effective Date. If
the Registration Statement has become effective and the Prospectus contained
therein does not so omit such information, the Trust will file a Prospectus
pursuant to Rule 497(b) or (j) of the Securities Act Rules as promptly as
practicable, but no later than the fifth business day following the date of the
later of the Effective Date or the commencement of the public offering of the
APS after the Effective Date. In either case, the Trust will
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provide the Managing Representative satisfactory evidence of the filing. The
Trust 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 APS is completed) or supplement to the
Registration Statement or the Prospectus unless a copy has first been submitted
to the Managing Representative a reasonable time before its filing and the
Managing Representative has not objected to it in writing within a reasonable
time after receiving the copy.
(b) For the period of three years from the date hereof, the
Trust will advise the Managing Representative promptly (1) of the issuance by
the Commission of any order in respect of the Trust or the Investment Adviser
which relates to the Trust, or which relates to any material arrangements or
proposed material arrangements involving the Trust or the Investment Adviser,
(2) of the initiation or threatening of any proceedings for, or receipt by the
Trust of any notice with respect to, the suspension of the qualification of the
APS for sale in any jurisdiction or the issuance of any order by the Commission
suspending the effectiveness of the Registration Statement, (3) of receipt by
the Trust, or any representative or attorney of the Trust, of any other
communication from the Commission relating in any material way to the Trust, the
Registration Statement, the Notification, any Preliminary Prospectus, the
Prospectus or to the transactions contemplated by this Underwriting Agreement
and (4) the issuance by any court, regulatory body, administrative agency or
other governmental agency or body, whether foreign or domestic, of any order,
ruling or decree, or the threat to initiate any proceedings with respect
thereto, regarding the Trust, which relates in any material way to the Trust or
any material arrangements or proposed material arrangements involving the Trust.
The Trust will make every reasonable effort to prevent the issuance of any order
suspending the effectiveness of the Registration Statement and, if any such
order is issued, to obtain its lifting as soon as possible.
(c) If not delivered prior to the date of this Underwriting
Agreement, the Trust 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 APS 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
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distribution of the APS is completed) (excluding exhibits) as the Managing
Representative may reasonably request.
(d) During such period as a prospectus is required by law
to be delivered by an underwriter or a dealer, the Trust will deliver, without
charge, to the Underwriters and any dealers, at such office or offices as the
Underwriters may designate, as many copies of the Prospectus as the Underwriters
may reasonably request, and, if any event occurs during such period as a result
of which it is necessary to amend or supplement the Prospectus, in order to make
the statements therein, in light of the circumstances existing when such
Prospectus is delivered to a purchaser of APS, not misleading in any material
respect, or if during such period it is necessary to amend or supplement the
Prospectus to comply with the Securities Act, the Investment Company Act, the
Securities Act Rules or the Investment Company Act Rules, the Trust 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 Trust) to whom APS may
have been sold by the Underwriters, and to other dealers on request, amendments
or supplements to the Prospectus so that the statements in such Prospectus, as
so amended or supplemented, will not, in light of the circumstances existing
when such Prospectus is delivered to a purchaser, be misleading in any material
respect and will comply with the Securities Act, the Investment Company Act, the
Securities Act Rules and the Investment Company Act Rules. Delivery by the
Underwriters of any such amendments or supplements to the Prospectus will not
constitute a waiver of any of the conditions in Section 6 hereof.
(e) The Trust will make generally available to holders of
the Trust's securities, as soon as practicable but in no event later than the
last day of the 18th full calendar month following the calendar quarter in which
the Effective Date falls, an earnings statement, if applicable, satisfying the
provisions of Section 11(a) of the Securities Act and, at the option of the
Trust, Rule 158 of the Securities Act Rules.
(f) The Trust will take such actions as the Managing
Representative reasonably requests in order to qualify the APS for offer and
sale under the securities or "blue sky" laws of such jurisdictions as the
Underwriters reasonably designate; provided that the Trust shall not be required
in connection therewith or as a condition thereof to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction.
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(g) The Trust will pay or cause to be paid the following:
(i) the fees, disbursements and expenses of the Trust's counsel and accountants
in connection with the registration of the APS and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or reproducing this
Underwriting Agreement and any other documents in connection with the offering,
purchase, sale and delivery of the APS (including advertising expenses of the
Underwriters, if any); (iii) the cost of preparing share certificates; (iv) the
expenses (including, but not limited to, travel, hotels and other
accommodations) incurred by the Trust's or the Investment Adviser's directors,
officers, employees and other personnel in connection with meetings held with
registered brokers in connection with the offering of the APS, the preparing to
market and the marketing of the APS; (v) any fees charged by securities rating
services for rating the APS; (vi) the fees and expenses of the Depository Trust
Company and its nominee, the Custodian and the Auction Agent; and (vii) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for. It is understood,
however, that, except as provided in this Section 5 and Section 7 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel and stock transfer taxes, if any, on resale of any of the APS by
them, except any advertising expenses connected with any offers they may make.
(h) If the transactions contemplated by this Underwriting
Agreement are not consummated, except as otherwise provided herein, no party
will be under any liability to any other party, except that (1) if this
Underwriting Agreement is terminated by (x) the Trust or the Investment Adviser
pursuant to any of the provisions hereof (otherwise than pursuant to Section 8
hereof) or (y) by the Underwriters because of any inability, failure or refusal
on the part of the Trust or the Investment Adviser to comply with any material
terms or because any of the conditions in Section 6 are not satisfied, ▇▇▇▇▇
▇▇▇▇▇ or an affiliate and the Trust, 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 APS and (2) no Underwriter
who has failed or refused to purchase the APS agreed to be purchased by it under
this Underwriting Agreement, in breach of its obligations pursuant to this
Underwriting Agreement, will be relieved of liability to the Trust and the
Investment Adviser and the other Underwriters for damages occasioned by its
default.
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(i) Without the prior written consent of the Managing
Representative, the Trust will not offer, sell or register with the Commission,
or announce an offering of, any equity securities of the Trust, within 180 days
after the Effective Date, except for the APS as described in the Prospectus and
any issuances of Common Shares pursuant to the dividend reinvestment plan
established by the Trust.
(j) The Trust will direct the investment of the net
proceeds of the offering of the APS in such a manner as to comply with the
investment objective and policies of the Trust as described in the Prospectus.
(k) No later than the APS Closing Date, the Underwriters
will provide, and will cause any selling group member to whom they have sold APS
to provide, the Auction Agent with a list of the record names of the persons to
whom they have sold APS, the number of APS sold to each such person, and the
number of APS they are holding as of the APS Closing Date; provided that in lieu
of thereof, an Underwriter may provide the Auction Agent with a list indicating
itself as the sole holder of all the APS sold by such Underwriter.
6. Conditions of the Underwriters' Obligations. The obligations of
the Underwriters to purchase the APS are subject to the accuracy on the date of
this Underwriting Agreement, and on the APS Closing Date, of the representations
of the Trust and the Investment Adviser in this Underwriting Agreement, to the
accuracy and completeness of all statements made by the Trust 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 Trust 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), (h) or (j),
as the case may be, of the Securities Act Rules.
(b) No order suspending the effectiveness of the
Registration Statement may be in effect and no proceedings for such purpose may
be pending before or, to the knowledge of counsel to the Underwriters,
threatened by the Commission, and any requests for additional information on the
part of the Commission (to be included
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in the Registration Statement or the Prospectus or otherwise) must be complied
with or waived to the reasonable satisfaction of the Managing Representative.
(c) Since the dates as of which information is given in the
Registration Statement and the Prospectus, (1) there must not have been any
material change in the Common Shares, the APS or the liabilities of the Trust
except as set forth in or contemplated by the Prospectus; (2) there must not
have been any material adverse change in the general affairs, prospects,
management, business, financial condition or results of operations of the Trust
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;
(3) the Trust 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 (4) there must not
have occurred any event that makes untrue or incorrect in any material respect
any statement or information contained in the Registration Statement or
Prospectus or that is not reflected in the Registration Statement or Prospectus
but should be reflected therein in order to make the statements or information
therein (in the case of the Prospectus, in light of the circumstances in which
they were made) not misleading in any material respect; if, in the judgment of
the Managing Representative, any such development referred to in clause (1),
(2), (3) or (4) of this paragraph (c) makes it impracticable or inadvisable to
consummate the sale and delivery of the APS pursuant to this Underwriting
Agreement by the Underwriters, at the initial public offering price of the APS.
(d) The Managing Representative must have received on the
APS Closing Date a certificate, dated such date, of the President or a
Vice-President and the chief financial or accounting officer of each of the
Trust and the Investment Adviser certifying that (1) the signers have carefully
examined the Registration Statement, the Prospectus, and this Underwriting
Agreement, (2) the representations of the Trust (with respect to the
certificates from such Trust 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, (3) there has not been any material adverse change in the
general affairs, prospects, management, business, financial condition or results
of operations of the Trust (with respect to the certificates from such Trust
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 Trust 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
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transactions in the ordinary course of business, (4) with respect to the Trust
only, to the knowledge of such officers after reasonable investigation, no order
suspending the effectiveness of the Registration Statement, prohibiting the sale
of any of the APS or otherwise having a material adverse effect on the Trust has
been issued and no proceedings for any such purpose are pending before or
threatened by the Commission or any other regulatory body, whether foreign or
domestic, (5) to the knowledge of the officers of 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 (6) each of the Trust (with respect to the certificates from such
Trust 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
the APS Closing Date (to the extent not waived in writing by the Managing
Representative).
(e) The Underwriters must receive on the APS Closing Date
the opinions dated such date substantially in the form of Annexes A and B to
this Underwriting Agreement from the counsel identified in each such Annex.
(f) The Underwriters must receive on the APS Closing Date
from Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP and its affiliated entities, their
counsel, an opinion dated such date with respect to the Trust, the APS, the
Registration Statement and the Prospectus, this Underwriting Agreement and the
proceedings taken in connection with the sale and delivery of the APS. Such
opinion and proceedings shall fulfill the requirements of this Section 6(f) only
if such opinion and proceedings are satisfactory in all respects to the Managing
Representative. The Trust 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 Underwriters must receive on the date this
Underwriting Agreement is signed and delivered by the Underwriters a signed
letter, dated such date, substantially in the form of Annex C to this
Underwriting Agreement from the firm of accountants designated in such Annex.
The Underwriters also must receive on the APS Closing Date a signed letter from
such accountants, dated as of such date, confirming on the basis of a review in
accordance with the procedures set forth in their earlier letter that nothing
has come to their attention during the period from a date not more than five
business days before the date of this Underwriting Agreement, specified in the
letter, to
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a date not more than five business days before such date, that would require any
change in their letter referred to in the foregoing sentence.
(h) The APS shall have been accorded a rating of "AAA" by
Standard & Poor's and a letter to such effect, dated the APS Closing Date, shall
have been delivered to the Managing Representative.
(i) As of the APS Closing Date and assuming the receipt of
the net proceeds from the sale of the APS, the 1940 Act Asset Coverage and the
APS Basic Maintenance Amount (each as defined in the Prospectus) each will be
met.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Underwriting Agreement will comply only if they are
in form and scope reasonably satisfactory to counsel for the Underwriters,
provided that any such documents, forms of which are annexed hereto, shall be
deemed satisfactory to such counsel if substantially in such form.
7. Indemnification and Contribution.
(a) Each of the Trust and the Investment Adviser, jointly
and severally, will indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of such Underwriter and each person, if any, who
controls such Underwriter within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act from and against any and all losses, claims,
liabilities, expenses and damages (including, but not limited to, any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any and all amounts paid in settlement of, any action, suit or proceeding
between any of the indemnified parties and any indemnifying parties or between
any indemnified party and any third party, or otherwise, or any claim asserted),
to which such Underwriter or any such person, or any of them, may become subject
under the Securities Act, the Exchange Act, the Investment Company Act, the
Advisers Act or other federal or state statutory law or regulation, at common
law or otherwise, whether foreign or domestic, insofar as such losses, claims,
liabilities, expenses or damages arise out of or are based on (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Preliminary Prospectus, the Prospectus, the sales
materials, or any amendment or supplement to the Registration Statement, the
Preliminary Prospectus, the Prospectus, the sales materials or in any documents
filed under the Exchange Act and deemed to be incorporated by reference into the
Registration Statement, the Preliminary Prospectus, the Prospectus, or in any
application or other document
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executed by or on behalf of the Trust or based on written information furnished
by or on behalf of the Trust filed in any jurisdiction in order to qualify the
APS under the securities laws thereof or filed with the Commission, (ii) the
omission or alleged omission to state, in any or all such documents, a material
fact required to be stated therein or necessary to make the statements therein
not misleading or (iii) any act or failure to act or any alleged act or failure
to act by such Underwriter in connection with, or relating in any manner to, the
APS or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, liability, expense or damage arising out of or
based upon matters covered by clause (i) or (ii) above (provided, however, that
neither the Trust nor the Investment Adviser shall be liable under this clause
(iii) to the extent it is finally judicially determined by a court of competent
jurisdiction that such loss, claim, liability, expense or damage resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by such Underwriter through its gross negligence, bad faith or willful
misconduct); provided that neither the Trust nor the Investment Adviser will be
liable to the extent that such losses, claims, liabilities, expenses or damages
are based on an untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Trust by such Underwriter expressly for
inclusion in the Registration Statement, the Preliminary Prospectus or the
Prospectus. This indemnity agreement will be in addition to any liability that
the Trust or the Investment Adviser might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the
Trust and the Investment Adviser, each person, if any, who controls the Trust or
the Investment Adviser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, each trustee of the Trust and each officer of
the Trust who signs the Registration Statement to the same extent as the
foregoing indemnity from the Trust or the Investment Adviser to the Underwriter,
but only insofar as losses, claims, liabilities, expenses or damages arise out
of or are based on any untrue statement or omission or alleged untrue statement
or omission made in reliance on and in conformity with information relating to
such Underwriter furnished in writing to the Trust by such Underwriter expressly
for use in the Registration Statement, the Preliminary Prospectus or Prospectus.
This indemnity will be in addition to any liability that such Underwriter might
otherwise have; provided, however, that in no case shall such Underwriter be
liable or responsible for any amount in excess of the fees and commissions
received by the Underwriter.
(c) Any party that proposes to assert the right to be
indemnified under this Section 7 will, promptly after receipt of notice of
commencement of any
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action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 7, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission to so notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provision of this Section 7 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel reasonably satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
disbursements and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on the advice of counsel) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party (3) a
conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. Subject to the requirements of
Investment Company Act Release No. 11330, all such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they are
incurred. It is understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than
one separate firm admitted to practice in such jurisdiction at any one time for
all such indemnified party or parties. An indemnifying party will not be liable
for any settlement of any action or claim effected without its written
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consent (which consent will not be unreasonably withheld). No
indemnifying party shall, without the prior written consent of each indemnified
party, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding relating to the matters
contemplated by this Section 7 (whether or not any indemnified party is a party
thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding.
(d) In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in this Section 7 is
applicable but for any reason is held to be unavailable from the Trust, the
Investment Adviser or the Underwriters, the Trust, the Investment Adviser and
the Underwriters will contribute to the total losses, claims, liabilities,
expenses and damages (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Trust and the Investment Adviser from persons other
than the Underwriter, such as persons who control the Trust or the Investment
Adviser within the meaning of the Securities Act or the Exchange Act, officers
of the Trust who signed the Registration Statement and directors of the Trust,
who may also be liable for contribution) to which the Trust, the Investment
Adviser and the Underwriters may be subject in such proportion as shall be
appropriate to reflect the relative benefits received by the Trust and the
Investment Adviser on the one hand and the Underwriters on the other. The
relative benefits received by the Trust and the Investment Adviser (treated
jointly for this purpose as one person) on the one hand and the Underwriters on
the other hand shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Trust
bear to the total fees and commissions received by the Underwriters. If, but
only if, the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such proportion
as is appropriate to reflect not only such relative benefits referred to in the
foregoing sentence but also the relative fault of the Trust and the Investment
Adviser (treated jointly for this purpose as one person) on the one hand and the
Underwriters on the other hand in connection with respect to the statements or
omissions or alleged statements or omissions that resulted in the losses,
claims, liabilities, expenses or damages (including any investigative, legal or
other expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted), as well as
any other relevant equitable considerations appropriate in the circumstances.
Such relative fault of the parties shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to
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information supplied by the Trust, the Investment Adviser or the Underwriters,
the intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such statement or omission and any other
equitable considerations appropriate in the circumstances. The Trust, the
Investment Adviser and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 7(d) were to be determined
by pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, liability,
expense or damage, or action in respect thereof, referred to above in this
Section 7(d) shall be deemed to include, for purposes of this Section 7(d) any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding any other provisions of this Section 7(d), the Underwriters
shall not be required to contribute any amount in excess of the fees and
commissions received by them and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7(d), any person who
controls a party to this Underwriting Agreement within the meaning of the
Securities Act will have the same rights to contribution as that party, and each
trustee of the Trust and each officer of the Trust who signed the Registration
Statement will have the same rights to contribution as the Trust, subject in
each case to the provisions hereof. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action against such
party in respect of which a claim for contribution may be made under this
Section 7(d), notify such party or parties from whom contribution may be sought,
but the omission so to notify will not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have under
this Section 7(d). No party will be liable for contribution with respect to any
action or claim settled without its written consent (which consent shall not be
unreasonably withheld). The Underwriters' obligations to contribute pursuant to
this Section 7 are several in proportion to the respective number of APS set
forth opposite their names in Schedule 1 (or such number of APS as determined
pursuant to Section 9 hereof) and not joint.
(e) Notwithstanding any other provisions in this Section 7,
no party shall be entitled to indemnification or contribution under this
Underwriting Agreement against any loss, claim, liability, expense or damage
arising by reason of such person's willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder, or by reason of such
person's reckless disregard of such person's obligations and duties hereunder.
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(f) The Trust and the Investment Adviser acknowledge that
the statements with respect to (1) the public offering of the APS as set forth
on the cover page of and (2) the statements relating to selling concessions and
reallowances of selling concessions under the caption "Underwriting" in the
Prospectus constitute the only information furnished in writing to the Trust 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.
8. Termination. This Underwriting Agreement may be terminated by
the Managing Representative by notifying the Trust at any time:
(a) before the later of the effectiveness of the
Registration Statement and the time when any of the APS are first generally
offered pursuant to this Underwriting Agreement by the Managing Representative
to dealers by letter or telegram;
(b) at or before the APS Closing Date if, in the sole
judgment of the Managing Representative, payment for and delivery of any APS is
rendered impracticable or inadvisable because (1) trading in the APS or the
Common Shares of the Trust is suspended by the Commission or trading in the
Common Shares is suspended by the principal exchange that lists the Common
Shares, (2) 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, or, (3) 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, (4) a general banking moratorium has been established by U.S. federal
or New York authorities or (5) any material adverse change in the financial or
securities markets in the United States or in political, financial or economic
conditions in the United States or any outbreak or material escalation of
hostilities or declaration by the United States of a national emergency or war
or other calamity or crisis shall have occurred the effect of any of which is
such as to make it, in the sole judgement of the Managing Representative,
impracticable or inadvisable to market the APS on the terms and in the manner
contemplated by the Prospectus; or
(c) at or before the APS Closing Date, if any of the
conditions specified in Section 6 have not been fulfilled when and as required
by this Underwriting Agreement.
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9. Substitution of Underwriters. If one or more of the
Underwriters fails (other than for a reason sufficient to justify the
termination of this Underwriting Agreement) to purchase on the APS Closing Date
the APS agreed to be purchased on such date by such Underwriter or Underwriters,
the Managing Representative may find one or more substitute underwriters to
purchase such APS or make such other arrangements as the Managing Representative
deems advisable, or one or more of the remaining Underwriters may agree to
purchase such APS in such proportions as may be approved by the Managing
Representative, in each case upon the terms set forth in this Underwriting
Agreement. If no such arrangements have been made within 36 hours after such
date, and
(a) the number of APS to be purchased by the defaulting
Underwriters on such date does not exceed 10% of the APS that the Underwriters
are obligated to purchase on the APS Closing Date, each of the nondefaulting
Underwriters will be obligated to purchase such APS on the terms set forth in
this Underwriting Agreement in proportion to their respective obligations under
this Underwriting Agreement, or
(b) the number of APS to be purchased by the defaulting
Underwriters on the APS Closing Date exceeds 10% of the APS to be purchased by
all the Underwriters on the APS Closing Date, the Trust will be entitled to an
additional period of 24 hours within which to find one or more substitute
underwriters reasonably satisfactory to the Managing Representative to purchase
such APS on the terms set forth in this Underwriting Agreement.
In any such case, either the Managing Representative or the Trust
will have the right to postpone the APS Closing Date for not more than five
business days in order that necessary changes and arrangements (including any
necessary amendments or supplements to the Registration Statement or the
Prospectus) may be effected by the Managing Representative and the Trust. If the
number of APS to be purchased on the APS Closing Date by such defaulting
Underwriter or Underwriters exceeds 10% of the APS that the Underwriters are
obligated to purchase on such date, and none of the nondefaulting Underwriters
or the Trust makes arrangements pursuant to this Section within the period
stated for the purchase of the APS that the defaulting Underwriters agreed to
purchase, this Underwriting Agreement will terminate without liability on the
part of any nondefaulting Underwriter, the Trust or the Investment Adviser,
except as provided in Sections 5(g) and 7 hereof. This Section 9 will not affect
the liability of any defaulting Underwriter to the Trust or the nondefaulting
Underwriters arising out of
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such default. A substitute underwriter will become an Underwriter for all
purposes of this Underwriting Agreement.
10. Miscellaneous.
(a) The reimbursement, indemnification and contribution
agreements in Sections 5(g) and 7 hereof and the representations of the Trust,
the Investment Adviser and the Underwriters in this Underwriting Agreement will
remain in full force and effect regardless of any termination of this
Underwriting Agreement. The reimbursement, indemnification and contribution
agreements in Sections 5(g) and 7 hereof and the representations and agreements
of the Trust, the Investment Adviser and the Underwriters in this Underwriting
Agreement shall survive the APS Closing Date and shall remain in full force and
effect regardless of any investigation made by or on behalf of any Underwriter,
the Trust, the Investment Adviser or any controlling person and delivery of and
payment for the APS.
(b) This Underwriting Agreement is for the benefit of the
Underwriters, the Trust, the Investment Adviser and their successors and
assigns, and, to the extent expressed in this Underwriting Agreement, for the
benefit of persons controlling any of the Underwriters, the Trust, the
Investment Adviser and directors and officers of the Trust and the Investment
Adviser, and their respective successors and assigns, and no other person,
partnership, association or corporation will acquire or have any right under or
by virtue of this Underwriting Agreement. The term "successors and assigns" does
not include any purchaser of the APS from any Underwriter merely because of such
purchase.
(c) All notices and communications under this Underwriting
Agreement will be in writing, effective only on receipt and mailed or delivered,
by messenger, facsimile transmission or otherwise, to the Underwriters in care
of PaineWebber Incorporated, Attn: Financial Institutions Group, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, to the Trust or the Investment Adviser
at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: Chief Legal Officer.
(d) This Underwriting Agreement may be signed in multiple
counterparts that taken as a whole constitute one agreement.
(e) This Underwriting Agreement will be governed by and
construed in accordance with the laws of the State of New York without reference
to choice of law principles thereof.
26
27
(f) A copy of the Agreement and Declaration of Trust of
each of the Trust and the Investment Adviser 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 respective Trustees of the
Trust and the Investment Adviser as Trustees and not individually and that the
obligations or arising out of this Underwriting Agreement are not binding upon
any of the Trustees or beneficiaries individually but are binding only upon the
respective assets and properties of the Trust and the Investment Adviser.
27
28
Please confirm that the foregoing correctly sets forth the
agreement between us.
Very truly yours,
▇▇▇▇▇ ▇▇▇▇▇ Municipal Income Trust
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇ ▇▇▇▇▇ Management
By:
-----------------------------------
Name:
Title:
Confirmed:
PaineWebber Incorporated
Prudential Securities Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
c/o PaineWebber Incorporated
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
By: PaineWebber Incorporated
By:
--------------------------------
Name:
Title:
Acting on behalf of itself
and the Underwriters
named in Schedule 1
29
SCHEDULE 1
NAME NUMBER OF APS TO BE PURCHASED
PaineWebber Incorporated
Prudential Securities Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
30
ANNEX A
FORM OF OPINION OF
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP REGARDING THE TRUST
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 Trust 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 Trust 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 Trust 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 Trust has no subsidiaries.
3. The capitalization of the Trust is as set forth in the Registration
Statement and the Prospectus. The Common Shares and the APS conform in all
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. The APS 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 in
connection with the issuance of the APS.
4. The Trust 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 APS as
provided in the Underwriting Agreement has or will have been taken by the Trust.
31
5. The Trust has full power and authority to enter into each of the
Underwriting Agreement, the Investment Advisory Agreement, the Custody Agreement
and the Transfer Agency Agreement, the Auction Agency Agreement and the DTC
Agreement (collectively, the "Trust Agreements") and to perform all of the terms
and provisions thereof to be carried out by it and (A) each Trust Agreement has
been duly and validly authorized, executed and delivered by the Trust, (B) each
Trust 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 Trust
Agreement constitutes the legal, valid and binding obligation of the Trust
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 Trust of the Trust
Agreements, (B) the issue and sale by the Trust of the APS as contemplated by
the Underwriting Agreement and (C) the performance by the Trust of its
obligations under the Trust Agreements or consummation by the Trust of the other
transactions contemplated by the Trust Agreements conflicts with or will
conflict with, or results or will result in a breach of, the Declaration of
Trust or the Amended Bylaws of the Trust or any agreement or instrument to which
the Trust is a party or by which the Trust 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 Trust, except that we express no opinion as to the securities or "blue
sky" laws applicable in connection with the purchase and distribution of the APS
by the Underwriters pursuant to the Underwriting Agreement.
7. The Trust 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 Trust for the consummation by the Trust
of the transactions to be performed by the Trust or the performance by the Trust
of all the terms and provisions to be performed by or on behalf of it in each
case as contemplated in the Trust Agreements, except such as (A) have been
obtained under the Securities Act, the Investment Company Act, the Advisers Act,
the Securities Act Rules, the Investment Company Act Rules and the Advisers Act
Rules and (B) may be required by the New York Stock Exchange or under state
securities or "blue sky" laws in connection with the purchase and distribution
of the APS by the Underwriters pursuant to the Underwriting Agreement.
▇-▇
▇▇
▇. 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 Trust, 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.
10. The Common Shares are listed on the New York Stock Exchange.
11. The Trust does not require any tax or other rulings to enable it to
qualify as a regulated investment company under Subchapter M of the Code.
12. Each of the sections in the Prospectus entitled "Taxes" and 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 Trust and to the purchase, ownership and disposition of
the APS.
13. The Registration Statement (except the financial statements and
schedules and other financial data included therein as to which we express no
view), at the time it became effective, and the Prospectus (except as
aforesaid), as of the date thereof, complied as to form in all material respects
to the requirements of the Securities Act, the Investment Company Act and the
rules and regulations of the Commission thereunder.
In rendering our opinion, we have relied, as to factual matters, upon
the attached written certificates and statements of officers of the Trust.
In connection with the registration of the APS, we have advised the
Trust 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 Trust 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 Trust 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
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33
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).
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34
ANNEX B
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 Trust 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
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Declaration of Trust or Bylaws 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
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 my opinion, I have relied, as to factual matters, upon the
attached written certificates and statements of officers of ▇▇▇▇▇ ▇▇▇▇▇.
In connection with the registration of the APS, I 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
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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. I also participated in conferences with representatives of the
Trust and its accountants and ▇▇▇▇▇ ▇▇▇▇▇ at which the contents of the
Registration Statement and Prospectus and related matters were discussed. With
your permission, I 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 my
attention that would lead me 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 I
express no view).
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ANNEX D
FORM OF ACCOUNTANT'S LETTER
March , 1999
The Board of Trustees of
▇▇▇▇▇ ▇▇▇▇▇ Municipal Income Trust
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PaineWebber Incorporated
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
as Managing Representative of the Underwriters
Ladies and Gentlemen:
We have audited the statement of assets and liabilities of ▇▇▇▇▇ ▇▇▇▇▇
California Municipal Income Trust (the "Trust") as of February 19, 1999 included
in the Registration Statement on Form N-2 filed by the Trust under the
Securities Act of 1933 (the "Act") (File No. 333-70725) and under the Investment
Company Act of 1940 (the "1940 Act") (File No. 811-09141); 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 Trust
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 Act, the
1940 Act and the respective rules and regulations thereunder.
3. We have not audited any financial statements of the Trust as of any
date or for any period subsequent to January 21, 1999, although have
conducted an audit of the statement of assets and liabilities as of
January 21, 1999. Therefore, we are unable to and do no express out
opinion on the unaudited statement of assets and liabilities as of
February 19, 1999, and the unaudited statements of operations, changes
in net assets and the
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unaudited condensed financial information for the period from January
21, 1999 to February 19, 1999 or on any other financial statements or
condensed financial information for any period subsequent to January
21, 1999.
4. 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 Trust as set forth in the minute books at the
offices of the Trust, officials of the Trust having advised us that the
minutes of all such meetings through March ___, 1999, were set forth
therein. We have carried out other procedures to March, 1999 as
follows:
(a) With respect to the period from January 21, 1999 to
February 19, 1999, we have:
(i) Read the unaudited statement of assets and
liabilities as of February 19, 1999, and the unaudited statements of
operations, changes in net assets and the unaudited condensed financial
information for the period from January 21, 1999 to February 19, 1999;
and
(ii) Made inquiries of certain officials of the Trust
who have responsibility for financial and accounting matters regarding
(1) whether the unaudited financial statements and unaudited financial
information referred to in 4(a)(i) comply in form in all material
respects with the applicable accounting requirements of the Act and the
1940 Act and the related published rules and regulations and (2) whether
those unaudited financial statements and unaudited condensed financial
information are in conformity with generally accepted accounting
principles.
The foregoing procedures do not constitute an audit made in accordance with
generally accepted auditing standards. Also, they would not necessarily reveal
matters of significance with respect to the comments in the following paragraph.
Accordingly, we make no representations as to the sufficiency of the foregoing
procedures for your purposes.
5. Nothing came to our attention as a result of the foregoing
procedures, however, that caused us to believe that (1) the unaudited
financial statements and unaudited condensed financial information
described in 4(a)(i) do not comply in form in all material respects
with the applicable accounting requirements of the Act and the 1940 Act
and the related published rules and regulations and (2) the unaudited
financial statements
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and unaudited condensed financial information are not in conformity
with generally accepted accounting principles.
6. Trust officials have advised us that no financial statements as of
any date subsequent to February 19, 1999, are available. We have made
inquiries of certain officials of the Trust who have responsibility for
financial and accounting matters regarding whether there was any change
at March ___, 1999, in the capital shares or net assets of the Trust as
compared with amounts shown in the February 19, 1999 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.
7. For the purposes of this letter, we have also read the following and
performed the procedures referenced below, set forth in the
Registration Statement under the headings indicated:
(a) Cover Page. We have verified the mathematical accuracy of
the dollar amounts listed with respect to the Trust under the headings "Sales
load" and "Proceeds to Trust."
(b) "Prospectus Summary - Asset Maintenance." We have verified
the accuracy of the approximate percentage of the Trust's capital attributable
to the preferred shares of beneficial interest, par value $0.01 per share, of
the Trust (the "APS").
(c) "The Trusts." We have verified the accuracy of the dollar
amount of the proceeds of the initial public offering of the Trust's common
shares of beneficial interest, par value $0.01 per share (the "Common Shares")
after the payment of organizational and offering expenses and the number of
additional Common Shares that the underwriters were given an option to purchase
to cover over-allotments.
(d) "Use of Proceeds." We have verified the accuracy of the
net proceeds of the offering of the APS of the Trust after payment of offering
expenses and the sales load.
(e) "Capitalization." We have verified accuracy of unaudited
capitalization of the Trust as of February 19, 1999 (as if the over-allotment
Common Shares of the Trust were issued on such date) and as adjusted to give
effect to the issuance of the APS is asset forth under such heading.
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(f) "Portfolio Composition." We have verified that the number
of issues, market value and percentage of total market value, by rating
category, which were invested in long-term and intermediate-term municipal
obligations by the Trust as of February 19, 1999, was as set forth under such
heading.
(g) "Description of the APS - Dividends - Restrictions on
Dividends and Other Payments." We have verified the accuracy of the approximate
asset coverage percentage set forth on the first paragraph under such heading.
(h) "Description of the APS - Asset Maintenance - 1940 Act
Asset Coverage." We have confirmed the accuracy of the dollar amounts and
percentages set forth with respect to the Trust in the table under such heading.
(i) "Description of Capital Structure." We have verified the
accuracy of the numbers of authorized Common Shares and Auction Preferred Shares
and the numbers of outstanding Common Shares and Auction Preferred Shares
outstanding (exclusive of shares held by the Trust for its own account).
(j) "Description of Capital Structure." We have verified the
accuracy of the net asset value per share and the closing price per share for
the Common Shares of the Trust as of February 19, 1999.
(k) "Statement of Additional Information - Appendix B: Tax
Equivalent Yield Tables." Based on the percentages set forth in the tax
equivalent yield table with respect to the Trust, we have verified the
mathematical accuracy of the percentages under the columns labeled "is
equivalent to a fully taxable yield of" set forth in such table.
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 Trust 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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